Loan Think

To be a success in 2010, mortgage originators need to understand the macro trends that brought down the financial services industry the past couple of years. Consumers are still weary about the past, and it is going to affect their behavior in the near term, if not the long term. Marketing success means understanding these mind-set changes,

Here are some thoughts on turning around a trend of declining income.

Over the weekend I asked readers which loan types were the most underserved in today's tight credit market where Fannie Mae, Freddie Mac and FHA rule the roost. Jon Overfelt, sales manager for Academy Mortgage in Raleigh, N.C., said manufactured homes. Another reader noted that a huge problem is a lack of solid mortgage money for homeowners who cannot refinance their first and second liens into one loan. "With a degree of LTV controls as the REFI PLUS can you imagine how much money this would free up for the economy in the mortgage sector thereby lowering overall debt load and keeping people in their homes?" writes Ralph Reitan, a broker. On Friday National Mortgage News Online noted that consumers extracted just $11 billion in equity from their homes using cash-out refinancing loans in the fourth quarter, the smallest such volume in nine years. And today, of course, is the big day. We find how much FHA will hike its annual insurance premium. Stay tuned...

Come March 1, the so-called 'spring home buying season' starts with consumers (supposedly) rushing out to buy new abodes, scouring newspaper ads and online listings for their "American dream." A key ingredient for a booming spring is there: rock bottom interest rates. The other key ingredient is absent: a strong job market. This morning the government released the 4Q GDP number: a stunning 5.7%. The stock market initially spiked and then fell limp by late morning. One would think that with the new GDP reading at 5.7% that employment would soon surge, thus helping the housing market but economists are throwing cold water on what the number means for the nation's jobless. Translation: the strong GDP showing is all about "inventory replenishment" and not real growth. Could the nation's economists be wrong? Speaking of economists, Jay Brinkmann of the Mortgage Bankers Association told us earlier in the week that he believes the Federal Reserve will indeed stop buying GSE MBS come March 31 and that private sector investors will fill the void...

I recently hired an assistant for my information technology director. I asked, "by the way, can you install ACT on that laptop?" He said, "I'll work on it." That is everyone's answer these days - "I'll work on it."

THIS JUST IN: It appears that certain account executives from CitiMortgage are quietly contacting some of their top performing brokers to see if they would like to rejoin the flock. For full details see the Monday edition of National Mortgage News. Don't subscribe? Call: 800-221-1809...

Late next week the Mortgage Bankers Association will hold a briefing on the Real Estate Settlement and Procedures Act. If you want to pay MBA to hear what your taxpayer supported government officials have to say, feel free. But if you want to read about it in the press, forget it. MBA has closed the briefing to reporters. Scheduled to speak about RESPA changes is Ivy Jackson, director of HUD's RESPA office. Another HUD official is speaking as well. Meanwhile, according to a recent report by Reuters, there are rumblings that (perhaps) a new private label MBS (backed by conservatively underwritten jumbo loans) could hit the market in the next few months. According to Allonhill of Denver, third-party reviews of the collateral are going to play a major role in the revival of this market...

It used to be that everyone and their brother contacted the human resources department of local companies offering them discounted restaurant coupons, banking and insurance specials and yes, mortgage discount programs.

With all the talk of breaking up the big banks (by Obama advisor Paul Volcker) how come no one is talking about breaking up the big mortgage companies, including how much in the way of servicing rights each can control? According to figures compiled the Quarterly Data Report and National Mortgage News, the top two -- Bank of America and Wells Fargo -- together control 40% of the nation's $9.94 trillion in home mortgages. Just think of all the bulk servicing rights that could change hands if a breakup is forced upon the industry? It would mean a boon to servicing brokerage firms, that's for certain. Meanwhile, in other news, Citigroup was the most heavily shorted stock on the New York Stock Exchange, with nearly 381 million shares sold short during the last two weeks of December. Citigroup's mortgage division ranks fourth among all servicers but has a meager market share (compared to the big two) of just 7.47%...

HUD OIG AUDITS MORTGAGE COUNSELING SERVICES AND RECOMMENDS IT BE DISCIPLINED