Loan Think

For the next few weeks, Broker Universe will feature some of our favorite Sue Haviland columns from the past year.In a follow up to my previous piece, let’s look at what we as reverse mortgage originators can do to be proactive about how we and the reverse mortgage product are perceived in the market place. What can you do today right in your town to improve your standing in the community and your profession? It’s probably a bit out of the box but you CAN do it. And it will elevate you to a new level and bring you more credibility.

Once again, I have to ask: what is it with Long Island and FHA lenders? Late Monday FHA slammed the door on Premium Capital Funding of Jericho, which was doing business as TopDot Mortgage. The government permanently and immediately ripped the government eagle from TDM's loan menu. The company, it appears had stolen a page from Lend America's playbook by advertising heavily on TV (in multiple markets) using late night infomercials. (One source said the lender was spending $200,000 a month on TV ads.) And like Lend America (they of Melville), TDM has claim rates that are through the roof. (See theNational Mortgage News website early this afternoon for a full update on what went wrong at TDM.) But even though FHA shut them down on Monday, it appears the writing was on the wall last week. I received a tip that the company was about to layoff a large chunk of its staff in Long Island. Also, a mortgage firm in the area advertised for an underwriter position (just one opening) and according to one source familiar with the story, this firm received 50 resumes -- all from TopDot underwriters. One company insider told me this morning that TDM's owners "will fight" the FHA action. Perhaps, but will they hire Rudy Giuliani to do their bidding, which is what Michael Ashley over at Lend America did?...

Relief efforts continue to pour into Haiti after last week’s catastrophic earthquake there. Here in the U.S., technology is changing the face of giving, providing effective tools for raising money for those in need. Provided are a few examples of technology and social media’s impact on the relief efforts.

Networking is one of the keys to developing a successful referral-based mortgage loan origination business. Loan officers need to have personal contact and relationships with other professionals so that those professionals can trust them with their clients.

Will the Federal Reserve really stop buying Fannie Mae and Freddie Mac MBS come March 31? That's the big question hanging over the mortgage market right now. If the Fed stops buying will the GSEs themselves step up and buy their own MBS? If they do, one can hope that Fannie and Freddie have some darn savvy mortgage traders running their desks. Both could stand to make -- or lose -- a lot of money in the months ahead. If the Fed does, indeed, go 'Cold Turkey,' mortgage rates will rise, which will increase the value of mortgage servicing rights. And which companies own the most servicing? The answer is obvious: Bank of America, and Wells Fargo & Co. with 45% of the market. As Mel Brooks once said, “It’s good to be king”...

The Republicans couldn't have had a better week. It started with Scott Brown winning a Massachusetts senate seat and was capped by the Supreme Court ruling that corporations have 1st Amendment rights and the right to be the deciding contributor in the election of presidents and congressmen.

As we reported last week, Total Mortgage Services of Connecticut soon will enter the wholesale sector and hopes to table fund its first loan by the end of this month. For 13 years it's been a retail lender. But we continue to hear rumors that a handful of hedge funds might enter the wholesale space with an eye toward jumbo lending, a niche that is suffering terribly from a lack of liquidity. John Walsh, who runs TMS, told us he recently facilitated a $2.2 million jumbo loan, offering the borrower a no-points 4 and 1/8th five-year ARM. Of course, the borrower put 50% down on the property. Mr. Walsh declined to name the funder. As for TMS' move into table funding, the company has hired Jim Lynch to be its EVP of wholesale and Robin Buttner as wholesale coordinator. Mr. Lynch used to work for Chase, Ms. Buttner for Homecomings...

Have you done enough planning? Have you learned enough yet to solve your most pressing problem?

THIS JUST IN: Are mortgage insurance firms beginning to get more aggressive, taking on additional risk? The answer is yes, according to FHA chief David Stevens. Keep in mind that five short years ago FHA's market share was a blood-curdling low 2.5%. The program barely had a pulse. Most of the industry had left FHA for dead, choosing instead to promote "liar loans" from Ameriquest, Argent, First Franklin. But that was then. Today, FHA has a share of close to 30% (and the U.S. economy a big gaping hole in it, but you already know about that.) For the full analysis see Brian Collins' story in the Monday edition of National Mortgage News. Don't subscribe? Call 800-221-1809...

Was the fourth quarter a good one for residential lenders? It all depends on the firm and where they are located (and lend). Cherry Creek Mortgage of Greenwood Village, Colo., had a blow-out quarter: $773 million in residential fundings compared to $431 million in the year ago period. Meanwhile, the yield on the 10-year has been slipping a bit this week, which means, perhaps, mortgage rates will not increase all that much in the months ahead. Keep your fingers crossed. Meanwhile, President Obama said this morning he will ask Congress to bar banks from proprietary trading or from owning, investing in or sponsoring hedge funds or private equity funds. Sounds a bit like he wants to re-erect the Glass-Steagall Act...