Loan Think

If anyone still thinks the Federal Reserve will stop buying GSE-backed MBS at the end of March they can look at today's new unemployment release from the Department of Labor and rethink their prediction. (U.S. employers unexpectedly cut 85,000 jobs in December.) All week, we heard media reports quoting analysts who were hoping for a December "surprise." But when the number came out this morning all the optimism that had been built up, popped. With the jobs picture still ugly, it's highly likely the Fed will want to keep mortgage rates low and one way to do that is to keep buying GSE MBS. Economist Mark Zandi was quoted as saying he thinks the unemployment rate will still be at 10% come election day -- which will be bad news for the party in power. At National Mortgage News we spend a lot of time looking at employment reports and related news because we know that employment is a key determinant of where delinquencies and new loan applications are headed. Meanwhile, we understand there was a little pow-wow at the FDIC this past week. The agency predicted that 250 to 300 banks will fail this year. That's probably no surprise, though...

I thought this story, an oldie but a goody, would be the very appropriate for the first article of the year. Enjoy!

2010 brings with it new ideas, innovations and technology. The New Year also brings numerous predictions from analysts regarding their view of the technology space. Here is a list of the 2010 technology predictions from the likes of Gartner, IDC and RedMonk. Highlights of these predictions are listed below.

There could be a quiet little revolution going on among small- to medium-sized mortgage originators that have been selling their servicing rights on a "released" basis in the secondary market. The revolution is this: more firms are thinking of keeping their SRPs - either in-house or assigning them to a subservicer. Why are they keeping the SRP? The short answer is that the price being paid by the mortgage cartel (we all know who they are) for SRPs stinks. For full analysis see the Monday edition of National Mortgage News and Mortgage Servicing News. Don't subscribe? Call 800-221-1809...

We're hearing scattered reports that more small "bulk" servicing portfolios could be hitting the market soon. One broker we know told us that he's working on a $100 million offering but he isn't ready to go public on the details. One reason for these smaller portfolio sales: new minimum capital requirements for seller/servicers from Fannie Mae. The new net worth minimum is $2.5 million. We tried to get some color on this but Fannie's PR department did not return a telephone call about the matter. The GSE's senior vice president of communications, Chuck Greener, departed a few months back...

First, before we get back to the conclusion of our discussion about the books I read, I want to tell you what areas you need to cover in your reading:

So much for the housing recovery. Yesterday's news that the pending home sales index fell by 16% sent minor shock waves throughout the financial system. Or perhaps the story was overplayed in the media? It's hard to say but we know a few things: the government realizes that in lieu of a fast recovery in employment it will have to keep rates low for the remainder of 2010 which means the Federal Reserve will keep gobbling up Fannie Mae and Freddie Mac MBS -- despite stated plans to pull out of that market come the spring. When it comes to buying and refinancing homes, there are two key factors: rates and employment. This Friday the Department of Labor will unveil the latest unemployment figures. A new ADP Employer Services report showed a smaller-than-expected slowdown in job losses in December. ADP is a precursor to the DOL numbers. Economists are looking for a loss of 8,000 jobs after a surprisingly small loss of 11,000 jobs in November...

Over the holiday season I was fortunate to be invited to a client appreciation holiday party by one of my financial planning firms. This is a father and son team and I have worked with them for a few years but had never been asked to attend an event like this. I felt honored to be included. They just said, "Sue swing by if you can, we like you to see what we do for our clients."

FHA ORIGINATION FEES AND NEW SELF-AUDIT MANUALS AS OF JAN. 1, 2010

So, Warren Buffett wants to enter the residential mortgage banking business, does he? The details are far from clear, but apparently Mr. Buffett's firm, Berkshire Hathaway Holdings, has been poking around the industry's ashes for several months. Representatives of Berkshire have been looking at not only "whole" companies but some of the larger servicing offerings out there. Keep in mind that in years past Berkshire has been a large investor in Wells Fargo & Co., as well as Fannie Mae and Freddie Mac. (The company dumped its GSE holdings many moons ago.) Also, Mr. Buffett, at one time, personally owned shares in Countrywide Financial Corp. In other news, the FDIC has a handful of non-performing and performing whole loan pools out for bid, many of which include commercial mortgages. One is a church loan. Also, an agency spokesman confirmed to National Mortgage News this morning that it is exploring the possibility of securitizing some of its residential whole loans...