Loan Think

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...

The start of a new year is like that proverbial breath of fresh air. It is a way to just close the door on all that happened in the previous year, both good and bad, and start over.

The "jumbo" loan market in and around the New York City area continues to have problems. One loan officer told me this morning that most lenders continue to require at least 50% down on home purchases north of $2 million. "I have a client who makes $2.7 million and wants to buy a $3 million Brownstone," one LO told me. "He just got divorced and wants to put 10% down but I can't help him." He noted that some of the largest lenders in the city refer jumbo applicants to their 'private banking' divisions but require a net worth of $1 million. As for the jumbo securitization market coming back any time soon, don't hold your breath...

My colleague Brad Finkelstein and I held a roundtable discussion with the board of the New York Association of Mortgage Brokers at their annual meeting in Melville, N.Y. Participating were Bonnie Nachamie, treasurer; Mary Ann Pino, secretary; Rick Wilson, vice president; Robert Duquette, president; Richard Biondi, immediate past president; Lou Borsellino, lower Hudson Valley regional president; Susan Kreyer, president-elect; Gene Tricozzi, past president; and John Commons, past president.MARK: The years 2008 and 2009 certainly haven't been great years for the mortgage broker industry. On the national level and in New York, what do you think next year will look like?