Loan Think

In the last edition of this blog I mourned the loss of an electronic mortgage pioneer, AmTrust. As it turns out, that obituary was premature and this mortgage technology editor couldn’t be happier. New information has come to light that will make e-mortgage believers very happy, indeed.

It's the end of the year and what better time to take stock and throw out three "wishes" for 2010. Most of these - as you might expect - are mortgage related. So, here goes:

It's all about making someone pay, isn't it? When Fannie Mae and Freddie Mac get stuck with a delinquent loan they try to force a seller/servicer to repurchase the mortgage. Of course, they have that right, depending on 'reps and warranties,' the underlying contractual terms, and (this is the big one) fraud. As NMN's Brian Collins reported recently, the GSEs are trying to get some of their largest seller/servicers to repurchase millions of dollars in troubled loans. Meanwhile, the lenders try to recoup their losses via claims they put in with mortgage insurance companies. But the MIs -- which have already shelled out billions in claim payments -- aren't rolling over so easily anymore. In a complaint filed in Superior Court of California, Bank of America alleged that MGIC is denying "millions of dollars in valid mortgage insurance claims" the lender has submitted. A spokeswoman for BoA -- the nation's largest funder of residential loans -- would not discuss the situation in depth with our sister publication American Banker. MGIC says in a Securities and Exchange filing that it will "vigorously" defend itself against the BoA lawsuit...

Before we continue our discussion about the books I read, let me go over the four areas you should be looking to cover in your reading:

As 2009 winds down and many of us are traveling to see friends and family over the next week or so, it's easy to get sidetracked in the hustle and bustle.

ARIZONA REAL ESTATE AGENT PLEADS GUILTY TO FRAUD

Yes, being the e-mortgage booster that I am, I am still in withdrawal over the loss of AmTrust Bank. They were so critical to the e-mortgage movement. They did such great things for the cause. But sadly, they are no more. So, what happens to e-mortgages from here?

Residential jumbo lending is beginning to show some signs of life again, according to recently compiled figures by National Mortgage News. Bank of America increased its jumbo fundings by 187% in 3Q but there are some caveats to consider here. There is "normal" jumbo lending above the standard Fannie Mae/Freddie Mac loan limit and then there's the "GSE jumbo limit" which is temporary and will sunset someday but don't hold your breath on that one. Meanwhile, there is not much of a secondary market for jumbos unless, of course, your institution is selling them servicing-released to BoA, Wells, and a few others. These mega banks hold the loans in portfolio and why not? They carry a yield 1% higher than the GSE rate (at least) and the mega banks have a cost of funds that is next to nothing. Can you spell 'profits'? Readers know that there is no jumbo securitization market any more. Will there ever be a "covered bond" market in the U.S. that includes jumbos? We shall see. And one last point. New FASB rules that go into effect January 1 will force banks to consolidate some of their off-balance sheet assets. What does this really mean? Answer: banks will need to hold additional capital against these assets because, well, they are now on the books. More capital and more balance sheet means that some depositories might be less inclined to hold jumbos...

How to Make Next Year a Stronger OneLeadership is what will make 2010 a better year for your company than 2009 was, declared one expert on the topic. Businesses must have a long-term fix to turn things around, not a magic bullet or a trendy program or a charismatic leader. There must be a culture built on good, solid, time-tested leadership principles.

As January is quickly approaching and the end of 2009 is in sight, it provides a great opportunity to review and reflect upon some of the most talked about technologies of 2009. In 2009 there were a number of innovative technologies that were either introduced or gain market acceptance. In looking back here are some of the top technologies.