Loan Think

According to an expert on the topic of e-mail marketing, the biggest issue which impacts the success of such campaigns is deliverability.

A FURTHER REMINDER THAT THE NEW TILA PREDISCLOSURE BECAME EFFECTIVE JULY 30

Just because a consumer is underwater on his mortgage does that mean he'll go into default? Anyone with a brain knows the answer to that question is no. Consider the case of the Las Vegas metropolitan statistical area (MSA) where according to First American Core Logic, 69% of homes have negative equity. If all those homeowners with 'underwater' loans handed the keys in think about what effect it would have on the nation's delinquency crisis. A consumer who is employed but has an underwater loan can ponder this question: I have a job and can make the payments but do I want to screw up my credit score by going delinquent? Meanwhile, I can't stop thinking about the federal and California tax credits for home buyers. Late last week new figures showed that home resales posted their largest monthly increase in 10 years. One of the chief reasons: first-time homebuyers are now acutely aware of when these tax credits expire. Some Realtors in California (and other states) have little signs in their window reminding home buyers about the tax credit...

Who says residential lenders don't advertise their products in newspapers anymore? A local San Diego credit union is running an ad in the Union-Tribune boasting a 5% rate (no FICO scores or down payments are mentioned in the advertisement) for 15-year, 30-year and 40-year mortgages. (In California 15.2% of all mortgages are 90-days or more late, according to the Mortgage Bankers Association. In two weeks National Mortgage News releases its delinquency figures, including individual servicer figures.) Fifteen miles south of San Diego the economic news is anything but good: The Mexican economy shrank by 10.3% in the second quarter and the days of Americans seeking beach homes south of the border are over. (A select group of U.S. lenders once extended credit there but no more.) And one last note: The Federal Reserve's annual retreat in Jackson Hole, Wyoming, is just getting under way. Here's a prediction: President Obama will reappoint Ben Bernanke to another term...

So, for you that responded to last weeks article about how to use the first-time homebuyer tax credit as a down payment, for those of you who are skeptical, I ask you, what do you think about my idea?

Paul Muolo is out of the office. We're running this story in place of his usual column.Colonial-TBW Deal Suspicious from the Get Go

It should be of no surprise to anyone, really, that the national loan delinquency rate on all residential loans is 13%. As most mortgage bankers know, employment drives the housing/mortgage market and until the unemployment situation improves for real -- as in real and massive hiring -- there will be no tangible relief. The Obama Administration's 'Making Home Affordable' progam has been a bust (more or less) not because it's necessarily a bad program but because I sense consumers aren't even bothering to use it and servicers are smart enough not to 'mod' someone into a loan that's going to fail within six months. So how do we solve the delinquency/unemployment problem? Answer: Have all profitable businesses pledge not to lay off workers no matter what. If you need to cut overhead go with a salary reduction plan where all workers -- including management -- have their pay cut. A 10% cut in pay is better than having no job at all. (And it would prevent more loan delinquencies.) Meanwhile, in the La Jolla area where I'm on vacation assignment homes sell for $10 million on the cove. No insurers will write a policy on the homes (so my tour guide told me) because within the next few decades many more multi-million dollar abodes could fall into the water. The cliffs are unstable. Still, you can't beat the view...

In this new section we will explore some rules of selling in detail. Many come from a book from Murray Raphael entitled "52 Ways You Can Achieve Sales Success." While these rules really apply to almost any type of sale I will be sharing with you the personal experiences I have had with these concepts as they apply to the mortgage industry.

Home prices are beginning to firm up in the San Diego area. According to MDA DataQuick, in July the median home price in San Diego was $320,000 compared to $280,000 in January at was presumably the height of the recession. However, in July a year ago the median price was $364,000. (In 2005 the median price was $520,000.) Despite the recent rise in prices, analysts are hardly expecting a return to rapid price appreciation. Negatives hanging over the market: high unemployment in the state, rising mortgage rates and as I keep mentioning, an end to hefty state and federal tax credits for homebuyers. Meanwhile, in this past weekend's column I forgot to mention that GMAC (through its Ally Bank affiliate) is beginning to ramp up its warehouse lending unit. Back during the boom years of mortgage banking, GMAC/RFC had commitments north of $18 billion -- $2 billion of which was multifamily-related . Will it ever see those volumes again? Certainly, the need is there...

Over the last couple of weeks, I've received comments from readers (please do comment on these posts and ask questions if you like) that indicate to me there is still a thirst for the basics of the reverse mortgage product, namely how it works and why it's so important to seniors. While we could go into a great deal of content and detail, space will allow me to say just so much here today.