Loan Think

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.

I'm on assignment in the San Diego area, Carlsbad to be exact. A few weeks ago I was on the Jersey shore (Ocean City) and discovered -- to my surprise -- that not many vacation properties were for sale. However, in the Carlsbad vicinity, the situation is a bit different. There seems to be a fair amount of homes for sale -- and plenty of vacation rentals. I met a fisherman on the beach one morning who told me his son recently bought a house in the area for $350,000. Two years ago, the same house would've fetched $550,000, he said. (The home is a bit inland though.) It seems to be a buyer's market ($500,000 is cheap for anything near the coast). But what will happen when California's $10,000 home buyer tax credit wears off next spring? More later...

Many people associate the Internet with the Wild West - a lawless place where almost anything goes, including trampling over copyrights.In reality, said several experts on the topic, that is not the case. Furthermore, be careful, what you post on a social network site can come back to bite you.For example, E. Thomas Watson, an attorney with the Charlotte, N.C., law firm of Robinson, Bradshaw and Hinson, notes that "creating a catchy viral marketing campaign or YouTube clip can be a big boost for business, but these endeavors are not a panacea for sluggish sales.

48 STATES AND THE DISTRICT OF COLUMBIA NOW HAVE ENACTED THE SAFE ACT; 14 ARE IN EFFECT NOW

Now that Joe Murin has hung up his cowboy boots at the Government National Mortgage Association there’s a growing fear in the industry that his departure could delay the agency from getting involved in aiding the warehouse lending industry. “He was definitely the point guy there on the issue,” said one warehouse consultant, requesting anonymity. A friend of Murin’s told National Mortgage News that, “Clearly he was the guy heading the effort. And it’s not like there’s a lot of people working at that agency.” Meanwhile, it appears that BB&T Corporation is the leading bidder to buy Colonial Bancshares of Alabama, the troubled bank that is also the nation’s largest warehouse provider. But will BB&T keep Colonial’s warehouse unit? Here’s the good news: BB&T is already in the warehouse business. Read the NMN website for an update later today...

Thought I would let you in on a secret, well at least a little known fact.