Loan Think

Here are a few more details about the Obama Administration’s proposed Consumer Financial Protection Agency and how it affects loan brokers: the CFPA can “impose on mortgage brokers a duty of best execution with respect to available mortgage loans and a duty to determine affordability for borrowers.” A Treasury Department white paper on the CFPA plan notes that loan brokers “often advertise their trustworthiness as advisors on difficult mortgage decisions” but notes they often accept “side payments from product providers.” I would assume those side payments are yield spread premiums. As for brokers advertising their skills, I can’t say I’ve seen too many direct mail pieces lately. And in case you missed it: late Tuesday Treasury sent a 152-page legislative proposal on the CFPA to Capitol Hill. Let the games begin...

A common question asked by new reverse mortgage originators is "what is the best way to get started?" It's a question that is to be expected since beginning any new venture requires a plan.

The main (economic) event of the week is this Friday – that’s when the Department of Labor releases its June unemployment report. Residential servicers and loan modification experts know full well the corollary between the unemployment rate and mortgage delinquencies. The jobless rate hit a 25-year high of 9.4% in May, jumping from 8.9% in April. Will the jobless rate cross the 10% threshold? Meanwhile, one mortgage vulture fund investor who’s based in California told us recently that the “bottom-end” of the housing marketing is “smoking” in the state. Specifically, he said homes that sell for $500,000 or less are moving quickly, especially near coastal areas. As for the job market in SoCal, he said that his firm recently advertised for a bi-lingual debt collector. Within three days he received 75 applications for the job...

Many businesses are searching for something that will enable them to come through the current tough economic conditions successfully.

TAYLOR, BEAN & WHITAKER OF FLORIDA SETTLE CHARGES THAT IT ALTERED INCOME AND ASSETS TO FUND NONTRADITIONAL LOANS

For years financial analysts have been wringing their hands over the low U.S. savings rate. Well guess what; we are no longer a nation of spendthrifts: the Commerce Department reported that the personal savings rate soared to 6.9% in May -- a 15-year high, while spending rose by a modest 0.3%. This is potentially bad news (believe it or not) because to get the U.S. economy moving again consumers need to spend. Then again, how can you spend if you’ve lost your job or fear losing your job? But there could be a silver lining to this bad news of “savings fever.” All that saved up money might, potentially, be used to for downpayment money on a new house. This might even lead to lower loan-to-value ratios on mortgages. Or am I dreaming?

Thank you for responding over the past two weeks to my request for your personal experience with the use of credit repair in your business. I am still compiling the results. If you have not provided information yet, please take this opportunity to go to the bottom of the article and comment. Thanks in advance.

With the advent of webinars, it's a fair question to ask: will the ease and convenience of webinars ever replace remote conferences with their unpleasant tendencies towards uncomfortable plane rides and uncertain hotel service?After all my years on the road as a business traveler (I'm approaching 400,000 frequent flyer miles!) this is not an academic question to me. The idea of leaving the suitcases in storage and substituting a telephone and an Internet screen has certainly gotten some consideration as this new technology has gotten better. (How many of you have started an Internet presentation, couldn't access the url, and asked to have the slides e-mailed to you so you can follow along? But that's happening less and less.)The short answer is this: webinars will not replace live conferences. But they absolutely have their place.Humans are social beings. It will always be easier to do business in person than remotely (that's why salesmen always want to come in to see you). It's also helpful to get out of the office once in a while and into the real world, to see old friends or put a face to a name. We're wired that way, and that isn't going to change.Plus, a full-scale conference isn't just about the sessions. I've often heard it said "the real meeting is out in the hall." Essential business networking takes place in the exhibit hall, most prominently, but also in restaurants and cocktail parties and golf excursions scheduled around the conference. These aren't replicable at a webinar.And, traveling has its charms. Pleasant cities (San Francisco, Palm Springs, Miami and Atlanta come to mind), tourist opportunities, comfortable hotels, great dining, all these things can be wonderful on a trip. (Of course, the actual traveling itself can be tiring and nerve-wracking.) I've had the opportunity to travel and see all 50 of these United States, mostly on the mortgage beat, and I wouldn't trade that for a headset and a PowerPoint on a monitor.That being said, the webinar has its good points as well. It needs to be really focused to one topic, and to be long enough to be comprehensive but not too long to make the eyes glaze over. And it has to have great speakers. At a remote show where you might go to ten sessions, one or two duds isn't a catastrophe. But for a webinar, everybody's got to really have game!I've participated in dozens of live events put on by our affiliate SourceMedia Conferences over the years, but last month, we put on our first editorial webinar. (I've participated in a bunch as an attendee.) The topic was a hot one: the first month's experience of the Home Valuation Code of Conduct.My colleage Brad Finkelstein, managing editor of Origination News, moderated, and I listened in. Our speakers were Alan Hummel, senior vice president and chief appraiser, Forsythe Appraisals, Tony Pistilli, chief retail appraiser for US Bank, and Brian Coester, CEO of Coester Appraisals.The webinar went off very well. The speakers were knowledgeable and articulate, there was no "dead air" time, which can be deadly, and the attendees deluged Brad with questions for the panelists. You always worry there won't be any audience participation at an event-this one had to be called on account of darkness as we ran out of time to get to all the questions.So, I still see the value of the traditional two or three day mortgage meeting in an interesting locale. But I look forward also to doing more interesting, focused, lively webinars on the hot topics in mortgage lending.

Here's the definition of the word "conundrum": A paradoxical, insoluble, or difficult problem; a dilemma. As I work on the paperback updates for "Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis," I've been pondering what to tell the reader in regard to solving/preventing another financial calamity the likes of which our nation is still working through. We indeed have a financial system with so many giants (AIG, Lehman, Bear Stearns, Citigroup, Bank of America) that if one of these go under it can cause damaging ripples in the fabric of our economy. These institutions are "too big too fail," or TBTF. So, then, is it better to have thousands upon thousands of smaller financial institutions, each with specified and distinct product lines to serve our nation's consumers and B2B customers? During his grilling on Capitol Hill this past week Federal Reserve chairman Ben Bernanke was asked about TBTF and whether our nation might better be served by having thousands upon thousands of small banks - just like we had in the old days (pre-1990). His response: "I don't think we can go back to a world of having [many] smaller banks." But we, as a nation, can't live with TBTF either. Right? A conundrum it is. Feel free to respond to this column on the message section at the end...

File this under “too big too fail and too big to worry about pesky foreclosure moratoriums”: According to a report in The Orange County Register, Bank of America, Citigroup and EMC Mortgage Corp. are among seven servicing firms that have received permanent exemptions to California’s 90-day foreclosure moratorium, which began last week. (EMC is owned by JPMorgan Chase which inherited the subprime/specialty servicer when it bought most of Bear Stearns last year.) The newspaper says more than 20 other lenders and loan servicers, including Wells Fargo, have received temporary exemptions which could become permanent...