Loan Think

A lot is being made of the financial incentives that the Obama Administration is passing on to servicers and borrowers for successfully modifying problem loans. Some have said in the past that if investors that accept e-mortgages had taken these same steps — offer lenders a financial incentive to deliver a full electronic mortgage — lenders would have adopted much faster. I’m not so sure myself. Lenders are slow to adopt anything.

So, what was the mood at the Mortgage Bankers Association's secondary marketing conference in Chicago? It all depends on who you talk to. One of our editors said lenders were trying to be optimistic but (obviously) acknowledged the huge challenges that lie ahead, including the warehouse funding crisis and delinquencies. One analyst sent out a message to his clients, noting that every lender he spoke with "is at or near record levels of production. They are originating conforming and government products with the best underwriting standards in years and with the biggest profit margins in years. There was plenty of reflection that this is how 'the business used to be.'" As far as mortgage employment is concerned, every lender that this analyst talked to is looking to hire "good" underwriters…

SIX MORTGAGE BANKERS TO GET $9.9 BILLION TO HELP REDUCE PAYMENTS FOR EXISTING BORROWERS

As more and more seniors and their families are faced with the decision about where mom and dad will live as they age, it is crucial for the family to be sure that the individual needs of each person is met. How can we as reverse mortgage professionals become a resource and guide our clients through the maze of issues to be considered?

We have us a refi boom, indeed. At least that's what it looks like if you gauge the first quarter origination figures released thus far by the nation's mega lenders: Bank of America, JPM Chase, and Wells Fargo. But how's the wholesaler/broker market holding up? How is it being in the trenches for the nation's remaining independent loan brokers, a group whose future looks less than rosy? One broker we interviewed recently said he's considering changing jobs to become a retail LO. This broker, who requested anonymity, gave us his perspective on dealing with Bank of America's wholesale department: "Their rates are simply not competitive. I have at least 20 other wholesale lenders that will offer my borrowers better terms. Their warehouse/correspondent rates are just as bad." This broker didn't want to be quoted because he still might use BoA and is on its "approved list"…

For those familiar with my editorials over the past few years, one of the points I have consistently made is that customer service will win out in attracting new customers and retaining old ones.

Social media makes it extremely easy for people to share information. This information can be in the form of opinions, ideas, complaints, specific needs and whatever a person is thinking at any given time. People are providing this information in blogs, tweets, videos and comments on online message boards, including employee activity. The mortgage industry is beginning to embrace social media as an additional business development and marketing strategy. While there are numerous benefits and opportunities for mortgage industry participants to engage in social media activity there are also some pitfalls if this activity is not monitored properly. As a business what are you doing to monitor this activity? Are you protecting your company’s good name and strong brand reputation?

When will the private label MBS market return? And will it need the government's TALF program (Term Asset-Backed Securities Loan Facility) to spark its revival? Both are good questions. For now it's safe to assume that the privatel label MBS market is dead and won't be back any time soon. Some may argue that it will never come back. Meanwhile, there's a more important question to ask: when the refi boom runs its course, what will mortgage originators do then?

Monopolies are good for one thing: profit margins. In a handful of conversations with analysts and mortgage executives this past week one thing seems clear: earnings on new originations are expected to be quite strong in 1Q. We're already seeing evidence of this from Wells Fargo. But keep in mind: the nation's mega lenders are now a cartel. They've marginalized loan brokers -- and correspondents. Non-banks are having a tough time getting a warehouse line and most of the top five mega banks/mega residential lenders are loathe to give them one or get too heavily involved in that business. And why should the top five? They have it good right now: little competition and the ability to heap on adder fees to new borrowers. Can anyone break the cartel?

Have you heard the story of the donkey that falls into a well? The story is that the old donkey had been a part of the farmer's life since birth. The farmer loved the donkey and the donkey was a great donkey. One day, the donkey got too close to the well and fell in. The farmer was very dismayed. He knew if he didn't get the donkey out of the well, the much beloved donkey would die and ruin the water well at the same time.