Loan Think

THIS JUST IN: Guess which banks - some recipients of billions of dollars in TARP funds - have been buying, in the private secondary market, AAA-rated "toxic" mortgage bonds for prices as low as 60 cents on the dollar? That's right, folks, it's JPMorgan Chase, Wells Fargo and Citigroup. One mortgage manager who works for a REIT that also is a buyer said the AAA-rated securities are being scooped up at bargain basement prices. "It's sort of ironic," said the manager. "Citi is on government life support and they're buying this stuff at 60 cents on the dollar." Keep in mind that in its 1Q earnings statement, JPM chief Jamie Dimon proudly announced that his bank had scooped up $34 billion in MBS during the quarter. Translation: if you think private sector banks want to partner with the government to buy toxic mortgages, think again. It's believed that quite a bit of JPM's purchases involved senior tranche discounted MBS. Other buyers of toxic assets include Blackrock Financial and PIMCO, Bill Gross' outfit. As we reported a few months back some 'scratch and dent' investors are buying performing mortgages for prices as low as 70 cents on the dollar. Why would an institution sell at those prices? Answer: because they're re-underwriting loans, discovering that there were program violations...

Congressional TARP cop Elizabeth Warren (and a friend to mortgage brokers everywhere) was on The Daily Show with Jon Stewart last night, slamming (to some degree) Treasury's accounting of how much bailout money has gone out the door. Ms. Warren says $590 billion in taxpayer cash has been spent. The Treasury's figure is a bit lower. "There is a dispute over" how much has been spent, she said. Meanwhile, she also said that for every $100 of tax dollars spent buying preferred shares in banks, the government (taxpayers) have received just $66 in value. Why? Because the secondary market value of these preferred shares has fallen. At least that was her argument. And I was just kidding about Ms. Warren (she of Harvard) being a friend to loan brokers. Ms. Warren does not like loan brokers in the least…

This is one of the big mistakes I used to make. I am sharing it with you so that you can avoid making the same mistake. Let's get this out of the way first before we go on, ok?

Mortgage bankers take note: one fact that hasn't been widely reported is that the cost to service loans is beginning to rise, in some cases significantly. The Mortgage Bankers Association is still working on its annual cost survey but chief economist Jay Brinkmann noted recently that "costs per loan are way up." The reason for the rise? No secret there: loan modifications. Mr. Brinkmann was speaking at the annual servicing conference of National Mortgage News and its parent, SourceMedia.

FEDERAL TRADE COMMISSION SUES FEDERAL MODIFICATION LAW CENTER OF IRVINE, CALIFORNIA, AND ITS MANAGING PARTNER FOR MISREPRESENTATION IN MORTGAGE LOAN MODIFICATIONS ALONG WITH NATIONAL FORECLOSURE RELIEF INC. AND OTHERS IN SEPARATE LAWSUITS

One of the most common concerns for new reverse mortgage originators is how to develop the proper methods for communicating with seniors. My advice is usually "relax." Oftentimes if you are a good listener, you'll be just fine. That is one of the most interesting aspects of dealing with this group of people, in my opinion. Seniors have incredible stories to tell, and when you hear about their experiences and their situations it will give you great insight about how to handle their reverse mortgage inquiries.

Companies that are looking to embrace social networking as a business strategy are turning to Twitter. Twitter provides the opportunity for corporations to gain a pulse of what customers are saying about their products, services and brands with the ability to instantly respond. This provides a proactive approach to customer service, brand management and new business development. In today’s information age, customers and prospective customers demand access to information instantly. Is Twitter a tool that organizations in the mortgage industry plan to adopt?

National Mortgage News has just released its final tally for the nation's top 100 lenders and the news wasn't entirely gloomy (though it certainly wasn't pretty). These four top 20 lenders actually increased their single-family originations last year: Franklin American Mortgage (+51%), U.S. Bank Home Mortgage (+26%), Branch Banking & Trust (+21%), and Flagstar Bancorp (+16%). The rankings appear in NMN's Quarterly Data Report and a version will appear in next week's newspaper…

If there is one point that I have tried to hammer home during this industry crisis is that mortgage originators still need to keep their marketing activities in place. But should they still be doing the same things they were doing two years ago or should marketing efforts change to face the new reality?

We continue to hear stories about scattered loan modification scams. One loan investor told us he ran into a loan-mod company operating in Southern California under five different names. He said the loan-mod company temporarily prevented him from foreclosing on one of the loans he bought and then tried to work out a settlement with him -- which he declined. The investor said the loan-mod firm is charging consumers between $2,000 and $5,000 for their services…