THIS JUST IN: Are employees of the U.S. Treasury moonlighting as loan officers to make extra cash? We can't say for sure, but we know of at least one Treasury official that's preparing to take his state test. And no, it's not Tim Geithner…
A battle is brewing in Washington over the issue of "horizontal" versus "vertical" risk retention on MBS. The Treasury and/or Securities and Exchange Commission may opine on the issue during the next week or so. The agencies are beginning to take sides and the general perception is that Sheila Bair of FDIC thinks banks can cover the market through covered bonds. Have thoughts on the topic? Drop me a line at:
THE BIG PICTURE: LO COMPENSATION: Mortgage brokers are at their wit's end regarding the coming loan officer compensation rules being promulgated by the government. Here's one loan officer's take on the whole mess: "The way I see it, this law is intended to put brokers and correspondent lenders of all sizes out of business, and will do that in pretty short order I am certain. I for one cannot see myself surviving financially with the coming changes. In fact, I struggle to survive in this business currently. The implementation of this rule will sharply decrease the commissions I earn on each loan meaning that I will have to sharply increase my loan volume to keep up. If I could sharply increase my loan volume, I would do it now." Those comments come from Rich Bailey, a loan originator who works the Ohio market, one of the toughest in the nation. The question is this: will the new Congress do anything to aid the industry? Many brokers I've talked to believe they've been unfairly tarred and feathered by Wall Street, the big banks and the regulators. They also believe their trade group has fallen down on the job trying to argue their case. And as we've noted before, the Federal Reserve could be slapped with a lawsuit over the new rules. Stay tuned…
A MUST ATTEND SERVICING SHOW: The future of the servicing business is up for grabs as the GSEs pull more MSRs from shop after shop. Will banks dominate the sector or will it deconsolidate? To get the answer to those and other questions you may want to attend SourceMedia's fifth annual servicing show in Dallas April 5 – 7. Top servicing and subservicing executives will be there. For more information email:
So, are home prices headed higher in 2011? Don't bet on it, especially if rates keep rising, which they may not until we have our national budget crisis in the Spring when Congress and the White House bump up against a debt ceiling of $14 zillion or whatever it is. I'm not exactly a big fan of the Tea Party but the one thing they bring to the table is their ability to focus the political debate on deficit reduction. How we get meaningful deficit reduction is another matter…
By the way, as for home values, the number I keep hearing is 7% down this year, though I understand that home buying has picked up in the Miami area but only because investors are bottom fishing near the coast…
Are big banks ready to unload their REO portfolios in bulk? Not exactly. For a full analysis on the situation see the Monday paper (yes paper) edition of National Mortgage News. Don't subscribe? Call: (800)221-1809. A sub gets you access to all the premium content on the NMN website too…
LEGAL STUFF: On Friday Massachusetts' highest voided foreclosures on two homes because the servicers that tried to take title to the properties failed to show they held the mortgages at the time of foreclosure. In case you think this means the end of the world for both foreclosures and securitizations, think again. Tom Deutsch, executive director of the American Securitization Forum, had this to say about the case: "The ASF is pleased the Court validated the use of the conveyance language in securitization documents as being sufficient to prove transfers of mortgages under the unique aspects of Massachusetts law. Importantly, unlike the lower court, the Court also said assignments of mortgage can be executed in blank, as long as a complete chain of transfers can be shown through the applicable deal documents. In this particular case, however, the executed deal documents with the loan schedules were not introduced in the lower court and so the Court ruled that an otherwise valid confirmatory assignment was not sufficient to prove right to foreclose. If these documents had been introduced, it appears that the ruling would have been substantially different. The ASF is confident securitization transfers are valid and fully enforceable."
PRODUCT UPDATES: CT Lien Solutions has introduced what it calls "the industry's newest and most robust platform to manage and record mortgage documents with unparalleled speed and ease." Its ILienRED product offers clients an easy-to-navigate web-based tool that allows mortgage back-end processes to be more efficient, transparent and compliant.
QUOTE OF THE WEEK: "The best time to get into a market is when there's blood in the streets" – Tom Wind, CEO of J.I. Kislak Mortgage. (See Monday's NMN as well.)
DATA POINT OF THE WEEK: Mortgage bankers with the highest percentage of refi volume in 3Q: AimLoan.com, Provident Funding, and Astoria Federal. These figures and much more are in the new 3Q edition of the Quarterly Data Report an NMN publication. To order the QDR send an email to:
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THE LAST WORD: Go Jets. Go Ravens. And a late congrats to Patti Smith for winning the National Book Award for 'Just Kids.'
