Origination

Mortgage industry groups are warning Department of Housing and Urban Department officials that they have to postpone the Jan. 1 effective date of a new Real Estate Settlement Procedures Act rule to avoid a compliance train wreck. "Despite the best motivations of HUD and the sincerest efforts of the industry, we are headed for a mortgage market train wreck on the tracks of RESPA compliance," according to six industry groups. The American Bankers Association, American Escrow Association, American Financial Services Association, Consumer Mortgage Coalition, Housing Policy Council and Mortgage Bankers Association contend that there is not enough time left to implement the new RESPA disclosure regime by yearend. "HUD has not provided clear and needed guidance on a timely basis to enable the industry to be fully RESPA-compliant by the first of the year," the Oct. 12 letter says. A spokesman said HUD secretary Shaun Donovan just received the letter and declined to comment at this time.

In a follow up to my previous piece, let’s look at what we as reverse mortgage originators can do to be proactive about how we and the reverse mortgage product are perceived in the market place. What can you do today right in your town to improve your standing in the community and your profession? It’s probably a bit out of the box but you CAN do it. And it will elevate you to a new level and bring you more credibility.

Short-sale listings passed the 10,000 mark in the struggling Las Vegas-Henderson housing market in September, even as underwater deals that closed during the month were up 22%, broker Robert Jenson of the Jenson Group reports. There are now almost twice the number of short sales on the market as there are bank-owned listings, the luxury Re/Max broker reports, but REO properties outsell short sales, four-to-one. Short sale offerings account for more than half the 19,366 houses currently listed for sale at $1 million or less with the local multiple listing service. By Mr. Jenson's count, 3,217 houses sold in the Vegas-Henderson market in September. That's an increase of 5.3% from August. But it pales in comparison to the nearly 20,000 houses listed with the MLS. In the $1-million-plus category, 17 properties sold in September, leaving 649 desert palaces still up for grabs. Forty-two of those listings are short sales, 21 are foreclosures. Overall, distressed sales account for four out of every five sales in the region, the broker said.

New home sales in California in August rebounded somewhat from July's low levels, but they were still 13% below the same month last year, according to the California Building Industry Association. The monthly CBIA/Hanley Wood Market Intelligence sales and pricing report counted 2,617 house and condominiums sales in the subdivisions with 10 or more units in August compared to 3,001 in August 2008. Single-family sales were down 20% and sales of townhouses and multiplex units were off 35%. Condo sales, on the other hand, were inexplicably 26% higher than a year ago. CBIA president Liz Snow blamed the decline on the end of the state's $10,000 homebuyer tax credit, which she said came "too soon." Said Ms. Snow: "The best thing you can say about California's experience with the state homebuyer tax credit is that it worked. It did everything it was supposed to do: restore buyer confidence, stimulate activity in dormant housing markets and put people back to work." She added that the latest dismal sales figures "should encourage lawmakers to revive the program."

Lend America, a nonbank mortgage originator, is launching a new correspondent program to buy closed Federal Housing Administration loans from certain lenders on a flow and bulk basis. The Melville, N.Y.-based firm said it hopes to buy its first pool of loans by this Thursday. The mortgage banker will buy pools as small as $1 million. It is calling the new channel its "Mini Ginnie Correspondent" program and the company is a Government National Mortgage Association servicer. However, the program is not related to nor done in conjunction with Ginnie Mae. The effort is part of Lend America's strategy to build servicing volume. The company estimates that by the second quarter of 2010 it will be purchasing $500 million per month in product. Lend America is aiming to compete in the space by offering to small to midsized mortgage bankers what chief business strategist Michael Ashley said will be stronger servicing, fewer credit overlays and more considerate business relationships.

eLynx, Cincinnati, has launched an electronic closing network (eCN) service that lenders can integrate into their closing process to increase loan quality and provide more control in order to meet the government's new demands for more accurate closings. The launch, which came at the annual MBA show, is designed to help lenders ensure that borrowers and settlement agents have a better experience at the closing table. The technology firm said a top five U.S. lender/servicer is now using the eCN but did not name the company.

Global DMS, Lansdale, Pa., has unveiled a new technology tool that allows lenders to transfer and receive Home Valuation Code of Conduct compliant appraisals. Announced at the Mortgage Bankers Association convention in San Diego, the tool, AppraisalTransfer.com, is an online portal that hopes to solve the "portability issue" of appraisals, said Global DMS chief operations officer Matt McHale. While it is permissible to transfer appraisals, lenders are reluctant to do so, he said. Even if there is portability it is usually just a transfer between users of the same appraisal management company. With AppraisalTransfer.com the goal, said Mr. McHale, is to allow any lender to have access to the appraisal. (There is no charge to the lender.)

Pointing to a significant rise in income fraud, Rapid Reporting has launched AccountChek, an electronic verification of deposit service that helps lenders, brokers and servicers detect financial account misrepresentations. Unveiled at the MBA show, AccountChek leverages direct access to more than 10,000 financial institutions, including insurance and investment firms, to confirm the accuracy of borrower-provided account information. The company says AccountChek automatically analyzes each account for suspicious activities that could indicate potential mortgage fraud.

Stewart Lender Services, Houston, has reorganized its operations, removing all of the silos customers had to go through to access its services. The company announced the reorganization at the Mortgage Bankers Association convention in San Diego. Jason Nadeau, president and chief executive of SLS, said in an interview that up until now SLS was organized in such a way that a customer had to contact a different person every time they wanted to use a different service. The new system creates a single point of contact. Given the consolidation in the mortgage industry, it was necessary for SLS to reorganize its approach to match the direction the market is going, he explained. Mr. Nadeau also spoke about the recent growth of SLS, whose revenues have increased 20-fold. The company started with a center in Houston and then added one in Tampa with others following in Dallas, San Diego, Irvine and Phoenix. SLS also has been aggressively recruiting new employees.

Freddie Mac said it will give a boost to the struggling warehouse lending market by providing standby commitments to purchase qualifying loans in the event a seller/servicer cannot meet its funding obligations or fails. A source close to the situation told National Mortgage News that the GSE has been operating a version of this pilot program since June. The participating warehouse provider in that program is Natty Mac of Florida. (The lender is Provident Funding Associates of Burlingame, Calif.) Freddie said pre-funding reviews are required. Fannie Mae is working on a similar program. "The warehouse lending industry has nearly exited the market making it increasingly difficult for lenders to fund loans," said Freddie CEO Charles E. Haldeman. "We're proud to help bring much-needed additional liquidity to the residential and apartment financing community." The GSE noted that seller/servicers interested and that qualify for the program will need to enter into a separate agreement directly with the participating warehouse lender. The credit line from the warehouse lender that is supported by the standby commitment will fund only the loans the participating seller/servicer intends to sell to Freddie. Fannie's pilot program is expected to be slightly different.