Feb 25, 2011

What to look for in an LOS (Loan Origination Software)

Today's mortgage lenders manage complex product options, mandatory investor and regulatory compliance, information security, and the integration of multiple lending technology tools. Mortgage lenders need to understand that successful integration of technology is a requirement for meeting mortgage banking objectives. Web-Based, loan origination software that integrates with mortgage service providers, streamlines operations, and simplifies compliance would be key to managing a successful origination shop in today's climate.

Here are some things to consider while selecting an LOS

Borrower data integration ... Borrower inquiries should be received via your website or by your loan officers through an easy interview style online interface.

Credit ... instant tri-merge or full residential mortgage credit reports should be available on demand 

Data Checks: Integrated data checks should be continuously updated and monitored at various stages of loan processing.

AUS: Two way interfaces should provide users with a more efficient method of approving loans and simultaneously reduce data input or approval inconsistencies.

Status Sheets and Loan Conditions: Status items and loan conditions should be based on the characteristics of the loan data and can be customized to support the lenders' workflow.

Forms ... an extensive print form library should be readily available and bundled into groups based on the loan program and customer data. Forms should be able to be printed or emailed and automatically populated for the application, initial disclosures, closing docs, HUD/VA specific forms, investor specific forms, and various forms used for loan processing and administrative purposes.

Appraisal and Title Reports should be able to be ordered and managed directly within the LOS.

Snapshots: Lenders should be able to see data snapshots, including final values that assist with secure data collaboration and are automatically created based on the status of the loan and the lenders workflow.

Final Underwriting: Final automated underwriting should be completed to validate processed data.

Pricing and Locking: Interest rate and pricing options should be made available to originators and secondary marketing based on cost of funds and are automatically updated throughout the business day for supported loan programs.

Closing Doc Prep should be completed via the LOS' supported print forms or with securely integrated third party vendors.

Stacking & Investor Sheets ... printed directly from the loan origination system reduces the workload on the shipping department and enabling maximum delivery effectiveness.

Post Closing Tracking ...should be accomplished within the system to ensure complete delivery of loans to your investors.

The above information has been compiled by Privo Corporation (aka PrivoCorp) - the fastest contract mortgage processor - for the benefit of our clients and prospects in the US markets. The article is based on an ezinearticle.com document which can be found at http://ezinearticles.com/?Loan-Origination-Software---Maximize-Mortgage-Lending-Efficiency&id=2363478

Cincinnati home sales start '11 on positive note

Home sales in the Cincinnati region started the year on a positive note, especially in Northern Kentucky.

While both the Cincinnati Area Board of Realtors and the Northern Kentucky Association of Realtors reported gains, Northern Kentucky sales were up 16.5 percent.

There were 892 total units sold in southwest Ohio in January, up from 860 sold in the same month last year, according to the Cincinnati Area Board of Realtors. Sales are down 25 percent from December, but January and February are generally the weakest sales months of the year.

The average sale price was $140,761, down 6.4 percent compared to the same month last year.

“The increase in the number of sales shows the continued stabilization of our local real estate market,” Pete Kopf, president of the CABR, said in a news release. “The dip in average sale prices is indicative of a 12.6 percent increase in lender-involved sales in January 2011 compared to January 2010. The continued cleansing of lender-owned properties from the available inventory is important for the complete recovery of the housing market.”

Nationwide, January home sales were up 2.7 percent from December and 5.3 percent compared to January 2010.

In Northern Kentucky, there were 226 home sales last month, up from 194 in the previous January.

In addition, the average sale price increased nearly 30 percent, to $165,862. The jump in average sale price was attributed to the closing of three properties over the $1 million price point.

Even without those sales, the average sale price rise to $153,247.

“We were pleasantly surprised when we saw the final numbers from January,” Mike Becker, president of the Northern Kentucky Association of Realtors, said in a news release. “To see positive numbers across the board in a month that is typically affected by seasonal weather conditions was a definite morale booster.”

Read more: http://www.bizjournals.com/cincinnati/news/2011/02/23/cincinnati-home-sales-start-11-on.html?ed=2011-02-23&s=article_du&ana=e_du_pub

Feb 22, 2011

Mortgage Loan Origination Software - 10 Functions of Mortgage Banking

Regardless of a mortgage lending organizations' size, mortgage loan software, data security solutions and automation tools and services should be able to assist with mortgage loan automation requirements. In today's chaotic mortgage lending environment origination and document security systems need to be easily configured to emphasize a company's special needs and increase efficiencies across all aspects of the loan origination process, allowing lenders to increase quality and productivity.

Technology-driven automation is the key to succeeding in the increasingly complex, deeply scrutinized mortgage industry. Web-based (Software-as-a-Service), Enterprise mortgage software that supports the ten primary functions in mortgage banking will provide lenders with the necessary competitive advantages to succeed in today's mortgage industry.

Ten Primary Functions in Mortgage Banking

1. Mortgage Web site design, implementation, and hosting to provide product, service, loan status, and company information to mortgage customers and business partners
2. Online loan applications for gathering information from borrowers and business partners that issue loan terms, disclosures, and underwriting conditions
3. Loan origination software for managing loan data, borrower data, property data, general status reporting, and calculations
4. Interface systems to send and receive data from real estate service providers, such as credit reports, flood determinations, automated underwriting, fraud detection, and closing documents
5. Internal automated underwriting system that is simple enough for originators and sophisticated enough for underwriting portfolio loan products
6. Document generation for applications, upfront disclosures, business processes, and closing documents
7. Integrated imaging that is used from loan origination to investor delivery and for file archiving
8. Interest rate and fee generation along with program qualification guidelines
9. Secondary marketing data tools to track loan revenue and investor relationships, including warehouse line management and interim servicing to complete the back-office system
10. Reporting such as loan delivery, year-end fee reporting, and HMDA reporting for loan application disposition

Web-Based, enterprise mortgage software that supports the ten primary functions of mortgage banking simplifies compliance, maximizes operational efficiencies, and increases profitability.

Article Source: http://ezinearticles.com/?Mortgage-Loan-Origination-Software---10-Functions-of-Mortgage-Banking&id=2363610

Feb 19, 2011

House Flipping Encouraged By FHA

If you know what you`re doing, house flipping can be a prosperous undertaking. FHA lending has become very popular in the last few years, insuring loans to credit-worthy borrowers who can`t make a large down payment. In the past, the Federal Housing Administration has discouraged house flipping but in recent years, the agency has changed a rule that now encourages it, and a flipper can now make a much quicker buck.

Greg Mayer has been flipping houses for 15 years but he refers to himself as more of a renovator, taking his time restoring a home to as close to its original character as possible.

"I don`t like buildings being torn down. I like to see what could be salvaged out of them, what can be redone with them," says Greg.

Greg has a pretty large undertaking with his new endeavor, a 1930s Mandan home. He`s not only restoring, but adding about 900 extra square feet, fit for a small family looking for their first home.

"The carpet will get pulled up. There`s hard wood flooring that will be redone," says Greg.

Greg says depending on the house, you could make a nice profit flipping but that`s not really why he does it. He simply enjoys doing the work. For those who are looking to make some quick cash, the Federal Housing Administration is making it easier. It extended a rule this year that allows an investor to buy and sell a home to a buyer using FHA financing right away, instead of having to wait 90 days, like in the past. The idea is to get rid of some extra inventory left behind from the recession.

"People got foreclosed on or people had to leave them and maybe they didn`t leave them in the best conditions. It gives investors the ability to go in and turn that house if the house just needs a little cleanup," says Joe Sheehan, a loan officer with Cornerstone Bank.

The extension also came with some clarifications. To turn a house right a way, an investor can only make up to a 20% profit. Or they can wait 90 days and make a larger profit. Greg hopes to have his latest project finished by May or June for interested families in search of possibly their first home.

Clarifications in the extension also mean a seller can get a second appraisal to try and get more value for the home. FHA lending has become the norm in North Dakota, and makes up 30% of all loans nationally.

Read more -visit http://www.kfyrtv.com/News_Stories.asp?news=46790

Feb 18, 2011

Let's try this again: Mortgage bond ratings return with scrutiny

Mortgage-backed securities are back, but Moody's, Standard & Poor's, and Fitch are approaching their job rating them with very different tactics.

Mortgage backed securities

What would happen in an earthquake?

The big three credit rating agencies are in trouble for not taking taking risk seriously enough when they examined bonds made from residential mortgages before the housing market crashed. They've been roundly criticized for their overly generous assumptions about housing market hazards (Prices go down? No way!), and for the abysmal way that AAA-rated, mortgage-backed bonds performed during the financial meltdown.

Now it looks like those same agencies are arguing to see who can be the toughest on those very same securities.

Redwood Trust (RWT) is getting ready to bring to market a $290.4 million residential mortgage-backed security. It's called Sequoia Mortgage Trust 2011-1, and among other things it features a top AAA rating from Fitch. But in the prospectus filed with the Securities and Exchange Commission, Redwood mentions that it had "terminated" its request for Moody's to rate Sequoia because Moody's thought the loans in the pool were riskier than Redwood thought they were. Moody's wanted a 10% subordination level in order to stamp the deal with an AAA rating. (Think of subordination as a protective cushion should mortgages in the pool start going bad). Fitch agreed with Redwood that a 7.5% subordination level would be fine.

Read more-http://finance.fortune.cnn.com/2011/02/18/lets-try-this-again-mortgage-bond-ratings-return-with-scrutiny/

Feb 15, 2011

Fannie and Freddie: Obama offers 3 options for mortgage market overhaul

WASHINGTON — The Obama administration laid out three broad options Friday for reducing the government's role in the mortgage market. All three would almost certainly lead to higher interest rates and costs for borrowers.

The administration said in a report that the government should withdraw its support for the mortgage market slowly, over five years or more. The report describes a path for winding down the troubled mortgage giants Fannie Mae and Freddie Mac.

But rather than making a single recommendation, the administration offered Congress three scenarios and will let lawmakers shape the final policy.

Read more ..visit-http://www.usatoday.com/money/economy/housing/2011-02-11-fannie-freddie-mortgage-overhaul_N.htm

Feb 3, 2011

Wells Fargo Is Ready to Roll

Careful mortgage lending practices helped the San Francisco bank avoid the problems plaguing large rivals such as Bank of America and Citigroup

Some of America's premier commercial banks, from Bank of America (BAC) to JPMorgan Chase (JPM), are still digging out from the 2007-2009 financial crisis, facing fat settlements and legal fees to resolve claims related to their mortgage portfolios that could yet cost billions of dollars. Not so Wells Fargo (WFC), the fourth-largest U.S. lender by assets, which is viewed by analysts as one of the commercial banks best positioned to sprint ahead.

Wells reported $12.4 billion in 2010 net income, beating 2009's number and placing it second in profits among the nation's largest commercial banks behind JPMorgan Chase. The San Francisco-based company moved into the top spot in mortgage lending in 2009, and held it last year, originating $386 billion in home loans as its main competitor, Bank of America, devoted more resources to working out troubled mortgages. "Wells is in a uniquely strong position to continue to outperform its peers," says Andrew Marquardt, an analyst at Evercore Partners (EVR) in New York. "They have weathered the storm far better than most."

Prodded by lawmakers, government-controlled mortgage companies Fannie Mae (FNMA) and Freddie Mac (FMCC) have pressed banks to buy back loans that were based on faulty data about homes and borrowers. Bank of America, JPMorgan Chase, and Ally Financial have settled in an effort to limit their liability. Bank of America paid $2.8 billion in December to end some repurchase demands.

Read more-visit http://www.businessweek.com/magazine/content/11_06/b4214043656537.htm