Economic indicators reasonable

The Federal Reserve did not change its target for short-term interest rates, and prices--while higher at both the producer and consumer level--remained reasonably in check. Industrial production, housing starts, and the index of leading economic indicators posted advances. For more details check out the Vanguard Weekly Review @ http://www.vanguard.com/visit/econweek121809.

Of course new home purchases continue to rise - probably as a direct result of the increases in foreclosures. While this alone is not a great reason to cheer on - it is reason to look and and consider the fact that individuals are confident about the future and are willing to take a risk in investing in the future - either on their primary home or their investment home. As the US economy is very dependent on consumer sentiment (on the retail side) - even these small numbers should give a lot of hope to investors and economists who are keenly watching the situation.

PrivoCorp - the fastest processor of mortgage home loans in the US is in a great position to help lenders, banks and net branch companies help close their loans faster. For more information click on http://www.privocorp.com/

Vanguard weekly update (12/04/09)

According to the economic news in the Vanguard Weekly update, November marked an unexpected break from the seemingly endless reports about massive job losses. Unemployment declined to 10.0%, and the steady--and large--declines in payroll numbers nearly came to a halt, at least for the month. It's not yet clear how sustainable this change of direction will be. As we have mentioned in several other posts, it is going to take a lot of innovation and demand (not just here in the US, but also globally) to help get the economy to chug along at a good pace.

Other reports indicate that the economy is growing, but well-regarded gauges of business activity show manufacturing growth slowing and service-sector growth reversing.

Another number to always keep an eye on is the value of home sales across regions. This we believe is more important than the number of homes sold or number of mortgages taken out, as this is a REAL indication of demand, rather than of (speculative in most cases) investors seeking a good deal in a down market. Here's hoping for the best in the weeks ahead - that the holidays bring even better cheer to everyone.

Vanguard weekly update (11/27/09)

According to this week's Vanguard report - the economy continues its upward slog, as chronicled by this week's mixed bag of reports. Consumer confidence, consumer spending, and home sales rose more than forecast, but durable-goods orders defied expectations by declining. Meantime, a revised estimate of third-quarter real gross domestic product (GDP) finds output growth softer than initially thought.

For more information on this report please visit the Vanguard(R) Economic Week in Review

Bankrate.com: Mortgage rates drop to all-time low

The benchmark 30-year fixed-rate mortgage fell 13 basis points, to 5.06 percent, according to the Bankrate.com national survey of large lenders.

That's the lowest rate on the 30-year fixed in the 24-year history of Bankrate's weekly mortgage index. Previously, the all-time low had been 5.13 percent, on April 1 this year. (In case you're wondering, the highest was 12.31 percent -- in the first-ever survey, conducted Sept. 25, 1985.)

One year ago, the mortgage index was 6.33 percent; four weeks ago, it was 5.34 percent.

The benchmark 15-year fixed-rate mortgage fell 13 basis points, to 4.48 percent. That, too, is a record low. The benchmark 5/1 adjustable-rate mortgage was unchanged, at 4.58 percent. That's a record low dating back to when Bankrate started collecting 5/1 ARM rates at the beginning of 2005. And the benchmark 30-year fixed jumbo fell 29 basis points, to 5.95 percent. It was 5.6 percent in June 2003.

PrivoCorp - the fastest contract processing company for mortgage home loans expects volumes to increase as a result of this. As it is, PrivoCorp is experiencing an increase in the volume of loans submitted as well as the value of the homes being transacted. Although this is not a scientific indicator - seems to indicate that economy is moving in the right direction (at least there is a confidence in the direction of movement).

For more information please check out the bankrate.com website.

Average loan size up slightly to $173k

The average loan file size processed by PrivoCorp increased slightly to $173,807. This is about 10% up from last month.

Would definitely like to get thoughts on what others are seeing out there? Not that this is a scientific predictor, but could be used as an indicator of where things are headed.

It would be nice to get thoughts on what others out there are seeing. PrivoCorp (http://www.privocorp.com/) is a contract processor of mortgage home loans in several states in the country. Please contact us for any information on mortgage home loan processing.

Good news returns?

Economists were given a respite from last week's packed agenda, as only two reports were released this week. The Department of Commerce announced that the U.S. trade deficit widened in September to $36.5 billion. Meanwhile, initial jobless claims fell by 12,000, to 502,000, suggesting that the labor market is starting to improve. With little economic news to digest, the S&P 500 Index rose 2.3% to 1,093 (for a year-to-date total return of about 24%) for the week ended November 13. The yield of the 10-year U.S. Treasury note fell 11 basis points to 3.43% (for a year-to-date increase of 118 basis points).

Vanguard posts a weekly at http://www.vanguard.com/visit/econweek111309. Check out this website for more information.

USA Today: Trial mortgage modifications offered to nearly 1 million

According to the USA Today, Lenders in the government's Making Home Affordable program have extended mortgage modifications to more than 650,000 delinquent borrowers since April — a fifth of those eligible, the government reported Tuesday. For more details visit USAToday.com.

The fundamental question that would need to be answered in our opinion from those opting for this type of modification - what got them to this point in the first place? The government would need to use this information for more structural reforms on the economy front (if that is where the problem is - and more likely than not, is). This modification program is just a band-aid for the problem. Wonder what others think? Please post your comments below.

Vanguard weekly update

The longest recession since the Great Depression is likely over based on the first rise in real gross domestic product (GDP) in more than a year. According to the Conference Board's index of consumer confidence, however, U.S. consumers aren't necessarily convinced. Various other economic reports offered mixed signals. Durable-good orders were up and new-home sales were down. Employer costs continued to rise at record annual lows, while personal income was unchanged and personal spending dropped.

To read Vanguard(R) Economic Week in Review in its entirety, go to:

http://www.vanguard.com/visit/econweek103009

Mortgage applications plummet (CNN Money)

As rates ticked higher to above 5% mortgage applications plummeted 13.7% in the week ended Oct. 16 from the prior week.

Uncertainty about a possible extension and expansion of an $8,000 tax credit for first-time homebuyers could be another damper to the housing recovery. The tax credit now can be claimed by anyone buying a home who has not owned one for three years and who closes the deal by Nov. 30. For more details visit the CNN website

The only sustainable scenario under which mortgage applications will increase is when employment creation is encouraged and jobs are created that will not only give jobs to the existing unemployed population by the hundreds of thousands entering the workforce.

PrivoCorp processes residential mortgage loans for clients across the US.

MBA Forecasts: Unemployment Will Continue to Slow Economic Growth in 2010

According to a report by the Mortgage Bankers Association (MBA) and DSNews, economic growth will continue through the rest of 2009, but will slow down in the first half of 2010 under the weight of continued unemployment, before resuming a sustained pace and recording a 3 percent gain for all of 2010, the Mortgage Bankers Association (MBA) forecasts.

For all of 2009, the economy will show a decline of 0.5 percent, the group predicted.

Unemployment will continue to climb from its current 9.8 percent, to peak at 10.2 percent in the second quarter of next year, the group said.

Mortgage originations should reach $1.5 trillion in 2010, MBA said, depending on how much interest rates increase and dampen activity in the refinancing market. Modest increases in home sales should drive purchase originations, the group said.

“Perhaps the biggest unknown is the level and volatility of interest rates,” said MBA chief economist Jay Brinkmann.

While the lack of inflation, high unemployment, and excess capacity in the economy should hold interest rates down, the termination of the Federal Reserve’s purchase of mortgage-backed securities will put upward pressure on all long-term rates as well as the spread between mortgage rates and Treasuries, he said.

“The size of any resulting rate move will largely determine the size of the refinance market,” Brinkmann said.

The MBA forecasts fixed mortgage rates will average about 5 percent in the fourth quarter of 2009 and increase to 5.6 percent by the end of 2010.

Other highlights of the forecast:

• Total existing home sales for 2009 will end up about 2 percent higher than those for 2008, and will increase by about 11.2 percent in 2010.

• New home sales for 2009 will be down by about 18 percent from 2008, though sales seemed to have bottomed in the first quarter of 2009 and have been rebounding since then. For 2010, new home sales should increase about 21 percent from 2009’s low levels.

• National average home price declines should abate by early 2010, but will vary by state and home value. Demand will be highest for entry-level homes.

• Purchase originations for 2009 will be $718 billion, about 2 percent below $731 billion in 2008. Purchase originations should rise about 12 percent in 2010, as existing home sales recover and home prices stabilize.

• Refinance originations will end 2009 at $1.245 trillion, up about 60 percent from $777 billion in 2008. Refinance activity will likely decrease in 2010 to about $745 billion as mortgage rates increase.

Foreclosure Activity Sets New Record in Third Quarter: Report

Foreclosure activity in the United States set a new quarterly record in the three months ended September 30, increasing 5 percent from the previous quarter and 23 percent from the third quarter of 2008, according to new data released by RealtyTrac Thursday.

While there is some kind of hope with the GDP numbers and the results coming in slightly better than expected, a complete recovery can only be accomplished by job growth - which will in turn spur demand for all types of assets including homes. With the number of jobs that have been lost so far, even if the economy grows it will only be sufficient to mop up the extra workers entering the workforce. So an incremental number of jobs will have to be created to not only ensure there are jobs for the new entrants but also jobs for the ones that have lost their jobs due to the recession.

Check out the complete article at DSNews.com

PrivoCorp annouces October Special

PrivoCorp has announced its October Special for NEW CLIENTS ONLY.

* CLOSE 1 FHA FILE and the next one is on us.

* No charge for 2nd Submission

* FREE Audit on all closed files (depends on Net branch/Lender)

Please visit the PrivoCorp website for more information on this offer as well as more information about the fastest processor of home mortgage loans.

U.S. hits loan modification target early

According to the San Francisco Business times quoting the Obama administration, more than 500,000 troubled home loans have entered trial modification programs.

Federal officials recently stepped up pressure to modify troubled loans after criticism during the summer that banks and other loan servicers were dragging their feet adjusting loan terms for borrowers in danger of default. The government had given servicers a deadline of Nov. 1 to get 500,000 eligible borrowers into such programs, where payments are reduced to not exceed 31 percent of the borrower’s pre-tax income.

An estimated 16 percent of troubled borrowers (defined as those at least 60 days delinquent) have been placed into trial modifications. Here are some of the stats on mods by banks in the state in CA. Citigroup leads the mods list with a third of all loan mods.

PrivoCorp is not involved in any loan modification program. PrivoCorp is one of the fastest processors of mortgage home loans in the state of California.

Provident discontinues 3 year ARM in IL

According to an official release Provident Funding has discontinued Adjustable Rate Mortgage (ARM) loan products with an initial fixed period of 3 years or less for properties located in the state of Illinois. All affected loans currently locked will be honored, but must fund by the original lock expiration date.

All brokers working on these kinds of loans, please advise your borrowers appropriately or switch to another lender. PrivoCorp does not have any such loans in our pipeline at the current time.

PrivoCorp is one of the fastest processors of Conventional and FHA mortgage loans in the state of IL supporting several brokers in the greater Chicago area.

State of the Union - NAMB President Jim Pair

Mark your calendar, set the appointment, tomorrow, Oct 1st, 2009, 11:00 a.m. CST, the President of NAMB, National Association of Mortgage Brokers, is hosting a webinar on the “STATE OF OUR UNION.”

Be on this call, listen, and most importantly, UNDERSTAND what is going on in the mortgage industry today, issues like HVCC and its’ future, newly adopted FHA Regulation, future of YSP, among others.

Click on https://www2.gotomeeting.com/register/296700555 to register.

Home prices increase from June to July, 3rd straight rise

According to an article in USAToday, quoting the Standard & Poor's/Case-Shiller home price index released Tuesday, prices rose 1.2% from June. Though home prices are still 13.3% below July a year ago, they have risen for three months straight.

For full details on this article visit http://www.usatoday.com/money/economy/housing/2009-09-29-home-prices-rise_N.htm. The increase in these asset prices can only be a good thing for the economy. The only hope is that while this trend continues Americans also spend some time thinking about savings and not only looking at their homes as piggy banks - and using them to fund a profligate lifestyle of consumption. While this behavior has sustained the world economy for a long time, the benefits can only accrue with the right kind of balance and of course growth across the world.

Home price increases can only be a good thing for companies like PrivoCorp - the fastest processors of Conventional and FHA loans in the country by virtue of our 24 x 6, streamlined and secure operations.

Top FHA Lenders - Q3, 2009

With TBW out of the picture, there is a gaping hole at the top of the market share pie for FHA mortgages originated by mortgage brokers. According to Inside Mortgage Finance's new special report "FHA Market Profile: First Half 2009," TBW was by far the largest wholesale purchaser of FHA mortgages in the first six months of this year with $5.37 billion in volume.

Wells Fargo was the second largest with $4.24 billion in FHA mortgages purchased from brokers. In third place was Flagstar Bank with $3.07 billion in FHA broker business, followed by MetLife Bank in fourth place with $2.37 billion in volume. Rounding out the top five FHA wholesalers in the first half was Bank of America with $1.92 billion in business.

PrivoCorp has processed loans for all the above lenders having done the maximum work with TBW, followed by MetLife, Wells Fargo, Bank of America and finally Flagstar in that order.

Tax credit to grow sales by 334,000

According to a new survey by Zillow, extending the first-time homebuyer tax credit into next year would bring nearly 20 percent more potential homebuyers to the table.

The survey found that, if the credit was extended, of those who plan to buy a home, 18 percent said the $8,000 tax credit would be the "primary influence" in their decision, 25 percent said it would be a "significant influence," and 27 percent said the credit would have "some" influence on any home buying decision. Thirty-one percent said it would have no influence on their decision.

"These numbers suggest that extending the credit might bring an additional 334,000 homebuyers who would not otherwise purchase a home into the market,” Zillow Chief Economist Stan Humphries said in a news release. “While 334,000 may seem like a small number relative to the total number of homebuyers who would claim the credit, their addition to the market next year could make the difference between a robust annual increase in home sales next year and a flat or negative change in home sales relative to this year.”

While the $8,000 first-time homebuyer tax credit is set to expire on Nov. 30 it is hopeful that this would help spur the economy to greater growth even after the incentives are taken away. The hope (in any case of federal support) is that the increase in economic activity will more than offset the lost revenues in income tax to the federal government.

(Home buyers who do not currently own a primary residence and have not owned one for the past three years are eligible)

Mortgage Disclosure Improvement Act (MDIA)

As everyone knows - the MDIA has become effective on July 30th 2009. Here is a link to the Respalawyer website (www.respalawyer.com) that has all the information on what brokers and processors need to know about this new act.

Here is information from the website.

*********************

On July 30, 2009, some of the provisions of the Mortgage Disclosure Improvement Act of 2008 (MDIA) go into effect and lenders, mortgage brokers, title agents, real estate agents, and real estate brokerages need be alert as to these new federal governmental regulations. Here are the details for the MDIA:

1. The 3/7/3 Rule requires a seven business day waiting period once the initial disclosure is provided before closing a home loan (business days are everyday except Sundays and Holidays). This means that before a borrower can close on a transaction the borrower must receive the initial Good Faith Estimate (GFE) and initial TIL statement disclosing the final Annual Percentage Rate (APR) seven days prior to closing.

2. If the final annual percentage rate APR is off by more than .125% from the initial GFE disclosure then the lender must re-disclose and wait yet another three business days before closing on the transaction.

3. The consumer has the right to cancel and not proceed with the transaction if they so choose.

4. Lenders are forbidden from collecting money for appraisals, loan applications, etc. prior to the delivery of the Truth In Lending (TIL). Lenders can only collect from the borrower the credit report fee at the time of prior to delivery of the final TIL. No other fees are permitted to be collected at the time of application. If the TIL is sent by mail, additional charges can occur after the 3rd business day after the borrower receives the TIL in the mail.

5. The following language must be clearly written on the initial and final TIL: "You are not required to complete this agreement merely because you have received these disclosures or signed a loan application."

If you are a real estate agent or title agent you need to manage the process very carefully by:

A. Making sure that you check the initial Good Faith Estimate and Truth In Lending form for your buyers and look for discrepancies in charges. The new rules were put in place to protect consumers from being low balled one figure by a loan officer only to find out at the closing table that the fees charged were much higher. The new MDIA rules will absolutely delay closings if these steps are not followed carefully.

B. Buyers, sellers, and real estate professionals should not schedule a closing until the borrower has completed the seven day waiting period as required in the initial TIL.

Here are three examples of the "3/7/3 Rule" of the MDIA:

Example A.

1. August 1st the loan application is taken;

2. August 2nd the initial TIL is sent in the mail;

3. August 10th the closing can occur on this day or after this day if the initial TIL was received

and the APR was within the .125 of the final TIL.

Example B.

1. August 1st the loan application is taken;

2. August 2nd the initial TIL is sent in the mail;

3. August 4th the borrower's interest rate increases causing the APR to increase by more

than .125 (1/8th) percent which triggers a re-disclosure of another TIL;

4. August 5th the revised initial TIL is mailed to the borrower. The borrower can close on the

transaction at the earliest on August 13th (add a day to account for Sunday).

Example C.

1. August 1st the loan application is taken;

2. August 2nd the initial TIL is sent in the mail;

3. August 20th the borrower's interest rate increases causing the APR to increase by more

than .125 (1/8th) percent which triggers a re-disclosure of another TIL;

4. August 20th a revised initial TIL is mailed to the borrower;

5. August 23rd the borrower receives the revised initial TIL in the mail;

6. August 26th (unless it falls on a Sunday then the 27th) the borrower can close on their

residential real estate transaction and sign the mortgage documents on this day or later if the

final TIL doesn't once again increase by .125 otherwise you can start the entire process all

over again.

Falling home prices and tax credit for first time buyers bolstering demand

According to Bloomberg.com, falling home prices and a government tax credit for first- time buyers are bolstering demand for housing. A return to economic growth may also help the property market. Federal Reserve Chairman Ben Bernanke said this week that the worst U.S. recession since the 1930s has probably ended, yet growth may not be strong enough to quickly cut the unemployment rate. said Donald Rissmiller, chief economist at Strategas Research Partners in New York,said "“The Federal Reserve are telling us that rates are going to be low for an extended period so that’s benefiting potential homeowners who are entering the mortgage market."He does not think that the policy makers want to make the mistakes of past episodes where stimulus was withdrawn too early.

The bond purchases from Fannie Mae, Freddie Mac and Ginnie Mae brought down yields on mortgage-backed securities and allowed lenders to reduce rates on new loans while still selling the securities backed by them at a profit. The plan helped drive mortgage rates to a record low of 4.78 percent twice in April.

The Mortgage Bankers Association’s index of applications to purchase a home or refinance declined 8.6 percent in the week ended Sept. 11. The group’s refinancing gauge fell 7.4 percent, while the index of purchases declined 10 percent.

Single-family home starts dropped 3 percent in August, the first decrease since January, while work began on 25 percent more multifamily units such as apartments, figures from the Commerce Department showed today. The decline in single-family starts may signal reluctance on the part of builders to start new homes as the government’s tax credit for first time buyers is set to expire later this year.

Rising foreclosures and falling home prices remain impediments to a full housing recovery. Foreclosure filings in the U.S. exceeded 300,000 for the sixth straight month in August as job losses left many homeowners unable to keep up with their mortgage payments, property data service RealtyTrac H

Housing Markets without the Tax Credits?

Can Housing Market Function Under Its Own Power Without Tax Credit?

According to an article by James Picerno, we’ve been writing for months that the recession appears close to a “technical” finale but that the recovery would be slow, sluggish and generally vulnerable for an unusually extended period of time. Two stories in the latest news cycle echo our long-running commentary and. In fact, the pair makes the point better than we could.

According to Fed Chairman Ben Bernanke: “From a technical perspective, the recession is very likely over at this point” but “it’s still going to feel like a very weak economy for some time,” via MarketWatch.com.

The New York Times had a story that raised the question about how soon the housing market could function under its own power. At issue is a key piece of the government’s fiscal stimulus—the $8,000 tax credit for first-time home buyers. The Times observed, “When Congress passed an $8,000 tax credit for first-time home buyers last winter, it was intended as a dose of shock therapy during a crisis. Now the question is becoming whether the housing market can function without it.” Although housing is but one piece of the economy, its trials and tribulations capture a core element of the economic turmoil of late. It may be too much to say that the housing market is a bellwether for the general economy, but it’s close.

More to the point, the Times story reminds us of one of the potential drawbacks of stimulus, monetary or otherwise: markets may get used to the idea and so taking it away, which can cause secondary problems, depending on the exit strategy. That’s not to say that stimulus was unnecessary. But in the rush to smooth over the crisis of the past year, cleaning up the mess born of the emergency financial and economic surgery promises to be the new new challenge in the months and years ahead.

http://wallstreetpit.com/10423-book-end-challenge

Can businesses that depend directly or indirectly on the mortgage market become successful in the long run? Post your comments on our blog.

TX fees more than FL. Work with PrivoCorp !!

According to a new study done by Bankrate.com, Texas charges more in origination, title and closing costs than Florida. Buyers of Florida homes are charged $3,368 in combined fees. Texas charges $3,655.

"Consumers need to keep a look out for the standard fees when figuring out the true cost of their new home," said Holden Lewis, senior reporter with Bankrate.com."Even as the average closing costs go down across the nation, some these surprise costs can make your new home deal more expensive than you initially thought.

"Nationwide, the average origination and title fees on a $200,000 mortgage this year totaled $2,732, down from $3,118 in 2008.Ron Donalson, a principal with Tampa's Alday-Donalson Title Agencies of America,said "In most of the deals we're closing now, sellers are paying the closing costs," Donalson said. "And you have to remember, in states that use attorneys for closings, buyers have attorney fees to pay on top of the other fees."

Seems like more and more brokers and net branches in the state of Texas need to work with PrivoCorp in order to reduce the fees for their customers. PrivoCorp processes conventional and FHA loans in all states in the United States. Contact PrivoCorp for the best processing fees in the state of TX and other parts of the country including Florida.

"Commercial subprime" crises?

Throughout the Washington area, gleaming new office towers have sprouted, but with few or no tenants.Property managers for the 1.4 million-square-foot [Constitution Center in Southwest Washington], which is scheduled to be completed in November, have yet to land any tenants .Constitution Center is just one of several dozen existing, newly constructed or soon-to-be-completed office buildings in the Washington region that had vacancy rates in the 80 to 100 percent range as of midyear.

With many commercial real estate loans coming due soon, some foresee trouble for the region's properties. "We may see the commercial version of the subprime situation," said Steve Silverman, director of the Montgomery County Department of Economic Development.

Economic activity is a major driver for companies to take up commercial space in various parts of the country and if GDP growth is not keeping pace with corporate expectations, companies will slow down on their off take of space.

Our hope at PrivoCorp (since we process Conventional and FHA loans) is that economic activity continues to grow and residential activity is spurred by this growth in economic activity.

Foreclosure Activity

According to Mortgage Ledger, US foreclosure activity decreased less than 1 percent from record high in July with activity up 18 percent from August 2008 despite year-over-year drop in REOs. RealtyTrac considers default notices, auction sale notices and bank repossessions as foreclosure filings.

“After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time.”

“After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time.” Florida fell into the second worst ranking with one foreclosure filing for every 140 households in August.

California ranked third with one foreclosure filing for every 144 households.

This maybe good for the real estate finance industry as a whole, but this movement (of reduced foreclosures) needs to be sustained over an extended period of time.

PrivoCorp processes conventional and FHA loans for brokers and net branches across the country. Contact us for more information http://www.PrivoCorp.com/Contact.html

USA Today Mortgage trends for 3 years

5 more banks shut down, 89 in '09

According to the USAToday, 5 more banks were shuttered by regulators on Friday, 4th September, ahead of the Labor Day weekend.

Bank	Location	Assets	Deposits
First Bank	Kansas City, MO	$16 million	$15 million
Vantus Bank	Sioux City, IA	$458 million	$368 million
InBank	Oak Forest, IL	$212 million	$199 million
Platinum Community Bank	Rolling Meadows, IL	$346 million	$305 million
First State Bank	Flagstaff, AZ	$105 million	$95 million

For more information visit the USA today article at http://www.usatoday.com/money/industries/banking/2009-09-04-bank-failure_N.htm

Answers for homeowners with TBW

If your loan has been with Taylor Bean & Whitaker, there is no need to panic as Freddie Mac has arranged for several servicing companies to begin working directly with such homeowners. Responsibility for servicing Freddie Mac mortgages that were transferred from TBW, has been given to Cenlar FSB, Saxon Mortgage Services and Ocwen Loan Servicing. These servicing companies will get in touch with you with either with a welcome phone call or welcome letter in which case it will include the contact information for your new Freddie Mac servicer and the address where you should begin sending your payments and any required documentation.

Home owners with TBW loans need not worry about the mortgage payments made to TBW.You should not be assessed a late fee and your credit report should not be impacted as a result of the transition. In the unlikely event your payment was not properly applied to your mortgage balance during the transition or you discover an error with your payment history, immediately contact your new Freddie Mac Servicer.They will resolve any issues that occured during the transition period, including waiving late charges when applicable and making appropriate adjustments to payment and credit records.

If you loan was in default, and you were being considered for a loan modification under the Making Home Affordable plan,then you should work directly with your new mortgage servicer to find options that's best for you. Additionally, if you received a letter from Home Retention Services regarding a loan modification of your TBW-serviced mortgage, please continue working directly with them on this process.For further informnation, check these websites out:

http://www.cenlar.com/home.html
https://www.saxononline.com/common/home/
https://www.ocwencustomers.com/home.cfm

PrivoCorp (http://www.privocorp.com) processes the loans for the brokers and is in no way involved with origination of these loans.

TBW files for bankruptcy, everyone affected

Florida based TBW Mortgage Corp, the 12th largest U.S. mortgage lender, filed for protection from creditors on Monday with the U.S. bankruptcy court in Jacksonville, FL. Shortly after FHA had suspended Taylor, Bean & Whitaker for irregularities, Freddie Mac (FRE.P) and the Government National Mortgage Association (Ginnie Mae) suspended Taylor Bean as an issuer of mortgage securities.

TBW is in talks with the Federal Deposit Insurance Corp to let it process payments for its mortgage borrowers.

We would like to know if anybody has been affected by this (delayed release of funds) ? If so, please let us know, so that we can point you to a broker/lender who can help you.

PrivoCorp (http://www.privocorp.com) processes the loans for the brokers and is in no way involved with origination of these loans.

Existing home sales surge

Price drop and the tax credit for home buyers are said to be the reason for the surge. According to the National Association of Realtors that home sales rose 7.2% to a seasonally adjusted annual rate of 5.24 million in July, from a pace of 4.89 million in June. It was the fourth-straight monthly increase and the highest level of sales since August 2007. For further details and the complete story check USAToday.

PrivoCorp (http://www.privocorp.com) processes the loans for the brokers and is not involved with the actual origination of these loans.

Rise in Foreclosures in Texas

Texans continue to make late mortgage payments due to which more than 1 in 10 mortgages are late or in foreclosure. In Texas, most of the loans facing foreclosure are subprime mortgages. In the second quarter, 8.79% of residential mortgages in the state had delinquent payments and 1.84 % went into foreclosure, which both figures exceeded the previous quarter.

For more information on this a good read is the article here

Homeowners facing situations like this should consult their broker or the financial planner to get help from some of the programs that the Bush and now Obama adminisitration are promoting for them.

PrivoCorp (http://www.privocorp.com) processes the loans for the brokers and is in no way involved with loan modifications or origination of these loans.

Mortgage Rates Lowest Since Late May

According to an article in the Memphis Daily quoting Freddie Mac sources, the average rate for a 30-year fixed-rate mortgage was 5.12 percent, down from 5.29 percent last week. At this time last year, the average rate for 30-year fixed-rate mortgages was 6.47 percent. For more information visit the Memphis Daily.

The hope in the mortgage banking industry would be that these low rates spur refinance activity (and possibly purchases), but the overall unemployment and real estate prices are the ones that will drive economic growth and will be real proof of the country coming out of the recession.

PrivoCorp (http://www.privocorp.com/) is one of the fastest processors of conventional and FHA mortgages in the country.

PrivoCorp on FaceBook

Become a fan of PrivoCorp on Facebook and join discussions on various mortgage banking related topics on the leading social networking website - Facebook.

PrivoCorp is the fastest processor of FHA and conventional loans and a thought leader in the mortgage industry providing observations and feedback on the issues and challenges facing the industry as a whole.

Update to Red Flag Alert

Here are a few things that we compiled on the new legislation. The new “Red Flags” requirements work in conjunction with the Safeguards Rules (GLBA):
1) Designate a compliance Officer / Coordinator;
2) Perform a Risk Assessment;
3) Draft and Communicate Policy and Procedures;
4) Conduct Employee Training;
5) Undertake Periodic Audits; and
6) Obtain Board Approval and Complete an Annual Report.

Red Flag Alert - Effective Nov 1st 2009

According to the Federal Trade Commission (FTC) the new ‘Red Flag’ Requirements for Financial Institutions and Creditors Will Help Fight Identity Theft. Identity thieves use people’s personally identifying information to open new accounts and misuse existing accounts, creating havoc for consumers and businesses. Financial institutions and creditors soon will be required to implement a program to detect, prevent, and mitigate instances of identity theft.

Mortgage brokers and lenders fall under the CREDITOR and COVERED ACCOUNTS category. Under the Red Flags Rules, financial institutions and creditors must develop a written program that identifies and detects the relevant warning signs – or “red flags” – of identity theft. These may include, for example, unusual account activity, fraud alerts on a consumer report, or attempted use of suspicious account application documents. The program must also describe appropriate responses that would prevent and mitigate the crime and detail a plan to update the program. The program must be managed by the Board of Directors or senior employees of the financial institution or creditor, include appropriate staff training, and provide for oversight of any service providers.

All mortgage brokers need to be prepared for the Red Flag Alert which becomes effective Nov 1st, 2009. For further information visit the FTC website.

If you have any comments please post them below or visit PrivoCorp website (the mortgage outsourcing destination) at http://www.privocorp.com/ and submit a request on how you can be compliant with these guidelines.

MBA: Mortgage applications rise as interest rates fall

According to the Mortgage Bankers Association of America, a decrease in interest rates boosted mortgage applications during the week ended July 31.

<< Here is some information from the Nashville Business Journal >>

With the average 30-year fixed rate falling to 5.17 percent, the number of total loan applications rose 4.4 percent over the previous week, according to the Mortgage Bankers Association.

The number of people refinancing grew by 7.2 percent over the previous week, and is up 35 percent above its recent low at the end of June.

Overall, the number of people refinancing loans made up 54.2 percent of total mortgage applications, up from 52.6 in the previous week. However, the percentage of adjustable-rate loans refinanced dipped to 5.4 percent from 5.5 percent of the total activity.

The average interest rate for 15-year fixed-rate mortgages decreased to 4.6 percent from 4.75 percent, with points decreasing to 1 from 1.14.

The average interest rate for one-year ARMs increased to 6.67 percent from 6.66 percent, with points remaining unchanged, at 0.09.

>>

Its been a while since PrivoCorp has worked on ARMs for customers. It is not difficult to understand that given the rates mentioned above. PrivoCorp is one of the fastest processors of Conventional and FHA mortgages in the country.

Flash: FHA suspends TBW

According to an article in the Wall Street Journal, the Federal Housing Administration suspended Taylor, Bean & Whitaker Mortgage Corp. from making loans insured by the federal agency, and raised questions about the company's business practices and financial disclosures.

Also, BoA just released that they were @ 5 days on FHA refis and 3 days on FHA purchases. I guess it would not be too difficult to see where all the TBW loans are going to go!

We can only hope that TBW is able to extricate itself from this situation and continue to lend, or else the consequences may be far reaching as TBW was the 12th largest FHA lender in Q1 and Q2 of 2009.

Acopia suspends TX Cash out

Citing "adverse market conditions" Acopia has decided to immediately suspend its TX cash out loans. Anyone wanting to get their TX cash outs funded please contact one of the business development managers at PrivoCorp (http://www.privocorp.com/) who can help you get in touch with lenders that continue to fund cash outs in the state of Texas.

Farm Real-Estate Values Post Rare Decline

According to an article in the Wall Street Journal, quoting government statistics, farm real-estate values fell for the first time in more than 20 years. The U.S. Agriculture Department said in its annual report that the value of all land and buildings on U.S. farms averaged $2,100 an acre Jan. 1, down 3.2% from last year. The decline in farm real-estate values was the first since 1987, the agency said.
For the details click here.


While the exact definition of farm real estate was not available in the article, it will be interesting to note the impact on major USDA lenders - like Chase - who has a significant USDA offering. Mortgage banking firms and brokers outside the MSAs are most likely to face the consequences of this decline - and it might result in lower eligibilities and possibly the creation of "declining markets" for farm areas as well.

Those with experience on USDA backed loans and/or facing the impact of the farm real estate declines can post their comments here.

Home prices rise across the US

According to the S& P Case-Schiller index, home prices have got their first monthly increase in over 3 years - which is definitely a good sign. This is according to a WSJ article this morning.

All other statistics about the mortgage industry rebounding and sales increasing etc, are not as valuable as this particular stat.

The question on most peoples minds is going to be can this be sustained, in the light of poor job growth numbers? Feel free to post your thoughts on the PrivoCorp blog.

Fed Changes to protect consumers

In order to protect consumers and help them make intelligent decisions while taking out mortgages, the Fed is instroducing some changes that seek to bolster its image as the watch dog for the consumer.

Under the proposed rules, mortgage applicants would get:
* A page Q&A document explaining risky features of a loan
* Streamlined early cost disclosures
* A revised annual interest rate that includes most fees and costs
* A graph showing borrowers how their rate compares with rates of borrowers with excellent credit
* In addition, side payments for steering borrowers to higher-cost or riskier loans would be banned.

Home-equity loan applicants would get:

* A one-page document explaining the risks of the loan
* Cost disclosures specific to their loan
(Courtesy: WSJ)

In addition, lenders would have to notify borrowers 45 days before changing terms of a loan.

The other proposals include complete disclosure of the YSP - the amount the broker makes on the loan. While it is very crucial that this disclosure be made, there is some talk about eliminating this or curtailing it in some form. While it is known fact that the higher the interest rate the borrower gets, the higher the payout for the broker, would it not be better to have an informed borrower than to eliminate this channel altogether (or squeeze it out of the market)?

If a consumer uses the broker/wholesale channel effectively, he/she can get rates that beat the retail channel. It is a known fact that the cost to originate is higher in the retail channel due to the overheads, so it remains to be seen what track the lenders take in this matter.

All comments for and against are welcome. The entire article is available on the WSJ

US Dept of Commerce: New home sales up 11%

According to the US Dept of Commerce new home sales are up 11% month on month, which is obviously a positive for the housing market in particular and the economy in general. Of course, these stats have to be seen in the light of various other parameters. For example, YoY numbers still indicate a 21 % drop.

"Green shoots", "positive signs" whatever phrase one wants to use - the best way to really tell is if these types of numbers are sustainable.

For the entire article on Business Courier visit http://cincinnati.bizjournals.com/cincinnati/stories/2009/07/27/daily6.html?ed=2009-07-27&ana=e_du_pap

HVCC

Much of the current controversy around appraisals stems from the May 1 implementation of Fannie Mae’s and Freddie Mac’s new Home Valuation Code of Conduct – a set of standards pushed by the New York Attorney General’s Office as part of a settlement with the Federal Housing Finance Agency.

Critics of this new code are of the opinion that this has greatly elevated the status of Appraisal Management Companies to the detriment of the mortgage and housing markets. Experienced appraisers feel that they have been sidelined by these AMCs in favor of appraisers with little experience, but who sign up with these AMCs to perform appraisals at a low cost in return for large quantities of work. (quantity discounts).

Separately, Fannie and Freddie have moved to tighten their appraisal standards outside the framework of the HVCC and beyond industry rules by mandating a new “market conditions” addendum. According to many this will cause a disturbing rise in failed home sales where appraisals won’t support purchase prices and mortgage loan-to-value requirements.

In another post, PrivoCorp (http://www.privocorp.com)- the fastest processors of home mortgages, will articulate some of the things Congress is considering doing in this regard. We welcome all opinions in this matter.

Update on Underwriting Guidelines (Recently listed FHA/VA Properties)

Properties currently listed for sale are not eligible for FHA or VA refinances, whether fully qualifying rate/term, streamline, or cash out. Properties previously listed and then canceled, are eligible for refinance with the following loan-to-value guidance:

• Refinances, including fully qualifying rate/term and streamline: Maximum loan-to-value allowed.
• Cash out transactions: Maximum 70% loan-to-value if the listing was canceled within six months preceding the application date.

The following evidence must be provided to verify cancellation of the listing:

• The property’s listing history must be shown in the subject section of the appraisal;
• Documentation of canceled listing agreement;
• Evidence a search was made of the Multiple Listing Service (MLS); and
• The borrower’s confirmation of their intent to continue to occupy the subject property as their primary residence and a reasonable explanation for removing the house from the market.

USAToday: Housing starts, building permits jump in June

According to USA Today, construction of new homes rose in June to the highest level in seven months, a sign builders are starting to regain confidence as they emerge from the housing bust.

This is definitely a good sign both for the economy as a whole as well as for those connected to the real estate industry including the mortgage industry. Surely the hope will be that these home starts result in jobs not only in the construction industry but also associated industries as well.

For the entire article check http://www.usatoday.com/money/economy/housing/2009-07-17-housing-starts-june_N.htm

1.5 million homes in foreclosure in '09

According to an article on cnn.com - homeowners fell behind on mortgage payments in record numbers during the first six months of 2009.

To read the full article go to : http://money.cnn.com/2009/07/16/real_estate/RealtyTrac_foreclosure_report/index.htm

Twitter and the mortgage industry

We have been watching twitter and how mortgage professionals have been using the system. Seems like it is being used only to drive website traffic. We have our own twitter page http://www.twitter.com/privo and have about 460 people following us and are following a lot of mortgage professionals ourselves. Most of the people who have gotten in touch with us are those trying to pitch some "get rich quick" schemes or trying to drive traffic to their website.

Would like to know if anyone has some good experience utilizing twitter- particularly on the mortgage banking side. We are working on putting together a white paper on how mortgage banking/broking professionals can benefit from twitter.

YTD - Mortgage rate trends

The rates have not high but at the same time are above their all time lows. Rate courtesy of Mortgage Wholesale rate (as on June 26th 2009)

Business Week article on housing market

The gist is that housing markets will go South for a couple of more quarters and then start looking up as the economy experiences growth.

For the entire article click on BusinessWeek

SNMC Guidelines

New underwriting guidelines: Nothing below 620 accepted on any loan program, all conforming loans must have AUS approval, FHA loans must have 620 or greater for AUS approval or manual, if manual ratios cannot exceed 2% above standard, so max DTI= 45%.

For more information on how to process loans fast contact PrivoCorp - http://www.privocorp.com/