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.

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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