Dec 15, 2011

Wells Fargo Breaks 25% Market Share

According to a report in the National Mortgage News, Wells Fargo continued to dominate the origination landscape in the third quarter, funding $90 billion of product and amassing a market share of just over 25%—the largest reading ever for one lender. 
For more information on this check the following website:

PrivoCorp has processed mortgages for various companies, but our proportion is not indicative of the marketshare of Wells Fargo. PrivoCorp is a contract mortgage processing company that is licensed in various states in the country. For more info about PrivoCorp  visit us @

Dec 13, 2011

After Starting Out Weaker, Mortgage Rates Finish Strong

According to Mortgage News Daily a strong Treasury auction and an uneventful policy statement from the Federal Reserve paved the way for mortgage rates to improve to their best levels since late September/early October today. Although the improvements haven't translated to a lower Best-Execution rate, the costs involved in obtaining those rates should be slightly lower today than they were last Thursday (12/8/11).

Today's auction of 10yr Treasuries showed extremely high demand and at lower rates than markets had been trading. Although mortgage rates are not based on US Treasuries, the Mortgage-Backed-Securities (MBS) that DO influence rates are similar to Treasuries and tend to trade in the same direction, even if it's by different amounts. 

After spending weeks at an average 4.0% Best-Execution, rates recently dropped to the next rung lower on the ladder at 3.875% late last week. Two days of marginal weakness was beginning to reintroduce 4.0% Best-Ex rates at several lenders. Rates were on a path higher again this morning, and 4.0% continued to proliferate, but the solid improvement this afternoon renders that phenomenon all but non-existent.

For the entire article please visit:

PrivoCorp is the fastest processor of conventional and FHA mortgages in the country. For more information about our services, please visit

Nov 27, 2011

Happy Thanksgiving to our clients and associates

To all PrivoCorp's clients and associates.

Hope Black Friday was great!!

Nov 14, 2011

Mortgage Apps are up 10.3%

Mortgage applications jumped 10.3% for the week ending Nov. 4, a sign that continued low interest rates are starting to entice consumers, according to new figures compiled by the Mortgage Bankers Association and contract mortgage processors like PrivoCorp are happy about the volumes ...

According to the MBA, refis are now 78.6% which is a good sign given that lending standards are higher and more people are getting their homes refinanced to capitalize on the lower interest rates in the country. This means that borrowers now have the ability to keep more income to themselves to either save or for other consumption activity which will be good for the economy as a whole.

PrivoCorp - is one of the fastest growing contract mortgage processing companies based out of Austin TX

Oct 13, 2011

Metlife exiting as well?

Metlife has been one of the more active lenders in the market these days. After 3 years of hard work in the market, Metlife had become the 12th largest in the space. It would be nice to understand the real reason for the decision to exit the residential mortgage space. Watch this blog for more details.

PrivoCorp has processed mortgages that have been placed with Metlife, but not worked with Metlife directly. PrivoCorp is a contract mortgage processing company that is licensed in various states in the country.

Sep 29, 2011

Largest warehouse lender this past Q

Bank of America ranked first among all warehouse providers in the second quarter with $12 billion of funding commitments, a 20% decline from a year ago, according to figures compiled by PrivoCorp from different sources on the web.

Sep 15, 2011

Finally, Mortgage Applications Pick Up Steam

According to a report in National mortgage news,

After several weeks of application declines, it appears that low interest rates are finally causing an increase in new business.

According to new figures compiled by the Mortgage Bankers Association, loan applications increased on a sequential basis by 6.3% for the week ending Sept. 9. (The figures, which are seasonally adjusted, also take into account the Labor Day holiday.)

Refinance applications continued to dominate, accounting for 77.3% of all new business, compared to 77.1% one week prior.

As expected, consumers continue to favor 30-year and 15-year fixed rate products. MBA found that the average contract rate for a 30-year FRM declined 6 basis points during the week to 4.17%, setting another all time low. Points decreased to 0.94 from 1.04 (including the origination fee) for 80% loan-to-value ratio loans.

MBA tracks activity through its proprietary application index.

Read more -

Aug 30, 2011

Mortgage rates fall to historic lows.

Fixed mortgage rates have fallen to historic lows. That's good news for the few who can afford to buy a home or are able to refinance. But, at the same time rates have done little to lift the ailing housing market.

Freddie Mac said Thursday that the average rate for the 30-year fixed mortgage fell to 4.32 percent this week from 4.39 percent. The 30-year loan hit a record low of 4.17 percent in mid-November.

Many people can't take advantage of the low mortgage rates. Banks have been insisting on higher credit scores and larger down payments from applicants. Others have too little equity invested in their homes to qualify for loans.

Historically low rates have helped fuel another boom in refinancing. Fast growing contract mortgage processing company, PrivoCorp, expects that refinance volumes will pick up significantly in the short term."We are getting ready to provide services to meet the increased refinancing that are the direct result of low interest rates in 2011" according PrivoCorp CEO. PrivoCorp is a licensed contract processing company providing services across the country to brokers and lenders of various sizes.

Aug 25, 2011

Bank and Nonbank Loan Officers: 459,000 and Counting?

According to a report in Origination news,

Could there really be 459,000 U.S. loan officers plying their trade in residential finance?

The tally comes from the Nationwide Mortgage Licensing System & Registry, whose job it is to count LOs who work at federally insured banks, thrifts and credit unions. Along with nonbank funders, these depositories have registered their LOs on the system.

According to a new head count, banks and their mortgage affiliates employ 350,000 registered LOs. Nonbanks—also known as “state-licensed companies”—have registered 109,000. (Each LO receives a unique identification number with their licensing status available on the NMLS website.) If the totals are correct, that means bank LOs currently outnumber nonbank professionals 3-to-1.

If you think the LO headcount sounds a bit too high, join the club. Figures compiled by the Bureau of Labor Statistics show that the entire residential finance sector employed 239,100 full-time workers as of June 30, but those figures apparently exclude bank LOs. The BLS survey only counts full-time employees on the payrolls of nonbank mortgage firms including companies that both fund and broker loans.

What's more, the BLS numbers include managers, loan officers, back-office staff and even full-time janitors. In other words, it appears that the NMLS tally provides the first true head count of LOs in the entire residential industry.

Still, there are skeptics who believe the 350,000 number is too high for LOs.

These naysayers suspect that banks have registered LOs with little involvement in mortgage lending, particularly since it takes very little effort for bank employees to register.

LOs at state-licensed companies (nonbanks) have to pass competency tests and comply with continuing education requirements. They also have to be licensed in each state where they make loans.

LOs at national or state banks are exempt from those requirements, but must undergo criminal background checks and get fingerprinted like their state-licensed competitors.

Under the 2008 Secure and Fair Enforcement and Mortgage Licensing Act, banks and other depositories are required to register their LOs on the NMLS, which is operated by a subsidiary of the Conference of State Bank Supervisors. (Banks were required to file their registry information with NMLS no later than July 29.)

The registry is now relatively complete, according to Bill Matthews, president of the State Regulatory Registry, the CSBS subsidiary which operates the NMLS on behalf of the American Association of Residential Mortgage Regulators. AARMR is a trade association for the agencies and professionals who oversee the mortgage business within their respective borders. “All the deadlines have passed and now we can start looking at the data and trends,” Matthews told National Mortgage News.

On Aug. 2 regulators “turned on” the consumer portion of the website, which allows homebuyers and other interested parties to check on companies and individual LOs employed in the industry.

The NMLS site was first launched 18 months ago with information on state-licensed (nonbank) companies, branches and individuals, including whether their license status is active. The site even indicates whether a license was denied, withdrawn or revoked. “If someone was denied a license on the state side, the consumer will be able to see that. If they are now working for a depository, they can see that as well,” Matthews said.

In late 2012, the site will start showing disciplinary actions taken against state-licensed individuals. But each state will determine for itself the exact nature of what is displayed. Some jurisdictions may decide to show C&D orders that have been levied against an originator, while others may rule only fully adjudicated enforcements should be disclosed.

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Aug 22, 2011

Mortgage Rates in U.S. Tumble to Lowest in More Than 50 Years

According to a report in Bloomberg,

U.S. mortgage rates fell to the lowest in more than half a century as concern that the global economic recovery is faltering spurred demand for bonds that guide home loans, according to Freddie Mac.

The average rate for a 30-year fixed loan dropped to 4.15 percent in the week ended today from 4.32 percent, the McLean, Virginia-based mortgage financier said in a statement today. That was the lowest in more than 50 years, Freddie Mac said. The average 15-year rate fell to 3.36 percent from 3.5 percent.

The decline followed a slide in yields for 10-year Treasury notes, a benchmark for consumer debt including mortgages. The yield touched a record low today of 1.9735 percent, after Morgan Stanley cut its forecast for global growth and concern grew that Europe’s debt crisis may deepen. Lower mortgage rates have done little to boost home demand as the housing market stagnates.

“Low interest rates are helpful at the margins but it’s indicating a lot of concerns about the economy,” said Scott Brown, chief economist for Raymond James & Associates Inc. in St. Petersburg, Florida. “The move into Treasuries is driven by fear.”

Housing demand is depressed as the U.S. unemployment rate sticks above 9 percent and lenders tighten standards. Sales of previously owned homes unexpectedly dropped in July, according to a report today by the National Association of Realtors. Purchases fell 3.5 percent to a 4.67 million annual pace, the weakest since November. The median forecast of economists surveyed by Bloomberg News called for an increase in sales.

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Aug 19, 2011

IL Homes Sales Pick up Nicely

According to a report in National mortgage news,

Existing home sales in Illinois in July were up 18% over the previous year but median prices were down by 4%, the Illinois Association of Realtors reported. The data includes both single-family properties and condominiums.

Even though conditions are good for the home purchase market, until the job situation clears up, a recovery will be difficult, an economist warned.

Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory of the University of Illinois, said, "It would seem that until the economy signals a clear rebound—with sustained employment growth of the order of 200,000 jobs added per month—can we expect to see a sustained up tick in housing sales and some modest recovery in prices. Since April, the unemployment rate has not shown any definitive movement."

In the Chicagoland metropolitan area, home sales (single family and condominiums) totaled 6,625 homes, up 19.2% from July 2010 sales of 5,560 homes. The median price in July was $182,500 in the area, down 5.4% from the previous year.

Statewide sales totaled 9,708 homes sold while the median price was $153,000.

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Aug 9, 2011

NMLS Update: Bank LOs Outnumber Nonbank LOs Almost 3 to 1

According to a report in National mortgage news,

Federally insured banks, thrifts and credit unions have three times as many loan officers engaged in mortgage lending as state-licensed companies, according to new figures submitted to the Nationwide Mortgage Licensing System and Registry.

The nearly completed system shows depository institutions and their mortgage subsidiaries employ 350,000 LOs, compared to state-licensed firms which have 109,000 LOs, according to the Conference of State Bank Supervisors.

State chartered firms include nonbank mortgage lenders and loan brokerage companies.

Banking institutions were required to file their registry information with CSBS by July 29.

The registry is now relatively complete, according to Bill Matthews, president of State Regulatory Registry, which is a CSBS subsidiary that operates the NMLS for the states. "All the deadlines have passed and now we can start looking at data and trends," Matthews told National Mortgage News.

The NMLS deadline for the last two states, Florida and California, was March 31.

In 2Q state (nonbank) LOs numbered 109,000 compared to 100,100 in the first quarter.

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Mortgage Rates: Regaining Some Ground

According to a report in mortgage news daily,

( Aug/ 8 /2011)
Last week the intense rally in bond markets helped mortgage rates reach their best levels of the year, but the rally came to an end on Friday. Then on Friday evening, news the S&P downgraded the US Sovereign Debt Rating set a chain of events in motion that completely rocked the markets. Despite steep losses in stocks and insane rallies in Treasuries, the Secondary Mortgage Market has been more of a bystander today, leaving Home Loan Borrowing Costs slightly better than Friday, but not as good as Thursday.

CURRENT MARKET*: The BestExecution 30-year fixed mortgage rate is 4.250%. Not many lenders are willing to offer 4.00% but 4.125% is available if you're willing to pay additional closing costs. On FHA/VA 30 year fixed BestExecution is 4.00%. Fewer lenders willing to quote 3.875% (includes additional closing costs). 15 year fixed conventional loans are still best priced at 3.75% and we're still seeing aggressive quotes at 3.625%. Five year ARMs are still best priced at 3.25. ARMs and 15 year quotes seem to have bottomed out.

It's important that we point out an increased amount of variation in what individual lenders are quoting as their BestExecution rates. This is a factor of price volatility in the secondary mortgage market. Unfortunately when volatility picks up in the secondary mortgage market, the cost of doing business gets more expensive for lenders (hedging costs go up). Those added costs are usually passed down to consumers via extra margin in rate sheets.

GUIDANCE: We've realized a good portion of the rates rally we'd been holding out for. And while things could still improve, it's an especially volatile time for the broader markets, meaning lenders have been slow to pass along gains. Mortgage rates DO NOT like volatility and uncertainty. Relative to various market levels, rate sheets are conservative yes, but there's no telling when things will get better, and sadly, always a chance that they won't get better at all. Incidentally, we lean toward the possibility of them getting better, but the timing and flexibility required to capitalize on that possibility makes floating a less attractive choice for most scenarios right now, especially when what's on the table is already so much better than everything else 2011 has to offer and fairly darn close to all time low rates.

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Aug 1, 2011

LPS Posts Large Decline in 2Q Earnings

According to a report in National Mortgage News,

Mortgage technology and service provider Lender Processing Services earned $21.4 million in the second quarter, a 73% decline from the same period a year earlier, citing restructuring charges and lower revenue.

In a statement LPS said “in light of current market conditions” the firm is evaluating its cost structure and “potentially underperforming assets.”

The Jacksonville, Fla.-based firm booked a pre-tax restructuring charge of $7.9 million during the quarter primarily due to continued personnel reductions. It also recognized a $31.8 million pre-tax asset impairment charge tied to the writedown of investments it is evaluating for sale or wind down.

Although its earnings fell by 73%, revenue declined by just 13% to $517.5 million.

"LPS continues to perform well despite very challenging conditions in the default and origination markets, as well as an ongoing difficult macro-economic environment,” said company CEO Lee A. Kennedy. “LPS, with its strong market presence and unique set of end-to-end solutions for the mortgage and real estate marketplace, remains well-positioned for the years ahead.”

Still, LPS’s second-quarter profit beat market expectations helped by lower cost of revenue. The firm manages more than half of U.S. mortgage foreclosures, but faces various legal and regulatory challenges tied to its alleged role in wrongful foreclosure practices.

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Jul 28, 2011

California Defaults Reach Lowest Rate in Four Years

According to a report in,

For the second quarter of 2011, California homes entering the foreclosure process decreased to their lowest rate in four years, according to DataQuick, a San Diego-based company that tracks nationwide real estate activity.

DataQuick attributes the decrease to an increasingly stable housing market and new mortgage servicing policies.

“A lot of theories are being floated as to why the numbers are down. Bank policy changes. Legal challenges. Politics. Holding back temporarily so as not to flood the market,” said John Walsh, DataQuick president.

“The fact of the matter is that no one really knows, outside of lending and servicing industry insiders,” Walsh continues. “One thing is certain: Homeowner distress spreads fastest when home price declines are steepest. And it now appears likely that, barring some new economic shock, the worst of the price declines are behind us.”

The number of notices of default decreased 17 percent from April to June when compared with the previous quarter and 19.2 percent when compared with the second quarter of last year. It was the lowest rate reported since the second quarter of 2007.

DataQuick reports that most of the loans defaulting today were originated between 2005 and 2007 when weak underwriting standards were most prevalent.

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Jul 25, 2011

Mortgage Rates Stall

According to a report in the wall street journal,

Mortgage rates were mostly flat in the past week amid a series of mixed reports on the health of the U.S. economy, according to Freddie Mac's weekly survey of mortgage rates.

"Although both the overall producer price index and consumer price index fell moderately in June on lower energy costs, the core price indexes inched up," said Freddie Mac Chief Economist Frank Nothaft, adding that a consumer sentiment reading fell to the lowest level since March 2009.

The 30-year fixed-rate mortgage inched up to 4.52% in the week ended Thursday, from 4.51% the previous week, though that is down from last year's rate of 4.56%. Rates on 15-year fixed-rate mortgages were 3.66%, compared with 3.65% last week and 4.03% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.27%, down from 3.29% last week and 3.79% a year ago. One-year Treasury-indexed ARM rates were 2.97%, up from 2.95% in the prior week but down from 3.70% in the prior year.

To obtain the rates, fixed-rate mortgages required an average payment of 0.7 point, while adjustable rate mortgages required an average 0.5-point payment. A point is 1% of the mortgage amount, charged as prepaid interest.

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Jul 18, 2011

Mortgage Rates Decline on Weak Jobs Data

According to a report in the wall street journal,

Mortgage rates in the U.S. followed long-term bond yields lower in the past week after a disappointing June jobs report, according to Freddie Mac's weekly survey of mortgage rates.

"The economy added 18,000 jobs in June, well below the market consensus forecast, and the unemployment rate rose to 9.2%, the highest since December 2010," said Freddie Mac Chief Economist Frank Nothaft.

Mortgage rates generally track Treasury yields, which have slid below 3% amid the uncertain economic environment.

The 30-year fixed-rate mortgage fell to 4.51% in the week ended Thursday, down from 4.60% the previous week and 4.57% a year earlier. Rates on 15-year fixed-rate mortgages fell to 3.65% from 3.75% last week and 4.06% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.29%, slightly lower than last week's 3.30% and down from 3.85% a year earlier. One-year Treasury-indexed ARM rates fell to 2.95% from 3.01% last week and 3.74% a year ago.

To obtain the rates, 30-year fixed-rate mortgages required an average payment of 0.7 point and 15-year fixed-rate mortgages required an average 0.6 point payment. Five-year adjustable rate mortgages required an average 0.6 point payment, while one-year adjustable rate mortgages required an average 0.5 point payment.A point is 1% of the mortgage amount, charged as prepaid interest.

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Jul 13, 2011

Name Calling, Market Whiplash and Mortgage Rates.

According to a report in origination news,

Oh the irony of the mortgage market! Loan rates are falling, home prices are the cheapest they’ve been (in most, but not all markets) in a decade, but the consumer is spooked by the prospect of the U.S. defaulting on its debt payments. (In short, what kind of crazy person would sign a home purchase contract in this environment?) Meanwhile, the GOP refuses to close tax loopholes (also known as “raising taxes”) and the liberal wing of the Democrats refuse to touch Medicare and Social Security. This morning, the top Republican in the Senate, Mitch McConnell of Kentucky, accused the President and Democrats of "deliberate deception" of the public during the ongoing negotiations to cut government spending and increase the nation's debt limit. But so far, ‘Mr. Market’ believes a debt ceiling deal will be reached because the yield on the 10-year has not yet spiked. Or is that a reaction to Italy and Spain probably defaulting on their debt and the U.S. (still) being considered a safe haven? Hang onto your seats…

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Jul 9, 2011

Mortgage Jobs Rise Ever So Slightly

According to a report in National mortgage news,

Mortgage-related employment rose every so slightly in May with residential firms adding 2,600 new jobs during the month, according to government figures released Friday morning.

However, the mortgage broker segment continued to suffer job losses with 1,600 workers leaving the business either voluntarily or through a job loss.

Overall, the mortgage sector employed 241,500 full-time workers in May, up 1% from April. Compared to the same month a year ago the sector shed 17,300 jobs. (The mortgage figures trail the national numbers by a month.)

The mortgage broker segment supported 50,200 workers in May compared to 61,000 a year ago. Broker employed peaked in April 2006 at 148,200 workers.

Jay Brinkmann, chief economist for the Mortgage Bankers Association told National Mortgage News that during the second-half lenders will focus on how to “manage and reduce capacity.”

He noted that some smaller firms may increase hiring – with an emphasis on recruiting high performance loan officers – in an attempt to gain market share. “Of course not everyone can increase market share at the same time,” he said.

Although the Bureau of Labor Statistics provides numbers on broker employment it does not segment out servicing related jobs. MBA believes the emphasis on helping delinquent borrowers has increased servicing employment somewhat but with late payments now falling hiring may not be as robust going forward.

The national employment report came in much weaker than expected with nonfarm payrolls rising only 18,000 in June, the weakest reading since September, and well below economists' expectations for an increase of 90,000 positions. The unemployment rate rose 0.1% to 9.2%, the highest level this year.

In a statement Fannie Mae chief economist Doug Duncan said, “June’s nonfarm payroll gain of 18,000 shows that May’s weakness was not an aberration. This raises doubts that the second half of the year will see much improvement in the overall economy from the anemic performance of the first two quarters.”

He added that, “The disappointing news on the labor front will only serve to further damage already depressed consumer confidence and the demand for housing. While home prices have stabilized recently going in to the spring/summer selling season, this report bodes poorly for house price expectations.”

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Jul 6, 2011

Looking for Productive Brokers and LO's

Our Mortgage Banker is currently looking for productive brokers and loan originators to bring on board to our banking platform.

Our client works with 6 lenders and another 15 wholesale channels when needed.

UW times are 24-48hrs

You will have the ability to choose your own ysp without any ysp disclosure

No more dealing with wholesale underwriters, communicate with our underwriters directly!

Our client lends in 13 states.

Full fledged compliance department

We are able to move full broker shops to our banking platform in under 1 week.

Must be currently employed by a lender or broker (no "trying to get back into the business").

Must have closed at least $500,000 in volume/month for past 6 months.

For more information please email back with the following : -

# of loans closed in last 6 months:
Active Mortgage License:

Jun 29, 2011

MBA: Small Co. Profits Down

According to a report in National mortgage news,

WASHINGTON—Small mortgage banking companies got crushed in the first quarter between falling loan volumes and rising expenses.

Profits per loan dropped 66% as the tail end of the fourth-quarter refinancing boom came to an abrupt end in late January and managers rushed to cut payroll and other expenses.

Average per-loan profit was $346 in the first quarter, according to a survey by the Mortgage Bankers Association, down from a $1,082 profit in the fourth quarter and $608 in the 2010 first quarter.

Meanwhile, expenses per loan rose from $4,930 in the fourth quarter to $5,837—which ate into first-quarter profits, according to Marina Walsh, MBA’s associate vice president of industry analysis.

The survey found 63% of the 329 respondent firms posted pretax profits for the first quarter, compared to 84% in the prior quarter.

It is not unusual for profits to take a hit at the end of the refinancing boom.

However, it appears this downturn in profitability was more severe due to regulatory costs associated with loan officer compensation and overtime rules.

Walsh pointed out that the first quarter of 2010 had a lot of similarities to the first quarter of this year. Loan production was nearly the same at $157,800 with refinancing volume was at 50%, compared with 44% in the first quarter of 2010.

Read more just Visit -

Jun 25, 2011

Florida: Sales Up, Prices Down

According to a report in National mortgage news,

Florida saw a 3% increase in single-family existing home sales on a year-over-year basis in May, but the median sales price fell by 5%, according to the state's Realtor group.

There were 17,228 single-family sales statewide in May, up from 16,790 one year prior. Sales in the Miami area were up 20%, year-over-year. The markets with the largest amount of sales, Tampa-St. Petersburg-Clearwater with 2,749, and Orlando, with 2,476, were down 6% and 5% respectively when compared with May 2010.

Florida's Realtors noted that the $135,500 median sales price for a single-family home was up nearly 3% over April. The Fort Myers-Cape Coral area had a 19% increase in median price when compared with May 2010, while the Panhandle metro areas of Fort Walton Beach and Pensacola were up 5% and 1% respectively.

But the median price did not go up all across the Panhandle as Panama City was off by 14%. Other areas with a large drop in median price include Gainesville, down 18%, as well as Fort Lauderdale and Ocala, each off by 17%.

Existing condominium sales in Florida increased by 17% over May 2010 to 8,338 from 7,104 and the statewide median sales price increased over the same time frame by 2% to $98,200.

In Miami, condo sales were up by 46%, and the 1,420 units sold during the month topped the 875 single family homes sold there. There were also more condos sold in the Fort Lauderdale area than single-family homes, 1,537 compared with 1,142.

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Jun 22, 2011

Not Much Relief for California Home Sales, Prices — Except San Francisco

According to a report in National mortgage news,

Home sales in the Golden State fell 6% in May from the prior month with the California Association of Realtors blaming tightened financing conditions and the weak economy for the decline.

According to figures compiled by the trade group, median home prices fell roughly 1% on a sequential basis to $291,790, but were down 11% compared to May 2010.

"Market demand has been sluggish as would-be home buyers remain concerned about the direction of the economy," said CAR president Beth Peerce. "They may also be weary of delays in the buying process and difficulty in getting a home loan."

The trade group chief also blamed a larger inventory of distressed properties sitting on the market for the sluggish sales pace and weak prices.

The San Francisco Bay area, however, bucked the trend, with values rising 4% between April and May. The areas with the biggest price gains include: Napa (up 23%), San Mateo (+13%), and Marin (+11%).

DataQuick of San Diego issued its own results for May sales in the Bay Area, finding that the median price paid for all new and resale properties (including condos) was $372,000, up 3% from April but down 9% from May 2010. It was the largest year-over-year drop in the median scale since August 2009, when it fell 20%.

"Given the sluggish start to this spring's home-buying season, with sales 20% to 30% below average, it's no surprise we're logging sharper declines from 2010," said DataQuick president John Walsh. "Sales got a big shot in the arm a year ago, when people rushed to take advantage of expiring homebuyer tax credits. Today the market must stand on its own, and it's having a hard time doing that in the absence of stronger job growth and consumer confidence."

Read more -

Jun 17, 2011

Rates Hold Steady After Weeks of Declines

According to the National Mortgage News says,

The average rate for a 30-year FRM inched up one basis point to 4.5% after eight weeks of consecutive declines, according to Freddie Mac's closely watched survey.

In general, rates across most product types remained stable for the period ending June 16.

"After two months of fixed mortgage rate declines, and hitting new year-to-date lows along the way, rates held mostly steady this week," a Freddie Mac spokesperson told National Mortgage News.

On average, 15-year FRMs continued to inch downward, ending the week at 3.67%, a decline of one basis point. Treasury-indexed hybrid ARMs were at 3.27%, with one-year Treasury ARMs ending at 2.97%, up two basis points from the previous week.

Freddie chief economist and vice president Frank Nothaft said the mixed rates reflect slight increases in inflation indicators that were close to consensus, specifically a 0.2% increase in the core producer price index and a 0.3% jump in the producer price index. These increases were mostly "shrugged off" by the market, Freddie said.

In general, all rates remained lower than year ago levels.

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Jun 10, 2011

Housing at a 'Tipping Point' just take a look.

Home price expert Robert Shiller says,

The nation should not have been surprised by the recent “double-dip” in home values, but said he’s uncertain whether it is the start of a longer term slide in prices.

Shiller told attendees at a Standard & Poor’s housing conference in New York there has been “too much attention” on the double dip, noting that he had said for several months the market was on the verge of one.

He predicted there could be another dip in the S&P’s Case-Shiller 10-city index going forward, but also suggested that the market could turn up again in the summer months.

In terms of whether there is another definitive downtrend trend coming, Shiller said he considers the market at a “tipping point” and “not quite there yet.” Another month of data will make it clearer as to whether there are more recessionary pressures, he said.

During a question and answer session, when asked about future trends in home prices, he reiterated a past assertion that there could be another 10%-25% decline in real home prices over the next five years.

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Jun 6, 2011

Questions to Expect From Mortgage Lenders, Know what to expect before you apply.

According to a report in realtor,

Your mortgage lender will want to know a lot about you before approving your loan application, and justifiably so; they and their underwriters want to be assured that you meet their minimum level of creditworthiness before lending you money.

Areas of questioning : -

Here are the general areas of questioning you can expect from a lender:
1. Employment and income
2. Outstanding debts
3. Cash reserves and assets
4. Down payment
5. Loan purpose
6. Property use
7. Property type

Employment and income : -

Where do you work?
How much do you make?
How long have you been at your job?
How is your income derived -- steady salary or irregular income? If it's the latter, you may need to provide more details to obtain a favorable interest rate.

Outstanding debts : -

What recurring debts do you have?
How much do you pay a month for auto loans?
Credit cards? How much of your monthly pretax income do these debts consume?
Cash reserves and assets
How much money do you have in the bank?
How much will be left after you pay your down payment and closing costs?

Down payment : -

How much money are you putting down?
Is this your own money?
If not, is it a gift from your parents?
A nonprofit agency grant?

Loan purpose : -

Is this mortgage for a home buy or refinance?
If it's a refinance, do you want to take cash out at closing to pay off other debts? If so, how much?

Property use : -

Do you plan to live in the house?
Is it investment property?

Property type : -

A condominium?
A duplex?

The following responses tend to work in your favor:

Steady employment (two or more years) with the same employer or in same line of work.
Low debt: no recent major buys (such as automobiles) and a debt-to-income ratio of 36 percent or less.
Loan is for straight home purchase (or rate-and-term refinance).
Property is detached single-family home to be used as primary residence.
Down payment of at least 5 percent of sales price with your own money.
You'll have at least two months' worth of mortgage payments in the bank after closing.

These responses tend to work against you:

Self-employed or contract worker.
High debt: credit cards maxed out, total debt-to-income ratio more than 36 percent.
Property is a duplex or condominium, to be used as a vacation home or rental.
No cash left after home buy and closing costs.
Down payment is 3 percent or less of buy price and money is borrowed.

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May 16, 2011

Home Prices Retreat to Circa 2003 as Foreclosure Pressures Persist: IAS

Integrated Asset Services (IAS) says, its latest market analysis indicates the size and scope of home price declines are accelerating across the nation.

The Denver-based default management and valuation firm’s IAS360 House Price Index (HPI) fell another 2.6 percent over the first three months of 2011.

IAS says with the first-quarter decline, U.S. house prices are now down more than 25 percent from their high-water mark touched four years ago. At the end of March, the IAS360 was standing at a level not seen since the second quarter of 2003.

The company says foreclosures, meanwhile, are expected to rise to 1.2 million this year, adding to an already engorged housing supply and exerting further downward pressure on property values.

“There are simply too many market factors weighing against house prices to correct the supply and demand gap in the near term,” said Paul Sveen, CEO of Integrated Asset Services.

“Even if the economy is normalizing a bit, I just don’t see any of the problems overhanging the housing market going away any time soon,” Sveen said.

IAS reports that virtually every key measure of its home price analysis declined during the first quarter, including all four U.S. census regions, all nine census divisions, and all of the IAS360’s largest metro regions.

The continued slide has pushed both Las Vegas and Miami down more than 50 percent from the top of the market in 2007.

Even the nation’s wealthier areas took a turn for the worse this period, with eight of the IAS benchmark’s ten wealthy counties reporting first-quarter declines. All were positive the previous period.

“We look at the housing market all the way down to the neighborhood,” said Sveen, “and there’s just nothing good to see in this report. I have very real concerns the U.S. housing market is on its way to a new low.”

Leading the way down this period were outsized price declines in the two North Central divisions that comprise the Midwest census region, according to IAS’ study.

With the Chicago metro area dropping 4.6 percent, the overall region fell a stunning 6.9 percent for the quarter — this following a slight gain the previous period.

Similarly, the Northeast and West regions also turned negative, falling 3.2 percent and 3.7 percent respectively. The South slid another 2.0 percent.

The West region, which includes three of the nation’s hardest hit states — California, Arizona, and Nevada — is down nearly 40 percent from its high four years ago, according to IAS.

IAS data includes non-conforming, bank-owned, and conventional sales transactions, in addition to those insured by federal government agencies.

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May 4, 2011

Customers are happier with their banks...?

According to a report in CNN,For the first time in more than three years, consumers say they are happier with their banks.

No, this isn't a joke.

While you can find stories every day about new fees popping up, and credit card interest rates rising as banks squirm under new regulations, consumers have actually become more satisfied with their banking experiences this year, according to research group J.D. Power and Associates' annual survey.

On a 1,000 point scale, customer satisfaction came in at 752 this year, up four index points from last year and the first uptick in sentiment since 2007.
The 8 least evil banks

What caused customers to warm up to their banks? Better in-person branch interactions, improved access to detailed account information and more product offerings that fit their lifestyles -- including online and mobile tools, the report indicated.

Even perceptions of banks' brand reputations have gotten better -- the first positive change since 2008.

But just because sentiment improved doesn't mean customers don't still have major gripes. What upset them most this year were the changes banks have been making to fee structures. While the number of customers reported being charged fees actually declined from 53% in 2010 to 43% this year, consumers were less satisfied with the way banks were choosing to impose charges.

This year, 18% of customers said their fee structures had changed in the last year, compared with 16% in 2010. J.D. Power said that changes in fee structures typically cause a customer's overall satisfaction rating to decrease by an average of 84 index points.

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Apr 26, 2011

Mortgage denied: Sometimes, for no good reason...

According to a report in CNN, Getting a mortgage just keeps getting tougher, and many homebuyers are getting rejected for loans they could easily afford.

The issue: Tighter standards from Fannie Mae and Freddie Mac, the government entities that back mortgages made by banks.

Banks are reluctant to make loans without the Fannie and Freddie guarantee, and loans backed by them account for just about every mortgage written these days.

In 2009, the agencies lifted the minimum credit score that borrowers must have from 580 to 620. That's probably for the best.

But they've pushed through a host of other requirements as well, and that means real estate deals don't get done, even for some relatively low-risk borrowers.

"You can have one Fannie/Freddie guideline you violate and that gets you rejected," said Alan Rosenbaum of GuardHill Financial.

A quarter of all mortgage loan applicants get denied for loans, according to the Federal Reserve. Many other potential homebuyers never even try to get loans, said Jerry Howard, president of the National Association of Home Builders.

"The pendulum has swung too far in the other direction," Howard said. "This overreaction is retarding the housing market recovery." (Homes: What a million bucks buys)

Here are some of the reasons that banks must turn down borrowers for mortgages:
Too few of the condos in your association have been sold

For Fannie/Freddie lenders to approve a mortgage to finance purchase of a condo, a large majority of the units -- 70% -- have to be already sold or under contract to individuals. Before 2009, the threshold was 51%.

If more than 30% are still owned by the company that built the complex or sponsored its conversion from rental units, the mortgage will be denied, no matter how qualified the buyer is.

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Apr 21, 2011

New commonsense mortgage rule... any thoughts..?

According to a report in bankrate,The Fed is proposing a rule that would require lenders to make sure borrowers can afford payments before they are issued a mortgage loan.

Isn't that common sense? You would think so but it was the lack of basic, commonsense rules that allowed lenders to give out mortgages to people who clearly couldn’t afford them during the housing bubble. The reckless lending practices resulted in a high volume of defaults that contributed to the financial crisis.

Only now regulators seem to have realized that minimum underwriting standards should be required.

According to the 474-page proposal, a creditor would be prohibited from "making a mortgage loan unless the creditor makes a reasonable and good faith determination, based on verified and documented information, that the consumer will have a reasonable ability to repay the loan, including any mortgage-related obligations (such as property taxes)."

The rule is being made pursuant to the Dodd-Frank Act and would apply to all consumer mortgage loans except equity lines of credit, timeshare plans, temporary loans and reverse mortgages.

Lenders would be required to follow basic underwriting standards, including verifying borrowers' income and assets, employment, debt obligations, monthly debt-to-income ratio, credit history and monthly mortgage payments.

But the problem is the rule doesn't spell out a guideline with numbers or ratios to determine if the borrower can afford the loan. Regulators are expecting lenders to be "reasonable" and use "good faith" to make the determination. Good luck with that!

And since every rule has an exception, here are the exceptions to the proposed rule:

* Lenders could be shielded from liability if they opt to making a qualified mortgage, which would be defined under the rule as a loan that does not contain negative amortization, interest-only payments or a balloon payment. Qualified mortgages would also exclude loan terms exceeding 30 years and loan with total points and fees that exceed 3 percent of the total loan amount. The underwriting of the mortgage would have to be based on the maximum interest rate that applies in the first five years. Don't confuse this with a "qualified residential mortgage," which relates to another rule that regulators are considering.
* Lenders would be allowed to write balloon-payment mortgages in "rural" and "underserved" areas without having to worry about this rule.
* Borrowers, who currently have a "non-standard mortgage" with risky features such a negative amortization loan, would be allowed to refinance with a "standard mortgage," without having to show proof of income and assets.

Do you agree with these exceptions?

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Apr 20, 2011

Wells Fargo cuts 1,900 mortgage jobs..

Wells Fargo & Co. cut 1,900 employees from its mortgage unit nationwide as mortgage refinancings slowed, the bank said Thursday.

San Francisco-based Wells (NYSE: WFC) announced the layoffs on March 23, giving affected employees 60 days' notice.

The bank blamed the cyclical mortgage business for the cuts, Reuters reports.

Wells saw mortgage originations fall to $386 billion last year from $420 billion in 2009, according to Bloomberg.

The cuts represent less than 1 percent of Wells' 272,000-plus work force.

Many of the employees were temporary hires brought in as refinancing surged on lower interest rates.

The bank said some of the affected employes would be moved to other departments.

House votes to kill Obama mortgage plan. just take a look..

According to a report in CNN,The House passed a bill Tuesday to kill a signature Obama administration program that helps homeowners stay in their homes but has faced criticism as ineffective.

The House voted 252 to 170 to stop any new funding for the Home Affordable Modification Program (HAMP). Eleven Democrats joined Republicans to defund the program.

The program taps the federal bailout that saved the big banks, providing incentives to mortgage servicers to modify mortgages for borrowers behind on their payments.

"To many struggling Americans seeking permanent mortgage relief, HAMP offered little more than false hope. More homeowners have been kicked out of the program than have received permanent relief," Rep. Darrell Issa, the California Republican who chairs the House Oversight Committee, said in a statement.

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Apr 12, 2011

Long Government Shutdown Would Harm U.S. Economy, Hit Washington Hardest

According to the report says,

An extended U.S. government shutdown would cause increasing harm to the nation’s economy, with the Washington area -- home to about 350,000 federal workers -- bearing the brunt of the damage.

“The economic damage would mount pretty quickly,” in a two- or three-week shutdown, said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The longer this drags on, the greater the odds it undermines confidence more broadly.”

The direct costs of lost income to federal workers and contractors would be about $6 billion a week, said Zandi. “The dollars and cents would start to add up.”

Congressional leaders remain stalemated over funding the U.S. government, with President Barack Obama unable to broker a compromise after several White House meetings -- the most recent one last night -- with House Speaker John Boehner, an Ohio Republican, and Senate Majority Leader Harry Reid, a Nevada Democrat. The lawmakers’ staffs were continuing negotiations into the night.

In brief remarks after last night’s session with Boehner and Reid, Obama said that a shutdown could severely hamper the economic recovery and job growth.

“We’ve been working very hard over the last two years to get this economy back on its feet,” he said. “For us to go backwards because Washington couldn’t get its act together is unacceptable.”
Midnight Deadline

Failure to reach a deal on funding for the remaining six months of the fiscal year would trigger a government shutdown at midnight tonight, causing more than 800,000 “non-essential” federal workers to be furloughed without pay.

Among services that would be halted are some mortgage processing by the Federal Housing Administration and loan approvals by the Small Business Administration, while some tax refunds would be delayed. Air traffic control, emergency management and federal law enforcement would continue.

Lockheed Martin Corp. (LMT), the world’s largest defense contractor, said it would keep its factories open and pay its employees’ salaries and benefits.

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Apr 4, 2011

Vendor Glut Drives Up Fees - interesting article - Ferrari versus home purchase.. what ...???

There was a recent article in the National Mortgage News about the fees associated with home loans. According to Patrick Stone, President of the Williston Financial Group, told the annual Real Estate Services Providers Council meeting that five to 18 different vendors are involved in the typical real estate transaction, “making for a complex and disappointing experience” for consumers. And costly, too. Whereas the fee to purchase $250,000 worth of securities is $1,250 and the commission to buy a $250,000 Ferrari is $7,500, Stone pointed out, home buyers generally pay a whopping 8%—a total of $20,000—in fees to purchase a $250,000 house.

Stone, who had a lengthy career at Fidelity National Financial, including eight years as president, said firms that operate affiliated business arrangements can and should “drive some of that cost out” of the transaction. “If you control the point of sale,” he ventured, “you should be able to cut the cost almost in half.”

During his talk, Stone, whose firm acquired the Millennium Title Group in 2009 and TransUnion National Title Insurance last year, also took exception to purveyors of national housing statistics. And he suggested that the housing finance sector can get along just fine without Fannie Mae/Freddie Mac. He said oft-quoted indices such as Case-Shiller do more harm than good because they distort the fact that housing is local. By reporting a national decline in house prices, he explained, the indices suggest that all localities are suffering when in fact many are doing well. The same goes for reports about foreclosures and borrowers who owe more than their homes are worth, he added. “Underwater borrowers are not a universal problem,” he said, adding that while every state has its share, the problem is heavily concentrated in just six states.

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While what is being said is very true, all stakeholders need to figure out the specific areas where costs can be taken out of the equation. An interesting benchmark was identified in the article and all efforts need to be made to figure out how costs can be reduced. Can the existing title (from a certain title company) be used to reduce the costs? Also, in the Ferrari example, are the insurance costs taken into effect?

Here are some fees associated with a vehicle purchase

Non negotiable fees
  • Destination Charge
  • Sales Tax
  • Title, Registration & License
Negotiable fees
  • Documentation Fee
  • Market Adjustments
  • Transportation Fee
  • Dealer Prep
  • Dealer Additions
  • Finance Fees
  • Processing & Miscellaneous Fees

Mar 30, 2011

Mortgage Tech Vendor Prices IPO, Hits the Road...just take a look.

Mortgage technology vendor Ellie Mae on Tuesday priced its initial public offering, laying out plans to raise between $40 million and $60 million.

The firm also officially launched its investor road show and will try to convince institutional buyers to gobble up its 5 million shares. (The offering range is $9 to $11 per share.)

In total, it will issue 7.5 million shares with the firm's executives retaining 2.5 million units. Its stock symbol will be ELLI with shares trading on the New York Stock Exchange.

The Pleasanton, Calif.-based software firm filed its S-1 registration statement with the Securities and Exchange Commission in May of last year. In 2009 it managed a small profit of $1.7 million on revenues of $38 million. (No figures were available at press time for 2010.)

The 13-year-old firm got its start in mortgage banking by offering website technology aimed primarily at loan brokers. It then expanded out its business footprint by becoming a broker LOS with the acquisition of both Genesis and Contour, and eventually expanded further to cater to midtier mortgage lenders. Its was founded by industry veteran Sig Anderman.


Mar 25, 2011

Mortgage rates creep higher in latest week

NEW YORK — Mortgage rates edged up this week, but even 30-year fixed rates below 5% have done little to boost home sales.

Freddie Mac said, Thursday that the average rate on 30-year fixed mortgages rose to 4.81% from 4.76% the previous week. It hit a 40-year low 4.17% in November.

The average rate on 15-year fixed mortgages increased to 4.04% from 3.97%. It reached 3.57% in November, lowest level on records dating back to 1991.

Mortgage rates tend to track the yield on 10-year Treasury notes, which rose this week.

MORE: New-home sales plunge

Still, low rates haven’t helped the weak housing market. In February, sales of previously occupied homes fell 9.6% and new-home sales tumbled to the slowest pace in nearly a half-century.

High unemployment, a record number of foreclosures and tight lending standards have kept people from making purchases. Other would-be buyers are waiting for home prices to bottom out, which most economists predict won’t happen until midyear.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country Monday through Wednesday each week. Rates often fluctuate significantly, even within a day.

The average rate on a five-year adjustable mortgage rose to 3.62% from 3.57%. The five-year hit 3.25% last month, lowest rate on records dating back to January 2005.

The average rate on one-year adjustable-rate home loans increased to 3.21% from 3.17%, which was the lowest level in a year for the one-year ARM.

The rates do not include add-on fees, known as points. One point is equal to 1% of the total loan amount. The average fee for 30-year fixed loans and 15-year fixed loans in Freddie Mac’s survey was 0.7 point. The average fee for five-year ARMs and 1-year ARMs was 0.6 point.

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Mar 18, 2011

Mortgage rates tumble; 15-year average falls below 4%

NEW YORK — Fixed mortgage rates tumbled this week and 15-year loans dipped below 4% on average for the first time in three months.

Rates follow the yield on U.S. Treasury bonds, which fell as bond prices rose on worries that the crisis in Japan could slow economic growth.

Freddie Mac said Tuesday that the average rate on 15-year fixed mortgages, a popular refinance option, dropped to 3.97% from 4.15%. The last time the rate was below 4% was in mid-December. It reached 3.57% in November, lowest level on records dating back to 1991.

The average rate on 30-year fixed mortgages fell to 4.76% from 4.88% the previous week. It hit a 40-year low of 4.17% in November.

Mortgage rates tend to track the yield on 10-year Treasury notes. Those yields have tumbled as investors bid up the price, seeking safer investments. Bond prices and yields move in opposite directions.

Low mortgage rates haven’t been enough to jumpstart the housing market. Home construction last month plunged to its lowest level in almost two years, while building permits, an indicator of future housing activity, sank to a five-decade low, the government said this week.

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Mar 10, 2011

U.S. mortgage rates hold steady

Long- and short-term mortgage rates saw little change this week, but they remain below year-ago levels.

A 30-year fixed-rate averages 4.88 percent this week, up from 4.87 percent last week. A year ago, 30-year mortgages averaged 4.95 percent.

The average rate on a 15-year fixed-rate mortgage is 4.15 percent, unchanged from last week.

A one-year adjustable rate fell to 3.21 percent from 3.23 percent.

Mortgage applications jumped nearly 16 percent last week, according to the Mortgage Bankers Association, as potential buyers and existing homeowners continue to try to lock in rates before they rise. Applications to refinance rose 17.2 percent while purchase applications rose 12.5 percent, to the highest level of the year.

“An improving job market is beginning to pave the way for an improving housing market,” said MBA vice president of research Michael Fratantoni.

Low mortgage rates have continued to help nudge housing sales higher nationwide. However, home sales in Dayton have continued to lag and dropped 5 percent in 2010.

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Mar 8, 2011

GROVER: Dismantling overbearing financial reforms Repeal is unlikely, but they can be taken down brick by brick

washingtontimes says,the 2,300-page Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by President Obama last year, enshrines “too big to fail,” further politicizes the Federal Reserve by planting diversity czars at each of its banks, imposes a huge regulatory burden on the consumer financial services industry, and does nothing to prevent what caused the financial crisis: easy Fed credit and politically driven weakening of mortgage credit underwriting.

Doughty Rep. Michele Bachmann, Minnesota Republican, has introduced legislation to repeal the Dodd-Frank Act in its entirety. A laudable goal, but while conceivably repeal can pass the House, mustering 60 votes in the Senate will be tough. A two-thirds majority necessary to override an all-but-certain Obama veto is unlikely. Nonetheless, a repeal vote would be symbolically valuable.

In the absence of outright repeal, it should be dismantled, brick by brick.

The Consumer Financial Protection Bureau (CFPB) and debit-card interchange price controls are two worthy targets to start with. The CFPB will wield vast authority to define and ban consumer financial products and suppress innovation, reducing the availability of consumer financial services.

An animating CFPB sentiment is the perception that financial institutions are fat-cat bankers - rapacious and untrustworthy - and many American consumers should not be trusted to manage their own financial affairs. Rather, Washington mandarins are better equipped to decide what’s in Joe and Sally Sixpacks‘ best interest than they are.

Before 2009, the Fed’s regulatory approach was to work toward full disclosure of consumer financial products’ material facts. Consumers were considered sovereign - a notion few questioned for the first several centuries of the Republic.

How radical is it to suggest Americans who can vote, serve on a jury and join the Army ought to be considered competent and free to choose a credit card?

But today, many members of Congress and regulators are at heart paternalists. Most Americans, however, want to govern themselves.

Those who want to roll back Mr. Obama’s regulatory onslaught on the financial services sector should propose narrowing the CFPB’s mandate to ensuring products’ material facts are fully disclosed. Then consumer choices in the market can determine what financial products succeed and fail.


Mar 3, 2011

Mortgage Pricing Hits Wall. Loan Demand Declines ..

According to the mortgage news daily says,The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 25, 2011.

The MBA's loan application survey covers over 50% of all U.S. residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a snapshot view of consumer demand for mortgage loans. In a falling mortgage rate environment, a trend of increasing refinance applications implies consumers are seeking out lower monthly payments. If consumers are able to reduce their monthly mortgage payment and increase disposable income through refinancing, it can be a positive for the economy as a whole (may boost consumer spending. Also allows debtors to pay down personal liabilities faster). A trend of declining purchase applications implies home buyer demand is shrinking.

Excerpts from the Release...

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5.5 percent compared with the previous week.

The Refinance Index decreased 6.5 percent from the previous week. The four week moving average is down 2.7 percent. The refinance share of mortgage activity decreased to 64.9 percent of total applications from 65.7 percent the previous week.


Mar 1, 2011

Commercial lending beginning to gain momentum...?

Sam Spatter says,( Pittsburgh Tribune-Review )

Lending by banks to real estate developers, small business and other companies is picking up slowly, according to Pittsburgh-area financial experts.

They say there is some easing of lending requirements for developers and larger businesses, but small businesses still are having a difficult time. Even those that survived the recession -- showing they have the ability to grow and repay loans -- are struggling to get loans, said Marilyn Landis, vice chairwoman of advocacy for the National Small Business Association and owner of Basic Business Concepts Inc. on the North Side.

"Banks are definitely moving in the right direction, but the lending parameters remain tight," said C.J. Handron, management consultant with the University of Pittsburgh Small Business Development.

In Western Pennsylvania, the Small Business Administration last year guaranteed 428 loans with total value of $110.39 million after guaranteeing 384 loans valued at $85.39 million in 2009. By comparison, before the recession hit the region hard in mid-2008, the local SBA office approved 571 loans for $94 million.

So far in 2011, 20 loans have been approved, valued at $3.82 million.

The latest data from the Federal Reserve Board showed economic activity expanded "at a modest pace" in the fourth quarter in the four-state district that includes Western Pennsylvania. Bankers here and in Ohio, West Virginia and Kentucky said commercial loan demand was "stable or showed modest growth" since September, but loan balances had declined.

Lenders are looking for assurance they will be repaid, Handron said. Two years ago, banks required 10 percent to 15 percent equity from the borrower. Today, they want 20 percent to 25 percent, Handron said.

James Kunkel, executive director of St. Vincent College Small Business Development Center, said that strict lending standards banks installed in 2009 and 2010 remain in effect.

Read more..

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 document which can be found at

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.”

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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:

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.

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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.

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