“The Message is Simply Amazing”

The reason this 5 minute video has such a powerful message for me, is that my parents were Holocaust survivors. Both of them lost their original families. There are some amazing stories. Thank you for allow me to share the video.

My parents instilled in my two brothers and myself, live every moment, like it will be your last. I never forget what they shared.

CLICK HERE TO SEE THE INSPIRING VIDEO

“My Mortgage Broker World is Alive and Well”

I spoke to a banker this morning that has been sending me business for many years. Carole was referring a client that her bank couldn’t help. These folks were buying a $500,000 home and putting $150,000 down. After giving me all the details, I told her that I could assist them and got all their contact information.

Yes, this was a great referral, but not the important part of our conversation. She told me that that she was getting very tired of telling perfectly good mortgage clients that she couldn’t do a mortgage for them. She was considering, as she put it, “coming over to the other side”. Would I consider hiring her?

I told her, I would in a New York second. I have a lot of respect for Carole and the work she has done for so many years. She had always done great work for clients that I had referred to her.

She had already started the licensing process, so over the next few months would be make the transition. I hear this type of story more and more.

Is Wholesale Mortgage Lending Hot?

By; Paul Muolo

The other day a mortgage recruiter made a blunt statement to us: “Wholesale lending is really hot right now.” Of course, given what’s happened to the mortgage business the past few years and all the blame being placed on brokers for crappy loan quality, such a statement might be taken with a grain of salt. But it’s safe to assume that all the bad actors have been forced out of the loan brokerage industry – although the same may not be said of retail LOs working for depositories. Anyway, lenders today (of all stripes) are constantly searching for the most efficient and cost effective way to fund loans – a strategy that should include brokers. Still, according to the Quarterly Data Report, brokers only account 10% of the origination market compared to 30% four years ago. Still, a recovery in the channel is underway but how far that recovery will go is up in the air – thanks to new CFPB and other regulatory proposals.

“The Heading and First Paragraph of this Wall Street Journal Article, Tells a Crazy Story”

It is amazing to me, that any bank that would leave you a message, that they will communicate back with you in 60 to 90 day, to begin the application process. How the hell are they still in business? I hear this type of story all the time, from clients that are referred to me. It is not like these banks have any product that we as mortgage brokers don’t have, so why does anyone use them at all? It is not like their interest rates are any better and their service surely is not. I wish I knew.

I suppose I should just be happy, they are around and as a result, they continue to grow my business.

Borrowers Face Big Delays in Refinancing Mortgages

By NICK TIMIRAOS And RUTH SIMON

When Craig Foyer called Bank of America Corp. in March to ask about refinancing the mortgage on his Oconomowoc, Wis., home, a saleswoman told him the company was "swamped with business" and that it would

call him back in 60 to 90 days, he says.

“Why Aren’t More HARP Loans Closing?”

The HARP program isn’t asking the lender to take a principal reduction, just an interest rate reduction. The majority of these homeowners have paid their mortgage on time, but their real estate values dropped. These homeowners didn’t cause the values of their homes to drop and they want to continue owning the properties. Why make this refinance process as difficult as it is? If these folks obtain an interest rate that drops, they have more dollars to spend every month, that will help the overall economy.

Right now, I am getting 7 out of 10 transactions closed. I am being told by the lenders that that is a great ratio. Why is that a great ratio? Let’s make the process easier for these homeowners.

HARP Means Savings, Less Debt for Homeowners: Freddie Mac

By: Ryan Schuette 05/11/2012

More homeowners continue to reap benefits from the newly modified Home Affordable Refinance Program (HARP), with 79 percent of homeowners with government-backed mortgages either keeping the same level of mortgage debt as before or reducing it over the first quarter.

Of those homeowners, Freddie Mac found recently, 79 percent held onto the same level of debt for first-lien home mortgages, while 21 percent of homeowners shaved off dollars from their principal balance.

The mortgage company said that the share of borrowers keeping their original loan amounts hovered at the highest level in the 26-year history of the survey.

“The enhancements to HARP announced in October, such as removing the maximum loan-to-value limit, are beginning to show up in additional refinance

volume during the first quarter,” Frank Nothaft, VP and chief economist with Freddie Mac, said in a statement.

He said that HARP loans amounted to 20 percent of Freddie Mac’s refinance funding during the first quarter, with borrowers drawing down their interest rates by 1.5 percent on average.

“On a $200,000 loan, that translates into saving about $2,900 in interest during the next 12 months,” he added.

Freddie Mac also found that “cash-out” borrowers – those who increased their loan balances by at least 5 percent – accounted for 21 percent of refinance mortgages.

For those who reduced their 30-year loans, the median interest rate reduction amounted to 1.5 percent, representing roughly 27 percent in savings on interest rates alone, the largest such share in 27 years for Freddie.

Net dollars of convertible home equity translated to an inflation-adjusted low, a bottom for the company in about 17 years of analysis. Refinancing homeowners cashed out with about $5.3 billion in net home equity during the first quarter, down from $7 billion in the fourth quarter.

The latest numbers arrive as the Obama administration and lawmakers considers new modifications to HARP, with the president set to address the issue with a Nevada family interested in refinancing.

HUD Secretary Shaun Donovan indicated in a teleconference call with reporters Friday that the administration stands ready to back one of three bills currently before Congress that would expand HARP.”

 image: stuart miles/freedigitalphotos.net

“Phil Hickey Joins Right Trac Financial and Activerain”

I am very pleased to introduce Phil Hickey as a loan officer at Right Trac Financial. I interview many potential loan officers, but I’m not looking for numbers, but rather quality.

The first time I meet Phil 7 years ago, I immediately liked him. He was genuine, straight forward and a great listener. I admire those qualities. I could go on and on, but you get the idea.

Once Phil made his decision to join Right Trac  we spent a lot of time talking about social media. Wow, he hopped on this horse, ready to right. He has already posted a few blogs on Activerain, updated his profile on Linkedin and is developing a following of Facebook.

Phil, welcome to Right Trac, we know you will have a successful career and look forward to your many blogs going forward.

IMMEDIATE RELEASE:

Phil Hickey joins Right Trac Financial Group

Manchester, CT - Right Trac Financial Group Inc. NMLS#2709 is pleased to introduce its newest mortgage consultant, Phil Hickey NMLS#887809.

Phil brings over 7 years of sales experience in the wholesale and retail side of the mortgage industry.  Phil worked most recently with First NLC Financial Services, headquartered in Boca Raton, FL.  Phil holds a Bachelor of Science degree in accounting from Eastern Connecticut State University.

Joe Petrowsky, the owner of Right Trac Financial Group, Inc. said, “It is with open arms that we welcome Phil.  I have had the pleasure of working with Phil when he was working on the wholesale side of mortgages.  Bringing him on board makes our already successful organization that much better.”

Right Trac Financial Group, Inc., located in Manchester, CT, has been in business since 1993 and is a licensed mortgage broker in CT, MA, RI, VT, NH, ME, NY & FL. Right Trac offers a variety of financial products including Conventional, Jumbo, VA, FHA, 203 K, USDA, HARP, Reverse and Commercial mortgages. 

“Proposed CFPB, Could Kill the Mortgage and Housing Recovery”

If you want to kill the mortgage industry, let the government get more involved.

Realtors, let me ask you a question. What if tomorrow morning, the CFPB brought forth a proposal that all Realtors had to charge a flat fee, just so one Realtor would not have an unfair advantage over another.   That the consumer no longer has to choose one Realtor over another, because one is not better than another.

We all know, that would wipe out most Realtors, which is what the intent is with the mortgage brokerage world.

Dodd-Frank, Obamacare and the current administration is slowly but surely taking away the free enterprise system in this country. All should be eliminated by years end.

The article mentions that 75% of the mortgage industry will most likely vote for Romney over Obama. The same can be said for anyone running a business. The sooner we get big government out of all business the sooner hiring will wake up in this country again.

Will the CFPB Kill the Mortgage Recovery?

By: Paul Muolo

Is the mortgage industry in the throes of what might turn out to be a lengthy and profitable recovery? Let’s look at the signs: Fannie Mae just posted a hefty profit, Freddie Mac has earned money on an operating basis for at least two quarters in a row, many lenders are enjoying strong profit margins and the HARP program appears to be humming along. Optimists might have reason to pop some champagne. Then again, let’s not kid ourselves: the CFPB’s decision to once again play with compensation formulas after the industry when through a wrenching LO comp nightmare a year ago will not help. Nonbank and brokerage executives I talked to this past week used words like “communism” and “socialism” when talking about the flat fee proposal. If the Obama White House is counting on the residential finance sector’s vote this fall, they can forget about it. (I would wager that 75% of mortgage professionals will vote for Romney in November, and that might be conservative.) But regarding the new LO comp proposal, there’s always the possibility that the CFPB will come to its senses and not create an industry where only the megabanks will thrive. After all, the CFPB’s mission is to help consumers, not commercial bankers…

image:ambro/freedigitalphotos.net

“As HUD Continues to Work Out These Settlements, Pretty Soon, They Will Have a Surplus Instead of a Deficit”

For months we have continually been told that, FHA will need an infusion of money in order to maintain its reserve requirements. Why, after they continue to collect millions in settlements, is a cash infusion necessary?

The biggest issue I see with FHA is their increased fees that they are charging. As a result of these increases, FHA volume has steadily decreased, which hurts first time home buyers. If less first time home buyers are able to purchase homes, that will hurt housing. These fees are hurting the ones they were set up to help.

HUD Reaches $202M Settlement With Deutsche Bank

HUD announced Thursday that it reached a $202 million settlement with Deutsche Bank and Mortgageit over allegations of misconduct and false certifications with a government lender program.

The agency said that Mortgageit acknowledged and accepted responsibility for false certifications it submitted to HUD in order to gain from a direct lender program under the Federal Housing Administration (FHA).

For its part, Deutsche Bank admitted wrongdoing by failing to account for Mortgageit’s activities before it made the decision to close down the unit in 2008.

The administration filed suit under the False Claims Act and U.S. District Judge Lewis Kaplan approved it.

Manhattan U.S. Attorney Preet Bharara said in a statement that the institutions “treated FHA insurance as free Government money to backstop lending practices that did not follow the rules…. Their failure to meet these requirements caused substantial losses to the Government – losses that could have and should have been avoided.”

A civil crimes unit helmed by Bharara’s office will oversee the settlement as it moves forward.

image:digitalart/freedigitalphotos.net

“Get Used to Home Value Increases”

Last week, two of my clients were involved with bidding on homes, where there were multiple offers. One was successful the other was not. That's not the point, I have been seeing values beginning to firm or getting stronger.

Here is the problem, appraisers are not seeing this transformation taking place. The problem, they are using comparables that haven’t caught up with the increased values. They are often still indicating declining values and making adjustments downward, instead of just the opposite.

Home prices rise for first time in 8 months

By: The Niche report

Home prices rose in March for the first time since last July, helped by tighter housing inventory, data analysis firm CoreLogic said on Tuesday.

CoreLogic’s home price index gained 0.6 percent from February, but was still down 0.6 percent compared with March a year ago.

Excluding sales of distressed properties, prices climbed 0.9 percent on a yearly basis. Homeowners in danger of foreclosure, or in “distress”, often sell their homes at significantly reduced prices.

“This spring, the housing market is responding to an improving balance between real estate supply and demand, which is causing stabilization in house prices”, Mark Fleming, chief economist at CoreLogic, said in a statement.

Of the top 100 statistical areas measured by population, 57 showed year-over-year declines, down from 65.

The closely watched S&P/Case Shiller index released in late April showed a rise in U.S. single-family home prices in February for the first time in 10 months, with a gain of 0.2 percent on a seasonally adjusted basis.

image: digitalart/freedigitalphotos.net

“Profits Affected by Dodd-Frank, Means Less Hirings”

The amount of rules and regulation that affect banks and mortgage companies is beyond belief. This bill got created to protect the best interest of the consumer. The problem is, just the opposite is happening.

The Consumer Financial Protection Bureau is now proposing a new and improved way to eliminate the mortgage brokers. They are proposing to reduce our fees, all in the name of the consumer.

I have a challenge for the CFPB, contact any of my clients, as them if they feel, that they were over charged for the services they received.

My parents are turning in their graves, as what they are seeing this country turn into. A country that government top heavy, that spends beyond its means, that continues to move more toward socialism each and every day.

The two guys in the photo below should be ashamed of themselves and others will be left with the mess they created. Thank you Barney and Chris.

Banks Continue to Fight the Dodd-Frank Act

By: The Niche Report

The Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 is failing to achieve many of its desired effects, according to Federal Reserve Governor Daniel Tarullo. The reason cited by Mr. Tarullo is that major investments banks are putting up a formidable fight.

Mr. Tarullo used the term “sobering” to refer to the opposition that Wall Street giants such as Godman Sachs and JP Morgan Chase have shown to rulemaking needed to implement the reforms. The Dodd-Frank Act is the main response to the global financial crisis that the Obama administration has enacted, but the implementation of rulemaking is not moving along as planned. Prominent law firm Davis Polk has been issuing progress reports on the rulemaking efforts, and while in April no rulemaking requirements were due, only eight were reached. This means that 67 percent of the deadlines established by regulators have been missed since April 2011.

The warning by Mr. Tarullo was made at a private meeting with the bank executives who are fighting tooth and nail against the rulemaking. Mr. Tarullo suggested that the momentum behind the much-needed financial reform that was cultivated during the early days of the Obama administration is in danger of being lost due to stall tactics.

Delaying the Volcker Rule

When President Obama asked the United States Congress to add the Volcker Rule to the Dodd-Frank reform package, Wall Street grumbled and Main Street applauded. The Volcker Rule seeks to stop banks from making the same kind of speculative investments and proprietary trading that led to the meltdown of former Wall Street giants such as Bear Stearns and Lehman Brothers. A lot of the trading that brought down these two former investment banking firms had to do with mortgage-backed securities.

The Volcker Rule has been a contentious item between Wall Street and federal regulators. Major banks are clearly not interested in abandoning the speculative activity that makes them so profitable, and even powerful clients who have not suffered major losses in the credit market are opposed to it. Pressure from the banks against the Volcker Rule has prompted regulators to move its implementation date to July 2014 instead of this year.

The comments from Mr. Tarullo were not the crux of the meeting. In fact, the agenda of the meeting was originally set to review the stress tests that are now regularly performed on the major banks. The majority of these banks have no choice but to submit to stress test as per the conditions set by the federal government when they were bailed out in 2008 and later. Still, bank executives complained about what they considered secretive parameters.

The bank executives also pointed out that the Volcker Rule and other requirements of Dodd-Frank would reduce liquidity and the bank’s ability to churn profits. Mr. Tarullo did not respond to the comments from the bankers.

“Many Want to Refinance and Can’t”

Yesterday was a very tough day. When I can’t help someone refinance, it is really tough to say to them, I’m sorry, there is nothing I can do to help.

Randie called me,saying that she was referred by her dad. They purchased a home in 2004 and refinanced in 2006, at the time the mortgage was $200,000. They are paying 8.05% interest and is not a loan that is owned by Fannie or Freddie, so a HARP 2 loan is not possible. The property value is estimated at $175,000. They do not have money to bring to closing and there are no family members that can assist them either. They are not willing to short sale, as they love where they live. For now, they are stuck and I can’t help them.

Billie called me, referred by their attorney. She and her husband have lived in the same home for 25 years. A few years ago, they refinanced to pay off some credit cards and to get some dollars for repairs. Their mortgage balance is $198,000 at 8.5% and would love to refinance to take advantage of today’s rates. The problem is the estimated value of their home is $165,000. Again, not a mortgage owned by Fannie or Freddie so a HARP 2 loan is not possible, so they are stuck. For them a short sale is out of the question, as they want to continue owning their home.

There are millions of these type of situations across the country. Unfortunately, no financing is available for folks in these kinds of situations.

Mortgage Applicants Face Greater Difficulties

By : The Niche Report

Mortgage interest rates hit historical low levels in early May, according to mortgage investment giant Freddie Mac, and yet most Americans are unable to enjoy them. Adding the fact that median home prices are currently at their lowest levels in the 21st century, the combination of these two factors is a perfect storm for homebuyers.

A housing bonanza, however, has failed to materialize in the disappointing American real estate landscape. The culprit is easy to point out: mortgages are simply too hard to get. The lending criteria imposed by mortgage lenders in the United States have become the bane of all borrowers. The problem is not in the credit histories or the borrowers’ ability to repay. The problem resides in the bank’s choice of mortgage applicants and low tolerance for risk.

According to the April 2012 Senior Loan Officer Opinion Survey on Bank Lending Practices released by the Federal Reserve Board, the cost of private mortgage insurance has turned prohibitive for some borrowers. This fact alone is very influential on the decisions taken by mortgage lenders.

Fannie Mae and Freddie Mac are also to blame, to a certain degree. The two government-sponsored enterprises (GSEs) have been very busy demanding that mortgage lenders take back mortgage loans guaranteed and purchased by the two GSEs. While many of these loans go back to the heady days of the housing bubble, the repurchase process is making banks nervous about their home lending operations.

Housing prices are also on the minds of the mortgage bankers. There is little evidence that collateral values will sharply improve in the near future, and banks see this as possibly eroding the value and marketability of their mortgage portfolios.

The risk aversion of banks with regard to mortgage lending has reached ludicrous proportions. Home buyers who do not have 20 percent down payments at their disposal are being passed over by many mortgage lenders. This is a major concern for economists who think that the American middle class is being unfairly kept out of the housing market.

image:Danilo Rizzuti/freedigitalphotos.net