It took six years and major controversies with Capitol Hill, but last Thursday HUD published final regulations mandating uniform disclosures for all new home mortgages — plus tougher rules requiring “good faith estimates” from lenders that accurately reflect the line items on consumers’ settlement sheets at the end of a home purchase or refinancing.
Source:
Washington Report: Uniform Disclosures Mandated
While smaller players fail in the market, the largest banks and mortgage companies grow bigger.
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Clash of The Titans
Although Wall Street’s woes got a lot of attention on Capitol Hill last week, so did the continuing crisis in home foreclosures.
Continued here:
Washington Report: Snag for FHA Hope
The Federal Reserve announced changes to its emergency lending window for financial institutions today. The changes extend the repayment period for the loans and the duration of the program among others. The lending window allows banks to borrow from the Fed for short periods of time while putting up securities (such as mortgage backed securities, etc.) as collateral for the loan. Banks have used this lending window to alleviate the strain on capital exacerbated by the credit crunch.
From Market Watch:
The Federal Reserve, continuing to combat the enormous stresses that have engulfed financial markets, announced Wednesday several steps designed to enhance its emergency lending program for banks and primary dealers.
For banks, the Fed said it would lengthen some of the credit it extends to 84 days. At the moment, the loans have been for 28 days.For broker dealers that serve as primary dealers of Treasury debt, the Fed said it would introduce auctions of options on $50 billion of loans. The options could be exercised if needed in periods of elevated stress in months to come, such as the end of financial quarters.The Fed also said it’s officially extending its primary-dealer loan program to the end of January from mid-September. This step had been previously telegraphed by Fed Chairman Ben Bernanke.
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Fed extends emergency lending window
Arizona is getting tough on loan originators.
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Wild, Wild West: Arizona Mandates Licensing For Originators
The mortgage crisis was caused by malfeasance in both the board room and the boiler room. From the arrests of Bear Stearns’ hedge fund managers to the widespread sweep of small-time crooks for fraud, the government is taking strong action toward prosecuting those responsible for the current credit crunch and over $350 billion in Wall Street write-offs.
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Realty Viewpoint: Wall Street Arrests Mean Housing Healing Can Begin
Fifth Third, the mid-western super-regional bank implemented new FICO requirements for FHA loans originated via its wholesale channel. The new minimum FICO for all FHA loans is now 580. Previously the bank had used “common sense” underwriting with no actual minimum FICO required (although the effective FICO for “make sense” deals was 520).
Other banks have rolled in similar higher-FICO guidelines on their FHA deals of late going from a “common sense” overall file risk assessment to more stringent FICO-driven guidelines.
Interesting that as Fannie and Freddie make “feel good” changes to reduce LTV restrictions in declining markets the funnel is being squeezed from another angle with tougher FICO requirements on FHA deals.
Here’s the (PDF) straight-forward notice from 5/3. (hat tip Chris for the 411)
More here:
Fifth Third Ups FICO Requirement on FHA Loans
Capitol Hill’s most influential legislator on housing issues says Wall Street and the mortgage lending industry are needlessly overpricing “jumbo” loans designed to help borrowers in areas with high home costs.
The rest is here:
Washington Report: Are “Jumbo” Loans Overpriced?
The mortgage credit crunch has spilled over into land acquisition, land development and home construction (AD&C) lending, increasing the challenges faced by builders in the current housing downturn, according to the National Association of Home Builders.
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AD&C Loans Tighten with Financial Markets
Have you often avoided making those “dreaded cold calls?” Do you dream of how much better your business could be but just can’t bring yourself to pick up the phone? You’re not alone. In the 10 years that I have specialized in coaching real estate agents, I have noticed the same avoidant patterns in each of my clients. This article gives you 5 tips to make it easier.
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Hate to Make Cold Calls? 5 Tips to Make it Easier
Roll back the clock two years on Silicon Valley’s housing market.
Excerpt from:
Wild, Wild West: Silicon Valley Price Fall Spreads
The Real-Time Housing Market Report shows an interesting trend. Housing prices are down a little over half a percent. That’s no surprise, but out of 25 markets, only seven fell in asking price. That’s a big improvement over March when listing prices fell 2.7 percent.
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Realty Viewpoint: Real-time Housing Index Says Falling Prices Easing
The mortgage credit crunch has spilled over into land acquisition, land development and home construction (AD&C) lending, increasing the challenges faced by builders in the current housing downturn, according to the National Association of Home Builders.
Here is the original:
AD&C Loans Tighten with Financial Markets
When a lender is issuing mortgages to be competitive with their fellow banks, common sense can take a holiday. Over the past several years the proliferation of no doc or “liar loans” showed that the wheels came off the mortgage lending wagon. All common sense, reasoning and rationale thought was thrown out the window. At what point does negligence become criminal?
Q: Can any imagine lending money to someone today, basing the decision to give hundreds of thousands of dollars to a borrower who doesn’t need to prove their income and take very little effort to understand the value of the asset being used as collateral? Oh yeah, and then securitize those mortgages to legions of unwitting investors (with full disclosure, of course)?
A: Never in a million years, or less than a year ago, whichever comes first.
It looks like the FBI is getting involved. They have formed a task force to investigate whether lenders turned a blind eye to inflated income figures. It would seem fairly simple to cross check mortgages and stated income paid for taxes. The IRS and the FBI may very well be working together a lot in the near future.
The Federal Bureau of Investigation and the criminal division of the Internal Revenue Service have formed a task force to examine mortgages that were made with little or no proof of the earnings or assets of borrowers, a government official who had been briefed on the matter said Sunday.
The task force, which was established in January, stepped up its investigation in recent weeks as the financial industry disclosed billions of dollars in additional write-downs from bad mortgage investments. The latest inquiry is broader and deeper than a separate F.B.I. investigation of mortgage lenders that is also under way.
While the new task force is focusing on the role of mortgage lenders and brokers in low- or no-documentation loans, it is also examining how the loans were bundled into securities.
“This is a look at the mortgage industry across the board, and it has gotten a lot more momentum in recent weeks because of the banks’ earnings shortfalls,” the official said.
Speaking of turning a blind eye: Sure, Jonathan Miller Can Value Your Home, But Can He Cook?
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[Blind Eye Turned] Not Caring About The Borrower’s Income Could Be Criminal
