TEAM EMPOWERMENT MORTGAGE CHATTER: May 12, 2009: SunTrust is originating high balance; news from Wells; Bank of America shedding assets; oil hits 6-month high

“The quieter you become, the more you can hear.”

~Baba Ram Dass    


Daily I am getting a lot of calls about HVC and the new appraisal guidelines.  I have attached an informative piece that breaks it down, etc.  So far one of the biggest changes is that we may have a verbal acceptance on a contract but until we get the fully ratified/executed contract we cannot order the appraisal.  As we all know the REPO’s and short sales may be accepted verbally but sometimes we wait weeks for the signed contract to come back.  Meaning the file just sits until we get the completed appraisal in our hand.  So, stress the importance of the executed contracts to your asset managers.  Our team can close conventional purchase loans in 15 days or less with a full package and 30 days or less with FHA.  We are here to help so don’t hesitate to call.  Make it a great day.    

Is it too early for these? The roundest knight at King Arthur’s round table was Sir Cumference – he acquired his size from too much pi…. I thought I saw an eye doctor on an Alaskan island, but it turned out to be an optical Aleutian…She was only a whiskey maker, but he loved her still….A rubber band pistol was confiscated from algebra class because it was a weapon of math disruption.


On to more serious things, like Bank of America looking to sell both its stake in a Chinese concern and First Republic Bank to raise money. Here in the San Francisco Bay Area, we remember Merrill Lynch buying First Republic , who caters to “well heeled” clients with high net worth, from stockholders in late 2007. And then earlier this year Bank of America bought Merrill Lynch (one can picture the classic cartoon with fish of varying sizes swallowing each other, similar to Golden West being bought by Wachovia being bought by Wells Fargo), which included First Republic. Last week’s stress test results showed that BofA has to raise $34 billion, so companies like First Republic could be on the way out. Bank of America has also sold their 5.8% stake in China Construction Bank for about $7.3 billion to a private-equity fund run by Goldman Sachs and Singapore ’s state-owned Temasek Holdings.


Wells Wholesale, in spite of Fannie Mae allowing borrowers to up to 10, will not change policy on the number of four financed properties when the subject property is a second home or investment property.

Wells Wholesale group also tweaked their minimum loan score requirements for the High Balance Conforming Loan Program, and made sure that brokers know that “Minimum Loan Score Requirements for Primary Purchase and Rate/Term Refinance Fixed Rate loans – If LTV or TLTV or CLTV require different loan scores below, apply the most restrictive loan score: LTV/TLTV/CLTV less than or equal to 75%: 660, LTV greater than 75% but less than or equal to 80%: 700, LTV is greater than 80%: 720, TLTV/CLTV greater than 75%: 700, and 2-4 units regardless of LTV/TLTV/CLTV: 740.”


Wells Fargo also reminded commercial lenders that the “Last day to submit small balance commercial applications is May 15, 2009 Due to current market conditions, the small balance commercial loans program is being suspended.”  This pretty much leaves the SBA and small local lenders for smaller commercial loans.


SunTrust is in the club! Effective yesterday, SunTrust came out with their “loan amount increases pursuant to the American Recovery and Reinvestment Act (ARRA) (2009 Temporary Loan Limits). The ARRA permits loans to be originated to the higher of the 2009 Permanent or 2009 Temporary Loan Limits. Agency Plus and DU Refi Plus Agency Plus loans may be originated under the 2009 Temporary Loan Limits. The maximum loan amount will vary based on location of the subject property. All Agency Plus loans must be processed through Fannie Mae’s Desktop Underwriter (DU) and receive a DU “Approve/Ineligible” recommendation with the ineligibility ONLY due to the loan amount. This loan program is not eligible for traditional underwriting or processing through Freddie Mac’s Loan Prospector (LP) automated underwriting.”


Yesterday we had no news, although most investors had mortgage price improvements that were passed through by lenders. Today we had the U.S. trade gap, which widened less than expected in March as both exports and imports fell. The trade gap grew to $27.6 billion, from an upwardly revised estimate of $26.1 billion in February, which was the lowest since November 1999, and is also the first time the trade gap had expanded in seven months. What does that mean? It means that U.S. demand remained weak in the first quarter – no surprise. What is interesting to watch is the price of oil, which is at a 6-month high due to signs of economic improvement. Currently the 10-yr is at 3.22% and mortgage prices are about unchanged from yesterday afternoon.

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