TEAM EMPOWERMENT MORTGAGE CHATTER: April 6; News & Headlines; Where Have Foreclosures Gone?; California Expands ‘Hardest Hit’; Don’t Just Walk Away, Survey Says; Open House Flyer Example

“The mass of men lead lives of quiet desperation and go to the grave with the song still in them.” — Henry David Thoreau: Was an author, poet, naturalist, and philosopher


Word spread quickly yesterday that the Appeals Court has dissolved the administrative stay of the rule and denied the motion of the NAMB and the NAIHP for emergency relief from the change in Reg. Z. The word on the street is that this action is not likely to be appealable, which means that the rule is effective immediately (today), and that companies should not accept any applications unless and until they are able to do so in compliance with the rule. Companies that already rolled the new comp structure out have little to do; companies that did not will be rolling it out today.

Yesterday the commentary discussed REIT’s raising money to buy MBS’s, and then a story broke about PIMCO doing exactly that! There is, of course, little correlation, and granted, the $600 million that Pacific Investment Management Co. is raising is less than the average daily volume of MBS’s traded in the market, but it is a good sign. PIMCO recently made financial headlines by divesting itself of all Treasury debt, claiming that debt levels were unsustainable given the budget problems facing the US. The REIT money will go toward commercial and residential mortgage-backed securities, real estate-related assets and other financial assets. “Significant increases in regulation and public policy are influencing which investors will have the financial ability to hold real estate-related assets. We believe that private non- bank capital will represent an increasing share of these assets in the years to come.”

Is servicing worth the hassle? Probably – it seems that many, many mortgage companies are starting servicing operations. But the government is not making it any easier.  ForeclosureProcedureSettlement?.

Yesterday I wrote that, “Mark Ryan, the first Risk Manager of the FHA and a Freddie vet, will become FHA’s Acting Commissioner when Dave Stevens departs.” It is Bob Ryan, not Mark Ryan, and my apologies to Bob. But speaking of FHA loans, the share of borrowers using FHA loans fell to its lowest level in 27 months in February, according to DataQuick, with “only” 33.3% of purchase money mortgages originated being FHA loans.

And along those lines, clarifications continue to come out regarding “net tangible benefit” and FHA refinancing. BNP Paribas put out a research piece noting that “Lenders will no longer have to certify a borrower’s employment and income. Note however that the borrower will have to be current according to requirements already in place. HUD stressed however that the borrower will have to be current both in the prior month and the month of refinancing. We think that these requirements are likely to blunt the effect of the income doc relaxation. The 5% reduction in payments that allows mortgagors to qualify for streamline refi’s shall be based on P&I + MIP rather than PITI (Principal, Interest, Taxes, Insurance) + MIP. Closing costs and other financing costs now cannot be added to the new loan balance, (which actually) would be a tightening rather than a relaxation of standards, and could negatively impact refinancing considerably.”

Remember when there was training on non-compensation issues? HUD will be offering webinar training on the HOPE LoanPort for counselors. “Last year, HOPE NOW announced the launch of a new web portal that allows HUD-approved housing counseling agencies the ability to efficiently transmit a borrower’s application to partner mortgage servicers and submit completed Home Affordable Modification (HAMP) applications for borrowers at-risk of foreclosure…HUD encourages all HUD-approved housing counseling agencies providing foreclosure prevention services to participate in the HOPE LoanPort…” There is a “Live Meeting” webinar demonstration of the HOPE LoanPort next Tuesday, April 12, from 2-4PM EST, followed by an interactive Q&A session for all participants. Reserve a seat by going to  HOPETraining.

The mortgage market saw some volatility yesterday, but unfortunately for those waiting to lock it pushed rates higher. MBS volumes picked up a little, generally not a good thing on a down day, with current-coupon prices worse by about .250 and the yield on the 10-yr closing at 3.49% (worse by .5 in price). This was despite a larger than expected decline in the ISM Non-Manufacturing index for March. The market was more focused on comments from PIMCO’s Bill Gross, who said he thought current yield levels were unattractive, as well as hints from the last FOMC meeting’s minutes that they’re seeing the recovery pick up a little.

There is no scheduled news today, aside from the MBA releasing its weekly application numbers for last week. Apps didn’t do much, dropping 2%, but refi’s dropped over 6% while purchase apps were up over 6%. The percent of applications made up of refi’s is now down to 61%, a word of warning to anyone basing their business on refinancing their rolodex clients. And ARM share rose above 6%, a warning to anyone who has forgotten what a “margin” is. Rates are a tad worse with the 10-yr at 3.50% and MBS prices down a few ticks.


The inventory of foreclosed homes for sale has been dwindling for almost six months. Everyone is wondering if the worst of our challenges with distressed properties are behind us. We are sorry to report that isn’t the case. We must realize that the problems banks have experienced with their paperwork on these properties has done nothing but delay them from coming onto the market.

The robo-signing blunders and then the MERS mess have caused the banks to slow down the foreclosure process dramatically. Just last week, the Office of Thrift Supervision released theirMortgage Metrics Report covering the 4th Quarter of 2010. In that report, they showed how foreclosure completions fell sharply because of these paperwork complications.

Foreclosures are not disappearing. They are just being delayed.

Bottom Line

If you think that waiting to sell your home makes sense, you may not be correct. Check with a local real estate professional to see how this will impact your market.


California has expanded the pool of borrowers who could qualify for three programs aimed at helping families at risk of losing their homes, by making those who tapped their home equity or who took out loans after Jan. 1, 2009, eligible for assistance.

The California Housing Finance Agency (CalHFA) is administering nearly $2 billion in federal “Hardest Hit” funds, a $4.1 billion program targeted at states with high foreclosure rates or unemployment.

CalHFA is using the Hardest Hit fund to provide four “Keep Your Home California” programs.  More than 2,000 homeowners are in the process of receiving help since the programs launched in February, CalHFA said in announcing expanded eligibility requirements  for three of those programs.

With the U.S. Treasury signing off on the changes, CalHFA said eligibility requirements are being expanded for:

  • The Unemployment Mortgage Assistance Program (UMA), which provides a mortgage payment subsidy of up to $3,000 a month for six months for unemployed homeowners in imminent danger of foreclosure.
  • The Mortgage Reinstatement Assistance Program (MRAP), which provides up to $15,000 per household for homeowners who have fallen behind on their mortgage payments due to a temporary change in household circumstance.
  • The Transition Assistance Program, which provides relocation assistance in conjunction with a short sale or deed-in-lieu of foreclosure.

Borrowers who took out loans after Jan. 1, 2009, or who tapped into their home’s equity by refinancing or opening a home equity line of credit, were previously excluded from those programs.

Homeowners who were previously disqualified for one of these reasons are being contacted and offered an opportunity to reapply, CalHFA said. They are also being invited to contact the Keep Your Home California call center at (888) 954-5337.

A fourth “Keep Your Home California” initiative, the Principal Reduction Program (PRP), provides funding to reduce outstanding principal balances for qualifying borrowers with negative equity, often in conjunction with a loan modification.

To qualify for any of the four programs, borrowers must own and occupy the home as their primary residence, meet income limits, and face a documented financial hardship.

Loan servicers participating in all four programs are GMAC, Guild Mortgage, CalHFA and California Department of Veterans Affairs. Other servicers, including Bank of America, JPMorgan Chase, CitiMortgage and Wells Fargo are participating in some, but not all of the programs.


Some Americans who owe more than what their house is currently worth are opting to walk away from their mortgage. But a new survey finds Americans don’t agree with home owners who make that choice.

Sixty-percent of Americans say it is “never OK” for home owners to stop making payments on their mortgage, according to a new survey of 1,000 American adults by, a legal information Web site. However, 34 percent say it’s OK for home owners to walk away from their mortgage if they are no longer able to make their monthly payments.

Only 3 percent of those surveyed said home owners should be able to walk away from their mortgage anytime they want.

“Many home owners are currently facing very difficult and complicated situations involving their home mortgage, in some cases even including the threat of foreclosure,” says Stephanie Rahlfs, an attorney and editor for “But before making any major decisions, home owners should consult with financial and legal professionals, including accountants, real estate attorneys and financial advisers. Any major change to a mortgage situation could lead to serious and unanticipated consequences involving taxes, contract law, credit scores, ability to borrow in the future, potential for lawsuits, and much more.”


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