We have some very EXCITING news!!!
As may know, my firm has owned CrossWay Mortgage Group for over 5 years. As of mid-June, CrossWay Mortgage completed the merger of its mortgage broker & software technology operations with Southeast Mortgage of Georgia.
Unfortunately, this change will likely signal the end of this blog. We will begin a new, more focused blog in the upcoming months and hope to see all of our faithful subscribers there!
CrossWay Mortgage Group, Inc. will continue operating as a consulting firm in the mortgage and financial industries. A new website will be available in the upcoming months to reflect this change and strategy. KnowledgeSpan (www.knowledgespan.com) assisted in the merger process of CrossWay Mortgage Group.
Monday, August 4, 2008
Friday, June 20, 2008
Mortgage Reform and Anti-Predatory Lending Act of 2007
This post is directed to all of our fellow brokers. While consumers may also find significant disadvantages to this new bill, it is the Mortgage Broker that will feel the full effects! Brokers throughout the country will have their ability to obtain & maintain licensing, ability to make money and ability to act in the best interest of the borrowers severely crippled. It is projected that 60% - 80% of brokers could be out of business within 6 months of the bill taking effect.
In short, the financial requirements ($100,000 net worth) are out of reach for the average small broker, the YSP will be eliminated (or significantly reduced) and it will be difficult for many of the already realing mortgage brokers to hang on. Read on below...
**** Below is a copy of the e-mail NAMB sent out ****
Some information has been removed for privacy purposes & to shorten
Mortgage Brokers are being singled out unfairly - please act!
From: NAMB Government Affairs
Sent: Wednesday, October 31, 2007 3:05 PM
Subject: NAMB Teleconference to Discuss H.R. 3915
To: All NAMB Members
From: Denise Leonard, NAMB Government Affairs Chair
RE: National Teleconference to Discuss H.R. 3915 the "Mortgage Reform and Anti-Predatory Lending Act of 2007"
Mortgage brokers are facing extinction. The U.S. House of Representatives is considering a bill that will fundamentally change the way we are paid, outlaw YSP, and legislate underwriting guidelines into law. Additionally, we fear that all subprime lending will cease to exist due to excessive lender liability. It is important that you read this memo.
We are calling upon our members to respond as never before. To save our industry, we are asking you to learn about this threat and then contact your congressman.
_____________________________________________________________________
Commentary: We urge you to read the balance of this memo and the attached information before you listen to our teleconference.
On Monday, October 22, 2007, House Financial Services Committee Chairman Barney Frank (D-MA), along with Representatives Miller (D-NC) and Watt (D-NC), introduced H.R. 3915, the "Mortgage Reform and Anti-Predatory Lending Act of 2007." Below you will find the full H.R. 3915 bill, a section by section summary, the NAMB Press Release, and NAMB’s Testimony presented before the HFSC.
The bill contains three sections. Title 1 will create a federal duty of care and outlaw steering. The anti-steering language will outlaw incentive compensation and YSP that varies with the terms of a loan. The section will allow indirect compensation if disclosed early in the process. This section also creates a minimum licensing standard for all originators and net worth or bond requirements of $100,000.
Title 2 creates an ability to repay standard and hardwires underwriting guidelines. Underwriting will include a verified ability to repay and take into account amortizing payments. Guidelines will also include taxes and insurance payments when calculating ratios. For refinancing, the act will define and require a net tangible benefit. For prime loans, there is a safe harbor. However, for subprime there is assignee liability and expanded rescission rights. Standards will also create a defense to foreclosure. Severe restrictions will be placed upon first-time homebuyer mortgages with negative amortization features.
Title 3 will expand the existing Section 32 of TILA by reducing the points and fees triggers and expand lenders liability. Prohibitions include no balloon loans, no lending without regard to ability to repay, prohibit a pattern or practice of making such loans, restrict late fees, and prohibit the financing of any points/fees. Taken together, the expansive liability and prohibited terms and conditions will make Section 32 lending practically impossible.
This is a critical time. Do not miss this important teleconference!
__________________________________________________________________
We have recently taken steps to ensure long-term security and viability, for both our employees and customers. As a lender, we still have the flexibility of a local broker, but have the safeguards in place to avoid the upcoming crisis in the mortgage industry.
If you don't have FHA...forget about it!
If you are a GA, FL, SC, TN, NC, VA, or AL mortgage broker, you should contact me to learn how I can help you get positioned to make more money (not less) and gain security for you, your employees and your customers.
In short, the financial requirements ($100,000 net worth) are out of reach for the average small broker, the YSP will be eliminated (or significantly reduced) and it will be difficult for many of the already realing mortgage brokers to hang on. Read on below...
**** Below is a copy of the e-mail NAMB sent out ****
Some information has been removed for privacy purposes & to shorten
Mortgage Brokers are being singled out unfairly - please act!
From: NAMB Government Affairs
Sent: Wednesday, October 31, 2007 3:05 PM
Subject: NAMB Teleconference to Discuss H.R. 3915
To: All NAMB Members
From: Denise Leonard, NAMB Government Affairs Chair
RE: National Teleconference to Discuss H.R. 3915 the "Mortgage Reform and Anti-Predatory Lending Act of 2007"
Mortgage brokers are facing extinction. The U.S. House of Representatives is considering a bill that will fundamentally change the way we are paid, outlaw YSP, and legislate underwriting guidelines into law. Additionally, we fear that all subprime lending will cease to exist due to excessive lender liability. It is important that you read this memo.
We are calling upon our members to respond as never before. To save our industry, we are asking you to learn about this threat and then contact your congressman.
_____________________________________________________________________
Commentary: We urge you to read the balance of this memo and the attached information before you listen to our teleconference.
On Monday, October 22, 2007, House Financial Services Committee Chairman Barney Frank (D-MA), along with Representatives Miller (D-NC) and Watt (D-NC), introduced H.R. 3915, the "Mortgage Reform and Anti-Predatory Lending Act of 2007." Below you will find the full H.R. 3915 bill, a section by section summary, the NAMB Press Release, and NAMB’s Testimony presented before the HFSC.
The bill contains three sections. Title 1 will create a federal duty of care and outlaw steering. The anti-steering language will outlaw incentive compensation and YSP that varies with the terms of a loan. The section will allow indirect compensation if disclosed early in the process. This section also creates a minimum licensing standard for all originators and net worth or bond requirements of $100,000.
Title 2 creates an ability to repay standard and hardwires underwriting guidelines. Underwriting will include a verified ability to repay and take into account amortizing payments. Guidelines will also include taxes and insurance payments when calculating ratios. For refinancing, the act will define and require a net tangible benefit. For prime loans, there is a safe harbor. However, for subprime there is assignee liability and expanded rescission rights. Standards will also create a defense to foreclosure. Severe restrictions will be placed upon first-time homebuyer mortgages with negative amortization features.
Title 3 will expand the existing Section 32 of TILA by reducing the points and fees triggers and expand lenders liability. Prohibitions include no balloon loans, no lending without regard to ability to repay, prohibit a pattern or practice of making such loans, restrict late fees, and prohibit the financing of any points/fees. Taken together, the expansive liability and prohibited terms and conditions will make Section 32 lending practically impossible.
This is a critical time. Do not miss this important teleconference!
__________________________________________________________________
We have recently taken steps to ensure long-term security and viability, for both our employees and customers. As a lender, we still have the flexibility of a local broker, but have the safeguards in place to avoid the upcoming crisis in the mortgage industry.
If you don't have FHA...forget about it!
If you are a GA, FL, SC, TN, NC, VA, or AL mortgage broker, you should contact me to learn how I can help you get positioned to make more money (not less) and gain security for you, your employees and your customers.
Thursday, May 22, 2008
Foreclosures: Impact on Real Estate Market May Not be as Severe as Expected
Great Article from www.behindthemortgage.com and Report that validates our belief of how the media has an enormous impact on the perception of the market.
We're talking about foreclosures and short-sales folks, or, as a new report from the Minneapolis Area Association of Realtors terms it: Lender-Mediated Sales.
Jeff Allen, research director at the MAAR and Aaron Dickinson, Edina Realty agent are responsible for this tight little report, entitled "Foreclosures and Short Sales in the Twin Cities Market" which gets to the heart of some questions that have been on a lot of minds lately.
Chief among them: Just how much of the current market activity is foreclosure/short sale related, and what are the broader impacts?
The report itself confirms a fact that many of us tracking the issue anecdotally have suspected: Almost 30% of closed sales (Q1 2008 - see graphic above) are/were in some stage of foreclosure or other "lender-mediated" status, such as a short sale.
One surprising data point gleaned by Jeff and Aaron was the fact that there is a fairly stark dichotomy between lender-mediated and traditional real estate activity in our market. Check out this graphic:
This obvious good news is also seasoned by this fact, from the report:
"The actual number of traditional seller new listings has fallen by 27.4 percent over the last two years...So clearly, homeowners are holding steady in their current residences with greater frequency and home builders are producing far less new inventory."
In other words, many sellers, sensing a bear of a market, are simply opting out, while those that are selling, aren't taking nearly the bath that one would expect.
Though it is still early on, and we have a lot of ground to cover before the real estate contraction is over, this report presents a far more optimistic view of the state of our housing market than we, and many others, would have expected.
Yes, prices are falling dramatically in the aggregate, but the bulk of the carnage is occuring in the lender-mediated market, and the traditional market is holding up rather well, all things considered.
Anyway, go read the report - too much good stuff to list it all here - and kudos to Jeff and Aaron for putting this together.
Jeff Allen, research director at the MAAR and Aaron Dickinson, Edina Realty agent are responsible for this tight little report, entitled "Foreclosures and Short Sales in the Twin Cities Market" which gets to the heart of some questions that have been on a lot of minds lately.
Chief among them: Just how much of the current market activity is foreclosure/short sale related, and what are the broader impacts?
The report itself confirms a fact that many of us tracking the issue anecdotally have suspected: Almost 30% of closed sales (Q1 2008 - see graphic above) are/were in some stage of foreclosure or other "lender-mediated" status, such as a short sale.
One surprising data point gleaned by Jeff and Aaron was the fact that there is a fairly stark dichotomy between lender-mediated and traditional real estate activity in our market. Check out this graphic:
The key takeaway from this is that Median sales prices outside the universe of lender-mediated properties have only deteriorated by 3.9% over the last year. One possible conclusion to be drawn from this is that the rising tide of lender-mediated listings and sales (i.e. foreclosures and short sales) are not putting as much downward pressure on prices of traditionally marketed properties as we would have imagined, and has been reported.
This obvious good news is also seasoned by this fact, from the report:
"The actual number of traditional seller new listings has fallen by 27.4 percent over the last two years...So clearly, homeowners are holding steady in their current residences with greater frequency and home builders are producing far less new inventory."
In other words, many sellers, sensing a bear of a market, are simply opting out, while those that are selling, aren't taking nearly the bath that one would expect.
Though it is still early on, and we have a lot of ground to cover before the real estate contraction is over, this report presents a far more optimistic view of the state of our housing market than we, and many others, would have expected.
Yes, prices are falling dramatically in the aggregate, but the bulk of the carnage is occuring in the lender-mediated market, and the traditional market is holding up rather well, all things considered.
Anyway, go read the report - too much good stuff to list it all here - and kudos to Jeff and Aaron for putting this together.
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