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October 18, 2010

Citi Home Loan Fundings Rise 66%

Category: Mortgage Lenders – admin – 4:57 pm

Citi Mortgage appears to be expanding their wholesale market-share for mortgage lending. The residential mortgage lending arm of Citicorp funded $18.6 billion of one- to four-family mortgages in the third quarter, an impressive 66% gain from the prior period, according to figures released Monday morning. Compared to the same quarter a year ago, loan production by CitiMortgage rose 56%.  According to Mortgage News, Citi Mortgage is once again expanding their market-share in wholesale mortgage lending.

Although its loan production results were impressive, it appears that Citi is continuing to mark down the value of its mortgage loan refinancing and servicing rights. At September 30, its MSRs carried an asset value of $3.9 billion, compared to $6.2 billion a year ago, a decline of 36%.   According to Colorado lender, Shawn Downs, “Citi has always been an agressive wholesale lender that lenders and brokers like to work with because their loan processing is efficient and the compensation has been good.”

Regarding home foreclosures, company chief financial officer John Gerspach said the bank has found no issues with the way its home loan servicing operation processes foreclosures, indicating it has no plans to follow other large banks in suspending foreclosure sales pending a review of their practices.  Gerspach said Citi has reviewed its procedures, calling them “sound.” He made the comments during a conference call with reporters to discuss the bank’s third-quarter earnings.  Meanwhile, Citigroup continues to whittle down the residential holdings of its affiliate, Citi Holdings. That unit had residential real estate holdings of $136 billion at Sept. 30, a 14% decline from a year ago. But delinquencies in Citi Holdings rose slightly to 4.78%.


June 20, 2010

Thrifty Tips for Buying Internet Mortgage Leads

Today, most mortgage brokers that have less to spend so it is imperative that they buy leads cautiously.  Internet mortgage leads can be a very cost effective form of marketing if you know how to purchase leads from lead generation companies.  Be careful of how and where you purchase leads. Ask the account executive at the lead company what their minimums are and be cautious when buying leads in bulk.  If a lead company is generating 50 leads a day and 15 leads a day that meet your filters, you have to wonder how a lead company could send you 250 leads in a 3-day span.  Clearly these are either old or brokered leads. In a recent article, Bryan Dornan the founder of mortgage lead generation company, the Lead Planet reminded mortgage companies to “Consider more than just the cost per lead.”  Dornan suggests that “the cost per funding is the bottom line.”  See the original mortgage lead buying post at the Mortgage Lead Vault > Cost to Funding Ratio Matters with Mortgage Leads


February 25, 2010

Jumbo Mortgage Loan Programs Improving

The recent mortgage meltdown caused jumbo mortgage rates to soar and the availability for non-conformning loans shrunk significantly. However signs are indicating that jumbo rates are declining and lenders are more willing to make loans that top the limits for Freddie Mac, Fannie Mae and the FHA.

Phil Kelly had 18 more months to go before the fixed rate on his $2.5-million mortgage became adjustable.  But when Kelly, a former computer executive living in Rancho Santa Fe, learned he could knock his interest rate down by a full percentage point by mortgage refinancing, he went for it.  “It’s always tough to pick the exact bottom or top of anything,” Kelly said. “But I think this rate is about as low as you’re going to get.” For most California borrowers, jumbo mortgage refinance options have been few and far between.

Jumbo Mortgage Rates:  For home loans greater than $729,750 in counties with the highest-cost housing — shot up during the financial crisis as lenders and loan investors shunned anything tainted with even a whiff of higher risk. Rates on big mortgages were especially high relative to those on smaller loans.  But in a boon for borrowers in California’s expensive housing markets, the jumbo-home loan market is starting to return to normal.

According to rate tracker Informa Research, two weeks ago, the average interest rate on 30-year fixed-rate jumbos dropped to 5.79%, a nearly five-year low, Services of Calabasas. It edged up to 5.88% on Tuesday, still very attractive by historical standards. The average has dropped from the 7% in late 2008.  Today, fewer borrowers qualify for jumbo home mortgage loans, because stated income loans have disappeared.

Jumbo rates are even lower on hybrid adjustable mortgage loans. With these hybrid ARM’s, the interest rate is fixed for three, five, seven or ten years before it becomes an adjustable rate loan. (ie. 3/1, 5/1, 7/12, 10/1 ARM)

Banks are also relaxing slightly some of their requirements for jumbo mortgage loans. That’s an encouraging sign because the market for jumbos, in contrast with the rest of the mortgage business, isn’t being supported by government backed bonds.  Unfortunately million dollar home loans are not supported by the Obama Administration.

The lower jumbo mortgage rates and somewhat easier terms reflect newfound confidence among banks in the housing market. That’s because, jumbos loans exceed the maximum loan amounts that Freddie Mac and Fannie Mae have agreed to insure.  In addition, the private market for mortgage-backed bonds dried up when the meltdown hit. So mortgage lenders offering jumbo mortgage loans in today’s market are willing to take the risk of servicing them in their portfolios.

The maximum amounts for Freddie Mac and Fannie Mae “conforming” mortgages, and for FHA mortgages, are set by Congress. The cutoff for single-family homes was $417,000 from 2006 until February 2008, when lawmakers increased it temporarily to $729,750 in certain high-cost areas, including Los Angeles, Orange and Ventura counties. Conforming loans top out at $500,000 in Riverside and San Bernardino counties and $697,500 in San Diego County.

The increased upper limits, which have been extended until the end of this year, have created a three-tier system in expensive areas, mortgage professionals say: loans of up to $417,000, which are the easiest to obtain and carry the lowest rates; “conforming jumbos” from $417,000 to $729,750, which are somewhat harder to get and have slightly higher rates; and true jumbos, with the toughest standards and highest rates.

In the boom years of 2005 and 2006, jumbo mortgage rates were typically no more than a quarter of a percentage point higher on jumbo loans than on conforming loans, according to Informa Research. That widened as the mortgage meltdown intensified and home prices dropped in late 2007. The spread ballooned to nearly 1.7 percentage points in early 2009 after the entire credit system froze.

But this year the rate spread has narrowed to less than a percentage point. It could shrink more if conforming-loan rates rise as expected after the Federal Reserve wraps up a $1-trillion-plus program to support the market for conforming loans next month.

In addition to lower rates, down-payment requirements are being relaxed in some cases. For example, to write a jumbo loan in coastal areas of Los Angeles and Orange counties, Wells Fargo Home Mortgage looks for a 20% down payment or that percentage of equity, down from 25% last year, said Brad Blackwell, a national mortgage sales manager at the lender.

The reason: Wells believes high-end home prices are stabilizing in those coastal counties. But the bank still requires higher down payments in the Inland Empire and other battered housing markets such as Florida, Nevada and Arizona, where prices for jumbo-size homes don’t appear to be stabilizing, he said.

Jumbo loans remain much harder to get than before the credit crunch and recession. Borrowers typically must have a credit score of at least 700, compared with boom-era minimums in the 600s, though Laguna Niguel mortgage broker Jeff Lazerson said at least one lender was again making sub-700 jumbos available.

What’s more, unless their down payments are very large, borrowers must provide evidence of high income, have sizable bank accounts as a cushion against the unforeseen and occupy the houses themselves.

But there are clear signs that the jumbo market has loosened. One is an increasing availability of “stated income” loans — those that don’t require proof of income — of as much as $2 million to borrowers with at least a 40% down payment, said mortgage broker Gary Bluman, owner of Real Estate Resources in Brentwood.

Also, instead of a true jumbo loan, some “piggyback” second mortgage loans are available again to help certain borrowers with 25% down payments pay for high-priced homes, Lazerson said.

Of course, adjustable, stated-income and piggyback loans were big contributors to the mortgage meltdown. But such provisions are less risky if a borrower has 25% to 40% equity.  Despite the confidence in the market that such terms imply, lenders and mortgage investors are still dealing with piles of bad jumbos made during the boom.

Delinquencies of 60 days or more on prime jumbo loans that were packaged into securities jumped to 9.6% in January, up from 3.7% a year earlier, Fitch Ratings reported this month.  The jumbo delinquency rate in California climbed to 11.3% from 4.1% a year earlier.

For now, the jumbo market remains limited to the volume of loans that banks are willing and able to keep on their books. But there is hope for a return to private outside funding. Although no jumbo loans have been turned into securities for at least two years, packages of delinquent jumbos have begun to be sold again to “vulture” investors, a sign that the secondary market for the home loans may revive, said Michael Fratantoni, vice president of research at the Mortgage Bankers Assn.  “The ice sheet,” he said, “is starting to crack here and there.”


February 3, 2010

Homebuyer Tax Credit Extended

According to data released by the Commerce Department’s Census Bureau and the Department of Housing and Urban Development, the expansion to the homebuyer tax credit, an exceptional government stimulus measure was passed to boost housing activity, new home sales took a 7.6% decline in December. The results come on the heels of National Association of Realtors (NAR) reports of similar December declines in existing home sales.  First time home buyer loans have seen a recent spike in loan application volumes since the tax credit news hit the street.


The homebuyer tax credit extended for first time homebuyers and expanded to include existing homeowners requires buyers have a contract in place by April 30 and close by June 30th. The problem, home-builder insiders and real estate agents tell HousingWire, is that consumers who tried to take advantage of the tax credit too late in the fall before realizing there wasn’t enough time to close a deal by the original November 30th expiration date have yet to reengage themselves in the home loan process.  FHA mortgage lending continues to support a majority of the first time homebuyer loans.  “With new homes, the home-builders ran out of everything they could close by the end of November,” Burns said. “There were people that wanted to buy in these communities that didn’t because they couldn’t close in time.”

As HousingWire previously reported, the JBREC December monthly builder survey showed optimism among 264 home building industry executives from public and private companies. The belief that builders will have increased community count, better orders and slightly higher prices has 57% of respondents planning for more revenue in 2010 than in 2009.

Another confidence booster is the tax credit many builders are receiving from the temporary extension of the terms of net operating carry-back laws, which let builder recoup losses from taxes paid in profitable years.  “It’s given them more confidence in their cash balances and they want to start more speculative homes because of the extra cash that they now have,” Burns said.


January 27, 2010

Home Mortgage Rates

The average mortgage rate on a 30-year home loan with fixed rates climbed to 5.02% last week from 5%, MBA said.  The mortgage rate reached 4.61% at the end of March, the lowest since the group’s records began in 1990.  At the current thirty-year mortgage rate, monthly borrowing costs for each $100,000 of a home loan would be $538.04 which is about $12 less than a year ago when the rate was 5.22%.

A report later today may show sales of new homes rose 3% in December to a 366,000 annual rate, according to the median projection in a Bloomberg News survey.   Sales of existing U.S. homes plunged last month, reflecting the expected expiration of the government’s first-time buyer tax credit on November 30th.

The Fed keeps mortgage rates low! Mortgage refinancing products are available. Finance Home Improvements!  Find out your eligibility for FHA 203K Loans.

The average rate on a 15-year fixed mortgage rose to 4.34% from 4.33 % a week earlier. The rate on a one-year adjustable mortgage increased to 6.84% last week.   The share of applicants seeking to refinance a loan dropped to 67.6% last week, the lowest level in almost three months, from 71.7% the prior week.

Mortgage lenders continue to see muted demand for financing.   “The residential mortgage and home equity line portfolios also continued their downward trend,” SunTrust Banks Inc. Chief Financial Officer Mark Chancy said on a conference call January 22nd. The Atlanta-based lender said it lost $248.1 million in the fourth quarter as loans soured in the Southeast real estate market.  The Washington-based Mortgage Bankers Association’s loan survey, compiled every week, covers about half of all U.S. retail mortgage loan originations.


January 8, 2010

Home Loan Industry Sees First Job Increase in 6 Months

The home mortgage industry added 200 full-time employees to their payrolls in November, the first jump in industry employment since July. The U.S. Bureau of Labor Statistics reported that employment in the mortgage broker/ banker sector rose to 255,700, compared to 255,500 in October. The BLS data shows the increase is entirely due to more mortgage brokers having jobs. Employment at mortgage broker and banking firms was flat in November. Overall, the home loan industry experienced a 10% drop in its workforce over the past 12 months. Major mortgage lenders have relied on outsourcing and temporary workers to deal with fluctuating demand. Meanwhile, the nation’s unemployment rate held steady at 10% in December, but 85,000 workers were laid off, according to the new jobs report. This disappointed analysts who were looking for a sign that the job market had finally turned the corner.


November 2, 2009

Fannie Mae Refinance Loans to 125%

Fannie Mae provides several refinance options including the Home Affordable Refinance Program.  Fannie Mae refinance solutions are only available eligible borrowers who have a mortgage balance less than $417,000 that is owned by Fannie Mae.  125 mortgage options are available for no equity home refinancing.

Fannie Mae Refinance Plus simplifies the refinancing process for loans that are already in a mortgage lender’s servicing portfolio. This Fannie Mae mortgage program allows refinancing to 125% LTV. The Home Affordable Refinance Programs offers a unique refinance alternative because no equity is required.  Fannie Mae pledges to provide home refinancing with increased efficiencies for the origination and underwriting of Fannie Mae.   Fannie Mae allows limited cash-out refinance transactions up to 125 percent loan to value.


August 17, 2009

Encompass Increases Marketshare with Home Loan Companies

Steve Park of Mortgage Brokers Network was asked about Encompass and this is what he had to say. “Encompass certainly has made a dent in the loan origination software market that Calyx’s Point has dominated for so long.”  Lead Planet, a mortgage lead generation company have confirmed a surge in Encompass users with their lead buying clients.  “We’ve been using Encompass very successfully for quite some time, and this integration has made it exponentially easier for us to access what we feel is the most accurate product and pricing information available on the market,” says Craig Willis, chief technology officer for Amerifirst Financial, an Encompass and Mortgage Pricing Systems user. Read the complete article > Mortgage Lead Companies See Rise Encompass Use for Mortgage Management Solutions


August 10, 2009

Mortgage Hirings Rise

Category: Home Loan News,Mortgage Lenders – admin – 8:42 am

New hirings at mortgage companies in the United States outpaced layoffs by more than 8,000 in 2nd Quarter according to a recent report outlining employment analysis. One mortgage company had more impact on mortgage employment than any other.

Mortgage lenders laid off 3,229 employees between April 1 and June 30, according to the analysis. Layoffs were about 71 percent fewer than in the first quarter and 31 below the same period last year. “The latest period reflected consolidation as a result of several high-profile mergers during the past year,” MortgageDaily.com Founder and Publisher Sam Garcia explained. “Much of the layoff activity was concentrated at financial institutions.”


July 20, 2009

Home Mortgage Rates Remain Low

Mortgage rates in the U.S. fell to the lowest since May as mortgage refinance loans surged on reduced borrowing costs. The average thirty-year rate fell to 5.14% from 5.20%, mortgage buyer Freddie Mac of McLean, Virginia, said today in a statement. The fifteen-year mortgage rate was 4.63%.   “It’s been stuck in this low-five range for a number of weeks,” Donald Rissmiller, chief economist at New York-based Strategas Research Partners, said. “This is still a good interest rate.”  

The Mortgage Bankers Association’s index of home loan applications rose 4.3% to 514.4 in the week ended July 10. Purchase applications fell 9.4 % while requests to refinance gained 18%, indicating prospective buyers are still wary of falling home prices while property owners are taking advantage of low rates to reduce their monthly payments.  Kelly Media Group Founder, Jason Cardiff of the Mortgage Lead Company, said, “The result of lenders cutting fees will trickle down to homeowners and eventually provide a hedge against inflation for the rest of 2009.”

Federal Reserve Chairman Ben S. Bernanke is trying to reduce lending costs with a $1.25 trillion program to purchase securities backed by home loans. According to data compiled by Bloomberg, the worldwide credit crunch spurred by bad credit mortgages has cost the world’s financial firms almost $1.5 trillion in losses and more asset write-downs.

Last month, the Federal Reserve left the size of its buying program intact and kept the benchmark rate for federal funds at between 0 and 0.25 %. The rate will stay at “exceptionally low rate levels” for an “extended period,” the Federal Open Market Committee said in a statement June 24th.   “We’re going to see more of the same out of the Fed,” Rissmiller said. “They’ve been happy with what’s happened.”

April’s Record Low

Mortgage rates reached a record low 4.78 % twice in April after the central bank announced its plan to boost buying of both mortgage securities and Treasuries.   Those purchases brought down yields on government debt and mortgage-backed bonds issued by Fannie Mae, Freddie Mac and Ginnie Mae, allowing lenders to reduce mortgage rates on new home loans and still sell the securities at a profit. Home loan rates started climbing in May along with Treasury yields on investor concern that ballooning government debt would fuel inflation.


June 5, 2009

Refinance or Mortgage Modification with Bad Credit or No Equity

In a recent article, California mortgage broker, Jeff Morris, formerly with GMAC and Ditech estimated that one in ten of homeowners who visit him online are able to get approved for a conventional or FHA-refinance.  Morris said, “People simply don’t qualify with the mortgage lenders tighter guidelines and lack of home equity.“ Borrowers seeking home refinancing, outside of California, Arizona and Nevada may have a better chance because fewer borrowers in the mid-west and south are under water with their mortgages being greater than their home’s value.  Even with mortgage lenders extending 97% FHA and 105% mortgage refinancing, California homeowners have little opportunities to be approved because home values have declined so significantly since they bought their properties years ago.   


The goal should be for homeowners to invest in a home that they can afford and if refinancing with a lower mortgage payment is an option, then borrowers would be foolish not to seize the savings opportunity. Morris added that “the demand for loan modifications has not waned and he sees an increase in loan workout requests for borrowers who are stuck in jumbo mortgage loans that have interest rates set to adjust.” The banks just aren’t handing out loan modification agreements to just anyone anymore.  Homeowners seeking foreclosure prevention alternatives from their mortgage lender must be able to document that they have the income to support the modified home loan payment. 


In Maui, Caleb Palmer, a broker, said “Consumers should stop whining about things they can’t control and focus the affordable home buying opportunities that have become available since the housing market crashed in 2006.” Palmer continued, “Mortgage rates were under 5% for thirty year fixed rate loans and inventories were beginning to open up in neighborhoods that haven’t been available for years.”  Palmer believes that 2010 will see more buying opportunities in Hawaii and California before the market shifts back to appreciation mode. 


In addition, if you’re older than 40, shortening your mortgage term now could help leave you mortgage-free in retirement, reducing the income you’ll need to generate from your battered 401(k).
But before you jump in, you should know that most single-family home loans today need to fall within Fannie Mae and Freddie Mac limits — up to $417,000 in most places, and up to $729,750 in certain high-cost cities such as San Francisco and New York. “Jumbo” mortgages, or those larger than those limits, are still very hard to find. Then you’ll need two crucial and tough-to-acquire bits of information: your credit score and your home’s current value. Those will determine whether you can refinance at all and how close you can get to the lowest rates available. Even then, you may find the process unusually long and unpleasant; some banks are taking up to 90 days to complete a refinancing.  If you got your current mortgage in the past few years, when less documentation was needed, you may be surprised by the financial colonoscopy that awaits you. You need pay stubs, bank statements, brokerage statements and maybe tax returns to convince the lender that you can and will repay the loan. If you’re self-employed, you may be asked for a profit-and-loss statement for this year; if you rely on bonus income, expect the lender to assume this year’s bonus will be a lot less than last year’s.


What is home equity? Having some equity in your house is essential to qualifying for a new mortgage loan. If your current mortgage is less than 80% of the value of your home or less than 75% of your condominium, you should have refinancing options as long as you don’t have late mortgage payments and bad credit scores.  Subprime refinancing and bad credit mortgage options have disappeared with the exception of VA and FHA loans.  VA home loans are only offered to military veterans and FHA mortgage guidelines require full income documentation and most bad credit home loan applicants need a stated income program.


If your mortgage is between 80% and 105% of your home value, you’re current on your payments and your loan was bought by Fannie Mae or Freddie Mac, you may be able to refinance under a two-month-old government program called “Making Home Affordable.” Some kinks are still being ironed out, and Fannie and Freddie have different requirements, so go to the program’s Web site at MakingHomeAffordable.gov or contact your mortgage servicer to see if you qualify.

Sometimes under this program, Fannie and Freddie will waive appraisals and other underwriting steps. And if you’re refinancing a Veterans Administration or Federal Housing Administration loan, a new appraisal isn’t needed. 


June 3, 2009

Streamline for VA Home Loan Refinancing

Mortgage brokers continue to report that FHA mortgage and VA home loans are the hottest products in the home financing sectors of the U.S.  The VA provides low mortgage rates for streamline programs to veterans who currently have a loan guaranteed by the U.S. Department of Veterans Affairs.  In addition to the VA streamline refinancing, Mortgage Related News reports that and VA loan officers are originating the Interest Rate Reduction Loan at a high volume than previous years because this VA loan has no “seasoning” requirement.


In the mortgage industry, this type of seasoning refers to borrowers who recently completed a mortgage refinance transaction.  In addition, these VA loans entail very little documentation and usually do not require an appraisal. In order to qualify, borrowers must have a VA home loan that is not delinquent. In a recent VA mortgage article, Tom Kelly highlights the opportunity that military veterans and their families have financing and refinancing with VA home mortgage loans.  He points out that one of the simplest ways for homeowners who have a VA mortgage is with the VA streamline refinance. 

VA mortgage lenders will assess that veteran borrowers meet basic program requirements including:

·         The new monthly mortgage loan payment must be for less than the original loan.

·         The VA mortgage rate must be for less than the original loan (unless refinancing from an adjustable interest rate).

·         The term cannot exceed thirty years or ten years more than the original mortgage term (up to a max of 360 months).

After 50 years of offering loans only to vets who served active duty, the VA changed its rules in 1992. Men and women who have completed six years in the Army, Navy, Air Force, Marine Corps or Coast Guard Reserves, or the Army National Guard or Air National Guard, are eligible for VA home loans, including programs with zero down required.