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#HVCC CALL TO ACTION

yourmortgageplanner — Wed, 10 Jun 2009 20:06:41 +0000

To: All Mortgage Brokers, Real Estate Agents, Appraisers, Lenders, Home Builders, Title Agents, and Consumers
From: Marc Savitt, President- National Association of Mortgage Brokers

After more than a year of exhaustive negotiations with Fannie Mae, Freddie Mac, James Lockhart, Director of FHFA (GSE Regulator), and NY Attorney General Andrew Cuomo, NAMB believes the time has come for your individual voice to be heard.

In order for this “Call to Action” to be effective, we ask that you fully participate, encourage others to join the action and continue calling and emailing every day, until advised to stop by NAMB. This will NOT be a one day action!

We have received hundreds of e-mails through the hvcc@namb.org e-mail address outlining specific cases where the HVCC has created delays and additional costs to consumers. NAMB has categorized and compiled a report of the examples received, which was sent to FHFA Director James Lockhart. Please use your own examples in your conversations with legislators, regulators, or their staff. Also, please visit the NAMB HVCC Resource Center for additional information and documents on the HVCC.

Who will you be contacting?

NY Attorney General Andrew Cuomo’s Office: (212) 416-8000, Internet Complaint
Federal Housing Finance Agency (FHFA): (866) 796-5595, director@fhfa.gov
Fannie Mae: (202) 752-7000, headquarters@fanniemae.com
Freddie Mac: (703) 903-2000, Internet Complaint
Senators, Representatives and Governors: Click here for contact information.
Also, please contact your local TV and Newspaper outlets.

Below are talking points and background information to assist in your conversations. Please remember we are all professionals and should conduct ourselves accordingly in any communication with the above parties. For the most successful and influential calls, it is important to concisely quantify how the HVCC is affecting your consumer and your business.

Talking Points:

1. NAMB conservatively estimates (breakdown below) that the HVCC is costing consumers over 2.8 BILLION dollars a year in extra fees, created by long delays (extended lock-in fees) and higher appraisal costs.

2. Unregulated Appraisal Management Companies (AMCs), who have been the subject of several misconduct investigations, are the centerpiece of the HVCC. The original Cuomo investigation involved a federally chartered bank and an AMC.

3. AMCs are driving honest appraisers and mortgage brokers from business, eliminating competition, increasing costs to consumers and reducing state revenue. The HVCC is causing significant delays in real estate transactions, hurting real estate agents, title companies and other third parties reliant on turnaround time.

4. HVCC does nothing to reduce fraud, as it legitimizes the same failed model, which was the subject of Attorney General Cuomo’s investigation.

5. No Portability! Consumers are “trapped” with a specific lender. If a better deal becomes available with a different lender, the consumer is forced to pay for another appraisal.

Background:

I. Lack of Portability

A. Lenders are not allowing borrowers to transfer appraisals, regardless of the reason.

B. Forces the borrower to pay for another appraisal and wait for a new appraiser to be assigned and complete it, increasing the total cost and time needed for obtaining a home. Delays in turnaround times also cause the borrower to miss rate lock deadlines and possibly face penalties charged by the lender.

C. In a poll conducted by NAMB, 75.8% of respondents said that 0% of their appraisals are portable since the enactment of the HVCC.

II. Lack of Quality

A. AMCs are assigning appraisers from a different municipality, county, or even state to appraise the target house, therefore unfamiliar with the neighborhood and unable to produce an accurate appraisal.

i. Because of this, the HVCC is forcing appraisers to be in direct violation of the Uniform Standards of Professional Appraisal Practice (USPAP) for jurisdictional competence.

B. Because AMCs pay appraisers such low fees, those assigned appraisers willing to do the work are often inexperienced and fail to adequately appraise the home.

III. Increased Cost of Appraisals

A. The minimum increase we have seen in direct consumer cost is $150 per appraisal. That, coupled with the drastically increased appraisal turnaround times that impose extended lock periods at an average expense of $561.95 per loan, is now costing consumers an estimated additional $711.95 per transaction.

B. $150.00 – minimum increase per appraisal
$561.95 – average loan amount of $224,778 at .25% for extended lock period
$711.95 – average total increase per transaction
x 3,870,552* – 2007 HMDA report of residential real estate loans originated
$2,755,639,496 – $2.8BILLION in increased fees to consumers!

IV. Articles Illustrating the Effects of the HVCC

A. The Appraisal Bubble – The Center for Public Integrity

B. The Cure is Worse than the Disease – AppraisalPress

C. Appraisals Roil Real Estate Deals – The Wall Street Journal

i. Feel free to forward these articles and/or reference them in your conversations.

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Using First-Time Homebuyer Tax Credits – Cannot Be Used For The 3.5% Required Down Payment

yourmortgageplanner — Wed, 03 Jun 2009 03:26:18 +0000

The First-Time Homebuyer Tax Credits – Cannot Be Used For The 3.5% Required Down Payment.

• Pursuant to 12 U.S.C. 1709(b)(9), the homebuyer’s downpayment required for eligibility for FHA insurance may not consist of any funds (including funds derived from a sale of the homebuyer tax credit) provided by the mortgagee, the seller, or any other person or entity that financially benefits from the transaction (or by any third party or entity that is reimbursed, directly or indirectly, by the financially benefiting person or entity). Accordingly, the proceeds of the sale of the tax credit to FHA approved mortgagees, the seller, or any other person or entity that financially benefits from the transaction (or any third party or entity that is reimbursed, directly or indirectly, by the financing benefiting person or entity), may not be used to meet the 3.5% minimum downpayment, but may be used as additional downpayment, buying down of interest rate, or other closing costs. – U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

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Using the $8,000 First Time Homebuyers Tax Credit as a Down Payment. – NOT So FAST!

yourmortgageplanner — Tue, 02 Jun 2009 17:25:10 +0000

I am sure you have heard all the Hype about the new ability about Using the $8,000 First Time Homebuyers Tax Credit as a Down Payment. Not so FAST! As a lender on the Broker side I am all over this; I have queried multiple lenders and have included there response. In short not one lender has implemented it and feel it will only be available towards the Closing Cost not the 3.5% required down payment.

Most borrowers will still have to come up with the FHA’s required 3.5 percent down payment, unless they work through a state or local housing agency or an approved nonprofit. Ten states have such programs in place, according to the National Council of State Housing Agencies. – AP: By ALAN ZIBEL

At this time Eagle has no investors who will take this. David feels that we need more time for the program to “evolve” as no one know who will monetize these funds. Borrowers can not yet use this as down payment, they still need the 3.5% down, it may let sellers off the hook for closing costs, but at this point no one knows.

When this is available to us, we certainly will let the world know, that includes YOU! – Eagle Funding.

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Mortgage Rates Week Review May 4 – 8, 2009 (Chart)

yourmortgageplanner — Sat, 09 May 2009 21:52:28 +0000

The first week of May is officially over, and Mortgage backed securities once again sold off at the end of the week giving up a total of 30bp this week (FNMA 30 YR 4% Chart). The selloff pushed Mortgage Rates higher for the first week of May. May 2009 Mortgage Rates.

This week we saw the economy shed 539,000 jobs in April, raising the 6-month total to nearly 4 million jobs lost.

And while the April data may look bad, it’s actually 10% better than what was expected.

Now, it may seem odd to categorize 539-thousand lost jobs as “good-for-the-economy”, but it’s important to remember that on Wall Street, expectations are everything.

As it turns out — relative — the actual job loss data wasn’t so bad.

Now, markets are making adjustments and re-forming expectations of what’s ahead for the economy. They’re preparing for things like higher levels of consumer spending in the months ahead, and fewer home foreclosures nationwide. Both outcomes would help to spur the economy from recession.

Other economic data included the second consecutive month, the number of homes under contract to sell increased — further evidence that housing markets may have already bottomed.

As reported by an industry trade association, the Pending Home Sales Index rose by 3-plus percent last month.

A “pending” home is one that’s under contract but has yet to close. This is one reason why the Pending Home Sales Index is an imperfect statistic.

Just because a home is under contract doesn’t mean it will actually sell. A lot can go wrong between the date of agreement and the date of closing. Deals fall apart all the time. But, when the number of pending contracts rises, we can infer that buy-side demand for homes is strong.

It’s likely that the number of homes under contract is being influenced by a combination of low mortgage rates, relatively inexpensive homes, and various tax credits for certain homebuyers. Overall, it’s spurring demand and that’s part of what’s captured by the Pending Home Sales Index.

So long as the demand for homes outpaces its supply, home prices are expected to rise.

No related posts.

Mortgage Rates April 29, 2009 – FED Minutes (Video)

yourmortgageplanner — Thu, 30 Apr 2009 03:22:30 +0000

The Federal Reserve adjourned from its two-day meeting this afternoon. It’s one of 8 scheduled meetings each year for the Federal Open Market Committee.

Although the FED announced to keep the FED Funds target unchanged, MBS gave up ground with the 30 YR FNMA 4.0% pulling back 22bp. Mortgage Rates held their ground and closed where they ended yesterday.

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged today within its target range of 0.000-0.250 percent. The Fed also reiterated its plan to support the mortgage market to the tune of $1.5 trillion.

In its press release, the FOMC noted that the economy may still be contracting, but that it’s not happening with the same speed as in prior months. Household spending is stabilizing and financial markets are “easing”.

Nevertheless, threats to the recovery are everywhere with the following items on the Fed’s short list:

The growing ranks of unemployed workers
The reduction of housing wealth nationally
Reduced inventories and investment from business

Furthermore, the FOMC fingered today’s inflation levels as too low to support economic growth. This justifies the Fed’s plan to hold the Fed Funds Rate near zero percent “for an extended period”.

The FOMC’s next scheduled meeting is June 23-24, 2009.

Source
Parsing the Fed Statement
The Wall Street Journal Online
April 29, 2009
http://online.wsj.com/public/resources/documents/info-fedparse0904.html

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Mortgage Rate Week Review April 24, 2009

yourmortgageplanner — Sat, 25 Apr 2009 19:20:25 +0000

Mortgage rates ended the week of April 24, 2009 lower. The MBS FNMA 30 YR 4.0% finished up 21bp higher for the week (higher is better for the MBS, price and interest are inverse). The historically low rates for both conforming and FHA products are intended to help stimulate the economy by giving home owners a reduction in monthly housing obligations. The low rates are also intended reduce the excess supply of

mortgage-rates-april-24-09

home sitting on the market. One would hope the Monetary and Fiscal policy will eventually lead us to equilibrium and a stable economy and housing market.

Friday’s better than expected New Home Sales number (337K estimated 356K actual). The positive number could be the first chute to sprout for this spring recovery.

No related posts.

Allen Greenspan Supporting His FED Cuts

yourmortgageplanner — Sat, 18 Apr 2009 16:53:43 +0000

Clip of former FED Chairman Allen Greenspan supporting his FED Cuts, from David Faber’s documentary House of Cards

No related posts.

Mortgage Rates April 17, 2009 – Mortgage Week In Review

yourmortgageplanner — Sat, 18 Apr 2009 04:52:25 +0000

Mortgage Rates increased April 17, for a second day as MBS posted another day of losses. Week over week rates are posted a 10bp improvement. Although there was 3bp improvement lenders sill took advantage of the decline in MBS and increased Mortgage Rates.

Overall rates remain low for the time being, thanks to the FEDs Subsidy Suppression program. The FED continued its weekly protocol purchase of Agency Mortgage-Backed Securities Purchase Program.

Gross purchases from April 9 through April 15: $30,400 million
Net purchases from April 9 through April 15: $21,750 million

With respect to housing data, news is rarely positive or negative on a universal level. There’s always two perspectives to consider, after all.

The home buyer’s perspective
The home seller’s perspective

Usually, when data is beneficial to one group, it’s less beneficial to the other. This is true for rising home prices, average days on market and so forth.

Today, the group that gets the most benefit from data is the home seller group.

Published Thursday, a government report showed that Housing Starts fell 11 percent nationwide in March and also fell short of analyst expectations. A “Housing Start” is a new housing unit on which construction has started.

The press is calling this a stumbling block for the economy, but that’s not exactly true.

Fewer Housing Starts last month means that fewer new homes will come on the market later this year. This is not necessarily bad news. Especially if you’re planning to sell your home in the latter half of the year. With fewer homes for sale, the supply-and-demand curve should shift in favor of home sellers. This helps stabilize home prices at a time when they might otherwise be prone to fall.

If it’s true that stable housing markets are key in an economic recovery, then fewer Housing Starts is actually a push in the right direction.

But there’s more to the story (as always).

As footnoted in the Commerce Department’s report, a statistical disclaimer states that the Housing Starts data’s Margin of Error was so high that the report’s conclusion is just a guess. Technically, the entire report is invalid anyway

So, the government won’t issue its final March 2009 Housing Starts data for months, but if the initial figures stick, home sellers may be in position to command higher sale prices later this year to the detriment of home buyers. It’s basic economics.

And from a home seller’s perspective, that news is good.

No related posts.

Mortgage Rates April 16, 2009 – Ready Set Foreclose

yourmortgageplanner — Fri, 17 Apr 2009 07:15:42 +0000

Mortgage Rates increased today as the FNMA 30 YR MBS 4% gave up roughly 9bp. This down tick in the MBS can be attributed to the late day mini rally in the equities market as JP Morgan Chase beats estimates as it releases earnings.

Both Building Permits and Housing Starts were released today. Building Permits were down over 61k from last month and Housing Starts down 62k..All though they are down this is a positive sign in the sense the supply is not increasing; it will take a tighter supply in order to clear the current inventory on the market. Given the Foreclosure Moratoriums have come to an end, the housing number are welcomed, as we will start to witness an increases in foreclosures given the temporary delay in now gone.

I have one REO Agent friend who informed me that just last week he received 48 BPO request from banks, if only half hit the market that is HUGE.

The finger has been removed from the dike!

In a recent post by my idol; Tyler Durden he points out that we can’t hide from the massive wave of California Foreclosures that is ominously approaching. While pointing out the fact he does not point to the reasoning.

Many borrowers in CA decided to take advantage of what we in the biz called the POA (Option ARM). Now that these ARM are set to adjust, the borrowers will need to refinance into a fixed. Given the deterioration in housing values they will not have the luxury. One item that is aiding in taming the massive amount of defaults is the fact that although the ARMS have adjusted the Index to which they are tied to has come down to the point they are paying less on their IO (interest only) payment then they would in a current fixed. This temporary lull will only be brief. Once inflation kicks in and rates shoot up, the defaults will recommence as the homeowners walk!

[where: 98109] [where: 85012]

No related posts.

Mortgage Rates April 13, 2009 – Rates Improve

yourmortgageplanner — Tue, 14 Apr 2009 03:01:19 +0000

What a great way to start the week. Mortgage Rates improved today, with an increase in MBS. After a light data week last week, data returns.

Tuesday, we’ll get a look at Retail Sales. Because consumer spending accounts for two-thirds of the economy, a lower-than-expected figure for Retail Sales would dampen Wall Street’s current optimism for the U.S. and that would likely lead mortgage rates lower.

Next, on Wednesday, the government will release a closely-watched ”cost of living” measurement called the Consumer Price Index. At its roots, CPI is an inflation gauge for the economy so — because inflation is bad for mortgage rates — a higher-than-expected CPI number is expected to push mortgage rates higher.

Then, on Thursday, Housing Starts is released.

Housing Starts measures the number of new homes on which the nation’s builders broke ground last month. If starts are up, it may mean that builders are optimistic for housing — a good sign for the economy. However, if starts are down, it should help reduce housing inventory over the next few months — also a good sign for the economy.

Meanwhile, 3 of the country’s biggest financial firms — Goldman Sachs, JPMorgan Chase, and Citigroup– are due to release first quarter earnings this week. If the filings show strength like Wells Fargo’s did, expect mortgage rates to rise like that did after the Wells Fargo report. What’s good for stocks right now may prove to be bad for mortgage rates.

Goldman Sachs reports on Tuesday, JPMorgan Chase on Thursday and Citigroup on Friday.

No related posts.

1.	NAMB conservatively estimates (breakdown below) that the HVCC is costing consumers over 2.8 BILLION dollars a year in extra fees, created by long delays (extended lock-in fees) and higher appraisal costs.
2.	Unregulated Appraisal Management Companies (AMCs), who have been the subject of several misconduct investigations, are the centerpiece of the HVCC. The original Cuomo investigation involved a federally chartered bank and an AMC.
3.	AMCs are driving honest appraisers and mortgage brokers from business, eliminating competition, increasing costs to consumers and reducing state revenue. The HVCC is causing significant delays in real estate transactions, hurting real estate agents, title companies and other third parties reliant on turnaround time.
4.	HVCC does nothing to reduce fraud, as it legitimizes the same failed model, which was the subject of Attorney General Cuomo’s investigation.
5.	No Portability! Consumers are “trapped” with a specific lender. If a better deal becomes available with a different lender, the consumer is forced to pay for another appraisal.

I.	Lack of Portability
	A.	Lenders are not allowing borrowers to transfer appraisals, regardless of the reason.
	B.	Forces the borrower to pay for another appraisal and wait for a new appraiser to be assigned and complete it, increasing the total cost and time needed for obtaining a home. Delays in turnaround times also cause the borrower to miss rate lock deadlines and possibly face penalties charged by the lender.
	C.	In a poll conducted by NAMB, 75.8% of respondents said that 0% of their appraisals are portable since the enactment of the HVCC.
II.	Lack of Quality
	A.	AMCs are assigning appraisers from a different municipality, county, or even state to appraise the target house, therefore unfamiliar with the neighborhood and unable to produce an accurate appraisal.
		i.	Because of this, the HVCC is forcing appraisers to be in direct violation of the Uniform Standards of Professional Appraisal Practice (USPAP) for jurisdictional competence.
	B.	Because AMCs pay appraisers such low fees, those assigned appraisers willing to do the work are often inexperienced and fail to adequately appraise the home.
III.	Increased Cost of Appraisals
	A.	The minimum increase we have seen in direct consumer cost is $150 per appraisal. That, coupled with the drastically increased appraisal turnaround times that impose extended lock periods at an average expense of $561.95 per loan, is now costing consumers an estimated additional $711.95 per transaction.
	B.	$150.00 – minimum increase per appraisal $561.95 – average loan amount of $224,778 at .25% for extended lock period $711.95 – average total increase per transaction x 3,870,552* – 2007 HMDA report of residential real estate loans originated $2,755,639,496 – $2.8BILLION in increased fees to consumers!
IV.	Articles Illustrating the Effects of the HVCC
	A.	The Appraisal Bubble – The Center for Public Integrity
	B.	The Cure is Worse than the Disease – AppraisalPress
	C.	Appraisals Roil Real Estate Deals – The Wall Street Journal
		i.	Feel free to forward these articles and/or reference them in your conversations.