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Dec-28-2010Ally's Mortgage Unit Settles Fannie Loan-Buyback Demands for $462 Million(topic overview)
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Ally Financial Inc. said Monday it will pay $462 million to settle buyback claims on $292 billion in home loans that it sold to Fannie Mae before the industry tightened underwriting standards in the wake of the financial meltdown. GMAC Mortgage, which is part of Ally's Residential Capital unit, originates and services loans then sells them to government-sponsored mortgage companies Fannie Mae and Freddie Mac. As part of their repurchasing deals, Fannie and Freddie have the option to go back and challenge Ally's underwriting standards. If successful, they could have forced Ally to buy back the loans in question. [1] Ally Financial Inc., the auto and home lender majority owned by the U.S. government, said its mortgage unit reached a $462 million settlement to resolve repurchase claims by Fannie Mae on $292 billion in home loans. Ally, formerly known as GMAC Inc., said the settlement covers loans serviced by its GMAC Mortgage unit for Fannie Mae before June 30 and mortgage-backed securities it sold to Fannie Mae. The accord was reached on behalf of Ally'''s Residential Capital unit and some of its subsidiaries, the Detroit-based company said today in a statement. [2] WASHINGTON (Reuters) - Ally Financial Inc, the lender formerly known as GMAC, on Monday said it agreed to pay $462 million to Fannie Mae to avoid having to repurchase poorly underwritten mortgages sold to the housing finance giant. Ally, which is majority-owned by U.S. taxpayers, said the agreement releases its Residential Capital LLC mortgage unit from any liability related to bad underwriting on $292 billion worth of loans sold to Fannie Mae, itself about 80 percent owned by the government. [3]
Taken over in September 2008 and fortified by the federal government, Fannie Mae and Freddie Mac buy a large chunk of new mortgages from banks and other lenders. Then they sell the mortgages to investors who rely on them to cover losses. The Federal Housing Administration insures lenders against loss in case a homeowner defaults on his mortgage. The three ''' with their government guarantees ''' have become ever more important to the housing market pummeled by risky home loans gone bad. [4] According to the rule, the limit will be reduced by 10% each year until the limit hits $250 billion. At that point, no further reduction in the maximum limit is currently required, the rule states. The second rule submitted by the FHFA requires Fannie Mae, Freddie Mac and the Federal Home Loan Banks to include women, minorities and individuals with disabilities in all functional activities. It also establishes an Office of Minority and Women Inclusion in each organization. The third rule says the Federal Home Loan Banks must establish housing goals, consistent with those of the FHFA, Fannie Mae and Freddie Mac. The FHFA said it is undertaking a review of its regulations governing federal membership to the Home Loan Bank circuit, to identify provisions that may need to be updated to ensure that they remain consistent with the statutory provisions concerning bank membership and the overall mission of the Federal Home Loan Banks. [5]
The number of seriously delinquent mortgages held by Freddie Mac rose slightly in November, while the percentage of single-family home loans backed by Fannie Mae that are 90-days or more late fell to the lowest rate in more than a year. [6] Since 2007, when Freddie Mac and Fannie Mae introduced "risk-based pricing," consumer credit scores have played an increasingly pivotal role in the mortgage application process. "Fannie Mae and Freddie Mac looked at credit scores and loan performance and realized that borrowers with lower credit scores are far more likely to default on their loan than borrowers with higher scores," says Douglas Benner, a senior loan officer with Embrace Home Loans in Rockville, Md. [7]
WASHINGTON, DC-In 2011, Congress and the Obama Administration are expected to tackle the issue of the GSEs. A recently-released report from the Congressional Budget Office provides reasons for both left and ring-wing politicians to consider alternatives from Fannie Mae's and Freddie Mac's current structure by debunking two assumptions. One is the belief that the GSEs have, at net, aided the availability and cost of affordable housing. The other is that they have not displaced private mortgage origination activities. Not so in either scenario, says the CBO, which found the GSEs had only a limited effect on affordable housing and, via its federal guarantees, reduced the incentives for mortgage originators to make risky loans. In the case of affordable housing, the problem arose because Fannie Mae and Freddie Mac faced intrinsic, and ultimately intractable, tensions in balancing competing goals: maximizing profits for their shareholders; maintaining safety and soundness to minimize potential costs to taxpayers; and supporting affordable housing. [8]
While there is broad agreement that government-sponsored mortgage companies Fannie Mae and Freddie Mac were a disaster, there isn't a clear answer to how to reshape the mortgage market to function better going forward. Since Democrats in didn't feel like approaching this very messy debate when drafting the summer's financial regulation bill, they just punted to the next Congress. At this time, little has changed, as the government continues to back most new mortgages in the U.S. Early talks implied that the government would ultimately continue to stand behind most mortgages, but suddenly housing policy's fate isn't looking as inevitable. [9] The government spelled out Thursday just how much the most expensive rescue of the financial crisis will end up costing taxpayers - as much as $259 billion for mortgage buyers Fannie Mae and Freddie Mac. That would be nearly twice what Fannie (FNMA) and Freddie (FMCC) have received so far. [10] The tab is mounting for the arrangement with Fannie Mae and Freddie Mac, one that lawmakers never meant to be permanent. The Government Accountability Office estimated the cost to taxpayers for shoring them up could total $400 billion over 10 years. [4]
"The affordable-housing goals and the pursuit of profit may have encouraged Fannie Mae and Freddie Mac to purchase subprime MBSs that were expected to generate high returns, but that involved excessive risk for borrowers and taxpayers alike." As for disincentives for private sector mortgage originators, CBO notes that this is one clear cost of the government's involvement in the secondary mortgage market--a cost that must be weighed against its many benefits. [8] The president and lawmakers will face difficult decisions about how to reform Fannie Mae and Freddie Mac and promote housing opportunities while limiting risks to taxpayers and ensuring stable financial markets, according to a financial audit from the GAO. [4]
At the financial crisis peak in 2008, the government raised the ceiling on the size of loans Fannie Mae (FNMA) and Freddie Mac (FMCC) could. Real estate investment trusts have raised billions of dollars in equity, debt and preferred capital over the last several months to strengthen their balance sheets. Now many REITs are experiencing an uptick in leasing that's improving occupancies and rents - or at least stabilizing them. [10] Delinquent multifamily loans rose to 0.71% last month from 0.65% in October and 0.66% last year. The companies were recently named two of the worst-performing stocks of 2010 with'' drops of 74% and 79% in their share price this year. Freddie Mac and Fannie Mae were delisted from the New York Stock Exchange in June, and their stock now trade at around 32 cents. [6] In what probably comes as no surprise to anyone, Fannie Mae and Freddie Mac were two of the worst-performing stocks of 2010. [11]
As always, the question is, "Can we make a profit and not get burned?" The answer is increasingly, "Yes." Ginnie Mae, Fannie Mae and Freddie Mac have raised their net worth requirements from $1 million to $2.5 million, an unreachable number even for most of the existing mortgage bankers. One has to wonder the logic of that strategy, given that their future existence remains in doubt. Be that as it may, the correspondent lenders who also raised their net worth requirements, and are now starting to think "volume" and becoming "competitive" once again. For those mortgage brokers who did transition to mortgage banker status and still remain open for business, are now starting to look around and say, "I think I can make more money now by upgrading my approvals" … and they can. [12] As of Dec. 31, 2009, Fannie Mae and Freddie Mac can hold $900 billion worth of mortgage assets. As of Dec. 31, 2010, each is required to reduce its holdings by 10% of the previous maximum limit. [5]
The first are kind of obvious - just look at Fannie Mae and Freddie Mac. They're a great lesson for how government mortgage guarantees can go horribly wrong. Philosophically, it's difficult to justify pricing a product lower than the market will pay for it, which is essentially what a government guarantee would do. There don't appear to be too many free market libertarians in the Obama administration, so it's hard to understand where this disagreement is coming from. [9] Some estimate Fannie Mae and Freddie Mac may ultimately cost the government up to $1 trillion, according to CNNMoney. Treasury will provide us with capital as needed to correct any net worth deficiencies that we record in any quarter through 2012, Fannie Mae states on its website. [11]
In July, Fannie Mae'''s regulator, the Federal Housing Finance Agency, said it issued subpoenas for documents related to private-label mortgage-backed securities in which Fannie and its smaller rival, Freddie Mac, had invested. [2] The Treasury Department, which has pumped more than $17 billion into Ally, declined to comment, as did Fannie Mae's regulator, the Federal Housing Finance Agency. [3]
Ally Financial, once known as GMAC Mortgage, will pay $462 mil to settle claims on $292 bil in home loans that it sold to Fannie Mae ( FNMA ) prior to the '08 financial crisis. [10] Ally Financial, the lender formerly known as GMAC, said Monday that its mortgage unit reached a $462M settlement to resolve potential repurchase claims by Fannie Mae on. [13]
Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America. [14]
The monthly summary report contains information about Fannie Mae's monthly and year-to-date activities for our gross mortgage portfolio, mortgage-backed securities and other guarantees, interest rate risk measures, and serious delinquency rates. [14] Fannie Mae said the 90-day delinquency rate of single-family mortgages it holds declined to 4.52% in November down from 4.56% in October and 5.29% a year ago. [6]
Note: Fannie Mae reported the serious delinquency rate declined slightly in October (they are a month behind Freddie Mac). [15] WASHINGTON West Texas Rep. Randy Neugebauer said he wants to get taxpayers off the hook for mortgage giants Fannie Mae and Freddie Mac. [4] Reports also indicated that Fannie Mae and Freddie Mac were reluctant to join the FHA initiative despite the fact that many felt this could bring other mortgage servicers into the program which again could offer homeowners the option to find more affordability in their underwater mortgage. [16]
Reforming Fannie Mae and Freddie Mac is expected to be a hot topic when Congress begins anew in January with Republicans in charge of the House. [4] I t's not hard to start a partisan fight in Washington these days. If you really want to see the fur fly, just gather a few Republicans and Democrats and get them arguing about how much blame Fannie Mae and Freddie Mac deserve for the 2008 economic collapse. [17]
Lawmakers expect a cue from the White House, which is expected to release a proposal about what to do with Fannie Mae and Freddie Mac in February. '''That should begin the debate,''' Neugebauer said. [4]
Ally, which is expected to go public next year, announced a smaller settlement with Freddie Mac in March. Resolving questions about its potential liability could help Ally attract investors. The lender, which is 56 percent owned by the U.S. government, said the agreements reduce the risk in its mortgage operations going forward. [3] Freddie Mac is one of America's top investors in the conventional mortgage industry. The 9-month extension is expected to allow military members enough of a grace period to settle agreements with their respective lending institution. [18]
Fannie and Freddie did not start securitizing and selling large quantities of subprime and other exotic loans until 2007 or so, by which time private-label securitizers had already sowed the seeds of disaster. The mortgage giants did, however, buy hundreds of billions of dollars worth of subprime securities for their own portfolios starting in 2003. Bottom line: Fannie and Freddie did not create the subprime boom, but they enabled it, to enrich their shareholders (and management), and to meet federal affordable-housing goals -- which, by the way, had bipartisan support. This argument seems especially inopportune now, since whatever happened in the past, there is broad agreement about what should happen in the future: The old "government-sponsored enterprise" model is a proven failure. [17] '''Then that will allow you to do the things that you need to do to Freddie and Fannie, but you have to have some direction or some place to go for people to get mortgages.''' He said he'''s been hearing different ideas from the players in the mortgage finance market, including people who make loans, insure them and buy them. '''The question that everyone is trying to address is, can we have a mortgage market that doesn'''t have to have some federal guarantee?''' he said. The way to get the taxpayer off the hook and steer mortgages into the private market is to allow courts to break mortgage contracts just as they can automobile loans, said Michael Brandl, a senior lecturer in business and finance at the University of Texas at Austin. [4] To the GOP, the culpability of the government-sponsored mortgage finance enterprises (GSEs), whose bailout has so far cost taxpayers nearly $150 billion, is self-evident -- proof that Washington wrecked capitalism. For Democrats, Republican vilification of Washington-based GSEs, and their mission of affordable public housing, is intended to whitewash the true culprit, Wall Street. The latest round in this blame game began on Dec. 15, when Republican members of the Financial Crisis Inquiry Commission published an analysis blaming government subsidies for inflating the subprime mortgage bubble -- to which liberals responded that Fannie and Freddie had followed, not led, Wall Street into the risky subprime business. This is not exactly an empty debate. If Republicans can win, score one for their broader free-market views; if Democrats win, it would vindicate government intervention. We are sorry to say, however, that both sides have a point. [17] Some worry any guarantees expose the government to too much risk, as the $134 billion in losses incurred by Fannie and Freddie indicate. This is a surprise, because as the excerpt above says, pretty much all sides agreed at the August conference that some form of government guarantee was necessary. Investors love the idea because it eliminates their risk. Banks love the idea, because they can originate all the mortgages they want to sell to investors. [9] Fannie and Freddie should be gradually dismantled and replaced with a new system of mortgage finance that does not permit ostensibly private companies to profit from an implicit federal government guarantee. [17]
All serious proposals emphasize a greater role for private capital than it currently has. With some justification, Republicans criticized the Obama administration and Democrats in Congress for failing to overhaul Fannie and Freddie during this year's financial reform legislation. Beyond calling for an end to the bailout, and winding down the GSEs over the next few years, they were vague about what should take the place of companies that, for better or worse, underwrite 90 percent of all new mortgages in America. Now that Republicans have won the House, they have a chance to prove that their concern over the mortgage giants was more than just election-year politics. [17]
As things stand now, there'''s little incentive for mortgages to go anywhere besides Fannie, Freddie and the FHA, Neugebauer, a Republican from Lubbock, said. '''We need to get the housing finance market back up and going again and not being dependent on Freddie and Fannie and FHA,''' he said. [4] Back in August, the Treasury opened up the housing finance policy discussion with a big conference consisting of investors, economists, bankers, and other industry experts. At that time, it looked like there was a fairly broad consensus advocating for explicit government mortgage guarantees, where lenders would pay a fee for that service. [9] Top administration officials, including Treasury Secretary Timothy Geithner, have publicly discussed the merits of a limited but explicit government guarantee of securities backed by certain types of mortgages. Investors, academics and the housing industry say such a guarantee is needed to maintain a healthy market, particularly for long-term, fixed-rate loans that remain a keystone of U.S. housing. [9]
Affordable housing advocates love the idea because government guarantees would keep mortgages cheap. The government loves the idea because it believes it can price the risk properly and points to its depository insurance as proof. Who doesn't like the idea? Libertarians who want a freer market and less government involvement argue that there are both practical and philosophical problems with government mortgage guarantees. [9] There are other countries that have healthy, functioning mortgage markets without government guarantees. There might also be some legitimate doubt that the government really can price these guarantees properly without political priorities getting in the way. The second could be those free market libertarians: they might not be making waves in Washington yet, but they're coming. [9]
About 90 percent of new home loans are backed with some type of government guarantee because the private market is still squeamish after the meltdown that began in 2007. [4] Chief Executive Officer Michael Carpenter, preparing Ally for a share sale that would allow the government to withdraw support, is trying to resolve ResCap'''s losses linked to representations and warranties on home loans. [2]
For November 2009, the rates were 3.83% for single-family and 0.19% for multifamily. Freddie Mac said the number of home loans in its portfolio that were modified during November reached 8,363 and nearly 155,200 loans have been modified this year. [6] Freddie Mac said the rate of single-family home loans more than 90-days delinquent inched up to 3.85% last month from 3.82% in October. [6]
The summary, available on the company's Web site at www.FreddieMac.com/investors/volsum, provides information on Freddie Mac's mortgage-related portfolios, securities issuance, risk management and delinquencies, including data on seriously delinquent mortgage loans in related mortgage Participation Certificate (PC) pools. [19] "At the start of 2010, we set a goal to substantially reduce the risk in our mortgage operation, and during the last twelve months, we have successfully completed a series of steps toward that objective and are largely complete," said Michael Carpenter, chief executive of Ally. In addition to questions about the way it made loans during the housing boom, the company's mortgage foreclosure process has come under fire after an employee admitted to signing thousands of foreclosure-related affidavits without properly reviewing them. Ally found that it must improve its processes, but said it has found no evidence of improper foreclosures. [3] "For example: Efforts to help low-income households tend to involve targeting loans toward borrowers who generally pose more risk than borrowers of traditional conforming mortgages do, thereby putting taxpayers at greater risk of loss," the report said. [8]
The FHA has proposed limiting loan approvals to borrowers with credit scores of 500 and above and to require a 10 percent down payment from borrowers with credit scores between 500 and 579. Another proposal would require borrowers with a credit score below 620 to have cash reserves of at least one month's mortgage payment available after the closing. Nicholas anticipates these changes to be in place in early 2011. Borrowers who are turned down for an FHA loan through their automated system can request manual underwriting so that a live person reviews their loan application, Nicholas says. "Be prepared with a letter of explanation for your low credit score, such as a one-time event or illness rather than a pattern of not paying your bills," Nicholas says. [7] If one lender won't do manual underwriting, another might. Other compensating factors that can help a borrower overcome a low credit score include a low debt-to-income ratio, stable employment and substantial savings. Benner says FHA loans are available to all borrowers regardless of income or whether they are first-time home buyers, as long as the home price meets area loan limits. [7] "While FHA has not yet set a minimum credit score, most lenders will only qualify borrowers with a score above 620 and some have even set the minimum for FHA loans at 660," Benner says. "My company is one of the few that goes down to 540, but this depends on the consumer meeting other guidelines such as a reasonable debt-to-income ratio and savings." [7]
"Most PMI companies will not approve a loan for anyone with a credit score below 680," Benner says. "In addition, the amount of the loan they will insure changes based on the credit score. On some properties, such as a cash-out refinance or a second home, the PMI companies insist on a credit score of 720 or higher." [7]
Nicholas says that in a declining market where home prices are still dropping, such as Michigan, PMI companies can require a credit score of 720 or higher. [7]
A credit score of 740 is the threshold for qualifying for the best interest rates from conventional mortgage lenders, Nicholas says. [7] According to the Freddie Mac Primary Mortgage Market survey, the interest rate for a 30-year, fixed-rate mortgage was 4.81%, down from 4.83% the previous week. [5] Freddie Mac was created by Congress in 1970 to ensure a liquid, stable, and affordable mortgage market. It strengthens the nation by making mortgage capital available to qualified applicants. Since its inception, it has enabled over 5 million renters become would be homebuyers. [18] Freddie Mac supports communities across the nation by providing mortgage capital to lenders. [19]
"Our military make sacrifices every day to protect our homes and families," said Anthony Renzi, Executive Vice President of Single Family Portfolio Management at Freddie Mac. "This small act will protect financially troubled service members when they return from active duty by giving them more time to work with their lender to stay in their home." [18] Freddie Mac recently issued instructions to its service providers to postpone starting foreclosure proceedings through the next 9 months against cash strapped military personnel who are getting released from service in the next year. [18]
By: Calculated Risk on December 27 10 6:11 EST Freddie Mac reported that the serious delinquency rate increased to 3.85% in November from 3.82% in October. [15] Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. [19]
It has been a long time since I've written an article about the broker-to-banker business, but it appears that the time has come around once again. From the ashes of the spectacular and abrupt meltdown of the mortgage industry, has come the tinkering of the federal government with matters that are really beyond their level of expertise. From the new legislation, which has yet to prove that it is a benefit to anyone remaining in this industry, comes the ever resourceful mortgage broker. [12] Slowly but surely, the new rules and regulations are re-shaping the conditions under which the mortgage industry will function for many years into the future. Good, bad or indifferent, we learn to live with them and adapt. [12]
The loss of jobs in the mortgage industry has also resulted in the loss of licensed loan officers, who have just decided to give it up. [12]
Santander will take over GE Capitals consumer mortgage unit in Mexico, according to the Times article, including a $2 billion loan portfolio. [5] Conventional loan borrowers who make a down payment of less than 20 percent also need to meet private mortgage insurance guidelines in addition to qualifying with the lender. [7] The company does not expect significant repurchase claims on loans at Ally Bank, noting that more than 90 percent of the Ally Bank loans serviced on behalf of Fannie Mae were originated from 2008 to 2010. [1] The settlement covers loans that GMAC serviced for Fannie Mae prior to June 30 as well as all mortgage-backed securities that Fannie Mae purchased from the company. [1]
In connection with the settlement, the FHFA will withdraw subpoenas to '''certain ResCap parties''' that relate to Fannie Mae, Ally said today in a filing to the Securities and Exchange Commission. [2] ResCap and Fannie Mae also reached an accord regarding ResCap'''s payment of mortgage insurance proceeds where coverage is rescinded or canceled. '''ResCap does not expect this exposure to be material,''' Ally said. [2]
The $462 million is slightly more than the reserves that Ally had set aside to cover a potential deal. Ally CEO Michael A. Carpenter says the deal significantly cuts Ally's risk related to its legacy mortgage business. [1] The FDIC did, however, sell $603 million in home mortgages from failed banks to RoundPoint Financial Group. [5] In Q2, 11 million, or 23%, of all residential properties with mortgages were in negative equity; in Q3, that has fallen to 10.8 million, or 22.5%. Before anyone gets excited about a housing recovery, however, CoreLogic says that this decrease is '''due primarily to foreclosures of severely negative equity properties rather than an increase in home values.''' [16] NEW YORK The private residential mortgage bond market that provides non-U.S.-backed capital may stay in hibernation as long as cheaper sources of bank funding persist, Bank of America Merrill Lynch's mortgage finance chief says. [10] We look forward to presenting the facts in a court of law, Ernst & Young said in an official statement. General Electrics finance unit, GE Capital, said it would sell its Mexican consumer mortgage division to Spanish banking giant Santander. [5]
Here again, credit scores make a big difference in a borrower's ability to secure a mortgage. [7] Benner says borrowers with a score in the mid-600s will likely pay 0.75 percent higher interest than the lowest current rates. [7] Benner says borrowers with credit challenges should apply for FHA-insured loans. [7]
According to Bloomberg, RoundPoint acquired 40% of the equity of the loan pool. This is the second deal RoundPoint has made with the FDIC concerning mortgage assets from failed banks. [5] Mortgage buyers invoke the clauses to force lenders to buy back faulty loans. [2] The agency, which is under pressure from lawmakers to stem losses to the two companies, is trying to determine whether misrepresentations or omissions might require lenders to repurchase failed loans. [2]
The administration is divided over whether a backstop for new loans would be needed when markets return to normal, a process that could take several years. [9]
The rate for a 5-year, Treasury hybrid adjustable-rate mortgage was 3.75% and the rate for a one-year, Treasury ARM was 3.4%. No banks were closed over the holiday weekend by the Federal Deposit Insurance Corp. A total of 157 banks have been shuttered this year. [5] Not only are there more Republicans who might not love the idea of continued government involvement in the market, but there are some tea partiers who consider themselves free market libertarian types more likely to be vehemently against government mortgage guarantees. The Treasury could be anticipating their distaste for these guarantees and intends to draw up an alternative or compromise. [9] Government mortgage guarantees should be controversial for reasons explained in the links below. [9]
'''When the federal government guarantees anything, it'''s the taxpayers ultimately that are on the hook for it,''' said Neugebauer, who'''s taking on a role in financial services oversight in January. [4]
The definition of home ownership, at least according to the Census, includes homeowners in a negative equity position. '''However, homeowners in negative equity are not likely to behave similarly to homeowners with equity, because their financial interest (the equity) has disappeared and has only a small prospect of returning soon, given price trends,''' note CoreLogic authors. Underwater borrowers are more likely to behave like renters, which means they'''re not going to invest much in home improvement. They are also more likely to walk away from their commitment, although not in the waves some had predicted. Customers are often surprised that their car isn'''t worth as much as they thought it would be. One reason for this is that the NADA and Kelley Blue Book values that most consumers have access to should be thought of as only a guide. [16] The increase in negative equity has reduced labor mobility in the U.S.; and there is evidence that a high percentage of underwater mortgages in an area has a strong correlation with higher unemployment. [16]
The agreement is intended to ensure that we are able to continue providing liquidity and stability to the housing and mortgage markets. [11] Concurrently with the settlement agreement, Ally said it increased an existing line of credit with ResCap to $1.6 billion from $1.1 billion. [1] According to an article in The New York Times, the deal priced at $2 billion pesos, or $162 million, plus debt. [5] The tab for taxpayers has come to $150 billion to shore up the pair of government-sponsored enterprises in the wake of the subprime mortgage crisis. [4]
The mortgage brokers who understood the value of "quality control" or "compliance performance" for the most part, are still standing and thriving and trying to figure out what to do next. Those who invested in advanced computer software programs, like Ellie Mae or Pro Lender Solutions, to assist them with pipeline management and the constant drum of "quality control" have reaped the reward of their investment. [12] The crazy thing about the mortgage business is that if you love what you do, and it gets into your blood, you will stick with it no matter what. The "high" comes not only from helping borrowers achieve their goals of homeownership in whatever form that takes, but also from how to "beat the system" and remain profitable under incredibly adverse conditions. [12] Elaine Roccio is a mortgage banking consultant with 25-plus years of mortgage experience and 10-plus years specializing in the broker-to-banker business. She may be reached by e-mail at [email protected] or visit www.brokertobankerservices.com. [12] As the San Francisco Fed noted in October, it's astonishing to see the difference in the share of U.S. mortgages that are underwater when compared against ten years ago. This is problematic for a few reasons. [16] The value of an existing mortgage banker, one who has survived the last two years, is a serious candidate for consideration. [12] Consumers need high scores to qualify for the lowest mortgage rates, says Gibran Nicholas, chairman of The CMPS Institute, an organization in Ann Arbor, Mich., that trains and certifies mortgage bankers and brokers. [7] A high number of underwater mortgages means that increasingly lower rates are required for mortgage borrowers to refinance. [16]
I want to receive t he hottest mortgage industry headlines, featured articles and others mission critical mortgage industry stories delivered to my email inbox each day. [12]
Janis Smith, a spokeswoman for Washington-based Fannie Mae, declined to comment. [2] Fortune tabbed homebuilder Lennar Corp. ( LEN : 18.58 +2.26% ) as a stock to watch in the coming year, despite significant losses and share price thats down to about $15 from $67 a share in the summer of 2005. [11]
SOURCES
1. Ally to Pay $462M to Settle Loan Deal With Fannie - ABC News
2. Ally's Mortgage Unit Settles Fannie Loan-Buyback Demands for $462 Million - Bloomberg
3. Ally Financial in $462 Million Settlement With Fannie - ABC News
4. Neugebauer grapples with federal mortgage guarantee issue » Standard-Times
5. Monday morning cup of coffee « HousingWire
6. Freddie Mac delinquency rate up slightly in November, Fannie rate drops « HousingWire
7. Credit scores get more crucial in loan approvals - NorthJersey.com
8. GlobeSt.com - CBO Report Defuses Case for GSEs on Left, Right - Daily News Article
9. Maybe Federal Mortgage Guarantees Aren't Inevitable - Daniel Indiviglio - Business - The Atlantic
10. Ally Financial - Investors.com
11. Fannie Mae, Freddie Mac two of the worst-performing stocks of 2010: report « HousingWire
12. Is the Broker-to-Banker Business Really Dead? | Mortgage News | Daily National and State Headlines
13. Ally to Pay Fannie $462M in Settlement - American Banker Article
14. PR-CANADA.net - Fannie Mae Releases November 2010 Monthly Summary
15. Forex - Freddie Mac: 90+ Day Delinquency Rate increases in November - ForexTV.com
16. Fannie Mae And Freddie Mac Underwater Homeowners | Press Release Mag
17. The mortgage blame game - Boulder Daily Camera
18. Home Foreclosures Freddie Mac To Postpone Foreclosure Proceedings For Nine Months | Star Global Tribune
19. PR-CANADA.net - Freddie Mac Issues Monthly Volume Summary for November 2010
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