Thoughts from the Chairman & CEO of AMC Institute, a learning center providing education, training, information and solutions for mortgage loan providers.
Some interesting stuff in the news today: The House Financial Service Committee on Tuesday will mark up a mortgage reform bill that bans certain types of yield spread premium payments and requires lenders to retain 5% of the credit risk on subprime loans that are sold to investors … the bill indicates that it would require mortgage banking firms to disclose their "servicing released premiums" to the public as well.
The legislation also mandates that all licensed and registered originators would be subject to a "federal duty of care" measure under the bill, obligating them to only make loans that a customer can afford. With refinancings, lenders would have to prove a "net tangible benefit."
Can’t wait to see if this one makes it into Law and what the details will be
"The Obama administration unveiled its long-awaited plan to remove toxic assets from the books of the nation’s banks, betting that it can revive the U.S. financial system without resorting to outright nationalization. " is the headline this morning, as Timmy struggles to handle everything’s that on his plate – I’m happy they’re gonna at least try something! All the unnecessary moving parts this Treasury Secretary has added to the basic TARP, probably has made this run at the problem impossible – as is.
If you wanna read the fine print, go HERE - I am hopeful that whatever it is they finally do about these "legacy assets" (since this is full of loop holes and miscalculations) will be done soon.
That’s the headline of a piece I saw in Bloomberg news this morning; Secretary Timmy to the Rescue! It’s all about " … put the finishing touches on a plan to remove troubled assets from banks’ balance sheets that will be unveiled early next week."
Those are the same one’s that he and Pauslon used to call TOXIC assets, back when they wrote the Emergency TARP program in September and were trying to scare Congress into letting the Treasury have that original $700 Billion – which Hank gave to his croneys at Big Banks and Wall Street. Today they call them ‘distressed’ and ’legacy assets’ … cute huh?
The piece went on to say " … this is Geithner’s next step (should have been the First Step) to cleanse banks’ balance sheets so they can start lending again …." Something that should have been done SEVEN Months ago!
I am verfy angry that those troubled, TOXIC, distressed, legecy assets, weren’t handled last Fall, because our industry and the housing crisis would have been only an ugly memory today, had THEY done their dam jobs in the first place!
As a Mortgage Professional, you’ll recall back in November 2007, the U.S. Federal Trade Commission (FTC) established a set of rules for regulating access to private information in an attempt to help STOP Identity Theft. These rules target several industries, naturally ours is one of them … it’s all about ‘Red Flags’.
What is a Red Flag? A Red Flag can be any pattern, practice or activity that triggers the suspicion that identity theft may have occurred.
On November 1, 2008, those companies who were required to comply, must be in full compliance with the Fair and Accurate Credit Transactions Act (FACT Act) Identity Theft Red Flag (FACT Act Section 114) and Address Discrepancy (FACT Act Sections 114 and 315) rulings. As it turned out, the FTC has extended the deadline to May 1, 2009 … so you better get written!
Have you developed a written program that identifies and detects the relevant warning signs – or “red flags” – of identity theft? If not, Get With It!
This is one of those things I have spoken about in the past. If you’re a mortgage broker running your own company, it’s way past time for you to mature in business, and finally realize there’s a lot more to it than making bank deposits – it ain’t all about sales! Stuff like this is vital to operating a proper full-fledged business … read all the fine print about your requirements HERE.
Wondering where to keep that written policy of yours? If you still make the mistake and permit customer information/files, etc. to be taken home by any of your personnel, then you could keep it in the same three ring binder as your written company policy in compliance with The Financial Modernization Act of 1999 (also known as the Gramm-Leach-Bliley Act); the specific detailed obligations you have on this are located HERE.
To help you focus, this EESA as you may recall had three (3) Sections, one on Tax Provisions, one on Budget Related Provisions and as Title One, the now LEGENDARY Troubled Asset Relief Program (TARP)!
Seems like it was only yesterday, but nope it was SEPTEMBER (seven short months ago!) – there stood Treasury Secretary Paulson, Uncle Ben from the Federal Reserve and GW … all quivering about the eminent collapse of the entire American financial system, mostly due to those TOXIC asset which were clogging up the credit markets and weighing down the financial statements of many financial giants … remember?
The proposed law handed to Congress for authorization by Paulson, was three sheets of paper, remember? TARP was destined to save our bacon! (I wrote about TARP in this blog almost 3 dozen times back then and I was in full agreement with Paulson about the wisdom of buying up those TOXIC/Troubled assets) … OK … so let’s now fast forward to today … WHEN do YOU think the Government will actually really seriously deal with those TOXIC assets and buy the first one? That’s right, haven’t touched even one of them in SEVEN MONTHS! And – dam it – that’s what’s gonna fix our Secondary Market!
An ingredient missing from the recent training and educational regimen of most employers in our industry, is teaching the concepts of Integrity & Ethical behavior to all personnel. Sure, processors may get a small bit of it via osmosis; naturally underwriters and institutional investors should all be intimately familiar with this sort of thinking; yet it is my glaring observation far too many of them are not. All too regularly, unfortunately mainstream Loan Officers don’t seem to have the first clue what that’s all about. They see themselves as sales experts – closers, and regrettably not conscious loan analysts as they should be. Yet those very LOs have been the face of our industry to nearly everybody outside the business, and look at what a disaster that turned out to be!
After this mess out there begins to clear up in several months, are last year’s mortgage brokers gonna try and stage a come back? If they return to ‘busines as usual’ – they won’t make it very long because of the negative attitudes of wholesalers and customers toward them. If that’s you – you need to change the way you run your shop – actually operate it like a real live genuine small business; this observation of mine above on how you’ve dealt with your LO’s was a BIG part of the mortgage broker sector getting hammered down … time to mature and operate a ‘full-fledged’ company for a change!
I noticed this quick news piece a couple of minutes ago:
High LTV Streamlined Refis Without M.I.
"Details were released on the The Home Affordable Refinance program. It impacts loans owned or guaranteed by either Freddie Mac or Fannie Mae. The refinance program is expected to help borrowers with loan-to-valuesas high as 105 percent refinance at today’s lower mortgage rates. The U.S. Treasury said it expects the refinances to rely on existing documentation and not necessarily require appraisals."
…TRANSLATED: we’re gonna re-fi them and use as property value what the old inflated appraisal says is it’s value, AND (stupidly) we’re gonna go with STATED income too (and be surprised later that so many of them re-default)! I DON’T THINK OUR GOVERNMENT CAN DO ANYTHING RIGHT ANY MORE.
Got the news release from theTreasury Department, here’s part of it:
"The TALF is designed to catalyze the securitization markets by providing financing to investors to support their purchases of certain AAA-rated asset-backed securities (ABS). These markets have historically been a critical component of lending in our financial system, but they have been virtually shuttered since the worsening of the financial crisis in October. By reopening these markets, the TALF will assist lenders in meeting the borrowing needs of consumers and small businesses, helping to stimulate the broader economy.
Under today’s announcement, the Federal Reserve Bank of New York will lend up to $200 billion to eligible owners of certain AAA-rated ABS backed by newly and recently originated auto loans, credit card loans, student loans, and SBA-guaranteed small business loans. Issuers and investors in the private sector are expected to begin arranging and marketing new securitizations of recently generated loans, and subscriptions for funding in March will be accepted on March 17, 2009. On March 25, 2009, those new securitizations will be funded by the program, creating new lending capacity for additional future loans.
The program will hold monthly fundings through December 2009 or longer if the Federal Reserve Board chooses to extend the facility."
Residential Mortgages you ask? That’s what TARP was to be used for, I guess they don’t want to fix that sector since they’ve successfully ignored it so far
Just like his new boss, while the Treasury Secretary, who’s been long on press conferences but short on details, stands there like a Deed in the Headlights, today the Fed Chairman told me (and you too) beginning March 17th securitizers can apply to the Fed for LOOT to fund their securitizations (kinda like secondary market). Details of the Term Asset-Backed Securities Loan Facility (TALF) are sparce right now, but looks like starting on the 25th The Federal Reserve will make a 90% loan to securitizers as against their newly created securities, the latest idea to help them re-cycle their limited funds. Hank the Bald’s old idea was to actually BUY those toxic assets already plugging up the financial markets (except he didn’t know how to price them – even after I told him a dozen times I would be happy to train his people in how to do that), Bernanke instead is gonna loan money using newly created ones (not old near-dead ones) as collateral/security for these Fed loans! A new twist, sounds like a good idea to me!
As a Mortgage Professional, you’ll recall back in November 2007, the U.S. Federal Trade Commission (FTC) established a set of rules for regulating access to private information in an attempt to help STOP Identity Theft. These rules target several industries, naturally ours is one of them … it’s all about ‘Red Flags’.
