My Perspective

If you are a careful reader of industry news, then you’ve been seeing things like these items below in todays news, as I have for about four or 5 months now … don’t be asleep at the switch, you don’t want to get surprised by events you didn’t see coming:

Secondary Transactions Listed, Sold
Around $858 million in mortgages owned by Residential Capital LLC were put up for sale by GMAC Inc. last month. Marshall Ilsley Corp. sold 800 primarily non-performing residential loans, according to an announcement. A portfolio of 321 single-family mortgages acquired in July by SilverLeaf Financial LLC is now being marketed on an individual loan basis, a news release stated.
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Mortgage Loan Exchanges Launch
DebtMarket announced its launch in August. Sellers list loan portfolios for sale on DebtMarket. Also launching last month was LoanMLS Inc. The company said in a news release that it is an online loan exchange providing a central information point for buyers and sellers.
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Warehouse Lending Opportunities
Southwest Securities FSB said in a statement that it hired a new representative to solicit warehouse lending business in the East and Midwest. Southwest said it provides residential funding capacity for U.S. mortgage bankers by taking a short-term ownership interest in the mortgages. Warehouse lending consultant Barry Epstein recently commented that banks don’t understand how lucrative warehouse lending can be. He warned that mega-banks will control the market if mid-sized mortgage bankers can’t find funding for their originations.
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Secondary Update
The Mortgage Bankers Association last month has proposed a draft purchase and sale agreement for whole loans. In a selling notice announcement, Fannie Mae said Refi Plus loans with loan-to-values above 105 percent can continue to be delivered beginning Sept. 1. Correspondent lender Affiliated Mortgage Co. has become a preferred investor for Lenders One Mortgage Cooperative, a press release indicated.

… so … my point? STAY UP TO DATE WITH EVENTS AND DON’T LOOK IGNORANT :-}

Because of the industry’s lack of direction, ever changing regulations, clumsy Governmental intervention, slow to develop credit markets, and the overall general disruption and chaos in the residential real estate mortgage lending industry – we are not accepting any new students for this Fall and upcoming Winter semesters.

I have spent the better part of this Summer, working with Investment Bankers and others, trying to get a $2 Million equity investor/partner to help me start up a long over-due ‘Agency Alternative Next – Generation Subprime’ wholesale operation funding mortgage broker sourced Portfolio Quality residential real estate mortgage loans. As that becomes reality, we will be re-purposing our mortgage professional training and educational facility.

This will also result in a coming name change to AMC Institute, our learning center will be focusing instead on creating a completely new curriculum over these next several months, and we strongly encourage you and definitely invite you to contact us with your input on the sort of classes, lessons etc. you would like to see from us when we re-open in the Spring!

FHA: Brokers No Longer Have to Register with Them

The Federal Housing Administration has decided that “direct endorsement” lenders should be fully liable for the mortgages they originate through loan brokers while saying that these third-party salesmen no longer need to register or meet the agency’s net worth requirements. The new policy change appears to be a major boost for brokers, whose ranks have been decimated during the housing and mortgage crisis. “Mortgage brokers will continue to originate FHA-insured mortgages through their relations with approved mortgagees,” the agency said. “However, they will no longer receive independent FHA approval for origination eligibility.” The new policy relieves brokers from filing audited financial statements with FHA and basically mirrors the hands-off approach that Fannie Mae and Freddie Mae follow with respect to brokers. FHA is making this change as part of a risk reduction effort (REDUCTION? R U KIDDING ME?) and refocusing of its resources. However, the agency is adopting a policy that prohibits brokers and commission-based lender staff from ordering appraisals. FHA commissioner David Stevens stressed that FHA is adopting appraisals policies that are consistent with the Home Valuation Code of Conduct but not the entire HVCC that Fannie and Freddie have adopted.

In another news piece I saw today the FHA Commissioned finally fess-up and said Yep, we’re below 2% capital requirement …. I’ll translate that for you: 2% in reserve and 7% in defaults … so his dumb solution is to open up FHA to every Tom, Dick & Harry mortgage broker (with no commercial office space, no audited financial, no FHA experience BUT plenty of experience on STUFFING 4 YSP on every loan)!

Listen up kids, our Government is getting stupider every day!!

As I’ve been putting the necessary pieces in place for my return to operations, I have given considerable attention to the Secret! University, and how it will operate as a subsidiary of a much larger organization.

Presently, as many of you know, it is a division of Americas Money Center, Inc. – therefore I’m thinking about changing its name to AMC Institute; before Americas Money Center, Inc. is sold, because it will undergo a major curriculum change after that capital event. One of the key people has suggested that it should possibly provide, in part, an education and training facility for the mortgage brokers who will be doing business with its new nationwide lending sister company. More specifically, possibly provide a particular training and testing section to award various compliance levels to the brokers who learn the company Underwriting Guidelines and Matrix the best. Possibly resulting in their files always being moved to the top of the pile (or whatever) … do to the Gold Star (or whatever) which they could achieve … so it’s a win – win.

Some sort of twist to that general concept, I’m thinking might be a very good idea!

I’ve experienced quite a lot of frustration recently in my journey to put together the Agency Alternation nationwide wholesale lending operation I’ve been working on the past two months … August was vacation month for what seems like everybody I tried to reach; then this past week and now next week there’s even more opportunity to put off to manana what needs to be done today. It’s been driving me NUTS!

Today I saw a statistic that the Government now controls 90% of the residential real estate mortgage industry (with FHA on the verge of exploding – something I told you all about more than a month ago – and the GSE’s in more trouble and getting tighter) – and that should SCARE THE CRAP outta you!

Better days are on the horizon :-}