California Home Mortgage

HUD is preparing to implement a few new policies that will no doubt affect your pipeline/loan application process. Last week, HUD and the FHA invited public comment on three of those policy changes, which are part of FHA's strategy to "strengthen their capital reserves". The proposed changes which are either tweaks to other recent revisions or have been telegraphed by FHA and HUD in earlier Congressional testimony, notices to lenders, or press releases will: Update the combination of credit and down payment requirements for new borrowers Reduce allowable seller concessions from six to three percent. Tighten underwriting standards for manually underwritten loans FHA has been scrambling to strengthen its financial situation since an audit late in 2009 showed that the capital ratio…(read more)

HUD is preparing to implement a few new policies that will no doubt affect your pipeline/loan application process. Last week, HUD and the FHA invited public comment on three of those policy changes, which are part of FHA's strategy to "strengthen their capital reserves". The proposed changes which are either tweaks to other recent revisions or have been telegraphed by FHA and HUD in earlier Congressional testimony, notices to lenders, or press releases will: Update the combination of credit and down payment requirements for new borrowers Reduce allowable seller concessions from six to three percent. Tighten underwriting standards for manually underwritten loans FHA has been scrambling to strengthen its financial situation since an audit late in 2009 showed that the capital ratio…(read more)

The Census Bureau and the Department of Housing and Urban Development have released New Residential Sales data for June 2010. Excerpts from the Release… Sales of new single-family houses in June 2010 were at a seasonally adjusted annual rate of 330,000 . This is 23.6 percent above the revised May rate of 267,000, but is 16.7 percent below the June 2009 estimate of 396,000 . The median sales price of new houses sold in June 2010 was $213,400…. The average sales price of new houses sold in June was $242,900…. The seasonally adjusted estimate of new houses for sale at the end of June was 210,000. This represents a supply of 7.6 months at the current sales rate. Plain and Simple : New Home Sales in June rebounded from historic lows in May. Attention should be given to the fact that May survey…(read more)

The Census Bureau and the Department of Housing and Urban Development have released New Residential Sales data for June 2010. Excerpts from the Release… Sales of new single-family houses in June 2010 were at a seasonally adjusted annual rate of 330,000 . This is 23.6 percent above the revised May rate of 267,000, but is 16.7 percent below the June 2009 estimate of 396,000 . The median sales price of new houses sold in June 2010 was $213,400…. The average sales price of new houses sold in June was $242,900…. The seasonally adjusted estimate of new houses for sale at the end of June was 210,000. This represents a supply of 7.6 months at the current sales rate. Plain and Simple : New Home Sales in June rebounded from historic lows in May. Attention should be given to the fact that May survey…(read more)

The National Association of Realtors today released Existing Home Sales data for June 2010. HERE is the methodology for data collection Excerpts from the release…. With the scheduled closing deadline for the home buyer tax credits, existing-home sales slowed in June but remained at relatively elevated levels, according to the National Association of Realtors®. Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million units in June from 5.66 million in May, but are 9.8 percent higher than the 4.89 million-unit pace in June 2009 . In addition, existing single-family home sales rose in 12 of the 19 areas from a year ago while two were unchanged. Single-family…(read more)

The second edition of the new Obama Administration Housing Scorecard issued yesterday shows that borrowers continue to enter into both trial and permanent modifications under the Treasury Department's Home Affordable Modification Program (HAMP), but they are also continuing to drop out of the program in high numbers after failing to meet program terms. The Scorecard, first issued last month , is an adjunct to the monthly report on HAMP and is intended to reflect the overall state of the nation's housing market. In addition to a summary of statistics on HAMP, the scorecard incorporates key housing market indicators and highlights of housing recovery efforts. The heart of the report, however, continues to be the operations of HAMP . Since the last scorecard was issued in June, 38,700…(read more)

Independent mortgage bankers and subsidiaries saw a sharp drop in their profits in the first quarter of 2010 according to data released today by the Mortgage Bankers Association (MBA). The average profit made on each loan was $606, a decrease of 32 percent from the $890 that was earned in the fourth quarter of 2009 and a 44 percent decline from the $1,088 that was reported in the first quarter of 2009. 75 percent of the firms in the study posted pre-tax net financial profits in the first quarter 2010, compared to 76 percent in the fourth quarter of 2009. Survey respondents reported a drop in the average production volume to $157.8 million from $216.5 million in the previous quarter. MBA reported that the v olume decrease was the main driver behind the decline in profitability . As volume dropped…(read more)

After much ado our political "leaders" have finally come to an agreement on the broadest regulatory overhaul since the Glass Steagal Act of 1933 . By a vote of 60-39, the Senate yesterday passed HR 4173: WALL STREET REFORM AND CONSUMER PROTECTION ACT . The House already gave their seal of approval so the legislation heads to President Obama's desk where he is expected to sign it into law next week. The bill includes several reforms aimed directly at the housing and mortgage industries. Instead of trying to translate the text into comprehensible English I chose to rely on the Mortgage Bankers Association's outlines. Once again they came through in the clutch… HERE is an indepth summary of the text. Below are some excerpts from the MBA's overview. Credit Risk Retention…(read more)

The House of Representatives passed legislation on Thursday which would authorize the National Flood Insurance Program (NFIP) for the next five years. H.R. 5114 would also make a number of changes to the NFIP. The flood insurance program has been operating under a series of temporary extensions for much of the year while more permanent legislation has been stalled in the Senate. The insurance lapsed completely on June 1 and was unavailable until the Senate passed a temporary and retroactive extension until September 30 earlier this month. During June it was estimated that some 1200 house closings were postponed or cancelled every business day because borrowers could not obtain the required insurance. NFIP is the primary source of reliable, affordable flood insurance coverage for more than five…(read more)

An aggressive stand against fraud by lenders is having an impact according to a new study, but attempted fraud is still a problem in a significant percentage of loan applications and the nature of the fraud itself is changing. The 2010 Mortgage Fraud Trends Report released today by CoreLogic is based on a proprietary predictive fraud model developed by the company which uses pattern recognition to determine a level of risk each quarter. The model produces a Fraud Index from a representative sample of 80 million loan applications spanning the years from 2005 to 2009. According to the report, fraud risk in the mortgage industry is down 25 percent since its peak in the third quarter of 2007 . Still, there are significant trends in mortgage fraud types and loan performance but, the study found…(read more)