Third-party review firm and mortgage due diligence/credit risk specialist Allonhill, Denver, said it is positioning itself for the residential mortgage-backed securities market's return. "We are rewriting the securitization process," chief executive Sue Allon said, noting that the company has adopted the American Securitization Forum's new universal mortgage loan identification code, meets new credit ranking agency requirements, has scientific sampling methodologies and practices documented and incorporated into its system, and tracks and reports loan errors, exceptions and their resolution. It also provides a signed attestation of its review procedures, findings and its disclosures. Its analysts also use Ethics Point, a service that allows anyone working on a transaction to report attempts to modify data or influence its findings in an instant and anonymous way. THIS is the most encouraging news for our industry I have seen in a couple of years!
Consumers Get Access to Licensing Registry
Consumers now have access to the National Mortgage Licensing System and Registry to check the credentials and background of state-licensed mortgage lenders or brokers. The online NMLS system allows consumers to see the 10-year employment history of the loan officer or broker, the name of their current employer and the states they are licensed in. Starting in 2011, any adjudicated enforcement actions taken against a loan officer or broker will be listed on the system and accessible by consumers. State regulators initiated the mortgage licensing system to enhance the supervision of the residential mortgage industry, according to Neil Milner, president and CEO of the Conference of State Bank Supervisors. "NMLS Consumer Access is one more initiative undertaken by the states to empower consumers with information while they take on what is usually the most significant purchase of their lifetime: their home," he said. To date, 45 states and territories are participating in the NMLS system. All states and U.S. territories are expected to be on the system by the end of this year. Loan officers employed by federally insured banks and thrifts will start registering on the NMLS system during the second half of 2010. A nice touch to finish off washing out the scum people that are still in our industry, who should have left long ago!
FHA May Seek 75BP Annual Premium in President's Budget
The Federal Housing Administration is expected to ask for Congressional approval to raise the annual insurance premium on its loans to at least 75 basis points and perhaps higher, according to industry officials interviewed by National Mortgage News. The exact figure will be released Monday when the President's 2011 budget is unveiled. Currently, the annual premium is capped at 55 basis points. The additional money raised would be used to bolster its reserve fund which is barely in the black. Some sources think increasing the premium to 100 basis points is a possibility but likely will not happen. "They have half-a-million in delinquencies," said one insurance executive, requesting anonymity. "They are absolutely going to hike it; it's just a matter of how much." FHA recently raised the upfront mortgage insurance premium (MIP) to 2.25%, a 50 basis point increase that becomes effective this spring. The budget document likely will include FHA's estimates on how much the premium hike will rise and a timeline for restoring the fund's capital ratio back to 2%. (At last check it was at 0.53%.) The Department of Housing and Urban Development budget also will have projections for FHA loan losses and claims in the current (2010) fiscal year and FY 2011. HUD wants Congress to enhance FHA's authority to seek indemnification from lenders for loans that go bad. Mortgage bankers are anxious about the proposal because it will increase their liability and risks of doing business with the FHA. Pretty damn expensive if you ask me.
Ya know what these guys haven't seen coming, which people like me and others have seen for almost 2 years now? I'll tell you. All the stats in the world look good (distorted) as you continue to grow, but just as soon as the FHA production goes back to the tiny slice of originations it was designed to serve, then everything is going to explode. Premiums won't continue to be raked in by the shovel full, and delinquencies will mount as REO's choke the fund. It's simple math, I learned at The Mother Company a short 45 years ago and it's still absolutely true! IF you've got your family's future set in stone doing mostly/mainly FHA originations, I'm just sayin' - that's going to prove to be a big mistake ... when? In 2010.
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