July 1: 10-yr down to 3.89%, Wells, CIT, FAMC, RMIC, Wachovia make some noticeable changes

July 1st, 2008 · No Comments


My Mother liked to say, “No man has ever been shot while doing the dishes.” I can’t tie that in to RESPA news, but thought it was pretty witty. Speaking of matters related to doing dishes, any single guys looking for houses in Florida might be interested in this at MSNBC.

Now that June is over with, with many companies reporting a good funding month, what does July look like? Not as good, according to many. Rates do not seem to be helping, unless an agent has a qualified borrower with equity in the property and an ARM rate that is shooting up. Nor are the mortgage credit markets making things much easier, and locks are slowing somewhat. A slowing economy will help rates eventually, but there are obvious costs associated with that – like increased unemployment. It is already helping rates, with the 10-yr down to 3.89% and mortgage prices better by another .125 this morning.

FAMC finally, unless I am missing something, “In response to the Economic Stimulus Act of 2008”, announced the availability of the Conforming Jumbo Fixed Rate Program.

CIT Group Inc., the business lender that’s lost money for four straight quarters, is exiting consumer lending and agreed to sell its manufactured housing and home-loan businesses for $1.8 billion to Lone Star Funds. Vanderbilt Mortgage and Finance Inc. agreed to buy CIT’s manufactured housing portfolio for $300 million.

RMIC put in some further restrictions beginning July 14th, which include “Investor properties will require a minimum FICO of 720, and Rate & Term Refinances for Investor properties will no longer be eligible (Cash-outs were previously retired from eligibility),

Wachoiva eliminated their “pick-a-pay” loan program.  Wachovia also discontinued any mortgage product offerings with payment options that would allow a customer to go into negative amortization.

Wells Fargo announced a change to their guidelines, and will now require a full appraisal and one of the following for any transaction with a Wells Fargo loan amount greater than $1M up to $2M: One Desk Review with data verification; or one Enhanced Desk Review with data verification; or Fannie Mae Field Review Form 2000.

The Review appraisal will be replaced with the Collateral Consultation Review (CCR) for loan amounts greater than $1M, and the Desk Review will no longer be an option for loan amounts greater than $1M up to $2M. (The CCR is a Uniform Standards of Professional Appraisal Practice (USPAP) compliant review product which provides a full review of the appraisal, a market analysis with two additional sales, and two additional listings that support the review conclusion.)

The National Association of Purchasing Management-Chicago said yesterday its business index increased to 49.6 this month from 49.1 last month, signaling a slower pace of contraction. (“You’re still bleeding, but not as badly…”) The consumer is getting squeezed more and more with little, no, or negative equity in their homes to tap into, and will either have to rely on credit cards or cut spending. Any questions class? Economists believe that consumers will add to their debt by use of credit cards rather than deprive themselves of anything, thus leading some to think that credit card debt will be the next debacle. They will have to continue to buy fuel and food, but will be forced to spend less on discretionary items. “Do I really need that new suit?” This will definitely slow the economy further, which may help rates eventually. We still have to grapple with oil and food prices that make one nauseous every time they fill up their tank or go through the check out line.

A senior loan officer was standing by the desk of a junior loan officer when the telephone rang.
The junior officer answered, saying, “No…no…no…no…yes…no,” and hung up.

The senior officer questioned him immediately. What had he said “yes” to?
“Don’t worry,” said the junior officer reassuringly. “I said ‘yes’ only when he asked me if I was still listening.”

Rob Chrisman

Tags: Commentary · Mortgage Market

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