Mortgages and Housing: FICO and Delinquencies. FNMA and MI, MEW Negative, 1mm Investor Homes, Servicing Reform, Zillow IPO, reverse Mortgages, 20% Down, Broker Comp, Cheap Houses, Underwriting, QRMs, GSE Faults, Reg Z, Retirement REOs

BillCoppedge_28Nov2010original content selection by



(interesting) Research looks at how mortgage delinquencies affect scoresHow much impact does a short sale have on FICO® Scores? How about a foreclosure? Since I frequently hear these questions from clients and others, I thought I’d share new FICO research that sheds light on this very subject. – FICO Banking Analytics Blog



Fannie Mae Warns Servicers on Mortgage Insurance Agreements – By Lorraine Woellert – Fannie Mae, the government-owned finance company, told mortgage servicers to halt a practice that could help them avoid repurchasing flawed home loans. In a notice to banks today, the company said servicers are prohibited from entering into loss-sharing or indemnification agreements with mortgage insurers. The deals help servicers avoid having their policies revoked. – Bloomberg

Americans Shun Cheapest Homes in 40 Years as Owning Loses Appeal – By Kathleen M. Howley – Victoria Pauli signed a one-year lease last week to stay in her rental home in Fair Oaks, California. She had considered buying in the area, where property prices have slumped 57 percent since a 2005 peak. In the end, she decided it wasn’t worth it. “I know people who have watched their home values get cut in half, and I know people who are losing their homes,” said Pauli,… "It’s part of the American dream to want to own your own home, and I used to feel that way, but now I tell myself: Be careful what you wish for.” The most affordable real estate in a generation is failing to lure buyers as Americans like Pauli sour on the idea of home ownership … – hattip NDP – Bloomberg



(delevering continues) Q4 2010: Mortgage Equity Withdrawal strongly negative – Bill McBride – Special Note: Dr. James Kennedy has a new method for calculating equity extraction: "A Simple Method for Estimating Gross Equity Extracted from Housing Wealth". I haven’t evaluated his method yet (here is a companion spread sheet), so the following is using my old "simple" method. Note 2: This is not Mortgage Equity Withdrawal (MEW) data from the Fed. The last MEW data from Fed economist Dr. Kennedy was for Q4 2008. -  CalculatedRisk



NAR Reports Around 1 Million Homes Were Investor Purchases Last Year – Posted by Carole VanSickle – … Interestingly, those investors doing the buying are increasingly doing so from outside the United States. In fact, NAR also reported that $41 billion worth of property was purchased by foreign investors in 2010 and that 28 percent of realtors have at least one international client[2] … – Bryan Ellis RE Letter



More Servicing-Reform Bills Introduced – BY MORTGAGEORB.COM – Mortgage servicing reform has become a hot topic in Congress, where Democrats last week offered no fewer than three bills meant to enact industry-wide changes



Real Estate Startup Zillow Files For An IPO – Jay Yarow     – Zillow Hires Citigroup To Run Its IPO – Here comes another tech IPO. Real estate startup just filed with the SEC to raise $51.75 million through a public offering. lists houses and apartments for sale. It has some pretty useful mobile apps, too – SAI at Business Insider



Ginnie Mae to erase flat fee for servicing reverse mortgages – by JON PRIOR – Housingwire

Bill would waive retirement plan withdrawal penalties to buy REOs – by KERRY CURRY – Housingwire



Will 20% Down Require Waiting 14 Years to Buy a Home? – DANIEL INDIVIGLIO – The Atlantic
1.  Questioning the Assumptions to Get 14 Years
2.  Getting to 20% in Under Six Years


(Comp) Fed Aims at Mortgage Fraud, Shoots Housing Market in the Gut – Charles Hugh Smith – … And that’s the fundamental problem with the Federal Reserve’s new regulations crimping mortgage broker compensation. Unless we expect mortgage brokers to take vows of poverty, then the system has to allow legitimate brokers to get paid in accordance with the amount of work the loan requires to get funded. By severely limiting compensation, the Fed has basically wiped out small brokerages and lenders, reducing the availability of mortgages to a handful of–you guessed it–too big to fail banks, who already control the majority of mortgage origination…. – Of Two Minds



Freddie Mac predicts housing rebound – Brian O’Connell – Apparently, not all is lost for the housing market. Freddie Mac just released a report (.pdf) penned by chief economist Frank Nothaft that paints a hopeful picture of the housing market just in time for the spring selling season – MSN Money


Underwriting Matters More than QRM – Andrew Kahr – … The core question is a very simple one: Should an institution protected by federal deposit insurance be allowed to originate or buy any damned thing it chooses, in unlimited quantities? Is that OK as long as it retains x% of the risk — surely a wrongheaded and backhanded way of protecting the foolish from their folly? I say no, for three reasons. … – American Banker



Only 31% of Fannie/Freddie Loans Originated in 2009 QRMs – By Michael Kraus – Total Mortgage Services



Don’t Overlook Fannie and Freddie’s Central Role in the Housing Collapse – Craig Pirrong – … There are two new editorials that press the argument for a substantial F&F role. The first is by Mark Brickell, formerly of J.P. Morgan (JPM) and a past chairman of ISDA … – Seeking Alpha



(gives 4 options) Federal Reserve proposes rule under Regulation Z pertaining to a consumer’s ability to repay a mortgage and minimum mortgage underwriting standards – … requested public comment on a proposed rule under Regulation Z that would require creditors to determine a consumer’s ability to repay a mortgage before making the loan and would establish minimum mortgage underwriting standards. The revisions to the regulation, which implements the Truth in Lending Act (TILA), are being made pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposal would apply to all consumer mortgages (except home equity lines of credit, timeshare plans, reverse mortgages, or temporary loans). – Press Release FR Board of Governors

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