Goodbye, 2009. Typing “2009″ is so much easier than typing “2010″, but such is life. And folks who are better at using words than I am (”than me”?) say 2010 is pronounced “twenty-ten”, not “two-thousand ten”. Speaking of “2’s” and “1’s”, The U.S. Treasury had a record year of debt sales last year, selling more than $2.1 trillion in bonds and notes, a record and more than the amount in the previous two years combined
One traditional way of controlling a pipeline is to cancel a lock if the file doesn’t come in by a certain number of days after locking. It makes sense – “Give us some documents if the lock is real!” The most recent example is Union Bank of California, which has a minimum lock period of 60 days, who informs their brokers that “All loans will be re-priced at ‘the higher of’ when a package is not received within 30 days of lock expiration date.” UBOC also adjusted their lock breaking policy, which is available one time during original lock period and only after the loan submission: to current rate: 0.500 rebate, or one-eighth (0.125) higher than current rate for a reduced rebate of +.125% for loans with rebates or +.125% cost to points, or lastly split rate if at least .500 difference in rate: free.
As it happens at this time every year, lock desks are slowing down. The week before last, the MBAA’s application index dropped almost 11%, with refinancing down about 10% and purchases down almost 12%. One thing to note, which I find most distressing, is thatrefinancing accounts for almost 76% of apps. If rates move higher (why wouldn’t they if the economy improves?), and/or underwriting guidelines don’t loosen up (why would they given projected delinquencies?) what will this do to the average mortgage banker’s pipeline.