On the possibility of Fannie and Freddie going away, one clever rep wrote to me and asked, “Do we really need FNMA, FHA, and FHLMC when it is all government run anyway? They could start a new entity named “Federally Regulated Committee to Normalize Mortgage Securities”, or “FRCNMS” – pronounced “FRICKEN MESS”.
In fourth grade, at Hoover Elementary School, Mark Pipes goofed off one too many times. Mrs. McDaniel made Mark bend over, grab his ankles, and she proceeded to beat his rump with a wooden pointer. The rest of us in the class didn’t quite know how to react seeing one of our brethren disciplined this way. “The herd was spooked”, and needless to say I remember it over 40 years later. I wonder if the FHA herd is spooked out there, hearing more news of the FHA Mortgagee Review Board (MRB) permanently withdrawing FHA approval for Strategic Mortgage Corporation, ProMortgage, Americare Investment Group, which does business as Premier Capital Lending and TopDot Mortgage. The MRB suspended FHA approval on Home Mortgage Inc. (HMI) for six months. In addition to losing its FHA approval, TopDot faces action from Ginnie Mae.
You know it’s a slow news day when I start dredging up IRS forms, and put a great joke at the end. But in this case, these might be worth a gander, as they are the instructions for reporting points paid to the IRS, and the definition of points. http://www.irs.gov/pub/irs-pdf/i1098.pdf
Are some companies using the new GFE as a marketing tool? Sure they are, although exactly how HUD will view them remains to be seen. “If another lender rejected your loan because the GFE was filled out wrong, come to XYZ Mortgage! As long as your borrower cancels that loan, you do not have to wait to submit it to XYZ. We’ll help you fill out the GFE correctly, and get your loan funded fast. We’re 48 hours from receipt of your complete file to a decision! For personal assistance completing your GFE, contact your Account Executive …” And from another company: “If a loan is rejected due to not meeting the new GFE requirements, the new loan needs to be created the same day the old one is cancelled. Then an email needs to be sent to PQR Mortgage with the old and new loan numbers asking for the lock to be transferred. If it is past 24 hours since the loan was rejected then you must create a new loan and lock at current market pricing.”
Although this news only impacts servicing companies, it does have potential ramifications for smaller lenders. The FHA has issued guidance to its approved servicers on how to assist borrowers facing “imminent default.” Previously, these homeowners were ineligible for such assistance until after they had missed payments. Servicers will now have additional options for those borrowers who seek help before they go delinquent, which hopefully increases the likelihood that the borrower will be able to retain their home, and servicers can use forbearance and the FHA’s Home Affordable Modification Program (FHA-HAMP) to assist borrowers facing imminent default.