Author: Tom Vanderwell (page 1 of 8)

Mortgage Officer

January 13, 2010

Using Social Media to Help In Haiti…..

by Tom Vanderwell

Mortgage Officer

I wasn’t going to put anything up on here, but a very gracious e-mail from Greg Swann encouraged me to lay out my experiences over the last 24 hours and how we can use social media not only to further our businesses but more importantly in dark times like this, we can use them to do good for those who are much less fortunate than us.

For the last 22 hours and 15 minutes (with the exception of a 2 1/2 hour nap around 4:00 this morning,) I’ve been using social media to help in Haiti. Let me explain:

As many of you know, my wife and I adopted our two youngest children from Haiti in the summer of 2004. We’ve remained very involved with the orphanage that we adopted them from, God’s Littlest Angels, which is in Petionville Haiti.
I’ve been on the board for the orphanage since 2006 and every year since 2003 (with the exception of 2005), at least one of our family has been back down there on a mission trip to help out. My 20 year old has decided to devote her life to third world medical missions, almost certainly in Haiti.
Throughout those experiences, I’ve developed a pretty extensive network of people around, literally, the world who have connections to Haiti. Most of those are Facebook Friends.
In addition to that, I’ve developed a pretty extensive network of online friends in the real estate and lending communities literally all across the country. If you consider Seattle to Miami to be all across the country, I think I’ve got it covered.

Yesterday, those two worlds met and it’s been truly a mindblowing experience. Let me explain:

At 5:15 pm, I got a tweet across tweetdeck that was from @latimes (I use that as one of my news sources). It talked about a massive earthquake in Haiti, near Port Au Prince.
I immediately hopped on AIM and talked to God’s Littlest Angels stateside coordinator and confirmed that the orphanage was affected but that the damage appeared minor and everyone was safe.
I then spent the next several hours e-mailing, facebooking, twittering and IM’ng with people all Read more

January 2, 2010

Mortgage Market Year in Review

by Tom Vanderwell

Mortgage Officer

So Long 2009! (Note – I originally sent this out as part of my weekly e-mail series – Mortgage Market Week in Review – but the response was so positive that I thought I’d repost it here.)

Rather than doing my normal Mortgage Market Week in Review, I thought I’d send out something a bit different. I’m going to, instead, take a look back at what I think were the three biggest issues in the mortgage market in 2009. On Monday, I’m going to take a look at the top 5 issues that I believe we’ll be facing going forward in 2010.

Neither one of them is going to be an extremely pleasant list, but I can guarantee you that they’ll be honest lists!

Tom Vanderwell

E-mail Me

1. Without a doubt, the Read more

December 29, 2009

Anyone think that Fannie and Freddie are “out of the woods?”

by Tom Vanderwell

Mortgage Officer

Then check out this chart marking delinquencies at Fannie Mae.

Calculated Risk: Fannie Mae: Delinquencies Increase Sharply in October

Fannie Mae reported today that the rate of serious delinquencies – at least 90 days behind – for conventional loans in its single-family guarantee business increased to 4.98% in October, up from 4.72% in September – and up from 1.89% in October 2008.

December 29, 2009

‘Twas the Night Before Christmas

by Tom Vanderwell

Mortgage Officer

and all through the country, people were paying more attention to Christmas than they were to the government and to the financial mess that is making our country struggle.

So what did the Treasury do? They did two things:

They expanded the nationalization of Fannie Mae and Freddie Mac from $200 Billion each (that’s $200,000,000,000) to an unlimited amount of funding. In other words, the US Treasury just handed their checkbook to Fannie Mae and Freddie Mac.
They did it on the day when no one was watching and they did it 9 days before it would have required congressional approval.

How nice and how timely.

Nothing to see here, move along, move along……

Tom Vanderwell

Heard on the Street: Fannie and Freddie – WSJ.com

That was a nice holiday gift to taxpayers.

As expected, the Treasury on Christmas Eve increased the amount of money it can plow into Fannie Mae and Freddie Mac to keep them solvent. Before, the U.S. had pledged up to $200 billion to each. Now, over the next three years, the Treasury can spend as much as is needed to prevent their net worth going negative. Such a change would have required congressional consent after Dec. 31. Given that each U.S. household had effectively committed $3,800 to both firms, the Treasury should have waited till the New Year so the people’s representatives could have had their say.

Technorati Tags: Fannie Mae, Freddie Mac

December 14, 2009

The Rates Aren’t The Only Thing That Matters….. (My thoughts on how to create healing in the housing market)

by Tom Vanderwell

Mortgage Officer

A couple of thoughts about this article from the New York Times:

It’s true. Anecdotally, I’d have to say that depending on the day, anywhere from 30-50% of the people who I discuss refinancing with are either not able to do it because their income has fallen or because property values have dropped. Now wait, you’re probably thinking, “I thought that the government was allowing people to refinance even if their mortgage was over 100% of the value of their property. They are, but there are a couple of caveats to that:
The loan has to be with either Fannie Mae or Freddie Mac and a substantial portion of the market isn’t with either one of those. If you want to find out whether your loan is with either one of them, check Fannie Mae Loans or check Freddie Mac Loans to find out.
If you have a second mortgage/home equity line of credit on your house and the combined balance of the two loans exceeds 105% of the value of your home (but is less than 125%) then you can still refinance, but the pricing adjustments that Fannie and Freddie charge are so extensive that unless your interest rate is over 6%, it’s probably not worth refinancing.
If you are like a LOT of people in today’s economy, your credit score isn’t quite as high as it used to be. It might be because you’ve had struggles to make some payments on time, it might be because you’ve had some of the credit lines cut on some of your credit cards (thereby lowering your credit scores because you’ve got too much of your available credit tied up), it might be a variety of reasons. But the end result is the same. In order to get the best possible rate, you need to have either:
A 5% equity position in your house and no second mortgage or
A first mortgage of no more than 80% of the Read more

December 11, 2009

Quote of the Day…..

by Tom Vanderwell

Mortgage Officer

Elizabeth Duke is on the Board of Governors for the Federal Reserve and I think she hit the nail on the head……

Fed’s Duke Outlines New Mortgage Market : HousingWire || financial news for the mortgage market

“Some would argue that most of the really risky behavior is now out of the market,” Duke said. “But, unfortunately, the backlash has restricted a lot of perfectly responsible lending as well. Banks are reluctant to put any but the lowest possible risk loans in their portfolios.”

December 10, 2009

ATM Machine? The more I hear, the more I like of this guy…..

by Tom Vanderwell

Mortgage Officer

Okay, this is actually kind of funny.

Paul Volcker, the former Fed Chairman, the guy who maneuvered us through the inflation mess in the early ’80’s, made a speech on Tuesday to a group of higher level financial executives. These are the “power” people in the industry, the “who’s who” of the top financial firms.

What does he tell them? The best thing that they have done in the last 25 years was to invent the ATM machine.

That box where you put your debit card in and it spits cash back to you? Yeah, that’s the ticket.

What’s his point? That all of the “exotic” financial tools that have been developed, derivatives, CDO’s, CDS’s, MBS’s, TIPS, and a whole variety of other acronyms really haven’t done anything useful for the world’s economy.

Ouch, that’s a stinging rebuke…..

Tom Vanderwell

Ex-Fed chief Paul Volcker’s ‘telling’ words on derivatives industry – Telegraph

The former US Federal Reserve chairman told an audience that included some of the world’s most senior financiers that their industry’s “single most important” contribution in the last 25 years has been automatic telling machines, which he said had at least proved “useful”.

Technorati Tags: Paul Volcker, ATM Machine

December 8, 2009

Modifications are Failing…. (More on the Acronym Soup)

by Tom Vanderwell

Mortgage Officer

There’s a couple of interesting and yet disturbing points to this report from CNBC:

over 2/3rds of the people who are currently in the trial period of loan modifications are not going to qualify for the permanent modifications. Why? A couple of likely possibilities: 1) They are too far upside down and are looking at it and saying, “I’m out of here.” 2) They aren’t willing to provide documentation of what their financial position is because it would make it evident that they had lied on their loan application and that’s a federal offense last time I checked.
I had a past customer call me on Friday and said that he was never told that his short sale paperwork had an expiration date (which has now past). He said it took too much work and he’s not going to do the paperwork again. I didn’t ask him what his plan is from here, but I think it illustrates the pain and frustration that so many people are feeling in the process. They just throw their hands up in the air and say, “I give up.”
If 2/3rds of the loan mods don’t go to permanent status, what do you think that’s going to do to the number of foreclosures? Yeah, that’s right, it’s going to increase them.

The entire way that the banking industry is handling foreclosures, short sales and loan modifications isn’t designed to encourage participation (or perhaps mandate participation?) Until we get an organized and systematic way to deal with the facts that:

We have many people who took out loans that they never had a chance of paying on time.
We have many people who took out loans that are worth way more than their houses are.
We have many people who took out responsible loans and have had bad things happen to them and now aren’t able to make their payments.

All three of these require different responses and a different way to effectively resolve the challenges that we’re facing.

If you ask me, the government and the banking industry haven’t figured out the way to deal with them that really works yet.

Tom Vanderwell

P.S. You’re probably Read more

December 3, 2009

A Disaster for Democrats? Yeah, but what about the rest?

by Tom Vanderwell

Mortgage Officer

This is just ugly…..

Let me attempt to explain. Goldman Sachs came out with their economic forecast. Here’s a brief summary of it:

Mediocre growth until late 2011.
Unemployment peaking at 10 3/4 in the middle of 2011.
Extremely low inflation through 2011
Low interest rates through 2011 (at least the ones the Fed controls.)

So, what does this mean for the housing and mortgage markets? The following list of predictions are made under the assumption that Goldman is right. If they are, I think the housing market is going to see:

Continued growth in the number of foreclosed homes.
Continued downward pressure on house prices.
Continued delinquency problems at Fannie Mae, Freddie Mac and FHA.
Continued tightening of underwriting guidelines for mortgages.
Continued situations where the interest rate isn’t the problem, it’s property values and qualifying for the loan that’s the problem.

In addition to that, a couple of other things we could see:

Growing political unrest and dissatisfaction with the current state of the government and those who run it.
An opportunity for a massive restructuring of the political landscape, starting in 2010 and continuing to the 2012 election.
Growing resentment against the financial institutions on Wall St. and elsewhere that have had a big part in this mess.
Substantial regulatory changes that will either lower the regulatory and tax burden on consumers and businesses and create the type of growth that we need or will stifle all initiative and all opportunities for us to pull out of this any time soon. We’ll either go Reagan or we’ll go Atlas Shrugged. I vote for Reagan.

It’s going to be bumpy and it’s going to be wild, but it’s definitely going to be a ride to remember……

Tom Vanderwell

James Pethokoukis » Blog Archive » Goldman Sachs 2011 forecast would be an absolute disaster for Dems | Blogs |

The key features of our 2011 outlook: (1) a strengthening in growth from 2.1% on average in 2010 to 2.4% in 2011, with real GDP rising at an above-potential 3½% pace in late 2011; (2) a peaking in unemployment in mid-2011 at about 10¾%; (3) extremely low inflation – close to zero on a core basis during Read more

December 3, 2009

1 Full Percentage Point? That would leave a mark…..

by Tom Vanderwell

Mortgage Officer

Okay, this Mr. Sack guy is the guy who manages the Fed’s day to day dealing with the financial markets. Here’s what he had to say about rates yesterday:

10 year Treasuries were .50% lower than they would have been without the program.
Mortgage rates would be 1% higher if it weren’t for the Fed’s purchase of mortgage backed securities.

The only questions that I see coming from this are:

Will those differences automatically reverse themselves when the program stops? It’s not necessarily a given that they will unwind immediately when the buying by the Fed stops.
How long will it take for those positions to unwind? Will rates climb over 30 days? 6 months? 12 to 18 months?
If you are contemplating either refinancing or purchasing relatively soon, why haven’t you done something yet? Take a look at the list of Bloodhounds on the right side and call any of the lenders on the list or call your favorite local guy, but don’t wait too long. The window of opportunity is going to be closing some time soon and probably sooner than we all think.

Stay Tuned……

Tom Vanderwell

The Fed’s Market’s Guy Eyes Asset Sales and Rate Increases – Real Time Economics – WSJ

Mr. Sack is a key voice on the Fed’s expanding balance sheet, because he manages most of the central bank’s interactions with financial markets and thus many of its asset purchase and money lending programs……

Mr. Sack’s group estimates that the Fed’s purchases of $300 billion in long-term Treasury securities earlier this year helped to push yields on 10-year Treasury notes down by about half a percentage point……

Some critics have argued that the Treasury purchases didn’t have the intended impact of pushing rates down.
But Mr. Sack – a long-time proponent of such purchases – said his estimate is supported by regression analyses by the Fed.

Purchases of mortgage backed securities, he says, pushed those rates down by a full percentage point.

Technorati Tags: Mortgage Rates, The Federal Reserve

December 2, 2009

I can’t tell you how disgusted this makes me….

by Tom Vanderwell

Mortgage Officer

It’s another example of people in the mortgage and real estate world who took advantage of someone who didn’t understand the system. And they aren’t the ones who paid the price, the borrower is…..

We’ll be better off when all of those types who are motivated soley by profit have been run out of the business.

Tom Vanderwell

Calculated Risk: WaPo: A Liar Loan Example

From Donna St. George at the WaPo: The $698,000 mistake

[A]ll of this began in the heady days of the mortgage boom … [Ms. White] only knew that there seemed to be possibilities, even to those with little means such as herself, which is how a woman who had never paid more than $700 a month in rent and who had relied in recent years on Section 8 housing vouchers suddenly owned a house.

A four-bedroom house.

With 3 1/2 bathrooms. And walk-in closets, black granite countertops and a fireplace.

You can already tell how this story will end.

On settlement day, reality bore down.
…
Papers were read and presented, most of which White did not try to decipher. … White’s papers cited income of $163,320 a year, even though she says her 2005 income-tax earnings were less than $15,000 and she relied at times on food stamps.
…
White signed papers while waiting for the one she cared most about: her monthly payment. … “Please let this be something I can afford,” she said to herself. She was pretty sure she could afford $2,000. She told herself that if her day-care business did well, perhaps she could afford $2,500. If it was $2,800, she would struggle. Here, now, came reality: $5,635 a month.

To get White to sign, the sellers – who were real estate agents – agreed to make the first two mortgage payments for Ms. White. According to the article, White received $40,000 in cash out at closing – and the seller made over $200,000 on the house. Naturally it went into foreclosure Read more

December 2, 2009

It’s going to get harder to get an FHA loan……

by Tom Vanderwell

Mortgage Officer

We’ll get more details later today, but it looks like it’s going to get harder and be more expensive to get an FHA loan. A couple of main points to consider:

FHA is currently losing money by the truckloads, so something has to change.
The increased FICO scores, larger downpayments and reduced seller concessions will probably weed out a few people, but not that many.
It will make it more expensive to buy a house FHA.
At first glance, the part about scrutiny of the lenders seems like it really wouldn’t affect borrowers, right? Wrong, here’s why. If FHA becomes more demanding in terms of their buy back provisions with lenders, guess what, lenders are going to be looking at absolutely every little detail on the loans to make sure that they comply with the guidelines. Your borrower needs to have 12 months on the same job and he’s only at 11.5 months? Sorry, wait two weeks. The paystubs are dated 31 days before application and we need 30 – sorry, got to get another one. The bank statement, well, you get the picture.

I’m working on a post outlining the details of what Fannie is doing next week Saturday with their new guidelines. Fun times…..

Tom Vanderwell

FHA to Toughen Mortgage Rules in Lenders Crackdown – Real Estate * US * News * Story – CNBC.com

Amid rising foreclosures and falling home prices, the Federal Housing Administration is proposing new rules to crack down on lenders and asking Congress for the authority to raise certain borrower requirements, all in an effort to reduce risk to its $685 billion mortgage portfolio.

While FHA Commissioner David Stevens said in an interview on CNBC following that release that the FHA would not need additional federal funding to meet its loan losses, he added that FHA will be looking for new ways to reduce risk.

Those steps will include raising minimum borrower FICO scores, requiring larger down payments, and reducing the maximum permissible seller concession from six percent currently to three percent.

It could also include raising up-front and/or annual insurance premiums, which would require Congressional authority. This is according to the testimony HUD Read more

December 1, 2009

HAFA, HAMP and other assorted worthless acronyms….

by Tom Vanderwell

Mortgage Officer

Okay, I’ve got to admit, it’s been one of those days, but I can’t stand by and not say what I’m thinking about this new “short sale” program. I’m already hearing a lot of Realtors and others saying, “This is great news!” Well, hold on a minute…..

I’m going to go through some of the main points of the HAMP Update that was issued yesterday and that our President spoke about today. You can find the entire thing at Hamp Update if you want to read it for yourself. If you want to read the entire directive, you can find that at Directive. The bold and italicized portions are quotes from the official documents. The regular print is my thoughts…….

Supplemental Directive 09-09 provides guidance to servicers
There’s the first clue that something’s not going to go well. It provides guidance.

The definition of guidance according to Wikipedia is: Advice (opinion), an opinion or recommendation offered as a guide to action, conduct.

See where the problem is? It’s guidance, it’s not mandatory. So, Uncle Sam can say, “Now, Mr. Banker, you really should do this……” And the Banker can say, “(Well, we really shouldn’t print that.)”

provides servicers with the option to determine the extent to which short sales or deeds-in-lieu will be offered under this program. (This is actually from the Directive).

It provides options. It allows the servicer to determine the extent to which they offer them under this program.

So, once again, what do we have? We have Uncle Sam saying, “Now, Mr. Banker, it would be really nice if you did this……” And the Banker can say, “____________________.”

The effective date of this Supplemental Directive is April 5, 2010.
Excuse me, but what the heck is the rush for? I mean, they rolled out the HASP refi program to lenders the day that they made it public to consumers so we were getting calls on it before we even knew what was what. Now they are giving the banks four months to decide whether they want to participate? Why not next Monday?

With either the HAFA short sale or DIL, the servicer may not Read more

December 1, 2009

The Next Step….

by Tom Vanderwell

Mortgage Officer

I’ve had a lot of people ask me lately, “Tom, what do you see is coming next? What’s the next step in this mess?”

A couple of thoughts at this point:

Anyone short of Nouriel Roubini, Paul Krugman, Meredith Whitney and maybe a few others who tell you that they KNOW how this is all going to end is lying. (Did you notice how I didn’t include Treasury Secretary Geithner or anyone in Washington in that list?)
But there are some people who have the ability to peer a little farther out into the fog than most do.
Anyone who tells you this isn’t a confusing and potentially scary time is lying to you as well. Never in our life times have we seen the kind of financial devastation and economic pain that is currently happening.

The things that are going on are causing lots of people to question a lot of things that they weren’t questioning before. Things like:

Will I be able to retire?
Can I ever trust a mortgage lender again?
Will real estate still be a good investment?
What’s happening in the stock market?
Is my financial advisor telling me the whole story?
What are mortgage rates going to do?
How does the actions of the Federal Reserve impact the financial markets?
What are the long and the short term ramifications of the deficits that the government is currently running?
How does the value of the dollar impact real estate and mortgages?

Those are just a smattering of the types of questions that I’ve been hearing from people lately. Okay, some of them aren’t quite in the format that I spelled them out but they have basically been asking that. Frankly, I think the consumer’s desire to ask more questions is a good thing and a healthy thing in the long run.

So where am I going with this? I’m getting to it…….

I’ve been fortunate to “hook up” with two of the experts in other areas of the financial spectrum (one of whom is our own Jeff Brown) and we’re setting up a new source for financial and real estate market insight and understanding. As Read more

November 30, 2009

The System is Broke? Humpty Dumpty

by Tom Vanderwell

Mortgage Officer

I’m just quoting the conclusion of the article that was up on Calculated Risk over the weekend. It was about a lot of the technical aspects of mortgage servicing and the way that mortgages are sold and bundled. A couple of main comments and then read the conclusion below:

Many of the problems in the mortgage world are because of the way that the mortgage world is structured. That means that it is going to take systematic and structural changes to get us back to a system that really works.
When there is a lack of accountability, things won’t work the way they are planned.
Do you think that this lack of accountability and lack of responsibility is part of the reason why short sales and foreclosures are so hard to get approved? There is no incentive for the servicer to make the decisions that need to be made.

Check it out below…..

Tom Vanderwell

Calculated Risk: Thanksgiving Weekend Mortgage Litigation Roundup

In other words, as many of you suspected all along, “hoocoodanode?” was officially part of the plan for creating mortgage backed securities. Systematic and willful ignorance was incentivized. If Wall Street created a system where each bogus mortgage passed through the hands of a couple of intermediaries who had no ability to do any due diligence on the quality of the loan, then the end buyer of the loan would, legally speaking, be in a better position to collect than the original lender by virtue of BFP status. Did the mortgage broker tell the borrower the loan was fixed rate when it really wasn’t? Oh well, no way the mortgage pool trustee could have known about that after the loan passed through the hands of an originating lender, an unrelated depositor and a legally separate issuer.

Whether for better or for worse, this system is pretty clearly not playing out as intended. BFP status does nothing to protect lenders from broke borrowers and half price houses, both of which were foreseen by knowledgeable people who were not willfully ignorant of details about loan origination. And even the limited protection of BFP status may not be available in Read more

Author: Tom Vanderwell (page 1 of 8)

Using Social Media to Help In Haiti…..

by Tom Vanderwell

Mortgage Market Year in Review

by Tom Vanderwell

Anyone think that Fannie and Freddie are “out of the woods?”

by Tom Vanderwell

‘Twas the Night Before Christmas

by Tom Vanderwell

The Rates Aren’t The Only Thing That Matters….. (My thoughts on how to create healing in the housing market)

by Tom Vanderwell

A couple of thoughts about this article from the New York Times:

Quote of the Day…..

by Tom Vanderwell

ATM Machine? The more I hear, the more I like of this guy…..

by Tom Vanderwell

Modifications are Failing…. (More on the Acronym Soup)

by Tom Vanderwell

A Disaster for Democrats? Yeah, but what about the rest?

by Tom Vanderwell

1 Full Percentage Point? That would leave a mark…..

by Tom Vanderwell

I can’t tell you how disgusted this makes me….

by Tom Vanderwell

It’s going to get harder to get an FHA loan……

by Tom Vanderwell

HAFA, HAMP and other assorted worthless acronyms….

by Tom Vanderwell

The Next Step….

by Tom Vanderwell

The System is Broke? Humpty Dumpty

by Tom Vanderwell

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