Mortgage applications did in fact drop again, by 6.7% from the previous week. The refinance index also decreased by more than 7 %, shaking things up a bit and changing our market for a moment. Why does this happen? It could be any number of reasons really. It could be the increase in unemployment, or it could just be that the American people weren’t feeling so confident since the end of February. The challenge with the unemployment number is that it changes when people stop receiving their benefits.
The Change in the Purchase Index
The purchase index dropped nearly 5% just from week to week, but compared to last year it dropped more than 11%. This is no time for people to be afraid to buy, and I will encourage them to buy, especially right now. There isn’t a reason not to buy, and the market is prime for it. Prices are low, rates are still low, and people should jump at the chance before this all changes. Inflation is on the rise, and once it really gets moving, don’t expect it slow down. If you have income, a credit score of 640 or better, and some assets, let’s talk.
-Mayer Dallal
Sunday, April 17, 2011
Sunday, April 10, 2011
Who Owns Your Loan?
This question has been burning on the ears of many borrowers for years, especially since the time of mortgage backed securities became the way to keep money turning over. These mortgage backed securities have caused many problems for homeowners and are still a growing problem. The problem? These mortgages were transferred so many times, that as foreclosures are being filed the banks discovered that they cannot find the original paperwork.
So, who is to blame for this problem? Many fingers are being pointed at those on Wall Street with absolute disgust for the simple fact that in all the business to make money and turn over profit, paperwork was pushed to the side. No matter what, this paperwork is important and those on Wall Street should treat it that way. The bigger problem is now that these banks relented to forgery, signing these papers now that nothing can be found.
When the chain of title has been lost this can cause problems for the homeowner and banks better figure it out quickly. Not producing the proper paper trail is a problem for those who are self-employed as far as taxes are concerned, but licensing is too. Not to mention that in general, wouldn’t it be smart to keep track of your documentation for everything; just in case?
-Mayer Dallal
So, who is to blame for this problem? Many fingers are being pointed at those on Wall Street with absolute disgust for the simple fact that in all the business to make money and turn over profit, paperwork was pushed to the side. No matter what, this paperwork is important and those on Wall Street should treat it that way. The bigger problem is now that these banks relented to forgery, signing these papers now that nothing can be found.
When the chain of title has been lost this can cause problems for the homeowner and banks better figure it out quickly. Not producing the proper paper trail is a problem for those who are self-employed as far as taxes are concerned, but licensing is too. Not to mention that in general, wouldn’t it be smart to keep track of your documentation for everything; just in case?
-Mayer Dallal
Sunday, April 3, 2011
AMI Has it Right
AMI, the Association of Mortgage Investors, definitely has it right by trying to get bank bailouts to stop. There is nothing worse than bailing out a big bank when it has responsibilities and plenty of explanations that it could be making for its actions. However, what I think really doesn’t matter to anyone who is making the decisions right now. Looking back, what did those big bank bailouts really do? They certainly didn’t turn our economy around as the banks were begging for big money, did they? Did they do right by the consumers that were suffering?
This past week while all the big boys were arguing about foreclosure settlements and more, AMI was there to just say, listen; what we want to see happen is those who messed up need to be punished, but those who didn’t do anything shouldn’t have to suffer. Not all investors did wrong, so why should everyone get punished? It’s like the few kids in the class who were caught talking in class, and so now the whole class has to write sentences over and over; “I WILL NOT TALK IN CLASS”.
As sad as it, I get it; I know that we are in trouble, and while people are looking to buy before rates go up and more changes occur, there just aren’t enough hours in the day. I am here to help those who are looking for a better loan; an FHA loan. This means not only will the loan be insured for the bank, but this means that FHA is there to help you keep your home should a problem arise. Maybe if there were more FHA loans or loans that were done in the best interest of the borrower, these banks wouldn’t have to worry about their bailouts in the first place.
-Mayer Dallal
This past week while all the big boys were arguing about foreclosure settlements and more, AMI was there to just say, listen; what we want to see happen is those who messed up need to be punished, but those who didn’t do anything shouldn’t have to suffer. Not all investors did wrong, so why should everyone get punished? It’s like the few kids in the class who were caught talking in class, and so now the whole class has to write sentences over and over; “I WILL NOT TALK IN CLASS”.
As sad as it, I get it; I know that we are in trouble, and while people are looking to buy before rates go up and more changes occur, there just aren’t enough hours in the day. I am here to help those who are looking for a better loan; an FHA loan. This means not only will the loan be insured for the bank, but this means that FHA is there to help you keep your home should a problem arise. Maybe if there were more FHA loans or loans that were done in the best interest of the borrower, these banks wouldn’t have to worry about their bailouts in the first place.
-Mayer Dallal
New Mortgage Qualifiers Limit Borrowers
While I was hoping for some sort of reform in the way that loans were being done, I wasn’t expecting what we are getting now. The regulators were trying to find a way to tame down the losses going forward on residential mortgages, and of course now we are wondering where their thoughts are headed. I want to see borrowers make more of an investment in the home upfront, but I am not so sure they came up with a good answer.
Qualified Residential Mortgages
The new terms for a qualified residential mortgage are 20% down for a home purchase, but the surprise is in the rest of the terms too that aren’t much better. Borrowers will need to put down 25% of if they are going to refinance the mortgage and 30% if they wish to do cash out refinance. The only loans that won’t be affected by these changes are FHA loans and any other federally funded loans. As you know, I am an FHA specialist so I am pro the FHA loan programs. The FHA programs are structured differently to begin with, and while they offer low down payments to first time homebuyers, they also are designed to keep the borrowers in the home; not on the streets. I am all for reform, but there is such a thing as being so strict that we close off the opportunity to bounce back.
-Mayer Dallal
Qualified Residential Mortgages
The new terms for a qualified residential mortgage are 20% down for a home purchase, but the surprise is in the rest of the terms too that aren’t much better. Borrowers will need to put down 25% of if they are going to refinance the mortgage and 30% if they wish to do cash out refinance. The only loans that won’t be affected by these changes are FHA loans and any other federally funded loans. As you know, I am an FHA specialist so I am pro the FHA loan programs. The FHA programs are structured differently to begin with, and while they offer low down payments to first time homebuyers, they also are designed to keep the borrowers in the home; not on the streets. I am all for reform, but there is such a thing as being so strict that we close off the opportunity to bounce back.
-Mayer Dallal
Saturday, April 2, 2011
Broker Business Drops, Banks Increase
It seems that with all this loan officer compensation reform, the broker side is really suffering. I am a banker not a broker, and yes there is a difference. Brokers have several commission sources, whereas bankers have a few. This is why broker’s fees always seem to be higher; because they are, and the shadow that follows them around is the same shadow that follows car salesmen around. There isn’t anything wrong with selling cars, but because of a few bad ones, we all get a bad rap. The same is true in the mortgage business.
Broker business has fallen nearly 60% since 2005, and it’s no surprise. This is when I could see things changing, although slow I could see we were headed for a real problem. I remember going to Las Vegas and talking with a cab driver and when he told me that he had all these investment properties that was a problem. People were being put into loans because they wanted them, not because they qualified for them. I can understand and respect why changes were expected and even mandated, however I think things can be too stringent. Change is good, but when we tighten it so much that it doesn’t make sense than we need to go back to the drawing board.
Everyone should be able to make a decent living, by charging a fee for the service they provide, but as always it’s all about balance.
-Mayer Dallal
Broker business has fallen nearly 60% since 2005, and it’s no surprise. This is when I could see things changing, although slow I could see we were headed for a real problem. I remember going to Las Vegas and talking with a cab driver and when he told me that he had all these investment properties that was a problem. People were being put into loans because they wanted them, not because they qualified for them. I can understand and respect why changes were expected and even mandated, however I think things can be too stringent. Change is good, but when we tighten it so much that it doesn’t make sense than we need to go back to the drawing board.
Everyone should be able to make a decent living, by charging a fee for the service they provide, but as always it’s all about balance.
-Mayer Dallal
Wednesday, March 30, 2011
Loan Payment Reforms Could Mean Trouble
I couldn’t help reading more about the issues that have been presented about how loan officers make their money, and how things are being disclosed. The challenge? These mortgage companies are going to have to let people go, and become a one man operation. While it isn’t conducive to anyone’s sanity during a busy time, it certainly spells trouble for everyone in terms of job loss and being able to run an office efficiently.
I know personally what that must feel like for loan officers across the board, but I work for myself and I know that when I get busy I wish I had more hands. I certainly hope that those who run a one man office are able to keep a processor because I know how hard that can be.
I guess my bigger issue is, I don’t have a problem paying anyone for a service that they provide, and even though some were unethical in their business practice that doesn’t mean that I was, and I have to make a living. I work hard, and while I do believe I work harder than most I just don’t see how cutting back on compensation helps anyone. The regulators are much better off by ensuring that buyers and homeowners get educated before borrowing money, and that they get what they need when they take out a mortgage loan.
Whether a current homeowner wishes to refinance, or someone else is looking to buy, the real problem was making sure that borrowers were actually getting loans that they needed and that were of benefit to them. That was the real issue, and before the regulators spend too much time on the wrong things, they need to get really involved in how these modifications are going and how they are being handled, along with the foreclosures.
-Mayer Dallal
I know personally what that must feel like for loan officers across the board, but I work for myself and I know that when I get busy I wish I had more hands. I certainly hope that those who run a one man office are able to keep a processor because I know how hard that can be.
I guess my bigger issue is, I don’t have a problem paying anyone for a service that they provide, and even though some were unethical in their business practice that doesn’t mean that I was, and I have to make a living. I work hard, and while I do believe I work harder than most I just don’t see how cutting back on compensation helps anyone. The regulators are much better off by ensuring that buyers and homeowners get educated before borrowing money, and that they get what they need when they take out a mortgage loan.
Whether a current homeowner wishes to refinance, or someone else is looking to buy, the real problem was making sure that borrowers were actually getting loans that they needed and that were of benefit to them. That was the real issue, and before the regulators spend too much time on the wrong things, they need to get really involved in how these modifications are going and how they are being handled, along with the foreclosures.
-Mayer Dallal
Are Securities Really Secure ?
Moving forward banks will be forced to take some of the risks that are associated with these securities. In the past they weren’t hold the risk, but now it is essential in order for our economy to move forward; at least that is what everyone is saying now. Banks will also be enabled to determine for themselves what risk they wish to take on and what they plan to get dish out to someone else.
Major banks asked that the government call all their loans qualified residential loans, but will that really happen? Bank regulators certainly wanted to jump in and say that they only wanted to take responsibility for the most conservative mortgages. Shouldn’t the banks take responsibility for everything they do?
The Dodd-Frank Act was final with only requiring them to hold onto 5% of the risk for only qualified residential mortgages. Bankers know that when business isn’t properly defined, that many borrowers wouldn’t qualify to get loans, which will do anything but stimulate the economy. Banks did get regulators to agree to limiting the risk they would have to take.
Mortgages were being sold in order to act as collateral for existing debts, which caused the banks to go down faster. At the time, everyone thought this was a great idea, because these mortgages were deemed as the least likely to default. I am not sure how that was possible, but I think we know better now. I would say that not only should these mortgages be monitored more closely, but I would also agree that yes, banks should take more responsibility as well.
-Mayer Dallal
Major banks asked that the government call all their loans qualified residential loans, but will that really happen? Bank regulators certainly wanted to jump in and say that they only wanted to take responsibility for the most conservative mortgages. Shouldn’t the banks take responsibility for everything they do?
The Dodd-Frank Act was final with only requiring them to hold onto 5% of the risk for only qualified residential mortgages. Bankers know that when business isn’t properly defined, that many borrowers wouldn’t qualify to get loans, which will do anything but stimulate the economy. Banks did get regulators to agree to limiting the risk they would have to take.
Mortgages were being sold in order to act as collateral for existing debts, which caused the banks to go down faster. At the time, everyone thought this was a great idea, because these mortgages were deemed as the least likely to default. I am not sure how that was possible, but I think we know better now. I would say that not only should these mortgages be monitored more closely, but I would also agree that yes, banks should take more responsibility as well.
-Mayer Dallal
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