Volume 4 | Issue 58 | Monday, March 28, 2005
|
 |
| Sponsored by: |
|
|
|
| |
 |
|
 |
|
|
 |
“They [immigrants and minorities] feel, in general and right or wrong, that the bank knows so much about them that they do not want to tell the bank everything they need to tell it in order to become a borrowing consumer.”
--Fran Clemens, ABN AMRO Mortgage's senior vice president and manager of emerging markets.
|
|
|
|
|
 |
|
 |
|
| |
|
|
| |
|
|
| |
|
|
| |
Top National News
Residential Finance News
New Products, Education Form Bridge to Emerging Markets
Residential Briefs
Commercial/Multifamily Finance News
DealMaker of the Day
MBA News
Colin Powell to Keynote MBA Annual Convention
Spotlight: Washington
MBA Advocacy Update
Washington: The Week Ahead
Fannie Mae Facing Another Class Action Lawsuit
AccountingWEB (03/28/05)
On behalf of Fannie Mae stock-option traders, lawyers on Friday filed suit against the government-sponsored enterprise for allegedly misrepresenting or failing to truthfully disclose its financial situation. The class-action litigation is just the latest in a string of legal actions taking Fannie Mae to task for securities-law violations triggered by the misrepresentation of financial data. The Securities and Exchange Commission has concluded that the mortgage-finance company manipulated accounting rules between 2001 and the middle of 2004 and, as a result, Fannie Mae is now faced with a restatement that could top $11 billion.
(More)
(Back To Top)
Buy Now, Pay Later
Wall Street Journal (03/28/05) P. R5; Bernard, Tara Siegel
Rising interest rates and soaring home prices have many home buyers looking to lower their monthly mortgage payments, at least in the short term, by opting for interest-only loans and hybrid adjustable-rate mortgages that require only interest payments during a set fixed-rate period. Some lenders even offer option ARMs, which allow borrowers to choose each month whether they will make the minimum payment, an interest-only payment, or a payment based on either a 30-year or 15-year term. Though lenders insist that most borrowers plan to move or refinance by the time the interest-only and fixed-rate periods expire, customers face higher payments and larger loan balances if interest rates dramatically rise or home values weaken. According to Keith Gumbinger of HSH Associates, "The products that feature more risks aren't bad products per se, but they should be a niche market for people who understand the risks and have the financial wherewithal to manage the risks if conditions don't turn out exactly as they hope."
(More - Subscription Required)
(Back To Top)
Bill to Ban Pressuring Appraisers
American Banker (03/28/05); Bergquist, Erick
The far-reaching predatory lending bill co-authored by Reps. Paul Kanjorski, D-Pa., and Bob Ney, R-Ohio, includes a section that reforms the appraisal process, which is being welcomed by appraisers and lender trade groups. Countrywide Financial Corp. helped shape the legislation by pushing to bar parties interested in a real estate transaction from improper influence "through coercion, extortion, or bribery, the development, reporting, result, or review of a real estate appraisal." The measure additionally requires physical inspections for high-cost loans, rather than computer-generated valuations, and gives the appraisal subcommittee of the Federal Financial Institutions Examination Council supervisory sanctioning powers over state appraisal regulators. Steve O'Connor--a vice president of government affairs at the Mortgage Bankers Association--says the client pressure provision creates a national standard, adding that federal oversight of state appraisal officials is "an inducement for the states to comply with … [the bill's] rigorous standards."
(More - Subscription Required)
(Back To Top)
Government Widens Residential Real Estate Probes
Denver Business Journal (03/28/05); Johansen, Erin
With the dust still settling from a national regulatory crackdown on title insurance practices, federal and state officials now are intensifying their investigations into packaged services offered by the residential property industry. For instance, the Colorado attorney general's office acknowledges that it has launched a formal probe into possible wrongdoing by firms involved in alleged kickback schemes between housing developers and their "captive" title re-insurers. At the same time, HUD has settled with a group of Oklahoma home builders, property firms and title companies for their alleged attempts to get around the anti-kickback provisions of the federal Real Estate Settlement and Procedures Act (RESPA), with the companies paying $450,000 in all and pledging to no longer engage in such practices. HUD spokesman Brian Sullivan remarks, "We've ramped up our staff and we're using contract investigators for enforcement. No matter how you slice it, we're a new HUD in terms of enforcing RESPA."
(More)
(Back To Top)
Creditors Press Troops Despite Relief Act
New York Times (03/28/05) P. A1; Henriques, Diana B.
The Servicemembers Civil Relief Act protects enlisted persons, their spouses and their dependents from repossessions and foreclosures without court orders during times of active service. The law requires lenders to reduce interest rates on existing debts to 6 percent if the borrower's income is impaired due to military duty, and it allows service members to break property leases without penalty when called to action. However, many servicemen and women are reporting problems with their lenders and landlords--many of whom are unaware of the law or do not fully understand their obligations under it. In addition to educating lenders about the measure, experts insist that Congress needs to make changes to address the mandatory arbitration clauses included in many credit agreements and alter enforcement procedures, considering that borrowers presently are forced to inform their creditors of the law and take them court if their problems are not resolved, a process that is cost- and time-prohibitive to the soldier.
(More - Registration Required)
(Back To Top)
Seniors Try to Get Ahead by Going in Reverse
Christian Science Monitor (03/28/05) P. 13; Decker, Jonathan P.
The National Reserve Mortgage Lenders Association reports that reverse loans benefit both seniors and lenders. While applicants receive cash to cover everything from basic living expenses to vacations, lenders note that reverse mortgages pose few problems for them. Fraudulent schemes in which heirs continue to collect monthly payments after the homeowner dies are rare, and the fact that these loans are treated as regular mortgages at the time of death eliminates confusing probate proceedings. Still, experts urge homeowners just entering retirement and those who are uncertain of how long they plan to stay put to downsize into smaller homes and invest the proceeds as an alternative to reserve mortgages.
(More)
(Back To Top)
Bankers Applaud Eased Residential Lending Rules
Boston Business Journal (03/28/05); Mason, Edward
A new banking law in Massachusetts takes effect at the end of March and has major implications for banks that engage in residential mortgage lending. The new measure, "An Act Relative to Banks and Banking," led by Sen. Andrea Nuciforo, D-Pittsfield, relieves state-chartered banks of the strict guidelines of the old state law and instead forces lenders to be more specific in the lending policies that they put into writing. For example, the old law required banks to have appraisals used in the mortgage approval process reviewed and certified by two members of their board and forced banks to put in escrow tax payments on homes for buyers who did not have down payment money. "Nuciforo said, 'We shouldn't micromanage your lending--you should,'" says Kenneth Ehrlich, an attorney with Nutter McClennen & Fish in Boston.
(More)
(Back To Top)
Bets Rise Against Real-Estate Sector
Wall Street Journal (03/28/05) P. C3; Morrissey, Janet
A new Banc of America Securities report shows that the number of short-sellers active in the Real Estate Investment Trust (REIT) market increased almost 7 percent in the four weeks ended March 10, following a gain of nearly 10 percent in short-selling activity in the previous four-week period. The firm's researchers add that REIT short positions actually have been on the rise for nearly a year--primarily in the commercial property sector--and are 58 percent more numerous than they were at this point in time a year ago. Short-sellers' general strategy is to borrow stock and sell, wagering that they will be able to buy it back at a lower price, return the loan, and keep the difference as earnings. In the case of REITs, the shorts clearly believe the real-estate rally will be coming to an end and consequently are targeting office, industrial, shopping-center, and diversified REITs.
(More - Subscription Required)
(Back To Top)
|
|
|
 |
| New Products, Education Form Bridge to Emerging Markets |
MBA (3/28/2005) Murray, Michael
As lenders present new products for immigrant, minority and underserved borrowers, education ranks high in building trust.
ABN AMRO Mortgage Group, Inc., Sunrise, Fla., in a new programs called “Dream First,” focuses on affordable products for these borrowers. “We believe that by having a product suite that allows us to bridge the gap and fill in where our "A" paper conforming products stop, we can begin to create a different kind of environment for our broker partners to deliver to us,” said Fran Clemens, ABN AMRO Mortgage's senior vice president and manager of emerging markets.
Speaking at an October Research Seminars audio conference, Clemens said financially illiterate or unbanked immigrants, minorities and underserved borrowers lack trust in the large bank. “They feel, in general and right or wrong, that the bank knows so much about them that they do not want to tell the bank everything they need to tell it in order to become a borrowing consumer,” Clemens said.
ABN AMRO provides its sales staff with “intense training” to educate borrowers. Clemens said education must come from the top down and from the grassroots up.
James Ballantine, director of community development at the American Bankers Association, said the successful financial institutions change their philosophy from initiative to infrastructure. He said United Bank of Americas, Atlanta, is one example of an institution that changed the face of the bank. “They changed it into an infrastructure,” Ballantine said. “This is what they do. This is a segment of the community that they are going to go after.”
Smaller institutions involve everyone from the CEO to the receptionist, Ballantine said. “For a small institution, it is CEO involvement. If you go out to a $100 million institution, it is the CEO that is currently involved in many of the success stories and how they start reaching out into the population.”
The larger institutions will have full knowledge within the institution of the market segment. At larger banks, the infrastructure change can begin with a community reinvestment officer or with the loan department, Ballantine said.
He cited Countrywide Financial Co., Calabasas, Calif., Wells Fargo Bank, Des Moines, Iowa, and Bank of America, Charlotte, N.C., as three large institutions “doing very well.”
At the beginning of the year, Angelo Mozilo, chairman and CEO of Countrywide, announced additional funding of $400 billion to extend its loan program for low-income and minority homebuyers. The program includes using pooled funds for downpayment, more non-traditional forms of credit and non-occupant borrowers.
Ballantine said the emerging market is growing in states not usually known for immigrant populations, such as North Carolina, Arkansas, Nebraska and Idaho. He estimates this emerging market, which includes Hispanics, Asians, African-Americans and immigrants, to account for 25 percent to 30 percent of the entire population.
“They’re starting to get it,” Ballantine said. “There’s a lot of work that needs to be done."
(Back To Top)
| | |
| Residential Briefs |
MBA (3/28/2005) McAfee, Jamie
iComply Inc., Washington, D.C., launched a next-generation online mortgage compliance subscription service. Version 2.0 added new navigation, more tools and a 10,000-document library.
****
Hyland Software Inc., Westlake, Ohio, has been named by Republic Mortgage LLC, Las Vegas, as the provider of ECM technologies. Republic, awarded the contract to OSAM, a provider of innovative records management products and a Hyland Software authorized OnBase provider.
OSAM integrates with OnBase and into Republic's existing environment, which Republic said improved imaging, storage, retrieval and delivery capabilities.
****
Mavent Inc., Irvine, Calif., and ARC Systems, Austin, Texas, formalized a strategic partnership to integrate the Mavent Expert System into ARC Systems' Loan Finder Express (LFE), creating a point-of-sale (POS) that includes product and pricing decisions and real-time high-cost compliance information.
(Back To Top)
|
|
 |
| DealMaker of the Day |
MBA (3/28/2005) Murray, Michael
 Welsh Capital, Minneapolis-St. Paul, closed on a $2.5 million permanent mortgage for 1410 Colorado Avenue, a 43-unit multifamily property in St. Louis Park, Minn.
The borrower extended the loan through Welsh Capital's correspondent lender IMPAC Multifamily Group . The 10-year term loan, amortized over 30 years, carries an interest rate at 5.625 percent.
Kip Dunkelberger of Welsh Capital arranged the deal. “The unique aspect of getting this deal done was the debt service coverage,” he said. “Most lenders will underwrite the cash flow to a 1.20 or 1.25. However, the lender we chose to do the transaction was willing in to underwrite to a 1.15.”
Dunkelberger said the 37,200 square foot property, built in 1969, was purchased at the top end of the market but other comparisons were available to support the value. “Much of this is due to the fact that there are a number of multifamily properties being acquired with the intent to convert them to condos and this will drive up the price per unit,” he said.
The property also had a 100-percent occupancy rate at closing. Dunkelberger said the market vacancy can become a big concern even though a property may be 100 percent occupied. “In our regional market, most of the data suggests that our vacancies are estimated at 7 percent,” Dunkelberger noted. “However, having solid information from a specific submarket can support an argument suggesting that a specific neighborhood is less. This was the case for this property. [We were] able to support a 5 percent vacancy, which the lender ultimately underwrote the deal to.”
(Back To Top) |
 |
| Colin Powell to Keynote MBA Annual Convention |
MBA (3/28/2005) Hagopian, Linda
One of the nation’s most celebrated military and political figures, General Colin Powell, USA (Ret.) kicks off the Mortgage Bankers Association’s 92nd Annual Convention & Expo 2005 in Orlando, themed “Innovative Solutions for a Greater Tomorrow,” as the Opening General Session speaker.
Powell will share his view of the international community and the role of the U.S. as a democratic nation and world leader.
 As the 65th Secretary of State, Powell represented the U.S. on the world stage and influenced international affairs for the past four years. As he stated at his confirmation hearing, the guiding principle of U.S. foreign policy during his tenure was that "America stands ready to help any country that wishes to join the democratic world."
Powell’s history of service to the U.S. is broad. Before becoming Secretary of State, he served as a key aide to the Secretary of Defense and as National Security Advisor to President Ronald Reagan. He also served for 35 years in the Army, rising to the rank of four-star general and serving as chairman of the Joint Chiefs of Staff (1989–1993). During this time Powell oversaw 28 major events, including the Panama intervention of 1989 and Operation Desert Storm in the 1991 Persian Gulf War.
Powell has won numerous military and civilian awards. He is also the founding chairman of America’s Promise-The Alliance for Youth, a national crusade to improve the lives of our nation’s youth. He is also the author of a best-selling autobiography, My American Journey.
Registration for MBA’s 92nd Annual Convention & Expo 2005 is now open. You can visit the Web site at http://events.mortgagebankers.org/92nd_annual to register and to see the line-up of internationally known speakers at this year’s convention.
(Back To Top) |
|
|
| MBA Advocacy Update |
MBA (3/28/2005) Pfotenhauer, Kurt
.jpg) Congress adjourned last weekend for a two-week recess. Both the House and the Senate will return to session on April 4. The House is expected to consider S.256, the Senate-passed bankruptcy reform legislation, when it returns.
Senate to Hold Hearings on GSE Oversight Reform
When it returns from Easter recess, the Senate Banking Committee will hold two hearings on GSE oversight reform. The first hearing, on April 6, will provide Federal Reserve Chairman Alan Greenspan with the opportunity to present his views to the Committee. In testimony before the committee in February, Greenspan indicated his support for limiting the GSEs' portfolio growth.
The next morning, April 7, the Committee will hear the Bush Administration's opening statement regarding its position on GSE oversight reform. Treasury Secretary John Snow and HUD Secretary Alphonso Jackson are scheduled to testify.
For more information, please contact Josh Denney at (202) 557-2816 (jdenney@mortgagebankers.org).
House to Discuss Fannie Mae's Agreement with OFHEO
Rep. Richard Baker, R-La., who chairs the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, announced last week that he will hold a hearing on "Additional Accounting and Management Failures at Fannie Mae: OFHEO's Efforts to Ensure Safe and Sound Operations." The hearing will take place on April 6.
OFHEO (Office of Federal Housing Enterprise Oversight) Director Armando Falcon is scheduled to testify regarding OFHEO's March 8 supplemental agreement with Fannie Mae, which requires the GSE to separate the roles of its Chairman and CEO, take steps to prohibit falsification of signatures and put in place other corporate policies.
Baker is expected to introduce a GSE oversight reform bill in the House in early April.
For more information, please contact Chris Harrington at (202) 557-2863 (charrington@mortgagebankers.org).
OFHEO Extends Comment Deadline for Mortgage Fraud
This week, OFHEO announced an extension of the comment deadline for its proposed fraud reporting rule. The rule would require Fannie Mae and Freddie Mac to report to OFHEO all instances of possible fraud relating to mortgages. The Mortgage Bankers Association is preparing a comment letter, which is now due on April 4.
For more information, please contact Rachel Voss at (202) 557-2865 (rvoss@mortgagebankers.org).
MBA Launches Online State Legislative Database
Last week, MBA launched the Online State Legislative Database, a comprehensive online resource of pending and enacted state legislation and regulations affecting the real estate finance industry. MBA members now have a new centralized resource for quick access to information on more than 400 state bills and regulations relevant to the real estate finance industry.
The database contains the state bill or regulation number, the primary issue, a brief synopsis of the bill or regulation, the effective date, the date the information was last updated, a link to the bill or regulation, as well as the relevant state's website.
MBA staff will update the database continuously. To view the online database, visit the My MBA webpage (http://mymba.mortgagebankers.org/login.aspx). If you do not remember your password for My MBA, you may click on the "forgot your password?" link to retrieve the required information.
For more information, please contact Paul Richman at (202) 557-2899 (prichman@mortgagebankers.org) or Beth Percynski at (202) 557-2866 (bpercynski@mortgagebankers.org).
(Back To Top)
|
| |
| Washington: The Week Ahead |
MBA (3/28/2005) Sorohan, Mike
MBA's National Technology in Mortgage Banking Convention and Expo kicks off this week in Orlando, Fla. The convention runs from March 29-April 1. MBA NewsLink will provide extensive coverage. For more information, go to http://events.mortgagebankers.org/Tech2005/default.html.
The House and Senate are off this week as part of their spring District Work Periods. Congress reconvenes on Monday, April 4.
And when they return, things are going to heat up. The Senate Banking Committee will hold the first two of a series of hearings on proposals to reform the government-sponsored enterprises. The hearing will take place in Washington, D.C. on April 6 and 7. The first hearing will feature testimony from Federal Reserve Chairman Alan Greenspan. The second hearing’s scheduled witnesses include Treasury Secretary John Snow and HUD Secretary Alphonso Jackson.
Both hearings will take place in room 538 of the Dirksen Senate Office Building. Staff of the Mortgage Bankers Association’s government affairs department will attend the hearing, and MBA NewsLink will provide coverage.
Senate hearings can be heard live over the Internet at www.capitolhearings.org. House Financial Services Committee hearings can be viewed live over the Internet at www.financialservices.house.gov.
Upcoming Reports/Events:
March 28: CampusMBA: Creating New Customers, Orlando
March 29-April 1: MBA National Technology in Mortgage Banking Conference & Expo, Orlando
March 29: Consumer Confidence, The Conference Board
March 30: MBA Weekly Application Survey
March 30: Gross Domestic Product, Commerce Department
March 31: MBA Commercial/Multifamily Regional Servicing Forum, Overland Park, Kan.
April 1: Employment, Labor Department
April 1: Joint Economic Committee Statement
April 1: Construction Spending, Bureau of the Census
April 6: MBA Weekly Application Survey
April 7 : Consumer Credit, Commerce Department
April 10-15: CampusMBA School of Mortgage Banking III, Oak Brook, Ill.
April 12: CampusMBA: Creating New Customers, Oak Brook, Ill.
April 12: Treasury Department Monthly Statement
April 13 : MBA Weekly Application Survey
April 13-14: CampusMBA: Detecting and Avoiding Mortgage Fraud, Birmingham, Ala.
April 18 : NAHB/Wells Fargo Housing Market Index
April 19-20: MBA National Policy Conference, Washington, D.C.
April 19: New Residential Construction, Commerce Department
April 19: Producer Price Index, Labor Department
April 20: MBA Weekly Application Survey
April 20: Consumer Price Index, Labor Department
April 20: Beige Book, Federal Reserve
April 25: Existing Home Sales, National Association of Realtors
April 26: New Residential Sales, Commerce Department/HUD
April 26: Consumer Confidence, The Conference Board
April 27: MBA Weekly Application Survey
April 28: Gross Domestic Product, Labor Department
April 28: Housing Vacancies and Homeownership, Commerce Department
May 1-4: MBA National Secondary Market Conference & Expo, San Francisco
May 4-6: Commercial Asset Administration & Technology Conference, Chicago
May 10: Campus MBA: Creating New Customers, Chicago
May 10-11: CampusMBA Default Best Practices Workshop, Chicago
May 11-12: CampusMBA Real Estate Appraisal for Mortgage Lenders, Dallas
May 15-18: MBA Legal Issues & Regulatory Compliance Conference, Phoenix
May 15-20: CampusMBA School of Mortgage Banking Course I, Philadelphia
May 17-18: CampusMBA: The Next Step in Combating Mortgage Fraud, Atlanta
June 2-3: FHA/VA/USDA Housing Finance Conference, Washington, D.C.
June 5-8: MBA Presidents Conference, Palm Beach, Fla.
June 8-10: MBA Subprime Lending & Alternative Products Conference, Washington, D.C.
June 12-17: CampusMBA School of Mortgage Banking Course II, Denver
June 15-17: CampusMBA eMortgage Workshop, San Francisco
July 10-15: CampusMBA Commercial School of Mortgage Banking, San Diego
July 17: CampusMBA: Essentials on Employment Law Compliance, San Francisco
July 17-22: Campus MBA School of Mortgage Banking Course I, Washington, D.C.
Aug. 14-19: CampusMBA School of Mortgage Banking Course III, Chicago
Aug. 24-25: CampusMBA: Detecting and Avoiding Mortgage Fraud, San Francisco
Sept. 11-13: MBA Document Custody Conference, Miami Beach, Fla.
Sept. 18-23: Campus MBA School of Mortgage Banking Course II, San Diego
Sept. 19-20: MBA Quality Assurance Conference, Chicago
Sept. 20-21: CampusMBA: Handling Fraud Files, San Diego
Oct. 23-26: MBA Annual Convention & Expo, Orlando
Nov. 10-11: MBA Residential Underwriting Conference, Coronado, Calif.
2006
Feb. 5-8: MBA Commercial Real Estate Finance/Multifamily Housing Convention & Expo, Orlando
Information about MBA Events can be found at the MBA Web site, www.mortgagebankers.org; and at the CampusMBA Web site, www.campusmba.org.
(Back To Top)
|
|
ABOUT MBA NewsLink
Publisher: Cheryl Crispen, Senior Vice President - Communications and Marketing
Editor: Mike Sorohan 202/557-2855
MSorohan@mortgagebankers.org
Deputy Editor: Michael Murray 202/557-2851
MMurray@mortgagebankers.org
Advertising Opportunities: Bill Farmakis 203/834-8832
bill@jlfarmakis.com
MBA NewsLink, a daily electronic publication, is free to you as an employee of
an MBA member company. For membership information, visit MBA's website at
www.mortgagebankers.org/membership
If this e-mail has been forwarded to you, please visit
www.mortgagebankers.org/mbanewslink to receive your own free subscription. If you
wish to unsubscribe or if you wish to receive MBA NewsLink at another e-mail
address, click here.
To view the NewsLink archives, click
here
The articles printed in MBA NewsLink are the exclusive property of the Mortgage Bankers Association, which reserves all rights. Any reprints or other use of these articles in whole or in substantial part, in any medium, requires advance written permission from the Mortgage Bankers Association. For reprint information on stories in MBA NewsLink, please contact Stefanie Lauff at (800) 394-5157 Ext. 26.
Abstracts
Copyright (c) 2005-2004 Information, Inc., Bethesda, Maryland USA
The links at the end of each abstract are to the publisher, publication, or
article. Some links may require registration or subscription. Information, Inc.
is not affiliated with the referenced publications.
(Back To Top)
|
|
Copyright © 2007-2002 Mortgage Bankers
Association
1919 Pennsylvania Ave. NW Washington, DC 20006-3438
(202) 557-2700, All Rights Reserved.
http://www.mortgagebankers.org/
If you have difficulties reading this HTML email, please go to http://www.mortgagebankers.org/mbanewslink/issues/2005/03/28.asp. |
|
|