This is big for our Florida Friends!  Here’s a message from Florida Association of Mortgage Professionals President Richard Peek (thanks for passing this along to me Donnell Smith!):

In-House Loan Processor Bill Signed
by Governor Scott

June 1, 2011

Greetings Fellow Mortgage Professionals:

We have learned that the loan processor bill, SB1316, which was sponsored in the Florida Senate by Senator Nancy Detert and in the Florida House by Representative Ritch Workman has been signed by Governor Scott and will become effective on July 1^st, 2011.  This law removes the requirement for licensure as a mortgage loan originator for in-house processors.  It also addresses the requirement for lenders to complete the call reports mandated under the SAFE Act of 2008.

We want to thank Senator Detert and Representative Workman, both of whom are members of the Florida Association of Mortgage Professionals, for all of the effort they have put forth for Florida’s mortgage professionals.

We suggest that you read the bill to ensure that you are in compliance.  If you need assistance, please be sure to obtain competent advice.

We hope to see you at our annual convention and trade show in Orlando in July.  We will be offering all of the continuing education you will need to satisfy your licensure renewal requirements this year.  For information, please visit our Convention Page on our website at https://m360.famb.org/event.aspx?eventID=22711&instance=0 .

Sincerely,

Richard E. Peek, CRMS

President

Be Careful with Those Buyer  Prequalification Letters  by Tim Brown, Academy Residential Mortgage

Having done hundreds of prequalification letters over the last 7 years, I recently came to the startling realization that providing a letter that says a buyer qualifies to purchase a home of up to a certain price point may not be entirely accurate in today’s real estate environment.

Since it seems half the buyers I work with are making offers on foreclosed or short-listed properties, the taxes and association dues are almost always out of alignment with the property’s current list price.  With foreclosures you have the double whammy of a property tax rate based on the previously assessed home value plus the absence of homestead exemption because the property was empty at the start of the year.  The problem is even worse with condominiums where association dues are also out of alignment. I had a recent closing where a $145,000 condo purchase (2006 sale price of $265,000) had monthly payments of $310 for taxes and $175 in association dues.  When providing the prequalification letter for this buyer, I had assumed much lower taxes and dues. Luckily the buyer was strong enough to qualify at the higher payment this home would require.

The important take away is for agents to confirm their buyer’s qualification at the inflated tax and association dues rates in today’s market particularly with the current difficult lending environment.  I would recommend you email or text your loan officer with the actual tax and association dues information for each property on which you intend to make an offer to confirm your buyer’s qualifications.              Tim Brown, Academy Residential Mortgage

March 8, 2010

FHA to the Mega-Lenders: Loosen Your Quals for Minorities

The Federal Housing Administration commissioner wants the nation’s largest originators to loosen their underwriting standards, allowing more minorities to qualify for government-backed single-family loans.  Many top ranked lenders voluntarily imposed a minimum 620 credit score in 2008 as subprime borrowers rushed to refinance into FHA loans. Commissioner David Stevens told minority real estate professionals that the lenders’ action has improved the performance of FHA loans and reduced defaults. However, the commissioner is now urging lenders to consider borrowers with lower FICO scores. "The one thing I will tell you, the difference in approval rates for African-Americans and Latino borrowers between 580 and 620 is significant," Mr. Stevens said. The commissioner noted that FHA is taking several steps to reduce default risk. But the agency does not want to raise the FHA 3.5% down payment requirement to 5%, despite congressional pressure. "If we had increased the downpayment to 5% we would severely impact the ability of a good family" to buy a home, he said. The FHA commissioner made his comments at a recent conference on minority home ownership.  National Mortgage News…

March 5, 2010

Study Sees FHA Taking More Risk

By NICK TIMIRAOS

The federal government’s mortgage-insurance agency is understating how much risk it has taken on, says a group of economists from the New York Federal Reserve and New York University, increasing the likelihood the agency may need taxpayer funds.

The economists warn that the Federal Housing Administration—which has jumped to fill the void left by the collapse of the private mortgage market—is overlooking factors that signal higher losses, according to a working paper released Thursday.

The agency has traditionally turned a profit for the U.S. government. But the economists warn that by underestimating the risks it faces, the FHA has increased the likelihood that it will have to ask Congress for money for the first time in its 75-year history.

The study doesn’t say how likely that now is, but "it’s hard to imagine that they won’t be returning to Congress several times," said Andrew Caplin, one of the authors and an economics professor at NYU. "It’s just inconceivable that the loans … will not cause very large losses."

The FHA says it would need taxpayer money only in a worst-case housing-market scenario.    more…  Wall Street Journal

The mortgage broker-share of home loan originations hit a new low of 12.9 percent in the third quarter, according to an exclusive survey from National Mortgage News.   The publication said loan originators funded a total of $443 billion in the third quarter, with retail lenders grabbing 48.3 percent of the market share and correspondent lenders accounting for 38.8 percent.    more…  

  THE WORD ON LOAN BROKERS: "A lot of firms have no interest in our broker research," said David Olson who runs Access Research of Columbia, Md. Earlier in the year Access was called Wholesale Access and you can pretty much figure out why he removed the word ‘Wholesale’ from the firm’s name. In an interview with National Mortgage News Mr. Olson said the only large bank wholesaler that still believes in brokers is Wells Fargo. "We’ve been having a debate with Wells," he said. "They think the channel is coming back."  more…  National Mortgage News Online