Lower Upfront Costs to be the key Feature of New Version of FHA Home Equity Conversion Mortgage

According to the National Reverse Mortgage Lenders Association, the Federal Housing Administration (FHA) announced today that it intends to make modifications to its Home Equity Conversion Mortgage (HECM) product, to make it more attractive and cost effective for older home owners seeking to tap their home equity to cover living expenses and health care costs.

The most frequently heard complaint among people who did not take a reverse mortgage has been that the upfront costs were high.The key feature of the new version FHA Home Equity Conversion Mortgage is lower upfront cost. The new "HECM Saver," will provide seniors with a reverse mortgage option that significantly lowers upfront costs by virtually eliminating the upfront Mortgage Insurance Premium that is required under the standard HECM option.This cost saving in upfront fees is able to be achieved because the amount of money available to a borrower, an amount known as the "principal limit," under a HECM Saver will be reduced, substantially lowering the risk to the FHA insurance fund. Borrowers will receive approximately 10% to 18% less under the HECM saver option, than they would under the HECM Standard option.This new variation, the HECM Saver, presents a sensitive response to the needs of old homeowners. Now more elderly people can take advantage of this new version of HECM; PrivoCorp can get you in touch with brokers who process HECM files. For more details go to www.privocorp.com

Mortgage rates hit a record lows: Freddie Mac

According to a survey released by Freddie Mac on Thursday,Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.42 percent for the week ended August 19, down from the previous week's 4.44 percent and its year-ago level of 5.12 percent. Meanwhile, 15-year fixed-rate mortgages averaged 3.90 percent, down from 3.92 percent last week, the lowest level since Freddie Mac began surveying this loan type in 1991. Fifteen-year mortgage rates have hit fresh lows for six straight weeks.

Low mortgage rates offer a glimmer of hope for a housing market, which has been struggling to gain traction since the expiration of popular home-buyer tax credits.To take advantage of the tax credits, buyers had to sign purchase contracts by April 30. Contracts originally had to close by June 30, but that has been extended by three months.By lowering monthly mortgage payments, lower rates may also help some homeowners avoid default and foreclosure if their credit is good enough.

Bob Walters, chief economist at Quicken Loans in Detroit, Michigan, said home loan demand at his company has jumped 50 percent over the past month."Nearly every person who has a mortgage right now can benefit from refinancing," he said.The Mortgage Bankers Association said on Wednesday U.S. mortgage applications leaped last week as rock-bottom interest rates lifted demand for home refinancing to the highest level in 15 months, a development that could portend stronger economic growth.

This is from a Reuters report.

20% of mortgages underwater???

According to the a report in the real estate website zillow.com, more than 20% of the nation's mortgage borrowers owe more than their homes are worth. At 21.5% for the third quarter, it is a small improvement over the previous quarter, when 23.3% of loans were underwater, according to real estate website Zillow.com. This so-called negative equity is a hotly watched statistic because it is a prime predictor of foreclosures.

To read the entire article go to  cnn.com

Vanguard - Weekly update

According to a Vanguard report citing the  Commerce Department's report on gross domestic product (GDP) for the second quarter; it confirmed what many had expected ... Although the economy has grown for the fourth straight quarter, the rate of growth has slowed. Moreover, the nation's recovery from recession has been tougher than previously thought, based on revised GDP figures indicating that the economy from 2007 to 2009 was weaker than originally estimated. 


The mortgage market continues to hobble along. PrivoCorp lost a good sized client to bad lending practices of the past which seems to continue to haunt the entire industry. The ghosts dont seem to be going away any time soon.


For more information on our processing capabilities visit www.privocorp.com

Mortgage Players Look to Soften Bill !!

As Congress moves to finalize new financial regulations, the mortgage industry is working to soften a series of provisions that reshape how most Americans obtain home loans. This was according to the Wall Street Journal.

The provisions in the legislation seek to eliminate questionable practices that proliferated during the housing boom by outlining clear underwriting standards, holding lenders more responsible for loans, and changing the way loan originators are paid. In addition, consumers would get new rights to seek damages when the mortgage process goes awry, according to The Journal.

Read more at-http://bit.ly/aPVd4g (The Wall Street Journal)

Texas mortgage delinquencies drop

Less than 9 percent of Texas homeowners missed a mortgage payment in the first quarter of 2010, according to first-quarter data from the Texas Mortgage Bankers Association.

Texas’ 8.7 percent delinquency rate is down from 10.3 percent one year ago. Nationwide, mortgage delinquencies increased about 1 percent to 10.1 percent.

Just more than 2 percent of Texas mortgages were in foreclosure proceedings at the end of the first quarter, the group said. The national foreclosure rate is 4.6 percent, said Scott Norman, president of the Texas Mortgage Bankers Association.

The above article appeared in the bizjournals of Atlanta and can be accessed @-http://dallas.bizjournals.com/dallas/stories/2010/05/17/daily35.html

Georgia foreclosure rate rises 31%

Georgia had the sixth-highest rate of foreclosures in America in May, according to RealtyTrac’s monthly foreclosure report-

The state had 13,778 foreclosures, or one for every 292 households, last month. This marked a jump of 31 percent over May 2009 and a 1.3 percent decline from April 2010.

Foreclosures are defined as default notices, scheduled auctions and bank repossessions.

There were 322,920 foreclosure filings, or one for every 400 households, in the United States in May. This was a 0.45 percent rise over May 2009 and a 3.3 percent drop from April 2010.

“The numbers in May continued and confirmed the trends we noticed in April -- overall foreclosure activity leveling off while lenders work through the backlog of distressed properties that have built up over the past 20 months,” said James J. Saccacio, RealtyTrac CEO, in a statement. “Defaults and scheduled auctions combined increased by 28 percent from 2007 to 2008 and another 32 percent from 2008 to 2009, creating a build-up of delayed bank repossessions. Lenders appear to be ramping up the pace of completing those forestalled foreclosures even while the inflow of delinquencies into the foreclosure process has slowed.”

The above article appeared in the bizjournals of Atlanta and can be accessed at  http://atlanta.bizjournals.com/atlanta/stories/2010/06/07/daily32.html

PrivoCorp provides contract mortgage processing services to lenders, brokers, net branches across the country.

Bankrate.com : Mortgage rates chug along

According to bankrate.com, mortgage rates have settled into a groove since last Thursday. Yields on mortgage bonds have chugged along at more or less the same level since then, and that implies that mortgage rates haven't moved much, either. Today is the day when Bankrate conducts its weekly rate survey; I predict that it will say that the benchmark 30-year fixed is 4.98 percent this week, up from 4.92 percent last week.

The Mortgage Bankers Association says there aren't many people applying for mortgages to buy homes; most customers are applying to refinance their current loans. Purchase applications are at their lowest level since April 1997, according to the MBA.

It's easy to figure out why home sales are down so much. The home buyer tax credits stole home sales from the future. We might come to regret this policy choice, because we will discover that some homeowners bought a few months too early, with an insufficient financial cushion. Some people will lose their homes because they bought in March instead of saving more money and waiting until the end of the year.

The above article appeared on bankrate.com

Vanguard: US Economy looking up?

The United States continued to show signs of recovery this week as retail sales, industrial production, and business inventories all increased. Although the good news was somewhat dampened by a widening trade deficit in March, many economists believe the continued increase in both U.S. exports and imports is another signal of an economy that is beginning to strengthen.For more information visit the Vanguard website. We at PrivoCorp regularly look out for signs of how the overall economy is performing in order to track the mortgage markets.

Global view of the housing bubble - old stuff but interesting

According to this MGI research although the current crisis started with the bursting of the US housing bubble, other economies around the world are feeling the effects of their own real-estate booms and busts. From 2000 through 2007, a remarkable run-up in global home prices occurred (see exhibit). But that trend has reversed abruptly. In 2008, the value of US residential real estate fell 10 percent; the global average fared only somewhat better, declining by almost 4 percent. We estimate that falling home prices erased more than $3.4 trillion of household wealth in 2008. And because home prices are slow to correct, the current slide may persist for some time, which could depress global consumption.

Check the McKinsey article (Global capital markets: Entering a new era.)  for more details

PrivoCorp Investors

Here are some of the investors PrivoCorp works with in the US

• Bank of America
• Wells Fargo
• Franklin American
• Provident Bank
• NationStar
• American Financial Resources
• Fifth Third Bank
• Polaris

and so on. This list is by no means exhaustive and is subject to change without notice.

BoA Chief to testify on Capitol Hill - BLEAK !!!

A few numbers from Barbara Desoer's prepared speech that will be made on the state of affairs of BoA's mortgage portfolio. Does not paint a very good picture though.

•1.4 million borrowers, or 10 percent of the entire BofA residential mortgage portfolio, are more than 60 days delinquent.
•More than 16,000 BofA employees are dedicated to helping troubled borrowers work out a solution.
•BofA has taken $10.4 billion in write-downs tied to mortgages over the past two years.

For more information check out the Charlotte Business Journal: Bank of America's Barbara Desoer paints ugly picture on Capitol Hill

Mortgage Market Question?

What are the current market conditions...? Is volume predicated by the Secondary Market, Int Rates, or Regulation?

My feeling is "Sh*t always rolls downhill" ... The Fed has slowed down purchase of MBS, hence, the secondary market has begun to tighten up. They see the exit strategy being not quite so easy come March. Investors (the BOA's and Wells of the world) are booking huge margins of profit on new loans. However, private money is who they will be answering to next. It's a good thing, but in the short term, it's gonna be rough. Watch the MBS ... everything else is truly "Secondary".

U.S. hits loan modification target early

According to the San Francisco Business times quoting the Obama administration, more than 500,000 troubled home loans have entered trial modification programs.

Federal officials recently stepped up pressure to modify troubled loans after criticism during the summer that banks and other loan servicers were dragging their feet adjusting loan terms for borrowers in danger of default. The government had given servicers a deadline of Nov. 1 to get 500,000 eligible borrowers into such programs, where payments are reduced to not exceed 31 percent of the borrower’s pre-tax income.

An estimated 16 percent of troubled borrowers (defined as those at least 60 days delinquent) have been placed into trial modifications. Here are some of the stats on mods by banks in the state in CA. Citigroup leads the mods list with a third of all loan mods.

PrivoCorp is not involved in any loan modification program. PrivoCorp is one of the fastest processors of mortgage home loans in the state of California.

Foreclosure Activity

According to Mortgage Ledger, US foreclosure activity decreased less than 1 percent from record high in July with activity up 18 percent from August 2008 despite year-over-year drop in REOs. RealtyTrac considers default notices, auction sale notices and bank repossessions as foreclosure filings.

“After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time.”

“After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time.” Florida fell into the second worst ranking with one foreclosure filing for every 140 households in August.

California ranked third with one foreclosure filing for every 144 households.

This maybe good for the real estate finance industry as a whole, but this movement (of reduced foreclosures) needs to be sustained over an extended period of time.

PrivoCorp processes conventional and FHA loans for brokers and net branches across the country. Contact us for more information http://www.PrivoCorp.com/Contact.html

USA Today Mortgage trends for 3 years

Answers for homeowners with TBW

If your loan has been with Taylor Bean & Whitaker, there is no need to panic as Freddie Mac has arranged for several servicing companies to begin working directly with such homeowners. Responsibility for servicing Freddie Mac mortgages that were transferred from TBW, has been given to Cenlar FSB, Saxon Mortgage Services and Ocwen Loan Servicing. These servicing companies will get in touch with you with either with a welcome phone call or welcome letter in which case it will include the contact information for your new Freddie Mac servicer and the address where you should begin sending your payments and any required documentation.

Home owners with TBW loans need not worry about the mortgage payments made to TBW.You should not be assessed a late fee and your credit report should not be impacted as a result of the transition. In the unlikely event your payment was not properly applied to your mortgage balance during the transition or you discover an error with your payment history, immediately contact your new Freddie Mac Servicer.They will resolve any issues that occured during the transition period, including waiving late charges when applicable and making appropriate adjustments to payment and credit records.

If you loan was in default, and you were being considered for a loan modification under the Making Home Affordable plan,then you should work directly with your new mortgage servicer to find options that's best for you. Additionally, if you received a letter from Home Retention Services regarding a loan modification of your TBW-serviced mortgage, please continue working directly with them on this process.For further informnation, check these websites out:

http://www.cenlar.com/home.html
https://www.saxononline.com/common/home/
https://www.ocwencustomers.com/home.cfm

PrivoCorp (http://www.privocorp.com) processes the loans for the brokers and is in no way involved with origination of these loans.

Existing home sales surge

Price drop and the tax credit for home buyers are said to be the reason for the surge. According to the National Association of Realtors that home sales rose 7.2% to a seasonally adjusted annual rate of 5.24 million in July, from a pace of 4.89 million in June. It was the fourth-straight monthly increase and the highest level of sales since August 2007. For further details and the complete story check USAToday.

PrivoCorp (http://www.privocorp.com) processes the loans for the brokers and is not involved with the actual origination of these loans.

Rise in Foreclosures in Texas

Texans continue to make late mortgage payments due to which more than 1 in 10 mortgages are late or in foreclosure. In Texas, most of the loans facing foreclosure are subprime mortgages. In the second quarter, 8.79% of residential mortgages in the state had delinquent payments and 1.84 % went into foreclosure, which both figures exceeded the previous quarter.

For more information on this a good read is the article here

Homeowners facing situations like this should consult their broker or the financial planner to get help from some of the programs that the Bush and now Obama adminisitration are promoting for them.

PrivoCorp (http://www.privocorp.com) processes the loans for the brokers and is in no way involved with loan modifications or origination of these loans.

Red Flag Alert - Effective Nov 1st 2009

According to the Federal Trade Commission (FTC) the new ‘Red Flag’ Requirements for Financial Institutions and Creditors Will Help Fight Identity Theft. Identity thieves use people’s personally identifying information to open new accounts and misuse existing accounts, creating havoc for consumers and businesses. Financial institutions and creditors soon will be required to implement a program to detect, prevent, and mitigate instances of identity theft.

Mortgage brokers and lenders fall under the CREDITOR and COVERED ACCOUNTS category. Under the Red Flags Rules, financial institutions and creditors must develop a written program that identifies and detects the relevant warning signs – or “red flags” – of identity theft. These may include, for example, unusual account activity, fraud alerts on a consumer report, or attempted use of suspicious account application documents. The program must also describe appropriate responses that would prevent and mitigate the crime and detail a plan to update the program. The program must be managed by the Board of Directors or senior employees of the financial institution or creditor, include appropriate staff training, and provide for oversight of any service providers.

All mortgage brokers need to be prepared for the Red Flag Alert which becomes effective Nov 1st, 2009. For further information visit the FTC website.

If you have any comments please post them below or visit PrivoCorp website (the mortgage outsourcing destination) at http://www.privocorp.com/ and submit a request on how you can be compliant with these guidelines.