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National Loan Originator Licensing May 20, 2008

The “Federal Housing Finance and Regulatory Reform Act of 2008″ is out. Here’s the PDF and here is the summary of the Dodd amendment. There’s a section inside Senator Dodd’s amendment that calls for national loan originator licensing. The first stop is page 34 where the definition of an LO is provided:

LOAN ORIGINATOR

A) IN GENERAL
The term ‘‘loan originator’’
(i) means an individual who
(I) takes a residential mortgage loan application; and
(II) offers or negotiates terms of a residential mortgage loan for compensation or gain;
(ii) does not include any individual
who is not otherwise described in clause (i) and who performs purely administrative or clerical tasks on behalf of a person who is described in any such clause; and (iii) does not include a person or entity that only performs real estate brokerage activities and is licensed or registered in accordance with applicable State law, unless the person or entity is compensated by a lender, a mortgage broker, or other loan originator or by any agent of such lender, mortgage broker, or other loan originator.

(B) OTHER DEFINITIONS RELATING TO LOAN ORIGINATOR.
For purposes of this subsection, an individual ‘‘assists a consumer in obtaining or applying to obtain a residential mortgage loan’’ by, among other things, advising on loan terms (including rates, fees, other costs), preparing loan packages, or collecting information on behalf of the consumer with regard to a residential mortgage loan.

This broad definition of “loan originator” means that we’ll be licensing LOs no matter where they work: broker, banker, consumer finance company, or credit union. There will be 20 hours of required, pre-licensing education and a national test delivered by the National Mortgage Licensing System and Registry. 75% to pass.

There’s way more to this bill than Nat’l LO licensing. 387 pages more. But that’s a good start.  Here’s the MBAA recap:

WASHINGTON, DC – Senator Chris Dodd (D-CT) and Senator Richard Shelby (R-AL), Chairman and Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, today announced that the Committee passed “The Federal Housing Finance Regulatory Reform Act of 2008,” legislation which includes major efforts to help prevent the rising number of foreclosures, to create more affordable housing for Americans, and to reform the regulation of the government-sponsored enterprises (GSEs) in order to improve their role in the housing finance system. The legislation passed by a vote of 19-2.

The Mortgage Banker’s Assoc has lots more to say to policymakers in regards to how ginormously specialer they are than mortgage brokers.  Bankers don’t want to be lumped in together with brokers, especially with any law that will require fiduciary duties.  According to Housingwire, MBAA says that “any legislation of a fiduciary relationship tied to borrowers should extend only to brokers and not to bankers, because brokers are an intermediary working with bankers on borrowers’ behalf; it also suggests that fee-level disclosures and limits on some forms of broker compensation, including yield spread premiums, need not apply to bankers’ own origination activities, because bankers are subject to greater supervision and regulation than brokers.” 

Wait, didn’t a fair number of lenders on the implode-o-meter hold a banking charter?

Interestingly MBAA rolled over and gave in to loan originator licensing for LOs who work at a bank.  See the bullet points at the end of this press release.

Along with national LO licensing, the act brings the “Hope Now” program which has been voluntary, into law, gives President Bush the government-sponsored entity reform he’s been looking for, and extends a hand to the affordable housing coalitions. There’s no way he will veto this during an election year.

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Get Preapproved before Memorial Day Weekend: More Changes with Fannie Mae

Fannie Mae will be releasing a new guidelines for their AUS over the Memorial Day weekend: Version 7.0.    Loans submitted prior to Memorial Day with an approval via Fannie Mae’s Version 5.7 will be honored.   Fannie Mae is saying that there will be more Expanded Approvals (higher rates) than what we have experienced.   I’m not saying that’s good or bad…just that if you’re considering a mortgage, getting approved before the Memorial Day weekend could be to your advantage.  Here are just some of the changes:

Loan to values greater than 85%.  Private mortgage insurance is no longer considered a “mitigating” factor for higher loan to values.   The more equity in the property, the more Fannie Mae smiles upon you (this is a not a change, the pmi factor is).

“Authorized Users” on credit cards will no longer be considered.   It was not uncommon for parents to add their child to their credit accounts as an “authorized user”.   This may have been done so that the child could have credit available in the event of an emergency (picture a college student away from home).   Once people figured out that the timely payments made by the parent (or credit payer) was benefiting the “authorized user”, it didn’t take long for some people to actually sell their credit history on that account by allowing strangers to become “authorized users”.   

Debt to income ratios tighter.  “In general, the updates to the maximum allowable total expense ration in DU (Desktop Underwriter aka Fannie Mae) Version 7.0 will be more conservative…”  

Loan Type/Level of Risk.   With Version 7.0, Fannie Mae is associating levels of risk with varios products (from lowest to highest):

Version 5.7 viewed fully amortized fixed rate, fixed period (3-10 year) ARMs as having the least amount of risk with balloon and interest only mortgages having moderate additional risk.   Negative amortized mortgages were considered the riskiest…now they’re off the charts.

Condos are now considered a higher risk than single family detached.  Version 7.0 views one-unit properties that are not “attached condominiums” as less risk than attached condominiums and two-unit properties.  Three- and four-unit properties have a higher level of risk associated than condo and duplex properties. 

Bankruptcy, mortgage delinquencies and foreclosures.   A bankruptcy needs to be fully discharged and 24 months since the date filed.

If a borrowers credit report shows a mortgage that was reported 60 or more days delinquent in the last 6 months, they will receive a “refer”.  

If the borrower has had a foreclosure reported within the last 5 years, they will also receive a “refer”.    If the date of the foreclosure cannot be determined, if the foreclosure was filed within the last five years and has not been satisfied, the loan will be declined.

Self-employed borrowers will no longer be considered “an additional layer of risk”!   Hey…I have to end this on a positive note!  :)

Expanded Approval is being pumped up.   Fannie Mae is anticipating more EA approvals.  An EA approval means that the borrower’s scenario is “less than perfect” or some prefer to say “A Minus”.  There are different levels of EA approvals (such as EA-1, EA-2, etc.).   Expanded approval also come with higher rates than a typical conventional mortgage as it’s risk based pricing. 

As Jillayne stated, guidelines will continue to tighten for a while with Fannie/Freddie and the private mortgage companies.  This is again, another reason for people, professionals and consumers alike, to learn all they can about FHA which may be an option to consider over an Expanded Approval and tougher underwriting standards with conventional mortgages. 

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Sellers and Agents: Don’t Rule Out FHA Buyers May 19, 2008

I was just working on a finance flyer for a listing agent…something I haven’t done in years!   Anyhow, the home is priced at $442,000 and she requested a 30 year and 5/1 ARM both with 20% down for scenarios…I added FHA at 3% down.  The property is in King County and would qualify under the FHA Jumbo program.   Until the end of the year (I suspect the “economic stimulus” loan limits will be extended beyond) Sellers have an opportunity to expose their homes to buyers beyond the normal “jumbo” or conforming market.  

Here’s a comparison:

30 Year Fixed with 20% down at 5.75% (APR 5.902%).   Principal and interest payment = $2,064.  Cash needed to close = $88,400 plus closing costs of approx. $6,000 (the rate is priced with 1 origintation/discount point) plus prepaids.    This rate requires a mid credit score of 720 or higher. 

5/1 ARM-LIBOR with 20% down at 5.25% (APR 6.810%).  Principal and interest payment = $1,953.   Cash needed to close = $88,400 plus closing cost of approx. $2,350 (the rate is priced with zero discount/origination points) plus prepaids.   This rate also requires a mid credit score of 720 or better.

FHA-JUMBO 30 Year Fixed with 3% down at 6.25% (APR 7.030%).   Principal, interest and mortgage insurance = $2,850.64.   Amount needed to close factoring down payment and closing costs is $20,350 plus prepaids.   FHA is not credit score sensitive (yet) and buyers who are truly FHA approved have done so via a “fully documented” loan.   They’re pretty darn serious!

When you compare 20% down conforming to the 3% minimum down required for FHA; it’s the difference of having approx. $100k for your down payment and closing costs to having a quarter of that.   Some folks have the income (they still have to qualify with FHA) but they’re shy on that kind of savings.   Maybe it’s their first house or perhaps their savings is tied into their retirement or children’s college fund.   These are buyers you don’t want to rule out.

FHA Jumbos allow buyers to have a loan amount of $567,500 in King, Pierce and Snohomish Counties with as little as 3% down payment (some lenders require 5% down).    With second mortgage’s evaporating and fewer “piggy back” options available, buyers who have less than 20% down where their loan amount will be over $417,000 will be considering FHA as an option.    For example, sales price of $625,000 with 10% down (loan amount $562,500) would be an excellent FHA JUMBO candidate…only offering cash or conforming products will pretty much limit your buyers to those with 20% down.   FHA buyers do not have to be minimum down…they can be less than 20% down or have a credit score or perhaps one of the borrowers has a mid score of 679.

I’ve written before about why Sellers should consider FHA…however with the temporary expanded loan amounts…now it’s even more compelling.   

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Friday’s Rates May 16, 2008

Rates continue to be very volatile…I’ve seen up to 3 rate sheets from one lender so far today.  Consumer Sentiment came in at an all time low and bonds did ralley early on but have lost their gain.   To see live rate quotes for various scenarios, check out my Twitter.

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  The conforming rate quote below is based on owner occupied with a minimum credit score of 720, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000.  This scenario includes reserves (taxes & insurance) not being waived.   Rates quoted are priced based on a 45 day lock with 1 origination/discount point and there are no prepayment penalties on any of the rates quoted below. 

30 Year Fixed:  5.750% (APR 5.902%)

30 Year Fixed with 10 Year Interest Only:  6.125%  (APR 6.267%)

15 Year Fixed: 5.250% (APR 5.500%)

7/1 ARM - LIBOR:  5.250% (APR 6.613%)

5/1 ARM - LIBOR:  5.000% (APR 6.759%)

Conforming-Jumbo Rates.   Pricing is based on the same criteria above except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties.  (For other conforming-jumbo loan limits in Washington state, click here); specifically priced for a sales price of $650,000 and a $520,000 loan amount.

30 Year Fixed:  5.875% (APR 6.021%) 

30 Year Fixed with 10 Year Interest Only:  6.375% (APR 6.513%)

5/1 ARM 5.250% (APR 6.894%)

JUMBO (Non-Conforming) Rates.   Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).   The specific scenario used to price the rates below is a sales price of $850,000 with a loan amount of $680,000.

30 Year Fixed:  7.500% (APR 7.758%)

FHA.  Pricing based on credit score of 620 or better and loan amounts up to $362,790 for FHA in King, Snohomish and Pierce Counties.

30 Year Fixed:  5.875% (APR 6.656%). 

FHA-Jumbo. Pricing based on loan amounts from $362,791 - $567,500 for King, Snohomish and Pierce Counties.  For other loan limits in Washington State, click here.

30 Year Fixed: 6.125% (APR 6.905%)

VA.  Pricing based on credit scores of 620 or better based on loan amounts up to $417,000.

30 Year Fixed:  5.875% (APR 6.188%)

Prime Rate (what HELOCs are based on):  5.000%  

This is just a small sample available of rates and products.  Rates are as of Friday, May 16, 2008 at 1:30 p.m. and may change at any time.  Available programs may change at anytime as well.   This is not a guarantee nor is it a commitment of interest rate.  

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Keeping the Keys to Your Home May 15, 2008

I love reading the comments over on the CR blog. They’re great entertainment when I need a break from trying to dig my way out from deep inside the new WA State Distressed Property Law class I’m writing. Tonight, as I was reading the comments from this post on Fannie Mae lifting the “declining markets” rule, I found a link to this website (hat tip w.)

Keepingthekeys.com is providing hope (for a fee) for homeowners who wish to use legal options to stay in their home as long as possible, or to prevent foreclosure altogether.

We’ve all read, and some RCG commenters have complained loudly, about loan servicing companies being slow to approve short sales, modify loans, or engage in any kind of foreclosure workout with homeowners. Well, perhaps the threat of predatory lending and violations of state and federal law at loan origination will bring loan servicers to their knees.

The legal team at Keepingthekeys.com seems to be focused mainly in California, where the current count of 1000 foreclosures per day seems to ensure a model for business growth for the next decade.

So what can homeowners do who are located in Washington State and want legal help? Sometimes homeowners in financial distress just want an attorney to take a look at their documents.  Taking this simple step is better than full blown homeowner denial, and legal help can often be more affordable than the homeowner might think.  I’ve been on the look out for Seattle area law firms offering affordable legal counsel for homeowners facing foreclosure.  Now I’ve found one and I bet you’ll never guess which firm decided to extend a hand to this market.  Thanks, Craig and Marc.

Now, what to do about all those homeowners who committed stated income fraud at application in 2007.  Hmmm.  Perhaps there’s a reason why foreclosure rates continue to climb.  Maybe it’s not just “denial” or “loan servicing” backlogs.  

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Countrywide facing shareholder lawsuit May 14, 2008

Directors and officers of Countrywide Financial will have to defend themselves against “shareholder accusations of insider trading and an overall failure to monitor lending practices that led to the company’s collapse” per the New York Times tonight.

Rejecting the arguments of Countrywide executives and directors that they were unaware of lax loan operations that led to ballooning defaults, Judge Mariana R. Pfaelzer of Federal District Court in Los Angeles ruled Tuesday that she found confidential witness accounts in the shareholder complaint to be credible and that they suggested “a widespread company culture that encouraged employees to push mortgages through without regard to underwriting standards.”

Will this lawsuit set a precedence for further legal action?

Hundreds of mortgage companies have failed in the last year or so, but few executives or directors have taken responsibility. That makes the ruling significant

Looks like the lead plantiff is the Arkansas Teacher Retirement System. I wonder how many other plantiffs are out there if we look at the hundreds of bankrupt companies. Probably thousands if we count all the individual employees who held stock in their companies.

For the next decade, we should all expect underwriting guidelines to further tighten until defaults start to subside. With 1000 foreclosures happening each day in California, a slowdown doesn’t seem to be in sight any time soon.

Frivolous lawsuit or corporate officer accountability 101, or ?

If you were a stockholder of BOA, would you vote to continue to move forward and purchase Countrywide?

Some of us will argue that lawsuits will lead to increased costs. With or without this lawsuit, borrowing costs will rise, and they should. Countrywide and all lenders severly underpriced risk. I believe this lawsuit has the potential to impact mortgage lending business practices for years to come.

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Financing an Investment Property May 12, 2008

Obtaining a mortgage for a non-owner occupied propery is much different than buying one you will reside in.  For starters, qualifying is tougher and mortgage interest rates are higher as it’s a riskier transaction for the lender.   Here are some quick tips to help get you started if you’re considering buying an investment property.

Plan on using at least 20% for your down payment plus closing costs.   With a 25 or 30% down payment, you will receive a slightly better interest rate.   Just to give you an idea, here is a sample of some current rates based on a single family dwelling with a sales price of $450,000 for a 30 year fixed mortgage and a minimum 720 credit score:

Owner Occupied with minimum 20% down:  5.75% priced with 1% origination/discount point (APR 5.904%)

Non-Owner Occupied (NOO) with 20% down: 6.375% with 1% point (APR 6.537%)

NOO with 25% down: 6.250% with 1% point (APR 6.413%)

NOO with 30% down: 6.125% with 1% point (APR 6.289%)

Of course, you can always pay more in points to have a lower rate.   This is just to provide you with an apples to apples comparison.

There are two camps for qualifying for an investment property:  those who are proven at managing rentals and those who are buying a rental for the first time or who have less than 2 years history.  If you have less than a 2 year history, then it’s likely that you will not be able to use rent credit from the proposed purchase.  Lenders allow 75%  of the rent to be used for qualifying purposes.   Proving you’re a financially successful landlord to the underwriter will take your last two year’s complete tax returns including the Schedule E’s.   If you can qualify for the full PITI payment on the investment property along with your current PITI payment on your residence, then the underwriter may only require a regular appraisal.  Otherwise, count on the appraisal costing almost twice as much as a typical appraisal for conventional financing.   Fannie and Freddie also require a minimum of 6 months reserves (cash assets after closing) for NOO borrowers.  

Odds and Ends

As always, I highly recommend that you meet with your local Mortgage Professional as soon as possible if you’re even just considering obtain a mortgage for any reason (investment property, residencial purchase or refi, vacation home, etc.).

 

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MGIC Tightens Underwriting Guidelines…Again May 9, 2008

MGIC has released underwriting guidelines that will go into effect on new applications as of June 1st. Here is the PDF.  Didn’t MGIC just finish doing that in March? From Housing Wire:

For all markets — so-called restricted markets or otherwise — MGIC said it will essentially no longer provide MI for any Alt-A loan. The company also said that it will no longer allow cash-out refinances in any market, investment properties, multiple units, and option ARMs to be eligible for its mortgage insurance. The insurer also will require a minimum of 3 percent down on any eligible purchase transaction

and this:

Loans in the conforming jumbo range — in a non-restricted market — must have a minimum of 90 percent CLTV and a minimum FICO of 700 to qualify for MGIC underwriting; in restricted markets, the CLTV requirement is tightened to 85 percent. MGIC said it will not insure any loan above $650,000 in any market.

As I have been saying for many months now, underwriting guidelines will, and should, continue to tighten until defaults begin to slow down.

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Friday Rates

Good news: conforming-jumbo rates have come down significantly!  In fact, the 30 year fixed rate for mortgages priced between $417,001 - $567,500 (for King, Pierce and Snohomish Counties) are the lowest since I’ve started publishing rates at RCG.   

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  The conforming rate quote below is based on owner occupied with a minimum credit score of 720, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000.  This scenario includes reserves (taxes & insurance) not being waived.   Rates quoted are priced based on a 45 day lock with 1 origination/discount point and there are no prepayment penalties on any of the rates quoted below. 

30 Year Fixed:  5.750% (APR 5.902%)

30 Year Fixed with 10 Year Interest Only:  6.000%  (APR 6.140%)

15 Year Fixed: 5.250% (APR 5.500%)

7/1 ARM - LIBOR:  5.250% (APR 6.502%)

5/1 ARM - LIBOR:  4.875% (APR 6.756%)

Conforming-Jumbo Rates.   Pricing is based on the same criteria above except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties.  (For other conforming-jumbo loan limits in Washington state, click here); specifically priced for a sales price of $650,000 and a $520,000 loan amount.

30 Year Fixed:  5.875% (APR 6.021%) 

30 Year Fixed with 10 Year Interest Only:  6.375% (APR 6.513%)

JUMBO (Non-Conforming) Rates.   Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).   The specific scenario used to price the rates below is a sales price of $850,000 with a loan amount of $680,000.

30 Year Fixed:  7.500% (APR 7.758%)

FHA.  Pricing based on credit score of 620 or better and loan amounts up to $362,790 for FHA in King, Snohomish and Pierce Counties.

30 Year Fixed:  5.750% (APR 6.527%). 

FHA-Jumbo. Pricing based on loan amounts from $362,791 - $567,500 for King, Snohomish and Pierce Counties.  For other loan limits in Washington State, click here.

30 Year Fixed: 6.000% (APR 6.776%)

VA.  Pricing based on credit scores of 620 or better based on loan amounts up to $417,000.

30 Year Fixed:  5.875% (APR 6.188%)

Prime Rate (what HELOCs are based on):  5.000%  

This is just a small sample available of rates and products.  Rates are as of Friday, May 9, 2008 at 12:30 p.m. and may change at any time.  I’ve all ready seen many lenders issue two rate sheets so far today.   Follow me on Twitter to see rates I’m quoting.  Available programs may change at anytime as well.   This is not a guarantee nor is it a commitment of interest rate.  

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The Future of Mortgage Brokers April 30, 2008

The reputation of mortgage brokers as a group has been tarnished by local and nationwide “brokers gone wild” stories that don’t need to be rehashed here. We all know there are some exceptionally fine mortgage brokers who perform exemplary for their clients. This blog article is not another attempt to throw mortgage brokers under the bus but to ponder the future of the mortgage broker.

We all have witnessed the closure of over 254, and counting, wholesale lenders. Brokers who are not actively thinking about the possibilities of more wholesale lines disappearing must still be living in denial. From the CR4RE Newsletter:

“Depository lenders who wish to commit portfolio dollars to keeping their origination operations going will do so only in the retail channel. This not only cuts loose brokers; it cuts loose a lot of correspondent lending in which smaller depositories (like community banks and credit unions) have been off-loading mortgages onto the big aggregators (who are currently shutting down their correspondent operations). There’s never been any upside of carrying a wholesale operation in a downturn—the whole point of wholesale lending is that it can be thrown off in a downturn, since brokers aren’t your employees—but it has never made less sense than it does today to stay in that channel. This has “tightening” effects in and of itself, beyond guideline or price tightening: more loans are being made by an originator who has some stake in the outcome (not as much as they ought, but more than a broker does).”

As more wholesalers shut down, some mortgage brokers and LOs will give up and try to obtain work at a bank or credit union where they may find the culture radically different. This could turn out to be a very good fit for some folks.

Some mortgage brokers will believe that the market will come back (mini refi booms tend to fuel that belief) but we are already hearing now that not all these inquiries and refi applications will translate into closed deals. Some customers simply no longer qualify due to continuous tightening of underwriting guidelines. Beyond the conforming purchase money loans and refis, there are three growth areas that are easy to see: FHA, hard money lending, and working with investors.

Mortgage brokers with correspondent lines of credit, with FHA approval in place, with in-house underwriting, compliance, auditing, and training all in place will be able to weather the storm and I predict the cream of the crop will survive. The key will be how well capitalized they are against lender buyback provisions, and if they control and maintain their own database of existing clients. Mortgage brokers who have largely left the client database maintenance in the hands of their LOs might lose access to those (hopefully very well served) clients if their loan originators cannot make the transition from writing, say 25 slam dunk stated income refis per month to 3 FHA deals a month.

Brokers who rely mainly on radio advertising and direct mail may keep the phones ringing with incoming leads. However, brokers are casting a very wide net at a relatively high cost. The ROI must be justified and that may mean cutting staff or giving fewer leads to fewer LOs, lowering LO compensation split, or pushing the lead cost onto the LO.

We would all hope that consumers are starting to wise up about not responding to mortgage spam, unsolicited mortgage offers that sound too good to be true, and lead generation sites. I recently noticed that lowermybills.com took a step into the gutter and moved from the world of deceptive banner ads to my junk mail folder.

FHA lending means making a commitment to compliance and training. This takes time, money, and an internal motivation to transform a brokerage from small to medium and actually hire real people to do the job of “compliance officer” and pay taxes on your W-2 employees. Not all brokers will make the decision to seek FHA approval. “Hey, conforming loan limit increases are going to be approved! Why bother with FHA?” In the future world of the mortgage broker that is already here, underwriting guidelines are nowhere near the good old days nor will we find them at the conforming lenders anytime soon. That leaves hard money.

Another growth area for mortgage brokers that do not want to seek out FHA approval is to become experts at finding private financing or hard money lending for their clients. Yes interest rates are going to be higher and documentation will be heavier. Yes, loan-to-value ratios will be tougher and appraisers aren’t as easily threatened with retaliation if values aren’t met. However, mortgage brokers who want to specialize in finding hard money or private money for consumers who do not meet FHA or GSE conforming guidelines can create a niche market for themselves and grow their business. This is a good opportunity for brokers who do not want to compete in the conforming market. Caveat: Make sure you have a competent attorney on retainer who is familiar with the Consumer Loan Law, Usury Law, and, well, everything in here. Trust me on this one.

Both FHA and hard money lending will require an investment in regulatory education. This means having systems put into place to make sure your loan originators are actually following state and federal lending laws on a daily basis and not just saying “This is HOEPA, meeting adjourned.” This means moving beyond just giving LOs a laptop with mortgage software and a lead sheet. Not all brokers are positioned to make this shift.

Also from the CR4RE Newsletter:

“The upside for the serious real estate investor is the elimination of unqualified buyer competition…smaller lenders with better service provision and local smarts may again be able to compete on rate. The bad news is that no one will compete on product: you’ll likely get the same terms offered from any lender you choose, unless you’re willing to pay a hefty premium for something “out of the box.”

Working with real estate investors is another niche market for mortgage brokers as a future growth area for the end of 2009 and 2010 as we have yet to see home prices bottom out.

We are all living through changes of historic proportion in the mortgage market. The future of today’s mortgage broker depends on the broker’s ability to adapt to what lies ahead. With heavy competition from banks in the conforming loan market, brokers who can reach consumers in small communities that banks can’t reach, will still be able to compete effectively for conforming market share. FHA lending, private money and investors are all growth areas for brokers.

What has been most challenging for me is to watch it all happen in slow motion. We know what’s coming. The waiting is the hardest part. Here’s a little Tom Petty for you.

Note: You can access the full January edition of the CR4RE newsletter at no cost here, (link opens PDF) which is written by Calculated Risk and Tanta. Quotes in this blog article are used with their permission. Annual subscription is $60.

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