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5/21/10--Loan Production Slowed By Collateral Valuations?; Financial Reform And Mortgages; Consumer Spending and Saving; Delinquency Rates |
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Sunday, 23 May 2010 08:05 |
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Sometimes things are simpler than they seem, other times not. For example, China's consumer spending grew at an 8% rate for the last 10 years. But interestingly, consumer spending in China only accounts for 35% of its GDP compared to 70% here in the United States. China's public debt as a percent of their GDP is only 18%, in this country it is 53% - a telling statistic. The average Chinese consumer puts aside 25% of their disposable income in savings, which as a country adds up to about $2.5 trillion a year. Many of us live beyond our means; most of them live beneath them. There are differences, however, that account for the reduced consumer spending: prices are expensive there, health care rare, unemployment benefits scant, and pensions are poorly administered. There are virtually no student loans. But overall, consumption is king here in the US whereas production is more important in China. At this point, much of the world is relying on the Chinese consumer to start spending more - but don't count on it. |
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5/19/10--Originator Feedback From The Trenches; FHA Broker/Lender Approval Guidance; HomePath Update; Citi Non-Agency Lending; 95% MI |
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Wednesday, 19 May 2010 07:02 |
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My comments yesterday about the general state of mortgage bankers and brokers drew some interesting responses.... |
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5/14/10--Why Isn't Loan Production Picking Up?; More on Originator Compensation and Risk Retention Legislation; HomePath Update; Less and Less Product |
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Friday, 14 May 2010 07:04 |
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Mortgage rates are steady near the lowest they've been all year - is your production heading higher? Probably not, so why isn't mortgage production per agent picking up? Analysts point out that mortgage spreads have not done much, and even if Treasury rates drop, mortgage rates may not follow. On the other hand, many lenders believe that the majority of borrowers who can refinance already have done so, and that until appreciation or guideline loosening appear, things will be slow. Every loan is a battle and borrowers appear to be in no hurry whatsoever. If your staff is busy, you are bucking the trend, and it seems companies have begun to cut profit margins. Mortgage traders continue to report low volumes being sold to them of about $1 billion a day. Although this is not good for the overall industry, it is good for mortgage prices relative to Treasury prices: the laws of supply and demand should help mortgage rates stay low relative to benchmark Treasuries. |
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5/17/10--Big Banker MBS Holdings Decline in Q1 2010; More Originator Job Offers; Secondary Marketing Conference; Investor Regs |
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Tuesday, 18 May 2010 06:48 |
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It's Monday, which these days includes a post-mortem accounting of Friday's FDIC moves. One thing to note - continued small bank closures don't make large mortgage investors really want to increase their exposure in that sector. Why would it? Southwest Community Bank (MO) is now part of Simmons First National Bank (AR). Midwest Bank and Trust Company (IL) is now part of FirstMerit Bank (OH). Satilla Community Bank (GA) was taken over by the FDIC and Ameris Bank (also of Georgia). Liberty Bank (MI) has changed its logo to Bank of Ann Arbor's. |
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5/13/10--Senate Votes to Limit Broker Compensation Options and Require Bankers to Retain Risk; Industry Job Losses; More on Loan Buyback Requests; |
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Thursday, 13 May 2010 06:51 |
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Well, let’s not beat around the bush. According to the popular press, the Federal Reserve scored a victory and mortgage bankers suffered a defeat yesterday when the Senate approved an amendment by a 90-9 vote to preserve Fed supervision of hundreds of smaller banks, instead of transferring them to other regulators. More importantly the mortgage professionals, the Senate voted 63 to 36 to approve the Merkley amendment and end mortgage kickbacks and "liar loans". Sometimes one wonders if politicians know basic economic principals – bond math economics dictate that an investor will pay more for a higher yielding instrument, other things being equal. Regardless of my opinion, yield spread premiums are believed to have encouraged brokers to steer consumers into risky, high-interest loans even if they qualified for cheaper loans. And liar loans let consumers qualify for loans they could not possibly repay if they opted to simply state their income or other assets, rather than waiting for verification. |
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