Marc's Mortgage Matter's

In totally unrelated news to mortgage banking, GFE's, and investor changes, Canada's last known First World War veteran, John Babcock, has died at age 109. Babcock was born on an Ontario farm in 1900 and enlisted to join the war at the age of 16 after lying about his age. (The United States has one known surviving WW I veteran, Frank Woodruff Buckles of West Virginia, who recently turned 109.)

A real estate agent wrote to me and said, "I was explaining to a listing agent as to why we needed an appraisal review on her property last night. What that entailed, why they are done, etc. etc. She responded with, 'Why does the lender care about the appraisal when the buyer is putting a lot of money down?' She went on to say, or ask, 'Why didn't I take this loan to a big bank?' I responded with, 'Do you mean like World Savings or Washington Mutual or Bear Stearns or Thornburg?' She said, 'Yes, there must be lenders who don't care about such things.' I guess she hasn't seen or heard the news in 2-3 years. I was shocked." Many of you now know how many odd and weird manifestations can sneak into a typical loan application of late.

Will the $1.5 billion plan rolled out last Friday by President Obama help the average home buyer? Nope. First, it is a proverbial drop in the bucket - remember that the Fed is buying over $2 billion a day currently. Second, it is directed toward California, Nevada, Arizona, Michigan, and Florida. It is targeted at preventing more foreclosures (Nevada has been able to chant "We're #1, we're #1" in foreclosures for over three straight years.) and the money, re-directed from the TARP bank bailout, will go toward homeowners who have lost their jobs, owe more than their houses are worth, or cannot afford to make monthly payments. State and local agencies will be given the leeway to tailor programs for the money, Obama said. The U.S. Treasury will approve the program proposals. Funds will be allocated through a formula based on home price declines and unemployment, so no, it doesn't help us folks.

Its gotten really tough to do mortgages. Lenders and banks are being overly nit-picky and unrealistic in making the loan application a nightmare for many. Even folks with 780 scores and 4 Bentley's are required to confirm their brief size. That's exactly what happens now, and as a 15 year mortgage loan originator I find nothing sadder than this. It's a total shame. The truth is this hurts the lending clients the most and the long time originators who have spent their entire career doing it right are right behind them! The problem is, I don't see a good fix in sight. A friend in the industry mentioned to me about fellow loan officers; "This is a sign that our industry is cleaning up. This non-professional needs to go back to selling cars. He is crying because he has to do his job. How absurd that a loan officer should have to actually key in correct information into a loan application! I say good riddance to these folks who dimensioned the value of the great loan officers out there."

While the inventory-led "technical" economic recovery pushed the latest revision of the nation's Gross Domestic Product to a robust 5.9% increase in the fourth quarter of 2009, more than a few signs this week pointed to a much more muted pace of growth. Although it would be hard to find any group who might cheer on stumbling economic growth, would-be homebuyers and refinancers do benefit to some degree as a weak trajectory means continued low -- and possibly falling -- interest rates in the days ahead.

Although interest rates were only mildly higher of late, there was a falloff in mortgage applications, according to the MBAA. The Fed's surprise move to the discount rate may have spooked some borrowers into thinking that all interest rates were kicked higher. Regular readers know that not only is that not the case, but also that the Fed doesn't control mortgage rates directly (some present conditions excluded). This week, the overall average for 30-year fixed-rate mortgages tracked shed a lone basis point (.01%), ending at 5.40%.


Bob, an older extremely wealthy widower, shows up at the country club with a breathtakingly beautiful and very sexy 25 year-old blonde.
She hangs onto Bob's arm and listens intently to his every word. His buddies at the club are all aghast.
At the first chance, they corner him and ask, "Bob, how did you get the trophy girlfriend?"

Bob replies, "Girlfriend? She's my new wife!"
They're amazed, but still ask, "So, how did you persuade her to marry you?"
"I lied about my age", Bob replies.
"What?! You are 70... did you tell her you were only 50?"
Bob smiles and says, "No... I told her I was 90."