WHAT'S NEW

HMMMM well lets see. I read that Countrywide is posting record foreclosures in fact they were twice as high as January last year. Who said you reap what you sew? I don’t think I have read recently that Bank of America is just so excited to buy Countrywide but I am sure they are. I know I would be if I was the biggest ego bank of the world. Watch out for that reaper!!!!

A lot of big lenders have put a moratorium on foreclosures for 30 days to see if some of the folks who are going to foreclosure could work out some options. I didn’t know you could get a call returned in 30 days. All kidding aside I think the industry sees the benefit of doing whatever it can to slow down the foreclosure snowball. I know a young man who works in that area for CW and tells me that most buyers don’t trust their mortgage company enough to even talk to them. Imagine that?????

The president did sign the economic stimulus bill which is good, I still am not sure how much money I am going to get but I am checking the mailbox everyday for sure. I can’t decide what I am going to do with my money. I think Karren wants a new sink for the kitchen she is fixing to remodel. Maybe she will find the check and spend it before I get the chance. I was thinking about putting it back into the economy where I knew it counted and buying as much beer as I could. I hope my Govt. check is big; I am going to need it if I reach my economic dreams.

One thing the economic stimulus bill did was to raise the maximum loan amounts for regular conventional loans. That won’t be for the Dallas Fort Worth area since we are not a high cost area. Pity!!! Also the FHA limit was raised to just over $271,000.00. Now that would be great for this area and would help plenty with our market but guess what. We can’t make the loans yet because all the greedy folks are now trying to figure out how to make a bigger profit ON them. I am not sure who all oF “them” are but you can bet the politicians and Wall Street is in there for sure. Instead of just saying yes lets do something that makes total sense and could help, “them” is trying to decide that these loans need to be in a different kind of security and all kind of other things so guess what, the price of loans, (the interest rate) will be higher and more profit will be made. Greed all the way baby.

Oh yes if you don't think Hillary is a big enough screw up already, read the following article:

http://www.chicagotribune.com/news/columnists/chi-080217chapman-column,1,4589006.column

Enough for this addition, good grief!!!

More to come

Lonny

CURRENT LEGISLATION

There has been a lot of legislation of late. Some has past and some has not. I will focus a bit on those that would seem to affect our business and the current issues we are facing.

Mortgage Fraud: The only piece of legislation that seems to have been made into law is that which makes mortgage fraud illegal. The problem is that mortgage fraud was already illegal and there are not enough cops to enforce the current laws we have. There are a lot of people going to jail and there will be a lot more but to simply pass more laws to expand or redefine the definition is not likely to help with the problem. Those criminals who perpetrate mortgage fraud are here to stay just like car thieves and drug dealers.

Predatory Lending: Many well meaning politicians have come to the rescue to try to pass legislation dealing with Predatory Lending. The problem is today as it has been for the last decade is simply you can’t define Predatory Lending to the point that any law would make sense. What is predatory to one group is a business model to another and short of price fixing there will never be any middle ground on this that can be put into an enforceable law. Buyer beware is today and in the future will be the buzz word for anyone entering into the mortgage lending arena. The lawmakers would love to pass laws that would require lenders to all be ethical but it just won’t happen. Most politicians need to understand it themselves in my opinion.

Mortgage Reform: Now this hits on a broad base for sure. Let's take an example dealing with FHA loans. FHA reform was a hot topic and well it should be. FHA was created to help the regular guy get a loan when regular sources were not available and FHA sure needs a new look. The current reform package needs to raise the FHA loan limit, allow for risk based pricing, and redefine what it takes to get an FHA loan. When FHA loans were created people had the ability to get money for down payment and for the most part had good credit or could at least access a system that would help them get it corrected. The politicians have killed anything that might help people buy homes because they just don’t get it, won’t listen, and really don’t care. FHA reform as goes with most smart legislation is gone with the wind.

There is certainly more legislation out there currently and more to come but a focus should be how to get more buyers qualified to buy the glut of homes on the market and those to come. From the looks of things, that just won’t happen.

More to come

Lonny

RATES

As promised today starts a series of Blogs dealing with what is happening in the mortgage world today. Now don’t confuse this with anything other than what my opinion might be. For instance I know little about interest rates and what makes them do the things they do on a daily basis. My comments will be more directed to how rate changes apply to a borrower who is trying to make sense out of what he or she hears on a daily basis. The one thing I do advise my customers to do is this: If you hear me say rates will go one way or the other then do the opposite of the thing I tell you to do because I am usually wrong.

So what is happening with interest rates? The first thing you need to know is that what the Federal Reserve does has no guaranteed effect on what mortgage rates do. I did ask one person who writes an article to explain it to me one day and in his arrogant way he explained that. If the market perceives a Fed interest rate cut to be non necessary then mortgage interest rates will go up. If the market thinks the Fed made a good decision based on the state of the economy then mortgage rates will come down. Maybe he is correct and maybe not, nothing happens the same in all cases.

Now this is a fact, the rates at my company were lower before the Fed cut the interest rates than they are today. Now remember the Fed has cut rates twice in the recent past. Everyone that I talked to who was trying to make a decision on their loan immediately thought interest rates on mortgages would come down. Not so, and if you ask me what rates will do in the near future I will tell you they may go up, or they may come down, or they may stay the same. Now the smart people tell me that rates could really come down or really go up based on some kind of formula that I don’t really understand.

Remember this, mortgage rates are fairly stable and have been for a long time within a narrow range. Some time ago I thought rates would stay within 1% of 6.5% on the up side and down side and I think if you will look it has been that way for a long time. Maybe just a safe guess, but still accurate all the same. Now is a great time to buy a home, rates are on the low side of the average that I think we will continue to have and home prices are on the low side currently based on the current situation.

More to come

Lonny

NEXT WEEK

Well I am up to speed technically so to speak and getting fired up again to post more regular blogs. Next Monday I will start a series on where I think the mortgage loan industry is today and where it is headed tomorrow. I can sense the anticipation in you already!!

More to come, I promise

Lonny

HAPPY BIRTHDAY

My aunt Myrna asked me this morning when I was going to get back to posting my blogs on a regular basis. I must admit I called to tell her happy birthday one day late. I made up a rather lame excuse but as luck would have it she forgave me. As I recall last year I asked her to go to lunch, she did and then I had forgotten my credit card. I can never remember doing that in my life. She paid the bill, (it was a great lunch as I recall). She forgave me for forgetting my card.

The story gets even worse, I told her I would pay it back and I don't remember ever doing that. I hope she forgot so I don't have to be forgiven once again. With all that going against me, today I called a day late to wish her happy birthday. Man I better get with it pretty fast. My luck may be running low. I am not sure how forgivable I am at this stage.

Anyway back to the blog, she encouraged me to keep going with it as she enjoys reading it. May be something to do with the fact that she really is quite supportive of the things I do now and have done in my life.

And for that, this one is for Myrna!!!

With love

More to come

Lonny

WHERE HAVE I BEEN

You may have noticed that I have been a little non consistent in my posts of late. Really short of turning this into a diary I am looking for something different in the mortgage news or in my personal travels that might be worth blogging about. I am not finding much of late except the status quo seems to be the status quo. My home computer died and we did not ever back it up. Don't make that mistake as I did. My hard drive with years of stuff is gone and can't be recovered for less than $2000.00. OUCH!!

I had a nightmare the other night that Bill Clinton was in fact our new first lady. I woke up with a knife in my hand pressed against my neck screaming it can't be so!!! I guess something could be worse but I can't imagine what. That would be my opinion of course.

I listened to a conservative radio talk show host in the metroplex the other morning go on and on about us part time bloggers who thought we were writers and without really having a clue. That certainly hit close to home.

With all that said be patient, I am convinced there is:

More to come

Lonny