Regulators Push for Looser Credit

For years lenders have been facing heavy political pressure to tighten credit. The three main tools advocated by legislators and regulators have been: Tighter credit standards – ensure borrowers are over-qualified. Strict buy-back agreements. Agencies can force lenders to buy back any loan for almost any reason, even if the loan is performing perfectly. This...

Finance Home Improvements and Be Debt Free Before You Retire

I just came back from a home show this weekend and was taken aback by how much homeowners fear financing nowadays. I understand why this is – after all, a lot of homeowners experienced a lot of pain in the last eight years. There is no question that acting irrationally can be a bad move,...

The Appraisal System is Broken (I’m whining again)

This one is long, and boring, and important. I’ve had yet one more borrower hurt by a broken system, and really want to find a solution to this. You may not know that I used to be an appraiser. In fact, I founded what eventually became one of the largest real estate appraisal firms in...

Worse Than We Thought – Mortgage Originations at 17-Year Low

From Mortgage Professional America: “Mortgage lending has hit a low not seen in 17 years as rising interest rates and spiking home prices keep borrowers at bay. Mortgage lenders did a total loan volume of $226 billion in the first quarter – the lowest quarterly amount since 1997, according to a Bloomberg report. Wells Fargo...

The Next Crisis is About to Hit

Bob Piepergerdes, director of Retail Credit Risk for the Office of Comptroller of the Currency (OCC to you) has been sounding the alarm for a while, but his warnings have received scant media attention.  What is he so worried about? As you probably know, one of the reasons for the financial meltdown was that the...

Getting a Mortgage 1 Year After BK or Foreclosure

An old client contacted me yesterday worried that she would not be able to get a mortgage to buy a home.  Her loan had gone into default a couple of years ago and a Notice of Default – the first step in the mortgage process – had been filed.  To your credit report, this is...

Will Fannie Mae and Freddie Mac Disappear?

You probably know what Fannie Mae and Freddie Mac are; at the very least you’ve heard of them and know what they do. In 2008 Fannie and Freddie were, in effect, seized by the Bush Administration and put under control of the Treasury Department.  Since then, Fannie and Freddie have collectively purchased as much as...

Does Anyone Care About Mortgage Fraud?

You might think that with extraordinarily tough underwriting guidelines that mortgage fraud is a thing of the past.  It is not necessarily so – old habits die hard for some people.  But it admittedly hasn’t been in the news much.  It turns out that might be because the Department of Justice has not made it...

Who Wrote All The Bad Loans? (And How About Now?)

I get into a debate once in a while about who was responsible for all the bad loans leading up to the foreclosure crisis.  There is a fairly common perception that brokers were entirely, or at least largely, responsible for the irresponsible lending practices. As it turns out, this is kind of true to a...

Will Government Shutdown Prevent Loans from Closing?

I’ve been hearing a lot about how underwriting guidelines are loosening up in response to the government shutdown. Not exactly… Nowadays lenders double-check and document every possible area where fraud occurred in the past.  Two of these areas – verifying social security numbers through the Social Security Administration and your income via IRS tax transcripts...