BlogTalkRadio Summary July 12, 2010: Q&A on Mortgage Issues in DFA (Dodd-Frank Act)

2017-12-20T17:34:16+00:00 July 14th, 2010|Categories: BlogTalkRadio Podcasts|Tags: , , , , , , , , , , , , , , , , , , , |

Glen Corso, Executive Director of  The Community Mortgage Banking Project, joined the BlogTalkRadio/Lykken on Lending show again today and was kind enough to answer a series of questions from the hosts about the content of the Dodd-Frank Act (DFA).  Glen has lobbied on behalf of the industry as this bill progressed through the legislative process.  The DFA is expected to pass the Senate soon and will then be signed by the President.  It has several provisions which, when implemented, will have a significant impact on the mortgage industry.  Its implementation is many months down the road, but its content needs to be understood to the extent possible.  Many of the provisions in the DFA will not be fully understood until regulators have finalized the Bill’s implementation rules. Click on the attachment to read through an extensive Q & A on these topics. Click PLAY to listen to the podcast of this week’s BlogTalkRadio/Lykken on Lending with Dave Lykken and MBSQuoteline’s Joe Farr: Listen to internet radio with David Lykken on Blog Talk Radio MBSQuoteline supplies the essential market information necessary for effective decision making by Originators when assisting borrowers during the loan origination process, and for secondary marketing departments while managing pipelines. For additional [...]

BlogTalkRadio Podcast, June 28, 2010

2017-12-20T17:34:16+00:00 June 30th, 2010|Categories: BlogTalkRadio Podcasts|Tags: , , , , , , , , , , , , , , , , , , |

Mortgage companies and mortgage originators will be significantly affected by what Congress does in the final Financial Reform bill.  The bill made it through the House and Senate Conference Committee last Friday.   Glen Corso, Executive Director of the Community Mortgage Banking Project, returned to the show today to describe what the bill now looks like.  He focused on the two provision directly affecting the mortgage industry: Risk Retention and Loan Officer Compensation. The current Risk Retention provision actually improved in the conference committee.  There is still a requirement for originators to retain 5% of the risk on the loans they originate and sell.  This would be devastating for the industry, except for the fact they the bill exempts almost all of the loans being made today.  The bill says that the requirement to retain risk does not apply to government guaranteed loans (FHA, VA, and USDA) and all other loans “well underwritten.  Well underwritten loans are loans that are fully documented and have reasonable ratios, are not negative amortization loans or loans with large payment adjustments possible.  Most Fannie and Freddie qualifying loans would meet this definition.  Glen believes the bill will allow an allocation of the retained risk between [...]

BlogTalkRadio Podcast – June 7, 2010

2017-12-20T17:34:16+00:00 June 9th, 2010|Categories: BlogTalkRadio Podcasts|Tags: , , , , , , , , , , , , , , , , , , , |

Dave Lykken, host of the BlogTalkRadio show Lykken-on-Lending, and President of Mortgage Banking Solutions, has published an article in National Mortgage Professional Magazine titled A View From the C-Suite: Branch development ... Four “C tips from the “C Suite.  In it he discusses four things to consider when adding branches to your production organization or when seeking a new production organization for your branch.  These four tips were the topic of discussion on the radio show today.  Here is a summary the four tips, but I recommend you read the full article for yourself. Both the producing group looking to join a new organization and the funding group looking to add more production need to carefully consider any potential marriage.  Both sides should follow the 4 "C"s:  seek  counsel, consider the culture, consider capital constraints, and consider character. 1.  Counsel here doesn't necessarily reference legal counsel, but legal counsel may help minimize confusion should things ever unwind.  The counsel you should seek is industry counsel.  Talk to those in the industry who know you and the other party.  Ask if they think the two of you will be a good match.  Some personalities just don’t mix. 2.  Find out if [...]

In The News: Loan Officer Compensation and Senate Bill 3217

2017-12-20T17:34:18+00:00 May 21st, 2010|Categories: In The News|Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , |

It is being reported that Senate Bill 3217 Restoring American Financial Stability will soon pass out of the Senate.  There are many things in this bill which will effect the mortgage industry.  In an earlier blog post I discussed the likely impact of the "Skin in the Game" provisions of this bill.  In this post, I will discuss the provisions in this bill which will restrict Loan Officer compensation. Glen Corso, Executive Director of The Community Mortgage Banking Project, discussed on the BlogTalkRadio/Lykken-on-Lending show on Monday that the amendment to Senate Bill 3217 which, among other things, prohibits loan originators from receiving compensation based on the terms of the loan.  He explained that the amendment was introduced late Tuesday evening May 11th and was passed on Wednesday morning May 12th, giving himself and other industry advocates no chance to weigh in on the amendment.  The intent of the amendment is to remove any incentive for an originator to charge more in origination fees to a borrower or to give a borrower a higher mortgage rate than the basic rate and price as established by his or her origination company.  So this amendment essentially prohibits companies from paying loan officers a [...]

In The News: “Skin in the Game” – Risk Retention Amendment to Senate Bill 3217

2017-12-20T17:34:18+00:00 May 21st, 2010|Categories: In The News|Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , |

Senate Bill 3217 Restoring American Financial Stability is working its way through the Senate and is expected to be passed in the coming weeks.  Certain provisions of this bill will have a significant impact on the mortgage industry. As you may recall, the Senate Bill 3217, as originally proposed, included a provision which would have required 5% of the risk on all loans originated be retained by the originator upon sale to investors.  The provision was not clear as to which entity or entities in the origination chain would be required to retain the risk.  It was not clear whether the risk that was to be retained would be an ownership interest in the loan or reserves supported by cash.   It was also not clear how long the originator would have been required to retain the risk.  The original provisions would have been devastating to the mortgage industry.  The 5% risk retention would have forced many mortgage originators from the business and would have driven mortgage rates much higher.  After significant industry efforts, this provision was amended last week. The amendment, as passed by the Senate, does very little to answer these questions, but what it does do is exempt [...]

BlogTalkRadio Podcast – May 17, 2010

2017-12-20T17:34:18+00:00 May 20th, 2010|Categories: BlogTalkRadio Podcasts|Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , |

Senate Bill 3217 Restoring American Financial Stability was the focus of discussion on the show Monday, particularly two recently passed amendments which are of great interest to the mortgage banking industry.  The amendments deal with risk retention and loan officer compensation.  One is good for the industry and the other is not.  Glen Corso, Executive Director of The Community Mortgage Banking Project, joined the show to bring a first hand understanding of the amendments and their status. The amendment that is good for the mortgage industry deals with the risk retention provisions of the original  bill.  The original bill would have required mortgage originators to retain “skin in the game.  It would have required originators to retain 5% of the risk on all the loans they originated and sold to investors.  The amendment exempts from the 5% risk retention requirement certain mortgage loans which meet the definition of Qualified Mortgage Loans.  Since 90% or more of today’s loans will meet the definition of Qualified Mortgage Loan, the amendment significantly reduces the number of loans on which originators will be required to retain risk. The amendment that is not good for the mortgage industry restricts how loan originators are to be [...]

BlogTalkRadio Podcast – Apr 26, 2010

2017-12-20T17:34:18+00:00 April 28th, 2010|Categories: BlogTalkRadio Podcasts|Tags: , , , , , , , , , , , |

Mitch Kider, Weiner Brodsky Sidman Kider PC, was back by popular demand. Last week’s topic of paying overtime to loan originators created many questions which Mitch this week tried to answer.  The majority of the questions had to do with (a) what options are available to consider loan originators exempt from overtime; and (b) if they, in fact, cannot be considered exempt, when do they need to begin paying OT and how do they do it. No one liked the answers given.  The recent reversal of opinion by the Department of Labor says that loan originator duties no longer qualify originators as exempt under the administrative exemption.  The outside sales exemption will not apply to most originators as they, too often, work from their office or home office.  Mitch made the case for originators to be considered exempt under the professional exemption.  This will become more and more applicable as the recently implemented  loan officer licensing and certification laws kick in.  Someone in the industry will need to work with the Department of Labor to determine if loan originators then should be exempt under the professional exemption.  If the DOL agrees, we may have the answer we want, loan originators [...]

BlogTalkRadio Podcast – Apr 19, 2010

2017-12-20T17:34:18+00:00 April 22nd, 2010|Categories: BlogTalkRadio Podcasts|Tags: , , , , , , , , , , , , , , , , , , , , |

MBS prices are down 3/32nds this morning.  Leading Indicators were released at 10:00 a.m. et and were a little stronger than expected.  Last week was another good week for mortgage rates.  Mortgage rates fell about 10 basis points during the week.  The Fed Beige Book painted a pretty picture for mortgage rates, slow growth and low inflation.  CPI confirmed the low inflation part as it reported prices in March rose at a 1.1% annual rate.  Volatility continued during the week.  Volatility has persisted since the end of the MBS purchase program on March 31st.  As the Fed is no longer a consistent big buyer, the market is functioning more naturally and that includes reacting more significantly to economic announcements and changing sentiment. Mitch Kider, of Weiner Brodsky Sidman Kider PC, joined the show to discuss the result of a recent Department of Labor ruling which changes an interpretation of labor laws as it relates to loan originators (LOs) and overtime.  The new ruling overrides previous rulings that allowed LOs to be exempt from overtime as they were considered to be performing administrative duties.  Now their duties are not considered administrative and the labor laws says, if they do not meet [...]

BlogTalkRadio Podcast – Mar 29, 2010

2017-12-20T17:34:19+00:00 April 22nd, 2010|Categories: BlogTalkRadio Podcasts|Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , |

MBS prices were volatile last week and fell about half a point during the week.  Most of the push for MBS prices lower came from weak Treasury auctions.  On Wednesday the 5 Yr Treasury Note received lower than usual demand, especially from foreign investors, and the yield required from the bidders was higher than the previous trading range.  The weakness in the Treasury auction spilled over to the MBS market.  The economic data released during the week was mixed with Durable Orders better than expected and the housing data was a little weaker than expected. All of the focus in Congress now that Health Care has passed seems to be with the Restoring American Financial Stability Act of 2010.  This proposed law will have sweeping changes for the mortgage industry, if passed.  It includes the creation of a new regulator for consumer protection, retention of 5% of the risk on loans originated and then sold, and increased HMDA reporting requirements, among other things.  This 1300 page bill seems to be on a fast track. Discussion continued on the risks and benefits of converting a mortgage company’s operations from a best efforts delivery of loans originated to a mandatory delivery.  The [...]

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