MBSQuoteline Market Update with Lykken on Lending
Listen to this week's market update from yesterday's podcast: http://lykkenonlending.com/2017-12-11-podcast-market-update-with-joe-farr/
Market Update with Lykken on Lending
http://lykkenonlending.com/2017-12-04-podcast-market-update-with-joe-farr/
Market Update with Lykken on Lending
http://lykkenonlending.com/2017-11-20-podcast-market-update-with-joe-farr/
Blog Talk Radio Show Summary July 18, 2011: Future of Mortgage Banking (Part III); CFPB Update
The Consumer Financial Protection Bureau (CFPB) was the topic of discussion this week on Lykken on Lending. The CFPB is set to start business on Thursday of this week. It will do so without a Director, as President Obama has just announced his choice. The name Richard Cordray will likely be sent to the Senate for confirmation. His confirmation is not assured. But in defense of Mr. Cordray, confirmation of any one is unlikely without significant efforts by Republicans in the Senate to alter certain aspects of the CFPB. As was established in the Dodd-Frank Act, the CFPB is to be headed by a Director. The Republicans would like to change that to a five person commission. Also, as set forth in the Dodd-Frank Act, the CFPB receives its funding from the Federal Reserve System rather than from Congress. Senate Republicans want to see the CFPB funded by Congress so as to make the CFPB more accountable. The CFPB will be a very powerful regulator and as such both these Republican demands have substantial merit. Lets hope the President does not circumvent the nomination debate by making the CFPB Director appointment during the August recess. Click PLAY to listen to [...]
Blog Talk Radio Show Summary July 11, 2011: Future of Mortgage Banking (Part II)
Lykken on Lending is hosting a series of blog talk radio shows about the future of mortgage banking. This week’s show was focused on the future of the secondary mortgage market. Will it be different? Will the mortgage-backed security structure survive? Will the 30 year fixed rate mortgage remain an option for borrowers? Dr. Michael Lea, of the Center for Real Estate at San Diego State University, joined the show today to give his opinions on the US secondary mortgage market and compared the US market to what works in overseas mortgage markets. According to Dr. Lea, among his other comments and opinions, the 30 year fixed rate mortgage is at risk (at least it will not be the predominant instrument), the industry needs a better balance of outlets (90% government guaranteed MBS is too much of one thing), the mortgage-backed security as a vehicle will survive but needs some tweaking (like skin in the game), and covered bonds have significant hurdles to overcome before they will be widely available in the US. He also thought borrowing rates will rise as the secondary market prices in the full cost of the risk, but he thinks the increased yields on private [...]
Blog Talk Radio Show Summary November 29, 2010: Loan Officer Compensation
Loan officer compensation rules will change fairly significantly beginning April 1st of next year, a mere four months away, and very few companies have released their new originator compensation plans. On the Lykken on Lending show today there was a round table discussion about what is known to date and what are we hearing companies are considering. The plans being discussed range from very complicated to very simple. One recommendation coming from the show hosts is to “keep your plans simple. Change is always difficult and the less complicated the change, the easier it will be for originators to understand how it will affect them. Another recommendation is to back test the plans as though they were in place over the last quarter or so. The benefits of this will be to ensure the plan is not too expensive for the company and will this help the company show that the consequences of the plan will not significantly impact the originators’ overall compensation. A third recommendation is to approach the changes with the right attitude. The changes are coming. They do not have to be life altering changes. Click PLAY to listen to the podcast of this week’s BlogTalkRadio/Lykken on Lendingwith [...]
Blog Talk Radio Show Summary November 15, 2010: What has Gone Wrong?
Mortgage rates have moved higher (mortgage security prices have moved lower) and strangely enough QE2 deserves much of the blame. The Fed intended for the opposite to happen. As they purchase their $600 billion in long-term Treasury securities, the Fed expected the added demand would drive prices higher and rates lower, not only for Treasury securities, but for mortgage backed securities as well. Things have not happened as planned. The Fed began their Treasury purchases on Friday and MBS prices fell 27/32nds. The Fed continued their Treasury purchases today and MBS prices are down another 16/32nds. So what has gone wrong? Some of the issue is that MBS prices rose considerably in the weeks preceding the Fed’s announcement that they were going to buy $600 billion of Treasury securities. The much anticipated announcement had already accomplished much of the expected end result before it even started. After the announcement, sentiment toward the benefits from the plan shifted. Investors worldwide began to doubt the Fed’s ability to control rising inflation when it begins. Foreign investors recalculated their required returns after seeing the value of the dollar fall to recent lows. Political power in the US shifted from the Democrats to the [...]
Blog Talk Radio Show Summary November 8, 2010: Election’s Effect on Mortgage Industry
Glen Corso, Managing Director of The Community Mortgage Banking Project, joined the show today and offered his “inside the beltway insights on the effects the change of control in the U.S. House of Representatives may have on the mortgage industry. According to Glen, the single biggest effect will come from Barney Frank no longer being the Chairman of the House Financial Services Committee. Barney has been such a significant influence over mortgage related legislation that without him in the Chairman position, future legislation will likely be less hands-on. Glen said to expect some technical corrections to the Dodd-Frank Bill. The corrections may be a little more than technical corrections, but far short of wholesale changes the Republicans would like. He expects little to be done about Fannie Mae and Freddie Mac now that the Republicans control the House. The two parties are very far apart in their belief about the proper course of action for Fannie and Freddie and without Democratic control of both the House and the Senate neither party is likely to succeed in pushing their plan. Glen reminded everyone that funds have already been committed to Fannie and Freddie to replenish their capital as losses continue to [...]
Blog Talk Radio Show Summary September 27, 2010: Loan Officer Compensation
The new rules which beginning April 1, 2011 will govern how loan originators (LO or LOs) are to be paid have been the topic of much discussion lately. There seems to be as many opinions as there are people and there are as many unanswered questions as there are answers. To try to help bring clarity to the situation and to try to address what is known, Tony Musgrave, mortgage industry veteran and practicing lawyer, joined the show today. Tony’s general advice on this issue is to accept that change is coming and to begin to prepare for it. He said that when considering the new rules, first consider where they came from. The new rules are a result of political and public perception that the old compensation rules incented LOs to take advantage of borrowers and to put them in loan products and at loan rates which were advantageous for the originator, but not necessarily for the borrower. Tony’s advice is to interpret the new rules with this perception as the basis for your new policies. What is known is that a loan originator cannot be paid an amount that differs based on the terms of the loans he [...]
Blog Talk Radio Show Summary September 13, 2010: Business Strategies through the New Year
Having a strategy and a plan to implement that strategy is always important. For the mortgage industry, it is even more important now as the consequences from regulatory changes are likely to change the origination landscape significantly. Implementing the regulatory changes will take considerable effort in retooling systems, training staff, and monitoring for compliance. All this will come with a price tag. Some companies will choose to get out before the changes are to be implemented. Others will choose to join firms that have the resources to implement the changes. Some firms will implement policies and controls based on the strictest, most conservative interpretation of the new regulations, and others will take a more common sense approach. All this is said to support the argument that over the next year or so we will see considerable movement within the industry. Firms with capital, systems and support in place will be well-positioned to benefit from the movement. So if your strategy is to profitably grow your origination business in a compliant manner, you should have a tremendous opportunity in the coming months. Your plan should include building capital to pay for the cost of change and to support larger volumes, employing systems [...]