Blog Talk Radio Show Summary January 7, 2011: Keep Your Flow Servicing

2017-12-20T17:34:15+00:00 January 11th, 2011|Categories: BlogTalkRadio Podcasts|Tags: , , , , , , , , , , |

Michael Lau, EVP of Phoenix Capital, a specialist in evaluating and brokering mortgage servicing rights, joined the LykkenonLending blog-talk-radio show this week to provide his opinions on the status of the mortgage servicing market.  According to Michael, the market for servicer-to-servicer bulk transfers is just about non-existent.  The only portfolios changing hands are done to move servicing of delinquent or distressed loans to special servicers.  Fortunately, the market for servicing on newly originated loans is still active.  There are a number of servicers buying this servicing, but they are paying very little for it.  Michael sees the price paid for flow serving as being between two and four times the service fee.  I remember being paid six to seven times the servicing fee on 2003 and 2004 originations.  How can servicing on loans that may never pay off (4% note rates) be worth only two to four times?  Servicing on today’s loans is worth more.  Now is a good time to consider keeping servicing on new production, if you can.  Hold on to it for three or four years and then sell it.  You need to have cash reserves, experienced people, and quality systems to be a servicer.  If you [...]

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 [...]