Mortgage News for Thursday June 25th 2009

I just found out at AHK we have 3 investors who will do the IRS Down payment Assistance Program using the $8000 tax credit available to new home buyers. I will have more information on this exciting news tomorrow.
Thursday's bond market has opened up slightly despite no highly important economic data on the calendar today and a positive opening in stocks. The stock markets are showing minor gains with the Dow up 34 points and the Nasdaq up 15 points. The bond market is currently up 4/32 from yesterday's close, which should improve this morning's mortgage rates by approximately .250 of a discount point over yesterday's morning rates.

This morning's release of the final reading to the1st Quarter GDP didn't reveal any significant surprises. It showed that the economy contracted at a 5.5% annual rate during the first three months of the year. This was a small upward revision from the previous estimate of a decline of 5.7%, meaning that the economy did not shrink as much as previously thought. However, since this data is old now (second quarter initial reading comes next month), the size of the revision was not enough to influence bond trading or mortgage rates.

The Labor Department gave us last week's unemployment figures, reporting that 627,000 new claims for benefits were filed. This was an increase from the previous week's revised total of 612,000 and much higher than forecasts of 600,000. But, as with today's GDP reading, this data is not considered to be of high importance to the markets or mortgage rates.

Also worth noting is today's 7-year Treasury Note sale. Yesterday's 5-year Note sale went pretty well, but the FOMC statement took center stage during afternoon trading. If today's sale is also met with a good demand from investors, we may see bond prices rise later today and mortgage rates move lower. Results will be posted at 1:00 PM ET.

Tomorrow morning has two reports on its calendar. May's Personal Income and Outlays data will be posted early morning. This report gives us an indication of consumer ability to spend and current spending activity. Analysts are expecting to see an increase of 0.2% in income and a 0.4% rise in the spending portion of the report. Smaller than expected increases should be good news for the bond market and mortgage rates.

The second report of the day and the last relevant data of the week will come from the University of Michigan who will update their Index of Consumer Sentiment for May. An upward revision from the preliminary reading of 69.0 would be considered a negative for bonds. The earlier data is the more important of tomorrow's two releases.

The Mortgage Business and Stanley Bing

I regularly read Fortune magazine just to see whats going on in the financial world since since mortgage rates are driven so much by oil prices as of late and the bond markets. The last page of Fortune Magazine always has cool stories and this months editorial by Stanley Bing caught my eye. His column this month is about his experience with refinancing his coop in New York City and the hoops he had to jump through to get it done. Stanley Bing is the alter ego of Gil Schwartz a high ranking Exec at CBS. Since he is a pretty well off fellow you would think he would have no problem refinancing or doing anything to do with money. But his story really hit home because of what documentation he was required to provide to satisfy the underwriters.

As with most large companies the bank he was refinancing through had outsourced their underwriting to a foreign country. His particular underwriter only knows what the computer tells her is required and if she doesn't get these documents she will not approve Stanley's loan for his apartment. Things went from bad to worse. Every document needed at least two pieces of paper for backup, which then required additional documentation. Sometimes things got "lost." He began to have trouble sleeping. Then one morning He got an e-mail from the Speedy Approval Department. This situation is what we deal with everyday all day with underwriters and setup clerks everywhere. I tell all my loan officers to document, document and then document some more just for things like this.

Last week, when all seemed perched on the verge of success, Mr Bing got an e-mail from the Speedy Approval Department requesting my appearance at a certain time and a certain date at Room 101 of the corporate headquarters. "For final adjudication of this matter," the note said. It was not signed. That was a week ago. I'm happy to tell you that I did get my refinancing package through at last. And in the end, I don't think I had to sacrifice too much.If more borrowers were like Stanley it would be a lot easier for us to get loans through in a timely fashion. But the same can be said about Loan Officers that turn in packages to processing with an incomplete 1003 and the loan has to close yesterday.

The point of this new blog is to relay stories like these and many others to more people within our company. We need to all roll upour sleeves and get back to doing business like we used to before we got in this mess. If you want to read more of Stanley Bings editorials you can go to http://money.cnn.com/magazines/fortune/stanleybing/ or http://www.stanleybing.com .

If you have a funny story or an informative blog posting you want to share feel free to email me at nick@ahkloan.com.

New blog about the mortgage business and AHK!

Hey everyone I have finally got America Home Key Inc a blog where we can find out the latest happenings at corporate and the mortgage industry as a whole. I will also be including links to training available from AHK Corporate and through Marie Murry at Apex Training Group. We will try to get as many of our underwriters as we can to do guest blogs and tell us whats coming up as far changes they see and changes that have occurred and affect our daily lives as loan originators.

Our industry is steadily changing at a pace that hasn't been seen in many years and definitely not by the current generation of loan originators. This blog will be available to everyone at AHK to comment and respond to our posts. We will be posting new legislation that has been passed recently and what is in the pipeline for future legislation sessions that will change out industry. Most people I have talked to said the mandatory registration as a mortgage originator will be a good thing since everyone will be on the same level and we will not have Broker title versus the Loan Officer title. The only problem is everyone will have to get their 20-30 hours of Continuing Education in before the deadline.

Marie Murry with Apex Training Group has been doing her CE classes since the beginning of 2009 with America Home Key employees to get everyone ready for the change we saw coming. She has put on classes about Ethics and Morals to the most basic of How to Complete a 1003 Loan Application. These classes are open to everyone even if you do not work for AHK since everyone needs their required hours of CE.

Chas Winckel and Don Harris have really stepped up to try and fill the void that was left by Melinda Truitt who did so much for our company. Chas and Don have stressed that everyone needs to make sure they use Oasys and check your email on the system everyday to stay informed about changes. This blog will also be a place to keep up with changes but more on the public level.
Bryon Cunningham is probably one of the best DE underwriters in the FHA mortgage world and a make sense underwriter that wants to approve your loans. I know AHK is working to improve our rates and be able to bring us competitive pricing to help you close more loans.

I hope this blog is what everyone was talking about at our last meeting with Chas on Wednesday at our USDA Training and CE we had with Marie. Please comment and let me know what you guys want to see on the blog and where you want it to go from here.