Below are two notable items on this slow news day, as well as a primer on how mortgage banks lock loans and hedge risk. (1) The bankruptcy trustee for Thornburg Mortgage sued Goldman, Barclays and other big banks for a combined $2.2 billion, blaming them for its bankruptcy. Meanwhile, former Thornburg CEO Larry Goldstone is [...]

FHA Commissioner David Stevens resigned Thursday and will vacate his post end-of-April. Former mortgage banker Stevens stepped in July 2009 and helmed the FHA during a tricky time: FHA-insured home loans were jolted back into relevance when Congress drastically increased FHA loan limits to (regional caps of) $729,750. But this increase happened in a crisis [...]

Moody’s Cuts Greece To Junk Moody’s cut Greece’s credit ratings to junk status (Ba1). Greece has been downgraded to non investment grade and Spain cannot seem to find any funding to rescue its savings banks. Of course, the rate on any fixed income security tied to Europe has gone up to compensate investors for the [...]

Update on State & National Mortgage Licensing The SAFE Act continues to weigh on some agents’ minds. Different states have different interpretations. In general, the SAFE Act requires all mortgage loan officer license applicants to complete 20 hours of pre-license education, including three hours of federal law and regulations, three hours of ethics, including fraud, [...]

Jargon Watch I had my standard “beginning of the year” meeting with the family. My soon-to-be 18-yr old son reported that this time in his life is “unprecedented” for him, and that he is working on his “exit strategy” from high school. He then said that this would be an “historic opportunity” for me to [...]

The former Atlanta quarterback Michael Vick has left the federal prison to attend a hearing in Virginia. He said that prison has completely changed him. It’s true … he’s more of a cat person now. Thornburg Bankruptcy Thornburg Mortgage, long thought of as good lender for “make sense” deals, announced that a consortium of investments [...]

Prepayment Effects On Rates One of the things that impacts the value of servicing is the length of time that the company servicing the loan (i.e., collecting the payments) expects to have the loan on their books. No one wants to pay a 2 or 3 point premium for a loan that they service for [...]

Good Luck on Rate Locks As I was getting ready to water down my kid’s milk yesterday (hey, things are tough, and no one is immune!) an agent called and wondered, “What is with all the late afternoon re-pricing for the worse?” Investors will change prices for any number of reasons. No one denies that [...]

When I was a kid, boy bands wrote songs about girls, cars, and school. Well, I guess the times have changed. This one, from Isaac Hollingsworth, comes from the son of a principal in a mortgage-related recruiting firm. State of Mortgage Banking/Brokering Where are the investors going? How about, “Away”? A good-sized, relatively well capitalized [...]

The analysis of Fannie & Freddie’s plan for forestalling foreclosures continues. As one astute loan agent quipped, “All I have to do is stop making mortgage payments and I can get a 3% rate?? Sweet! Who needs a mortgage broker!” Speaking of Freddie, they announced a 3rd quarter loss of $25.3 billion, and the company [...]