THE BASIS POINT

Loan Apps Up 6% Last Week, Loan Disclosure Rules, Oh My…

“Holy Good Faith Estimate, Bat Man!” Here are HUD’s answers to all your questions about the new Good Faith Estimates & RESPA.

In the old days, hurricanes were named after women. Why? Because when they arrive, they’re wet and wild, but when they go, they take your house and car. We now have Hurricane Bill in the Atlantic, which reminds the markets that it is the time of year when every major storm that comes and goes tends to move the price of oil. Fortunately for anyone who drives a car, however, the price of oil is sinking, given continued slow economic news around the world.

Aside from that, there is no economic news today, aside from whatever the equities markets might be up to. Yesterday rates worsened slightly in spite of the Fed buying their usual allotment of securities – this time mostly 5% and 5.5% securities (5.25%-6.125% mortgage rates). In spite of little news, the bond market is on a tear this morning! The price on the 10-yr is better by almost a point, and the yield is down to 3.41%; 30-yr mortgage prices are better by between .250-.375

Loan Applications Up 6% Last Week
The Mortgage Bankers Association’s application came out, as it does every Wednesday, showing apps were up last week almost 6%. Refinancing was up almost 7%, and purchases were up almost 4%. But by most accounts things are pretty slow out there, which some attribute to rates staying where they’ve been for a while, and others attributing to folks being away on summer vacations. Per the survey, refinancing accounts for a little over 53% of applications.

Lender & Builder News
Citi reminded their clients that starting on the 24th, “If the conventional loan was closed, or construction loan modified into permanent financing more than 60 days prior to being purchased by CitiMortgage, the seller must provide a new appraisal or an appraisal update to support there has not been a decline in the subject’s property value since the last valuation was performed. The new appraisal or appraisal update must be dated within 60 days of purchase by CitiMortgage for conventional loans.” In addition, Citi implemented some credit policy overlays which “apply to all loans processed as DU Refi Plus, regardless of DU findings: maximum LTV/CLTV/HLTV is 95% /95% /95%. (Over 80% LTV is only permitted if MI is not required.), minimum FICO score is 660, and the 5-4-3-2-1 buy downs for Corporate Relocation borrowers are discontinued for loans registered on and after 8/24/09.

The stockholders of Pulte Homes and Centex Homes approved their merger, which completes the $1.3 billion purchase of Centex by Pulte. The expected savings amount to about $350 million per year.

ING, still a presence in the wholesale arena, has seen its stock take a dip after the company’s second-quarter profit had been almost wiped out by falling property prices and rising bad-debt charges. Last week ING said its profits dropped 96%. Ouch. ING said the value of its real estate holdings fell, it had write-downs on a portfolio of residential mortgage-backed securities in the U.S., and the banking business took provisions to cover customers who may be unable to repay their loans.

GMAC Bank (GMACB) Correspondent clients were reminded that “the revised eligibility requirements for FHA Roster Appraisers that becomes effective for case numbers assigned on or after October 1, 2009. All appraisers chosen or approved to conduct appraisals of properties that will be security for FHA-insured mortgages must be “certified” by the State in which the property to be appraised is located; or by a nationally recognized professional appraisal organization, and have demonstrated verifiable education in the appraisal requirements established by FHA. Are there enough of these appraisers to go around? Perhaps not, so GMAC tells clients that the requirement has been phased in. But no Later than October 1, 2009, all FHA Appraiser Roster appraisers in all states must be state certified in order to be eligible to conduct appraisals for FHA-insured mortgages and remain on the FHA Appraiser Roster.

Daily Humor
A young man takes the required exam to become a Buddhist Monk, passes with flying colors and heads off to the nearest monastery to begin his training.

When he arrives at the monastery, he meets with the Abbot for a training session to introduce him to his life as a Monk. The Abbot explains to the young man that, in order to be a monk, he must take a vow of silence and can only utter two words every five years. He will work in the fields during the day and in the library in the evenings. The monk-in-training tells the Abbot he understands and begins his training.

For five long years, the young monk toils in the fields and studies in the library. At the end of the first five years, the monk meets with the Abbot for a performance review. The Abbot says: “You have performed well during your first five years, and you may now break your vow of silence; you may speak two words.” The trainee replies “Food Cold.” The Abbot sends the young monk back to work.

For another five years, the monk toils in the fields and studies in the library. At the end of the second five years, the monk again meets with the Abbot for a performance review. The Abbot says: “You have again performed well during your last five years, and you may now break your vow of silence by speaking two words.” The trainee replies “Bed Hard.” The Abbot again sends the monk back to work.

For a third five years, the monk continues to toil in the fields and study in the library. At the end of the third five years, the monk meets yet again with the Abbot for a performance review. The Abbot says: “You continue to perform well, you should be proud of your work, and you may now break your vow of silence by speaking two words. The monk replies “I quit!”

The Abbot says “Doesn’t surprise me! You’ve been b-tch-ng ever since you got here.”

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