The Product and Pricing Engines (PPE) of yesteryear were an efficient substitute for the good old rate sheets. These have evolved into necessary selling tools for loan originators and an efficient system to quickly analyze potential profits by lender’s secondary marketing managers. Rate sheets and spreadsheets are things of the past. LO’s must be armed with the latest and most…
Not All Fireworks Were on the 4th of July
Just prior to July 4th, the Department of Justice announced that it hit another lender with a False Claims Act violation and fine. The most recent victim is Prospect Mortgage who was levied a fine of $4.16 million, and another one bites the dust… According to DOJ, once again a lender gets fined for misrepresentations made in connection with FHA-insured…
Non-QM Ain’t the New Subprime
Non-QM (Non-Qualified Mortgage) loans are getting a bad rap as the coming of the next subprime wave. Although they may be considered a little riskier than your standard QM (Qualified Mortgage), the perceived risk is in not having the QM’s safe harbor from repayment ability requirements. Some loans may have loan terms, i.e. interest only features, which disqualifies them as…
CFPB Comes Up Short on TRID Updates
The Consumer Financial Protection Bureau finally issued their long-awaited updates the “Know Before You Owe” rule (better known to lenders as TRID) on Friday, July 7th. The big news is not so much of what CFPB said, but more so in what was not said. CFPB addressed some areas that needed clarification. But, noticeably they side-stepped two of the main…
Loan Defects on the Rise as Business Declines
Recently, I’ve been writing about the challenges lenders face resulting from a shortage of affordable housing. With consumers having less money available for a down payment, lenders are forced to stretch the credit and income limits to qualify potential home buyers for higher priced homes. Now, we start to see the flip side. Loan defects, fraud, and misrepresentations once again…
People Are Staying Put
Hope you all had a happy July 4th holiday. It’s great to see the country come together to celebrate our freedoms and honor those who sacrificed to preserve them. Even if it was only for one day! Another thing to celebrate is the improving economy. But, with continued low mortgage rates, great mortgage products, and increasing home values and equity,…