New Jersey Mortgage Banker Regional Conference 2010

The New Jersey Regional Mortgage Bankers conference was exceptionally good.  Mr. Levy did a great job pulling together the other states and speakers to make this event an informative and productive event.  I went to the event without my notebook.  I had to take notes on a 3”x 5” pad of paper provided by the conference host.  I thought I had lost all my notes and later found them in my pant pocket folded neatly and hidden away.  So I apologize for getting this out so late. This event is one that Quality Mortgage Services is planning to continue to support in the future.

My first set of note cover Robert Story, CMB, and Chairman of the Mortgage Bankers Association.

-Mentions of the numerous times MBA testified on Capitol Hill for the reform of FHA

-FHA provides mortgage equity

-FHA provided 30% of all mortgages in 2009

-Reform is putting FHA on sound footing

-Recommendation of the reform will be released next week. (This statement was March 18, 2009 and the recommendation can be found on the Mortgage Bankers Association web sit.)

-MBA supports HUD’s insurance premiums

-Indemnification to the lowest level

-FHA to suspend lenders – Give opportunity to clear problems prior to suspension

-FHA increase down payment to 10% for riskier loans

-FHA receives adequate funding

Ted Tozer is the President of Government National Mortgage Association (GNMA)- Ginnie Mae

The NJ MBA Regional Conference was the first public speech Mr. Tozer has made since his appointment to GNMA.

-Presented the mission statement for GNMA

-$59 Million in business

-There are market challenges for Ginnie Mae

-Support multi and single family markets to stimulate jobs and the economy

-Most of GNMA’s products are 30-yr fix rate products

-Credit risk is to ensure the loan pool can be insured by the government

-Review every part of GNMA business to improve risk

-Do things we (GNMA) have never done before in order to adjust to market and pushing the staff to new levels

-Approval process has not changed and it is a thorough process

-Working with Wall Street firms: it is very small. GNMA has a very small space in the market.  However we are look to expand.

-The guarantee of the US is very high proven by resent meetings with China

-The correspondent application should be approximately 3 months.  Send thorough applications and GNMA is looking to stream line the process to a few month rather than 6 months.

David Stevens – Commissioner of FHA.  I am very confident that Mr. Stevens has a vision for FHA not like the industry has seen in the past.  He knows the industry and has solutions.

Stevens – “It is easy to dodge responsibility but we cannot dodge the consequences of doing our responsibility.”

-FHA has too much of the market share it is a sign of illness. FNMA in 1934 was founded because it was needed to help the economy to recover.  Shifting the majority of mortgages to the private sector will help the economy recover.  When private capital returns it is a sign that the market has returned.

-FHA market has placed some stress on the market resulting in congress requiring a higher down payment from the borrower.

-There are 354 lenders suspended 3 times more than those suspended in a decade

-FHA hired it first Risk Manager

-When making decision there are 3 things considered:

                What does it do to our capital?

                What does it do to the housing market?

                What does it do to the total risk of the portfolio?

-80% of loans made did not have 5% in reserves

-Material fraud or misrepresentation leads to indemnifications to lenders

-FHA is sticking to the new RESPA rules “it had to be done”

-The Obama Administration is focused on the housing recovery

-China does not trust the loan officer in the market.  China had 30 people meet with him and grilled Mr. Stevens over the adverse mortgage market.

-FHA’s point on HVCC is… FHA like the arms-length from the broker and appraiser and capitalization will win regards to HVCC and appraisal will rally to get or earn more.

-Brokers play a scalable roll in the market.  Brokers serve a market that banks don’t.  There is a viable broker community.

-Exit from sponsorship mean more brokers will be approved.