New Mortgage Data Requirements from FHFA
Submitted by
CalculatedRisk on Mon, 01/26/2009 - 11:48am (100 comments)
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It's re-regulation time.
o
So they will just mark them all as NINJA and call it an update?
Evil Nemo! I have never, ever been first.
That's good.. as I'm LONG regulation.
What a concept!
jo6pac
Is really going to help anything currently going wrong?
Or just CYA and more work for paper-pushers...
Broward was right. Data mining is the wave of the future!
Yep, now is a great time to actually monitor for accountability sake.
sheesh...
I don't see how these changes should be necessary, nor how they will positively impact anything.
Better to set standards for each hand that touches it, and then declare a universal loan number(record number) which stays with the loan from birth to perpetuity. Like an SSN for loans. As long as everyone in the change associates their data with this number...we should be able to cross reference anything and everything.
So now that the horse is out of the barn, we've scheduled a door closing for the start of 2010.
Better than writing a book of poems about the picaresque quality of the door as it hangs there open.
Markets open!
Requirements? Next they'll want documented income.
CBR, well if we close the door now, at least it will keep the squatters from enjoying the barn...
It always warms my heart to see token measures being brought forward as the ship continues to list.
So everyone that wants to be a mortgage originator for a living now, please line up right over here!
"The Euro Won't Be around in 20 Years: Jim Rogers" Now that Rogers is on the Death to the Eurozone bandwagon, that leaves the USD as the sole Western currency that isn't going to be gone in 20 years?
Speed, I'm trying to refi now and have been asked to provide two years tax returns, four weeks pay stubs and two months bank statements so that's already in practice once more.
Meh - not so much re-regulation, as simply capturing a little extra forensics data.
This strikes me as a no-brainer. This is also the kind of simple, smart change I can believe in! Just putting those tags on there sends a message, without adding any other regulation.
a Plane! a Plane!
Citigroup wants to buy a $50 million corporate jet?
If you got it, flaunt it.
Will this make them eligible for golden parachutes and multiple bailouts?
OT:
Many states, including Maine, Ohio, Washington and New York, want to close or consolidate prisons to save money. Here in Maine, Gov. John Baldacci wants to mothball part of Charleston Correctional Facility and relocate nearly 40% of the inmates, which would cut work-release crews.
But this farming town of 1,500 wants its criminal element to stick around. Town leaders say they don't know what they will do without the free or ultra-cheap labor the jailbirds provide. "Oh my goodness, gracious, they are such an asset -- they are our public-works department," said Ms. Hall.
404 | MiamiHerald.com
NEEDED TO QUALIFY
The new conditions include:
No more than 15 percent of unit owners can be 30 days or more past due on association fees.
For new condo buildings and condo conversions, at least 70 percent of units must have been sold or put under contract. That's up from 49 percent previously.
Fannie will have to review condo buildings itself to make sure they meet Fannie requirements -- at the lender's expense. Before, Fannie relied on the lenders to perform these reviews.
Charles Foschini, vice chairman of debt and equity finance for brokerage CB Richard Ellis in Miami, said Fannie was protecting investors, borrowers and taxpayers, as it should in a climate of increased risk.
Borrowers will benefit, he said, by knowing they are moving into a condo complex that is adequately funded and has plenty of reserves, allowing them to predict their monthly expenses.
''From the taxpayer's perspective . . . the quicker we can instill sounder underwriting practices for mortgages for Fannie or anyone else the more confidence we'll have in the market,'' Foschini said.
`NAILS IN THE COFFIN'
But many condo buildings won't meet those requirements, meaning the buildings most in need of bringing in fresh buyers will increasingly have trouble doing so.
Sharon Dodge, president of the condo association at The Venetia, a 30-year-old building next to the Venetian Causeway in Miami, said about 32 percent of unit owners were past due -- more than double Fannie's new rules.
She described the rules as ''driving the nails in the coffin,'' just as the association is making headway on collecting delinquent payments and when sales were finally picking up.
''To have the major source of loans draw a line through us is terrible; it's wrong and it shouldn't happen,'' Dodge said. ``The feds can't pull the rug out from under us.'
only about 8 year's too late.
Seriously you can write all the regs. you want....even attach some strong sounding language but as always it will not matter unless it's actually enforced and verified. I think this industry, more than any other-with the exception of the casino over at the options desks, has had a somewhat large problem with this before....
Ciao
MS
The whole Citigroup buying a new private plane thing is bizarre. It's almost like they WANT to get nationalized (or at least help build a public case for it in the media)...
Good point Builder Bob, the old "Hey! Look over here!" move...
EvilHenryPaulson | 01.26.09 - 3:10 pm | #
-----
"Oh my goodness, gracious, they are such an asset -- they are our public-works department," said Ms. Hall.
...
But now that budget cuts could close the facility, he says, "People are concerned. Who is going to pick up the litter?"
-----
Your comment left me speechless. It almost read me as if "They are taking our slaves! How will we ever survive without our indentured servants?!"
I live in a freakin' Bizarro World nowadays. Prisoners are good. People spending their time and energy improving their own community bad.
Now is a great time to minimally move the barn door to "less wide open."
Wish I had the inside track.
I'd go long on the bull and longer when real interest rates went below zero, short the "time-bomb" markets through the downside, buy gold througout the latent low risk era and sell at maximum panic; then buy up all the fire-priced goodies for the next run. Currency risk isn't anything if you know the sequences and watch over the dials and levers.
Money for nothing. And a superpower for free.
It's almost like they WANT to get nationalized (or at least help build a public case for it in the media)...
Builder Bob | 01.26.09 - 3:12 pm | #
Any truth to the rumor the name of the corporate jet is, "Brer Rabbit"?
So the appraiser gets tagged if the borrower gets foreclosed on...GREAT! Heard from a fellow appraiser that this was the case. He is being sued for a borrower defaulting. I guess the appraiser has to now order W-2's, Credit Reports, and verify income before we evaluate the collateral. This is in STARK contrast to our uniform standards of professional appraisal practice. The home value is NOT influenced by the purchaser OR who the lender may be. I guess we just throw out all those damn standards and if Mr. Rockefeller is buying...the sky is the limit and if Joe 6 Pack is buying...it ain't worth shit!!!! I have to CYA don't ya know!
Ok,
So now they will know who the originating individuals and companies are....so what?
When a loan goes bad, isn't it a little too late to do something worthwhile about it? Loan level indicators my ass...useless drivel.
"So now they will know who the originating individuals and companies are....so what?
When a loan goes bad, isn't it a little too late to do something worthwhile about it? Loan level indicators my ass...useless drivel."
Then they force the originator to buy back the loan. Something they used to do in the past. And the originating company forces the broker to buy back the loan.
Speed, I'm trying to refi now and have been asked to provide two years tax returns, four weeks pay stubs and two months bank statements so that's already in practice once more.
Comrade Kristina | Homepage | 01.26.09 - 3:08 pm | #
Back to sanity. It never should have been any different.
I guess it is EVERYBODY ELSE'S FAULT but NOT the BANKER!!!! (Fill in the blank) the bastards now and make the world a better place!
It always warms my heart to see token measures being brought forward as the ship continues to list.
No ponies, just pwnies. | 01.26.09 - 3:07 pm | #
New Regulation: No more ice on the deck of the Titanic!
[i]Then they force the originator to buy back the loan. Something they used to do in the past. And the originating company forces the broker to buy back the loan.[/i]
I understand. But, how long do they need to season for? A lot of these loans going bad are pretty old...these aren't loans originated four months ago.
CONJURE'S FUN FACTS
BEANS AND BULLETS DEPARTMENT
They also might be hunkering down. Hale said canning and freezing supplies turned up on Nielsens list of fastest-growing supermarket items for the 52 weeks ended Nov. 1, a sales performance he cannot recall seeing before.
The increase likely reflects a trend of people growing more of their own food or buying fresh food in bulk at farmers markets and putting in the proverbial larder.
We havent seen that since the 1930s, Drewnowski said.
http://www.pantagraph.com/articles/2009/01/26/family/doc497b9a874378c381379792.txt
It has to start somewhere. Of course this doesn't rectify 8 years of crap standards. But those of you decrying the implementation of accountability now - why? Why NOT start requiring it again?
Seems like crying that your team didn't win the big game, so no use preparing for next season.
I get the feeling I's being manipulated by a pseudo "red neck"
Safe Haven | The Hilarious Stuff Revolutions Are Made Of
only about 8 year's too late.
Seriously you can write all the regs. you want....even attach some strong sounding language but as always it will not matter unless it's actually enforced and verified. I think this industry, more than any other-with the exception of the casino over at the options desks, has had a somewhat large problem with this before....
Ciao
MS
MS
Yep. And regulation is only your friend when the regulators are competent and you don't have issues with regulatory capture.
That's the issue that has to be addressed foremost and in as much as it's not I don't think you can expect the long-term outcome of more regulation to be positive.
That regulation is just as likely to be a tool for future fraud and abuse if there's no accountability or moral leadership.
Homework assignment:
Take all municipal, state, and federal borrowing, deficit spending, present and future obligations, AND add costs of bailout.
Presume a decade long contraction of 5% y-o-y.
Calculate total indebtedness in gross, as a percentage of GDP, and in relation to world GDP. Calculate the rates of taxes, inflation, and marginal default to sustain such debt while maintaining bare sustenance economy, military, social outlays, demographic changes.
Reconcile with modeled growth. Determine probability of sovereign default.
Recommend action to ameliorate contraction, arrest and expand employment, meet interest obligations and formulate means to maintain government programs.
Demonstrate there is a free lunch, and Can have Cake and eat it too.
Game over, cry, baby, cry. That is all there is gonna be left.
Ah Ezra, you're right on time ! Bet you thought I'd forgotten your Christmas bonus. There you are.
Five dollars... maybe I'll go the movies...by myself.
Half of that is from me!
Thank you Mr. Mortimer....motherf....
If you count all the red, green and purple Skittles you can figure out if the pony is holding out on you.
Not sure how beneficial this will be without better regulation (either by state or federally). If the originator is thinly captalized you can't get much trying to push the loan back. If the originator is cut off, closes and the owner re-opens under a different name will Fannie catch it?
Loan level indicators
starting at the bottom
They also might be hunkering down
A lot of people aren't doing any hunkering. A friend of mine went to lunch last week in a local $30/entree restaurant. It was as packed as a survivalists pantry.
timmy-time!
Ciao
MS
So the appraiser gets tagged if the borrower gets foreclosed on
Money Man | 01.26.09 - 3:18 pm | #
That's a pretty far stretch.
Do your normal excellent appraisal work, and don't worry about it. And don't accept engagements from schlock LOs.
Rob Dawg,
I referred to your portland implosion comment here:
Portland Housing Blog: Oregon banks cut dividends
Could you please expand on that comment here or at the PHB.
Timmay!
(has he been sworn in yet?)
Hale said canning and freezing supplies turned up on Nielsen's list of fastest-growing supermarket items for the 52 weeks ended Nov. 1,
mp | 01.26.09 - 3:24 pm | #
Tell me about it!! I'm always surfing craigslist for used canning jars, and there just aren't any these days. Luckily neighborhood barter works with my retired neighbor who can get them at estate sales for cheap.
I'm glad people are getting more into keeping a full pantry though.
Geithner is supposed to be approved today. Probably what the rocket-shot is about.
I keep my Ball jars in my 7 figure commode, fer sure
surveys say over half of the 'merican public does not think a tax cheat (read Geithner) should be confirmed.
POIC,
Dunno, looks just like the end of day jam job the Euro exchanges got...or it's trying to look that way.
Geithner is supposed to be approved today. Probably what the rocket-shot is about.
Pissed Off In California
I haven't been paying attention.
Is he another Wall Street connected super-criminal?
Is he another Wall Street connected super-criminal?
A well respected man about town?
Geithner ...Is he another Wall Street connected super-criminal?
ac | 01.26.09 - 3:38 pm | #
If he isn't now he will be soon.
Are you joking AC?...see Rubin et al. for a wonderful reliving of the not so distant past.
Ciao
MS
Oh good,something new for Cheney's NSA computers to do.
Bottoms are in the markets. Time to get back in. Fatten that calf some more before he's slaughtered
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In 2010??? Wow, talk about the barn door closing...
The Palm Beach Post reported Monday that the tree in front of Bernard Madoffs Palm Beach home has been covered in toilet paper. Teenage boys claimed credit for the prank, according to the Post, saying they lost their trust funds in the Madoff scandal.
Be wary of ex-trust fund babies
does anybody think Thain had plastic surgery to look like Rubin?
Recap on the job losses of the day:
Bloody Monday: Over 65,400 jobs lost - Jan. 26, 2009
"Bloody Monday: More than 50,000 jobs lost"
Attaching identifiers to loans. Hmmm, does IBM know about this? Or EDS? Or ???
Sounds like a massive computer project in the works. Who gets/wins the bids? Have they started a feasibility study on this yet? Ordered the new and very necessary equipment to store this info? When will training classes start? Auditing and quality control procedures initiated?
Most important - have funds been allocated for such a radical venture? Would a couple hunderd million $$$s be sufficient to do the job?
"Be wary of ex-trust fund babies"
And current ones to boot. Damn near have ruined SF in the last few year's.
Ciao
MS
I'm just waiting for someone to scream at 1st amendment rights. You know, there's now way they government should be given the right to track a loan back from a borrower to the lender, broker and appraiser.
I'm just waiting for someone to scream that if we allow this travesty of justice the next thing you know they'll be taking away our right to own fire-arms.
FHFA Announces New Mortgage Data Requirements.
Ah, the helmsmen of the America_Titanic fiddle on their knobs on the way to the bottom.
It's a good thing since about 1/2 of the mortgages now are FHA.
Pissed off in California....I'm not saying that ex Govenor Spitzer wasn't a dog or got what he deserved, But he was not a friend of wall street, and went after them big time, and now that he is gone....well lets just say the the street is getting what they want and in a fast way.
Someone was mentioning using Google news to do a survey of stories about depression in the MSM.
Below I have done a Google trends query for the terms "recession" and "great depression" as a proxy for economic depression..I purposely didn't use "depression" on its own because of its other connotations.
Anyway the key point I am trying to make is when recession became a watch word in the MSM at the beginning of 2008 (see pt. A) depression was not a popular query but as the crisis unfolded toward the end of 2008 you see "great depression" queries growing in prominence.
Google Trends: recession, great depression
BTW, mp, any news stories I post in the future will be of a positive nature..along the lines of "fireman rescues frightened kitten from tree"
I don't want to be contributing to the advancement of "the clock"
bob, I wonder if you google "Greatest Depression" what the rise would be?
Kristina, "Greatest Depression" does not register..not enough queries?
I came up with 203,000 hits when I googled it. I'm sure that will grow soon
Okay, the fact is that the GSEs generally used to track defaults by party, so that if they detected a troubling pattern they could bar further activity from that source.
This is not really new, except it is an expansion. As far as I know, Fannie used to maintain a "trouble list" of appraisers who came up short.
The bottom line for the GSEs is that they don't have the staff to screen everything up front, so they really survive by figuring out who the bad actors are and then blacklisting them. If banks are buying up wholesale loans, the GSEs want to know who the originating broker and appraiser are so that they can make sure they aren't taking crummy loans from the same source through another channel.
Yes, this does work, because it gets the really bad people out of the marketplace, and supports the honest people.
The big difference here is the GSEs will make the data available to everyone. There should be more of this. IMHO one of the contributors to the housing bubble (admittedly in a small way) is the GSEs held over 50% of historical mortgage performance data, but would not share it with anyone.
So anyone building a mortgage performance model had LoanPerformance data going back to 2000 at best, and the majority of risk models were built on that data.
We know how that went.
They have always been able to track appraisers. Nothing new here. Appraisers have their license numbers on the appraisals.
What is new it tracking the loan originators. This implies that loan originators will be required to have some sort of registration system.
For what its worth many lenders have tracked loan performance for years, cutting off the offensive.
In other words, no more loans for illegal aliens.
Interesting they're just starting to track this for residential loans, it's been a data point for Fannie Mae multifamily loans for many years. In my experience, loan performance correlates closely with the loan officer, but it's largely a function of geography (loan officers located in a market that tanks underperform) and experience (inexperienced loan officers have newby clients who underperform).
Ummm, excuse me but, isn't there a spot on page 4 of the 1003 where you have to put your name and then sign your name as the loan officer and it also has to have the name of your company???
Perhaps these idiots ought to look at what is already in place before they start putting in redundant requirements.
Anybody still wondering why we are in such a big clusterf#&k??
I posted without reading all other comments.
Sure this is closing the barn door late, but it means that this kind of gaming of the system won't be allowed going forward. It improves transparency and that will improve trust in the secondary market.
Using a single loan number doesn't let me look at the loan and go back and see who touched it. The loan needs to carry those tags around with it. Much easier, then to review loan data internally without having to go back to the origination chain to try and extract that information.
On appraisers-- read recently in my local paper that Virginia appraisers are vehemently objecting to some type of new 'online appraisal software' format being forced on them, because they say its format allows other users (RE agents, brokers, lawyers, etc) to access the system on the back end, and "re-do" the original appraiser's original inputs.
am sketchy on recalling all the details on the story-- it was in the Virginian Pilot-- but it sounded like the appraisers were trying to warn that this was a new set up for bad actors to game the system.
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