The Fed Will Wait
May 4th, 2008 by Quentin Keefe
After last weeks fed funds rate cut down to 2%, the general consensus now is that that may be the last cut we see for awhile. The Fed, most observers believe, will now wait and see what happens especially against the backdrop of the of the added stimulus from the government rebate checks about to go out. Two of the Fed members dissented, favoring a no change posture over this latest cut, mostly attributable to concerns that inflation is starting to moderate giving rise to concern over future inflation levels. So for now the Fed seems content with taking a neutral posture with regards to rates and seeing how the economy performs before taking any further action.
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Regency Mortgage Corp.- a safe haven for proven Loan Originators
May 2nd, 2008 by Quentin Keefe
If you’re a loan originator working for either a big national lender or a small local broker, you are no doubt starting to get anxious about your future. The big national lenders used to be the safe bet. They were so solid financially, had great name recognition, provided excellent benefits, and on and on. While they were never necessarily price leaders, they were competitive enough given all of the upside. Now, not so much. With the demise of American Home Mortgage and the pending “sale” of Countrywide to Bank of America, not to mention the countless others taken down by the collapse of the sub-prime market, big companies aren’t what they used to be.
Local brokers on the otheer hand, by no fault of their own, are seemingly the fall guy for what has taken place in the industry. The regulators and even Congress to a certain extent, seem hellbent on making it more and more difficult for brokers to do business. The onerous regulatory initiatives that are being proposed and in some states already promulgated, are unfairly targeting brokers. This, coupled with the fact that most broker shops don’t have access to either the state housing authorities products or FHA loans is making it increasingly difficult for them to survive.
At Regency, we are a small mortgage banker, meaning we are a lender with in-house underwriting, state authority products, FHA loans and more. While we have the ability to broker loans as well, as a lender we are better positioned to survive this challenging environment and we remain committed to doing just that.
So if you’re a proven loan originator with concerns about your future, give us a call at 888-646-5626 and ask for me, Quentin Keefe. Or e-mail me at, qkeefe@regencymtg.com.
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A New Meaning to Buyer beware (and Realtor Beware!)
April 30th, 2008 by Quentin Keefe
The financial markets are in turmoil. Repeat: the financial markets are in turmoil. There has not been a time in the last 25 years, when getting a real estate mortgage has been more difficult. The market for mortgage backed securities (MBS’s) is anemic. Investors are looking elsewhere, and while short term interest rates continue to plummet, mortgage rates remain at inflated levels. Yes, rates are still very attractive, hovering around 6% on a 30 year fixed rate with no points. But, with the 10 year bond yield sitting in the 3.6 – 3.7 range, by historic measures rates should be closer to 5.5% or so. With that said, rates are not the issue. Rather, due to the lack of demand for MBS’s, coupled with the billions upon billions of dollars lost as a result of the collapse of the sub-prime market, Fannie Mae, Freddie Mac and the numerous national mortgage lenders to whom the greater majority of loans are sold, are running scared. They have pretty much changed the underwriting standards for loan qualification overnight. For the most part, gone are all the no doc and stated income and asset loans; 100% financing and low credit scores. Construction loans are getting more and more difficult to find, as are loans for land, mobile homes, and more alarming, condominium financing.
And if that wasn’t bad enough, if a borrower has a down payment of less than 20%, (25% if the home is determined to be in a declining market) then there is an added worry of trying to obtain private mortgage insurance. The mortgage insurers are being as strict as they have ever been. The result of all this is that mortgage brokers and lenders are having to process loans to be submitted to multiple investors at a time, increasing the cost to the broker or lender and adding time to the loan approval process. Any loan that has to be brokered is taking sometimes up to 3 – 4 weeks in underwriting. If a loan is underwritten by the originating lender, you can be assured of a laundry list of prior-to-closing conditions, some of which may be difficult to meet.
None of this applies to the A credit borrower with more than 20% down, a good job with sufficient income and assets, but as we all know, these borrowers are the exception not the rule. Yes, it is better to do business with a lender right now; a company that has the ability to underwrite in-house. But even then, should something come up during the processing of the loan, the lender might not want to take any undue risk and choose to broker the loan any way. These are indeed trying times for mortgage lenders.
My advice is simple…understand what the realities of the market are and make the necessary adjustments to your business to accommodate these new realities. Sellers and borrowers need to know the truth; they deserve to know the truth. We have limited choices. We can pretend everything is the same and just sit around and play the blame game when things go awry, or we can be the professionals our clients expect us to be and be honest from the start, all work together and do our very best for the seller, the buyer and our respective professions.
While Regency Mortgage Corp. is not immune from the effects of this market, we are well positioned as a local mortgage lender to underwrite most loans right here in our local offices in New Hampshire and
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Absurd Credit Policy
April 10th, 2008 by Quentin Keefe
The credit markets continue to tighten, adding to the continuing real estate market woes. The markets have reacted to the current crisis in ways that can only be described as absurd. We all understand that untold amounts of money was lost as big banks, financial institutions and Wall Street’s greed, that led to the sub-prime market fiasco, didn’t pay off . I am still having a hard time feeling sorry for them as they knew the risk, or at least should have, yet they forged ahead with making loans that made no sense. They bet that the larger yields they were getting would mask the dirty underbelly of these ill advised lending practices. And for a while they did indeed; and these big institutions and their cohorts on Wall Street were laughing all the way to the bank.
Today, they are all running scared and mortgage backed securities have fallen out of favor. Lending practices and underwriting guidelines have tightened to the point where an otherwise good borrower is having difficulty obtaining home financing. The current requirements for financing are so absurd that they are actually an impediment to home ownership. The pendulum have swung all the way to the other side.
Congress needs to step in and calm the markets and, if needed, pass legislation allowing good credit Americans access to capital immediately. Otherwise we can all sit on the sidelines and watch the American Dream wash away in a sea of fear right in front of our own eyes.
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Obama’s Appeal
February 12th, 2008 by Quentin Keefe
I was listening to Imus this morning as he spoke with a Washington reporter about the presidential race and thought that a comment he made was very telling. While Imus is an old friend of John McCain and was very open about his support of his candidacy this year (although Imus is known for changing his mind when it appears his “guy” is starting to look vulnerable), he went on to say that electing Sen. Obama though, ”feels right”. His point being that Sen. Obama represents a real new era of political thought for this country; one that is being embraced with growing enthusiasm around the globe. His election will send a message that America is back, ready to work with the rest of the world to solve problems shared by all. Ready to talk with our enemies and look for opportunities for peace. Yes Imus, there is something that feels right about this.
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More Greed
February 12th, 2008 by Quentin Keefe
The Federal Reserve has lowered short term interest rates 125 basis points over the last several weeks, so where do you suppose that leaves the interest rate on your credit cards? They too are going down, right? Well, not so fast there smartypants. You best check with the bank that you have your credit cards with, because many of them are actually increasing the rates they charge on credit cards. Yes, you read this correctly…your credit card rate may be going up! Why? In a word…greed. See most of these big banks have taken it on the chin with the sub-prime mortgage implosion. They have literally lost billions of dollars, and now they would like for you and me to help them recover some of these losses by paying through the nose. Nice, huh? So this is what you need to do…call your credit card company and ask if the rate on your card has increased lately. If it has, give them the option of either lowering it back to where it was or cancelling it. Or, if you’re mad enough that they did this in the first place, just cancel the card. This practice is unacceptable, especially since these same banks are mostly to blame for the sub-prime fiasco in the first place. Just so no to more greed!
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Stimulus Package is a Joke
February 11th, 2008 by Quentin Keefe
Does anyone really believe that the stimulus initiative that just passed Congress is the answer to our economic woes? Not a single person, I bet. So why all the hoopla? Well, probably because this dreadful administration has nothing else up it’s sleeve so they might as well spend another $150 billion plus, to try show the “people” that they understand their pain. What a crock. This administration is an abject failure. They have failed on all fronts…on Iraq, on healthcare and on the economy. Only George W. Bush could take a balanced budget with a sizable surplus and turn it into a $600 billion +/- deficit with a national debt approaching $9 trillion. So what’s another $150 billion? Well, the truth is that something had to be done to try to help all of the home owners facing foreclosure. The irony is however, that we should have never allowed ourselves to get to this point. But this administration has been asleep at the wheel. They are so smitten with big corporations (remember Enron?) and fat cat Wall Street tycoons that they stood by and watched these so called “exotic” loans being forced fed to people who had no idea what they were getting into. So long as their friends on Wall Street were making a killing and contributing to their “cause”, everything was hunky-dory. Now, that is not to excuse some people who should have known better, who should have asked more questions and who now should take some personal responsibility for what happened to them. But, there are countless others who are either seniors, or who face a language barrier, for example , and trusted those people who posed as mortgage professionals and sold them down the road for a nice fat commission check. Everyone knew these types of practices were taking place and nothing was done until the fat cat investors started losing money. How pathetic. While tens of thousands of people will lose their home to foreclosure, the powers to be in this inept administration will move on and will be just fine. Don’t look for fairness here, because it doesn’t exist. The only saving grace is that January 20,2009 is now less than a year away.