Viewpoints: Mortgages
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2011
A Funding Cut that Mortgage Scam Artists Would Love
American Banker | May 25 Depriving distressed homeowners of easy access to trained counselors would hurt everyone except for the fraudsters who are offering bogus mortgage help.
Go From 10% to 100% to Ensure FHA Loan Quality
American Banker | May 9 Quality control is slipping through the cracks with regularity. The current 10% industry sample fails to deliver confidence in mortgage lending standards.
Mortgage Reg Problems, Tech Solutions
American Banker | Apr 28 Lenders must leverage technology, integrating compliance issues into systems such that compliance is a natural part of the workflow from loan origination to secondary marketing.
Private Option a Good One
American Banker | Apr 25 The problem with fixed-rate mortgages is politicians have generally prohibited prepayment penalties when refinancing, and borrowers have ruthlessly exploited this advantage.
Underwriting Matters More than QRM
American Banker | Apr 18 Should an institution protected by federal deposit insurance be allowed to originate or buy any damned thing it chooses, in unlimited quantities? I say no, for three reasons.
To Avoid Foreclosures, Try Forbearance
American Banker | Apr 12 A well-structured forbearance program would likely save many homeowners from defaulting on their mortgages, and it would do so at a very modest cost.
A Covered Bond Solution for Housing
American Banker | Apr 11 Covered bonds will be very high-quality assets in any case, but such a rule would suggest that — unlike FHLB advances — they would not be able to pass all their risk to the FDIC.
Seize the Moment: Use Settlement Talks to Halt Abuse of Homeowners
American Banker | Apr 5 Some in Congress don't want banks held to account for their actions. But banks should be held accountable, and if anything the proposed terms should be strengthened.
Mortgage Lenders Need a Social (Media) Life
American Banker | Apr 5 Mortgage banks must adapt their strategies to stay competitive. They must leverage various social media platforms and convey their value proposition in a persuasive fashion.
Solution for Underwater Borrowers: Keep the Mortgage, Switch the House
American Banker | Apr 4 For underwater borrowers looking to relocate, why not allow banks to simply substitute new collateral for old, charging a fee for the service?
Mortgage Brokers, Get Serious
American Banker | Mar 31 Broker trade groups are attempting to enjoin the new rules in court and they are predicting all kinds of dire consequences for the nation. Yet a story reporting these reactions in Wednesday's American Banker ["Broker Pay Rules Forcing Banks to Play the 'Bad Cop' "] draws all the wrong conclusions.
Don't Mourn the 30-Year Fixed-Rate Mortgage
American Banker | Mar 30 Mortgage borrowers and lenders did not expect house price deflation and interest rates near zero, but they got them anyway, in part because they believed in house price inflation.
Lenders Need to Dig Deeper than the Credit Score
American Banker | Mar 29 Growth opportunities come from predicting which borrowers in a portfolio will — and which will not — pose new risks and which ones are poised to improve their creditworthiness.
Incentives' Role in the Financial Crisis
American Banker | Mar 28 If the financial crisis has reinforced just one fundamental economic principal it is that incentives are powerful determinants of behavior. More succinctly, incentives matter.
Restore Common Sense to Mortgage Underwriting
American Banker | Mar 23 Rather than worshipping at arbitrary rules like never making a loan to someone with as FICO down to, say, 580, how about making a very human credit decision that looks at all the facts?
Don't Get Blindsided by Mortgage Industry FCA Suits
American Banker | Mar 22 When the government sues for fraud, its primary weapon is a Civil War-era statute called the False Claims Act. Signs are that this weapon is going to be turned on the mortgage industry.
Blame on Home Appraisers Is Misplaced
American Banker | Mar 17 Some consumers and sellers may be disappointed with the appraised value of a property, but professional appraisers are just fulfilling their ethical obligation to the community.
Fannie and Freddie Weren't Pushed into the Muck, They Dove Headfirst
American Banker | Mar 14 There is more wishful thinking than fact in Mark Olson's account of how Fannie Mae and Freddie Mac's affordable housing goals helped cause their downfall ["Banks Still Need a Robust Secondary Mortgage Market," March 10].
Defense of Servicers Puts Blame Elsewhere
American Banker | Mar 10 Servicers don't have a lot of fans among the public these days. Rest assured, the feeling is mutual; a recent BankThink post noted that servicers are privately fuming about the potential agreement issued by the public's representatives in state capitals and in Washington.
To Fix the GSEs, Copy Ginnie Mae's Model
American Banker | Mar 9 We cannot afford to tie government backing to specially chartered financial companies. The question then becomes how to involve private capital in the process.
Banks Still Need a Robust Secondary Mortgage Market
American Banker | Mar 9 While the GSEs have become struggling entities in conservatorship with a doubtful future, the structure of the secondary mortgage market remains significant, especially for community banks.
Serving Notice to the Process Serving Field
American Banker | Feb 28 Our industry can virtually eliminate the types of abuses that recently put process servers in the spotlight by institutionalizing processes to engage the "right" people.
A Big Score for Alternative Credit Data
American Banker | Feb 23 Adding nontraditional data to credit files, such as Experian including positive rental payment data, puts more consumers on the map.
A 120% Solution for Our Homeownership Problem
American Banker | Feb 18 What we need is just the type of tax incentive that has routinely been given, generally at far higher amounts annually to the affluent who purchase McMansions.
Misaligned Incentives May Encourage Flawed Loans
American Banker | Feb 16 The challenge in every lending case is to design and enforce appropriate metrics and controls for originating loans based on an analysis of alternatives.
White House's Options 2 and 3 Are GSE Reruns; FCIC Missed the Story
American Banker | Feb 14 An FCIC report concluded that the GSE model was "fundamentally flawed." It should also have concluded that they play an unneeded role, as a consequence of political expediency.
Five Questions Lenders Should Ask Appraisal Managers
American Banker | Feb 10 Lenders, these days, are overwhelmed. While striving to remain compliant, lenders may be forgetting to ask their appraisal management companies these crucial questions.
Higher Profile and Costs for Fair Lending
American Banker | Feb 8 As the cliche goes, the best defense is a good offense. There are basic steps an institution should perform to help eliminate fair-lending risk.
Replace the GSEs with a Tax Credit
American Banker | Feb 8 To make houses more affordable, increase — guess what — the much-maligned mortgage interest deduction, or better yet, replace it with a corresponding tax credit.
Rising Rates May Actually Nudge Borrowers to Action
American Banker | Feb 7 Instead of lenders' lamenting any assumed harm from rising mortgage interest rates, they should more closely consider why modest increases can be to everyone's advantage.
Ruling in B of A Loan Modification Case a Victory for Lenders
American Banker | Feb 3 After the Papoutsakis decision, borrowers nationwide have been filing actions claiming that lenders failed to honor modifications from Hamp, constituting an unfair trade practice.
FHFA Remedy Is Not Enough
American Banker | Feb 2 The FHFA has attributed the poor mortgage modification record of servicers to their low compensation and wants better incentives to modify loans. The agency is only partly right.
Cooperative Loan Buyers Could Fix Housing Finance
American Banker | Jan 27 The advantage of having multiple, prudentially operated and monitored cooperatives is that none of them could become "too big to fail," and none could control the housing finance market.
Wells Risk-Retention Idea Would Hurt Independent Mortgage Lenders
American Banker | Jan 25 Regulators must reject this transparent attempt by the megalenders to use rulemaking to enhance profit margins at the expense of consumers and independent mortgage lenders.
A Problem of Too Few to Compete in Mortgage Servicing
American Banker | Jan 25 There is something worse than "too big to fail." The rating agencies, for instance, were not TBTF — but they were too few to compete. The same is true for servicing.
Viewpoint: Avoid Rigidity in Defining Qualified Residential Mortgage
American Banker | Jan 20 Underwriting is an art, not a science. Accordingly, while the new rule should be clearly defined from the start, it should allow for some flexibility and lender discretion.
Viewpoint: Investors Can't Afford to Neglect Loan Paperwork
American Banker | Jan 20 Investors must be able to ensure that the loans they buy have proper documentation and that they can prove their ownership in court if they have to.
Viewpoint: Lender-Borrower Disconnect Harms Both
American Banker | Jan 14 Increased saliency and connectivity, and an ongoing positive connection with the homeowner will provide those banks a tremendous competitive advantage over the others.
Column: Guarding Against the Next Clever Idea
American Banker | Jan 10 In the short to medium term, we are safe from a repeat of the mortgage securitization fiasco. Are there broader or deeper frailties in the system and its regulation? Yes indeed.
Feedback: The Myth of Refis
American Banker | Jan 6 I wanted to respond to your origination strategies article ("Home Lenders Face a Smaller, Purchase-Driven Market," Jan. 4). One big fallacy that has become more real every day is the statement that refinancings are cheaper than purchase originations to produce.
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