Blog of the Mortgage

We get left in the lurch

I just spent the 4th of July and the subsequent weekend grilling meat, spending time NOT working on the weekends and enjoying time with my friends and family and being thankful that I made it all the way to July '08 in the mortgage business.
I can't believe it's been almost a year since ABC/AHM (my last company) went Bankrupt. Amazing where the time goes.
I'm just happy to be working for a stable and consistent company and to be able to provide this source to you and your customers.
Earlier this year (May 10th) in this space I wrote about how the MI companies were pushing us out
of business whether it was on a rate sheet or not.
Last week Friday we got the updated (linked here) MI Insurance Grid from Genworth (GE). This little hand-out shows us that as of August 14th no one will be able to write >90% LTV business in California, regardless of what FNMA is saying.
You're maximum LTV in California is now going to be 90% for conventional. Add in all the price adjustments and FHA really starts to look better and better every single day. Those of you funding FHA business with my team and I right now know exactly what I'm talking about.
Back to FNMA and the MI companies. About 1.5 months ago FNMA was pressured (politically from the White House on down) to remove the declining markets policy they had instituted. I wrote it about back then and some of you were able to get your business funded with some of the more aggressive conventional lenders. Now, the MI companies are still hemorrhaging cash and reserves. These firms are doing whatever is necessary to stop the bleeding and doing sub 90% business is part of it. Keep in mind the MI companies are throwing their declining blanket on the entire state of California, there is no county list to pick and choose anymore.
Triad is basically out of business since FNMA canned their affiliation with them. Radian was just served with a notice from FHLMC at the same level (we'll see what comes of them). These (MI) companies stock prices are at all time lows as they have to continuously write down their reserves/assets and adjust their earnings into negative territory. Not good. And so you get what you had here last week:
No more 95% business in declining markets. Period.