Originating Mortgage Loans

American Banker (02/23/07) P. 17; Terris, Harry
A top priority for the National Association of Mortgage Brokers this year, according to Legislative Chairman Joe Falk, will be pushing for a federal government study of the causes of foreclosures and what actions should be taken to curtail them. Falk says the causes of the most recent wave of foreclosures are unclear, but originators, investors, brokers and borrowers all played a role. The group continues to voice opposition to a suitability standard that would force lenders to ensure that borrowers obtain loans that fit their budgets, with Falk insisting that "the ultimate decision maker" is the consumer. Among other things, the group will also push for increased government loan limits and the development of a reverse mortgage backed by the Department of Veterans Affairs.
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Investor's Business Daily (02/23/07) P. A2
The Federal Deposit Insurance Corp. reports a 15.6-percent increase in late mortgage payments in the fourth quarter of 2006, following an increase of 5.2 percent during the previous three-month period. Non-traditional loans such as subprime mortgages account for a large number of delinquencies, with officials predicting that "their performance will get worse before it gets better."
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American Banker (02/22/07) P. 19; Kaper, Stacy
In a Feb. 16 letter to bank and thrift regulators, more than two dozen Democrats on the House Financial Services Committee requested that financial institutions be given greater leeway in approving mortgage forbearances. The legislators are concerned about a possible jump in foreclosures tied to the fact that interest rates on more than $1 trillion in adjustable-rate mortgages will reset this year. The letter states that "it is important that institutions who are willing to forbear in particular instances understand that they will not be subject to additional penalties."
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