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Yellen: Housing recovery still too slow

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Mortgage Professional America | 15 Jul 2014, 10:23 AM Agree 0
The head of the Federal Reserve says the housing recovery isn’t moving fast enough – due in part to last year’s mortgage-rate spike
  • Charles Stidham | | 15 Jul 2014, 11:04 AM Agree 0
    Ms. Yellen should look no further than the current scare tactics that the entire wholesale lending community is perpetrating upon folks such as Franklin American and Caliber pertinent to the false notion of the God almighty "BUYBACK".

    Current mortgage lending has almost nothing to do with a fear of foreclosure because all TPO mortgage mortgages are so stringently underwritten that the foreclosure rates are at uncommon historic lows. Yet when the reps for the wholesale lenders come by my office all they do is talk and cry about "BUYBACk's'.

    When I ask them exactly what their BUYBACK ratio is, none of them can tell me. Basically this whole thing has turned into one big game to see which lender can tighten the screws a little bit more. I consistently send mortgages for underwriting that are $400,000 mortgage amounts, 80% or less LTV and excellent reserves yet the files get kicked in the head with brain damage conditions. It's a joke.

    I have been originating for 20 years and the current environment hiding behind the BUYBACK wall is very strange and not seen before. Underwriters are consistently making $65,000 to $100,000 while working out of their homes as DE Underwriters and they won't make a common sense decision for fear of the BUYBACK. That's what I see as an impediment to the housing recovery. There is no mutual and/or causal relationship between a foreclosure and a buyback because the mortgages are solid when placed into the market for sale. Asking for one more bank statement in a BUYBACK scenario or one more signature in a BUYBACK scenario has nothing to do with a borrower making his mortgage payment. Foreclosures and BUYBACK's are mutually exclusive. Yet the entire change environment over the past 5 years was exclusively geared to preventing foreclosures. BUYBACKS are a new phenomena and threat on a large scale and that is creating the impediment to more mortgages being closed and funded.
  • Debbi Kearl | | 17 Jul 2014, 12:05 PM Agree 0
    I really believe the new QM rules are a significant reason for the decline in housing. It has become harder for the first time home buyer to qualify with the combination of lower DTI and higher student mortgages. Without the first buyer in the market, there is no move up buyer.
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