Coffee for Closers | Leads360 Sales & Marketing Blog 

President Bush has dropped his threat to veto the housing rescue bill. His threatened veto was based mostly on $4 Billion to be given to states to enable them to buy and rehabilitate foreclosed properties. Questions were raised by Senator Jim DeMint, R-S.C., after learning that one of the bills architects, Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., received a mortgage deal through a VIP program at Countrywide. Unsure how much Countrywide and other retail mortgage lenders stand to profit from that $4 Billion, DeMint and Sen. Jim Bunning, R-Ky., attempted to send the bill back to committee but were defeated, 70-11. Other attempts to send back the bill to be rewritten were similarly defeated. This bill which offers some relief to homeowners on the brink of foreclosing, have broad bipartisan support in this election year, indicating there may be enough votes to override a veto. Eager to avoid a protracted veto fight, President Bush dropped his threat, indicating that restoring confidence and stability to the financial markets was a goal that was better tended to sooner than later.

A price has been put on the potential Fannie and Freddie bailout. The price tag could be as much as $25 billion. It is not a fait accompli, however. Peter R. Orszag, Director of the nonpartisan Congressional Budget Office put the odds at better than half that Fannie and Freddie will not use need any cash. Critics of the bailout maintain that homeowners should be the first to benefit from any taxpayer help. But if it is approved by congress, restoring confidence to investors in the U.S. and internationally is the bailout’s aim.  We will continue to closely watch the developments at Fannie and Freddie along with our mortgage broker and mortgage banker clients.

As a follow-up to yesterday’s post, DoublePositive has dropped another bit of news:  they have started to provide hot-transfer insurance leads.  They are looking for more lead generation companies to work with them.   Here’s an excerpt from their LeadWire newsletter:

“Insurance has been a long journey for us and we have learned a ton along the way. Our Insurance Team has been working night and day on launching the new insurance platform. We have already developed some strategic relationships with several leaders in the Insurance space and they have been vital in helping us get to this next step. We are really excited about the opportunities we see on the horizon and we want to let you in on the action. We are currently looking for suppliers to partner with us in the Insurance vertical. We are looking for leads in all types of Insurance so if you think you will be an appropriate fit, please contact me.”

DoublePositive has announced a bevy of new products aimed at providing increasingly customized hot-transfer leads for their clients.  The new products include:

PositiveExpress ARM - Hot leads facing an ARM reset.

Name-Your-Filters - Hot leads can now be filtered on the fly just as you would filter traditional leads in Leads360.

Name-Your-Script - This is certainly the most premium hot transfer lead availible.  DoublePositive will customize the leads as well as the contact and qualification process, just for your company!

Visit DoublePositive to learn more.

In a post boom world, mortgage lenders have been requiring more borrowers to get private mortgage insurance. During the boom, fewer lenders required insurance from borrowers who would traditionally have needed to purchase it, i.e. borrowers who couldn’t cough up a big enough down payment. During those days of more relaxed lending practices, a piggy back loan was a much more common way for borrowers to come up with a satisfactory down payment. But Piggy Back loans have largely gone the way of the dodo. Concurrently, the amount of mortgages that have PMI have more than doubled in the last year, in part because of the growing number of loans funded by Fannie and Freddie. Fannie and Freddie require PMI if the down payment on the mortgage is not great enough.

Fearing that the worst may be to come in the housing market in terms of foreclosures, Insurers are not eager to write policies that will leave them holding the bag in a withering market. To that end they are classifying ever widening areas in the U.S. as “a declining market”. Critics hold that this broad brush classifying is wreaking havoc on the ability of lenders to qualify loans for borrowers. Insurers maintain that the data that informs these classifications is not precise enough to allow for the exceptional neighborhoods within cities which continue to see growth and increasing real estate values.

What this means for the borrower, is another obstacle to new home ownership. They will be asked to come up with a larger down payment, and pay higher PMI premiums. For the Mortgage Banker, it is more critical than ever to find and qualify the right type of borrowers. The pendulum has swung the other way in terms of lenient lending practices becoming much more conservative.

Negative Amortization (NegAm) Mortgage products are increasingly hot-potato like for the banks. Wachovia has hatched a plan to drop more of these mortgages and look good doing it. They announced today that they are waiving all fees associated with their Pick-A-Pay Products.  It makes them look good, offering an easier way for borrowers to refinance out these loans.  And it reduces their risk that comes from borrowers holding NegAm loans which draining the equity from their homes. With the economy slowing and falling property values, it is crucial that they dump as much of these kinds of mortgages as possible.

It is a savvy move to requalify their customers and get them out of these Option ARMs and into loans that can be underwritten by Fannie and Freddie. Similarly they have announced that they will no longer be offering any mortgage products that will result in Negative Amortization. Wachovia won’t be offering these products anymore, and presumably won’t be buying these as part of mortgage blocks.

Throughout the industry, people have to rethink lending practices and work more closely with borrowers to make sure they can afford their home. From mortgage brokers, who are increasingly turning to lead management software to maximize profits, to banks that are altering their lending practices, the mortgage industry continues to be in flux.