Richard Nacht's The Daily Mortgage

Georgia looking at predatory lending again

The Georgia Legislature is considering a bill that, if enacted, would create the “Georgia Predatory Lending Prevention Act.” House Bill 808 (PDF) proposes enacting a new law to create categories of “home loans” and “high cost home loans.” The bill proposes limitations on loan terms and lending practices in connection with “home loans” and “high cost home loans.”

If observers are experiencing a sense of déjà vu regarding the bill, they are correct. The Georgia Fair Lending Act, a piece of legislation enacting similar limitations on certain loans, became law effective March 7, 2003. Subsequently, the Georgia Fair Lending Act was amended effective May 15, 2004 to remove certain provisions.

IRS addresses AMT deduction for home mortgage interest

The Internal Revenue Service has clarified its position on the deductibility of refinance mortgage interest under the alternative minimum tax.

In Revenue ruling 2005-11 the IRS says that interest paid on a loan that is refinance more than once will continue its status as qualified housing interest, up to the point of the original loan amount.

The IRS will shortly post on its website clarification rules for Form 6251 (PDF), which taxpayers use to calculate the correct home mortgage interest adjustment for AMT purposes.

Broker employment falling

January’s employment by the Bureau of Labor Statistics reports that employment in the mortgage industry hit an all time high of 489,400 full time employees.  But, mortgage and non-mortgage broker jobs were 123,100, the lowest number since September of last year.

This is in line with the estimated 30-60% decrease in overall broker activity that has been reported during the most recent quarter.

Nigerian real estate

Alex from Behind the Mortgage reports on Nigerian Real Estate - I won’t rest until I find the 419 Nigerian real estate related spam - it just has to be out there.

Looking for somewhere to invest all that dough you’ve been hoarding from wire-transfer and bogus cashier’s-check scams?  How about Nigerian real estate?  There’s even a recently launched (and unfortunately named) real estate website to make your search easier. From the press release:

”Searching for properties in the Nigerian real estate market has now been made easy and pleasurable, thanks to www.ip4properties.com, Nigeria’s foremost on-line property search engine.

This takes the stress and boredom off your search for Nigerian real estate, by offering properties that match specifications indicated by visitors to the site.”

·Online Marketplace for Nigerian Real Estate Debuts [AllAfrica.com]
Rejected taglines
ip4properties.com: “Deals So Good You’ll Wet Yourself.”
ip4properties.com: “Turn Your Real Estate Dreams Into a Golden Stream of Wealth.”
ip4properties.com: “We’re Not the Guys that Send the Emails.”

New York Mortgage adds industry vets

National Mortage News reports that, “Richard Payne has been named president of wholesale operations at The New York Mortgage Co., New York, and Joseph Gorton has been named chief operations officer of the division. NYMC said Mr. Payne, a 25-year veteran of the mortgage industry, was formerly a managing director of Lehman Brothers and executive vice president of wholesale development for Lehman’s Aurora Loan Services. He was previously president and chief executive officer of SIB Mortgage Corp. Mr. Gorton, a 20-year industry veteran, was formerly EVP and COO at SIB Mortgage. His previous positions include vice president for lending operations at GMAC Mortgage, EVP and national operations manager at Eastern Mortgage Services, and first vice president for production support at Anchor Mortgage Services. NYMC can be found online at http://www.nymc.com.”

Tennessee renews originator registration

The Tennessee Department of Financial Institutions re-adopted the public necessity rule that was set to expire on March 13, 2005, requiring mortgage loan originators to register and pay a fee to the Commissioner of the Department in order to originate mortgage loans. According to the Department, failure to re-adopt the public necessity rule would have prevented the Department from combating predatory lending and prohibited mortgage loan originators from conducting business because registration and fee requirements must be met before the Commissioner may register anyone as a mortgage loan originator.

Robert Shiller’s home price hedge

Robert Shiller, the author of Irrational Exuberance has devised an investment that hedges the value of real estate in case of a market downturn.

Shiller argues that homeowners should be able to hedge their home value risk through tradable securities based on home values. “Our homes are a major asset class for which there has never been a liquid market.”

Shiller has formed Macro Securities Research and has applied with the Securities and Exchange Commission for approval of a home hedging strategy called a “macro.”

The macro works like this.  At the time a homeowner closes on the purchase of a home the new owner buys a “down” macro to protect against falling real estate prices.  An investor would match that investment with an “up” macro, a bet that prices will rise.  If prices go down, the investor pays the homeowner, offsetting the decrease in the value of the home.  If the value increases, the homeowner loses the cost of the hedge but comes out ahead because of the value increase.

Shiller hopes the SEC will approve the concept and that macros will be trading on the American Stock Exchange before years’ end.  He intends to open the security to Los Angeles homeowners first, who have seen a doubling in house values in five years.

Remember, Shiller was the one who foresaw the stock market bubble in 2000 and he thinks his plan is a means of offsetting the fall the real estate market is about to face.  This is an idea to keep an eye on.

American Capital expands to the east coast

PRWeb:

American Capital Financial Services has appointed Ron Agasar, a seasoned lending professional with 30 years in the mortgage banking business, is in charge of the firm’s east coast expansion.

Read enire press release.

NMS survey reminder

National Mortgage News is reminding lenders and servicers to fill out their annual survey.  Respondents will receive NMS’s daily mortgage news briefing (which is free for anyone) and will be ranked in NMS’s the Mortgage Industry Directory.  The survey can be reached here.

Loan officers are reminded to complete the Loan Officer  Survey by March 18th.  A copy can be obtained by contacting elizabeth.washington at sourcemedia.com.

RBC named wholesale lender of the year

RBC Mortgage was noted wholesale lender of the year by the North Carolina Association of Mortgage Professionals at the 2005 NCAMP annual conference.

”We congratulate RBC Mortgage not only for its dedication to our industry and our association, but also for its commitment to superior service and wide product selection,” said Jennifer Salemson, NCAMP president.  “RBC Mortgage has been a strong supporter of NCAMP and mortgage professionals for many years, and their assistance helps us deliver top quality educational offerings for our membership.”

The award based on recommendations from the NCAMP members and voted upon by its executive committee is given to the wholesale organization that has continually to the betterment of the overall industry by providing education, service, support, programs and innovative technological advances that enhance the mortgage industry.