Mortgage News

Calendar Toward Tragedy
The following is a letter from our chapter president regarding a memorandum titled 'Calendar Toward Tragedy' which has nine exhibits. The purpose is to capture in a snapshot of time some of demands and responses that have occurred during this mortgage crisis. These exhibits and the chronology of time concern mortgage brokers. This effort is to highlight actions that are questionable and to suggest that new and different responses and action need to be taken. Read the items and see if you concur.

Read the letter here

Read the memorandum with the exhibits here.


New Savings and Mortgage Lending Commissioner Sworn In

This is the swearing in ceremony of our new Savings and Mortgage Lending Commissioner on April 10,2008. The attractive lady in the white jacket is Connie Hearn, our Past President. The tallest gentleman is Commissioner Doug Foster and immediately to his right is Governor Rick Perry. This was a brief, but very meaningful ceremony. Mr. Foster has been with the agency in excess of twenty years. He is the third Commissioner regulating mortgage brokers since 1999 when the mortgage brokers worked with the legislators and created Texas licensing. He oversees some 16,000 loan officers and 6,000 mortgage brokers originating a quarter of a million loans per year for the people of Texas to buy homes and refinance their residential property.


2nd Annual DFWAMB Trade Show
The DFWAMB 2nd Annual Trade Show was held on March 11th at the Marriott Quorum following Fannie Mae’s seminar at the hotel. It offered a chance for our sponsors to meet with our members and guests. Many of them took advantage of the opportunity to discuss their products and specialties with the brokers and loan officers that attended. Our many “thanks” to our sponsors for making this event a productive and fun afternoon for all of our members and guests.

After spending time at the Trade Show and taking advantage of the information available, several of our guests decided it was time to become members of DFWAMB, joined up, and asked about serving on a committee. We welcome our new members and hope to see you at the April Luncheon or Golf Tournament.


DFWAMB is a grass-roots organization that welcomes input from it’s members. Several of the attendees participated in a survey and provided insightful feedback that is always considered valuable by the DFWAMB Board.











Recent Lobbying Efforts by DFWAMB With FHA

Seen above is DFWAMB Director Martin Sisk with the Commissioner of FHA, Brian Montgomery. Mr Sisk is trying to make his usual pointed remarks regarding how FHA needs to be more accommodating to the mortgage brokers in implementing the new FHA lending features. Mr. Montgomery was reluctant to accept all of Mr. Sisk's rather bold suggestions. He did acknowledge there was an interest in becoming more accommodating to the brokers wishes to eliminate the audit requirement and accept surety bonding in lieu of $50,000 net worth. In addition he targeted late January 2008 for a RESPA proposed rule to go to Congress for review. He stated it would be more industry friendly than the 2002 rule. They would incorporate some of the suggestions learned on the 'field trips' in 2005. The rule was withdrawn in March 2004.

In addition to the purchase market inroads FHA is making, Mr. Montgomery was touting the success of the 'reverse mortgage' product introduced some four years ago. FHA has insured over 100,000 of these mortgages in that time. Mr Sisk pointed out that this was a superior product to FNMA and FHLMC and any seen in the industry. Texas had been one of the last states to come on board due to the homestead laws. Lenders were cautious regarding penalties lending to the reverse mortgage client.

Mr. Montgomery is aware of our association's lobbying efforts and encouraged Mr. Sisk to continue. He was cordial and open to suggestions. He invited a follow up visit when in Washington, D.C.

In addition to the purchase market inroads FHA is making, Mr. Montgomery was touting the success of the 'reverse mortgage' product introduced some four years ago. FHA has insured over 100,000 of these mortgages in that time. Mr Sisk pointed out that this was a superior product to FNMA and FHLMC and any seen in the industry. Texas had been one of the last states to come on board due to the homestead laws. Lenders were cautious regarding penalties lending to the reverse mortgage client.

Mr. Montgomery is aware of our association's lobbying efforts and encouraged Mr. Sisk to continue. He was cordial and open to suggestions. He invited a follow up visit when in Washington, D.C.




The Brokers' Choice

President’s Message
By Bob Gray & Connie Hearn

June, 2008

Fannie Mae updates-June 17th
As you are aware, Fannie Mae has released a new version of DO/DU that will change many of the guidelines and loan programs. If you are like me, I find it challenging to stay on top of the rapidly changing products. A Fannie Mae rep will update, inform, and share the secrets of the new DO/DU at the June 17th luncheon at Prestonwood Country Club. Join us and get a boost for your summer business while supporting your association. It’s the best way to start the season.

GSEs, NY Appraisal Agreement
The Office of the Comptroller of the Currency sent a letter to the Director of OFHEO strongly opposing the “Home Valuation Code of Conduct” agreement between Fannie Mae, Freddie Mac, and the Attorney General of New York. The OCC laid out a list of unintended adverse consequences, major legal flaws and concluded that the agreement should be withdrawn. The OCC believes the “extreme approach” of the agreements would also increase the closing cost for the borrower by as much as 20%. A new level of “management” of appraisals would be created and the additional cost would be passed onto consumers without any additional benefit.

There is no objection to the principle that appraisals must be conducted free from influence or coercion, but that the OFHEO was over reaching in it’s attempts to implement the Agreement and Code. “Appraisal practices of insured depository institutions are already subject to an extensive framework of Federal law, regulations, standards, and oversight” established by Title XI of FIRREA.

Although Fannie Mae and Freddie Mac encouraged members of the industry to comment on the Agreement and Code, the Agreement gives the NYAG authority over any changes that may be considered or implemented. The OCC builds a strong case against OFHEO sharing authority with a state government official.

As mortgage brokers, we should all be thankful that the OCC has taken on the OFHEO and the NYAG on behalf of banks, brokers and consumers.

MBA’s Issue Paper
As we said last month, there has been talk of imposing a fiduciary duty onto the broker based on the premise that the broker “is shopping for the borrower”..

The MBA released an Issue Paper in which they go to great lengths to define the differences between a Banker and a Broker in an effort to justify “distinctly different regulations” for Brokers. MBA believes that all loan originators except those employed by banks with federal charters should be licensed, but they will agree to “registering” employees of federal charters.

They support increasing the financial net worth requirement for all Brokers to the level required by FHA and should buy surety bonds of $75,000 or an amount equal to 10% of the annual loan volume, whichever is higher. Since bonding often requires a financial audit, you can be assured your cost of staying in business would go up.

The MBA also recommends the Broker be treated legally as agents of the borrower to identify the “best loan product(s) for them”. They also believe that the YSP disclosures need clarification so that the broker is discouraged from steering the borrower to higher rates. But they continue to refuse to disclose their loan officer compensation or payments they may receive on the secondary market sale of loans.
Clearly, if you previously thought that the Mortgage Bankers Association was not anti-broker, this letter makes it clear that they would love for HUD, the Federal Reserve Board, OFHEO and Congress to write laws, rules, and regulations to put you out of business.

DFWAMB Takes Action
DFWAMB has put together numerous documents supporting a Call to Arms to respond to challenges facing our industry. Please visit our website at www.dfwamb.org and find out what you can do. We have learned the hard way that NAMB plans to let HUD implement their proposals and then attempt to sue to have them stopped after the fact. DFWAMB believes this is a strategically flawed approach. We have been in conversation with other chapters around the country and have found support for our pro-active approach. The board believes it would be best to stop HUD before they imple-ment their rule even if that takes a legal challenge.

At the May luncheon, John Duca, an economist from the Dallas Federal Reserve Board presented an outlook on the market both locally and nationally and then listened to members concerns about the Fed’s proposed changes to YSP disclosure, etc.

TSML Advisory Meeting
At the May meeting of the Savings and Mortgage Lending Dept. Advisory Committee, Connie Hearn asked about the Commissioner’s report on the Recovery Fund. It seems the Fund is at the $3,000,000 cap and has been for some time. Consequently, the $20 fee paid by loan officers and brokers at the time of license renewal is going straight into Texas’s general revenue fund. Meanwhile the $3 million is earning interest of over $200,000 per year that is given to the general revenue fund. Connie proposed that the fee be reviewed and if possible revoked so that broker aren’t “taxed”. The department wants to wait until they see how many brokers renew their licenses.

There is has never been a time when your membership has meant more. To our current members, we appreciate your being a part of this active organization. If you are not a member, please consider joining. You are definitely welcome at DFWAMB.