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More robust XSites order management eases workflow, gives you the big picture
We launched Mercury 3.0 late last year with lots of very cool and productive workflow management features, including the ability to edit orders, easily track all open projects and their status and to search orders. Last week, because you asked for it, we brought those same features to your XSite.
Gone are the days when XSite orders were automatically accepted and the only "status" choice you really had was "completed." The new Order Manager interface in your XSite lets you tag orders as In Progress (with five subcategories), Revision Needed, Delayed, On Hold, Canceled or Deleted. The interface is clean and uncluttered, putting all your tasks and information within your reach. In the Mercury-style Workflow Dashboard, you can see the status of your whole appraisal pipeline at a glance and quickly navigate to the order you need.
With Quick Find, you can instantly locate any order based on borrower name, property address or other features. And because mistakes happen, especially in data entry, you can now edit orders and fix mistakes made by your clients during data entry.
Give it a spin. Or, get one.
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Freddie, NAR predict another big, bad housing year (bad in a good way)
Rising family income coupled with low mortgage rates are two of the critical ingredients for a strong housing market, and both are expected to be at work this year, Freddie Mac economists said in their annual housing market forecast. "With the two key ingredients in place, 2004 will be another good year for housing. Slightly higher interest rates will choke off some construction and sales activity at the margin, with starts slipping 5 percent to 1.75 million dwellings and new and existing house sales down 3 percent to 6.98 million." Those construction and sales figures though are well above the level of 2002, which was regarded as an exceptional housing year, economists said.
"We raised our 2003 mortgage originations estimate after careful examination of market indicators not directly feeding our models; given the relative strength of home sales, housing starts and refinance activity, the year was extraordinary by every means," Freddie said. "Our 2004 forecast is 40 percent below 2003 at $2.2 trillion, owing largely to less mortgage refinancing."
The National Association of REALTORS® forecast had a similar tenor, but predicted new and existing home sales of about 6.86 million units. "Existing-home sales should come in at about 5.85 million in 2004, still the second-best on record," NAR Chief Economist David Lereah said. "We'll see a similar pattern this year for new homes with 1.01 million sales, off from a record of about 1.08 million for 2003." Lereah said he expects housing starts to total 1.84 million units for 2003, the best performance since 1978, with 1.71 million units projected for this year.
NAR said the national median existing-home price for all of 2003 rose about 8.0 percent to $170,800, while the median new-home price is expected to be up 3.7 percent to $194,500. The median existing-home price is forecast to grow by 4.6 percent in 2004, while new homes should increase by 5.1 percent.
OCC: No more loans based on collateral value
The Office of the Comptroller of the Currency issued two final rules last week that it said reflect the federal character of the national banking system. State Attorneys General protested that one of the rules would broadly preempt all state laws against national banks, including predatory lending laws, leaving only narrow exceptions. The second rule vests the OCC with exclusive jurisdiction over national banks, and excludes state attorneys general from enforcing consumer protection laws against national banks.
In a nutshell, if a bank is federally-chartered it is subject to the jurisdiction of the federal government, and when the federal government says that its laws apply and state and local laws don't, then its laws apply and state and local laws don't, according to the U.S. Constitution. The OCC rules say just that. Cities and states have passed hundreds of different predatory lending laws in the last few years, making it difficult for banks that do business across large parts of the country to keep up with what it can and can't do where. The OCC said the regulations "enhance the ability of national banks to plan their activities with predictability and to operate efficiently, subject to effective and efficient supervision."
In an effort to satisfy concerns over state and local law preemption, the OCC included in its rules two standards that it said would target predatory lending. One, of interest to appraisers, prevents national banks from making loans based on collateral value. Instead, they must base lending decisions on repayment capacity.
Comptroller John D. Hawke Jr. told American Banker, "we have basically set out a threshold standard that says if you make a loan based solely on the equity that somebody has in their home, that's going to get you in trouble. We expect banks to engage in the normal principles of bank underwriting, which requires them to look at a borrower's ability to repay the loan without regard to the collateral, and that really lies at the heart of predatory lending."
What kind of curb this could be on lender pressure on appraisers remains to be seen, and will be determined by the OCC's willingness to sic the Federal Trade Commission on predatory lenders. We'll keep an eye on this.
Congress curses RESPA darkness
The House Small Business Committee held a recess hearing January 6 on the Department of Housing and Urban Development's RESPA reform proposal, which is under review by the Office of Management and Budget. Rep. Donald Manzullo, R-Ill., and Guam's delegate to the House, Madeleine Z. Bordallo, were the only Congresspersons in attendance. Interim HUD secretary Alphonzo Jackson was invited and expected, but did not attend. Every other witness -- representing lenders, the MBA, mortgage brokers -- testified vociferously against the reform scheme.
The contentious part of the proposed rule is the creation of a guaranteed mortgage package, which would include a fixed rate and points as well as a fee, fixed early in the application process, for settlement costs like appraisals, inspections, and flood reviews. Current rules forbid such bundling of services. Appraisal advocacy groups oppose the plan.
"The continued existence of tens of thousands of American small businesses is at stake depending on HUD's revisions to its initial proposal," released a year and a half ago, Rep. Manzullo said. A new proposal was sent to the OMB prior to public review and comment, and HUD has not disclosed how the proposal differs. HUD's move to issue an ostensibly final rule during Congress' recess "will invite lawsuits which will cost U.S. taxpayers millions of dollars to defend," Manzullo complained. "In the end, it could cost thousands of American jobs, and that is extremely unfortunate and unnecessary."
[*] The Mortgage Bankers Association Weekly Mortgage Application Survey tracks the overall level of mortgage applications, as well as purchase and refinance applications separately. The Purchase Index includes all mortgage applications for the purchase of a single-family home. It covers the entire market, both conventional and government loans, and all products. Since refinancings depend overwhelmingly on interest rates while purchases depend on many other disparate economic factors, and because single family purchases mainly require full appraisals, we pay more attention to the Purchase Index. Click here for weekly Survey news releases by the MBA, and here for survey methodology.
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Briefs
OFHEO: E-commerce revolutionizing mortgage lending, service providers
A white paper by the Office of Federal Housing Enterprise Oversight (OFHEO), safety and soundness regulator for the GSEs, released January 9 said that the Internet is leading to new business models "likely to radically change the residential mortgage finance delivery system." It said the competitive advantage of proprietary software applications such as loan origination systems (LOS) is disappearing, and the influence of e-commerce is being felt more than ever. See how a la mode has been positioning itself -- and you -- to succeed during this change here and here.
MBA Purchase Index
Weekly - 12/10 - 1/7 [*]
Waning refi boom won't KO consumer spending, Fed says
More than one out of every four home mortgages in the United States was refinanced in 2003, causing some analysts to speculate that consumer spending should peter out with the refi boom as rates rise. The Federal Reserve Bank of New York asserts that this isn't necessarily so. Fed economists speculate that most of the cashed-out equity was used to retire other debt and improve the borrower's overall financial condition, not buy new stuff.
But consumer debt is a problem
Consumer debt, which includes auto loans and credit cards but excludes mortgages, rose to a record $1.99 trillion in November, the Federal Reserve reported January 8, roughly $18,249 per U.S. household. "We've never had so many who owed so much," David Wyss, chief economist with Standard & Poor's, told the Baltimore Sun (registration required). Adding to the concern, the percentage of conventional mortgages in foreclosure in the third quarter almost broke the record set early in 2003, and credit card delinquencies, or missed payments, hit a milestone of 4.09 percent in November, the American Bankers Association reported.
FHA claims soar 42 percent in 2003
According to a new independent audit conducted by KPMG LLP, claims paid by the Federal Housing Administration spiked by 42% last year to $7.8 billion, up from $5.5 billion in 2002, the National Mortgage News reported in its print edition. Changes in underwriting policies may contribute to the higher default rates, the audit said. The number of claims filed soared from just over 65,000 in 2002 to 85,186 last year.
Having asked an appraiser for her phone number once and gotten three comparable numbers from phones in her neighborhood instead, I hope if you have a tip or feedback you'll contact the editor: mattb@alamode.com.
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