3 Comments

1. 

   The_Cynic

   February 3, 2016 at 9:50 am

   So many love to tell a tale of 2016 being a year of growth but when it comes to where the rubber meets the road and there are speed bumps, they are no where to be found. These are the optimists in our industry.

   Then there are those who look to see how the numbers actually are and investigate to understand where we are really headed. These are the realists in our industry.

   Finally there are the pessimists who do not care what the numbers are, they only see something worse ahead.

   Well January endorsements at 3,890 only further confirm that the endorsement count for fiscal 2016 will not exceed that of fiscal 2015 without some extremely positive event occurs later this fiscal year. Even the optimists must begin to question their overblown declaration of growth. Their opposites look at these numbers and question if we are returning to endorsement production of fiscal 2005 which lacks any meaningful data support.

   It is time for the positive (not optimistic) realists in the industry to speak up and point to the direction the industry is heading.

   • Reply
   • Link
2. 

   Tim Pedersen

   February 8, 2016 at 12:26 pm

   Many depression era prospects want a fixed rate HECM, and will not accept any ARM, or a 60% principal limit. And many motivated prospects live in condo projects which are not approvable due to the stringent HUD rules. If these two items can be significantly improved, we will have more endorsements.

   • Reply
   • Link
   • 

     The_Cynic

     February 11, 2016 at 10:40 pm

     Tim,

     The best you can do is offer your Depression Era prospects a fixed rate HECM just as you described — capped not only by age, value of the home, and the expected interest but also by the disbursement limitation rule. The price for most such prospects will be a permanent loss of 40% of their principal limit. It is their decision.

     Don’t expect the foregoing to change. It was profoundly silly how long it took so many pundits to call March 31, 2013, the date that fixed rate Standards were eliminated. Instead they called HUD’s action, a suspension. How ridiculous that overly optimistic, misleading, and false description was.

     FHA is not going to risk the MMI Fund to the poor financial condition of a HOA and poor management decisions of some risk minded HOA Board. FHA should be past the point of no return on this issue.

     The past is the past. It is time to move forward. Either prospects will adjust or they will find HECMs not to their liking. HUD almost lost the program due to leaning too close to the edge of disaster by trying to provide too many proceeds to borrowers. It is better to temporarily have lower endorsements but an ongoing program than to lose it all.

     • Reply
     • Link