President's Message

President's Message

Christy Allison

Dear IMA Member:

This month's message is going to be short. Just like you, I am busy originating loan refinance requests right now and couldn't be happier. Isn't it great! With what we have all experienced in this most difficult year, could this be a Christmas blessing for the mortgage industry? That sounds just a little better than "the government is using the housing market to stimulate the economy" now doesn't it?

My wish for the entire IMA membership is that you all have a very Merry Christmas. Take the time to enjoy your family and appreciate the struggles you have experienced this year. We have all had to change the way we do business but in the long run it has made us all that much stronger and more experienced in our chosen profession.

I also wish each and every one of you a happy and prosperous New Year! Can you believe 2009 is just around the corner? It will be exciting to see what the New Year brings us in the mortgage industry. As always, you can count on the Iowa Mortgage Association for education events that will help keep you and your team on the cutting edge.

Best wishes,

Christy

Christy Allison
2008-09 IMA President
Christy.Allison@countrywide.com
(319) 314-3333

2009 Membership Drive

2009 Membership Drive

There is still time to take advantage of the 2009 membership drive discount. If you return your membership form with payment by December 31, you will receive a $50 discount on membership or $200 in education vouchers. Renewal forms were in the mail in late November and are also available on the IMA website at www.iowama.org.

The IMA is planning another great year, continuing to make significant strides to improve the mortgage industry. We encourage to you join forces with your fellow mortgage professionals and take advantage of all the IMA has to offer.

IMA and MBA to present two upcoming FHA seminars

IMA and MBA to present two upcoming FHA seminars

The IMA is proud to present two upcoming FHA seminars. The seminars are presented by the CampusMBA, the educational wing of the Mortgage Bankers Association. The curriculum is up-to-date and developed by MBA in conjunction with the Department of Housing and Urban Development to address all your questions about FHA lending. The first seminar is gears for loan originators and processors. The second workshop is a more advanced look developed especially for underwriters and originators who want all the details on FHA lending guidelines.

FHA Fundamentals Workshop
Tuesday, February 24, 2009 • Johnston • Iowa Bankers Association

The FHA Fundamentals Workshop is designed for anyone who is new to residential FHA lending and those who need to refresh their knowledge of the FHA guidelines. FHA’s continual changes has had a remarkable affect on our industry. Take this opportunity to attend a great workshop for FHA Sales and Operations to help refill your pipeline!

Attending this one-day event will keep you abreast of all the recent changes in FHA procedures and regulations. We provide up-to-the-minute information, including HERA and Mortgagee Letters.

Learning Objectives
At the end of the workshop, students will be able to:

• Understand FHA products
• Understand FHA closing costs and the GFE
• Understand FHA processing requirements and forms
• Understand FHA income and asset requirements

FHA Underwriting and Operations Workshop

Wednesday, February 25, 2009 • Johnston • Iowa Bankers Association

The FHA Underwriting and Operations Workshop is designed for residential processors, underwriters and quality control staff responsible for the details within an FHA loan and who have taken the FHA Fundamentals workshop. Otherwise, attendees should have at least 2 -4 years of recent hands-on FHA experience. This workshop takes a deeper dive into the processing and underwriting requirements and helps participants apply those guidelines and rules in day to day operations. Further, this workshop will discuss the back end of the process from closing through insuring and quality control.

Attending this one-day event will keep you abreast of all the recent changes in FHA procedures, guidelines and regulations. You will know how to deliver a quality product to HUD and be ready for the opportunities FHA financing brings to customers.

Learning Objectives
At the end of the workshop, students will be able to:

• Understand FHA processing
• Understand FHA appraisal guidelines
• Understand the keys to quality closing, post closing and insuring of FHA loans
• Understand automated UW vs. manual UW and assessing risk on FHA loans

Registration for each seminar is $195 for members and $290 for nonmembers. Register online at www.iowama.org.

Kick off the New Year with IMA!

Kick off the New Year with IMA!

Iowa Mortgage Association Networking Reception

January 22, 2009 • 5:00 - 7:00 P.M.
Champps
101 Jordan Creek Parkway, Jordan Creek Mall, West Des Moines

This event is free for all to attend. Join IMA for Hors d'Oeuvres. Also, if you donate a non-perishable food item for the Food Bank of Iowa you will receive a FREE drink ticket. Questions? Call IMA at 800-800-2353.

MBA Releases Q3 2008 National Delinquency Survey

MBA Releases Q3 2008 National Delinquency Survey

On December 5, the Mortgage Bankers Association (MBA) released its National Delinquency Survey, finding an increase in delinquencies and foreclosures for the third quarter of 2008. The report found that the delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 6.99 percent of all loans outstanding at the end of the third quarter of 2008, up 58 basis points from the second quarter of 2008 and up 140 basis points from one year ago on a seasonally adjusted basis.

The rate of loans entering the foreclosure process was 2.97 percent, an increase of 22 basis points from the second quarter of 2008 and 128 basis points from one year ago. Nine states had rates of foreclosure starts that were above the national average: Nevada, Florida, Arizona, California, Michigan, Rhode Island, Illinois, Indiana and Ohio. The remaining 41 states plus the District of Columbia were below the national average.

Iowa's Q3 2008 Housing and Economic Statistics

Iowa's Q3 2008 Housing and Economic Statistics

Housing Environment

• - Iowa's home prices remain stable. Iowa home prices increased nearly one percent in September, while nationally prices dropped 11% (according to First American CoreLogic).
• - The Des Moines metropolitan area was one of only 28 areas nationwide to see its median sales price climb in the third quarter (to $155,400).
• - Sales of existing homes for the third quarter fell 16% from the prior year (according to the National Association of Realtors).
• - 83% of Iowa's mortgage loans are prime loans (Ranked 13th).
• - Only 8% of Iowa's mortgage loans are sub-prime and only .03% of sub-prime loans are adjustable rate.
• - Iowa mortgage loans in foreclosure fell to 2.03 percent in the third quarter. The national average was 2.97 percent. Iowa would fare even better in this regard were it not for its debtor friendly foreclosure laws which lengthen the process.
• - Iowa ranks 43rd in foreclosure starts, at .56% of residences.
• - The home ownership rate in Iowa is 72%, above the national average of 68%. An indicator that Iowa lenders are placing borrowers in loans appropriate for their income and borrowing capacity.
• - The Iowa Attorney Generals Office offers a foreclosure hotline, a toll-free number to the Iowa Mediation Service that counsels borrowers and lenders on approaches to avoid foreclosure.
• - The Iowa Division of Banking has authority to license and examine mortgage brokers.

Click here to read the full article as it appeared in the December issue of the Iowa Bankers Association's "The Disclosure" magazine.

Fed proposes changes to mortgage loan disclosures

Fed proposes changes to mortgage loan disclosures

The Federal Reserve has issued a proposal that would revise the Regulation Z (Truth in Lending) disclosure requirements for mortgage loans to ensure that cost disclosures are received earlier in the lending process. It is similar to a final rule the Fed issued this summer, but would broaden and add to those requirements.

Under the proposal, lenders would be required to give good faith estimates within three business days after receiving a consumer's application and before any fees are collected, as in the final rule. The proposal, however, would extend the disclosure requirements to loans secured by second homes.

It also would require lenders to wait seven business days after providing the early disclosures to close the loan and would mandate that lenders provide new disclosures with a revised annual percentage rate and wait an additional three days before closing the loan if a change makes the APR in the early disclosure inaccurate beyond a specified tolerance.

Comments on the proposal are due by January 23.

USDA Rural Development provides $3.4 million in loan guarantees

USDA Rural Development provides $3.4 million in loan guarantees to help rehabilitate apartment buildings in rural Iowa in 2008

During the past year, USDA Rural Development obligated $3.4 million as guaranteed loan funds to help rehabilitate apartment buildings in Oskaloosa, Winterset, Carlisle and Belle Plaine.

When repairing facilities costs must be at least $6,500 per unit. Eligible costs include building materials, as well as professional service fees, bond fees, developer's fees, land acquisition and development and financing costs.

This guaranteed loan program can also be used for new construction of apartment buildings. New and rehabilitated apartment complexes must be located in communities with fewer than 20,000 people to be eligible.

"At Rural Development we are committed to helping provide safe and affordable living for all rural Iowans," said Mark Reisinger, USDA Rural Development State Director in Iowa. "Apartment complexes play an important role in the sustainability of rural communities."

This past year USDA Rural Development invested more than $108 million in guaranteed loans to provide rural Iowa residents with decent, safe and sanitary single or multi-family housing. The agency also provides guaranteed loans for business opportunities, as well as to help communities purchase or build essential community facilities and services.

For more information about any of Rural Development's guaranteed loan programs, please call (515) 284-4666 or visit www.rurdev.usda.gov/ia.

Iowa Finance Authority awards more than $3 million in housing grants

Iowa Finance Authority awards more than $3 million in housing grants

$3.296 million in grants approved by the Iowa Finance Authority (IFA) Board of Directors will soon have a direct effect on thousands of Iowans’ housing. The funds will aid in the development and preservation of affordable housing in communities throughout the state through the State Housing Trust Fund’s Local Housing Trust Fund Program.

The housing grants will impact Iowa families through a record 17 Local Housing Trust Funds across the state. The funds will be used for initiatives including subsidizing local down payment assistance programs, providing low-interest loans or grants to assist Iowans in home rehabilitation, financing construction of new single-family housing for low-income Iowans, supporting transitional housing programs and homeless assistance.

“Providing housing assistance through the Local Housing Trust Fund Program, as well as IFA’s other programs, not only assists thousands of Iowans directly, but also aids in the revitalization of neighborhoods and ultimately boosts economic activity,” Bret Mills, IFA Executive Director said.

The Iowa Legislature created the State Housing Trust Fund program in 2003. Since its inception, the State Housing Trust Fund has provided more than $12 million in awards and leveraged more than $116 million in local housing development. Organizations that receive the Local Housing Trust Fund Program grants are obligated to commit a least 30 percent of their award to assist extremely low-income Iowans, defined as those who are at or below 30 percent of the county or statewide area median income. Grant recipients must also confirm a local match of at least 25 percent of their application amount.

The Iowa Legislature created The Iowa Finance Authority, the state’s housing finance agency, in 1975 to undertake programs to assist in the attainment of housing for low and moderate-income Iowans.

HOPE NOW has helped 2.7 million homeowners avoid foreclosure

HOPE NOW has helped 2.7 million homeowners avoid foreclosure
The HOPE NOW Alliance has announced that its members have helped more than 2.7 million homeowners avoid foreclosure through workouts and loan modifications since July 2007. The November 25 announcement noted that HOPE NOW provided loan workouts to approximately 225,000 homeowners in October of 2008. Approximately 122,000 of the loan workouts were repayment plans, while the remaining 103,000 were loan modifications.

HOPE NOW is an alliance between HUD approved counseling agents, servicers, investors and other mortgage market participants that provides free foreclosure prevention assistance. Learn more at www.hopenow.com.

Final Reg C Rule Issued to Revise HMDA Rate Spread

Final Reg C Rule Issued to Revise HMDA Rate Spread

The Federal Reserve Board has approved final amendments to Regulation C to revise the rules for reporting price information on higher-priced mortgage loans. The changes are intended to improve the accuracy and usefulness of data reported under the Home Mortgage Disclosure Act.

Regulation C currently requires lenders to collect and report the spread between the annual percentage rate (APR) on a mortgage loan and the yield on a Treasury security of comparable maturity if the spread is greater than 3.0 percentage points for a first lien loan or greater than 5.0 percentage points for a subordinate lien loan. This difference is known as a “rate spread.” Under this new final rule, a lender will report the spread between the loan’s APR and a survey-based estimate of APRs currently offered on prime mortgages of a comparable type (“average prime offer rate”) if the spread is equal to or greater than 1.5 percentage points for a first lien loan or equal to or greater than 3.5 percentage points for a subordinate-lien loan. The Board will publish average prime offer rates based on the Primary Mortgage Market Survey® currently published by Freddie Mac. The Board will conduct its own survey if it becomes appropriate or necessary to do so.

The changes to Regulation C conform the threshold for rate spread reporting to the definition of higher-priced mortgage loans adopted by the Board under Regulation Z (Truth in Lending) in July of 2008. By implementing the same pricing threshold test under both regulations, the Board hopes to reduce the overall regulatory burden on mortgage lenders.

The final rule is effective Oct. 1, 2009. The final rule can be found in the Oct. 24, 2008 Federal Register at http://edocket.access.gpo.gov/2008/PDF/E8-25320.pdf.

Guidance on Lending to Creditworthy Borrowers

Guidance on Lending to Creditworthy Borrowers

On Nov. 12 the federal banking agencies issued an “Interagency Statement on Meeting the Needs of Creditworthy Borrowers." Several federal programs have recently been instituted to promote financial stability and mitigate the effects of current market conditions on insured depository institutions. These efforts are designed to improve the functioning of credit markets and strengthen capital in our financial system to improve banks’ capacity to engage in prudent lending during these times of economic distress.

The agencies expect all banking organizations to fulfill their fundamental role in the economy as intermediaries of credit to businesses, consumers and other creditworthy borrowers. Lending to creditworthy borrowers provides sustainable returns for the organization and is constructive for the economy as a whole.

The agencies urge all lenders and servicers to adopt systematic, proactive and streamlined mortgage loan modification protocols and to review troubled loans using these protocols. Lenders and servicers should first determine whether a loan modification would enhance the net present value of the loan before proceeding to foreclosure, and they should ensure that loans currently in foreclosure have been subject to such analysis.

In implementing this Statement, the agencies encourages institutions to:

• Lend prudently and responsibly to creditworthy borrowers;
• Work with borrowers to preserve home ownership and avoid preventable foreclosures;
• Adjust dividend policies to preserve capital and lending capacity; and
• Employ compensation structures that encourage prudent lending.

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