President's Message

President's Message

Christy Allison

Dear IMA Member:

I want to take a moment of your time to explain why it has never been more important that we all engage our lawmakers as members of the MBA’s grassroots program, the Mortgage Action Alliance (MAA). The election of a new Administration and larger majorities in both houses of Congress present a unique opportunity to get involved and take action. Now, more than ever, I am convinced that the industry needs to speak with a strong voice of leadership.

We’ve had a wrenching year in the credit markets which lead to two major historic government actions: HERA and the historic $700 billion rescue bill. Yet, despite an atmosphere on Capitol Hill that “villainized” our industry, this crisis propelled several of our core issues front and center – FHA modernization, GSE reform – and MBA brought those home. At the same time, MBA fought off well-funded proponents of bankruptcy cram-down.

But, the threats to the real estate finance industry, and the consumers we serve, still remain. I don’t have to remind anyone about the surge of activity that’s coming our way with the new Administration and Congress. Additionally, when state legislatures come back this January the pace will pick up substantially. Measure that activity against the backdrop of what has happened to our industry and individual firms during the last two years. Entire companies are gone, and good people are either out of work, or have left the industry entirely.

It’s important to remember that owning a home remains the most effective tool for creating, maintaining and passing on wealth in this country. I am proud of my profession for precisely this reason, and I am confident that working together, this industry will get the economy back to where it needs to be.

MBA has a monumental and critical task in front of it during the coming year, and it needs our help. Specifically, it needs each of us to join its grassroots program. It’s free, it’s easy and it’s entirely voluntary.

Please visit the MAA Web site and sign up. It only takes a few moments. Then, from time to time in the months ahead, you may be asked to help by participating in an e-mail campaign to support the industry position on proposed legislation. MBA drafts the notes for your to send, so it literally takes a couple of mouse clicks to participate at critical moments.

Please join MAA and encourage others in the industry to get involved as well. It’s the simplest way to stay involved and at the same time help the industry continue to succeed in the tough battles ahead. And remember, you don’t have to be an MBA member to join, and no dues are required.

Thank you.

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

2009 Membership Drive

2009 Membership Drive

Be on the lookout for your IMA renewal for 2009! Back by popular demand, 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 will be 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 website is your source for industry news

IMA website is your source for industry news

Are you looking for the latest statistics about the mortgage industry? Are you getting calls from your local media and need some up-to-date information about the Iowa mortgage industry? The Iowa Mortgage Association website is a great place to go for timely information that you can use immediately. Just look on the front page in the “News” section and you will find letters to the editor, Iowa mortgage facts, a press release that can be adapted for your company’s use, a PowerPoint presentation and other great reference material. This information is updated with the latest statistics on foreclosures, homeownership rates and more.

IMA issues release on availability of mortgage products for qualified borrowers

IMA issues release on availability of mortgage products for qualified borrowers

In late October the Iowa Mortgage Association issued a press release about the availability of mortgage products for qualified borrowers. Members are welcome to adapt this for their own use:

Contrary to what you may have read or heard lately, there are tens of millions of dollars available for home purchase, new home construction and refinancing in Iowa! Iowa lenders are taking residential mortgage applications, processing, approving and closing them every day.

While it is clear that guidelines for approvals have changed, becoming more restrictive due to the increases in mortgage delinquencies and foreclosures, loans are still available with low or no down payments. Iowa mortgage lenders also have loan programs available with down payment assistance.

Iowa is fortunate that we did not experience the ‘boom’ in home prices that has now become a ‘bust’ in other states. According to a survey done by the Office of Federal Enterprise Oversight (OFHEO) as of 6/30/08 Iowa is ranked 17th in housing appreciation (1.83%) in the United States. This modest appreciation during the last year is great news when 22 other states have depreciating housing values.

Iowa mortgage lenders encourage you to inquire about a residential mortgage loan for a new home purchase or construction, as well as opportunities for refinancing. With loan products available from our members that include conventional, FHA, VA, Rural Housing and their own internal mortgage loan programs, there is a good chance that the mortgage money that you need today is available!

The Iowa Mortgage Association is a statewide trade association that aims to promote the welfare of Iowa mortgage professionals and to improve their service to the community, promote a spirit of cooperation among the various persons or organizations who constitute the IMA and for the encouragement and assistance of its members. For a listing of Iowa Mortgage Association members that will assist you with your residential mortgage needs see the IMA website at, www.iowama.org, for a listing of our members or contact our Association office at 800-500-2353.

A copy of the release is available on the IMA website at www.iowama.org.

MBA website devoted to HERA

MBA website devoted to HERA

MBA has developed web sites dedicated to HERA as well as the GSE conservatorships status. Click here to view. This new center is the complete HERA resource for the real estate finance industry. This collection of resources houses the latest information on this major piece of legislation that Kieran P. Quinn, CMB, 2008 MBA Chairman called "the most important piece of housing-related legislation in more than a generation."

FDIC Unveils Loan Modification Program

FDIC Unveils Loan Modification Program

On Friday, Nov. 14 the FDIC unveiled its long-awaited loan modification program that is designed to help prevent an estimated 1.5 million home foreclosures through the end of 2009 by offering incentives to lenders and providing government guarantees on the modified loans.

Under the program, housing payments for delinquent borrowers two months or more past-due would be reduced to 31 percent of gross monthly income. Servicers could reduce the payments by cutting the interest rates to a minimum of 3 percent, extending the loan terms beyond 30 years or deferring repayment of the principal. The government would pay servicers $1,000 to cover expenses for each re-worked loan, and would cover up to half of lender losses on modified loans that subsequently re-defaulted.

The program would cost an estimated $24.4 billion, and FDIC officials want to use Troubled Asset Relief Program funds to pay for it. The Treasury Department, however, is opposed to that idea. Click here to read more.

HUD Announces Final Changes to RESPA Regulations

HUD Announces Final Changes to RESPA Regulations

On Monday, November 17, the Department of Housing and Urban Development (HUD) published new regulations to amend Regulation X, the regulations that implement the Real Estate Settlement Procedures Act (RESPA). These rules had been proposed on March 14, 2008 with the stated objective of enacting revisions to "protect consumers from unnecessarily high settlement costs," and to improve certain disclosures required to be provided under RESPA.

Compliance with the new requirements pertaining to the Good Faith Estimate (GFE) and HUD-1 settlement statements is not required until Jan. 1, 2010. Other provisions of the rule are to be implemented by Jan.16, 2009.

According to a HUD fact sheet, the final RESPA rule makes various important revisions to current regulations:

1. entirely reformats and significantly lengthens the Good Faith Estimate and HUD-1 Settlement Statement forms;
2. adds an additional page to the settlement documents meant to compare estimated charges from the GFE and final charges from the HUD-1 and to list loan terms;
3. requires that RESPA forms include new information on interest rates and loan terms;
4. imposes new tolerances that would limit any increases in originator charges and credits (after locking in the rate), and also impose a 10 percent tolerance to limit charges required, selected or identified by the loan originator; and
5. mandates that yield spread premiums paid to mortgage brokers be disclosed as "credit or charge for the interest rate chosen." Through its website, HUD has made available the revised disclosures for public review (see below).

Click here for a complete analysis from the American Bankers Association.

Agencies seek comment on proposed Interagency Appraisal and Evaluation Guidelines

Agencies seek comment on proposed Interagency Appraisal and Evaluation Guidelines

The federal bank, thrift and credit union regulatory agencies have jointly issued for comment proposed Interagency Appraisal and Evaluation Guidelines that reaffirm supervisory expectations for sound real estate appraisal and evaluation practices. The proposed guidance builds on the existing federal regulatory framework to clarify risk management principles and internal controls for ensuring that financial institutions' real estate collateral valuations (both appraisals and evaluations) are reliable and support their real estate-related transactions. The initiative is intended to respond to heightened concerns over appraisals and credit quality.

The proposed guidance would replace the 1994 Interagency Appraisal and Evaluation Guidelines to incorporate recent supervisory issuances and reflect changes in industry practice, uniform appraisal standards and available technologies. As with prior issuances, the proposed guidance would apply to all real estate lending functions within a federal financial institution, including commercial and residential lending departments, capital market groups, and asset securitization and sales units.

Volatility within certain real estate markets and associated credit risk underscore the importance of independent and reliable collateral valuations. In this regard, there is an expanded discussion of portfolio management techniques and circumstances under which an institution should update or replace a collateral valuation for an existing real estate transaction.

The proposed revisions address:

• - Additional detail on the agencies' expectations for an independent appraisal and evaluation function.
• - Greater explanation of the agencies' minimum appraisal standards, including clarification of requirements for appraisals of residential tract developments.
• - Revisions to the Uniform Standards of Professional Appraisal Practice, which are incorporated by reference in the agencies' appraisal regulations.
• - Risk-focused appraisal and evaluation reviews separate and apart from an institution's compliance function.
• - New appendices – Appendix A provides further clarification on real estate transactions that are exempt from the agencies' appraisal regulations; Appendix B addresses acceptable evaluation alternatives and use of automated valuation models; and Appendix C contains a new glossary of terms.
• - The agencies request comments on all aspects of the proposed guidance. Comments are due to the agencies 60 days after publication in the Federal Register, which is expected shortly. Click here to few a copy of the Federal Register notice with the proposed guidance.

In an oversight hearing on Sept. 25, before the House Financial Services Committee, Federal Housing Finance Agency (the new regulatory agency for Fannie Mae and Freddie Mac) Chairman James Lockhart indicated that a revised appraisal agreement among the regulator, Fannie Mae, Freddie Mac and New York Attorney General Cuomo would move forward but that the agreement would be amended and become effective sometime early in 2009, but not on Jan. 1, as originally planned.

HOPE NOW, GSEs, Government Announce Streamlined Modification Program

HOPE NOW, GSEs, Government Announce Streamlined Modification Program

HOPE NOW, the private sector alliance of mortgage servicers, non-profits, counselors and investors, announced a joint effort with government and private sector partners a new program that will make it easier and faster for the most at-risk homeowners to modify their mortgages and stay in their homes.

The Streamlined Modification Plan, or SMP, an expansion of what many lenders are already doing, will be implemented by Dec. 15. The Mortgage Bankers Association, which is a founding partner of HOPE NOW, helped design the new program.

"The SMP will undoubtedly speed up the loan workout process for thousands of borrowers, making it easier for the most at-risk borrowers, who work with their mortgage servicers, to get the loan modifications they need to avoid foreclosure," said MBA Chief Operating Officer John Courson.

Under the SMP, lenders will use an expedited process to modify, or restructure, a mortgage so that the homeowner can afford the monthly payments. The streamlined process will apply to at-risk borrowers who are 90 days or more late on their existing mortgages and whose loans are owned by Freddie Mac, Fannie Mae or participating balance sheet lenders/servicers.

After compiling the homeowner's information, lenders will use a simple process that reduces the homeowner's monthly payment to no more than 38 percent of the borrower's monthly income. This may include in any combination (1) extending the number of years of the loan, (2) reducing the interest rate and/or (3) forbearing part of the principal.

If these steps are cannot reduce a homeowner's monthly payment to that affordable level, the borrower will receive an additional loan-by-loan review that will include all other options to prevent foreclosure.

"This is an important effort by the mortgage industry to help homeowners," said HOPE NOW Executive Director Faith Schwartz. "This is a big step forward that will make it easier to modify loans for the most at-risk homeowners so they will be able to avoid foreclosure and stay in their homes."

While many lenders have used some combination of these SMP components up to now, Schwartz said the real benefit of the program will be the systematic and uniform approach that lenders will now apply to modifications. This is expected to streamline the process significantly. "This effort compliments those being made by other institutions and should provide homeowners with real confidence that the mortgage lending industry wants to help them avoid foreclosure," she said. "SMP will help stabilize the housing market."

Since July 2007, HOPE NOW has helped more than 2.5 million homeowners avoid foreclosure. Courson said the SMP will improve those numbers.

"Over the past year, mortgage servicers have drastically accelerated their efforts to reach out and help borrowers who are having trouble paying their mortgage," Courson said. "It has always been in the industry's best interest to help the homeowner avoid foreclosure. The SMP is yet another critical tool that mortgage servicers will have at their disposal as they work to keep more of America's homeowners in their homes."

Treasury Secretary Neel Kashkari also commended the program. "Stabilizing our financial system will require not only strengthening our financial institutions so they are able to lend to our communities, but also helping homeowners avoid preventable foreclosures," he said. "We are experiencing a necessary correction and the sooner we work through it, the sooner housing can again contribute to our economic growth. We must explore all tools to help homeowners and increase the availability of mortgage finance."

For more information about HOPE NOW, visit www.hopenow.com.

A Message from Past President Becki Rogers-Neese

A Message from Past President Becki Rogers-Neese

Dear IMA friends,

I am excited to announce that I am taking a break from the mortgage business! Yes, after over 35 years in the business, another door of opportunity has opened for me. It is with much excitement yet sadness that I make this change. I have been in mortgage lending all of my life. I started in the business when the rates were 16.5% and higher. So believe me I’ve seen a lot!

I wanted to tell you all that I will always treasure the friendships, acquaintances and alliances that I have been so fortunate to have been a part of since my participation in IMA.

For those of you new to the business…listen and learn from the best in the Association. There is so much talent and knowledge in your peers and you are fortunate to have them to learn from and lean on. Attend functions, participate in learning, and get involved in the Association…. and most important work to earn your ICMP certification. It is more important now than it ever has been to get certified within your professional organization.

For those of you who are veterans to the business…THANK YOU….for all the great times, your knowledge and your participation in making this Association the great entity that is today. Your participation and leadership will drive the Association to greatness, far and beyond its status of today. You are to be commended as drivers of change in this crazy business. Your stability and fortitude to forge ahead will make the Association members respected in the business, as opposed to the picture that has been painted of our industry as of late.

In closing, I just want to say that what you all do is important. It is important to the economy, it is important to your respective organizations…but most of all it is important to your clients. There is a lot to be said for spending your first Holiday season in a home of your own…always think about the good that you all do.

Thank you all and God bless.

Becki Rogers-Neese
Past President, Iowa Mortgage Association

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