Kirk Williams

The New York Times says the following about Shaun Donovan Housing Urban Development (HUD) Secretary....

"He developed a national reputation as an innovator along the way, holding to a middle ground between free-market forces that opposed government controls and liberal groups that believed only government and nonprofits could be counted on to provide housing for the working class."

"Mr. Donovan has experience in all facets of the affordable housing market, having worked in both the nonprofit and private sectors and in academia as a scholar of housing policy. He has even worked as an architect in New York and Italy."

Really? So far the Good Faith Estimate going into effect January 01, 2010 certainly is different but innovative? The consumer or the working class folks won't think so. Now he wants to increase the down payment from 3.5% to 5% for the FHA loan and what result does he seek....more home sales? Are you kidding me? Definitely kills the chance for the down payment assistance program from coming back in any meaningful way. IF it were to come back I will bet you they will allow assistance of 1.5% pushing back the required down of 3.5%...wouldn't that be rich!?

The "Architect" by all accounts is a smart guy but clearly is not the right guy as evidenced by the 'stuff' coming out of HUD. He needs to go. Sorry that simple but if we get one more academic pile thrown at this calamity it will further delay the recovery and during the delay the other geniuses in congress will probably decide to throw more TARP money out there hoping it will stick. Let's hope not!

At least Vicki Golder of the National Association of Realtors gets it and testified on the hill making the case to keep down payment where its at.

I still advocate for the return of the down payment assistance program too. I want to remind people the down payment is not the reason for this financial calamity....OK? So stop the crap about down payment. Lenders from the beginning of time always want to prove the person asking for a loan has the ability to PAY IT BACK and they check that by looking at how much the person makes each month. No this is not rocket science but at HUD they seem to think so.

Mr. Donovan clearly has no private sector experience in lending in fact I doubt he has much longevity in the private sector at all - it seems his thing has always been housing projects and design in his public works jobs and I think he should stick to that. Obama needs to find a mortgage professional to run HUD. I am available if anybody asks....

SO WHAT DO YOU THINK?

Write your representative and tell them to get off the dime.

I wish us all well.

Over the past two years we have had hearing after hearing with all the usual suspects that I have named as public enemies to the consumer and our industry. Wall Street certainly set the table for this calamity but they couldn't have done it without the help of repealing an act called GLASS STEAGULL (Originally passed in 1933). The repeal happened in the dark of night a late December eve in 1999. Thank you Phil Gramm.

Without going into much detail you can read the awful details and yes you will find the usual enemies of the consumer and our industry currently costing the consumer millions with their antics of "reform" - familiar names.

You will find a huge list on both sides of the political spectrum which demonstrates and supports my previous blogs noting that we are not represented by anyone and for those that are ideologues and carry the water for their political party should be ashamed. Everyone is to blame period. Three plus bank lobbyist to every representative and senator so you wonder how this happened....really?

http://www.counterpunch.org/kaufman09192008.html

My point is the FDIC chair Shela Bair (a Bush appointee) was a lone voice over a year ago and stated the painfully obvious however was pushed off by the 'big shots' Mr. Summers (the architect that cost Harvard 1.8 billion in investments) and Mr. Geithner (a former NY FED guy advising the Bush team on the now infamous bail out).

During the hearings while JP Morgan Chase, Citi, Wells Fargo, Countrywide, Bank of America, Washington Mutual and others testified they were making great progress in giving the consumer options for relief in these troubled times the foreclosure rate quadrupled. Ms. Bair called them out but seemingly was quieted and became silent until now.

Obama is applying pressure forcing banks to do short sales instead of foreclosures...a "Short Sale Directive"...hmmm. Took two years and by the way congress is still asleep on this issue but slowly waking up realizing if the foreclosure rate were to slow or short-sales were quickened maybe the bleeding has a chance to subside and a floor in real estate can be established.

READ MORE:

http://www.boston.com/realestate/news/blogs/renow/2009/12/forcing_bankers.html

Thank you Sheila Bair for hanging in there. Between you and the brilliant Elizabeth Warren we have a chance of getting through this mess.

WATCH VID:

http://www.youtube.com/watch?v=QzD1w4Y9IpQ&feature=related

I wish us all well.

If you have gazed upon the stock price of Fannie Mae recently you can at the same price purchase a pack of gum....or maybe not.

Comprehensive Quote: 12/01/09 11:15 AM EST Last 0.92 Change 0.04 % Change 5.05% Volume 8,368,658 Open 0.90 High 0.93 Low 0.89 Prior Day's
Volume 32,357,983 52-Week High 2.13 (08/25/2009) 52-Week Low 0.35 (03/09/2009) Prior Day's Close 0.88

NYSE and Amex prices are delayed at least 20 minutes and Nasdaq prices are delayed at least 15 minutes. Volume updates until 8:00 p.m. ET.

Meanwhile the genious at Fannie Mae has decided to tighten underwriting standards hiding behind the credit score system that in my humble opinion should be abandoned after all it is is used to jack up rates and costs and if you lose your job score does not matter does it?

Well that's a good thing someone may say. Sure prudent underwriting is a good thing however true risk analysis is accomplished when you have a real person look at another real persons credit profile and particular circumstances and makes the determination based upon the real facts before them. Credit score, down payment (equity position) does not make a good loan always as evidenced by the current economic down turn. Technology cannot replace that kind of analysis either.

December 12, 2009 Fannie Mae will only approve loans at 80% if your score is 620 or below. Your total debt (housing plus any other credit) cannot exceed 45% of gross income. This means Fannie Mae will not be generating much in loan volume which means ....Fannie Mae is inept or thinking they can't do this anymore or maybe hope the taxpayers will once again throw some money at them to keep the doors open...Why we would do that is a mystery.

My point is FHA for now will be THE LOAN that will carry us through the housing market until better minds appear on the scene. Of course HUD and congress may screw that up too. Hmmm - My bet HUD will mess it up based upon their work revising the Good Faith Estimate!

I wish us all well.

If I'm not sharing my vast wisdom (nudge nudge wink wink) I would be on a rant about the inept nature of government or particular individuals but today as another deal closes for a new home buyer knowing they will be celebrating their first Thanksgiving in their new home I pause to give thanks that I am still paddling up this creek we call an economy.

It has been a challenging year for our family on many fronts just like families across America. In the end we still have it better than most in the world we live in today. I am thankful for that.

Our community lost a couple great souls this year some way too premature. I am lucky to have been touched by their lives. I am thankful for that. I am lucky I have one of my parents still living. I am thankful for that. If I were to drop today I cannot complain. I have had every opportunity to do whatever I wanted to do in life - it is always there for me to grab. I am thankful for that. Of course like the idiot I am I decided to be a mortgage professional.

All this gratitude will be leaving me by the time Monday hits because my football team (Seattle Seahawks) will probably lose another game and all the usual political knuckleheads will be back on the air telling me how they plan to 'fix' things. I am not thankful for that. Until then I will meditate with my Turkey and family. I am thankful for both.

My family celebrates Thanksgiving. For those that do celebrate Thanksgiving I wish you and yours a very Happy Thanksgiving.

I wish us all well.

Not surprising to me HUD is going to put a 120 day 'enforcement' delay for the new Good Faith Estimate and HUD-1 roll out scheduled for Jan. 01, 2010. What a mess. What a disaster. This photo depicts perfectly how our government (the big guy - Oliver Hardy) and HUD (the skinny -Stan Laurel) are managing this little thing we call a financial calamity. Recovery my (Fill in blank).

HUD always has a scandal each administration costing millions or billions (depending upon how many years you include). Inexplicably they eliminated the down payment assistance program thinking a down payment would solve this economic calamity. BIG thinking.

So here the nation of lenders wait to see what's next. How are the investors going to react. Some lenders may require us to use the new form. Others may not. How will the consumer navigate through this?

ME of course and my fellow mortgage professionals. As usual although always made out to be the villain it is up to us to interpret as best we can the mess handed down to us by the idiots, the knuckleheads, the "intellectuals" - congress & HUD.

We are the ones picking up the pieces to try and make sense of the non-sense. We are the receivers of funny looks from the consumer asking us - WHY DO WE HAVE TO DO THIS OR THAT - glaring at us like WE are the crazy ones!

AMERICA -WE did not make this up....this is Barney Frank, Chris Dodd - both sides of the political spectrum- brilliance is coming out from all corners.

The consumer is getting nothing. The consumer cost is increasing - will increase and continues to get more expensive. After getting reamed at the financing table because of the 'new' regulation the consumer will have to pay more taxes to cover the bureaucratic tape that goes with it.

I'm in a bad mood.

I wish us all well.