Dec. 8, 2011: Mortgage Ops job; Lending to borrowers with negative equity: spotlight on the FHA’s Negative Equity Program

Dec. 8, 2011: Mortgage Ops job; Lending to borrowers with negative equity: spotlight on the FHA’s Negative Equity Program Rob Chrisman

If you made a Christmas wreath out of $100 bills would you have Areath-a Franklins? I have been retained by a very well-capitalized mortgage bank to assist in its search for a Senior Regional Operations Manager in Sacramento, CA. It is a national lender with a portfolio lending appetite – company-wide production is in excess of $5 billion through its wholesale, correspondent, retail, and direct lending channels. The ideal candidate will provide “leadership of the continued growth, development, efficiency, and quality of the regional operations center to support all wholesale and correspondent operations out of assigned region, implement operational strategy and planning execution in order to achieve operational business goals, and should have a high core competency of understanding and practical applied knowledge of underwriting, closing, funding, and overall wholesale and correspondent operations processes and procedures. Experience managing a mortgage operations center, national strategic leadership experience preferred.” Please send resumes to me at rchrisman@robchrisman.com. The Federal Reserve, the FDIC, and the OCC want your input on some proposed rulemaking (NPR) that focuses on “the agencies’ market risk capital rules for banking organizations with significant trading activities. The amended NPR includes alternative standards of creditworthiness to be used in place of credit ratings to determine the capital requirements for certain debt and securitization positions covered by the market risk capital rules. The proposed creditworthiness standards include the use of country risk classifications published by the Organization for Economic Cooperation and Development for sovereign positions, company-specific financial information and stock market volatility for corporate debt positions, and a supervisory formula for securitization positions.” Any time one combines Basel III with Dodd-Frank and several government agencies, it can become a little muddled: http://www.fdic.gov/news/news/press/2011/pr11189.html.

Agencies are indeed trying to clarify their supervisory and enforcement responsibilities for Federal Consumer Financial Laws. Remember (who can forget) that Dodd-Frank provides the CFPB with exclusive supervisory and primary enforcement authority over “Large Institutions,” defined as institutions with total assets exceeding $10 billion.  The prudential regulators retain supervisory and enforcement authority over their respective institutions falling under that threshold. But the devil is in the details: the Dodd-Frank Act does not specify how or when to calculate total assets for purposes of applying the threshold. A copy of the joint statement is available at http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20111117a1.pdf.

Lending to underwater borrowers, short sales, and foreclosures are a sign of the times. (When a borrower can come back after one of these is discussed at