I find it troubling that regulators seek to bury wholesale origination (brokers) in new regulation while retail origination is being painted as the good guy in the mortgage meltdown. The only difference between wholesale origination and retail origination is the lobbying power of the latter dwarfs that of the former.

Regulators, through their proposed legislation and regulatory changes, would have you believe that fraud only exists in the wholesale origination end of the business. Nothing could be further from the truth. Retail lenders are equally prone to fraudulent lending activities as are the wholesale originators. Apparently, the regulators haven’t recognized this.

In the current environment of massive lending changes and industry scrutiny, fraudulent origination practices have been uncovered at Citigroup. Essentially they have been misrepresenting, to their adjustable rate mortgage clients, that their rate resets will be higher than their present mortgage rates, therefore they should refinance to a fixed rate mortgage.

This would be beneficial to their clients if in fact the resets were higher than current rates. However, they are not higher and in fact are lower. Consider this post at Mish’s Global Economic Trend Analysis. Emphasis is mine.

Question 1. What happens to our loan on the anniversary? Will it go down?
Answer: It is very unlikely that it will go down. Would you like to refinance?

By the way the existing rate on the loan in the Email above is 6.00%. That rate is based on the one-year treasury rate plus an index of 2.75. On March 17, the one-year T-Bill rate was 1.53 as quoted during the conference call. Let’s do the math. 1.53 + 2.75 = 4.28 (rounded to the nearest higher 1/8 would be 4.375). Citigroup told the client the new rate would be above 6.00%

The above conversation, in conjunction with the documented hard evidence above, suggests a pattern deceit by Citigroup. I am wondering how many Citigroup customers have refinanced to a higher rate and payment based on inaccurate rate quotes from Citigroup mortgage specialists.

I am not a lawyer. I do not know if any of this violates truth in lending laws, fair lending practices laws, or any other laws. However, I do know this is a mess, and if I was a customer of Citigroup ...

Congress would like the prudent to pay for the misdeeds of the irresponsible. Of course the cost will show up in your tax bill or the ever shrinking buying power of our dollar. Enough is enough.

Say now or pay later. Visit this website dedicated to stopping the mortgage/real estate bailout. Stop the Mortgage Bailout.

From the website…

This site is dedicated to stopping the government’s planned bailout of the housing market. A bailout requires responsible Americans to pay for the acts of greedy bankers, mortgage brokers, flippers, and over-extended homeowners. In other words, the government wants you to pay for the blunders of others who knew, or should have known, better.

Equally as important, a bailout would permanently price out of the housing market all those responsible Americans who have been patiently saving to buy a house that they can actually afford. The current housing correction is necessary to correct for the historic run up in housing prices over the past decade, which has pushed the price of housing beyond affordability. By bailing out the housing market, the government will prevent housing prices from returning to affordability and thereby ensure that young families will not be able to afford homeownership.

A government bailout of the housing market is both fiscally and morally irresponsible; it is an unfair subsidy being paid to the wealthy (bankers), the greedy (mortgage brokers, flippers, and yes some homeowners), and the incautious (some homeowners), with no benefit to those paying the bill (taypayers).

Why should responsible Americans be forced to pay for the mistakes of others?

They are stealing from us. Let them know we know. United we can stop them.

The long awaited details on the expanded loan limits for Fannie Mae and Freddie Mac are now becoming available. Here is the latest information we have on the new jumbo loan guidelines for counties located in Connecticut.

While the limits have been approved and the matrices released, FNMA’s Desktop Underwriter (DU) and Freddie Mac’s Loan Prospector (LP) do not reflect these changes or offer pricing for these loans. We expect those details to follow shortly. DU and LP are the computer underwriting models used to determine borrower eligibility.

Here you can find the FNMA Jumbo Mortgage Matrix

And

Here is Freddie Mac’s Jumbo Loan Matrix

We will post any developments with regard to these new limits as they become available.

I think we may have seen the best of mortgage interest rates for the foreseeable future. It’s very possible that we have already visited this year’s lows on fixed rate mortgages. Keep in mind of late, the foreseeable future is about as far away as tomorrow.

Normally in a recession, mortgage rates respond to the Federal Reserve cutting the federal funds rate. This time around, it’s very different. Instead of mortgage rates dropping with the Fed lowering the target rate, mortgage rates are going the other way.

There are reasons behind this anomaly. First of all, mortgage rates never mirror the fed funds’ rate moves. However for the past fifteen years, fixed rates more often than not, moved in the same general direction as the fed funds rate. Presently the rates are going in opposite directions. This by the way, is telling us a lot about the economy.

One reason long term mortgage rates are moving upward is because inflation is raging out of control. It doesn’t matter what the government numbers say, everything is more expensive and some commodities have have skyrocketed in price and I’m not just referring to oil. Long term rates have a history of going up in response to inflation because inflation directly erodes the value of long term debt. In essence, the higher rate is supposed to offset the ravages of inflation.

The dollar’s weakness is also adding to the inflation picture. The dollar buys less of everything we import, which is more fuel for the inflation fire that long term mortgage rates are responding to. Keep in mind, in order to strengthen the dollar, long terms rates would have to go up from their current level or foreign currencies would have to weaken.

That could happen, perhaps due to the recessionary environment spreading globally or some other reason. However, there is little reason to think foreign economies won’t deteriorate because they too are affected by the credit crisis and the implosion of the largest economy on the face of the earth.

The U.S. credit markets are broken. The mortgage debt markets are at the vanguard of the market’s destruction, malfunctioning and ongoing deterioration. Hundreds of billions of dollars in mortgage debt value has evaporated into thin air. Mortgage paper (debt securities) is toxic and no one wants to buy it. This is reflected in the trend and level of current mortgage rates.

Not only ...

The credit bureaus, Trans Union, Experian and Equifax, sell a certain kind of data called trigger data. When a borrower applies for a mortgage, a credit report is ordered for the sake of qualifying and underwriting the loan. Naturally, your credit report request is directed to the credit bureaus who notate all of the people who are having their credit pulled for the sake of getting a mortgage.

What the bureaus do with this refined data, is sell it to mortgage origination companies or middlemen in the consumer data arena. Here is a sales pitch for such data from mortgage triggers dot com.

FAQ Answers

Where do triggers come from?
A: Trigger Leads come directly to us from the three major credit bureaus. A mortgage trigger is simply a credit bureau derived lead based on live credit attributes triggered by the actual credit behavior of your prospect. It is highly specialized and targeted for individual client.

Can I specify the lead parameters?
A: Yes. You can select the FICO scores, mortgage amounts, LTV ratios, geography, and revolving debt balances that make up your ideal candidate. When they apply for a mortgage, we send you the borrower’s information within 24 hours.

How is a mortgage trigger lead generated?
A: Once you have established your ideal criteria the bureau creates a “watch” list of all homeowners that fit the exact criteria you desire. When they have a mortgage inquiry which is generated when their credit is pulled, we send you the lead.

If you have ever applied for a mortgage and wondered why you are getting scores of mortgage offers over the telephone, via mail or email, it is probably due to the credit bureaus selling your trigger data to whomever wants it (the releasing of the hounds). I don’t know about you, I’m in the mortgage origination business and I find this tactic disturbing from a consumer point of view. I also don’t like it from the origination perspective either.

I have no problem with the bureaus providing my credit information to prospective lenders. That is their function. However, ...