Following the mortgage meltdown in 2007, lenders came under federal scrutiny for their loose financing standards which helped start the housing free-fall.  As a result, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (or SAFE Act) was passed by Congress.  On October 1st, the final rules will take effect, including a mandatory registration for mortgage brokers.

According to MSNBC, fingerprinting and background checks will be a part of the registration along with mandatory education,

Industry sources say that thousands of brokers have gone through mandatory education, credit checks and state and federal testing in order to retain the right to handle mortgage originations.

The process has thinned the ranks of brokers, who may be even fewer soon given talk of a 30 percent fail rate on testing, said Bob Moulton, president of Americana Mortgage Group in Manhasset, New York.

While it may be bad news for many brokers, overall the consumer will gain from a more informed and educated lender.  If everyone else in the housing industry is accountable for their work, so too should be lenders.

While it might be in good jest for certain red haired comediennes to be on the D-list, Fannie Mae and Freddie Mac’s impending delisting on the New York Stock Exchange caused shares to plunge yesterday.  According to CNN Money.com,

FHFA said in a statement that the planned delisting is due to the weak stock price for both firms, and not due to any determination about a change in condition at the firms or decisions about their futures.

“A voluntary delisting at this time simply makes sense and fits with the goal of a conservatorship to preserve and conserve assets,” said FHFA’s acting director Edward DeMarco in the statement announcing the move.

The main worry is investor confidence.  Investors are willing to risk more on government backed securities than on privately owned, so we could see an investor meltdown.

June 28, 2010 is the D-Day for D-Listing.

Wall Street major league player Goldman Sachs was charged today by the Securities and Exchange Commission with subprime loan fraud - a charge that the firm vehemently denies.  According to MSNBC.com,

In its lawsuit, the SEC alleged that Goldman structured and marketed ABACUS, a synthetic collateralized debt obligation that hinged on the performance of subprime residential mortgage-backed securities.

It alleged that Goldman did not tell investors “vital information” about ABACUS, including that Paulson & Co was involved in choosing which securities would be part of the portfolio.

The charges come as the government is looking to expand regulatory efforts that would hold companies and their manager accountable for the nation’s financial crises.  The charges were so severe that the stock market tumbled today by 125.91 points.

The housing market continues to struggle as home prices fall and mortgage applications drop. The Market Composite Index, which measures the volume of mortgage applications each week, dropped this past week. One of the biggest reasons is the fact that the refinancing portion of the index dropped.

Apparently, even though mortgage rates are low, people are reluctant to refinance their homes. This is causing mortgage applications to drop. Perhaps some are waiting to see if mortgage interest rates will drop back below 5%, since mortgage rates rose last week. Another issue is that home values have not been rising, and do get the 80% loan to value ration that many mortgage lenders are asking for is difficult.

Those with mortgages serviced by Fannie Mae or Freddie Mac, though, can take advantage of a refinance program from the government that allows a 125% LTV.

Ever since the financial crisis, Fannie Mae and Freddie Mac have been wards of the federal government, under direct control. This happened when the companies appeared to be on the verge of collapse, and ready to take down a large portion of the mortgage market. With the two GSEs accounting for about 70% of loan originations due to FHA loans, a collapse would have been devastating. Fannie and Freddie are the biggest mortgage lenders in the country, between originations and servicing.

But Barney Frank doesn’t want Fannie Me and Freddie Mac to go back to the way they were before. National Mortgage News Online reports on his opposition:

Chairman Frank said he plans to hold hearings on restructuring the U.S. housing finance system and he has no desire to see Fannie and Freddie return to the former “hybrid” status as a private companies with a public mission.

It is unclear about what might happen going forward, but if Fannie and Freddie are no longer GSEs, they would end up either being completely private, or they would be turned into government home financing programs.

Goldman Sachs has managed pull in profits as revenues jump. So far, the earnings season for financial companies has been somewhat mixed, with some companies reporting profits (like JP Morgan Chase and Morgan Stanley), while others, like Citi, post losses.

But with Goldman in the profit category, it seems as though things are probably looking better overall for the big banks that seemed on the verge of collapse toward the end of 2008. MarketWatch reports on the Goldman Sachs response to their profits:

“Despite significant economic headwinds, we are seeing signs of growth and remain focused on supporting that growth by helping companies raise capital and manage their risks, by providing liquidity to markets and investing for our clients,” Chief Executive Lloyd Blankfein said in a press release.

Some of the biggest helps to Goldman include underwriting fees it earned, as well as the fact that there were pay cuts. Compensation and benefits were cut in response to public outrage, and Goldman appears to have reaped some benefits.

When it comes to getting a mortgage, you want to make sure that you are getting a good deal, and that you are choosing a mortgage lender that can help you through the process. This can also be helpful when you are looking to refinance. As you choose a mortgage lender, it is a good idea to shop around a bit first. Chris Bibey, at the Bankruptcy & Foreclosures blog, offers three tips that can help you as you choose a mortgage lender:

1. Consider reputation: Look for a mortgage lender with a good reputation. You can usually find information on banks and brokers. Get references from friends and relatives.

2. Look for a low mortgage interest rate: This is probably the most important aspect of your home mortgage loan. Shop around for a mortgage lender offering a low rate. You can also look for other helpful amenities like reduced closing costs. You should also consider a mortgage lender that is knowledgeable about different programs.

3. Don’t be too hasty: Even though you may want to move through quickly, make sure you take some time to carefully review your mortgage financing options, and choose the mortgage lender you are most comfortable with.

This week, mortgage applications have dropped. The Mortgage Bankers Association is reporting that applicants are holding off a bit. This is not especially surprising, with the holiday approaching. Indeed, the MBA is taking next week off, and not planning to release data on mortgage applications.

As is usually the case, most mortgage applications were related to refinance. Nearly 76% of mortgage applications were from those wishing to refinance. This is not surprising, since rates are near historic lows, and many homeowners are interested in refinancing to a lower rate in order to save money.

It will be interesting to see how things go starting in the new year, and whether the expanded and extended home buyer tax credit will contribute to a pick up in new mortgage applications.

Citi got $45 billion from TARP, and now Citi is ready to pay it back. In order to help raise the funds, Citi plan to raise $20 billion by selling new equity. The idea is that by repaying TARP, Citi can get out from underneath the thumb of the “pay czar”.

The news that Bank of America received approval to repay its TARP money sent Citi (and Wells Fargo) into repay mode as well. However, officials have to give banks the go ahead in order to repay the money that they received. Banks know that if they don’t follow BofA’s lead, they could be at a disadvantage, since Bank of America would be able to lure top talent to the organization with large bonuses.

It will be interesting to see how things go, and how many banks line up to repay their money. This is good news for the Obama Administration and tax payers, since it means that the deficit won’t be as large as projected.

It’s been a tough year for the housing market. But it’s not all been bad. With FHA loan rules likely to tighten, there are concerns amongst some that the the ability to get new loans going will continue to be difficult. However, there are some silver linings. Mortgage News Daily offers 10 reasons that the housing market should cheer up. Here are my five favorite reasons from the list:

1. Stock market rally: Overall confidence should help matters immensely, and the stock market should be a big part of that.

2. Extended tax credit: The first time homebuyer tax credit was extended into next year, and expanded to include those who are “trading up”.

3. TARP repayment: Bank of America repaid TARP, and the latest news is that most of the TARP funds are going to be repaid.

4. CRE is resilient: Commercial loans still have a lower delinquency rate than residential loans, and that is helping matters for the overall real estate market.

5. Not all the home builders are bankrupt: Mortgage News Daily points out that even though many home builders are struggling, it’s a veritable miracle that they all aren’t bankrupt.