NMP - December 2016 - 70


The Long
& Short
The Business of Short Sales

When Unpopular Policy Works
BY PAM MARRON

ur current
Administration
inherited a
financial crisis
that this country
has not
experienced anything close to
since the Great Depression.
When the collapse occurred, it
was visible by the number of
unoccupied homes, and many
of us knew of friends, relatives
and colleagues who were
impacted by this. Initially, the
problems were blamed on the
unscrupulous mortgage broker
industry until it was learned that
the banking industry had an
equal amount of blame.
Almost every loan originator I
know was negatively impacted
by the housing crisis. They were
either losing their homes or
income, and in many cases,
both. All of us saw the housing
bubble, but complacency set in
after it continued for years, not
months. When the crash
happened, it was fast and
mammoth. It had to be dealt
with and the depth of problems
that housing faced during the
last eight years was
unprecedented. Drastic
measures were necessary to be
put in place immediately to stop
the bleeding.
Many say that the measures
put in place went too far and
stalled the progress of the
housing market, and ultimately,
added more cost to the entire
mortgage process. Others say it
could have been much worse if
these safeguards were not in
place, and that the
inconveniences placed upon our

O
DECEMBER 2016 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

70

industry need to be adapted to.
But a few changes occurred
that have provided end results
that could be argued as good.
The role of AMCs
and home prices
Many of us have concerns when
we see housing prices increase
quickly. How do we safeguard
against the alarmingly fast
increase in home values that
was the norm prior to the
crash? The answer appears to
be the appraisal management
companies (AMCs) where all (or
at least) qualified mortgage
(QM) appraisals must go
through. Appraisals are now
done by third-party AMCs who
lenders and realtors have no
communication with until after
the appraisal is completed.
Even though the process can
be frustrating, the value cannot
be blamed on the buyers'
lender. A dispute in value can
be done, but it is with the
appraiser through the AMC
rather than the lender.
Qualified mortgages (QMs)
Due to requirements put in
place by the Consumer
Financial Protection Bureau
(CFPB), almost all secondary
market sellable mortgage
products no longer have
prepayment penalties, negative
amortization, balloons and
interest-only options. Prior to
the housing crash, these
negative options were mostly
explained to consumers as
"rare to happen," but ultimately,
became a main reason so many
homeowners were negatively

"Please don't say the past housing crash
won't happen again with policy changes
in the new administration."

affected by the housing crash.
Consequently, a new industry
of non-QM mortgage products is
out there. Though a rare few
have limited "skin in the game,"
most of these products require
20 percent equity to close the
deal.
I know that many in my
industry have opposite views of
the above. And, yes, policies can
be streamlined. Frustrating to all
of us is that dealing with housing
issues seem to come to a
standstill six to 12 months
before every election cycle,

seeming to be a topic that no
political candidate wants to
touch.
Please don't say the past
housing crash won't happen
again with policy changes in
the new administration.
Instead, those of us in the
mortgage and real estate
industries need to ensure that
this doesn't happen again by
looking at what policies have
and have not worked. More
effort needs to be placed in
fine-tuning policy that does
work.

Pam Marron (NMLS#: 246438) is senior loan originator
with Innovative Mortgage Services Inc. (NMLS#: 250769)
in Tampa Bay, Fla. She may be reached by phone at (727)
375-8986, e-mail Pam.M.Marron@gmail.com or visit
HousingCrisisStories.com, CloseWithPam.com or
8Problems.com.


http://www.NationalMortgageProfessional.com http://www.HousingCrisisStories.com http://www.CloseWithPam.com http://www.8Problems.com

Table of Contents for the Digital Edition of NMP - December 2016

Contents
NMP - December 2016 - Cover1
NMP - December 2016 - Cover2
NMP - December 2016 - 1
NMP - December 2016 - Contents
NMP - December 2016 - 3
NMP - December 2016 - 4
NMP - December 2016 - 5
NMP - December 2016 - 6
NMP - December 2016 - 7
NMP - December 2016 - 8
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NMP - December 2016 - Cover3
NMP - December 2016 - Cover4
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