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Archive for March, 2008

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The Big Squeeze - Countrywide Limits Broker Compensation

March 31, 2008 By: Morgan Category: Uncategorized No Comments →

Countrywide issued a communication to its brokers today limiting compensation on all loans to Countrywide to 4 points, including yield spread premium (back points or YSP).  While 4 points may seem egregious to some, it is the first step at banks actively restricting total compensation to brokers above and beyond traditional federal and state guidelines.  

The following is an Important Message regarding Broker Compensation. 

Dear Valued Business Partner: 

Consistent with evolving industry standards within the wholesale lending environment, Countrywide®, America’s Wholesale Lender® will be modifying the current Broker Compensation Policy for all broker-originated loan transactions. Effective Thursday, April 3, 2008 at 8:00 p.m. (PT), the maximum allowable total broker compensation will be set at 4% - which includes Yield Spread Premium (YSP) plus any additional points and fees charged by the broker to the borrower.* 

Broker compensation limits do not include discount points paid to the lender to reduce the borrower’s interest rate, lender fees, broker credits to the borrower or pass-through fees paid to a third party for actual services rendered. 

Impact to Pipeline 

Loans currently in the pipeline must be in “Docs Out” status, as reported on CWBC, by Thursday, April 3, 2008 at 8:00 p.m. (PT) or will be subject to the new Broker Compensation Policy. In addition, pipeline protected loans under the old Broker Compensation Policy must fund no later than Wednesday, April 30, 2008. 

If you have questions regarding this new policy, please contact your Countrywide Account Executive. 

Thank you for your business. 

As a wise man once said, the beat goes on…

Monday Market Commentary: Mortgage Rates Unchanged Last Week

March 31, 2008 By: Alex Stenback Category: Uncategorized No Comments →

Last Week:
Mortgage bonds endured yet another week of choppy action driven by a decidedly mixed bag:

  • Bear Stearns do over, from $2 to 10 per share,
  • Continued weak housing data, with some (early) bottoming signs.
  • Ebbing consumer confidence,
  • Weekly unemployment claims better than expected,
  • Friday's PCE report showed inflation remains anchored and a fading consumer. 

Add it all up, mix in a little generalized anxiety, and mortgage rates closed out the week unchanged from where they started.

This Week: 
As for the economic calendar:  Monday's Chicago Purchasing Managers Survey, Tuesday's ISM Manufacturing index, Wednesday's Factory orders report will give us a look at the manufacturing and wholesale components of the economy. Friday's Employment Report will garner the most attention from the markets.  Negativity in any of these reports, but especially the employment report, should help mortgage rates.

Fed Chairman Bernanke testifies before the congressional joint economic committee on Wednesday, which also brings the ADP payroll report.  Information hungry traders trying to gauge the Fed and front-run Friday's employment report may spark some volatility if there are any surprises here.

31_march08

For up to the minute news and views on interest rates and the factors that drive them, tune in to our twitter feed, BTM RateWatch.

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