Page 19

news flash

continued from page 6

Commissioner of Banks. “States have been hard at work for nearly two years delivering an examination format that is not only effective, but efficient for regulators and stakeholders.” In addition to these regulatory improvements, state legislatures have also been hard at work. In the past 12 months, 49 states have enacted legislation to update mortgage licensing schemes to meet or surpass the federal minimum requirements of the federal SAFE Act enacted in July 2008. AARMR and CSBS drafted and adopted a model state statute to assist states in complying with the SAFE Act. This model statute was determined by the U.S. Department of Housing and Urban Development (HUD) as meeting federal requirements for the licensure of mortgage loan originators under the SAFE Act. For more information, visit

MBA: Commercial/multifamily delinquency rates continue upward trend

Bachus says government must sever ties with ACORN

I must say that the MBA did a great job combining quality assurance personnel and underwriters all in one conference. The conference would not have been successful if it had received the support of committee volunteers and speakers. This forum cannot support the variety of hot topics and concerns that were addressed in the breakout sessions at the conference. However, there were a number of intense discussions outside the agenda during networking events and after hours lounging that served as a voice of concern. The concerns of these mortgage professionals were not necessarily discussed during the breakout sessions. Stop the blame game for the economy and state of the industry These quality assurance professionals and underwriters are positioned to see what is going on in the industry. We all need to be held accountable for our role and learn from it so that we can move forward. There is a perceived notion that the MBA is not policing their own. The industry pushed for the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) and the states are requiring that mortgage brokers and loan officers to be licensed. In some states, processors and underwriters must be licensed or registered as well. The industry is allowing a virtual “Phoenix,” the burning in flames of failed mortgage corporations and resurrection of new mortgage corporations with the same leadership that allowed scrupulous mortgage banking practices. Some of these mortgage professionals have earned the coveted Certified Mortgage Bankers (CMB) designation and continue to wear that badge of honor. The quality assurance professionals and underwriters are taken back by an industry that has not policed its own and they may have to touch loans that came from those who are allowed back into the industry to run, manage or direct mortgage operations. Many of the MBA members know who these individuals are and see these individuals back in action. This puts a bad taste in the mouth of those who must see these individuals hide behind a corporate structure with no sanctions being applied by the industry. There is a perceived notion that a great deal of unnecessary regulation is being written with little or no real value added to the customer or industry. The mortgage professionals want to know where the data to support all the new regulations is. If the industry wants to recover, stop funding loans to those who cannot pay or are given at-risk loans. Stop insuring and purchasing loans on the secondary market that have risk and regulatory errors. Renting is affordable housing and it is okay to wait a season so those potential homebuyers are creditworthy enough to qualify for a home purchase. Quality assurance and underwriting perceptions are at an all-time low. These mortgage professionals are looking out for the welfare and health of the respective corporations and industry. There was much chatter about how the industry needs to take a more proactive approach in showing how prudent pre-funding quality control is, both prior to and during the underwriting process. They also stressed that fact that post-closing quality control is saving the mortgage corporations, the mortgage industry and the economy. The industry takes the approach of reporting mortgage failures that were the result of poor underwriting practices, failed quality control policies and procedures, and mortgage fraud. The industry needs an information campaign celebrating the successes of best practices, solid underwriting, and successful quality control policies and procedures, and have associated those successes with the positive impact it is making on the industry and the economy.

Tommy A. Duncan is executive vice president of Quality Mortgage Services LLC. For answers to your QC and FHA questions, please contact Tommy at (615) 5912528, ext. 124 or e-mail You may also visit Quality Mortgage Services LLC on the Web at

Sponsored by


continued on page 14

Tommy: What did you take away from the 2009 Mortgage Bankers Association (MBA) Quality Assurance and Residential Underwriting Conference?


Rep. Spencer Bachus (RAL), the top Republican on the Financial Services Committee, has called for an end to federal funding for the Association of Community Organizations for Reform Now (ACORN), a left wing activist group linked to voter registration fraud and other criminal activity. Rep. Bachus became an original co-sponsor of the Defund ACORN Act, which would eliminate all ties, including financial support, between the government and the organization. He also signed a letter to President Barack Obama demanding a termination of taxpayer assistance to the group. “Taxpayer funding for ACORN’s far left agenda must end now,” said Rep. Bachus. “It is unconscionable to use the hardearned money of the American taxpayer to support a radical organization that has repeatedly been embroiled in scandal and shady activity. This is an outrageous use of public money and the ties must be cut off immediately and permanently.” According to one analysis of budget data, the federal government has awarded more than $53 million in direct funding to ACORN since 1994. ACORN fraudulently registered thousands of voters during last year’s elections and has been investigated for other potentially illegal activities. The U.S. Census Department recently said it would not allow ACORN to officially assist with the 2010 census count, citing a lack of confidence in the organization. As Ranking Member on the House Financial Services Committee, Rep. Bachus has spotlighted funding that ACORN has received from the U.S. Department of Housing & Urban Development (HUD) and formally requested that House Financial Services Committee Chairman Barney Frank (D-MA) to hold hearings on the group’s alleged abuse of taxpayer funds. For more information, visit

By Tommy A. Duncan O

Delinquency rates continued to increase in the second quarter of 2009 for all commercial/multifamily mortgage investor groups, according to the Commercial/Multifamily Delinquency Report from the Mortgage Bankers Association (MBA). “The economic fallout of the recession continued to push commercial and multifamily delinquency rates higher during the second quarter,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “Lower levels of employment, the pullback by consumers and other aspects of the slowdown translated into a difficult operating environment for many income-producing properties. That, in turn, has led to increased stress on the loans those properties support.” Between the first and second quarters, the 30-plus day delinquency rate on loans held in commercial mortgage-backed securities (CMBS) rose 2.04 percentage points to 3.89 percent. The 60-plus day delinquency rate on loans held in life company portfolios rose 0.03 percentage points to 0.15 percent. The 60-plus day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.17 percentage points to 0.51 percent. The 90-plus day delinquency rate on multifamily loans held or insured by Freddie Mac rose 0.02 percentage points to 0.11 percent. The 90-plus day delinquency rate on loans held by Federal Deposit Insurance Corporation (FDIC)insured banks and thrifts rose 0.64 percentage points to 2.92 percent. The MBA analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, CMBS, life insurance companies, Fannie Mae and Freddie Mac. Together, these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding. The analysis incorporates the same measures used by each

individual investor group to track the performance of their loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another. Based on the unpaid principal balance of loans (UPB), delinquency rates for each group at the end of the second quarter were as follows: CMBS were at 3.89 percent (30-plus days delinquent or in REO); life company portfolios were at 0.15 percent (60-plus days delinquent); Fannie Mae was at 0.51 percent (60 or more days delinquent); Freddie Mac was at 0.11 percent (90 or more days delinquent); and banks and thrifts were at 2.92 percent (90 or more days delinquent or in non-accrual). For more information, visit