Executive Q&A with Claude Cousins, Executive Vice President of Delta Trust Mortgage

Interest rates are at historical lows, and the market resembles a limbo contest. How much lower can it go?

Just as in a limbo contest, you still need room to work under the bar. Lenders have margins and overhead to meet, and the closer rates get to zero, the tighter those margins become. Rates might edge a bit lower, but it is hard to pass on a purchase or a refinance when the rates are hovering at all-time lows. Trying to pick a bottom on rates is always a risky game because you will not know rates have bottomed out until they start going back up.


What are the front-burner issues for Arkansas mortgage lenders?

The continuing changes to the FNMA (Federal National Mortgage Association, known as Fannie Mae), FHLMC (Federal Home Loan Mortgage Corp., or Freddie Mac) and investor guidelines require a diligent awareness from a lender about those changes and a keen attention to detail on all loan packages. Lenders typically require very specific documentation for all information in the loan package. While this is not a significant change to the underwriting guidelines in the past, the documentation process has become much more exacting. In turn, the consumer may be unaccustomed to the level of detail required for today's loan application. Accurate communication is critical.


What are the most significant changes in the mortgage business for lenders and borrowers since 2008?

The unprecedented continued decline in the mortgage rates has to be at the top of the list. As an example, lenders have been able to refinance loans that are less than a year old and have that process make financial sense for the consumer. Additionally, the absence of any type of alternative documentation program has affected the self-employed and those who have unusual income situations. If a consumer meets the FNMA or FHLMC guidelines, the process is basically unchanged. If a consumer falls outside those guidelines, the financing options are severely curtailed. Lastly, the investor underwriting guidelines for non-conforming loans over $417,000 (jumbo loans) remain relatively stringent. The individual investors for those loans set their own guidelines. While those loans are available, the underwriting guidelines generally make the approval process more difficult when compared to the conforming loan guidelines.


How has the relationship between lenders and appraisers changed during the past four years?

The Home Valuation Code of Conduct that was implemented in May 2009 had a significant impact on the ordering of residential real estate appraisals. The HVCC required that the appraisal assignment process be completely separate from the loan production staff or from anyone who has a direct benefit if a loan closes. While there have been some changes to the HVCC, lenders have adhered to the overall goal of an appraisal assignment processing being independently or randomly assigned. Generally speaking, lenders have become a bit more selective about which appraisers they use and who they might have on a lender appraisal panel.

Claude Cousins, Executive vice president of Delta Trust Mortgage, is a 25-year mortgage lending veteran in the Little Rock market.

Background: Cousins was born in Dumas and grew up in Pine Bluff. He began his career as a mortgage lender in Little Rock with Capital Savings & Loan in 1987. He went on to work for Mellon Mortgage, Worthen/Boatmen's/Bank of America, Chase Manhattan Mortgage and Centennial Bank. In April 2009, Cousins joined the predecessor of Delta Trust Mortgage, where he is executive vice president of loan production.

Education: Cousins graduated from the University of Arkansas at Fayetteville in 1986 with a bachelor's degree in finance and banking.