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Chatter on Elizabeth Warren; CFPB Ombudsman Report; Investor Updates
Here's a recent inquiry: "Rob, what is up with government going
after Gfee money? Why does Congress have to vote to intrude into areas where it
shouldn't be? How many times does it have to dip into the well? Shouldn't the
actors and actresses be left out of providing the government for money to fund
immigration issues? The two are totally unrelated! This is just a tax on the
entertainment business, and I am sure us viewers will pay the costs through
more advertising or whatever. What can we do about it?" Well, for one
thing, go to Wal-Mart and buy some readers - the controversy is around
Potential gfee increases aren't stopping companies from hiring. In Orange
County, Metropolitan Home Mortgage is searching for a Mortgage Lock
Desk/Secondary Market Specialist. Responsibilities include daily loan
pricing which "consistently positions Metropolitan Home Loans to offer
competitive rates while managing associated risks," review and confirm loan
locks with appropriate end investor and loan originator within stated
timeframes, manage delivery dates, and reconcile investor fundings. Experience
with loan pricing engines such as OB, Mortech, Loan Sifter, etc., a plus. Metropolitan
Home Mortgage has been in business nearly 20 years, and is a HUD approved FHA
direct endorsement lender as well as an approved Fannie Mae seller servicer. Inquiries
and confidential resumes can be sent to Chris Weir at CWeir@mthm .com.
A Wall Street buddy wrote to me, "Can SIFMA make the end of the Mayan
calendar an early close... 12/21/12?" Something tells me that most of
the world will wake up, just fine, on the 22nd, but this illuminates the
problem with predictions. Talk about a crystal ball: 4 months ago here is Loan
Value Group's Frank Pollatta, a non-economist, putting out a forecast on housing
(rally!) Bloomberg TV that so far has been a good one. More
Senator-elect Elizabeth Warren has secured a spot on the Senate
Banking Committee, according to a Democratic Senate aide. Warren, a Harvard
professor and founder of the Consumer Financial Protection Bureau, beat out GOP
incumbent Sen. Scott Brown in a heated and expensive battle this fall. Tim
Duncan, who worked with Warren during the early phases of the CFPB and Dodd
Frank, wrote me saying, "On her first day at work, Elizabeth will be one
of the most knowledgeable and experienced members of the Senate Banking
Committee when it comes to the issues that the Committee deals with.
Whatever people think of her, they should appreciate that she knows her
stuff. Also, I would definitely not make any predictions on the
positions she will take or who she may align herself with - particularly with
regard to issues affecting the mortgage industry and the GSEs. It is one
area where the battle lines don't seem to be aligned with party affiliation and
interesting things could happen." (By the way, Tim left work on the CFPB
to focus on goodlyhome.com.)
TR writes, "After HUD announced its pending MIP increase AND plans to make
the annual MIP permanent for loans originated starting next spring, I have been
breathlessly awaiting the CFPB to step in and denounce this assault on the
nation's most vulnerable homebuyers. (Insert tongue firmly in
cheek). CFPB may stay up nights wondering how to gain the most
publicity over stopping $5 account fees at big banks, but it's clear they would
never so much as acknowledge FHFA and Congress's role in increasing housing
costs. Love the fact that CFPB is concerned about gfee increases for
judicial foreclosure states while it ignores gfee increases to pay for SS tax
cuts and (potentially) expansion of Visas for new immigrants! Perhaps we
need a new entity called the Homeowner Protection from Government Assault
Bureau. They could evaluate and publicize all legislative/bureaucratic
measures impact on housing, could fund them off budget through the Federal
Reserve (as CPFB is). Would guess there would be no shortage of industry
experts willing and able to staff the HPGAB!"
While we're on it, an ombudsman is a person or body that investigates
complaints and mediates fair settlements, especially between aggrieved parties
such as consumers or students and an institution or organization, or a
government official who investigates citizens' complaints against the
government or its functionaries. The CFPB's just issued its first annual
report. Of primary
significance to industry is the report's identification of "the presence
of enforcement attorneys at supervisory exams" as one of two systemic issues
reviewed by the Ombudsman in FY 2012. Also of interest are the roughly 500
complaints about the CFPB complaint system.
And from the week before last: "In reference to the link to the IBD
article on the aggressive use of disparate impact, I saw a separate article
later in the day that there is discussion of raising FHA fees once again.
Since FHA's stated mission is to increase access to credit for underserved
markets, and if a greater percentage of those obtaining FHA mortgages are
minorities, wouldn't the FHA be guilty of discrimination because their fee
structure has a disparate impact on minorities (even though applied evenly to
While the press is focused on the fiscal cliff, let's not forget the
expiration of the Mortgage Debt Relief Act. Forty-one state attorneys
general recently signed a letter appealing to the U.S. Senate and House of
Representatives to extend the Mortgage Debt Relief Act of 2007 past its current
expiration date of December 31, 2012. The attorneys general believe that
allowing the act to expire would weaken the National Mortgage Settlement Act
passed earlier this year which prevents homeowners from having to pay taxes on
debt that lenders agreed to forgive as a result of home foreclosures, short
sales or, loan modifications. The sentiment is that the act is set to expire at
a time when homeowners are receiving benefits from the national settlement
mortgage, signed earlier this year, which obligates the five of the nation's
largest mortgage services to pay $20 billion in credited relief to consumers.
One of the stipulations of the act is that the relief must be provided before
March 2015. Failure to extend the bill could stick families with an unexpected
tax bill. In addition, failure to extend the bill could result in tax increases
up to $1.3 billion, according to the Congressional Budget Office.
Moving over to some relatively recent investor, M&A, and agency news...
For all conventional loans, Franklin American will no longer be
checking the Borrower, Seller, Loan Officer, Loan Processor, Loan Underwriter,
Listing Agent, Selling Agent, Appraiser, and Settlement Agent fields against
HUD's Limited Denial of Participation and General Services Administration
Excluded Party lists. Additional guidance changes apply to non-conforming
jumbo fixed products, for which FAMC has reduced the minimum loan amount from
the Fannie high balance amount to $417,000. Non-conforming jumbo fixed
underwriting guidelines have been relaxed such that submission through DU is no
longer required and the continuance timeframe on retirement income has been
reduced from ten to three years.
FAMC has updated its USDA product guidelines to allow farm service buildings on
residential properties so long as they're not used to produce income. In
cases where farm service structures do contribute to the borrower's income, the
contributory value will be deducted from the maximum loan amount prior to any
financed up-front guarantee fee. USDA product guidelines on Income-Based
Repayment student loans have been updated as well.
GMAC updated the pricing adjustments for all High Balance/Super
Conforming ARMs to -0.75%, while High Balance Interest Only ARMs are subject to
an adjustment of -0.25%.
M&T Bank has updated its disaster re-inspection policies for properties in
the state of Delaware that were affected by Hurricane Sandy. Properties
in Kent, New Castle, and Sussex Counties whose appraisals were completed before
November 8th will require a full re-inspection by the original appraiser that
includes an exterior photograph and certification that the property hasn't been
As per the laws signed by the VA back in August, M&T has updated its
policy to incorporate the new maximum county loan limits and to allow dependent
children of veterans as VA property occupants. M&T has also changed
the current VA adjustment from 0.375 to 0.5 and updated the rate sheet
Affiliated Mortgage implemented its new SRP schedules for all loans
locked on and after November 19th, the full details of which can be found on
the AMC website. Locked loans that need to be re-locked based on pricing
after November 19th will be subject to the SRP schedules in effect at the time
of re-lock, while those re-locked based on pricing prior to that date will be
subject to the SRP schedules that were in effect on the old lock date.
Congrats to Mortgage Harmony, which made the American Banker Top Ten Tech
Companies to Watch in 2013.
Pinnacle Capital has updated its large deposit, retirement account, tax
payoff, and CLTV/HCLTV guidance for conforming and Pinnacle Plus
products. The 12-month payment history requirement for Enhanced DU Refi
Plus products has been removed, as have the reserve requirements for 3-4 unit
PHH has revised its policy on Truth in Lending Disclosure errors and
will no longer consider any loan involving rescindable transactions where the
Disclosure contains and under-disclosure error exceeding $35 eligible for
California wholesaler Parkside Lending is now requiring that a copy of
the borrower's HUD-1 settlement statement be provided for review before
obtaining closing documents.
Mergers and acquisitions (M&A) continue...in Wisconsin Nicolet
Bankshares ($654mm) will acquire Mid-Wisconsin Financial Services ($462mm) in
an all-stock deal valued at $10.2mm. The deal creates the 6th largest bank
holding company in WI and would allow Mid-Wisconsin to pay off the $10.5mm in
TARP that it owes when the transaction closes. And in New Mexico the First
National Bank of Santa Fe ($760mm) will merge with Strategic Growth Bancorp
($291mm) for an undisclosed sum. Strategic has reportedly raised $250mm from
investors seeking to invest in banks located in the Southwest and has been
looking for opportunities.
For those looking for more information on DU 9.0, Fannie has published a
list of FAQs. A DU
Refi Plus Income and Asset Documentation Requirements job aid, which provides
information on determining the documentation requirements for DU Refi Plus
loans, is also available.
The FHA is offering a TOTAL Scorecard and AUS webinar on December 13th.
The training will cover basic guidelines, which files are scored through TOTAL,
when to downgrade files to a manual underwriter, and documentation
As I tell folks, we could easily have these mortgage rates, plus or minus a
little, all through 2013. The lack of volatility may drive some folks up the
wall, but hedging and lock desk personnel don't mind at all. Neither do LO's,
for that matter. Thomson Reuters mentioned that mortgage banker selling was
about $2.5 billion again, but hey, with the Fed buying more than that, bring it
on! Agency (Fannie and Freddie and Ginnie) MBS prices improved almost .125 as
the 10-yr closed at 1.61%.
Today has a full slate of economic news: the good ol' MBA stats, ADP
Employment, the final Q3 reading for Productivity and Unit Labor Costs, Factory
Orders, and ISM Non-Manufacturing. But with the markets waiting for fiscal
cliff chatter, and the Fed in buying, we could see another day of "unchanged"
on the screens.
Said one senior to another: "I'm thinking about changing my password to
'incorrect'. That way, when I log in with the wrong password, the computer will
tell me, 'Your password is incorrect.'"
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