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Chatter on Elizabeth Warren; CFPB Ombudsman Report; Investor Updates
Posted to: Pipeline Press
Wednesday, December 05, 2012 9:27 AM

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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 "Gfee" money.

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 all borrowers)?"

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 damaged.

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 accordingly.

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 FHA Streamlines.

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 purchase.

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 protocol.  Register

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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More From MND

Mortgage Rates:
  • 30 Yr FRM 4.19%
  • |
  • 15 Yr FRM 3.32%
  • |
  • Jumbo 30 Year Fixed 4.03%
MBS Prices:
  • 30YR FNMA 4.5 107-28 (0-05)
  • |
  • 30YR FNMA 5.0 110-08 (0-02)
  • |
  • 30YR FNMA 5.5 110-28 (-0-02)
Recent Housing Data:
  • Mortgage Apps 2.43%
  • |
  • Refinance Index 4.14%
  • |
  • FHFA Home Price Index 0.67%