recently: "The lottery gives you a one-in-two hundred million chance of
not going in to work tomorrow. Alcohol gives you one-in-five." What are
the odds that the person sitting next to you in the movies could
benefit from refinancing, even after years of low rates and being
bombarded with "lower your rate" flyers? According to Black Knight,
still pretty good: there are millions of borrowers out there who could still benefit.
Plenty of smart folks in our business think that the "credit box"
has to expand. It is probably more like a "credit amoeba" but
nonetheless let's take a look at credit score trends and lender's
approaches to evaluating credit. Rep. Royce and Rep. Terri Sewell (D-AL), have introduced HR 4211, the Credit Score Competition Act of 2015, which will allow Freddie & Fannie to use other credit scoring models besides Fair Isaac's FICO.
Royce and Sewell based their legislation on the problems faced by
would-be homebuyers (like low- and middle-income Americans) who can
"responsibly" pursue homeownership but don't have a FICO score. The
authors also noted that the GSEs maintain a near-monopoly on the
secondary market and relying on FICO solely reinforces this dominance.
TransUnion released a new report forecasting the state of the credit and mortgage lending industries in 2016.
The report reveals that the consumer lending market will have fully
recovered by the end of next year from the mortgage crisis and ensuing
Great Recession. TransUnion
forecasts that the mortgage delinquency rate will decline from 2.50% at
the end of 2015 to 2.06% at the end of 2016. The 2016 projection is in
the range of delinquency rates seen before the mortgage crisis. Mortgage
debt per borrower has also slowly gained in recent years, which is
partly due to a rebound in housing prices. Debt levels are expected to
increase to $192,512 at the end of 2016, from a projected $189,917 in Q4
2015. Credit card delinquency rates are expected to be 1.46% at the
conclusion of 2016 - the fourth consecutive year with delinquency rates
below 1.5% and a nearly 50% decline from the end of 2009. Credit card
debt per borrower is expected to remain flat in 2016, moving from an
estimated $5,281 in Q4 2015 to $5,262 in Q4 2016.
Recently Ellie Mae published its Origination Insight Report, finding that credit scores on closed loans have dropped to the lowest level
since Ellie Mae began tracking the data in August 2011.The average FICO
scores on all loans fell to 723, while refinance transactions accounted
for 42 percent of overall loan volume in September, up 5 percent from
August. The drop in interest rates has contributed to the greater share
of refinances. Purchase transactions represented 57 percent of overall
loan volume in September, compared to 62 percent in August. Other
findings from the report include, the average 30-year rate for all loans
fell to 4.280, the first decline since May and the average time to
close all loans dropped to 46 days.
The average days to close a loan increased by 3 in November, according to Ellie Mae. Blame TRID? Sure, why not. Average FICO slipped a point to 721.
As of December 12th, United Wholesale Mortgage began offering Fannie Mae's HomeReady product. "The
HomeReady mortgage allows us to offer an unbeatable competitive
advantage for buyers with a low down payment and decent credit scores,"
said Anthony Bird, owner of Riverbank Finance, a partner of UWM.
"Combining this program with lender paid mortgage insurance blows away
the competition with lower payments and lower costs." Click the link to learn more about UWM and HomeReady.
Angel Oaks has jumbo loans available with features such as, interest only, up to 90% LTV/CLTV, no MI, and down to 500 credit scores.
Citi Correspondent has published its most recent credit policy updates and clarifications to be viewed by its clients.
And back in December Ditech
spread the word it would no longer require clients to send in a check
for principal curtailments. The principal curtailment amount will be
netted from the wire when the loan is purchased. As a reminder, the
curtailment amount must meet program parameters. Ditech also announced
the reinstatement of its Jumbo AA High LTV Fixed Rate Product. Effective
immediately it will accept loan registrations and locks on this
product. Be aware that there have been changes to the credit score and
DTI requirements. The minimum LTV for the Jumbo AA High LTV Products is
80.01%. This minimum LTV has been implemented to ensure that each loan
is placed in the correct product and receives the appropriate pricing.
Walter Investment told us about the fate of Ditech's retail group, of course, but prior to that Ditech
announced the reinstatement of the Jumbo AA High LTV Fixed Rate
Product. Ditech began accepting loan registrations and locks on this
product. Be aware that there have been changes to the credit score and
National Homebuyer's Fund (NHF) has opened up the Sapphire Grant
program to the state of Nevada. Some highlights include: down payment
and closing cost assistance in the form of a forgivable grant, not
restricted to 1st Time Homebuyers and Minimum Credit Score of 620 (680
for manufactured housing). View MWF product matrix for full program details.
has updated its guidelines for VA IRRRLs submitted on or after January
4, 2016. The maximum recoupment period limited to 120 months and income
documentation requirement no longer applicable. The borrower must be
current at the time of closing with no 30 days past due payments in the
past six months. The minimum FICO of 620 remains unchanged.
Correspondent National Bulletin 2015-23 includes information on Product
and Guideline Updates, Clarifications and Reminders including removal
of overlays. Log into the FAMC website to view the bulletin for additional information and all lock, delivery and purchase by dates, if required.
has posted expanded product information. One such example relates to
its non-occupant borrower income/liabilities requirements. Effective for
loans with an initial AU submission date on or after 12.13.15, Gemstone
AU will be updated to consider the income and liabilities of all
borrowers on all principal residence mortgage transactions, including
two to four unit properties. Effective for loans with an initial AU
submission date on or after 12.13.15, Gemstone AU will be updated to
consider the income and liabilities of all borrowers on all principal
residence mortgage transactions, including two to four unit properties.
On the vendor side of credit information, a while back Chronos Solutions,
a national real estate finance services provider, has agreed to acquire
Cogent Road, a San Diego-based mortgage technology company. Cogent Road suite includes LOS, verification and credit/data platforms. The
acquisition will allow Chronos to expand its suite of products and
services supporting mortgage lenders as well as add a deep bench of
mortgage technology talent. According to Chronos Solutions CEO, Matt
Martin, Chronos intends to grow the Cogent Road, acquisition into a
mortgage and real estate technology lab, based in San Diego. "We expect
to announce multiple new products and services in the coming year with
the help of Cogent Road's talented team."
What about document news in the last several weeks?
In order to provide better clarity on document eligibility, Wells Fargo Funding's
Seller Guide Section 508.02: Document Eligibility will be updated to
include a list of documents that are not eligible for eSignature and/or
eDelivery (in addition to the existing list of eligible documents).
following documents are ineligible for eSignature and/or eDelivery:
Note, Security Instrument, Notarized documents, Final Closing Disclosure
and Notice of Right to Cancel. Wells Fargo Funding considers the "final
closing disclosure" the closing disclosure signed by the borrower(s) at
consummation. Also, take note of the current Audit Trail requirements
in Seller Guide Section 508.03: eSign Technology Standards and
with all loan applications dated 01/13/16, M&T will adhere to the
updates per Agency Underwriting Eligibility Standards (UES). (The
Agency UES serves all Fannie and Freddie registered loans, but does NOT
include M&T Treasury product). The updated guide will be posted to
MEME. A comparison document highlighting the old policy versus the new
policy is also being provided.
Mountain West Financial clients are reminded that LendingQB and BOLT performed an additional system security enhancement on November 6th. All
users will be required to change their password at any time after 11/6
to activate the enhancements. If their password is not updated by
2/12/2016, it will be expired on that date and users will be prompted to
update it at next login.
Franklin American Mortgage
removed the requirement for the use of the "Age Restricted Property
Form" on its conventional products. In addition, the guidelines will be
enhanced to allow the use of the Home Energy Score option for existing
construction homes on FHA products in order to utilize the EEH stretch
ratios for manually underwritten loans.
The markets? There is more attention on stocks, which managed a small rally yesterday, oil prices, which made
new multi-year lows, and China's rebalancing act. Aren't you glad you
don't have to worry about problems in Europe!? But with Morgan Stanley
putting a fresh price target for oil at $20/barrel we could see some
real problems - and if oil prices head farther south the Fed won't be
raising rates any time soon.
there isn't much in the way of scheduled economic news - some job
opening figures and a $24 billion 3-year note auction by the Treasury. We saw a 2.16% close on the 10-year and this morning it is at 2.18% with agency MBS prices a shade worse.
Jobs and Announcements
correspondent channel news, "Does your correspondent investor send you a
lead anytime a payoff demand is ordered on your loan? Does it waive the
EPO if you sold the loan back to them? If not, maybe it's time to look
for the right partner. The Money Source
is just that type of lender. With management's unique approach to
treating their correspondent lenders as partners, The Money Source has
given back 8093 leads to their correspondent lending partners in 2015.
To find out more about what a Partnership looks like compared to a
'transactionship,' please email the EVP of Correspondent Lending Jeff Vanderluit.
the retail side, "Are you a successful Loan Officer or Branch Sales
Manager who wants to take your career to the next level but it won't
happen unless your branch manager gets promoted? As a well-established,
privately held company, Network Funding
has the opportunities and the support structure for you to reach your
goals. For example, we have a 'plug and play' branch ready for the right
candidate in Scottsdale, AZ with processing, underwriting and closing
on site. Our growth is focused in the western states (AZ, CA, CO, OR & WA) but we have opportunities all over the country. Learn more about us at join.nflp.com or contact Executive VP Brett Snortland (832.545.4653) or VP of Sales/Branch Ops Richard Jefferson (480.370.3600) for more information."
In Ops job news, Michigan Mutual, Inc.,
an agency direct/seller/servicer/issuer based in Port Huron, Michigan,
continues to expand its wholesale platform in the West and is excited to
announce that management will be opening a fulfillment center in
Roseville, California. They're currently looking for an experienced underwriting manager, wholesale underwriters, a processor, and a closer.
Our underwriters are key members of our sales support team and are
responsible for ensuring timely and accurate responses to our valued
customers. To learn more about our underwriting and company philosophy, visit our underwriting web page at https://michiganmutual.squarespace. com/. And to learn more about joining the team please contact HR Generalist Nicole Francois or Director of Wholesale Lending Al Crisanty or visit our careers page to complete an application."
sweeping through the Southeast, "Was your New Year's resolution to
close more loans this year and increase your loan production? Assurance Financial says it can help you realize both. The company is looking to broaden its footprint, hiring top producing branch managers and MLOs
in Colorado, Arizona, New Mexico, Louisiana, Texas, Mississippi,
Alabama, Tennessee, Florida, Georgia, Arkansas, North Carolina and South
Assurance Financial is an established full service retail mortgage
banker with a 15-year history of consistently closing loans on time. As
an example, Paul Peters, CMB, Sales Recruiting Manager, reports that
Assurance is several hundred loans into TRID and has not encountered any
significant closing delays. For more information, contact Paul Peters
at 225-239-7948 or visit www.LendTheWay. com.