First Community Mortgage announced its new expanded TPO/supervised correspondent channel to include a full delegated correspondent
platform. "While our delegated correspondent price is competitive and
our purchase process is fast, what sets FCM Correspondent apart is our
superior underwriting support and customer interaction. See why a
relationship with FCM Correspondent will help your business grow." For
more information visit www.fcmkc.com/corr or contact National Sales Director Dennis Patchett at email@example.com.
On the flip side, however, on Friday broker clients of Investors Home Mortgage
received the following note from Russell Tucker, SVP: "After much
discussion, research, and deliberation, Investors Home Mortgage has
decided to exit from the wholesale broker mortgage business. The
existing regulatory environment would force us to take important
resources away from our primary focus, which has always been, retail
mortgage banking. The friends and relationships made over the past
10 years have been very rewarding and will be sorely missed. I would
like to thank each and every one touched by this letter for your
professionalism and loyalty over these many years and, to wish you much
success in the future. Effective today at 4:00pm we will no longer be
accepting loan registrations. All loans currently registered will be
brought to their natural conclusion."
Yet companies continue to evolve and expand, especially on the servicing and capital markets side. For example, IMA is
an advisor to the mortgage industry specializing in the valuation,
accounting, trading and purchasing of mortgage servicing rights. The
company reminded clients that, "As a transactional broker and advisor,
IMA has managed over $800 billion of principal balance whole loan and
servicing sales & transfers, and over $50 trillion of principal
balance loan and servicing portfolio valuations."
is easy to see how and why blocks of servicing will be sold and bought
this year as capital is required by lenders - it is not becoming any
less expensive to originate a loan. Last week I mentioned a servicing deal by Phoenix Capital, and here is another deal by MountainView Servicing Group, LLC.
It is brokering a $341 million GNMA servicing portfolio from a
well-capitalized mortgage bank that is being made available to the
national market. "Loan-level data is available upon request and written
bids are due Wednesday, January 15th at 3:00 pm EST. Quality features of this portfolio include: 100 percent fixed rate 1st
lien product, weighted average original FICO of 741 and weighted
average original LTV of 96 percent, weighted average interest rate of
3.35 percent, approximately 7% of the portfolio is VAIRRRL product. And
maximum LTV is 100% (based on appraisals) for all VAIRRRL loans.
Geographically dispersed: top states are Texas (7.4 percent), Georgia
(6.1 percent), North Carolina (6.0 percent), and Colorado (5.6 percent),
average loan size of $193,673. (If you need any information on this,
contact Matt Maurer at firstname.lastname@example.org.)
Staying on with company news and investor updates, Stearns Lending
sent out a "Qualified Mortgage Exceptions" to its clients. "Loans
received on or after January 10, 2014 and up to January 24, 2014 may be
excluded from the QM rules if ALL the following criteria exists: the
1003 is dated January 9, 2014 or earlier, the initial 3 Day Disclosures,
GFE is dated January 9, 2014 or earlier, credit report is dated January
9, 2014 or earlier, FHA Loans must have had the case number assigned by
January 9, 2014. After January 24th, regardless of the date of the
application or any other document, any loan received will be considered
under the QM rules and must meet all requirements."
Regarding "Home Ownership Counseling"
notices, which this commentary mentioned a few weeks ago, apparently
for some investors they do not only apply to high-cost mortgages. For
example, Weslend sent out a form to clients, and is requiring it for all mortgages. Looking at this, it seems like the notice applies to "all applicants for federally-related mortgages".
added the form to their 9.0sp2 release (1/7/2014). Flagstar also sent a
memo on the 7th about it. Fifth Third reminded clients of its
counseling requirements, modeled after those of the CFPB. Fifth Third is requiring a new "counseling" disclosure on all loans as of Jan 10 (see "Counseling only" doc attached.
appears that this disclosure is required to be provided only to
"federally related mortgage loan applicants" - in other words this is a
VA / FHA disclosure, but 53 is requiring it for GSE loans. "Homeownership
Counseling: Effective Date Loan application taken on or after January
10, 2014. Homeownership Counseling Amendments to the Real Estate
Settlement Procedures Act
X will require that a new disclosure is provided to all applicants,
within three (3) business days after applying for a mortgage loan that
includes a list of Homeownership counseling organizations in the
applicant's area. Correspondents must provide a copy of the
Homeownership Counseling form provided to the borrower in the file
delivered to Fifth Third Mortgage Company. If there is more than one
loan applicant, the required list of homeownership counseling
organizations may be provided to any loan applicant with primary
liability on the mortgage loan obligation. A lender must provide a
written list of housing counseling agencies for federally-related
"Lenders have two options: 1. Generate the list from the Bureau's website, which uses U.S. Department of Housing and Urban Development (HUD)
data on HUD-approved counseling agencies. 2. FTMC will accept
homeownership counseling disclosures provided to consumer in accordance
with the interim procedure in CFPB Bulletin 2013-13. Please note while
CFPB has not specified an expiration date for the interim process, FTMC
my stipulate a timeframe for our acceptance of the interim procedures.
Should this be the case, we will provide sufficient notice to
correspondent via communiqué. Please reference CFPB Bulletin 2013- 13;
following is the suggested text to be used for this interim procedure:
"Housing counseling agencies approved by the U.S. Department of Housing
and Urban Development (HUD) can offer independent advice about whether a
particular set of mortgage loan terms is a good fit based on your
objectives and circumstances, often at little or no cost.
you are interested in contacting a HUD-approved housing counseling
agency in your area, you can visit the Consumer Financial Protection
Bureau's (CFPB) website, noted above, and enter your zip code. You can
also access HUD's housing counseling agency website via www.consumerfinance.gov/mortgagehelp."
Wells Fargo has
updated its Market Classification list, which will take effect for all
transactions locked, re-locked, renegotiated, or committed on or after
As a reminder, Wells' new policy on self-employed income for Non-Conforming loans took effect on January 10th. The
revised policy provides requirements on income qualification by
analyzing the increased risk, business classification, personal and
business tax returns, and financial statements. Applicable borrowers will also be subject to a re-evaluation of their business income.
has updated its Non-Conforming rental income eligibility guidelines to
permit rent received from investment properties or other units of an
owner-occupied multifamily property and from a live-in aide generated by
a disabled borrower's 1-unit primary residence for up to 30% of the
total gross qualifying income. The
latter may be considered stable monthly income so long as the borrower
has received regular rental payments from the live-in aide for the past
12 months and the live-in aide plans to continue residing with the
borrower for the foreseeable future. Rent
from boarders in a single-family property that is the borrower's
primary residence and rent from the borrower's second home will be
considered ineligible. Newsflash C14-001FR provides additional details on qualifying, documenting, and analyzing the stability of rental income.
For any LO who had waited to lock, the waiting paid off on Friday.
Agency MBS prices improved by .75 in price, and rate sheets may catch
up to that today. Basically weaker-than-expected employment data caused
the rally - certainly the head fake provided by the strong ADP number on
Wednesday reminded us of its spotty predictive ability. Employment
plummeted well below consensus estimates, rising by only 74,000 jobs in
December compared to the survey forecast that expected almost 200,000
jobs. Yes, much of the decline could be due to one-time seasonal quirks
and we could see some payback in the coming months. The weakness in the
employment report brings into question whether the Fed moved too quickly
on their decision to begin tapering and may see some adjustment in the
expected course in the slowing of asset purchases. While this question
is on the minds of Fed watchers, the Fed left plenty of wiggle room in
its language to change course if further data disappoint.
Zervos with Jefferies LLC wrote, "The December payroll report does NOT
suggest that labor market momentum is increasing. The modest 78k
increase in payrolls, plus the 34k in positive revisions barely gets us
half of what was expected. But the most concerning part of the report
comes from the household survey where we saw another 347,000 people
leave the labor force. And it was not just more retirees, or more
youngsters going to college. The largest acceleration downward in the
participation rate came from the 45-54 year old cohort - that rate fell
0.5 percent, from 79.6 to 79.1. In the early part of the crisis, the
most important driver of a lower participation rate came from the
younger cohorts. But these 16-19 and 20-24 year old groups have been
stable in recent quarters, albeit at much lower levels. The 'trouble'
now is manifesting itself with the seasoned veterans!"
Yes, this week we'll have the usual scheduled economic news, but we'll also have a bevy of bank earnings announcements:
tomorrow is Chase and Wells, Wednesday is Bank of America, Thursday is
BB&T, Citi, Goldman, and PNC, and more on Friday. It will be
interesting to see the 4th quarter mortgage banking information from "the big guys."
news, there is nothing that usually dramatically moves rates although
the Empire and Philadelphia Fed indices will be published Wed 1/15 and
Thurs 1/16, respectively. We'll also have the Retail Sales data
tomorrow, the Producer Price Index (PPI) on Wednesday, and the Consumer
Price Index (CPI) on Thursday. Housing Starts & Building Permits and
Industrial Production will come out on Friday. Import Prices, Consumer
Sentiment, and the Fed's Beige Book will round things out. The benchmark 10-yr. closed at a yield of 2.86%, here this morning it is at roughly unchanged (at 2.86%) as are MBS prices.
Unintended headlines? "The rich are different -- they still get interest-only mortgages."