Reverse Mortgage Product Offering Thins Out; Broker Business Quiet: Feedback from Trenches; Lots of Lender Updates
What am I
hearing out there? I am hearing, not officially, that wholesale reps are having
trouble drumming up business from brokers. Production estimates for 2011 are
down 30% from 2010's levels, but applications are holding in pretty well -
maybe loans are coming in through retail channels. In fact the MBA reported
that apps rose 2.7% last week, with refi's accounting for almost 67% of
applications. The ARM share is almost up to 6%. MND says fencesitters aren't responding to modest rate improvements: FULL STORY
This is not mortgage related. But if you've never seen a live shot of an eagle
on a nest, and need 60 seconds of quiet time in the middle of your day (sorry
about the ad - not my doing): MoreFunThanCompChatter (No
guarantees of it doing much!
Ok, back to mortgages. If you
have questions regarding LO licensing, this is a good place to start
your search for an answer: NMLSQ&A
"Money isn't everything. But
it sure keeps the kids in touch." Regardless of the fee income from the
reverse mortgage origination business, no one wants to run the risk of the
Gray Panthers or AARP picketing their office during the Channel 5 news. Bank of
America, Wells Fargo, and now Financial Freedom have ended that channel.
"Financial Freedom Acquisition, a subsidiary of OneWest Bank...we have
decided to exit the wholesale reverse mortgage origination business based on
the regulatory environment and the desire to focus on the bank's core
businesses. The wholesale reverse mortgage origination channel represents the
majority of Financial Freedom's origination business and is the only wholesale
origination channel within OneWest. As a result of exiting wholesale, Financial
Freedom's retail reverse mortgage origination channel is also closing due to
our limited presence and scale in retail alone."
Monday I noted that a few folks in the media have called for an immediate
government withdrawal from the mortgage biz. I received some e-mails. "When
was the last time Steve Forbes applied for a mortgage loan? I have
been in the business since 1982, when the prime lending rate was 22%, and I can
tell you that if the buyer put down 20%, it was because they had a
"gift" from family, or had just sold their past residence and had
profit toward the new purchase. 10% down was more common, and MI was
necessary; underwriting standards from Freddie and Fannie were very
tight. People seem to forget that prior to FNMA/FHLMC there were no
standard underwriting guidelines."
Another wrote, "People
should not forget that the US Government, through HUD, trying to increase
lending through lower standards, was instrumental in the credit crisis. It was
not necessarily the fault of the agencies trying to maintain market share. The
GSE's gave liquidity to the markets, banks were able to sell their mortgages,
and money moved around the system. It is misleading to try to blame
FHMA/FHLMC for other investors moving down the credit curve and into subprime.
I don't recall the 2/28 loan, the NINA, 100% (or above) financing being a
And on the comp issue: "Implementation of the comp rule keeps
getting more and more convoluted and complex and is mostly unnecessary.
Logically, the only information a consumer needs to determine the best offer is
the rate and the closing costs for a given loan. All this additional
information only clouds the important factors from getting to the
consumer. If over-charging is really an issue, which is debatable and
ill-defined, simply putting a limit on it would have accomplished it. If
disclosing revenue was so important why don't banks, which do the lion's share
of loans, do it?"
Speaking of compensation, Wells Fargo's brokers received a handy two
page chart showing the differentiation between the two compensation plans, lender-paid
and consumer-paid. In addition, its brokers also received a reminder that the
current GFE will not be changing, however "the way we input information
and review the GFE will change for loans submitted after the 25th.
In Block 1, Broker's Compensation Paid by Lender, don't forget to include your
Tier incentive/hit. Your broker-owner will need to provide you the level
selected for Wells Fargo." And so forth. "Effective March 25, Wells
Fargo will only accept the Wells Fargo Fee detail with loan submissions."
Wells brokers also received updates on S.A.F.E. changes, updates &
reminders, the calendar for the next three months for FHA Streamline purchase
dates, a revised policy for FHA refinance transactions, and a reminder of the
increase in Annual Mortgage Insurance Premiums (Paid Monthly) for FHA Loans
wholesale division reminded brokers of Reg. Z and comp training yesterday,
today, tomorrow, and next week. The call-in number for all the sessions is
800-370-8105. For USB's California region, the training call is today at 1PM
PST, Conference ID 53665179; or tomorrow at 9AM PST, Conference ID 53666144.
For its Mid-Central region the call is also today, 8:30AM CST, Conference ID
53662235. For the Southeast region, the call is today at 2PM EST, Conference ID
53662723. In the Northeast, the call is tomorrow at 9:30AM EST, Conference ID
53665836. "There will be additional sessions on Tuesday, March 29, 10:00
AM CT Conference ID 53666599, and Wednesday, March 30, 3:00 PM CT
Conference ID 53667049. Materials for the training course will be posted on the
'SellUs" website under 'Regulation Z changes/broker comp.'"
US Banks's Consumer Finance
Division(portfolio product) has comp information available at its website:
USB. As of
now, the LPC will be 1.5% (subject to change), but brokers should note
that with this division the broker is responsible for compliance with all
federal and state laws so it is not requiring copies of compensation plans for
LO's nor is USB having the brokers sign a new agreement. (This should allow
USB's Consumer Finance Divison more flexibility to make changes.) Brokers
can select on a loan by loan basis whether they want LPC or BPC.
SunTrust has a new
fellow running its mortgage business: Jerome Lienhard. For the full story go
Parkside Lending, a
wholesaler in San Francisco, sent its brokers news that it has "updated
its "Certification of Receipt of GFE and Intent to Proceed" and
"TBD Certification" forms to comprise the Regulation Z amendments
which go into effect on April 1, 2011. In language only a broker would love,
"The "RESPA and TILA Disclosure" form will replace the existing
"Certification of Receipt of GFE and Intent to Proceed" form. The
"TBD RESPA and TILA Disclosure" form will replace the existing
"TBD Certification" form. The revised applicable form must be
included with loan submissions on or after April 1, 2011 in order to avoid
delays during the registration process."
Kinecta Federal Credit Union is also
offering a training session for its Midwest Central States Region today
starting at 10:30AM. It is online via Webex, and brokers can RSVP at
1.800.854.4600 or wholesale.kinecta.org. Kinecta also got the word out to its
clients that it will no longer generate a new credit report at time of loan
submission, and "will accept credit reports from all Fannie Mae approved
credit vendors. All credit supplements and credit re-pulls must be provided to
Kinecta, if required. A new credit report will be required in instances where
the original credit report has expired."
Bank of Internet sent
word out that under the Lender Paid compensation model, BoI "will pay a
predetermined amount of compensation to the Loan Originator which may not vary.
Compensation will be paid as a percentage of the principal loan amount. The LO
will not be permitted to credit or reduce any portion of their compensation to
the borrower, nor may they offer any other form of additional credits,
concessions or incentives. Please keep in mind, once selected, the Lender
Paid compensation plan will be applied to all branches of each wholesale
customer. It is not permissible to have multiple compensation plans for
different branches." BoI sent out a Lender Paid template for brokers to
use to figure out "the compensation option your organization would like to
be placed on for the coming calendar quarter, April 1, 2011 through June 30,
Fifth Third told its
brokers that under the Lender Paid Compensation option, "We have added two
new pricing options based on broker feedback. The Lender Paid compensation now
has 7 (bp) options: 100, 125, 150, 175, 200, 225 & 250... If you choose to
submit a GFE without prior GFE worksheet review/approval, please note that
GFE's will be rejected if deficiencies are identified. Common rejection reasons
will include, and not limited to: Incorrect compensation amount for lender paid
comp Owners' title not disclosed on Purchase loans Incorrect appraisal fees per
the appraisal matrix found on wholesale connect Incorrect/low transfer tax fees
5 3 also reminded brokers of its float-down policy which has been in place for
nine months, but with the new twists caused by the Reg. Z changes. For precise
details consult the bulletin.
Pinnacle Capital, with
guidelines available on www.pcmloan.com, updates its Fannie HomePath
program identification, updated its VA, FHA, and jumbo underwriting criteria,
and clarified some information on its standard and enhanced DU Refi Plus loans (noting
Mountain West mimicked
Wells Fargo's announcement regarding the revised flip policy. "Mountain
West Financial is pleased to offer once again, FHA transactions involving
properties acquired and sold within 90 days of sellers' acquisition. Mountain
West Financial will be adhering to HUD's waiver of the 90-day flipping rule
which requires the following: All cases in which the sales price of the
property is 20 percent or more over and above the seller's acquisition cost
will require (2) full appraisals. The appraisals must be ordered through
MWF's appraisal department via the company's approved FHA appraiser
The markets were relatively tame yesterday following some Treasury-induced
volatility Monday. The volume of MBS sales went back down below recent
averages, the yield on the 10-yr was stuck around 3.33%, and MBS
prices ended the day worse by about .125. Overall the $10 billion per month is
seen as manageable, helped in part by limited mortgage banker supply that is
averaging around $1.5 billion per day.
forward to retirement?
Question: How many days in a week? Answer: 6 Saturdays, 1
Question: When is a retiree's bedtime? Answer: Three hours
after he falls asleep on the couch.
Question: How many retirees to change a light bulb?
Answer: Only one, but it might take all day.
Question: What's the biggest gripe of retirees? Answer: There
is not enough time to get everything done.
Question: Why don't retirees mind being called "Seniors"?
Answer: The term comes with a 10% discount.
Question: Among retirees what is considered formal attire?
Answer: Tied shoes