the industry watches the personnel turmoil at Utah's Castle & Cooke
Mortgage, here's an interesting promotional twist: a builder's real
estate company paying borrowers $100 to consult with the builder's
mortgage company after the borrower already chose another lender. "We
are offering a $100 Visa gift card to home buyers who meet with one of
our mortgage loan originators for a second opinion on their home loan,"
states Howard Hanna Mortgage Services. (More details can be found here.
Last year Howard Hanna Mortgage Services averaged about $100 million a
month. Howard Hanna Real Estate Services is located in several states
around Pennsylvania and Ohio...specializing in residential and commercial
brokerage service, mortgages, closing and title insurance, land
development, appraisal services, insurance services, corporate
relocation and property management - it has 167 offices and 5,700 sales
On the personnel side, Caliber Home Loans is now hiring experienced AEs
in the Third Party Originations Channel to source wholesale, emerging
banker, and correspondent business. Established to meet the requirements
of this radically transformed industry, Caliber has a well-capitalized
balance sheet, and a servicing portfolio of over $50 billion and
growing. Built on strength and stability of experience, culture and
innovation, Caliber Home Loans is a full service mortgage bank, offering
a variety of operational solutions and products, and a range of
delivery methods including wholesale, emerging banker, and
correspondent. To learn more about this opportunity, please send your
resume or questions to Chris Legg, West Division VP, at firstname.lastname@example.org. Let Caliber Guide you Home!
strong credit union, forward thinking management, common sense
underwriting, seasoned and courteous ops team, stellar product line,
pricing that wins loyal members, reduced MI, hi-tech loan fulfillment,
in-house realtor affiliation, over 600 associated employer groups
including aerospace and health industries, several other ways to
join....if you like what you see, read on. Financial Partners Credit Union is seeking seasoned, Mortgage Loan Originators in Southern California
to meet the demand of their growing, retail business. Since 1937, FPCU
has established itself as a financially strong mortgage lending resource
to members, realtors and the communities it serves. "A full product
suite that includes FNMA/FHLMC, FHA, Portfolio Conforming & Jumbo,
HELOCs and 2nds is available to offer to new and established members
nationwide. An aggressive commission plan, marketing support and
exceptional benefits are offered to successful candidates." Contact Wendy Edralin at wedralin@fpcu. org or Todd Helmerson at thelmerson@fpcu. org for more information. Become a partner today.
CFPB has had its hands full with charges of discrimination, and of
planting sympathetic people in public hearings. That aside, it is pretty
good about keeping us up to date on its activities. For example: details of its each of the new rules that is currently available.
But today the House Financial Services Committee will hold a hearing entitled "Who's in Your Wallet: Examining How Washington Red Tape Impairs Economic Freedom." According to the Committee memo,
the hearing will examine the economic consequences of recent
rulemaking, supervisory, and enforcement actions of the CFPB, FDIC, Fed,
NCUA and OCC. Issues to be explored include how the agencies evaluate
the costs and benefits of their actions, whether products or services
are no longer being offered because of agency actions, the steps federal
regulators take to measure the impact on consumers if they no longer
have access to specific products or services as a result of regulatory
action, and the procedures or standards agencies follow in determining
whether to engage in formal rulemaking under the Administrative
Lawsuits, and settlements, have become a fact of life in mortgage banking. Yesterday Citigroup announced a proposed settlement with 18 institutional investors
represented by Gibbs & Bruns over 68 RMBS (residential mortgage
backed security) deals done on deals done between 2005 and 2008. Under
the proposed settlement, Citigroup would pay $1.125 billion to
bondholders, which represents approximately a 7.6% payout of past and
projected losses on those deals. The trustees have until June 30 to
accept the settlement, with an option to extend the offer for an
additional 45 days. Of the 68 deals involved, there are around 5 deals
which are involved in active rep & warrant litigation initiated by
the trustees - with one of the lawsuits against the originator.
Additionally, some of the deals have had meaningful loss reversals in
the past (most likely due to loan repurchases by Wells Fargo). There are
quite a few deals with Wells Fargo as the originator and it's not clear
how these deals are going to be treated as a part of the settlement. In
addition, trustees do not appear to be indemnified, and this may delay
the acceptance process.
this case, Citi will make a binding offer to trustees (Deutsche
Bank/HSBC/US Bank and Wells Fargo), offering a payment of $1.125 billion
in cash and a reimbursement of any trustee expense in return for a
release of all repurchasing claims. The settlement does include a
servicing component similar to the Countrywide/JPMorgan settlements. The
agreement is also subject to regulatory approval by the FHFA.
Analysts immediately pointed to the similarities between this deal and one involving Countrywide
- the one where the FHFA entered into a settlement agreement with Bank
of America to resolve existing litigation on securities fraud as well as
other legacy contract claims regarding $57.5 billion of legacy
securitizations from Bank of America, Countrywide, and Merrill Lynch.
Bank of America agreed to pay $9.5bn in total, which included a cash
payout of $6.3bn to resolve securities fraud claims and a fair market
value purchase of $3.2bn for securities with a UPB of $5 billion. The
settlement covered deals in certain legacy shelves and the repurchase of
selected securities. BoA agreed to indemnify the GSEs from any damages
resulting from this settlement.
let's not forget another big settlement - the $1.9 billion one between
the FHFA and Deutsche Bank Structured products announced last December.
The agreement resolved ongoing securities fraud-related litigation as
well as certain repurchase claims. After the announcement of this
settlement, various trustee letters were sent out to bondholders stating
that the FHFA would not pursue rep and warranty claims in certain
deals, and the GSE entities were withdrawing their notices of repurchase
demands for certain deals.
And the industry learns from past lawsuits. Talk
about a sword over the lender's head. Recently in the legal case of
Wells Fargo Bank, N.A. v. Lonzie Heath, the Court of Appeals for the
Fifth District of Texas at Dallas affirmed a jury verdict concluding
that the lender should forfeit all principal and interest because the
fair market value of a homestead for a Texas home equity loan was less
than the value indicated on the Acknowledgment of Fair Market Value.
According to the Texas legal firm of Gregg & Valby, the originating
lender apparently failed to sign the Acknowledgment of Fair Market Value
as required by Article XVI Section 50 of the Texas Constitution. They
write, "The trial court accordingly determined that the fair market
value of the homestead, at the time the loan was made, was a question of
fact to be decided by a jury. The jury determined that the fair market
value at the time the loan was made was lower than that indicated on the
appraisal and acknowledgment of fair market value. The jury further
found that the lender failed to cure this violation after notice; and
the lender, therefore, must forfeit all principal and interest on the
loan. A motion for rehearing en banc has been filed in the matter and is
pending." Considering that failure to sign the Acknowledgment of Fair
Market Value places originators at risk of forfeiting all principal and
interest, Gregg and Valby suggest, well, actually signing the
Acknowledgment of Fair Market Value, and to have procedures and
protocols in place for future closings. Imagine that!
How about some relatively recent investor updates?
Wells Fargo has
updated its adverse credit history requirements for all Conventional
Conforming transactions, including removing the minimum Loan Score
parameters for bankruptcy, foreclosures, pre-foreclosures, short sales,
and deeds-in-lieu. For
bankruptcies, guidance now stipulates that at least 24 months must have
elapsed since the discharge date or 48 months must have elapsed since
the dismissal date, the latter which applies to borrowers who were
unable to complete the Chapter 13 plan. Borrowers
with multiple bankruptcy filings within the last seven years will be
considered eligible if at least five years have passed since the
discharge or dismissal. The seven-year requirement also applies to foreclosure situations that were a result of financial mismanagement. For
deeds-in-lieu, pre-foreclosures, and short sales, Wells has removed the
minimum down payment requirement and will allow loans with a DU
certificate if the borrower has a 24-month history of re-established
credit and the LTV/TLTV/CLTV is less than 80%. Cash-out
refinances are no longer allowed on LP and manually underwritten loans
if the borrower has experienced a pre-foreclosure, short sale, or
deed-in-lieu within the last seven years, and only primary residences
will be permitted for purchase transactions.
has expanded the credit box for its Piggyback Buster program to allow
FICOs down to 680 for 1-unit LP Accept purchases and rate/term
refinances with LTVs up to 95%. DTI must be 45 or below, and the loan amount must be within the conforming loan limits.
removed its previous deed-in-lieu/short sale/pre-foreclosure and high
LTV overlays and has added LP Open Access as a program option for
refinancing restructured loans. Borrower
contribution requirements have been updated to require 5% of the
borrower's own funds for LTVs over 80%, and HPMLs will no longer be
eligible as Conventional loans and will only be accepted for FHA and VA
non-streamline transactions. The Government HPML DTI has been changed to 43 in accordance with QM as well.
now permitting lenders to make changes to the original note in cases
where a defect is identified prior to delivery if the correction is
authorized with the borrower's initials. Loan
modifications will also be permitted as an alternate form of correction
but will not allow the prior corrective note process, and note defects
identified after delivery must be accompanied by a Loan Modification
Agreement to satisfy the correction requirements.
the State of Illinois' establishment of the Predatory Lending Base as
an amendment to the Residential Real Property Disclosure Act, Nationstar is
requiring all files on properties located in Cook, Kane, Peoria, and
Will Counties to include a Certificate of Compliance showing that the
loan info was submitted to the database. Transactions that are exempted must have a Certificate of Exemption included in the file.
who think that the movement stock and bond markets are always linked
are having a little trouble defending that false premise over the last
few business days. Stocks have continued to fall, but rates have not
done much of anything.
might be of more interest to investors, and in a round-about way
lenders, is the issuance of other debt. Sure, originators are pumping
out agency and non-agency loans every day. But this week we have a 3-yr,
10-yr, and 30-yr Treasury auction. The Federal Home Loan Bank, which
has not issued any debt since January, is in the market this week.
Freddie Mac auctioned off $500 million of "reference
bills" across three- and six-month maturities. And when you throw on
corporate debt issuance, anyone needing to buy fixed-income securities
has plenty of options.
returning to mortgages, Monday was a quiet day although agency MBS
prices improved slightly; the 10-yr's yield sat around 2.71% all day and
closed there. There is no substantive scheduled news for today,
although there is a $30 billion 3-year note auction. And, in the very early going, we're unchanged from Monday's closing levels.