The origins of job interviews? Here you go. And speaking of employment, yesterday the commentary mentioned companies coming and going. Here in Florida, thank you to Genworth's Karen M. for passing along Sir Richard Branson's well-written tribute to his Virgin America brand which is being eliminated in its merger with Alaska Airlines.
Servicing news & trends
MIAC Capital Markets is offering an MSR package totaling $2.1 billion of government servicing rights. The seller has a nationwide footprint and is a well-capitalized non-bank originator. Key pool characteristics are: $123,290 average loan size, 23% GNI and 77% GN2. WA rate is 3.806%, WA loan age is 53 months. WA FICO is 672. The bid date is May 9, 2017 by 5pm EST. Please contact Dan Thomas, Steve Harris or your MIAC sales representative for more information. 212-233-1250.
The MBA tells us that independent mortgage banker net servicing financial income, which includes net servicing operational income as well as mortgage servicing rights amortization and gains and losses on MSR valuations, fell to $34 per loan in 2016, from $73 per loan in 2015. Most servicers posted net servicing financial losses in the first half of 2016 because of heavy MSR amortization and valuation losses, but recovered in the last quarter of the year.
Regulatory risk around servicing transfers continues to be a hurdle for enticing investors to engage in the market. This is largely dependent upon lenders' ability to ensure the quality of the assets being traded. The best strategy for taking the risk out of servicing transfers from a regulatory standpoint and verifying the soundness of underlying assets is through enhanced data and process management. MetaSource's newest whitepaper addresses best practices for leveraging better data and process management in servicing transfers.)
Fannie Mae has updated the Servicer Expense Reimbursement Job Aid, which provides operational instructions based on Servicing Guide policies. Updated topics include claim status, property preservation, required documentation, attorney fees and legal costs, property inspections, and changes to line items. Click here for a detailed list of all revised items and specifics about where the revisions were made. Visit the Servicer Expense Reimbursement page for additional training and resources.
Ocwen - it'll be a challenge to put a good spin on this news
Yesterday the North Carolina Commissioner of Banks, along with mortgage regulators from 20 states, issued Cease-and-Desist orders to Ocwen. Separately, the CFPB also sued Ocwen. Some analysts opined that since Ocwen is not currently purchasing servicing the immediate impact of these actions should be small. The news, however, does suggest that expenses could remain elevated and growth limited even if it the company settles with NY DFS, which is expected.
The stock reacted accordingly from news regarding the cease-and-desist order to subsidiaries of Ocwen to address mishandling of consumer escrow accounts and a deficient financial condition. The Order prohibits the acquisition of new mortgage servicing rights and the origination of mortgage loans by Ocwen Loan Servicing. Further, the company will probably be unable to grow servicing, even through the retention of its own originations, until it resolves these issues. This could result in portfolio runoff being faster than current forecasts.
For its part, in its defense Ocwen did release a statement worth reading. The U.S. case is Consumer Financial Protection Bureau v. Ocwen Financial Corp., 17-80495, U.S. District Court for the Southern District of Florida (West Palm Beach).
Fannie, Freddie, and conventional conforming news
The residential lending industry continues to banter about the future of Freddie and Fannie. Certainly the man in charge of fixing Fannie and Freddie knows them well. You may not know much about Craig S. Phillips, special counselor to Steven Mnuchin, the US Treasury secretary. That is because Mr. Phillips has not garnered any headlines. Nor was he a political appointee, so did not face congressional scrutiny before he began directing our nation's housing policy, one of his main tasks.
Yesterday the Mortgage Bankers Association (MBA) released a white paper GSE Reform: "Creating a Sustainable, More Vibrant, Secondary Mortgage Market" which provides a detailed picture of a reformed and revitalized secondary mortgage market. It also attempts to shed light on two critical areas that have tested past reform efforts - the appropriate transition to the reformed system and the role of the secondary market in advancing an affordable housing strategy.
"Key leaders on Capitol Hill and in the new administration have made it clear that GSE reform should be accomplished through bipartisan legislation," said David H. Stevens, CMB, MBA's President and CEO. "While progress has been made during conservatorship, only Congress has the power to ensure lasting reform."
The MBA's approach to GSE Reform includes several topics. Among other things it is designed to inject much higher levels of risk-bearing private capital into the mortgage system, while dramatically reducing the system's reliance on government support. Another is to enhance the stability of the mortgage system with multiple Guarantors that will operate as privately-owned utilities. The MBA noted it will protect taxpayers and consumers with a clear set of market conduct rules, prudential requirements, and a new federally-backed Mortgage Insurance Fund (standing behind the mortgage backed securities, not the Guarantors themselves) financed with appropriately priced insurance premiums.
David G. Kittle, CMB, president and vice chairman, The Mortgage Collaborative, wrote, "The issue of GSE reform is critically important for the independent mortgage banks, community banks and credit unions that today originate more than 3 out of every 4 home loans in the country. The MBA's reform proposal recognizes the value of a competitive and diverse primary market, and calls for important reforms that will provide stable liquidity for the 30-year fixed mortgage and preserve a level playing field for smaller lenders. Guarantee fees based on loan quality not volume, and a new structure that encourages increased private capital flow into the primary market are all central elements to the MBA plan and key principles for the members of The Mortgage Collaborative."
Tom Millon, President and CEO of Capital Markets Cooperative, a Computershare company, noted, "With both Congress and the new Administration making legislative reform of Fannie Mae and Freddie Mac a priority, it's important that the mortgage industry has a strong voice at the table. As a member of the MBA's Task Force that developed the new white paper, I believe the MBA plan offers a viable path forward to reforming the GSEs. Of particular importance, the MBA paper recognizes the critical role that smaller, community-based lenders play in the market, and recommends key protections to ensure that they maintain direct and reliable access to the federally supported secondary market guarantors."
Leo Pareja, 2017 President of The National Association of Hispanic Real Estate Professionals (NAHREP), noted, "Housing Finance Reform is the most important issue facing the housing market. Today, the Mortgage Bankers Association (MBA) presented a proposal that is a very thoughtful and constructive contribution to the housing finance reform debate. Considering that Hispanics currently represent roughly 40% of the nation's first-time homebuyer population, NAHREP was particularly pleased with the MBA's formidable attention to affordable housing. Congress needs to prioritize Housing Finance Reform and should seriously consider many of the principles laid out by the MBA in their deliberations."
Meanwhile, the Agencies and investors continue to make changes. The April 3 release of Fannie Mae Connect includes functional enhancements to the user experience and adds new reports to provide lenders with more transparency and analytics around quality assurance and market activities. For details on the release, log in to Fannie Mae Connect and view its latest Release Tracker, and view the Report Directory for report descriptions (these documents are available to Fannie Mae Connect users only).
Fannie Mae is enhancing LoanSphere Invoicing. The Pending Submitter Review (PSR) Status, Bankruptcy Attorney's Fees, and Foreclosure Attorney's Fees sections are impacted by the updates. The timeline for enhancements has shifted to May 1. The Servicer Expense Reimbursement Job Aid has been updated since the initial March update to accurately reflect the new timeline. Click here for a detailed list of all revised items, and visit the Servicer Expense Reimbursement page for additional training and resources.
Take advantage of the Day 1 Certainty Resource Guide. This document provides everything you need to get started, including eLearning modules, FAQs, job aids, and reference guides.
NationStar Mortgage Seller Guide update includes a change to the max cash-out limit, the requirement to provide a letter of explanation for cash-out transactions and delayed financing eligibility for owner occupied properties (conventional only). NationStar Mortgage has eliminated its CO-OP Lending program. For co-op lending loans already committed, the last day to purchase these loans will be April 24.
Pacific Union Financial will not accept Freddie Mac Desk Review Form 1033 to establish market value for the subject property in lieu of a subsequent appraisal or field review. The opinion of market value for the transaction must be established by an appraisal or inspection that meets Loan Product Advisor (LPA) requirements and/or an appraisal field review of the initial appraisal report/valuation. Pacific Union will utilize Freddie Mac Desk Review Form 1033 only to substantiate the market value established by the original appraisal. The Overlay Matrix has been updated to reflect the restriction.
Beginning April 1, for Non-Delegated and Delegated Correspondent lenders submitting loans to ditech for underwriting, it will be required to upload the Fannie Mae 3.2 file (1003 Import). Once the 3.2 file has been uploaded and the 1003 application image along with the rest of the credit file has been uploaded, the loan will advance into the underwriting queue.
Rates crept higher yesterday. Blame the small move on anxiety over the upcoming French presidential election subsiding, or the Philadelphia Fed's manufacturing activity survey showing sentiment pulling back sharply from March to April, but remaining at a level consistent with strong growth. Initial jobless claims exceeded expectations last week but continuing claims fell to a 17-year low. And throw into the mix chatter about another go at ACA repeal in addition to comments from Treasury Secretary Mnuchin saying that a major tax reform proposal would be coming "very soon".
Regardless of MBS prices worsening .125-.250 yesterday, and the 10-year ending at 2.24%, rates have certainly been behaving themselves lately. And there isn't much scheduled news today to move them. The only item of substance is March Existing Home Sales which will be released at 10AM ET.
Jobs and Announcements
In wholesale product & AE job news, Greenbox Loans was founded based on the concept of 'out of the box' underwriting of residential loans in the Non-QM/Non-Prime market. Greenbox is providing real lending solutions for its broker partners with an exception minded mentality and a committed approach to specialty lending. "Greenbox has been dedicated to the Non-QM programs for the last 3 years while other lenders have been pursuing agency and government loans - we are focused and determined to be #1 in the Non-QM lending marketplace" per Raymond Eshaghian, President. Greenbox is offering TEN unique programs that provide solutions for any Non-QM/Non-Prime Borrower including four different bank statement programs to accommodate A+ borrower to Non-Prime borrowers with 580 Fico score, three Non-Prime Full Doc programs, two Investor based programs with No Income, No Employment, and one Foreign National program. Greenbox is actively hiring Regional Sales Managers, Area Sales Managers, Wholesale Account Executives as well as Operations staff nationwide as part of its expansion plans. Send your resume to email@example.com or call 213-235-4204.
"PRMG Retail is continuing its nationwide growth and is looking for LOs. Built by Originators for Originators, PRMG continues to deliver consistent service levels allowing their LO's to close more loans in less than three weeks. Chris Sorensen, SVP Director of National Retail said, "We've built a 'best-in-class' retail platform allowing us to maintain a competitive edge by providing better products, pricing, technology and marketing. This has fostered tremendous growth for retail; over 225% annually while creating Raving Fan's across the country. We offer a wide-range of loan products including Conventional, FHA, VA, USDA, DPA, and 2nd Liens! Plus, we pay some of the highest commissions and branch credit to the P&L amongst our peers. We deliver on what we promise!" Voted No. 1 of the 50 Best Companies to Work for in America 2015, No. 1 Best in the Desert 2017 and TOP 25 of 100 Mortgage Companies in America! PRMG employees over 1,300 people with 93 branches across the country. Contact Chris Sorenson to learn more (909.262.0452).
Here at Assurance Financial, our success isn't a secret: we hire great people. Start to finish we not only have a talented operations team in the back office, but also talented loan originators and branch managers on the sales side. If you think you're ready to join Assurance Financial and grow your career, call Sales Recruiting Manager Paul Peters, CMB at 225-239-7948 or visitLendTheWay.com/Careers.
In product news, "Need to validate wire info & state licenses of your closing agents before sending funds? FundingShield can significantly enhance your anti-fraud and compliance protocols leveraging their technology that provided diligence at transaction level. They provide closing agent oversight with verification services for Wires, State Licensing, CPLs, and UPL enforcement. FundingShield will be at the MBA Secondary May 1st - 3rd in New York City and would welcome meeting interested lenders, technology firms and investors seeking a risk enhancement that "pays for itself many times over." The firm is seeing a significant increase in client outreach resulting from several cyber-based fraud schemes that have amounted to individual lender losses ranging from $200k up to $2mm plus over the last 3 months. FundingShield has also expanded into insurance underwriting due diligence services to benefit those in the mortgage industry. Contact Adam Chaudhary (949.706.7888) to schedule a meeting or demo.