"Action will be taken to prevent the next disaster as soon as possible after it has occurred." In an unrelated topic, although in the same paragraph as that clever statement, the Federal Reserve tells us that at the end of March outstanding student loans were $1.11 trillion versus outstanding credit card debt of "only" $857 billion. Student loans have increased $124 billion in the last 12 months while credit card debt has increased just $7 billion over the same period. The smart guys in the room are predicting a new "mobile" economy characterized by low labor participation, high auto sales, high student loan debt and strong multifamily housing production. Residential mortgage borrowing and single family housing production appear to be "so pre-crisis," meaning Millennials just may not be that interested the way their parents once were in buying a home. The net result is need for continued Fed accommodation and a positive technical and fundamental backdrop for mortgages and other securitized products.

This is the year that lenders and investors are faced with the "QM versus non-QM" decision - and of course Congress is involved. A bill that is engineered to "improve access to credit and qualified mortgages for low and moderate income borrowers and also protect consumers from bad loans" passed in the U.S. House by a unanimous vote last night. Michigan Congressman Bill Huizenga says that the common sense changes will insure that safer, properly underwritten mortgages will pass the QM test, and that H. R. 3211, the Mortgage Choice Act, amends and clarifies the QM. The fate in the Senate is uncertain.

Bloomberg's Alexis Leondis and Jody Shenn wrote a story about the latest non-QM lender, designed to improve both our knowledge of non-QM and our vocabulary. "Western Asset Management Co. plans to start buying non-agency mortgages the way a gentleman orders a bespoke suit. The bond firm, with $469 billion in assets, will take on the role typically played by Wall Street banks, specifying to lenders the mortgages it wants them to make -- from interest- only to those with higher debt-to-income ratios -- then buying them. 'A large portion of people who don't qualify for government-sponsored loans now will become good borrowers,' said Rob Bloemker, who started his mortgage career at Salomon Brothers in the 1980s and is now co-founder of San Francisco- based lender Dwell Finance. 'We think non-QM lending is going to be really ramped up in a year from now and will be large enough to securitize.'"

Speaking of Bloomberg articles about non-whatever, we also have this one: "Walter Gains Share in Ocwen-Nationstar Market Rivalry" by Kathleen M. Howley. "Walter Investment Management Corp., the third-largest non-bank mortgage servicer, has been expanding while its bigger rivals shrink amid probes from regulators. Walter Investment, which was spun off from a coal-mining and homebuilding conglomerate in 2009, increased its mortgage servicing business by 20 percent in the first quarter" passing PHH. "The two largest non-bank operators, Ocwen Financial Corp. and Nationstar Mortgage Holdings Inc., both lost market share in the first quarter, while Walter Investment enlarged its loan holdings to $234 billion."

Every once in a while someone asks me about HOAs, non-payment of dues, and the possible result to borrowers and credit. So here is a timely article from The Law Offices of Peter N. Brewer - page down a few times to find it (although there are other interesting articles along the way).

Here is the latest on the CFPB's thoughts on the appraisal business, and about AMCs in general.

The CFPB continues to hammer home its requirement that supervised banks and nonbanks have an effective process for managing the risks of service provider relationships in order to protect consumers from harm.  Dennis Waller with FACTintel writes, "Each mortgage lender may deal with hundreds of settlement agents, appraisers, brokers, and other parties, and be required to track expirations (license, insurance), monitor for new derogatory records or events, and manage thousands of documents.  If a borrower is harmed, the lender will need to show what it knew about the service provider at the time it wired money, or ordered an appraisal, etc.  The penalties for non-compliance are stiff. Services to assist mortgage lender with managing the due diligence and monitoring of hundreds of vendors vary greatly. Lenders need to be able to rely on vendors (such as FACTintel) to provide specialized fraud detection services, manage risks associated with the loan application process, be knowledgeable about compliance for vendor vetting, provide background data verification services, and so on. FACTintel, for example, provides an effective and secure platform to manage and monitor for new derogatory records on thousands of service providers in the mortgage industry."

"Have you heard of Connective? I've seen some pretty aggressive pricing from the company." The company is indeed making waves, especially on the high balance conforming loans. And so lenders are selling to Connective, depending on its pricing. One small catch, however, that I have heard some rumblings about, and that is Connective is ultimately owned by AIG (yes, the TARP AIG) which also owns the mortgage insurance company UG. So lenders and banks are weighing selling loans to a company and/or using the same company for their mortgage insurance needs. The relationship is plainly stated on its website.

Mountain West Financial wholesale has revised its process on requests for appraisal reconsideration. Brokers may request a Reconsideration of Value in the event that there is a disagreement with the Estimated Final Value of the property given by the Appraiser, or in the event of major discrepancies and/or errors that directly affect the final value. Contact your account executive for the revised guidelines and protocol associated with appraisal reconsideration process.

Mountain West Financial Wholesale announced June 3, 2014 its Jumbo 1 program has been temporarily suspended. A notification will be distributed as soon as the program is made available. Contact your Account Executive with any questions.

PHH Mortgage Correspondent has updated its conventional underwriting guidelines. Effective May 30th, employment related assets for qualifying on conventional conforming loans are now permitted under the updated guide applicable to eligible loans. Refinance buy out of co-owners equity guideline have been updated as well. Additionally, requirements for signed federal tax returns have been amended. If tax returns are required, unsigned copies are acceptable if transcripts have been provided as required and the transcripts reflect the same information as the copies of the tax returns. Contact your representative for all up to date guidelines.

Cole Taylor Mortgage Mini Correspondent partners are encouraged to review its REALEC quick guide for updates. Be sure to include key items when using REALEC appraisal ordering system. A valid CTM loan number at the point of order and providing FHA case numbers, when applicable, at the point of order will improve the level of service provided by its AMC partners.

The Wholesale Lending Division of Carrington Mortgage Services, LLC (Carrington) announced the launch of www.CarringtonMarketingGenie.com, a broker marketing portal available exclusively to Carrington Approved Brokers as a value-added service. "Carrington Approved Brokers can now market themselves to new and existing customers with professional, targeted materials covering the loan products most needed in their respective markets - regardless of whether or not Carrington currently offers those loan products. From Carrington's online portal, brokers can access, customize, order and purchase marketing materials covering a wide variety of loan types, including FHA Purchase and Refinance, VA Purchase and Refinance, USDA, Jumbo, Conventional, Low Down Payment, Co-op, and programs focused on the needs of first-time homebuyers."

New Leaf Wholesale has a new process for VA case number and appraisal ordering. Partners no longer need to place orders directly on WebLGY. The NEW process will require completion of New Leaf's VA Appraisal Order Form emailed to its appraisal department.

As a reminder, Penny Mac Correspondent Lending Group has announced additional changes to its Jumbo product. Business funds to close, Leasehold and subordinate financing guidelines updates are in effect per its May 29th 14-30 announcement. Additionally, PMC has posted a reminder regarding multiple financed properties on conforming loans. Investment and Second Home transactions with multiple financed properties require additional validation to confirm the transaction meets Agency and/or program requirements. Contact your sales representative for specific update and requirement information.

PennyMac's mandatory rate sheet was updated a week ago to reflect additional price adjustments extension cost/day 0.0150.

United Guaranty posted an announcement regarding HARP Loan Modifications and MI Guide. United Guaranty must manually process all requests for changes to mortgage insurance (MI) for HARP loans-requiring servicers to submit requests for MI-related changes in advance. Send requests to loanmods@ugcorp. com using the Loan Modification Request Form on the ugcorp.com/forms page. Post-closing MI changes must also be submitted to loanmods@ugcorp.com.

WesLend Wholesale's Direct FHA and Direct VA minimum FICO has been lowered to 580. Additional DTI requirements, based on compensating factors, have also been added. Conforming fixed DU 41% maximum DTI requirement, for LPMI loans with FICO scores < 740, has been removed and Direct Fixed 30 Year Fixed LPMI has been added as an eligible option.

The bond market pretty much sat on its hands Monday - maybe everyone is thinking about Father's Day, graduations, or vacations. The Fed was in buying a couple billion of agency MBS, and traders reported that supply from originators was limited but that didn't stop MBS prices from worsening about .125. For excitement today we'll have a $28 billion 3-yr note auction. And for numbers, the 10-yr closed Monday at 2.61% and in the early going is up to 2.63% while agency MBS prices are worse another .125.


A "Top 20 retail mortgage bank is looking to partner with high producing, purchase-focused branch managers and loan originators. American Pacific Mortgage Corporation, founded and run by Originators, continues to thrive to be the best by delivering consistent results. In 2013, American Pacific Mortgage funded over $4.3B and was ranked not only 19th in the top 100 Mortgage Companies in the US by Mortgage Executive Magazine, but also 4th in ranking for the best and most rewarding places to work!  American Pacific Mortgage has a unique perspective when it comes to the needs of its originators and takes a fanatical approach to branch service and support, believing management's job is to make producers and branch managers look good and provide them with what they need. With innovative and strategic programs like Keys on Time, Fast Trac Funding and SecureLock, APM provides purchase focused originators with the tools and operational support necessary to distinguish themselves in today's competitive market." Interested parties should contact Mike Haden at mhaden@apmortgage.com.

Pennsylvania's GMH Mortgage Services is strategically expanding in target retail markets. GMH is well-capitalized and committed to a best-in-class philosophy across all channels, and is hiring self-sourced, purchase-centric retail loan officers and Regional Builder Managers with strong business development experience.  With the recent launch of GMH's retail specialty products platform and the verticals built to grow purchase business, GMH Mortgage offers a unique value proposition to both mortgage loan originators and external referral partners. GMH Mortgage is a division of the GMH Associates family of companies. To find out more about all of the career opportunities available at GMH Mortgage Services, check out GMH and apply today.

And lastly AmeriHome Mortgage Company, LLC, an emerging player in the Correspondent market, recently announced its new Expanded Program for correspondents: "key features include 600 and above credit scores, up to 83% LTV, and requires only 2 years out of bankruptcy or foreclosure." John Hedlund, AmeriHome's Managing Director of the Correspondent Lending Division, positions AmeriHome's value proposition as "the combination of a superior loan purchase experience coupled with our unique ability to develop and offer innovative and expansive products to our clients". For more information, please reach out to AmeriHome's Sales Executives Chris Maturo or John Hill. Additionally, as AmeriHome continues to expand and grow, it is looking for experienced correspondent sales professionals across the USA. Please forward resumes to jobs@amerihomemortgage. com.