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
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
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
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
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 email@example.com.
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.
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 firstname.lastname@example.org.
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.