We're racing toward the Summer Solstice, with the most daylight in the Northern Hemisphere, but Happy Friday the 13th
AND a full moon! This combination won't happen again in North America
until 2049, another thirty five years. Maybe by then some of the current
mortgage bankers and Realtors may have retired. But probably not.
European Space Agency is developing a Doomsday Ark on the moon. This
"ark" would be a database containing information on things like
language, crop growing, and modern technology. Ideally, the base would
allow remaining earthlings access to information ensuring the survival
of the human race. The Consumer Financial Protection Bureau contributed
its most recent Semi-Annual Report
to the cache of items to be located on the moon. I can't even grow
herbs in my kitchen window, and scientists believe we could colonize the
moon? Back to mortgage....although there's nothing too earth shattering
in the report, one statistic did catch my eye: of the type of complaints being logged by consumers, 73% of complaints are Incorrect Information
on credit reports; more specifically: information is not that of
consumer, account terms, account status, personal information, public
record, reinserted previously deleted information.
Of some interest to GNMA issuers is the recent mortgage letter HUD Issue ML 2014-09. The purpose
of the letter is to inform lenders about changes to FHA's systems that
alter the way lenders execute post-approval updates and complete FHA's
annual recertification process. The primary change detailed in HUD's
letter (which became effective May 27th),
is with the deployment of the Lender Electronic Assessment Portal
(LEAP). LEAP, which is accessible through FHA Connection, will affect
the way originators go through post-approval updates & business
changes, annual recertification, financial data templates, and agreed
upon procedures. And while we're talking about GNMA issuance, more than
$21.66 billion in Ginnie Mae II single-family pools were issued in
April, while Ginnie Mae I single-family pools totaled nearly $449
million. In addition, Ginnie Mae issued nearly $1.66 billion in
multifamily MBS in April. Issuance for the Ginnie Mae Home Equity
Conversion Mortgage-Backed Securities (HMBS), included in Ginnie Mae II
single-family pools, was $395 million.
Residential mortgage-backed securities may make a comeback as demand increases for home equity lines of credit.
Basel III requires high levels of capital to be held on balance sheets
for these loans, so lenders are turning to securitization and exploring
investor interest: Reuters/International Financing Review.
And congrats to JMAC Lending, the #1 lender in WinWater Home Mortgage's $250 million residential jumbo deal. Yes - finally some news in non-agency issuance!
Kroll Bond Rating Agency has issued its pre-sale report WinWater's
first securitization offering (WIN 2014-1). WinWater is "a residential
mortgage conduit aggregator focused on opportunities in the non-agency
jumbo sector." The pool is 306 loans with an average balance is
$815,247, average FICO score of 753, and an average LTV of 71%. 65% of
the loans are on California properties (about 19% each from LA and SF
areas), 8% from Washington, and 3% from Texas. Not surprisingly Kroll
notes that the concentration of loans in California is a concern of the
deal. But heck, it is hard to put together a jumbo deal without
California loans, and most of the loans come from California-based
lenders: JMAC Lending: 14%, RPM Mortgage: 13%, and Opes Advisors: 10%, followed by Guaranteed Rate, Paramount, and Texas' PrimeLending. Cenlar services nearly all of the loans, and the master servicer and custodian is Wells Fargo.
Trust announced that it had entered into an agreement with the Federal
Home Loan Bank of Chicago (FHLBC) to create MPF Direct,
a new mortgage product offered by the Mortgage Partnership Finance
(MPF) program. The program will allow FHLB members that participate in
the MPF program to deliver eligible high-balance loans to Redwood. Under
the agreement, Redwood will be the only investor in MPF Direct loans
for three years. The MPF Direct program will allow FHLB members that
participate in the MPF program to deliver eligible high-balance loans to
Redwood Trust. The MPF program was set up by FHLBC in 2000 to provide
an alternative for its members who did not want to fund mortgage loans
on their own balance sheets and other FHLBs subsequently joined the
program. These loans are retained on balance sheet by the FLHB so it
manages interest rate risk and prepayment risk.
participating financial institution (PFI) that sells the loan enters
into a risk sharing agreement which obliges it to cover losses after
they reach a certain level. The FHLB also has a newer program called MPF
Xtra through which the PFI can transfer all risk including credit risk.
The new MPF Direct program will focus on high loan balance loans (the
traditional MPF program is only for conforming or government loans).
These high-balance loans will now be acquired by Redwood, therefore
creating a new way for Redwood to very efficiently acquire jumbo loans.
Analysts believe that one of the strongest selling points of this
program is that Redwood, unlike most buyers of jumbo loans in the
secondary market, is not a potential competitor for the customers of the
Consumer Financial Protection Bureau ordered a New Jersey company,
Stonebridge Title Services Inc., to pay $30,000 for paying illegal
kickbacks for referrals.
CFPB Director Richard Cordray stated that, "Kickbacks drive up the
costs of getting a mortgage and put law-abiding companies at a
disadvantage. The Consumer Bureau will continue to take action against
companies that seek to attract consumers through illegal schemes." The
Bureau charged that Stonebridge paid commissions
to more than twenty independent salespeople who referred title
insurance business to Stonebridge. "Stonebridge solicited people to
provide it with referrals of title insurance business, offering to pay
commissions of up to 40% of the title insurance premiums Stonebridge
itself received. These practices violated Section 8 of the Real Estate
Settlement Procedures Act (RESPA), which prohibits kickbacks and payment
of unearned fees in the context of residential real estate
transactions. Paying commissions for referrals is allowed under RESPA if
the recipient of the payment is an employee of the company that is
paying the referral. In this case, although the individuals received W-2
tax forms, the Bureau's investigation determined that these individuals
were independent contractors and not bona fide employees."
This summer, LoanSouth Mortgage will begin marketing as BankSouth Mortgage,
a name it legally adopted in 2011 after forming a joint partnership
with BankSouth to continue the growth of residential mortgage services
in greater Atlanta and the southeast. When LoanSouth became a wholly
owned subsidiary of BankSouth, it continued doing business as (DBA)
LoanSouth Mortgage. "Nothing about LoanSouth Mortgage or what customers
have come to expect is affected by this transition," said Kim Nelson,
CEO of LoanSouth Mortgage.
Franklin American Mortgage
Correspondent Lending has lowered its minimum FICO on conventional
conforming fixed rate products from 640 to 620 on one unit, owner
occupied properties with LTV >80%, effective with locks on or after
5/30/14. Its Minimum borrower contribution on conventional high balance
transactions has also been updated. Effective immediately, borrowers
required contribution has been reduced to 5% of their own funds for
purchase transactions, as opposed to the previously required 10% of
borrowers own funds. Delayed financing, flood zone determination,
appraisal requirements, and other expansions, reminders and changes have
also been updated. Contact your representative for full details.
is offering an Asset Based Jumbo Program for self-employed borrowers.
Self-employed income is not verified, and is for primary & second
Homes. This is a "No Income verified program" for self-employed
borrowers. Liquid assets (including business), are verified for
qualifying purposes, and is not an asset depletion program. There are
specific minimum asset requirements for each loan tier. CMG's
asset based jumbo product requires no income documentation for
self-employed borrowers, and borrowers are underwritten by verifying the
required liquid assets (business accounts as well). At least one of the
borrowers must be self-employed. Salaried borrowers will have their
income verified if part of the loan. For more information contact Joe
Brockman jbrockman@cmgfi. com.
Mountain West Financial Wholesale announced changes in reference to CHDAP and allowable broker compensation. CalHFA
recently announced that for all new CHDAP reservations subordinate to
any first mortgage made on or after June 2, 2014, the first mortgage
maximum allowable fees charged by a lender may not exceed the greater of
2% of the first mortgage loan amount or $3,000.
As a result, borrower paid maximum compensation will be limited to
1.5%; Lender Paid Compensation is unavailable for CHDAP at this time.
MWF wholesale has also released information regarding multiple
underwriting additions and changes on its VA, FHA and Conventional
products. Updates include LP maximum number of financed properties on
conventional products, and refinance transactions with property listed
for sale. FHA high balance VOR/VOM updated guidelines to indicate:
mortgage history of no lates in 12 months to be applicable to Refer and
Manual UW only.
Say all you want about the US economy - sudden overseas events quickly remind us how our markets can be moved by non-U.S. news.
We did have a disappointing May Retail Sales report, but concern about
military and political events in Iraq drove a flight to quality and an
increase in oil prices. And higher oil prices produce a drag on the
economy, also leading to lower rates - but I am sure every lender would
rather have an economy that is doing well. But hey, the 10-yr rallied
nearly .5 in price and current coupon agency MBS rallied .375. Remember
that prices are determined by supply and demand, and if demand for loans
is strong, and the supply is down, that tends to push prices higher and
rates lower on a relative basis.
morning the scheduled news wrapped up with the Producer Price Index.
PPI, a measure of inflation, for May was expected at +.1% and came in at
-.2% - there just isn't a lot of wholesale inflation out there. Later
we'll have the preliminary June Consumer Sentiment number, generally
regarded as "second tier". Currently the 10-yr is 2.61% after a 2.59% close Thursday, and agency MBS prices are worse about .125.
For anyone looking to "explore alternatives", Prospect Mortgage is looking to acquire small to large mortgage lenders. "As
a top 5 non-bank retail lender in the purchase-money market, Prospect
has created a national platform that supports retail LOs and their
Realtor partners. Prospect
is known for the synergy that exists between its Sales and Operations
teams. Supporting Realtor partners in closing on time is the number one
company goal and this purchase focus has positioned Prospect to win in
the new "post-refi" mortgage market. If you're looking for an exit
strategy, talk to Prospect. If you need a succession plan while
remaining entrepreneurial, talk to Prospect. If you want to preserve
your hard-earned equity and stay in the game, talk to Prospect. Let
them show you how to keep growing your business and take your risk off
the table." Contact John Manglardi at John.Manglardi@Prospectmtg. com for confidential inquiries.
And any lenders in the Southeast looking for a new investor should contact Fidelity Bank Wholesale/Correspondent's division. Based out of Atlanta, GA, Fidelity Bank
has hired two well-seasoned Account Executives (each with over ten
years of experience) to help expand its business throughout the
Southeast. Darren Bird will be covering the Carolinas for Fidelity, and
Brent Posey will be responsible for the state of Florida. Fidelity has
targeted Florida as a growth opportunity and has recently begun lending
in all Florida counties. Fidelity Bank Wholesale / Correspondent is a
direct servicer seller to both Fannie Mae and Freddie Mac, and with the
exception of 640 credit score, Fidelity has no additional overlays and
will allow both DU and LP AUS findings for credit review. Fidelity has
also recently developed a one-time close construction/perm program with
extended lock option for all clients that are financial institutions.
For more information please contact production manager Eric Blanks.
a new kid on the block in Virginia. First National Corporation, the
parent company of First Bank, announced the launch of a new mortgage
division named, First Mortgage.
George Ballew has joined First Bank as the CEO of the division that
will be headquartered in Staunton, Virginia. "The Company is excited
about the strategic opportunity to expand operations into the Staunton
market. First Mortgage is a natural extension of the Company's core