Financing Options Increase; Mortgage Banker M&A; Question on QM Rental Income Underwriting
Here's a survey for LOs - maybe it will have an impact on being able to contribute closing costs to borrowers.
"Last year, the Government Affairs team at NAMB conducted a survey of
mortgage professionals to determine the amount closing cost credits
given back to consumers at closing. The data overwhelmingly showed that
in 2012, mortgage brokerages gave millions of dollars to consumers to
help cover closing costs. Our data helped the mortgage industry get some
very positive press and turn some heads in DC. We are now conducting the same survey for 2013. Please fill out the short 5 question survey and help NAMB help you.
servicers are garnering their share of press in the last several
months, with the conversation as of late focused on government
regulators telling them how much capital to have. Some, like NationStar,
Freedom, Quicken or Stearns, have well-known production divisions.
Others, like Ocwen or Walter Investment, not so much. Walter Investment Management announced its initial Walter Capital transaction. WAC announced that it has completed its initial funding of Walter Capital Opportunity (WCO) and the first transfer of excess servicing spread.
The acquisition by WCO was of 70% of the excess servicing spread
relating to MSRs with a UPB of approximately $25 billion related to a
Green Tree deal. The sale price was roughly $75 million. Analysts say
that the transaction is likely to be seen as a positive for Walter and
other non-bank servicers as this structure provides a way for Walter to
grow its MSR book without increasing balance sheet leverage. The
transaction announced today will also moderately reduce leverage. What
will Walter do with the 75 million ducats? Stay tuned...
And for other ways to fund various mortgage operations, Home Loan Servicing Solutions (HLSS) announced entry into a repurchase agreement with Wells Fargo
with a maximum aggregate purchase price of $290 million. The agreement
will terminate the day after Christmas. This appears to be a loan
funding facility, and the language of the agreement also makes it appear
that it will be used to fund loans on a flow basis as opposed to
funding delinquent loans repurchased out of Ginnie Mae pools. This
suggests that this facility could be part of one of the company's new
Speaking of big bucks, here's another settlement for you folks who follow the legal maneuvers out there. This time it is SunTrust.
Here's a quick QM underwriting issue that seems to be causing some confusion out there. The question is, "What is required to prove rental income in order for a loan to be a Qualified Mortgage?" The CFPB is in charge of underwriting criteria now for QM loans, of course, and Appendix Q is under its jurisdiction. Look for the sections II. Non-Employment Related Consumer Income
D. RENTAL INCOME
4. Documentation Required to Verify Rental Income.
of the following required documentation is necessary to verify all
consumer rental income: a. IRS Form 1040 Schedule E; and b. Current leases/rental agreements."
my uneducated eye, it seems pretty clear that if a borrower has rental
income, in order for the lender to make a QM loan they'd better have
both the Schedule E and the lease agreements IF the borrower needs it to
qualify. If you feel that the "and" should be changed to an "or", or if
you have other questions & comments, they should be addressed to
continue to strive for every basis point. It is a real challenge, given
the mounting compliance and regulatory costs tacked on to every loan
and in turn passed on to borrowers. Beware to any lender who tries to
scrimp on compliance costs. Many companies are finding the uphill battle
not worth the fight, and are looking for buyers or at least partners.
Yet other companies are continuing to earn decent profits. So what are
cash-rich companies doing with their hard-won dough? MutualBank announced that it has signed a definitive agreement to acquire Summit Mortgage, Inc.,
a mortgage banking company headquartered in Fort Wayne, Indiana (home
of Major Frank Burns). The transaction has received all regulatory
approvals and is expected to close in August 2014.
Phoenix's CFS Mortgage Corporation announced that it has joined the Comstock Mortgage team. Founded
in 1989, Comstock is a Fannie Mae seller/servicer and direct lender.
"The addition of the CFS management and production team will help
Comstock expand its origination platform in the Arizona and Southern
California Markets as part of its ongoing western US expansion
a national provider of multifamily and healthcare mortgage loans,
announced it provided $8,994,500 in HUD financing for two multifamily
affordable housing properties in the greater Houston, TX region:
Lexington Square, an 80-unit Section 8 property in Angleton was
refinanced with 30-year HUD 223(f) loan terms, and Countryside Village, a
182-unit Section 8 property in Humble was refinanced with 35-year HUD
223(f) loan terms.
M&T Bank Correspondent has made several updates as of June 11th,
to its Agency Underwriting Eligibility Standards. The new guide will be
posted to the MEME and Empower Info Centers. Effective immediately,
M&T Bank is discontinuing HARP Arm Products from its product
offerings. Also, M&T's referenced change regarding definition of
large deposits increase to 50% of gross income in its bulletin 2014-06;
this definition has not yet been announced by FHLMC. The
noted large deposit definition policy is currently under consideration
by M&T and additional guidance will be provided in the near future.
New Penn Financial announced
the launch of Conforming Fixed Rate Custom Loan Terms, customizing loan
terms to your borrower(s) individual needs. On May 27, 2014, Fannie Mae
published SEL-2014-06 which included updated policies as it pertains to
Large Deposits and Other Assets. Effective immediately, New Penn
Financial will be adapting FNMA's revised policies. Also, moving
forward, when a borrower is relying on the sales proceeds from another
property to pay for the down payment or closing costs, the lender must
simply obtain a copy of the final HUD-1 from the sale. It no longer
needs to be executed as a source of funds per New Penn UW guidelines.
Mountain West Wholesale
has provided detailed information regarding its policy on Termite
Report Review and Clearance Policy. Contact your Account Representative
for the specific guidelines.
Cole Taylor Mortgage Wholesale
is enhancing its procedures for providing the Maryland Financing
Agreement and Commitment to applicants to ensure compliance with
Maryland state law applicable to all first lien mortgages secured by
owner-occupied primary residence. Contact your Area Manager for the
details on this enhanced procedure.
U.S. Bank Home Mortgage
has eliminated the restrictions on first and second lien transactions
in the states of Florida and Nevada. It has no remaining restricted
markets. Product Guides are being updated for both first and second lien
Franklin American Correspondent
has retracted the updated requirement for the New York prevailing
interest rate commitment disclosure. The disclosure will not be required
on all loans in the State of New York but will be required where
applicable under state regulations. See the bulletin 2014-20 for specific requirement information.
Illinois Association of Mortgage Professionals
new June 2014 video newsletter has been published. All its video
newsletters will now be exclusively published on its website. View the
news website: IAMP News & Video Page. Additionally, IAMP is offering 100% FREE membership for all licensed or registered Mortgage Loan Originators. Click Here To Find Out More About FREE MLO 2014 Membership .
Policies on Arm's Length Transactions and Compliance with State Laws:
FHA is aware of concerns that the laws in certain states may conflict
with its arm's length transaction requirements for preforeclosure/short
sales. FHA is in the process of issuing guidance
to specifically address the intersection between its policies and
applicable state laws on this requirement. Until such guidance is
issued, mortgagees are reminded of their ability to seek guidance and
assistance in complying with both FHA requirements and any applicable
state laws from FHA's National Servicing Center.
has published two Mortgagee Letters on Home Equity Conversion
Mortgages: "Limit on Insurability of Fixed Interest Rate Products Under
the HECM Program" and"Prohibition
on Misleading or Deceptive Program Descriptions or Advertising and
Prohibition on Restriction of Mortgagor's Freedom of Choice". To view
these documents, both mortgagee letters are published on HUD.gov at: Mortgagee Letters
Citi Bank Correspondent
has recently updated a plethora of information including, DU approved
loans in reference to other non-employed income, hazard insurance
effective date and reserve requirements on multiple properties.
Underwriting guideline updates including:
Funds for Down Payment and Closing Costs, Definition of Full Monthly
Payment Amount, and Income Derived from Marijuana Related Businesses.
to the markets, think all the way back to Thursday...and remember that
housing and jobs are the lynchpins of the economy...we had a very strong
Non-farm Payroll number. Traders reported that soon after the number
"things got off to a naturally choppy bias as price action was swift yet
erratic after a robust NFP print rattled the markets a bit. 10yr
support first established at 2.70% while MBS buyers came out with a
quick burst on half billion in purchases. The going became less
cumbersome up around 4s and 4.5s as Originators put on some extra
pipeline coverage on mainly 30yr 3.5s and 4s, as upwards of $900 million
was seen. These sales came as rates rose and locks supposedly were more
likely executed on underlying mortgages."
And now, in spite of yesterday seeming like Monday, today is Monday! Through the Fed's website
we already know that it plans on buying a maximum of $8.2 billion over
five business days - no surprises there. For scheduled news there is
zipola today, and not much tomorrow. Wednesday things pick up a little
with the MBA apps numbers (bound to disappoint, even after being
adjusted for the holiday) and the release of the Fed's minutes from its
June 17-18 FOMC meeting. Thursday is jobless claims - and that is about
it for substance. The 10-yr closed Thursday with a yield of 2.65%.
I am still receiving comments like this: "My
office has had a ton of LOs leave. Only two were still producing, the
other dozen were on the verge of being fired for lack of production.
They were approaching 4-6 months negative on their drawers, so an offer
from a lesser competitor with a 3-month sign-on bonus was a no brainier
for them. In one move they went from being -$8 to -$12k in the hole to
positive $5k a month. For those of us producing we always hear the grass
is greener on the other side until we find out it really is not. It's a
tough environment as you know and some recruiters are thriving."
But on the operations side, in Colorado Springs Peoples National Bank is looking for a Vice President, Director of Secondary Marketing & Capital Markets.
The position is primarily responsible for prudently managing net income
from the sale of mortgage loans, managing the risk associated with
Secondary Marketing, including pipeline and interest rate risk
management, pricing, hedging, trading and loan sales. Candidates should
have experience in issuing agency MBS securities, and creating and
managing investor relationships in order to improve sound and profitable
operation of its Mortgage Department. Peoples
offers a solid national bank platform & an aggressive mortgage
sales operation that has been in the business more than 30 years, and
did more than $1 billion in residential production in the past two
years. E-mail CFO Dean Christensen for confidential inquires or to submit resumes visit PeoplesCareers.
Southwest Funding is hiring branch managers and loan originators in multiple states. This
opportunity is for branch managers and licensed mortgage originators in
13 states at new branch office locations. For example, the company just
entered Colorado and is expanding. "Its mortgage banking branch
platform offers the autonomy of running an office with a competitive
compensation structure, an open door communication policy to talk with
underwriters, purchase business expertise to close on time, and products
including FHA, VA, USDA, Conforming, Jumbo and HECM loans as a direct
lender." Southwest Funding recently celebrated its 20th year in business. Contact Michael Taylor for more information. "Limited Time $25,000 Sign On Bonus Available!"
Congrats to the Wisconsin Mortgage Bankers Association's
newest board members: Betty Feierstein, Julio Rios, and Peter Wilder.
(Executive Board Members, President Marcia Howe, Secretary/Treasurer
Mike Kellman, and President-Elect John Inzeo took their oath of office