The homeownership rate in
the US fell again last quarter, to 64.7%, the lowest rate in almost 20
years. Separately, the rental vacancy rate fell to 7.5%. Every weekend
babies are born, offers are made on houses, new households formed.
Here's a program that attempts to tie it all together - after all, why
register for place settings when couples can register for a down payment? And how about crowdfunding downpayments - yes, that is catching on too, apparently.
Remember when New York stopped a $39 billion Wells Fargo sale of servicing to Ocwen earlier this year? Tongues were wagging yesterday after news broke of a review of Ocwen's mortgage servicing operation showed a "troubling" transaction involving Altisource Portfolio
in New York. The Superintendent of Financial Services, Benjamin Lawsky,
wrote a letter to Ocwen's general counsel Timothy Hayes. The letter
noted that "Forced-place" insurance transaction appears "designed to
funnel" as much as $65m annually from "already distressed" homeowners to
Altisource for "minimal" work. The Superintendent is also looking at
role that OCN CEO William Erbey played in approving the arrangement, and
it appears to be "inconsistent" with public statements made by Ocwen.
insurance (or force-place; I've seen it both ways) has been a hot
button with regulators for decades, and continues to be an issue. This
latest event, where Lawsky's office alleges that inter-company dealings
between Ocwen and Altisource Portfolio Solutions (ASPS) inappropriately
benefit ASPS is no huge surprise. In particular, the letter outlines
historical background on Ocwen's force-placed insurance arrangement with
ASPS. According to the letter, a go-between entity was set up between
OCN and ASPS, known as SWBC, so that the companies would not transact
directly with each other. The NY DFS alleges that ASPS then received
certain fees (including insurance commissions and per loan fees) while
not providing commensurate services. The letter notes that the
transaction was approved by Bill Erbey, chairman of OCN, among others,
but seeks to answer several questions including information regarding
the services provided by ASPS in return for payments under the
arrangement and the decision-making process that led to the arrangement.
Hey, what lender doesn't want to do a perfect loan? On the other hand, what lender wants to pay for that? Here are Collingwood's thoughts on the issue.
lost count of how many articles I've read either predicting the
equivalent of a real estate apocalypse, or a real estate big bang...my
scale on what is a good article, versus what is a bad article, rests
upon a sole question: Were they able to distract my attention away from
Tetris on my laptop, or the Rubik's Cube which has sat idle on my desk
for the past 22 years mocking me. Quantitative data helps, and Zillow is
a driver of data on a number of levels. Their recent article on the
housing market, Why Rising Mortgage Rates Could Mean Falling Homes Sales, is another slant on a popular opinion; that is to say, at some point normal market behavior will become the norm. They write,
"Existing home sales have recovered slowly and have struggled to gain
momentum over the past half-decade as the United States economy emerges
from the Great Recession. Countervailing economic currents have pushed
existing home sales in opposite directions. Low and declining interest
rates-the result of extraordinary monetary policy actions-have been
broadly supportive of home sales, but broader economic trends-including
low homeownership and household formation, high unemployment and slow
income growth-have been a net drag on home sales." Their main conclusion is very eloquent, actually, as they
predict that over the next year, the underlying drivers of the housing
market will approach a delicate handoff as a market driven by
accommodative monetary policy gives way to one driven by macroeconomic
Lender/investor changes and upcoming events/training
Arch MI is offering Economic and Housing update complimentary Webinar
August 6th and 8th led by Ralph DeFranco, Ph.D., a recognized authority
on the housing market, Arch MI's Senior Director of Risk Analytics and
Pricing to its existing customers.
MERS is offering an interesting set of "Regional Workshops".
"Learn more about MERS® System transactions and reports, including how
and why to use reports. You'll also dive into procedures-learn how to
write and maintain procedures for your organization, as well as why and
when the MERS® System Procedures Manual is updated and how you can
provide feedback. Lastly, tackle common scenarios encountered by MERS System® members and learn about resources you can use to help solve these problems. The workshops
cost only $95 and it includes the training manual and meals. Join us in
one of four locations: Hyatt Regency Bethesda, MD September 11, Denver
Marriott Tech Center, CO, October 7, Hyatt Regency St. Louis at the
Arch, MO, November 5, Hilton Tampa Downtown, FL, November 13."
Fannie Mae's Learning Center hosts a variety of education opportunities throughout August and September Calendar of Classes. Scheduled for release the weekend of Aug. 16, 2014, DU Version 9.1 Webinar registration will review the updates being made to DU.
Fannie Mae handles the pipeline management and interest rate risk in a best efforts commitment for more information view Best Effort Tutorial.
If you're in San Francisco in late November, the MBA Accounting & Financial Mgmt. Conference
provides you with targeted, real-world strategies for solving the
accounting, regulatory and finance challenges you face in this changing
First Community Wholesale
posted updated product and pricing changes as of June 30th. These
updates include large deposit definition 50% of qualifying income,
clarification of gift fund transfer documentation when given at closing,
and cash-out increase on Non-Conforming Jumbo. To view the bulletin: FCMKC.
Fifth Third Correspondent
has clarified land contract requirements on all products. Fifth Third
does not lend to borrowers who have sold the subject property through a
land contract agreement. FTMC continues to lend to borrowers when the
proceeds of the mortgage loan are used to pay off the outstanding
balance of an installment land contract. Contact your Account
Representative for the latest update information.
Urban Financial of America, LLC, one of the "top lenders" of reverse mortgages in the United States, is now licensed to conduct its retail and wholesale reverse mortgage business in the state of Hawaii.
US Bank Correspondent
Respa Homeowners Disclosure reminder, US Bank will continue accepting
applications that demonstrate compliance with RESPA requirement by
accomplishing either of the following: provide a compliant disclosure
within 3 business days of initial application, which contains a current
list of 10 counseling agencies based on the applicants current zip code
or if a lender is still working on its software vendor in good faith to
incorporate the list of counseling agencies into its origination system,
the lender may provide a disclosure which contains a link to the CFPB
housing counseling website. Effective with loans dated on or after July
10th, if the name and NMLS information is missing on the note and
security instrument, the loan will be ineligible for purchase.
ECOA Valuation Rule acceptable proof of delivery on all USBHM underwritten files, the lender must use the provided model form Appraisal Delivery Certification.
On delegate-underwritten files, the appraisal delivery certification
form or other proof of delivery are acceptable. Flood insurance
requirements with applications dated on or after July 7th, updated
procedures calculating flood insurance coverage on properties located in
special flood zone are applicable. Flood insurance must be at least the
lower of unpaid principal balance of all liens against the property,
the insurable value of the property or the NFIP insurance maximum. For
complete details on any of the requirements, contact your Account
WesLend Wholesale Financial
weekly product updates include USDA, WesLend Direct Fixed, WesLend
Direct FHA, WesLend Direct VA, and WesLend Jumbo products. USDA program
enhancements include 600 minimum FICO and 100% maximum LTV and no
maximum loan amount as long as the income requirement and DTI
requirement are met, the loan amount is eligible. Weslend
Direct Fixed product updates includes Investment Properties are allowed
on Non-Arms Length transactions, there is no longer a minimum tradeline
requirement. All loans require a DU approval, so Fannie Mae's
requirements will be followed. Texas 50(a)(6) Cash Out refinances are
now eligible. Contact your Account Representative or visit the website WesLend for weekly product update information.
Fifth Third Mortgage
no longer requires that non-taxable income must be grossed up if tax
returns are obtained and the income is tax exempt provided the 25%
grossed up amount is not required for loan qualification effective
the grossed up amount is required for loan qualification, tax exempt
status must be verified. Regarding Homepath product, effective October 7th, the product will no longer be available. Purchase contracts must be dated on or before October 6th. Homepath loans must close and fund by December 31st.
Suddenly the securities market is "en fuego" with structured deals.
Not all of them are non-agency, but it is hard to keep track of them.
So with IFR/Thomson Reuter's help..."Banks will launch up to 14 new bond
deals in the structured finance primary market this week, including
Freddie Mac's latest risk-sharing trade and auto ABS issues from CarMax
and Enterprise Fleet Financing." Those clever Wall Street folks are
securitizing CarMax vehicle deals, Enterprise fleet lease deals, Orange
Lake Country Club's timeshare ABS, First Investors Auto's subprime auto
securitization, Susquehanna Bank's prime auto loan trade, Salle Mae's
private student loan deal, and DineEquity's US$1.4bn IHOP and Applebee's
whole business transaction this week.
back to mortgages, since that is what this commentary is about, Freddie
Mac announced a US$1.2bn K series CMBS as well as a new US$1.1bn
risk-sharing RMBS from its Structured Agency Credit Risk (STACR) series.
But the flooding of the market is causing prices to drop, therefore the
required yields to rise. "The latest evidence of bigger pricing
concessions came Monday after Blackstone Group priced its latest single
family rental bond (SFR) 10-75bp wide of its May issue."
thrilling news today we have....Factory Orders! We closed the 10-yr
Friday at 2.50%; we started Monday with it around 2.49%, which is where
it closed. There just isn't much going on, here or overseas, to push
rates one way or the other. And
thus we find the 10-yr at 2.49% in the early going this morning, and
agency MBS prices roughly unchanged - at this point from Friday
On the jobs side, Wintrust Mortgage, a national mortgage lender headquartered in Rosemont, IL, is expanding its Quality Control team. Management is seeking to employ a Vice President of Quality Control.
This person should have a minimum of three years of quality control,
auditing or compliance experience in the mortgage banking industry. A
thorough knowledge of agency guidelines is strongly preferred. Wintrust Mortgage is also hiring a staff level Quality Control Specialist. Interested candidates should contact DeAnn Kovalan, Executive Vice President of Wintrust Mortgage, for confidential inquiries.
(Maybe Wintrust and others can pick up some talent in Ohio, since Huntington Bank cut nearly 200 jobs.)
for those looking for alternatives, "As the market continues to
consolidate and the cost of compliance gradually increases, it leaves a
significant opportunity for acquiring strong retail talent and
origination market-share", says Dr. Rick Roque, principal of MENLO, an investment banking consulting firm whose efforts help mortgage lenders raise capital, be acquired or seek to attract/expand their production. "Origination
teams, divisions of other companies, or independent mortgage banks are
calling me because their present circumstance is either
under-capitalized or uncertain - they know they can have better
products, pricing and improved execution with less risk, but filtering
through the companies who are high risk versus those who are the right
fit, is too risky of a decision to get incorrect. So if you are a team
of LOs doing $3-5M/month in volume, OR an independent mortgage bank / broker doing $5M per month to $100M/month in volume
(~$60M to $1B+ annually), contact me to review acquisition
options. Specific markets of interest are the North East/New England,
Arizona, California, Florida, Wisconsin, Minnesota, Illinois,
Kansas/Missouri, Wyoming, Virginia and Maryland." Inquiries can be
directed to Dr. Roque.
Who says wholesale is a dying business model? Certainly not Essex Bank, which started doing wholesale.