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Switching gears to legal issues...What's this? Lawyers giving lawyers a bad name relating to mortgages? Only in Chicago!
 
The industry took notice of a recent ruling that showed the foreclosure of Nevada HOA "Super Lien"cannot extinguish a mortgage lender's security interest.
 
(In other HOA news, Wells Fargo expanded it Homeowners Association Certification Review for condominiums under the Non-Conforming Program. Under the Wells Fargo HOA Certification Review, at least 50% of the units sold must be sold to owner occupants for use as primary residences or second homes.)
 
Did PricewaterhouseCoopers fail to spot, for seven years, a multibillion dollar fraud that led to the demise of Taylor Bean & Whitaker Mortgage Corp.? A lawyer for the lender's bankruptcy trustee told a Miami judge that is exactly what happened. TBW went belly up exactly seven years ago, and shows that the industry finds it hard to move forward while focused on the past. And how did poor Mr. Waterhouse wind up with his name un-capitalized?
 
And don't forget that the Supreme Court of the State of New York ruled in favor of Barclays Bank PLC in a breach of contract action by granting a motion to dismiss in Federal Housing Finance Agency v. Equifirst Corporation. This is good news for lenders and brokers as a whole who are facing claims against Lehman Brother's Holdings, Inc. ("LBHI") in New York.
 
Barclays was alleged to be the successor and alter ego of EquiFirst, both of whom were sued by the Trustee U.S. Bank National Association ("US Bank"). Barclays filed a motion to dismiss based on a New York statute contending that the claims for breach of contract, anticipatory breach, and breach of the implied covenant of good faith and fair dealing were time barred. The Court, basing its decision on Ace Securities as well as some of the Court's previous rulings, found in Barclays' favor that the claims were in fact time barred.
 
In its description of what happened the American Mortgage Law Group wrote, "In making its ruling, the Supreme Court rejected U.S. Bank's contention that its claims for breach of representations and warranties were timely under an accrual clause in the applicable Flow Mortgage Loan Purchase Agreement ("Flow LPA"). The loans at issue were sold to Lehman Brother's Bank, FSB ("LBB"). Thus, applying the reasoning in Ace, the Court found that U.S. Bank's claim accrued not when Barclays failed to comply with a repurchase demand, but rather on the securitization closing date in February 2007 as the operative representations and warranties were made on the closing date of the securitization. The Trustee then sought the opportunity to re-plead the matter, which the Court likewise denied.
 
"For AMLG clients facing claims against LBHI, this adds further support to the contention that LBHI's claims, which we contend are based on and derivative of breaches of representations and warranties, are time barred."
 
There was a HUD settlement/agreement with the City of Richmond, Virginia to resolve 14 discrimination complaints filed against the City by Hispanic residents. The complaints alleged that the City of Richmond selectively enforced its code requirements against residents of the City's mobile home parks, who are predominantly Hispanic. Of course the Fair Housing Act prohibits discrimination in housing because of national origin, including discriminating against persons because of their national origin when enforcing local housing codes. 
 
The complainants, who are current or former residents of mobile home parks in Richmond, alleged that, due to their national origin, the City imposed unreasonable and legally unjustified requirements that they had to meet to avoid condemnation of their homes; intimidated and harassed them by conducting intrusive inspections with armed police escorts and threatening criminal court action and large monetary fines; and failed to provide meaningful access to residents who have limited English proficiency.
 
Discrimination is wrong, regardless of the alleged target. The interesting thing, of course, is the large percentage of first-time home buyers who are minorities. In many parts of the nation Hispanic buyers represent an undeniable segment of the buying population, and lenders are hiring originators truly based on the ethnic makeup of the area. L. Maria Zywiciel, president of NAHREP Consulting, came out with a new blog that addresses this topic: "5 Things to Know When Working with Hispanic Clients."
 
Hispanic or not, Millennial or not, plenty of lenders are courting first-time home buyers. Where is the most expensive place to buy a starter home? Honolulu, where the income required to buy a starter home is over 6 figures and the median income is somewhere around $75k. Unsurprisingly, the West Coast dominates the unaffordable area. On the other side of the coin, if you make just over minimum wage, you can afford a starter home in Pittsburgh.
 
San Francisco aint cheap. Metrostudy has released the results of their 1Q16 survey of the new home market in the San Francisco Bay Area, and the results show continued strong demand even as the market reaches affordability limits. Some of Regional Director Greg Gross' findings include: 1Q16 Annual New Home Starts Up 17% YoY; Quarterly Starts Up 6% over 1Q15, 1Q16 Quarterly New Home Closings Up 6% YoY; Quarterly Closings Up 8% from 1Q16, and start activity increased significantly in the higher price ranges; the average "offer to build" price increased 10% YoY to $856K; 22% of starts priced over $1 million. If you would like to read the full report, click here.
 
Baby Boomers like lists, and here are the top 20 hottest real estate markets in July this year, according to Realtor.com. There's everything from the West Coast swath to Rust Belt pockets of note. 
 
Whether its title, mortgage, or flood, there are changes and trends in the insurance side of residential lending.  Genworth Mortgage Insurance today announced an expansion of its Homebuyer Privileges program to include discounts for nearly 300,000 retailers nationwide, including Target, Costco, Sears Commercial and ADT, among others. The program allows homebuyers to save up to $7,500 through a variety of retailer coupons. Loan Officers can extend these savings to homebuyers regardless of whether or not their loan includes private mortgage insurance from Genworth Mortgage Insurance. Homebuyers have up to 12 months to enroll in the program, and up to 12 months after enrolling to utilize the discounts. With a mobile app expected to follow by early next month, this Genworth Mortgage Insurance service has no limits on how many discounts a homebuyer can use during their 12-month eligibility period.
 
Effective August 10, FHA's Mortgagee Letter 2016-12 203(k) Rehabilitation Mortgage Insurance Program: 203(k) Consultant Draw Inspection Fee permits 203(k) Consultants to charge a Draw Inspection Fee that is reasonable and customary for work performed in the area where the property is located, provided the fee does not exceed a maximum of $350. The previous fee limit was $100.
 
Wells Fargo is updating its flood insurance deductible requirements for conventional Non-Conforming Loans to allow private flood insurance deductible amounts exceeding the National Flood Insurance Program (NFIP) requirement.  For private (non-NFIP) policies, the Cooperative Project Approval Team (CPAT) may accept a higher deductible than that permitted by NFIP, currently $10,000* on any one building when specified conditions are met. 
 
U.S. Bank posted two enhancements to its flood insurance policies for determining the full insurable value when using the hazard insurance policy. The first is the ability to assume the foundation is included in the insurable value shown on the hazard insurance policy. The second is regarding the actual percentage of the replacement cost value if it is not reflected on the hazard insurance policy. Lenders may assume, unless otherwise stated in the insurance policy, that the insurable value shown on the policy provides coverage at % of the RCV.
 
The big event for the markets today will be the release of the Federal Open Market Committee minutes from its last meeting in late July. ("Who was supposed to bring the donuts? Let the minutes reflect that, once again, Ms. Yellen was too busy to stop by Dunkin' Donuts on the way in.") But looking back to yesterday New York Fed President Dudley indicated that the Fed is closer to hiking rates and that the Treasury market's current high valuations are "concerning." We also had some better-than-expected housing starts and industrial production data. The core consumer price index grew slightly slower than expected - inflation hasn't been an issue for decades.
 
Besides the Fed meeting we have no other scheduled economic news on tap. We've already had the MBA's application data. It doesn't move rates, but gives MBS investors a sense of supply eventually coming their way. Apps were -4% with both purchase & refis -4 percent.
 
While we wait for the 2PM ET Fed minutes, to see if any squabble broke out about who sat in which seat at the table, for those quantitatively inclined, yesterday the 10-year worsened .250 in price and closed at 1.58%, and the 5-year T-note and agency MBS prices sold off .125. This morning the 10-year is pretty much unchanged from Tuesday's close as are agency MBS prices.

Jobs and Announcements

In retail job news Envoy Mortgage, a national agency direct lender, "wants to share a professional conversation with career-minded teams and individuals like you. Envoy provides and maintains 'Best in Class' service while experiencing unprecedented growth by closing loans in less than 21 days, month-in and month-out.  If you are career-orientated and want to evaluate a genuine opportunity with an industry leader, we would like to dedicate time to listen to you about your goals and aspirations." Envoy is interested in talented and team centric branch offices and/or sales professionals around the mid-coast markets of IA, IL IN, MI, MN, OH and WI. Interested professionals can reach out to Ken Panosian, Regional Vice President at (248) 212-3993 or Kelly Zilka, VP of Strategic Recruiting (248) 339-6755.
 
On the management side of things Jordan Capital Finance is hiring a Senior Vice President, Sales & Marketing to lead a sales team and its marketing strategy.  JCF provides private money financing for investors who buy, renovate, sell, and rent residential real estate, and offer lines of credit up to $7.5M and lend in 40 states. "We do not lend to home owners. JCF is extremely well funded by Garrison Partners, a premier New York private equity firm, and is on an aggressive growth path. We are a top 5 lender in our industry. Our management has closed $150 billion in mortgage volume. The SVP must have at least 7 years' experience and must have a proven track record of exceptional senior sales management success. The candidate must have a degree from a top 4-year college and be extremely savvy with marketing technology. The position requires a very strong work ethic and will receive a competitive salary, but a substantial portion of compensation will be incentive-based. The candidate reports to the CEO and should live in Chicago." For consideration, please a send resume and salary history to Magdalena Pyclik or careers@Jordancf. com. 
 
And in terms of events geared toward LOs & AE hiring, "If you want to learn about techniques and strategies some of your most successful competitors are using, the following is going to be of real interest to you. On August 18, REMN Wholesale's Director of National Sales, Carl Markman, will be hosting a live online broadcast of the Mortgage News Network's "Masters of The Mortgage Industry", featuring a round table discussion with three very successful, but very distinct, loan originators from different parts of the country. It will explore the strategies each has used to grow their business, their use of social media and what they're doing to stay on top as the industry continues to evolve. Register here for the free webcast which will air live at 2PM ET. On the hiring side, REMN continues to grow and is looking for experienced AEs in all markets who share the company's dedication to an excellent broker experience. If you know someone who fits that description, have them send their resume to AErecruiting@REMN. com.