Today is “job’s day,” and it seems like many people I talk to in other professions have 2-3 jobs. (“Yeah, I graduated with a degree in physical therapy, so I do that from 8-11, then I paint houses from 12-4, and then from 5-7 I tend bar.”) NPR took the Census data and developed a map of the most popular job in each state 1978-2014. The data was also broken down by state for the years 1978, 1996 and 2014. The Dakotas agriculture, Oregon, Pennsylvania and North Carolina, as well as many others, show truck drivers as the most popular job throughout the last 40 years. New Mexico and Maryland - secretaries.
Trends in Credit
Most of the risks and terms that underwriters consider fall under the three C's of underwriting: credit, capacity and collateral. Fair Isaac, to its credit (pun intended) has become the Kleenex (instead of tissue) or Band Aid (instead of bandage) when folks talk about credit scoring. FICO scores have been around a long time, everyone pretty much understands them, and we have all sorts of data from which to back test loan performance versus FICO. Now, some lenders are pushing FHFA to allow scores from Experian, Equifax, and Transunion for conforming loans. These alternative scoring methods tend to be a little more forgiving than FICO (which comes from Fair Isaac).
The FHFA is ruminating on this, but there is always the fear that credit scoring companies could create a "race to the bottom" by becoming more lenient. The non-FICO companies launched VantageScore, which supposedly can grade 30 million more people than FICO can. Of course, having competing credit score companies can open lenders to charges of discrimination, particularly if they use different scores for different borrowers.
The Federal Housing Finance Agency (FHFA - overseer of Freddie and Fannie) recently issued a Request for Input to obtain feedback about the operational and competition considerations of changing Fannie Mae and Freddie Mac's current credit score requirements. We know that F&F are "expected to maintain, in a safe manner, credit availability and foreclosure prevention activities for new and refinance mortgages to foster liquid, efficient, competitive and resilient national housing finance markets."
FAMC published guidance about DU frozen credit as announced in Fannie Mae SEL-2017-10. If the borrower's credit information is frozen at one of the credit repositories, the credit report is still acceptable if the following requirements are met: Credit data is available from two repositories. A credit score is obtained from at least one of those two repositories. There is a tri-merged report. As a reminder, FAMC does not permit manually underwritten loans and nontraditional credit.
For delegated loans closed on and after January 1, 2018, FAMC Correspondents must deliver in the closed loan file the ULI assigned by the financial institution that issued the credit decision on the loan. Disclosure of the ULI may be made on the FAMC Loan Delivery Transmittal, the Demographic Information Addendum to the Application, or any place on the 1003 Application where it can be easily identified. The second change to Regulation C that will impact the delivery of closed loan files is the requirement to collect expanded borrower demographic information. The additional data may be collected on the Demographic Information Addendum to the Application and is required to be delivered in the closed loan file on all loans with applications dated on and after January 1, 2018.
DU currently issues an error message when a borrower has a security freeze on their credit report with any credit repository. Effective November 18th, when credit is frozen at one of the three repositories, the loan will be underwritten using the credit data received from the other repositories and DU will issue a Potential Red Flag message. FAMC's credit policy guidelines may be applied. If credit is frozen at two or more repositories, loans receiving this type of error message are not eligible. As a reminder, FAMC credit guidelines do not permit non-traditional credit or manual underwriting.
Freedom Mortgage Wholesale offers opportunities for borrowers without an established credit history. Click the link for its Key Features Chart.
Citadel Servicing Corp. released the ONE Month Bank Statement income qualification program for self-employed borrowers designed for Self Employed borrowers with solid credit histories of 700 plus credit scores with very few past to no derogs. This program will streamline the purchase and cash out process for LTV's of 75% and below. Loan amounts up to $3,000,000.
For non-delegated and in-house underwritten purchase transactions, Citi's requirement for the appraisal and UCDP Summary Reports to be included with initial credit package submissions has been removed. These documents are still required and should be provided to Citi as soon as they're obtained. Note: The appraisal and UCDP summary documents will continue to be required at the time of initial credit package submission for refinance transactions.
Flagstar's conventional underwriting guidelines have been updated with the following changes, applicable to Fannie Mae loans, and are effective immediately. Loans for a borrower with credit data frozen at one of the credit repositories, the credit report is still acceptable if the following requirements are met: Credit data is available from two repositories, a credit score is obtained from at least one of those two repositories, the lender requested a three in-file merged report.
On December 19, 2017, Fannie Mae updated its Selling Guide to address underwriting borrowers with frozen credit, disaster-affected loans, and additional areas. With this update, Fannie Mae also provides additional detail related to its expectations and requirements for sellers/servicers' Internal Audit function.
Fannie Mae implemented Collateral Underwriter (CU) 4.2 last month. It added the Advanced Search functionality formerly available only in classic CU to the new layout of the CU web application. The release also gives mortgage insurers (MIs) access to specific appraisals and related information in CU, if the lender provides the MI the Doc File ID.
For conventional Conforming manually underwritten loans, Wells Fargo Funding is removing a requirement pertaining to significant inaccurate credit. Sellers will now defer to the more restrictive of Fannie Mae or Freddie Mac policy when there are one or more open trade lines with an outstanding balance that does not belong to the borrower and all of the following are present: The credit report includes messages indicating either too many accounts or outstanding balances are too high, and the credit report reflects no messages regarding delinquent accounts, and the balance on the trade line that does not belong to the borrower exceeds 25% of the total balance of all trade lines on the credit report (include balances on all revolving and installment accounts and inaccurate mortgage accounts; exclude balances on accurate mortgage accounts). Also removed are requirements for collections, charge-offs, repossessions, and judgements as our policies align with the Agencies.
Effective for all loans uploaded on or after 1/5/2018, Provident Funding's fee will be $975. Also, fee for a tri-merge credit report ordered through Provident Funding will be updated from $22.47 to $30.38 to match the credit vendor's fee changes. Alternatively, credit reports may still be re-issued from an approved vendor. The complete list of approved vendors is available under the "Credit Vendor Setup" link in the "My Account" section of pfloans.provident.com.
Credit Plus has introduced its Business Intel Suite, a set of commercial credit reports and verification services. Verification tools include customizable credit information, business credit and failure scores that are built on pre-recession, recession and post-recession data, utilizes up to 23 monitoring criteria, and a variety of other verification products.
Strong economies lead to higher rates, and US Treasury yields increased Thursday - the 10-year note finished the day yielding 2.46 percent. Why? There is increased talk of global growth. Stateside, the ADP Employment Report showed that private employers added 250,000 jobs in December which makes it the largest monthly increase since March 2017. The market was looking for an increase of 190,000. Initial jobless claims increased by 3,000 to 250,000.
The continued positive economic news is having an impact on expectations for the next Fed rate increase as seen in the CME Group's FedWatch Tool which shows the probability of a hike in March at 73% versus 51% just one week ago. Mortgage rates still aren't bad: The Freddie Mac Primary Market Survey reported that the average 30-year mortgage rate declined to 3.95% due to the year-end rally. It also noted that the spread between the 30-year and 5/1 ARM was the lowest since 2009.
The main event for today is the December employment situation. In order of importance, Hourly Earnings were +.3%, the Unemployment Rate came in at 4.1%, and Nonfarm Payrolls, expected at +195k, were only +148k but November was revised higher. Way down the totem pole of importance, November Factory orders and the December ISM Non-Manufacturing Index will be released at 10AM ET. After the employment data we find the 10-year yielding 2.44% and agency MBS prices a shade better than Thursday's close.
Employment and Correspondent/LO Products
The Barrent Group, a "Best-in-Class" leader in forensic loan reviews, is seeking a dynamic and well-connected Business Development Director to lead nationwide sales of our evolving products and services. In this role, you will develop, maintain and nurture long lasting client relationships and grow the business, by identifying new sales opportunities. The ideal candidate will have vast connections, including lending institutions and RMBS or whole loan investors, buyers and sellers nationwide. Target clients are those who may be seeking Quality Control (Pre-Funding and/or Post-Closing) or Due Diligence services. Required qualifications include a college degree, very strong presentation and communications skills and the ability to travel, as needed. If you are a well-connected, self-motivated and experienced sales professional, with an entrepreneurial spirit, the Barrent Group may be the right fit for you. Interested candidates should send their resume to Rich Barrent, President.
Mortgage Network is expanding throughout the Mid-Atlantic area. The New England based lender is seeking experienced Loan Officers and Branch Managers to build new territories. Opportunities exist from New Jersey to DC metro to North Carolina. Mortgage Network is a well-established lender, coming up on 30 years in business, offering no overlay Agency Direct, All Federal and State Govie as well as Delegated Jumbo and Portfolio lending. Behind the full product menu, the company offers award-winning proprietary LOS, fully integrated concierge marketing and dedicated team OPS support. If you are a producing mortgage professional, looking for a place where you come first, contact Brandi Floyd or Chris Hamilton.
PRMG Retail continues to expand its footprint nationwide by opening 6 new branch locations during the month of November! Along with the drive and ambition to bring the American Dream of Homeownership to all cities across the country, PRMG has now opened its doors in Sacramento, CA; Bonita Springs, FL; Ft. Myers, FL; Indianapolis, IN; College Park, MD and Folsom, NJ. PRMG is devoted to growing their retail platform and is always looking for Motivated Loan Originators to support the mission to being "Progressively Better in All that They Do". Voted TOP 5 of the 50 Best Companies to Work for in America, No. 1 Best in the Desert 2017, OC Register Top Workplace 2017, NMP Visionary Organization 2017, CAMP Corporate Affiliate of the Year 2017 and TOP 25 of 100 Mortgage Companies in America. PRMG employs over 1,600 people! Contact Chris Sorensen at 909.262.0452.
AnnieMac Home Mortgage has opened a new branch in Paramus NJ that will serve the local market with strong jumbo & high balance products & rates, and a full product suite for all needs. The local real estate community can expect a 3x a week white label coaching program compliments of the Paramus team, and the loan officer sales force will benefit from AnnieMac's internal mastermind groups, new Realtor introductions, company-developed 'local lunch and learns,' and efficient loan flow and cd process. The goal is to be the top lender of choice locally on all purchase transactions, with raving fan client and referral partner reviews. Contact Paul Zinn, SVP of Business Development (856.577.7749), for more information.
Merchants Bank of Indiana has announced an addition to its Correspondent Lending Program. MBI is now offering a Best Efforts, Delegated, Agency program. The program is built around meeting the product, process and liquidity needs of their customers, and management believes in following the AUS guides with very minimal overlays and having client's loans purchased as efficiently and timely as possible. The staff knows from experience that liquidity is key, so their focus is gaining clients better execution through a faster purchase process. With this rollout and in conjunction with its Mandatory, Warehouse and E-Notes capability, Merchants Bank of Indiana can offer a full liquidity and product solution. For more details, contact Rob Wilson (317.798.2398).
It's a new year and it's time to set yourself up for a winning 2018. The mortgage industry will have another strong year ahead, but the dynamics have shifted. Taking the time to lean into those shifts will set you up for success, that less reflective competitors will fail to capitalize on. A free eBook, "5 Things to Do for 2018" provides great inspiration and focus that will help you prepare for the new year. A must read for all mortgage leaders and their teams. Download your Free Copy Here.