How has housing changed in the last 100 years? It’s easy to see when a “vertical flight” is put together, and Trulia posted current listings that were built in every decade that are pretty interesting to skim through and look at styles & pricing.
Another day, another settlement. In this instance JPMorgan Chase has agreed to pay $55 million to settle an investigation into whether it charged thousands of African-American and Hispanic borrowers higher interest rates on mortgages than white customers. The discriminatory loans were originated from at least 2006 to late 2009. The mortgages were made by independent brokers and then funded by JPMorgan, and Chase was charged with violating the U.S. Fair Housing Act and the Equal Credit Opportunity Act
JPMorgan released a statement. "We've agreed to settle these legacy allegations that relate to pricing set by independent brokers. We deny any wrongdoing and remain committed to providing equal access to credit." Even though JPMorgan did not originate the loans, allegedly the bank gave mortgage brokers some discretion in setting the rates and fees on loans. The prosecutors cited a "causal connection" between the bank's price discretion policies and the racial disparities among the mortgages. The complaint also said that JPMorgan was "directly and extensively involved in setting the complete terms and condition of wholesale mortgage loans." Even when JPMorgan had reason to know there were pricing disparities, it did not determine the extent of the problem and act to stop it, the complaint said. In other words, Chase did not require mortgage brokers to document the reasons for changing rates and failed to address racial discrimination, encouraging it to continue.
Does every country have issues with mortgages? Spain set to give banks three months to fix the mortgage crisis over there.
Don't think politics interferes, both positively and negatively, with residential lending? The Mortgage Bankers Association spread the word yesterday that, "Based on recent testimony and political pushback, we believe there is a strong chance the most recent MIP reduction (as published in HUD Mortgagee Letter 2017-01) may be one of the rollback actions taken soon after President Trump takes office. This change will likely be effective immediately, and could create significant operational challenges for lenders and their customers. Given this information, MBA encourages members to consider the contingency steps that would be necessary to unwind any changes that have already been made to adjust for the reduced MIP rates if this reversal is implemented. We will continue to provide updates as we receive information."
Along those lines, HousingWire reported that per multiple sources the FHA premium cut, which is currently scheduled to go into effect on January 27, will be delayed, at the very least, by the incoming Trump administration. "...repealing the FHA premium cut is on the list of things that the Trump administration plans to review and/or roll back almost immediately. The source also told HousingWire that the Trump administration will not enact the premium cut on the 27th while it considers the impact of the premium cut on the FHA's Mutual Mortgage Insurance Fund before determining whether to proceed with the cut. But the source said that it is a distinct possibility that the premium cut will be done away with completely."
The impact from higher interest rates will likely filter through in coming months, projecting a deceleration in growth in 2017. On the policy front, Zelman & Associates expects the incoming Republican-led administration will be favorable for the mortgage market by reducing regulatory burdens, clarifying FHA policies, and supporting private capital.
In the meantime, lenders and investors announced FHA & VA changes.
Wells Fargo Funding has removed two overlays to its VA High Balance policy: No foreclosure or bankruptcy in the last five years and no housing payment 30 days or more past due in the last 12 months.
Pacific Union Financial has created a revised gift letter for all eligible products that will also provide gift fund documentation requirements for each product. The Gift Letter is available on FLOW. Regarding FHA products, Delegated Correspondents must insure that acceptable compensating factors are provided when approving manually underwritten loans that require compensating factors.
NewLeaf Wholesale issued a reminder about FHA loan that fund on or after January 27, 2017. These transactions must have the reduced MIP rate and all loans that fund prior to January 27, 2017 must have the current and higher MIP rate. If you and your borrower want to delay the funding of the loan to occur on or after January 27, 2017 to take advantage of the reduced MIP and a lock extension is required as a result, the borrower will be charged for the cost of the extension.
Ditech Financial LLC Approved Wholesale Clients should note that FHA is reducing its annual mortgage insurance premiums (MIP) for most new mortgages with a closing/disbursement date on or after January 27, 2017. Closing/Disbursement date refers to the later of the date the mortgage is signed or the disbursement date of the loan proceeds, as is entered in FHA Connection. In addition, FHA is eliminating the distinction in rates based upon the base loan amount. Also noted, Ditech will discontinue purchasing loans with applications dated prior to October 3, 2015. All loans submitted to ditech must have been originated and closed with all applicable disclosures required under TRID. This would include all two-close construction loans so the end loan must include an initial application dated on or after October 3, 2015 along with all applicable disclosures required under TRID.
AmeriHome will purchase loans at the new, reduced MIP rates without overly announced by FHA on 1/9/2017, in the timeline provided by FHA, subject to the loan meeting all FHA terms and requirements for the MIP change.
Brokers in the market for a VA loan, Mountain West Financial announced the following changes to its VA Jumbo products: 3 year waiting period for all Bankruptcies, Foreclosures, and Short Sales. No reserve requirement. The 2-month reserve requirement has been eliminated. No DTI restrictions. Follow the AUS Findings. Cash Out - FICO requirement has been reduced to 620. Loans from 620 to 639 need to be priced under the "direct" product. 640 and above are not required to go "direct".
Moving from the primary to the capital markets...
The US Supreme Court has rejected an industry appeal and ruled that investors' antitrust lawsuits against a number of banks accused of manipulating the London Interbank Offered Rate, including Deutsche Bank, Bank of America and JPMorgan Chase, can move forward.
In terms of the bond markets, Wednesday wasn't a great day for anyone looking for lower rates, and was made a little more volatile due to the FHA MIP rumors. (Concerns that the incoming administration could reverse the recent MIP cut on FHA mortgages shifted the pricing on Ginnie Mae securities relative to those of Freddie and Fannie.) We also heard from Fed Chair Janet Yellen whose comments were viewed as somewhat "hawkish." Federal Reserve Chair Janet Yellen said yesterday that the US economy was close to full employment and the Fed's 2% inflation target, making it strong enough to sustain higher interest rates. By the end of Wednesday, the 10-year T-note had worsened .5 to close yielding 2.39% while the 5-year and agency MBS prices worsened .250-.5 worse depending on coupon.
Looking at today, we've already had the latest monetary policy decision from the European Central Bank (as expected it left its rates unchanged), Initial Jobless Claims (-15k to 234k), Housing Starts & Building Permits (+11.3% and permits were at a 1.21 million rate - as expected), and the Philadelphia Fed Manufacturing Survey (+23.6, whatever that means). At 10AM ET the Senate Finance Committee confirmation hearing for Treasury Secretary Nominee Mnuchin starts up, and we'll also have some Fed presidents on the speaking tour. After the initial numbers the 10-year is yielding 2.46% and MBS prices are worse .250-.375 versus last night.
Jobs and Announcements
In upcoming events there is less than one week left to register for "The Path To $100M in Loan Volume," a webinar hosted by mortgage automation platform, Floify, on Jan 25th from 1-2PM ET. "Top-performers and industry coaches Lisa Wells and Andy Zemon ($120 million in combined loan volume) will break down the path from $10 million to $30 million to $90 million+ in annual loan volume and present strategies for accelerating growth. 'Created for LOs, this powerhouse panel will present the stages of LO business growth and how to assess which stage you're in (hint: it is not about loan volume or how many hours you work.), why culture, hiring and systems are critical areas to master, and how business priorities shift through the stages. High loan volume is achievable by anyone willing to learn the methods. All registrants will receive a recording of the webinar. Register Now!'"
In personnel news, Right Start Mortgage announced the hiring of Greg Grandchamp as its new National Wholesale Manager! "Greg has over 40 years' experience in all aspects of mortgage banking and will work to establish a presence and grow wholesale mortgage production throughout the United States. 'The integrity and professionalism I have found at Right Start is like a breath of fresh air. Right Start is incredibly well positioned to take advantage of our direct agency abilities, while being nimble enough to smoothly handle any changes that might come along. We will be the perfect partner for any originator who is tired of being just another loan file and is looking for concierge level of service that truly gives a darn about your borrowers, your reputation, and your referral relationships. It's not about us...it's about you." "Right Start Mortgage is poised to grow significantly in 2017" says Buster Williams, President of Right Start Mortgage. "We are very lucky to have Greg on board to help accomplish our goals for 2017 and beyond." If you would like to join Greg and our growing wholesale channel, please contact him at 626-739-5307 or email him.
Citywide Home Loans is looking for a Chief Operating Officer to join the Citywide family. This position is in the greater Salt Lake City, Utah area. "We are looking for someone who is accustomed to very high volume and a fast pace, and the ideal candidate is someone who is looking for their next great adventure as they join us in our continued growth and success. If you have a minimum of 15 years of mortgage industry experience, especially end-to-end mortgage operations and in a leadership role, at 20,000+ transactions per year we would love to talk to you! Confidential inquiries & resumes can be submitted to email@example.com or to Fawn Bird.
Assurance Financial has a solid reputation for closing loans on time. It's what we do. Our back office supports its mortgage loan originators and branch managers so they can focus on originating more new loans rather than worrying about closing their pipeline. Assurance is expanding its footprint, selectively hiring branch managers and MLOs in good markets. For more information, contact Paul Peters, CMB at 225-239-7948 or visit www.LendTheWay.com/Careers.
Congratulations to Joe Langer, who is PCLender's new president. Langner, who was previously with Sage Software and the chief sales officer and COO of Ellie Mae, will supervise PCLender's growth initiatives. "Langner is leading the executive team for PCLender, and will be critical in the development of new business opportunities and strategic vendor relationships with the company. He is a seasoned veteran of the financial services and mortgage industries, with over 25 years of senior level sales, marketing and general management experience." "PCLender's next generation software is a game changer," Langner said. "They have a great product with limitless potential and the right foundation to grow. I'm excited to join their talented team, and look forward to furthering the growth of the company."
And congrats to New American Funding's Rick Arvielo who was named Chairman of the Mortgage Bankers Association Political Action Committee (MORPAC) for the 2017-2018 election cycle. In this capacity, he will spearhead advocacy efforts within the nation's political system on behalf of the mortgage industry.