Two men are sitting in a bar when Mark Zuckerberg walks in. One of the men says to his friend, “This is awesome! On average, everyone in this bar is worth $20 billion!” It’s important to remember the difference between “mean” and “average.” Now, apparently, in the most expensive housing markets in the country, a $1 million home is considered average, while homes priced at $5 million and above are considered luxury homes.
Last week Ginnie released information about certain lenders allegedly churning borrowers who are veterans. Flagstar Bank, one of those named, sent a note out reaffirming “its commitment to responsible lending and the overall strength of its VA lending program, and addressed recent news articles alleging that certain lenders, including Flagstar, churned loans to veterans. ‘We value our VA business for many reasons, but most of all because it benefits veterans,’ said Alessandro DiNello, president and CEO of Flagstar Bank. ‘That’s a trust we would never even consider violating, which is why we put every effort into ensuring we adhere to the rules and regulations that protect veterans who are buying or refinancing homes.’
“’We have been a VA partner for 30 years and a long-time leader in VA lending. We highly value the VA program and the opportunity for homeownership that it gives to our veterans. We have policies and procedures in place to prevent churning. And, simply put, we do not churn.’
“Flagstar uses a number of tools to protect borrowers, investors, and itself, from serial refinancing or churning, including: An early payoff policy that requires third party originators (TPOs) to pay a penalty for any loan that is paid in full within 180 days of purchase. Our STAR Rating system, a proprietary measurement of a TPO’s performance in key risk categories that adjusts pricing to incentivize responsible long-term performance and assesses penalties for excessive early payoffs. Underwriting guidelines in place since 2008 in all origination channels (retail and TPO) that require a minimum net tangible benefit to the borrower on all refinance transactions. A requirement since 2016 for VA Interest Rate Reduction Refinance Loans that a minimum of six consecutive monthly payments be made on the loan before it is eligible for refinance.” (In 2017, Flagstar originated $4.8 billion in VA loans across the country out of its total mortgage originations of $34.4 billion.)
Flagstar Bank posted the following regarding the change in Ginnie Mae pooling requirements. VA Cash-out refinance, VA IRRRL, FHA Streamline, FHA Cash-out and USDA Streamline assist must meet the following when the loan being paid off is a government loan (FHA, VA, or USDA): The borrower must have made at least six consecutive monthly payments on the loan being refinanced, referred to hereinafter as the Initial Loan, beginning with the payment made on the first payment due date; and the first payment due date of the refinance loan occurs no earlier than 210 days after the first payment due date of the Initial Loan. Accordingly, loans where the borrower does not meet the above requirements are no longer eligible. The borrower cannot prepay payments to satisfy the six consecutive monthly payments requirement. Underwriters, including VA delegated and bulk customers, must ensure the above requirements are met.
After the last several trading sessions, Tuesday was a bit of the doldrums, though treasuries ended on a mostly higher note. The lone exception being the 2-yr note, which slid slightly lower throughout the day, while 5s, 10s, and 30s held modest gains and displayed little movement. The late morning FedTrade operation, the last on the current schedule, aided volume as they purchased $1.287bn 30-year conventional 3.5% and 4% with a 17.1% hit rate.
Supply and demand move long-term mortgage rates, and the new FedTrade schedule sees the Desk purchasing up to $6.825bn over the coming two-week period with 9 of the 10 business days seeing an operation and 30-year 3% and 15-year 2.5% no longer a part of the rotation.
Weekly mortgage applications from the MBA kicked off today’s calendar. Last week’s apps were -4%, with purchases -6% and refis -2%. January's CPI and retail sales reports were +.3% and -.3%, respectively. The Consumer Price Index was expected +0.3% and retail sales was expected +.2%, so was weak. Budget Director Mulvaney testifies before the House Budget Committee on the recently released budget this morning. With the focus on inflation picking up, the 10-year is currently yielding 2.88% and agency MBS prices are worse .250-.375.
There’s buzz surrounding a new association that has emerged to support independent mortgage professionals and grow the wholesale channel. The Association of Independent Mortgage Experts (AIME) launched with strong support from brokers, loan originators, processors, etc., and expects to surpass 5,000 members. AIME intends to push the needle further than ever before in terms of broker advocacy, aiming to provide real tangible financial value to its members. Ultimately, the association’s goal is to grow the wholesale channel beyond a 20% market share within the next three years. “There will be no confusion about AIME’s agenda, in terms of ‘is it pro-broker or pro-banker?’ AIME will fight solely for independent mortgage professionals,” said Anthony Casa, AIME founder. Find more information on AIME membership benefits at www.AIMEGroup.com
If you haven't yet joined the America's Homeowner Alliance - you should join today! It is set up for existing and all future homeowners, built to protect and promote sustainable homeownership for all segments of America. If you go to the AHA website and use the promotional code “rcc2018” to get your first-year membership free. “Anyone who cares about homeownership should join for free. LOs or escrow agents can give a free first-year membership in AHA as a housewarming gift to any applicants or to anyone closing a loan. You’ll be a hero for your customers and will be doing something great to build the advocacy voice of the homeowner of America.”
Despite being considered one of the more cost-effective ways to renovate your home, the Fannie Mae HomeStyle program is still cloaked in mystery. REMN Wholesale’s next free educational webinar will focus exclusively on how to unlock the power hidden behind this often-neglected product. REMN’s upcoming HomeStyle Lending Decoded webinar will be led by Damon Richardson, Renovation Lending Specialist. The webinar will explore the benefits of HomeStyle loans, what borrowers should be using them, and how to convince Realtors to bring them up to finicky buyers who can’t seem to find a home that meets both their needs and their budget. The webinar will be held on February 20 at 3 pm EDT. Space is limited, so interested attendees should register ASAP at www.tiny.cc/homestyledecoded.
Two fantastic companies unite to bring you one of the most important webinars you'll see this whole year. Insellerate and Sales Boomerang have come together to show you how to automate your loan growth with borrower intelligence. This is going to be a MUST-SEE webinar. The webinar starts at 10:30am PST / 1:30pm EST on Wednesday the 21st of February. IMPORTANT NOTE: This webinar will not be recorded so if you don't attend you will miss the content. Sign up now!
Find out how to manage your marketing tech through API architecture by registering for a FREE webinar this Friday, February 16 at 11 a.m. (Pacific). You’ll learn about the state of the API ecosphere in the mortgage industry, examples of mortgage software vendor APIs, the difference between System, Process and Experience APIs, some best practices, and a real-life case study. The webinar is a presentation of the California MBA Mortgage Technology & Marketing Committee (MTAM), and will feature Brent Elmer, Velma.com; Gina Torvik, Broadview Mortgage Corp.; Mike O’Meara, Infoview Systems; and John Seroka, Seroka Brand Development. Click here to register.
On February 15th, learn the possibilities of a reverse mortgage. Register for “How to grow your business in reverse” webinar hosted by President of HighTechLending, Inc. and Nancy Davidson, V.P. of Reverse Mortgage Division.
Radian Group Chart and News
Radian Group Inc. announced a reconfigured its sales team to create a unified focus on selling all Radian products and services across the mortgage continuum. Chief Franchise Officer Brien McMahon will continue to lead the Radian Enterprise Sales team to offer a comprehensive suite of products and provide increased support to the company’s growing customer base, steered by Mike Dziuba, SVP, Real Estate Services. The senior relationship managers will work closely with the mortgage insurance (MI) sales team, under the leadership of Marshall Gayden, SVP, MI Sales, to drive an even better customer experience by offering a unified focus on all Radian products and services. The team consists of Tony Bruschi, Senior Relationship Manager, Credit Unions, Gary Egkan, Senior Relationship Manager, Banks, David Kittle, Senior Relationship Manager, Mortgage Bankers, Andy Pollock, Senior Relationship Manager, Wall Street, Investment Banking/Private Equity and Fund Managers, and Shelly Schwieso, Senior Relationship Manager, GSEs.
“The creation of this new enterprise sales team further demonstrates our commitment to growing our MI and services businesses including due diligence, title and settlement services, real estate valuation, surveillance, and REO asset management, all of which continue to have their dedicated sales teams respectively,” said Mr. McMahon. “The senior relationship managers will work closely together with each of our sales teams to provide the exceptional service that our customers expect from Radian.”
Radian Group Inc. announced that it received the 2017 Risk Maturity Model (RMM) award for the third year in a row. The award, presented by RIMS, the risk management society™, highlights organizations with industry-leading enterprise risk management (ERM) programs.
Lastly, recently Radian reported earnings and the sentiment was generally positive. Management noted that the company expects IIF growth to remain at the high single digit levels. On credit, the company noted that the default to claim rate could fall to the 8-9% range. Insurance-in-force growth was 9.4% in 2017 and given expectations for NIW and persistency, management expects IIF growth to remain in the same range in 2018. Analysts reported that, “While there is still some modest downward pressure on average premium yields, the increased production in higher LTV loans should partially offset this. When asked about the possibility of MI pricing pressures due to lower tax corporate tax rates, management noted that they had not heard anything from regulators… The company noted that the claim rate, now down to about 10%, could come down a little further, but historically has not dropped below 8-9%.”
Employment and Products
“Good things are happening in 2018 at Premier Nationwide Lending! We are pleased to have been named as one of National Mortgage Professional Magazine’s 2018 Top Mortgage Lenders. In the coming months, the company is rolling out new branding and several automated marketing platforms, we have an outstanding operations team that is committed to closing every loan on time, as well as a full-service marketing department to support your business growth. Our company culture promotes management to lead with this definition of a leader in mind, ‘someone who helps others achieve more than they would have achieved if left to themselves.’ Premier Nationwide Lending is committed to assisting our colleagues in achieving their best, and we are seeking experienced loan officers in multiple states. If you are interested in learning more about our winning team, please contact Joe Collins, National Recruiting Director, today at (214) 680-0216.”
“Caliber Home Loans, Inc. has career opportunities for Loan Officers you’ll LOVE. From our wide range of products to local underwriting and processing to our expanding technology resources – Caliber is the perfect match for you! And because we’re both an originator and servicer, you can still be in a relationship with your borrowers after their loan closes. Contact Jeremy DeRosa to learn more reasons why the best in the industry love working at Caliber.”
Building on their mission to create an all-inclusive mortgage automation platform for their more than 270,000 users, Floify just launched an exciting and highly-anticipated feature to further boost your borrowers’ experience – progressive web apps! Floify’s progressive web apps (PWAs) feature is a lightweight and customizable solution that allows your borrowers to easily access their mortgage point-of-sale directly from their mobile device – all without the need to download and install bulky applications. Floify’s PWAs function just like a regular website but resembles a traditional native mobile app, complete with an icon that is displayed on the home screen of your borrowers’ phone or tablet for easy, one-touch access. With powerful new features like PWAs, and more on the way, Floify has helped LOs close loans an average of 8x faster and increase annual loan volume by more than 11%. To learn more about how Floify can help you streamline your lending processes, request a live demo.