While in captivity it is important to have a hobby. “Dad, why is my sister named Paris?” “Well, uh, that’s because we were in Paris when she was conceived.” “Okay, that makes sense. Thanks!” “No problem, Quarantine.” Prince Charles, Jackson Browne test positive? Yup. People are adapting. Local strip club shuts down? Time for the workers to adapt and start a food delivery service. (Warning: Rated PG.). Those “in the know” are talking about MBS REIT hedge fund liquidation reminiscent of 2008. Investors are evaluating risk and adapting. They don’t need to entirely cut out a program to lower risk, right? Investors can lower the maximum LTV, raise minimum FICOs, eliminate non-owner loans or refis, lower maximum DTIs, change the geographic range, all kind of things! Individuals and corporations are always happy to have others take risk. (Look at the crowds in a casino that sit there watching others gamble.) The changes driven by the financial markets’ turmoil continue, and we’re already seeing lender casualties. More below.
Lender Services and Products
Did you know that TMS has consistently provided amazingly fast 24-hour turn times on Initial Funding Review for three years running? In fact, TMS has hit their 24-hour turn times so often that, last fall, they started guaranteeing a complete initial funding review in 24 hours—or they’ll waive their funding fee. No other lender does this. They call this the TMS Turninator. Check it out on their blog and learn how you can partner with them to take advantage of their fast turn times today!
Ready to learn about and market new VA mortgage opportunities in 2020? The recently implemented Blue Water Navy Vietnam Veterans Act of 2019 has provided new mortgage benefits for jumbo borrowers, active duty Purple Heart recipients and more. As a leading VA lender, Freedom Mortgage Wholesale’s No Down Payment VA Jumbo program enables eligible jumbo borrowers to exceed published FHFA county loan limits without a down payment requirement! No jumbo overlays or loan limits! Want to learn more or receive training material? Email AskFreedom@FreedomWholesale.com
In light of the current market conditions, Stearns Wholesale recognizes the importance of a fast, secure and customized experience to serve more borrowers effectively and keep referral partners euphoric. In a recent release, the Accelerator program was enhanced by 25bps, in addition to the already incorporated 25 bps totaling 50bps price improvement. Streamlining the process and improving the price on popular scenarios with the same best-in-class fulfillment was the driving force behind this development. There is no minimum credit score, just requiring the borrower is a W2 wage earner that owns no other REOs and has no recent major derogatory marks. Better value, faster, sustainable. Click HERE to learn more about this program or connect with a Stearns Account Executive.
Notarize and Mace announced eClosing integration for Encompass lenders nationwide, enabling Mace customers to offer their borrowers a seamless eClosing solution via Notarize’s award-winning closing automation platform. Notarize, the first company to power an entirely online mortgage closing process, today announces a new, out-of-the-box integration with Innovations to enable joint customers to offer every borrower a digital closing, from hybrids nationally to full remote online closings in as many as 38 states. The Notarize integration with Mace allows lenders to digitize their operations and reimagine the way they serve borrowers. Out of the box, the integration supports Hybrid and Fully Online Closings, as well as redraws and other transaction changes. Lenders can leverage Notarize’s Closing Automation platform to determine which loans should close as Hybrids vs. full remote online closings, without ever having to worry about loan eligibility again. Contact Mace Innovations to learn more.
Covid-19 is having a crippling effect on the economy and our thoughts and concerns are with everyone affected in any way. For Lenders, it has complicated what can potentially be another refi boom. Lenders are swamped with new refi business and staffing is now more challenging than ever. DocProbe is here to help you, by enabling you to focus on closing loans while we focus on your Trailing Documents. DocProbe is an extension of a lenders post-closing operation, your dedicated Trailing Docs team. From our NJ offices, we will manage all aspects of your Trailing Docs from retrieval, through auditing, processing and shipping. No long-term contracts, Easy integration. Use your staff to close more loans. Email firstname.lastname@example.org or visit www.docprobe.net to learn more.
Corona-Driven Changes Continue
A month or two ago your Ginnie servicing was on your books for a point, but now has the value of your Ginnie Mae’s servicing portfolio gone to 0 (zero)? Or is your capital markets crew assigning no internal MSR value, or a negative value to cover future cash drains? (Forbearance still results in the servicer having to advance during the forbearance period.) That isn’t all that’s going on.
I received this opinion note from a small mortgage banker in the West regarding Quicken Loan’s new policy of only locking approved/CTC Loans. “Rob, the big question here is who will be the next retail or wholesale lender to replicate QLMS’s new plan to lock loans once they are CTC (clear to close). Brokers and correspondents already price multiple investors and then lock with whomever has the best pricing. Try telling a broker or correspondent to substitute a loan, work conditions, get CTC, and then lock. The immediate response will be, ‘What if pricing is dramatically different?’ Just think of the fallout from clients who will walk away if/when pricing is worse. Think about the brokers who will double/triple submit loans and then ‘lock’ when they get CTC, only to then cancel out the files at the other lenders to which they’ve submitted files. Think about the operational costs and the nightmare that will unfold from the bottom up. Whomever at Quicken thought of this are not only setting up to lose thousands of borrowers who will shop, but more concerningly, brokers who will game the system to ensure that they don’t lose borrowers.”
Speaking of lock policies, loanDepot sent out a revised lock policy, effective immediately. Refinances can no longer be locked prior to "Request for Final Approval/Final Purchase Commitment," all lock periods remain available (15, 30, 45, and 60 day), and there are no changes to the current CD request process. Upon "Request for Final Approval/Final Purchase Commitment" in the Broker Portal, the following message will appear, indicating lock eligibility: "You may now lock your loan and request CD. Loan will not be reviewed by an Underwriter for Final until the loan is locked." For purchases, there are nochanges to current purchase lock requirements or available lock periods.”
I received an update from Dean Huynh, President of Property Sciences, providing a correction to my post Tuesday reporting they had ceased activity in the Shelter-In-Place counties. Property Sciences had paused activity to enable a comprehensive review of the mandates and have since resumed appraisal services nationally. In addition, with the recent bulletins from the GSEs to allow temporary flexibility to appraisal inspections, Property Sciences has completed a retooling of their workflow and operations to accommodate desktop appraisals. These new GSE directives enable the appraisal industry to continue to keep housing finance markets open, efficient, and safe.
Redwood Trust made an assuring company announcement.
Wholesaler Clearedge Lending (SG Capital’s wholesale division) bailed and sailed. Brokers received, “Due to the continued volatility in the markets and the difficulties in underwriting credit risk, we are suspending all loan activity at this time. This includes the funding of loans. Our team will do its best to support our broker customers any way we can due to our change in direction.”
Chase correspondent is out and about. “CB20-11 Chase Correspondent COVID-19 Update - Non-QM Documentation Features Discontinued. Chase is discontinuing our acceptance of Non-QM Documentation Features, Pricing Bulletin PB20-03.
Arch MI is “aligning with the flexibilities unless otherwise noted.”
Brokers paid attention to loanDepot’s message yesterday. “Due to extraordinary market disruption, loanDepot Wholesale has temporarily suspended all Jumbo Advantage REFINANCE transactions, effective immediately. Any transactions that have closed/signed may proceed with no additional restrictions. Any refinance transaction that has documents out, but has not signed, has been temporarily suspended and will need to be reworked into another viable program. A purchase transaction, that is currently locked, can proceed subject to the following restrictions: Primary Residence & Second Home Only, Fixed Rate: Maximum 80% LTV/CLTV - or program maximum, whichever is less, ARMs: Maximum 75% LTV/CLTV - or program maximum, whichever is less, 15-Months Reserves - required on all transactions, regardless of previously committed approval, Verbal Verification of Employment (VVOE) on all borrowers no earlier than 48 business hours prior to funding (Reasonable assumption can be made that borrower's income continuity will not be impacted due to COVID-10 restrictions, the borrower's employment type is listed as "critical infrastructure industry" by the Department of Homeland Security).”
The memo went on. “Self-Employed Borrowers: to ensure business viability at final approval, additional due diligence must be applied, but not limited to: Business class listed as a "critical infrastructure industry" by the Department of Homeland Security, AND reasonable assumption can be made that business/income continuity will not be impacted due to COVID-19 restrictions, AND Business webpage is active and indicates open for business, OR Third party validation of business phone number confirms open for business, OR signed letter from borrower(s) attesting to future business & income continuity. Business NOT listed as "critical infrastructure industry" by the Department of Homeland Security: Reasonable assumption can be made that the business/income continuity will not be impacted due to COVID-19 restrictions, AND Business webpage is active and indicates open for business, AND Third party validation of business phone number confirms open for business.”
Guild Mortgage’s correspondent group sent out the following measures, effective immediately for application dates on or before May 17, 2020 for FNMA and FHLMC loans. “FNMA and FHLMC temporarily allow alternatives to the traditional appraisal required when an interior inspection and credit related issue due to the COVID-19 concerns. The parameters for use of alternative appraisal reports are (here).
Wells Fargo Funding let correspondent clients know about a COVID-19 temporary policy expansion: Gap coverage eligible - All Loans. “Loans with gap coverage are temporarily eligible for purchase if the: County recorder’s office is closed due to COVID-19-related disruptions. Closed Loan Package includes an affidavit signed and dated by all borrowers, providing indemnification against intervening liens. Effective date of the title policy is the same as the Note date in non-escrow states or notary date on the Security Instrument for escrow states (not the recording date). Coverage complies with Agency and investor requirements, as well as federal, state, and local laws.
AmeriHome sent out a 5-page document (with small type) regarding Fannie Mae published Lender Letter 2020-03, Impact of COVID-19 on Originations and Lender Letter 2020-04 Impact of COVID-19 on Appraisals providing temporary measures and clarifications to address the impacts of COVID-19 (coronavirus). The temporary measures are effective immediately for all loans in process and remain in place for loans with application dates on or before May 17, 2020. To support publication of the Lender Letters, Fannie Mae additionally published updates to COVID-19 Frequently Asked Questions, providing additional information and clarifications, as well as implementation guidance for the interim policies.
As always, it is best to examine the AmeriHome’s announcement. But there are a couple things to note, on the hot topics of the day, namely verbal VOEs and appraisals. “VVOE: A verbal or written re-verification of employment must be in the loan file at the time of loan file delivery to AmeriHome. AmeriHome will not accept a paystub or bank statement in lieu of a written or verbal VOE. It is recommended that the re-verification be obtained within 3 business days of Note date, but it must be completed no sooner than 10 calendar days prior to Note date.” And AmeriHome accepts the temporary appraisal information set forth by Fannie.
Plaza Home Mortgage notified clients, “Plaza Home Mortgage is here to help you and your clients alleviate some of the uncertainty with 60-day rate lock periods. The 60-day lock costs the same as 30 and 45-day locks (until further notice) and offers your borrowers more time to work on finalizing their transactions without the added stress of a lock that may be expiring. Of course, we still offer our 15-day rate lock option for those borrowers who have floated their interest rate, are clear to close, and want to take advantage of a shorter lock period.”
Julian Hebron from The Basis Point posted a note to help LOs with confusion about coronavirus mortgage and rental relief, sourced from gov't agencies and put in plain language.
ProxyPics Direct is the risk-controlled solution lenders need to adapt to Fannie Mae and Freddie Mac’s new appraisal flexibilities.
This note came from Andrew Liput with Secure Insight. “The current health crisis has created unparalleled challenges for lenders, title companies and attorneys. Now more than ever the industry needs to embrace the concept of eMortgages, eClosings and remote and eNotarization. Our company is working overtime to help support that endeavor and have a team of experts working on ways we can assist lenders by engaging with the closing agents registered in our nationwide database to identify relevant skills and to educate them how to conduct eClosings. We have already begun working to verify e-closing, e-notarization and RON licensing and experience from among our thousands of nationwide closing agents and those who are qualified will be so identified in our database as of April 1st. Furthermore we are working to launch an online training program to ensure more notaries, title agents, escrow officers and attorneys understand the eClosing concept and have the skills to conduct electronic and remote closing transactions. This online platform will be available within one week and we already have hundreds of closing agents registering to complete the course and become am available asset to lenders seeking trained professionals in this area. In a time of crisis innovation blossoms. At Secure Insight we continue to stay in the forefront on innovation affecting the title and closing industry in support of lenders everywhere.”
PennyMac, known to be a large buyer of FHA/VA production, “will be suspending the Bulk AOT delivery method effective immediately. No new locks under this delivery method will be taken. Available delivery options continue to include Bulk and Best Efforts.”
The big “news” yesterday as far as markets were concerned, was the optimism that Treasury Secretary Mnuchin and Senate Minority Leader Schumer could hash out sticking points on a virus-related fiscal stimulus bill. The promise of a coming deal buoyed treasury and equity markets. Additionally, the Fed buying did help to steady liquidity in the MBS market, though retail volumes were still light. On a less positive note, much of the mortgage industry faced reported margin calls and forced liquidations with the REIT market as a whole asking for some Fed support. On the day, the NY Fed Desk purchased $36.4 billion MBS.
Today’s economic calendar began with mortgage applications from the MBA for the week ending March 20. Activity was expected to have fallen last week, and applications did just that, posting a 29 percent decrease from one week earlier. The Refinance Index decreased 34 percent from the previous week though was 195 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 15 percent from one week earlier and was 11 percent lower than the same week one year ago. We’ve also seen February durable goods orders (+1.2 percent, ex-transportation -.6 percent); the FHFA Home Price Index for January is later. The Desk will follow the same MBS FedTrade purchase schedule as yesterday when they purchase up to $50 billion MBS across five operations starting with $20 billion UMBS30 3 percent through 4 percent for T+3 settle. We begin the day with Agency MBS prices better by .250 and the 10-year yielding .85 percent.
Jobs and Transitions
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National MI is excited to introduce Ashli Matson, its newest Account Representative in Atlanta, GA. Ashli will be covering the Atlanta market along with Linda Stooksbury. Ashli has over 17 years in the mortgage industry from processing to sales. She brings a wealth of mortgage knowledge and experience that will prove to be invaluable to our customers. Ashli is an Atlanta native and is well respected in the industry throughout Georgia. Ashli understands the importance of supporting our associations and has been active with the Atlanta MBA, Atlanta NAPMW, and SE CUREN over the years. Please feel free to reach out directly to Ashli: 510-788-8468, or cell phone 770-714-5417.
“Towne Mortgage continues to add talent to its sales management team and its TPO sales force. We are very pleased to welcome Mark Mazzenga who will head up sales growth & talent engagement along with AE’s Ron Summers (Southern California) and Danette McGee (Louisiana). ‘As we continue to grow our sales organization its critical to add top talent. We are extremely excited to have attracted this type of talent and expertise to the Towne team,’ said Mark Zierott, SVP TPO National Sales. AEs at Towne can sell all three channels of TPO business including delegated and have access to a full FNMA/FHLMC/GNMA agency product set, renovation (203K & FNMA Homestyle), Construction, Jumbo, no minimum FICO FHA, manual underwrites and manufactured housing loans. And at Towne we service most of our loans! If you are an AE interested in learning more about open territory opportunities at Towne, please send confidential inquires to Mark.”
Paul Conway (Conway & Greenwood executive search) is retained by Hamilton Group Funding, for its CFO search. HGF originates over $1B/year, all retail, 10 states, and office is in Sunrise, FL (must reside or relocate to Sunrise area).
Michigan’s Ross Mortgage Corporation has added Len Wilczewski as VP of Mortgage Operations. Len will focus on managing the capacity, training, and accountability among Ross’ team members, as well as track performance and areas for improvement, increasing efficiencies, and decreasing expenses.
Congratulations to 40-year vet Burton Embry who is now the Panorama Mortgage Group’s EVP – Chief Compliance & Risk Officer, responsible for the Company’s risk management, quality assurance and regulatory compliance programs.
On the flip side, real estate brokerage Compass laid off 15 percent of its employees this week.