What happens when you combine an already tight housing market, marijuana, a Chinese crime syndicate, and the U.S. government? The answer is not a movie starring Jackie Chan, Sean Penn, and Denzel Washington. “This represents one of the largest residential forfeiture efforts in the nation’s history,” the U.S. Justice Department said. (Marijuana is still illegal under federal law, and nothing about California’s law OKs growing pot on federal land either.) While we’re on “unusual” transactions, a unit in the Millennium Tower in San Francisco sold for $4.66 million. Yes, for that price you’ll own a four-bedroom, 3,814-square-foot condo in a sinking and tilting skyscraper.
Jumbo, ARM, Non-QM, Non-Prime, and Nonconforming Tidbits
Non-QM loans aren’t subprime loans. The private label MBS market is still a shadow of its pre-crisis self. Most of these loans (ARMs, jumbo, non-QM) are being retained on a bank's or REITs balance sheet. This limits the available credit. The most puzzling aspect, however, is that a lot of lenders want to get into the non-QM business, but the demand for non-QM credit has been disappointingly small. People are ramping up the non-QM product, but the loans just haven't been there yet. Lenders are concerned about potential rep and warrant issues with non-QM product, it is a tough sales job for an LO to present a borrower with an 8% rate versus a 4.5% rate, and many don’t want a reputation as
Carrington Mortgage Services has expanded its residential mortgage offerings “to make access to home loans a greater possibility for the roughly 100 million U.S. consumers who have less than perfect credit.” Carrington’s non-prime loan products target a market segment. “According to Experian's eighth annual State of Credit survey, 21.2 percent of Americans have credit scores below 600. For these consumers, especially in today's risk-averse lending environment, access to appropriate financing options can be a challenge. Carrington has developed the expertise to qualify creditworthy borrowers with less-than-perfect credit, originate quality loans and service them.”
“Who does the Carrington non-prime loans serve? Carrington's new non-agency loan products is an ideal solution for consumers with lower credit scores, high debt-to-income ratios, who are self-employed or who have had a recent credit event – such as foreclosure, bankruptcy, missed credit card or late mortgage payment – and may not be eligible for conventional or government loan products.
“Highlights of Carrington's non-prime loans for purchase or refinance programs for prospective borrowers include: Credit scores down to 500, loan amounts up to $1.5 million and cash-out up to $500,000, Recent credit events and history of late payments are acceptable, single-family homes, town houses and condos are allowed, bank statements are acceptable to verify income in place of IRS tax documents for self-employed borrowers, cash-out refinance program allows borrowers to refinance higher interest rate loans, pay for home improvements or college, and possibly lower their overall monthly payments.”
(Carrington also recently lowered its minimum FICO score requirement to 500 for FHA and VA loans.)
Banc of California has made several credit enhancements. Some changes include: Interest only qualification, Gift Funds (Alt Doc and Expanded Criteria Programs), Departing Residence (listed or retained), Cash Out Limits – Portfolio Prime (NonQM) Program, and Recoup of funds.
Angel Oak's latest (and largest) securitization closed this week. Inside sources say it’s a “big deal for non-QM, and Angel Oak isn't slowing down anytime soon.” AO Companies announced a record-breaking year for its three affiliated lending units, Angel Oak Mortgage Solutions, Angel Oak Home Loans and Angel Oak Prime Bridge. The lending units surpassed $1.1 billion in non-qualified mortgage originations in 2017 – the highest volume in the companies’ history. “We believe that the non-QM market will grow from its current size of a few billion dollars per year to over $100 billion in the coming years. Angel Oak has already positioned itself as the leader in non-QM lending, but we see huge potential for future growth,” stated Steven Schwalb, Managing Partner of the AO lending platform.
Chase Jumbo IO qualify using the terms of the fully amortized product based on 20-year amortization schedule.
Flagstar announced the launch of Jumbo Express, Doc. #5432 product, which leverages automated underwriting and conventional guidelines to provide a more efficient process for higher balance loans. The Jumbo Express offers borrowers with loan amounts above conforming county limits access to a crafted solution and best-in-class experience by using Desktop Underwriter (DU) with minimal overlays.
Effective immediately, Flagstar Wholesale Lending Jumbo Fixed, Jumbo 5/1 & 7/1 ARMs, Jumbo 10/1 ARM, Doctor Loan, and Jumbo Advantage VVOE requirements are being updated as follows: A VVOE confirming the borrower’s employment status is required for all borrowers whose income is used for qualification purposes. The VVOE should be completed within 10 business days before the note date for wage income. Verification of self-employed businesses by a third-party source should be obtained within 30 calendar days from the note date.
Citadel Servicing Corps’ Foreign National Program includes No Pre-Payment Penalties, 7/1 ARM - 30year Amortized Payment and stated income. Brokers can Charge up to 6 Points. Citadel is offering a Foreign National Rate Special. This Program is for True Foreign National loans submitted between March 1st to May 1st. Loan must fund by June 29, 2018.
The PennyMac Correspondent Group has posted an update to its Jumbo Program.
PennyMac has posted a new announcement about updates to Conventional and Jumbo LLPAs.
Mortgage Network has announced a new program that finances the purchase or refinance plus the costs of renovating the home, all in one loan for single-family homes and primary residences in MA, CT, and NH. The Jumbo Renovation Loanallows for loan amounts that exceed the current Fannie Mae and Federal Housing Administration county loan limits, including the limits in designated high-cost areas. Loans are available up to $800,000, but loan amounts greater than that, including more than $1 million, will be considered. Down payments are as low as 10%.
Plaza’s Elite Jumbo and Elite Plus Jumbo program guidelines have been updated to follow Fannie Mae guidelines for treatment of student loan payments. For clarification purposes, the following updates have been made to the Program Guidelines to match recent changes to Plaza’s underwriting guidelines: References to LP have been updated to reflect Loan Product Advisor (“LPA”). Plaza’s Conventional Underwriting Guidelines have been renamed Credit Policy. Plaza’s Cooperative (Co-Op) Guidelines have been renamed “Project Standards.”
HomeXpress Mortgage is offering lender paid compensation at 1.00% Comp Plan - .50% rate, 1.50% Comp Plan - .75% rate and 2.00% Comp Plan - 1.00% rate.
Yesterday fixed-income prices dropped, and thus rates moved higher, but intra-day movement was limited ahead of today’s employment data. And mortgage prices did well compared to Treasury prices. There wasn’t much news that we haven’t talked about throughout the week (tariff), but the 10-year’s price worsened nearly .375 and its yield crept up to 2.83% where it closed. In supply news the U.S. Treasury released its auction schedule for next week. $30 billion in 3-yr notes will be sold on Tuesday, followed by a $21 billion 10-yr note sale on Wednesday, and a $13 billion 30-yr bond offering on Thursday.
Of interest to lenders was the price performance yesterday of GNIIs, 4% and 4.5%. Their prices were impacted by the reports that GNMA had suspended two originators from their multi-issuer program (New Day and Nations Lending) and into the custom program due to alleged churning issues within VA loans.
Not that it will change the opinion that the Federal Reserve will change its mind (a path to rate normalization through increases throughout 2018), but we’ve had the employment data this morning. The unemployment rate for March was 4.1%, non-farm payrolls were +103k (weak), and hourly earnings were +.3% (solid). After the numbers we find rates quiet: agency MBS prices are little changed versus yesterday’s close and the 10-year is yielding 2.81%.
Ignite Integrations Solutions, Inc., sister company to matchbox LLC, has partnered with Optimal Blue through the creation of a custom Pricing Scenario Worksheet within Encompass. The custom-branded form leverages the Optimal Blue API to provide live, accurate product eligibility and pricing that is presented directly to Loan Officers. Comprehensive results provide up to three loan scenarios side by side, which can consist of different products, terms, down payment information, and more. Customers of Ignite and Optimal Blue can run various scenarios simultaneously, pulling accurate pricing back into the pricing scenario form and ultimately presenting real-time options to their borrowers. The times of running multiple scenarios in a PPE, writing the results on a post-it and then manually composing an email are over – and non-compliant. A clean, side-by-side scenario form that is on-brand and compliant is a win-win for lenders, originators and borrowers. Ignite Integration Solutions, a recent HW Tech 100 selection, is a leading custom development software company driven to provide technical solutions to the mortgage banking industry. For more information contact Frank Fiore.
PHH Mortgage, a top five subservicer, announced the addition of Alterra Home Loans to its portfolio of subservicing clients. Alterra is a minority-owned mortgage bank and the second largest Hispanic-owned mortgage company in the U.S. “We look forward to providing a servicing solution that helps Alterra achieve their business and client goals,” said Steve Staid, SVP, Servicing. “PHH has one of the most robust servicing platforms in the industry with a team of mortgage professionals dedicated to flawless execution and delivering exceptional customer experience.” Jason Madiedo, Alterra’s President, said, “We selected PHH as our subservicer because they have the experience, capabilities and a proven track record that aligns well with our mission to build wealth through homeownership. We are excited about this newly formed partnership and having PHH become an extension of our team.” Alterra’s subservicing agreement is not expected to have a material impact on the Company’s financial results.
American Mortgage Consultants, Inc. announced that funds managed by Stone Point Capital LLC (“Stone Point”) have acquired a majority stake in AMC. Financial terms of the transactions were not disclosed.
Fast-growing Home Point Financial Corporation is expanding and looking for Wholesale/Non-Delegated Correspondent Account Executives in the Chicago, Houston and Virginia territories. “If you thrive in a fast-paced environment and are looking to take the next step in your career and financial growth, then Home Point has a great opportunity for you. Well-seasoned sales professionals must have current outside wholesale and/or non-delegated mortgage sales experience, with exposure to FHA lending. Join a nationwide team with strong sales leadership and a focus on technology and support to help our wholesale and non-delegated correspondent clients succeed.” To apply, send resumes to Damon Martin.
GSF Mortgage Corporation continues to expand its Construction Lending Division by adding 12 loan originators in March. The FHA, VA and USDA Single Close Construction programs are hot products in this time of thin inventory. If you are interested in joining the GSF Mortgage Construction Lending Team, and offer this product in your market, click here.
TowneFI is Towne Mortgage Company’s newest formation, combining the best of AmeriCU for Credit Unions and Homeowners Mortgage for Community Banks and Ag Banks, serving both markets for over 25 years. TowneFI is looking for a seasoned, high-energy, Senior Account Executive to partner with Towne to expand their book of business. This rarely available position will have access to multiple operation centers and all products including FHA, 203K, Fannie Mae HomeStyle, HomePath, HomeReady, DU Refi Plus, VA, USDA, and Manufactured Programs. In this position you will have the ability to add an array of account types including Community Banks, Credit Unions, and Ag Banks with execution channels including Retail, Wholesale, and Mini-Correspondent offerings. Come join a growing team! Email Cassi Sluka for more information.
Last year was more than another great year for Caliber Home Loans, Inc., “one of the fastest growing top ten mortgage company in America. All areas of the organization worked together to break records, introduce new products and increase our purchase business. Caliber didn't just have a great year – it had its BEST year in its history. We've kicked off another prosperous year and are looking for talented Loan Consultants to join us! Watch and learn why Caliber rocks and contact Jeremy DeRosa!”
Congrats to Paul Steenson who has joined First Interstate Bank as Regional Mortgage Manager for OR & WA and who will be instrumental in supporting First Interstate’s mortgage originator expansion across that footprint. First Interstate currently has opportunities for successful mortgage originators in many markets. If you’d like to hear more, contact Paul directly for more details.
Impac Mortgage Holdings, Inc. announced that Libby Cooper has been hired as SVP Corporate Strategy, and Tiffany Entsminger has been hired as SVP Chief Risk Officer. Congratulations to both!