For some good news, any company that holds or buys servicing has seen their balance sheet improve with the rise in mortgage rates. For more good news, reverse mortgage lenders are licking their chops over the news that homeowners, aged 62 and older, saw their collective housing wealth increase by $234 billion to a record of $8.05 trillion, according to data provided by the National Reverse Mortgage Lenders Association (NRMLA) and data analytics firm RiskSpan. For not good news, the MBA reported that the GSEs' .50 Adverse Market Refinance Fee is reportedly in place through at least December 1, 2021, per Federal Housing Finance Agency (FHFA) officials. The fee is currently imposed on most Fannie Mae and Freddie Mac refinances, and FHFA plans to evaluate data in early October to determine if the fee has been successful in offsetting pandemic response costs, which would determine whether the fee subsequently could be phased out in early December. For other not good news, few vendors or lenders want to unwillingly see themselves in the headlines. CoreLogic apparently missed approximately 400+ tax payments in Texas recently and wound up in the press. (By the way, the audio version of today’s commentary is available here and is sponsored by Candor, the dynamic, adaptive underwriting engine.)
Broker and Banker Services and Products
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“The FHA training that XINNIX offers in our Performance Programs for new mortgage talent has long been heralded as the best. We’re excited to share that our FHA training is now being offered as a stand-alone class outside of our Performance Programs to help mortgage professionals refresh and fine-tune their skills and understanding of the FHA loan program and current lending guidelines. To celebrate the launch of our new FHA Mortgage Master Class™ XINNIX is offering $50 off the retail price through April 15! No code needed. If you’re looking for top notch FHA training for your team or branch, now is the perfect time to enroll and take advantage of this special pricing. For more information about the program and how to register, you can visit XINNIX online or schedule a call with a XINNIX Account Executive.”
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“HomeBinder is excited to announce that Celebrity Home Loans is rolling out our service to its borrowers. According to David Robnett, Chairman and CEO of Celebrity Home Loans LLC, “Celebrity immediately recognized that HomeBinder enables our borrowers to enhance their lives through financial education and literacy, thereby enhancing our ‘client for life’ experience. As an innovative and technology-forward business, we have implemented multiple fintech platforms to deliver a streamlined experience through closing, but what happens post-close? We see an immediate and highly complementary fit with HomeBinder to educate today’s homeowner, remain top of mind with our clients, and enhance our relationships with real estate agents. HomeBinder’s new API integration with Encompass enables us to implement their service within hours and days vs. weeks and months. We are eager to launch this Spring.” Learn more about HomeBinder.”
It has been nearly two years since Dr. Mark Calabria was sworn in as director of the Federal Housing Finance Agency. Calabria noted that he sees everything he does as fulfilling Congress' expectations from the Housing and Economic Recovery Act of 2008, believes that Fannie Mae and Freddie Mac are not prepared for the next housing downturn, and states that F&F need to improve their cultures, establish an appropriate set of incentives, and focus more on their mission to provide liquidity to the mortgage market during times of disruption.
As noted above, the GSEs' .50 Adverse Market Refinance Fee is reportedly in place through at least December 1, per FHFA officials. The fee is currently imposed on most Fannie Mae and Freddie Mac refinances, and FHFA plans to evaluate data in early October to determine if the fee has been successful in offsetting pandemic response costs.
Last week Freddie Mac addressed the agenda set out on January 14th’s amendment to the terms of F&F’s Preferred Stock Purchase Agreements. “In Single-Family Seller/Servicer Guide (Guide) Bulletin 2021-11, we’re announcing that we will only buy loans secured by investment properties or second homes that are Loan Product Advisor® (LPASM ) mortgages with a risk class of Accept. Effective for mortgages with settlement dates on or after May 1, 2021, we will no longer purchase manually underwritten mortgages secured by investment properties or second homes. Effective April 15, 2021, non-LPA loans secured by investment properties or second homes that are submitted or resubmitted to Loan Quality Advisor® will receive a risk assessment result of “Yellow – High Likelihood of Caution” and will be not eligible for sale to Freddie Mac.”
Also listed in January 14th’s amendment is, “The GSEs will limit the acquisition of single-family mortgage loans with multiple higher risk characteristics at their current levels. A maximum of 6% of purchase money mortgages and maximum of 3% of refinancing mortgages over the trailing 52-week period can have two or more higher risk characteristics at origination: combined loan-to-value (LTV) greater than 90%; debt-to-income ratio greater than 45%; and FICO (or equivalent credit score) less than 680.” And “The GSEs will limit the acquisition of single-family mortgage loans to (i) qualified mortgages, (ii) loans exempt from the CFPB’s ability-to-repay requirement, (iii) loans for investment property subject to the restrictions above, (iv) refinancing loans with streamlined underwriting for high loan-to-value ratios, (v) loans originated with temporary underwriting flexibilities due to exigent circumstances, and (vi) loans secured by manufactured housing.”
Fannie Mae and Freddie Mac have posted a high-level timeline showing key milestones and date ranges for the Uniform Appraisal Dataset (UAD) and Forms Redesign.
Fannie Mae’s March 2021 edition highlights its recent appraisal risk management Lender Letter, videos and reference guides about condition and quality ratings, and a video about the Uniform Appraisal Dataset Redesign initiative, questions from appraisers about time adjustments and more.
Read Fannie Mae’s latest issue of Quality Insider to learn how reverification tracking and aggregated reverification data can strengthen your QC program’s efficiency and effectiveness and enhance overall loan quality.
Expansion of the Chase Correspondent credit parameters. Chase removed LTV/CLTV overlays to align with the agencies and expanded the minimum FICO requirements. All these changes are in effect for commitments taken on or after April 5th.
Wells Fargo Funding issued clarification on its ineligible resale-deed restrictions for conventional Conforming Loans, refer to the updated Wells Fargo Funding Seller Guide for complete requirement. Additionally, the Resale-Deed Restriction Approval Request (Exhibit 21) has been updated.
Wells Fargo Funding is updating its requirements for postponed improvement or repair escrows on Conventional Conforming Loans to require work escrow funds be held by the title company or closing attorney effective April 20th. There is no change to postponed improvement or repair escrow requirements for Non-Conforming, FHA, VA, or GRH Loans.
PennyMac Correspondent posted updates to Conventional LLPAs in Announcement 21-24.
Caliber Home Loans posted Announcement CL21-18 containing information on updates to Conventional Cash Out Refinance, Investment Property and Second Home LLPAs.
Recent economic data has been consistent with a swiftly improving US economy benefitting from service re-openings, increasing vaccinations, and extraordinary fiscal stimulus. The economic expansion continues to strain global supply chains, putting pressure on prices. It remains to be seen how hot the economy can run before the Fed is forced to take action despite the FOMC’s expectations to keep monetary policy unchanged throughout the rest of the year.
Treasuries were little changed to start the week despite stocks rallying to another record high. The big news yesterday, aside from Treasury Secretary Yellen suggesting a global corporate tax, was an announcement on forbearance by the Consumer Financial Protection Bureau. Millions of U.S. homeowners who’ve fallen behind on mortgage payments would have more time before facing foreclosure under rules proposed yesterday by the Consumer Financial Protection Bureau. This comes as the Mortgage Bankers Association’s latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 6 basis points to 4.90 percent of servicers’ portfolio volume in the prior week as of March 28. According to MBA’s estimate, 2.5 million homeowners are in forbearance plans.
Today’s economic calendar is on the light side and kicks off shortly with same store sales from Redbook for the week ending April 3. February JOLTS are next up. Today’s MBS purchase schedule from the Desk is tied for the largest on the current schedule at $8.1 billion. We begin the day with Agency MBS prices better/up about .125 and the 10-year yielding 1.69 after closing yesterday at 1.72 percent.
Shamrock Home Loans adds yet another milestone under the leadership of Rick Roque, Corporate VP, by adding Georgia, Tennessee, North and South Carolina, and hiring underwriting staff in Phoenix, Dallas, and New Orleans. "The strategy is very clear: to attract the best, high integrity talent in the industry that aligns with our Core Values, and are committed to aggressive growth in target markets. A mortgage company needs core values that are felt, seen, and experienced in the day to day." Watch this video to understand why Shamrock is rated as one of the best companies to work for in America. Dean Harrington, Founder and CEO, explains our core values, and you can check out Shamrock’s TV ad, put together by its ad agency. We apply these tools to brand you in your market. To learn more how you can go to the next level, email: JoinTheRock@hamrockHomeLoans.com.
PrimeLending is growing! Over 50 top producers decided to take their careers to the next level by joining the powerhouse national lender during the first quarter, including six returning originators! Why are so many mortgage professionals making the move? In a nutshell: better support, as in more local operations assistance, an unsurpassed team-oriented culture and leaders that always have your back. It’s because of this unmatched level of support that our employees voted PrimeLending a Top Workplace in Financial Services for the 7th straight year on the Fortune and Great Place to Work annual ranking. It’s amazing what you can accomplish when everyone pulls in the same direction. Do you have the support you need to reach your full potential and Discover Your Best®? You would at PrimeLending. Contact Nic Hartke to explore your opportunities.
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Movement sets new record despite market headwinds. Movement Mortgage set a new single-month origination record in March, funding approximately $3.5 billion in new home loans, despite a rising rate environment and inventory challenges. How is this possible? Superior Ops, speed and culture that helps loan officers do more. By remaining focused on the purchase market (more than 70% of Movement’s loans are purchase!), Movement can provide faster turn-times and more support for retail originators than many others. Leaders and Loan Officers looking for long-term platforms to grow their business, own the purchase market and adapt to changing business conditions are choosing Movement. Got 55 seconds to learn more? Check out this new video explaining why LOs can Earn More at Movement.
I wanted to clarify that, believe it or not, there are two Mike Bugbees in the mortgage business: Mike Bugbee who took the new role with BSI noted yesterday in the commentary, moving over from Mr. Cooper, and the one still at MIAC analytics. (You can tell the difference because the latter has MIAC tattooed on his sinewy bicep.) I’m sure they’ll arrange to meet at the next in-person conference.