“Forward” lenders can’t ignore that 10,000 people a day in the U.S. turn 62. Of course, not every one owns a home, or has appreciation – but many do. And thus, plenty of lenders now have reverse mortgage departments. All FHA HECMs are non-recourse loans. The borrower or the estate will never owe more than the value of the subject property at loan maturity. In many instances, reverse mortgage borrowers “walk away” from a reverse mortgage with equity! (More below on reverse lending development and law changes.)
The Federal Savings Bank (TFSB), one of the largest privately held federally chartered banks in America focused on residential home lending, announced plans to offer its Member Reverse Mortgage Program to credit unions nationwide. “Since most credit unions do not offer reverse mortgages to their members, this partnership with TFSB is an opportunity for credit unions to better serve their growing population of retirement-aged members through this expanded product offering. The partnerships will be based strictly on a referral basis and allow TFSB to educate more seniors about this less-known option to plan for a secure financial future. (Learn more about TFSB’s Member Reverse Mortgage at www.creditunionreversemortgage.org.)
FHA has released Version 2.5 of the Home Equity Conversion Mortgage (HECM) Calculation Software on its Home Equity Conversion Mortgages for Lenders (HECMs) webpage under “Software.” Version 2.5 of the HECM Calculation Software (Calculator) includes the new Initial Mortgage Insurance Premium (IMIP) formula for HECM refinance cases.
Washington has enacted House Bill 2057, an “Act relating to the services and processes available when residential real property is abandoned or in foreclosure” (the “Act”). The Act is effective as of June 7, 2018. The Act “modifies provisions relating to nonjudicial foreclosures, required beneficiary remittances, notice of pre-foreclosure for residential reverse mortgages, and a process for when residential real property is determined by a local government to be abandoned, in mid-foreclosure, and a nuisance.”
The state of New York modified its Real Property Actions and Proceedings Law and Civil Practice Law and Rules relating to foreclosure upon a reverse mortgage. The provisions regarding reverse mortgage loans, including a new disclosure and defining a reverse mortgage as a home loan, become effective immediately and are deemed to have been in full force and effect on and after April 20, 2017. A home loan shall include a loan secured by a reverse mortgage if the following requirements are met: The borrower is a natural person; The debt is incurred by the borrower primarily for personal, family or household purposes; The loan is secured by a mortgage or deed of trust on real estate improved by one to four family dwelling or a condominium unit used or occupied or intended to be used or occupied wholly or partly, as the home or residence of one or more persons and which is or will be occupied by the borrower as the borrower’s principal dwelling; and the property is located in the state of New York.
Register for Plaza’s May 15th webinar on how to use the Reverse Mortgage to purchase a home.
Dan Ribler with Baseline Reverse tells us, “Total new production bond issuance in March and April 2018 was $817MM vs total new production issuance in the same period of 2017 of $1,092MM, (so) volumes are down ~25% vs “the good ol’ days” of 2017. It’s also worth noting that November and December were massive new issuance months vs the rest of 2017. AAG set the pace again in April, issuing $103.5MM of new production bonds, $92MM of which was Annual LIBOR. The $103.5MM represents 25.8% market share. This is down from 29.4% market share and $122MM of new production bonds in March. With $77.7MM of new production bonds in April, FAR captured 19.4% market share, in line with the $77.8 they issued in March. In April RMF issued $70.8MM of new production, down from $85.6MM the month prior. Ocwen created $62.3MM in April to take 15.5% of the market, up from 11% share on $45.9MM in March. Rounding out the top 5, Longbridge captured just under 11% of the market, creating $43.6MM in new production bonds. (As always, fully interactive charts are available on our site with loan level data available in Baseline Universe.)
Earlier in the year, new HMBS issuance (containing Ginnie Mae backed Home Equity Conversion Mortgages – HECMs), were at $1.26 billion so far in 2018, compared to $1.04 billion for the first two months of 2017. For the month of February, American Advisors Group (AAG) led the way with $149.8MM/24.7% followed by, Reverse Mortgage Funding (RMF) ($122.3MM /20.1%), Finance of America Reverse (FAR) ($112.3MM/18.5%), Longbridge Financial at ($84.8MM/14.0%), Live Well Financial ($67.3MM/11.7%), and Ocwen Loan Servicing ($53.1MM/8.7%). RMF issued $689 million of seasoned pools in February.
Sure, rates are heading higher this year, but for now they’re pretty quiet. The 10-year closed unchanged at 2.97% to end Friday, unmoved despite President Trump announcing he planned on cutting prescription drug prices in half. “Follow what he does vs. what he says,” is what one MBS trader told me recently.
This week's calendar is heavy on Fedspeak – it’s everywhere! There are speakers scheduled for all but Friday. This includes the vetting of PIMCO's Rich Clarida (for Vice Chair) and Michelle Bowman (Governor) by the Senate Banking Committee on Wednesday morning. April retail sales is the data highlight on Tuesday with reports on inventories, TIC flows, housing and industrial production also scheduled.
Coming in this morning there was a lot of big news on the US-China trade front and this is helping to propel S&P futures higher – but having little impact on bonds. Today sees little on the data front, save the usual Monday T-bill business, two Fed speakers, and the NY Fed releasing its Survey of Consumer Expectations for April at 11:00am. Tomorrow things pick back up April Retail Sales, Retail Sales ex-auto, and May Empire Manufacturing (prior 15.8). Additionally, we will have March Business Inventories (prior 0.6%) and May NAHB Housing Market Index (prior 69). We begin the trading week with rates up a smidge: the 10-year is yielding 2.98% and agency MBS prices are down a shade versus Friday’s close.
Lender Products and Training
New Penn Financial has launched a new High Balance Extra product that’s perfect for borrowers exceeding max conforming loan limits. This proprietary product provides attractive benefits such as DU risk assessment allowing for reduced documentation and reserve requirements. Some of the highlights include: Loan Amounts up to $750,000 with no county restrictions, 90% LTV with no MI, FICOs down to 680, DTI to 45% and Cash out to $500,000. Visit www.GoNewPenn.com to learn more.
Do you use Cenlar as your subservicer? Richey May & Co., a public accounting firm recognized as the leader in providing audit, tax, compliance and oversight services within the industry, will once again be conducting a review over Cenlar in early June to assist companies with their monitoring and oversight responsibilities. Richey May’s oversight report is over 120 pages and includes interviews with all servicing departments as well as compliance, internal audit, QC, IT and Vendor Management. It also offers loan-level testing specific to a client’s portfolio in numerous and varied servicing areas. To learn more about Richey May’s comprehensive oversight review program and the upcoming review over Cenlar, or to participate in the oversight review already conducted earlier this year over Dovenmuehle, please contact Kevin Lohry.
Caliber Home Loans, Inc. recently expanded its mobile platform to now support its wholesale brokers. “CaliberH2O is a feature rich mobile app that puts the power of Caliber’s proprietary H2Online system, conveniently in the palm of their brokers’ hands. Brokers can search, price and lock loans from the app, which syncs real-time with the online platform. Caliber CEO Sanjiv Das said, ‘Caliber's investment in technology provides a new level of service for our wholesale business partners than ever before. Through a secure digital platform, mortgage professionals can take their business outside of the office and have information readily available at their fingertips.’ To learn more ways CaliberH2O can work for a broker’s business, watch this short video. The mobile app is currently available to download in both the App Store and Google Play.
Join this week’s webinar – Mortgage Sales & Marketing Boot Camp: 6 Tips to Master Marketing – on May 18, from 10-10:45am PT. Register here. If you’re interested in making a real impact on your company’s bottom line with your marketing efforts, this is the webinar for you! Join this webinar to learn how to unify your end-to-end marketing to sales process for a better borrower experience. Industry experts Dale Vermillion (Mortgage Champions) and Josh Friend (Insellerate) will go over best practices around creating a seamless lead journey to maximize conversion. Register today to learn how to get more out of your current marketing spend, email best practices, and how to improve content engagement.
eRAMP reduces MERS workload by 70% or more with batch processing. Submit 25, 500 or more loans to MERS in minutes. All transaction types supported; Registration, Update, Transfer of Rights and more. eRAMP has been the leader in batch processing MERS transactions for nearly 15 years. Lenders with LendingQB’s loan origination system receive additional benefits through our LQB integration including eRAMP’s exclusive registration confirmation report uploading into EDocs. It’s all about more loans, less work. If you are interested in learning more about eRAMP, contactGreg Uttal (818.917.2265) or visit www.oncyberlink.com.
Employment and Personnel Moves
Congratulations to Jim Anderson, Aaron Shepler, and Mike Floyd who have joined First Look Appraisals leadership team. Jim Anderson joins as EVP of Business Development and Strategy, overseeing advancements for strategic growth. Jim stated, “the people, processes and proprietary technology at First Look will positively disrupt the industry and provide lenders and appraisers a best-in-class solution.” Aaron Shepler is Chief Technology Officer and architect of First Look’s proprietary technology, Docent, that provides complete visibility and pro-active control over appraisal orders. Along with 15 years of experience leading development teams, Aaron previously served as CTO for the largest independent AMC in the US. Mike Floyd, Chief Corporate Appraiser, has over 20 years of appraisal industry experience including ten years as Chief Corporate Appraiser for a large national AMC. Mike directs appraisal quality control policy and procedure and focuses on cultivating the industry’s best national appraiser panel. To learn more about First Look Appraisals contact Jim.
Assurance Financial is quietly growing into a nationwide leader in lending. Just ask Mike Killmeyer who recently opened a branch for Assurance Financial in Denver, Colorado. “Mike was equipped to take loan applications immediately with little downtime and is now poised to add to his growing professional staff. Mike and his team saw that our compensation structure is excellent, and our back-office support was second to none - 16 years of working, changing, and perfecting it. He also saw that we have an unwavering mission to close loans on time, every time! We have immediate openings for proven, successful, producing Branch Managers and MLOs in Wilmington, Charlotte, Denver, Austin, and many other branch locations throughout the country.” For immediate consideration, contact Paul Peters, CMB, Assurance Financial, Recruiting Manager (225-239-7948).
Ohio’s Union Home Mortgage Corp. (UHM) announced the Asset Purchase of Alliance Home Loans, headquartered in Arizona, under the Union Home Mortgage brand. UHM has grown to 130+ established retail branches across 36 licensed states and this agreement will push Union Home’s loan volume over 4 billion dollars in annual loan production. Culture is important for both. Bill Cosgrove, CEO and owner of Union Home Mortgage, believes, “The culture match is wonderful and Jamie Korus Pearce [President of Alliance Home Loans] should be proud of the company she has built. Alliance employees have impressed us, and they are absolute UHM material.” Ms. Pearce stated, “My team is my most valuable asset and the decision to join UHM was easy because their culture is to value and treat their team in the same manner. UHM has the most impressive leadership team I have ever seen, and the platform, operations and tools that they have created and made available has everyone extremely excited about this new venture.” (UHM has retail, wholesale, consumer direct, a rapid growing servicing portfolio, and is an approved direct lender of F&F, FHA, VA, USDA, and other conforming and non-QM loan products.)