Words are great things. (Sometimes I wish my kids would use them.) Let's take the poor financial news headline writer who hears about a few layoffs at some bank or lender. The writer pretty much has at their disposal cuts, slashes, slices, reduces, decreases, cuts back, declines, drops, falls, chops, prunes, removes, expurgates, hacks, incises, severs, or curtails, to name a few. Now let's take the statistician who relies on numbers to tell their story, but who can be accused equally of exaggeration. And so it is important to keep these things in mind when you read, "Chrisman LLC cat workforce slashed by 50 Percent". It might merely mean that I told Gusto that her services were no longer needed, leaving me with Myrtle. Yes, the numbers went from two felines to one, but the headline is a little sensationalized. (And yes, Gusto is a girl - it is important to live life with gusto, right?) And if house price appreciation last year was 10%, and this year someone expects house prices to "only" be up 6%, one headline could be, "House Price Appreciation Rate Expected to Plummet 40%." Be careful out there folks!
The Mutual Mortgage Insurance Fund is a fund that insures mortgages made by the Federal Housing Administration on single-family homes; the fund must make quarterly reports to Congress. These reports are a fulfillment of the requirement under section 2118 of the Housing and Economic Recovery Act of 2008 that HUD report to the Congress on a quarterly basis respecting mortgages that are an obligation of the Mutual Mortgage Insurance Fund. HUD uses this report to provide public information on new endorsement activity, delinquency, claim and prepayment rate trends, and financial information on core insurance operations. Highlights from Q1'14 (found here) include some not-so-surprising details regarding originations over the first three months of the new year. The forward-loan endorsement count was 208,488 with a dollar volume of $35.8B (which represents a 28% decrease in dollar volume from the previous quarter), prepayment activity was 26% above actuarial predictions (attributable to low interest rates), and the year-to-date net loss rate on claim activity (53%) remained below actuarial projections of 56%.
With rising home prices, and stagnant wages over the last few years, more and more middle class buyers are being pushed out of the market. No more so, than in high cost of living areas such as Los Angeles, or New York City. In the same vein, I was recently asked by someone NOT in banking (yes, they're out there) "what's all this talk about the burden of student loans? It's simple, you take out a loan for anything, and then you pay it off, right?" Yes, I agree; however the conversation is a little more complex, as we're not talking about financing a Honda Accord. Some believe there is a systemic issue with student debt, that the ever-increasing cost of financing a college education, disproportionately carries over into young adulthood; that this debt, prohibits a vast majority of young adults from buying that 'starter home'. This is turn, impacts housing consumption levels, if you believe economists (which you shouldn't). It's a "35,000 foot" conversation, and if you're reading this while staring at a stack of loan files yet to be processed or underwritten, it's of little help to you. If that's the case, then click on this video of Tim Rood, co-founder of the Collingwood Group, who was recently on Fox Business News discussing this exact topic.
If you're near Seattle next week, don't miss the Seattle Mortgage Banker's "Regulatory Summit." The MBA's Dave Stevens will be there, as an example of the level of speakers the group attracts, along with a slate of folks to discuss how regulatory and compliance issues should concern any lender.
There will be a free, informational National VA Financing Webinar on Tuesday, June 24th at 10AM PST. The purpose of the call will be to enlighten and encourage real estate and financial industry professionals to better embrace the VA financing option. The call is sponsored by iServe Residential Lending and will feature comments by Keith Pedigo, the former Director of Loan Guaranty Services and Deputy Undersecretary for Policy at the Department of Veterans Affairs. Presenting for iServe will be long-time industry Veteran, and Director of Government Lending, John McDade.
Informative Research (a mortgage information services provider) announced that it has successfully completed the Experian Independent Third Party Assessment (EI3PA) certification. These technical and operational assessments are designed to help protect consumer information and enhance consumer compliance. "The EI3PA certification is an annual assessment of an Experian reseller's ability to protect the information they receive from Experian. EI3PA requires companies to go beyond the already stringent PCI DSS 2.0 standards and prove more areas of their infrastructure are secure for full compliance. This entails an extensive strenuous evaluation of information security by a 3rd Party Quality Security Assessor (QSA), based on requirements provided by Experian. These requirements have been adapted from PCI-DSS 2.0 standards." I am so not an IT guy, but I am sure this makes sense to someone out there...
Citibank Correspondent has added an additional credit overlay to all conventional programs eligible for purchase by Citi. An executed contract for deed/land contract must be seasoned for at least 12 months before the transaction. To review the complete product guidelines, visit its website or contact your account executive for all the details.
Do you have a conforming LP or DU eligible for 14 day lock? If so, National Mortgage Services Inc. wholesale lending is offering no LP add-on, no 5-10 property add-on and no loan amount add-on. (Eligibility for 14 day lock must have UW approval, appraisal conditions cleared and no PTD requiring sign off). NMSI also has programs for self-employed borrowers: Jumbo stated income program, 12 month bank statement program, and a Financial Statement program. If you would like more information, contact your account executive.
WesLend Financial Wholesale updated some program requirements. NHF access/First Down DPA Program signed budget letter, when borrower is living with relatives, has been removed. Its Non-conforming guideline have been expanded and clarification regarding full Review Condo Questionnaire requirements. Contact your account executive for the complete list of program updates.
Fifth Third Correspondent Lending has recently updated its ineligible condo list. The list is available on both Correspondent Connect and Wholesale Connect.
New Penn Financial Correspondent has announced, effective immediately, Advantage ARM's will be capped at 80% LTV. Also, effective June 2, 2014, New Penn Financial will accept loans for purchase in its Correspondent Lending Channel in the state of Utah.
Sierra Pacific Mortgage is now offering government products with FICO down to 620 with automated approval. Contact your account representative for all the details.
US Bank Home Mortgage Correspondent Division has announced it will purchase FHA loans from full Direct Endorsement Correspondent Lenders when using Federal Home Loan Bank Down Payment Assistance grant programs as a source of funds for down payment or closing costs. USBHM will not purchase loans utilizing FHLB grant funds for rehabilitation of properties. Each FHA first mortgage loan utilizing funds from one of the FHLB DPA grants must meet the requirements of the specific FHLB program being used, FHA guidelines and USBHM guidelines, in full, including complying with any income limits of the program, counseling requirements and all HUD minimum down payment requirements.
I'm convinced Wells Fargo's Economics Group doesn't sleep. In April's Housing Data Wrap Up the group writes, "There has been a steady tide of negative housing reports over the past few months that have raised doubts about the housing recovery. Sales of new and existing homes have weakened, mortgage applications have fallen, and the homeownership rate has plunged to its lowest level in 20 years. New home construction has also slowed. Single-family housing starts through the first three months of this year are running 1.6 percent below their year-ago pace, and starts of multi-family units are down 3.8 percent." But all is not lost just yet, as the report is some-what optimistic; seeing conditions improving this year, even after a disappointing Q1, with expectations for new home sales to rise 14.2% to 490,000 homes in 2014 and a 20.4% rise to 590,000 homes in 2015. While I still enjoy reading the groups reports online, our cat Myrtle doesn't have the time, or the patience, to sit still with so many song-birds at the feeder this time of year, and prefers to listen to their podcast instead.
Rates: up a little, down a little. Tomorrow that may change with the unemployment data, but we've been in a decent rate environment for quite some time. (By the way, Nonfarm payrolls are expected at +218k versus +288k previously, with the unemployment rate up one-tenth to 6.4%.) Yesterday's ADP number, always of dubious predictive ability for the "real" number, disappointed many, but the Fed's Beige Book, which certainly trumps ADP, saw further improvement in the economy from the April report. In fact, all twelve Federal Reserve Districts reported that economic activity expanded.
But probably of more important to anyone reading these words is The Beige Book's report on real estate. To the surprise of few, residential real estate activity was mixed since the last report, "with a lack of inventory at times cited as a constraining factor." Five districts reported sales were higher and four districts reported softer; homebuilders also gave mixed reports on new home sales and construction, while residential real estate lending was mixed as well.
For numeros, Wednesday agency MBS prices were pretty much unchanged and the 10-yr closed at a yield of 2.61%. Today we've had the weekly Initial Jobless Claims (312k, +8k from a revised 304k). Later we'll have some information on prepayment speeds, and the Treasury telling us how much it is going to auction next week in the way of 3, 10, and 30 year securities. After the Jobless Claims numbers rates and MBS prices are basically unchanged from Wednesday's closing levels.
On the expansion front, Magnolia Bank Correspondent Lending is expanding its lending area into the Midwest and Southwest and is seeking experienced account executives to build a new territory. Magnolia Bank is a well-established lender, based in Kentucky offering Conventional, USDA, FHA and VA products. Its clients are both non-delegated and delegated, and "in addition to offering a full product menu, state of the art technology, we specialize in extraordinary client service, ease of doing business and the flexibility to meet the specific needs of our clients. If you are looking for a place where service matters, contact Dee Anna Hatfield, Correspondent Lending Manager, dhatfield@magnoliabank. com or visit Magnolia for more information on the mortgage division
And Fairway Independent Mortgage Corp., headquartered in Plano, TX is looking to fill a Product Development Manager Position. The position is primarily responsible for managing a Product Development Team, new and existing product releases, and working with both Fairway's wholesale and retail channels. The person will work closely with Secondary and Credit Policy. Fairway Independent is a top independent mortgage company originating $5.5 billion in 2013, with 150 branches nationwide and over 1,600 employees. Fairway has a strong focus on purchase business and is dedicated to providing the highest level of customer service and support through its Fannie, Freddie, and Ginnie seller/servicer, along with many well- known aggregator approvals in today's market. For questions, to see a full job description, or to submit a resume, please contact Sally Stoffels at sallys@fairwaymc. com.