Elaine F. reminded me of a quote from Hemingway: “Never mistake motion for action.” And basketball coach John Wooden said, “Never mistake action for achievement.” The FHFA is certain taking action, and moving toward achieving its goals, although those don’t necessarily match those of many borrowers or lenders. Why every originator should care is spelled out in “The Secondary Market’s Presence in the Primary Markets”. By raising gfees (as lenders saw last Friday) to one borrower at a time, will Freddie Mac and Fannie Mae reach the hundreds of billions of dollars of retained capital that many believe are required to exit conservatorship? Of course not. And it appears that TPO business (correspondent and wholesale) is being hit much harder than retail. Of course business will flow away from F&F toward other investors and other capital markets outlets such as private label securitization. Dave Stevens of Mountain Lake Consulting accurately likens the FHFA changes over the last several months to the “boiling a frog theory”, with the industry being the amphibian, of course. Well said! (Today’s audio version of the commentary is available here. This week’s is sponsored by Symmetry Lending, rolling out more HELOC solutions for lenders including HELOCs as a stand-alone transaction.)
Lender and Broker Products
Are you tired of overpaying for employment verification that doesn’t even work half the time? Are you juggling multiple vendors to cover your company’s asset, income, and employment verification needs? Are you paying to embed digital verifications in your 1003, but still circling back to collect pay stubs and W-2s on the back end? Then FormFree invites you to experience AccountChek 3n1, a single service that combines market-leading VOA with outstanding VOIE that covers 85% of working Americans AND comes with your borrower’s last six pay stubs and most recent W-2s. It’s a smooth experience that borrowers love — in fact, FormFree customers offering AccountChek 3n1 see an average borrower adoption of 63%. See AccountChek 3n1 in action.
Get the earliest, most representative look at mortgage origination trends in a new data report from Black Knight. BK’s Originations Market Monitor reviews snapshots of key pipeline metrics to provide a more comprehensive and timely view of monthly market trends than has previously been available publicly. For the report, Black Knight aggregates the latest available monthly rate lock data drawn from the company’s Optimal Blue PPE, the most widely used product and pricing engine in the industry. In addition, the Originations Market Monitor offers additional insights through the company’s dual market-leading hedging platforms to help you see how interest rates and other factors weigh on the market and get a clearer picture of current lending activity. The newest report is out today, so check it out and subscribe to get this monthly report delivered right to your inbox.
Check out Freedom Mortgage Wholesale’s recently enhanced VA and FHA pricing! Enjoy 2 Business Day Priority Purchase Underwriting and a (.250) LLPA incentive for all Conventional, VA, and FHA purchases with the Freedom Mortgage Wholesale Division’s Big Spring Purchase Tee Off! Offer a hole in one experience with every new Conventional, VA, and FHA purchase! Plus, offer more buying power for your Jumbo VA borrowers with no maximum loan amount and no down payment for eligible* VA borrowers. To learn more, check out our rate sheet or email AskFreedom@FreedomWholesale.com to have an Account Executive contact you. *Subject to credit approval, requires full entitlement; for purchases and cash-out refinances only and not applicable for loan amounts<= $144,000. For IRRRLs, VA will continue to guaranty 25% of the loan amount without regard to the Veteran’s available entitlement and/or county loan limits.
They say you can tell a lot about a person based on what movie they know Tim Curry from – Clue, Rocky Horror Picture Show, Home Alone 2, the list goes on. Similarly, you can tell a lot about a lender by their servicing risk management strategy. To help lenders evaluate their servicing risk management strategy and identify specific areas that may need improvement, MQMR has developed a Servicing Risk Assessment. The Servicing Risk Assessment analyzes and grades the effectiveness of a lenders’ servicing program, identifies specific areas of concern, ensures the program is effectively mitigating lenders’ risk and more. Once lenders complete the assessment, an MQMR servicing expert will then provide personalized and actionable recommendations. Take MQMR’s Servicing Risk Assessment today and find out what your servicing risk management strategy says about you.
Servicers are preparing for an uncertain future that hinges on foreclosure moratoria and forbearance program expirations. One thing is sure: proactive communication with borrowers will put servicers, investors, and homeowners in the best possible position. Computershare Loan Services (CLS) is one of the highest-rated servicers in the US. With deep roots in default servicing, Specialized Loan Servicing (SLS), part of the Computershare Group, helps clients mitigate a rise in foreclosures with contact strategies that meet borrowers where they are. Leesa Logan, General Counsel of SLS, stated in a recent article, “Email, IVR, educational videos, and texting have all been very effective for us. We get much more engagement by using a combination of these outreach methods. By using these tools, we have a very high rate of getting consumers out of forbearance and into a resolution.” Read the full article and learn more about CLS’s special servicing expertise.
While lenders and borrowers bear the brunt of FHFA-directed changes, Freddie and Fannie continue to announce developments.
Freddie Mac announced a cap structure on the sale of mortgages secured by second homes and/or investment properties. For Sellers that sell more than five loans secured by second homes and/or investment properties, such loans may not be more than 6.5% of total monthly unpaid principal balance (UPB) for July sales and thereafter not more than 6%.
Freddie Mac made the Loan Closing Advisor® customer test environment (CTE) available to begin testing UCD XML files for Phase 2 critical edits on June 8, 2021. Prepare for Phase 1, that will transition to critical on July 31, 2021, and for Phase 2 by reviewing the Loan Closing Advisor Critical Edit Message Document. Use these resources to test the delivery of the UCD file and review the Loan Closing Advisor critical messages for Phase 2 critical edits. For more information on the UCD critical edits transition, check out the Freddie Mac UCD page.
Freddie Mac changed the retirement date for Loan Closing Advisor system-to-system (S2S) versions 1.0 and 2.0 from May 30, 2021, to July 31, 2021. The current version of the Loan Closing Advisor S2S specification is 3.0. Review the Loan Closing Advisor S2S Versions Retiring document for more details.
The GSEs have updated the Uniform Loan Delivery Dataset (ULDD) specification to reflect the retirement of Constant Maturity Treasury (CMT) indexed adjustable-rate mortgages (ARMs). The GSEs will not purchase any CMT-indexed ARM with an Application Received Date of July 1, 2021, or later. Effective Oct. 1, 2021, the GSEs will no longer purchase any CMT-indexed ARMs, regardless of the Application Received Date or Note Date. Read the Announcement.
Fannie Mae Servicing Guide update SVC-2021-03 provides an alternative means of verifying borrower income and asset information through third-party vendors, clarifies when borrowers must make full monthly contractual payments during the month of solicitation for a disaster payment deferral, streamlines our process for obtaining loss mitigation valuation information, adjusts our requirements for IRS reporting, and makes miscellaneous updates.
Fannie Mae reps will discuss manufactured home financing options, with an overview of programs and policies that can support your manufactured home financing business, including MH Advantage® and financing for single-width manufactured homes. These webinars are offered monthly starting on June 16.
Fannie Mae announced its selection of a replacement index to be used for the servicing of legacy COFI mortgage loans, called the Enterprise 11th District COFI Replacement Index. This index will be based on the Federal Cost of Funds Index plus a spread adjustment. The COFI Transition Playbook provides scenarios and additional details to better understand how the interest rate and payment calculation of a COFI indexed ARM will change next year.
Fannie Mae launched RefiNow™, a new refinance mortgage option with flexibilities aimed at making it easier and less expensive for qualifying homeowners to reduce their monthly housing costs. View the interactive training guide.
Remember to visit the Freddie Mac PSPA Resource Center regularly to access training and other resources on Higher Risk Mortgages, $1.5 Billion Cash Volume Limit and Qualified Mortgage (QM).
Events This Week
The CFPB has announced it is hosting an Appraisal Bias webinar on June 15, at 1PM ET. This is a virtual discussion on home appraisal bias. Acting CFPB Director Dave Uejio will host discussions with civil rights organizations, housing policy experts, and other federal agencies to explore how racial bias in housing appraisals and automated valuation models may occur and what steps can be taken in response.
If you’re in Southern California, “Cruising with CAMP!” It’s first live, in-person event is June 16th: a cruise around Newport Harbor. CAMP members $35.00, Nonmembers, $40.00. Meet special guest “Undercover Billionaire” Glenn Stearns, CEO / Founder of Kind Lending. Network with local industry professionals. Appetizers and drink tickets. Thanks to our generous sponsors, Kind Lending, PRMG, Angel Oak, PacWest Home Loans, High Tech Lending, Caliber Home Loans, Class Valuation, Plaza Home Mortgage, Loan Depot, Homebridge and Solidify AMC. Registration ends at midnight on Monday and the event will be closed to attendees only.
The California MBA’s Mortgage Innovation Committee will be hosting its latest monthly webinar on June 17th at 11 am PT, and the group will tackle “The New Non-QM: How It Works For You”. The group will cover the basics of alternative lending, how technology advancement Is making non-QM easier to close, how you can grow your non-QM business, and more. Click here to RSVP.
Join RCLCO Real Estate Consulting on Thursday, June 17th for a conversation with senior leaders in real estate to explore the latest insights on the market, as part of RCLCO's
LBA Ware will be sponsoring this Friday’s edition of The Mortgage Collaborative’s Rundown with Rich and Rob on June 18. Lori Brewer will be leading the discussion with Rich Swerbinsky, the COO of The Mortgage Collaborative, and me in covering current events in the mortgage market for 30 minutes starting at 3PM ET: “The Rundown with Rob and Rich.”
Congratulations to Ginnie Mae which reported May MBS issuance of $77 billion with more than 288,000 homes financed!
Last week in the bond market closed on a quiet note as investors continued to digest a hotter-than-expected CPI for May. Since politics is impacting gas prices, and maybe therefore soon rates, it is worth including that the G-7 summit continued in Cornwall to end the week while the NATO summit begins today. In Washington, a bipartisan group of senators reportedly agreed on a framework for an infrastructure spending package that would not require tax hikes. As far as economic releases were concerned, the preliminary June reading for the University of Michigan Index of Consumer Sentiment increased beyond expectations despite rising inflation remaining a top concern for consumers.
With nothing of note on the economic calendar today, the important releases for the rest of the week include May Retail Sales and the Producer Price Index, as well as May Industrial Production and Capacity Utilization tomorrow, May Housing Starts and Building Permits, and May Import/Export Price (in addition to the June FOMC Rate Decision) on Wednesday, and the usual jobless claims on Thursday. Zip on Friday. We begin the week with the 10-year’s yield unchanged at 1.46 percent and current-coupon Agency MBS prices worse a smidge.
Operation leader looking for next opportunity: 33 years in Operations across multiple functions including originations and servicing, extensive recent experience with a major wholesale lender building from $600m to $3b in monthly originations. Candidate’s background includes quick turnaround of under-performing operations while providing leadership that includes driving service, loyalty, customer and employee satisfaction, long term continual improvement, and establishing partnerships across all functional areas. If interested in a discussion with the Candidate, please reach out to Anjelica Nixt.
“loanDepot Wholesale is dedicated to continued brand growth and increasing market share. To that end we are excited to announce the following sales leadership organizational changes. Scot Baker has been promoted to VP, Divisional Manager for the West. Scot has been with LDW since we opened our doors in 2014, first growing his own book of broker business and then a very successful region. He brings a wealth of LDW knowledge and over 30-years mortgage experience to his new role. Congratulations Scot! And Matt Mancasola joins LDW as Regional Sales Manager for the NW/Mountain States region. Matt has over 25-years of mortgage experience and most recently served as a Division Vice President, overseeing sales teams in Northern California, Oregon, Washington, Alaska, Idaho, and Montana. Prior to that, he has held various Sales and Sales Leadership roles for several well-known lenders in preparation for his new role at loanDepot. Welcome Matt!”
Every once in a while, a story comes along that inspires people to take action. Take for instance, the recent news story about a North Carolina principal. He works nights stocking shelves at a local Walmart to buy supplies for low-income students at his school. The story was seen by military spouses with the Inspire Up Foundation™ who turned to partners at Caliber Home Loans and suddenly the idea of building a pantry and laundry room for the kids was born. Stepping up to help those in need is one of the unique things about Caliber’s culture. Caliber encourages service by giving full-time employees eight hours of paid time off to volunteer in the community in which you live and work. If supporting your friends and neighbors is important to you, then join the team that understands community service is a benefit of employment. Email Jonathan Stanley for Operations positions or James Hecht for Sales positions.
“Now hiring: Temple View Capital! Our strong 2020 growth continues into 2021 with new financing partnerships in place that provides billions for the company to allocate to DSCR, Fix & Flip, Ground Up Construction and Bridge loans to borrowers nationwide. Our products are designed using common sense underwriting approaches, making them perfect both for direct lending to borrowers and also as a white-label solution for brokers & correspondents. They are competitively priced as well. Please visit TempleViewCap.com to see our latest DSCR and Fix & Flip rates. We are constantly innovating with new technology and honing our processes to ensure quick, easy, and consistent approvals making it smoother than ever to close deals. Because of our growth, Temple View is adding experienced BDMs, Loan Officers, Underwriters, Analysts and more. Want to be part of the fastest-growing private lender in the US? Email Doug Perry today for full-time and partnership opportunities!”
“Conventional wholesale is dying. ACC Mortgage and Non-QM are growing in 2021 and beyond. Founded in 1999, ACC never stopped lending during COVID and has shattered sales and closing records in 3 of the first 5 months. We have added a West Coast Operations team to support growth. Pricing will not be beat, and we have expanded our product offerings to included 90% ITIN. Check out www.Nonqmpricer.com. ACC is hiring only 8 experienced account executives to support our growth and maintain our turn times. If you are passionate about Non-QM and want to join the leader in NonQM, e-mail resume to Recruiting@accmortgage.com.”