I ain't one that puts much creed into book learnin'. But somes, I'm guessin', do. The Mortgage Bankers Association will be offering a Path to Diversity & Inclusion Scholarship to eligible candidates looking to attend MBA Education's School of Mortgage Banking I. The purpose of the program is to advance the careers of employees from under-represented segments of the community through education and expand the pool of qualified employees from under-represented segments of the community in the real estate finance industry. The scholarship will cover 100 percent of the registration fees for the course.
The industry continues to evolve, and there are plenty of rumors about mergers, acquisitions, and changing business models. For example, I received this note: "Rob, I was talking to one of my Realtor buddies, and he'd heard that Wells Fargo was getting out of the desk rental and marketing agreement business. Is this something that you have you heard that? If true, why would they drop paying for desk space?" Well, your best bet is to ask your Wells Fargo retail mortgage originator - there are lots of rumors. It should not be a surprise to anyone, however, if companies did exactly that. Some companies actively pursue this line of business, and just like when Wells and Bank of America pulled the plug on their broker (wholesale) business, other lenders took heed, or else rushed in to grab market share. Like I said, check with your Wells retail group, but in this regulatory environment it would not surprise me at all. Are we having fun yet?
What's new in the conventional conforming sector?
Freddie Mac has updated credit and underwriting rules to its Selling Guide. Freddie Mac has revised the abatement requirement to state that the payment of up to 12 months of homeowners' association dues by an interested party is not considered an abatement but an interested party contribution and is also subject to the requirement for interested party contributions and other conditions. Freddie Mac is increasing the maximum number of financed properties - from four to six- that the borrower may own or be obligated on when the transaction is a second home or an investment property. Freddie Mac is removing the requirement that the borrower must have six months of rent loss insurance to use rental income from the subject Investment Property for qualifying purposes. These updates are effective for mortgages with settlement dates on or after October 26th. Effective on or after August 1st, Freddie Mac is removing the requirement that the gift letter must identify the Mortgaged Premises and Freddie Mac is updating requirements to provide that when conducting verbal verifications of employment, the seller must verify the borrower's employment status and not whether the borrower is employed or on leave.
As a reminder and follow-up to Nationstar Mortgage's original announcement on June 19th; effective with Best Efforts locks and loans locked in Mandatory commitments created on or after Wednesday July 8, 2015; Nationstar will apply the new Agency Loan Level Price Adjusters announced by the Federal Housing Finance Agency (FHFA) on April 17, 2015. Loans locked before July 8, 2015, must be purchased by Nationstar Mortgage on or before August 6, 2015, or they will be re-priced with the new Agency Loan Level Price Adjusters. All pricing from the commitment date or lock date will carry over except any applicable Agency Loan Level Price Adjusters.
PennyMac is aligning with Freddie Mac's updates to certain income requirements. Click the link to view updates to qualifying income requirements and LTV ratios with secondary financing.
Freddie Mac has updated its selling requirements for credit and underwriting, property eligibility and loan delivery. Freddie has also added business terms for Guarantor pricing and loan-level buy up and buy down options, and making updates to other areas of business.
Freddie Mac will also be providing updates to its Selling System in the near future relating to: Loan-to-Value ratios for mortgages with secondary financing, Certification requirements for Document Custodians, Loan originator company identifiers, Home equity lines of credit, and Cash Contract Details screen.
Updates to Fannie's Post-Foreclosure Bankruptcy Filing Requirements, MBS Reclassification and the Application of HAMP Incentives are outlined in Fannie Mae SVC 2015-10 Servicing Guide Updates.
M&T posted an updated requirement for Agency and M&T Treasury guidelines clarifying that a Lender‐generated written VOR, or Credit Bureau‐generated rental payment history is only acceptable if the landlord is a veriﬁed professional management ﬁrm. For these products, rental history from a private landlord may only be veriﬁed by documenting 12 months cancelled rent checks from the borrower. For FHA transactions, there is no change to the current policy, which does permit a credit bureau‐generated rental payment history from a private landlord.
M&T Bank has received clariﬁcation directly from FNMA conﬁrming that if a HUD Consultant or Professional Renovation Consultant is engaged on any HomeStyle mortgage transaction, those individuals are eligible to conduct inspections throughout the draw process. Therefore, eﬀective immediately, and including pipeline loans, M&T will accept inspections from HUD Consultants or Professional Renovation Consultants in addition to the original appraiser on HomeStyle transactions. Draw Inspections from General Contractors and/or Architects continue to not be permitted. Please note it is a best practice to always provide a Consultant with a copy of the original appraisal and any prior inspections by the appraiser, before the consultant conducts their own draw inspection.
First Community Mortgage Wholesale posted its FCM Guideline Changes which include Fannie & Freddie changes.
LDWholesale is now underwriting to the Freddie LP finding on revolving debt, if paid off thru closing, the account no longer needs to be closed. Click the link to view LDWholesale revolving debt update.
Freddie Mac has updated its servicing guide to include that any HAMP modifications must have a Modification Effective Date on or before September 1, 2017 and all evaluations must be based on a complete Borrower Response package submitted on or before December 31, 2016. Additional changes include the elimination of the expiration date for the Freddie Mac Streamlined Modification, a Servicer compensation clarification for certain instances when the modification is the third modification to the mortgage as well as the mandatory use of the Freddie Mac Default Fee Appeal System for submitting appeals of late foreclosure sale reporting compensatory fees.
Ellie Mae announced it has entered into a strategic partnership with Fannie Mae to "further integrate Fannie Mae's suite of risk management tools into Encompass, Ellie Mae's all-in-one mortgage management solution. Fannie Mae and Ellie Mae will collaborate to provide joint clients enhanced functionality that will help ensure loans meet Fannie Mae requirements from eligibility to loan delivery...Joint customers will be able to leverage Ellie Mae and Fannie Mae leading technologies from within a unified workflow environment in Encompass, giving lenders a more efficient process for delivering quality loans to Fannie Mae with greater certainty."
Plaza's underwriting and program guidelines have been updated and are applicable to conventional Plaza Programs that utilize Desktop Underwriter as the AUS and that are underwritten to Fannie Mae guidelines. Changes include: Unreimbursed Employee Business Expenses, Conversion of Principal Residence, and requirements of Stocks, Bonds and Mutual Funds usage.
Mountain West Financial shared big news on FNMA's Lending Policies. Some highlights include: Unreimbursed Employee Business Expenses for a borrower who is qualified using base pay, bonus, overtime, or commission income less than 25% of the borrower annual employment income. Unreimbursed employee business expenses are not required to be analyzed or deducted from the borrower's qualifying income, or added to monthly liabilities. For borrowers earning commission income that is 25% or more of annual employment income, unreimbursed employee business expenses must be deducted from gross commission income regardless of the length of time that the borrower has filed that expense with the IRS. Tip income is allowed to be included in qualifying income if the lender can verify that the borrower has received the income for the last two years. Fannie May will now permit an IRS "Wage and Income Transcript" (W-2 Transcript) in lieu of the actual W-2 forms.
Fannie Mae is eliminating the requirements specifically associated with the conversion of a principal residence to a second home or investment property meaning the 30% equity rule is no longer in place. One hundred percent (100%) of the borrowers vested value of Stocks, Bonds and Mutual Funds is allowed when determining available reserves. Note: Non-Vested assets are not eligible for down payment, closing costs, or reserves. All updates are effective immediately and DU will be updated the weekend of August 15, 2015, to reflect these policy changes.
NYCB Mortgage posted a reminder to clients concerning FHFA pricing directives. Updates to Loan Level Pricing Adjustments (LLPAs) on Conforming Fixed and Standard ARMs were effective July 6.
The bond market didn't do much Tuesday, so I won't waste your time - we ended about where we began, rate-wise. The Case-Shiller 20-City Index rose 4.9% (year over year) in May: Denver led the gains with a 10% increase in prices and Washington, D.C. trailed the pack, rising "only" 1.3%. Of perhaps more interest was the Conference Board reporting the lowest reading of the Consumer Confidence Index since September 2014. The index fell to 90.0 in July from a downwardly revised 99.8 in June (previous estimate of 101.4). And the $26 billion 2-year note auction drew the highest indirect bid since 2009.
Today is a brand-spankin' new day. We've had the MBA Mortgage Index for the week ending 07/25 (overall apps were slightly higher). Later this morning is the June Pending Home Sales figure, and a $35 billion 5-year note auction. We ended Tuesday with the 10-year at 2.25% and this morning we're sitting around 2.28% with agency MBS prices worse roughly .125 versus Tuesday afternoon.
Jobs and Opportunities
Gold Star continues to expand nationally in all regions! "Our sustainable growth is the result of continually attracting Branch Managers and MLOs who share Gold Star's founding principle of providing the industry's highest level of service through relationship-based financing. We have spent years perfecting the Branch onboarding experience, ensuring you have the dedicated support, ground-breaking technology, integrated marketing CRM, direct access to key decision-makers and competitive pricing/compensation you deserve. From day one, you'll understand why our branches grow and thrive in a culture that has made us a multi-year recipient of numerous accolades for top workplace and award-winning process and technology. Schedule a confidential conversation with Tina Jablonski, Senior Vice President (248.470.3834), and find out what becoming part of one of the nation's premier lenders could mean for your future.
1st Advantage Mortgage, a Draper and Kramer company, "is experiencing impressive growth with no signs of slowing down. This year alone we have grown 30%, opening 6 new branches nationwide. We recently welcomed a new President, John Elias, and are currently hiring Loan Officers, Processors, Underwriters, and many other operational positions. Please reach out to Amanda York, recruiter, or visit our recruiting site at www.join1am. com."
Jordan Capital Finance is hiring a Senior Vice President, Realtor Division. The focus will be establishing partnerships with the Top 100 real estate brokerages. JCF provides private money financing for investors who buy, renovate, sell, and rent residential real estate. "We offer lines of credit up to $5M and lend in 40 states. We do not lend to home owners. JCF is extremely well funded by Garrison Partners, a premier New York private equity firm, and is on an aggressive growth path. We are one of the largest firms in the industry. Our management has closed $150 billion in mortgage volume. The SVP must have a college degree, at least 7 years of experience, and must have a proven track record of sales success and relationships with the Top 100 real estate brokerages. The position requires a very strong work ethic and travel. The position includes a competitive salary and bonus. A very substantial portion of compensation will be incentive-based. Chicago-based candidates are preferred but others will be considered. The candidate will report to the CEO. For confidential consideration, send resume and salary history to careers@Jordancf. com.