No wonder companies are hiring. The Mortgage Bankers Association raised its forecast for loan production this year to $1.1 trillion in residential mortgage origination, up $100 billion from its last forecast. Low mortgage rates have brought in higher than expected refinance volume, while purchase volume has been less than anticipated. But put those pennies aside: despite lower rates, weaker projected economic growth in 2012 led to a reduction in MBA's origination forecast for that year to $931 billion, which would be the lowest volume originated since 1997: MBAForecast.
Speaking of hiring, Amerisave Mortgage is looking for underwriters all over the nation. It been in business since 2001, is a direct lender that lends in all fifty states, and funded over $7 billion last year. Amerisave is searching for conventional "Frontline" Fannie Mae underwriters (with a minimum three years of experience) due to its large scale growth. If you know of someone who might be interested in this position, please send an email to Robert Wilkes at rwilkes@Amerisave.com.
And in America's heartland, VAMortgageCenter.com is looking for a top level Operations manager for its Kansas City Ops Center. The company started operations in 2003 and on pace to do $2 billion in fundings this year. This position will oversee VAMC's growing retail operations department of underwriters, processors, and closers - the company has over 600 employees. Experience managing a large operations staff, as well as experience with VA, FHA and USDA loans is a must. Email resume or letter of interest to: Leigh Ann Wanserski at email@example.com.
Last week the commentary noted anecdotal reports of loan reps changing companies. I received this note from Nicole Shown at STRATMOR: "Rob - your reader's anecdotal observation that loan officers are shifting 'big time' is not supported by emerging data. We are in the midst of our Loan Officer Compensation Surveillance Program designed to provide lenders with hard data regarding compensation plan changes and loan officer movement. We have 23 participant lenders, both bank-affiliated and independent, that report loan officer turnover each month (along with other metrics on compensation). These lenders are spread throughout the country and range in volume from $20-$200 million per month. Our data shows that on an annualized basis, loan officer turnover is running at lower than historical averages. We typically see loan officer turnover in the 35% - 40% range and our sample is at around 20%. The independent mortgage banks are showing greater turnover than the average at around 30% but this is still below historical averages, and the bank-affiliated lenders are showing much lower than average turnover at around 10%. If your readers have questions, I can be reached at firstname.lastname@example.org."
(Given that, an industry vet noted, one could argue that the tremendous contraction in the industry has left only the fittest LO's in place. Arguably, in the past, when turnover typically running 40%, much of the turnover was being driven by below average LOs who couldn't make a living or were let go. So, the much lower turnover we are seeing may be attributable to an upgrade in average LO quality, assuming that better LO's are less likely to turnover than weaker LO's.)
We appear to be marching toward a reduction in the temporary loan limits, although there are numerous attempts to extend it. HUD weighed in last week with its FHA single-family loan limits which are effective on or after October 1, 2011 through December 31, 2011. "For Forward Mortgages, the FHA floors for the period October 1, 2011 through December 31, 2011 are $271,050, $347,000, $419,425 and $521,250 for 1-, 2-, 3- and 4-unit dwellings, respectively. The FHA ceilings are $625,500, $800,775, $967,950 and $1,202,925 for 1-, 2-, 3- and 4-unit dwellings, respectively. For all other areas, i.e., those where 115 percent of the median home price for the area is in between the floor and the ceiling, the limit shall be at 115 percent of the median home price. For areas under Section 214 of the National Housing Act (Alaska, Guam, Hawaii and the Virgin Islands), higher ceilings of $938,250, $1,201,150, $1,451,925 and $1,804,375 for 1-, 2-, 3-, and 4-unit dwellings, respectively, apply. For HECMS, the maximum claim amount will remain at $625,500."
So the FHA conforming loan limit on forward mortgages is set to drop in October but not so for reverse mortgages. As HUD is not updating median prices at this time, there is no appeal period associated with the change of loan limits on October 1. And "For calendar year 2012, HUD does expect to announce proposed maximum mortgage amounts in November 2011. Once the principles set forth in the Mortgagee Letter announcing the loan limits that take effect on October 1, 2011, there will be no further declines in any loan limits for 2012, absent a change in authorizing legislation." Complete schedules of FHA mortgage limits for all areas for forward mortgages will be available through the downloadable file links found at LoanLimits with a "frequently asked question site" found at FAQ. Or fire off an e-mail to email@example.com or by visiting Answers. And if that isn't enough, read the Mortgagee Letter at Letters.
Lender news is filled with schedules for the impending change although there is a chance that limits will be extended. Fifth Third got the word out to its clients, "The temporary loan limit expires on Friday, September 30, 2011 for Agency Super Conforming Products; applications must be received by Fifth Third no later than Friday, August 26, 2011 and fund by Wednesday, September 28, 2011 regardless of the lock expiration date, in order to meet the agency loan limit change...FHA loans that are affected by the loan limit change for the counties impacted must be locked and applications received by Fifth Third no later than Friday, August 26, 2011 and fund by Wednesday, September 28, 2011 regardless of the lock expiration date, in order to comply with the current proposal from HUD."
SunTrust also told correspondents, "The Agency Plus temporary high-cost loan limits and Federal Housing Administration (FHA) 2011 maximum loan limits are ending. Correspondent lenders must close and deliver the loan package by Sept. 16, 2011, regardless of the lock expiration date, on transactions utilizing loan amounts under the Agency Plus temporary and FHA high-cost loan limits. The Veterans Administration (VA) is extending their annual high-cost county loan limits until Dec. 31, 2011."
Stearns Lending told brokers, The "Temporary" high-cost loan limits expire on October 1st 2011, at which point the "Permanent" high-cost loan limits are in effect. To ensure your loans fund prior to the expiration date, please note the following cutoff dates: Submission cutoff date August 26th, Docs must be drawn by September 20th, Notes must be dated on or before September 29th, and Loan must to fund by September 29th."
Freddie Mac announced a number of changes in Mortgage Eligibility and Credit Underwriting guidelines last week worth noting. For second homes and investment properties, the borrower will not be allowed to have "any affiliation with or relation to the builder, developer or the property seller for mortgages for newly constructed homes that are purchase transactions." And for second homes, "each borrower individually and all borrowers collectively must not own and/or be obligated on more than four 1- to 4-unit financed properties, including the subject property. Ownership of commercial or multifamily (five or more units) real estate is not included in this limitation. Rental income from the borrower's second home or 1-unit primary residence may not be considered as stable monthly income in the credit qualification analysis. The housing expenses related to a borrower's current primary residence must be used in computing the borrower's monthly housing expense-to-income ratio." It is best to view the extensive u/w changes: Freddie.
Credit Unions are certainly susceptible to the real estate downturn. Saddled with a heavy load of mortgage defaults, Synergy One Federal Credit Union (Manassas, VA) merged with Fairfax-based Apple Federal Credit Union. Apple is the fifth largest in the Washington DC area, and the merger will give Apple FCU, which serves schools in Northern Virginia, $1.53 billion in assets, some 143,000 members and 22 branches: AppleofmyEye.
We had one bank closure Thursday, with a few more on Friday. To sum up, in Georgia First Southern National Bank was closed and the deposits taken over by Heritage Bank of the South, up in Illinois First Choice Bank was taken over by Inland Bank & Trust, and in Florida Lydian Private Bank was taken over by Sabadell United Bank, National Association.
Bank of America recently warned its correspondents that it issued a disaster declaration for Missouri and Nebraska due to the recent flooding. (On a personal note, on my flight into Kansas the other day, the flooding one can see from the airplane is immense.) BofA also sent out an update addressing various transactions "The restriction that gifts and gifts of equity are not allowed on second homes is removed from Transactions with Family Members guidelines." For principal residences, "Guidelines for owner-occupied transactions are clarified to include that borrower(s) must occupy the subject property within 60 days of the Note date," and so on. BofA also revised several of its agency price adjustments to high balance loans, fixed and ARM.
Both Chase and GMAC also publicized pricing adjustment changes, Chase to its 10-yr product (lessening the bonus from 1.25 to 1.00) and GMAC to its LPMI grids for various FICO & LTV combinations, along with 2nd home, rate & term refi, loan amounts above $417k, and different amortization terms.
Last week was quite the week for rates, as 10-yr Treasury yields reached a low below 2.00% for the first time since 1945, and MBS prices climbed to new highs. At these levels, though, it may be difficult for yields to move much lower. Tradeweb volume averaged 114% of its 30-day moving average, and 15-yr MBS securities made up about 20% of the overall volume.
For news this week, there is zip today, New Home Sales tomorrow, Durable Orders Wednesday, and revisions to second quarter GDP (old news?) will be released on Friday. In addition, there will be Treasury auctions tomorrow, Wednesday, and Thursday. The 10-yr note yield closed Friday around 2.07%, and this morning we find it at 2.12%. MBS prices, which on Friday were worse by about .250, are worse about .125.
(Today's humor is political, does not necessarily reflect the views of the author, and is easily converted to the other party.): RonaldR