Welcome to the autumn equinox. How about this? There have been no public CFPB enforcement actions or consent orders dealing with QM, ATR, or TRID. Zero, zip. Has the CFPB realized that companies are genuinely trying to adhere, and that having 100% TRID error-free originations is impossible? Or that that regulation through enforcement action is not a good idea, a concept advanced by lenders, state & regional trade groups, and the MBA? Certainly there are violations - just look at pages 17 & 18 of the Supervisory Highlights. Giving lenders instructions, and time for continued improvement, rather than taking away half their net worth via a penalty is constructive. But as my cat Myrtle seems to believe, "Just because there aren't heads impaled on the castle wall doesn't mean the beatings in the dungeon have stopped."

Freddie/Fannie Updates Directly from the Agencies

Let's play some catch up from recent weeks of changes in the conforming conventional arena in F&F's race to trademark acronyms & phrases. (Remember when you started in the industry and you thought there were real owners named Fannie & Freddie?)

Down the list a ways, behind tax, immigration, and health care, lays GSE reform. "We are increasingly concerned about efforts to derail comprehensive reform. We urge both Treasury and FHFA to focus on continuing to work with Congress to end conservatorship through comprehensive, bipartisan, legislative reforms." So said the MBA in a letter to Secretary Mnuchin and Director Watt.

Freddie Mac is re-imagining the mortgage experience to create a smarter, simpler, and less costly origination process. We're using big data and advanced analytics to offer an automated alternative to an appraisal through our new automated collateral evaluation (ACE) for certain loans submitted through Loan Product Advisor, our next-generation automated underwriting system and the gateway to Loan Advisor Suite. As of Sept. 1, ACE became available for purchase and refi transactions. This means you can potentially shave 7-10 days off the time it takes for loans to close, and save your borrowers in some instances up to $300 to $700 on the appraisal fee (Source: Freddie Mac Strategic Delivery and lender feedback). Visit the Loan Advisor Suite web page or Single-Family Seller/Servicer Guide Bulletin 2017-13, to check eligibility.

Fannie Mae announced a newly enhanced Hybrid Adjustable-Rate Mortgage loan with flexible, long-term financing and attractive prepayment options aimed at serving small-loan multifamily borrowers. Fannie Mae's Hybrid ARM is a fully amortizing loan with options for a fixed rate in the first five, seven, or 10 years, automatically converting to an adjustable-rate mortgage for the remainder of the loan term with no balloon payment. The financing will be available for properties with 5 to 50 units and for loans of $5 million or less. Proceeds from the loans can be used for acquisitions or refinancings.

Fannie is working with credit repository Experian to add trended data to credit reports for submission to Desktop Underwriter (DU). In 2016, the DU credit risk assessment began using trended data from credit repositories TransUnion and Equifax. Now, the Experian single in-file has been updated to include trended data. Credit reporting agencies and lenders will work to adopt the Experian file with trended data, which Fannie Mae expects to see included in all DU transactions by mid-December. Lenders do not need to take any action, but can obtain details from their credit report suppliers. 

Freddie's Single-Family Seller/Servicer Guide (Guide) Bulletin 2017-20 announces updates to certain credit underwriting requirements, New 5-year ARM option for super conforming mortgages, flexibilities in certain appraisal requirements, more flexible owner-occupancy requirements for new condominium projects, updates to condominium insurance requirements, and more.

Freddie announced it has completed requirements for its new high loan-to-value (LTV) refinance offering, Freddie Mac Enhanced Relief Refinance in Single-Family Seller/Servicer Guide (Guide) Bulletin 2017-17. The new offering aligns with the Federal Housing Finance Agency directive and provides refinance opportunities to borrowers who do not qualify for standard refinance programs because of high LTV ratios. It is also formalizing the previously announced extension of Freddie Mac Relief Refinance Mortgage - Same Servicer and Open Access through 2018 to make sure high LTV borrowers continue to have refinance opportunities until the new offering is available. 

Freddie posted Investor Reporting Guideline changes in Bulletin 2017-15. Updates include: ongoing Investor Reporting Change Initiative, including additional information on customer testing as well as transition and cutover strategies, Uniform Instrument requirements and servicer impacts from Guide Bulletin 2017-10.

The Fannie Cash Remittance System (CRS) implemented several user interface enhancements, including updates to the Contact Information and Drafting Instructions sections, extended submission time for updating or creating banking instructions, and more. Review the Release Notes for details.

The Federal Housing Finance Agency (FHFA) announced that the Home Affordable Refinance Program (HARP) will be extended to Dec. 31, 2018. In addition, F&F will introduce new high loan-to-value (LTV) ratio same-investor refinance options for loans with note dates on or after Oct. 1, 2017, with a 15-month seasoning requirement. The high LTV refinance option will provide refinance opportunities to borrowers with existing Fannie or Freddie mortgages who are making their mortgage payments on time but whose LTV ratio for a new mortgage exceeds the maximum allowed for standard refinance products. Under the new option, as with HARP, the refinance must provide a borrower benefit, such as a lower interest rate. Unlike HARP, the new option will not have an expiration date. To preview Fannie's new high LTV refinance option, read the fact sheet; detailed requirements will be provided in a future lender communication.

Fannie is introducing a new web-based application, Fannie Mae Invoicing, on Sept. 25 to eventually replace the Servicer REAM Deficiency Billing System (SRDBS). Providing easy access to consolidated loan-level invoices and direct communications with the operations team to quickly resolve claims, this new system replaces manual processing and gives servicers a significantly improved experience. Read more in the fact sheet and FAQs on the Fannie Mae Invoicing page.

Freddie posted Investor Reporting Guideline changes in Bulletin 2017-15. Updates include: ongoing Investor Reporting Change Initiative, including additional information on customer testing as well as transition and cutover strategies, Uniform Instrument requirements and servicer impacts from Guide Bulletin 2017-10.

Capital Markets

From the capital markets trenches I received this note from a hedging exec. "Now that rates are on the rise again and the ever-dwindling pool of refinances is once again shriveling, it is natural for the sales staff to feel like they are losing deals to competitors over rates. Everybody wants to have the lowest rates and be able to win every market-sensitive buyer, but obviously that isn't realistic in practice. Each company will have a different amount of overhead, anywhere from 50bps to sometimes as much as 250bps for marketing, compensation, and everything else including keeping the lights on.

"With the variance in cost to originate a mortgage varying by company, you can see how some are able to offer lower rates. Averaged out across the yield curve, each .125% change in note rate is going to add or subtract 45-75bps to execution on the back end. That is the trade-off senior management needs to weigh in deciding where they come down on the age-old volume versus profit quandary. It's easy for a member of the sales staff to think the company should sacrifice 50bps on a loan to win business, but often those 50bps are the difference between the company ultimately making or losing money on that file." Thanks!

In terms of the actual bond market, not much happened Thursday after all was said and done. Intra-day a morning bounce from post-FOMC selling was largely retraced into the afternoon. For yield curve fans, the 2s10s spread ticked up by a basis point to 85 bps. The weekly jobless claims number indicated that employers appear to be reluctant to cut their payrolls in a tight labor market.

Today there is no scheduled news to move rates. We find the 10-year yielding 2.26% and agency MBS prices better by .125 versus yesterday's close.

Jobs, Personnel, and Programs

Republic Bank and Trust Company in Louisville, KY. is pleased to welcome Steve Shields to its Warehouse Lending team. "Steve's addition to the group as Vice President, Relationship Manager is a terrific fit to the organization, Steve's 20 + years of mortgage banking experience including his most recent 13 years of supporting warehouse lending clients in a Relationship Manager role brings a wealth of experience to the already strong warehouse lending team at Republic. Steve will bring great value to his clients", shares Kevin Rost, Managing Director of the Republic Warehouse Lending group. Steve is actively expanding his customer base and can be reached directly at 801-647-4000.

Pacific Union Financial, LLC has hired Caleb Mittelstet as the new Executive Vice President of Distributed Retail. Mr. Mittelstet will join the Executive team under the leadership of Chief Production Officer, Andy Peach. He brings more than 16 years of mortgage origination and sales leadership experience. He will oversee all Pacific Union Distributed Retail production at the 50-plus branch locations nationwide and will be active in efforts to expand and grow the channel. If you are interested in learning more about joining the Pacific Union Distributed Retail team, contact Amy Gallow. 

New America Financial Corporation announces its new 100% financing program for homebuyers, allowing borrowers to purchase a home with no money down. The New 100% financing program will help more families become homeowners by extending down payment assistance of up to 3.5% in the form of a gift, forgivable or soft-second mortgage to borrowers. "New America Financial was built upon our dedication to the communities we serve, our 100% financing program is a great step forward in this mission," said Founder and CEO, Michael Rapaport. There is no first-time home buyer requirement on this program and eligible home buyers can receive down payment assistance, forgivable or soft-second mortgage, with rates as low as 0% to help qualify. New America Financial Corporation's emphasis on building strong relationships with buyers and referral partners has propelled the company to notable expansion and achievements since its inception in 2006, including recognition on the Inc. 5000 List of America's Fastest-Growing Companies for 2017.

As a full-service mortgage banker, Assurance Financial is seeking motivated, experienced Branch Managers and MLOs who want to take their career to the next level. As seen in Scotsman Guide, leaders who join our team enjoy our reputation of closing loans on time, with great back-office support, ready-to-use marketing and advertising tools, and a state-of-the-art CRM. Close more loans, fill your pipeline, and enjoy your career with Assurance Financial. Contact Sales Recruiting Manager Paul Peters, CMB at 225-239-7948 or visit LendTheWay.com/Careers.

Altisource announced that Phil Huff has joined the company as VP and Head of Valuations, responsible for the growth and advancement of Altisource's Valuation Business including Springhouse, a full-service appraisal management company, where he will serve as President and CEO. Congrats!

This jobs and opportunities contrast with layoffs, of course. One recent large "RIF"/relocation/shift was believed to have been carried out at Blackstone's Stearns Lending. The rumored moves impacted Capital Markets, post-closing, and Accounting, among other groups; and it is thought that only legal, accounting, and IT are being left in California. It is whispered that most everyone is being transferred to Texas. Rumors only!