Want to lend money? A common evaluation framework is the Five C's of Credit: capacity, capital, collateral, conditions and character. Let's see what's going on with the collateral side of things, especially with disaster areas - investors sure want to know that the value is there!
Four federal financial institution regulatory agencies issued an exception from the appraisal requirements for real estate-related financial transactions in the parishes declared to be in a major disaster area due to the severe storms and flooding in Louisiana. The agencies will not require financial institutions to obtain appraisals for affected transactions for the time-period specified if certain conditions are met. The exception is being made under the Financial Institutions Reform, Recovery, and Enforcement Act and its implementing regulations. Read the details as outlined by the Department of the Treasury regarding Temporary Exceptions to FIRREA Appraisal Requirements in Areas Affected by Severe Storms and Flooding in Louisiana.
In the last week Fannie turned some heads with a new program destined for rollout in December: the optional DU validation service. "Get Day 1 Certainty with validated income starting immediately, and validated assets and employment effective when DU is updated the weekend of December 10, 2016. Find freedom from appraisals on eligible refinance transactions beginning with the December 10, 2016 DU update. PIWs provide an offer to waive the appraisal on eligible refinance transactions. You'll get Day 1 Certainty with a more streamlined process, and freedom from representations and warranties on property value, condition, and marketability."
In response to Hurricane Matthew in South Carolina and in response to a Federal Disaster Declaration, M&T Bank will enforce the Disaster Re-Inspection Policy for all properties located in the affected parishes of designated Area: Counties of Beaufort, Berkeley, Charleston, Colleton, Darlington, Dillon, Dorchester, Florence Georgetown, Horry, Jasper, Marion, Orangeburg, and Williamsburg. For loans secured by properties, in the designated disaster areas, and appraised prior to the Federal Government / State Government declaration, please refer to the M&T matrix for requirements.
New counties in South Carolina have been declared by FEMA as Major Disaster Areas. Incident Period Date of October 04, 2016, designated SC Disaster Areas: Marion County and Orangeburg County. To view FEMA's recent update on SC, click here: FEMA. For loans submitted with an appraisal dated on or before the incident period end date or for those submitted without an appraisal, Sun West will require an interior and exterior inspection prior-to-funding or purchase of any loans with subject properties that are determined to be at risk. The inspection must verify that the property is sound, habitable and in the same condition as when it was appraised.
While we're on appraisals, it should be of little surprise that homeowners are overestimating the value of their homes, though not by much. In September, according to Quicken Loans, values were 1.26 percent less than what homeowners estimated. This is down from the 1.56 percent gap in August. Quicken's home value index found that home values dropped 0.28 percent from August to September, but increased by a robust 7.78 percent since September 2015. The drop in values comes after four straight months of increases.
Zelman & Associates posted its Mortgage Originator Survey: "Favorable Trends Supportive of Purchase Market." In summation, it states an expected 13% growth in dollar purchase originations in 2016 following robust growth of 18% in 2015. Based on the feedback which has indicated stable growth in purchase applications through the year, Zelman's believes that current origination growth is consistent with this full-year estimate. While it believes the existing credit box is reasonable for most borrowers, there have been several notable developments that are expected to further improve availability. Fannie Mae's most recent update of its automated underwriting engine will provide greater flexibility for consumers with limited credit histories, such as young buyers. Additionally, lenders have introduced several low down payment options and continue to reduce credit overlays, resulting in modest net easing of underwriting stringency and supporting the acceleration in first-time buyer activity. Looking forward, the eventual decline in refinance activity is expected to drive further credit expansion and lessen the challenges with appraisal turn-times that are causing closing delays and higher costs in some markets. Regulatory headwinds, however, remain an overhang.
Yes, a big conference just wrapped up, but more are on the way, along with some interesting training starting next week.
The Mortgage Bankers Association of Metro Washington is holding its annual Mid-Atlantic Lender Conference on Wednesday, November 2nd. Speakers include Bill Emerson (CEO of Quicken Loans), Mitch Kider (Managing Partner of Weiner Brodsky Kider PC), Terry Clower, PhD (Director at George Mason University Center for Regional Analysis), and Mark Bergel, PhD (Founder and Executive Director of A Wider Circle). The conference also features a "Loan Officer Panel of Top Producers" and a workshop for originators presented by Jason Abell, President of Rewire, Inc.
Also on November 2 law firm Mayer Brown is hosting a webinar that will discuss the effects of the PHH Decision on future marketing and advertising arrangements between settlement service providers, as well as the impact on CFPB enforcement of RESPA. Join Phillip Schulman, Andrew Pincus and Holly Bunting at 2PM EDT for a 60-minute webinar to discuss the takeaways from PHH Corporation v. CFPB. "Among other topics, we will address what the court's affirmation of Section 8(c)(2) of RESPA means for your business arrangements and relationships, how the unconstitutionality of a single-director structure of the CFPB impacts the CFPB, whether the CFPB is likely to change how it interprets RESPA and pursues RESPA issues in enforcement actions, and what's next in the case and what happens on remand to the CFPB.
United States Appraisals announced it will host a series of free webinars designed to help mortgage lenders navigate the rapidly changing appraisal industry, and take their appraisal quality to the next level. The first webinar, CU Assisted Appraisal Review, is slated for Nov. 15 at 2 p.m. CST, and will feature expert user tips on the Collateral Underwriter (CU) platform by Fannie Mae and best practices on working with appraisal management companies.
OMBA Members, register now for Tuesday, November 1, 2016 at 10:00 am for its PHH v. CFPB Decision's Impact on Mortgage Lenders. The Presenters for this webinar include Ari Karen, Principal at Offit Kurman & CEO, Strategic Compliance Partners Daniella Casseres, Principal at Offit Kurman.
Register for Plaza's November 1st to learn the types of rural properties that are acceptable per FNMA. In addition, the guidance for distance of comparable properties and clarify some facts regarding what is acceptable or not acceptable will be discussed. Learning will be reinforced with some scenarios from FNMA.
Valuation Expo will be held Nov. 10-12 at the Flamingo Hotel & Casino in Las Vegas, NV. Join lenders, regulators, and valuation professionals at the nation's largest gathering of real estate appraisers. Offering 14 hours of continuing education for appraisers with sessions addressing challenges within the industry and updates from policy makers.
All Regs is offering a Broker to Banker course designed for a mortgage broker that is interested in growing his/her business into a full mortgage banking operation. The course is $600 per person. Upon successfully completing the course, students will earn an industry-recognized certificate of completion. Choose from the upcoming 4-week course sessions Wednesdays, November 2, 9, 16, and Tuesday, November 22, 2016, 2:00 p.m. - 3:30 p.m. ET Tuition includes all course materials.
Automation's Impact on the Economy & Housing Market: at 1PM EDT. In this 60-minute webcast, Mark Fleming, Chief Economist, First American Financial Corporation, will dig into the economic measures used to: justify the "automation angst" narrative, uncover the truth behind the data, and gauge automation's real impact on the housing market.
Fannie Mae's trading desk is offering a demo of the new committing grids and learn how to create and customize your browse price templates. Presenters will also preview upcoming Pricing & Execution - Whole Loan enhancements and answer your questions. Register for a webinar today and read the Expanded Committing Grids Fact Sheet for more info.
Speaking of capital markets, interest rates and the bond markets? Much ado about nothing. As ThomsonReuters put it, "MBS closed lower in price, little changed in spread, as the basis continues to trade directionless despite another pullback in treasuries, heavy demand, and a steeper curve which marginally helped lower coupons outperform on the stack." But certainly, if the demand for agency MBS product continues to be steady, and the supply is dropping, it would suggest that mortgage prices should do well relative to Treasury prices over time. Wednesday the 10-year note worsened about .250 (closing at 1.79%) but the 5-year T-note and agency MBS prices only sank .125.
Rates were already higher this morning ahead of the always volatile Durable Goods (-.1%, ex-food & transportation +.2%) and Initial Jobless Claims (-3k to 258k). at 8:30am ET. The current probability of December rate hike is at 73 percent versus 50 percent a month ago. After the initial numbers we find our benchmark buddy the 10-year at 1.81% with agency MBS prices slightly worse versus Wednesday night.
Jobs and Announcements
Many vendors and lenders are focused on hiring. Millennial workers (defined by the Census Bureau as currently ages 19-35) will comprise 50% of the workforce by 2020, while Boomers (1946-1964) and Gen X (1965-1980) will be about 20% each. Time to think about replacing that old Steelcase desk…
Freedom Mortgage, named the #1 FHA/VA Lender by Inside Mortgage Finance (2Q2016), is actively recruiting experienced top-producing Wholesale Account Executives nationwide, with a specific focus in the Southwest markets of CA, AZ, NV and HI. Freedom's newly appointed Southwest Regional Sales Manager, Brenda Oxford, a successful 18-year industry professional, is excited to speak with you about joining the Freedom Mortgage team. To learn more, contact Brenda at (602) 614-8926 today! Interested in markets outside the Southwest region? Please contact Keith Bilodeau, Senior Vice President, Freedom Mortgage Wholesale Lending Division.
On the retail side, Evergreen Home Loans, headquartered in Bellevue, WA, is expanding its presence in the Arizona and southern CA markets. "To further this quest, Evergreen welcomes Cassidy O'Sullivan to the company as a Talent Acquisition Manager. In 2016, Evergreen has been recognized nationally by Fortune magazine in 3 different categories of Best Places to Work (#12 in Finance & Insurance; #33 best place to work for women, and #19 best small/medium company workplace). With a low 13% turnover rate, originators annually increasing their personal production by over 33% on average, and organic company growth of over 350% since 2013, Evergreen is looking for like-minded originators and branch managers to join our company. To explore opportunities in AZ or southern CA, please contact Cassidy O'Sullivan. To explore opportunities in WA, OR, ID or NV, please contact Talent Acquisition Managers Mike Moyer or Lindsay Larson."
And "It may be time for Halloween, but that doesn't mean your closing times have to be scary slow! Assurance Financial has the right processes, commitment and technology to consistently close loans on time. We're selectively seeking Experienced Mortgage Loan Originators and Producing Branch Managers to help us grow. For more information, contact Paul Peters, CMB at 225-239-7948 or visit lendtheway.com/careers.
In management job news, New American Funding, a national mortgage banker, is seeking an experienced Sales Manager for its Tempe, AZ call center location in addition to licensed loan officers and operations staff. New American Funding is known for its direct marketing lead generation feeding its call centers with live inbound calls from direct mail, television, radio, billboards and more. Rated as one of America's Top 100 Mortgage Companies by Mortgage Executive Magazine the company is committed to its steady expansion reaching out to consumers nationwide. Please contact Al Ortega at (480) 582.0468.
In commercial news, Walker & Dunlop Inc. (NYSE: WD) has agreed to acquire Southern California's George Elkins Mortgage Banking Co. one of the largest remaining independent mortgage brokers. Elkins has served as the direct commercial real estate loan origination arm for numerous life insurance companies, banks, trusts, pension funds, thrifts and other private capital sources since 1922.
STRATMOR recently conducted a survey on the Appraisal Process and Turn Times through its Spotlight Survey program. The results of this survey are now available for purchase. The survey reports on changes in appraisal fees, the timing of fee collection, the use of AMCs vs. APs and appraisal QC and the increase in turn times lenders are experiencing. For example, lenders using an AMC report that appraisals take on average 13 days versus an average of 15 days for lenders using an AP.