Word on the street has House and Senate negotiators agreeing to scale back the mortgage interest deduction in the latest version of the GOP tax bill. The move means homeowners will now be able to deduct interest on the first $750,000 of a new mortgage, down from the current limit of $1 million. Legislation has been introduced in Congress recommending that the CFPB employee pay structure be aligned with the rest of the government. In the meantime, in other government related news besides Alabama’s vote, Movement Mortgage must pony up $1.1 million for California mortgage servicing violations. “Overcharged borrowers and serviced loans without a state license” – not a long-term recipe for success.
Fire and Disaster Updates
One should always start with the FEMA website for the latest on Federal declarations. It is these declarations that drive lender and investor policies and procedures.
Wells Fargo Funding spread the word to clients, "If your operations are impacted by the California fires, please contact your Regional Sales Manager or a member of your regional team to discuss options around suspense fee relief on Best Effort and Mandatory Loans. Watch for communications from Wells Fargo Funding with details for handling properties in case they are affected by the fires. For more information, refer to our Disaster Policy in Seller Guide Section 820.19, FHA and VA Handbooks, and the FEMA website for disaster declarations. As always, contact a member of your regional sales team with any questions."
Pacific Union is monitoring the impact of the wildfires currently occurring in Santa Barbara and Ventura counties in Southern California. The Federal Emergency Management Agency (FEMA) has not published impacted counties but has declared a state of emergency in California due to the wildfires.
Weslend Financial posted a map of current affected area from Ventura County Sheriff OES, Office of Emergency Services. Thomas Incident Map and Ready Ventura County and is asking clients to review all pipelines to identify those properties that may be affected. All properties within the Fire Perimeter and Mandatory Evacuation Zones are subject to its disaster area policy. All other properties within the county, especially those within close approximation to this fire, will be evaluated by Underwriting / Credit Risk to determine if the subject property falls under current disaster area policy.
Due to the wildfires currently burning in California, Flagstar Bank is suspending loan closings and funding for properties located in certain zip codes. Once closing and funding has resumed, Flagstar will provide the re-inspection requirements, as applicable. Loans that have already been issued a Final Approval Clear to Close status will be placed in an Approved with Conditions status until a re-inspection is performed. Appraisal re-inspections are not required to be completed by the original appraiser; however, a Flagstar Bank eligible appraiser must be utilized. For loans that have an appraisal that was ordered via Loantrac, an appraisal re-inspection may be requested via the Appraisal Management module by selecting "Yes" to the "Do you need a Property/Disaster Inspection" question.
Lenox/WesLend Disaster Area Property Valuation Requirements are as follows: If the effective date of the appraisal was on or prior to the Disaster Date Then the valuation must be validated with the following (interior and exterior only): 1004D (Disaster), CDAIR or interior and exterior Disaster report. Effective for Conventional Loans, Non-Conforming / Jumbo loans, Non-QM and All FHA, VA and USDA. Appraisals on or prior to the Disaster Date and a Property Inspection Waiver (PIW) or other alternative valuation tool was used, a full appraisal with interior and exterior inspection is required. Appraisals effective on the day after the Disaster date until the expiration of the disaster notice (generally 120 days from the date of the original event, but may be extended), a full appraisal with interior and exterior inspection is required.
New Leaf Wholesale: For the California wildfires, if the subject property is in the counties/impacted areas with a completed appraisal dated prior to the incident start date, a 1004D re-inspection completed by the Appraiser must certify that the property is free from the applicable natural disaster damage. For appraisals in the impacted areas dated during the incident period, the Appraiser must: Comment on the condition of the property and any effects on the marketability AND Add detailed language into the body of the appraisal confirming that the property is free from the applicable natural disaster damage OR provide a 1004D re-inspection to certify that the property is free from the applicable natural disaster damage. For appraisals in the impacted areas dated after the incident end date*, the Appraiser must: Comment on the condition of the property and any effects on the marketability AND Add detailed language confirming that the property is free from the applicable natural disasters damage into the body of the appraisal. *NOTE: This requirement is necessary for 30 days after the incident end date.
Although AmeriHome is not requiring countywide disaster inspections for properties affected by the Southern California wildfires, Sellers are reminded that they are responsible for determining potential impact to a property located in an area where a disaster is occurring or has occurred, irrespective of whether a property was included in the area covered by a disaster declaration. If a Seller has reason to believe that a property might have been damaged in a disaster, the Seller must take appropriate action to ensure that the property is free from damage and meets AmeriHome requirements at the time of purchase by AmeriHome.
Turning to rates, the 10-year closed at 2.40% and yesterday's curve flattening reversed as spreads widened. Prices declined following a stronger PPI of +0.4% vs +0.3% m/m expected. With producer prices rising, profit margins will come under pressure if the increases cannot be passed along to consumers. Earlier in the morning the NFIB Small Business Optimism Index soared to 107.5, a level that has not been seen since 1983, though the index did hit 107.4 in 2004. Of course, this optimism is resting on whether Washington can follow through on tax reform.
Although at 8:30AM we will have the Consumer Price Index, a measure of inflation, today the market will be focused on the FOMC decision at 2PM EST with a 25bps increase in the Fed Funds Rate mostly priced in. Updated dot plots for rate hike expectations in 2018 will be released as well. (What's a dot plot? Here's one from September.) Current projections forecast 3-4 rate hikes for the upcoming year as the Fed continues to move slowly to unwind the post-crisis stimulus. Tax reform and its potential positive impacts on the economy, however, could influence the Fed to move quicker in 2018. Rounding out the economic calendar today are weekly mortgage applications (-2.3%, , CPI at 8:30am, and the latest Weekly Petroleum Status Report. We're starting the day with the 10-year's yield near 2.41% and agency MBS prices worse a smidgeon versus last night's close.
Employment, Promotions, and Business Opportunities
PennyMac is launching its wholesale lending division, PennyMac Broker Direct, and is looking for motivated candidates to join its growing sales team in Westlake Village, CA. As one of Fortune's Top 100 Fastest-Growing Companies, the account executive roles will fill up quickly, so please contact Matt Sjolund (805.225.7352) to learn more and get in on the ground floor! You can also apply directly on LinkedIn: Client Success Specialist and Senior Client Success Manager - PennyMac Corporate NMLS ID# 35953.
"Freddie Mac is Reimagining 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 is 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). Ready to learn more? Visit the Loan Advisor Suite web page."
Floify, the mortgage automation app for modern LOs, has just reached another major milestone by surpassing 253,000 registered users on their industry-leading platform. This staggering and widespread adoption of Floify has proven the system's unique ability to meet the diverse needs of LOs and borrowers alike. Since its inception, Floify has grown into a full-fledged mortgage automation solution that streamlines nearly every aspect of the mortgage process. Many of Floify'ssuccesses have been attributed to their robust platform, a customer-first and customer-funded business model, and successful partnerships and integrations with industry titans, including Equifax, DocuSign, AccountChek, and more. If you've been considering Floify, now is a great time to take advantage of this incredible solution. Check out how Floify has helped LOs close loans an average of 8x faster and increase annual loan volume by more than 11%. To experience the power and efficiency of Floify, request a live demo.
Built continues its winning ways after being named Best in Show at the 2017 Digital Lending + Investing Conference, hosted by SourceMedia. The conference brings together the brightest minds in lending, loan investing and fintech to discuss what's next in the consumer finance industry. Earlier this year, Built was named to the HousingWire Tech 100 and won NTC growth company of the year in Nashville. Watch the winning presentation for a peek at their platform or learn more about Built.
Is there an answer to the riddle "are there too few appraisers?" YES, & DVS has the solution! Have appraisers work directly for YOU, the lender, utilizing DVS Direct - meaning your appraisers put your assignments first - producing high quality reports with turn times of less than a week. It's compliant, efficient, cost effective and does everything - appraiser panel management, assigning the most motivated, responsive, and skilled appraiser within seconds, communicating with all parties (even the borrower or realtor on the transaction), keeping everyone informed as to status, delivering the appraisal to the UCDP/EAD and your borrower. DVS Direct even takes care of all the accounting functions such as borrower payment processing and appraiser payments weekly via ACH Direct Deposit, while building the cost into the borrower paid appraisal fee. Couple with integrated LOS' and DVS Review Services, DVS Direct is THE complete solution and it's easy to adopt and deploy. Is 2018 the year you move your company forward and put appraisal issues behind you? Make 2018 exceptional & successful. Contact us - we can help (888.931.0040).
Congrats to Mike Lee! Planet Home Lending LLC announced that he has joined the company as the Senior VP of National Production. Mike leads all sales activities in distributed retail and third-party origination channels throughout the U.S. He is responsible for strategically building and managing corporate and branch franchises, including recruiting, on-boarding and transition activities. Lee will directly recruit and hire top-tier distributed retail branch managers and loan originators in the company's key markets.
Headquartered in California, Sierra Pacific Mortgage Company, Inc., which has retail, wholesale, and correspondent channels, has announced the company's launch of its new Builder Division which will be focused on providing mortgage services for homebuilders, across the nation.