Apr. 7: Mortgage jobs & opportunities; HAMP challenges; state & lender updates; is flood relief on the way?

Rob Chrisman

Rob Chrisman began his career in mortgage banking – primarily capital markets – 31 years ago in 1985 with First California Mortgage, assisting in Secondary Marketing until 1988, when he joined Tuttle & Co., a leading mortgage pipeline risk management firm. He was an account manager and partner at Tuttle & Co. until 1996, when he moved to Scotland with his family for 9 months. Read more...

I don’t know too many people who look forward to dusting of their resumes, trying to squeeze into an interview suit, and making it look like their last job went precisely as planned. But such is the case with the modern worker, and very few people will spend any length of time with just a single firm; it’s the new-new economy where according to BLS the median tenure for workers is right around 4.5 years. Individual tenure varies by occupation, educational level, etc., of course, but what happens with displaced labor during economic slowdowns? The common thought is that workers who have been laid off from a certain sector or industry (remember 2008?) dust off their transferable skill-sets and hit the pavement outside their comfort zone. But do they? The San Francisco Federal Reserve recently released an interesting paper in which they address this very topic entitled Career Changes Decline during Recessions.

 

Speaking of jobs, and lender opportunities, a well-capitalized Asset Management firm is looking to acquire a small or medium sized FNMA, FHLMC and GNMA Direct Seller/Servicer/Issuer.  One, two or all three of these agency approvals along with numerous state licensing approvals is optimal. A servicing platform is not required but would be welcomed. Contact Lawrence Holguin at lholguin@mtgss.com for a confidential inquiry.

 

PMAC Lending Services is growing and is seeking experienced Wholesale Account Executives to expand its California team in Ventura County, Los Angeles, and San Diego, and licensed Mortgage Loan Originators for its new location in Pasadena. “As a PMAC AE you will be able to offer the programs, pricing and superior service you need to succeed in today’s purchase market. And as a MLO you will be given quality leads on a daily basis and enjoy a lucrative compensation plan.” PMAC is a direct seller to all agencies and has a substantial servicing portfolio. We stay focused on keeping everyone involved up-to-date from the day the loan is submitted to the day the loan funds. With the experience, resources and exceptional service standards at PMAC, you’ll see why we deliver……simply better home loans.” To apply for these positions, please go to:  https://careers-pmac.icims.com/jobs/intro?hashed=0.

 

And on the vendor side, Alight Planning, a San Francisco Bay Area top provider of enterprise performance management applications, is looking for Mortgage Finance Sales Executives. “AlightMortgageLending is the leading strategic and financial planning application for the mortgage banking industry, and provides instant insight into warehouse utilization, staffing optimization and cash flow requirements allowing users to maximize profitability and maintain compliance. If you’re a high-energy, mortgage-industry sales person this is an exciting time to join a rapidly growing software company. Compensation includes results-based equity participation.” To learn more please see www.alightplanning.com/company/opportunities.

 

Remember HAMP? What happens to a sizeable portion of HAMP borrowers after their loan resets from, say 1% to the current market? They re-default, and this article sheds some light on what servicers like Ocwen and Nationstar are facing: http://www.fool.com/investing/general/2014/04/05/mortgage-resets-are-beginning-and-things-could-get.aspx.

 

I really wish I hadn’t read K&L Gates’ article covering the lessons learned from the first 35 CFPB enforcement cases, mainly because of the title We’ve Only Just Begun; not only do I have that song stuck in my head now, I’m starting to think my musical library is missing a mixed-tape of The Carpenter’s, and the Bee Gees, greatest hits. Regardless, the article is an interesting read and worthy of a few minutes. It’s framed in three important sections, the first being a look into the numbers which have been generated since the Bureaus inception; which include the number of cases, to how many are brought administratively versus in court, to the frequency with which individuals are named. In the second part K&L address in detail the remedies and sanctions which have been imposed as a cost of resolution. Finally, the article makes nine observations about the current program.

 

Yes, most parts of the nation are enjoying some spring weather, but the threat of flood is still present. The new flood bill was signed on March 24th, but that doesn’t mean home owners are seeing any price relief yet. In fact, on FEMA’s site is only an encouragement to buy flood insurance (http://www.fema.gov/news-release/2014/04/02/now-time-buy-flood-insurance) with no information on the changes. Lenders are wondering how long it will take to get relief back to homeowners. Of course the Biggert-Waters Act attempted to remove the subsidies and have the government sell flood insurance at market rates; it was a failure: government attempts to issue insurance rates at market rates (when they’re the only market) caused premiums to skyrocket. The private market has tried to step in to fill the void (http://www.privatemarketflood.com/) but the U.S. Government has decided to jump back in this past month to address this “injustice” (http://www.bostonglobe.com/2014/03/28/help-for-homeowners/fTtrthaDyaHsYpmeJg0zJP/story.html). As lenders know, on a relative basis higher premiums impact low income owners more than high income owners (http://thinkprogress.org/economy/2012/11/01/1121831/stossel-flood-insurance-hypocrisy/). On veteran originator wrote, “My client was quoted $7,377/year when the current owner is paying $458/year. That is a difference of $576/month (or $117,000 of borrowing power at 4.25% with a 30-yr amortization). Needless to say, my client is not buying the home at FEMA’s current rates.

 

I’m confused. What qualifies as “a lot of money” these days? Is $4.3 Billion considered a lot? I’m fairly confident, with $4.3B to swing around, one could make a competitive bid for the mining rights to downtown LA. According to a recent OCC study, that’s the estimated number which the “Volker Rule” will cost U.S. national banks, as they comply with legislation which curbs specific arbitrage/speculation trading. According to the OCC’s report, “The range of our cost estimate primarily reflects the uncertainty of the final rule’s impact on the market value of banks’ investments.” After Volcker, the market value “could drop by up to 5.5 percent.” Selling the restricted assets after such a decline could cost the banks as much as $3.6 billion, according to the report. The remainder of the costs would largely come from as much as $541 million in compliance and reporting burdens.

 

Let’s catch up with some notable recent state-level changes.

 

Virginia has recently updated their lending compliance to include limiting the amount of flood insurance required by lenders, as well as, allowing for the issuance of temporary transitional mortgage loan originator licenses. The state recently amended Code of Virginia (6.2-412) stating that lenders cannot require a borrower to carry general property insurance or flood insurance greater than the replacement value of the property. Regarding temporary mortgage licenses, the state’s General Assembly approved legislation to allow the issuance of these licenses provided the applicant falls into either category of: those who maintains a license to originate loans from another state, or, for those who were registered loan originators within two months prior to applying for a transitional license.

 

Pennsylvania recently amended provisions of the Pennsylvania Consolidated Statutes regarding deficiency judgments in House Bill 84. Under the new law, the following actions must be completed within six months following execution and delivery of the sheriff’s deed for property sold in connection with the execution proceedings: a petition for the establishment of a deficiency judgment, and a petition for re-determination of fair market value. The bill takes effect immediately.

 

Mississippi has changed some rules by clarifying, and identifying certain information regarding what must be included in an instrument pertaining to real property that is presented to the applicable chancery court clerk for recording. The information relates to the name, mailing address and telephone number of every grantor, grantee, borrower or other party to the instrument. These provisions are effective on July 1, 2014.

 

And let’s play some catch up on relatively recent investor, lender, and vendor news. As always, it is best to read the actual bulletin for full details, but this will give you an idea as to trends out there.

 

United Guaranty Corporation has named Tom Parrent Chief Risk Officer (CRO). Parrent comes to United Guaranty from American International Group, Inc. (AIG), where he had been Senior Managing Director of Asset Risk Analytics within Corporate Enterprise Risk Management since 2012.

 

Fannie Mae has thrown down the proverbial gauntlet to data ne‘er-do-wells; the agency will now be issuing warning letters to, and assessing compensatory fees on servicers that submit late or inaccurate reports. In Servicing Notice: Late or Inaccurate Mortgage Loan Reporting Fannie announced that, effective May 1, 2014, it will begin enforcing the new doctrine.  Currently, the agency sends a Failed Business Rules Report to a servicer that fails to submit its investor reporting system reports on a timely basis or fails to use the correct data and formats. After May 1st, a servicer may be assessed fees which are structured to reimburse the agency for “internal administrative costs in tracking, reporting, and correcting these errors.” So what’s the penalty, you ask? The greater of $250 or $50 per mortgage loan, up to a maximum of $5,000, for the first instance of late or inaccurate reporting; greater of $500 or $50 per mortgage loan, up to a maximum of $10,000, for the second instance of late or inaccurate reporting (if it occurs within one year of the first instance; and the greater of $1000 or $50 per mortgage loan, up to a maximum of $15,000, for each subsequent instance of late or inaccurate reporting.

 

Will the U.S. Government ever get around to addressing whether or not MI premiums should be tax deductible? It has a ways to go, but progress is “USMI applauds the members of the Senate Finance Committee for voting on a bipartisan basis today to extend vital homeowner tax relief. We are particularly pleased that the bill continues to recognize the tax-deductible treatment of mortgage insurance premiums for low and moderate income borrowers.  We look forward to working constructively with Congress towards enactment of this important tax relief for homeowners.”

 

Sun West, an industry leader in Reverse Mortgage securitization, has published an informational paper on the upcoming demand of Reverse Mortgages. Please CLICK HERE to access the paper. Take advantage of Sun West’s Reverse Mortgage training tools today. With the depth of our training materials and technological infrastructure, you can start originating Reverse Mortgages within a few weeks. Take pride in helping seniors achieve a relaxing and comfortable retirement.

 

In response to the discontinuation of the Federal Reserve Board CD rates, Fannie Mae is requiring seller/servicers to use the LIBOR rate as published in The Wall Street Journal

Freddie Mac is now allowing lenders to submit any missing or incomplete Performing Loan review documents and will be providing a list of specific documentation that is missing, incomplete, or otherwise needed to make the final loan decision.  The same process will be used for Non-Performing Loan reviews.

 

US Bank will now allow borrowers to pay off revolving debt to qualify on all loan types provided that they can supply sufficient documentation in the form of a copy of the cancelled check, the paid statement from the creditor, or a credit supplement showing that the balance has been paid to zero as well as evidence of the account being closed.  Accounts that are paid off at closing must be reflected on the HUD-1, and the file must include an Authorization for Account Payment/Payoff and Closure form.  Underwriters will need to source and verify all funds used to pay off the debt.

 

After Friday’s nonfarm payroll excitement, we find ourselves in a lull of scheduled-market moving news. Nonfarm payrolls increased across most industries in March, signaling that the recovery is broadening and likely gaining momentum as payrolls rose by 192,000 while the unemployment rate was unchanged at 6.7 percent but the labor force participation rate and employment-population ratio both increased. Looking at the whole week, reports on manufacturing, motor vehicles sales, construction spending, and aggregate hours worked show the economy bouncing back from weather-induced setbacks earlier this year. The employment data was in line with expectations that the Federal Reserve will continue to reduce stimulus while keeping interest rates low. Employment in January and February was also revised higher, showing that the effect on the labor force from weather was less significant than previously thought

 

This week we don’t have much to talk about until Wednesday’s FOMC Minutes from the previous fed meeting. On Thursday, April 10th, Jobless Claims will product the number of individuals filing for unemployment insurance for the first time, and we will also have some import price numbers. Friday finishes the week with the Producer Price Index (measuring inflation, or lack thereof, at the wholesale level), and the University of Michigan Consumer Confidence number. In the early going agency MBS prices are nearly unchanged from Friday’s closing levels, with the benchmark 10-yr. sitting around 2.71%.

 

 

Watch your age in the upper right corner as it goes up and (in my case) down as you answer the questions about how long you will live. This is a simple 13 question calculator, developed by Northwestern Mutual, which estimates your life expectancy: http://media.nmfn.com/tnetwork/lifespan[media.nmfn.com].” Worth the two minutes – thank you Joe F.!

 

Rob

(Copyright 2014 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)