Sep. 26: CAN-SPAM primer; Nevada’s ruling on HOA foreclosures has major implications; USDA map update; vendor updates

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...

For something totally un-mortgage related to finish off the work week…as Derek Jeter fades into the sunset to await the Hall of Fame voting in five years, it seems that a certain number of gals have signed memorabilia for doing “certain things”. It reminds me of today’s joke (parental discretion advised) below.

 

And a quick look at trends…I don’t know what you earn on your savings in the bank, but I earn about 0%. I think plenty of others do as well, and plenty of others are thinking that they may-as-well help someone out with it. The National Association of Realtors reports in 2013 about 27% of people who purchased their first home received a cash gift from relatives or friends to help with the down payment vs. 24% in 2012. This is the highest percentage on record.

 

A secondary marketing guy I know was lamenting over the fact that when he signed up to see the rates for an online mortgage company (name being withheld, by the way), that he was inundated with phone calls, then emails for weeks afterwards. When I asked him if his bank had an employee loan program, he said, “ya, but our rates stink.” Moving right along….we all know about the “do not call” list which is federally mandated and prohibits commercial sales calls from ruining our dinners, however, there is no such “do not email” list with government oversight. This does not mean that emails can be used to violate the CAN-SPAM Act which must be adhered to when a commercial message or advertisement is transmitted via email. It’s important to note while attempting to market or advertise that the CAN-SPAM Act covers “all commercial messages defined as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service”.

 

Unlike many other advertisement regulations, the CAN-SPAM Act does not contain an exception for business to business emails. Here are a few items to remember in order to be within compliance (the full PDF file can be accessed via the FTC link I added above): Opt-Out/Unsubscribe Requirement: The email must contain a clear and conspicuous explanation detailing a mechanism for the recipient to opt out of all future emails. All opt-out requests must be honored within 10 business days. The only information recipients can be asked to provide, in order to opt out of future emails, is their email addresses.  No ghost emails permitted: A valid physical address of the sender of the message and/or the advertiser must be set forth in the email [Section 5(a)(5)]. Be transparent: (a) the email must clearly and conspicuously indicate it is an advertisement; (b) the subject line must relate to the body of the email and not be deceptive; and, (c) the “from” header must be accurate and identify the sender on the email.

 

Here’s trouble. The Nevada Supreme Court upheld a law that allows homeowners associations (HOAs) to foreclose on homes ahead of first mortgage providers, solidifying “super lien” priority for HOA claims in Nevada. The decision is expected to reinforce similar laws in other states that have super lien laws designed to protect HOAs at the expense of first lien holders. So are first liens still secure when an HOA is involved?

 

The court ruled that an HOA super-priority lien is a “true super-priority lien,” and that a properly conducted foreclosure on the HOA lien extinguishes first deeds of trust. The case in question involved a $6,000 lien that was foreclosed upon by SFR Investments, wiping out an $880,000 first lien held by U.S. Bank. Analysts quickly pointed out that super lien states (about 20) pose a great risk to lenders, servicers and investors in many parts of the country, with some estimates running as high as 350,000 HOAs covering over 25 million households.

 

Much of this is new construction, and it has been a growing issue in many retirement states like Florida. If, in theory only, one had a greedy condo association, we could anticipate varying levels of mismanagement, fraud or vindictiveness. The CFPB and FHFA have gone to great lengths to inform the consumers about the mortgage indebtedness, but critics believe this allows for an unregulated group to seize a property with little effort.

 

The public sees what is spelled out in newspapers such as the Reno Gazette Journal, business section. The case involved a condo HOA in Las Vegas filing liens on property for non-payment of HOA dues. Some entity bought those lien rights, and foreclosed. In the past the HOA could not actually foreclose, as they were behind the deed of trust: they could file notice but not actually foreclose.  Only government agencies that are in front of deed of trust could actually foreclose. The NSC ruled in favor of the HOA, meaning the HOA can foreclose and is in front of the 1st deed of trust – in this case held by US Bank.

 

In general lenders believe that the court is “misguided.” The HOA is not a government agency, and historically, that is the only entity than can be in front of a 1st deed of trust. So will lenders stop lending whenever an HOA is involved since the possibility has increased that their loan will be wiped out? Possibly – evidently the ruling does not specify the type of HOA or any limitation, so some subdivision that has an HOA to maintain a front entrance brick wall and some flowers and collects $20.00 a month dues has lien rights over a 1st deed of trust. Why would any lender make a loan knowing this? This could be catastrophic for housing with HOAs in Nevada and several other states.

 

Speaking of warning flags, Tom Davis from PMAC writes, “USDA Update–Implementation of New Rural Area Ineligible Area Maps Delayed!! The USDA maps have been delayed once again. The Continuing Resolution had language in it that would not allow federal funds to reclassify eligible areas. The delay will last the length of the CR at that time the areas could potentially be extended once again. If the Republicans gain control of the Senate, more than likely another CR would be passed until the end of March. If the Democrats remain in control then more than likely an Omnibus bill will be passed and the changes to areas will be implemented. On September, 19 “Continuing Appropriations Resolution, 2015,” (Public Law 113-164) was signed by the President. The continuing resolution extends a current general provision regarding housing program eligibility. This means that if a community is eligible today, they will remain eligible under the continuing resolution. Barring further Congressional action, RHS will delay implementation of the revised rural area maps based on the changes to the rural area definition as revised in the Agricultural Act of 2014 (Pub. L. 113-79). During the continuing resolution and as provided in the FY 2014 Appropriations Act (P.L. 113-76), RHS will not reclassify any area eligible for rural housing programs on September 30, 2013 as not eligible for such programs. The ‘Future Eligibility Maps’ are posted on the Eligibility Website.” (If anyone wants to become part of a group that is dedicated to Rural Housing, I highly recommend they join the LinkedIn group “USDA Guaranteed Rural Housing Loan Program Experts”.)

 

Let’s continue seeing what vendors have been up to lately!

 

FormFree Holdings Corporation, a leading provider of automated asset verifications, announced that its award-winning, patented solution, AccountChek™, is now available through Ellie Mae’s Encompass® mortgage management solution. FormFree integration with Sallie Mae allows Encompass® users to verify an applicant’s bank records in just minutes through FormFree’s AccountChek™.

 

Vantage Production has announced that Waterstone Mortgage will deploy its CRM System to help achieve their growth objectives. Waterstone has chosen Vantage Integrated Production (VIP) to standardize its approach to marketing, compliance and control. “Waterstone Mortgage is gearing up for our next phase of growth by providing our loan officers with the tools they need to excel while providing the business intelligence and controls to run our business soundly,” said Waterstone Mortgage Senior Vice President and Chief Information Officer Tom Knapp. “With VIP, we have the ability to integrate and leverage our data throughout our infrastructure, which is central to achieving our growth objectives.”

 

Indecomm Global Services, a leader in business process outsourcing, learning, and technology solutions, announced that its eRecording services are now available in more than 700 counties in the United States with the addition of Ramsey, Minnesota, and others. These eRecording successes are accompanied with a growth in companion paper filings. “Indecomm has been steadily investing in eRecording across the country, moving from 600 to 700 counties in less than six months. Of the 3,600 recording jurisdictions nationwide, only 1,184 counties offer eRecording and Indecomm serves 59 percent of these jurisdictions. In terms of population, Indecomm serves 55 percent. This clearly shows that Indecomm is committed to serving all of the public and not just the largest counties. Indecomm’s footprint is broad and deep, allowing Indecomm’s customers to reach the majority of the counties and the majority of the population on one eRecording platform.”

 

a la mode announced it’s reached a preliminary agreement with DataMaster, the leading provider of MLS-sourced comparable data specifically structured for appraisers, to integrate its data service with a la mode’s full range of appraisal formfilling systems. DataMaster is currently integrated with a la mode’s legacy WinTOTAL system, and with this agreement will also be available in a la mode’s newer TOTAL 2013 formfilling platform.

 

An Arch MI press release announced it has been approved as a mortgage insurance provider for the FHLB Boston and its participating financial institutions for loans purchased under the Mortgage Partnership Finance® (MPF) program.

 

Effective this week, CoesterVMS will begin distributing an amended compliance certificate with all completed appraisal orders. This document contains verbiage updated to adhere with current regulations, as well as a section which displays an itemization of fees as required by applicable state legislation.

 

Anyone convinced that a selloff in the stock market leads to a big rally in bonds was dealt another blow Thursday. Stocks dropped (the Dow was down 264 points, the S&P -32) yet 10-yr T-note yields only went from 2.56% to 2.51%. And agency MBS prices rallied but not like Treasury securities (“widening”) and not enough to cause much in the way of intra-day price changes.

 

We do have some news out at 5:30AM PST: Q214 (Final) Real GDP is seen higher from the last decline of -2.1%, while the GDP deflator is expected higher from prior as well (+1.3%). And at 6:55AM we’ll see the University of Michigan Sentiment number. In the early going rates are a shade better with the 10-yr at 2.50% and agency MBS prices better by a few “ticks”.

 

 

(Parental discretion advised; can be used for guys or gals – just change the pronouns.)

A woman meets a man in a bar. They talk, they connect, and they end up leaving together. They get back to his place, and as he shows her around his apartment, she notices that one wall of his bedroom is filled with soft, sweet, cuddly teddy bears.

There were three shelves in the bedroom with hundreds and hundreds of cute, cuddly teddy bears, carefully placed in rows covering the entire wall.

It was obvious that he had taken quite some time to lovingly arrange them and she was immediately touched by the amount of thought that he had put into arranging the display. There were small bears all along the bottom shelf, medium sized bears covering the length of the middle shelf, and finally huge, enormous bears running all the way along the top shelf. She found it strange for an obviously masculine guy to have such a large collection of teddy bears but doesn’t mention that to him, and actually is quite impressed by his sensitive side.

They share a bottle of wine and continue talking and, after a while, she finds herself thinking. “Oh my God. Maybe this guy could be the one! Maybe he could be the future father of my children?”

She turns to him and kisses him lightly on the lips. He responds warmly. They continue to kiss, the passion builds, and he romantically lifts her in his arms and carries her into the bedroom where they rip off each other’s clothes and make hot, steamy love. She is so overwhelmed that she responds with more passion, more creativity, and more heat than she has ever known, and even did a few things she had never done with any other man.

After an intense, explosive night of raw passion with this sensitive guy, they are lying there together in the afterglow. The woman rolls over, gently strokes his chest and asks coyly, “Well, how was it for you?”

The guy gently smiles at her, strokes her cheek, looks deeply into her eyes and says…..

“Help yourself to any prize from the middle shelf.”

 

 

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.)