Jan. 26: LO and sales jobs; the nitty-gritty on the HUD & FHA changes and how lenders are handling them

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...

One never knows what will cause mass hysteria. Maybe the storm hitting the Northeast? I doubt Ocwen’s troubles will cause it, but the industry has watched its stock plummet and chairman resign, its battling with regulators in New York and California, it being prohibited from buying a block of servicing from Wells Fargo, adding a pastor to its board of directors, and now Reuters tells us it seems that large investors are lining up to sue it. Calgon, take me away!

 

That aside, we are definitely seeing successful companies growing. Pulte has immediate openings for loan originators, loan processors, and entry level candidates for its mortgage banking training program in Denver, CO. “What do dream homes and your career have in common?  They both get built here!  Pulte Mortgage prides itself on strong values, a vibrant culture, reputation, reliability, and top performance. Pulte Mortgage is a wholly owned subsidiary of PulteGroup, a Fortune 500 company, and has been a proven leader in the mortgage industry for over 40 years. We offer a competitive salary with monthly bonus opportunities, a comprehensive benefits program which includes medical, dental, vision, 401k match, and paid time off. You can send your confidential resume or your referrals’ resumes to PMResumes@pulte.com or visit our website at:  http://careers.pulte.com/.”

 

Out in California Citizens Business Bank/CVB Financial Corp. recently reported record earnings of $104.0 million in 2014 overall.  Additionally, Citizens Business Bank completed its 151st consecutive quarter of profitability as of 12/31/2014. A direct portfolio, Jumbo and non-QM lender, Citizens Business Bank is expanding rapidly on the Home Lending side of the house and hiring top-producing retail mortgage originators across California.  For more information about their available positions, email your questions and resume to CareerOne@cbbank.com. The Bank has assets of approximately $7.4 billion with locations across the Inland Empire, Los Angeles County, Orange County, San Diego County, and the Central Valley areas of California.

 

And Florida’s Capital Markets Cooperative is searching for Regional Account Managers (Northeast, Southern, Western, and Midwest. The Regional Account Manager role is responsible for expanding CMC’s product offering in the Region and responsibilities are varied but include sourcing business from correspondent co-issue and whole loan sellers, marketing CMC’s cooperative and risk management services, managing investor and vendor marketing relationships and participating in management strategy and development initiatives. CMC has been around for 12 years and has leveraged the collective power of a nationwide network of mortgage bankers to negotiate better pricing, products and service during the process and sale of mortgages. Members choose from a wide array of services including risk management and hedging solutions; a full roster of preferred investor and service providers; MSR valuations and analytics; and servicing acquisitions through it’s wholly- owned subsidiary, CMC Funding. For a complete job description, or to submit confidential inquiries, contact Laura LaMontagne.

 

FHA posted information regarding Borrowers’ Notification and Full-Months Interest. As a reminder, last August a Federal Register final notice (Docket No. FR-5360-F-02) was published regarding the elimination of post-settlement interest for Federal Housing Administration (FHA) mortgages with an effective date of January 21, 2015. This rule revises FHA’s regulations that currently allow an FHA-approved mortgagee to charge the mortgagor interest through the end of the month in which the mortgage is being paid. The final rule allows mortgagees to charge interest only through the date the mortgage is paid and prohibits the charging of interest beyond that date. Mortgagees may use the applicable revised Model Prepayment Disclosure Statement language in meeting their annual prepayment disclosure requirements.

 

There is a certain amount of confusion out there with FHA lenders, especially with those that service FHA loans, on the interest charges. One wrote, “Based on the FHA update received yesterday though it does indicate that FHA is giving lenders a way to still charge the interest on loans originated prior to January 21st. So who gets this additional interest charged when it is included in the payoffs generated? In my case the payoff was with Wells. They were adamant that the new rule only applied to loans originated after January 21st. If the interest is reimbursed to the borrower with the return of their escrow I suspect it is not quite as big of a deal than if the servicer is still sending the monies to FHA. I would just like to give my borrowers good insight on this and now that it is in place it seems that some are charging and some are not. On the payoff I received the MIP was also charged for the full month and I wonder if that should also be prorated. Maybe not but the payoff from Wells referenced the proration of the MIP. I haven’t heard squat about that!”

 

According to the publications we received  FHA loans “closed after January 21, 2015” would no longer have interest charged through the end of the month. But even veteran LOs trying to decipher that wondered about what “closed” meant. Was the loan originated and closed after January 21, 2015 or was the loan originated prior to January 21, 2015 and paid off and closed after January 21, 2015? It is the former: “For FHA-insured loans which originally closed before 1/21/15 (as in origination closed), the amount of interest collected will depend on the servicer’s policy and may include interest through the end of the month. Due to the variance between servicer’s, all demands need to be carefully inspected by underwriting and funding to determine the interest amount that will need to be collected.” In English that means if your seller’s loan closed (originated) before 1/21/15 you would be wise to include a full month of interest in their net sheet.

 

And then we have the MIP change. Hopefully the announcement by HUD, which includes “frequently asked questions”, addresses that but also includes a warning. “Due to the expected high volume of case number assignments beginning Monday, January 26, 2015, lenders may experience slower than normal processing times.  FHA Connection (FHAC) peak times are between 11:00 AM and 3:00 PM (Eastern). As a reminder—if the new case number is replacing an old one; the old case cancellation must have been completed before the system will permit a new case number assignment. FHA will monitor processing times and, if necessary, provide updates through the FHAC Message Board, which lenders can access after FHAC log in. For Frequently Asked Questions (FAQs) regarding MIP reductions and case cancellations, go to the FHA Resource Center’s online knowledge base and search by Keyword ML 15-01.”

 

Recently HUD released the January edition of the HUD Housing & FHA Monthly Review, which provides an overview of recent single-family and multifamily policy changes by the Agency. Topics of discussion include the MIP reduction, the expiration of the FHA’s property flipping waiver, 2015 FHA loan limits, and guidance for HECM program counselors. If you currently do not receive the Monthly Review and would like to do so, please email FHA.Commissioner@hud.gov and request to be added to the distribution list.

 

FHA reissued Mortgagee Letter 2015-01 which introduced the 50 basis point reduction for the annual MIP, and now includes additional information about rates for mortgages with amortization terms less than 15 years. The reissued letter clarifies that the MIP reductions do not apply to mortgages with terms less than 15 years.  All the other policies outlined in the initial letter remained unchanged. FHA also released Mortgagee Letter 2015-2, which outlines new HECM requirements and supersedes Mortgagee Letter 2014-07. The letter defines “ineligible non-borrowing spouse,” provides new model certification language mortgagees must use at origination and throughout servicing, includes language to update HECM model documents, contains clarifications on acceptable documentation for seasoning requirements, and allows a 30-day cure to reinstate a deferral period for an eligible non-borrowing spouse.
K&L Gates has scheduled a Webinar on Navigating the New HUD Origination Handbook scheduled for Tuesday, January 27 from 2-3:30 EST. K&L The discussion will address the most significant changes to HUD origination and underwriting requirements included in the new Handbook. There will be time at the end of the webinar to answer questions. For details registration, click here.

 

In order to allow mortgagors to take advantage of the reduced MIP rates, Plaza Home Mortgage will continue to accept new FHA loan submissions; however, Plaza will not order case numbers for new FHA loan submissions until on or after 1/26/15. New loans will be underwritten prior to Case Number assignment and will be conditioned accordingly. Loans in process with Case Numbers assigned prior to 1/26/15 will need to have the Case Numbers cancelled and a new Case Number obtained to receive the new MIP rates. For FHA loans in process, Plaza will cancel existing Case Numbers and obtain a new FHA Case Number if the loan is to close on or after 1/26/15. Please contact your Plaza Regional Office for handling of these requests. FHA loans closing before 1/26/15 are not affected by this change and will continue to have MIP rates at existing levels. Note: HUD has indicated that appraisals obtained under a Case Number that was cancelled will be acceptable under the new Case Number once the new case number is obtained. Specific requirements related to the use of appraisals obtained under cancelled Case Numbers will be provided as more information becomes available.

 

  1. S. Bank Home Mortgage Correspondent Division is committed to following HUD’s direction regarding the reduction of FHA Annual Mortgage Insurance Premium. Some guidance points are as follows: There is no need to change the case numbers on existing appraisals. Lenders can hand write the new case number on the appraisal. FHA will allow appraisals to be ordered without case numbers as you will have to wait until January 26th to order the new case number. Regarding Lock Expirations, Improvements to Annual MIP may require additional time for loan processing and lock extensions. It is the Correspondents responsibility to acquire any lock extensions if your borrower chooses to take advantage of this opportunity. If USBHM is underwriting the loan file, please allow additional time for resubmission and re-approval of the new terms.

 

M&T Bank announced it is not currently offering the Fannie Mae 97% LTV products. It has also clarified the max LTV/CLTV/HCLTV permitted on FHA 203K refinance to be 97.75%. Additionally, M&T posted a product bulletin regarding FHA Maximum Flood Insurance Deductibles, FHA Eliminating Post-Payment Interest Charges, and FHA Important Notice to Homebuyers form, VA Loan Limits, USDA Eligible Areas and USDA Appraisal Requirements.

 

Regardless of lock status, if a loan is currently approved by Franklin American Mortgage (FAMC), in order for the borrower to take advantage of the FHA reduced MIP rate structure, the borrower must request the change and the loan must be re-submitted to Underwriting for approval. The new case number must be updated and resubmitted through AUS.  The FAMC Correspondent Lending Manual will be updated by January 26th to align with these changes.

 

Effective with the refinance of any FHA insured loans closed on or after January 21, 2015, Penny Mac is aligning with FHA’s elimination of the post-payment interest charge.  Mortgagees will no longer be allowed to charge interest through the end of the month; instead interest may only be charged through the date of loan pay off.

 

Flagstar is handling FHA case cancellations on a bulk basis on FHA SO and FHA SO AA loans only. FHA Direct Endorsed and FHA Authorized Agent Lenders may request case cancellations directly from FHA as described in the Mortgagee Letter. Effective Friday, January 16, 2015, Flagstar Bank announced the ability to select lender paid mortgage insurance (LPMI) on the Freddie Mac Super Conforming ARM products. Additionally, the FL Tax price adjustment on loans with LPMI in the state of Florida will be removed on new locks as of Friday, January 23, 2015.

 

Mountain West Financial told us that FHA appraisals may be ordered WITHOUT case numbers prior to the MIP changes going into effect on 1/26/15. The case number field is not required with the online MWF appraisal order form during this temporary time. All other Appraisal ordering instructions apply. To take further advantage of the decreased MIP, FHA has clarified that in the interim before 1/26/15, FHA appraisals may be ordered WITHOUT case numbers. The case number field is not required within the online MWF appraisal order form during this temporary time. All other Appraisal ordering instructions apply.

 

Switching to the markets, is it Monday again already? We have quite a bit of news to digest – some of it even inside of this country. Although we have zip today, tomorrow is the volatile Durable Goods, the S&P/CaseShiller 20-City Index with its two-month lag, New Home Sales, and Consumer Confidence. Wednesday afternoon will be the FOMC rate decision (don’t look for any change). Thursday is Initial Jobless Claims and Pending Home Sales. We wrap up Friday with the Employment Cost Index, Gross Domestic Product, the Chicago Purchasing Manager’s Survey, and the University of Michigan Consumer Sentiment numbers.

 

For those quantitatively inclined, we closed the U.S. 10-yr at 1.82% and this morning we’re at 1.80% with agency MBS prices a shade better.

 

 

The wife texts her husband at work on a cold winter’s morning: “Windows frozen, won’t open.”

Husband texts back: “Gently pour some lukewarm water over it.”

Wife texts back 5 minutes later: “Computer really messed up now.”

 

 

Rob

 

(Copyright 2015 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.)