Apr. 1: AE jobs; disclosure, HELOC, non-QM, rural products; credit news & shifts in credit guidelines

(Yes, here is today’s actual commentary.) It is well known among loan officers that real estate agents don’t know their client’s credit situation before recommending the buyer to an MLO. What will they qualify for? And is this the beginning of the end for Tri-merge reports? Equifax is planning to team up with Fair Isaac, the creator of the FICO credit score, to sell consumer data to banks. Let’s take a random walk through other lender credit news below.


“Ready to make your move from retail LO to independent mortgage broker? The time has never been better. At BeAMortgageBroker.comwe can match you with a mortgage broker in your area or help you take the next steps toward opening your own shop. We are your single, no-cost source for the information and tools you need to become an independent mortgage broker. Call us for a free, confidential consultation and continued support throughout the process at 800.229.6342 or learn more at BeAMortgageBroker.com.”

“Are you an experienced outside or inside Account Executive looking for a change? Tired of the ‘same old same old’? Towne wants to talk to you! Towne is currently hiring ‘outside AEs’ throughout our 43 licensed states and hiring ‘inside AEs’ for our headquarters located in Troy, MI. Towne is a 37-year old full service GNMA/FNMA/FHLMC seller servicer. Our AEs are able to offer a full set of agency, non-QM and rehab products (203k, Homestyle) no minimum FICO FHA, manufactured homes, and no agency overlays! They can offer TPO clients multiple delivery options including delegated correspondent, mini-correspondent, wholesale as well as special offerings for credit union and community bank partners including hybrid retail and subservicing options. Product, client options, competitive pricing, superior service: We’ve got that covered and top that with a very aggressive compensation and benefits package!

Interested? Outside AEs Chad Farmer (803-765-1521); Inside AEs  Ray LaFave (248-247-1856).”

Lender products & services

Impac Mortgage is breaking through the barriers of Non-QM. Impac Mortgage, a pioneer in Non-QM lending, is aggressively developing its Non-QM correspondent business throughout the country by building strategic partnerships focused on providing all the necessary tools and resources for you to become a leader in your Non-QM marketplace. Along with our tools and resources, we provide coaching on how to: build a diverse client base, create new referral business, increase loan volume and close Non-QM loans quickly and efficiently. Our high-demand loan products include: 12-Month Bank Statement program, Investor program, Asset Qualifier program and Agency Plus program. These programs offer the lender a tremendous opportunity to grow their business and take full advantage of revenue streams previously not available to them. Now is the time to explore the Non-QM marketplace with a partner that will help you succeed. To find out more, contact us today!

Non-delegated correspondent lenders can experience a more efficient way to do business with Caliber Home Loans, Inc. and Caliber Express Connect from FirstFunding. When Caliber CL-1 business partners use Caliber’s proprietary loan origination system and select FirstFunding, Caliber Express Connect will transfer the loan information and documents directly to FirstFunding. By eliminating the manual entry of the loan information into both systems, Caliber Express Connect saves time and minimizes errors. This provides greater data integrity, quicker turn times and same day wires. In 2018 Caliber partnered with First Funding to bring the first-of-its-kind technology integration, Caliber Express Connect, to meet one of the industry’s biggest concerns – providing viable, secure, and accelerated solutions for its lenders. For more information about Caliber Express Connect, email Caliber at NewClientInquiry@CaliberHomeLoans.com.

Social Survey’s 2018 Top Performers Awards are unlike any other recognition in the mortgage industry. They focus on customer satisfaction, celebrating mortgage companies and loan officers who deliver outstanding experiences for their clients. They’ve just crowned the TOP 4 Mortgage Companies among four divisions (Small, Medium, Large & Jumbo), and the TOP 10 Loan Officers out of over 30,000 fierce competitors nationwide. The awards program was open to all mortgage professionals, not just Social Survey clients. Find out who won from the exclusive list of winners.

Want to learn how to take advantage of growth opportunities in rural lending? There are more people moving to rural America and the RuraLiving program is an excellent way to take advantage of this net migration. We will be attending the Great River Conference and we have meeting times available to discuss how you can utilize the RuraLiving program to increase your market share and volume. You can also stop by Booth 31 to learn more about this unique correspondent program. Please contact Jessica SacreDoug Gibney, or Hannah Stenzel to schedule a meeting or learn more about what RuraLiving has to offer.

TCF Bank®’s Relationship Lending Unit is excited to announce new broker compensation on our Stand Alone HELOC. This is no April Fools’ Day joke. Effective April 5, we will pay 1 percent of the line amount, but no less than $750 or more than $1,500 per Stand Alone HELOC transaction. “With over $16 trillion in untapped equity, we understand how important it is for our valued partners to stay connected with past customers,” said Mark Zierott, SVP, National Sales Director at TCF. “Whether it’s a need for debt consolidation, home improvement, college education, or a down payment on a second home, customers can access their equity for what matters most.” Please contact your existing business development manager for more details. If you are currently not an approved partner, please email us at RLUCorporate@tcfbank.com. You can also visit tcfbank.com/brokerloans for more details.

SimpleNexus delivers Disclosures Done Right, a disclosure toolset that seamlessly presents disclosure packages and enables borrowers and loan originators to eSign in the mobile app or online including wet signatures. SimpleNexus Disclosures includes innovative tracking tools integrated directly into the LOS system for compliance peace of mind. SimpleNexus’ disclosure solution changes nothing on the backend, ensuring the processes of underwriters and disclosure desk teams remain efficient. SimpleNexus Disclosures fits right into the fully branded digital mortgage platform SimpleNexus uniquely configures to each lender. Loan originators become truly mobile by using their smart devices to access credit, appraisals, pricing, VOA, and now disclosures, while syncing with their LOS and CRM system every step of the way. Watch our new Disclosure Video and get a demo for SimpleNexus Disclosures

Credit guidelines

All lenders are lowering credit qualifications across the board, but nonbank lenders lead the pack. Median FICO scores are around 713 for nonbanks compared with banks, where the median scores are 745, according to the Urban Institute’s Housing Finance Policy Center February Chartbook. Overall, credit availability has been tightfisted as median FICO scores for current home purchases are still 30 points above pre-mortgage crisis levels of 700. The lowest credit scores for home loan borrowers is 643, compared with the low 600s in the early 2000s. Keep in mind, however, you can obtain a mortgage with even lower scores through government programs including FHA loans and VA loans. While median credit scores might be stronger than pre-crisis levels, the debt-to-income ratios, or DTI, are higher. Today, the median DTI is 40 percent, which is 4 percentage points higher than it was before the mortgage meltdown, when DTI was 36 percent.

Huh? Don’t qualify for regular loan? There are reasons for portfolio loans.

Research published by the Urban Institute and Freddie Mac, Barriers to Accessing Homeownership— Down Payment, Credit, and Affordability, revealed three key barriers to homeownership in today’s market. Saving for down payment, gaining access to credit and mortgage affordability. Freddie Mac is developing a three-part article series to aid in understanding the opportunity around mortgage-ready borrowers and to provide tips on growing your affordable-lending business. Read the first article, What’s Keeping Lower-Income Families from Homeownership?

Blockchain technology is on track to upend the mortgage industry by giving underwriters and financial institutions the ability to access information they’ve never had access to before.

Recently, more than a dozen well-known online lenders like SoFi and Better Mortgage signed on to participate in testing a platform created by Spring Labs, a company looking to improve the security and efficiency of the credit reporting industry with blockchain. The platform aims to help consumers and mortgage lenders (among others) by facilitating the secure and efficient exchange of information directly with each other while maintaining the privacy of the underlying data. Spring Labs Co-Founder and CEO Adam Jiwan, who was a founding board member of Avant, a $5+ billion online lending company, thinks blockchain is going to completely change the competitive landscape of the mortgage industry and make lenders rely less on credit bureaus for information on borrowers.

As a reminder, FHA has announced that effective with case numbers assigned on or after March 18, 2019, its TOTAL Scorecard underwriting technology will incorporate changes that will better manage loans with low credit scores, high ratios and excessive risk layering. FHA states that over the last several years they have seen a continuing increase in certain high-risk credit characteristics, including: a growth in cash-out refinances (in 2018, an increase of more than 60% as a percentage of all refinances); an increase in high debt-to-income ratios (in 2018, 25% of all FHA forward mortgages purchase transactions had a DTI of over 50%); and a decrease in average credit scores (the lowest since 2008). To read FHA Info #19-07, click here.

Wells Fargo Funding provided clarity on its Non-Conforming revolving accounts policy when the credit bureau does not reflect a payment on a current reporting liability. If the actual monthly payment can be documented by a letter from the creditor or a current monthly statement, the actual payment may be used for qualifying.

Plaza has a new way to submit a request in BREEZE for a Pre-Qual loan, also referred to as a TBD loan. Using the Pre-Qual feature, you can submit your borrowers for credit underwriting while they are still shopping for a property. Once they’ve found a property, update the address in BREEZE and process as usual. View the Pre-Qual Quick Step Guide for step-by-step instructions.

HUD loans receiving a “Refer” scoring recommendation from the Technology Open to Approved Lenders (TOTAL) Mortgage Scorecard are required to be manually underwritten. Similarly, a loan with an “Approve” scoring recommendation from the Scorecard may also be required to be downgraded to manual underwriting in certain cases. To improve transparency and to help clients better understand how a borrower’s credit is reviewed during the manual underwriting process, Sun West has updated its manual underwriting guidelines specifically for the review of a borrower’s credit. The updated guidelines include additional information on how various risk factors associated with a borrower’s credit are analyzed during a manual underwriting review. To access the updated guidelines, click here.

Capital markets

Residential loan officers certainly watch construction numbers. As a reminder, housing construction surprisingly decreased to nearly a two-year low in February, according to the US Commerce Department, while consumer confidence is down for the second consecutive month in March, according to The Conference Board. The data point to a significant slowdown in economic activity. What could make rates go up? If the Fed unexpectedly stops purchasing or reinvesting monies in 30-year paper.

We had a bunch (a technical term) of economic news Friday, and U.S. Treasuries closed rebounding slightly from the rate rally that defined the first half of the week on no real economic news. Personal income increased 0.2% in February after decreasing 0.1% in January. Personal spending increased 0.1% in January after decreasing a revised 0.6% in December. The PCE Price Index for January decreased 0.1% while the core PCE Price Index, which excludes food and energy, increased 0.1%. (The core PCE Price Index slipped below the Fed’s longer-run inflation target of 2.0%, which can be used by the FOMC as a reason for maintaining its newfound patient stance.) A recent decrease in prices appears to have spurred more home sales activity in February. Domestically, Fed Vice Chair for Supervision Randal Quarles said that he maintains an upbeat view of the growth potential in the economy, which may necessitate more rate hikes. Internationally, the British Parliament voted against Prime Minister Theresa May’s deal for the third time, increasing the likelihood of a no-deal Brexit on April 12.

The first week of this new month and quarter is a busy one, with economic releases including the March employment report on Friday. But I’m getting ahead of myself. Today’s busy calendar began with the February retail sales report (-.2%, ex-auto -.4%, weak). Markit manufacturing PMI, ISM manufacturing PMI, business inventories, and construction spending are all ahead. Tomorrow brings February Durable orders before Wednesday sees application data, the ADP employment change, and ISM Non-manufacturing Index. The week closes with Nonfarm Payrolls (March) and February Consumer Credit. The Fed speaker circuit is also busy, particular in the latter part of the week, with appearances by Atlanta’s Bostic, Richmond’s Barkin, Kansas City’s George, Minneapolis’ Kashkari, New York’s Williams, Philadelphia’s Harker and Cleveland’s Mester. Additionally, the RBA will be out with their latest monetary policy decision on Tuesday. We begin today with agency MBS prices worse a solid .125 versus Friday and the 10-year yielding 2.44%.

Why is it that everyone is so worn out on April 1?

They have just endured a March of 31 days!

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 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.)

Rob Chrisman