Daily Mortgage News & Commentary

Apr. 22: Ops, LO jobs; digital products; GSE & large investor adjustments; bond market quiet: a good thing

While in captivity it is important to amuse oneself. And here’s a tender song – the video is only 30 seconds. By the way, the residential industry is not the only one that is seeing forbearance requests. In the commercial sector, in 30 days over 5,000 borrowers reached out to master servicers, requesting $100.7 billion, about 17% of the CMBS universe. Change is afoot. LendingClub has 460 fewer employees. (Anyone can post their resume for free at www.LenderNews.com for employers to view, just click on “registration.”) Yesterday the commentary mentioned the “skip-a-pay” prompting Joe Ventrone, VP of Federal Policy and Industry Relations with NAR, to write, “NAR is acutely aware of this issue and working diligently to educate members and their clients on proper uses of forbearance. See NAR’s recent FAQ. “…forbearance should only be used by homeowners who are genuinely in distress and cannot afford to make payments. The program is not intended as a stimulus or incentive to buy a home. Missed payments are not forgiven, but delayed and will need to be made up. Furthermore, widespread forbearance is causing lenders to raise requirements on new home buyers. If new homebuyers use forbearance unnecessarily, this will cause lenders to pull back further, making it even more difficult to buy and sell homes.”

Employment & transitions

New American Funding is locking more loans than ever! Coming off another record-breaking month, our continued growth is driving the need for rapid expansion across most positions. We are committed to serving our consumers and real estate partners nationwide and need experienced licensed loan officers and operations staff across the nation. We are a direct seller servicer: We sell agency direct and service our own loans. We continue to focus on make sense underwriting with minimal overlays and products that serve the first-time homebuyer and minority communities. Our remote workforce is stronger than ever! Our leadership remains visible and engaged! Our NAF360 Culture facilitates teamwork and getting the job done! Our technology allows you to do business from anywhere. And our digital marketing team will help you take your online business to the next level. Over 100k online reviews can’t be wrong! What’s your trajectory in 2020? Let’s get started! Contact Sam Ellsworth, Director, National Retail Sales (949) 208-8982. Equal Opportunity Employer.”

In addition to smashing production records in 2020, Thrive Mortgage is also impacting lives and industries outside of real estateIn its latest “Thrivenomics” podcast episode, James Duncan, Director of Marketing, and CFO, Michael Jones, interviewed Dr. Marty Makary, a world-renowned physician, best-selling author, professor, and public policy influencer who is one of the most respected voices in the medical profession concerning Health Care Reform and Patient Advocacy. Duncan and Jones interviewed Dr. Makary for his take on the current events related to Covid-19 and his extensive work providing counsel and solutions for navigating the current environment. “We were honored to have the opportunity to interview Dr. Makary,” Duncan stated. “His insights were incredibly valuable and, I believe, will offer a great deal of direction and leadership for communities across the nation. It was a great interview!” For more information about our company and culture, visit https://join.thrivemortgage.com.

Roostify’s Board of Directors has a new member: former Freddie Mac executive Dave Lowman.

Lender services and products

Floify just released its most powerful feature yet: Hybrid E-Closing! Floify’s newest addition to its robust point-of-sale solution helps enterprise lenders stay ahead of evolving market conditions and appeal to modern consumers’ appetites for digital offerings by enabling borrowers to electronically sign non-notarized portions of their closing package in advance of their in-person closing appointment. By coupling Floify’s Hybrid E-Closing with the platform’s existing Disclosure Desk offering, enterprise lenders are able to cut significant time from face-to-face interactions, thus improving the speed, efficiency, and satisfaction in the entire experience. The result is a more focused signing session where only the necessary documents need to be wet signed and borrowers are in and out in minutes. See how Floify’s Hybrid E-Closing can help your mortgage company provide a digital workflow that saves a ton of time on the origination process as well as at the closing table – request a demo to learn more.

Free Webinar: Use Digital Closings to Keep Your Loans Moving. Register for a complimentary webinar on Wednesday, April 22 to learn how digital closings can keep your loans on track during the COVID-19 crisis. Hear from John Ralston, Black Knight’s Director of eLending Strategy, as he provides an update on digital closings in light of the GSEs’ guidance and the availability of remote online notarizations. John will also demo Expedite Close, Black Knight’s proven, easy-to-use digital closing solution that can be implemented in a few weeks. Register for this complimentary webinar today.

Cathleen Schreiner Gates has joined the SimpleNexus board of directors (details here). A veteran at helping companies of all sizes accelerate growth, Schreiner Gates most recently served as EVP of sales and marketing at Ellie Mae. During her tenure, the LOS provider spent six consecutive years on the Deloitte Tech Fast 500 list and negotiated a $3.7-billion purchase by Thoma Bravo. Since SimpleNexus has been making strides itself (its app just reached 2 million borrower downloads after earning FinTech Breakthrough’s “Best Digital Mortgage Platform” award in March) we’re eager to see what the company does next with Schreiner Gates’ considerable experience at the table.

Corona changes

Fannie and Freddie haven’t changed their policy on not buying home loans that recently entered forbearance, but yesterday the email airwaves were filled with the news that the FHFA announced that GSE mortgage servicers will not have to advance principal and interest (P&I) for more than four months of missed payments for borrowers in forbearance. The timeframe is consistent with the policy before COVID-19, when the GSEs generally purchased delinquent loans out of MBS pools after being delinquent for four months. But this should meaningfully improve the liquidity concerns of servicers, who earlier had concerns about funding servicing advances for up to twelve months, which is the period that GSE borrowers are eligible for forbearance. Once a servicer has advanced four months of missed payments on a loan, it will have no further obligation to advance scheduled payments. This applies to all servicers regardless of type or size.

So the Federal Housing Finance Agency capped, at four months, the period of time mortgage companies are on the hook to make monthly payments on behalf of borrowers who are in arrears. It is good news for servicers, especially nonbanks like Quicken Loans Inc. and Freedom Mortgage Corp., since they can now plan for exactly how long they will need to advance principal and interest payments on loans for which borrowers have not made their monthly payment. Remember that as part of the $2 trillion coronavirus stimulus package, the federal government allowed homeowners harmed by the outbreak to suspend payments for as long as a year without penalty. As of April 12, 5.95% of home loans were in forbearance, up from 3.74% on April 5, according to data released by the Mortgage Bankers Association on Monday.

Freddie Mac has published several Guide Bulletins providing temporary servicing measures to support Servicers’ efforts to assist borrowers who may be facing hardships due to the COVID‐19 pandemic. These measures include expanding its eligibility for temporary payment forbearance for up to 12 months to cover mortgages secured by second homes and investment properties. Freddie also provided servicing requirements concerning evaluation of borrowers for various relief options upon the end of the forbearance plan, including reinstatement and repayment plans for borrowers who are able to cure their delinquency, Payment Deferral for borrowers who have missed one or two monthly payments, but are unable to cure their delinquency, and, if borrowers are in need of additional relief, loan modifications.

“Our regulator, FHFA, has directed Freddie Mac to align our loan removal policy with Fannie Mae’s current practice related to loan removal for loans subject to temporary payment forbearance plans, including those plans implemented due to COVID‐19. Loans in Freddie Mac Mortgage Participation Certificates (PCs), Uniform Mortgage‐Backed Securities (UMBS), and Mortgage‐Backed Securities (MBS) that receive forbearance, including loans impacted by COVID‐19, will remain in the related mortgage securities pools. Once the forbearance period(s) expires, the loans will remain in the securities pools while an offer to reinstate the loan or enter into either a Payment Deferral option, repayment plan or a trial period plan pursuant to a loan modification remains outstanding; or the loan is in an active repayment plan or trial period plan; or a Payment Deferral relief option is in effect.

“If the related borrower has failed to timely accept or comply with the terms of a forbearance plan, payment deferral option, repayment plan, or trial period plan, or the borrower has successfully completed the trial period plan related to a loan modification, Freddie Mac must remove the loan from the security in accordance with aligned Enterprise practices. Loan modifications that include changes to the term or coupon generally require loan removal.

“Generally, for fixed‐rate loans in Freddie Mac mortgage‐backed securities that are in temporary payment forbearance plans, market participants will see in our monthly disclosures the percentage of loans reported as delinquent at the pool level increase to reflect those loans in temporary forbearance, although principal and interest payments are being advanced to the certificate holder.”

Fannie Mae updated Lender Letter LL-2020-04 with additional temporary guidance, including use of virtual inspections for appraisals and renovation loans, and flexibilities for condominium project reviews. Additionally, we’ve updated information about flexibilities for new construction loans and Homestyle® Renovation loans, as well as other temporary appraisal requirement flexibilities.

BB&T’s correspondents received, “…Beginning April 24, 2020, we will implement the temporary restrictions in the chart below. We will honor all loans locked prior to April 24, 2020. Relocks will not be permitted; however, extensions will be allowed. At this time, the published product descriptions and underwriting guidelines will remain unchanged, as we do see this as a temporary measure. However, the conventional overlay matrix, government overlay matrix and the Price Adjustment and LTV Chart will be updated. An updated excel version of the Price Adjustments and LTV Charts for both CorrAdvantage and Non-CorrAdvantage will be distributed immediately following this bulletin. Please note that DTI is not programmed in our system…” It is best to read the bulletin, but there were plenty of 680 minimum credit scores, 3.5-point hits for Super Conforming Fixed & ARMs, and no 2nd homes or investment properties.

PennyMac Correspondent Group, for quite some time the “go to” FHA/VA buyer, updated its Government LLPAs details for best efforts commitments starting April 27th: 20-25: Updates to Government LLPAs. (All of Penny’s announcements can be seen here.) Don’t forget that Announcement 20-24 covered a variety of updates including Interior Access, Renovation Programs, Fannie Mae and Freddie Mac, COVID- 19 and VA Circular 26-20-13. Additional posting includes Announcement 20-23: Appraisals with CU Score 5.

Wells Fargo Funding (correspondent) is aligning its appraisal requirements for VA Loans with the temporary, COVID-19-related appraisal flexibilities VA announced in Circular 26-20-13.

Effective for loans locked on or after April 22, Flagstar is implementing overlays until further notice. It will honor loans locked on or before April 21, 2020 for loans not meeting the

temporary requirements, however; lock extensions and re-locks will not be permitted.

The California MBA is hosting two free webinars tomorrow for industry pros looking for some timely education. First, at 11AM PT, the Mortgage Quality and Compliance Committee (MQAC) will be discussing Cyber Security and Cyber Insurance with Bankers Insurance Services Tom Delaney and Mitch Tanenbaum from CyberCecurity. Later in the day, at 2PM PT, the Mortgage Tech and Marketing Committee (MTAM) will be hosting a live chat with four experts on “How to Stay Visible in a Crisis”. Listen to Amy Hansen from Seroka Brand Development, Linda Wagner at CrossCheck Compliance LLC, Joe Dahleen from FirstClose, and the California MBA’s Dustin Hobbs discuss and take your questions!

Capital markets

Stocks tumbled the most in almost three weeks, and Treasuries rallied with the dollar, as the oil turmoil triggered a fresh bout of risk aversion yesterday; the 10-year closed -6 bps to 0.57 percent as the curve continued its recent flattening. Existing home sales declined 8.5 percent month-over-month in March to a seasonally adjusted annual rate of 5.27 million, slightly beating expectations as total sales increased for the ninth straight month on a year-over-year basis. The report showed existing home sales activity was relatively soft before coronavirus began to have an impact, with low inventory and high prices crimping sales. Existing home sales are counted when the deals are closed, so the sales activity for March was predicated mostly on contracts signed in January and February.

Today’s calendar is already underway with the weekly MBA Mortgage Index (+0.3 percent for the week ending April 17). Later this morning brings April FHFA Housing Price Index and weekly crude oil inventories. Today’s FedTrade schedule is a repeat of Monday’s with the desk scheduled to purchase up to $10.709 billion, starting with $3.188 billion max of UMBS30 2.5 percent and 3 percent, followed by up to $4.333 billion GNII 2.5 percent through 4 percent and $3.188 billion UMBS30 2.5 percent and 3 percent. We begin the day with Agency MBS prices unchanged from Tuesday’s close and the 10-year yielding .59 percent.

Today marks 6 weeks of isolation. Walking 5 miles a day, no meat, dairy or flour. Eating fresh vegetables and home cooked meals every day. The change has been fantastic! Zero alcohol. A healthy, gluten-free, caffeine-free diet and a 1-hour home workout every day. Lost 20 pounds and gained muscle mass.

I have no idea who wrote this, but I am so proud of them that I decided to copy and paste.

(Thanks to Anthony G. for this one.)

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Loan Officers: Now More Important Than Ever”. If you have the inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)