Daily Mortgage News & Commentary

Apr. 9: AE, Ops, LO jobs; servicing, appraisal, eClose products; Agency, USDA, investor, lender changes aren’t stopping

As the market looks at this morning’s Federal Reserve huge aid package announcement, while in captivity/quarantivity, testing yourself is important. Someone told me this week, “Hey, we’re trying to stay alive, not sober and skinny! I’m well on my way to putting on my ‘quarantine 15’ or my ‘Covid 19.’” I never realized how much I’d miss going into a restaurant, sitting down, looking at a menu, and ordering. And there were other people in the room doing the same thing! Enjoy every sandwich. Speaking of ingredients, regrettably, wet markets (selling live animals) are very present in New York City as this two-minute video shows. (Warning: you will veer toward becoming a vegetarian after watching this.) So as not to end paragraph on this bitter note: “Quarantine Day 28: Went to this restaurant called THE KITCHEN. You have to gather all the ingredients and make your own meal. I have no clue how this place is still in business.” And how ‘bout Steph Curry calling an ICU?

Employment & business opportunity

Last month, Thrive Mortgage announced the addition of Marla Guillaume as the new head of Thrive’s Multi-Channel Origination Division. Since then, Guillaume has added powerful industry veterans to her team to lead the company’s growth in the eastern U.S. Kyle Brady, the Kentucky Region’s newest Branch Manager, is joined by Chris Hampton, David Gnadinger, Mark Smith, and Chris Palmer, all of whom bring vast years of experience. In addition, Thrive’s Operations Department has added to its all-star team with veteran Underwriters Steve Hamm, Lorne Snyder, Ginger Hamm, and Heather Brunetti. “The growth opportunities for Thrive in Kentucky and much of the eastern U.S. could not be more exciting,” stated Guillaume. “I’m thrilled to add such an experienced team of professionals to be a part of the Thrive Culture.” For more information about available opportunities in your market area, write to Chris Karageorge or visit Thrive Mortgage.

As we are all adjusting to life and work in a completely new and unprecedented environment, AmeriHome continues to adapt and thrive. AmeriHome has taken actions to protect its employees, clients, and communities, as well as to ensure business continuity. The vast majority of AmeriHome’s staff has moved to secure, remote workstations, and despite these adjustments, AmeriHome has maintained its productivity and service levels. The expert executive team is monitoring the critical issues that have an impact on their own practices as well as providing relevant information for AmeriHome’s clients and partners. AmeriHome’s leaders participate in committees with all of the agencies and are represented on the Residential Board of Governors of the MBA, ensuring they have the most up to date information. They are committed to being there for their clients and partners, and to continuing to deliver the top-tier service AmeriHome is known for. To receive all of its latest updates follow the AmeriHome Correspondent LinkedIn page. AmeriHome is also looking to fill some critical roles, so please be sure to check out the careers section on its website.

Guaranteed Rate is seeking acquisition opportunities with mortgage companies looking to maximize profitability. Guaranteed Rate, the 3rd largest retail lender in the country, experienced record growth in 2019, creating a great opportunity to partner with likeminded leaders looking to take advantage of our expertise and economies of scale. If you are an owner or CEO of a mortgage company that is looking for better pricing, increased profitability, lower risk and much less stress and hassle, we urge you to e-mail Mark Filler or call him at (773) 516-6979 to learn more about integrating your business into our platform.

“As the mortgage market is buffeted by growing volatility caused by the coronavirus pandemic, we understand that lenders and servicers need strategic support to successfully weather the storm. Whether it’s taking over your day-to-day mortgage production operations on an interim or full-time basis, or helping absorb and/or temporarily relocate employees to new assignments, we act as your strategic partner, preserving your business and your employees during these challenging times and helping you meet strategic business objectives both over the short and the long term. Contact Anjelica Nixt to learn more.”

Lender services and products

During this unprecedented time with the COVID-19 pandemic, Parkside Lending hopes that you and your families are staying safe and healthy.  We would also like to thank all those who are tirelessly working to keep our communities safe and functioning.  To show our gratitude, Parkside Lending is rolling out a “COVID-19 Community Heroes Special” for all Fannie Mae Loans where Parkside will waive fees paid to Parkside as well as providing a 45-day lock for the price of a 30-day lock. To all the Medical Workers, Police, Firefighters, Teachers, First Responders, Grocery Employees, Service Station Attendants, Package Distribution Employees, and many more qualifying professionals that are going to work every day, on the front lines, to provide essential services, we thank you! For more Details about Parkside Lending’s COVID-19 Community Heroes Special, and to obtain a list of the qualifying professions, please contact your Parkside Lending AE.

Anyone looking to cut expenses right now, should look at OptiFunder. Its patented optimization engine has proven to cut the cost of warehouse funding by 10%. Contact Brian Abbott for more information.

Become the most valued option around. Now, potentially more than ever, borrowers are looking for the perfect loan. As an independent mortgage broker, you have endless options to match their situation and needs. You also possess industry-leading technology that speeds up every part of the process and puts it all online, which leads to happier clients and real estate partners. To learn more about all that working in wholesale lending has to offer, visit BeAMortgageBroker.com.

Finance of America Mortgage realizes that now may be a confusing time for many borrowers who are approaching their loan’s closing date. Rest assured, we are taking every precaution to help keep our borrowers, their families, and our team members safe and healthy while maintaining the same level of excellence you’ve come to expect from us. That is why we are excited to announce the eClose process from Finance of America Mortgage. eClose is a digital client experience for closing on your purchase or refinance. This new closing process will help ensure the safety of both the borrowers and their closing agent. eClose allows borrowers to review and sign virtually all of their closing documents from the safety of their homes. Join Finance of America Mortgage today and save your clients time, paper, and energy with eClose.”

COVID-19 concerns are developing rapidly and becoming increasingly critical. Consequently, many credit unions and banks are becoming limited when ordering appraisals and valuations because appraisers want to stay safe through social distancing. Your origination pipelines do not need to slow down or become blocked! Verisite keeps loan pipelines moving and reduces appraisal cancellations because its mobile nature promotes social distancing, so appraisers stay safe. The Verisite mobile app allows homeowners to take interior property photos themselves, then securely transfer interior photos and descriptions to appraisers for their reports. Verisite has been used by lenders for years, reduces fraud by validating the photo location, and has processed and completed thousands of interior and exterior inspections.

Schedule a demo with Credit Information Systems (800) 782-9094. Call or click here today.

SRP’s recently hit zero, but current MSRs do have economic value. Utilizing a smart asset allocation and retaining the right MSR’s creates income diversification and reduces risk as a lender. IMA, a full-service mortgage advisory firm, and PollyEx Inc., a leading provider of capital markets software, have partnered to create an integrated solution for agency sellers to analyze and determine the best execution across retained, released, co-issue and aggregator delivery at the loan level. Utilizing their Cash Flow Management tool, IMA builds lenders a custom portfolio model while forecasting cash needs and minimizing credit and liquidity risk. PollyEx’s platform uses real-time data, API’s and pricing sheets from whole loan and servicing buyers and combines that with IMA’s servicing models to provide a real-time value for both the loan and SRP, giving lenders the best execution visibility across all delivery methods. Contact PollyEx or IMA to learn more about this powerful solution.

The coronavirus changing our industry

Navigating investor and regulatory requirements is challenging at the best of times — let alone now, with things changing on an almost-weekly basis in response to the pandemic. If you’ve been white knuckling your way through the crisis, don’t miss today’s pandemic compliance webinar featuring expert guidance from Johnston Thomas law firm’s James Brody. Curated by LBA Ware CEO Lori Brewer, “Keep Calm, Keep Compliant: Regulatory Resilience During a Pandemic” will cover Payroll Protection legislation, long-term sick leave, EPDs, EPOs, forbearances, LO comp, consumer privacy and data security best practices and more. Register here ahead of the 1:30 pm ET (10:30 am PT) start time.

In news that could relate to Wells Fargo Funding’s (correspondent) re-thinking its decision to exit jumbo lending, the Federal Reserve is temporarily “letting Wells Fargo out of the penalty box, freeing the troubled bank to aggressively lend to small businesses struggling to survive the coronavirus crisis.”

Is a forbearance an early payment default (EPD)? We await that news although Fannie has said that a loan entering early payment default status will not result in an automatic repurchase request. See Q68. Not exactly the same question the industry is asking, but this is what they’ve provided.

Speaking of which, Freddie and Fannie released their latest guidance that the industry is perusing. Don’t forget that there are loan lookup tools to determine if Fannie Mae or Freddie Mac are the current investor of the existing mortgage: Fannie Mae Loan Lookup tool or the Freddie Mac Loan Look-Up tool. Rumors have the FHFA releasing additional guidance on loans in forbearance by weekend. Perhaps they’ll waive all EPD tenants on loans in forbearance in certain circumstances, and also allow closed loans from a certain date onward that subsequently went into forbearance after closing to still be saleable until a certain date?

In a TMC survey taken this week a significant impact would be felt by respondents if mortgage servicers are not given access to a liquidity facility to help them advance unmade monthly P&I payments to mortgage bond holders. A significant impact (some said “catastrophic”) would also be felt if investors failed to purchase (or demanding repurchase on) loans closed properly that went into forbearance post-closing.

loanDepot’s Anthony Hsieh will be a featured guest on Fox Business News’ Neil Cavuto: Coast to Coast sometime between 9:00-9:30am PT today.

USDA Rural Development has taken a number of immediate actions to help rural residents, businesses and communities affected by the COVID-19 outbreak.

Caliber addressed Government Appraisal Guidance. “Effective immediately… Caliber is aligning with Appraisal guidance based on recent FHA Mortgagee Letter 2020-05, VA Circular 26-20-11, and USDA Stakeholder Announcement dated March 27 announcements.

BB&T Correspondent (Truist?) let everyone know that beginning yesterday it will temporarily suspend BB&T’s jumbo/non-conforming loan program. “We will honor all loans locked prior. Relocks will not be permitted; however, extensions will continue to be allowed. At this time, the guidelines, SRP schedules and rate sheets will still reference this program, as we do see this as a temporary measure.”

Equifax notified clients that the IRS Service Center in Kansas City will not re-open April 9th as anticipated, nor has an expected re-open date been set. The closure of the Fresno, CA facility combined with Kansas City closure is expected to result in processing-returns delays of at least two weeks. Equifax will “continue to receive, process and hold 4506T orders as they are received. Our intent is to release the orders in sequence, in coordination with the IRS as they re-open and begin to process again.”

In Pennsylvania there is new guidance for appraisers, notaries, title companies and home inspectors for transactions started prior to March 6, 2020.

Associated Bank TPO sent out 8 pages of small print detailing its set of changes to Associated’s portfolio guidelines and pricing. “Guideline changes are effective with applications registered in ELC and pricing changes are effective with new locks on or after Good Friday. (For full details, look at the actual announcement.) Portfolio Guideline Changes: Minimum credit score = 720. Maximum Loan-to-Value = 90% (see matrix for updated MI coverage requirements). Maximum Debt-to-Income ratio = 43%. No longer offering cash-out refinances (any LTV). No longer offering the use of asset-based income (f/k/a asset depletion). No longer offering 5-year ARMs. With the exception of new construction, all applications utilizing pre-April 10 guidelines must close by June 1, 2020.

“Portfolio Pricing Changes: Maximum premium paid on portfolio = 102.00. No longer offering the 75-bps purchase pricing special on portfolio. LPMI and BPMI Single Pay options will no longer be available on Wholesale loans. Your lock status does not affect your ability to utilize pre-April 10 credit parameters. Pricing changes are independent of credit guideline changes. The aforementioned changes do not impact our portfolio CARE program.”

CIT? “Effective immediately we are suspending the requirement for tax transcripts. CIT continues to require the signed 4506-T at loan closing as reflected in the Seller Guides… verbal verification of employment confirming the borrower’s employment state is required for all borrowers whose income is used for qualification purposes. The VVOE is to be completed within 10 business days of the Note date (or funding date for escrow states) for wage income… we accept lender’s policies of title insurance written on the 2006 ALTA loan title insurance form or a local equivalent. Covered Risk 14 in the 2006 ALTA form includes ‘gap coverage’ for matters arising between the loan closing date and the mortgage recording date. We will accept this if there is no exception for this coverage under Schedule B of the policy.”

NewRez sent out 2020-044 with a multitude of guideline changes and requirements that “may be applied to existing loans in process but must be applied to loans with application dates on or after April 14, 2020 through May 17, 2020. Income and asset documentation must be 60 days old as of the Note date for all loans (existing and new construction): If an asset account is reported on a quarterly basis, the lender must obtain the most recently issued quarterly statement. No changes have been made to the age of documentation requirements for military income documented using a Leave and Earnings Statement, Social Security, retirement income, long-term disability, mortgage credit certificates, public assistance, foster care, or royalty payments. Refer to the agencies’ guidelines for full details.

“Information in third-party employment verification vendor’s database, when using for income and employment documentation, must be no more than 60 days old as of the note date (for VVOE guidance, refer to NewRez Announcement 2020-026). Due to the federal income tax filing extension granted through July 15, 2020, the following documentation is not required: Copy of the IRS Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Tax Return), and IRS Form 4506-T (Request for Transcript of Tax Return) transcript confirming “No Transcript Available” for the 2019 tax year.

NewRez also addressed verification of self-employment… verification that the borrower’s business remains operational must be done within 10 days of the Note date. Included: evidence of current work (executed contracts or signed invoices that indicate the business is operating on the day the lender verifies self-employment); evidence of current business receipts within 10 days of the note date (payment for services performed); lender certification the business is open and operating (lender confirmed through a phone call or other means); or business website demonstrating activity supporting current business operations (timely appointments for estimates or service can be scheduled).

Capital markets

Our markets trade off of health news. Globally the COVID-19 cases are now at 1.4 million people infected and 82,000 deaths. The U.S. has 400,000 cases and 13,000 deaths; Manhattan now has more people testing positive than any country. (In the U.S., the annual flu season results in about 35 million being sick and 30,000 deaths – think of those numbers hitting our emergency rooms!)

Good news: Denmark, Norway and Austria are now looking at easing some of its lockdown restrictions in the coming days as Wuhan, China, where the coronavirus originated, is no longer on lockdown. As volatility in markets has declined this week, the street seems to be looking towards the proverbial light at the end of the tunnel when it comes to the coronavirus pandemic. Those positive coronavirus headlines included Dr. Fauci saying numbers of projected U.S. deaths are going to be downgraded following latest modeling, and that the outbreak should begin to turn around after this “bad week.”

Not that they are linked to MBS prices as much as they were, but U.S. Treasuries pulled back again, as they have each day this week, including the 10-year yield closing the day +3 bps to 0.76 percent. For those that believe a yield curve-flattening signals “recession,” a steepening took place yesterday against that backdrop of optimistic coronavirus headlines, as well as a well-received $17 billion 30-year bond reopening, a broad-based rally in the stock market, and the release of FOMC Minutes from the emergency March 15 meeting that revealed a willingness on the part of Fed members to keep rates low and to provide accommodative policy support for an extended period.

Today’s economic calendar received another eye-popping jobless claims report (6.6 million, huge but not a record), though these record-setting figures will be the norm for the foreseeable future, unfortunately. We’ve also seen PPI for March, in at (-.2 percent, +.2 percent core). Later this morning brings Wholesale Inventories for February and preliminary April Michigan sentiment. After yesterday’s release of the Fed minutes from its emergency meeting last month, we have Fed Chair Powell’s economic update. The early settlement close at 1:00pm ET will be followed by the cash close an hour later before Good Friday tomorrow, but Fed speak continues with San Francisco’s Daly this evening. Despite the early close, the Desk will still purchase up to $25 billion in MBS as they have done every day this week, but over four FedTrade MBS purchase operations instead of the usual six. We begin today with Agency MBS prices better by .125 and the 10-year yielding .74 percent.

Do not call the police about suspicious people in your neighborhood! Those are your neighbors without makeup and hair extensions!

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, “Drinking from a Firehose is Not a Long Term Business Model” 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.)