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Mar. 23, 2011: Numerous investor updates & comp training; LO licensing site for your files; agency feedback from the trenches
Rob Chrisman
What am
I hearing out there? I am hearing, not officially, that
wholesale reps are having trouble drumming up business from
brokers. Production estimates for 2011 are down 30% from 2010’s
levels, but applications are holding in pretty well – maybe
loans are coming in through retail channels. In fact the MBA reported that apps rose 2.7% last week,
with refi’s accounting for almost 67% of applications. The ARM
share is almost up to 6%.
This is not mortgage related. But if you've never seen a live
shot of an eagle on a nest, and need 60 seconds of quiet time in
the middle of your day (sorry about the ad – not my doing): http://biggeekdad.com/2011/03/decorah-eagles-webcam/. (No guarantees of
it doing much!)
Ok, back to
mortgages. If you have questions regarding LO
licensing, this is a good place to start your search for
an answer: http://mortgage.nationwidelicensingsystem.org/courseprovider/Pages/Resources.aspx.
“Money isn't
everything. But it sure keeps the kids in touch.” Regardless of
the fee income from the reverse mortgage origination business, no one wants to run the risk of the Gray Panthers or
AARP picketing their office during the Channel 5 news. Bank of
America, Wells Fargo, and now Financial Freedom have ended
that channel. "Financial Freedom Acquisition, a subsidiary
of OneWest Bank…we have decided to exit the wholesale reverse
mortgage origination business based on the regulatory
environment and the desire to focus on the bank’s core
businesses. The wholesale reverse mortgage origination channel
represents the majority of Financial Freedom’s origination
business and is the only wholesale origination channel within
OneWest. As a result of exiting wholesale, Financial Freedom’s
retail reverse mortgage origination channel is also closing due
to our limited presence and scale in retail alone."
Monday I noted that a few folks in the media have called for an
immediate government withdrawal from the mortgage biz. I
received some e-mails. "When was the last time Steve
Forbes applied for a mortgage loan? I have been in the
business since 1982, when the prime lending rate was 22%, and I
can tell you that if the buyer put down 20%, it was because they
had a "gift" from family, or had just sold their past residence
and had profit toward the new purchase. 10% down was more
common, and MI was necessary; underwriting standards from
Freddie and Fannie were very tight. People seem to
forget that prior to FNMA/FHLMC there were no standard
underwriting guidelines.”
Another wrote,
“People should not forget that the US Government, through HUD,
trying to increase lending through lower standards, was
instrumental in the credit crisis. It was not necessarily the
fault of the agencies trying to maintain market share. The GSE's
gave liquidity to the markets, banks were able to sell their
mortgages, and money moved around the system. It is misleading
to try to blame FHMA/FHLMC for other investors moving down the
credit curve and into subprime. I don't recall the 2/28 loan,
the NINA, 100% (or above) financing being a Fannie/Freddie
idea."
And on the comp issue: "Implementation of the
comp rule keeps getting more and more convoluted and complex and
is mostly unnecessary. Logically, the only information a
consumer needs to determine the best offer is the rate and the
closing costs for a given loan. All this additional information
only clouds the important factors from getting to the
consumer. If over-charging is really an issue, which is
debatable and ill-defined, simply putting a limit on it would
have accomplished it. If disclosing revenue was so important
why don't banks, which do the lion’s share of loans, do it?"
Speaking of compensation, Wells Fargo's brokers
received a handy two page chart showing the differentiation
between the two compensation plans, lender-paid and
consumer-paid. In addition, its brokers also received a reminder
that the current GFE will not be changing, however “the way we
input information and review the GFE will change for loans
submitted after the 25th. In Block 1, Broker’s
Compensation Paid by Lender, don’t forget to include your Tier
incentive/hit. Your broker-owner will need to provide you the
level selected for Wells Fargo.” And so forth. “Effective March
25, Wells Fargo will only accept the Wells Fargo Fee detail with
loan submissions.” Wells brokers also received updates on
S.A.F.E. changes, updates & reminders, the calendar for the
next three months for FHA Streamline purchase dates, a revised
policy for FHA refinance transactions, and a reminder of the
increase in Annual Mortgage Insurance Premiums (Paid Monthly)
for FHA Loans starting 4/18.
US Bank's wholesale division
reminded brokers of Reg. Z and comp training yesterday, today,
tomorrow, and next week. The call-in number for all the sessions
is 800-370-8105. For USB’s California region, the training call
is today at 1PM PST, Conference ID 53665179; or tomorrow at 9AM
PST, Conference ID 53666144. For its Mid-Central region the call
is also today, 8:30AM CST, Conference ID 53662235. For the
Southeast region, the call is today at 2PM EST, Conference ID
53662723. In the Northeast, the call is tomorrow at 9:30AM EST,
Conference ID 53665836. “There will be additional sessions on
Tuesday, March 29, 10:00 AM CT Conference ID 53666599, and
Wednesday, March 30, 3:00 PM CT Conference ID 53667049.
Materials for the training course will be posted on the ‘SellUs”
website under ‘Regulation Z changes/broker comp.’”
US Banks's Consumer
Finance Division
(portfolio product) has comp information available at its
website: www.usbank.com/brokerloans. As
of
now, the LPC will be 1.5% (subject to change), but brokers
should note that with this division the
broker is responsible for compliance with all federal and state
laws so it is not requiring copies of compensation plans for
LO's nor is USB having the brokers sign a new agreement. (This
should allow USB’s Consumer Finance Divison more flexibility to
make changes.) Brokers can select on a loan by loan basis
whether they want LPC or BPC.
SunTrust has a new fellow
running its mortgage business: Jerome Lienhard. For the full
story go to: http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid 1103221721dowjonesdjonline000393&titlesuntrust-names-new-head-for-mortgage-operations.
Parkside Lending, a wholesaler in San
Francisco, sent its brokers news that it has “updated its
“Certification of Receipt of GFE and Intent to Proceed” and “TBD
Certification” forms to comprise the Regulation Z amendments
which go into effect on April 1, 2011. In language only a broker
would love, “The “RESPA and TILA Disclosure” form will replace
the existing “Certification of Receipt of GFE and Intent to
Proceed” form. The “TBD RESPA and TILA Disclosure” form will
replace the existing “TBD Certification” form. The revised
applicable form must be included with loan submissions on or
after April 1, 2011 in order to avoid delays during the
registration process.”
Kinecta Federal
Credit Union is also
offering a training session for its Midwest Central States
Region today starting at 10:30AM. It is online via Webex, and
brokers can RSVP at 1.800.854.4600 or wholesale.kinecta.org.
Kinecta also got the word out to its clients that it will no
longer generate a new credit report at time of loan submission,
and "will accept credit reports from all Fannie Mae approved
credit vendors. All credit supplements and credit re-pulls must
be provided to Kinecta, if required. A new credit report will be
required in instances where the original credit report has
expired."
Bank of Internet sent word out that
under the Lender Paid compensation model, BoI “will pay a
predetermined amount of compensation to the Loan Originator
which may not vary. Compensation will be paid as a percentage of
the principal loan amount. The LO will not be permitted to
credit or reduce any portion of their compensation to the
borrower, nor may they offer any other form of additional
credits, concessions or incentives. Please keep in mind, once
selected, the Lender Paid compensation plan will be applied to
all branches of each wholesale customer. It is not permissible
to have multiple compensation plans for different branches.” BoI
sent out a Lender Paid template for brokers to use to figure out
“the compensation option your organization would like to be
placed on for the coming calendar quarter, April 1, 2011 through
June 30, 2011.”
Fifth Third told its brokers
that under the Lender Paid Compensation option, “We have added
two new pricing options based on broker feedback. The Lender
Paid compensation now has 7 (bp) options: 100, 125, 150, 175,
200, 225 & 250… If you choose to submit a GFE without prior
GFE worksheet review/approval, please note that GFE’s will be
rejected if deficiencies are identified. Common rejection
reasons will include, and not limited to: Incorrect compensation
amount for lender paid comp Owners’ title not disclosed on
Purchase loans Incorrect appraisal fees per the appraisal matrix
found on wholesale connect Incorrect/low transfer tax fees
5 3 also reminded brokers of its float-down policy which has
been in place for nine months, but with the new twists caused by
the Reg. Z changes. For precise details consult the bulletin.
Pinnacle Capital, with guidelines
available on www.pcmloan.com, updates its Fannie
HomePath program identification, updated its VA, FHA, and jumbo
underwriting criteria, and clarified some information on its
standard and enhanced DU Refi Plus loans (noting the extension).
Mountain West mimicked Wells
Fargo's announcement regarding the revised flip policy.
“Mountain West Financial is pleased to offer once again, FHA
transactions involving properties acquired and sold within 90
days of sellers’ acquisition. Mountain West Financial will be
adhering to HUD’s waiver of the 90-day flipping rule which
requires the following: All cases in which the sales price of
the property is 20 percent or more over and above the seller’s
acquisition cost will require (2) full appraisals. The
appraisals must be ordered through MWF’s appraisal department
via the company’s approved FHA appraiser roster.”
The markets were relatively tame yesterday following some
Treasury-induced volatility Monday. The volume of MBS sales went
back down below recent averages, per Tradeweb, the yield on the
10-yr was stuck around 3.33%, and MBS prices ended the day worse
by about .125. Overall the $10 billion per month is seen as
manageable, helped in part by limited mortgage banker supply
that is averaging around $1.5 billion per day.
We learned that, per
FHFA’s House Price Index, home prices declined 0.3% in January
and December’s number was revised downward. Every week we are
reminded of the anemic housing market, and the news continues
today with the New Home Sales for February (actually projected
to increase slightly). Rates are down slightly today, but
unfortunately the market is being moved by more bad news from
Japan and the Middle East. The 10-yr is down to
3.29% and MBS prices are better by .125.
Looking forward to
retirement?
Question: How many days in a week? Answer: 6 Saturdays, 1
Sunday
Question: When is a retiree's bedtime? Answer: Three hours
after he falls asleep on the couch.
Question: How many retirees to change a light bulb?
Answer: Only one, but it might take all day.
Question: What's the biggest gripe of retirees? Answer: There
is not enough time to get everything done.
Question: Why don't retirees mind being called “Seniors”?
Answer: The term comes with a 10% discount.
Question: Among retirees what is considered formal attire?
Answer: Tied shoes.
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