Other
lenders are only too happy to step into BofA’s, MetLife’s, and
ING’s void. Affiliated
Mortgage Company (AMC) is expanding its Retail Division in
Texas, the Southwest, and Midwest. This expansion would
include top producing LO’s, producing managers, senior DE/LAAP
Underwriters and/or retail branch teams that form enduring and
useful relationships with borrowers/referral sources. AMC, the
Home Loan Division of Benchmark Bank based near Dallas, is also
lenders to its Correspondent Division. Interested individuals
and/or teams looking for an opportunity to join a top tier
mortgage bank should contact Todd Potter at amcjobs@benchmarkbank.com.
On
the other side of the continent, Sterling Bank is searching
for underwriters for its Retail Mortgage group in its
North Seattle corporation center in Mountlake Terrace. Sterling
has nearly 500 employees, originated $2.1 billion in 2011, and
is on track to do $2.5 billion in 2012 with a full product
menu. For more information on the bank, go to https://www.bankwithsterling.com/,
and if you know someone who is interested in a position, they
should contact Kristy Benson at kristy.benson@bankwithsterling.com.
"Rob, what is this rumor I hear that Fannie can now change
our g-fee at will,
with little or no notice? What if we have a large pipeline of
loans, locked or closed, priced using a lower g-fee, and Fannie
raises the fee - do we take the hit? And can Fannie base our
g-fee on repurchase requests, or base g-fees on the states in
which we originate? And do we now have to build a g-fee reserve
into our pricing model, the cost of which is once again passed
on to our borrowers, in case the government asks Fannie to pay
for something and it is raised?” My answer to that is plain
& simple: that your head of Capital Markets should ask their
Fannie Mae rep about it. But…
That
being said, Fannie did
release "Selling Guide Announcement SEL-2012-03" which
will be directly quoted here: “Changes to Pricing Terms - Fannie
Mae is updating the terms that pertain to Fannie Mae’s ability
to change the pricing applicable to lenders’ deliveries of
mortgage loans under the standard Selling Guide provisions as
well as under any existing Master Agreements and related MBS
contracts. Accordingly, Fannie Mae may change the base guaranty
fee, loan-level price adjustments (LLPAs), and/or guaranty fee
adjustments for MBS Express or rapid payment method remittance
cycles (‘Pricing’) applicable to mortgages delivered under MBS
contracts or as whole loans as follows: Fannie Mae reserves the
right to change the Pricing one or more times during the term
of any Master Agreement or related MBS contract at any time.”
Fannie’s
announcement
goes on, “In each case, prior to the date on which the new
Pricing will become effective (‘Pricing Effective Date’), Fannie
Mae will provide the lender with written notice of the proposed
Pricing to be implemented. If the lender and Fannie Mae are
unable to come to acceptable terms on the new Pricing prior to
the Pricing Effective Date, either party may cancel the affected
MBS contract(s) or the related Master Agreement by delivering
written notice to the other party on or before the scheduled
Pricing Effective Date." This is effective immediately for
Master Agreements and related MBS contracts entered into on or
after May 1, at Fannie's discretion for the time of amendment
for existing Master Agreements and/or related MBS contract(s)
that are amended on or after May 1, and October 1 for all other
Master Agreements and related MBS contracts.
I
remember being on the trading desk when Drexel Burnham blew up.
It certainly gave us all a lesson in limiting counter party
risk. The heads of some of the largest banks in the U.S. have
met, or will meet, with Daniel Tarullo, governor of the Federal
Reserve, to discuss proposed changes, particularly a proposal to limit the
lenders' exposure to companies and governments. Bank
executives say the rule could hinder liquidity and hurt growth.
SIFMA and other industry groups recently sent a letter to the
Fed raising concerns with the proposed policies. "We submit that
an approach grounded in a 'too big' or 'big is bad' concept is
not only contrary to Congress' intent but is misguided and
detrimental to a sound, strong banking system and a strong
economy," according to the groups' letter: http://www.reuters.com/article/2012/04/27/us-financial-regulation-fed-idUSBRE83Q19Q20120427.
Speaking
of
bureaucracy, and how it has changed our landscape, the CFPB has become a
force to be reckoned with: it is expected to come out with a
final rule shortly on the definition of a Qualified
Mortgage/Ability to Repay provision; other proposed rules
in the pipeline are expected to address Home Ownership Equity and
Protection Act triggers and ceilings, designed for more
loans to be covered; mortgage
servicing, in which the CFPB will be more involved; and
the Truth in Lending Act
and the Real Estate Settlement Procedures Act, which
should come out this summer. And the line is certainly becoming
blurred about regulatory structures for banks, nonbanks, and
other real estate finance entities. Institutions who believe
that they are too small to be impacted might just be surprised
one day…It is one-sided, however, to say the least: the
CFPB is a consumer-based agency, so its focus is on fraud and
actions against consumers, not fraud committed against lenders.
While
the theory of QM is sound (“don’t lend to anyone who can’t repay
the debt”) Section 1412 of Dodd-Frank provides that a qualified
mortgage under its “ability to repay” standards cannot have points and
fees in excess of 3 percent of the loan amount. Try asking
any lender or LO to originate a $100,000 loan for that. The MBA
and numerous other trade groups have said an unnecessarily
narrow definition of QM that covers only a modest proportion of
loan products and underwriting standards and serves only a small
proportion of borrowers would undermine prospects for a housing
recovery and threaten the redevelopment of a sound mortgage
market. They want a broadly defined QM using clear standards so
that lenders are not afraid (any more than they are now) of a
higher risk of an ability to pay violation and even steering
violations, and a “safe harbor” provision that would protect
lenders and servicers from billions of dollars in litigation.
HARP
2.0 continues to breed uncertainty. A few weeks ago Grand Bank’s Icon
Residential turned some heads by drastically changing its HARP
2.0 requirements. On April 19th brokers
received a bulletin saying, “Icon Residential is revising Icon
Announcement 12-16 issued April 10, 2012 as follows: Icon will
no longer require HARP loans to be in "approved" status to be
locked. HARP 2.0 loans may now be locked prior to loan approval
subject to Icon's published lock policy which is posted on
Icon's website at www.iconwholesale.com
under the Rates/Matrices link. (Here) is a summary of the recent
changes to the Portfolio DU Refi Plus/HARP program: Expanded
Approvals (EA I, II and III) are no longer eligible for
submission regardless of lock status; "Approve/Eligible" is the
only acceptable DU Finding. Loans with an EA I Finding,
submitted and locked on or before April 10th, will be
underwritten, evaluated and decisioned on a loan level basis and
these loans must fund by the original lock expiration; lock
extensions or re-locks are not eligible. The maximum LTV/CLTV is
now 150%. Loans with an LTV/CLTV > 150% that were approved
and locked on or before April 16th must fund by the original
lock expiration; lock extensions or re-locks are not eligible.
Loans with an LTV/CLTV > 150% that were not in approved
status and locked on or before April 16, 2012 are not eligible.”
Icon
went on to say, “A CoreLogic ValuePoint4 AVM, with a Confidence
Score of 80% or higher, or a FNMA 2055 is required on loans that
receive a property inspection waiver (PIW) with a stated value
> 125% LTV/CLTV. This requirement was effective with new
submissions on or after April 11, 2012. Second home and
investment properties are no longer eligible. Loans > 125%
LTV with a PIW (without an AVM or 2055) and loans secured by a
second home or investment property must have been locked on or
before April 11, 2012. Second home and investment properties are
still eligible under the Agency DU Refi Plus guidelines. Refer
to the matrix posted on Icon's website.”
The markets are quieter
than quiet, which tends to help mortgage originators focus on
originating mortgages rather than reacting to volatility. Yesterday
we had the ADP Employment Report Private Payrolls number which
increased by 119,000 in April following a revised 201,000 in
March and weaker than the median forecast for a 170,000 advance.
(Tomorrow’s Bureau of Labor Statistics' nonfarm-payroll data,
which includes government workers, is expected +160k and an
unchanged unemployment rate of 8.2%.) Factory Orders fell 1.5%
in March, the biggest loss in 3 years. With numbers like that,
and continued problems in Europe, you’d think we’d rally more,
but we didn’t. Some of the Fed governors were speaking around
the nation, and given their comments it seems that QE3 (another
round of Quantitative Easing) is unlikely. The 10-yr closed at
1.92%, MBS prices were better by about .125, and mortgage banker
selling was well below its recent average levels. Hey, low rates can only help
refi’s for so long, right?
Today,
for action-packed excitement, we’ll have Initial Jobless Claims
(expected lower), the preliminary Q1 readings for Productivity
and Unit Labor Costs (expected at -0.5% and +2.8%,
respectively), and at 10AM EST is the ISM Non-Manufacturing
number for April. Thursday is starting with rates right about
where they were at Wednesday’s close, with the 10-yr at 1.93% and MBS
prices unchanged.
(An oldie but goodie.)
A
guy is driving around the back woods of Montana and he sees a
sign in front of a broken down shanty-style house: “Talking Dog
for Sale.”
He
rings the bell and the owner appears and tells him the dog is in
the backyard. The guy goes into the backyard and sees a nice
looking Labrador retriever sitting there.
"You talk?" he asks.
"Yep," the Lab replies.
After the guy recovers from the shock of hearing a dog talk, he
says "So what's your story?"
The Lab looks up and says, "Well, I discovered that I could talk
when I was pretty young. I wanted to help the government, so I
told the CIA. In no time at all they had me jetting from country
to country, sitting in rooms with spies and world leaders,
because no one figured a dog would be eavesdropping. I was one
of their most valuable spies for eight years running.”
“But
the jetting around really tired me out, and I knew I wasn't
getting any younger so I decided to settle down. I signed up for
a job at the airport to do some undercover security, wandering
near suspicious characters and listening in. I uncovered some
incredible dealings and was awarded a batch of medals. I got
married, had a mess of puppies, and now I'm just retired."
The guy is amazed. He goes back in and asks the owner what he
wants for the dog.
"Ten dollars," the guy says.
"Ten dollars? This dog is amazing! Why on earth are you selling
him so cheap?"
"Because he's a liar. He's never been out of the yard."
