What
did the Dali Lama say to the hot dog vendor? "Make me one with
everything." Some LO’s out there wish the Lama could fix the
pricing on some of the products out there. Agency
mortgage-backed security prices are on the moon: at the close on
Friday Fannie, Freddie, and Ginnie 3.5% securities closed at
roughly 104, 103.875, and 105.5, respectively. For the sake of
simplicity, let’s say those are the prices of 4% 30-yr
mortgages. Are borrowers seeing those rates at those prices? Of
course not - a four point premium for a 4% conventional loan or
five points for a FHA/VA, even when you throw in the value of
servicing? Companies have too much overhead now to pass all that
along, of course, too much buy back risk, too many reserves to
set aside, too much whatever, and on top of that, many lenders
are at capacity – they don’t have to!
And
lenders continue to add staff. I have been retained by a well-known bank-owned
regional lender in the Mid-South which is seeking a Mortgage
Operations Manager to oversee processing, underwriting,
and closing functions. The lender is closing over $2 billion of
annual production, is an agency securitizer and servicer (well
over $5 billion), and has all agency approvals. The candidate
should be prepared to live near the headquarters, information to
be released to viable candidates, and travel is required to the
company's regional support centers. If you know someone who
might be interested in a good opportunity, please have them
contact me at rchrisman@robchrisman.com
referencing the ops position.
North of there, I have also been retained by an established mortgage
company in the Northeast region in its search for a lock
desk/scenario professional. The company is originating
approximately $1 billion per year and is licensed in well over
20 states. The ideal candidate should be prepared to process
lock requests from branch and loan originators, establish
scenario desk and respond to product eligibility questions, lock
loans with delivery sources, prepare daily lock reports and
distribute to management, prepare purchase advice analysis and
exception reports, maintain company pricing and best-ex engine,
maintain company product grid and matrices, and assist in new
product development. Resumes should be directed to me at rchrisman@robchrisman.com
referencing the introductory secondary position.
Both
these lenders are doing much better than ResCap. Ally announced this
morning that its ResCap mortgage subsidiaries filed for
Chapter 11 bankruptcy. (“These actions will enable Ally to
further invest in and grow its leading U.S.-based automotive
services and direct banking franchises and be best positioned to
return additional capital to the U.S. taxpayer by year-end. ‘The
action by ResCap will enable Ally to achieve a permanent
solution to its legacy mortgage risks and put these issues
behind us,’ said Ally Chief Executive Officer Michael A.
Carpenter.”) Ally Financial, Ally Bank and all other Ally
entities are not part of the ResCap Chapter 11 cases. In
addition, “ResCap and its origination and servicing platform are
expected to operate in
the normal course during this process.”
Let’s
hope California doesn’t follow. California's budget deficit will
swell to $16 billion, nearly $7 billion greater than expected
due to weak tax revenues and slow progress in cutting spending:
http://www.reuters.com/article/2012/05/13/california-deficit-idUSL1E8GD07D20120513.
Yes,
the government is entwined in residential lending. Beside the
splash caused by President Obama’s proposal, another piece of
legislation was introduced by Senator Feinstein. It would
provide simple, low-cost refinancing opportunities to non-GSE
borrowers by extended streamlined refinancing to those who have
been paying on their mortgages but have private label or bank
loans. (Did anyone ask
the non-agency security investors about this one?) The new
mortgages would be run
through the FHA and open up today's low rates to an
estimated three to four million families.
But
wait – there’s more! A
third piece of legislation proposes to give underwater
borrowers who decide to refinance a choice of taking the
reduced interest in the form of a lower monthly payment or
applying those savings to rebuilding equity in their homes. To
encourage borrowers to make the latter choice the legislation
would cover the closing costs of borrowers, a benefit of about
$3,000 per homeowner on average. Taking this course of action
would give the majority of underwater borrowers the chance to
get back above water in five years or less. That’s dandy – where
are we going to come up with the $3k for each loan?
Returning
to Obama’s proposal, the key points are as follows, many of
which are actually pretty good.
1) Extend the HARP eligibility date to May 31st 2010. (The bill
mentions that May 31st 2010 was chosen because most of the loans
originated after this date already have a mortgage rate below
5%.) 2) The bill would direct the GSEs to require the same
streamline underwriting process, and associated reps and
warranties for new servicers (cross servicer) as they do for
existing servicers (same servicer), removing some barriers to
competition. The bill would eliminate employment and income
verification requirements, thereby allowing a simple
pre-approved refinance package to be sent to a borrower that
only needs to be signed and returned – further streamlining the
process. 4) As a result of the bill, lenders who do not permit a
second lien re-subordination to a refinance loans, as long as
that it does not increase the risk to the second lien holder,
will be prohibited from receiving GSE guarantee for new loans.
Similarly mortgage insurers who refuse to transfer coverage to
the refinance loan will be prohibited from new business with the
GSEs – a penalty. 5) The bill also advocates extending the HARP
2.0 program not just to LTV >80, but also to borrowers with
LTV <€. 6) The bill would prohibit the GSEs from charging
LLPAs on a Fannie-to-Fannie or Freddie-to-Freddie refinancing.
And lastly, 7) it would eliminate appraisal costs - for
borrowers who still require a manual appraisal, possibly because
they live in communities where there haven’t been many recent
sales, the bill suggests that the GSEs provide alternatives to
manual appraisals in order to reduce overall cost and time to
refinance.
How do Ops and compliance folks keep up with things? Here are
some somewhat recent
lender/investor updates. As always, it is best to read
the actual bulletin, but this will give one a flavor for what is
happening out there. In no particular order…
US
Bank
announced that it is no longer offering the full FHA 203k
program (streamline is still available). (I received this note:
“We do a reasonable amount of these loans and used to sell them
to BofA, then moved over to US Bank….now looking for a home.
Stonegate correspondent offers both a full and streamline
version but their guides seem a bit more restrictive, plus I
would prefer to have at least two outlets. Do you know of any other companies that
offer this program on a correspondent basis?”)
Flagstar,
prior to the April 28th Fannie update of DU Version
8.3 to implement enhancements to DU Refi Plus, reminded clients
that it will provide lenders with estimated property values on
certain DU Refi Plus loan casefiles. The estimated values are
intended to provide transparency into Fannie Mae’s view of the
value of the property that was used to determine eligibility for
the DU Refi Plus property fieldwork waiver offer. These updates
will apply to DU Version 8.3 loan casefiles submitted or
resubmitted to DU on or after the weekend of April 28.
GMAC also reminded
folks prior to the 28th that Fannie Mae will update
DU Version 8.3 to implement enhanced messaging for DU Refi Plus
loans. The estimated property value used to determine
eligibility for a property fieldwork waiver offer will be
disclosed.
SunTrust Mortgage will
accept an allonge in lieu of an endorsement for conventional and
government loans.
Chase announced
changes and clarifications to its detached Planned Unit
Development (PUD) appraisal policy, including reduced appraisal
requirements for: Detached PUDs with monthly Homeowners’
Association fees less than or equal to $50 and Property
Inspection Reports (2075/2070) and DU Property Inspection
Waivers (PIW).
In conjunction with Fannie Mae Selling Guide Update SEL 2012-01,
Chase is eliminating the lot ownership seasoning requirement for
calculating LTV for all Fannie Mae and Non-Agency transactions
utilizing the Chase construction modification program. This
update to the Construction-to-Perm Modification (Single Close)
product guide aligns Fannie Mae and Non-Agency LTV calculations
with Freddie Mac.
Wells Fargo Wholesale
issued a new Fee Details form on the Broker’s First® website and
reminds users that, on the form, broker compensation should be
shown as a percentage of the loan amount. Should the percentage
on the Fee Details fail to match the dollar amount on the GFE or
the compensation be listed as a flat fee, the loan will be
stopped. The only case in which the dollar amount of the broker
compensation will be increased after the loan is through the
receiving process is if the loan amount increases.
The Home Equity compensation promotion that Wells had been
offering on properties in 29 states ended on May 5th.
A new Home Equity SIMO pricing special will be available for
commitment amounts of $50,000 and greater that will allow CLTVs
up to 80%. Loan scores of 740 and over can benefit from a
reduced variable rate of 4.25% on home equity SIMO transactions,
which includes the standard 0.125% mortgage relationship
discount. SIMO applications submitted from May 5th to June 1st
are eligible.
Effective for Home Equity Market Classes 3 and 4, restrictions
on CLTV for Loan Scores of 790 and above, DTI, and CLTV for Loan
Scores between 740 and 789 in Indiana, Michigan, Ohio, and Rhode
Island have been lifted.
A few weeks back Wells reminded correspondent and wholesale
clients in New Mexico that, under New Mexico law, for
transactions that are negotiated in a language other than
English but finalized in English, the consumer must be provided
with a summary in the language primarily used for the
negotiations. This does not affect Wells Fargo Funding’s
willingness to purchase loans so long as clients adhere to it.
After a relatively quiet news week in the United States, things
"hot up" a little during the next five days. Tomorrow we'll have
Retails Sales and the Consumer Price Index, Empire
Manufacturing, and the NAHB Housing Market Index. Wednesday is
Building Permits and Housing Starts, and Capacity Utilization
and Industrial Production (I reversed the traditional order of
both of those just to see if anyone noticed), and the release of
the Federal Open Market Committee meeting from 4/25. Thursday is
Jobless Claims, a Philly Fed number, and Leading Economic
Indicators.
Over
the weekend we learned that output at factories in the euro zone
unexpectedly fell in March, the latest in a series of
disappointing numbers signaling that the bloc's recession may
not be as mild as folks had hoped for. And banks are very
concerned that the Chase trading error will help usher in the
Volker Rule, which in its present form will prohibit hedging
rate locks. Our 10-yr
T-note, which closed Friday at 1.84%, is down to 1.78%, and
MBS prices are better by about .250.
Church Ladies With
Computers. (Part 1 of 3) These sentences (with all the
bloopers) actually appeared in church bulletins or were
announced in church services:
The Fasting & Prayer Conference includes meals.
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The sermon this morning: 'Jesus Walks on the Water.
The sermon tonight: 'Searching for Jesus.'
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Ladies, don't forget the rummage sale. It's a chance to get
rid of those things not worth keeping around the house. Bring
your husbands.
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Remember in prayer the many who are sick of our community.
Smile at someone who is hard to love. Say 'Hell' to someone
who doesn't care much about you.
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Don't let worry kill you off - let the Church help.
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Miss Charlene Mason sang 'I will not pass this way again,'
giving obvious pleasure to the congregation.
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For those of you who have children and don't know it, we have
a nursery downstairs.
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Next Thursday there will be tryouts for the choir. They need
all the help they can get.
If
you're interested, visit my twice-a-month blog at the STRATMOR
Group web site located at
