Oct. 1, 2012: Mortgage UW jobs; CFPB update on credit reporting; NMLS changes for LO's; USDA rural news; non-depositories continue to buy servicing
Rob Chrisman
This
one from an AE in a “red state”: Q: Do you know what the
difference is between conservatives and progressives? A: About
$16 trillion! Trillions - kind of like the money that Taylor
Swift makes every time she breaks up with a guy during lunch,
and then mints a hit song about it by dinner time. Seriously,
within the Commerce Department, the Bureau of Economic
Analysis announced Friday that "Personal income increased
$15.0 billion, or .1%...and Personal consumption expenditures
(PCE) increased $57.2 billion, or 0.5 percent." By my HP-12C
calculations, given those percentages, every month we're
making $150 trillion, and spending $114.4 trillion. I know
this is overly simplistic, but no wonder banks are flush
with deposits!
Mortgage Capital Associates a Southern California-based
Direct Lender, operating in 32 states is seeking an
Underwriting Manager (in the Los Angeles area) and in-house
underwriters. The ideal candidate should have
exceptional communication skills and thorough knowledge of
Conventional and FHA Guidelines in addition to multiple
investor overlays. For over 28 years Mortgage Capital
Associates has been a leader online and is currently expanding
its Branch Operations to target the Jumbo Market, and is
already doing nearly $100/million per month in originations.
Confidential resumes should be directed to Jason Kravitz at jkravitz@mtgcapital.com.
And in the next state over, Phoenix-based The Lending
Company is in search of DE/CHUMS/LAPP Certified mortgage
underwriters. "As an Underwriter you will be responsible
for managing and monitoring daily workflow. Act as the subject
matter expert on investor’s loan guidelines and internal
underwriting procedures. Make sound underwriting decisions on
large and complex loans regarding credit worthiness of
Borrowers. Relay these decisions in a professional manner to
Loan Officers and internal staff." A thorough knowledge of
Ginnie, Fannie, and Freddie guidelines is desired, along with
hands-on experience performing automated risk system data
entry and output analysis. The ideal candidate should have
current knowledge of RESPA and MDIA regulations, and know MS
Excel, MS Word, Desktop Originator, Desktop Underwriter, Loan
Prospector, Lenders Office, Calyx Point. For more information
on the company visit http://www.jointhelendingcompany.com/default.aspx?sJOINTHELENDINGCOMPANY&paboutus.ascx
and confidential resumes should be sent to Aileen Marcus at amarcus@thelendingco.com.
Yes, the CFPB is very concerned about all things consumer. Its
most recent missive focused on credit reporting, which
is guaranteed to be required reading at companies like Fair
Isaac, VantageScore, Fitch, Kroll, and many other credit-score
reliant companies: http://files.consumerfinance.gov/f/201209_Analysis_Differences_Consumer_Credit.pdf.
As required by the Dodd-Frank Act, the CFPB compared credit
scores sold to consumers to those sold to creditors to
determine the impact of the different scoring models used by
consumer reporting agencies. The CFPB found that for a
substantial minority of consumers, the different scoring
models yielded meaningfully different results, i.e., the
consumer and creditor purchased different credit scores from
the same reporting agency. In comparing different models
across various demographic subgroups, the CFPB found that
different credit scores did not appear to treat different
groups of consumers systematically differently than other
scoring models. The CFPB cautioned consumers against
exclusively relying on credit scores they purchase as a guide
to how creditors will view their credit quality.
Yes,
Ops, compliance, and legal staff usually outnumber loan
producers in lenders. I received this note from Penny
Showalter, the managing director of Cognitive Options
Group, about trends she’s seeing. “There is a lot of
uncertainty and angst surrounding all the proposals, new
requirements and looming thought of a CFPB audit for mortgage
bankers, community banks and credit unions. I am finding that
most while doing a good job and handling lending in a
compliant manner do not have the long list of required
policies and procedures that are being asked for. In addition
the typical company has one person in charge of compliance and
do not have the time, even if there is expertise, to handle
day to day issues and also prepare for what is coming. The
need for outside expertise and assistance has never been
greater in our industry. In order for lenders to meet
the challenges initiated by Dodd-Frank and subsequently being
implementing by the CFPB, processes need to be examined and
reformed by subject matter experts that study the specific
regulations and understand the ramifications to an
organization. Vendor Management, SARs/AML reporting (new for
mortgage bankers) and Fair Lending concerns specifically with
disparate impart are keeping people up at night. But there is
help out there from qualified mortgage professionals that can
help ease the burden. Use LinkedIn, go to industry conferences
to meet these experts and use the internet to search them out
so you can make this long bumpy road a bit smoother and keep
your mortgage lending practice successful.” (Cognitive Options
specializes in this – if you want more information on the firm
go to www.cognops.com.)
On
September 26, USDA’s Rural Development office released
an Administrative Notice (AN 4679) announcing that, “all RD
programs will begin using 2010 Decennial Census population
data … on March 27, 2013.” The AN also states that, “until
that time, and unless specifically directed otherwise,
programs are instructed to use the population data from the
2000 Decennial Census.” The 2010 Census data will render
ineligible for RD programs many areas that are currently
eligible for such programs, including RD Section 502 direct
and guaranteed single-family loans and Section 538 multifamily
loan guarantees. Here you go: https://www.ncsha.org/resource/usda-rural-development-notice-implementation-2010-census-data.
Here are some relatively recent banking, agency, and
investor updates to give you a flavor for recent changes
and trends. As always, it is best to read the full bulletin.
Yes,
it is almost hard for residential mortgage lending not to make
money. This will, of course, change, but bank earnings are
certainly profiting due to the residential business:
Saturday's
commentary gave a sampling of bank M&A for various
reasons, most notably increasing efficiencies. Bank closures
are still with us, however, but seem to be slowing down.
Friday we had one in Illinois: First United Bank for Crete,
and the FDIC entered into a purchase and assumption agreement
with Old Plank Trail Community Bank, National
Association, in New Lenox, to assume all of the deposits of
First United Bank.
Nationstar (which some dub “Wells Fargo Lite” given all
the talent it has brought over from Wells this year) is not
the only non-depository buying servicing. PennyMac
Mortgage Investment Trust recently agreed to acquire a
nonperforming whole loan pool totaling $452 million in unpaid
principal balance. Although the seller is not known (it is
often BofA, but that is just conjecture), about 53% of the UPB
is related to loans backed by houses in foreclosure, while the
rest is at least 90 days delinquent and most of the loans are
in FL, CA, IL, NY, and NJ. One report mentioned that during
the second quarter PennyMac bought $402 million in unpaid
principal balances of both nonperforming ($224 million) and
“reperforming” loans ($178 million). It isn’t alone: Carrington
Mortgage Holdings will close the year having bought $800
million in nonperforming loans which have an unpaid principal
balance of roughly $1.6 billion.
As yet another reminder, temporary FHA guidance on condo
project approval replaces the current provisions on the
definition of “under construction,” owner-occupant principal
resident purchases, mixed-use developments, investor
ownership, HOA dues delinquencies, project certification, HOA
Fidelity Bonds and Fidelity Insurance, pre-sale requirements,
and owner occupancy. Full details of the changes, which will
remain in place until further notice, are available at http://portal.hud.gov/hudportal/documents/huddoc?id-18ml.pdf.
Freddie Mac is updating guidance on how servicers
interact with state Housing Finance Agencies when assisting
distressed borrowers. Servicers should participate in state
HFA modification assistance programs that allow them to apply
funds as a partial principal curtailment for homeowners whose
mortgages are either owned or guaranteed by Freddie, a
practice that provides an additional way to help borrowers
reduce their LTVs and achieve more affordable payments. The
funds received from the program must be put towards paying
arrearages and any other past due amounts and decreasing
principal so that the mortgage is recast or re-amortized
without any other changes to the terms. This should be done
in conjunction with HARP or the Freddie Mac Standard
Modification program for approved borrowers. In addition,
servicers should ensure that the funds applied to
interest-bearing balances for borrowers who have partial
forbearance don’t go towards paying off the interest-bearing
balance.
When completing foreclosures for active duty service members,
Freddie servicers now have a maximum of 450 allowable delay
days (increased from the previous maximum of 365) to finish
the process provided that the delay can be attributed to
military indulgence under the SCRA or similar state law. This
will apply to all foreclosure sales executed on or after
November 1, 2012.
In compliance with the Fed’s anti-steering rule, Wells
Fargo Correspondent requires that the Anti-Steering Loan
Options Disclosure be presented to consumers in cases where
the safe harbor under Section 226.36(e)(2) of Regulation Z
applies. The disclosure must be signed and acknowledged by
all borrowers listed on the Note at least one business day
before closing. Loans that fail to adhere to the
anti-steering guidance will not be eligible for purchase by
Wells.
GMAC encouraged clients to take advantage of its 30-
and 45-day lock prices, which weren’t priced to comply with
the November 1st g-fee increase, and has issued a reminder
than the spread between the 30- and 45-day price is less than
the cost of a 15-day extension. The g-fee increase is
currently being integrated into the 60-day lock price. The
g-fee increases bring changes for GMAC Freddie and Fannie
products requiring extensions to close and disburse after
October 19, 2012. Loans with terms of less than 15 years are
subject to a 50 bps increase, while those with terms of 15
years or more are subject to an increase of 25bps. This
applies to loans with 5-, 7-, 15-, 30-, and 45-day lock
windows that have locked with GMAC prior to September 24rd and
to loans with lock windows of 60 days or more that were locked
prior to September 6th. The fee increases are in addition to
the existing extension fees as listed on the GMAC rate sheet.
Turning
to the markets, sometimes I am tempted to write, “Rates are
great” and leave it at that. But it is useful to talk about
the economy, especially with last week showing us some
disappointing reads on the economy. A good term would be
“wallowing” or “slow growth trajectory.” GDP is certainly less
than expected, and the Durable Goods (items made to last three
years or more) orders dropped over 13%. (Yes, it is volatile –
in this case aircraft orders plunged more than 100%.) The
“budding” housing recovery remains in-tact: new home sales in
August missed on the headline, but remain near two-year highs,
and the median price for a new home is now 17% higher than a
year ago. July’s Case-Shiller index also pointed to stronger
prices.
For
exciting scheduled economic news in the United States this
week, there isn't much in the way of the 8:30AM EST numbers
(the ones that can generally move rates more than other
releases). That comment aside, later this morning we'll have
some ISM Index number, and Construction Spending. Wednesday
are the ADP number (of questionable worth in predicting the
government unemployment data), another ISM number, and the
FOMC minutes from the 9/12 meeting. (Those might be kind of
interesting.) Thursday is the Challenger Job Cuts, Jobless
Claims, and Factory Orders. But Friday is the Big Kahuna:
employment. We closed the week with the 10-yr at 1.64%;
this morning it’s around 1.62% with agency MBS prices
slightly better.
(Parental discretion advised.)
A little boy dressed up as a pirate knocks on the door on
Halloween and an older lady come to the door and says, “Oh my
goodness! Now what are you?"
The little boy answers, “Look, lady, I’m a pirate”!
The lady replies, “Well, if you’re a pirate, where are your
buccaneers”.
The boy answers, “Right here under my buckin’ hat!
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