Oct. 16, 2012: Mortgage jobs with a twist; Wells Fargo addresses "illegal" income; forced place insurance defined
Rob Chrisman
In
terms of foreclosures, California has been having a rough go
of things recently. The state has one of the highest rates of
foreclosure in the country, but Keep Your Home California,
which was established in 2010 and funded through the Hardest
Hit Fund, aims to change that. The initiative makes
unemployed borrowers’ payments for a period of several months,
the idea being that this frees up time for them to find jobs
and stabilize sources of income, and can provide troubled
borrowers with as much as $100,000 under the Principal
Reduction Program. In order to be eligible, borrowers’ income
must fall underneath the income limit for their county (limits
range from $69,500 to $123,600), and must have loans must be
serviced by companies that have agreed to take part in the
program. With those eligibility requirements in mind, how
effective has Keep Your Home California been? Over its first
year, about 10,000 homeowners participated, and the program’s
website has published a few success stories at http://www.keepyourhomecalifornia.org/success.htm.
Considering
that, at most recent count, California foreclosures numbered
around 240,000, it’s not a massive dent, but it’s far from
negligible.
Maybe
Vikram
Pandit ,who just stepped down this morning as Citigroup’s
CEO, and John Havens, president and COO, who also resigned,
might be interested in these jobs:
With 66 years in the business Informative Research, an
Orange County based company, is looking to add a national
strategic accounts salesperson and a marketing/business
development analyst. Informative Research helps mortgage
lenders nationwide make sound risk decisions by offering a
full suite of products covering Credit, Capacity, Collateral
and Fraud. We are looking for people who have extensive
contacts in the industry and who can make an immediate impact.
The genuine team culture and underlying family company values
make Informative Research a great place to work. Send your
sales resume to the EVP of Sales, John LaBriola at johnl@informativeresearch.com
Send your marketing/business development resume to the VP,
Business & Product Development Patrick Buckner at patrickb@informativeresearch.com(Going to the MBA
Conference in Chicago? So are they – feel free to set up a
meeting.)
Here are underwriting jobs where you don’t need to move or
leave your regular job! “Give Your 203k DE Underwriters
A Terrific Holiday Thank You! The holidays come early for 203k
underwriting talent. Here’s an unusual opportunity for any
203k underwriter who may want to fill their Christmas wallet
with significant extra cash. We need about 40 part-time 203k
underwriters (with CHUMs number) to work on a special
diligence project for 2-4 months. The job entails a very
limited review of the value and LTV calculations. A qualified
203k underwriter can perform this job in about 15 minutes per
file and the job can be done on line. The underwriter needs to
commit to doing at least 3 loans per hour and make some time
commitment over the next few months. A qualified underwriter
willing to put in a few hours over some evenings and the
weekend can easily make $1-1500 extra per week. For managers,
consider rewarding some of your best talent with extra
money. We can assure you this is a really unique opportunity
and the personnel will not be shared with anyone else except
this specialized vendor who will also provide an assurance of
non-hire and non-solicitation. Send resumes or inquiries to 203kproject@thetomorrowgroup.com.
I
don’t know about you, but I’ve received about a dozen
invitations to receive a FULL free registration to the
NAMB National Conference, December 9-10. Las Vegas can
be fun, but the industry is wondering about NAMB membership,
expense problems, and trying to fill rooms…
If you think that you have a lot to do today, or over the next
several weeks, think about the CFPB. They're going to
revise TILA/RESPA ("know before you owe"), the ability to
repay rule, HOEPA, LO compensation tuning, and the mortgage
servicing rules. Granted, a fair amount of work has already
been done, but the industry is especially waiting for
Qualified Mortgage rules. But if the CFPB doesn't deluge the
industry with new rules and regulations soon, statutory
provisions kick in from Dodd Frank, Title XIV. And then later,
when the rules are actually put in place, things will have to
be changed again - and as we all know the markets rarely
like change and don't like uncertainty. And when asked
by Secondary Marketing about if the CFPB considers its impact
on origination volumes and cutting off consumer credit,
Richard Cordray subtly answered, "It's great for us to write a
lot of protections for consumers on consumer credit, but if
they can't get credit, we haven't accomplished anything and we
really haven't improved life for consumers." Tick tick tick...
What
is forced-place insurance? The basic answer is,
"Something you don't want to be involved in." "If you stop
paying your insurance on your home and you have a mortgage on
it, your lender will Google ‘most expensive home insurance in
the country’ and purchase that for you. This is known as
Forced-placed insurance. According to the NY Times the cost is
2-10x’s as expensive as standard homeowner policies. Oh and
guess what? The lender can receive a commission from a company
affiliate too. There is pressure from the CFPB to have the
lender advance money to keep the homeowners policy in effect
rather than letting it lapse." So wrote Guy S. with CMG.
Here's what the public sees: http://www.nytimes.com/2012/10/07/realestate/mortgages-the-high-price-of-forced-insurance.html?_r1&.
"Rob, you mentioned Chase & Wells' results. Your readers
might want to know about a story that CNBC ran titled, 'Can
Little Banks Compete With the Big Guys?' Here is the link: http://www.cnbc.com/id/49392458
Regarding trends in underwriting, Dennis Smith, co-owner of
Stratis Financial, wrote, "I have seen many articles and
commentary on how underwriting continues to get tighter and
the primary---often sole---bit of evidence is the higher FICO
scores for approved applicants. Of course the scores for
approved applicants has climbed since most of the approved
applicants are homeowners refinancing, in many (most) cases
for the 2nd, 3rd, or 4th time since rates dropped. We
have many customers who have been in their homes for many
years, have had equity not entirely wiped out by the real
estate crash and been able to refinance to lower and lower
rates. Missing from the applicant pool, until recently, have
been the first time buyers and prior-sub-prime borrowers who
cannot refinance due to not having HARP eligible mortgages.
Add to the mix the more stratified costs of mortgages based on
credit scores which has caused many of us in the industry to
encourage clients to spend a few weeks getting some debt paid
down to raise their scores for a better rate. Yes the
verification of funds has become more challenging (ridiculous
in many instances as show in a few of your examples) but
otherwise most of the guidelines are not much different
than they were in the late 1980's and early 1990's; an
era not a lot of current mortgage originators were around to
experience. FICOs are higher for approved applicants, not
because underwriting is tighter but because applicants as a
whole have higher credit scores due to the vast majority being
seasoned homeowners who have made their payments on time.”
Speaking
of underwriting, let’s look at some relatively recent
changes in investor, M&I, state, and vendor policies and
procedures to give you a flavor for current events.
Radian
released the delinquency data for September, and also spread
the word that it wrote $3.5 billion of new mortgage insurance
business and expects to maintain a risk-to-capital ratio below
25:1 in 2012. Good to hear! The delinquency data can be found
on Radian’s website at http://www.radian.biz/page?nameNewsReleases.
Previously
released historical data is also available on the website at http://www.radian.biz/page?nameFinancialReportsMortgageInsurance.
With a nod toward potential borrowers who earn money from
medical marijuana, or practically anything else that would
raise eyebrows, Wells Fargo's correspondent group
announced, "Sellers are reminded that all income and asset
sources used to qualify borrowers must be legal at the local,
state, and federal level. Any income or assets derived from an
activity or source that violates Federal, state, or local laws
cannot be considered for Loan qualification in order to meet
Wells Fargo Funding purchase requirements."
M&T Bank has updated its disaster policy for HARP
2.0 and FHA Streamline refinances such that re-inspection is
required only up to four months after the disaster. This
replaces the previous requirement for inspection for the
following 12 months. Following FEMA’s announcement about
disaster aid, M&T is requiring all properties in Baldwin,
Mobile, and Pickens counties in Alabama to be re-inspected if
their appraisals were completed before September 9, 2012. The
re-inspection must carried out by the original appraiser,
include exterior photographs, and be completed using Freddie
Form 442/Fannie Form 1004D to verify that the property has not
been damaged.
As of October 1st, Stearns Lending will require that
the loan originator’s email address be disclosed on all GFEs.
Registrations that are currently in the pipeline and don’t
include this information will be accepted up until the end of
September.
Following Freddie and Fannie’s announcement about HARP
changes, Genworth‘s mortgage insurance unit will be
aligning its policies with the GSEs’ HARP guidelines in an
effort to make it easier for lenders to offer HARP
refinances.
The Cadent Group, a title, property tax, valuation,
and analytics provider has announced plans to release the
expanded version of its ValueXStream technology, which
provides branded support for property tax initiatives for both
large and small entities. The updated ValueXStream technology
has been designed to be integrated with loan origination
systems and web-based applications; for more information, see
www.thecadent.com.
In the wake of the severe storms in late July, FEMA
has announced the availability of disaster aid for Ferry and
Okanogan counties in Washington.
Illinois has amended the Illinois Lending Database
provisions of the Residential Real Property Disclosure Act to
include further requirements that will go into effect on
January 1, 2013. These requirements dictate that originators
and title agents include certain data for mortgage
applications in Cook, Kane, Peoria, and Will counties; title
agents are also required to attach a Certificate of Compliance
or a Certificate of Exemption to all mortgages. The amendment
also requires that additional income and expense information
be included in each loan application.
There isn’t much volatility to report on interest rates, which
is fine by practically everyone on the origination and hedging
side. Monday we learned that Retail Sales rose 1.1% in
September, with some back-month revision higher. Given that
economists point to how 70% of the U.S. GDP is made up of
consumer spending, this is important. But investors still want
to own our fixed income securities as a safe haven, despite
the fiscal deficit and impending tax and spending measures
that are set to expire in a couple of months. Besides, if our
economy worsens due to our government’s inability to act, that
will lead to lower interest rates anyway, right? The 10-yr
closed at a basically unchanged level of 1.67%.
Turning
to mortgage pricing, Tradeweb reported that MBS volume at just
77% of its 30-day moving average. One item of interest,
pointed out by Thomson Reuters, was a speech by New York Fed
President Dudley “in which he commented on the widening in the
spread between primary mortgage rates and secondary mortgage
yields which has ‘limited the drop in primary mortgage rates.’
Several reasons for this are: lack of mortgage banker
competition, rep & warranty concerns, and increased g-fee
charges by the GSEs. These, in fact, were highlighted by Mr.
Dudley who added ‘Factors limiting pass-through warrant
ongoing attention from policymakers.’ Given the price levels
on MBS, talk of changes that might help homeowners refinance
tends to send a shudder through the market.
After a pretty quiet night this morning we’ve had the Consumer
Price Index for September (+.6%, core +.1%, about as
expected). We also have the duo of Industrial Production and
Capacity Utilization (expected +.2% and 78.3%, respectively),
and another housing health indicator (NAHB Housing Market
Index). Although there isn’t much going on, rates have
crept a little higher, with the 10-yr at 1.70% and MBS
pricing worse about .125.
If
you're interested, visit my twice-a-month blog at the STRATMOR
Group web site located at www.stratmorgroup.com.
The current blog discusses the looming fiscal cliff brought on
by Washington DC. If you have both the time and
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.
