Dec. 11, 2012: Mortgage jobs; IndyMac back in the news; first time home buyer comments; Ocwen's servicing audit not stellar
Rob Chrisman
IndyMac
is back in the news. Last week a jury ordered three former IndyMac
loan officers (in the homebuilder division) to pay $168
million to the FDIC for negligently approving 23 loans to
developers who never repaid them. The FDIC said the
lenders had “significant departures from safe and sound
banking practices,” driven by a desire to get bonuses. Here
is the dirty laundry: http://articles.latimes.com/2012/dec/08/business/la-fi-indymac-verdict-20121208.
And folks wonder why the lending industry is cautious about
making loans…
"Rob,
is there a better alternative being discussed to credit
score underwriting? For example Mississippi has the
lowest scores in the nation, but also the lowest default
rates." Not that I know of. In the “old days,” Thornburg
was known for doing “make sense” loans, and certainly the old
subprime companies like Household or Beneficial (the
training grounds for many good folks) would encourage lending
if the loan officers felt they could collect on the loans. But
at this point, although there are some portfolio products or
private banking models, I don’t see a lot of variance from the
standard underwriting models in place – companies are busy
enough as it is with vanilla product underwritten to vanilla
standards.
Turning to the jobs front, in San Jose fast growing Western
Bancorp is searching for loan officers, account
executives, and operations staff. If you’re highly organized,
productive and passionate please apply online and/or visit
Western's career page at http://www.westernbancorp.com/contact-western-bancorp/careers/
or email careers@westernbancorp.com.
And in Southern California, seasoned mortgage broker Back
Bay Funding is seeking experienced and talented loan
officers to join a very established team of originators and
processors, many of which have worked together for many
years. Back Bay Funding is a mid-size firm located in Irvine,
CA and works with over 35 lenders (http://www.backbayfunding.com/).
Originators
have the ability to generate conventional, jumbo, VA, FHA,
construction, commercial and private loans, along with
portfolio and private banking products, and take advantage of
fast turn times, and very competitive commissions. Loan
officers will need to be DRE and NMLS licensed to be
compensated; satellite offices welcome. For inquiries contact
Darren McLellan or Amisha Hansji at Darren@backbayfunding.com
or Amisha@backbayfunding.com.
What if husbands were treated like FHFA directors, and only
"acting?" ("Oh, him over there? He's my acting husband.")
Maybe Ed DeMarco will apply to one of the jobs above. Well,
probably not, but he is probably looking. The Wall Street
Journal is reporting that the Obama Administration is
planning to name a permanent Director of the Federal Housing
Finance Agency, perhaps as soon as the beginning of next
year. Nick Timiraos reports that, while the White House has
declined comment, sources familiar with the Administration say
officials are gathering names of potential nominees but have
not yet whittled it down to a short list or interviewed anyone
for the post. Edward J. DeMarco has been Acting Director of
FHFA since August 25, 2009, replacing James B. Lockhart. Did
you know that in almost 5 years the FHFA has never had an
actual director? They're always "acting," since the
government seems unable to come to enough of a consensus and
confirm someone. Officials are said to be considering an array
of candidates: financial regulators or professionals,
academics, and current administration officials.
What
does
this mean for the average guy in the biz?
Replacing Mr. DeMarco could give the administration greater
latitude to expand initiatives to refinance underwater
borrowers or to embark on a tailored principal forgiveness
program. Any replacement would also play an important role
guiding any process of overhauling Fannie and Freddie as the
administration prepares to unveil more details about its
preferred course. That’s right – another refi program to
keep us all busy!
If you think servicing is a walk in the park, just ask Ocwen.
A review of Ocwen’s mortgage servicing practices has found
indications of non-compliance with recent servicing reforms,
New York’s Department of Financial Services announced.
In a release, Superintendent Benjamin Lawsky said a review of
Ocwen’s business showed that “in some instances, the company
failed to demonstrate that it had sent out required 90-day
notices before commencing foreclosure proceedings or even that
it had standing to do bring the foreclosure actions.” The exam
also found that Ocwen sometimes failed to provide a single
point of contact for borrowers, pursued foreclosure actions on
borrowers seeking loan modifications, failed to conduct an
independent review of loan mod denials, and failed to ensure
that borrower and loan information was accurate and up to
date. He added that the examination of Ocwen’s servicing
practices came about after the department received complaints
about the company. Following the examination, the department
is now requiring that Ocwen hire an independent monitor to
review its operations and identify and report on corrective
actions. And those recently announced deals to acquire ResCap
and Homeward Residential’s servicing assets? Well, they seem
to be on hold: http://www.dfs.ny.gov/banking/ea121205.pdf.
On
Saturday, just in time for Sunday’s open houses, the
commentary discussed how the first time home buyer had
been left out of the recent excitement. Deb S., a top
Realtor from California, wrote, "Unfortunately for our overall
well-being, those purchasers were investors and first-time
homebuyers cannot compete with cash. Period. So, they are
scrambling like crazy and running from property to property
and simply get beaten out (either due to the terms or they
can't even make a decision as quickly as a number-oriented
buyer can) every time. I am witnessing HOA being slow to
react, with management not well-trained or asleep at
that wheel, and they are not making any rules about what % of
units must be owner occupied and the result is the complete
makeover of many complexes into below 50% owner occupancy and
thus, unable to get a loan. The homeowners aren't informed
from the management, they have no idea who is buying, what the
repercussions are, and they are suddenly in a home they cannot
refinance and must sell at a substantially lower price when
our market stabilizes and the investors slow down. I can't
wait for prices to take a jump up so the market is in balance
and homeowners can sell again with some equity and the buyers
are a more balanced lot... OR maybe what really needs to
happen is for rents to drop off their highs and those
properties won't look as appealing. Nothing good came out of
the Vegas buyout or the Arizona buyout and they are happening
all over again - this time add Reno plus many, many more. Can
I interest you in Stockton??"
And another note regarding Saturday’s commentary came from
Mike L. who wrote, "I have a comment on the “lack” of first
time homebuyers that actually are buying homes. By my
experience, it’s not for the lack of them trying. I have
pre-qualified a multitude of First Time Homebuyers and they
are writing offers on homes. Typically they are using either
FHA financing or Conventional financing with 5% to 10% down
(some even with 20% down). However they are typically writing
offers on lower priced “entry level” properties. These
properties are also very attractive to investors, so we
are getting constantly beat to the punch by investors using
all cash or very large down payments. It’s hard to blame
the seller. Why wouldn’t they take an “all cash, higher priced
offer” over the lower down payment first time buyer? Some of
my first time buyers have been trying for well over a year to
have their offers accepted. Combine this with the lack of
inventory here in Southern California and the problem is
amplified even further."
How
about
some relatively recent investor and vendor news?
Barbara
Werth with Mortgage Training Today points out that in reading
a recent blog there was a statement in there about “FNMA
requiring 5% down. I am including for you a link to the
single family guide stating that the minimum down is 3%
and it does not have to be the borrower's own funds. FHLMC
requires 5% of the borrower's own sourced and seasoned funds.
Now, of course PMI still have to be considered and MGIC is the
only company that will do PMI on these loans. There is
information is located here: http://www.mgic.com/pdfs/71-40600_uwguide.pdf.”
And
Barbara also points us to https://www.efanniemae.com/sf/guides/ssg/sg/pdf/sel082112.pdf#pageB6
and http://www.allregs.com/tpl/Main.aspx
(FHLMC). Thank you!
Starting
December 10th, the FHA will accept manual delivery of
credit scores and will be adding a field to the
Connection Insurance Application in order to differentiate
between Credit-Qualifying and Non-Credit Qualifying Streamline
refinances. The credit type indicator will become mandatory
on March 31, 2013.
In response to the large number of suspensions and
post-purchase defects associated with large deposits, Citi
reminds clients that the source of funds must be documented if
they’re coming from an account that was either opened within
90 days of the mortgage application or if they exceed 25% of
the borrower’s total monthly qualifying income. This applies
to the sum of unexplained deposits that meet the large deposit
criteria as well.
Citi has also issued a few general reminders about asset
verification, the first being that verification documents
should not be more than 45 days old at the time of application
and 50 days old as of closing. The funds required for closing
as per the HUD-1 must either match or be less than the value
disclosed on the AUS findings, and AUS findings that reflect
required assets should either meet or exceed the amount
verified through documentation. No more than 60% of the face
value of retirement accounts can be used to calculate the
amount of available funds, and all retirement accounts must be
verified with the two most recent months’ bank statements
after having subtracted any outstanding loans and, if required
for closing, proof of liquidation.
Effective for all HASP Open Access and DU Refi Plus products,
Fifth Third is now basing the expiration date of HARP programs
on the Application Received Date rather than the Note date for
new mortgages. All new loans must have application dates on
or before December 31, 2013.
Turning to the markets, Monday was a snoozer, but here
is what one trader noted yesterday: "So far in December we've
seen slightly lower origination numbers and expect these
decreased volumes to continue which has us bullish on the
basis." If originators are indeed seeing things slow down a
little, the production environment could become interesting.
If home loan rates stay here for the next year or so, the pool
of available loans for refinancing will drop. Two big wild
cards, however, are a) the purchase market heating up due to
the economy picking up steam, or b) the government introducing
yet another refi program. There are a lot of experts thinking
(b) is exactly what is going to happen. Regardless, things are
pretty quiet, interest rate-wise, and this morning we find the
10-yr pretty close to where it closed Monday, which is
pretty close to where it was all last week (it is currently
around 1.64%). And MBS prices this morning might be slightly
worse - but don't look for much change on rate sheets as
companies may just absorb the difference into their margins.
We're entering the college football bowl season, so how about
part 2 of 2 of gridiron humor? (Suitable for changing to any
school - don't send me "you insulted my daddy's alma matter"
e-mails please.)
If three Florida State football players are in the same car,
who is driving? The police officer.
How can you tell if an Auburn football player has a
girlfriend? There's tobacco juice on both sides of the pickup
truck.
What do you get when you put 32 Arkansas cheerleaders in one
room? A full set of teeth.
University of Michigan Coach Brady Hoke is only going to dress
half of his players for the game this week; the other half
will have to dress themselves.
How is the Indiana football team like an opossum? They play
dead at home and get killed on the road.
Why did the Nebraska linebacker steal a police car? He saw
"911" on the side and thought it was a Porsche.
How do you get a former Illinois football player off your
porch? Pay him for the pizza.
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 some of the considerations facing
the FHFA regarding Fannie and Freddie. 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.
