Aug. 1: AE & Ops jobs, personnel moves, subservicer review; conventional conforming DTI, LTV, ARM, DU, LP, LLPA, and UCD changes

August already? Time flies, and we live in an age where we must prove to machines that we are not machines. What about watching artificial intelligence devices (robots) create their own language that humans can’t understand? Scary stuff.

Jobs, subservicer review, personnel news, and broker pricing product

“One of Utah’s fastest growing mortgage bankers, Citywide Home Loans, continues to grow and is looking for an experienced National Director of Operations to spearhead innovation and enhance efficiency within the organization. This individual will be responsible for the management and oversite of National Mortgage Operations to include Set Up, Loan Processing, QA, Closing, Funding and Post-Closing at our Corporate Headquarters located in Salt Lake City, Utah. Additionally, we are seeking a remote Regional Underwriting Manager to join our fast-paced, high-volume Underwriting team. Must be DE/LAPP certified. Contact Fawn Bird to apply for either position.”

Do you use LoanCare as your subservicer? Richey May & Co., a public accounting firm recognized as the leader in providing audit, tax, compliance and oversight services within the industry, will once again be conducting a review over LoanCare at the end of August to assist companies with their monitoring and oversight responsibilities. The review is performed on behalf of multiple clients at the same time, thereby sharing expenses and creating cost savings that are passed on to participating clients. To learn more about Richey May’s comprehensive oversight review program and the upcoming review over LoanCare, or to participate in the oversight reviews already conducted earlier this year over Dovenmuehle and Cenlar, please contact Kurt Blohm. Richey May has also released its latest whitepaper, “Mortgage Subservicer Oversight: Understanding Your Selection and Oversight Responsibilities.” It includes guidance on selecting a subservicer, as well as recommendations regarding the timing and frequency of oversight procedures.

Freedom Mortgage is very pleased to welcome David McPherson to its Wholesale Lending Division as the Regional Manager of the Northwest Region. David has over 25 years’ experience in Wholesale, Correspondent, and Branch Management and will play a key role in helping to grow market share and manage profitability. With his strong track record of growing sales and contributing to company goals, David will be an exceptional addition to Freedom Mortgage. David is actively recruiting experienced top-producing Wholesale Account Executives in the OR, WA, ID, MT, WY, CO, UT, NM and AK markets. To learn more or to join our team, please contact David McPherson at (360) 901-3266. Freedom Mortgage is a top 10 national lender with over 25 years serving customers and is licensed in all 50 states.

Carrington Mortgage Wholesale Lending continues to remain loyal to the underserved market, while competitors continually move away from this segment. To further expand our support, Carrington is offering a 25bps LLPA adjustment on FHA/VA Full Doc loans with credit scores less than 640 throughout August, Jumbos excluded. Carrington remains the tough loans leader, closing loans others can’t through expanded guidelines and manual underwriting capabilities. Contact Carrington at 866-705-9506 or visit to become an approved broker.”

Endeavor Select Program (ESP) is the new program offering premium pricing on select loans. ESP promises to get your loans through the system faster and close in less than 15 days on average!  NOTE: All new brokers qualify for an additional .125 price improvement on their first ESP loan submitted. Price out your ESP loan with EASY Quick Price to see the premium pricing. If you’re not signed up with Endeavor America, fill out an application here. The Endeavor Select Program is Built for Brokers with premium pricing and premium service.

CALCAP Advisors, Inc., announced today that a substantial equity investment has been completed with Gatehouse Partners, LLC into its business purpose lending affiliate, CALCAP Financial, Inc. The investment will enable the firm to expand nationwide. In conjunction with a significant private equity investment completed, CALCAP Advisors today announced that Len Israel has been appointed CEO of the company’s mortgage lending entity. Most recently Israel was President of Mortgage Banking at Flagstar Bancorp, where he was responsible for all production, operations, and capital markets activities. Under Len’s leadership, Flagstar originated over $32 Billion of residential mortgages in 2016.

Congrats to Tom Gillen whom Churchill Mortgage has named as the company’s senior vice president of capital markets. Gillen will oversee the ongoing development of business strategies for the mortgage provider.

Northpointe Bank announced that Pete Tamoney and Seth Elbaum will be serving Northpointe bank as a vice president sales manager of correspondent lending. “Both Elbaum (West) and Tamoney (East) will be responsible for developing new relationships, while supporting current clients, in Northpointe Bank’s correspondent business channel.”

Fannie & Freddie, LP, DU, Conventional Conforming updates

Stock owners in Freddie and Fannie are a dogged group and they took great interest in a new document helping the argument for shareholders that the government lied when began to sweep all of Fannie’s profits. We all thought that Fannie was in a “death spiral” and this was necessary to hasten the wind-down of their business, yet Tim Geithner said that Fannie will be earning strong revenues and can support the 10% dividend for years into the future.

GSE reform is an ongoing project, and probably will be for the rest of our lives. And everything they do is open to debate. For example, the MBA commented on the proposed “Duty to Serve” plans regarding underserved market plans of F&F.

All the yammering about loans being offered by various lenders with a minimum of a 1% down payment coming from the borrower was addressed by Freddie Mac, since it was the secondary source purchasing these loans. Some point out that to finance the lender credit of the additional 2% down needed under the program, some (not all) lenders jacked up their rates and/or fees.

Get the facts on available products and programs geared toward the first-time homebuyer (FTHB). Using affordable products, and bundling them with DAPs and MCCs, can address barriers such as funds for down payments – and help make the dream of homeownership a reality for more FTHBs. Wells Fargo Funding offers a full spectrum of low down payment program options for both conventional and government loans. Sign in to access information in the News from Wells Fargo section.

Wells Fargo Funding has removed its overlay requiring refinances of a cash-out Loan aged less than six months to be treated as cash-out refinance, and its guidance for refinancing Loans with less than one-year seasoning, for conventional Conforming rate/term Loans.

Fannie Mae announced changes to the maximum LTV/CLTV ratios for conventional conforming ARM loans. Wells Fargo Funding is assessing this change, but loans underwritten to Fannie Mae’s expanded LTV/CLTV ratios are not currently eligible for purchase by Wells.

Effective July 28 the LTV requirements on Fannie Mae High Balance and Agency 3/1, 5/1, 7/1, and 10/1 ARM’s will be improved to align with the LTV requirements of the matching fixed rate products. Log into Flagstar’s website for full product requirements.

Fannie Mae is introducing its new web-based application, Fannie Mae Invoicing, on Sept. 25 to eventually replace the Servicer REAM Deficiency Billing System (SRDBS), which will be phased out over time. This new system replaces manual processing and gives servicers a significantly improved experience.

The Fannie Mae Selling Guide has been updated to simplify underwriting by implementing updated policies related to the Desktop Underwriter® (DU®) 10.1 release. Read about these updates in Selling Guide Announcement SEL-2017-06. For a summary of key updates in this Selling Guide Announcement, view the executive perspectives video presented by Jude Landis, Vice President, Credit Policy, and the executive overview from Carlos Perez, Chief Credit Officer for Single-Family.

Plaza is aligning with the DU 10.1 updates. Its guidelines will be updated July 31, 2017 to reflect these changes.

To limit the confusion surrounding the June 6th joint Uniform Closing Dataset (UCD) announcement about relief for the Closing Disclosure PDF, Freddie Mac posted the UCD mandate of September 25, 2017 has not changed. The six-month relief period is only for embedding the Closing Disclosure PDF within the UCD XML file. The requirement to embed the Closing Disclosure PDF in the UCD XML file will not be fully enforced before April 2018. “However, if lenders are able, we encourage them submit the UCD XML file with the embedded PDF, before April 2018. The UCD must still be submitted for all loans delivered to the GSEs with a Note Date on or after September 25, 2017. The GSEs will require the Borrower data and Closing Disclosure within the UCD XML file (i.e., either the Model form, or if using a Split Disclosure, the Borrower-only form).”

Freddie Mac updated its Guide to add the Uniform Closing Dataset (UCD) requirements which are effective for mortgages with note dates on or after September 25, 2017. As announced last month, there is a six-month relief period for the specific requirement to embed the closing disclosure PDF within the UCD XML file. This bulletin also Bulletin provides updates to its selling requirements to support new selling opportunities.

As previously announced by AmeriHome, for all loans with a Note date on or after September 25, 2017, Fannie and Freddie will be implementing new UCD Data Points requirements. property closing disclosure, and refinance CD “alternative form” requirements.

Effective July 20th, Mortgage Solutions Financial has made changes to its Conventional termite inspection requirements.

Mountain West Financial posted the following: U.S. Bank has announced with the Home Mortgage’s Lender Operations Update (LOU) 2017-027, they will not accept Freddie Mac loans reserved on or after Tuesday, August 1, 2017, in which the borrower has ownership interest in another property at the time of closing. This announcement affects the loan programs offered by the Housing Finance Agencies to include California Housing Finance Agency (CalHFA), IDAs of Phoenix/Maricopa (AKA Home in Five, Arizona Department of Housing (ADOH Home Plus) and
Golden State Finance Authority (GSFA). Borrowers may not own other property at the time of closing.

Royal Pacific Funding will implement the recent Fannie Mae changes as of July 29. DTI Ratios: DU will no longer require additional compensating factors for DTI >45% and ≤50% allowing more borrowers to qualify. Self Employed: With the new DU update, more borrowers may be eligible for the one year personal and business tax return documentation. Maximum LTV/CLTV for ARM mortgages will be aligned with Fixed rate for all transactions, occupancy and property types up to a maximum of 95%.

With Single-Family Seller/Servicer Guide (Guide) Bulletin 2017-11, Freddie Mac requirements for Home Possible mortgages will now specify that gifts or grants from the Seller as the originating lender will be permitted only after a contribution of at least three percent of value from borrower personal funds or other eligible sources of funds. These changes were previewed in its July 6 Industry Letter, and are effective for mortgages with settlement dates on and after November 1, 2017. Freddie is also updating its requirements for agencies that provide funds for mortgages. Clarifying delivery requirements for Home Possible mortgages that feature lender-funded gifts or grants. Effective immediately.

Effective with new locks as of Friday, July 28, 2017, Flagstar began making the following Freddie Mac Home Possible loan level price adjustment update. Instead of using the existing Subordinate Financing LLPA grid found on page two, the Freddie Mac Home Possible products will just use one LLPA of -0.500 for any eligible loans with subordinate financing. This update does not apply to Fannie Mae HomeReady, which will continue to use the existing Subordinate Financing LLPA grid. This new LLPA is eligible for the Home Possible LLPA cap.

Fannie Mae introduced an online Post Payment Documentation Request portal. Beginning Aug. 4, this portal will trigger email notifications to servicers when a paid expense is flagged for a post-payment review and additional documentation is required. Servicers will be able to electronically upload the necessary documentation or communicate when they will remit collection funds back to Fannie Mae. The Post Payment Documentation Request Portal Job Aid, located on the Servicer Expense Reimbursement page, provides instructions on how to access the new portal, as well as procedures on how to complete requests.

Franklin American Mortgage Company announced the expansion of its condominiums requirements which includes significant updates to its system and guidelines. As an example, Freddie Mac Streamlined Project Review has been added as an eligible review type for LP/LPA loans.

SunTrust Mortgage announced the 2017 area median income (AMI) limits for Fannie Mae HomeReady. In addition, SunTrust revised Agency Loan Product Advisor (LPA) product guidelines to more closely align with recent Freddie Mac updates including Agency Condo and PUD insurance.

Capital markets

The bond market did little yesterday, and closed Monday nearly unchanged from Friday’s closing levels (10-year: 2.29%). Chicago PMI for July came out a little under estimates, but one would be hard-pressed to say that is a market-moving stat. Meanwhile, June Pending Home Sales (+1.5%) beat estimates. Most of the chatter away from the trading screens was focused on White House Communications Director Scaramucci’s dismissal.

This morning June personal income and spending have already come out (unc., +.1%). The Core Personal Consumption Expenditure Price Index was +1.5%. Coming up are Markit Manufacturing PMI, the ISM Manufacturing PMI (July), and Construction Spending for June. FHFA Director Watt is scheduled to deliver the keynote address before the National Association of Real Estate Brokers (NAREB) Annual Convention. We have the 10-year yielding 2.30% and agency MBS prices down a shade versus yesterday.

Animals – always up to something. It should only take you about 30 seconds to skim through these – and they’re mostly G-rated.

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to Copyright 2017 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Rob Chrisman