Dec. 1: Mortgage jobs across the country; investor overlays expected to be reduced; rise of niche products

I still own a typewriter. But Discover Home Loans conducted a national survey of more than 1,000 recent homebuyers and found that most homebuyers believed they were better buyers due to technology. The survey discovered that 89% of respondents used some form of online technology to help them in the home buying process, 76% felt technology made them a more knowledgeable home buyer and 69% said technology made them more confident. About half of respondents said that using technology saved them money and 92% said it saved them time. For Realtors out there, almost three quarters (74%) said it’s essential for their real estate agent to be tech savvy and 42% of buyers working with agents said they did most of the work to initially find properties. And heck, most of the millennials haven’t even hit the market yet!


On the expansion scene, Mortgage Solutions Financial continues to expand its retail footprint and is now seeking a well-established Vice President of Retail to lead its expansion into the East Coast and further expand its footprint in the West Coast by hiring a Vice President of Retail for the West. Mortgage Solutions Financial is a direct seller servicer with Fannie, Freddie, Ginnie, and Farmer Mac. The two positions will require established and well-respected mortgage professionals as MSF is looking for measured growth with the right people, not growth at all costs. “With a unique and battle tested platform including its ‘Gold’ program which entails no overlays with NO CREDIT SCORE MINIMUM, Mortgage Solutions Financial will surely make their presence known in whatever market they grow into.” Contact Rob Clennan with confidential inquiries.


And Sterne Agee Mortgage announced its correspondent & wholesale expansion in the Western United States. Sterne Agee Mortgage has hired a production and operations staff led by industry veterans Tim and Grace Frohock and the new branch has ten employees and is located in Phoenix, AZ. The team was most recently with Affiliated Mortgage and was one of its top producing branches. Tim noted that, “Our Team has a proven track record and we all look forward to continuing our customer centric business model with Sterne Agee Mortgage.  We are confident that Sterne Agee Mortgage’s culture is an ideal match and is consistent with our approach to creating lasting relationships with banks and brokers.” Contact Tim Frohock, Regional Manager, with inquiries.


Lastly, for entire branches looking to “explore options”, Castle & Cooke Mortgage LLC is expanding and actively seeking highly skilled Branch Managers and their teams. “CCM is one of the few lenders in the country that is a direct Fannie/Freddie/Ginnie seller/servicer, which means amazing speed and control of your files.  If you and your team are looking for a fantastic platform that gives you the ability to consistently produce and grow, give CCM a call. CCM is known for incredible turn times and is committed to being a market leader in products, technology, and service.  You and your branch staff will be backed by state-of-the-industry software, marketing, and training resources. The position reports directly to the SVP and requires at least 2 years in branch management experience. Candidates being considered for this position will be subject to additional background checks as required.” Please contact Christopher Jensen or Jim Hoggan for further information.


“Rob, when do you think the industry will bring back SISA or NINA loans? We sure seem to be headed back to those days of lower credit and documentation standards, especially as investors have lots of cash to put to work, lenders fight over fewer loans, and the government keeps pushing for higher home ownership percentages.” Up until recently I would dismiss talk like that, reminding anyone who would listen that “those that don’t know history are doomed to repeat it.” But things are changing, and the recent rep & warrant changes proposed by the FHFA for Fannie & Freddie are a gauge.


Out came an article in the Wall Street Journal by Joe Light titled “Mortgage Lenders Set to Relax Standards.” What is the public to think with a headline like that? “Some of the largest U.S. mortgage lenders are preparing to further ease standards for borrowers after the release of new guidelines this month from mortgage giants Fannie Mae and Freddie Mac. The new guidelines, to take full effect Dec. 1, resulted from an agreement in October meant to clarify when lenders would be penalized for making mistakes on mortgages they sell to Fannie and Freddie. Lenders have blamed the lack of clarity for tight credit conditions that have made it difficult for many consumers to qualify for a mortgage. Relaxing the lending standards potentially could make it possible for hundreds of thousands of additional consumers to get mortgages…The Urban Institute, a Washington think tank, earlier this year estimated that as many as 1.2 million additional home loans would be made annually if mortgage availability were at ‘normal’ levels.”


What is normal? Back to alternative documentation? Back to SISA or NINA loans? The vast majority of originators would not fight offering this product again IF investors were buying them again, right? Cutting criteria or documentation certainly lowers the processing time, and the article notes that, “Some lenders, including Wells Fargo & Co. and SunTrust Banks Inc., said borrowers should begin to see initial changes in a few weeks, including faster turnaround times for mortgage applications to be processed. Currently, it can take two months or longer between the time a consumer makes an application and the loan is made. Lenders also are expected to widen the scope of the types of borrowers they will accept by reducing credit-score requirements and giving greater leeway to consumers whose credit history suffered because of one-time events, such as a job loss or big medical bill.”


Perhaps it means a reduction in overlays that lenders have put in place in order to protect them for skirting near, or originating loans, the straight agency guidelines. “With the new agreement, ‘I’ve been told with absolute confidence that some lenders are lifting almost all of their overlays,’ said David Stevens, president of the Mortgage Bankers Association. Wells Fargo, the nation’s largest mortgage lender, lifted its credit-score overlay earlier this year, which the bank said was in anticipation of the agreement with Fannie and Freddie. Now it says borrowers can expect a smoother process of getting a loan with less ‘excessive’ paperwork.”


“For example, under the previous system, (Wells Fargo’s) Mr. Heid said a borrower who had a late payment on an auto loan might have been asked to write a memo describing what happened, even if such a mistake wasn’t critical to the decision to make a loan or not. That was because Wells couldn’t be certain what would trigger a repurchase demand from Fannie or Freddie, he said. Now, they are less likely to be required to ask for such documentation, he said, which should speed the process of securing a loan.”


So what have investors & lenders been doing recently? A quick sampling…


Impac Mortgage Corp. Wholesale spread the word about its 5th AltQM program in its IMPortfolio Series. “AltQM Asset Qualifier is designed for high net worth borrowers with significant verifiable liquid assets. Unique features include: the borrower is qualified based on verified liquid assets, credit scores as low as 680, no income document or DTI calculation, no 4506-T, only eligible for owner occupied transactions, 5/1, 7/1, 10/1 ARMs, LTVs up to 70%, loan amounts to $2 million (minimum loan amount is $100,000), and max cash out $500,000.”
Fannie Mae has released updates to its selling guide to simplify its condo approval process. Some of the changes include, reducing the pre-sale requirements for new projects from 70% to 50% and consolidation of Condo Project Manager and Full Review Process to streamline the approval process. There is a waver on the 10% investor ownership limit for projects that have between 5 and 20 units by allowing a single entity to own up to 2 units and 15% of unit owners may be 60 days past due on common expense assessments.


LDWholesale has updated its submission form and state specific disclosure forms. Additionally, select jumbo guidelines for non-permanent resident aliens have been updated as well.


NewLeaf Wholesale announced the release of its Portfolio Jumbo 5/1 and 7/1 Products that are available now.


Wells Fargo Funding updated its requirements on VA IRRL high balance and non-high balance loans effective on or after October 27th. In reference to current loan servicing, regardless of who is servicing the loan, a mortgage payment history reflecting no mortgage lates (0x30) in the six months preceding the new VA IRRL’s closing date is required. Additionally, regardless of who is servicing the loan to be paid off, the loan being refinanced must have been seasoned, or originated, at least six months preceding the new VA IRRL’s closing date.


Carrington Mortgage Services, LLC announced the national availability of “The Carrington Loan,” offering borrowers a more transparent, simplified home loan process with no closing costs or upfront financing fees. The Carrington Loan can facilitate home purchases for borrowers in the sub-640 FICO score range. The announcement in its entirety is available, click here.


M&T Bank introduced a re-defined Fannie Mae Homestyle product. The streamline nomenclature has been removed and the $35,000 rehabilitation cutoff has been eliminated. Also, different criteria have been placed dependent upon whether the repairs are structural or non-structural.


Wells Fargo Funding has updated its temporary leave and long-term disability requirements on conventional conforming and non-conforming loans. Additionally, Wells is reminding clients to comply with the list of counseling agencies requirement per the homeownership counseling rule on all loans and the FHA elimination of post-payment interest charges on prepayments effective January 21st, 2015.


It also announced updates to GRH annual fee. Prior to October 14th, GRH annual fee requirement includes 2 months’ worth of monthly annual payments at closing. On or after October 14th, collection of 1 month worth of annual monthly fee is due at closing. Wells has also updated its condo eligibility requirements.


Wells Fargo Funding also improved its refinance adjusters for all non-conforming products as of November 10th, adjuster improvements are listed on the daily rate sheets. In addition, its minimum down payment requirement has been removed from its conventional conforming loans.


A while back Flagstar announced loans underwritten April 15 through October 14, and for which 2013 tax returns and transcripts are not provided, the tax return expiration date is October 15, 2014. Also, VA IRRRLs interim qualified mortgage rule information has been updated with new information pertinent to these loans.


Franklin American Mortgage Correspondent National Bulletin 2014-31 includes an update on Operational Job Title Changes. The former title of Auditor is being updated to loan purchase specialist, lenders primary contact for all loan suspense condition notifications.


Social Security Number verifications are conducted only if they are a condition of the loan. As a courtesy to its clients, Plaza Home Mortgage will verify Social Security numbers if required. As such, the link for SSN Verification has been removed from the website, effective October 20, 2014. As of October 15, 2014, all 2013 Personal Tax returns must be filed with the IRS. 2013 IRS tax return extensions are no longer valid. Plaza will now use the 4506T on file to request transcripts of 2013 personal returns. Plaza is now offering Co-op financing in select areas of New York and New Jersey, effective October 21, 2014.


Turning to interest rates, an expanding economy, as indicated by strong GDP, low unemployment and increasing wage growth, and continued housing appreciation usually leads to higher rates. In theory, borrowers are doing well and more of them qualify to buy houses, right? We are indeed seeing decent employment and housing numbers, and last week, according to the latest BEA revisions, the U.S. economy grew at a 3.9 percent annualized rate in the third quarter. This was faster than the initial estimate, mostly due to a faster pace of domestic spending – both business and consumer. Wells Fargo’s economists point out that, “The revised look at GDP may offer a brighter assessment of third quarter growth, but the stronger domestic spending and inventory investment figures may set us up for a difficult fourth quarter.” Stay tuned!


But we’re all back to a full work week, and several more business days this month than in November. And suffice it to say we have a lot of scheduled news this week, starting with some Institute of Supply Management numbers today and tomorrow. Tomorrow we’ll also have Construction Spending. Wednesday is the ADP Employment Change (which does not include government hiring & firing, Nonfarm Productivity, Unit Labor Costs, and the Fed’s Beige Book. Thursday has weekly Jobless Claims. Friday things wrap up with the media favorite: the Unemployment Rate, Hourly Earnings, and Nonfarm Payroll. Friday we’ll also have some trade balance figures which will be lost in the shuffle. We closed last week with the 10-year yield at 2.19% and this morning we’re at 2.17% with agency MBS prices better a smidge.



Labeled, “This Is By Far the Best Commercial You’ll ever see In This Season”, I can’t disagree too much. Worth the two minutes, and G-rated.





(Copyright 2014 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