Jan. 13: Mortgage jobs; a wholesaler exits, a correspondent enters; are you up to speed on Home Ownership Counseling? Me neither…

Unintended headlines? “The rich are different — they still get interest-only mortgages”: http://www.latimes.com/business/money/la-fi-mo-interest-only-mortgages-20140110,0,7524049.story#axzz2qHSwz2yZ. (If the link doesn’t work, you can search for the story, which is a good one, by the author’s name: E. Scott Reckard.)


In an effort to expand their growing retail branching network, Gold Star Mortgage Financial Group is offering opportunities for highly experienced branch managers & retail mortgage branches in AL, CA, CO, CT, FL, IL, IN, MA, MD, MI, MN, NC, NJ, OH, OR, PA, TN, TX, VA, WA, WI.  Based in Ann Arbor, MI and founded in 2000, Gold Star has become one of the fastest growing mortgage companies and top 50 lenders in the nation. As an Inc. 500 & Inc. 5000 company they have been recognized 4 consecutive years as a Michigan Top Work Place and more recently recognized by Mortgage Technology Magazine as one of the nation’s Top Tech-Savvy Lenders. They are currently licensed to do business in 21 states. To learn more, contact Shawn Sirko at ssirko@goldstarfinancial.com.


Carrington Mortgage Services and Ray Brousseau, EVP Mortgage Lending, are offering “Career Webinars” at three times this Thursday: 9:30-10:30, 12-1, and 4-5, PST. “Discover the opportunities for Loan Officers, Managers and Branches. Great compensation, benefits and wide variety of programs that can help you take your performance and sales to the next level. Register Today, space is limited.” The sessions are from 9:30-10:30, 12-1, and 4-5, PST, and to register, respectively, click on https://www4.gotomeeting.com/register/635811823?cm_mid=2994612&cm_crmid={dbc2ddbb-2e29-e211-aeb3-005056b73d9f}&cm_medium=email, https://www4.gotomeeting.com/register/580344511?cm_mid=2994612&cm_crmid={dbc2ddbb-2e29-e211-aeb3-005056b73d9f}&cm_medium=email, or https://www4.gotomeeting.com/register/607138999?cm_mid=2994612&cm_crmid={dbc2ddbb-2e29-e211-aeb3-005056b73d9f}&cm_medium=email.


First Community Mortgage announced its new expanded TPO/supervised correspondent channel to include a full delegated correspondent platform. “While our delegated correspondent price is competitive and our purchase process is fast, what sets FCM Correspondent apart is our superior underwriting support and customer interaction. See why a relationship with FCM Correspondent will help your business grow.” For more information visit www.fcmkc.com/corr  or contact National Sales Director Dennis Patchett at dennis.patchett@fcmpartners.com.


On the flip side, however, on Friday broker clients of Investors Home Mortgage received the following note from Russell Tucker, SVP: “After much discussion, research, and deliberation, Investors Home Mortgage has decided to exit from the wholesale broker mortgage business. The existing regulatory environment would force us to take important resources away from our primary focus, which has always been, retail mortgage banking. The friends and relationships made over the past 10 years have been very rewarding and will be sorely missed. I would like to thank each and every one touched by this letter for your professionalism and loyalty over these many years and, to wish you much success in the future. Effective today at 4:00pm we will no longer be accepting loan registrations. All loans currently registered will be brought to their natural conclusion.”


Yet companies continue to evolve and expand, especially on the servicing and capital markets side. For example, IMA (www.Interactivemortgageadvisors.com) is an advisor to the mortgage industry specializing in the valuation, accounting, trading and purchasing of mortgage servicing rights. The company reminded clients that, “As a transactional broker and advisor, IMA has managed over $800 billion of principal balance whole loan and servicing sales & transfers, and over $50 trillion of principal balance loan and servicing portfolio valuations.”


It is easy to see how and why blocks of servicing will be sold and bought this year as capital is required by lenders – it is not becoming any less expensive to originate a loan. Last week I mentioned a servicing deal by Phoenix Capital, and here is another deal by MountainView Servicing Group, LLC. It is brokering a $341 million GNMA servicing portfolio from a well-capitalized mortgage bank that is being made available to the national market. “Loan-level data is available upon request and written bids are due Wednesday, January 15th at 3:00 pm EST. Quality features of this portfolio include: 100 percent fixed rate 1st lien product, weighted average original FICO of 741 and weighted average original LTV of 96 percent, weighted average interest rate of 3.35 percent, approximately 7% of the portfolio is VAIRRRL product.  And maximum LTV is 100% (based on appraisals) for all VAIRRRL loans. Geographically dispersed: top states are Texas (7.4 percent), Georgia (6.1 percent), North Carolina (6.0 percent), and Colorado (5.6 percent), average loan size of $193,673. (If you need any information on this, contact Matt Maurer at mmaurer@mvcg.com.)


Staying on with company news and investor updates, Stearns Lending sent out a “Qualified Mortgage Exceptions” to its clients. “Loans received on or after January 10, 2014 and up to January 24, 2014 may be excluded from the QM rules if ALL the following criteria exists: the 1003 is dated January 9, 2014 or earlier, the initial 3 Day Disclosures, GFE is dated January 9, 2014 or earlier, credit report is dated January 9, 2014 or earlier, FHA Loans must have had the case number assigned by January 9, 2014. After January 24th, regardless of the date of the application or any other document, any loan received will be considered under the QM rules and must meet all requirements.”


Regarding “Home Ownership Counseling” notices, which this commentary mentioned a few weeks ago, apparently for some investors they do not only apply to high-cost mortgages. For example, Weslend sent out a form to clients, and is requiring it for all mortgages. Looking at http://www.consumerfinance.gov/regulations/high-cost-mortgage-and-homeownership-counseling-amendments-to-regulation-z-and-homeownership-counseling-amendments-to-regulation-x/, it seems like the notice applies to “all applicants for federally-related mortgages”.

Calyx added the form to their 9.0sp2 release (1/7/2014). Flagstar also sent a memo on the 7th about it. Fifth Third reminded clients of its counseling requirements, modeled after those of the CFPB: http://files.consumerfinance.gov/f/201311_cfpb_summary_homeownership-counseling.pdf. Fifth Third is requiring a new “counseling” disclosure on all loans as of Jan 10 (see “Counseling only” doc attached.


It appears that this disclosure is required to be provided only to “federally related mortgage loan applicants” – in other words this is a VA / FHA disclosure, but 53 is requiring it for GSE loans. “Homeownership Counseling: Effective Date Loan application taken on or after January 10, 2014. Homeownership Counseling Amendments to the Real Estate Settlement Procedures Act

Reg X will require that a new disclosure is provided to all applicants, within three (3) business days after applying for a mortgage loan that includes a list of Homeownership counseling organizations in the applicant’s area. Correspondents must provide a copy of the Homeownership Counseling form provided to the borrower in the file delivered to Fifth Third Mortgage Company. If there is more than one loan applicant, the required list of homeownership counseling organizations may be provided to any loan applicant with primary liability on the mortgage loan obligation. A lender must provide a written list of housing counseling agencies for federally-related mortgages.


“Lenders have two options: 1. Generate the list from the Bureau’s website, www.consumerfinance.gov/find-a-housing-counselor , which uses U.S. Department of Housing and Urban Development (HUD) data on HUD-approved counseling agencies. 2. FTMC will accept homeownership counseling disclosures provided to consumer in accordance with the interim procedure in CFPB Bulletin 2013-13. Please note while CFPB has not specified an expiration date for the interim process, FTMC my stipulate a timeframe for our acceptance of the interim procedures. Should this be the case, we will provide sufficient notice to correspondent via communiqué. Please reference CFPB Bulletin 2013- 13; following is the suggested text to be used for this interim procedure: “Housing counseling agencies approved by the U.S. Department of Housing and Urban Development (HUD) can offer independent advice about whether a particular set of mortgage loan terms is a good fit based on your objectives and circumstances, often at little or no cost.


“If you are interested in contacting a HUD-approved housing counseling agency in your area, you can visit the Consumer Financial Protection Bureau’s (CFPB) website, noted above, and enter your zip code. You can also access HUD’s housing counseling agency website via



Wells Fargo has updated its Market Classification list, which will take effect for all transactions locked, re-locked, renegotiated, or committed on or after January 10th.


As a reminder, Wells’ new policy on self-employed income for Non-Conforming loans took effect on January 10th.  The revised policy provides requirements on income qualification by analyzing the increased risk, business classification, personal and business tax returns, and financial statements.  Applicable borrowers will also be subject to a re-evaluation of their business income.


Wells has updated its Non-Conforming rental income eligibility guidelines to permit rent received from investment properties or other units of an owner-occupied multifamily property and from a live-in aide generated by a disabled borrower’s 1-unit primary residence for up to 30% of the total gross qualifying income.  The latter may be considered stable monthly income so long as the borrower has received regular rental payments from the live-in aide for the past 12 months and the live-in aide plans to continue residing with the borrower for the foreseeable future.  Rent from boarders in a single-family property that is the borrower’s primary residence and rent from the borrower’s second home will be considered ineligible.  Newsflash C14-001FR provides additional details on qualifying, documenting, and analyzing the stability of rental income.


For any LO who had waited to lock, the waiting paid off on Friday. Agency MBS prices improved by .75 in price, and rate sheets may catch up to that today. Basically weaker-than-expected employment data caused the rally – certainly the head fake provided by the strong ADP number on Wednesday reminded us of its spotty predictive ability. Employment plummeted well below consensus estimates, rising by only 74,000 jobs in December compared to the survey forecast that expected almost 200,000 jobs. Yes, much of the decline could be due to one-time seasonal quirks and we could see some payback in the coming months. The weakness in the employment report brings into question whether the Fed moved too quickly on their decision to begin tapering and may see some adjustment in the expected course in the slowing of asset purchases. While this question is on the minds of Fed watchers, the Fed left plenty of wiggle room in its language to change course if further data disappoint.


David Zervos with Jefferies LLC wrote, “The December payroll report does NOT suggest that labor market momentum is increasing. The modest 78k increase in payrolls, plus the 34k in positive revisions barely gets us half of what was expected. But the most concerning part of the report comes from the household survey where we saw another 347,000 people leave the labor force. And it was not just more retirees, or more youngsters going to college. The largest acceleration downward in the participation rate came from the 45-54 year old cohort – that rate fell 0.5 percent, from 79.6 to 79.1. In the early part of the crisis, the most important driver of a lower participation rate came from the younger cohorts. But these 16-19 and 20-24 year old groups have been stable in recent quarters, albeit at much lower levels. The ‘trouble’ now is manifesting itself with the seasoned veterans!”


Yes, this week we’ll have the usual scheduled economic news, but we’ll also have a bevy of bank earnings announcements: tomorrow is Chase and Wells, Wednesday is Bank of America, Thursday is BB&T, Citi, Goldman, and PNC, and more on Friday. It will be interesting to see the 4th quarter mortgage banking information from “the big guys.”


For news, there is nothing that usually dramatically moves rates although the Empire and Philadelphia Fed indices will be published Wed 1/15 and Thurs 1/16, respectively. We’ll also have the Retail Sales data tomorrow, the Producer Price Index (PPI) on Wednesday, and the Consumer Price Index (CPI) on Thursday. Housing Starts & Building Permits and Industrial Production will come out on Friday. Import Prices, Consumer Sentiment, and the Fed’s Beige Book will round things out. The benchmark 10-yr. closed at a yield of 2.86%, here this morning it is at roughly unchanged (at 2.86%) as are MBS prices.



We’ll have some bank earnings this week, and in honor of that, let’s take a look at some financial statement comments & questions that make little or no sense, part 1 of 3.

1. “They don’t have any debt except for a mortgage and student loans.”

OK. And I’m vegan except for bacon-wrapped steak.

2. “Earnings were positive before one-time charges.”

This is Wall Street’s equivalent of, “Other than that, Mrs. Lincoln, how was the play?”

3. “Earnings missed estimates.”

No. Earnings don’t miss estimates; estimates miss earnings. No one ever says “the weather missed estimates.” They blame the weatherman for getting it wrong. Finance is the only industry where people blame their poor forecasting skills on reality.

4. “Earnings met expectations, but analysts were looking for a beat.”

If you’re expecting earnings to beat expectations, you don’t know what the word “expectations” means.

5. “It’s a Ponzi scheme.”

The number of things called Ponzi schemes that are actually Ponzi schemes rounds to zero. It’s become a synonym for “thing I disagree with.”

6. “The [thing not going perfectly] crisis.”

Boy who cried wolf, meet analyst who called crisis.

7. “He predicted the market crash in 2008.”

He also predicted a crash in 2006, 2004, 2003, 2001, 1998, 1997, 1995, 1992, 1989, 1984, 1971…

8. “More buyers than sellers.”

This is the equivalent of saying someone has more mothers than fathers. There’s one buyer and one seller for every trade. Every single one.

9. “Stocks suffer their biggest drop since November.”

You know November was only six weeks ago, right?

10. “We’re cautiously optimistic.”

You’re also an oxymoron.




(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