July 25: Mortgage layoffs; big changes at Ginnie; GSE reform – no – but playing catch up on agency changes; Zillow & Trulia merger?

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“Rob, you have mentioned before that you are beginning to see some companies’ volumes slowing down, and maybe even some lay-offs. Is that still happening?” Yes it is. Established lenders, even those adding production units, are looking at their historical purchase volumes and forecasting things for the 2nd half of 2014. The longer rates stay here or go up, the more refinances will drop, and practically every lender sees a marked decline in purchase volumes during the autumn and winter. Companies are moving toward a variable cost structure, and yes, unfortunately layoffs can be part of the equation – the latest example being RoundPoint Mortgage eliminating 166 jobs.


And Zillow might buy Trulia? That would cause quite a stir…


Do you think GSE reform is still a possibility? Snort. Congress currently has a 15% job approval rating, and of the 535 members of Congress (100 senators and 435 elected officials in the House of Representatives), 468 members (or 87% of Congress) are up for re-election on 11/04/14. With the August recess, and October campaigning where incumbents will try to convince us that it is everyone else’s fault, and then the lame duck period heading into the Holidays, it doesn’t leave politicians much time for action. So we can all look to the MBA, the FHFA, the CFPB, and others to help chart mortgage policy and reform.


If Congress won’t act, we can continue to watch the FHFA (and thus Freddie and Fannie) and GNMA take matters into their own hands. So it is no surprise to see Ginnie Mae Set To Launch Electronic Issuer Application Process — Government Corporation Brings Transparency to the Application System  “We want to do everything that we can to ensure that our process is smooth, efficient and responsive for all parties,” said Ginnie Mae President Ted Tozer. “This includes creating a more efficient application process, becoming more responsive to applicant concerns and helping prospective Issuers clearly understand our issuer eligibility criteria and what it means to become a participant in our program.”    “This new process, which will also allow applicants to check their application status online, will make the process more transparent,” Ted Tozer said.  Beginning September 1, 2014, applicants will be required to file applications for Ginnie Mae Issuer approval electronically via Ginnie Mae’s new Application Connection.


Many originators have gone through the process of becoming a GNMA issuer. It can be long and tedious obtaining the sometimes hundreds of pages which fulfill the application’s checklist. The final obstacle in the process has always been to print up the application, overnight it, and then cross your fingers and hope that it doesn’t end up in the hands of delivery guys who’s been featured on YouTube throwing someone’s flat screen TV over a fence. I was pleased to read that GNMA is blasting into the late half of the 20th century with this release. “Ginnie Mae announced today that it is moving from a paper-based Issuer application process to an electronic system. Beginning September 1, 2014, applicants will be required to file applications for Ginnie Mae Issuer approval electronically via Ginnie Mae’s new Application Connection. The new Application Connection, which will be located on Ginnie Mae’s website at www.ginniemae.gov, will be available starting September 1. Due to the transition from a paper-based to an electronic application process, Ginnie Mae will not accept paper-based (hard copy) applications after July 31, 2014.”


And Ginnie revised its MBS Issuer eligibility requirements. “Ginnie Mae has also revised its minimum net worth requirements for applicants who wish to participate in multiple Ginnie Mae program types (single-family, multifamily, home equity conversion mortgages (HMBS), and/or Title I manufactured home loan-backed securities). Beginning September 1, 2014 and thereafter, applicants seeking Ginnie Mae approval to participate in multiple program types will be required to have an adjusted net worth equal to or greater than the sum of the minimum net worth requirements for each program type in which the applicant intends to participate. For example, an applicant seeking approval to participate in both the single-family and HMBS programs must have an adjusted net worth of at least $7,500,000.”


Speaking of government programs, the MBA filed a comment letter with FHA on the Homeowners Armed with Knowledge (HAWK) housing counseling program, which would provide first-time homebuyers who receive HUD-certified counseling with FHA mortgage insurance premium (MIP) reductions. MBA believes that the current FHA premium structure is pricing many otherwise qualified borrowers out of the market, and in its comments MBA congratulated FHA for its initiative with HAWK, but suggested that the program be restructured to offer borrowers greater material reductions in their monthly payments by shifting proposed reductions in the upfront MIP to the annual MIP. MBA’s comment also expressed concern with several other aspects of the FHA proposal, including its requiring of lenders to bear the cost of some portions of the counseling, the utility of post-closing counseling, and the limiting of the initial phase of the HAWK program to lenders and servicers selected by FHA.


Fannie Mae released the inaugural results of its quarterly Mortgage Lender Sentiment Survey. This new industry research initiative tracks insights into current lending activities and market expectations among senior mortgage executives at Fannie Mae’s lending institution partners. Results collected during the first two quarters of 2014 show greater consumer mortgage demand in the second quarter of the year, a steady and positive near-term mortgage demand outlook, and divergence between larger and smaller lenders in underwriting credit standards.


Fannie Mae announcement SVC-2014-11: Servicer Compliance with Anti-Money Laundering Provisions of the Bank Secrecy Act. Fannie Mae is defined as a “financial institution” under the Bank Secrecy Act and must implement a formal anti-money laundering program. This Announcement describes the steps servicers must take no later than Aug. 25 to comply with these new requirements: 2014-11.


Announcement SVC-2014-12: Neighborhood Stabilization Initiative — MyCity Modification for Detroit, Michigan, Fannie Mae is introducing a mortgage loan modification program for Detroit, Michigan — MyCity Modification. This program is part of the Neighborhood Stabilization Initiative recently announced by the Federal Housing Finance Agency and jointly developed by Fannie Mae and Freddie Mac. The MyCity Modification targets borrowers whose mortgage loans are secured by properties within the City of Detroit and who meet specific eligibility requirements: 2014-12.


Fannie Mae announcements include SEL-2014-05: Lender Selling Representations and Warranties Framework Updates, Fannie Mae introduced an alternative to repurchase for certain mortgage loans for which the mortgage insurance has been rescinded, known as an “MI stand-in”. The announcement describes the process the servicer (or the responsible party) must follow to be considered for an MI stand-in. To view this announcement:  svc1413. Additionally, Fannie announced changes to Servicing Reports in Message Manager. Fannie Mae plans to add the following servicing reports, currently emailed to applicable servicers by Fannie Mae Exceptions Transactions Management or Investor Reporting analysts, to the servicing report distribution in Message Manager effective July 30 and 31: The Loan Read Detail Report (LRDR) The Service members Civil Relief Act (SCRA) Cash Report. To view the information: Servicing Report.


As part of its enhancements to make the Freddie Mac selling system easier to use, it is updating the following on July 28: adding Freddie Mac Loan Number Search Capability.

Search for your existing loan data with your Freddie Mac loan number. This new feature is in response to your feedback and gives you another method to search for your loan data in addition to the existing Seller Loan Identifier search capability. The search by Freddie Mac loan number option is available from the selling system home page and from the basic and advanced search tabs on the pipeline search screens. Expanding Selling System Online Help Features

Get answers quickly with our enhanced online help to questions you may have when entering loan data into the selling system. Updates include: Detailed content explaining all aspects of the selling system’s functionality, improved Table of Contents for easier navigation, new search capability, and short video clips that walk you through common selling system topics. To access, click on the “help” tab at the top of the selling system home page. For more information: Contact 800-FREDDIE and select Option 3.


On July 13 Freddie Mac and Fannie Mae (the GSEs) made the following updates in the Uniform Collateral Data Portal® (UCDP®): Changes to Accepted MISMO XML File Formats in the UCDP – The GSEs will only accept the MISMO standard XML file format in the UCDP. The UCDP will no longer accept appraisals submitted in PDF, ACI XML, and AIReady file formats. Implementation of Third Phase of UCDP Conversion of Warning to Fatal UAD Edits – The third phase of the conversion of current Uniform Appraisal Dataset (UAD) compliance warning edits to fatal UAD edits will be implemented in the UCDP. Refer to the release information UCDP Release Information for additional details on the UCDP July 13 release and other important updates.


Freddie Mac has video help! Check out Freddie’s new Quick Tips for Single Family video to see how you can quickly and easily identify and track changes in the Single-Family Seller/Servicer Guide (Guide).  The video walks you through our Guide features on AllRegs®, including:

Highlighted titles in the table of contents to indicate where changes were made in the past 60 days, Green text to show recent additions in the Guide language, Quick access to recently published Guide Bulletins impacting a section, exhibit or form in the Guide, The “Inline Revision History” feature which helps you review future or past requirements and The video also highlights the Historical Guide Snapshots on FreddieMac.com, which is a convenient way to review archived Guide requirements.


Fannie Mae bulletin SEL 2014-07  outlines new flexibilities for financing HomePath® properties, allowing the Federal Home Loan Banks as grant and Community Seconds providers, incorporation of Announcement SEL-2014-05, and changes to the high-cost areas for MyCommunityMortgage loans as a result of the 2014 area median incomes. Refer to HomePath Fact Sheet.


The FHFA has issued a public “Request for Input” regarding Fannie Mae and Freddie Mac’s revised Private Mortgage Insurer Eligibility Requirements (PMIERs). Refer to FHFA’s announcement and Fannie Mae’s statement of support for more information.


Bulletin SEL 2014-08 discusses Approved Mortgage Insurance Forms. Fannie Mae has worked with approved mortgage insurance companies to update their master primary policies and related endorsements and other forms (Forms). Any mortgage loan sold to or securitized by Fannie Mae that requires primary mortgage insurance (or that has primary mortgage insurance) and has a loan application date on or after Oct. 1 must be insured under one of the approved forms. Lenders also become responsible for ensuring that only Fannie Mae-approved forms are used in connection with such loans.


In spite of the news, domestic or international, rates continue to stay in a narrow range. But those in lending and real estate did not receive good news yesterday as we saw some disappointing new home sales data. June sales were down 8.1% to 406K while May was revised down to show a gain of 8.3% vs. the prior estimate of 18.6% increase. The big swing was concentrated in the Northeast, but the South also saw a sizable drop in June (-9.5%) after a rise of 3.1% in May. We also had an outsized decline in single family starts in the South in June. Inventory has edged higher, bringing months supply to 5.8, which is elevated relative to recent history.


But for jobs, Jobless Claims unexpectedly dropped to an 8-year low falling by 19,000 to 284,000 in the week ended July 19.  The four-week average of jobless claims, considered a less volatile measure than the weekly figure, decreased to 302,000, the lowest since May 2007. This jobs number is what the bond market keyed off and it led to a modest sell-off with the 10-year Treasury note losing .375 in price and closing at a yield of 2.51%. Agency MBS prices followed along for the ride in spite of the Fed buying nearly $2 billion a day.


This morning we’ve already seen the only piece of schedules news, and that is the volatile Durable Goods number. It was expected at +0.5% (from last month’s -1.0%) and came out at +.7%. Prior to the number rates were unchanged; soon after they are slightly lower at 2.49% and agency MBS prices better by about .125.



A Realtor’s client bought a new home and the broker wanted to send flowers for the occasion. They arrived at the home and the owner read the card; it said “Rest in Peace”.

The owner was angry and called the florist to complain.

After he had told the florist of the obvious mistake and how angry he was, the florist said. “Sir, I’m really sorry for the mistake, but rather than getting angry you should imagine this: somewhere there is a funeral taking place today, and they have flowers with a note saying, “Congratulations on your new home.”





(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