July 3: FHA, VA, reverse news & training; EverBank name to return; Movement Mortgage, the DOJ, and the False Claims Act

The other night my cat Myrtle began squeaking in her sleep and moving her paws. She was either dreaming about a Chupacabra, a CFPB exam, or the Department of Justice holding on line 2. Movement Mortgage, LLC, was caught up in the latter, and has agreed to pay the United States $23.75 million to resolve allegations that it violated the False Claims Act by “failing to comply with material program requirements when it originated and underwrote mortgages insured by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA)… Movement Mortgage admitted that it certified for FHA mortgage insurance and VA home loan guarantees a material percentage of loans that did not meet applicable requirements and, therefore, were not eligible under those programs, despite inaccurately representing to HUD and the VA that such loans complied with applicable program requirements. Movement Mortgage also acknowledged that HUD and the VA would not have insured or guaranteed the loans but for its submission of false certifications. Movement Mortgage further admitted that it failed to adhere to HUD and the VA’s applicable self-reporting requirements.” (Today’s podcast can be found here and is sponsored by Gallus, the premier business intelligence tool for the mortgage industry. With hassle-free insights and user-friendly functionality, Gallus empowers you to make faster, data-driven decisions for enhanced profitability. Hear an interview with Black Knight’s Frank Poiesz on how AI and associated technologies are helping streamline the origination process and what the future of originations looks like.)

HUD, FHA, reverse, & VA news and training

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Guess who’s back? “EverBank,” a respected name in the biz, is seeing its name return. “The name change is being timed to the closing of the bank’s sale to investors later this summer. Following an earlier acquisition, the bank’s name was changed from EverBank to TIAA Bank in 2018. TIAA Bank is rebranding to EverBank. The stadium of the NFL team the Jacksonville Jaguars will be renamed from TIAA Bank Field to EverBank Stadium. In November 2022, the parent company TIAA sold TIAA Bank to private investors to help the bank move in an independent direction. TIAA will hold a minority stake in EverBank. The transaction is expected to close later this summer, with the name change taking place officially at the same time.”

EverBank/TIAA do its share of government loans, and in general those products constitute about 25 percent of applications. The U.S. Department of Housing and Urban Development’s Federal Housing Administration (FHA) announced that it will require lenders making FHA-insured mortgage loans to use the Fannie Mae/ Freddie Mac Supplementary Consumer Information Form (SCIF) to collect a mortgage applicant’s language preference. Using the form will enable lenders to make information available in the languages that borrowers will understand best.

Recall that last month, the FHA also launched its new language access web page, which provides translations of key FHA mortgage documents in the top five languages most commonly spoken by borrowers with limited English proficiency (LEP).

So yes, the U.S. Department of Housing and Urban Development (HUD) recently announced in Mortgagee Letter 2023.13 that lenders must use the Supplemental Consumer Information Form (SCIF) of Fannie Mae and Freddie Mac in connection with FHA insured mortgage loans with application dates on or after August 28, 2023.

As previously reported, in May 2022 the Federal Housing Finance Agency announced that for residential mortgage loans to be sold to Fannie Mae or Freddie Mac with application dates on or after March 1, 2023, the lender must present a SCIF to collect information on the applicant’s language preference.

Revisions to the Single Family Housing Guaranteed Loan Program (SFHGLP) technical Handbook-1-3555, Chapter 5, Origination and Underwriting Overview; Chapter 13, Special Property Types; Chapter 15, Submitting the Application Package; and Appendix 4, Agency Contact Information. These changes became effective upon the recent issuance of a Procedure Notice (PN).

And there is some training which revolves around government loan programs.

This August, The Single-Family Housing Guaranteed Loan Program (SFHGLP) is offering two Live and In-Person, training conferences at no cost to lending partners in St. Louis, MO. Loan Origination Training, August 15th and Loan Servicing Training, August 16th. Register for one or both, seating is limited. Training conferences will be offered in Lewisville, TX., September 12th and 13th

The FHA’s Office of Lender Activities and Program Compliance will conduct a series of free webinars on the FHA Lender Approval Application process as outlined in FHA’s Single Family Housing Policy Handbook 4000.1. This training series is designed to assist entities interested in becoming FHA-approved mortgagees (lenders). The three webinars will conclude with a live question and answer (Q&A) session. Session 2 – Non-Supervised Applicants on July 11, 2:00 PM – 3:30 PM (Eastern). This webinar will provide a detailed overview of the FHA Lender Approval Application process, the eligibility requirements, and required documentation for supervised and government mortgagees. Common application deficiencies will be addressed and tips for submitting a successful application will be provided.

FHA is conducting Application Workshop Series, free virtual webinars, designed for entities interested in becoming FHA-approved mortgagees (lenders). The webinars will conclude with a live question and answer (Q&A) session.

Session 1, Financial Requirements for FHA Approval was recorded on April 13, 2023.

Session 2 – Non-Supervised Applicants webinar on July 11, 2023 │2:00 PM – 3:30 PM (Eastern) will provide a detailed overview of the FHA Lender Approval Application process, the eligibility requirements, and required documentation for non-supervised mortgagees. Common application deficiencies will be addressed and tips for submitting a successful application will be provided.

Free, In-Person FHA Underwriting Training in Minneapolis, MN., July 11, 9:00 AM – 5:00 PM (Central). FHA representatives will provide an overview of FHA underwriting procedures and address a number of industry-related frequently asked questions (FAQs).

Free, In-Person FHA Appraisal Training in Minneapolis, MN., July 12, 9:00 AM – 5:00 PM (Central). FHA representatives will cover FHA appraisal requirements, including appraisal protocol and updates to appraisal policy and an in-depth look at a variety of appraisal-related topics including property acceptability criteria; minimum property requirements; property defects; appraiser responsibilities and requirements.

Join the leading minds in reverse mortgages at NRMLA’s Southern Regional Meeting, on July 13, in Austin, TX. Join other business owners, underwriters, compliance staff, attorneys, counselors, servicers, processors, and loan originators to be part of these discussions. Gain a competitive edge in the industry by learning from our expert speakers, who will share insights on the latest trends and developments in reverse mortgages. From market analysis to loan servicing best practices, this conference covers it all. Plus, network with fellow professionals, share experiences and discuss strategies for success. With a wide range of informative sessions, this conference is sure to provide value for all attendees.

Servicing is a critical, yet misunderstood, part of the reverse mortgage process. Even the most experienced reverse mortgage professionals who have years of experience originating reverse mortgages will sometimes find themselves misinformed. At NRMLA’s Southern Regional Meeting on July 13, 9:00 am – 5:00 pm, in Austin, TX, three of the top servicing experts in the business — Gail Balettie and Rex Lamb from Celink and Richard Burke from Longbridge Financial LLC — will provide pro tips on the most commonly asked questions that loan officers have.

Capital markets: continued strong data impacts rates

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The second quarter rounded out with a “risk-on” feel that put Treasury and MBS prices down, and rates up, as month and quarter end indexing offset the beginning of the summer Friday lull. Don’t fight the Fed: Markets finally are coming to terms with Fed Chair Powell’s persistent statements about rates being higher for longer. Broader fixed income markets sold off and 10-year U.S. Treasury yields broke north of 3.80 percent in Friday’s session. Fed Chair Powell commented that a good part of the reason the Fed can continue to raise rates is due to the strong labor market. “Though policy is restrictive, it may not be restrictive enough, and it hasn’t been restrictive for very long,” he said last week. For most of 2022, the fed funds rate was below the inflation rate, which means that real interest rates were negative and thus stimulating to the economy.

Economic data released over the last week remained stronger than anticipated, certainly stronger than the “experts” who have been forecasting a downturn predicted. Durable goods orders for May rose 1.7 percent versus forecasts for a decline of 0.9 percent. Core orders rose 0.7 percent. Meanwhile, house prices appear to have bottomed out as limited supply pushed prices higher in April and new home sales were significantly higher in May than expected. Consumers also continue to spend as inflation-adjusted personal consumption rose at a 4.2 percent annualized rate in the first quarter, according to the final Q1 GDP release. Jobless claims data retreated from a recent, but brief upswing, and remains well below levels that would indicate a recession is looming. The strong data pushed rates higher over the week and expectations for an increase to the Fed Funds target in July are now at 87 percent. Fed speakers have commented recently that two more hikes may be on the table this year and the market is pricing in the timing for the second towards the end of the year.

We begin the abbreviated trading week, and today’s early close, with final S&P Global manufacturing PMI for June, May construction spending, and June ISM manufacturing PMI for June, all due out later this morning. Fixed income futures will settle at 1:00pm ET with SIFMA recommending a 2:00pm ET close for cash ahead of the Independence Day holiday. Not that anyone cares about locking in a loan today, but Agency MBS prices are unchanged from Friday’s close, the 10-year yielding 3.85 after closing last week at 3.86 percent, and the 2-year is up to 4.95 percent!

This tale begins with the premise that no English dictionary has been able to adequately explain the difference between these two words: “Complete” or “Finished”.

In a linguistic competition held in London and attended by, supposedly, the best in the world, Samdar Balgobin, a Guyanese man, was the clear winner with a standing ovation which lasted over 5 minutes.

The final question was, “How do you explain the difference between COMPLETE and FINISHED in a way that is easy to understand? Some people say there is no difference between COMPLETE and FINISHED.”

Here is his astute answer. “When you marry the right woman, you are COMPLETE. When you marry the wrong woman, you are FINISHED. And when the right one catches you with the wrong one, you are COMPLETELY FINISHED!”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. STRATMOR’s current blog is titled, “Compensation: Ever Changing.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2023 Chrisman LLC. All rights reserved. Occasional paid job & product 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