Daily Mortgage News & Commentary

June 20: FHA jobs; POS, LO survey, processing, servicing, non-QM products; Freddie & Fannie ceaseless changes

“I won’t be impressed with technology until I can download food.” The universe doesn’t care about technology, nor does the earth’s rotation. The summer solstice (not the “longest” day of the year, since they’re all 24 hours, but when the Northern Hemisphere angles itself at the point in its orbit closest to the sun, or the poles are tilted at their maximum toward or away from the sun) is tomorrow morning. Then we start to tilt back with less sunlight in the northern part of the globe, more in the southern part of the globe. Lenders are hoping that rates tilt back, but ask yourself: Do you want another pandemic or a recession to drive rates lower? (If you’re looking for some variety versus the earth, one can, if you’re clueless, purchase an acre of land on the moon or on Mars for as little as $30. Apparently, over 250 celebrities have already bought land on the moon, including William Shatner, Tom Cruise, Mick Jagger, Harrison Ford, John Travolta and Clint Eastwood. A fool and his money are soon parted. Maybe you’re better off putting it into bitcoin?) Due to the observed holiday there is no podcast today, normally available here, but this week’s is sponsored by Candor. With Candor’s Machine as an Underwriter, lenders modernize their manufacturing infrastructure making them immune to margin, capacity, and staffing challenges forever.

 

Employment

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Wanna work for the FHA in Atlanta? FHA has 2 job openings for a Program Assistant whose duties include receipt and review of mortgage insurance packages and/or appraisal packages. Provide various forms of support to mortgagees. Maintain computer system to track status of mortgagee activities, complaint, and sanctioning process. Establish and maintain logs and controls to assure timely accomplishment of Branch work and goals. Salary range is $47,216 – $61,376 per year, see job announcement 22-HUD-1769-P for details. And one Appraiser job responsible for the review of assigned appraisals, conduct detailed desk reviews and field reviews, recommend disciplinary actions or sanctions against appraisers who violate USPAP and HUD program requirements, as set forth in HUD handbooks and in the Code of Federal Regulations (CFR). Salary range is $83,755 – $108,886 per year, see job announcement 22-HUD-1759-P for details.

Broker and lender services & programs

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This month, the Federal Housing Finance Agency (FHFA) shared the finalized details of government-sponsored enterprises’ (GSEs) Equitable Housing Finance Plans designed to address persistent racial and ethnic disparities in homeownership. FormFree is already helping GSEs solve key points of these plans with its digital mortgage solutions designed to streamline the homebuying process while advancing equity in housing finance. FormFree’s AccountChek empowers lenders to democratize their lending practices by considering consumers’ direct-source bank data (including positive rent payments) to reduce racial and ethnic disparities in acceptance rates for GSEs’ automated underwriting systems. Learn more about how FormFree can help you lend more equitably.

If you are attending the CMBA Western Secondary make sure to schedule a time to meet with Arc Home to review our industry leading Non-QM and Non-Agency loan products. A top-10 Non-QM lender, Arc Home offers Delegated Correspondents a path to continued and sustained growth as the market evolves. Arc’s Elite Non-Agency products offer both Full-Doc and Alt-Income options with flexible LTVs and No MI. The Access Non-QM suite offers a variety of options to expand borrower qualifications. In less than 30 minutes we can help identify ways to grow your business through a partnership with Arc Home. Schedule your meeting before spots are filled. If you aren’t attending but want to learn more, email Katherine Gardner, Chief Production Officer and set up a meeting today.

There is no better way for financial institutions to grow mortgage originations than expanding usage of products and services. Today, technology enables new data-driven tactics that overcome the challenges that have derailed cross-sell in the past. Ironically for its importance, “cross-selling” has a checkered past in banking, and when pursued by institutions in the wrong way, it has often done more damage than good. To overcome these past barriers to cross-sell, however, banks and credit unions must turn to new tools offered by technology today, which enables new data-driven tactics that overcome the challenges that have derailed cross-sell in the past. Ready to overcome the barriers of cross-sell? Read the guide from Total Expert to learn how.

Get the most out of every verification with The Work Number®. Each borrower is different. Their financial situation is unique but complex. To confidently close loans, you need more than searching for an inefficient number on a bank ledger, which may have only a portion of the information you really need. Rely on The Work Number to help you make data-driven decisions to maximize your return and provide appropriate terms for every loan. With access to over 548 million records, The Work Number database INSTANTLY returns records provided directly by employers and payroll providers, updated each pay cycle (no need to collect an applicant’s private banking credentials) exposing them and yourself to risk. There are several ways to verify income and employment. Choose the gold standard for all of your verification needs. Learn more here.

Do you have proper oversight over your subservicer? Richey May conducts annual subservicer oversight reviews over many subservicers to assist lenders with their monitoring and oversight responsibilities. Richey May’s program and subsequent 120+ page report provide value beyond basic compliance requirements. With a focus on current and on-going procedures, the review includes interviews with all key department leaders to observe their processes and challenges, a comprehensive review of business continuity and IT assessments, a summary of the subservicer’s strategic initiatives for the future, and optional, tailored loan-level testing. Richey May’s loan-level testing digs deep into loans in your portfolio to provide valuable insights into how your portfolio is serviced. We test the areas where you’ve received consumer complaints so you know exactly what happened and what you can do to make improvements and drive value. For more information on Richey May’s Subservicer Oversight Reviews and custom loan-level testing, contact us today!

Mortgage servicing oversight once again hits the top of the CFPB’s priority list. What can you do about it? In its second response metrics report, the CFPB is putting the spotlight on servicing operational deviations and borrower risk, with a heavy concentration on management of forbearance exits and loss mitigation processes. The CFPB has called out their Top 5 Observations for servicing. How do your operations stack up? Read our recent blog for a quick summary of the CFPB’s latest findings, plus actionable solutions so you can prevent being subject to fines or enforcement action. CLARIFIRE® offers these innovative solutions, as well as the rapid, informed experience your borrowers want and an automated proven track record that helps servicers meet CFPB requirements. Better approach, better software, and BRIGHTER AUTOMATION® with CLARIFIRE®.”

Forget gas prices. The cost of originating a loan has soared to an all-time high of $10,637. You may be wondering how to make that number a little more manageable. The answer is simple: Computershare Loan Services (CLS). By taking on your underwriting, processing, and closing functions, CLS saves clients an average of 30%. That’s roughly a third of closing costs. Their experienced teams can also fulfill your home equity products with the same expert efficiency. In my book, there’s no reason not to turn to our friends at Computershare Loan Services. What are you waiting for?

Calling all loan originators: We want to hear from you! Take the Loan Originators Survey from MGIC and Loan Officer Hub and share your insights on marketing, working with referral partners and consumers, the trends that impact you the most, and more. From our last survey, we know that learning from your peers is one of the best ways LOs grow and improve. Complete the survey by July 1 and you’ll be the first to receive the full survey report this fall!

Introducing the Maxwell Point of Sale mobile app: A robust tool that empowers loan officers to turn more leads into loans while on-the-go. Today’s top-producing LOs are capturing available loan volume by getting out of the office to meet people, build relationships, and generate business. Maxwell’s brand new mobile app brings everything LOs love about Maxwell Point of Sale, including fan-favorite features like SmartTasks™, from the desktop to the smartphone. Intuitive functionality allows LOs to easily start a loan application, track milestones, identify files that need attention, and get a 360-degree view of their pipelines no matter where they are. Want to arm your LOs with the tools they need to meet modern borrower needs and close more loans anytime, anywhere? Learn more about the Maxwell Point of Sale app in the Apple app store or through Google Play, or schedule a call with our team today.

Freddie & Fannie never sleep

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Fannie Mae announced a new weekly series, Refinance Application-Level Index (RALI), that will provide near real-time insights into refinance and prepayment trends gained from mortgage applications received through Fannie Mae’s Desktop Underwriter® (DU®) from more than 1,900 lenders. Early insights will support broader market analysis, including lender forecasts of origination volumes and investor forecasts of mortgage-backed security (MBS) prepayment activity. Learn more about the RALI in a new Fannie Mae Perspectives blog from Devang Doshi, Fannie Mae Senior Vice President, Single-Family Capital Markets, and Doug Duncan, Fannie Mae Senior Vice President and Chief Economist.

For those in the industry still preparing their systems transitioning to Fannie Mae’s updated legal documents, which includes both Fannie Mae/Freddie Mac uniform instruments and Fannie Mae-specific instruments; Fannie Mae suggests coordinating with document vendors to ensure readiness to implement by Jan. 1, 2023. Review Fannie’s fact sheet for more information.

Experian is now an authorized report supplier of income and employment verification for the DU® validation service. Contact the vendor directly to begin the onboarding process. A list of all verification report vendors is available, learn more about the DU validation service.

Fannie Mae published a new job aid to help DU users with common error codes. See common error messages, learn more about what they mean, and find ways they can be resolved.

Fannie Mae has a new training module on reconciling taxes and insurance (T&I) custodial bank accounts. This introductory overview provides step-by-step instructions for completing T&I custodial account analysis via Form 496A.

Fannie Mae Announcement SEL-2022-05 allows a two-closing construction-to-permanent loan to include certain documented construction cost overruns, clarifies the definition of a group home and related property eligibility, better aligns our policy for calculating the fully indexed Adjustable-Rate Mortgage (ARM) rate with Regulation Z requirements.

Fannie Mae issued SVC-2022-04, Servicing Guide update, to transition the process for ordering liquidation-related property valuations to Servicing Management Default Underwriter™ (SMDU™), which now consolidates all servicer valuation orders into a single platform, and make several miscellaneous clarifications and updates.

Help clear the path to homeownership for more borrowers, Fannie Mae’s comprehensive free online course, HomeView™, is now available in Spanish. HomeView™ can be used to satisfy education requirements for most mortgage products.

Building on recent innovations and efforts Fannie Mae has undertaken to improve Black consumers’ experience with first-time homeownership, access to affordable, and quality rental housing, Fannie Mae released its three-year Equitable Housing Finance Plan. The plan outlines a range of specific actions Fannie Mae will take over the next three years to knock down barriers faced by Black homeowners and renters throughout their housing journey.

In response to a 2021 request by the Federal Housing Finance Agency, Freddie Mac announced its first Equitable Housing Finance Plan designed to promote equity and increase sustainable homeownership and rental opportunities for traditionally underserved Black and Latino communities across the nation. The Plan includes a series of ambitious actions to advance equity in both the single-family and multifamily housing markets, view the Fact Sheet

online. Learn more about Freddie Mac’s diversity, equity, and inclusion efforts.

Freddie Mac Guide Bulletin 2022-11 announces updates to Mortgages secured by properties with an ADU, Asset and income modeler (AIM), Condominium and Cooperative Projects, Desktop appraisal exclusions, Attorney opinion of title letter, 2022 Area Median Income, Certificates of Incumbency and wire and automated clearing house (ACH) instructions effective June 8, 2022.

Freddie Mac issued a reminder about recent Uniform Loan Delivery Dataset (ULDD) Phase 4a testing availability and upcoming critical messages in Loan Selling Advisor®.

Capital markets

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The markets are closed today in observance of the holiday, so beware rate sheets (hedges were put in place Friday for any locks today, but pricing tends to be conservative). The main headline over the last week was the Fed’s decision to raise its target rate by 75 basis points to a target range of 1.50 – 1.75 percent. Higher than expected inflation data a few days prior sounded the alarm bells and necessitated the most significant increase in 27 years. The committee made it clear that aggressive tightening lay ahead. While the Fed does not directly set mortgage rates, they are influenced by future inflation expectations and have risen significantly.

It is interesting to note that during the last tightening cycle from 2016 to 2019, the Fed Funds target topped out at 2.5 percent, and mortgage rates were in the high 4s. As a result of the higher rate environment, builders have slowed construction as housing starts fell 14.4 percent in May. Additionally, small business owners are reporting that increased costs have eaten into margins and sales have begun to decline. It remains to be seen if the Fed can achieve its sought-after soft landing, however, the prospects for declining inflation without economic contraction seem less likely. (More tomorrow!)

Marvin Gaye used to keep a sheep in my cousin’s vineyard. He’d herd it through the grapevine.

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. The current blog is titled, “Owning a Home: The Dream is Alive and Well.” 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 2022 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.)