June 26: Sales management & AE jobs; jumbo & state news; disparate impact ruling clears things up – kind of – a new UDAAP?

HOLY COW, MOOve out of the way, cows are dangerous. Wow that was cheesy… I can’t stop. The ridiculousness of that line is only mirrored by the preposterousness of this fact: cows kill more people per year than sharks, alligators, bears, snakes, and spiders COMBINED. A new report shows that a cow is more likely to exact revenge on humans than most other animals on this earth. For people that are afraid of the top of the food chain animals (sharks, alligators, bears) fear not for you are three times more likely to be killed by non-venomous arthropods (ants) than any of those beasts you see in your worst nightmares. You can real all of the stats here. Life isn’t all about lending…


Returning to lending, Mountain West Bank in Boise, Idaho is looking for a Production Sales Manager to increase market share.  MWB is a community bank headquartered in Coeur d’Alene, Idaho, and the position will be in Boise. “We are the #1 lender in Northern Idaho and are looking to expand our market share in Southern Idaho. MWB is a ‘Customer Driven Lender’ with local processing and underwriting. This position comes with a very competitive compensation/benefit package EOE.”  For more information or to apply visit Careers.


Congrats to Anthony Salley! JMAC Lending recently added Anthony as an Area Sales Manager for its East Coast region. In fact JMAC is looking for ASMs and AEs throughout the nation as it expands its correspondent and retail channels. JMAC Lending is a full service lender and an approved seller/servicer with FNMA, FHLMC, and a GNMA issuer, and has been in business since 1997.  JMAC offers variety of loan products from Conventional, FHA, VA, jumbo, and its own Non-QM product such as ‘Jumbo Out of the Box’, Alt Doc, diminishing credit, and Foreign National. “Come and join a growing company with family culture and a strong foundation in operations and top notch customer service. Please send your resume for a confidential interview to Lilly Lefeber.


Yesterday the Supreme Court weighed in on disparate impact in what was viewed as a win for housing advocates & the CFPB and a setback for the banking industry. The Court upheld the use of “disparate impact” in a Texas case alleging housing-related discrimination. Remember that disparate impact says lenders and other defendants can be found liable for racial discrimination even if it was unintended, is recognized under the Fair Housing Act. Many CEOs and lenders say that disparate impact unfairly victimizes financial institutions that are not aware that their credit policies may have a disproportionate effect on minority neighborhoods.


Groups on both sides are figuring what it means, and how it will be applied. Certainly no lender wants it to turn into a UDAAP situation – viewed as a catch-all for bringing action against lenders where terms like “unfair” are subjective and vague. In his opinion, Kennedy wrote that disparate impact has long been established in fair housing cases. “In light of the longstanding judicial interpretation of the FHA to encompass disparate-impact claims and congressional reaffirmation of that result, residents and policymakers have come to rely on the availability of disparate-impact claims,” he wrote, adding that many large American cities that could be potential defendants in similar cases sided with the plaintiffs in the Texas case.


Attorneys noted that the Court imposed important limitations on the application of the legal theory – hopefully that does away with frivolous claims.  The Court held that a racial imbalance by itself does not establish a case of discrimination, and directed lower courts to “examine with care” the claims presented at the pleading stage. The Court further directed that remedial orders in disparate impact cases must “concentrate on the elimination of the offending practice” and employ “race-neutral [remedial] means.”  The Court believed these limitations necessary “to protect potential defendants against abusive disparate-impact claims.”


“Disparate-impact liability has always been properly limited in key respects that avoid the serious constitutional questions that might arise under the FHA…if such liability were imposed based solely on a showing of a statistical disparity.”  The Court ruled that “a disparate-impact claim that relies on a statistical disparity must fail if the plaintiff cannot point to a defendant’s policy or policies causing that disparity.” The Court imposed a “robust causality requirement” and held that “racial imbalance does not, without more, establish a prima facie case of disparate impact,” “thus protect[ing] defendants from being held liable for racial disparities they did not create.”  The Court reasoned that “[w]ithout adequate safeguards at the prima facie stage, disparate-impact liability might cause race to be used and considered in a pervasive way [that] would almost inexorably lead governmental or private entities to use numerical quotas.” And even if a plaintiff meets its prima facie burden, the Court reiterated that proper business justification will provide a defense to a disparate impact claim. Finally, the Court held that, to prove a claim, a plaintiff must “show[] that there is an available alternative practice that has less disparate impact and serves the entity’s legitimate needs.”


Let’s play catch up on recent changes & news in the jumbo sector. Yes, there is plenty of jumbo business, but most banks continue to add the loans into their portfolios rather than securitize them.


Impac Mortgage reminded everyone of its jumbo line-up. Jumbo Premier product highlights include: 80% LTV/CLTV to $2 Million, Cash out up to $750,000, First time home buyers allowed, 2nd home allowed, 43% Max DTI. Its Jumbo Platinum product includes: Non-warrantable condos ok, minimum loan amount $100,000, 80% LTV/CLTV/HCLTV to $1.5 Million, Cash out up to $300,000 and minimum credit score 700. Impac’s ALT QM™ Jumbo highlights include: DTIs up to 50%, Foreign Nationals Ok, 80% LTV/CLTV to $1.5 Million, Cash out up to $500,000, and Minimum loan amount $100,000, Loan available to $3 Million.


Introducing a suite of portfolio products from Caliber Home Loans including Jumbo Alt program designed to serve the borrower who is looking for a higher loan amount, with flexible guidelines, and who can demonstrate the ability to repay. Other exciting products include: Homeowner’s Access Program, Fresh Start Program, Investment Program and Foreign National Program. Click link to log into Caliber’s Website.


U.S. Bank Home Mortgage announced a significant price improvement to its traditional jumbo 30 year fixed rate products. Daily pricing for Jumbo 30 Year rates can be found on page 5 of its rate sheets.


Effective Tuesday 6/2/15, Kinecta Federal Credit Union’s Jumbo Loan Level Price Adjustments (LLPAs) went from rate to price. This change impacts new loans and floating loans already in the pipeline.


NYCB Mortgage’s table funding clients should be aware of its enhancement to its Jumbo Fixed 30 Year Minimum Trade Line Requirements, effective for loans with an Initial AU Submission date on or after June 21st. Also effective for loans with an Initial AU Submission date on or after June 21st; eligibility requirements have been updated on Fixed and Standard ARM Core Financing for 5-10 Second Home or Investment Properties. Log into NYCB Mortgage website for details.


And in state-level news in no particular order…


The Nevada Senate unanimously passed SB 306. This legislation — the product of discussions between numerous stakeholder groups including MBA and the Nevada MLA — seeks to mitigate mortgagee extinguishment risk stemming from the recent HOA super-priority lien decision in SFR Investments Pool 1, LLC v. U.S. Bank.


So yes, Nevada has passed a bill revising the provisions of legislation that allows homeowner’s associations to foreclose non-judicially on a residential home when the homeowner’s HOA dues become delinquent.  The Nevada Senate Bill 306 was approved last week and was created in response to a bill that gave HOAs the ability to attach super priority lien status to a mortgage. The bill requires an HOA to provide the mortgagee with a formal statement of the amount of the deficiency and a breakdown of all charges that will allow the mortgagee to address the lien payment if the owner does not, therefore allowing mortgagees the chance to protect their position. Other provisions include requiring the foreclosure notice to be publicly available in a newspaper or a county website, and if a payment is made to the HOA for the amount of the dues deficiency no later than 5 days before the foreclosure sale, then the HOA cannot legally extinguish the first lien. To read more about the amended bill, click here.


Texas has amended provisions regarding licensing exemptions effective on September 1st. The new provision states that any entity designated as a 501(c)(3) and originates residential mortgages for borrowers though self-help program is exempt. The entity must provide at least 200 hours or 65 percent of the labor to build the dwelling securing the loan. Additionally, employees of exempt organization are also free from licensing and other requirements if the employees are acting for the benefit of those entities.


Oregon has enacted House Bill 2532 to require disclosures in communications about reverse mortgages, effective January 1st, 2016. Disclosures must be in a large enough font and color that contrast or is set off from the surrounding text. The amendment requires inclusion of a summary of the terms of the reverse mortgage loan contract in any advertisement, solicitation or communication where the contact includes the following provisions: “Interest on a reverse mortgage is not deductible from the person’s income tax return until the person repays all or part of the reverse mortgage loan”, “the person retains title to the property that is the subject of the reverse mortgage until the person sells or transfers the property and is therefore responsible for paying property taxes, insurances, maintenance and related taxes. Failing to pay these amounts may cause the reverse mortgage loan to become due immediately”, “the balance of the reverse mortgage loan grows over time and the lender charges interest on the outstanding balance,” and “the lender will charge an origination fee, a mortgage insurance premium, closing costs or servicing fees for the reverse mortgage, all or any of which the lender will add to balance of the reverse mortgage loan.”


A while back, and with a nod toward changing demographics, the California MBA asked the Department of Business Oversight (DBO) to revise and reissue the translated forms they created for the GFE, “that you are required to provide borrowers if the transaction is negotiated in any one of the five specified languages, to align with the new CFPB “Loan Estimate” document. Although the DBO is not requiring use of the new documents until the August 1 implementation date, California MBA has provided the links to the documents a while back so that your team can be prepared and ready as soon as possible.”


How about rates?! The markets aren’t doing much, frankly, although there is some intra-day volatility. On Greece, the IMF made some concessions to Greek negotiators on the crucial subjects of value-added tax and pensions. These have been sticking points this week, and the IMF has been the most uncompromising of Greece’s official creditors. The IMF’s willingness to bargain suggests that Greek Prime Minister Alexis Tsipras can save face and keep Greece on the euro, as most of his citizens would prefer (according to polls).


In our country Treasuries were “deeply red” Thursday morning after positive Personal Income and Personal Spending data were released for May, but then recovered ground as the day wore on and we had a decent 7-year Note auction. The main takeaway of the data is that households have opened their pocketbooks in a reversal of the trend we’ve been seeing since the beginning of 2015. This is good for growth in the short run, as one person’s spending equals someone else’s income.


There really isn’t any news of note this morning. We had a 2.39% close on the 10-yr T-note yield and this morning we’re at 2.42% with agency MBS prices worse about .125.



Part 4 of 4 of some trivia, and no, I did not fact check these. And yes, from yesterday – Roger Miller said that “syrple” rhymes with “purple”.

The words ‘racecar,’ ‘kayak’ and ‘level’ are the same whether they are read left to right or right to left (palindromes – and yes, there are plenty more).

There are 293 ways to make change for a dollar.

There are more chickens than people in the world.

There are only four words in the English language which end in “dous”: tremendous, horrendous, stupendous, and hazardous.

There are two words in the English language that have all five vowels in order: “abstemious” and “facetious.”

There’s no Betty Rubble in the Flintstones Chewables Vitamins.

Tigers have striped skin, not just striped fur.

TYPEWRITER is the longest word that can be made using the letters only on one row of the keyboard.

Winston Churchill was not born in a ladies’ room during a dance, but was a 2 month “preemie”.

Women blink nearly twice as much as men.

Your stomach has to produce a new layer of mucus every two weeks; otherwise it will digest itself.





(Copyright 2015 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