June 6: Products from processing to servicing; state-level lending law changes – does California have a price loophole?

How do you appraise a school bus that is made into a home? Good question. But if you like mobile tiny homes, I’ve got a guy in Denver for you. This fellow builds school-bus homes. With solar, of course.

Products for processing, recruiting, subservicing

If you are attending Mastermind in Las Vegas and would like to have a confidential discussion with Jeff Mason, one of the nation’s top recruiters and a member of the prestigious Pinnacle Society, this is an incredible opportunity to discuss market conditions, new opportunities, or ways to grow your business. To schedule a meeting with Jeff, send a private message via LinkedIn, contact via his website at www.mtgrecruiter.com, or call 281-773-2810.

According to the most recent ARMCO Mortgage QC Trends Report, TRID-related defects dominated lenders QC issues in 2016: over 68% of all loan defects were due to legal, regulatory or compliance issues and/or loan package documentation. “Legal, regulatory and compliance defects made up almost 40% of all reported defects, and the leading issues were all related to TRID. The Critical Defect Rate increased slightly in Q4 to 1.50%, an 18% increase from Q3. A key driver of the increase was a shift to purchase transactions in Q4 2016. In Q3 2016, purchase transactions accounted for just under 48% of our benchmark data but by the end of Q4, they accounted for more than 51%. This change is a predictive indicator of possible changes in 2017. View the full report.”

“If you’re a lender looking to capitalize on the opportunity with millennial homebuyers, Equifax (EFX) might have exactly what you’re looking for. The global information solutions company recently joined forces with Fannie Mae facilitated the rollout of Day 1 Certainty and made the origination process simpler, faster and more user-friendly than ever. Lenders now have access to third-party data verifications (from employer-provided payroll records) for employment and income and thanks to EFX’s verification services, tax transcript forms can be received directly from the Internal Revenue Service. In addition, the data verifications show a prospective homebuyer’s existing assets. The result of a more digital mortgage process: for lenders, it means the ability to quickly verify borrower information, reduces risk and moves the borrower down the pipeline more quickly than ever. And for borrowers – especially millennial homebuyers – the elimination of hoops to jump through when it comes to providing documentation introduces the level of convenience they desire. Who knows, it might even make the origination process a major selling point.”

It’s the ‘Summer of Gov’ at JMAC Lending with a.25% price improvement on all FHA and VA loan products for wholesale and correspondent business. JMAC’s government lending features manual underwriting, fast closing (15-days or faster), plus the opportunity to talk directly to the underwriter. Loans must lock by June 30, 2017. Borrowers need a 620 FICO to qualify for the price improvement (JMAC does go down to 580 FICO). Visit JMACGovernment, call 844-888-JMAC or email iwant@JMACLending.com. In addition, JMAC provides aggressive pricing and a wide range of innovative JUMBO and non-QM products. Visit www.JMACLending to learn more.”

X-Ray Mortgage Intelligence Platform allows mortgage professionals to visualize their loan data in real-time! Special Agent X has announced an updated version of its mortgage reporting software X-Ray, which eliminates wasted time across all loan tracking activities so you can focus on selling and increased margins. Here is a real-world example: A branch manager recently used X-Ray to spot a trend, isolate the performance issue and apply a specific strategy to increase their sales. Further, this branch manager could create workflow-specific reports, alerts and notifications at the touch of a button. Ready to see what X-Ray can do for you? RobChrisman.com readers who take five minutes to book a free demo qualify for waived setup fees! (Up to $5,000 in value.)”

What does it take to become one of the industry’s best producers? Download this complimentary white paper from XINNIX: “A View From the Top: The Wisdom of Elite Producers.” Written by XINNIX CEO Casey Cunningham and featured in The Mortgage Professional’s Handbook, this resource shares powerful strategies mastered by the most Elite Top Producers across the country to help you take your production to a whole new level! Click here to download this free white paper, and don’t forget to explore the new Resource Library at www.XINNIX.com. Want to learn more proven strategies of Top Producers? Sign up for ELITE, XINNIX’s Performance Program that empowers top performing loan officers to accelerate their success, beginning June 13th!

What is the difference between the status quo and experiencing great service? In most businesses, the inches separating the two are the difference between great profitability and losing money. Great businesses generally control no more than 7% of the market share while controlling 70% of a given industries profitability. In 2015, The Money Source (TMS) decided to break away from the status quo of the subservicing world and bring their servicing in-house. What was the result? Lower delinquencies, higher profitability, creating a world class technology to aid in servicing oversight, and much more. TMS is now offering the fruits of their labor to the entire market place. Tired of dealing with subservicers who treat you like they are doing you a favor providing “status quo” service, with 1990’s technology to boot. Come and see what TMS Subservicing offers. Visit www.getSIME.com for more details.

“Mortgage brokers: Do you want to compete with the technology of the largest lenders? Do you want to offer your customers a fast, simple, and safe way to turn in the documents you need? Lendsnap automatically collects borrower W2s, pay stubs, bank statements, tax returns and more. We deliver the actual statements directly from the banks and providers so you can take your loan to any lender for any loan program. If you want to learn more, visit Lendsnap or email Mike Romano to set up a conversation and demo.”

State level changes? They don’t stop, making it expensive for lenders, therefore borrowers.

I received this note/suggestion regarding broker business. “Is California dysfunctional? In California, brokers are typically regulated by the BRE, but also the DBO. The BRE doesn’t appear to care much about the LO comp rule, nor are brokers big enough to show up on the CFPB’s radar screen. Brokers are able to pick their comp plans with various wholesalers. I am not saying all brokers do this, but un-savvy borrowers are locked with a wholesaler with whom the broker has a 2-point comp structure, whereas knowledgeable borrowers are locked with the wholesaler with whom the broker has a 1 point comp structure. The cure for this is one regulator instead of the BRE and DBO. DBO ought to regulate all lenders.”

Effective June 1, 2017, Maryland passed an act that will change the mechanics of surety bonds filed in tandem with applications to become a debt collection licensee in the state of Maryland. With the amendments added to the act, the State Collection Agency Licensing Board (the board) is now to be one of the named obligees, acting on behalf and for the benefit of the state.

Effective January 1, 2018, Maryland amended certain provisions of the Maryland Personal Information Protection Act. Specifically, the amendments changed what information is covered and the steps a compromised business must take post-discovery of a breach. The data covered under the Act includes all data in electronic or optical form. Captured data must be protected from breaches. However, not all data falls under the protection of the Act. The Act specifically omits data that is publicly available or has had its protection privileges explicitly waived by the individual for disclosure to third parties.

Effective October 1, 2017, Maryland adopted several amendments affecting mortgages and deeds of trust recording prerequisites. Most of these changes are minor textually but are important as they may have broad impact. First, a deed other than a mortgage, deeds of trust and an assignment/release of a mortgage or deed of trust may not be recorded unless an attorney or a party named in the instrument certifies it. Second, the amendments define limitations as to which individual constitutes an “attorney. After the changes, an attorney at law must be admitted to the Maryland Bar to be able to be considered a proper certifying party. Last, mortgages, deeds of trusts, and assignments/releases of mortgages and deeds of trusts do not require a certification. So long as the instruments were prepared by an attorney or a party mentioned within the instrument, the document may be recorded without any certification requirements.

Effective October 1, 2017, Maryland enacted the Maryland Uniform Electronic Legal Materials Act. This Act essentially makes uniform electronic documentation of certain state legal documents and databases. The following are important changes brought by the adoption of the Act. First, determining whether a legal material is published solely electronically or in two or more mediums is pivotal. A legal material that is published solely electronically is deemed official and must be authenticated. Second, a legal material that is authenticated is presumed to be accurate. A party may contest the authenticity of the material, however, by a “preponderance of the evidence” (this is legal language for more likely than not, or 51% likelihood). Last, should a legal material be deemed official, the publisher must take steps to secure and preserve the material.

Nevada has enacted provisions regarding its Revised Uniform Fiduciary Access to Digital Assets Act. These provisions are effective as of October 1, 2017. The first several new sections of the Act define key terms such as “catalogue of electronic communications,” “content to an electronic communication,” “digital asset,” and “electronic-communication service.” Section 31 specifies that the new provisions apply to Fiduciaries, Personal representatives, Guardianship proceedings, Trustees and Custodians. Section 32 directs the Rights of Users. Sections 34-41 confer upon the rights of custodians as well as the Rights and Duties of Fiduciaries.

Colorado has enacted several new provisions regarding its Revised Uniform Law on Notarial Acts. These provisions are effective as of August 9, 2017. Section 24-21-502 is a definitions section which defines several notarial terms including “acknowledgment,” “electronic signature,” “notarial act,” and “verification by oath or affirmation.” Section 24-24-504 describes the persons having authority to perform notarial acts and to which circumstances the authority extends. Section 24-21-505 identifies requirements for certain notarial acts. Section 24-21-507 lists the acceptable forms of identification. Several other provisions have been enacted, including sections addressing the performance of notarial acts both within the state of Colorado and in foreign jurisdictions, signature requirements in cases of persons unable to sign, and an officer’s authority to refuse to perform notarial acts.

Effective January 1, 2018, Alabama has enacted the Revised Uniform Fiduciary Access to Digital Assets Act as Chapter 1A of Title 19, Code of Alabama 1975. The Act allows a fiduciary acting under a will or power of attorney, a personal representative of a decedent, a conservator, or a trustee of a trust to compel disclosure of a digital asset from a custodian who stores the digital assets of a user. The Act only applies to a custodian if the user resides in the state of Alabama or resided in the state of Alabama at the time of the user’s death. The Act does not apply to the digital assets of an employer used by an employee in the ordinary course of business. Additions include user direction for disclosure of digital assets, content of electronic communication, procedure for disclosing, custodian compliance and immunity.

Capital markets

The benefit of this is, of course, lower rates: Barron’s cover story describes the surprising “threat” to the American economy: no one is spending money. It evaluates the lackluster consumer spending growth in the US and discusses some of the reasons behind it. Real US personal spending is growing at ~2.6% y/y despite a 16 year low in unemployment, rising wages, lower mortgage rates, and a record high stock market. Some of the reasons discussed in the article include rising student loans, income inequality, healthcare costs, and the increased frugality.

In terms of rates, the U.S. Treasury market sold off a smidge in a curve-steepening trade yesterday as traders unwound some of the gains from Friday’s jobs data. The news in the morning wasn’t much to be excited about (unit labor costs grew less in the first quarter than originally estimated, factory orders dipped, as expected, and May’s ISM Services Index reading came out lower than expected). The 10-year note was confined to a 3.5bp range the entire session with a late drift lower (closing yielding 2.18%) but MBS prices barely budged.

There is no scheduled news today of any note, although coming up at 10AM ET is the April JOLTS job openings figure. We begin Tuesday with rates having improved: the 10-year yield is down to 2.15% and agency MBS prices are better by .125-.250 versus Monday’s close.

Smart Alek answer:

The police officer got out of his car as the kid who was stopped for speeding rolled down his window.

I’ve been waiting for you all day,” the officer said.

The kid replied, “Yeah, well I got here as fast as I could.”

When the cop finally stopped laughing, he sent the kid on his way without a ticket.

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, “Does Everyone Want a Job?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.


(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2017 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