Mar. 25: Mortgage jobs & channel expansion; dropping MI and MI master policies; FTC guidance on background checks
Huh? Did someone say baseball season is here? Here’s 18 seconds of non-mortgage humor: http://www.youtube.com/watch?v=oLnB4UVNoUQ&feature=youtu.be.
Citibank, N.A., is strategically adding new correspondent sellers for delegated and non-delegated delivery. Citi offers competitive pricing with additional incentives for CRA eligible loans. It also offers a thorough pre-purchase review process to help improve quality manufacturing and delivery to Investors and Agencies. A relationship-centric organization, all clients benefit from the expertise, support and resources that Citi offers. For consideration please complete the Prospective Mortgage Correspondent Questionnaire here:
Freedom Mortgage currently has openings for experienced retail sales loan officers in New Jersey, Pennsylvania, Southern California, Texas and New England. Freedom “boasts a competitive, commission-based compensation plan and a competitively priced product menu, including Jumbo, FHA and 203k, VA, USDA and state bond programs, in addition to conventional fixed and ARM programs. With over 20 years of mortgage lending experience, Freedom Mortgage is a national lender licensed in all 50 states, Washington D.C. and Puerto Rico. Freedom Mortgage (https://www.freedommortgage.com) is a top 20 mortgage lender (Inside Mortgage Finance, January 2014) and a top 3 VA loan originator in the U.S. (Department of Veterans Affairs, 2013).” To learn more about this opportunity for top loan officers to grow their business, please forward your questions and resume to firstname.lastname@example.org.
And Pro Mortgage Branching Solutions (PMBS) is a mortgage BranchMatch company helping retail branch managers and lenders find just the right fit for expansion. PMBS has been contracted by growing regional banks and independent mortgage bankers nationwide to identify market leaders seeking to expand. If you are a successful branch manager and want better pricing, service, culture and/or a better, more compliant branch manager comp plan, contact Adam Sidle through www.mortgagebranchingsite.com/.
Ellie Mae came out with its latest “Origination Insight Report.” “The free monthly Report mines its data from a robust sampling of closed loan applications that flow through Ellie Mae’s Encompass mortgage management software and Ellie Mae Network.” For example, last month the loans run through Ellie’s system showed 57% purchase and 43% refi, with refis taking 40 days to close and purchases taking 42 days. But hey, don’t take my word for it: Origination Insight Report for February 2014.
Dave McGill, a senior AE with UG, reminded me, “Rob- After reading your write-up of Genworth, I thought you might like to know that all mortgage insurers are required by the GSEs to establish new master policies that will go into effect on July 1st of this year. The GSEs are requiring standardization of many aspects of these new master policies, including rescission relief after 12 months on full file underwrites (i.e. files that are submitted to and underwritten by the MI company on a non-delegated basis) and relief after 36 months on delegated files where the MI piece is underwritten by the lender. These and other required changes will establish a more common master policy among all MI companies, thus eliminating much of the variance that we see among the different policies that are in effect today.” Thank you Dave!
So where do standardized uniform master policies leave MI companies trying to differentiate themselves in the business? Turn times, service, paying claims immediately jump to mind. And companies have personnel or roles that others don’t, of course. For example, Arch MI has a dedicated economist – Ralph DeFranco, Ph.D. – whereas other MI companies do not. I am sure they’ll all figure it out…
While I am yammering on about MI, here’s a recent note: “My client refinanced and the resulting LTV was approximately 85% so he had a private mortgage insurance payment. That was over a year ago and the homes are appraising quite a bit higher now. Due to appreciation he inquired about having the PMI dropped. But his servicer Ocwen sent two letters basically saying that it will not consider a current value that considers market conditions such as appreciation. Is this normal or legal?”
Rather than suggest something that would be in the realm of common sense, I asked a contact at MGIC. She replied, “Ocwen is not obligated to drop the MI until the loan meets the requirement of the Home Owners Protection Act (HPA) which generally requires that the servicer drop MI coverage once the loan amortizes to 78% of the original value. (There are some caveats depending on the original loan type.) Aside from that, it’s really up to the servicer. Most servicers follow agency standards and will consider dropping MI coverage when the value (appreciated) reaches 20% with proof of equity AND two years payments, as agreed. But there is no law requiring that they drop it. The borrower could refinance into an uninsured loan or wait for the loan to amortize to 78% (with an 85% loan, that won’t take too long). MGIC has a QuickLink on our homepage for MI cancellation at www.mgic.com. There’s a good consumer brochure that can be emailed as well as a detailed explanation about the HPA.”
Yesterday I had more information on servicing transfers, and I received this note. “Rob, I have been to a couple presentations where presenters said they thought we’d hit $1 trillion in servicing sales in 2014. Do you agree with that?” No, I don’t, but what the heck do I know? Remember that the FHFA layers on a different set of audits/requirements on any sale of performing agency paper of more than $3 billion in addition to the process that Fannie and Freddie have in place – and that can take months to carry out. Of course companies like Ocwen are buying non-performing pools, but those are generally smaller. Yes, flow deals are happening regularly, but it takes a lot of $20-50 million a month deals to hit a billion dollars a month – hitting $80 or $90 billion a month is much farther off. Lastly, the entire industry is expected to originate about $1 trillion, and much of that servicing will be kept by lenders – especially the big banks.
It’s been said that it’s hard to find good help, or at least that’s what my wife tells me when I load the dishwasher incorrectly (if it fits, it’s goin’ in!). HR departments are usually tasked with the due diligence process of prospective employees, and in the process normally run some kind of background profile. Recently the Federal Trade Commission and the Equal Employment Opportunity Commission have issued guidance on doing background checks. Any time you use an applicant’s or employee’s background information to make an employment decision, regardless of how you got the information, you must comply with federal laws that protect applicants and employees from discrimination. That includes discrimination based on race, color, national origin, sex, or religion; disability; genetic information (including family medical history); and age (40 or older). The joint publication covers areas such as the use, and disposal of acquired information, along with how it can be used to arrive at employment decisions. The guidance can be found here.
In early March, the agencies issues the final Dodd-Frank Act stress test guidance for companies with total consolidated assets between $10 billion and $50 billion, the so-called “medium-sized firms.” As most may know, medium-sized companies are required to conduct annual, company-run stress tests under rules issued by the agencies in October 2012 to implement a provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act. These companies are required to perform their first stress tests under the Dodd-Frank Act by March 31, 2014. The agencies’ stress test rules are flexible to accommodate different risk profiles, sizes, business mixes, market footprints, and complexity for companies in the $10 billion to $50 billion asset range. Consistent with this flexibility, the final guidance describes general supervisory expectations for these companies’ Dodd-Frank Act stress tests, and, where appropriate, provides examples of practices that would be consistent with those expectations.
Donna Beinfeld writes, “I have a Research Page at Donnashi’s site, and it includes HUD Webinar and training schedules, Ginnie Mae’s schedule, Fannie Mae’s web training, and other information. Here you go: https://donnashi.com/research.php – page down once.
Check out CMBA’s Weekly Video Update and get an update on a new bill in California that changes MLO (Mortgage Loan Originator) education requirements.
Speaking of which, the California Mortgage Bankers Association’s Mortgage Quality and Compliance Committee (MQAC) announced its next call – and the calls are free! On Thursday, March 27 at 11AM PST the call’s topics will include “New Agency Requirements for Pre-Funding and Post-Funding QC, what does your pre-funding QC platform look like and does it meet Agency requirements, what does your post-funding QC platform look like and does it meet Agency requirements, and new QC requirements from FNMA, effective January 2014.” To join the teleconference, dial 1-800-351-6802 and when prompted by the operator, provide the passcode 4378.
For more training news, “Looking for a really cheap but informative way to understand the basics of warehouse lending, including the key risks, the approval process, key structuring terms, the important players, forms of contracts, and much more? Sign up for “Warehouse Lending from A to Z,” a two-part, interactive MBA webinar that Mike McAuley will be moderating on Tuesday, April 1st and Tuesday, April 8th. It’s geared toward staff at mortgage bankers who want to understand the nuts and bolts of warehouse lending, banks who want to learn more about the credit and regulatory issues involved with warehouse lending, and mortgage brokers who are considering becoming mortgage bankers. For more information about the course and to register, click on this link: http://store.mortgagebankers.org/ProductDetail.aspx?product_code=E2141716Y%2fREGIS.
Carrington has lowered its minimum credit requirement to a FICO score of 550 in its wholesale channel, and expanded its guidelines on a number of FHA, VA and USDA loan programs, extending eligibility to more property types and reducing overlays. “In addition to reducing its minimum FICO requirements to 550, Carrington has added to and enhanced a number of its primary product offerings to further complement this strategy and increase its accessibility for the underserved market.”
LoanScoreCard announced that Chase will accept the LoanScoreCard Abridged Funding Request Form (link here) starting April 1, 2014, as indicated in the Chase Correspondent Bulletin issued today. Based on feedback from their correspondents, Chase will accept this in lieu of the longer traditional Chase Funding Request Form for users of the LoanScoreCard QM engine. Correspondents can complete the much shorter Abridged Funding Request Form and include it along with the LoanScoreCard QM Findings Report in the closed loan package delivered to Chase – saving significant time for the originating correspondent.
Envoy Mortgage CLD has announced the release of the Fannie Mae HomePath Fixed Rate Product. The product highlights are: 30 year fixed rate, no mortgage insurance required, no appraisal required, up to 95% LTV allowed, minimum 660 credit score for Primary and Second Homes, minimum 700 credit score for Investment properties, 1 unit only, DU Approve/Eligible required. Note: Only HomePath mortgages are acceptable. Envoy will not be participating in the HomePath Renovation Mortgage program at this time.
Congrats to a couple folks. Informative Research, a leading mortgage information services provider, announced the appointment of Patrick Kelly to V.P. Business Development and Colleen Knapp to Director, Business Development. Patrick Kelly will be focused on the entire central region of the United States, and Colleen Knapp will oversee the business development for the Southeast Region of the United States.
Commerce Mortgage announced the appointment of Shabi Asghar as president of its wholesale real estate lending division. “In his new position, Asghar will be responsible for maintaining the company’s dedication to delivering best-in-class service while introducing cost-effective options to mortgage lenders and borrowers.” And Colony American Homes has appointed Beth O’Brien as president of its single-family lending unit.
Hey, I only know what I read in the newspapers. Premier Mortgage Resources, Inc. announced that it has “acquired an exciting new business, and will shortly be filing to change the company’s name to Alternaturals, Inc. The company will be releasing a product line consisting of products containing hemp, medical marijuana, and many natural substances as alternatives to prescription drugs.” If you can’t beat ‘em, join ‘em? Here you go: http://www.marketwatch.com/story/premier-mortgage-resources-announces-the-launch-of-an-exciting-new-business-model-2014-03-24?reflink=MW_news_stmp.
The market didn’t really do much exciting on Monday, so once again, I am not going to waste your time explaining why it didn’t. But we have a decent chunk of scheduled news today: 9AM EST has the FHFA housing price index and the Case-Shiller house numbers, 10AM EST we’ll see New Home Sales for February (468k last) and Consumer Confidence. And the Treasury doesn’t want the primary dealers out there to forget about its auction of $32 billion of 2-yr notes. Looking at the numbers, the 10-yr. yield at the close on Monday was 2.73%, and in the early going we’re unchanged at 2.73% – and there isn’t much change to agency MBS prices.
The Amazing Human Body
It takes your food seven seconds to get from your mouth to your stomach.
One human hair can support 3kg (6.6 lb.).
The average man’s “manhood” is three times the length of his thumb.
Human thighbones are stronger than concrete.
A woman’s heart beats faster than a man’s.
There are about one trillion bacteria on each of your feet.
Women blink twice as often as men.
The average person’s skin weighs twice as much as the brain.
Your body uses 300 muscles to balance itself when you are standing still.
If saliva cannot dissolve something, you cannot taste it.
Women reading this will be finished now.
Men are still busy checking their thumbs.
(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.)