May 11: Non-QM product & company opportunities; TRID products & training; HARP-o-rama extended; BofA & Chase change bankruptcy policy

Taking a quick look at what people are doing with their money, just 14% of American households own individual stocks, according to Federal Reserve data. (I bet the number owning individual bonds is much less.) However, retail investors as a group hold more equities than any other market segment, such as hedge funds and mutual funds, writes Rich Daly of Broadridge. “Small investors should be taken seriously. They are a bigger part of the shareholder equation than you may think,” Daly writes.


Silvergate Bank, one of the price/program leaders in NonQM is continuing to enhance its Alt Doc program by offering 1year W-2 or tax return – up to 70% LTV. In recent months, Silvergate has seen increased liquidity for NonQM and is continuing to expand its guidelines to meet borrower’s needs. “Alan Peviani, Director of Sales and Marketing states, ‘Our Clients are enjoying the benefits of NonQM, including higher pull thru, broader product mix and increased margins and we are continuing to add correspondent Clients, nationwide.’  If your company is considering moving into NonQM and looking for ways to increase production and profitability, please contact Alan Peviani.”


“Are you a branch or regional manager looking for the right opportunity?  Do you want to partner with someone where your voice will be heard?  If so, you may want to contact LendSmart Mortgage as it is looking to expand again – this time, in the Southwest and Northwest regions of the US. Management is looking to add two production groups with leaders who can operate as Regional Managers. LendSmart Mortgage enters markets by acquiring existing teams with production, operations and strong leaders. They are currently licensed in 20 states and growing as a culture first regional lender that has conventional, FHA, VA, USDA, bond, and non-QM authority. This unique opportunity will give the right leader a chance at regional profit sharing, input on operations and a seat on the company Board of Directors.  Contact Tom Dolan at 480-748-5226 for more information.


A quick congrats to William Clopton, the new VP of Mortgage Operations at GenEquity Mortgage, and to Stephen Crispin, its new VP of Secondary Marketing. GenEquity Mortgage is a nationwide mortgage banker.


And congrats to Mr. Scott Davis who will be joining the warehouse team at Legacy Texas Bank. Scott hails from Wells Fargo where he has been a senior warehouse lender for nine years.


I received another note from a “well known in the industry” source saying, “Rob, although by now the majority of the industry – certainly the vendors – know that TRID will change things, and the majority of them know the basics, I am seeing a big disconnect between the theory and the practice. And uniting those two will be what takes time. Lenders, settlement agents, and real estate agents have to go much farther than merely knowing the changes and looking at comparisons of before and after. They will need to tailor the policies and procedures to accommodate the timelines, file flow, and documents. ‘Who is going to do what?’ within the affected companies. And ‘When are they going to do it?’ The devil will be in the details – in this case companies making sure that borrowers are impacted to as minimum degree as possible. As I heard you state in a speech recently, yes, the sun will come up on August 2nd, and people will still want to buy homes, but as an industry we need to make sure that they can do that.”


Everyone in the industry knows the significance of August 1st, and TRID knowledge and resources continue to evolve. Lenders Compliance Group, Inc., the nationwide mortgage risk management firm, announced TEAM TRID, a hands-on compliance solution to implementing TILA-RESPA Disclosure Integration. “LCG has put their own team together, consisting of subject matter experts in all relevant areas of regulatory compliance, the purpose of which is to ensure that the TILA-RESPA Integration Disclosure (TRID) requirements are implemented for their clients and financial services institutions with a need for compliance support. Jonathan Foxx, the firm’s President & Managing Director, stated in an announcement, “In my view, people need reasonably priced, expert support at this time, not yet another guide for the perplexed, costly training modules, and stop watch, hourly counseling charges.” The compliance solution offered by LCG is a hands-on approach, offered on a flat fee basis. By retaining Team TRID, mortgage lenders, mortgage brokers, and mortgage servicers, will receive the tools needed to implement TRID.” Check out the link above for the full details.


(Mr. Foxx wrote saying, “The response to TEAM TRID has been considerable. My main focus is ensuring that LCG will assist companies via a methodologically stable implementation track. TRID is simply not a learn-as-you-go integration process. In my lectures I have been increasingly concerned by the feedback from attendees with respect to their limited familiarity with TRID. Much of what many people know is high level, lacking the clarifying and intricate details. The conferences, webinars, conventions, manuals, forums, and training, are somewhat helpful, but not effective – if by ‘effective’ we mean unambiguous implementation. With less than 90 days to go before the compliance effective date, I want to do what I can to offer LCG’s subject matter experts.”)


DocMagic Inc. announced that it has completed all required TILA-RESPA Integrated Disclosure rule (TRID) software development and testing, and the new TRID enhancements have been officially released into DocMagic’s production environment. The new TRID offering is available to all DocMagic clients and all LOS partners for in-depth testing. DocMagic wants each of its clients and partners to become acquainted with the TRID enhancements and functionality that was recently incorporated into its suite of web-based document production systems.


And the Ellie Mae Resource Center launched its RESPA-TILA page. “It’s dedicated to putting everything – documentation, support, education, and more – all in one place so you can access it with a click. Visit it now, bookmark it, and keep checking back. We will be updating it often.” Ellie Mae is also offering, “RESPA-TILA Education – Attend a Hands-On, Interactive RESPA-TILA Workshop. You have less than 80 business days to get ready for new Integrated Mortgage Disclosures. Take one of those days to get ready. Register now for one of our new hands-on RESPA-TILA workshops in a city near you. This is hands-on learning – not lectures – led by our by nationally recognized compliance experts. Read more…


And on May 4, the CFPB updated its Supervision and Examination Manual’s Mortgage Origination examination procedures to include guidance on how its compliance examiners will examine loan disclosures and terms of closed-end residential mortgage loans that are subject to the TILA-RESPA Integrated Disclosure (TRID) rule. The TRID examination procedures updates are reflected in module 4 of the Manual’s 8 modules, and instruct compliance examiners to review a sample of complete loan files to determine a company’s compliance. Further, if consumer complaints exist concerning the mortgage origination and closing disclosure requirements, then compliance examiners are permitted to interview the consumers included in the sample and inquire about each subject area listed in the module.


Yes, the rules go into effect on August 1st – but we don’t have to like it. The American Land Title Association (ALTA), along with 15 other real estate trade associations, sent a letter to U.S. Representatives Steve Pearce (R-NM) and Brad Sherman (D-CA) applauding their introduction of H.R. 2213. The legislation provides a reasonable hold-harmless period through the end of the year following the August 1 effective date of the CFPB TILA-RESPA Integrated Disclosures (TRID) regulation. The bill would provide a temporary safe harbor from enforcement actions as long as companies show a good-faith effort to comply. “We appreciate the leadership of Representatives Pearce and Sherman for introducing this important bipartisan legislation to help ensure we can properly implement the new real estate closing disclosures,” said Diane Evans NTP, president of ALTA. “We know from previous regulation implementations that there will be a learning curve and unforeseen issues once the new forms are used in real homebuyer transactions. To ensure that consumers’ real estate closings will not be disrupted beginning August 1, a hold harmless period crucial.” “A hold harmless period will allow the real estate industry to adapt their business processes to comply with this regulation without the fear of potential enforcement actions. This will allow industry more flexibility in meeting homebuyer’s needs as we transition to using the TRID forms in actual homebuyer transactions,” Evans added.


In a move sure to attract the attention of other banks and credit reporting agencies, Bank of America and JPMorgan Chase agreed to erase debts from credit reports after bankruptcies. Well, that will certainly help these guys approve more loans – just in time for volumes tailing off, right? But as seasoned lenders know, not everyone qualifies to borrow money for a home…


Few people like uncertainty, and the FHFA did what it could do to alleviate some of that when it directed Freddie Mac and Fannie Mae to extend the implementation of the Home Affordable Refinance Program (HARP) not through March 0f 2016, not through June of 2016, but ALL THE WAY to December 31, 2016. (The program had been set to expire on December 31, 2015.) HARP is a program that allows GSE borrowers with very high loan to value (LTV) ratios to refinance.


“As a result of the extension, we are revising the eligibility dates for Freddie Mac Relief Refinance Mortgages – Same Servicer and Open Access as follows: Relief Refinance Mortgages must have Application Received Dates on or before December 31, 2016, and Freddie Mac Settlement Dates on or before September 30, 2017…No other changes are being made to HARP or our Relief Refinance Mortgage eligibility criteria at this time. See Freddie Mac Relief Refinance Mortgages for more information on our implementation of HARP.”


Bose George with KBW noted that, “In a speech on Friday afternoon, Mel Watt, Director of the FHFA, announced that the HARP and HAMP programs would be extended for a year through the end of 2016. Watt noted that there are 600,000 borrowers who could take advantage of HARP (although the current monthly HARP run rate is around 10,600 loans). We believe the announcement is mainly a positive for the mortgage servicers (WAC and NSM), who we estimate jointly account for over half (18,000 loans for the two in the first quarter) of industry HARP production…While Watt noted that there are 600,000 borrowers who could take advantage of HARP, recent HARP volumes have fallen sharply to around 10,600 a month from over double that level a year ago despite total refinances rising sharply year-over-year on lower rates. HARP volume peaked at well over 100,000 loans a month in late 2012. Assuming a loan size of $175,000, current HARP volume is under $2 billion a month. Given the low current HARP volumes, the extension of HARP is likely to have a limited impact on the mortgage market as a whole.”


The GSE HAMP program was also extended through the end of 2016. Last year, the Treasury Department had already extended the non-agency HAMP program (which is funded through TARP, while the GSE HAMP program is funded by the GSEs). While monthly HAMP modification volume has also fallen sharply, it remains an important program. KBW points out that, “In 4Q14, about 60,000 HAMP modifications were started, and there are around 1 million HAMP loans that were modified and remain current….The extension of the GSE HAMP program is a modest positive for servicers and for mortgage insurers, in our view, who have benefited meaningfully from GSE HAMP modifications. Since the HAMP program for non-GSE loans had already been extended to 2016, there will be no impact on the non-agency MBS market from this change.”


Ah, another Monday, another week of scheduled economic news, hopeful investors in MBS, and hopeful LOs ready to produce those loans if they can overcome the expense. Actually it is the companies that must overcome the expense. But I digress. To be blunt, and at the risk of offending all the hundreds and thousands of people producing the 2nd tier numbers Monday and Tuesday, we don’t much of consequence until Wednesday’s Retail Sales and Import Price Index figures. Thursday is good ol’ Initial Jobless Claims and the whole set of Producer Price Index numbers. On Friday the 15th are Empire Manufacturing, the Industrial Production & Capacity Utilization duo, and some forgettable University of Michigan stats.


In more immediate news, the Bank of England left its rates alone overnight, and the focus is more on the weather-related damage and loss of human life here in the United States. For numbers we closed the 10-year at 2.15% on Friday and this morning rates have nudged higher slightly and we’re at 2.16% and agency MBS prices are worse a couple ticks.



The time that I walked up to a pretty gal in a bar and said, “If I told you that you had a great body would you hold it against me?” didn’t work out too well. What if you told complete strangers that you could read their minds, and watched their reactions when you were right? This short, hidden video watches the fun, and then unveils the nightmare all of us increasingly have. It is a must-see for anyone who uses a computer.





(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