May 8: Questionnaire product; Lehman legal news; vendor updates; trends in credit scores & tax documentation

Passwords can be a pain in the neck (I even have a password joke today at the bottom). I cannot attest to the numbers, or the source, but I spotted this note: “Research that looked at 6 million username and password combinations found 91% of users had used one of the 1,000 most common.” First off, it doesn’t surprise me. But second, who the heck answers some general survey question about their passwords?


Jobs & products


Surveys seem to be the name of the game, and ARMCO announced it has added new capabilities to its ACES Intelligent Questionnaires (ACES IQ), “empowering organizations to swiftly adhere to changing compliance rules. ACES IQ provides preset and user-defined quality control audit questions addressing GSE’s, agencies, state law, and federal regulations. Loan level data within ACES allow users to further save time and quickly isolate desired question sets. ACES IQ’s are completely customizable and can leverage and modify existing template questionnaires that ARMCO has in its library of forms for origination and servicers. ARMCO maintains all relevant state and Federal compliance rules for clients, and then empowers them with the interface to makes changes to their own rules and policies. ACES Standard IQ, the traditional questionnaires, guide auditors through a question-driven loan level audit review while the ACES Multi-Answer IQ include logic-based questions supporting increased QC productivity.”


NRL Mortgage is extending an exclusive invitation to the attendees of the upcoming Mastermind Summit in June. Management has arranged an exciting cocktail reception with music, food, fun and networking with the industry’s elite top producers, and will be getting REAL with their special guest & friend, Josh Altman, star of Million Dollar Listing Los Angeles! This private event will be held at The Palms, Las Vegas “Real World” Suite; June 7th, 5-7PM, and is already drawing much attention. Those interested should RSVP quickly to NRLEvents. Click here to explore the potential of what NRL Mortgage offers, as they are licensed in 45+ states and growing nationally. Any top producers and top managers interested in having a confidential conversation regarding a new opportunity should reach out to President Ron Zach.


Washington’s Evergreen Home Loans is seeking a Chief Financial Officer (CFO) to join its Senior Management team and “make significant contributions toward continuing to achieve dynamic growth and profitability. This individual will be actively involved in ensuring Evergreen continues to be the industry leader in customer service by delivering On Time and As Promised; and the very best place to work in the mortgage industry. Since 1987, our focus has been on providing a WOW full service home buying experience. We originate, fund, and service home loans and have approvals with Fannie Mae, Freddie Mac and Ginnie Mae. Evergreen was recognized as part of Washington’s 100 Best Companies to work for by Seattle Business Magazine in 2016, 2015 and 2014. Fortune Magazine ranked Evergreen no. 12 in their national survey of best workplaces in finance and insurance and Fortune named Evergreen a 2016 Great Place to Work for Women. Join our team today!” Please contact Arlene Evans -Talent Acquisition – or apply online.


Legal news


Is LBHI’s third wave of claims against and lenders and brokers starting? According to the American Mortgage Law Group’s Managing Member, James Brody, Lehman Brothers Holdings, Inc. (“LBHI”) has often stated that its RMBS litigation could result in Trust Claims that are very similar in nature to the Fannie Mae and Freddie Mac claims that LBHI had asserted against as many as 3,000 possible counter-parties. Last week it appears LBHI filed a Motion for Approval of a Compromise that specifically asks the Bankruptcy Court to approve an “RMBS Settlement Agreement.” According to Mr. Brody, in the motion, LBHI represents that the initial demand filed in LBHI’s bankruptcy was for $37 billion dollars in claims. The motion further states that the universe of loans has been established by a “protocol” and that the Trustees have provided the LBHI Plan Administrator with the loan files and evidentiary support for their claims. After much litigation since 2009, the claims purportedly total approximately $16.7 billion dollars.


LBHI and the Trustees have agreed to reserve $2.4 billion dollars and, at this point, the parties agree that the non-final settlement number for the claims is $2.416 billion dollars and the next step is for an estimation proceeding to determine the final amount of the allowed claims, which proceeding is to take place by October 17, 2017. As a result, LBHI is now in the process of serving this motion on a very large number of interested entities. As this could be LBHI’s way of providing notice of settlement, which has potential legal consequences if an interested part fails to respond when necessary, Mr. Brody says that it is extremely important for the those in the mortgage banking industry to keep an eye out for these notices. To learn more about these recent litigation developments, whether in relation to LBHI, ResCap, Citi or otherwise, please contact AMLG’s Managing Member, James Brody (415-878-0030).


Vendor news


VantageScore Solutions has announced the completion of VantageScore 4.0, its fourth-generation tri-bureau credit scoring model. The new model considers fresh behavioral and product trends and introduces groundbreaking new modeling techniques. Vantage Score 4.0 is built on a refreshed data set from all three credit reporting companies (CRCs), compiled of anonymized consumer credit files from the years 2014-2016. VantageScore 4.0 will be available to lenders and other users of credit scores through the CRCs this fall.


In an OpenClose recent announcement, announced that Ventana Home Mortgage, LLC a residential mortgage conduit aggregator with a focus on the non-QM market, has signed with the company to utilize its OC Correspondent™ module. The web-based, turnkey solution will fully automate Ventana’s new conduit business, and is expected to do so in less than 45 days. OC Correspondent enables Ventana correspondent lenders to electronically submit loans for swift review and acceptance. The solution consists of a robust seller-facing portal, automated eligibility and decisioning, quality controls, lock notifications, real-time pipeline status, custom-configured workflows, compliance, reporting, document management, an imaging system and more.


From Luxembourg comes news that The Lenders One Cooperative, a national alliance of independent mortgage bankers, announced that Matthew Orlando has joined as VP of National Programs. “Further strengthening the Lenders One leadership team, Mr. Orlando brings over 10 years of experience having served various leadership roles at Equifax. With his background in product and marketing strategy, he will focus on enhancing the value that Lenders One delivers to both members and preferred vendors.”


Simplifile announced that it has begun e-recording Land Court documents in Massachusetts for the first time in the wake of recent legislation that allows “registered land” to be recorded electronically. Representing about 20% of real property in Massachusetts, registered land is subject to stricter policies than other properties and is managed by a department commonly referred to as the “Land Court.”


QuickInsured announced that its homeowners’ insurance quote service is now available through Ellie Mae’s Encompass all-in-one mortgage management solution. “QuickInsured offers an automated solution that enables borrowers to receive an instant home insurance quote while finalizing the terms of their loan. With the integration, Encompass users are now able to expedite this process for their borrowers so quotes are delivered in seconds. The technology is device agnostic, so on-the-go borrowers can easily generate and bind their quote from a handheld device.”


Altisource Portfolio Solutions S.A. announced the expansion of the Vendorly platform, an “innovative vendor oversight platform for financial institutions. The platform launched last year exclusively for members of the Lenders One Cooperative but is now available to the broader mortgage and community bankers market outside of the Lenders One network. “The Vendorly platform is designed to help streamline vendor due diligence, document maintenance, monitoring and audits by offering managed vendor oversight services, including due diligence, document management, annual assessments, information security assessments, financial condition reviews and on-site audits.” Vendorly is announcing collaboration with Secure Insight, “an innovator in the mortgage industry in providing settlement agent risk evaluation, rating, monitoring and database reporting on fully vetted mortgage closing professionals.”


Trends in credit scores, tax requirements, and underwriting


TransUnion reports about 20% of people have a credit score above 780.


Chris Whalen has a good piece on what the origination business will look like for 2017. Punch line: lower volumes, increasing purchase activity, and a widening of the credit box. He also speculates that CFPB Chairman Richard Cordroy’s response to Trump staffer Gary Cohn’s request to resign was to launch a new assault on Ocwen. There are rumors that JP Morgan might get back into the FHA lending business, and Wells has cut pricing on FHA loans as well. In terms of home price appreciation, housing affordability is stretched, but low inventories will prove price support.


The WSJ chronicles the student lending credit problem roiling the country. The “Parent Plus” program has loans outstanding to more than 3M Americans and many of those people have subprime credit ratings. The default rate on these loans exceeds the rate for US mortgages at the peak of the housing crisis. WSJ.


One potential issue for tax reform is affordable housing construction, which relies on tax credits to entice investors to put up money. If the corporate tax rate falls from 35% to 20% – 25%, then the value of those tax credits decreases. Affordable housing has always been a money-loser for developers and landlords, so tax incentives are used to paper them over. They used to be called tax shelters back in the day. Apparently, the value of the credits (which trade) has dropped by 10% – 20% since Election Day. This is going to make life more difficult for Ben Carson and HUD.


Cash-out refinances are about 44% of all refis these days, which is a pickup from the depths of the bubble, but nowhere near the heady times of the bubble years where people used cash out refis to fund consumption. Today, cash-out refinances are used more to refinance debt, especially credit card debt.


Wells Fargo Funding will not require a completed and signed IRS Form 4506-T for a borrower when all income sources for that borrower are validated by Desktop Underwriter® (DU®) validation service.


Plaza is reminding its clients that IRS tax/W-2 transcripts are no longer required prior to funding except in the circumstances. With this change, effective May 1st, please note that the link on Plaza’s website allowing you to order transcripts has been removed. When required, Plaza’s local branch will order the transcripts prior to funding.


Capital markets


Fed Fund Futures now currently have a June hike at over 90%. So, does it matter what the economic news is? Sure it does – especially if there are surprises – sometimes in the wrong way for rates. Friday, for example, saw jobs numbers that exceeded expectations – the labor market certainly continues to truck along – and the 10-year hit 2.38%. Nonfarm payroll growth was 211k but average hourly earnings were up just 2.5% year-on-year. Curiously, the unemployment rate fell to 4.4% but the diminishing slack in the labor market is not pushing wages higher. By the end of trading on Friday the bond market was pretty much unchanged from Thursday night.


A couple things to note. Yesterday was the final round of the French presidential election on Sunday which Emmanuel Macron easily won – which pretty much assures France will stay in the European Union. And late last week the Fed Presidents continued to talk about the Fed’s balance sheet. Chicago Fed President Evans (FOMC voter) said that the Fed’s balance sheet is very large and needs to shrink, and St. Louis Fed President Bullard (non-FOMC voter) said that the Fed should have begun unwinding the balance sheet earlier and that it could shrink to $2 trillion (currently it is $4.5 trillion).


We have a fair amount of news this week, although nothing today of much consequence. Tomorrow things pick up with March JOLTS (job openings), March Wholesale Inventories and a $24 billion 3-year Treasury auction. Wednesday is the MBA’s app survey numbers for last week, April Import Prices and Export Prices, and a $23 billion 10-year Treasury auction. Thursday is a fair amount with April’s Producer Price Indices, Initial Jobless Claims, and a $15 billion 30-year Treasury bond auction. We end the week with April’s Consumer Price Index, April Retail Sales, March Business Inventories, and May Michigan Sentiment. For numbers, rates are a shade better than Friday: the 10-year is currently yielding 2.34% and some agency MBS prices are better by nearly .125 in the early going.



(Thanks to Liz for this one, and yes, swear words removed.)

WINDOWS: Please enter your new password.

USER: cabbage

WINDOWS: Sorry, the password must be more than 8 characters.

USER: boiled cabbage

WINDOWS: Sorry, the password must contain 1 numerical character.

USER: 1 boiled cabbage

WINDOWS: Sorry, the password cannot have blank spaces.

USER: 50damnboiledcabbages

WINDOWS: Sorry, the password must contain at least one upper case character.

USER: 50DAMNboiledcabbages

WINDOWS: Sorry, the password cannot use more than one upper case character consecutively.

USER: 50damnBoiledCabbagesShovedUpYourButtIfYouDon’tGiveMeAccessNow!

WINDOWS: Sorry, the password cannot contain punctuation.

USER: ReallyPissedOff50DamnBoiledCabbagesShovedUpYourButtIfYouDontGiveMeAccessNow

WINDOWS: Sorry, that password is already in use.



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(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 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