Nov. 9: Retail jobs; upcoming training, parties, and events; several Agency changes & investor’s reactions

The end of the year is in sight. Banks are doing their usual search for CRA loans, employees are lining up Christmas parties, and…bidding on cat paintings? My cat Myrtle told me not to laugh – this one sold for over $800,000 – but if you have 30 seconds some of the comments below it are classic.


How is TRID going for you as a Manager or Originator? Has your company had to delay any closings yet?  It seems as though there are companies who were prepared for TRID and others who weren’t. Some companies spent hundreds of hours preparing and testing for TRID, and they are experiencing significantly fewer problems than many others I hear about. One of those companies that was prepared for TRID is LendSmart Mortgage.  “As an independent mortgage bank growing across the country, LendSmart has a leadership team that their employee’s trust and their culture centers on both the originator and consumer.  LendSmart has implemented a system that allows them to send the Closing Disclosure out prior to receiving a CTC which has allowed originators to continue meeting their closing dates while others have struggled. Their technology advancements and custom CRM create opportunities that simply don’t exist elsewhere. For those looking to advance their careers, LendSmart has new leadership opportunities for the right team of people in Texas, California, Washington, and Georgia.  Contact Director Tom Dolan for more information.”


Events continue to come in, and many have specific causes. For example, some are meant to train existing staff while others are intended to bring in new blood. Joel Berman writes, “I’m hoping that the concept of ‘Next Gen Mortgage Professionals Rally’ become an industry standard that is added to national, regional and state mortgage banking & mortgage broker conferences on an ongoing basis wherein the rally is promoted to the surrounding college community, the veterans & to those interested in changing their careers. This is not just an attempt to get ‘millennials’ into the profession nor is it just for developing LO’s but also operational personnel. This industry needs to develop a program ‘together’ to achieve this mission rather than just develop self-serving programs individually. With NMLS reporting the average age of a loan originators being 54 we need to recharge this industry with programs to attract, train, and mentor the new members of this profession.”


Speaking of which, the National Mortgage Professional Magazine is launching a series of FREE Holiday Networking Parties in Texas, California and Florida! Each party starts off with the Next Gen Mortgage Professionals Rally to launch its campaign titled, “Recharge the Mortgage Profession” and college students, veterans and individuals interested in changing careers are invited to attend. The rallies will be followed by business building workshops from industry leaders such as Greg Frost from PRMI, Barry Habib from MBS Highway, and Frank Garay and Brian Stevens from NREP.  Workshops will be followed by a networking party where attendees will mix and mingle with other successful mortgage loan officers and celebrate the evening with music, complimentary food, prizes, and a heavy dose of holiday cheer! MLOs with NMLS numbers, college students and veterans attend free. Register by clickingthe state that you wish to attend: California, Texas, or Florida. Lenders and vendors, to learn more about the few remaining sponsorship opportunities please click here.


American Mortgage Law Group and the Community Mortgage Lenders of America are co-hosting a free webinar titled, “Insurance Needs for Mortgage Bankers – What You Need to Know to Protect Your Company in the 21st Century.” It will on Tuesday, November 10, 2:00PM EST/11:00AM PST. The webinar will feature guest speakers from JMB Insurance Agency, Inc. and from Bankers Insurance Service, Inc. who will be discussing the various insurance policies mortgage bankers and brokers should carry, limits required for compliance, how and when to make claims, and common pitfalls to avoid. “Speakers will be discussing policies such as Mortgage Bankers Bonds, Property and Casualty, Employment Practices Liability, D&O, State Licensing, Professional Liability, and Cyber Liability: comprehensive webinar on Insurance Needs for Mortgage Bankers.”


The California MBA has rescheduled its free webinar to discuss how to capture the millennial $1 trillion purchase market potential for November 18th. Click here to re-register. Call the CMBA office at 916-446-7100 if you have any questions.


Join CoAMP and Bill Kidwell, President of IMMAAG, on November 18th for the tenth (and final) webinar in its regulatory compliance series. Register now for Compliance Webinar #10 – Seven Myths and Realities about TRID.


Register for MBA’s “Know before you owe: where are we now” webinar on November 18th. In this webinar, the panelists will discuss what is being experienced 5-6 weeks in, especially from the perspective of your investors and technology vendors. They will also address any lingering questions.


Plaza is providing a complimentary training webinar titled Focus on Assets: Acceptable Documentation and Eligible Sources. This November 16th module will look at eligible sources for funds to close and reserves (if applicable) as well as the requirements for asset documentation.


It’s an Agency lending world, right?


The Obama administration rejected calls to re-privatize Fannie and Freddie, leaving GSE reform for the next president. The government has been making a lot of cash from F&F. Both private investors (especially activist funds who hold Fannie stock) and affordable housing advocates are pushing the government to clarify where F&F stand.


Does anyone remember when Fannie and Freddie got into a little trouble and were forced into conservatorship under the United States government? It rings a bell too; the New York Fed recently published a paper which evaluates the rescue of the two GSEs, and even though we as an industry are mired down by the fallout of those events (with some having formed opinions long ago about how well its gone so far), it’s a well written paper which evaluates the success (failures to some, please don’t email) of the past seven years. The group writes regarding the initial necessity of public intervention, First…stabilizing the GSEs allowed them to continue financing mortgages. This was particularly important at the time because of the tight supply of other forms of mortgage finance, including a market freeze in the non-agency securitization market. Second, the government rescue supported overall financial stability. GSE debt and mortgage-backed securities were widely held by leveraged financial institutions and commonly used as collateral in short-term funding markets. Allowing credit losses on these securities would have exacerbated the weak capital and liquidity position of many already stressed financial institutions and raised the possibility of forced asset sales and runs. Third, foreign central banks and governments also held significant quantities of GSE obligations; a default by either or both firms could have had international political ramifications, and potentially undermined the perceived creditworthiness of the U.S. government itself.”


In the good news category, last week the House voted to adopt the Neugebauer/Huizenga amendment to the highway reauthorization bill by a vote of 354-72. It removed an extension of an increase in Fannie Mae and Freddie Mac guarantee fees (“g-fees”) and a Federal Reserve Bank stock dividend cut as funding sources for the proposal. The House went on to pass the full highway reauthorization bill by a vote of 363-64.


Last week F&F announced their earnings, once again igniting the debate about their future – neither can have much of a future without being able to retain their earnings. The Community Mortgage Lenders of America (CMLA) has become a prominent voice in the effort to recapitalize the GSEs. CMLA Chair Brooke Anderson Tompkins wrote in the American Banker that the law authorizing conservatorship requires the Conservator to move the GSEs toward financial viability and release from conservatorship.


The CMLA is also actively opposing Congressional attempts to highjack GSE fees to fund federal highway programs. The Federally imposed 10bp GSE guaranty fee is set to expire in 2021. The Senate version of the bill includes a 4-year fee extension to 2025 and assigns the additional revenue to fund highway programs. The House recently voted to knock this provision out of the Highway bill. The timing of the Senate action couldn’t be worse CMLA noted, coming at time when the homeownership rate is at a 48 year low and rents in most markets are steadily increasing. CMLA also notes that, in the FY 2016 Budget Resolution, Congress prohibited the use of the GSE guaranty fees for other purposes.


Fannie Mae posted the effective date for Updates to Lender-Placed Insurance Requirements has been corrected. The updated policy is effective for all insurance policies renewed or obtained with an effective date on or after July 1, 2016, acknowledging that lender-placed insurance policies are often retroactive. The update has been reflected in Announcement SVC-2015-13 and Announcement RVS-2015-03.


Freddie issued a warning to home-owners about scams involving paying cash to raise credit scores.


Fannie Mae announced that in mid-2016 it will begin incorporating Equifax trended credit data, as well as the company’s verified employment and income data via The Work Number® database, into its automated underwriting platform, introducing important changes to help strengthen the home mortgage market for both consumers and lenders. Click the link to review the release in its entirety.


DU Version 9.3 is scheduled to be implemented the weekend of Dec. 12. Fannie Mae is providing a webinar to review the updates being made to DU, including implementation of the HomeReady mortgage loan; housing finance agency (HFA) message updates; non-occupant borrower changes; updated high-balance mortgage loan requirements; self-employed income documentation requirements; Preliminary Underwriting Findings Report updates; updates to align with the Selling Guide, and the retirement of DU Version 9.1. To learn more before the webinar, review the Release Notes, see the webinar schedule and register today.


Freddie Mac has obtained its largest insurance policy to date — more than half a billion dollars — under its Agency Credit Insurance Structure program. Through ACIS, Freddie Mac obtains insurance policies that transfer to insurance and reinsurance companies around the globe, a portion of the credit risk associated with its Structured Agency Credit Risk debt note reference pools. With this transaction Freddie Mac has acquired more than $1.5 billion in insurance coverage this year with seven ACIS transactions and more than $2.4 billion since the program’s inception.


Freddie Mac has updated servicing rules and foreclosure timelines to include increased state foreclosure timelines in 34 jurisdictions, extension to simultaneous assumption and modification options to include eligible hardships. There is a new deductible requirement for Lender-Placed Insurance policies and Freddie Mac is extending the temporary suspension of the assessment and billing of State foreclosure timeline compensatory fees. The State foreclosure timelines will remain unchanged in Alabama, Guam, Indiana, Iowa, Minnesota, Mississippi, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, South Carolina, Utah, Virgin Islands and Virginia.


U.S. Bank Home Mortgage announced a significant change to its core portfolio program price adjustments effective August 5, 2015. Adjustments on its selected Elite Treasury ARMS, Elite Libor ARMS and Non-Conforming Fixed Rate products include loan amounts between $35,000 to  $1,500,000 subtract ZERO points from price and loan amounts between $1,500,001 to $3,000,000 subtract .250 points from price.


The latest Penny Mac announcement outlines its alignment with various changes in FHLMC Bulletin 2015-12.


Ditech has updated its LP transactions for eligibility. Some highlights include: power of attorney may be used for cash out refinance transaction. Properties that have been listed for sale within the last six months have no requirements. Credit score restrictions for LTV/CLTV/HCLTV greater than 80% have been reduced. A minimum credit score of 620 for Fixed Rate and 640 for ARM mortgages is permitted. A non-occupant co-borrower is eligible to 95% LTV/CLTV/HCLTV. Freddie Mac REO with resale restrictions are permitted and Self-employed borrowers with LP Streamlined Accept documentation is permitted.


FCMKC posted its October bulletin updating conventional LP guidelines. Updates include adjustments to credit, employment/income and assets/reserves.


Turning to rates, originators were focused on the “wonderful” job news Friday morning (Nonfarm Payrolls +271k, Hourly Earnings +.4%, Unemployment Rate of 5.0%). The Treasury complex suffered heavy losses today after the October jobs report surprised even some very optimistic forecasters and seemed to cement a rate hike for the December FOMC meeting. Fed fund futures now indicate a 70% chance of a rate hike at the December meeting, up from 56% prior to the release. The yield curve steepened somewhat, with the 2-year note holding up better than the other maturities.


LOs were happy if they locked in prior to Friday morning, and those that didn’t are wondering if rates are going to come back down. But there isn’t a lot of news to push rates back down. There is zip today; tomorrow is October Export Prices ex-ag. and Import Prices ex-oil (08:30 EST). Wednesday is Veteran’s Day. Thursday is the usual Initial Jobless Claims. Friday things heat up with the October Producer Price Index, October Retail Sales, and the November Michigan Consumer Sentiment Survey figures. For numbers, they ain’t pretty. Friday we closed the 10-year at 2.33% – back where it was in June and July – and this morning we’re at 2.34% with agency MBS prices worse a shade.



Staffing Problem

A passenger jet was suffering through a severe thunderstorm. As the passengers were being bounced around by the turbulence, a young woman turned to a Rabbi sitting next to her and with a nervous laugh asked, “Rabbi, you are a man of God, can’t you do something about this storm?”

To which he replied, “Lady, I’m in sales, not management….”





(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