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If you changed residences between 2010 and 2010, congratulations: less than
12% of the U.S. population moved during that time, the lowest recorded rate
since the Current Population Survey began collecting statistics on the
movement of people in the United States in 1948. The recent peak was in 1985
(20%). If folks move more than 500 miles, the majority do it for
employment-related issues, and if folks move less than 50 miles, the
majority do it for housing-related reasons ("My mudda-in-law was driving me
crazy!"). Per the survey, of the 45 million people who lived in a different
house within the United States, almost 7 million lived in a different
state, with the top being CA to TX, NY to FL, FL to GA, CA to AZ, NJ to PA,
NY to NJ, CA to WA, TX to CA, GA to FL, and CA to NV.
The Fed continues to buy roughly $1 billion a day of MBS's with proceeds
from prepaying pools of loans. Do originators really think that the New &
Improved HARP loans will carry the same rates as a brand-new, 80% purchase
loan? Or, asked another way, where will the new securities trade since they
could be filled with loans having greater than a 125% LTV? Jungle drums say
+/- 3 points worse than current MBS's, based on risk and illiquidity. As one
astute reader wrote, "If you convert three points to yield and bump a
borrower's refi rate by 75 basis points, that definitely cuts into the
refinance potential for the outstanding loans." But investors may want the
new pools, given that the prepayment expectations should be very slow.
And while we're on securitizing, Freddie announced that it would take
previously delinquent loans that it was required by contract to repurchase
from its Mortgage Participation Certificate (PC) pools and return them to
the secondary market. The Freddie loans from those repurchased pools which
are now current and have been performing for four months will be securitized
and sold. Coming to a trading desk near you, they will be identified with a
new "R" prefix ("R"eperforming). The program is expected to begin this
month with the first group of loans selected from among those that have been
performing for at least 12 months at the time of securitization.
Freddie Mac said that these PCs may back new Freddie Mac Real Estate
Mortgage Investment Conduits (REMIC) and Giant securities in the future.
And HARP 2.0 chatter continues. Brian B. with Two River Mortgage writes,
"HARP 2.0 failed to address three of what I view as the most critical
aspects of the recovery.
First, it completely ignored all the HELOCs in existence. It is my
understanding that the banks had written of somewhere over 80% of all
HELOCs. If the FRB increases the interest rates by 1% the defaults will rise
dramatically. Second, at the height Fannie & Freddie retained about 14% of
all the mortgages. Since '07 we know where they have risen. A large number
of F&F loans qualify for F&F, yet were never sold to F&F. These are the
folks on the fringe. If they walk it will just further devalue the F&F owned
homes. It is my understanding there are a significant number of homes in
this position. Third, F&F both capped the ARM refi's at 105% LTV. Why, when
these are arguably the homes in the most distress when rates begin to rise.
They were also the borrowers who are at the greatest risk of default."
In recent months the mortgage biz has seen its share of company news, such
as Bank of America cutting its wholesale and then correspondent channels,
MetLife being up for sale, and major lenders ending their reverse mortgage
programs. What would happen if a Top 5 investor stopped doing a conventional
or government program entirely or only offered it to selected clients? For
example, rumors, apparently true, swept the biz yesterday that Citi is
suspending government delegation for many - but not all -of its clients
today. The decision is driven by defect rates: perhaps the FHA/VA business
that Citi was seeing showed a marked difference to that of the conventional
business and it took it upon itself to act. The move is not meant to be
permanent, and Citi will be working with its clients to improve quality - a
good goal.
Other jungle drums are saying that Google will be shutting down its current
Lead Source model. The goal might be to be able to provide lender service
levels and title company costs, etc. in addition to best rate. They will
open the new model for the states of Alaska, CA, AL, PA and Washington DC,
having a huge impact on internet lenders.
Earlier this week United Guaranty has expanded its underwriting requirements
"to allow greater eligibility for broker TPO loans, using its risk-based
Performance Premium pricing." Reference guides and documents can be found at
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108664509681&s=8721&e=001EzlwOO
3fNyEc4tsUaTPSgksJ5Dg7BgtRlAv-ViXuHPw8y06or7iD3EZdAzFwKFpY9uUck2KxYfIR6m39h1
sj-hJ--_WxO4osLfrVG4kDf25mMsjPcK1tIA==].
Mountain West Financial "will now accept a purchasing spouse with 'no FICO
score,'
as long as the remaining purchasing spouse has the minimum FICO score for
the program requested and an approval through DU and the borrower without
the FICO has a valid social security number. (I am no underwriter, but
usually VA looks at the non-borrowing spouse as if she was a borrower,
whereas FHA has no issue.) No manual underwriting is allowed. MWF also
addressed the USDA situation: "Rural Development is currently operating
under a Continuing Resolution (CR) which expires on November 18, 2011.
If the Fiscal Year 2012 budget is not passed by that date then a new
Continuing
Resolution may be issued. During this time Mountain West Financial (MWF)
will
accept locks only on loans that have received a full Conditional
Commitment."
Wells Fargo wholesale sent the word out to brokers that "registrations for
purchase transactions for the Guaranteed Rural Housing (RD) program will
again be accepted.
Note that refinance transactions are NOT being accepted at this time. The
new fee and policy changes impact the upfront guarantee fee and new annual
fee changes.
A two-month escrow of the annual fee will be required. This is an
APR-sensitive fee and will be included in the high-cost tests when
applicable."
No one can accuse Freddie Mac and Fannie Mae of not giving us enough warning
as both recently sent out advanced notice on new ULDD data requirements for
delivery in November 2012. Per Dodd-Frank requirements, one of the
requirements is to disclose the identity of the entity funding the
applicable loan, as recorded on the note, so the GSE's will require lenders
to deliver the following new ULDD data points beginning November 2012:
PartyRoleType="NotePayTo", and FullName, enter the name of the entity
funding the applicable loan, as recorded on the note.
SunTrust enhanced guidelines for the Key Loan Program, and announced that a
reference on the Portfolio Affordable Housing Mortgage Program was removed
and that the FHA has no annual MIP on certain loans.
GMAC let correspondent clients know that it GMACB will require the
successful submission of UAD compliant appraisals to both Fannie Mae and
Freddie Mac through the joint UCDP for all conventional conforming loan
applications dated on or after December 1. (Fannie Mae's DU Refi Plus loans
need only be submitted to Fannie Mae through the UCDP.) Appraisals that
were successfully uploaded will receive a Submission Summary Report (SSR)
along with a Document File Identifier (Doc File ID). These documents must
be uploaded to Image Central along with the appraisal prior to purchase.
"If using GMACB's VEROS Appraisal Management System exclusively, no further
action by you is necessary." In addition, GMAC addressed the changes in VA
Funding Fee Rates starting with loans closed today, and the revised
appraisal requirements for VA Interest Rate Reduction Refinance (IRRRL)
loans.
Fifth Third is "updating our fee structure for Fannie Mae DU Refi plus
adjustments and Freddie Mac Open Access adjustments on our rate sheets...for
all locks effective November 18, 2011. Relocks on existing loans in the
pipeline are not currently eligible for the updated pricing grids. The
primary impact of the changes is on loans with an LTV> 80% is significantly
improved. This is a pricing update only, product guideline changes are not
effective November 18, 2011."
Flagstar announced, starting Monday, will be making changes on jumbo
products, updated the FHA funding requests deadline, and updated its
disaster memos (updated information regarding re-inspection requirements)
for areas affected by Hurricane Irene, Tropical Storm Lee, and the Texas
wildfires.
RMIC told clients that it fully supports the new HARP enhancements and "will
participate in the new program when it becomes effective on December 1st.
Any RMIC-insured loan that is eligible under Fannie Mae or Freddie Mac's
enhanced HARP guidelines will be eligible under RMIC's HARP guidelines.
RMIC offers HARP Same Servicer and New Servicer Programs. In conjunction
with the HARP enhancements, RMIC is announcing
a major redesign and expansion of our New Servicer Program. The
redesigned New
Servicer Program will be very similar to the Same Servicer Program. (??) For
both programs RMIC will simply modify the existing MI certificate,
eliminating the need for any further analysis as long as the new loan
improves the borrower's ability to repay the loan, has sustainable terms,
and meets Fannie Mae's or Freddie Mac's HARP program requirements." "While
RMIC is not currently writing new mortgage insurance coverage, our
affiliated companies continue to support our customers and provide
non-insurance products and solutions. We continue to offer Contract
Underwriting, Credit Reporting Services, Valuation Products, Customer
Relationship Management Technology, Training, Pre-Home Ownership Counseling,
and other services important to our customers."
Effective immediately, HSOA no longer requires the Mortgage Broker Fee
Agreement
(MBFA) on wholesale loans.
MSI announced a clarification for MERS 123 Members, the elimination of MSI
lending in Clark County, Nevada, underwriting chapter clarifications, and
AIR requirements for FHA/VA and USDA loans.
It seems like half the e-mails I received Thursday afternoon were from
lenders improving their rates. Europe resumed being on the center stage - it
is a problem that is just not going to go away any time soon. So investors
moved money into "riskless"
U.S. Treasuries: 10-yr T-note prices improved .625 which dropped the yield
to 1.96%.
MBS tagged along for part of the ride improving by perhaps .250 on current
coupons.
(Reuters reports that for the four-day week ending November 16, the Fed
bought $5.55 billion in agency MBS, or $1.4 billion per day on average,
compared to $5.4 billion in mortgage banker supply over this period.)
The only news today from the U.S. is Leading Economic Indicators. In the
very early going rates have slid higher with the 10-yr at 2.01 and MBS
prices worse by .125-.250.
A husband read an article to his wife about how many words women use a
day...
30,000 to a man's 15,000.
The wife replied, "The reason has to be because we have to repeat everything
to men."
The husband then turned to his wife and asked, "What?"
If you're interested, visit my twice-a-month blog at the STRATMOR Group web
site located at www.stratmorgroup.com
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106435366068&s=4179&e=001SVt-lj
bp53436QjxD9vbwURtIPPjV05jEcEKyBN3SjS2forXe0C_foO8RjEV-Uye0N7Z_Sh1il0SRXPx6P
jQauayNXQjni-Hc9Sseu-hhZcR1ujeZyAEpw==]
. The current blog takes a look at the impact of HARP 2.0 and the
differences in the agency's programs. 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.
Rob
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