Most of us received an extra hour this weekend - and don't forget that
Friday the bond market is closed in the U.S. So if any company is generating
a rate sheet and taking locks on the 11th, don't expect sharp pricing - the
usual procedure is to take Thursday's close, see what happened in Europe,
and then back things off .250 or more.
Sometimes I joke about a board game titled, "Mortgage Banker Scrabble,"
where one draws three words out of a bin and creates a company name from
them. Words like union, financial, home, first, united, mortgage, lending,
funding, associates are all good ones to combine. "Allied" is another very
common name, and the problems that Allied Home Mortgage Capital of Texas is
going through is impacting other Allied's around the nation. For example,
Allied Mortgage Group, Inc. of Bala Cynwyd, PA is not associated or
connected with Allied Home Mortgage Capital of Texas, and never been
associated or connected with Allied Mortgage Capital of Texas. The
Pennsylvania Allied has been in business for 17 years in the Philadelphia
tri-state area - don't confuse them!
Mortgage companies should pay attention to the Allied lawsuit. The
government is seeking triple damages from Allied under the federal False
Claims Act, also known as the "Lincoln Law." Originally written in 1863, the
federal law imposes liability on persons and companies who defraud
governmental programs (and was a result of unscrupulous contractors selling
the Union Army decrepit horses and mules in ill health, faulty rifles and
ammunition, and rancid rations and provisions during the Civil War). The
government uses it against businesses or individuals who knowingly make,
use, or cause to be made or used, a false record or statement material to a
false or fraudulent claim. In Allied's case, apparently, because among other
issues the government found examples of Allied not adhering to its published
quality control policies and procedures, it is able to pursue this remedy.
Observers say that this is very dangerous: whether it admits it or not, what
company, mortgage or otherwise, follows its QC procedures 100% of the time
on every loan?
We have less than a week until the new version of Freddie's LP comes out
(11/13).
The new version includes information on MI feedback message for second home
manufactured home mortgages with LTV ratios greater than 85%, and adding and
updating LP feedback messages. As always it is best to read the actual
bulletin, which can be found at NewLPAhead
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108531550124&s=8721&e=001_DQVs-
eOLbhOFJbEXonEaNWqgzYlFXuDT7ewNEAB8g_UNpaM1YUlDZyItWLHoKjBRV_WbFoHF2d-sYKpv_
L9YS_WkNNiTjzZR_NFGObRE4F6nDjUZSOCj2kBGn4G90dg_Dd_MmOyDbBuL-WfLmnZ2rIKHCxG01
q2vLoQkqoN8f8=].Freddie
also sent news on some updates and revisions to its selling requirements,
including changes to mortgage eligibility and credit underwriting, income,
appraisal requirements, repurchase late fee remittance, and so on. Freddie's
latest bulletin can be seen at FreddieBull
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108531550124&s=8721&e=001_DQVs-
eOLbiTnZHvrAqwoNm8mIhi3EbMeREkYUp0ObfGUIgSlZLLBqMFDRgHbTMrYs8aeHlQKtbRNIoGHV
gmHwjAvaznYDd6oxukHq_9O9mdvry4aTR1JcYZi2eSLUmaNTwB8bdgL0J6bIHO7kNmf-sRSq8rum
Gh-EFfYLb-fU7TUybig_a0_Q==].
One date that will be here before we know it is 12/1: the Uniform Collateral
Data Portal (UCDP) and Uniform Appraisal Dataset (UAD) deadlines are right
around the corner and with the constant changes in appraisal regulations
over the past years it's easy to get lost in it all and just say, "My
Appraisal Management Company is taking care of this." We don't want any
lenders to be caught unaware of these new UCDP and UAD changes - make sure
you are ready at: FreddieUCDP
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108531550124&s=8721&e=001_DQVs-
eOLbj-Kn16jVNZLZ-sk_MUdSxGS4Gl3lnUWy19ozdV6akKfcf8eKSb0dxpfe8AOEfW2ll0yr6jIs
ozM81M4BKwFPmhhLqUwUr4quvojeK2iOYPu0hL1RiOeDp5xhONi27FHWJlUIvfqOuihg-tghf9Al
bqlvAl_6u794RvSJgqzULmPjE47JIoag1R]
and FannieUCDP
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108531550124&s=8721&e=001_DQVs-
eOLbgC9Qf-eSW0eYEeB69-rvDsnhWQG_-bRxeLV6OeK_g9kC7B12LMHXh3-cktXDs5hSoCDzm5_s
hHR1yHVAFtcmg2SmiJsAP_jq7FfP5k9dSEllkXU71yqfMNGbAt9b8h58vJ0GKFNRgbNj494k1QQl
WqnBaIGYmE87g=].
And if you have to ask what "UMDP" stands for, maybe you should consider a
new career:
FannieUMDPYardstick
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108531550124&s=8721&e=001_DQVs-
eOLbhNqBwH6506onJSO0DHIBdlAV54pIwzVn6qhd6G8ak9jnm07BMhERXVcqGzbzjpI9NiwQzkFq
M8LuxgbQHkoBvQCxPqi9EZpBd6vn1q6Z0unhR8F8Y6_buevQDPEQ54QdXmZ7n9Gnv-3HrM40J-wG
niqSKstlk94EY=].
Friday afternoons are the typical time that the FDIC, as receiver, shuts
down banks and finds healthier institutions to assume the deposits. Up in
Nebraska, Mid City Bank was closed its depositors will be seeing Purdum
State Bank on their statements.
And in Utah SunFirst Bank was closed with most of the deposits going to
Cache Valley Bank. The FDIC also released the "Monthly list of Banks
Examined for CRA Compliance
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108531550124&s=8721&e=001_DQVs-
eOLbhSWJ8pyhWjwx-Ls8qbtKKs1Ci0wN1ux-_Ma4h3qp5rAyQPCra6UXdim3uddVDwlvjUeaP7_c
69h9hDq1--48PD5R0AeC2OffgDJF_DSf4bAGVGHNMJb57s0c-8qLt2wMxOqgM6sTWRXJ1ZEo-uCH
JV]".
Chase turned some heads when it revised its correspondent net worth
eligibility requirements. "The new requirements apply to: New Correspondent
approvals, Existing Correspondent annual recertifications, and all extended
authority requests." The announcement noted the new HUD Adjusted Net Worth
(HANW) requirements for existing Correspondents maintaining their current
level of authority. "The HANW is based on the Program and the Fiscal Year
End of the Correspondent" and are based on Agency delegated and non-agency
delegated, non-agency non-delegated, and FHA/VA, raising them by $250-500k.
"To maintain an authority, Correspondents must maintain the program's
minimum HANW throughout the year. If a Correspondent drops below the
minimum, they are no longer eligible for that program.
Chase policy for Quality Control Plans requires the Correspondent's senior
management to receive results of reviews within 30 days of a completed
review."
Last week Radian announced changes to LPMI, Split MI, and Single Paid BPMI
(Cash or Financed). "LPMI & Single Paid (Cash or Financed) minimum credit
score reduced from 680 to 620. Split MI minimum credit score reduced from
720 to 680.
For company news, in South Carolina FirstBank has entered into an asset
purchase agreement with StellarOne through its banking subsidiary,
StellarOne Bank, to sell it wholesale mortgage banking business. The newly
formed wholesale department at FirstBank will absorb StellarOne's biz.
Those in the area probably know that FirstBank is Tennessee's largest
independently owned and operated bank, with 45 locations across the state
and more than $2 billion in total assets.
For national news, CitiMortgage spread the word that in its extensive
post-purchase due diligence on a sample of correspondent loans, the
calculation of non-reimbursed business expenses has been identified as a top
post-purchase defect. "When a borrower has non-reimbursed business expenses,
such as classroom supplies, uniforms, meals, gasoline, auto insurance and/or
taxes, a recurring monthly debt obligation should be developed based on a
24-month average of the expenses (from Schedule A and IRS Form 2106 from the
tax returns). Automobile depreciation may be netted out. The 24-month
average should be deducted from the borrower's stable monthly income. If
there is not a full 24-month history, the underwriter should develop an
annualized monthly average."
Citi also posted the latest changes to its Ineligible Originator list
(posted on the Citi Correspondent website in the eInfo section), and is
also in the middle of a special price incentive drive for many states.
Although California and Nevada are not included, there are .2-.250 bonuses
for November for states such as AZ, MI, CT, FL, GA, OH, TX... - 24 total.
Plaza reminded clients that, "The Flood Disaster Protection Act (FDPA)
requires lenders to ensure that adequate flood insurance coverage is in
place for any property used as collateral for a loan that has a building
(dwelling, structure, or improvements) located or to be located in a Special
Flood Hazard Area (SFHA). Special Flood Hazard Areas are defined by FEMA as
any flood zone A or V. When a transfer of servicing occurs the new lender
may send a letter to the borrower requesting that they increase the flood
insurance to satisfy the maximum coverage requirement of that lender."
Be sure to include the Notice of Special Flood Hazards (NSFH), and
Servicing Disclosure Statement Notice, which include specific new language
for all loans originated after
1/1/12 whether or not the property is located in a flood zone.
PHH released a series of underwriting updates to its correspondent clients
focused on FHA projects. Items included pre-sale requirements (for new
construction, at least 30% of the total units in the project must be sold
prior to endorsement of a mortgage on any unit), owner occupancy ratios
(for projects that are proposed, under construction, or existing less than
12 months, the owner occupancy amount must be at least equal to 30% of the
number of declared units. Existing projects will continue to require a
minimum of 50% of the units in a project to be owner occupied or sold to
owners who intend to occupy the unit), FHA-insured concentration (50%),
ineligible projects, site condominiums, etc.
Who needs U.S. economic news when we have all the excitement in Europe? The
Greek situation should make clear that there are only two issues: 1) who is
going to take the loss and 2) when? Most politicians in Europe are doing
everything possible to avoid making these two decisions. The big news
overnight was that the leaders of Greece's two biggest parties are due to
resume talks Monday to agree on who should be the country's new prime
minister, after reaching a historic power-sharing deal to push through a
massive financial rescue deal and prevent imminent bankruptcy.
But economic news here in the U.S. still comes out, regardless, although
this week is pretty light as there is nothing of substance until Thursday.
On the 10th we'll have Jobless Claims, Export & Import prices, and the Trade
Balance, and on Friday all we have is a Michigan Consumer Sentiment number.
Here is this country, the 10-yr closed Friday at 2.05%.
"OLD" IS WHEN....
Your sweetie says, "Let's go upstairs and make love," and you answer, "Pick
one; I can't do both!"
Your friends compliment you on your new alligator shoes, and you're
barefoot.
A sexy babe or hunk catches your fancy, and your pacemaker opens the garage
door.
Going braless pulls all the wrinkles out of your face.
You don't care where your spouse goes, just as long as you don't have to go
along.
You are cautioned to slow down by the doctor, instead of by the police.
"Getting a little action" means you don't need to take any fiber today.
"Getting lucky" means you find your car in the parking lot.
An "all-nighter" means not getting up to use the bathroom.
AND 'OLD' IS WHEN...
You are not sure these are jokes!!
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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