On the first
day at the new senior's complex, the manager addressed all the new seniors
pointing out some of the rules:
"The
female sleeping quarters will be out-of-bounds for all males, and the male
dormitory to the females. Anybody caught breaking this rule will be fined
$20 the first time."
He
continued, "Anybody caught breaking this rule the second time will be
fined $60.
Being
caught a third time will cost you a fine of $180. Are there any
questions?"
At this
point, an older gentleman stood up in the crowd and inquired: "How much
for a season pass?"
We're
nearing boating season in many states. Here's a bit of trivia that you can
throw out there: there are more registered boats in Wyoming then there are in
Hawai'i! (In fact I believe that the Hawai'i could be last in the nation.)
Congratulations
to United Wholesale Mortgage (UWM), voted the #1 wholesale mortgage
lender in the nation for 2015 according to numbers published by Inside Mortgage
Finance. UWM was one of only two wholesale lenders among the Top 25 to increase
production volume in the fourth quarter of 2015 and the only lender to increase
volume by double digits.
And
a quick clarification on news that I posted yesterday. ("Assured
Guaranty Ltd. announced the acquisition of CIFG for approximately $450
million in cash. The acquisition is expected to close in mid-2016. AGO will
acquire CIFG through AGC, the same operating subsidiary that acquired Radian
Guaranty...") AGO acquired Radian ASSET, the financial guaranty
company, and not Radian Guaranty. Said another way, the paragraph references
AGO's prior acquisition of Radian Guaranty which should have stated that the
group formerly acquired Radian Asset Assurance. Same parent, different entity.
My apologies for any confusion.
Next
Thursday Mortgage Coach and Optimal Blue are hosting an event to help
loan officers you increase referral business with effective mobile
technology. Special guest Mitch Kider is also joining the call to
provide compliance insights post this week's MBA Advocacy conference on Capitol
Hill. Sign up here to attend the webinar next Friday, on April 21st,
at 10AM PDT, 1PM EDT.
Ginger
Bell has joined with the attorneys and compliance specialists at Strategic
Compliance Partners to create a monthly " Trends in Compliance" webinar series. Join Ginger
on Thursday, April 21st to find out more about this series.
Fannie
Mae's announcement to utilize trended consumer credit data in the
assessment of mortgage applicants beginning in June 2016 is a major shift for
the industry. Register for Data Fact's April 20th complimentary webinar to learn more
about trended data and how it will affect your business.
The
best efforts committing option available through Fannie Mae's intuitive
web-based application, Pricing & Execution - Whole Loan helps manage your
pipeline and interest rate risk to eliminate the fall out risk. Join account
executives from Fannie Mae's Capital Markets Sales Desk for an overview on why
best efforts may fit your business and a live demo on April 20 at 2PM EDT. Register today.
Yes,
every week it seems like the airwaves are filled with news from the
government-sponsored enterprise landscape. This week was no exception. The FHFA
announced that the GSEs (think Freddie and Fannie) would offer a one-time principal reduction to owner-occupied borrowers
who are 90 days or more delinquent as of March 1, 2016, have an outstanding
unpaid principal balance of $250k or less, and whose mark-to-market LTV ratio
exceeds 115%.
Critics
say that this is, once again, a slippery slope, but the FHFA thinks 33,000
borrowers will be eligible for the modification, and that servicers must
solicit eligible borrowers no later than October 15, 2016. The plan has already
upset consumer advocates who will think it's not enough to address the problem,
as well as from some taxpayer advocates frustrated that the bailouts keep
coming. Most think that the program's scale and scope will limit its ultimate
impact on the broader market but operational specifics could impact mortgage
REITs, private mortgage insurers, and servicers.
FHFA
Director Melvin L. Watt said that, "The Principal Reduction Modification
program...will allow an opportunity for delinquent, underwater borrowers in
these areas to avoid foreclosure and save their homes."
One
veteran broker wrote to me saying, "Here is another government program
designed to fail from day one. This is the key condition: '...only a select
group of troubled borrowers will be eligible - owner-occupant mortgagors who
are 90 days or more delinquent as of March 1, with unpaid principal balances of
$250,000 or less. Also, the mark to market loan-to-value ratio must exceed 115
percent.' Why didn't they just add, you have to be able to stand on the top of
a chair, balancing on one leg and juggle 5 eggs for 3 minutes?
"First,
they are in essence urging people to default rather than continue to pay the
payment. Second is the restrictions: why the $250k balance if F&F go to
$625k? Isn't that disparate impact under Fair Housing? Oops - federal
regulators are exempt? That means if the house isn't abandoned, then they had
better have a low loan amount to begin with, coupled with the back principal,
interest and legal. Of the 33,000 eligible, what percentage are currently not
abandoned? I have seen people who were modified, after being told to go
delinquent, that wound up with higher payments even though the loan was now out
to 50 years and then couple that with no interest reductions."
As
most of these delinquent loans are likely already bought out of pools, very
little market impact is expected on this news. But the companies must now
instruct their debt buyers to evaluate borrowers for loan forgiveness or
principal reduction options. Also, debt purchasers can no longer release and
walk away from possessed, vacant properties.
In the wake of revelations from court proceedings that
there were strong Fannie Mae and Freddie Mac profit projections at the time the
GSE profit Sweep Agreement was put in place, Scott Olson, Executive Director of
the Community Home Lenders Association (CHLA) issued
the following statement: "Since last summer, the Community Home Lenders
Association has been calling for a change to the GSE Dividend Sweep Agreement to
allow them to retain profits to build up a capital buffer and avoid a Treasury
advance. These new revelations of strong GSE profitability projections
significantly strengthen the arguments for this approach and the need for
prompt action to do this." Last summer, the CHLA sent a letter to Treasury
Secretary Lew, asking for a modification to the GSE Senior Preferred Stock
Agreement which sweeps all Fannie Mae and Freddie Mac profits on a quarterly
basis. The same agreement artificially reduces net worth for each GSE
down to zero by January 2018 - creating concerns about the impact of a Treasury
advance when they run out of money.
Fannie
Mae's HomeReady mortgage expands access to mortgage credit without
adding incremental risk to the industry. Among its most innovative features,
HomeReady's non-borrower household income flexibility has received a lot of
interest. To answer any questions, you may have about this flexibility, Fannie
has developed a new eLearning course to explain the research behind its decision
to develop it. View the eLearning course or read
the FM Commentary.
Citi
reminded folks that Fannie & Freddie Mac recently implemented a new
appraisal-sharing solution within the Uniform Collateral Data Portal (UCDP).
The appraisal-sharing feature enables correspondent lenders to easily share
appraisal information with Citi within the UCDP. The new appraisal-sharing
solution provides benefits to both the Correspondent and to Citi, one being the
ability for Aggregators to retrieve the Status, Findings and Submission Summary
Report (SSR) for correspondent-shared appraisals. There will be no change to
Citi's existing pre-purchase process. Correspondents will continue to be
required to provide successful Submissions Summary Reports; however, this new
solution will help to reduce post-purchase resolution time and expedite loan
delivery to the agencies.
USBHM
will continue to require 5% minimum contribution from borrowers own funds
for manufactured homes regardless of LTV/TLTV/CLTV for FHLMC Manufactured Home
Program and Home Possible Manufactured Home Program. In addition, FHA 4000.1
requires that the borrower(s) employment be re-verified within 10 calendar
days prior to Note Date. Recent HUD audits have found that in some
cases re-verifications do not comply with the guidelines as they were completed
10 business days prior to Note Date. All FHA loans must have the
re-verification of employment completed within 10 calendar days prior to
Note Date.
Radian announced
that it has entered a quota share reinsurance agreement with third-party
reinsurers for a portion of its single-premium business. The after-tax cost of
capital is expected to be less than 2 percent and the impact to 1Q16 earnings
is expected to be $2.4 million (or $0.01/share). Fannie Mae and Freddie Mac
have approved the deal and allowed full PMIERs credit. The new agreement is
expected to reduce the percentage of single-premium risk in force, net of
reinsurance ceded, to 25% from 31% in 1Q. RDN also expects 1Q16 net premiums
earned to decrease approximately $6 million, operating expenses to decrease $3
million, the loss provision to decrease by $0.6 million, and pretax income to
decrease by $2.4 million.
The
Ditech Mortgage Insurance Desk was established to order mortgage
insurance for transactions where Borrower Paid Mortgage Insurance (BPMI),
Lender Paid Single Premium (LPSP) (Correspondent Paid) or Lender Paid Mortgage
Insurance (LPMI) (Ditech paid MI) coverage is required. The MI Desk will no
longer order BPMI and LPSP for Clients.
Prior
approval submissions (those submitted to Ditech for underwriting) require the
correspondent to order the MI insurance certification on all BPMI and LPSP
transactions, prior to closing, to be cleared by the Ditech underwriter.
Delegated Correspondents will be responsible for ordering Mortgage Insurance on
all BPMI and LPSP transactions. Evidence of mortgage insurance must be in the
loan file prior to purchase by Ditech.
United
Guaranty's SwiftClose underwriting requirements are being expanded.
Loans for which Desktop Originator (DO) is used to access Desktop Underwriter
(DU) are now eligible. In addition, United Guaranty is removing all references
concerning DO from its Standard underwriting requirements. Effective
immediately, all loans for which DO is used to access DU are treated the same
as loans entered directly into DU.
Of
course companies are still buying and selling conventional/conforming servicing
rights. Time to play a little catch up with MSR's, here's what I've been seeing
recently. Mountain View Servicing Group was the seller of a $3 billion
FHLMC/FNMA non-recourse servicing portfolio. Quality features of this portfolio
include: 99.5% fixed rate and 100% 1st lien product, WaFICO of 761, WaLTV of
74%, WAC of 3.77%, no delinquencies, top states: Illinois (49.5 percent),
Colorado (6.1 percent), California (5.2 percent), and New Jersey (4.6 percent),
with an average loan size of $246,559.... Prestwick Mortgage Group is
the exclusive broker for a well-capitalized Massachusetts-based financial
institution, with a monthly concurrent flow of approximately $30-40 million of
FNMA loan servicing. The deal will be 100% FNMA, 75-85% 30 FRM, 15-25% 15 FRM,
$300k Avg Loan Balance, 100% Massachusetts (go Socks), 100% retail origination,
85% O/O, 63% SFR 28% Condo 9% 2-4 Family.
Looking
at the bond markets, it has been a very non-volatile week - which is fine for
anyone trying to hedge a pipeline and focus on closing those locked loans!
Today we wrap up with the Industrial Production & Capacity Utilization duo
along with some University of Michigan numbers measuring consumer sentiment.
And for anyone focused on rates, we began the week with the yield on the
10-year T-note at 1.74%, closed out yesterday at 1.79%, and this morning
we're at 1.77% with agency MBS prices better by .125.
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