Lender and Investor Changes in Lock and Pricing Policies

By rchrisman@robchrisman.com

 

A Redneck buys a ticket and wins the lottery. He goes to claim it and the man verifies his ticket number.

The Redneck says, "I want my $20 million."

The clerk replied, "No, sir. It doesn't work that way. We give you a million today and then you'll get the rest spread out for the next 19 years."

The Redneck said, "Oh, no. I want all my money right now! I won it and I want it."

Again, the man explain that he would only get a million that day and the rest during the next 19 years.

The Redneck, furious with the man, screams out, "Look, I want my money! If you're not going to give me my $20 million right now, then I want my dollar back!"

 

"Drive til you qualify." That's a little real estate agent ditty to start a Tuesday, and this advice to buyers certainly applies to urban areas where price appreciation has outgrown salaries.

Sierra Pacific Mortgage continues its focus of featuring industry experts on their Market Power webinar, hosted by Kelli Brookman.  Who is the "expert" this month?  Well, it's yours truly - Rob Chrisman.  If you are trying to determine why rates are doing what they are doing and if that is going to change, how to read the CFPB and their enforcement actions, and what lender CEOs are concerned about, then join in on the fun tomorrow, April 20th from 11-12 PDT (2-3 EDT). Sierra Pacific Mortgage believes the key to success is sharing expert knowledge, so the webinar is open to all.

The Fannie Mae Capital Markets Sales Desk is offering up a session on the best efforts committing option available through Fannie Mae's web-based application: April 20 at 2PM EDT.

 Register for Arch MI's May Webinars. Master the Mystery: Navigating and Evaluating Personal Tax Returns Tuesday, May 10, 2016 - 10am Pacific. Loan Processing: Using the 1003 as a Roadmap Wednesday, May 11, 2016 - 12pm Pacific. Mortgage Fraud: Everything Old is New Again Thursday, May 12, 2016 - 10am Pacific. Seizing Market Share in a Purchase Market:
Creating Separation Between You and Your Competitors Thursday, May 12, 2016 - 12pm Pacific. Analyzing Appraisals: for Single-Family Residences Tuesday, May 17, 2016 - 12pm Pacific. Negotiate the Numbers: Understanding Self-Employed Borrowers and Business Tax ReturnsWednesday, May 18, 2016 - 12pm Pacific. Conquer the Components: Understanding the Aspects of a Loan File Thursday, May 19, 2016 - 10am Pacific.

 Calling all employees of Fairway Independent Mortgage, not just the sales professionals.AWI boot camps give you the opportunity to hear Sean Parnell and Ben Lunak speak - but also the Boot Camp "experience" and witness several veteran initiatives, all of which help to explain the "WHY" of giving back to those to have served this nation to protect our freedom. Details are provided in the links below: April 26 in New Braunfels, Texas, April 27 in Bryan, Texas, May 5 in Newark, Delaware, May 6 in Rehoboth Beach, Delaware.

 MBA Education is providing Loan Officer focused webinars. Click a link for details on: Hiring Superior Originators May 4th being led by Pat Sherlock AND Close More Loans... FasterJune 9^th being taught by Deb Killian.

 We just learned that the National Association of Home Builders Sentiment Index in April remained unchanged at 58, but failed to rise to expected 59. Still, readings above 50 mean more respondents report conditions as "good." The level, however, stayed near the post-recession highs and suggests, with Prospective Buyers Traffic component and Future Single Family Sales moving higher, that coming activity will improve. These reads offset a drop in current single sales. The report said that builders are "cautiously optimistic" about activity in 2016, citing "firm data" and "solid job creation and low mortgage interest rates" as reasons to "sustain continued gains."

 And here's a story in the Wall Street Journal about how the housing market's health is being put to the test.  The current economic environment seems wonderful for home builders.  But their stock prices don't agree, though, perhaps with good reason. Low interest rates, an improving job market and rising rents suggest the business should be booming. Relatively low inventory of existing homes for sale is pushing the values of both old and new ones higher.

 

What is happening with lender fees and lock polices lately?

 

NewLeaf Wholesale Broker's may elect to "float down" from the original locked rate one time only.  The "float down" option may be exercised no earlier than thirty (30) days prior to the earlier of the loan's scheduled closing date or the original expiration date.  The new expiration date will be 30 days from the "float down" if closing prior to the original expiration date.  Extensions will not be allowed. No exceptions. There is no upfront fee. Purchases with a property not yet identified are eligible.

 Effective April 15 Freedom Mortgage (wholesale) increased all Lender Administration Fees. All loans with TRID application dates of April 15 and later will be subjected to the new fee schedule.

 Freedom Mortgage implemented a procedure to assist in pipeline management. Any loan that is not actively locked is subject to cancellation if the Initial Submission Package has not been uploaded within 30 days of loan creation. To prevent your newly registered loan from cancellation, please make sure your Initial Submission Package is uploaded within 30 days. 

 (Speaking of Freedom Mortgage wholesale, it has temporarily suspended its Patriot Jumbo Product effective as of Monday, April 11th. Patriot Jumbo transactions that are registered prior to April 11th will be permitted to close; however, all registrations, locks and submissions should have been received no later than Friday, April 8th by 5:00PM EST.)

 AmeriHome Mortgage has added two new resources, the Auto-Notification Subscription User Guide and Best Efforts Rate Lock Quick Reference Guide, available on its SellerWeb. 

 At this time Pacific Union can accept 90 day locks for a flat adjustment of .625 to the 30-day price via email to lockdesk@loanpacific.com only. Unfortunately, these locks cannot currently be made via FLOW. This functionality should be added to FLOW within the next month.

 In Non-Escrow closing states, Fifth Third requires closing documents to be signed on or within one (1) business day after the Note Date. In addition, the updated Ineligible Condo list is available in the Correspondent Connect Online Guides and Forms.

 Back in February Mortgage Solutions Financial has implemented improvements to its loan level price adjustments on loans (see Announcement 09-16W).  In addition, MSF will be eliminating what has been its "standard" product that was laden with overlays - and further reducing overlays on its Gold product. For additional guideline updates, changes and other announcements, click here.

 Envoy Mortgage Correspondent Lending Division (CLD) updated its government LLPAs. Its clients know that these changes were effective with loans locked or re-locked on and after March 21.

 Effective with locks starting March 22^nd, Franklin American updated its loan level price adjustment for government FICO 620-639 the adjustment has increased from -1.50 to -1.75.

 Effective April 1 Ditech began applying a tolerance threshold of $35.00 for understated Finance Charges for all refinance transactions subject to rescission. For purchase transactions and those refinance transactions not subject to rescission, Ditech will continue to apply a tolerance threshold of $100.00 for understated Finance Charges.

 USDA & rural lending news? Sure there is. Those "in the space" know that non-banks are "going rural" with Freedom Mortgage recently announcing it is buying JPMorgan's USDA origination business. JP Morgan has a 31% market share in the sector and Freedom refis are running at 2x Chase in FHA/VA. Analysts say we can expect peak speeds on new USDA loans to rise 2-3 CPR and seasoned speeds are likely to trend higher as well.

 "Rob, someone told me that the USDA was preparing to lower the G FEE to 1% upfront and 35-50 bps monthly. Is that true?" I don't know - you should contact the USDA - but I have heard that from a few folks. And there is chatter out there about the USDA contemplating charging a fee every time a file is ran through GUS (Guaranteed Underwriting System). Time will tell. Don't forget that in FHA loans surge in 2015 while USDA numbers declined.

 Pacific Union has updated requirements per revised USDA guidelines. All applicable changes have been included in the updated Program Guide and are also available in the USDA Bulletin.

 Denver-based LenderLive has added a United States Department of Agricultural (USDA) Rural Development program to its correspondent lending offerings. The program is open to delegated correspondent lenders who have been approved by USDA and LenderLive. LenderLive's correspondent program offers a full suite of conventional, government and non-QM programs in all states. The company is known for it "no compete" policy, which protects originators' customers from cross-sell activity and refers all new loan inquiries back to the correspondents.

 

Condo developments?

 

The overlays restricting manufactured homes located in a condo project or PUD project and singlewide manufactured homes are being removed by Ditech. Multi-wide manufactured homes are eligible in a condo project, PUD project, subdivision or individual lot. Singlewide manufactured homes are eligible if located in a condo or PUD project. Singlewide manufactured homes may not be located in a subdivision or on an individual lot.

 Ditech posted Condominium Fidelity or employee dishonesty insurance policy is being updated as follows: Fidelity insurance is required for projects with more than 20 units unless the maximum estimated fund required is less than or equal to $5000.

 Excelerate Capital has non-warrantable condo loans available. For more information, contact Blake Adams at 855-606-9227.

 First Community Mortgage has posted new CONDO questionnaires.

 In capital markets news, Wells Fargo was approved as a "primary dealer" for US Treasury debt. Many wonder what the advantages are anymore of being a primary dealer, but it is the first bank to be accepted to bid at US Treasury auctions in more than two years.

 The bond market certainly has temporarily lost its volatility - fine for pipeline hedgers. (Volatility increases hedge costs - who wants that?) The U.S. fixed income market ended nearly unchanged Monday but was focused on oil prices and OPEC's failure to cut output at its weekend meeting in Doha. Oil prices spent most of the day recovering overnight losses as a strike by oil workers in Kuwait was enough to bolster sentiment in oil markets.

 Today, aside from March Housing Starts and Building Permits (-8.8% and -7.7% respectively - a darned weak set of numbers), there is no scheduled news to move the markets. We opened the week yesterday with the 10-year's yield sitting at 1.77% - pretty much where it was most of last week - and this morning after the building news it is at 1.79% with agency MBS prices worse about .125.