Friday, August 26, 2016

HARP Extended, and Continued Conventional Conforming Changes



(From Florida thanks to Stephen G. who sent this one.)

There were four churches and a synagogue in a small town: a Presbyterian church, a Baptist church, a Methodist church, a Catholic church, and a synagogue. Each church and the synagogue had a problem with squirrels.

The Presbyterian church called a meeting to decide what to do about their squirrels. After much prayer and consideration, they concluded the squirrels were predestined to be there and they shouldn't interfere with God's divine will.

At the Baptist church the squirrels had taken an interest in the baptistery. The deacons met and decided to put a water slide on the baptistery and let the squirrels drown themselves. The squirrels liked the slide and, unfortunately, knew instinctively how to swim so twice as many squirrels showed up the following week.

The Methodist church decided that they were not in a position to harm any of God's creatures. So, they humanely trapped their squirrels and set them free near the Baptist Church. Two weeks later the squirrels were back when the Baptists took down the water slide.

But the Catholic Church came up with a very creative strategy. They baptized all the squirrels and consecrated them as members of the church. Now they only see them on Christmas and Easter.

Not much was heard from the Jewish synagogue; they took the first squirrel and circumcised him. They haven't seen a squirrel since.

There's been a lot of chatter in the industry to the effect that TRID has significantly increased appraisal turn-times and cost. To get at the truth, our friends over at STRATMOR have recently launched their August Spotlight Survey: Lender Appraisal Processes and Turn-Times, that examines when in the origination process lenders order appraisals; how they obtain them, i.e., via an Appraisal Management Company, an internal Appraisal Panel, or both; when and how they collect appraisal fees; and the impact of all this on appraisal turn times and costs and how these metrics may vary with loan purpose, method of obtaining an appraisal and other factors. Launched on August 10th, the survey will remain open until September 16th with results available for purchase on or about October 7th. As with all Spotlight Surveys, there is no up-front charge for taking the survey, which should not take more than 15-20 minutes. Instead, you can purchase results when they come available. If you are interested in taking this survey or finding out more, you can click here.

 For you CFPB watchers, it has ordered First National Bank of Omaha to provide $108 per head, or $27.75 million, in relief to roughly 257,000 consumers harmed by illegal practices with credit card add-on products. See? Mortgages aren't the only industry in its crosshairs. BuckleySandler partners Andrew L. Sandler and Valerie Hletko led the team that advised First National Bank of Omaha in relation to the CFPB's most recent Order. (CFPB Press Releasehttp://bit.ly/2bK0h74). 

 Yesterday a little uncertainty was removed from the conventional conforming arena. The Federal Housing Finance Agency (FHFA), which runs Freddie & Fannie for the U.S. Government, has announced that the Home Affordable Refinance Program (HARP) will be extended nine months to September 30, 2017, continuing to provide liquidity to support eligible borrowers.

After that, apparently, Fannie Mae and Freddie Mac will introduce new high loan-to-value (LTV) ratio same-investor refinance options, scheduled to be available in October 2017 - yet to be named. The new options will be for existing loans with LTV ratios exceeding the maximum otherwise allowed, supporting borrowers who are making their payments but are constrained by a high LTV from refinancing. Under the new options, as with HARP, the refinance must provide a borrower benefit, such as a lower interest rate. Unlike HARP, the new options will not have an effective date or an expiration date. Full details will be available in the coming months through the Enterprises, but the offering will make use of the lessons learned from the Home Affordable Refinance Program (HARP) and its streamlined approach to refinancing.

Refer to the
Selling Notice for more information on the extension of DU Refi Plus™ and Refi Plus™. To preview Fannie Mae's new high LTV refinance option, read the fact sheet; detailed requirements will be provided in a future lender communication although it is believed that the program is more targeted than HARP and, unlike HARP, can be used more than once by eligible borrowers. Existing HARP loans, however, will not be eligible for the new program.

 The Fannie Mae Post-Purchase Adjustment (PPA) Data Change Rules Matrix was recently enhanced featuring easier navigation and a simpler look and feel. In this update, documentation requirements were streamlined for certain data attributes and Special Feature Codes (SFCs).

 This Exhibit provides the new Fannie Mae Standard Modification Interest Rate required for all Fannie Mae conventional mortgage loan modifications, excluding Fannie Mae HAMP Modifications.

 DU Version 10.0 is coming to town the weekend of September 24. DU Version 10.0 The integration testing environment has opened for testing of DU 10.0 and integration customers have been notified. Find more information about DU 10.0 on the DU web page.

 Flagstar Bank announced updates to Fannie Mae HomeReady which include: Occupant borrowers are no longer restricted from having an ownership interest in other residential properties. Requirement for homeownership education has been removed for rate/term refinance transactions.  Education is still required for purchase transactions. Requirement for landlord education has been removed for loans secured by 2- to 4-unit properties.

 LHFS Wholesale posted information to align with DU's HomeReady loans with a Note Date on or after July 26, 2016. The occupant borrower may now own other residential properties and be eligible for a HomeReady transaction. The property ownership restriction has been removed. Homeownership education is now required for purchase transactions only. DU messaging that conflicts with these changes may be disregarded until the DU future update is released reflecting the changes.

 Income from future employment will be acceptable for Desktop Underwriter Approve transactions in the Fannie Mae Eligible products for ditech clients if specified criteria has been met.

 M&T Bank, August 10th, for new registrations and existing pipeline loans, issuing a clarification for Agency, Treasury and FHA loans. Wedding gifts may be an acceptable explanation for a large deposit as long as acceptable documentation is provided. Underwriting and UES guides will be updated for each product type to reflect acceptable documentation.

 Franklin American Mortgage has updated its guides to include: The 2016 HomeReady income limits, including the change to 100% AMI (or no limit in certain census tracts) which became available in DU during the month of July. The removal of the previous restructured refinance requirements for DU loans as announced by Fannie Mae. In addition, Lenders may now follow Fannie Mae's guidance regarding sufficient business liquidity.

 Plaza'sHomeReady Program Guidelines have been updated per Fannie Mae announcement SEL-2016-06. Updates include: Removed the restriction against occupant borrowers owning other residential property. Homeownership education is no longer required for rate/term refinance transactions. Landlord education is no longer required for borrowers financing 2-4 unit properties. Updated the Maximum Financed Properties to match standard Fannie Mae Guidelines as the restriction against owning other properties has been eliminated.

 Click here for First Community Mortgage underwriting guideline updates as of August 1st.

 Flagstar's Conventional Underwriting Guidelines have been updated, effective immediately. Updates include changes to social security income, properties with resale restrictions, restricted mortgage, and student loans.

 U.S. Bank Home Mortgage has updated its underwriting guidelines for work completion escrows. Updates include clarification in transactions and property types. Applicable to FHA (excluding HUD REO), VA and Conventional Purchase Transactions and Refinance of a New Construction Loan for one unit primary residences only. USBHM will not allow escrow for items that impact the immediate habitability of the property. Those items must be repaired prior to closing (i.e. well/septic, other health/safety issues, non-functioning utilities electric/heat/water, kitchen, bathroom etc.) Escrows for well/septic, other health/safety issues or interior work will be considered on an exception basis only (except for Rural Housing where it is not allowed).

 M&T Bank has clarified and enhanced FNMA HomeStyle property type guidelines to be inclusive of multiple scenarios: Eligible and Ineligible Properties and Programs. 

In addition, as of August 1st, its tax service fee has increased to $82.50.

 NYCB Mortgage Table Funding Clients, effective for loans with an Initial AU Submission on or after August 20th, HomeReady Mortgage underwriting guideline updates designed to simplify and expand options. See HomeReady Mortgage product page and Seller's Guide section 4.8 Homeownership Education and Housing Counseling for complete details.

 One important note from yesterday on the appraisal front. Pacific Union Financial, LLC had announced a change for the required appraisal, if applicable to the transaction, to be submitted at loan submission for all refinances...the appraisal to be submitted with the credit package. Pacific Union revoked this change. "While appraisals may be submitted with the credit package to initiate review of the collateral earlier in the process, the appraisal will no longer be required at time of initial loan submission. Appraisals can continue to be submitted as a condition."

 Interest rates? There isn't much to move them - things are pretty quiet overseas - and they've been steady at these levels for nearly two weeks with little to report. Current coupon agency MBS prices have traded in a .250 range for the last week or so, up a little, down a little. Thursday, for example, the 10-year note price worsened about .125 and wound up yielding 1.58% but mortgage-backed securities were pretty much unchanged.

 Today, in Wyoming, one could either fish, do some mining, or attend the first full day of the KC Fed's 2016 Economic Policy Symposium ("Designing Resilient Monetary Policy Frameworks for the Future") which is being held in Jackson Hole, WY. Why Jackson Hole? Paul Volker likes to fish. Currently, futures are implying a 32% chance of a rate hike at the next FOMC meeting on 9/21. This probability has increased significantly over the past few weeks, but as we've found out, Fed Fund targets don't directly correlate to 30-year mortgage rates.

 We've already had the 2nd release of Q2 GDP. Expected to show a little pick up, it showed GDP is +1.1%. Also we've seen the advanced readings for July on goods trade, wholesale and retail inventories (the deficit narrowed sharply). And then at 10:00am the University of Michigan Sentiment Index. As noted above the 10-year closed at 1.58% and this morning, after these numbers and ahead of Janet Yellen's speech, it is at 1.56% with agency MBS prices a shade better. 

1 comment:

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