Wednesday, April 12, 2017

Lender Product News, Trends in Closing and eClosing Processes




Smart aleck answers
A flight attendant was stationed at the departure gate to check tickets.
As a man approached, she extended her hand for the ticket and he opened his trench coat and flashed her.
Without missing a beat, she said, "Sir, I need to see your ticket, not your stub.

"Marriage is a legal and religious alliance entered into by a man who can't sleep with the window shut and a woman who can't sleep with the window open." So said Ogden Nash. Being married matters in taxes. The current GOP tax reform plan adjusts the respective limits for itemized deductions and the standard deduction. Specifically, it proposes that all combined itemized deductions should be capped at $200,000 for married couples filing jointly and $100,000 for single taxpayers. At the same time, it calls for a doubling of the standard deduction a filer could take ($30,000 for married couples filing jointly and $15,000 for single filers) instead of claiming itemized deductions.
 Lender product & company news indicate industry trends
 In product news, Congressional Bank selected Alight for "what-if" scenario analysis and dynamic forecasting. Industry vet Mike McAuley introduced Congressional Bank's founder, John Lane, to the team at Alight. "We endorse Alight for providing strong financial forecasting, modeling, and business planning to mortgage lenders," McAuley said, "And we knew Alight could help Congressional in achieving its vision moving forward." Alight Mortgage Lending is cloud-based, accessible from anywhere, anytime and from any device, allowing management to optimize operations and make decisions in real time, even in changing markets. "We're always thinking about where we want to be 2-3 years out and how to move the team in that direction," said John Lane. "Alight can help us integrate scenario analysis into decision making so that we may continue to professionalize our financial forecasting and reporting, and achieve our plans for growth and continued profitability." Please contact Randall Crail to set up a demo to see how Alight Mortgage Lending can help your business!
 As of April 1, Mountain West expanded the Fannie Mae HomeStyle Energy Mortgage to include purchases as well as the existing refinance option. This product enables borrowers to include energy upgrades to increase home energy efficiency and reduce utility costs. Borrowers can finance up to 15% of the "as completed" appraised value of the home for energy-efficient upgrades when purchasing a home. This option may be a more affordable financing solution than a subordinate lien, home equity line of credit, Property Assessed Clean Energy (PACE) loan, or unsecured loan. An energy report showing the cost-effectiveness is required for this financing with the exception of weatherization or water-efficient improvements of $3,500 or less.
 PRMG is now offering CHFA Products for Colorado Wholesale Originations. See its product profiles for all updates and requirements.
 NationStar Mortgage has expanded its mortgage insurance options. Details are available in NationStar's updated Seller Guide.
 iServe Residential Lending a San Diego, CA and Stamford, CT-based mortgage provider, is debuting a series of "Non-QM" products designed to provide millions of homeowners with "responsible non-prime loans", that afford them the opportunity for home ownership once again. iServe is partnering with Charlotte, NC based Deephaven Mortgage LLC, a premier provider of private-capital liquidity, to make these loans possible. iServe shares Deephaven's vision for rebuilding the non-government mortgage market by making common-sense-driven underwriting decisions centered around a borrower's ability to repay. Payments are often cheaper than renting, with programs often providing a needed stop-gap that allows borrowers to rebuild and seek conventional credit down the road.
 NewLeaf Wholesale updated its NewLeaf Home Possible guidelines to include the HomePossible Advantage program. Home Possible Advantage Mortgages have the additional flexibility of higher Loan-to-Value (LTV) and Combined-Loan-to-Value (CLTV) ratio limits, and must comply with all other Home Possible Mortgage requirements, except when specifically stated.
 All the products in PRMG's Non-Agency Niche suit have been updated across the board. Click here to view its product profile updates.
 FBC Mortgage has opened SimpleLoan.com, FBC's online mortgage application, for the Wholesale/Correspondent division. The same advancements seen in the retail version of SimpleLoan.com are also offered in the Wholesale version; in about 10 minutes, a client can upload his/her paystubs, W-2 forms, and bank statements securely to the site. This is done using electronic verification from the several employment agencies and thousands of financial institutions synced with SimpleLoan.com. SimpleLoan.com can pull credit and run automated underwriting on the spot, making the pre-approval process even quicker. Brokers can also use it to co-brand their SimpleLoan.com application.
 Effective immediately, including pipeline loans, M&T will adhere to UES updates. A mortgage that was originated as a Cash Out Refinance, seasoned less than 6 months, and then refinanced again is eligible to be classified as a No Cash out/Limited Cash Out Refinance. The requirement to consider these loans as cash out is no longer applicable.
 Pacific Union Financial, LLC will now use AllRegs to publish Correspondent Loan Program Guides, Quick Reference Guides (QRG), certain polices and miscellaneous product related documents. Delegated and Non-Delegated Correspondents will have access to all content in the Pacific Union library.
 Loan closing news
 Land Home Financial Services, Inc. joined a select group of private mid-market mortgage lenders when it officially announced its first eClosing via Land Home's Retail origination channel. This initiative was accomplished in collaboration with MERSCORP Holding, Inc. (MERS eRegistry is the system of record that identifies who is in control of the eNote) and Fannie Mae. "Offering eClosing has long been a goal at Land Home as it unifies the needs and desires of our clients with the regulatory ambition of the Consumer Financial Protection Bureau (CFPB)," Land Home's President/CEO Brad Waite said. Land Home worked with PeirsonPatterson LLP, a Dallas based financial services compliance and technology firm; FirstFunding, Inc., a Dallas based privately held non-depository (non-bank) financial services company; and Placer Title Company/National Closing Solutions to process, update and secure its first eClose.
 In a letter to the CFPB, the American Land Title Association urged CFPB to issue an alert warning to consumers about wire fraud schemes attempting to steal funds for real estate closings. The alert should provide tips on how consumers can protect themselves and questions to ask to help determine if real estate professionals have procedures in place to protect their money. The best defense is to inform customers about the danger. "Unfortunately, these criminals frequently target homebuyers prior to the title company getting involved in the transaction," said Michelle Korsmo, ALTA's chief executive officer. "In many instances, they obtain access to unsecure email accounts used by consumers or real estate professionals. They use this access to find transaction patters and details to make their fraudulent communications see legitimate. The criminals will instruct the buyers to send the funds to a different account and the money vanished in minutes."
 Effective Friday, March 31, 2017, Flagstar Bank's One-Close Construction program is available. The Conforming One-Close Construction, Doc. #5717 program incorporates a construction period of 6, 9 or 12 months followed by a fully amortized loan term with a single closing.
 Ditech wholesale clients should note that properties with unexpired redemption periods have unacceptable title defects. If the subject property was previously foreclosed in a state where a redemption period is allowed, ditech will not close the Loan until the redemption period has expired and the foreclosure sale has been confirmed. The purchase of additional insurance, a redemption bond or similar coverage during the redemption period does not remedy the title defect.
 Franklin American Mortgage's Construction to Permanent Modifications/One Time Close Transactions are now eligible for purchase with the use of combined disclosures for both the construction and permanent phases of the transaction if the construction term is less than or equal to 12 months. If separate disclosures are used, the construction phase discloses a Loan Estimate (LE) and Closing Disclosure (CD) describing only the construction phase of the transaction, and the permanent phase is disclosed on a separate LE and CD describing only the permanent phase of the transaction.  If combined disclosures are used, one set of disclosures (LE and CD) is utilized to disclose both phases of the transaction simultaneously. FAMC will not purchase construction-to-permanent loans in which the construction phase and permanent phase are disclosed using combined disclosures and the construction term is greater than 12 months.
 Capital Markets
 To keep community banks competitive in their local markets, the American Bankers Association - through its Corporation for American Banking subsidiary - has renewed its endorsement of Fannie Mae's secondary market options. Since the partnership began in 2002, Fannie Mae has helped participating banks effectively compete in their market while managing their interest rate risk. This endorsement provides for discounts on application fees and on Housing Finance Institute courses, underwriting support, customized education, and regular updates to keep lenders current on critical issues.
 Volatility has picked up some during this holiday week. Yesterday the 30-year bond, the Japanese yen, and gold all ended the session with substantial gains at multi-month highs. The big event of the day was the $20 billion 10-year Treasury auction: somewhat "sloppy" but the buyers were there. Once again, we are seeing news from overseas (geopolitical headlines related to Syria, North Korea, and French elections) outweighed puny weekly or monthly U.S. economic news. And when there's unrest overseas, often there is a "flight to quality" in the form of buying in U.S government-related securities - including agency MBS. The 10-year note prices rallied more than .5 and closed yielding 2.30%. Agency MBS prices, and the 5-year note, improved roughly .375 depending on coupon and maturity.
 This morning we've seen last week's weekly mortgage application activity from the MBA. The survey, which the MBA states covers 75% or retail originations, showed apps +1.5% last week but still 21% lower than this week last year. Refis are down 40% from a year ago. We've also seen March import & export prices (-.2%, +.1% respectively), and later today is a $12 billion 30-year Treasury bond auction. All the while the market continues to watch FOMC Chair Yellen, who said the Fed is moving away from its efforts to revive the economy and is shifting to focusing on maintaining the gains made over the past few years. We start the day with rates a shade better than last night. The 10-year is yielding 2.29% and MBS prices are better by a few ticks.

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