(Thanks to Robin for this one.)
Did you hear about the guy who is an
insomniac dyslexic agnostic?
He lays awake at night wondering if there
really is a dog.
Summer's here, school's out for many, and it's time for
vacation, right? Here's a little trivia for your co-workers. What is number of
available vacation days that Americans collectively did not take in
2016? Try "662 million" on for size. (There are about 124 million
full time workers in the U.S.) Do you really think you'll be on your death bed
saying, "I'm sure glad I didn't use all my vacation time again this year -
the company would collapse without me there. Besides, I enjoy work more than
vacation!"?
If you are looking for a good book for training new
hires, here is a strong option to help them with their studies: "The Successful Mortgage Broker: Selling Mortgages After the
Meltdown."
Freddie, Fannie, investor conforming conventional news
& changes
For over 20 years, Freddie Mac has provided
superior underwriting capabilities to lenders. "Now, we're leveraging the
power of big data and advanced analytics to build game-changing solutions into
Loan Product Advisor - our next-generation underwriting solution. Our goal is
to drive efficiency in your loan manufacturing process, ultimately helping you
cut costs and giving you rep and warranty relief sooner. For example, our
automated collateral evaluation will speed up, simplify and save money in your
appraisal process - you'll get your borrowers to closing faster, while
receiving immediate certainty for collateral rep and warranty relief. Loan
Product Advisor's automated asset and income validation will reduce paperwork
helping to quickly confirm qualifications for borrowers. Finally, you can now
expand homeownership opportunities through automated assessments for borrowers
without credit scores. Plus, Loan Product Advisor is a simpler, more intuitive
tool with easier navigation and data visualization, Ready to learn more? Visit
our Loan Product Advisor web page."
A few months back the D.C. Circuit panel gave the U.S.
Department of the Treasury and Federal Housing Finance Agency (FHFA) a win over
the allocation of profits from Freddie and Fannie to the Treasury. This
affirmed a lower court's ruling that actions taken under the FHFA's
conservatorship of the GSEs cannot be challenged in court. But Fannie and
Freddie shareholders sued the two for agreeing to the deal. Now, the FHFA and
Treasury are urging the D.C. Circuit not to modify its ruling.
Fannie Mae and Freddie Mac have announced that the Closing
Disclosure PDF will not be required to be embedded in the UCD XML file until
April 2018.
Fannie Mae has added a clarification to effective dates
for a prior foreclosure allowable increase has been made to the Hawaii AAA
Matrix. To view the updated matrix, visit the Excess
Attorney Fee/Cost Guidelines page.
Freddie Mac launched a Single-Family Fraud Risk homepage. Freddie established its
Financial Fraud Investigation Unit - which is responsible for the prevention,
detection, investigation and resolution of mortgage fraud - in 1989, and we've
continually worked to keep the industry informed about the types of schemes
detected. However, this page pulls together all its resources, including those
for seller/servicers, industry professionals and consumers. It tells people how
to report suspected fraud to Freddie Mac and it includes a Fraud Mitigation Best Practices checklist and a Mortgage Screening Process checklist.
Franklin American Mortgage Company expanded its
HomeReady guidelines to include all Homeownership Education and Counseling
options per the Fannie Mae Selling Guide. Homeownership
Education/Counseling from a Community Seconds provider or a HUD approved
Counselor as applicable are permitted in addition to Framework. This change is
effective immediately.
To ensure an efficient purchase process, for Fannie Mae
and Freddie Mac loans with Note dates on and after 9/25/2017, AmeriHome
will require that Sellers submit their UCD files to both GSEs and provide
evidence of a successful submission via the UCD Findings Reports. In addition,
AmeriHome's FHA Standard 4000.1 Program Guide has been updated to clarify that, although single-close
construction loans and construction loan modifications are not eligible
for purchase, loans for the purchase of a newly constructed property are
eligible.
To allow more preparation time, Fannie Mae and Freddie
Mac have announced
that the Closing Disclosure PDF will not be required to be embedded in the UCD
XML file until April 2018. To support adoption of UCD, there are live
webinars to facilitate the changes and offer abundant resources on
the UCD page.
Fannie Mae recently announced
several condo policy
changes and a reduced Streamlined Project Eligibility Review Service (PERS) fee.
Learn about PIW eligibility requirements and more in our PIW FAQs.
To align with Fannie Mae's policy for the Condominium
Project Questionnaire - Full Form, Wells Fargo has clarified its age of
document requirements to specify that, when utilizing the Wells Fargo
Homeowners Association Certification Review, Form 24 or 25 must be completed
within 180 days of the Loan Note date. Wells is also updating its Homeowners
Association Certification Review forms for consistency with the Seller Guide by
including a question and answer for zoning with legal non-conforming use of
land.
Capital markets
Here's a note that I received from a director of
capital markets from a well-known lender about locks. "What have we
seen with locks over the last several weeks, and how dependent are locks on
rates? Prevailing rates have decreased due to several factors, most notably a
suffocation of post-election optimism around the ability of conservatives to
pass pro-business agenda. Less regulation and lower taxes would in theory
increase investment in markets and corporations, causing higher stock prices
and boosting the economy, and in turn mortgage rates, at least that was the
hope that drove up markets.
"Recently, markets have displayed confusing patterns, as
U.S. stocks remain near at or near record highs despite economic data that
continues to be positive but fails to meet expectations, pushing treasury
yields and mortgage rates lower. We have seen the 10-year treasury yield go
from above 2.40% in mid-May down nearly 30bps to a low last week of 2.14%.Throw
in the geopolitical and cultural conflict we have seen - nationalist fervor in
elections, dozens of terror attacks around the globe, political tensions
involving Russia, the U.S., Syria, North Korea, Britain, domestic conflict
within government over Russian interference in the election and before
transition, travel bans, and withdrawal from the Paris climate accord, etc. -
so much news to digest in the 24-hour news cycle world we live in.
"But what does it mean for rates and locks? Many of
my competitors were forced to evaluate profitability with a shrinking refinance
business in the wake of the presidential election in November. For our company
specifically, we saw purchases go from nearly 60% of our applications in early
May down to 42% last week. The increase in refinance business is always
welcome, but we need to avoid basing future projections on this, as I would
say this recent rush is primarily from borrowers who had been looking to
refinance before we saw rates increase in April.
"Now that rates have decreased slightly and provided a
temporary boon for refinancers, I expect the boon to be only that: temporary.
Fed Fund futures have priced in over a 90% probability of a rate hike at next
week's Fed meeting, and although markets will undoubtedly have this increase
priced in come the time of the announcement, an increase would still likely
mean a rise in prevailing mortgage rates over the next few months. For LOs
asking me if they should wait or lock and get the ball rolling, my answer is
going to be that a sure thing now is a better proposition than waiting and
responding to markets in the future. With mortgage rates and treasury
yields are back down towards pre-election levels, today is as good a time as
any to push those borrowers toward closing their deal."
Yup, suddenly "refi" is back in originator's
vocabularies. Yesterday U.S. Treasuries, and agency MBS prices, moved higher in
a "curve-flattening trade." Why? Job Openings and Labor Turnover
Survey (JOLTS) data showed job openings increasing more than expected in April.
Oil prices rose meaningfully for the first time in a week as a dispute between
Qatar and Saudi Arabia continued to preoccupy energy traders. China's
government said that it stands reading to buy Treasuries, now that the yuan has
stabilized. There are heightened concerns ahead of Thursdays' "risk
events" including the UK general election. The 10-year note price closed
over .250 better (2.15%) and 5-year Treasury securities and MBS improved about
.125.
This morning we've had the MBA's survey of last week's
locks: up 7.1%. Purchase apps were +10%, and refi apps were up about 3%.
Overall apps are still down 16% versus this week last year. That about does it
for scheduled news. We begin Wednesday with the 10-year at 2.15% and agency
MBS prices worse a shade versus last night's close.
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