Here is an interesting note I received from a capital
markets VP in Florida:
"Rob, I have nicknamed my company's sales staff the
'If only's.' It seems
that practically every conversation I am having includes
a 'If only I had a
(fill in the blank)'.
You name it,
they're suddenly asking for it: government loans with no
appraisals required, extended locks, construction to perm
product, one time
close, portfolio ARM products, and the list goes on. Are
you seeing this
with other capital markets departments?" Yes I am.
Yes, volumes have
dropped, for a variety of reasons: the old locks have moved through the
pipeline and not been replaced with new locks, higher loan level price
adjustments, higher origination costs, higher rates,
everyone being on
vacation, and so on. The tendency is for originators to
look for new
products or outlets when this happens. So yes, you are
not alone out there.
But many companies continue to shore up their operations.
Wisconsin's
Associated Bank
N.A. is searching for a Director of Residential Loan
Operations in Milwaukee, WI. The Director will manage and
set the strategic
vision for retail lending operations for residential
mortgage (primary
focus) and home equity lending fulfillment activities
from the retail
channel, relating to processing, closing and document
preparation in
compliance with all regulatory requirements. Develops,
reviews, and
recommends overall operational systems and procedures
relating to the retail
lending function with a focus on compliance and
regulatory requirements.
Experience of 10-15 years in mortgage operations in a
mid-size to large
financial institution preferred. Associated Bank
originated over $4.5B in
2012, and is the subsidiary of Associated Banc-Corp, a
top 50- publicly
traded US bank holding company. For more information or
to send confidential
inquiries and resumes, contact Amy Jo Derenne at
or take a look at its website
[http://r20.rs6.net/tn.jsp?e=001RxeyjYgMBgkcmyCRlmaAdFmlMzWZJkIdY-VxrXE5V19S
Ltf_rCWJ-H4GTTmtUXNDHo-xZ1BvxZaebDLwIVVa7_8qZ0cInkhtZVQ9EBNnpmicuz8eDZB8scyY
RCqm8BkV3TxzewC_SfY=].
And CapWest Mortgage is expanding its secondary market
operations: "online
mortgage company to enter wholesale and
mini-correspondent markets." CapWest
Mortgage, a division of 106-year old Farmers Bank &
Trust, is expanding its
secondary market
objectives to include wholesale and mini-correspondent
programs, in addition to
its comprehensive Third Party Origination program.
Through its new wholesale program, CapWest Mortgage will
partner with
community banks and credit unions across the country,
offering no-hassle
underwriting and closing services and mitigating overall
lending risk. Its
mini-correspondent program will allow CapWest to infuse
instant liquidity
into banks and credit unions for an outlet for delivery
of agency-quality
closed loans. For inquiries about these programs, please
contact Tony Thole,
Director of TPO for CapWest Mortgage, at tthole@capwestmortgage.com
In addition to the TPO options, CapWest has begun a
lender fulfillment
program with HELOC and Fixed Rate Second Lien programs.
We are confident
that our ability to originate and deliver performing
assets to banks and
credit unions in need of earning assets will support a
market with existing
needs but few providers" said CEO & President
Monte Robbins. CapWest is
originating fixed and variable 2nds and HELOC's. "If
a bank is looking to
acquire some performing assets, we have new production
junior lien mortgages
available in any footprint." For more information on
this, contact Joe
Stadler at jstadler@capwestmortgage.com
Let me think about this...how much success does a
mortgage plan if the MBA,
HUD, the
securities industry, and the FHFA are aligned against it? Perhaps
not much.
In this case, the
eminent domain process, led by Steve Gluckstern, John
Vlahoplus, Graham Williams, and others, was dealt another
blow when HUD
questioned whether the new loans would be eligible:
AnotherSpeedbump
[http://r20.rs6.net/tn.jsp?e=001RxeyjYgMBgmm_0vrVBLvvnEp_XO8Hw8xxQNCRWlGeljT
oCGLLuQ-LqdePzHkVVzbmXdwpu9B0IG-_vEtwuFdkvCjh9YQTl0BIeJ5K72xMh0hMW0bynJL5h2K
SUIG8UCuoenLsXrG13T7E8bEwCh8ezU6LQ1IJzztD10ekn8Div17bgVSIy_HeALLx3yHX2GnHIED
obhIL_55QgKnnpSAlC9Tyk7RvW1PehGRiWKTmqcdWQyhW4VmSA==].
And we're definitely heading toward a world where QM =
QRM. This is one of
those things where
if we have to have it, this minimizes the amount of
further restriction on the lending industry:
TheSameIsGood
[http://r20.rs6.net/tn.jsp?e=001RxeyjYgMBgk5N0j_LoVFeQ7whB7a3pF5yJOPWh1TIPIL
uPTV26nXKTm79nwszS-Tb2QixCbZvuFb4CH574hzk6pNPCTJOXz0zWjUVSMvhgW0dH7kX8PucZTt
SRokVjouy0MTQmAvssUzPDRRPdFKnTL0U2EesPR5TR5pypcEF0pF_4Jh-vn8a8akySMl2J9h1L2Z
mKqLMHLhh8HD0-4ZHn3wwtnzc_YeOHV7B3nAd18=].
We'd all like the actual QRM news to be a non-event.
Berkshire Hathaway (Warren Buffett) apparently likes
Wells Fargo. It upped
its stake in Wells by 1.1%.
No one is too old to learn about compliance, right? Today
is a webinar
titled, "What Every Loan Officer Should Know about
Compliance." It is today
from 2-3PM EDT. This commentary wrote about the event
last month, and the
links are already set and user-specific.
But if you want to listen in, call +1 (415) 655-0057,
Access Code:
932-355-526.
"Rob, once the Fed stops its QE program and buying
$85 billion a month of
Treasury securities (yes, one part of Washington D.C.
buying what another
part issues) does mean rates will automatically go
up?" Good question,
especially as earlier this week the San Francisco Federal
Reserve released a
paper estimating that asset purchases, also known as
quantitative easing,
add only "a moderate boost" to economic growth.
And that boost itself is dicey, as it really depends on
the central bank
promising not to raise short-term interest rates, the
study found. Between
November, 2010 and June, 2011 the Fed bought $600 billion
of paper (QE2),
but the guys in SF said the purchases added about 0.13
percentage point to
real GDP growth. And without the guidance from the Fed
that rates would be
held close to zero, QE2 would only have added 0.04 percentage points to
growth, the economists found. The study fits with the
view of some monetary
policy experts who argue that asset purchases are really just "earnest
money," or a signal to markets that the Fed is going
to keep interest rates
low for longer: while the Fed is buying assets, it won't
be raising rates.
Psychologically, once the Fed starts to taper asset
purchases, the market
will quickly turn its attention to when the Fed will hike
rates. So it is
almost as if tapering is priced in to the market, and
traders are wondering
when rate hikes will commence.
By the way, Native Americans used beads, the Dutch
monetized their tulips,
and in the '00's we Americans had an affinity for real
estate (hey, they
'aint makin any more of it, I'm sure you've heard a time
or three). At some
point, someone must have pointed out the absurdity of
using a flower bulb to
store wealth, and it was at that tipping point that a guy
with a warehouse
full of Burning Hearts
[http://r20.rs6.net/tn.jsp?e=001RxeyjYgMBglV5bHtfgWDy0NN0lO1l4-M4nSP_Iin4MyC
8iMPx7S95OFdb01P3-_nSPOqLDHV76pQtqaguvJpIHeLKs-HM9A8Z_AktbKZS7oxXct037Z5pjQF
AzWARRvo_SANlne2RHYL3zHgxDWh5wWv6M3h8ZBovIEzQUa5pOm27MMb83bclh9-Lk-itN0Zb1IJ
u3zUDwhWOeVvuwO2Uw==]
thought, "I wonder if I'll be able to send my kids
to college now". The
point being, all markets reach an apex, and maybe it's an
example of how far
the real estate markets have come since then, but I've
occasionally started
hearing about this "housing bubble" we're in. A
couple weeks ago Pro Teck
Valuation Services has an interesting article
[http://r20.rs6.net/tn.jsp?e=001RxeyjYgMBgkFhgUd4WfguRz1jY_c8NBiz9PzPukofPtn
ygeHrYSpDF546bMj_twTF5B49stVULaLaNS8G9yTNzxd7qdXGtxPUi7T_9-vUMGpjuIZcibdH8N_
F01zCbgAGWeYLETdWQVNA62t39g5DD3sAZb55uDd0K1sIR7B7NqyO4yBdPP7-6wBa4P6Fg2PH5Wr
kIKPVzri2LZ9-g7pUYijix8GGvNTFnu3a1sGuzyyQPzV0JFFLQ==]
on why the current rise in home prices is not necessarily
anything to worry
about.
Let's take a look at some recent agency, vendor, and
investor updates.
Fannie Mae updated its Servicer Disaster Assistance
Policies. On August 7,
Fannie Mae issued Servicing Guide SVC-2013-16
[http://r20.rs6.net/tn.jsp?e=001RxeyjYgMBgng7f8OeSQElhi_KmlHpYGWaq0xZt85kFJF
vAzPixKmzkweX218wqtIbitcXuxI3_Q5Sin_zL8wDlnMHGIahlJ5pGD9sLywALo8sy9XRKJlC_QP
bEUqFm5fWqcRXEqpw32v5af_05dIDvxAFC0_wpUSzNlC4wFoT2A=]
which updates
assistance policies for borrowers affected by earthquakes,
floods, hurricanes, or other catastrophes caused by a
person or event beyond
the borrower's control. The announcement provides a table
of new
pre-approved forbearance terms for borrowers affected by a disaster. Fannie
Mae reminds servicers that while they have discretion to
determine the
appropriate duration of forbearance, any forbearance that
exceeds the set
terms must be approved in writing by Fannie Mae. The
announcement also (i)
updates requirements for insurance claim settlements,
(ii) requires that
income documentation be no more than 180 days old at the
time of the
post-disaster foreclosure prevention alternative
evaluation, (iii) directs
servicers to suspend credit reporting for a
disaster-impacted borrower
during a repayment plan or Trial Period Plan if the
borrower is making the
required payments, (iv) reduces eligibility requirements
for streamlined
modifications for borrowers completing a disaster-related
forbearance plan
in a FEMA-declared disaster area, (v) introduces a new
modification, the Cap
and Extended Modification for Disaster Relief, and (vi)
addresses escrow
analysis requirements prior to offering a Trial Period
Plan for certain
disaster-related modifications. All of these policy
changes took effect
immediately.
MSI is no longer requiring appraisals for VA IRRRL loans
so long as they
comply with all guidelines and use the applicable 307100
product code. Note
that this is not available in all states; for the full
list of states see
the daily rate sheet.
Effective immediately, MSI is no longer closing or
purchasing loans where
the borrower claims two primary residences within a
12-month period unless
the current servicer can provide a written statement that
the first primary
residence has been changed to a second home or investment
property.
As part of its long-term effort to clarify underwriting
requirements for the
purpose of complying with ability to repay and QM, MSI is
requiring that
borrowers using
funds from IRA/402(k) or Keogh Retirement Accounts provide
documentation that they have unrestricted access without
penalty along with
confirmation that the income is expected to continue for at least three
years following the loan's closing.
In cases where the borrower is at least 59.9 years of age
and the assets are
in the form of stocks, bonds, or mutual funds, MSI will
allow 70% of the
current value to be used as income, which is calculated
after any withdrawal
of funds to complete the loan transaction. Foster care
income guidelines
have also been clarified and now state that MSI requires evidence of a
two-year history of having received the income and
current copies of the
contract or agreement with the relevant government
agency.
M&T is one of the banks that has chosen not to affect
the State of New
York's order to exclude the FHA MIP increase from the APR
calculation; as
such, it will not accept loans that exceed the state's
subprime threshold
inclusive of the increased FHA MIPs. This is subject to
change if a
subsequent order is published with a longer duration, in which case loans
could be evaluated on a case-by-case basis.
To accommodate weekend home shopping, Cole Taylor
Mortgage is allowing loans
to be locked through 11.59pm every Saturday, replacing
the previous cutoff
time of 11.59PM on Fridays.
Cole Taylor has updated its lock extension policy for
Jumbo loans has also
been updated such that the maximum extension time allowed
is now 30 days; in
cases where additional days are required the loan will be
subject to worse
case pricing, effective for all new extension requests
and new locks. The
maximum allowable net price for Government fixed rate
products has also been
revised so that it has increased to 105.000.
Carrington Mortgage is now offering USDA loans through
its retail and
wholesale lending channels in addition to its FHA and VA
purchase options.
With the new products, borrowers with DTIs of 41 or less
and FICO scores as
low as 580 can receive up to 100% financing on purchase,
rate/term
refinance, and Streamline refinance transactions.
United Wholesale Mortgage has rolled out its new UWM
Connect service, which
monitors borrower credit pulls for activity and transmits
the information
for brokers that have previously worked with them for
potential leads. UWM
also provides the broker's contact information to
borrowers, and account
executives keep in regular contact to alert brokers of credit pulls so that
they have the option of reaching out to former borrowers
themselves.
Mortgage Harmony and Denver-based LenderLive have entered
into an agreement
whereby the former will begin servicing the latter's
loans. In addition,
LenderLive will
offer the HarmonyLoan product, a consumer-initiated
interest rate-resetting mortgage with a recurring LO comp
structure, to its
borrowers. For full details, go here
[http://r20.rs6.net/tn.jsp?e=001RxeyjYgMBgkZTtuhx8wx9tSZiEFUn2gbJkvLYB7F7R8E
znisT3XwBcvoKl2tJP9wXFHEaUliW8Sl8e1GPiT1BcenwY7M8M0RXzoNv8tZHFY5bWz93fIHwuKK
B-wgLkSDb59YnWHyv-DX-mTF-4FbijCjGJMUZTtNO3WyiT_6M8CFPC5fkUAsYJWM-Bfmc5xyfKvP
5fZptVDl8voskqt_Mg==].
Residential mortgage special servicer Statebridge has
signed an agreement to
enter a strategic partnership with Denver-based
FrontRange Capital Partners.
Proceeds from FrontRange's investment will be used to
repurchase the
entirety of Integrated Asset Services' current ownership
share, buff up
Statebridge's balance sheet with the intention of
qualifying for GSE
servicing, and upgrade it's operational and IT platforms.
Let's move to the markets! After Tuesday's selloff, the fixed-income
markets
were pretty quiet Wednesday. The Producer Price Index
numbers were below
expectations which
should have helped. It also lent a bit of support as it
could mean a slower pace to the Fed's tapering when it
begins. Traders
reported that flows in MBS were generally balanced
(supply and demand) with
most selling happening in 30-yr 3.5 and 4% coupons
(containing 3.75% and
above 30-yr fixed-rate mortgages). The 10-yr closed out
around 2.71% - with
higher rates partially attributed to the pickup in
Europe.
Today is a new day, of course. We've had July's Consumer
Price Index (core
expected unchanged at +0.2, the headline +.2% as expected
and the core rate
was +.2%); August's Empire State Manufacturing Survey
(+10 versus 9.46
previously; 8.24 actual) and Initial Jobless Claims
(+335k versus +333k, was
down from a revised 335k down to 320k). This morning we'll also have the
Industrial Production and Capacity Utilization duo for
July, projected to be
little changed from the prior month at +0.3 and 77.9,
respectively. Winding
it up at 10AM EDT are August's Philly Fed Index (+15.5
from
19.8) and the National Association of Home Builders
Housing Market Index for
August.
After the strong Jobless Claims number, rates have moved
higher, and the
10-yr is sitting at 2.79% and MBS prices are worse about
.250.
Okay, here is five minutes of commercials to watch. But
just not any
commercials
- Ameriquest did a
great & funny job on them: IAmHerDaddy
[http://r20.rs6.net/tn.jsp?e=001RxeyjYgMBgmkBrIHnD3XVJ1P0pU7HsGi3yENZFHoTOB3
umhWccI1EZH6SewBaf3tIVZJ3kdvifcuxAywcMJAZq7oEJLL-mk89kkcHRb26DZZM_z8ddMeL8dH
F5WXUa8TqOotarM8Zs6y2lOa6t4AHA==].
Even the first 40 seconds is classic.
If you're interested, visit my twice-a-month blog at the
STRATMOR Group web
site located at www.stratmorgroup.com
[http://r20.rs6.net/tn.jsp?e=001RxeyjYgMBglnnScedA0eKk57yi1zZzs_pMWkViHHy5O3
Xc1wEAa6d7wNZQBrpZQq7TjCPMjxvcT_J2_DiTLMvz7w0uHTZ5BAfngCrRi21SjDfPgMD1IU9Cle
rv24BAOR].
The current blog is, "A Little Primer on Reverse
Mortgages"." If you have
both the time and inclination, make a comment on what I
have written, or on
other comments so that folks can learn what's going on
out there from the
other readers.
Rob
(Check out
[http://r20.rs6.net/tn.jsp?e=001RxeyjYgMBgkjloltX6jKwvafj3RGk7jW1tHFQTYToW0h
GmzYGJZd-W3N0klqWSRiXgt7czFNPy_PD4YLy3D6EXPW4MR0xOrT92HLdb8pCbbmVUK17gKzi6kB
ZaB6pjpiiZUZvnoNgSQz3Fja7kf0cnvz94YY3D799gdmhlWEj0ij3TUNcJzKqQ==]
[http://r20.rs6.net/tn.jsp?e=001RxeyjYgMBgnnV3I4dIvL89VM5aVB4raAV9r5VaUPeCMh
BY2oDHkkHayGnFpGpdNRA_VEZhZGS2y1NdoHnPz4qOEnhpyftmnb0WSncSucYa8mi16blPJqtWJg
BpBmJm94NbVNB-zp5OCOoJAar8nTFo--gAla2u8J].
For archived commentaries or to subscribe, go to www.robchrisman.com
[http://r20.rs6.net/tn.jsp?e=001RxeyjYgMBgkqjR01XiITvy1vNaKHSLQkxA_q0BxONGeV
X9NhP7FE-YVJAOnNmWpYIxfQqveoJCTS2ZVzt54plqfXDCGlmff3n3HfN_LIyA4hj7ECFlzLkQMC
nPPJbPw5].
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