Underwriters will soon be
entering that netherworld where they want 2013 tax returns, but borrowers just
don't have them yet. With that in mind, here's a little trivia from our
compatriots at the IRS: 47.8% of the individual income tax returns filed in the
USA for tax year 2011 reported less than $30,000 of adjusted gross income. The
mortgage and financial services sector has more than its fair share of
personnel who made that in a month last year, and the year before. Maybe
not this year...although generally the gap between the haves and the have not's
seems to be widening.
The
market for servicing is roiling. The average borrower doesn't know that the
rights to service their mortgage may be sold and bought (creating a letter they
receive in the mail saying they will start sending their payments somewhere
else). Despite the apparent speed bump that the market has seen on the demand
side from non-depository servicing buyers basically waiting for regulators to
tell them if they have enough capital to keep going and keep their stockholders
happy, the supply continues.
Today
is a federal holiday, so news might be light. So let's use the opportunity to
catch up with some relatively recent lender, investor, vendor, and agency
updates - they just don't stop. And as always, it is best to read the
actual bulletin for full details
Software
provider Mortech, a division of Zillow, has enhanced the compliance
capabilities of the Marksman pricing engine to integrate the APR/POR
rate check spread, applicable DTI limits, and requirements for the lender fees
and points calculation. Users are issued with a full compliance worksheet
that provides an overview of the loan scenario at both the application stage and
when the loan is locked and discloses which test have been performed and the
test results. Home Ownership and Equity Protection Act rules, investor
eligibility, and a workflow for anti-steering that allows the lender to print
an anti-steering disclosure form.
Per
Regulation Z, Wells Fargo is requiring that all individuals who have an
ownership interest in the property be provided with a fully executed Notice of
Right to Cancel. This applies to all loans, including those where a
non-vested individual is deemed to have an ownership due to state laws based on
community property, homestead, dower/curtesy, etc. Wells will also accept
a Spousal Waiver, Warranty Deed, or transactional Quit Claim that shows that
the non-vested individual no longer has an interest in the property in lieu of
the Notice of Right to Cancel.
Wells
has updated guidance to state that electronically signed documents from TPOs or
mobile apps will be ineligible for purchase and that electronic signatures may
not be applied to multiple electronic records simultaneously. Loan
packages with electronically signed documents must include evidence of Borrower
Consent Language showing that the borrower agreed to receive and sign any
application documents as such.
To align with Fannie's updated
guidance, Wells is now requiring condo and PUD projects to have gap dwelling
insurance policies if the amount of the HOA blanket coverage is between 80% and
100% of the replacement cost. Loans on properties in projects with
insurance that covers less than 80% of the replacement cost will not be
eligible for purchase.
Effective for all commitments,
re-locks, or re-negotiations dated February 17th or after, Wells is
requiring that all loan files include the updated Loan Submission
Summary. As a reminder, the revised LSS features a new Disclosed Index
Rate that must be completed for Conventional Conforming ARMs to meet the
Agencies' ULDD requirements.
US Bank is now
offering 5/1 ARM loans with a 2/2/5 cap structure and a new FHLMC Super
Conforming 7/1 LIBOR ARM program. The latter is available for primary
residences, second homes, and investment properties and offers a cash-out
option. The new program is subject to the same 5/2/5 cap structure of the
existing FHLMC Conforming 7/1 LIBOR ARM.
FAMC has rolled out a new
Conventional 10/1 ARM product, available for purchases, rate/term refis, and
cash-out refis. The program uses the same cap structure (5/2/5) and
qualifying rate guidelines as the Conventional 7/1.
Penny Mac is now
offering a Jumbo program to all correspondent lenders with a TNW of $2.5m and
above. Loan amounts of up to $2 million are available for 1-unit purchase
transactions with an LTV at or below 70% and a FICO of at least 720.
The markets are closed today, so
pricing folks either aren't pricing, or are looking at the Asian & European
markets (who for some unknown reason don't celebrate President's Day along with
us) and adding in some cushion just to throw something on rate sheets. We're
coming off a Friday that had a weaker-than-expected Industrial Production
number, but (go figure) stocks rallied and bond prices sank. Investors appear
to be discounting recent data due to bad weather.
Inflation has not been an issue
for many, many years, but still analysts talk about it - especially when there
isn't much else to talk about. And this week we'll have the monthly inflation
reports: the Producer Price Index (PPI) and its sibling the Consumer Price
Index (CPI). They come out Wednesday and Thursday, respectively. The minutes
from the January 29 Federal Open Market Committee Meeting will be released on
Wednesday, as will Housing Starts. Its cousin Existing Home Sales will be
released on Friday. Throw in the Philly Fed and Empire State numbers and that
about does it.
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