Given
the amount of change facing our industry, open dialogue amongst industry peers
is more important than ever before. The MBA is focused on giving its community
lender members the ability to discuss their unique opportunities and
challenges. To that end, the MBA now has two members-only networking groups
- the brand-new Community Bank and Credit Union (CBCU) Network, which is
open to all MBA member banks and credit unions with 10 billion or less in
assets, and its popular network for Independent Mortgage Banks. Both groups
meet regularly via phone and in person, and serve as forums to share
information, as well as pool knowledge and resources. MBA hosted the first of
many member-led CBCU Network calls on August 12, receiving rave reviews and a
high level of participation. Contact MBA's Tricia Migliazzo or Tamara
King to learn about either of these groups, and about special
first-year member benefits.
Speaking
of the MBA, I learned a new term (for me) yesterday: "backwardly
compatible." My guess is that many failed personal relationships could use
that term, but in this case it applies to the latest update on MISMO
(Mortgage Industry Standards Maintenance Organization). Most IT and Ops folks
already follow developments on its website.
There
is a lot going on with the Agencies! Yes, the FHFA has requested input on its
proposal for a single security structure for agency MBS (and you should
comment!). Fannie Mae and Freddie Mac also recently reported 2Q14 earnings.
Earnings declined at both companies driven primarily by lower litigation and
other one-time gains. Fannie Mae reported $3.7 billion of operating profit
before the payment of preferred stock dividends, while Freddie Mac reported $1.4
billion of operating profit before preferred dividends. Fannie was helped by
the release of some reserves, and Freddie earned some coin on derivative gains.
Fannie's serious delinquency rate decreased to 2.05% from 2.19% in 1Q. Fannie's
loss reserve of $42.1 billion (from $45.3 billion) declined to 1.32% of the
guaranty portfolio vs. 1.41% in the prior quarter, and its single-family loss
severity rate was 18.89% (although this excludes REO disposition costs), down
from 20.31% for the full-year 2013. The company took a reserve release of $1.6
billion vs a release of $774 million last quarter. Charge-offs were up to $1.9
billion from $1.6 billion in 1Q.
Freddie
Mac's credit also continued to improve. The serious delinquency rate fell to
2.07% from 2.20%. Freddie Mac's loss reserve fell to $22.8 billion from $24.1
billion, or 1.3% of loans, down from 1.4%. Total non-performing assets fell to
$122.6 billion from $124.8 billion in 1Q. The reserve equated to 18.6% of
non-performing loans. The company's single-family loss severity rate for 2Q was
33.4%, down from 35.6% (unlike for Fannie Mae, this includes most REO
disposition costs). The company took a release of $618 million, down from a
provision of $85 million in the prior quarter. Charge-offs were down to $1.22
billion from $1.46 billion.
If
you'd like some input on the direction of Freddie
and Fannie, their conservator (the Federal Housing Finance Agency)
is requesting input by Sept. 15 on the plan for fiscal years 2015-2019. As it
stands, the Plan lists three strategic goals: ensure safe and sound regulated
entities; ensure liquidity, stability and access in housing finance; manage the
enterprises' ongoing conservatorships.
There
continues to be a lot of talk among LOs about the short sale that came out in
June. Just to remind folks, this information is from a FNMA bulletin dated June
17, 2014. Background info, right now if a borrower had a short sale 2 years ago
and has 20% to put down, FNMA will let them back in the game. If the borrower
has less than 20% to put down they have to stay on the bench for four years.
Effective August 16th FNMA is changing their policy; "A new policy will
apply to mortgage accounts that have been subject to a charge-off that will
require a four-year waiting period after the charge-off occurred before the
borrower is eligible for a new loan that would be salable to Fannie Mae."
Furthermore, if the charge off is due to extenuating circumstances, then FNMA
would be OK with a two year wait. We hope that FNMA publishes a precise
definition of "Extenuating Circumstances " we don't think that any
lender is going to risk having an un-saleable loan on their hands, therefore we
do not think that anyone that has a short sale is going to be OK with less than
a four year wait.
Quick
note to remind people that on July 29th Fannie Mae issued SEL-2014-10,
"Selling Guide" updates. The update included changes to the following:
Significant Derogatory Credit Events, Property Insurance Requirements,
Lender Quality Control Policy Updates and Clarifications, Notification
Requirements for Misrepresentation or Breach of Selling Warranty and Fraud, MBS
Buyup and Buydown Ratio Grids, Incorporation of Announcement SEL-2014-08, Fannie
Mae Announces Approved Mortgage Insurance Forms, Incorporation of
Announcement SEL-2014-09, Anti-Money Laundering Requirements, Special
Feature Codes, and Miscellaneous Selling Guide Update.
Fannie
Mae
posted Initial Results from the Mortgage Lender Sentiment Survey. Inaugural
results of the survey show significant improvement from Q1 to Q2 2014 in
lenders' near-term profit margin expectations, with fewer lenders in Q2
reporting that they expect their profit margin over the next three months to
decrease More Results.
Fannie
Mae
recently published updated lender resources for mortgage products to finance
home construction, renovation, and energy-efficient improvements. The materials
construction-renovation-energy
of updated resources include: a HomeStyle Renovation (HSR) on-demand recorded
training tutorial that provides detailed loan origination, delivery, and
servicing information; a HomeStyle Renovation Fact Sheet; a HomeStyle
Renovation Product Matrix; a Construction-to-Permanent Product Matrix; and an
Energy Improvement Feature Fact Sheet. Additionally, Fannie's announcement covers
information pertinent to Adverse Action Notices, Allowable Foreclosure Attorney
Fees, Evaluation Model Clauses, and the Master Custodial Agreement reminding
servicers of the requirements.
Lastly,
this last weekend Fannie rolled out DU 9.1.
Included are changes to foreclosure message updates, deed-in-lieu of
foreclosure and pre-foreclosure sale message updates, charge-off policy message
addition, 2014 Area Median Income limits, Special Feature Code retirement, and
updates to align with the Selling Guide.
Freddie
Mac Reps and Warrants Updates
reminds lenders that have mortgages that obtained selling representation and
warranty relief between February and July 2014, your organization will receive
a Selling Representation and Warranty Relief Date Report by mid-September.
Also, Freddie Mac has terminated its relationships with the following law firms
providing default-related legal services (DRLS) for Freddie Mac Default Legal
Matters. Connolly, Geaney, Ablitt & Willard, P.C., in the following states:
Massachusetts, New Hampshire, Rhode Island, Florida and Puerto Rico. The Castle
Law Group, LLC, in the following states: Utah, New Mexico, Nevada, Arizona and
Wyoming. Visit default legal services for
detailed information for Servicers, law firms, and Legacy Matters. Bulletin 2014-15 covers a
great deal of information including: Mortgages insured by Arch Mortgage
Insurance Company, Suspicious Activity and anti-money laundering (AML)
noncompliance reporting, Updates to counterparty eligibility, Updates to flood
insurance requirements, Updates related to ULDD, Certificate of incumbency
forms, and Requirement updates for manufactured homes.
Four
draft appraiser-specific policy documents that will be part of the Federal
Housing Administration's (FHA) Single Family Housing Policy Handbook (SF
Handbook) were posted today for stakeholder review and feedback. An extension
from July 29 to August 15, 2014 has been granted to allow stakeholders
additional time to provide voluntary feedback on the draft Doing Business with
FHA-FHA Lenders and Mortgagees and Quality Control Posted for Feedback. HECM
New Principal Limit Factors Use and Other HECM Reminders 2014-12, regarding
Principal Limit Factors (PLFs) and Mortgagee Letter 2014-07, regarding Due and
Payable policies for an eligible Non-Borrowing Spouse are effective for FHA
Case Numbers assigned on or after August 4, 2014 Mortgagee Letters.
On
August 19, 2014, FHA will host a webinar FHA QC Update: Loan Review
Findings and Trends. Topics will include: FHA trending resources, a one-year
look back at FHA's quarterly loan review findings report, trends over time,
lessons learned, and future mitigation. August 27th in New York, FHA
is offering Underwriting Training that
covers the underwriting of loans proposed for Federal Housing Administration
(FHA) mortgage insurance. The training is for underwriters that are currently
employed, or wish to be employed, by FHA-approved lenders.
Sometimes
government agencies get it right....and no, I'm not nipping at the schnapps at
5am. The National Association of Realtors commended Congress for their timely
implementation of the Homeowners Flood Insurance
Affordability Act which relieved property owners of costly premium
hikes and stabilized housing markets where flood insurance is required for a
mortgage. Within a month of the legislation's implementation, FEMA
issued rate-relief guidelines to insurers so that homebuyers would not have to
pay more than current owners would at the time of their next flood insurance
policy renewal. The relief also applies to current homeowners who bought a new
policy or let one lapse, not just to owners who bought property after the
Biggert-Waters Flood Insurance Reform Act went into effect last year. Testifying in front of
Congress last week, NAR Flood Insurance Task Force Chair Donna Smith said, "The
progress so far has been encouraging, but there is still more work to be done.
FEMA still needs to set up an Office of the Advocate called for by the
Biggert-Waters Act to provide property buyers with the timely help they need to
address problems with flood insurance and other rate issues that they face. It
is also critical that FEMA and the NFIP ensure the long-term accuracy of flood
rates and maps. Homeowners need an independent government advocate who has
experience and access to the necessary information to fully investigate and
resolve suspect rate quotes."
The bond market sold off a
little bit Monday - but no big deal, right? Rates are still great. Besides -
folks rooting for lower rates should ask themselves: why? If rates go much
lower, it is because our economy is doing pretty poorly - and who wants that?
Certainly not a borrower with a rate lock, or a secondary marketing department
with a locked pipeline. So we had a break yesterday, and agency MBS prices
worsened about .125-.250 and the 10-yr closed at 2.39%.
http://globalhomefinance.blogspot.com
No comments:
Post a Comment