Today
New York became the latest state to adopt the Uniform State Test (UST).
Ohio, Connecticut, and Oklahoma will then follow soon after. NMLS approved
course providers are encouraged to keep abreast of which states are adopting
the UST and to update any course material accordingly. Adoption information is
posted on the
testing page of NMLS Resource Center. "Additionally, we have
received several course submissions with incorrect test retake
information. As a reminder, an individual who attempts to take the
test and fails to achieve a passing score of at least 75% must wait 30 days
before they are allowed to retake the test. An individual may take the test a
total of three (3) times before the SAFE Act requires the individual to wait
180 days before attempting it again. Detailed information about the MLO SAFE
Test is available in the MLO
Testing Handbook."
On
August 20, the District of Columbia Department of Insurance, Securities
and Banking (DISB) spread the word that as of September 3 it will begin using the NMLS to manage
money transmitter, check casher, money lender, retail seller, sales finance
company and non-bank ATM licenses and registrations. Beginning on that
date, new applicants for such licenses and registrations must apply via the
NMLS. Entities currently holding such licenses and registrations must create a
complete record in NMLS and submit it to DISB for approval by December 31.
Last
week HUD issued its final rule prohibiting
mortgagees from charging post-payment interest under FHA's single family
mortgage insurance program. The final rule is responsive to the CFPB's
ATR/QM rule, under which post-payment interest charges will be considered a
prepayment penalty in connection with FHA loans closed on or after January 21,
2015. Because prepayment penalties are prohibited on higher-priced FHA loans, the
new definition of "prepayment penalty" under the ATR/QM rule would
have effectively prohibited the making of higher-priced FHA mortgage loans.
Also effective January 21, 2015, HUD's final rule ensures consistency among FHA
single-family mortgage products and provides the same protections for all
borrowers. Under the final rule, monthly interest on the debt must be
calculated on the actual unpaid principal balance as of the date prepayment is
received.
We
also had HUD issuing its final rule to amend FHA's
single family adjustable rate mortgage (ARM) program regulations to align
with the interest rate adjustment and notification periods required for ARMs
under the CFPB's new TILA mortgage servicing rules. The final rule is effective
January 10, 2015 and adopted the proposed rule issued on May
8 without change. Under the final rule, interest rate adjustments resulting in
a corresponding change to the mortgagor's monthly payment for an ARM must be
based on the most recent index value available 45 days before the date of the
rate adjustment. FHA's previous regulations provided for a 30-day look-back
period. Further, the final rule mandates that mortgagees of FHA-insured ARMs
comply with the disclosure and notification requirements of the CFPB's TILA
servicing rules, which require at least 60-days, but no more than 120-days
advance notice of an adjustment to a mortgagor's monthly payment. Previously,
the regulations provided for only 25 days advance notice.
And
Fannie Mae issued Lender Letter LL-201404,
which reminds lenders that when a mortgage loan is selected by Fannie Mae for
an anti-predatory and HOEPA compliance review, the lender must provide
requested loan information to Fannie Mae. Further, the letter reminds sellers
that mortgage loans with either an annual percentage rate or total points and
fees payable by the borrower that exceed the applicable HOEPA thresholds are
not eligible for delivery to Fannie Mae. Additionally, Fannie Mae released an
optional worksheet, available on the Fannie Mae website, designed to assist
lenders in responding to any information requests from Fannie Mae. This letter
highlights the continued focus of Fannie Mae regarding its anti-predatory
lending quality control process.
And
I received this note from a concerned mortgage professional. "Rob, the
commentary about FNMA and FHLMC allowing lenders to only provide W2,
paystub, with the supporting 4506T illustrates that they are willing to
continue to put good lenders in jeopardy. The main reason many
originators go that route is to not disclose 2106 expense or schedule C that
would prohibit the borrower from qualifying. We asked our QC team at FNMA
what they thought. Their response was, 'If you know (or believe) the borrower
occupation typically has 2106 expense you should ask for full returns'.
My thoughts are that they continue to put us in harm's way. Some lenders use
this lack of proper documentation as a competitive recruiting advantage while
the rest of us look long range at the implications. By not fully
documenting we run the risk of violating the ability to repay as well as
creating a repurchase risk later when FNMA or aggregator gets the taxes
from the borrower during proposed workouts and looks for borrower
fraud."
Freddie
Mac's Reps and Warrants Updates remind
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.
Freddie
Mac news and reminders covers
Loan-to-value edits, elimination of ULDD data point for certain construction
conversion mortgages and for seller-owned modified mortgages; both effective
August 18th, , upcoming ZIP code edit, and changes to allow the 'Field Review'
option to be selected for conforming loans.
On
Friday HUD came out with several proposed changes to
its FHA 203(k) program. The possible changes prompted one veteran broker
from New Jersey to write me saying, "There are some interesting proposals,
including two appraisals (which we like) - 'as is' value and 'after improved'
value. I am not sure I like the capping of the loan amount to 110% of after
improved value now to include the EEM money, so hopefully I am misinterpreting this.
FHA posted revised hudclips form
HUD/VA Addendum to Uniform Residential Loan Application to implement changes
for VA-guaranteed mortgages. The VA update clarifies what constitutes a valid
marriage for the purpose of obtaining VA benefits.
We ended last week with the
10-yr at a yield of 2.34%. At the current time the U.S. economy is not doing
well enough to warrant higher rates, and trouble overseas has increased foreign
investment in our bond (and stock) market. We did find out, however, that U.S.
second-quarter gross domestic product was higher than initially estimated - but
it wasn't enough to reverse a rally in Treasury securities as the 30-year yield
reached a 15-month low. Concern about Russian intervention in Ukraine and an
expectation that the European Central Bank will soon launch a bond-buying
program drove demand for U.S. government debt as a safe-haven investment in
spite of second quarter GDP being revised higher to a 4.2 percent annualized
rate. Headlines for housing data were mixed last week, but reports
generally suggest the sector continues to gradually improve as home prices are
increasing at more reasonable rates, supply is coming back and future recorded
sales look to improve.
It's Tuesday already, and we
have a lot of scheduled news staring us in the face. Today the ISM
Manufacturing Index will report on the general direction of production, new
orders, backlogs, inventories, employment and overall demand from 300
manufacturing firms nationwide. We'll also see Construction Spending for July.
Tomorrow is Factory Orders and the release of the Beige Book (the status of the
Federal Reserve Districts). Thursday the 4th will have International
Trade numbers, Challenger Job Cuts, ADP Employment Change numbers, Nonfarm
Productivity, and Unit Labor Costs. On Friday, September 5th, the
Employment Report tells us the change in Nonfarm Payrolls, Unemployment Rate,
and Hourly Earnings.
Rates are higher this morning:
as a benchmark, Friday we had a 2.34% close on the 10-yr T-note, and this
morning we're at 2.38% (the 10-yr is worse by .375 whereas the 30-yr T-bond is
worse a full point!). Agency MBS prices are worse between .125-.250.
There is no late-breaking news, aside from stock markets around the globe
rallying on Ukrainian tension subsiding somewhat.
Opening Trend:
FNMA
3.5% 102.67
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