During a visit to my doctor, I
asked him, "How do you determine whether or not an older person should be
put in an old age home?"
"Well," he replied,
"We fill up a bathtub, then we offer a teaspoon, a teacup and a bucket to
the person to empty the bathtub."
"Oh, I understand," I
said. "A normal person would use the bucket because it is bigger than the
spoon or the teacup."
"No" he said. "A
normal person would pull the plug. Do you want a bed near the window?"
For anyone who likes numbers,
the U.S. Census Bureau projected the United States population was 322,762,018
on Jan. 1. This is an increase of 2,472,745, or 0.77 percent, from New Year's
Day 2015. In 2016, the United States is expected to experience one birth every
eight seconds and one death every ten seconds. Meanwhile, net international
migration is expected to add one person to the U.S. population every 29
seconds. The combination of births, deaths and net international migration
increases the U.S. population by one person every 17 seconds. (The
projected world population on Jan. 1 was about 7.3 billion, an increase of
1.08% during the year.)
FHA & VA news just keeps
coming...
Yes Quicken Loans has
been in the news in the last few months with its Rocket Loan, but also with the
industry watching its comments about FHA lending and its legal battles with
various parts of the U.S. Government. Last week a federal judge dismissed
a lawsuit by Quicken Loans Inc against the U.S. Justice
Department that alleged the company was being forced to make a big settlement
over its mortgage lending and underwriting practices. As NMP Daily put it,
"It was an ignoble end to Quicken Loans' attempt to preemptively sue the
federal government ahead of Washington's legal challenge to the Detroit-based
lender."
Recently the Federal
Housing Administration (FHA) issued Mortgagee
Letter 2015-26, Extension of Certain Timeframes in Mortgagee Letter
2015-11, Loss Mitigation Guidance for Home Equity Conversion Mortgages (HECMs)
in Default due to Unpaid Property Charges. The purpose of this Mortgagee
Letter is to provide mortgagees with an extension through January 18, 2016
to the timeframes provided in ML 2015-11 to submit a due and payable
request and to the timeframe to take First Legal Action where the mortgagee is
actively reviewing the borrower for loss mitigation in accordance with ML
2015-11. All other provisions in Mortgagee Letter 2015-11 became effective April
23, 2015, and remain in effect.
Onboarding to the FHA's
Electronic Appraisal Delivery (EAD) portal is well underway. A web-based
technology that enables mortgagees to electronically transmit appraisal data
and reports to FHA prior to loan endorsement, the EAD portal promotes quality
up-front appraisal data. Mortgagees should register now for their
chosen onboarding phase, even if it is later in the schedule or if their chosen
phase is tentative. If plans change, mortgagees can easily reschedule their onboarding
to a different available phase using the instructions in FHA Connection's
(FHAC) Electronic Appraisal Delivery Sign Up screen. Get more information and
view the onboarding schedule on FHA's EAD portal Mortgagee Onboarding Process web
page.
Yes, FHA's Electronic Appraisal Delivery (EAD) portal
onboarding continues. The third onboarding phase closes to new participants on
December 15, 2015, leaving four remaining onboarding phases before the portal's
June 27, 2016 mandatory use date. EAD
migration details can be found here.
The
FHA Resource Center has been experiencing a larger than normal volume of
inquiries through both its telephone and email channels. If immediate answers
to FHA Single Family policy, program, technology, or other questions are
needed, FHA is encouraging lenders to consider accessing the Resource Center's
online Frequently Asked Questions site. Available 24/7, this online knowledge
base at www.hud.gov/answerscontains over 1,500 searchable Frequently Asked
Questions.
Federal
Housing Administration (FHA) published Mortgagee Letter 2015-30: 2016 Nationwide Forward Mortgage Limits, which
provides the maximum mortgage limits for FHA-insured mortgages.
VA's has posted
its circular announcing the Department of Veterans Affairs Loan
Limits for closed loans on or after January 1, 2016.
"Another great group that supports the
Veterans is the VA
Home Loan Network. This group was created to bring together people who have a common goal to support the VA
home loan program and Veterans. The VA home loan program helps Servicemembers,
Veterans, and eligible surviving spouses to become homeowners."
Kinecta will
adjust administration fees, effective for new applications dated January 1,
2016 and later. Non-California loans including will be $795. California state
Agency, FHA and Jumbo loans administration fee will be $995.00 Piggy back HELOC
Fixed Second loans will cost $250 for all states.
Chase Correspondent has suspended its FHA Streamline - Different Servicer
product line(s). As a result, these products will no longer be offered in the
Optimal Blue system, but will be available to Secondary Users until February 3,
2016. Loans must be locked on or before January 3, 2016.
Mountain
West Financial announced it will follow FHA's 4000.1 guidance in regards to
a Chapter 7 Bankruptcy. A Chapter 7 bankruptcy (liquidation) does not
disqualify a Borrower from obtaining an FHA insured mortgage if, at the time of
case number assignment, at least two years have elapsed since the date of the
bankruptcy discharge. During this time, the Borrower must have either
re-established good credit; or chosen not to incur new credit
obligations. Additional details are available in this announcement.
In reference to FHA
Streamline Refinances, M&T Bank has updated its product page to
reflect net tangible benefit requirements. At least one NTB must be documented
from the three available options: a reduced combined rate, a reduced term
and/or change from ARM to fixed rate loan.
Language on the M&T
Product Page has been corrected to clarify that the permitted 50% initial
release at closing on a Limited 203(k) is 50% of labor & materials.
This release is only allowed on a Limited 203(k) when the contractor(s) are
either unwilling to wait for payment due to business reasons, or require funds
upfront to pay for materials and/or as a deposit for labor costs. Also,
The FHA Streamline Refi product pages are being updated to clarify that adding a
new borrower to the Note is not permitted, and the loan must be switched to a
rate/ term refinance.
Freedom
Mortgage posted data entry requirements unique to each scenario which
included the FHA Non-Credit Qualifying Streamline Refinances and the new
Freedom First Program. Regarding its FHA Non-Credit Qualifying Streamline
Refinances, as credit scores are not required to be pulled or disclosed, when
entering into the system use '200' as a placeholder where the credit score
would normally be entered. When a credit report is pulled on its Freedom First
Program and the Borrower does not have sufficient trade-lines to generate a
score, use '100' as a placeholder where the credit score would normally be
entered.
Per FHA's published 2016
Calendar Year Maximum Loan Limits, Impac Mortgage is requiring the new
limits effective for case numbers assigned on or after January 1, 2016 through
December 31, 2016. Although there were no counties limit decreases, 188
counties had loan limit increases. Click
the link to view the FHA 2016 loan limit details.
VA has
posted a correction to the fee schedule for appraisers in Arkansas, Louisiana,
Oklahoma, and Texas, effective January 1, 2016. The correction is for fees
concerning triplex and 4-plex appraisals in the Texas-Houston and Texas-Waco
areas. All other fees remain unchanged. The
corrected current fee schedule, as well as the new one which will be posted
January 1, 2016 is available here.
Per
current policy, there is a VA QM requirement for IRRL transaction that the
veteran recoup the costs and fee associated with the new IRRL within 36 months
to be QM compliant. M&T Bank received clarification that the calculation to
measure this is as follows: Subtract the new P&I from the old P&I to
calculate the monthly savings (not PITI). Divide the current closing/prepaids
by the monthly savings amount to determine how many months recoupment will take
if <36, the IRRL meets this QM test. If >36m, the IRRL must be credit
qualified. M&T's Form 2440 "VA IRRL Comparison" may be used to
perform calculation. This guidance is effective immediately for both pipeline
loans and new registrations.
Turning to the bond market and
interest rates...
No, it wasn't a dream: our Fed
really did raise short term rates, and yet our long term rates - which include
15 & 30 year mortgage rates - haven't done much. This was not a surprise to
anyone in capital markets. What was more interesting was what happened heading
into yesterday: Treasuries rallied as China's Caixan purchasing managers' index
missed forecasts and set off a wave of risk aversion in global markets to start
2016. Chinese stocks had stabilized late in 2015 after seeing panic selling in
August, but China's transition to a service-oriented economy continues to hit
bumps on the road. Also noted was the ISM manufacturing index which fell to
"48.2" in December from 48.6 in November. That was the first time the
ISM Index has been below 50.0 in two consecutive months since June-July 2009.
Data out today is...zip.
We closed Monday with the 10-year at 2.25%. In the early going today we're
at 2.24% with agency MBS prices better by a "tad" - a highly
technical term roughly equaling a "shade" or "a little".
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