Investor Disaster News

Turning to the disastrous weather patterns and their results in the various parts of the nation...

 In Idaho due to the severe storms and straight-line winds that occurred in Idaho on November 17 a presidential disaster declaration was issued on December 23. As a result, all properties located in Benewah, Bonner, Boundary, and Kootenai counties require evidence that the subject sustained no damage from the identified disasters. FEMA's website lists in greater detail the assistance available to those affected by the storm.

 Yes, as mother-nature unleashes severe storms resulting in tornadoes, blizzards, and flooding throughout several states, including Arkansas, Louisiana, Mississippi, Oklahoma, and Texas view the FEMA website for continued updates regarding these states. Brokers should check with their lenders for individual requirements regarding re-inspection and other policy updates for loans in process in the effected counties.

 Pacific Union Financial announced that effective with all loans closing on or after January 1, 2016, flood insurance escrows will be required, regardless of the LTV, for properties located in a special flood zone for the life of the loan. Use of the Originating Org ID Exception (1011001) is no longer permitted when registering a loan on the MERS^® System. In early January, this Org ID will be disabled, and registration transactions using it will fail.

 PennyMac Correspondent Group has posted a new announcement regarding Texas tornadoes and post disaster inspections.

 As a reminder, Wells Fargo Funding's non-escrow fees are updated quarterly and can be found on page 4 of the Best Effort and Mandatory rate sheets. Keep in mind that its non-escrow fees are state-specific and differ between fixed rate and ARM products.   Sellers who use a vendor(s) for product eligibility and pricing support are responsible for working directly with their vendor(s) to incorporate the non-escrow fees into impacted systems and processes for best execution. Sellers are reminded that an escrow/impound account must be established for payment of flood insurance premiums for all Loans where the property is located in a Special Flood Hazard Area (SFHA) flood zone beginning with A or V, regardlessof LTV and/or federal exemptions. The escrow account for flood insurance is required for the life of the loan. This change to flood insurance escrow requirements is in response to the Homeowners Flood Insurance Affordability Act of 2015 (HFIAA)final ruling that was issued on June 22, 2015.

 ditech announced its newly available ditech HomeReady Mortgage Products designed for creditworthy, low-to moderate-income borrowers, with expanded eligibility for financing homes in designated low-income, minority, and disaster-impacted communities.

 Turning to the markets and capital markets news, sometimes it is interesting to see what is happening in other countries. Mizrahi-Tefahot, Israel's fourth-largest bank, said it was selling part of its mortgage portfolio to insurance company Menora Mivtachim as a means to bolster its balance sheet. Mizrahi-Tefahot, which is also Israel's top mortgage lender, will shed 80 percent of one portfolio of mortgages totaling 770 million shekels ($198 million). It has a total mortgage portfolio of some 100 billion shekels. The deal, which was approved by the Bank of Israel and is the first of its kind, comes in the wake of an agreement by Israel's regulators to develop a securitization market to increase the sources of funding in the economy and boost competition in the financial system.

 Here in the U.S. the federal government is trying to get taxpayers off the hook for billions of dollars of potential losses if another mortgage crisis arrives - and in the process, it's quietly giving birth to a new asset class. As mentioned in this commentary and in the press, Fannie Mae and Freddie Mac will ramp up sales of new types of securities (called Connecticut Avenue Securities and Structured Agency Credit Risk, respectively) that in effect transfer potential losses in a housing downturn to private investors. The sales are especially notable because issuances of private-label MBSs, which also give private investors mortgage exposure, are still moribund, or at best slow. The securities are essentially residential mortgage-backed securities - bonds whose performance is tied to that of a pool of mortgages. If the mortgages default, investors in the bonds could lose some or even their entire principal, according to the Wall Street Journal. But proponents of the securities see them becoming a mainstay of the bond and housing markets, and possibly even entering major bond indexes. If this goes well it would actually help primary mortgage rates for borrowers - and who doesn't want that?

 We're staring at a Monday morning with no Federal holidays in sight until Monday January 18^th. But the global financial markets are in a shambles based on Chinese stock markets falling dramatically. As we know stocks and bonds don't necessarily follow opposite paths, but today bonds are definitely being helped by the world-wide stock market route.

 And we have a heckuva lot of scheduled news this week starting with today's Construction Spending and ISM figures later this morning. Tomorrow we take a break, but resume Wednesday with the MBA's application numbers, the ADP employment change stats, Factory Orders, Durable Goods, and Trade Balance figures. On Wednesday the 6^th we'll also have the release of the Fed's Open Market Committee Minutes from the Dec. 15-16 meeting. Thursday we carry on with Challenger job cut numbers & Initial Jobless Claims. Friday we'll have all the employment data for December. We ended the year with the 10-year yield at 2.27% - it began 2015 at 2.17% so not a lot of net movement. This morning we're at 2.23% and agency MBS prices are better nearly .250 based on Asian stock market fears.