New Mortgage Products - More On Risk Sharing

(Warning: religious overtones for those sensitive to them.)

 

Three men were playing golf. The course was a wicked dogleg with a large water hazard.

The first man stepped up to the tee and hit a sharp slice into the water hazard. He walked up to the water; it parted and he lofted his ball within one foot of the hole.

The next man stepped up and hit the ball. Sure enough, he sliced it so that it landed on top of the water. He walked across the surface of the water and hit the ball within six inches of the hole.

The third man stepped up, hit the ball, and sliced it. The ball was just about to land in the water when a trout jumped out of the water and grabbed it in his mouth. An eagle swooped down, scooped up the fish, and flew off. As the eagle banked over the green, lightning struck it, it dropped the fish, the fish dropped the ball, and it landed in the hole for a hole in one.

Moses turned to Jesus and said, "I really hate playing golf with your Dad."

 

There are traveler trailers and motor homes but have you heard of a Home RV? EscapeHomes owner Dan Dobrowoski has created a tiny home, the Traveler XL that is also movable, and it's only 319-square feet! Ideal for Millennials camping out in the parking lot rather than buying a downtown Denver loft for $800,000, the price starts at $74,500. The Traveler XL has a queen-size, first-floor bedroom, sleeps as many as eight people and can include full-sized appliances for additional cost. These tiny homes range from micro cottage and portable homes to micro apartment units

New products? Yes, they're coming out.

 For correspondents looking for new products, Deephaven Mortgage continues to provide innovative products to help originators find opportunity in an ever evolving origination market. With the release of the Deephaven Investor Advantage Loan (DIAL) program, we have designed a professional investor's product with a variety of simplified financing options. This new product is an asset-based underwrite that allows for loan amounts up to $2M, purchase and refinance transactions up to 75% LTV, foreign national borrowers, properties with 1 - 4 units, and the optionality of both ARM structures and IO payment periods. Please contact Brett Hively or complete the contact request form at deephavenmortgage.com to become an approved seller of Deephaven Mortgage products today!

 Subservicer oversight costs continue to increase and it isn't easy finding areas where you can satisfy the regulatory mandates while saving money.  Having visited most of the major subservicers in the last 12 months, Mortgage Quality Management & Research (MQMR) and its sister company, Subsequent QC, are once again organizing coordinated onsites to save lenders time and money. This year MQMR will be sending its servicing team and vendor management team to perform a combined audit of subservicers on behalf of multiple lenders.  Save money by sharing the costs with other lenders while receiving the added benefit of having a servicing and vendor management specialist performing the review.  For more information about upcoming subservicer audits, reach out to Casey Hughes.

 A while back Chris M. wrote that his kids gave him this one: "What did the lemon say to the teacher?" "Sorry for being tarty." So let's play catch up on new products and interesting changes to existing products.

 Kinecta Federal Credit Union has slightly loosened its rate lock commitment requirements. Files are now eligible for 45 and 60 day locks with the contingency that a Loan Estimate request has been submitted.

 Stearns Lending is now offering Freddie Mac's Home Possibleand Home Possible Advantage programs. With the launch of the FNMA HomeReady product Stearns will purchase the My Community Mortgage (MCM) product through April 30th, 2016. Yes it is now offering FNMA HomeReady. Want to learn more? Click Here.

 Fifth Third's policy has been updated to no longer restrict 1031 exchanges for the seller. A 1031 exchange is a real estate transaction involving the sale of one investment property with the tax on the capital gain deferred due to the qualified purchase of another like-kind property in exchange. However, 1031 exchanges for the borrower remain ineligible.

 Caliber Wholesale can qualify FHA borrowers with 600 minimum FICO when they are applying for a fixed-rate loan, buying a primary residence and maximum LTV/CLTV is 96.5/105%.

 Lakeview Servicing announced it is now offering Lender Paid Mortgage Insurance for loans with LTV's greater than 80%. 

 NewLeaf's High Ratio and Access product guidelines have been updated to allow lower reserve requirements and other enhancements. Also, NewLeaf has created a job aid to assist in walking borrowers through the simple steps of eConsent and eSign. The job aid is available at the following link: NewLeaf Wholesale eConsent and eSign Customer Experience

 Remember when...Ditech began purchasing Piggyback Closed End Second Qualified Mortgages that fall into the Rebuttable Presumption classification and which otherwise meet our loan purchase eligibility requirements? Loans were classified as QM Rebuttable Presumption when the APR was greater than or equal to the Average Prime Offer Rate (APOR) for a comparable transaction as of the date the interest rate is set + 3.5%.

 But Ditech has seen exceptional growth in its Correspondent Lending Division in the last 18 months. To continue this momentum, the company is expanding the services it offers to a larger number of correspondent clients by focusing on the non-delegated lending space. In addition, Ditech's Correspondent Lending Division has brought on board two leaders in the non-delegated space to develop its market share across the country. Congratulations to John Dubisky, Sales Director for the Eastern Region of the U.S. and Marcy MacDonnell, Sales Director for the Western Region of the U.S.

 Mid America Mortgage, Inc. owner and CEO Jeff Bode announced the firm has developed Mid America Concierge, an online marketing support portal for its strategic business partners, including real estate agents and brokers. The portal provides Mid America's partners with access to marketing and promotional materials, in addition to services for lead generation, social media marketing, customer relationship management (CRM) and more. Click the link to learn more.

 Citadel Servicing's Non-Prime product extends options to 90% LTV, 2yrs from Foreclosure or Bankruptcy. If you would like more information, inquire via email to sales@citadelservicing.com. And 2nd mortgages are back at Citadel Servicing. Borrowers can qualify with up to 85% CLTV, 1 day seasoning from short sale, up to $1milion combined loan amount, loan amounts up to $500,000, bank statements used for income self-employed.

 Kinecta updated its Fixed Seconds matrices to reflect the following changes: the minimum credit score is reduced from 720 to 710 and the maximum loan amount decreased from $500,000 to $450,000. In addition, its Jumbo ARM cash-out seasoning requirements were clarified based on investor guidelines. Clarifications include cash out ineligibility for properties listed for sale within the last 12 months. To be eligible for a cash-out refinance, the borrower must have owned the property for a minimum of 6 months prior to the application date.

 NYCB Mortgage is now accepting HomeReady Mortgage applications for loans registered on or after January 24^th.

 Started in this commentary Monday, the discussion about risk sharing continues and I received this note from Pete Mills with the MBA. "Rob, Scott Olson's comments on risk sharing are puzzling. The bottom line is that FHFA has added expansion of up front risk share to the GSE scorecard, and it is being done today in a form that is completely inaccessible to smaller lenders, and in a way that could undo years of efforts by MBA to eliminate G-fee differentials based on the asset size or volume of deliveries by the seller.

 "It is precisely because of the JPM structure that Scott highlighted in his note to you that we are insisting that FHFA expand risk share options to all lenders. Since the GSEs are committed to doing these transactions, we object to the fact that the up-front versions can only be done with very large institutions. Our letter to Director Watt clearly points this out. We believe any risk sharing should not be limited to only a few large institutions. MI companies are eager to participate and create an offering that all lenders - IMBs, community banks, and credit unions - would have access to. I encourage your readers to read our letter to the Director and imagine how unleveled the market will get without expanded risk share offerings for all sellers, considering, again, that FHFA plans to expand the use of up front risk share."

 Shifting to the actual day-to-day bond markets few mortgage bankers that I know of base their business plan on interest rates. But they should know that JPMorgan has moved its expectation for the next FOMC rate hike from March to June given global events, ongoing strength in the dollar, and deterioration in inflation measures. And JPMorgan has cut its Q4 GDP projection from 1.0% to 0.1%, following weaker-than-expected December retail sales and an expectation for lower business inventories. And a weaker economy tends to favor lower rates - but no one is talking about yet another refi boom yet.

 Tuesday agency mortgage-backed securities ended the day "higher and tighter to Treasuries", and the stock market turned in a nice performance as well. The 10-year yield managed to break through 2% just ahead of the close finishing near the highs of the day. Yes, the Fed continues to use early payoff monies to purchase new MBS although no MBS FedTrade operation will be conducted today due to the FOMC announcement.

 This morning we've already had the MBA's tally of last week's apps (+9% adjusted for the holiday - purchases +5% and refis +11% accounting for 59% of all applications). Later we have December New Sales at 9AM CST expected slightly higher, and the Treasury will auction $15 billion 2-year FRNs at 10:30AM CST and $35 billion 5-year notes at 12PM CST. Finally the FOMC statement is due at 1PM CST. We closed the 10-year at the easy-to-remember 2.00% yield Tuesday and this morning things are roughly unchanged from those levels.