Something
for seniors to do to keep those "aging" grey cells active! (Answers
tomorrow.)
1.
Johnny's mother had three children. The first child was named April. The second
child was named May.
...What
was the third child's name?
2.
There is a clerk at the butcher shop, he is five feet ten inches tall and he
wears size 13 sneakers.
...What
does he weigh?
3.
Before Mt. Everest was discovered,
...what
was the highest mountain in the world?
4. How
much dirt is there in a hole
...that
measures two feet by three feet by four feet?
5. What
word in the English language
....is
always spelled incorrectly?
6.
Billy was born on December 28th, yet his birthday is always in the summer.
....How
is this possible?
7. In
California, you cannot take a picture of a man with a wooden leg.
...Why
not?
8. What
was the President's name
...in
1975?
9. If
you were running a race,
...and
you passed the person in 2nd place, what place would you be in now?
10.
Which is correct to say,
..."The
yolk of the egg are white" or "The yolk of the egg is white"?
11. If
a farmer has 5 haystacks in one field and 4 haystacks in the other field,
...how
many haystacks would he have if he combined them all in another field?
(Answers
tomorrow.)
Lenders
across the nation are switching to potlucks at the end of the month instead of
catered lunches. Why? A new survey of mortgage lenders by the MBA finds loan
production expenses have climbed 9.4% to $7,747 per loan vs. $7,080 before the
TRID requirement went into effect. I just made up the tidbit about the lunches,
and everyone knows that these costs are passed on to borrowers, but still... It
certainly helps explain why there is less refinancing in a similar rate
environment. But STRATMOR has a different take on the increase in cost -
see below.
Regarding
TRDI Jim Hennessy writes, "Do you suppose when coming up with TILA/RESPA
Integrated Disclosure that the acronym squad ever considered "Truly
Understanding Residential Disclosures"? (I think the industry might
have agreed with that one.)"
STRATMOR
released select findings from its TRID - Impact and Experience Spotlight
Survey. It has impacted not only the mortgage lender but also the borrowers it
was created to assist. Dr. Matt Lind writes, "Based on the results of
STRATMOR's Spotlight Survey, TRID implementation seems to be largely complete,
with the vast majority (87 percent) of survey respondents reporting
implementation either fully or mostly accomplished; only 1 percent said their
efforts were 'way behind.' Independent lenders were generally ahead of banks,
with TRID implementation fully accomplished at 72 percent of small and 80
percent of mid-sized independents, as compared to just 33 and 44 percent
respectively for small and mid-sized banks. In fact, banks seemed to have a
harder time with implementation all around, with 31 percent characterizing their
experience under TRID as either 'difficult' or 'terrible' versus only 16
percent of independents reporting similar results.
"Implementing
TRID has obviously not been easy for lenders. It's been costly as well. On
average, since October 2015, TRID has increased lender back office
fulfillment and post-closing costs by an average of $209 per loan, and
lenders are estimating that only about 17 percent of those costs can be
recovered through additional charges," said Dr. Matt. "However, TRID seems
to be associated with a significant pickup in borrower satisfaction, despite
somewhat slower application-to-closing times. At the end of the day, improving
the borrower's experience is a main objective of TRID, and in an increasingly
competitive origination market, it is also a primary goal of lenders as
well."
"The
increase in satisfaction is borne out by STRATMOR's MortgageSAT Borrower Satisfaction Program survey
data, which pulls in thousands of data points every month. The MortgageSAT data
shows that the time to process a mortgage from application to closing, after
initially increasing, is moving back towards pre-TRID levels. There has also been
a steady and substantial increase - from 85 to 91 percent - in the proportion
of borrowers being contacted by their lender prior to closing. Increasing such
contact was a key goal of TRID and has previously been shown by MortgageSAT to
be an important factor affecting overall borrower satisfaction. As a result,
overall borrower satisfaction with the origination process now stands at 91
percent, a record high since MortgageSAT was launched in 2013. (Full results of
the TRID - Impact and Experience Survey are available for purchase from
STRATMOR online at http://www.cvent.com/d/pfqxkh.)"
Regarding
the recent MBA figures on the cost per loan heading higher, it seems that,
"Over $425 per loan in the MBA's roughly $650 per loan increase can be
attributable to a 12.5% decline in volume from the 3rd to 4th
quarter. Assuming that $3,000 of the roughly $7,000 origination expense per
loan cited by the MBA for the 3rd quarter are fixed costs, a 12.5%
decline in volume results in a 14.2% increase the cost per loan or an increase
of about $426. Add our estimate of $209 in TRID costs and you get $635 per
loan, just about what the MBA estimated for the total increase from the 3rd
to the 4th quarter."
Speaking
of TRID I received this note. "Appraisers always will have many
questions as they continue traveling down the road to compliance. Am I doing
what is right? Am I going about my business that meets with regulation
guidelines? Some of those rules have changed since October, when the TILA-RESPA
Integrated Disclosure (TRID) rule took effect. "Mistakes made by the
appraiser regarding the report will result in hyper-diligence, meaning the
remedy time to fix those mistakes will be hours and not the usual 24- to
48-hour time frames," Jan Buchele, SVP of The William Fall Group &
Valuation Partners said.
"In
my opinion, there will be more pressure on the appraiser to be accurate.
Consumers losing earnest money deposits due to falling outside contractual
closing dates may come back and claim the appraiser caused these problems in
the first place costing them real money. Lenders will not deal with appraisers
who make mistakes that can delay closings." Of course, everything starts
with a quality report, where accuracy should be reflected to achieve
compliance. Buchele said a quality report convinces the reader that the
appraiser believes in its conclusion. "I believe that reconciled data is
what gets lost in reports," she said. "It is the responsibility of
the appraiser to provide results and explain the data used to arrive at that
determination of value. There's no such thing as too much or too little
information within a report. Each report has to contain the sufficient data for
that individual assignment and has to be detailed and explained to the reader
as to why this is the appropriate and necessary data."
There
are some definite thoughts on the appraisal side of the biz. From the Sierra
Nevada Foothills in California Sharon Nixon penned, "Here's a good article addressing the shortage of appraisers. Where
the use of trainees is concerned, the few lenders who will accept trainee
signatures most require the Supervisory Appraiser to sign also. The
Supervisory Appraiser takes full responsibility for the appraisal just as
he/she would if the signing appraiser. Most appraisers carry E & O
Insurance. There really is no shortage of appraisers. The lenders and AMCs
want to go cheap then they complain about lousy appraisals and long turn
times. They do not want to pay a reasonable and customary
fee and many appraisers are refusing to do lender or AMC work. Seasoned
appraisers are changing their client focus on non-lender work, retiring or
changing their profession."
As
a reminder there is a relatively extensive process to first become a
Trainee/Apprentice Appraiser, and then a Licensed Appraiser. To become a
Trainee one must complete and pass 75 hours of basic appraisal education, which
includes three courses (Basic Appraisal Principles 30 hours, Basic
Appraisal Procedures 30 hours, and 15-hour Universal Standards of Professional
Appraisal Practice (USPAP) 15 hours). Each Trainee Appraiser must be supervised
to get the required hours of experience before applying for the Licensed
Residential Appraiser level. Locating a certified appraiser is a very important
step to becoming an appraiser. The trainee and supervisory appraiser must keep
a log of work completed that will be reviewed when the trainee applies for any
license to the state regulatory body. All new Trainee (Beginning) Appraisers
and Supervisory Appraisers are required to complete an approved
Supervisor/Trainee course before they will be able to log experience hours.
Licensed
Appraisers can appraise non-complex, one- to four-unit residential properties
less than $1,000,000 and complex one- to four-unit residential properties less
than $250,000 in market value. They must complete a total of 150 hours of
education. The 150 hours includes the 75 hours required for the trainee level
and four additional courses: Residential Market Analysis and Highest and Best
Use (15 hours), Residential Appraiser Site Valuation and Cost Approach (15
hours), Residential Sales Comparison and Income Approaches (30 hours), and
Residential Report Writing and Case Studies (15 hours).
But
wait - there's more! New appraisers are required to complete 2,000 hours of
experience in no less than 12 months. These hours must be directly supervised
by an acceptable supervisory appraiser. Appraisers are required to maintain a
log jointly with the supervisory appraiser. And then an Appraisal
Qualifications Board (AQB)-approved Licensed Residential Real Property
Appraiser examination must be successfully completed. All education, degree,
and experience hours must be completed prior to taking the national exam.
And
appraisers must complete 30 semester hours of college-level education from an
accredited college, junior college, community college, or university. An
associate degree or higher satisfies this requirement. Wow!
For
anyone relying on a bond market rally to spur business, we had a nice rally in
the bond market yesterday after Fed Chair Yellen allayed investor concerns that
April's FOMC meeting might harbor the second rate hike in this tightening
cycle. She played up the downside risks to the U.S. economy more than investors
had expected although she did say that the fallout from 2016's market turmoil
is likely to be limited.
Today
we've already had the MBA's weekly mortgage indices. Apps dropped 1% with refis
down 3%. We've also had the March ADP report. Expected to come in around
190-200k, and down from February's 214k, it was indeed at 200k. Later we have
the $28 billion 7-year note auction. We closed the 10-year Tuesday at 1.81%
and this morning we're at 1.83% with agency MBS prices worse slightly.
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