"I've surely gotten old! I've
had two bypass surgeries, a hip replacement, new knees, fought prostate cancer
and diabetes. I'm half blind, can't hear anything quieter than a jet engine. I
take 40 different medications that make me dizzy, winded, and subject to
blackouts. I have bouts with dementia, have poor circulation, hardly feel my
hands and feet anymore. I can't remember if I'm 85 or 92, and I've lost all my
friends. But, thank God, I still have my Florida driver's license."
Today I am in Kansas City,
where it is "only" 96 degrees. Phoenix hit 119 degrees this week.
Let's ask the folks over there what they think about housing made out of metal shipping containers. Seriously,
in heat like that we have to use our noggins - otherwise tragic things can
happen, like a gal dying after biking in the sky-high temperatures.
Are you maximizing
opportunities to work with low-to-moderate income (LMI) borrowers? Join
National Mortgage Professional Magazine on Thursday, June 23 at 2PM EDT for a
complimentary webinar titled "Are Low-to-Moderate Income Borrowers Worth
the Risk?" presented by Freedom Mortgage. You will learn that just
because these LMI borrowers have low FICO scores doesn't mean they're a bad
investment. We know everyone deserves a chance (or two) to achieve the American
dream of home-ownership. In this webinar we'll shine the light on fact vs.
fiction for these loans and why we embrace LMI borrowers. Click here to sign up for this FREE Webinar!
Registration is now open
for The Mortgage Collaborative's Summer Lender Member Conference, which will take place
August 21-23 at the Four Seasons Hotel & Resort in Denver, CO. The
conference will feature a powerful agenda filled with presentations from top
industry leaders, relevant educational breakout tracks, and a series of peer-to
peer networking sessions and events. For more information, contact Rich Swerbinsky.
AllRegs by Ellie
Maestill hascourses available for everything from underwriting and
compliance, to QC, appraisal review and more. Click here to view July and August training topics brought to
you by AllRegs.
Have you taken advantage
of one of Fannie Mae's HFI InDepth webinar trainings? There are a several upcoming
webinars available including its new Customer Care Course designed to help you learn more about
the transformation redesign of the loss mitigation process on July 7th.
And Alight Inc., the
fast-growing provider of real-time financial optimization applications across a
range of industries, announced that SWBC Mortgage Corporation, a
wholly-owned subsidiary of a 40 year-old financial services company, SWBC, has
selected the Alight Mortgage Lending platform to support the firm's growth
objectives and help optimize performance and profitability.
There is renewed interest in the future of Fannie & Freddie
lately. Partly due to this being an election year where big, long-term
problems get their every 4-year moment in the sun and partly because some
shareholders continue to push for their rights (or perceived rights) demanding a
determination on the value of their shares. Bloomberg reported the likely Clinton Plan, likely because two of her
closest campaign advisors were intimately involved in developing housing policy
at the Obama Administration, is to replace Fannie & Freddie with a single,
government entity resembling the FDIC. The merits of the plan notwithstanding
the proposal will be altered, one way or the other, depending on who Secretary
Clinton selects as her running mate and how the general election evolves on
questions of government support of the economy. Whereas housing policy
might generate one or two questions in a single debate, the overall theme of
government involvement in the economy is likely to only grow as we near
November.
Fannie Mae's update to
Desktop Underwriter (DU) is scheduled for the week of September 24, 2016.
"We are focused on delivering the best technology solutions that provide
certainty and stability for our customers. Our release date ensures that all of
our customers have the time they need to fully test and transition to the new
DU version 10.0. We remain unwavering in our commitment to earn our
customers' business every day and look forward to bringing them the industry
leading capabilities of the enhanced DU, such as use of trended data in credit
risk assessment and automated underwriting for borrowers with no traditional
credit to expand access to mortgage financing."
In Saturday's commentary
I discussed the upcoming changes to the good ol' 1003, the Uniform Residential
Loan Application. Yes, changes are in the works. Some, given the recent TRID
experience, view the changes as a nightmare. Others don't. But just think of
all the other aspects of pricing, tracking, doc drawing, title, etc., etc.,
information from the 1003 touches.
In response, from Tracy
Sanderson, Banner Bank's VP/Policy & Training Manager, comes, "Fannie Mae's website contains an update, and it has to do
with the Uniform Loan Application Dataset (ULAD). Fannie Mae and Freddie Mac are
revising and redesigning the Uniform Residential Loan Application (URLA) and
developing a corresponding standardized dataset, the Uniform Loan Application
Dataset (ULAD). 'The revised URLA form will provide lenders and borrowers with
greater clarity and an easier, more consumer-friendly loan application.' Yep,
it's coming, and the format will be similar to LE and CD. For simple
borrowers, it might only be 3 pages long; for complex borrowers, it could be
15+. The target implementation date is 1/1/17 (think HMDA)."
All this chatter about
Fannie Mae reminded me of a recent story opining that U.S. taxpayers may be
paying too much for construction of the new headquarters of Fannie Mae.
"The new Fannie Mae building in downtown Washington has seen its per-square-foot
costs increase by more than 50 percent in about eighteen months, according to
the watchdog's report, which said the original cost estimate for the structure
was $770 million."
It goes on. "We
believe there are significant financial and reputational risks from the
projected costs associated with Fannie Mae's relocation of its
headquarters," reads the report from the independent auditor of the
Federal Housing Finance Agency (FHFA). Director Watt shot back, "The sale
of the properties Fannie Mae currently owns and occupies will result in
substantial additional financial benefits," Watt wrote in response to a
draft of the report. The new building envisions spiral staircases and
'bridges' that transverse the building but those are part of a modern building
design and not extravagances," Watt wrote.
At the other agency, Freddie Mac hit $650 billion in
transferred credit risk to private capital. This is made up of $500 billion in
single-family loans since 2013 and $150 billion in multifamily loans since
2009. On top of that, Freddie spread the word that it has significantly reduced
its legacy mortgage credit risk through the securitization and/or sale of more
than $50 billion in less liquid and impaired assets from its mortgage-related
portfolio since 2013.
Freddie
Mac debuted its first official credit risk transfer program in 2009 with a
multifamily deal, and then in 2013, for single-family mortgages, did a transfer
of credit risk when it introduced both Structured Agency Credit Risk (STACR)
debt notes, which are sold to bond market investors, and Agency Credit
Insurance Structure (ACIS), which transfers risk to insurance companies.
Greystone
announced it has originated and closed $1,000,000,000 in Freddie Mac Small
Balance Loans since the Freddie Mac Small Balance Loan program was launched
in October 2014. In that time, Greystone has closed over 350 Freddie Mac Small
Balance Loan transactions from the East Coast to the West Coast.
As
noted last week in this commentary, Resitrader, a provider of whole loan
mortgage trade management software, announced that more than $1 billion in
loans have been presented and delivered on its mortgage trading platform since
its introduction late last year. "Resitrader automatically normalizes loan data so buyers can
easily search for loans by investment criteria and loan type."
Call it Brexit or
Bremain, it is dominating the world bond and stock markets. Trading desks
everywhere are girding their loans. For example, clients of Bank of America
Merrill Lynch received this note of warning. (And take notice of the spelling
of "endeavor" - a clue as to its origin.) "We would like to take
this opportunity to remind you of the measures Bank of America Merrill Lynch
(BofAML) has in place for trading in volatile market conditions.
"In periods of
extreme volatility, we have on some occasions seen delays to trades, including
requests for quotes (RFQs), order taking, order processing, price streaming
and/or market data dissemination. As a reminder, we are not obligated to
provide price streaming, respond to RFQs, or accept orders for execution in any
particular manner, and all determinations of if, whether, or when market
criteria have been met for execution shall be made by us in our sole
discretion.
"BofAML's electronic
trading platforms have volatility controls that may temporarily suspend
execution and price streaming in response to rapid and adverse market
movements. It is possible that different clients submitting orders or
requesting trades with similar profiles may achieve different outcomes,
including whether and when orders or trades will be executed.
"During volatile
markets, we will endeavour to continue to serve clients but we may not be able
to provide the product offering, level of execution, liquidity and pricing -
including in electronic markets - as would be the case under more
normalized market conditions.
It seems like the Brexit
campaign was losing momentum ahead of Thursday's UK referendum, with polls
showing more support for "Bremain" - darn those Brits are clever with
words. And so Monday started off with a sell-off prior to the opening, and
pretty much stayed there all day. So aside from some intra-security and
inter-rate minor movement, not much happened - so I won't waste your time.
So now its Tuesday, and the sun
will start rising later and setting sooner. Fed Chair Yellen's semi-annual
Monetary Policy Report before the Senate Banking Committee, starting at 9AM
Kansas time, will be the highlight today when she will get a chance to
elucidate on recent Fed decisions. If you have some spare change sitting around
the Treasury will auction $50 billion of 1-month bills, $20 billion of 1-year
bills at 11:30am, followed by $34 billion of 5-year notes at 1:00pm. We
closed Monday with the 10-year sitting at 1.67% and in the very early going today
it is at 1.68% with agency MBS prices a shade worse.
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