(Thanks to Stephen S. for this one.)
College Education:
I'd been working on my business degree for
about a year when I finally got to take a popular finance course. I went to the
bookstore to buy the text and was shocked to find out that it would cost me
$96. I asked how much it was worth if I sold it back at the end of the
semester.
"You'll get $24," said the clerk.
"This is insane," I protested as
I wrote out the check.
"I know," replied the clerk
sympathetically. "I've always thought that a person who buys a book for
$96 and then sells it back for $24 should fail the course."
Stephen Covey said, "The key is not to prioritize what's on
your schedule, but to schedule your priorities." Catchy. Speaking of
schedules, my cat Myrtle saved me an internet search by telling me that
Daylight Savings Time doesn't end this year until November 6. (We change the
clocks again in early March, so we have four months of it.)
Capital markets folks are always looking for a new outlet for
loans. Michael
Lima, managing director of Whole Loan Trading at Mid America, writes, "We launched our Whole
Loan Trading division in December 2015 because we saw an opportunity to provide
an outlet for smaller independent mortgage bankers to offload troublesome
loans, either as a stand-alone purchase or in pools that might be too small
to attract other investors. Having started by purchasing performing
government-insured loans and then moved into defective TRID loans and
delinquent FHA/government-insured loans, we've been able to provide much
needed liquidity to market players while also improving our own position. As
the saying goes, 'A rising tide floats all boats,' and we intend to continue
seeking out niche opportunities for investment that can provide mutually
beneficial opportunities for us and the market at large."
In-between the primary and secondary markets are operations, and
Jim Boghos, President of Boghos Search Group, writes, "Loan Originator
chief concerns today continue to center on the lack of operational capacity.
Lenders who truly offer better service have a tremendous window of opportunity
for retail growth in today's market. The war for processors and underwriters
is as intense as I have ever seen it. The capacity issues are plaguing
service levels and therefore keeps the door wide open for nimbler
service-oriented companies to move into new markets and capture proven people
and market share." Jim will be in attendance at the MBA Conference Oct
23-26 in Boston. If you would like to schedule time with him to discuss your
recruitment and growth strategy, contact him at jboghos@boghosgroup.com
or call his office direct at 407-790-7500 ext. 100.
The training and event possibilities just keep coming!
Data Facts is hosting a webinar tomorrow, 10/19, at 11AM ET, 8AM PT, on the
trends that will affect lending practices throughout 2016 into 2017.
Grabbing the headlines for residential lenders, there are plenty of issues
lenders must watch. I am privileged to help host this webinar where we will
discuss interest rates, the election, "Know Before You Owe" issues,
the merger and acquisition environment, marketing service agreements, the
continuing QM versus non-QM discussion, measuring borrower satisfaction, and
MORE! Loan officers, closers, lending compliance officers, processors, and mortgage
managers can all benefit.
This week's complimentary webinar from National Mortgage
Professional Magazine titled "The Future of Mortgage
Marketing" will show you how to create, deploy and measure powerful
marketing plans that the top lenders are using. TagQuest will share proprietary
marketing strategies they've seen grab the attention of
"ready-to-buy" borrowers. Everyone wants their business to thrive
with new and repeat clients. From baby boomers to millennials, the strategies
used today are effective ways to grow your business. The webinar takes place on
Thursday, October 20, at 2PM EDT.
HomeBridge Wholesale is hosting a webinar on
October 21st titled "Grow your business through expanded plus
product". Register now to learn more about Non-Agency Loans.
Plaza is providing a webinar designed to teach the
basics of evaluating a self-employed borrower. Join MGIC on October 24th
for this comprehensive workshop that will help you dig deeper through today's
tax returns to develop a clear picture of your self-employed borrowers' monthly
cash flow and overall financial standing.
Learn about Plaza's FHA 203(k) Standard and Limited loan
programs on October 20th via its webinar. These renovation loan
programs enable borrowers to purchase a home that may need repairs or refinance
their existing home for the purpose of remodeling. Join us for this informative
webinar for an overview and comparison of Plaza's FHA 203(k) Standard and Limited
programs.
If you're in Utah November 17th and 18th,
or want to be in Utah then, there are two conferences, back to back, at the
same hotel about an hour outside of Salt Lake City. Mortgage Star's Leadership & Strategy for Professional Mortgage Women is
November 16th-17th at the Zermatt Resort in Utah, and
the next day is the Utah Association of Mortgage Professionals event.
Training and development is crucial for the success of your
recently-hired MLOs. Beginning November 29th, MBA's SOLO Course I offers the background context, real-world
examples and a unique learning experience that will set your MLOs apart and
play an important part in their loan production capabilities.
Join MBA and a panel of legal experts on December 14th
in North Carolina for a new workshop: Regulatory Impact of HMDA on Fair Lending and CRA Lending.
This workshop will go over all aspects of this new rule, including the
compliance and risk management challenges, and its regulatory implications for
both Fair Lending and the Community Reinvestment Act (CRA).
If you are looking to buy, sell or grow your business, or you're
simply exploring your options then MBA's Mergers & Acquisitions Workshop 2017 may
be of interest. Taking place February 22-23 at the Intercontinental
Dallas in Dallas, TX, this workshop will equip you with the knowledge you
need to make strategic informed decisions considering today's business and
regulatory environment.
The Mortgage Collaborative's Winter Lender Member Conference will be held March
1-4, 2017 at the Omni Scottsdale Resort & Spa at Montelucia in Scottsdale, Arizona.
"The conference provides The Collaborative's lender members a unique
opportunity to interact with top industry leaders and to attend and participate
in compelling educational and peer-to-peer networking sessions."
Speaking of the Mortgage Collaborative, it recently added twelve
new lenders to its national network of originating members, and yes, they're
all located in the United States: Admirals Bank, Bank of England Mortgage, CIS
Home Loans, Equity Prime Mortgage, Holland Mortgage Advisors, Home State Bank,
One Trust Home Loans, Pacific Trust Mortgage, South Pacific Financial,
Southwest Funding, US Mortgage Corporation, and Weichert Financial. The
addition of these companies increases the aggregate origination volume of The
Mortgage Collaborative's lender members to over $125 billion annually.
And you can bet those companies are selling to Freddie Mac and
Fannie Mae, as is everyone else - even if through large correspondent
investors. Employees from F&F aren't allowed to comment on news about them
- or much else. So go ahead and tell them that their mother wears army boots!
Seriously, what's new with those rascally agencies and others offering
conventional conforming products?
Fannie Mae and Freddie Mac have proposed sharing more risk
with insurance companies, prompting concerns from bond investors and industry groups.
"People have memories of the crisis, when state regulators shut down
monolines," said Chris Killian, head of SIFMA's securitization group.
Recently the MBA submitted comments in response to FHFA's RFI
on the GSEs' credit risk transfer programs. Its comment letter can be found
here, and "emphasizes the need to maintain a level
playing field in executing these programs, urges the GSEs to improve
transparency and consider borrower impact, and advocates for more
experimentation to find products that less volatile and simpler to use than the
current structures."
Eight years since Fannie Mae and Freddie Mac were put into
government conservatorship, and DSNews interviewed The Collingwood Group
President, Brian O'Reilly for his insight on the GSEs.
All Citi Correspondent credit package submissions as of
November 1, 2016 will require the Appraisal and the Fannie Mae and Freddie Mac
Submission Summary Reports in addition to the existing required
documents. To view/print this bulletin, CLICK HERE.
Fannie Mae is reminding Servicers
that, for the servicer to offer a Fannie Mae MyCity
Modification Trial Period Plan, the first Trial Period Plan payment due
date must be on or before December 1, 2016.
Ditech is expanding the guidelines to now permit
Second Home and Investment Property loans not serviced by ditech in the Fixed
Rate DU Refi Plus product. Also note all LPMI (ditech paid) products that
support Manufactured Homes are restricted to a 30 year only loan term.
Effective for all Conventional loans with application dates on
or after October 3, 2016, Sun West will calculate the Self Employed
Borrower's Income or Loss per updated Fannie Mae handbook: income analysis of the S-Corporations and income analysis of Partnership business.
As a result of widespread damage from Hurricane Matthew, United Guaranty has initiated a disaster policy and will
work with mortgage lenders and servicers to provide flexibility for borrowers
in declared disaster areas who are experiencing severe property damage and
interrupted employment. Forbearance measures to prevent foreclosure actions on
those coping with storm damage should follow the procedures for dealing with
homeowners affected by disasters, natural or otherwise, found in the guidelines
established by Freddie Mac and Fannie Mae. Areas of Florida, Georgia and the
Carolinas have been declared disaster areas due to damage from Hurricane
Matthew and related storms.
Wells Fargo is updating its
owner-occupancy requirements for cooperative (co-op) properties to align with
Fannie Mae guidelines by requiring 50% of the total stock or shares, and not
the total units, be owner occupied. It is also correcting the policy for
single-entity ownership to be based on units, as Fannie Mae requires, not stock
shares/occupancy rights.
Franklin American announced the expansion
of its Conventional High Balance Fixed Product to include 20 and 25 year terms.
These changes are effective immediately. Also, USDA/Rural FICO Changes are in
effective with locks beginning Oct. 14th.
Jumbo and non-conforming news? Only a little that I
have seen.
NYCB now offers a new Jumbo 30 Year Fixed
solution featuring LTVs up to 85% and no mortgage insurance requirements. Visit
Gemstone to review the new Jumbo Fixed 30 Year Program Guide (WSL: 1195).
Due to implementation of the new Non-Agency loan program,
administration fees have been updated for Pacific Union Financial 's Correspondent
loans based on channel, product and property state. Non-Agency loans include
all loans previously called labeled Jumbo or Non-Conforming. Effective November
1, 2016, Correspondent Non-Agency admin fees will be automatically determined
based on channel, product and property state.
Updated eligibility guidelines will be applicable for new NYCB
Jumbo Portfolio (ARM & Fixed) loans registered only in Alameda, San
Francisco and San Mateo counties in California on or after 10.16.16. Please see
Gemstone's Product Page for the updated guidelines for the NYCB Portfolio ARM (5/1, 7/1, 10/1) and NYCB Portfolio Fixed 15 Year. A loan level price adjustment
(LLPA) will apply to new loan registrations on 10.16.16 specific to these three
counties.
Loan Stream Wholesale has No Doc 3/1, 5/1 and
7/1 ARM's up to $2,000,000 with interest only options available. For details,
contact Loan Stream Wholesale at 800.760.1833 or inquiries@lswholesale.com.
Angel Oak offers Non-Warrantable Condos options
which include up to 90% LTV/CLTV (Single or Combo loans), up to 100% Investor
Concentration, No MI, Credit scores down to 500. For more information, contact
Bob: bob.hutchens@angeloakms.com
And where would the primary markets be for lenders & borrowers
if it weren't for the secondary markets setting the demand for loans?
Banks were the largest supporter of MBS (not counting the Fed
which is still buying about $2 billion a day) through Q3 according to recent
earnings statements. Other domestic real money and relative value accounts have
turned sellers of late. Analysts are quick to point out that it is important to
note that the 10-year rate is about 45 basis points off its summer lows, but
that primary mortgage rates have risen only 15 basis points! That being said,
however, many think that much of the slack has been taken out of the
primary-secondary spreads, and that further sell-offs could be transmitted to
retail borrowers more directly.
The U.S. Treasury market rallied (e.g., rates dropped) Monday as
we had softer-than-expected manufacturing data. (Industrial Production was +.1%
for September, and was -.5% in August; Capacity Utilization fell slightly.) By
the end of the day the yield on the 10-year was down to 1.77% and agency MBS
prices had improved a couple ticks - less than .125.
But the press is focused on the Federal Reserve's Open Market
Committee. The markets are now looking past November to its December meeting,
and there are enough data releases scheduled between now and December 13-14
that Fed speakers are unlikely to move the rate hike probability needle much.
This morning we've had the September Consumer Price Index and
Core CPI (+.3% and +.1%, about as expected - strong inflation hasn't been a
concern for many years). Later is the October NAHB Housing Market Index. We
find the 10-year sitting around 1.76% with agency MBS prices unchanged versus
yesterday's close.
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