Two newlyweds quickly realized their
marriage wasn't working and filed for a divorce.
The judge asked them what the problem was.
The husband replied: "In the five
weeks that we've been together, we haven't been able to agree on a single
thing."
The judge turned to the wife: "Have
you anything to say?"
She answered: "It's been six weeks,
your honor."
If you're a lender in only one state, just think about the state
and federal regulations you must deal with, not to mention the investor or
agency rules. If you're a nationwide lender, you can grapple with 49 other
rules and regulations. If you service loans, throw on some more. What if you're
a worldwide bank? Citigroup will place a "global regulatory affairs team" in Washington, D.C.,
to help the bank "assess the impact of existing and proposed regulations
on our franchise, clients and customers," according to an internal memo.
In job news, Fannie Mae has an opportunity to join its team of
Quality Control Specialists. "In this role, you will provide oversight
and consultation to many of our lenders on all aspects of loan quality. The
ideal candidate will have 10+ years' experience in underwriting and quality
control with an in-depth knowledge of the Selling Guide's QC requirements for
lenders. Strong analytical, creative problem solving, and negotiation skills.
The preferred locations are Chicago, Dallas, Philadelphia, or Pasadena,
although alternative locations may be considered. To join our talented team of
risk analysts, please apply here." For more information contact Lorna Kamau.
In wholesale & job news, Mid America Mortgage has been quietly establishing
itself as the premier national agent of eClosings and eNotes for the Wholesale
and Emerging Banker space. To that end, we have collaborated with Calyx to
create an interface allowing Calyx users to obtain MAM pricing indications,
guidelines and eligibility criteria, as well as generate a timely, compliant
LE, without leaving the Calyx platform. MAM is also giving its brokers free
access to the validation services offered as part Fannie Mae's Day One
Certainty initiative and eliminating the 4506-T requirement for agency loans
that use AUS findings that qualify under Day One Certainty. Finally, MAM has
released a series of pricing enhancements to its FICO adjusters on government
products, which can be found in Optimal Blue, Mortech, Calyx Point and MortgageElements.com. Our Wholesale & Non-Delegated
Correspondent division is selectively seeking regional Account Executives to
support our efforts in this area. Interested parties should contact Adam Rieke,
MAM's Director of TPO Lending.
And in appraisal management news, InHouseUSA will discuss Predictive Estimated Due
Date (PEDD) technology, how they provide clear proactive communications during
appraisal process and their secret to reducing appraisal turn times at the
Ellie Mae Experience 17. The InHouseUSA team will be found at Booth 12,
their private meeting suite, or at the cocktail reception that they will host
at Senor Frog's on Tuesday, March 7th. InHouseUSA offers lenders
integrated with Ellie Mae Encompass the bandwidth to work compliantly with a
lender's panel and a limitless number of AMCs to maintain a single system for
reporting and a consistent quality control policy. The Encompass Experience
2017 is at the Wynn Las Vegas on March 6-8. Do not miss the chance to have a
live session by booking a meeting with an InHouseUSA team member here or sign up here to get on their invitation list to Senor
Frogs.
"I come home one Friday, had to tell the landlady
I'da lost my job.
She said that don't confront me, long as I get my money next
Friday.
Now next Friday come I didn't get the rent, and out the door I
went!"
So sang George Thorogood and the Destroyers. It is
always good for residential loan originators to know the rental situation in
their area. If rental rates, or house prices, are going up 5% a year and incomes
are only going up 2% a year, well, that is a problem. Until recently, the
combination of a shortage of multifamily units, booming demographic demand from
Millennials, and an improving economy meant strong demand for apartments. This
resulted in strong rental growth and large increases in supply. But, things are
reversing. The largest cohort of Millennials is almost 26, job growth is
slowing, years of new supply are saturating the market, and now banks are
becoming skittish about lending to multifamily developers.
RentRange identified 25 markets with the largest rental
rate increases. First prize went to McAllen, Texas while Orlando, Florida rent
growth was the lowest. RentRange, a provider of market data and analytics for
the housing industry, released data ranking the top 25 U.S. Metropolitan
Statistical Areas (MSAs) by average rental rate increase for single-family
homes between the fourth quarter (Q4) of 2016 and the same quarter in 2015. The
data analysis also identified the average vacancy rate within these markets in
Q4 2016.
"The Q4 2016 RentRange data identified rental rate
increases in areas like Cape Coral and Portland, both of which moved up the
list into the top five, as well as newcomers including McAllen, Denver, Boston,
Nashville and Miami. While rents remain high in the Bay Area, San Francisco
dropped several positions, indicating that the year-over-year rent change was
not as significant as seen in past years. Comparatively, San Jose made the list
as a new addition in Q4 2016."
The highest vacancy rates are in the Southeast region,
where vacancy rates range from 10.5 percent in Charleston to 20.4 percent in
Myrtle Beach. "In these areas, builders and investors may need to compete
for a limited number of renters. An oversupply of new properties can drive up
the vacancy rate and eventually push rental rates down, and this is currently
happening in Myrtle Beach, where more than 3,100 new homes were built in 2015,
a 94 percent increase compared to two years earlier."
"As we begin 2017, it continues to look bright for
single-family rental investors," said Wally Charnoff, chief executive
officer, RentRange Data Services. "Compared to the Q3 2016 change in rent,
we are seeing the percentage change begin to lessen while rents continue to
increase, which should ultimately stabilize demand, keeping vacancy rates down.
It remains important for investors to look at stability within a market,
focusing on the market's activity over time to ensure there is a good balance -
low historical volatility with a current upswing."
It seems that landlords are taking over the U.S. housing market. As
Wall Street backs off of buying rental homes, small investors are picking up
the slack. Rising home prices slow new home construction, and demographic
shifts push homeownership rates to 50-year lows, the U.S. is increasingly a
country of renters and landlords.
First time homebuyers face a shortage of real estate going
into 2017, according to Redfin. For starter homes, the problem is
acute. Over the past year, prices have risen 7.5% as inventory fell 12%. This
increased the percent of income needed to buy a median home in that segment to
38.5%, an increase of about 2 percentage points. They are hopeful that the
bottom is in with respect to tight inventory, however some of that will depend
on regulatory policies of the new administration. On the plus side, credit will
probably ease a bit as the financial system gets more clarity on regulation. On
the negative side, immigration limits will exacerbate the construction labor
shortage we currently are experiencing.
Rental trends are greatly influenced by demand, and much
of the demand comes from people in their 20s. And the trend is evident at the
end of 2016. While mortgages for home purchases made up the bulk of loans taken
out by millennials over the second half of 2016, they gradually declined as a
percentage of all loans as the year went on. The Ellie Mae Millennial Tracker first started tracking in June
of 2016. More than half (57 percent) of millennial borrowers took out
conventional loans during the latter part of 2016, followed by FHA loans (40
percent) and VA loans (1 percent). FICO scores on closed purchase loans by
millennials hovered in the low 720s from June through November. The average
FICO score on refinances started at 721 in June, rose to a peak of 750 in
October, then tapered off to 747 in November.
"While we have seen a steady increase in refinances
among millennials, the bulk of this generation is still entering the market as
first-time homebuyers," said Joe Tyrrell, executive vice president of
corporate strategy at Ellie Mae. "Across the board, we're continuing to
see strong interest in home ownership from this younger generation."
And when you think "first time home buyer" it is
good to know about...Ginnie & FHA changes.
In case you missed Ginnie Mae's recent Notes & News.
Back in early January, FHA announced its intention
to implement the new Loan Review System (LRS), which will provide an electronic
platform for FHA's Title II Single Family quality control functions. FHA is in
the final stages of technology development, and will announce the
implementation date soon. Loan Review System (LRS): Implementation and Process
Changes. Mortgagees are encouraged to view the recording accessible from the
Single Family Housing Archived Webinars page. This recorded webinar provides an
overview of LRS functionality and related process changes.
Effective Tuesday, February 28, PennyMac
is updating the FHA loan DTI overlay
for Best Effort and Mandatory deliveries.
Down Payment Resource has a new program that
tackles student loan and down payment challenges. Find out how it works. Wondering who qualifies for the down
payment program? Find out eligibility requirements.
Ditech has rolled out Home Possible & Home
Possible Advantage. Ditech now offers a full complement of low down-payment
programs... FNMA 97, Home Ready, Home Possible, Home Possible Advantage, FHA,
USDA & VA.
US Bank issued underwriting guideline updates that
effect 2nd Appraisal Requirements, 2017 FHA / VA Loan Limits, and VA
- Student Loan Debt Calculations. Refer to the full Guidelines, in the Seller
Guide, for complete details. These changes are effective immediately for any
new registration / lock or loans in the pipeline.
Effective immediately, M&T Bank will no longer
require the completion of a Warranty form for FHA Streamline Refinance
Condominium or PUD transactions. Lenders are reminded to underwrite all
projects to meet FHA requirements as published in FHA Handbook
4000.1.
Mountain West Financial announced product
enhancements which include FHA deduction of #2106 expenses - no deduction of
#2106 expenses will be required for wage earners, or commission earnings of 25%
or less. Direct Pricing is no longer required for 5 - 6 financed
properties. Conforming conventional guidance applies. DU Refi Plus
12-month reserve is no longer required for DTI greater than 50%. FHA High
Balance with lowered FICO score to 620. FHA High Balance lowered FICO score to
680 for DTI up to 55%, cannot exceed 55%.
Effective immediately, NewLeaf Wholesale added
Manufactured Homes located in Condominium Projects or Planned Unit Developments
(PUDs) as an eligible property type under the following products: NewLeaf 1 -
DU-LP Conforming Manufactured Housing. NewLeaf 2 - DU Conforming Manufactured
Housing. NewLeaf FHA Conforming and High Balance. NewLeaf VA Conforming, High
Balance and IRRRL.
Capital Markets
Seasonal patterns going back decades suggest that Treasury yields may slide, despite business-friendly
policies of the Trump administration and indications that the Federal Reserve
will increase rates. "I would make sure to respect the seasonals in
thinking about the odds that we get a significant sell-off based on
Trumponomics," said Ian Lyngen of BMO Capital Markets.
Interest rates continue to be range-bound although last
week we closed near the lower end of the rate range. In fact, if one uses the
10-year T-note as a proxy for the general interest rate environment, it hit its
lowest rate in over a month (2.31%, closing at 2.32%). On the mortgage side
rates were helped by the continuing slowdown in supply and the continued strong
demand for product (especially by the NY Fed). On Friday, the 10-year improved
.625, the 5-year (which more closely mimics MBS) and MBS prices improved about
.375.
This week's economic calendar is busy despite February
payrolls not being released until the following week on March 10. This morning
we've already had January's Durable Goods (+1.8%, but ex-transportation -.2%).
Coming up are January Pending Home Sales Index, at 10:00am, expected higher.
Tuesday brings GDP, International Trade in Goods, S&P/Case-Shiller HPI,
Chicago PMI and Consumer Confidence. Wednesday has the MBA's application
figures, Personal Income and Outlays, PMI Manufacturing Index, ISM
Manufacturing Index, Construction Spending, and the Fed's Beige Book. Thursday
brings the usual Jobless Claim but also Challenger Job Cuts. Friday closes out
with ISM Non-Manufacturing Index (no unemployment data).
That's a lot of economic news. Will it make any
difference? Perhaps. The bond market certainly believes that the Fed is going
to raise short-term rates a couple times this year, although global problems
could certainly drive money into our bond market pushing down rates. Or our
economy could slow slightly, which would also push rates lower. In the
meantime, we start the week with the 10-year yielding 2.34% and agency MBS
prices worse .125 from late last week.
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