Jumbo Delegated Programs? Sure

by rchrisman@robchrisman.com

 

At Sunday School they were teaching how God created everything, including human beings.

Little Johnny seemed especially intent when they told him how Eve was created out of one of Adam's ribs.

Later in the week his mother noticed him lying down as though he were ill, and she asked, "Johnny, what is the matter?"

Little Johnny responded, "I have pain in my side. I think I'm going to have a wife."  

 

There is an ever growing problem about women in the workforce. Women make around 80% of what men make in the same job. Another scary fact is that the construction industry consists of only 9% women. Construction has always been perceived as a "male job" but women are a growing force in the construction industry. While the national wage average for women is 82% of what their male counterparts make, in the construction industry, women make 93.4% of what males make. BuilderOnline notes that, "The roles females typically fill in the industry tend to be more focused around project management, operations, and business development. We also still see a lot of women in the industry filing administrative roles like assistant or project coordinator." Obviously the role of women in mortgage banking can't be underestimated, and let's hope it continues to grow in managment.

Over at STRATMOR, Senior Partner Dr. Matt Lind tells us that STRATMOR has just launched another Spotlight Survey, this time addressing Retail Loan Originator Ramp-Up Practices and Experiences. According to Dr. Matt, this latest survey focuses on both the recruitment, training and compensation of new retail loan originators and the volume expectations over time that lenders have for new LO hires, and compares the performances of experienced originators and so-called "newbies." Importantly, survey results should indicate both what works and what doesn't as measured by the percentage of new hires that fail to meet minimum expectations. With the mortgage industry experiencing slow growth, it would seem important for lenders to learn about what their peers are doing to grow their retail sales force and with what success. The survey will remain open until May 15th with results expected to be available around June 1st. As with all Spotlight surveys, there is no up-front charge to take the survey and those who participate can purchase results when they come available for a modest fee.. Click here if you are interested in taking this important 15-minute survey.

 Citing the rapid growth of MSR portfolios held by nonbanks in recent years, the Government Accountability Office issued a report last month in which it called on the FHFA and CFPB to provide more oversight of nonbank mortgage servicers. With more and more companies retaining servicing, effective oversight is not only required by the regulators and the CFPB, but is a prudent control to ensure that risks to a company's assets are minimized. Richey May & Co, an accounting firm recognized as a leader in providing audit, tax, compliance and oversight services within the industry, is heading out to Cenlar in May to conduct a comprehensive subservicer oversight review that includes loan-level testing and a thorough review of Cenlar's policies and procedures and internal controls. If you are an agency seller/servicer, or GNMA issuer, you are fully responsible for monitoring and overseeing your subservicer's performance as required by the CFPB and other regulators. For more information about the upcoming Cenlar review, or to participate in the Dovenmuehle review conducted earlier this year, please contact Kurt Blohm.

 Switching to banking news, the announced mergers & acquisitions quieted down slightly this last week: in Michigan West Shore Bank ($390mm) will acquire West Michigan Bank & Trust ($40mm) for about $8.3mm in cash, and in Tennessee Citizens Tri-County Bank ($692mm) will acquire Franklin County United Bank ($78mm).

 "Rob, are correspondent investors like Chase offering clients its delegated non-agency program?" Yes they are - but you should ask your local reps about programs. (Plenty of banks are keeping their jumbo originations in their portfolios.) Remember that some lenders ("some" perhaps being an understatement) have had operational issues ("issues" perhaps being an understatement) with purchase times with Chase - but many tell me that the process has improved. And word has it that Chase jumbo delegation must be QM-Safe Harbor or QM-Rebuttable presumption - Delegated Non-Agency amortizing transactions with a Non-QM designation are not eligible. But correspondents like Chase believe it gives the client more control over the loan process.

 Continuing along with the Chase program, as an example, the letter clients normally receive goes something like, "You have been chosen by Chase to participate in our Delegated Non-Agency Underwriting Program. Your Delegated Non-Agency Underwriting authority allows you to underwrite Non-Agency transactions within the approved delegated authority, Rep and Warrant transactions secured by condominium and PUD properties, Rep and Warrant revocable trusts, and submit some Non-Agency transactions within your Delegated Non-Agency authority for Chase Underwriting for a fee of $750."

 But it isn't a matter of just flipping a switch. With Chase, "Your Delegated Non-Agency Underwriting authority is contingent upon the successful completion of the underwriting test case evaluation phase ('Evaluation Phase'), and receipt and acceptance of your completed and signed Chase Delegated Non-Agency Underwriting Addendum to the Correspondent Origination and Sales Agreement ('Addendum'), and issuance of your approval letter by Chase.

 "To ensure loan salability and compliance with Chase credit, appraisal, and product requirements, we will perform a quality review on a minimum of 10 Non-Agency files prior to allowing submission of Delegated Non-Agency transactions. The loans selected should be representative of your Non-Agency production and in clear-to-close condition."

 As a reminder I am merely using Chase as an example, but in its program clients can still have Chase do the underwriting. "This enhanced program will allow you to submit some Non-Agency transactions within your Delegated Non-Agency Underwriting authority for Chase Underwriting for a fee of $750. The maximum number of Non-Agency loans allowed to be submitted to Chase for underwriting during any calendar quarter is the greater of 1 loan or 10% of your Non-Agency loans delivered to Chase in that calendar quarter. The number of Non-Agency loans allowed for Chase Underwriting will be calculated at the end of each calendar quarter based on Non-Agency loans received (number of Non-Agency loans underwritten by Chase as a percentage of total number of Non-Agency closed loan packages delivered for purchase by Chase)."

 While we're on this topic, Wells Fargo Funding rolled out process enhancements for Non-Conforming Loans. Beginning April 4 Sellers have the ability to: Order Direct - Order appraisal products for Non-Conforming Loans directly from any Wells Fargo Funding-authorized appraisal management company (AMC): Clear Capital, PCV MurcorTM (NEW! Authorized AMC beginning April 4), Rels Valuation (*Rels Valuation's Share with Investor function will be retired in May 2016) and ServiceLink. Deliver Direct - Deliver the first-generation Adobe PDF and industry-standard XML for your final appraisals on Non-Conforming Loans directly via its Wells Fargo Funding website utilizing its new appraisal upload feature. Clients should read the Newsflash for full details.

 

And while we're on appraisals...

 

CMG Financial (CMG)has streamlined the management of its appraisal process from start to finish using Global DMS' eTrac platform. This has enabled CMG to work with its AMC providers that have disparate systems through a single interface with eTrac. As a result, processors and brokers no longer have to log into each AMC's system to place appraisal orders. From within eTrac, CMG users can order and assign appraisals, track them with real-time status, review appraisals, and they are then automatically delivered to the Uniform Collateral Data Portal (UCDP) in full compliance and without errors or missing data.

 As an additional clarification to existing Sun West guidelines regarding HECM-to-HECM Refinances, Sun West will accept a HECM-to-HECM Refinance only if it meets the seasoning requirement. There must be an 18 month waiting period after the closing of the prior HECM loan before it can be refinanced to a new HECM loan. If the HECM-to-HECM refinance does not meet the seasoning requirement, Sun West will only accept the loan if there is no increase in the appraised value and the new loan passes both Closing Cost1 and Loan Proceeds2 tests.

 In a topic related to appraised values, all states' have current Homestead laws that are directly related to the original Federal Homestead Act of 1862 which promoted our country's expansion in the mid to late 1800s. The great state of Florida offers some of the broadest and most generous protection compared to homestead laws of other states. The main reason is that there is NO limit to the value of property that can be identified as a resident's permanent homestead.

 The Homestead Exemption applies to those who make a Florida property their permanent primary residence.For LOs in Florida this is a great reason to get in touch with all their buyers from last year and be sure they know about Florida's Homestead Exemption. Sending a reminder now is a great way to follow up and maybe get a new referral or two. Even when they were Second Home or Investment buyers, they'll appreciate knowing about this. They had until March 1 to file and receive the property tax break for all of 2016. If they had homestead status on a previous home, they'll need to establish their new one as homestead. Florida's Constitution and Statutes extend 3 different types of protection under Homestead Laws: Partial exemption from property taxes, Protection from forced sale, and preserving full value. Safeguards for surviving spouse and/or minor children. Homestead Exemption for property taxes is NOT automatic. Property owners seeking the partial tax break must qualify and apply to the Property Appraiser's Office in the county where the property is located. Filing for the exemption can be made up to March 1, though proof of residency must be dated before January 1st in order to receive the tax break for the upcoming year. Additional information can be viewed here.

 And speaking of Florida, it has reduced the time limit for a mortgagee to cancel a mortgage after satisfaction from 60 to 45 days, unless the mortgage is an open end mortgage. The new provision will be in effect July 1^st.  An open end mortgage is one that can increase, pending the request from the borrower. To cancel an open end mortgage, the borrower has to provide a written notice of the intent to close the mortgage and then 45 days after receiving the notice, the mortgagee will cancel the open end mortgage.

 The bond market broke out of the narrow range we've been in for a couple weeks yesterday ahead of today's ECB (European Central Bank) meeting. Frankly I did not hear a solid reason, other than "rates were tired of staying the same so decided to move higher." Some thought it was due to stock market strength, others suggested, "jiggering of hedges and concerns about extension risk." Needless to say, the same buyers were buying MBS, and the same sellers were selling, but by the close the 10-year note was .625 worse in price while current coupon agency MBS prices were worse about .250.

 Today is a new day, and we have already learned that the ECB, as expected, left its rates unchanged. (Recall that the March statement also expanded QE to 80 billion euros per month, added corporate bonds to the mix, and announced TLTRO II.) In this country we've had weekly Jobless Claims (-6k to 274k) and the April Philadelphia Fed Business Outlook (-14 to -1.6 - not good). Later is Leading Economic Indicators for March (at 10AM EDT), is expected to rise 0.4% vs. +0.1% in February. We closed the 10-year at a yield of 1.85% and this morning it is at 1.87% with agency MBS prices worse less than .125.

Housing Starts and Building Permits – UGH!!!

by rchrisman@robchrisman.com

 

This is a conversation between a man and a woman.

Woman: Do you drink beer?

Man: Yes.

Woman: How many beers a day?

Man: Usually about 3.

Woman: How much do you pay per beer?

Man: $5.00 which includes a tip.

Woman: And how long have you been drinking?

Man: About 20 years, I suppose.

Woman: So a beer costs $5.00 and you have 3 beers a day which puts your spending each month at $450.00.  In one year, it would be approximately $5400.00 correct?

Man: Correct.

Woman: If in 1 year you spend $5400.00, not accounting for inflation, the past 20 years puts your spending at $108,000.00 correct?

Man: Correct.

Woman: Do you know that if you didn't drink so much beer, that money could have been put in a step-up interest savings account and after accounting for compound interest for the past 20 years, you could have now bought a Ferrari?

Man: Do you drink beer?

Woman: No.

Man: Where's your Ferrari?

 

I was just in Denver the last few days where they were gearing up for the Colorado 420 celebration. But there's not much to celebrate if you work for Intel: the company just announced job cuts of 12,000 as PC demand slumps. And research by Citibank projects banks will cut staff by about 30% by 2025 as customers switch more and more to digital channels and away from branches. Even if you disagree it certainly doesn't seem like banks are moving away from technology...Speaking of Citi, Citigroup said it will no longer buy loans from the Prosper Marketplace platform and repackage them into securities, but did not indicate why. Regardless of the reason, it is probably not a good sign.

And for brokers' products, Carrington Wholesale Lending is now including conventional loans among its portfolio of products, "adding to our Government lending experience - providing more choices for our broker customers, their agent partners and their clients. Together with our government product line and expertise, Carrington is the go-to lender for both government and conventional lending, ensuring we're able to provide loan choices across the entire market to a more diverse range of customers. Carrington's Wholesale group's new conventional products include Conforming Fixed Rate Loans (Purchase/Refinance available), High Balance (Higher Loan Amounts, Purchase/Refinance), Freddie Open Access (Refinance), DU Refi Plus (Refinance), Lender Paid Mortgage Insurance (LPMI), and Texas Home Equity."

In reviewing Fannie MORA and Freddie CORE reviews it's clear that seller/servicers continue to struggle with establishing and implementing an internal audit program.  The first part of the challenge is that the guidelines are vague in determining what the GSEs want. What Mortgage Quality Management and Research, LLC (MQMR) has extrapolated in its dealings with the GSEs and clients is that there are three key items needed: 1. Initial risk assessment of the seller/servicer's organization as a whole, 2. An internal audit charter (policy and procedure and acceptance by the Board of Directors), and 3. Minimum 12-month calendar for performing ongoing audits of various departments, functions, and processes.  The second part of the challenge is then implementing those three items, but it is very hard for a lender to staff internally without having to hire a cadre of individuals with broad and deep subject matter expertise in areas such as compliance, originations, operations, quality control, vendor management, servicing, IT, HR, and many more.  MQMR's internal audit division has been assisting seller/servicers in meeting their internal audit requirements whether fully outsourced, or supplementing the existing program that is in place. For more information on internal audit programs contact Casey Hughes (818-940-1200x104). MQMR will be attending the upcoming MBA Legal Issues and Regulatory Conference in Denver and the TMBA in San Antonio if you'd like to meet in person.

 The industry can hardly wait for folks in their 20's and 30's to start buying houses. But on the hiring side of new entrants in lending, XINNIX is offering its popular webinar, "Millennials in the Mortgage Business." XINNIX, The Mortgage Academy, notes that with the aging sales force in the mortgage industry, it has become essential to fuel the industry with new talent. Learn how to source, train and retain Millennials to build a successful and productive sales force in this OnDemand webinar. Click here to view Millennials in the Mortgage Business now!

 Yesterday this commentary had some recent trends in lock periods and pricing, and one entry noted NewLeaf Wholesale's policy. ("NewLeaf Wholesale Broker's may elect to 'float down' from the original locked rate one time only. The 'float down' option may be exercised no earlier than thirty (30) days prior to the earlier of the loan's scheduled closing date or the original expiration date...") One item was omitted regarding the new float down option: it is available for NewLeaf's 180-day lock program only. (This allows borrowers to shop for a property and protect their interest rate risk while they shop.) I apologize for any confusion.

 

"And you may find yourself behind the wheel of a large automobile.

And you may find yourself in a beautiful house, with a beautiful wife.

And you may ask yourself - 'Well...How did I get here?'"

 

Fewer people may be asking The Talking Heads' question. Jobs and housing drive our economy, and yesterday we learned that housing starts in the U.S. fell to 1089K in March from an upwardly revised 1194K in February (preliminary reading 1178K). Housing Starts and Building Permits were weak - no argument. All four regions saw declines with the South falling 4.9% and a 21.2% plunge in the Midwest. Building permits declined to 1086K in March from 1177K in February. The March reading for permits was a one-year low.

 If these numbers indicate a trend it is not a good thing for builders, lenders, real estate agents, etc. Last autumn, for example, taking a look at Freddie Mac's numbers, the year-over-year index had improved 6.31%, and from its all-time low in October 2010 it had rebounded 38%. Back then FHLMC Deputy Chief Economist Len Kiefer noted, "The strong annual change of 6.31 percent is the best improvement we've seen in the MiMi on a year-over-year basis since July 2014." He also was fairly positive about the outlook in 2016 saying "we don't expect tighter monetary policy to generate a spike in longer-term interest rates in the foreseeable future", and "with stronger job and income growth, the net result may be strong growth in household formation, construction, and home sales." He did point out, however, that affordability is likely to decrease in 2016.

 As home prices rise, affordability is declining. The median house price to median income ratio is around 4.6x, which is closing in on its bubble high of almost 5x, and well above its historical range of 3.2x - 3.6x. What is driving the increase in house prices? Restricted supply has been an issue, as housing starts have been anemic since the bust. Another issue until recently has been foreign demand, especially from China. Many Realtors on the West Coast have seen Chinese demand drop off the proverbial cliff as their desire to have dollar denominated assets has dropped. (If a Chinese investor funds a development which creates US jobs, they receive a green card.) Since Chinese buyers are cash-rich, they don't need a mortgage and are winning bidding wars by offering cash. 

 Construction jobs have increased, adding several thousand jobs per month for many months. The numbers are well above the post-recession average of 5,000 per month. As recently as February marked the 12 month in a row that the U.S. economy has added over 200,000 jobs, decreasing national unemployment to 5.5 percent. This is positive news for the housing industry, as people are more inclined to buy a home or upgrade their accommodations if employment opportunities are abundant.

 Even back in December Zelman and Associates' Land Development Survey found that finished lot inflation remains temperate. The development index reached 61.9, down from 62.5 in November of 2014. The timeframe for raw land to be developed into finished lots is 15 months and the finished lot supply is down 3% YoY, whereas finished lot prices grew 12% YoY.  Survey respondents expect that community count will increase 10% within the next year and expected growth is highest in Las Vegas and Austin, whereas the lowest growth is expected in Baltimore, Phoenix and Miami. Finished lot price inflation of 9% is anticipated over the next year, a slight decline from 9.5% in November. For more information about Zelman and Associates please contact Ivy Zelman.

 And going back even farther in time a similar survey from Zelman and Associates showed that price appreciation was still ahead of last year. As of September, the existing home price index was up 6.1 percent YoY, but year-end appreciation is expected to reach 5.4 percent, an increase from 4.9 percent in 2014. Home price appreciation is expected to hit 4.3 percent in 2016 and 3.7 percent in 2017. The average national entry-level monthly mortgage payment for homes bought in 2015 will equate to $1,010, which is down 5 percent YoY and equals to 33 percent of entry-level income versus the 1990-2009 average of 42 percent.

 And going back an entire year, according to the May 2015 Realtors Confidence Index Survey, 63 percent of properties sold below list price. In fact, most properties (two-thirds) don't sell above list price and a year ago, about 70 percent of properties sold at a discount. The survey cited that 84 percent of properties that were sold between 2012 and May 2015 after 12 months were sold at a discount and less than half of the properties that sold within a month went for below list price whereas 24 percent sold for a premium. In May 2015, it was common for a property to sell between 4-11 percent off list price and a discount between 0-3 percent was the second most common outcome.

 In California there are only about 2 ½ seasons on any given year. Every time I read "seasonal adjustments" I know they're not talking about some states, where buyers and sellers, realtors and brokers, all work under the assumption that it's always a great time to sell and move. At the start of 2015 (a year ago) the mortgage numbers for Q1 were better than expected, and pushing into the "moving season" there were a lot of optimistic folks out there. The guys and gals over at Compass Point noted this fact last year in their weekly Mortgage Market Monitor. "The purchase market continues to drive an expansion in the mortgage market as applications are significantly higher from the year ago period and over 40% higher than 1Q15. Refinance applications have obviously come down as rates have moved higher, but they still remain above the trough levels we saw in the second half of 2014. The momentum from 1Q into 2Q indicates the market should be larger than we expected initially and we are raising our FY15 origination estimates to $1.5 trillion from $1.3 trillion."

 Turning to interest rates, volatility continues to ebb out of the market. Up a little, down a little, and Tuesday there were "minor losses" as oil prices and global equity indices pushed to multi-month highs. Both housing starts and building permits greatly missed estimates for March.

 Today's economic calendar is again light with the MBA's application index for last week (+1.3% with refis +3% but purchases down 1%) and Existing Home Sales for March at 7AM PDT. For anyone guessing where mortgage prices are going to be, we closed Tuesday with the 10-year sitting at 1.78% and this morning we're at 1.77% and agency MBS prices, upon which borrower's rates are generally based, are slightly better.

Lender and Investor Changes in Lock and Pricing Policies

By rchrisman@robchrisman.com

 

A Redneck buys a ticket and wins the lottery. He goes to claim it and the man verifies his ticket number.

The Redneck says, "I want my $20 million."

The clerk replied, "No, sir. It doesn't work that way. We give you a million today and then you'll get the rest spread out for the next 19 years."

The Redneck said, "Oh, no. I want all my money right now! I won it and I want it."

Again, the man explain that he would only get a million that day and the rest during the next 19 years.

The Redneck, furious with the man, screams out, "Look, I want my money! If you're not going to give me my $20 million right now, then I want my dollar back!"

 

"Drive til you qualify." That's a little real estate agent ditty to start a Tuesday, and this advice to buyers certainly applies to urban areas where price appreciation has outgrown salaries.

Sierra Pacific Mortgage continues its focus of featuring industry experts on their Market Power webinar, hosted by Kelli Brookman.  Who is the "expert" this month?  Well, it's yours truly - Rob Chrisman.  If you are trying to determine why rates are doing what they are doing and if that is going to change, how to read the CFPB and their enforcement actions, and what lender CEOs are concerned about, then join in on the fun tomorrow, April 20th from 11-12 PDT (2-3 EDT). Sierra Pacific Mortgage believes the key to success is sharing expert knowledge, so the webinar is open to all.

The Fannie Mae Capital Markets Sales Desk is offering up a session on the best efforts committing option available through Fannie Mae's web-based application: April 20 at 2PM EDT.

 Register for Arch MI's May Webinars. Master the Mystery: Navigating and Evaluating Personal Tax Returns Tuesday, May 10, 2016 - 10am Pacific. Loan Processing: Using the 1003 as a Roadmap Wednesday, May 11, 2016 - 12pm Pacific. Mortgage Fraud: Everything Old is New Again Thursday, May 12, 2016 - 10am Pacific. Seizing Market Share in a Purchase Market:
Creating Separation Between You and Your Competitors Thursday, May 12, 2016 - 12pm Pacific. Analyzing Appraisals: for Single-Family Residences Tuesday, May 17, 2016 - 12pm Pacific. Negotiate the Numbers: Understanding Self-Employed Borrowers and Business Tax ReturnsWednesday, May 18, 2016 - 12pm Pacific. Conquer the Components: Understanding the Aspects of a Loan File Thursday, May 19, 2016 - 10am Pacific.

 Calling all employees of Fairway Independent Mortgage, not just the sales professionals.AWI boot camps give you the opportunity to hear Sean Parnell and Ben Lunak speak - but also the Boot Camp "experience" and witness several veteran initiatives, all of which help to explain the "WHY" of giving back to those to have served this nation to protect our freedom. Details are provided in the links below: April 26 in New Braunfels, Texas, April 27 in Bryan, Texas, May 5 in Newark, Delaware, May 6 in Rehoboth Beach, Delaware.

 MBA Education is providing Loan Officer focused webinars. Click a link for details on: Hiring Superior Originators May 4th being led by Pat Sherlock AND Close More Loans... FasterJune 9^th being taught by Deb Killian.

 We just learned that the National Association of Home Builders Sentiment Index in April remained unchanged at 58, but failed to rise to expected 59. Still, readings above 50 mean more respondents report conditions as "good." The level, however, stayed near the post-recession highs and suggests, with Prospective Buyers Traffic component and Future Single Family Sales moving higher, that coming activity will improve. These reads offset a drop in current single sales. The report said that builders are "cautiously optimistic" about activity in 2016, citing "firm data" and "solid job creation and low mortgage interest rates" as reasons to "sustain continued gains."

 And here's a story in the Wall Street Journal about how the housing market's health is being put to the test.  The current economic environment seems wonderful for home builders.  But their stock prices don't agree, though, perhaps with good reason. Low interest rates, an improving job market and rising rents suggest the business should be booming. Relatively low inventory of existing homes for sale is pushing the values of both old and new ones higher.

 

What is happening with lender fees and lock polices lately?

 

NewLeaf Wholesale Broker's may elect to "float down" from the original locked rate one time only.  The "float down" option may be exercised no earlier than thirty (30) days prior to the earlier of the loan's scheduled closing date or the original expiration date.  The new expiration date will be 30 days from the "float down" if closing prior to the original expiration date.  Extensions will not be allowed. No exceptions. There is no upfront fee. Purchases with a property not yet identified are eligible.

 Effective April 15 Freedom Mortgage (wholesale) increased all Lender Administration Fees. All loans with TRID application dates of April 15 and later will be subjected to the new fee schedule.

 Freedom Mortgage implemented a procedure to assist in pipeline management. Any loan that is not actively locked is subject to cancellation if the Initial Submission Package has not been uploaded within 30 days of loan creation. To prevent your newly registered loan from cancellation, please make sure your Initial Submission Package is uploaded within 30 days. 

 (Speaking of Freedom Mortgage wholesale, it has temporarily suspended its Patriot Jumbo Product effective as of Monday, April 11th. Patriot Jumbo transactions that are registered prior to April 11th will be permitted to close; however, all registrations, locks and submissions should have been received no later than Friday, April 8th by 5:00PM EST.)

 AmeriHome Mortgage has added two new resources, the Auto-Notification Subscription User Guide and Best Efforts Rate Lock Quick Reference Guide, available on its SellerWeb. 

 At this time Pacific Union can accept 90 day locks for a flat adjustment of .625 to the 30-day price via email to lockdesk@loanpacific.com only. Unfortunately, these locks cannot currently be made via FLOW. This functionality should be added to FLOW within the next month.

 In Non-Escrow closing states, Fifth Third requires closing documents to be signed on or within one (1) business day after the Note Date. In addition, the updated Ineligible Condo list is available in the Correspondent Connect Online Guides and Forms.

 Back in February Mortgage Solutions Financial has implemented improvements to its loan level price adjustments on loans (see Announcement 09-16W).  In addition, MSF will be eliminating what has been its "standard" product that was laden with overlays - and further reducing overlays on its Gold product. For additional guideline updates, changes and other announcements, click here.

 Envoy Mortgage Correspondent Lending Division (CLD) updated its government LLPAs. Its clients know that these changes were effective with loans locked or re-locked on and after March 21.

 Effective with locks starting March 22^nd, Franklin American updated its loan level price adjustment for government FICO 620-639 the adjustment has increased from -1.50 to -1.75.

 Effective April 1 Ditech began applying a tolerance threshold of $35.00 for understated Finance Charges for all refinance transactions subject to rescission. For purchase transactions and those refinance transactions not subject to rescission, Ditech will continue to apply a tolerance threshold of $100.00 for understated Finance Charges.

 USDA & rural lending news? Sure there is. Those "in the space" know that non-banks are "going rural" with Freedom Mortgage recently announcing it is buying JPMorgan's USDA origination business. JP Morgan has a 31% market share in the sector and Freedom refis are running at 2x Chase in FHA/VA. Analysts say we can expect peak speeds on new USDA loans to rise 2-3 CPR and seasoned speeds are likely to trend higher as well.

 "Rob, someone told me that the USDA was preparing to lower the G FEE to 1% upfront and 35-50 bps monthly. Is that true?" I don't know - you should contact the USDA - but I have heard that from a few folks. And there is chatter out there about the USDA contemplating charging a fee every time a file is ran through GUS (Guaranteed Underwriting System). Time will tell. Don't forget that in FHA loans surge in 2015 while USDA numbers declined.

 Pacific Union has updated requirements per revised USDA guidelines. All applicable changes have been included in the updated Program Guide and are also available in the USDA Bulletin.

 Denver-based LenderLive has added a United States Department of Agricultural (USDA) Rural Development program to its correspondent lending offerings. The program is open to delegated correspondent lenders who have been approved by USDA and LenderLive. LenderLive's correspondent program offers a full suite of conventional, government and non-QM programs in all states. The company is known for it "no compete" policy, which protects originators' customers from cross-sell activity and refers all new loan inquiries back to the correspondents.

 

Condo developments?

 

The overlays restricting manufactured homes located in a condo project or PUD project and singlewide manufactured homes are being removed by Ditech. Multi-wide manufactured homes are eligible in a condo project, PUD project, subdivision or individual lot. Singlewide manufactured homes are eligible if located in a condo or PUD project. Singlewide manufactured homes may not be located in a subdivision or on an individual lot.

 Ditech posted Condominium Fidelity or employee dishonesty insurance policy is being updated as follows: Fidelity insurance is required for projects with more than 20 units unless the maximum estimated fund required is less than or equal to $5000.

 Excelerate Capital has non-warrantable condo loans available. For more information, contact Blake Adams at 855-606-9227.

 First Community Mortgage has posted new CONDO questionnaires.

 In capital markets news, Wells Fargo was approved as a "primary dealer" for US Treasury debt. Many wonder what the advantages are anymore of being a primary dealer, but it is the first bank to be accepted to bid at US Treasury auctions in more than two years.

 The bond market certainly has temporarily lost its volatility - fine for pipeline hedgers. (Volatility increases hedge costs - who wants that?) The U.S. fixed income market ended nearly unchanged Monday but was focused on oil prices and OPEC's failure to cut output at its weekend meeting in Doha. Oil prices spent most of the day recovering overnight losses as a strike by oil workers in Kuwait was enough to bolster sentiment in oil markets.

 Today, aside from March Housing Starts and Building Permits (-8.8% and -7.7% respectively - a darned weak set of numbers), there is no scheduled news to move the markets. We opened the week yesterday with the 10-year's yield sitting at 1.77% - pretty much where it was most of last week - and this morning after the building news it is at 1.79% with agency MBS prices worse about .125.