LenderNews by Rob Chrisman
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Dec. 21: AE & LO jobs nationwide; F&F updates including Duty to Serve, risk sharing, HARP, HAMP, ULDD, etc.

December 21, 2016

Hey, don’t know what to get your favorite capital markets guy or gal this year for Christmas? Here’s a memorable gift, with a one minute video. Although apps rose slightly last week, folks in the secondary marketing department are wondering if there any pipelines left to sell. And what will pipelines look like after the end of December when the pre-election loans fund? (Before I forget, here’s a Christmas tip: take empty boxes, wrap them in festive paper, then throw them in the fire every time a child misbehaves.)
 
In job news, Firstrust is a privately held savings bank based in Philadelphia with assets in excess of $2.8 billion. Management is currently seeking to expand their retail channel in the PA, OH, NJ and DE markets. Firstrust is interested in individual loan officers or a team that is looking for an organization that offers local support, a strong compensation package and a high level of customer service. If you or your team is interested in discussing opportunities, please forward your information to Kelley TyrellFirstrust is also looking for experienced wholesale Account Executives in VA, DC, NC and CT. The wholesale channel offers a high level of customer service, a deep array of products and a highly competitive compensation package. Please contact Michael Scheier for additional information.
 
Wholesale AEs in California, it is critical to know the following things about a broker: Who they close loans with, their percentage of purchase vs refi, the breakdown of conventional, FHA, & VA, monthly volume & how thin do they spread the closings across lenders, and what is your share of their business. If you want a peek at the type of intel available as a Broadview Wholesale Account Executive, look at this sample report. Andrew Ryan Broadview’s SVP of Wholesale Lending, said, “In my 22 years in wholesale, I’ve never seen this type of report on a broker which allows an AE to focus more time and energy on the RIGHT broker as they’re trying to grow a territory. One of the great challenges to succeeding as an AE is identifying a broker, the extremely long sales cycle, obtaining a broker package, then having them submit loans. The ability to focus time and attention on productive brokers, with a sustainable mix of purchase vs refi business, is nothing short of a game changer.” If you’d like to know more about opportunities with Broadview Mortgage as an Account Executive, contact Andrew Ryan.
 
Quickly expanding nationally, Loanwise Financial is hiring experienced licensed loan officers and branch managers to help build its distributed retail locations in Chicago, Phoenix, Orlando, West Palm Beach, Miami and the Washington DC Metro area. Also, Loanwise is looking for branch managers in CA, FL, TX, AZ, MD, IL, AL, MI and CO that will bring a team with them. “Loanwise is committed to providing the best in class customer service which leads to the certainty of execution on every loan closing. That starts with happy, engaged employees who are treated like family as the first 10% of all the company’s profits are shared back with the employees and the next 2.5% to philanthropy in local markets. By reinventing the workplace, Loanwise staff, called ‘family members’ have the unique opportunity as owners to excel both personally and professionally while making more money than they ever have as Loanwise also has one of the top compensation plans in the industry.” To learn more about this opportunity, please contact Loanwise’s National Director and Partner, Randy Lightbody.
 
In retail job news, GSF Mortgage is looking to hire loan originators within its 31 state footprint. “GSF has 22 years of business and an exceptional retail branching platform. Providing direct servicing to Fannie, Freddie & Ginnie direct. GSF offers a lack of underwriting overlays, a 15-day close, and in-house dedicated underwriting teams. LOs would be hard pressed to find a more aggressive lending platform. And GSF offers customized branch setup on-boarding with marketing and recruiting assistance, along with full transparency and direct access to Senior Management & the entire operation team. Call today, we’d like to talk to you: 262-957-8901, or contact General Manager, Debbie Beier.”
 
Congratulations to Flagstar Bancorp, Inc. Yesterday the Office of the Comptroller of the Currency (OCC) terminated its Consent Order with Flagstar Bank, FSB, a wholly owned subsidiary of the Company. “In response to the Consent Order, the Bank implemented and adopted industry best practices related to, among other things, regulatory compliance, enterprise risk management, capital and liquidity…the OCC has determined that the Bank has met all of the Consent Order requirements.”
 
The companies above, as well as others, know plenty about changes in the conventional conforming (i.e., Freddie & Fannie) channel. Let’s see what is going on there.
 
FormFree spread the word that, “Four of the most critical pillars of the loan are income, identity, asset, and employment. Now that Fannie Mae has weighed in on using automated verification technology for three of these four pillars (i.e. asset via AccountChek and Employment/Income via Equifax) through the Day 1 Certainty Initiative, the savvy lender will be turning their attention to bundling and automating all four pillars to create a true straight-through process environment in underwriting. This is an area to which FormFree has turned its attention in recent months, and we anticipate bringing to market an integrated verification platform called Passport, which we previewed at the SourceMedia Digital Mortgage Conference in San Francisco. The platform securely leverages both direct-access data and records from trusted third-party consumer information repositories to bundle and deliver this critical verification information into one easy report.”
 
The FHFA continues to push Fannie & Freddie on credit-risk sharing.  A regulatory 2017 scorecard for Fannie Mae and Freddie Mac calls on the firms to transfer a significant portion of credit risk to third-party private investors on at least 90% of unpaid principal balance of newly acquired single-family mortgages. And legislation pops up occasionally.
 
Moody’s: Privatizing Fannie Mae, Freddie Mac Would Cost "Hundreds of Billions".  According to a new report from Moody’s Investors Service, privatizing the GSEs is not only unlikely to happen any time soon, it’s also hugely cost-prohibitive, and it would be a negative for bond investors as well. 
 
The Federal Housing Finance Agency (FHFA) issued Final Rule on Fannie Mae and Freddie Mac Duty to Serve Underserved markets. The statute requires Fannie Mae and Freddie Mac to serve three specified underserved markets: manufactured housing, affordable housing preservation, and rural housing, by improving the distribution and availability of mortgage financing in a safe and sound manner for residential properties that serve very low, low, and moderate-income families.
 
Freddie Mac issued the following Statement on Duty to Serve Final Rule. “We look forward to working with the Federal Housing Finance Agency (FHFA) and stakeholders to implement the Duty to Serve provisions. We’re proud to responsibly increase our activities involving manufactured housing, affordable housing preservation and rural housing to help more American families. This is an opportunity for the entire mortgage industry to work together to address some of the toughest issues in housing, including the distribution and availability of both mortgage financing and affordable rental housing for working families. The Duty to Serve provisions align with our mission to build both a better Freddie Mac and a better housing finance system for this country.”
 
Fannie Mae, Freddie Mac Offer New Loan Modification Program.  Fannie Mae and Freddie Mac announced new programs to provide relief for distressed borrowers. The Flex Modification programs will replace the Home Affordable Mortgage Program, the government mortgage assistance program developed in 2009 in the wake of the subprime loan crisis. HAMP is set to expire Dec. 31.
 
There were “only” 243,000 Fannie & Freddie residential loans that were refinanced in October of this year, which also saw the slowest HARP month on record. Mortgage Daily reported, “GSE Refinances Fall, Slowest HARP Month on Record.  Just a month after surging to a three year high, refinances of government-sponsored enterprise loans fell, with federally funded transactions falling to an all time low.
 
Fannie Mae updated its Servicing Guide to reflect changes in Verifying Master Project Insurance, Maximum Allowable Foreclosure Attorney Fees for Judicial States, and Servicing Fees for Redeemable Mortgage Loans and Third-Party Foreclosure Sales. Read the Announcement for full details. Fannie Mae’s Servicing Management Default Underwriter™ (SMDU™) Version 7.1 has been implemented. The SMDU Version 7.1 Release Notes supports the retirement of four modifications (HAMP, Mod24, MyCity Modification, Principal Reduction Modification). In addition, to create more efficiency, servicers can now utilize SMDU for additional case management functionality.
 
The Freddie Mac Flex Modification foreclosure prevention program, which is designed to help America’s families by offering significant reductions in their monthly mortgage payments, replaces Freddie Mac’s version of the Home Affordable Modification Program (HAMP), which is set to expire at the end of this year. The new program was developed in alignment with Fannie Mae at the direction of the FHFA. The Flex Modification incorporates input from a wide range of industry participants as well as lessons learned from earlier programs. It’s expected to provide a 20 percent payment reduction for eligible borrowers. A high percentage of those who are at least 60 days’ delinquent would be eligible; the modification could also be an option for those who are current or less than 60 days’ delinquent in certain situations. Servicers must implement the new program by Oct.1, 2017. In the interim, while HAMP expires on Dec.30, Freddie Mac’s Standard and Streamlined Modifications will remain in effect until the new program is implemented. Visit Freddie Mac Flex Modification web page for additional information, including reminders and a link to the fact sheet. FHFA’s statement about the Flex Modification is available here.
 
Desktop Underwriter (DU) has been updated with new features and functionality to help you enhance your business. Fannie Mae has implemented all components of Day 1 Certainty including: DU validation service for income, employment, and asset validation; Enhanced Property Inspection Waivers (PIWs) on eligible refinance transactions; and Certainty on appraised value powered by Collateral Underwriter® (CU™). Incorporated the updated HomeReady eligibility guidelines.
 
Day 1 Certainty provides lenders enforcement relief from representations and warranties, as well as efficiencies by bringing some quality control processes upfront with the DU validation service. The Quality Control Considerations job aid provides the information you need to adjust your prefunding and post-closing QC when using the optional DU validation service for income, assets, and employment.
Fannie Mae and Freddie Mac have announced the Uniform Loan Delivery Dataset (ULDD) Phase 3, along with updates to each GSE’s specification. ULDD Phase 3 will include approximately 30 new data points and updates to existing data (see Appendix D for a complete list). Nearly half of the new data consists of borrower demographic information in support of the HMDA rule (effective January 1, 2018). More information on the Phase 3 implementation timeline is forthcoming in Q1 2017.
 
Fannie Mae has implemented CU Version 4.0, which provides a new, easy-to-use CU web application design and layout. The new CU was designed based on customer feedback to enhance and simplify the appraisal review process. It delivers the dynamic functionality and cutting-edge analytics you’ve come to expect from CU in a new, attractive, streamlined format. Here’s a short introduction video.
 
Fannie Mae recently announced the elimination of the $75 Property Inspection Waiver (PIW) fee. To accommodate this change, Pacific Union’s Correspondent channel will discontinue the assessment of the $75 fee for loans purchased on or after December 16, 2016. Pacific Union will continue to audit the use of a PIW or appraisal and will rely on the Lender’s Reps and Warrants as to impact of the PIW fee change to the Loan Estimate and/or Closing Disclosure.
 
Rats? Uh, I mean rates? Not doing much, given no economic news and some market participants are done for the year so hopefully we just sit around here through the end of December. Since nothing is going on here, let’s look overseas. Investors in China are becoming more worried about wealth management products, financial products that were used to circumvent low bank deposit rates. Many of those WMPs borrowed money from short-term money markets to buy stocks, bonds, or bank loans. With the People’s Bank of China now tightening liquidity in money markets to slow down China’s credit expansion, some of which has been filtering into the property sector, and that tightening has caused unwinding in these WMPs as they have lost access to cheap financing.
 
Tuesday agency MBS closed unchanged to a touch lower in price. The New York Fed was in doing its usual buying, which knocks off next week for the holiday week. But the 10-year note sold off .250 in price to yield 2.57% and 5s worsened .125.
 
Today we’ve seen the MBA’s weekly update on mortgage applications (+2.5%-3%, purchases & refis). November Existing Home Sales will be released at 10AM ET. To start the day the 10-year is yielding 2.56% and current coupon agency MBS prices are unchanged versus last night’s close.
 
 
Two shepherds lean on their crooks at the end of a long day. The first asks the second, "So, how’s it going?"
The second one sighed and shook his head, "Not good. I can’t pay my bills, my health isn’t good, my kids don’t respect me, and my wife is leaving me."
The first replied, "Well, don’t lose any sheep over it."
 
 
If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Election Day 2016 is Over – Now What?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2016 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)