LenderNews by Rob Chrisman
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Oct. 10: LEP, compliance, communication products, CFO available; upcoming events; credit guideline changes

October 10, 2017

6,762 institutions took a residential loan application in 2016, per Richey May’s HMDA dashboard data. That is a lot of lenders!! Another big figure is the number of houses that were built with porches last year. According to a NAHB analysis of the U.S. Census Bureau’s Survey of Construction data, 65.1% of the 780,000 single-family homes started in 2016 were built with porches. I am sure many of the homes destroyed in the terrible fires in Northern California had porches, and our thoughts are with those harmed and the families of those killed.
 
Jobs, products, promotions
 
Orange Coast Title Company, an industry leader since 1974 and one of the largest independently owned title insurance companies, is growing again and has an excellent opportunity for a National Sales Executive. As our National Sales Executive, you will acquire, build, and maintain strong, long-lasting client relationships with the top mortgage lenders in the country. The ideal candidate will possess a broad knowledge of the loan origination and servicing space, have sales experience with a proven track record of exceeding goals, and be self-motivated to succeed in a fast-paced, competitive environment. Interested candidates should send their resumes to Tim Curtis, National Sales Manager.
 
A highly-experienced CPA and CFO with over 20 years of experience with financial institutions and independent mortgage banking companies is looking for a new opportunity with a fast-growing organization that will utilize his expertise in supervision of financial reporting, budgeting, internal controls, financial processes and framework, facilitation of statutory and internal audits, and serving as primary liaison to external auditors and various other vendors and counterparties. Experience includes lenders with wholesale, retail, correspondent and joint venture operating models. If interested, send inquiries to Ken Richey at Richey May & Co., LLP.
 
It’s common to hear in our industry how stressful many borrowers find the mortgage process. This can obviously have an impact on your borrower experience and ultimately your referral business. The solution that every originator can own themselves: focusing on communications. Some great guidance can be found in the eBook: ‘The Mortgage Communication Playbook.’ It summarizes why great communication is critical, what great communication looks like, and how to make it happen. By focusing on how you communicate with your borrowers, you can relieve their anxiety, increase referrals, open up your time, and make your business grow. Download your free copy here.”
 
Strategic Compliance Partners (SCP) continues to revolutionize regulatory compliance for mortgage lenders, and is proud to announce its latest innovation – ASTRO, an all-in-one compliance dashboard. ASTRO provides compliance officers and Executive management with complete visibility into their compliance programs through its cloud-based and content-enabled dashboard. SCP will launch ASTRO at MBA Annual in Denver on October 21. To schedule a demo, contact Leslie Benjamin, VP of Business Development.”
 
Sierra Pacific Mortgage continues to build the best mortgage banking team in the country. With that goal in mind, management just announced Jay Promisco has joined Sierra Pacific as Senior Vice President, Retail Lending. Jay will lead Sierra Pacific Mortgage’s Retail Division including Distributed Retail, Consumer Direct, and Builder Divisions. Jay’s extensive experience and expertise in running and resourcing retail mortgage banking enterprises includes all facets of retail mortgage lending including business leadership, creating onboarding programs, recruiting platforms, overseeing technology implementations, running joint ventures, builder business, portfolio retention, operations, compliance and capital markets. ‘Today’s business is more technical than ever. We require our leaders to be hands on and experienced in all aspects of their area of responsibility. Jay brings this to Sierra’s retail division as well as embodying our culture of high work ethic and forthrightness,’ said Chuck Iverson, EVP.”
 
The MBA stated that limited English proficiency (LEP) could create a liability for lenders since this is a key priority for many regulators. A CFPB official said, “If every loan application had a talk’uments file, our job (CFPB) would be done.” Available in ENGLISH and SPANISH, talk’uments is a new consumer information delivery model that displays borrower specific loan data through interactive loan and disclosure technology – from pre-sale through loan closing. Talk’uments increases loan originations, as it eliminates LEP risk and cuts compliance, legal and regulatory costs for all mortgage transactions, and, by providing market ready borrowers with what they want: interactive loan information specific to their loan request (i.e. Loan Product Info, LE and CD review, Application & Closing Docs explanations, and Borrower Responsibilities). Talk’uments is the first of its kind in the field of interactive loan and disclosure technology. For more information or to visit with talk’uments at the national MBA conference (booth 1322), contact George Baker.
 
Changes to the credit eco-system & underwriting changes
 
I don’t exactly know what a credit eco-system is, but it sounds like a term someone would use.
 
Lenders are easing standards given the increase in interest rates and the corresponding drop in volume. “Lenders further eased home mortgage credit standards during the third quarter, continuing a trend that started in late 2016. Both the net share of lenders reporting easing on GSE-eligible loans for the prior three months and the share expecting to ease standards on those loans over the next three months increased to survey highs," said Doug Duncan, SVP and chief economist at Fannie Mae. "Lenders’ comments suggest that competitive pressure and more favorable guidelines for GSE loans have helped to bring about more easing of underwriting standards for those loans. We believe that the GSEs’ attempts to relieve repurchase concerns and expand credit for creditworthy borrowers have contributed to the easing trend. Meanwhile, market competitiveness also led to the fourth consecutive quarter in which lenders’ net profit margin outlook deteriorated. The share of lenders citing competition from other lenders as the key reason for a negative profit market outlook rose to a new survey high.”
 
Banc of California has reduced its fico and reserve requirements on its Alternative Documentation products. Also, noteworthy, it offers incentives for lower LTV’s on 5/1 and 7/1 ARM transaction.
 
Mountain West Financial (MWF) posted, “Certain loan attributes that previously required use of our Direct products can now use our regular products. Examples of these loan attributes include: Low FICO’s, manufactured homes, 2-4-unit investment properties, 7-10 financed properties, and certain LTV/CLTV combinations.”
 
And MWF is making it even easier for Wholesale Brokers to originate loans that utilize Mortgage Credit Certificate (MCC) programs within BOLT. It has created an MCC request page within BOLT that will allow Brokers to submit their MCC automatically to Mountain West Financial for processing. View the links to “Wholesale MCC Request How to Guide” the updated “MCC Broker Process”, and “Reissue MCC Broker Process” to understand the new streamlined MCC process. 
 
NewLeaf Wholesale has released the following new products: NewLeaf Prime Non-QM, NewLeaf Early Access, NewLeaf Asset for Income, NewLeaf 1 Year Tax Return, NewLeaf Elite Bank Statement.
 
Flagstar Bank’s Jumbo Fixed was updated with the following tradeline requirements. All borrowers that are contributing income for qualifying purposes must meet one of the following tradeline requirements: Minimum 3 open tradelines with a 2-year history: 2- month reporting history, 0 x 30 mortgage late in the last 12 months if applicable. Two open tradelines are acceptable for purchase transactions where the borrower(s) have a 24-month mortgage history in the past five years. An exception to the minimum trade line requirements is not required if the borrower’s credit history meets the following: No less than 10 tradelines are reporting and one must be a mortgage. At least one tradeline is open and reporting for a minimum of 12 months. Credit history established for at least 10 years. See product descriptions for full product requirements.
 
Click here for FCM Wholesale underwriting guidelines updates.
 
Before you upload those paystubs and bank statements, use the digital verification features in Caliber Home Loans’ H2O for reduced documentation and reduced fees. You will achieve results within minutes. Download the Reference Guide at: H2O > AllRegs > Resources > Digital Mortgage Toolkit.
 
FTMC has removed the requirements for how a Certificate of Trust is to be executed on all agency and Jumbo products. The Correspondent is still responsible for ensuring that the trust meets Fifth Third guidelines. Refer to the Correspondent Underwriting Guidelines for additional information.
 
The Royal Treatment offered by Royal Pacific Funding offers acceptance of your credit report, Conventional transferred appraisals allowed, W2 and paystub only offered on all products, manufactured homes offered on all products, VA 580 FICO 100% LTV, and no max DTI with AUS approval.
 
Events and trainings:
 
On Thursday, October 12th, in Albuquerque, the NMMLA October Monthly Luncheon with guest speaker Garrett Hennessey will be held at the Tanoan Country Club from 12:00 – 1:00.
 
FHA announced a new, upcoming live webinar, FHA Quality Assurance Update, to be held on October 19. This webinar will provide an update of FHA’s fiscal year 2017 Quality Assurance Results, as well as offer additional guidance on the Loan Review System. Advanced registration is required.
 
The mergers and acquisitions trend in the mortgage industry shows no signs of slowing down. On October 18th, industry experts John Guzzo, managing director of industry M&A firm Berkery Noyes and Richard Bitner, consultant and former President of HousingWire will present, “Understanding the Housing & Mortgage M&A Marketwebinar.
 
On Friday, November 3rd, the Utah Mortgage Expo will be held at its new location, the Park City Marriott. Representing more than 300 companies with 6 workshops for loan originators, register to be a part of the conference that celebrates men and women who finance residential and commercial property.
 
This year marks the third installation of MBA’s Whole Loan Trading Workshop. Register for this November 9th event in Chicago and hear from expert speakers involved in the buying and selling of home loans as well those involved in the servicing transactions coupled with these trades. 
 
Capital markets
 
The U.S. Treasury released a report that outlines 91 technical fixes aimed at boosting the financial markets. Basically telling Congress to lead, follow, or get out of the way, rather than proposing legislative changes, the report notes the Commodity Futures Trading Commission and the Securities and Exchange Commission could simply tweak existing rules and not endorse international rules unless they meet domestic objectives.
 
U.S. Treasury markets were closed yesterday. Looking back to Friday, the yield on the 10-year ended at 2.36% but hit 2.40% briefly. The last 12 months has seen the highest growth rate since the financial crisis, so anyone thinking the economy is dragging is going to have a tough time convincing everyone else. Those who follow such things know that the implied likelihood of a rate hike in December increased to nearly 90% from under 80% earlier in the week per the fed funds futures market.
 
Today we had September’s NFIB Small Business Optimism Index (down), and on Hump Day we’ll have the MBA’s app data for last week, August Job Openings & Labor Turnover Survey (JOLTS), and the FOMC minutes. Thursday is September’s Producer Price Index (is there any inflation out there?), weekly jobless claims, and the September Treasury Budget, while Friday has the Consumer Price Index, September Retail Sales, a spate of University of Michigan survey numbers, and August Business Inventories. We start the week with the 10-year yielding 2.35% and agency MBS a shade better than Friday.
 
 
PECANS IN THE CEMETERY
On the outskirts of a small town, there was a big old pecan tree just inside the cemetery fence.  One day, two boys filled up a bucketful of nuts and sat down by the tree, out of sight, and began dividing the nuts.
“One for you, one for me, one for you, one for me,” said one boy. Several dropped and rolled down toward the fence. Another boy came riding along the road on his bicycle. As he passed, he thought he heard voices from inside the cemetery, so he slowed down to investigate. Sure enough, he heard, “One for you, one for me, one for you, one for me…”
He just knew what it was. He had been going to Sunday School all his life. He jumped back on his bike and rode off. Just around the bend he met an old man with a cane, hobbling along.
“Mister, come here quick,” said the boy, “You won’t believe what I heard! Satan and the Lord are down at the cemetery dividing up the souls!”
The man said, “Beat it kid, can’t you see it’s hard for me to walk.” When the boy insisted though, the man hobbled slowly to the cemetery.
Standing by the fence they heard, “One for you, one for me. One for you, one for me.”
The old man whispered, “Boy, you’ve been tellin‘ me the truth. Let’s see if we can see the Lord!”
Shaking with fear, they peered through the fence, yet were still unable to see anything. The old man and the boy gripped the wrought iron bars of the fence tighter and tighter as they tried to get a glimpse of the Lord.
At last they heard, “One for you, one for me. That’s all. Now let’s go get those nuts by the fence and we’ll be done…”
They say the old man had the lead for a good half-mile before the kid on the bike passed him.
 
 
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Will User Names and Passwords Go the Way of Thermal Fax Paper?” 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 2017 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.)