Sometimes after leaving the airdrome on an airplane I will break out the credit card to access the web. There I sit, in steerage, and marvel about how the internet works on a plane at 35,000 feet over barren wasteland…but my cell phone doesn’t work downstairs at my house. Technology is interesting, and can make a difference. As big lenders and banks outspend small lenders and banks on technology, assuming it is “wise” spending, the eventual result will be…what? (What does the moon 4 billion years ago and Compaq in 2013 have in common? Both had an awful atmosphere.)
Opportunities
After 17 years of organic growth, Fidelity Bancorp Funding is expanding and looking to hire and develop Residential and Commercial Loan Officers in its Orange County office. “Fidelity’s platform has no peers with income opportunities in not only single family, but also multi-family, commercial, SBA and Bridge loans. Imagine doing one loan that leads to 1-2 others. Imagine being able to meet with a client and offer options for their entire real estate portfolio. Imagine being able to offer a bridge loan that allows the buyer to buy with no contingencies to compete with all cash offers. Imagine having recent college graduates being trained specifically to work with you to provide support and earn fee income as well. Fidelity thinks outside of the box… Is it time for you to consider your career options and consider joining a company that offers more? If you’re interested in learning more please contact our VP of Business Development Bobby Rizzo (714-908-5119).”
“If you are an independent mortgage company or retail production team, closing $10M/month or more, loosely intrigued with the idea of an asset acquisition or transition to a strong and well-capitalized National Retail Mortgage Bank, we should speak. The Bank has a wide array of products with deeply competitive credit policy and a unique and serious approach to consumer facing technologies to support loan officers and branch managers. If interested, confidentially email: [email protected].”
In warehouse news, Flagstar Bank has added to its bench strength with the announcement that Celeste Ludwig has joined the team as senior warehouse lending relationship manager. She comes to Flagstar from Comerica Bank, bringing 17 years’ experience in the banking industry and more than four years in warehouse lending. Flagstar’s been in the warehouse biz since 1991, and under the leadership of industry veteran, Joe Lathrop, since 1999. It offers lines from $1M to $100M with no minimum volumes required to be sold to Flagstar’s wholesale division. Borrowers get a dedicated relationship manager and a dedicated processor—no phone queues.
FHA & VA changes impacting the primary markets
In Massachusetts, Robert Pena, the founder and president of defunct Mortgage Securities Inc., pleaded guilty last week defrauding Ginnie Mae out of approximately $2.5 million. Pena began diverting money that borrowers sent to MSI into private bank accounts, which he then used to pay for personal and business expenses, resulting in one count of conspiracy and six counts of wire fraud.
Lots of people want to “reform” FHA, pointing to a wide variety of potential changes that can be made to the program. The Congressional Budget Office analyzed seven illustrative policy options that would reduce the cost of risk to the federal government from FHA’s single-family mortgage guarantees.
With the implementation of the Loan Review System (LRS), FHA has discontinued publication of the quarterly Lender Insight newsletter. Loan-level and compliance information previously published in Lender Insight will remain available.
FHA published Mortgagee Letter 2017-13, Extension of Temporary Approval Provisions for the Federal Housing Administration (FHA) Condominium Project Approval Process. This Mortgagee Letter extends FHA’s temporary condominium project approval policy provisions until FHA completes both permanent policy rulemaking and the future Condominium Project Approval section of the Single-Family Housing Policy Handbook. This extension, without changes to existing temporary provisions, ensures that mortgagees, real estate professionals, and others may continue to work with borrowers seeking FHA-insured mortgages on condominium units in FHA-approved condominium projects. Temporary condominium project approval provisions continue to be applicable to all FHA Single Family Title II programs, including the Home Equity Conversion Mortgage program, unless otherwise stated.
Effective for new Mountain West Financial reservations received on or after October 2, 2017, sales price limits for CalHFA first mortgage and subordinate loan programs will increase for all California counties to $660,000. This change pertains only to sales price limits. Loan limits remain the same (set by Fannie and FHA per county). As a reminder, any CalHFA 1st mortgage over $424,100 (in applicable counties) has a high-balance fee.
Pacific Union Financial posted the following update: FHA DELRAP projects approved by other lenders are now allowed subject to and must meet the following: The Certification for Individual Unit Financing (Appendix B Certification) document must be signed by the underwriter. Condition(s) listed on the DELRAP Approval must be met. The Underwriting Manager must notify HUD if any condition(s) of the DELRAP approval cannot be satisfied, or if the Appendix B Certification cannot be issued due to project changes, including but not limited to: Owner-Occupancy less than 50%, Pending Litigation that would not meet HUD’s criteria, Delinquent HOA dues greater than 15%, or Investor Ownership greater than 10%. HUD will reevaluate the project and advise of any changes to the project status. Non-Delegated: The FHA Condo Certification Questionnaire has been updated to indicate that the questionnaire is required for both HRAP and DELRAP projects. The DELRAP approval process is the same as the approval process for HRAP.
The verbiage for condition B019: FEMA disaster area-recert of value required, will be updated to more accurately convey Wells Fargo Funding’s requirements on government Loans impacted by a disaster. If you receive this condition on an FHA or VA Loan, you can clear the condition by providing: FHA: Evidence that FHA has already endorsed the Loan per FHA Connection. Evidence of an inspection, completed after the Incident Period End Date, by an FHA appraiser indicating that there is no material damage to the property. Incident Period End Dates – Hurricane Harvey: September 15, 2017. Hurricane Irma: September 18, 2017 (Florida only). VA: A Loan Guarantee Certificate showing that the VA has guaranteed the Loan. Lender’s Certification, completed after the Incident Begin Date indicating that there is no material damage to the property.
Pacific Union Financial posted the following information effective immediately: The Underwriter’s signature and CHUMS number is required on FHA’s HUD-92800.5B in the “By” section on pages 1, 3, and 5. The following items have been removed from the list of VA unallowable fees and charges that may be included in the 1% origination fee. These items may never be charged to the borrower: Attorney services other than title work and charged as a benefit to the lender, Fees charged by a Real Estate Agent, HUD/FHA inspection fee from builder, Prepayment penalties and Realtor commission.
Mortgage Solutions Financial has updated its Conventional, FHA, VA and USDA guidelines.
Citi Correspondent Lending posted a new bulletin with credit policy updates, clarifications and reminders.
HUD has issued a “Waiver of Housing Directive for FHA Disaster Re-inspection Requirements for Hurricane IRMA.” As such, Lenox/WesLend will move forward on FHA and VA transactions with ordering New Appraisals on current and new submissions, Clear to Close on transactions for funding, and re-inspections, for those areas affected within the identified FEMA Disaster Declared counties under DR-4337 for Florida.
As the risk of further property damage is subsiding after Hurricane Irma, FHA has issued a waiver regarding the timing of the property inspection for properties located in Florida PDMDA due to Hurricane Irma. Effective immediately, PennyMac is aligning with FHA’s waiver and will accept property inspections dated on or after September 19th for all loans secured by properties located in PDMDAs in Florida. Waiver is effective only for properties located in Florida.
The VA requires water testing be completed by a water testing laboratory, a licensed sanitary engineer, the county, or the state. The test sample must be collected by a non-interested party to the transaction. The individual water supply must meet health authority requirements. If there are, no local or county, or state requirements, the EPA standards must be met. Tests results greater than 90 days old at date of closing are not allowed. This clarification is effective immediately for any new registration, locks, or loans in the U.S. Bank Home Mortgage pipeline.
Pacific Union Financial is now accepting Manufactured Home Transactions on all Government products in the following states: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont. The State Requirements document has been updated to include state specific requirements. For purchase transactions, Manufactured Homes that have not been converted to real property MUST be converted at or prior to closing. For refinance transactions, the property must be converted to real property prior to application.
Effective for locks on or after September 26, 2017, Plaza has improved certain loan-level price adjustments for all Government programs: 760+ = (0.375). 720-759 = (0.250). 700-719 = (0.125). 680-699 = (0.125). 660-679 = 0.00. 640-659 = 0.250.
Royal Pacific Funding has made “significant price improvements” on FHA / VA with 700+ FICOs. And has reduced its VA minimum FICO down to 550* (*limited to conforming loan amounts). Manual underwriting ok with no pricing hits (up to 50% DTI with 2 comp factors).
Pacific Union Financial recently announced a change to its Verbal VOE policy to allow completion of the Verbal VOE 10 days prior to Note Date. The Verbal VOE Policy has been updated to indicate whether the rule applies to business or calendar days, as required by the applicable agency: Conventional, VA and USDA products: Business days. FHA: Calendar days. Non-Agency products: Refer to the Program Guide for requirements.
On FHA purchase transactions for properties built before 1978, the Property Seller/Realtor must issue a Lead-Based Paint Disclosure to the Borrower and include it in the Purchase Contract. NewLeaf Wholesale must obtain a copy of the Lead-Based Paint Disclosure with the Purchase Contract and ensure that the appropriate disclosure receipt option is indicated on the HUD 92900A. To ensure disclosure accuracy, the year the subject property was built must be accurate on the 1003.
Capital markets – closed today, but…
U.S. Treasury markets are closed today for the holiday though stock markets are open. U.S. Treasuries ended last week slightly down due to an uptick in selling as the Employment report for September missed expectations. Though a 2.9% spike in the wage growth rate solidified expectations for a rate hike in December, lifting the 10-yr to above 2.40% briefly. The last 12 months has seen the highest growth rate since the financial crisis. 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.
We had some fed speak on Friday. FOMC Vice Chair William Dudley spoke in favor of remaining on the rate-hike path, while St. Louis Fed President James Bullard said he was concerned by the weaker than expected September Employment Situation Report. Mr. Bullard added there will not be sufficient information about inflation or the economy to invite a December rate hike, though I should point out he is not an FOMC voter.
Looking to the week ahead, tomorrow we have September’s NFIB Small Business Optimism Index, and on Hump Day we 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… oops! The markets are closed today. Beware those potentially conservative rate sheets – few capital markets folks will stick their neck out being aggressive when the market is closed.
A lady is having a bad day at the roulette tables in Las Vegas. She’s down to her last $50. Exasperated, she exclaims to the whole table, “What rotten luck I’ve had today! What in the world should I do now?”
A man standing next to her suggests, “I don’t know, why don’t you play your age?”
He walks away, but moments later, his attention is grabbed by a great commotion at the roulette table. Maybe she won! He rushes back to the table and pushes his way through the crowd. The lady is lying limp on the floor, with the table operator kneeling over her.
The man is stunned. He asks, “What happened? Is she all right?”
The operator replies, “I don’t know. She put all her money on 36, and when 47 came up she just fainted!”
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.)
- Dec. 31: Rates, the Fed, world economies, affordability, and the shutdown – all tied together - December 31, 2018
- Dec. 29: FEMA reverses flood ruling; cybersecurity notes; observations on general housing trends - December 29, 2018
- Dec. 28: Doc automation product; FHA & VA changes around our biz; Agency deals continue to share risk - December 28, 2018