LenderNews by Rob Chrisman
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Sep. 18: DTC jobs, reverse, training, & new DAP products; Morgan Stanley to originate; latest disaster lender updates

September 18, 2017

My cat Myrtle didn’t seem too interested in the fact that on September 12 CFPB Director Cordray appeared as the keynote speaker at the Seventh Annual Ohio Land Bank Conference. Or that Director Cordray’s appearance came on the heels of his speech at the Cincinnati AFL-CIO Labor Day Picnic, also obviously in Ohio. Supporters believe he will announce a run at Governor. Others say we don’t need another leadership void or more uncertainty within a government agency.
 
Products & jobs
 
Loan officers should know that, “There’s a great opportunity in the 62+ market. Are you prepared to capture it? Today’s redesigned reverse mortgages are key to aligning your business for the future – with refinance, home purchase and HELOC alternative options. Learn how you can increase revenue and better serve this growing demographic by adding reverse mortgages to your product mix. Click here to register for an upcoming educational webinar presented by Reverse Mortgage Funding LLC (RMF).”
 
Loftium is launching today to provide down payment funds in exchange for a share of future Airbnb income. “Homebuyers who need Loftium’s down payment help simply agree to rent out a spare bedroom and share the income with us for 12-36 months after buying their new home. The company is working initially with Umpqua Bank to bring down payments to Seattle homebuyers, but has plans to expand rapidly. If you’re looking to buy a primary residence home (not an investment property) in Seattle, Loftium can offer up to $50,000 (not to exceed 10% down) on a conventional Fannie Mae mortgage. With exclusive regulatory & agency approval, Loftium is different from other down payment programs because they’re focused on high-cost cities and don’t have income limits or home price restrictions. (Questions about the program should be addressed to founders Adam Stelle or Yifan Zhang.)
 
“Do You Want to Break Free from What’s Holding You Back and Accelerate Your Results? Schedule your Readiness Call with Cindy Ertman – now accepting applications for her next Mortgage Mastermind Elite (MME) coaching group starting October 2017.  MME brings together a vetted community of High-Performance Mortgage Professionals committed to sharing best practices, increasing their income, and expanding their referral partner network. Cindy was one of the Top 100 Mortgage Loan Originators in the U.S. for over a decade, and will teach you her Total Success Blueprint to drive results and grow your pipeline with proven lead-generating strategies. Learn more at www.MortgageMastermindElite.com and receive a FREE copy of Cindy’s ‘Time is Money Guide.’”
 
A top 50 nationwide lender is looking for the right Consumer Direct Leader to further build its outbound-calling Consumer Direct Platform. All infrastructure is currently in place (call center, lead providers, and management tools.) Now, a dynamic leader is needed to recruit ad hire talent, provide analysis and recommendation relative to the type and quality of leads to be purchased, script the Loan Originators, manage the process, and grow the unit. Please send your confidential resumes directly to me.
Are you in need of sales management expertise? Are you looking to take your existing team to the next level? Or, is your company looking to expand into Third Party Origination (Correspondent and Wholesale)? A seasoned Sales Executive is seeking a new opportunity to help lead a mortgage company into achieving their growth goals.  All institution sizes and locations will be considered.  Please send inquiries to me to pass along to the candidate, and specify the listing.
 
Company news
 
I remember the big problems that ensued when investment banks, who specialized in the secondary markets, got involved in the primary markets. But hey, what do I know? Reuters reports that Morgan Stanley plans to bring its mortgage origination business in-house to “improve customer service and generate more business.” Prompting the move is Morgan’s third-party provider, PHH Corp. exiting the origination business next year. “Although it will soon begin handling the early stages of mortgage lending, Morgan Stanley will continue to use PHH for other functions like mortgage servicing.” “Morgan Stanley got into consumer lending more aggressively after finalizing its purchase of the Smith Barney brokerage from Citigroup in 2013. The deal came with a slew of deposits that Morgan Stanley had to start lending out to generate profits. While lending has increased 50 percent over the past four years, largely through securities-based loans, only 2 percent of Morgan Stanley’s wealth management customers have mortgages from the bank.”
 
Disaster news
 
Before going any farther, Saturday’s commentary contained a letter from a reader saying, “Dodd Frank may have added more systematic risk than anyone had previously considered, and the latest disasters in Florida and Texas bring that to light. Think about catastrophe bonds, PE firm investment wipeouts, and the mortgage finance business, i.e. AmeriHome and Athene. Could catastrophe bond investors be wiped out?”
 
The note prompted John Hill, SVP of Correspondent Sales for AmeriHome, to write, “This post is not only incorrect, it’s potentially slanderous. Athene does not own any catastrophe bonds in their portfolio. This could have been verified as Athene is publicly traded, and required, as a life insurance company, to make all their investments public. Furthermore, Athene is a life and annuity insurance company, not a PE firm. I’m also unclear as to how Dodd-Frank is tied into their or AmeriHome’s existence. As you know, we are only 29 months old and are already #4 in the US for correspondent production with over 400 clients. This type of unvetted ‘contribution’ is not helpful to AmeriHome, Athene, our clients or our industry. We expect a higher standard from you and your blog.” I agree, and apologize.
 
It is thought by Susan Maklari, Credit Suisse analyst, that the home builder sector will make up Irma losses quickly, but building products have a murkier future.
 
The federal flood insurance program has paid more than $1.8 million between 1979 and 2015 to rebuild a single house in Kingwood, Texas. The house has been flooded 22 times since 1979, but Hurricane Harvey was the last straw — the homeowner wants out.
 
FEMA continues to update disaster declarations for Florida counties. Amendment 7, dated September 16th has added Dixie and Lafayette Counties. The state of Georgia is also receiving updated federal funding available to affected individuals in Camden, Chatham and Glynn counties. Hurricane Harvey received an official incident period end date of September 15h per Amendment #7 to DR-4332.
 
The MBA addressed the FHA’s disaster position. “We are aware that FHA’s re-inspection policy for loans that were in process prior to the hurricanes is impacting literally thousands of families. MBA staff has been in ongoing discussions with FHA and has elevated our concerns to Secretary Carson. We are hopeful that HUD will move quickly to align its re-inspection policies with those of the GSEs and other federal agencies so lenders can resume working with FHA homebuyers to speed up re-inspecting properties, make repairs where necessary, and help families (both the buyers and the sellers) return to normal.
 
FHA’s current policy from the Handbook on page 351 states: c. Inspection and Repair Escrow Requirements for Mortgages Pending Closing or Endorsement in Presidentially-Declared Major Disaster Areas. All Properties with pending Mortgages or endorsements in Presidentially-Declared Major Disaster Areas (PDMDA) must have a damage inspection report that identifies and quantifies any dwelling damage. The damage inspection report must be completed by an FHA Roster Appraiser even if the inspection shows no damage to the Property, and the report must be dated after the Incident Period (as defined by FEMA). FHA does not require a specific form for a damage inspection report.
 
MBA has urged HUD Secretary Carson to eliminate the requirement to wait until after FEMA specifies the end date of an incident period, and align its re-inspection policy with the GSEs’ requirements. “We understand that some HUD field personnel have advised lenders that they can close loans now and reinspect the properties a second time — after FEMA designates an end date to the incidents — without impacting the insurability of the mortgage. Until FHA changes its policy officially, we caution lenders about the risks to insurability of closing FHA loans in the designated area. We are hopeful the policy will be changed soon and we will apprise the industry of any developments as they occur.” 
 
For properties impacted by Hurricanes Harvey and Irma, AmeriHome will purchase FHA loans with appraisals, in FEMA declared disaster areas, with an acceptable inspection completed prior to the Incident End Date.
 
As of September 14th, Thirty-seven Florida Counties are now designated for Federal Assistance after Hurricane Irma. Prior to closing and funding, ResMac, Inc. will require a property inspection for any loan secured by a property in the affected area. If the subject property is in one of the impacted counties and the appraisal was completed prior to the incident period end date, ResMac will require a post disaster inspection confirming the property was not adversely affected by the disaster. The inspection report must be dated no earlier than the date of disaster conclusion as determined by FEMA and/or the State of Florida. If the appraiser notes defects in the exterior inspection, a Uniform Residential Appraisal Report with an interior and exterior inspection and photographs is required. If damage is revealed by the inspection, it must be repaired prior to purchase.
 
Weslend Financial Disaster Area Property Valuation Requirements are as follows: Effective date on or prior to the disaster date: the valuation must be validated with the following (interior and exterior only): CDAIR report, Or interior and exterior Disaster report. A full appraisal with interior and exterior inspection is required on or prior to the Disaster Date if a Property Inspection Waiver (PIW) or other alternative valuation tool was used of the appraisal or the day after the Disaster date until the expiration of the disaster notice (generally 120 days from the date of the original event, but may be extended).
 
Capital markets
 
Last week Austria announced plans for a 100-year bond. And now China is reportedly planning its first dollar-denominated bond sale in more than a decade, valued at around $2 billion, to meet increasing Asia-Pacific appetite for such bonds. All kinds of things going on in the debt markets!
 
Ours here in the U.S. has been in the same interest-rate range for several months. The Friday session resembled Thursday’s when the market saw some intraday volatility only to end little changed. Interestingly, a disappointing batch of data invited only a short-lived bid, leaving the 10-yr note near last week’s low: Q3 GDP estimates were lowered in response to weak Retail Sales for August but the 10-yr yield rose 14 bps for the week (closing at 2.20%) and the 2s10s spread ticked up a basis point to 82 bps. And agency MBS closed Friday’s session a touch lower in price and narrowly changed on spread to treasuries.
 
There is no early morning news this morning (typically more market moving) so today’s calendar kicks off with the NAHB’s single-family homebuilder sentiment index for September at 7AM PT. Tomorrow is Housing Starts and Building Permits, and the Import & Export Price Indices (is there inflation?). Wednesday is the usual MBA apps data, Existing Home Sales, but then the Federal Open Market Committee’s announcement & rate decision.
 
The FOMC decision could be the highlight of the week. While the Fed is expected to keep short-term rates unchanged, given what nearly every Fed official has been saying for months, expectations are that they will announce the beginning of tapering of both treasury and MBS reinvestments which are expected to start at monthly cuts of $6 and $4bn, respectively, and go into effect as soon as the next two-week FedTrade schedule (Sep 28 operation) for MBS or sometime in October.
 
Thursday, we resume with Jobless Claims, the Philly Fed numbers, and the FHFA House Price Index. We finish the week with Markit US manufacturing numbers. We begin the week with rates versus Friday’s close: the 10-year yielding 2.21% and agency MBS prices down/worse a few ticks.
 
 
A couple in their nineties are both having problems remembering things. During a check-up, the doctor tells them that they’re physically okay, but they might want to start writing things
down to help them remember.
Later that evening, while watching TV, the old man gets up from his chair. “Want anything while I’m in the kitchen?” he asks.
“Will you get me a bowl of ice cream?”
“Sure.”
“Don’t you think you should write it down so you can remember it?” she asks.
“No, I can remember it.”
“Well, I’d like some strawberries on top, too. Maybe you should write it down, so as not to forget it?”
He says, “I can remember that. You want a bowl of ice cream with strawberries.”
“I’d also like whipped cream. I’m certain you’ll forget that, write it down?” she asks.
Irritated, he says, “I don’t need to write it down, I can remember it! Ice cream with strawberries and whipped cream – I got it, for goodness sake!”
Then he toddles into the kitchen. After about 20 minutes, the old man returns from the kitchen and hands his wife a plate of bacon and eggs. She stares at the plate for a moment.
“Where’s my toast?”
 
 
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.)