Kim Kardashian has vowed to take and pass the bar exam in 2022 without attending law school. You go girl! Few who go that route pass the test. Then again, few accomplish being famous just for being famous. Perhaps her goal is to one day address the MBA's Legal Issues and Regulatory Compliance Conference (next month). While we’re on legal issues, Mortgage Media points out that “…Quicken is the only major lender to have not settled their FCA case, unlike almost all others, and have steadfastly defended their innocence. Not only has Quicken refused to settle, they have been effective at slimming down the volume of loans used as the base sample for the suit. ‘We’re talking about 55 loans that the DOJ said had an issue with out of the 250,000 FHA loans that we’ve done in that time period,’ stated Bill Emerson, the Vice Chairman of QL and former MBA Chairman. ‘We refuted 47 of those, so we’re only really talking about eight of those.’”

Lender Products and Services

“Shrinking margins, increased pressure from state regulators and an uncertain compliance landscape has many lenders looking for support that can save them money and provide flexibility. Strategic Compliance Partners, a leader in compliance management, provides compliance support through all stages of growth. Whether you need minimal support or looking to never worry about compliance again, SCP has a fixed-price solution to get you where you need to go. Contact us today at sales@strategiccompliancepartners.com to learn how we can save you money.”

Find the right digital lending software! For in-house teams who are still looking, evaluating, and testing digital lending platforms, Blend has compiled a guide of our customers' collective advice. We hope it shines some light on what we know can be an incredibly intimidating process. Download the white paper.

Looking for ways to grow your business? Freddie Mac is collaborating with clients to deliver automation and insights that provide a competitive edge. Cut back on documentation and reduce time to close with Loan Product Advisor® automated income and asset assessment capabilities. Save borrowers time and money with ACE appraisal waivers, now available for certain condo unit loans. Grow your condo business with Freddie Mac’s unit-level condo exception tool, Condo Project AdvisorSM. Get greater efficiency with simpler collateral QC and underwriting in Loan Collateral Advisor® Get The Freddie EdgeSM.

Loan Vision is ready for ASC 842, but are you? The new GAAP standard coming into effect later this year, which significantly changes how leases must be accounted for, is certain to create significant challenges for mortgage lender’s finance teams. Compliant with the new ASC 842 standards, Loan Vision’s new Lease Management Tool helps manage this major change in the world of accounting. To learn more about the tool, join them for a webinar on April 25, 2019 at 11am, or call Carl Wooloff at (724) 216-5266. If you are unfamiliar with the changes, check out their infographic here.

Conventional Conforming News

The Fannie trading desk spread the word that, “As a result of our periodic review of risk-based pricing, Fannie Mae is implementing a 25-basis point (0.250%) loan-level price adjustment (LLPA) for loans secured by second homes with LTV ratios greater than 85%.  This LLPA will be applied to whole loans purchased on or after July 1, 2019, and for loans delivered into MBS pools with issue dates on or after July 1, 2019. Note that it is not applicable to DU Refi Plus™ and Refi Plus™ loans. Review the Lender Letter for more information.”

Seller/Servicers: do you have question on Fannie Mae audited financial statements? Check out the FAQs about the Fannie Requirements.

The Fannie Mae April Selling Guide update adjusts or clarifies several policies related to HomeReady® mortgage loans, removes references to the self-reporting mailbox to align with a new self-reporting process in Loan Quality Connect™, provides additional flexibilities for Fannie Majors®, and more.

During the weekend of April 20, Desktop Underwriter® (DU®) for government loans will be updated to support the FHA Third Party Verification changes announced by FHA in Mortgagee Letter 2019-01, as well as other message related updates. Read the Release Notes for information.

The revised Uniform Closing Dataset (UCD) Seller data requirements will be effective on June 24, 2019. Freddie Mac and Fannie Mae (the GSEs) limited the requirements to the Seller data that is contained only in the Borrower Closing Disclosure. For full details, read the joint GSE announcement and refer to UCD Delivery Specification version 1.5 that can be found on its UCD web page.

PennyMac posted announcement 19-22 regarding Non-US Citizens.

Fannie Mae published a Fact Sheet providing guidance to clarify eligibility for non-U.S. citizen borrowers. On 12/21/2019, HUD provided clarifications for FHA loans as well. There are no policy changes from these clarifications.

Fannie Mae announced changes to the Selling Guide, Announcement SEL-2019-03, for sections covering HomeReady ® mortgage loans, the self-report process, and additional topics. Changes include: imposing a maximum limit of two financed properties, including the subject property.  HomeReady loans combined with HomeStyle® Renovation can be delivered with the lower level of mortgage insurance permitted for the HomeReady transaction. Effective date to require mandatory use of the new Form 1008 for applications.

U.S. Bank Home Mortgage issued Seller Guide Update SEL 2019-013 for Correspondent and HFA covering multiple topics.

PennyMac’s Announcement 19-21 specifies details of its alignment with Freddie Mac updates to income.

Ditech posted information for Correspondent Clients. Its Conforming, VA, and USDA underwriting guidelines are being updated.

In a recent Freddie Mac bulletin 2019-7, Freddie updated its requirements for second home Mortgages to: permit second homes with seasonal limitations on year-round occupancy (e.g., lack of winter accessibility) to be eligible for sale to Freddie Mac provided the appraiser includes at least one comparable sale with similar seasonal limitations to demonstrate the marketability of the subject property. Specify that the property may be rented out on a short-term basis provided that: The Borrower keeps the property securing the second home Mortgage available primarily (i.e., more than half of the calendar year) as a residence for the Borrower’s personal use and enjoyment; and the property is not subject to any rental pools or agreements that require the Borrower to rent the Property, give a management company or entity control over the occupancy of the property or involve revenue sharing between any owners and developer or another party.

Mountain West Financial Wholesale posted a bulletin regarding information on the Fannie Mae DU Version 10.3 Release Notes, March 23, 2019.

Effective June 27th, the Wells Fargo Purchase Advice and online purchase advice reports will display the time that the funding process is initiated for each loan. Also posted, effective April 30, 2019, Freddie Mac’s GreenCHOICE Mortgages will not be eligible for purchase by Wells Fargo Funding.

Capital Markets

MCT congratulates The Money Source and Freedom Mortgage as the latest fully-integrated investors on its Bid Auction Manager (BAM) whole loan trading platform. While BAM has achieved 100% adoption among the investor aggregator community, these investors leverage API’s and advanced features like tri-party agreement automation for AOT transactions to provide the best experience to MCT sellers. “We’re also proud to have supported TMS in the launch of their new bid tape AOT channel,” said Phil Rasori, COO of MCT. “By offering automatic blending, immediate acceptance, and short delivery periods, the TMS program distinguishes itself from some of the hybrid and legacy AOT programs sellers may have seen.” These investors join previously-integrated Wells Fargo, AmeriHome, and PennyMac. Contact MCT about leveraging advanced features for investors, or learn more about how MCT has been pioneering secondary marketing technology through API’s and software integrations since 2012.

It's good to keep some historical perspective. Retail sales, which certainly help drive the economy, managed to bounce back somewhat in January after December’s large decline. While the headline gain was only 0.2 percent core sales (which removes the food, autos, gas, and building materials) gained 1.1 percent for the month. December was marked by a market selloff which hampered consumer confidence and reduced household wealth, but the markets have since regained those loses and consumer confidence is back on the upswing. Elsewhere, inflation remains subdue as both the Producer and Consumer Price Indices posted modest gains in February.  With inflation more or less at the Fed’s target, there is little motivation from that standpoint for the Fed to move quickly on more rate hikes. Even more so considering increasing labor costs have had only a small effect on consumer prices. Increasing productivity and historically high profit margins have allowed some companies to absorb those rising labors costs, keeping consumer inflation in check.

U.S. Treasuries ended Wednesday mirroring Tuesday’s rate rally, including the 10-year’s yield slipping to 2.48% after a hotter than expected headline CPI for March. But the core rate of inflation moderated on a year-over-year basis, which is a trend that should keep the Federal Reserve comfortable with its position of being on hold. The FOMC Minutes from the March meeting confirmed the Fed's patient stance, as most policymakers agreed that the fed funds rate range should remain at its current level for the rest of the year.

European Central Bank President Mario Draghi gave his press conference, during which he said the ECB is ready to use all instruments that are at the central bank's disposal, that the central bank will study whether negative interest rates need to be mitigated, and said details about the targeted longer-term refinancing operation will be provided at one of the upcoming policy meetings. Additionally, Treasury Secretary Steven Mnuchin said that an agreement on an enforcement mechanism has been reached with negotiators from China, causing pullback from Treasuries. The EU will reportedly grant a conditional extension of Article 50 to British Prime Minister Theresa May at yesterday's summit of EU leaders.

Today’s calendar started with weekly jobless claims (196k, nearly a 50-year low!) and the March Producer Price report (+.6%, core +.3% for people who don’t eat or use energy). We also receive five scheduled Fed speakers: Vice Chair Clarida, New York’s Williams, St. Louis’ Bullard, Minneapolis’ Kashkari, and Fed Governor Bowman. The day begins with agency MBS prices are worse .125 versus last night’s close and the 10-year yielding 2.49%.

Employment and Transitions

NMSI Inc recently announced that industry veteran James Hooper has joined its team as President of TPO. CEO, Jae Chong, said "We are excited to have James spearhead our national growth for us. His track record in Wholesale and commitment to the broker community we truly feel is unmatched in this space.” Also joining NMSI Wholesale, are VP of Sales Jon Laolagi and Kurt Lehrmannwho together have been serving the mortgage community in the Pacific Northwest for over 25 years. The rest of the new team includes, Regional Sales Manager Tom Hoppe, outside account executives Claudia Mann and Wellman Yu. Additionally, they’ve added a new office in Chandler, Arizona that houses a team including account manager Ryan Moore along with the following wholesale account executives, Michael Maday, Daniel Kohn, and Aaron Hilton. If you are a wholesale account executive looking to join a winning team with untapped territories and an aggressive product line contact James.Hooper@nmsigroup.com.

Congratulations to Peter Schwartz, whom Pinnacle Home Loans (Pinnacle), has just announced as its new Vice President of Business Development. Over nearly 2 decades, Peter has successfully recruited and on-boarded hundreds of Loan Officers and Branch Managers throughout the country. Pinnacle President, Nevin Miller said, "We feel fortunate to land a professional of Peter's caliber to help grow our California market share." “If the pressure of shrinking margins and associated pricing challenges is causing you to think about leaving retail and becoming a mortgage broker, Pinnacle might be a logical alternative,” said Nevin. Pinnacle is an innovative emergent lender, designed solely with the originator in mind. Based in Northern California, and now completely independent, Pinnacle offers competitive pricing, meticulous execution, and an extraordinary culture. Interested Branch Managers and Loan Officers should contact Peter Schwartz (916-770-0053).

Ready to make your move from retail LO to independent mortgage broker? The time has never been better. At BeAMortgageBroker.com, we can match you with a mortgage broker in your area or help you take the next steps toward opening your own shop. We are your single, no-cost source for the information and tools you need to become an independent mortgage broker. Call us for a free, confidential consultation and continued support throughout the process at 800.229.6342 or learn more at BeAMortgageBroker.com.

Congrats to Brett Arsta whom Guaranty Home Mortgage has appointed its CEO.