Did you know that Wells Fargo gives more assistance and aid to people and communities through its Foundation than any other company in the United States. For example, “the Wells Fargo NeighborhoodLIFT program looks to the future by delivering down payment assistance and financial education to homebuyers.” If only people focused on that, right? Not only did Wells tragically lose an employee in the Southwest Airline accident, but in a smack to the Retail Division the American Federation of Teachers notified Wells that it is dropping the bank as a recommended mortgage lender for the national education union's 1.7 million members. The press continues to talk about a settlement of a potential $1 billion fine, and by some specific measures other lenders have overtaken Wells’ volume. Seems like “The Coach” has had negative headlines for a couple years now, with rate lock issues, car insurance, opening unauthorized accounts. The banking and lending industry is watching…

Freddie and Fannie Changes

According to The Wall Street Journal, new research from mortgage data tracker CoreLogic found that about one in five conventional mortgage loans completed this winter went to borrowers who were paying more than 45 percent of their monthly incomes toward their mortgage and other debts. The amount of the loans packaged and sold by Fannie Mae and Freddie Mac also increased 73 percent in the second half of 2017, compared with the first six months of the year. In that same period, overall new mortgages rose 15 percent. Despite a lack of housing stock for anyone to buy, lenders have been trying to find ways to make homeownership more affordable. “For example, Fannie Mae and Freddie Mac have started backing loans made by lenders who offer to pay down a buyer’s student debt or to help the self-employed obtain mortgages. They also started guaranteeing loans with down payments as low as 3 percent several years ago, and both Fannie and Freddie are backing more loans made to borrowers with debt-to-income ratios of up to 50 percent.”

“Fannie’s new policy closed 100,000 new mortgages that otherwise wouldn’t have been made in 2017 and early 2018, according to the Urban Institute, a non-partisan research organization. The share of new buyers with debt-to-income levels in the 46 to 50 percent range is well below the peak registered in 2007, but it is getting close to the levels of 2004 and 2005, the years leading up to the bubble.” Is it a great policy idea, or a race to the bottom (again)?

The Fannie Mae Servicing Guide 2018-03 has been updated with changes that remove the requirement for servicers to provide a welcome call for servicing transfers if borrowers receive timely and accurate information about the transfer. Servicers must remain in compliance with all applicable laws. Also, it provides more flexibility for escrow shortages associated with loan modifications. Servicers now have the option to spread an escrow shortage over a period of up to 60 months and may do so in any way that most benefits the borrower.

The Fannie Mae Selling Guide will be updated on the first Tuesday of the month, instead of at the end of the month, to better align with lender processes. The April 2018 Selling Guide updates include: Providing lenders with a choice to select a full-service certification custodian (FCC) for whole loans and MBS transactions instead of requiring lenders to use a designated document custodian. Allows lenders to provide closing cost assistance to borrowers when certain requirements are met. Offering more flexibility to single-closing construction-to-permanent transactions. Simplifying the Loan Delivery application by updating payee codes after a lender submits a new or updated wire transfer transaction on Form 482, Seller's Designation of Wire Transfer Instructions, and also retiring the monthly Out of Compliance report.

In Bulletin 2018-5, Freddie Mac announced project, liability insurance, and fidelity insurance reviews are no longer required for condominiums securing certain refinances of Freddie Mac owned loans. At this time, Freddie Mac Loan Product Advisor (LPA) Loans secured by condominiums without a project review are not eligible for purchase by Wells Fargo Funding. It will continue to purchase LPA Loans secured by condominiums when a project review is completed.  

Capital Markets

Meanwhile, no one is going to argue that rates aren’t heading higher – eventually. The 10-year Treasury yield closed above 2.9% for the first time since February amid a wave of selling across European sovereign debt and inflation, returning the 2s10s spread to last week's level. European-issued debt dipped in response to the continued rally in crude oil, which will translate into higher inflation. U.S. stocks fell for the first time in four days, including the S&P 500 dropping its most in nearly two weeks as technology shares were hurt by trade and earnings concerns.

Looping back to some released from yesterday, Initial claims covered the period in which the survey for the April employment report was conducted, so it will fuel expectations for a strong gain in nonfarm payrolls. Components from the Philadelphia Fed Index increase should increase inflation pressures. The Conference Board's Leading Economic Index increased 0.3% in March, slightly below expectations following an upwardly revised February figure. Notably, the 4.3% growth rate for the index for the six-month period ending March 2018 was much faster than the 1.9% growth rate over the previous six months.

Today’s calendar has zip for scheduled economic data of consequence scheduled for release, though we do have two Fed speakers: Chicago's Evans will speak on current economic conditions and monetary policy, and San Francisco's Williams participates in a closed fireside chat. Rates are a shade higher versus last night’s close: the 10-year is yielding 2.92% and agency MBS prices are worse a few ticks.

Compliance Accreditation

MBA is excited to announce the launch of Level I of the highly anticipated Certified Mortgage Compliance Professional (CMCP) designation. With roughly 30 hours of self-paced content covering the fundamentals of the regulatory ecosystem, the CMCP is the only designation that is exclusively geared towards compliance professionals that serve in the mortgage finance industry.  Throughout the level I curriculum, students will be tested on how the regulations fit in the residential loan lifecycle, the critical rules and regulations that impact our industry, and how to apply the regulations to common business practices and situations. Students receive a certificate of completion upon achieving a passing grade for each of the courses and comprehensive final exam, which allows training managers to assess proficiency and progress. Pete Mills, MBA’s Senior Vice President for Residential Policy and Member Engagement says that, “The launch of this program demonstrates MBA’s commitment to providing top quality content and being the industry’s most trusted source for mortgage finance training.  Having a sound training program is a crucial element in a company’s compliance management system and this designation will provide an accessible, affordable and consistent means of educating your compliance workforce and documenting those efforts.” Contact Amber Lawrence for more information.

Employment, Webinars, and Products

Excitement is building within the mortgage community in anticipation of the upcoming launch of Floify’s remastered “interview-style” 1003 loan application, which will be a “game-changer” for the industry, according to several top-producing LO insiders. Floify, the leading end-to-end mortgage point-of-sale solution, has committed to raising the bar when it comes to speed, efficiency, and overall satisfaction with the loan process between LOs and their borrowers. Floify’s new 1003 promises to provide borrowers with a beautiful, simple, and secure online mortgage application that functions equally well on both desktop and mobile devices. This highly integrated application will pack a tremendous amount of value for lenders and originators seeking to add robust automations to their loan process. If you’ve been considering Floify for yourself, your brokerage, or your enterprise, now is the perfect time to take advantage of this incredibly powerful solution. Request a live, 30-minute demo today!

An expanding Northern California mortgage bank looking for a Banking Operations Manager with experience in process automation, systems, roll-outs, and written procedures. “You must have some experience in compliance and licensing. In addition, we are looking for this manager to create, document, and execute new processes and procedures for the company.” Please submit confidential resumes to me for forwarding and specify the job.

Vendorly has been named a 2018 HW TECH100 Winner, recognizing the 100 most innovative technology companies in U.S. housing, spanning real estate, mortgage lending, mortgage servicing and investments. Since Vendorly’s launch in 2016, it has facilitated the oversight of over 20,000 vendors across more than 90 clients and continues to enhance its platform through new integrations with leading third-party data providers. Vendorly wants to hear about your vendor oversight best practices and challenges to continue to bring the most relevant and valuable solutions to our industry. Share your thoughts in a two-minute survey and you’ll be automatically entered to win one of three $100 Amazon gift cards! To receive a demo, contact Michael Ehms.

“Cybersecurity is not your expertise. Therefore, it behooves you to have a trusted cybersecurity pro who knows the mortgage industry in your corner. Mitch Tanenbaum, CyberCecurity LLC partner and regular contributor to this newsletter is someone you should know. He is the best in the business and he can be your pro. Mitch can be your Virtual Chief Information Security Officer or vCISO.  You do NOT require a FULL-TIME CISO, but you absolutely require a part time CISO...whether 2 hours a quarter or 7 hours a week. Go HERE to see what Mitch can do for you as your vCISO. Get to know Mitch. See why so many of your peers have chosen him as their vCISO.  Put him on retainer - 4 hours for $1,000. Now you have a cybersecurity pro on your side. It’d be a very smart move.”

James Brody, Chair of Johnston Thomas’s Mortgage Banking Practice Group, in collaboration with the Mortgage Bankers Association (MBA), Nations Reliable Lending (NRL) and Richey May, will host and moderate the first in its ongoing series of free webinars, titled “Mergers & Acquisitions in the Mortgage Banking Industry: Expert Insights and Forecasts for 2018 and Beyond”. Whichever side of an M&A transaction you are interested in learning more about, the special guest speakers for this webinar will provide you and your companies with critical insights needed to make informed and strategic business decisions. Click here to register for this free webinar. Otherwise, should you have any questions regarding this program, please contact Mr. Brody or, if possible, meet with him (and his colleagues) in person at the upcoming MBA Legal Issues Conference in LA, where Mr. Brody will be presenting on the issue of Mortgage Banking Repurchase Litigation.   

PHH received a Top Servicing Performance rating from Fannie Mae. PHH Mortgage, a top five subservicer, is pleased to announce that it was named a Fannie Mae Servicer Total Achievement and Rewards™ (STAR™) Performer for 2017 in the General Servicing and Timeline Management categories. “We are honored to receive the STAR award from Fannie Mae and proud to be recognized as one of the top performing servicers in the industry,” said Steve Staid, Senior Vice President, Servicing. “This is a testament to the outstanding work of our dedicated employees and their commitment to providing exceptional service to our customers.”

Paramount Residential Mortgage Group, Inc. (PRMG) proudly announces the hiring of Ty Rothenberger as a Retail Northwest Regional Manager. Ty is a 12-year trusted industry professional with an unyielding passion to build and be part of top performing mortgage origination teams. “I'm looking forward to providing the resources of a well-capitalized lender that has a pro originator-based platform. PRMG is a privately held, non-institutionally funded and controlled lender that provides all the expected resources in today’s mortgage lending environment. PRMG is the place where decisions and resolutions can be efficiently executed and implemented. It truly shows as PRMG is Built by Originators for Originators”, said Rothenberger.  If you’re ready to join a top-tier team and company, then it’s time to talk! Contact Chris Sorensen at 909.262.0452.

Evergreen Home Loans jumps to #1 on national list by Fortune. Being named the #1 BEST Place to Work in Financial Services and Insurance by Fortune and Great Place to Work® is a testament to the culture that Evergreen associates live everyday - 98 percent of those surveyed say they are proud to tell others they work at Evergreen. “At Evergreen Home Loans we are creating the best place to work in the country and this recognition shows that we are leading the way among our industry peers,” said Don Burton, president, Evergreen Home Loans. This is the third consecutive year Evergreen was named to the list adding to their other numerous awards and recognition accolades. The company is aggressively hiring loan officers seeking a great culture and place to work. Candidates can find the latest job openings on the Evergreen Home Loans Careers page.