Psst… want a snapshot file that contains the national HMDA datasets as of April 18th, 2018 for all HMDA reporters, as modified by the Bureau to protect applicant and borrower privacy?  Here you go. Versus 2016, there were 1 million fewer home loans originated in 2017, for example. Last year there were 12.1 million home loan applications resulting in 7.3 million loan originations (60%) by 5,852 institutions – that’s a lot of lenders!

Adjustable Rate and Jumbo News

According to the most recent Origination Insight Report from Ellie Mae, which looks at the loans that pass through Ellie’s system, this March ARMs accounted for 6.3% of all mortgage loan originations—their highest share since October 2014. Every LO will tell you that rising 30-year rates are the reason since the gap between ARM rates and FRM rates tends to increase when rates head higher – something that the minority of LOs have ever seen.

Rick Bechtel, head of U.S. mortgage banking at T.D. Bank, opined, “First-time homebuyers or those who are on the edge of approval tend to gravitate toward ARMs primarily because the lower rate allows them to purchase more home or to purchase in a hot market, such as NYC or San Francisco. And Palmer Heenan, executive vice president of secondary marketing at Flagstar Bank, said his company has seen a rise in ARMs from in-demand markets across California, in particular.

Fannie Mae and Freddie Mac both offer adjustable programs, but both are renowned for issues in the secondary markets in terms of packaging these loans and selling them to investors. And thus, the ARM market for other products, especially portfolio ARMs, tends to be dominant.

Plaza’s Preferred Purchase Jumbo program guidelines have been updated to allow for LTVs up to 85%. Refer to program guidelines for complete details. New Preferred Purchase Jumbo price adjustments have been added to coincide with this new enhancement. In addition, updates have been made to certain existing LLPAs effective for loans locked on or after April 10, 2018.

As of April 13 Mountain West Financial, Inc. is offering 85% LTV Jumbo programs with NO Mortgage Insurance for primary residences that meet specific parameters.

Effective May 8th, Wells Fargo Funding is restricting the CLTV to 80% for Non-Conforming Loans in Fairfield County, Connecticut. Its Seller Guide Section 950: Non-Conforming Conventional LTV Matrix notifies Sellers to refer to Section 825.12: Property and Appraisal – Specific Property Types for CLTVs greater than 80%.

Condo, Alt, manufactured home lender/investor updates

A while back Chase offered up an “Investor Concentration Update for Condominium Review.”

Lenders, such as SunTrust, have required forms to complete for lending in this area.

American Lending is offering Non-Warrantable Condo and Condotel financing. Call 949-342-1234 for information.

C2 Financial put out a “What to Expect When Buying a Condo” guide worth a skim.

Pacific Bay Lending Group is offering an ALT DOC product. Contact Jennie Ensunsa for information.

Mountain West Financial is now offering manufactured housing with California Housing Finance Agency (CalHFA) FHA products.

FHA/VA

Loan Officer 101 class tells you that FHA loans are government loans often used by first-time homebuyers, borrowers with low-to-moderate incomes, or those with down payments of less than 20 percent of the purchase price (down to 3.5%). They can be easier to qualify for than a conventional conforming loan, but also require upfront and annual mortgage insurance premiums. Its market share ebbs and flows somewhat, and certainly Freddie and Fannie view the program as competition.

Guild Mortgage has launched FHA Solar for California residents, an innovative mortgage program developed to provide customers with more options and meet increasing demand for renewable energy homes. “The FHA Solar program allows homebuyers to include solar panels in their mortgage loan amount, offering the flexibility and convenience of combining the financing for their home and solar into one, single transaction. Solar panels can be added to any home, providing buyers interested in investing in renewable energy with more options. The program adheres to Federal Housing Administration loan requirements and offers down payment options as low as 3.5 percent. The down payment is based on the purchase of the home before the panels are added into the cost of the mortgage.

As of May 1st, FHA made available in FHA Connection (FHAC) the new loss mitigation claim submission function — Claim Type 33 – 2017 Natural Disaster Partial Claim — to support the disaster standalone partial claim announced in Mortgagee Letter 2018-01, Loss Mitigation Policy Changes, and communicated in FHA INFO 18-08 on February 22, 2018. will file the disaster standalone partial claim by selecting — Claim Type 33 – 2017 Natural Disaster Partial Claim submission instructions in the FHA Connection Guide once updated. In the meantime, FHA has posted a link to the submission instructions on hud.gov.

FAMC posted clarification on VA products regarding Construction-to-Permanent – Cash to Borrower: the borrower may not receive cash back from funds provided by another party; or cash paid for the lot if the funding fee is being reduced for eligible lot equity.

Capital Markets

Yes, the trend in rates is higher – no question. In fact, the 10-year T-Note crept back up towards 3% (and is higher this morning) yesterday despite President Trump announcing that the U.S. will withdraw from the Iran nuclear deal and reimpose all sanctions that had been lifted. Geopolitical uncertainty usually means lower rates, but leaders from France, Germany, and the U.K. voiced their intention to keep their countries in the agreement. And the overnight press was focused on Trump’s Iran decision. Crude prices are spiking as investors worry about supply disruptions (although Saudi Arabia pledged this morning to offset any lost output) and heightened geopolitical tensions.

Yes, U.S. rates are influenced by what happens overseas. In Italy, Forza Italia's Silvio Berlusconi denied reports that his party might break its alliance with Lega to allow a Movimento 5 Stelle-Lega coalition. The stalemate has produced a heavy dose of speculative headlines, causing Italian debt to retreat and lifting their 10-yr yield nine basis points to 1.86%, the highest level since late March. And Argentine President Mauricio Macri announced his government has requested financial assistance from the International Monetary Fund.

In our country, the NFIB Small Business Optimism Index ticked up as expected to 104.8 in April. The Job Openings and Labor Turnover Survey (JOLTS) showed that openings increased to 6.550 million in March from a revised 6.078 million (from 6.052 million) in February.

As markets grapple with the oil market volatility, the usual mortgage applications from the MBA kicked off today's calendar (-.4%, down 6% versus a year ago) for the week ending May 4. Next up was April’s Producer Price Index (it was +.1% & core +.2% versus forecasts of 0.3% and 0.2% MoM). March wholesale inventories and sales, at 10:00am, are seen increasing 0.5% and 0.6% MoM vs. 0.5% and 1.0% previously, and the U.S. Treasury is back with round two of the quarterly refunding when it auctions $25 billion new 10-year notes at 1PM ET. After the PPI number rates are higher versus last night’s close: the 10-year is at 3.00% and agency MBS prices are worse .125-.250.

Lender Products and Expansion

For brokers in search of additional products, including super jumbo, alternative documentation loans, FUNDLOANS.COM is a wholesale residential lender offering jumbo, super jumbo, and non-QM products to its brokers. “We take a common-sense approach to underwriting, and understand the nuances of working with self-employed borrower and love making exceptions! We fund owner occupied bank statement loans to $10 million! In 2017 we grew and expanded our loan products so much that we expect to triple our volume and size in 2018! And in addition to offering these products to brokers, FundLoans is hiring AEs who are experienced and who thrive when challenged and are inspired to deliver a unique selection of Jumbo loan products. Elevated compensation for AEs with current book of Jumbo A/Jumbo QM business. Come join the nation's newest Jumbo A/ Non-QM lender as we grow and thrive in this lucrative new space. We are hiring in CA, FL, TX, AZ, CO, WA, OR, HI, MO, WY. Send resumes to David Hidy, EVP Strategic Development.

“Fresh off yet another record month, Angel Oak Mortgage Solutions is busy growing our correspondent channel. With a robust set of non-Agency products including bank statement and Prime Jumbo, AOMS is the perfect complement to a lender’s product offering. Come talk to us at the MBA’s National Secondary Market Conference. We’ll be at the NFL Experience in Times Square talking non-Agency and how we can help you serve more borrowers. Simply email Sean Marr at sean.marr@angeloakms.com to schedule time to learn how you can become a correspondent partner with the leader in the industry.”

Are you spending time multitasking without getting much done? With the market shifting, this is not a time to fall back into old habits. That’s why on Wednesday, May 16th from 10-11 AM PST/1-2 PM EST, Sierra Pacific Mortgage is offering a free, engaging, and info-training webinar entitled “The Top 9 Most Effective Time Management Tips You’re Not Using” This unique webinar covers more than time management; it provides the scientific reasons why we revert to old habits as well as how to turn our goals into highly productive, life-enhancing, awe-inspiring habits! Click here to register. Talk about time well spent.

Caliber Home Loans, Inc., the nation’s fourth largest non-bank residential mortgage originator, has improved its funding through a series of refinancing collateralized by discreet pools of Ginnie Mae, Freddie Mac and/or Fannie Mae Mortgage Servicing Rights (MSRs). These provide Caliber access to capital efficiencies for MSR hedging and growth not previously available within the industry. The collection includes multiple partners which expand MSR-backed financing capacity by over 30%, lowers interest expenses by over 300bps, and extends duration by around three years. Notably, the Ginnie Mae structure is their first MSR-backed term note to include a subordinate class which provides access to additional financing for portfolio growth. Caliber CEO Sanjiv Das commented, “We remain focused on responsibly expanding our Retail and Servicing platforms and driving innovative industry leadership. This enables us to continue to address homeowners’ financing needs and proves there is robust investor appetite for financing the MSRs we service.”

Jobs and Promotions

Hiring an industry veteran, Envoy Mortgage has expanded its reach again adding a new branch in Essex Junction, Vermont to its over 150+ branches nationwide. Michael Blanchard is Envoy Mortgage’s newest Branch Manager. His strong focus on building lasting relationships and exceeding customer expectations has brought him success in the Vermont mortgage industry since 1989. “Michael has the experience and the same customer-focus we were looking for to continue to grow our Vermont market,” said Andy Pettola, Senior Vice President. “He is a Vermont native and his compassion and drive to increase local business come through in every day interactions. We are proud to have Michael leading the Essex Junction branch.” For career opportunities in Vermont with Envoy visit www.envoymortgage.com or contact Andy Pettola at 860.372.2569.

Congrats to Nick Suwanvichit whom On Q Financial, Inc. has brought on as VP of Strategy and Business Development. “With over 17 years of high-caliber leadership and business development experience, Suwanvichit plans to disrupt the mortgage industry, recruit top talent, and triple the business by 2020.”