What did the Dali Lama say to the hot dog vendor? "Make me one with everything." Some LO's out there wish the Lama could fix the pricing on some of the products out there. Agency mortgage-backed security prices are on the moon: at the close on Friday Fannie, Freddie, and Ginnie 3.5% securities closed at roughly 104, 103.875, and 105.5, respectively. For the sake of simplicity, let's say those are the prices of 4% 30-yr mortgages. Are borrowers seeing those rates at those prices? Of course not - a four point premium for a 4% conventional loan or five points for a FHA/VA, even when you throw in the value of servicing? Companies have too much overhead now to pass all that along, of course, too much buy back risk, too many reserves to set aside, too much whatever, and on top of that, many lenders are at capacity - they don't have to!
And
lenders continue to add staff. I have been retained by a well-known bank-owned regional lender in the Mid-South which is
seeking a Mortgage Operations Manager to oversee processing, underwriting,
and closing functions. The lender is closing over $2 billion of annual
production, is an agency securitizer and servicer (well over $5 billion), and
has all agency approvals. The candidate should be prepared to live near the
headquarters, information to be released to viable candidates, and travel is
required to the company's regional support centers. If you know someone who
might be interested in a good opportunity, please have them contact me at rchrisman@robchrisman .com referencing the ops position.
North of there, I have also been retained by an established mortgage company in the Northeast region in its search
for a lock desk/scenario professional. The company is originating approximately
$1 billion per year and is licensed in well over 20 states. The ideal candidate
should be prepared to process lock requests from branch and loan originators,
establish scenario desk and respond to product eligibility questions, lock
loans with delivery sources, prepare daily lock reports and distribute to
management, prepare purchase advice analysis and exception reports, maintain
company pricing and best-ex engine, maintain company product grid and matrices,
and assist in new product development. Resumes should be directed to me at rchrisman@robchrisman .com referencing the introductory
secondary position.
Both these lenders are doing much better than ResCap. Ally announced this morning that its ResCap mortgage subsidiaries filed for Chapter 11 bankruptcy. ("These actions will enable Ally to further invest in and grow its leading U.S.-based automotive services and direct banking franchises and be best positioned to return additional capital to the U.S. taxpayer by year-end. 'The action by ResCap will enable Ally to achieve a permanent solution to its legacy mortgage risks and put these issues behind us,' said Ally Chief Executive Officer Michael A. Carpenter.") Ally Financial, Ally Bank and all other Ally entities are not part of the ResCap Chapter 11 cases. In addition, "ResCap and its origination and servicing platform are expected to operate in the normal course during this process."
Let's hope California doesn't follow. California's budget deficit will swell to $16 billion, nearly $7 billion greater than expected due to weak tax revenues and slow progress in cutting spending.
Yes, the government is entwined in residential lending. Beside the splash caused by President Obama's proposal, another piece of legislation was introduced by Senator Feinstein. It would provide simple, low-cost refinancing opportunities to non-GSE borrowers by extended streamlined refinancing to those who have been paying on their mortgages but have private label or bank loans. (Did anyone ask the non-agency security investors about this one?) The new mortgages would be run through the FHA and open up today's low rates to an estimated three to four million families.
But wait - there's more! A third piece of legislation proposes to give underwater borrowers who decide to refinance a choice of taking the reduced interest in the form of a lower monthly payment or applying those savings to rebuilding equity in their homes. To encourage borrowers to make the latter choice the legislation would cover the closing costs of borrowers, a benefit of about $3,000 per homeowner on average. Taking this course of action would give the majority of underwater borrowers the chance to get back above water in five years or less. That's dandy - where are we going to come up with the $3k for each loan?
Returning to Obama's proposal, the key
points are as follows, many of which are actually pretty good. 1) Extend the HARP eligibility date
to May 31st 2010. (The bill mentions that May 31st 2010 was chosen because most
of the loans originated after this date already have a mortgage rate below 5%.)
2) The bill would direct the GSEs to require the same streamline underwriting
process, and associated reps and warranties for new servicers (cross servicer)
as they do for existing servicers (same servicer), removing some barriers to
competition. The bill would eliminate employment and income verification
requirements, thereby allowing a simple pre-approved refinance package to be
sent to a borrower that only needs to be signed and returned - further
streamlining the process. 4) As a result of the bill, lenders who do not permit
a second lien re-subordination to a refinance loans, as long as that it does
not increase the risk to the second lien holder, will be prohibited from
receiving GSE guarantee for new loans. Similarly mortgage insurers who refuse
to transfer coverage to the refinance loan will be prohibited from new business
with the GSEs - a penalty. 5) The bill also advocates extending the HARP 2.0
program not just to LTV >80, but also to borrowers with LTV <=80. 6) The
bill would prohibit the GSEs from charging LLPAs on a Fannie-to-Fannie or
Freddie-to-Freddie refinancing. And lastly, 7) it would eliminate appraisal
costs - for borrowers who still require a manual appraisal, possibly because
they live in communities where there haven't been many recent sales, the bill
suggests that the GSEs provide alternatives to manual appraisals in order to
reduce overall cost and time to refinance.
How do Ops and compliance folks keep up with things? Here are some somewhat recent lender/investor updates. As
always, it is best to read the actual bulletin, but this will give one a flavor
for what is happening out there. In no particular order...
US Bank announced that it is no longer offering the full FHA 203k program (streamline is still available). (I received this note: "We do a reasonable amount of these loans and used to sell them to BofA, then moved over to US Bank....now looking for a home. Stonegate correspondent offers both a full and streamline version but their guides seem a bit more restrictive, plus I would prefer to have at least two outlets. Do you know of any other companies that offer this program on a correspondent basis?")
Flagstar, prior to the April 28th Fannie
update of DU Version 8.3 to implement enhancements to DU Refi Plus, reminded
clients that it will provide lenders with estimated property values on certain
DU Refi Plus loan casefiles. The estimated values are intended to provide
transparency into Fannie Mae's view of the value of the property that was used
to determine eligibility for the DU Refi Plus property fieldwork waiver offer.
These updates will apply to DU Version 8.3 loan casefiles submitted or
resubmitted to DU on or after the weekend of April 28.
GMAC also reminded folks prior to
the 28th that Fannie Mae will update DU Version 8.3 to implement
enhanced messaging for DU Refi Plus loans. The estimated property value used to
determine eligibility for a property fieldwork waiver offer will be disclosed.
SunTrust Mortgage will accept an
allonge in lieu of an endorsement for conventional and government loans.
Chase announced changes and
clarifications to its detached Planned Unit Development (PUD) appraisal policy,
including reduced appraisal requirements for: Detached PUDs with monthly
Homeowners' Association fees less than or equal to $50 and Property Inspection
Reports (2075/2070) and DU Property Inspection Waivers (PIW).
In conjunction with Fannie Mae Selling Guide Update SEL 2012-01, Chase is
eliminating the lot ownership seasoning requirement for calculating LTV for all
Fannie Mae and Non-Agency transactions utilizing the Chase construction
modification program. This update to the Construction-to-Perm Modification
(Single Close) product guide aligns Fannie Mae and Non-Agency LTV calculations
with Freddie Mac.
Wells Fargo Wholesale issued a new
Fee Details form on the Broker's First® website and reminds users that, on the
form, broker compensation should be shown as a percentage of the loan
amount. Should the percentage on the Fee Details fail to match the dollar
amount on the GFE or the compensation be listed as a flat fee, the loan will be
stopped. The only case in which the dollar amount of the broker
compensation will be increased after the loan is through the receiving process
is if the loan amount increases.
The Home Equity compensation promotion that Wells had been offering on
properties in 29 states ended on May 5th.
A new Home Equity SIMO pricing special will be available for commitment amounts
of $50,000 and greater that will allow CLTVs up to 80%. Loan scores of
740 and over can benefit from a reduced variable rate of 4.25% on home equity
SIMO transactions, which includes the standard 0.125% mortgage relationship
discount. SIMO applications submitted from May 5th to June 1st are
eligible.
Effective for Home Equity Market Classes 3 and 4, restrictions on CLTV for Loan
Scores of 790 and above, DTI, and CLTV for Loan Scores between 740 and 789 in
Indiana, Michigan, Ohio, and Rhode Island have been lifted.
A few weeks back Wells reminded correspondent and wholesale clients in New
Mexico that, under New Mexico law, for transactions that are negotiated in a
language other than English but finalized in English, the consumer must be
provided with a summary in the language primarily used for the
negotiations. This does not affect Wells Fargo Funding's willingness to
purchase loans so long as clients adhere to it.
After a relatively quiet news week in the United States, things "hot
up" a little during the next five days. Tomorrow we'll have Retails Sales
and the Consumer Price Index, Empire Manufacturing, and the NAHB Housing Market
Index. Wednesday is Building Permits and Housing Starts, and Capacity
Utilization and Industrial Production (I reversed the traditional order of both
of those just to see if anyone noticed), and the release of the Federal Open
Market Committee meeting from 4/25. Thursday is Jobless Claims, a Philly Fed
number, and Leading Economic Indicators.
Over the weekend we learned that output at factories in the euro zone unexpectedly fell in March, the latest in a series of disappointing numbers signaling that the bloc's recession may not be as mild as folks had hoped for. And banks are very concerned that the Chase trading error will help usher in the Volker Rule, which in its present form will prohibit hedging rate locks. Our 10-yr T-note, which closed Friday at 1.84%, is down to 1.78%, and MBS prices are better by about .250.
Church Ladies With Computers. (Part 1
of 3) These sentences (with all the bloopers) actually appeared in church
bulletins or were announced in church services:
The Fasting & Prayer Conference includes meals.
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The sermon this morning: 'Jesus Walks on the Water.
The sermon tonight: 'Searching for Jesus.'
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Ladies, don't forget the rummage sale. It's a chance to get rid of those things
not worth keeping around the house. Bring your husbands.
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Remember in prayer the many who are sick of our community. Smile at someone who
is hard to love. Say 'Hell' to someone who doesn't care much about you.
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Don't let worry kill you off - let the Church help.
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Miss Charlene Mason sang 'I will not pass this way again,' giving obvious pleasure
to the congregation.
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For those of you who have children and don't know it, we have a nursery
downstairs.
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Next Thursday there will be tryouts for the choir. They need all the help they
can get.
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