Capital markets folks know that there are billions of dollars of outstanding 5, 6, 7, and even 8% securities filled with high interest-rate loans. LOs know that they aren’t paying off/refinancing. One possible reason? Despite the headlines talking about housing appreciation outpacing wages, about 10% of all U.S. homes with a mortgage are “seriously underwater.” These are homes where the balance on the loans are 25 percent higher than the actual market value of the home. There are 5.5 million seriously underwater properties in the U.S., but some areas are harder hit than others. In Louisiana, 21.7 percent of homes are seriously underwater, 18.5 percent in Illinois and 17.8 percent in Missouri. Some zip codes are particularly dire: 65809, in Springfield, Missouri has 81 percent of homes seriously underwater.

FHA, VA, HUD, and Ginnie Changes

In an op-ed published in the American Banker, Ginnie Mae’s Senior Vice President for Enterprise Data and Technology Solutions, Barbara Cooper-Jones, explained how the agency is making strategic technological improvements to keep up with the modern housing market. Cooper-Jones writes: To help ensure that lenders and consumers who seek financing in the government mortgage market can do so quickly and securely, Ginnie Mae is modernizing its operations. We have a critical role to play as an essential source of mortgage capital that is available all the time and at the best price that an efficient global capital market can provide.

While a government agency, Ginnie Mae is less constrained than many others and can move more quickly and decisively to keep up with the pace of change occurring in the primary market. While some agencies do struggle with dated technology, Ginnie Mae has been an outlier in our focus on continued improvement. We believe that our work will help ensure a stable secondary market for government mortgage loans.

FHA has published version 1.1 of the Loan Review System (LRS) User Manual on the Loan Review System page on hud.gov. The manual includes several updates to the original May 2017 version published at the time of system implementation, including: Detailed instructions for accessing downloadable data; Enhanced Completed Reviews information to include batches of loans; Instructions for troubleshooting access errors; and Revised screen shots and descriptions of other system enhancements.

HUD Provides Updates on Health of Reverse Mortgage Program and FHA’s Technology Systems.  During a House Appropriations Subcommittee hearing, Acting FHA Commissioner and HUD General Deputy Assistant Secretary Dana Wade acknowledged that the FHA continues to experience problems with its home equity conversion mortgage (HECM) program. While changes have been made to ensure borrowers understand their continuing financial responsibilities for tax, insurance, and that there are more rigorous financial assessments of the program, Ms. Wade noted that the legacy book of HECM’s portfolio continues to “include a good bit of trouble.”

PennyMac Correspondent Group posted an announcement on VA Refinance of Loans with No Payment History.

AmeriHome will no longer require that a paper copy of the FHA Mortgage Insurance Certificate (MIC) be sent to the AmeriHome document custodian.

AmeriHome Mortgage Company has a new FHA, VA, and USDA Quick Reference Guide, providing a straight-forward summary of the minimum insuring, guarantee, and pooling eligibility requirements for government loans available now on SellerWeb.

Mortgage Solutions Financial posted a new bulletin revision and clarification regarding 6 Month Seasoning Requirement on VA Cash Out and IRRRL.

Non-Delegated Pacific Union Financial clients can now utilize HUD’s Real Estate Owned (REO) GNND Sales Program. The purchase only program is available to borrowers currently employed as law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians. Through the GNND program, HUD Asset Managers list eligible single-family homes located in revitalization areas at a 50% discount off the list price. Eligible GNND borrowers must commit to occupy the property as their primary residence for 36 months.

New Programs and Guidelines

UWM is now offering doctors’ loans, waiving student loans from DTI. “United Wholesale Mortgage is making it easier for mortgage brokers to fund loans for borrowers who are medical doctors. Now, borrowers who are currently in, or have recently completed, a medical residency program or medical fellowship program do not need to include student loan debt in their debt-to-income ratio. The following requirements must be met: Loan is a Purchase or Rate And Term Refinance (no cash-outs), product must be fixed-rate or 5/1, 5/5, 7/1 or 10/1 ARM, LP findings must reflect “Accept,” and minimum FICO of 720 to qualify.

If you are looking for a self-employed borrower Stated Plus product, Contact Jennie Ensunsa from PacBay at 323-346-7474. This new product only requires 1-month Personal Bank Statement and starts at 4.75%.

California’s Parkside Lending offers Jumbo Foreclosure/Bankruptcy programs that include the reduction of the waiting period to 4 Years. Contact all Dirk Nelson with questions.

If you are looking for a No Income Loan, contact Kelly Brown at ACC Mortgage (949-887-4399).

The Lending Answer’s Alt-Doc Financing, SIVA Elite, has low Non-QM interest rates available to both W2 and Self-Employed Borrowers with no ratio underwriting. DTI's are not calculated, and no income documentation is required. For details and more information, visit The Lending Answer website.

Plaza’s Piggyback Closed End Second Lien program has been updated and are effective for second lien loans locked on or after August 7.

CoreVest announced a new program, Build-To-Rent Complete, that is tailored specifically for build-to-rent investors. Build-To-Rent Complete provides construction financing for the development of new rental properties along with long-term financing once projects are completed and stabilized.  CoreVest is offering this program to seasoned investors across the US with loan sizes ranging from $3 million to over $25 million. Beth O'Brien, CoreVest's CEO stated, “Whether it's bridge financing for large multifamily projects, long-term loans for single family rentals, or Freddie Mac loans, we can offer borrowers a range of attractive financing solutions," added Beth O'Brien, CoreVest's CEO.

Capital Markets

Time is precious, so I am not going to waste yours this morning. Interest rates aren’t doing much. The Turkey turmoil is “old news.” Aside from some chatter about officials from China and the U.S. looking to restart trade discussions, albeit at a lower level, we had some minor intra-day coupon, maturity, or security price movement of a few ticks – just like we’ve had all summer. Lenders took note that, in the housing starts number, single-family starts rose just 0.9% to 862,000, which is a modest pace that likely reflects the headwinds builders are facing with higher costs for materials, labor, and land. Nothing we didn’t know already, right?

And there is no “important” scheduled news out (the 8:30AM ET, 5:30AM PT stuff) today; later is July Leading Indicators (expected +.5%) and preliminary August Michigan Consumer Sentiment Index. Rates are down versus yesterday: the 10-year is yielding 2.86% and agency MBS prices are better by a few ticks.

Lender Products and Events

Change! It’s happening whether it feels good or not. As Originators and Leaders, what you do in the next 12-24 months will impact your career for the next 5-10 years. Todd Duncan’s Sales Mastery 2018 is themed Game Changers, appropriately designed to give you the tools and strategies to increase your value, elevate your attractiveness to borrowers and partners, and “future proof” your business. Mandates for thriving in the new mortgage landscape include adapting to radically new consumer buying behaviors, the emotional and economic value of your advice, deploying integrated content marketing and relationship tribe building, and a revolutionary approach to Consumer Direct. Todd Duncan will unveil all this and more at this year’s event on October 10-13 at the Marriott Marquis in San Diego. Register here and receive a $200 Digital Upgrade for FREE, and access to Todd’s brand-new video series, The 5-Steps to Unlocking Your Potential in the New Economy only available to ticket holders for this year’s event. Advanced ticket pricing is still available!

Employee satisfaction is just as important as customer satisfaction. Potential recruits looking to join your firm will read an average of 7 company reviews before deciding, so your Glassdoor and Indeed content is crucial. If your firm is not managing its online reputation, your unhappy employees—past and present—will do it for you. That's where SocialSurvey’s Employee WellCheck comes in, to attract and retain your best employees with a better online reputation. SocialSurvey recently announced 15 outstanding lenders in 2018, The top lenders of their 3 categories are: USA Mortgage (large), Mortgage Financial Services (mid-size), and Assent Mortgage (small). Find out the rest by checking out the inaugural Top Workplace Awards. Email GetStarted@SocialSurvey.com to find out how your company can boost its employer reputation using their Employee WellCheck campaign. Maybe you'll be recognized next year!

Company News and Business Opportunities

A regional retail lender is searching for a depository bank partner to expedite its growth, build a regional company, and establish servicing entity. This lender is currently licensed in over 40 states, has a widespread branch network offering a full range of residential products, and is a direct lender primarily focused on the East Coast. This is a great opportunity for a bank with limited or no mortgage originations looking to expand instantly into the industry, either as part of the bank or as a separate mortgage banking division independent of current operations. Interested parties should send a note to me for forwarding.

Congrats to Movement CEO Casey Crawford! Leadership in our industry received a nod from best-seller and leadership guru John Maxwell at his annual conference in Orlando. Casey Crawford, co-founder and CEO at Movement Mortgage, was named Maxwell’s Transformational Leader Award winner for 2018. Crawford and business partner Toby Harris started Movement with 4 people in 2008. Today, the lender originates about $13 billion annually, employs more than 1,800 originators nationwide and has invested about $40 million in community nonprofit work through Movement Foundation. Read more about Crawford and the company’s growth here.

Center Street Lending is excited to announce that Reid Stewart has joined its sales team as a Relationship Manager. Reid comes to Center Street Lending from Bedrock Capital Funding where he held positions in origination, underwriting and servicing. Reid’s background also includes starting, running, and growing lending and investment companies. With over 13 years of house flipping experience, Reid’s in-depth knowledge makes him a valuable resource for Center Street Lending customers. Center Street Lending has built a reputation as a premier private money, portfolio lender providing business-purpose loans through wholesale and retail channels for investments in: fix and flip, fix and rent, buy and rent; buy, tear down and build; new construction, and bridge loans. Contact Reid for more information.

Caliber Home Loans, Inc., IMF’s #3 non-bank Top Mortgage Lender for the first half of 2018 is proud to announce its newest Regional Vice President, Justin Jurkovich. He comes to Caliber with over 20 years of retail lending experience. Justin is known for building teams and driving increases in production. For the past 10 years, he has launched new regions within the Midwest for two national distributed retail lenders. Prior to joining Caliber, Justin started a new region for a competitor, growing the platform from zero to $400 million in annual production in less than three years. On joining the top-ranked lender, Justin says, “With Caliber’s best-in-class mortgage platform, proprietary systems, and focus on growth, the company is leading the industry and positioned for optimal growth within current market conditions.” Justin resides in Minnesota. To welcome Justin, comment on Caliber’s Twitter or LinkedIn post.

One shouldn’t forget that the Agencies have career opportunities: Fannie Mae and Freddie Mac are hiring, as is HUD.

Congrats to Flagstar Bank: The Fed has lifted its supervisory agreement, which originally dates back to early 2010. While the company has indicated that the agreement has not hampered its operations in any material way, the lifting does resolve the company's last legacy regulatory issue.