You think you have it rough? Try being a Wells Fargo MLO trying to hold onto your business when every newspaper is carrying stories about the cross-selling scandal, auto insurance scandal, unauthorized account scandal, bill pay enrollment scandal, rate lock fee scandal… No wonder independent mortgage banks are picking up market share through steering clear of negative headlines, fostering cultures that “fire employees up,” offering decent products & pricing, focusing on service, and reminding employees that “all we do is home loans – let’s do them right.” If I am a borrower, all that can be pretty compelling.

Disaster Updates - Estimated at $90B and Counting

As always, clients should read the full bulletins from lenders and investors. Those presented here, as well as earlier this week, are kept brief to give readers a sense of what is being done.

Fannie Mae reminds clients that "Following a disaster, we rely on our customers to implement our disaster relief policies and assist impacted homeowners. We require servicers to assess property damage and the needs of homeowners in order to provide appropriate relief. In addition, our Account Teams work closely with our customers to determine physical and operational impacts to their business operations and their ability to service mortgages owned or guaranteed by Fannie Mae."

"Citibank Correspondent Lending is ready to help residents regain pre-storm business functionality. Among other assistance, Citibank will work with you on a case by case basis regarding loan file delivery and lock expiration dates, consider rate lock extensions based on your business needs due to storm damage1 and consider fee waivers on issues arising due to the impact of the storm.

"As a reminder, Lenders represent and warrant that the properties securing all loans submitted to Citibank for purchase consideration have not been negatively impacted by any natural or man-made disaster as of the date Citibank purchases the loan. The Lender also represents and warrants that the borrower's credit qualifications for the underlying loan have not been negatively impacted by any natural or man-made disaster as of the date Citibank purchases the loan. 

"Lenders must have a process in place for identifying disaster areas and potential impact to properties that are the subject of loans proposed for sale to Citibank. If the Lender's disaster policy includes a requirement for re-inspection of the property, the re-inspection should be included in the closed loan file submitted for purchase (i.e. appraisal ordered prior to the storm with closing after the event)."

Citi's note finished with, "For loans originated after the storm, it is important to note that section 501 of the Correspondent Manual. Lenders are responsible for ensuring that the borrower's credit qualifications for the underlying loan have not diminished because of the storm. Property or Lender's place of business must be located in a FEMA disaster area."

Because of the Presidential Declaration of a Major Disaster Area (PDMDA) in designated counties in the State of Texas due to damage caused by Hurricane Harvey, FHA is issuing this reminder to mortgagees originating and/or servicing mortgages in the affected PDMDAs: FHA-insured mortgages secured by properties in a PDMDA are subject to a 90-Day moratorium on foreclosures following the disaster. HUD provides mortgagees an automatic 90-Day extension from the date of the moratorium expiration date to commence or recommence foreclosure action or evaluate the borrower under HUD's Loss Mitigation Program.

Mortgagees should review complete servicing guidance in the Single-Family Housing Policy Handbook (SF Handbook) 4000.1, Sections III.A.2 and III.A.3.c relating to the servicing of mortgages in PDMDAs.

In preparation for assisting homeowners with longer-term recovery efforts, mortgagees should also review: FHA's 203(h) Mortgage Insurance for Disaster Victims requirements in Section II.A.8.b of the SF Handbook. The 203(h) program allows FHA to insure mortgages for victims of a major disaster who have lost their homes and are in the process of rebuilding or buying another home. FHA's 203(k) Rehabilitation Mortgage Insurance Program requirements in Section II.A.8.a of the SF Handbook. The 203(k) program provides mortgage financing or refinancing which includes the cost of home repairs - both structural and non-structural - into the loan amount. Mortgagees can find more information about the policies referenced above and other FHA PDMDA policies on the FHA Resource Center's Online Knowledge Base.

The Mortgage Solutions Financial Disaster Policy must be followed for the following areas Texas DR-4332 and Louisiana EM-3382.

Mortgage Solutions guidelines have been updated to address any property area located in a FEMA declared disaster area requiring individual assistance or as determined by MSF. Search for a specific property provided by Disaster Assistance.gov.

For conventional, VA and USDA:  Properties with an appraisal effective date prior to the date of the disaster, appraiser to provide a 2075 drive-by, 1004D update/completion report, or Disaster Inspection Report, or Disaster Area inspection prepared by a certified appraiser to verify home is not affected Specific requirements must be met within the inspection.

Specific to Conventional properties, disaster inspections are not required for DU Refi Plus and LP Open Access transactions. Property Inspection Waiver (PIW) is not eligible in disaster-impacted areas. If a FEMA disaster is declared after the loan has closed with a PUW, one of the above-listed exterior inspection documents is required.

FHA Properties with an appraisal effective date prior to the date of the disaster, appraiser to provide a 1004D update report, prepared by a certified FHA Roster Appraiser to verify home is not affected. Disaster inspections are not required on new FHA transactions endorsed by FHA prior to the disaster date. Disaster inspections are not required for FHA Streamline without Appraisal transactions.

NewLeaf sent out, "All subject properties in the areas impacted by the disaster require evidence that the subject sustained no damage from the identified disaster for NewLeaf transactions. As the effects of Hurricane Harvey are continuing, please note impacted areas are subject to change without notice.

If the subject property is in an impacted area listed on the NewLeaf incident table with a completed appraisal dated prior to the incident start date, a 1004D re-inspection completed by the Appraiser must certify that the property is free from the applicable natural disaster damage. For appraisals in an impacted area dated during the incident period, the Appraiser must: Comment on the condition of the property and any effects on the marketability AND add detailed language into the body of the appraisal confirming that the property is free from the applicable natural disaster damage OR provide a 1004D re-inspection to certify that the property is free from the applicable natural disaster damage.

Prior to closing and funding, ResMac, Inc. will require a property inspection for any loan secured by a property in the FEMA declared Texas DR-4332. If the subject property is in one of the impacted counties and the appraisal was completed prior to the incident period end date, ResMac will require a post disaster inspection confirming the property was not adversely affected by the disaster. The inspection report must be dated no earlier than the date of disaster conclusion as determined by FEMA and/or the State of Texas. Clients may utilize any of the following re-inspection options to satisfy the post disaster inspection requirement, with a photograph of the subject property: Property Inspection Report (Fannie Mae Form 2075/ Freddie Mac Form 2070), or  Appraisal Update and/or Completion Report (Fannie Mae Form 1004D/Freddie Mac Form 442), or Uniform Residential Appraisal Report (Fannie Mae Form 1004/Freddie Mac Form 70), Exterior Only Appraisal Report (Freddie Mac Form 2055), Individual Condominium or PUD Unit Appraisal Report (Fannie Mae Form 1073/Freddie Mac Form 465), Disaster Inspection Certification from a Licensed Certified Inspector.

"Buy a shirt, help Houston. Movement Mortgage is inviting employees, friends and, yes even rivals, to join them raising money for Hurricane Harvey relief efforts. The fast-growing mortgage brand released a custom T-shirt this week that's becoming a hot commodity around the industry. The #heartsforhouston shirt was made by Movement's branding team but has no Movement branding or logos. Just a heartfelt message inside the outline of the Lone Star State: "Texas-Sized Hearts for Houston." The shirts are $20 and 100 percent of sales go to relief efforts on the ground in Texas. Movement Foundation is underwriting the production costs of the shirts.

Capital Markets

We've had a fair amount of housing news lately. Last week's data shed light into the stalling U.S. housing market. Both new and existing home sales came in lower than expected in, as new home sales fell to the lowest rate since last December at a 571,000-unit rate. Mortgage apps for purchase fell slightly as well. Initial claims for unemployment jumped by 2,000 while continuing claims were unchanged. And though Hurricane Harvey will continue to cause refinery shutdowns, this should will not affect payroll job counts for August - too recent. Fed Chair Yellen also gave a speech on a review of monetary and regulatory policy, but it did not add to, nor alter, any current market assumptions with regards to balance sheet changes or the fed funds rate.

U.S. Treasuries crept higher on Thursday, ending August with solid gains. The market saw some light selling up front in overnight action, but the entire complex advanced in response to a July slowdown in the year-over-year core PCE Index (to 1.4% from 1.5%), which suggests the Fed will be less eager to raise the fed funds rate in the near term. Pending Home Sales came in less than expected, Initial Claims and Chicago PMI matched expectations, and Personal Income and Spending were mixed relative to expectations, showing a greater than expected savings rate. The yield curve continues to flatten, suggesting a somewhat slowing economy: The 2s10s spread ended the month at 80 bps, down from 96 bps at the end of July.

We ended Thursday with the 10-year risk-free T-note yielding 2.12% - back to November levels. But this morning we've had the "first Friday of every month" employment data. Estimates of nonfarm payroll clustered around +190k, and it came in at +156k. The unemployment rate, expected unchanged at 4.3%, was 4.4%. And hourly earnings, thought to increase slightly, came in +.1%. We have some numbers coming out later this morning of minor importance, but many folks are either gone for the holiday weekend or will be leaving soon. With these somewhat weak employment numbers we find the 10-year yielding 2.10% and agency MBS prices better .125 versus Thursday's close.

Personnel Moves

Wells, however, has other sources of mortgage business, and on the correspondent side, Wells Fargo Funding recently welcomed Colleen Morse Cawley and Tom Boles as Regional Sales Executives for the New England and PA/NJ regions, respectively. Colleen is a 25-plus year veteran of the mortgage industry, and has worked extensively in correspondent sales and sales management with a strong track record of building and growing business. Tom brings 20-plus years of sales experience to Wells Fargo Funding, including retail, wholesale, and correspondent sales; and sales management positions with other lenders. Existing & potential clients can contact them through clicking on their names above.

And Castle & Cooke Mortgage, LLC welcomed three new members to its executive team: Brooke Joy, Samantha Bateman and Tomilynn Clark. Joy joins the company as the Director of Marketing, Bateman as the Director of Compliance, Operations - a new position for the company - and Clark as the Director of Underwriting. Congrats!