There’s a fine joke about bowling balls and tennis balls and golf balls which I won’t repeat here, but let’s go down the scale of “numerical magnitude.” Today, the NY Federal Reserve Trade Desk is set to surpass $1 trillion (with a “T”) in MBS purchases since the restart of QE on March 16. (By the way, should the Fed tell everyone what it is buying that day, or next week?) What doesone billionaire give to another billionaire on their birthday? According to MBA’s estimate, 3.6 million homeowners are in forbearance plans. Eliminating commas in numbers and ratcheting down, executive pay at public companies has adjusted during COVID, often not for the better. Lastly, and there is no smooth way to work this in, in the 1960s the U.S. Army Corps of Engineers built more than 270 concrete crosses, precisely 60 feet wide, in the Arizona desert to help calibrate the world’s first spy satellites. (Speaking of “up,” the latest Amazon news is that it achieved a regulatory milestone in delivery using drones.)

Lender Products and Services

“Staying Compliant In 2020 And Beyond: TENA’s Commitment To Service. Are you keeping up with your Mortgage Servicing QC and compliance in 2020? With the CARES Act creating a record number of homeowners requesting forbearance and the resulting implementation of loss mitigation and loan modification tools, staying compliant with regulations is more important now than ever. TENA’s COVID-19 Targeted Review examines the following subject areas for compliance: Foreclosure, Evictions, Forbearance, Credit/Agency/Investor Reporting, Property Inspections & Valuations, and Insurance. Our team of experienced Mortgage Servicing Auditors have extensive knowledge of Agency, Federal and State guidelines, both old and new, and stand ready to assist you with all of your Mortgage Servicing Quality Control needs. TENA has remained steadfast in our mission to serve our customers since our inception in 1982 and is dedicated to continuing that mission in 2020 and beyond. Contact Us to Get Started Today!”

Northpointe Bank announces new Streamline Jumbo program with LTVs up to 85% and no MI. Northpointe Bank Correspondent Lending is rolling out its new Streamline Jumbo loan program, which closely follows GSE automated underwriting requirements, and allows loan amounts up to $1,500,000 with loan-to-value ratios up to 85% and no mortgage insurance requirement.  This competitively priced program fills an important market need for loan amounts greater than the conforming limits, and will be available on August 08/26/2020.  Northpointe Bank provides tailored solutions to maximize your profitably and help grow your business. For more details, email correspondentsales@northpointe.com.  

As you know, there is a lot of M&A activity going on. Most of these deals are asset deals, leaving behind the corporate entity that is then available as a ‘shell’ for other entities who may be wanting to obtain the agency tickets. These shells are marketable, especially if the selling entity has been well-run, originating low risk product and thus has a low tail risk associated with their legacy production. In fact, a well-capitalized de novo mortgage conduit is looking right now for this type of shell. The ideal shell would have all three-agency tickets to be approved sellers and/or servicers to Fannie, Freddie, and Ginnie and a majority of state licenses. We are open, however, to looking at shells that have a minimum of one active agency ticket. If you are interested, reach out to our advisor Richey May at info@richeymay.com. All inquiries will remain confidential.

Events, Webinars, Videos

All-star panel alert! This Thursday, 9/3, don’t miss Sagent’s National Mortgage News webinar, a deep dive on powering one-stop-shop homeownership with Sagent’s Tim Von Kaenel, Ellie Mae’s Parvesh Sahi, HouseCanary’s Michael Rodriguez, and The Basis Point’s Julian Hebron. Agenda: Why the next 5 years of housing fintech will move even faster, playbooks for customer retention and maturing forbearances, and how lenders choose partners as origination/servicing technologies converge. Register for this complimentary event now!

Hear from Fannie Mae CEO Hugh Frater at Blend Forward, September 22-23. Frater will chat with Blend President Tim Mayopoulos about how he sees the pandemic impacting the pace of innovation and regulatory change. Other speakers include Chip Mahan, Chairman and CEO of Canapi Ventures and Susan Stewart, CEO of SWBC Mortgage. Reserve your spot at the virtual summit.

Technology paired with human connection is at the core of delivering exceptional experiences that create customers for life. More and more often, we’re seeing top mortgage lenders follow 5 key strategies that align with this concept to increase trust and build deeper customer relationships. Total Expert Chief Customer Officer Sue Woodard and Pinnacle Home Loans COO Paul Gigliotti are taking a deep dive into the 5 strategies and sharing their tips for implementing them into your organization. Tune in to learn what the best-run mortgage companies are doing and uncover hidden opportunities that will have a lasting impact on your brand. Watch their video here. 

Agency Consortium News: FHFA, Freddie, Fannie

The Agencies have certainly been in the news, lately from the rolling out, and then delay of, the refi price hit of .5. (The agencies said the fee would be necessary to help cover projected losses of $6 billion from Fannie Mae and Freddie Mac because of the pandemic.)

Fannie Mae announced an extension of the temporary moratorium on foreclosures and evictions until December 31, 2020, effective immediately and applies to properties with single-family mortgages backed by Fannie Mae. The suspension of evictions applies only to homes owned by Fannie Mae and does not apply to tenants in homes that have not been foreclosed. Homeowners can find out if they have a Fannie Mae-owned mortgage here. Fannie Mae also offers help to homeowners navigating the broader financial effects of this crisis through the company’s Disaster Response Network.

Freddie Mac extended its nationwide suspension of single-family foreclosures and evictions on mortgages and real estate owned or guaranteed by the company through Dec. 31, 2020. The suspension of evictions applies only to homes owned by Freddie Mac and does not apply to tenants in homes that have not been foreclosed. In addition to suspending foreclosure activity and evictions, Freddie Mac has directed servicers to offer COVID-19-related mortgage relief for borrowers. For more information on Freddie Mac mortgage relief, visit My Home by Freddie Mac. For information on sustaining homeownership in a crisis, see Freddie Mac’s #helpstartshere interactive guide.

The MBA reported that the FHFA extended Fannie, Freddie COVID-policies through September. The Federal Housing Finance Agency (FHFA) has extended Fannie Mae’s and Freddie Mac’s COVID-19-related policies through Sept. 30. “Both the origination flexibilities and the program to purchase loans in forbearance are providing important stability to the mortgage market during the pandemic,” said Mortgage Bankers Association President & CEO Bob Broeksmit. So Fan and Fred will continue to buy loans in forbearance through September 30, extending the previous deadline of August 31.

Fannie Mae posted the August Appraiser Quality Monitoring (AQM) list and compiled a list of the top customer inquiries related to escrow accounts for COVID-19 payment deferrals.

Flagstar Bank posted Memo #20082 clarifying Conventional Guide updates regarding solar panels, borrowed funds secured by an asset, and mortgage and non-mortgage debt paid by others.

By the way, to dive into the weeds, for Fannie Mae, when financed to own solar panels are recorded as a UCC fixture filing in the land records the debt must be included in the CLTV and must be subordinated when recorded as a priority senior to the mortgage.

UMH Properties obtained a groundbreaking Fannie Mae loan for manufactured home community acquisition and development. Watch this video featuring Founder and Chairman Eugene W. Landy and UMH President and CEO Samuel A. Landy to hear the details.

The PennyMac Correspondent Group has posted a new announcement 20-52: Adverse Market Refinance Fee LLPA.

Section 545.16: Loan Forbearance in the Wells Fargo Funding Seller Guide was added a while back reflecting its forbearance policy for the subject loan delivered to Wells Fargo Funding.

The talk of the ability of the FHFA/Freddie/Fannie consortium being able to set prices and move the entire industry with one announcement reminded me of an issue earlier this year. The Urban Institute’s Housing Finance Policy Center posted a brief: Should Nonbank Mortgage Companies Be Permitted to Become Federal Home Loan Bank Members? In response to the Federal Housing Finance Agency’s (FHFA) February request for input on eligibility requirements for membership into the Federal Home Loan Bank (FHLB) System, this brief explained the benefits of expanding FHLB membership to nonbanks. The researchers explain that not only is there is a strong alignment between nonbanks’ housing market activities and the FHLBs’ mission, but their absence from the system is impairing the role FHLBs used to play in the mortgage market. Expanding membership eligibility to include nonbanks could advance the housing finance and community development mission of the FHLB system. They also explain that nonbanks do pose some additional risk to the safety and soundness of the FHLB system and offer ideas about how these risks can be mitigated through a combination of prudential nonbank regulation and enhanced FHLB lending terms.

It's been exactly twelve years since Freddie and Fannie were placed under U.S. Government conservatorship. And for years the industry has debated how much capital is enough for F&F to have before they are released from conservatorship. Don Layton, the ex-CEO of Freddie Mac, had reactions.

F&F filed new comment letters with the FHFA, saying the re-proposed capital framework will significantly increase the guarantee fees they charge lenders and could impact the prospects for any public offerings of stock. Fannie’s letter estimated the guarantee fee on single-family loans would have to increase by 20 basis points in order for investors to achieve a 10% return on capital. Freddie’s opined, “The proposal may require Freddie Mac to increase guarantee fees by 15-35 bps, which may increase housing costs for U.S. consumers.”

Housing Policy Council (HPC) comment letter to the FHFA on the proposed capital rule. HPC’s letter generally supports the framework proposed by the FHFA but offers important and specific recommendations in several areas, including the treatment of credit risk transfer, the size of the leverage capital buffer and the calculation of the prescribed capital conservation buffers.

The proposed capital rule for the GSEs that is currently in the notice and comment period.

Mountain Lake Consulting’s Dave Stevens weighed in with, “The comment document submitted to FHFA from Andrew Rippert of Portum Trust is really well done and worth the review. At its core, I think it clearly shows either the intent or at minimum the effect of the FHFA to scale back the role the GSE’s play. And while some of the data tables show this point with clarity, this is the starting point: ‘Additionally, our analysis indicates that the proposed capital rule will result in a G-fee increase of approximately 23 bps in the high LTV (>80%) segment, where the FHA competes.’

“Portum concludes that about 14% of GSE loans would now get best execution through the FHA. I think for housing stakeholders we need to ask, ‘What will be left of the GSEs?’ By this analysis, what trades away is high LTV product. On the other side of the scale, sub 80% LTV could be competed away by bank balance sheets as they will not apply the same cost of capital standard as well as the cat risk overlays and therefor will take market share as well.

“In the end, a weakened GSE model with higher LTV going to FHA and sub 80% LTV going more to balance sheet or pls will leave a much smaller GSE market. For those that depend entirely on a secondary market, this could force a greater dependence on FHA and likely a greater need to increase correspondent lending to aggregators assuming they do not prejudice pricing significantly based on channel (retail/correspondent).”

Capital Markets

It was an odd day for market movement yesterday, possibly due to a bank holiday in the U.K., or an opening decline in equities that was saved by tech stocks. Actually, the day was fairly uneventful until Fed Vice Chair Clarida pushed back on a rule-based approach to inflation following last week’s more employment-focused framework from Chair Powell, saying that a return to low unemployment will not call for higher rates. He added that yield caps and targets may be used in the future. Those remarks caused a bond market price rally in the late afternoon, which was aided by reports that lawmakers in Washington have not made any progress on the fiscal stimulus front.

Today’s economic calendar kicks off here shortly with Redbook same store sales for the week ending August 29. That will be followed shortly thereafter by the final August reading of the Markit manufacturing PMI, ISM manufacturing PMI for August, July construction spending, and Dallas Fed Texas services for August. Overnight, the MBA’s latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance remained unchanged relative to the prior week at 7.20 percent as of August 23, 2020. The lone Fed speaker today sees Governor Brainard speaking on "Monetary Policy Framework Review." And the Desk is scheduled to conduct just two MBS FedTrade operations today, purchasing up to $4.6 billion 2 percent and 2.5 percent as it bypassed $1 trillion in MBS purchases in aggregate since March starting with $2.9 billion UMBS30s followed by $1.8 billion GNIIs. Sep. 1 begins with Agency MBS prices better by a shade and the 10-year yielding .72 after closing yesterday at 0.69 percent.

Careers

Company culture means more than saying what people want to hear…or giving spot bonuses when times are good. Home Point Financial is committed to building a culture where its associates feel respected and they’re part of building something great in good times and bad, where there is a larger purpose than just making good money. Home Point isn’t merely stocking up talent temporarily to manage the current refi boom. It has its sights set on growing its team, and market share, for the long run. If you want to work at a company that offers competitive pay, prioritizes your safety and work-life balance, and has a leadership team that is committed to your long-term employment and professional growth, apply for a position on Home Point’s careers page or email your resume directly to John Eite.

ACCmortgage.com never stopped non-QM lending during COVID. August was another incredible month with a $100MM in new loan proposals. As the leading and oldest Non-QM lender, ACC has expanded and widened its credit box to included 90% Full Doc, 75% DSCR, 80% Super JUMBO, 80% ITIN, 80% P&L Lending, 85% Bank Statement. Feel free to test the simplest Non-QM pricing tool: NONQMPRICER.com. ACC has hired more experienced underwriters and processors to support this growth and we are able to support more National Account Executives and Sales Managers. If you are looking for a stable Non-QM home, we have the top comp plan in the industry. If interested in joining our family, please send your resume to the president, Robert Senko, for consideration.