As Treasury yields head toward the lows of September, and Monday’s bond market holiday, let’s start Tuesday with some “trivia.” Did you know that one of the handful of original Cabinet members who are still in Donald Trump’s Cabinet is Secretary of HUD, Dr. Ben Carson. He has an impressive list of qualifications, and the evidence on his walls to back them up. The United States Department of Housing and Urban Development, with over 8,000 employees, oversees federal programs designed to help Americans meet their housing needs, seeks to increase homeownership, support community development, increase access to affordable housing free from discrimination, and dozens of other functions. It sells houses, oversees Ginnie Mae and the FHA programs, and has Brian Montgomery as its Assistant Secretary for Housing – Federal Housing Commissioner. 203(k)? Yup. Reverse mortgages? Yes sir. The Department turned 54 last month. More HUD & FHA news below.

Lender Products and Services

Scotsman Guide Media co-owner and former CEO, Brian Simmons helps launch Stronghill Capital. Stronghill Capital is a nationwide direct/wholesale lender that funds small balance commercial and residential investment property loans originated by mortgage brokers. For more information, connect with Brian (425-308-1532) or LinkedIn. Stronghill Capital provides permanent financing not short term/hard money lending. Rates start at 4.625%, DSCRs from 1.10x, LTVs up to 75%. Loan amounts between $250,000 and $3,500,000. 5/1, 7/1, 10/1 ARMs, and 25-30-year amortizations. Commercial, Multifamily (5+ Units), Investor 1-4 Residential Properties and short-term Rentals (e.g. Airbnb). Purchase, Refinance, Cash-Out Refinance and Blanket Loans. YSP available. Lending Territory: Multifamily/Commercial – Nationwide except NV, ND, & SD. Residential (1-4) – Nationwide except AZ, MI, MN, NV, ND, SD, VA, VT. In addition, Stronghill Capital offers Transactional Funding, perfect for wholesale or flip transactions purchased/sold within a day (100% financing - 250K to 21M).

“What if you had a marketing technology solution that equipped you to close 5.9 more loans per year, per LO? What if you could increase your ROI by as much as 321% and reach payback for your technology solution in less than nine months? These are just a few of the findings uncovered in The Total Economic Impact™ of the Total Expert Marketing Operating System (MOS), a Total Expert commissioned study conducted by Forrester Consulting. Join our live webinar on Oct. 15 at 1 p.m. as we explore how leading financial brands are leveraging the Total Expert MOS to increase productivity and drive optimal business outcomes.”

Home Point Financial is excited to support brokers as a Gold Sponsor at AIME’s Fuse in Las Vegas this Friday and Saturday. Chief Business Officer Phil Shoemaker is a featured speaker, and you really don’t want to miss it. Home Point keeps over 95% of its loans for servicing, but there’s more Customer For Life to be announced. Also, its Correspondent team will be at MBA Annual19 in Austin, TX, October 28-29. Reach out to your Sales Manager or Client Advocate, or email Michael Bender to get some face time. Don’t wait to partner with Home Point Financial: click here.

“While the market upturn over the last half of the year has improved independent mortgage lenders’ pipelines, it has also placed considerable pressure on warehouse capacity.

Mid America Mortgage can help lenders actively manage their warehouse position. As an active buyer of scratch and dent loans, Mid America provides a reputable outlet for loans aging on warehouse lines. For nearly a decade, our correspondent division has assisted lenders by providing an alternative outlet for over $1 billion of loans with minor compliance or performance issues. For more information, please visit our website or submit loans for bid to the Trade Desk at Tradedesk@midamericamortgage.com.”

A 30-minute conversation with Planet Home Lending at MBA Annual19 can increase your product menu and margins all year long. Planet Home Lending’s competitive products and pricing, flexible delivery, and superior service help you deliver the loans customers want in today’s environment. Multiple delivery methods (best effort, mandatory, long-term locks) give you options that fit your company’s needs. We have buydown programs builders love, 203(k) for homebuyers who want to escape multiple bidding problems by buying a fixer-upper, manufactured housing and USDA, along with standard products, including FHA, VA, Fannie Mae and Freddie Mac. Reach out now to discover how your company can benefit from the flexibility Planet Home Lending brings to correspondent lending. Contact Jim Loving (414-270-0027).

The nation’s best lenders are not struggling to go fully digital. According to a new white paper from Fiserv, there’s a good reason for this. Older technologies bolted onto the loan origination system is no substitute for a solution that provides a true digital transformation. The smartest lenders have three excellent reasons for accelerating their pursuit of the digital mortgage now. The first is pressure from regulators and investors. The second has to do with new borrower demands and the third has everything to do with competition. The new white paper is available on the company’s website. Are you headed to Austin for the MBA Annual Convention? Meet with us to get on the path to a truly digital mortgage. Email mortgagedirectorsales@fiserv.com.

HUD, FHA, VA, News

Did you know HUD requires its approved mortgagees to check its employees against the exclusionary lists after they are hired? HUD requires all approved mortgagees to conduct checks to verify employee eligibility at least semi-annually (as indicated in Chapter V.A.2.b.i.(B) of the HUD Handbook 4000.1). The mortgagee must verify employee eligibility for all officers, partners, directors, principals, managers, supervisors, loan processors, loan underwriters, loan originators and all other employees and affiliates participating in HUD programs for or on behalf of the mortgagee using the System for Award Management and the Limited Denial of Participation list. Additionally, the mortgagee must verify that all employees and affiliates participating in HUD programs for or on behalf of the Mortgagee are registered with the National Mortgage Licensing System and Registry (NMLS), unless excluded from NMLS requirements by law or regulation.

HUD defines affiliates as contractors, agents, vendors, sub-servicers, and sponsored TPOs who participate in FHA programs on behalf of an FHA-approved mortgagee. Affiliate monitoring must include a periodic (semi-annual at a minimum) re-verification of the affiliate’s compliance with all applicable laws related to licensing, qualification, eligibility, or approval to originate or sub-service mortgages. The mortgagee must document the methodology used to review Affiliates, the results of each review, and any corrective actions taken as a result of review findings. The procedures used to review and monitor a mortgagee’s affiliates must be included in the mortgagee’s QC Plan.

Don’t forget that earlier this year HUD issued guidance on the use of Third-Party Verification Services through Mortgagee Letter 2019-01, which specifically authorized the use of Third-Party Verification services to verify a borrower’s employment, income and asset information. The Mortgagee Letter explained that Third-Party Verification provides an alternative means for verifying a Borrower’s employment, income, and assets [and eliminates] the requirement for a Mortgagee to collect paystubs, W-2s, and bank statements.” HUD explained this revision is meant to align HUD policy with industry practice. The revised HUD Handbook 4000.1 (the “Handbook”), indicates a Mortgagee may use contract support for administrative, human resource, and clerical functions including Third-Party Verification. MQMR points out that, “The Handbook further explains that Third-Party Verification refers to a process through which a Borrower’s employment, income, and asset information is verified directly by the mortgagee with a borrower’s employer or financial institution via a third-party vendor. The mortgagee must still obtain the borrower’s authorization to verify the information needed to process the mortgage application as set forth in the Handbook.”

The Urban Institute’s Housing Finance Policy Center has published a new brief: HUD’s Proposal to Revise the Disparate Impact Standard Will Impede Efforts to Close the Homeownership Gap. In their brief, the authors note that HUD’s recent proposal to revise the Fair Housing Act gives the upper hand to those defending potentially discriminatory housing practices and essentially creates a safe harbor from disparate impact liability for the entire lending industry. The authors also explain why they do not expect HUD’s proposal to survive legal challenge and why it will exacerbate the current homeownership and racial wealth gaps if it does.

VA announced in VA Pamphlet 26-7 Revised, dated July 30, 2019, that Chapter 9 of the Lenders Handbook was revised in its entirety. As a result, effective October 28, the following loans are ineligible for purchase by Wells Fargo Funding: VA Loans with title in a life estate and VA Loans with escrows for completion of Minimum Property Requirements (MPRs).

loanDepot Wholesale/Correspondent issued an announcement with information on its loanDepot Jumbo Advantage Matrix, VA Appraisal Orders, Fannie Mae – Homeownership Education Update, VA Circular 26-19-25 and VA Bulletin 9-26-19.

As an “October special” for its valued Broker partners, Mountain West® is offering free appraisals on FHA and VA Purchases through the month of October. Highlights include Applicable on select FHA and VA Standard Loans. Purchase Transactions Only. Loans must be submitted between October 1st and October 31st. Minimum 680 FICO or higher. NEW SUBMISSIONS ONLY. Available to Mountain West Financial, Inc. Approved Wholesale Brokers. Valid on the initial “Standard” Appraisal ONLY. To ensure proper credit, indicate the Appraisal Fee as POC prior to issuing disclosures.

PRMG is pleased to be able to once again offer VA Cash Out Refinances up to 100% LTV. There will be a LLPA for LTVs over 90% on VA Cash Out transactions (for VA, Rate/Term is classified as a Cash Out transaction).  Additionally, a few requirements have been added for VA Cash Outs with LTVs over 90%.

Mortgage Solutions Financial issued revised Announcement 16-19W regarding VA IRRRL - Recoupment Period changes.

Capital Markets

Beginning 10/2, AmeriHome Mortgage posted that two additional fields are required in Bulk Trade and Bulk AOT bid tape submissions. Also, bids and bid confirmations will be returned in the Bulk AOT Bid and Bid Confirmation format. Wait! As of Monday, October 7, AmeriHome will no longer offer Direct Trade or traditional Assignment of Trade commitments. The following commitment options will continue to be available: Bulk AOT, Bulk Trade, and Best Efforts. There’s just no market for this.

Chinese officials signaled Monday they’re increasingly reluctant to agree to a broad trade deal with the U.S. ahead of negotiations this week, causing U.S. equities to slump, including the 10-year yield closing the session +4 bps to 1.55 percent. Bloomberg reported over the weekend that Chinese officials have narrowed the range of subjects that will be discussed during these meetings, but U.S. negotiators are expected to hold firm on issues like intellectual property protections and state subsidies.

Fed Chairman Powell delivered remarks on the importance of an independent central bank, though he did not comment on monetary policy. Reports out of Europe had the European Commission calling for "pre-emptive" fiscal stimulus in the eurozone, and British Prime Minister Johnson challenging the legal block of a no-deal Brexit in the British Supreme Court. The big news out of Washington was not more impeachment developments, but rather President Trump declaring via twitter that he will "totally destroy and obliterate the Economy of Turkey" if Turkey does anything in Syria that President Trump considers to be "off limits" after a Sunday announcement from the White House indicating that U.S. forces would not stop Turkey from conducting a military operation in Northern Syria against the Kurds, previous U.S. allies. Geopolitical uncertainty normally means lower rates.

Turning to today, markets have already received the September NFIB Small Business Optimism Index (-1.3), September Producer Price Index and core PPI (both -.3%). Later this morning brings $38 billion 3-year Treasury note auction results, Redbook same-store sales for the week ending October 5, and remarks from Chicago Fed President Evans, Minneapolis’ Kashkari, and Chairman Powell. Additionally, the Federal Reserve Bank of New York will continue lending roughly $75 billion per night in the overnight repurchase market through November 4. The central bank also plans to offer a minimum of $45 billion in two-week repo loans from Tuesday to Friday, which will then be reduced to $35 billion through October 29. We begin the day with Agency MBS prices are up by .150 and the 10-year yielding 1.51% based on more trade warring.

Jobs

Executive Vice President Mortgage Lending: The major responsibilities & duties of this position with Commonwealth Bank and Trust Company will be to maintain and grow the sales organization, identify and engage strategic partners as sources of new production and for the sale of loans into the secondary market, manage credit, regulatory and interest rate risk, maximize the productivity of the operations organization while delivering a customer centric business model, engage investors to provide a competitive product set and pricing, manage the serviced for others mortgage portfolio and  evaluate, purchase and deploy technology solutions for the division. “You will make routine decision including organizational priorities established weekly with staff, evaluate new relationships for loan acquisition or sale and product deployment. This candidate will possess thorough knowledge of all of the functions needed to run a secondary market mortgage operation and have a deep understanding of the complex regulatory environment affecting mortgage lending. Candidates will be required to possess 10 or more years’ experience in mortgage lending and management.” Please contact Pam Thompson. 

It’s that time of the year again when employees across the country begin to review their benefit selections in preparation for or during Open Enrollment. Did you know that Academy Mortgage offers Loan Officers a full benefits package? Benefits include deferred compensation; medical, dental, and vision insurance; HSA and FSA options; company-paid basic life insurance and AD&D; short- and long-term disability; and a 401(k) plan with company-matching contributions. Academy also extends two weeks of paid paternity leave (in addition to paid maternity leave) for bonding time with a new child and provides access to affordable legal counsel and representation as well as a free and confidential Employee Assistance Program. Contact Chad Melin, VP of National Business Development, for more information on how Academy’s commission structure and benefits package reward your Performance and will unlock your Potential.