Lots of folks in the mortgage biz like statistics and odds. They may not remember them, but they like them. (As Marcus L. writes, “People still play the lottery even though most of us can't get the USB in the first time correctly and those odds are 50/50.”) Plenty of home loans are impacted by student debt. For every 100 students who enroll full-time in college or university, 42 percent will graduate within four years and 18 percent more will graduate within six. This means that 40% of college students get all the benefits of student debt without obtaining a degree. And put another way, of those 60 students of every hundred who graduate, 42 will leave with student loans and five will default on those loans by the age of 33. For the 40 who don’t graduate, 10 will default on those loans. Even more, 10 years down the line, 32% of the college grads end up in careers that didn’t require a college degree in the first place.

Business News

Regarding the news about Gateway, the U.S. Government, and FAM… Readers should know that management reports there is no financial impact to FAM as this was prior claim indemnified by Gateway. “You may have seen some news that FAM has settled a pending matter with the Department of Justice and Department of Housing and Urban Development concerning False Claims Act allegations related to HUD-insured loans. This action is related to mortgages originated prior to Finance of America’s purchase of Gateway Funding in 2015. Finance of America has been fully cooperative with this inquiry and we are pleased that the matter is resolved. There was no admission of liability by FAM and no financial impact to FAM or UFG as a result of the settlement.”

Conventional Conforming Loan Amount Changes in the Primary Market

There’s a lot of chatter about the potential replacement of Mel Watt – Mark Calabria – but lenders are more focused on the “here and now” and helping their borrowers.

Every one knows that the FHFA announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2019. In most of the U.S., the 2019 maximum conforming loan limit for one-unit properties will be $484,350, an increase from $453,100 in 2018. As a result of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum conforming loan limit will be higher in 2019 in all but 47 counties or county equivalents in the U.S. Click this link for a list of the 2019 maximum loan limits for all counties and county-equivalent areas in the U.S.

To accommodate the new Freddie Mac and Fannie Mae loan limits, from now through January 1st, US Bank correspondent lenders will need to register or lock loans at the 2018 maximum loans limits and submit a change request.

Beginning December 14th, Wells Fargo Funding sellers can take down new Best Effort locks and Mandatory Commitments at the 2019 Conforming Loan Limits.

Mortgage Solutions Financial posted information regarding upcoming DU and loan limit changes.

As of December 6th, AmeriHome product codes and pricing are available at the new FHFA 2019 maximum conforming limits.

UWM is honoring the new increased loan limits. That's an increase from $453,100 to $484,350 for regular conventional loans and from $679,650 to $726,525 for conventional high balance loans. “Don't wait for the New Year to qualify more of your borrowers for conforming loans. Even though the FHFA announced the conforming loan limits will be increasing starting January 1, 2018, we are letting you submit and close your high balance loans now, no need to wait.”

loanDepot Wholesale is accepting the new 2019 GSE Conforming Loan Limits, click here to view the details.

PennyMac announced it is aligning with the conforming loan limit increases for standard and high balance loans.

With the FHFA announcement of new loan limits, PRMG will allow conventional loans with the increased standard and high balance limits to be submitted, locked and funded immediately. Loan limit changes for FHA, VA, USDA and Housing Authority products will be addressed in a separate communication later when announced by the agencies.

California’s Land Home Financial Services “will immediately accept locks at the new 2019 limit amounts! Lock the Loan using the applicable 2018 maximum loan amount for the transaction.

LHFS will update the lock manually until such time as our systems are updated through eXPRESS/Optimal Blue. Once the system is updated, you can lock at new limits. We will send out an announcement when the system has been updated. If you have any existing locks that you would like to update, please contact the lock desk: Locks@LHFSWholesale.com. (Please address questions regarding delivery and eligibility questions to Land Home.)

PennyMac’s Correspondent Group posted updates regarding FHLMC Home Possible and Home Possible Advantage, an announcement referencing its alignment with the updates in Freddie Mac’s Bulletin 2018-12 and 2018-13, and sent out 18-39: Updates to Conventional and Government LLPAs.

ditech’s Freddie Mac Conforming, Expanded Criteria and VA underwriting guidelines are being updated. The Client Guide and product matrices must be referenced for complete guideline requirements.

The Freddie Mac Guide Bulletin 2018-23 introduces automated income and asset assessment with Loan Product Advisor®, which are effective for submissions and resubmissions on and after December 9, 2018.

Sellers should recall that Freddie Mac made changes to its Scorecard and Manager Series. The Scorecard Metric – Total Timeline Trend Update will no longer be impacted by loans that are sold in non-performing loan sales (“NPL sales”). Currently, the total timeline trend metric excludes loans in NPL sales from the numerator. Now, loans in NPL sales will also be excluded from the denominator. Last year, two new disaster workout originator codes (“NG” and “OTM”) were introduced to support accurate disaster reporting; however, these two codes were excluded from the Scorecard Metric – Modification Pull-Through Rate Update. And it now includes the new Workout Originator codes for disaster modifications in the numerator. Servicers’ Scorecards will now reflect these workouts in the pull-through rate Manager Series – REO Manager® Update.

Capital Markets

The U.S. 10-year closed Thursday +1bp to 2.91% as shorter dated Treasuries experienced curve flattening action on more of the same international news markets have been digesting throughout the week. (The markets are global!) People's Bank of China Governor Yi Gang acknowledged that economic growth in China is nearing the potential rate of output and that there is increased downward pressure on the economy. Chinese authorities also confirmed the detainment of Canadian businessman Michael Spavor, who is accused of harming China's national security, and a former Canadian diplomat, Michael Kovrig. Turning to Europe, Italy's Prime Minister Giuseppe Conte confirmed that the Italian government agreed to lower its 2019 deficit target to 2.04% from 2.40%. In France, French Finance Minister Bruno Le Maire acknowledged that the country’s deficit will breach the 3.0% limit in 2019 as the government looks to quash protests by increasing entitlements. British Prime Minister Theresa May survived a no-confidence vote, but the prime minister will not stand in the next leadership election in 2022.

Today’s U.S. economic calendar kicked off with the November retail sales report (+.2%, stronger than expected, while the “control group” was seen increasing slightly over the previous reading but was +.9%). November Industrial production and capacity utilization at 9:15am are seen increasing from October figures. Markit will release both their manufacturing and services PMIs at 9:45am, 15 minutes before October business inventories are seen increasing 0.6% versus 0.3% in September. We begin today with the 10-year yielding 2.88% and Agency MBS prices better .125 versus Thursday’s close.

Lender Products and Services

Redwood is excited to be named as the number one purchaser of expanded-credit and Non-QM mortgage loans by Inside Mortgage Finance. Redwood’s expanded-prime and Non-QM programs have aided its numerous business partners in keeping volumes up as refinance opportunities continue to decline. Redwood encourages loan officers at any of their business partners to sign up for the many training sessions offered by Redwood’s program experts. Redwood’s expanded-prime and Non-QM programs are simple to understand and easy to implement. It’s the same Redwood process and program support, now with even more opportunities for loan officers and their customers. Come see why others are having so much success working with the largest buyer of expanded-credit and Non-QM mortgage loans.

Simplify your underwriting process with Loan Product Advisor asset and income modeler (AIM). Through the expertise of third-party service providers, AIM automates the manual processes of assessing borrower assets and income. AIM reduces the burden of traditional documentation, speeds up the loan origination process and helps you close loans faster. Freddie Mac is working hard to bring you solutions that create efficiencies for your business and improve the borrower experience - giving you a competitive edge. These capabilities are available for Loan Product Advisor submissions and resubmissions on and after December 9, 2018. Gain greater efficiency in your underwriting processes with AIM – get your edge.

Interested in offering your customers new products? The join Sierra Pacific Mortgage on December 19 at 1PM PST for a short webinar that can impact your business in a big way. You will learn all there is to know about these Sierra’s Access and Core products. You may have heard of these programs as the "Sierra's Bank Statement Program" and while that is true, Sierra Access and Sierra Core has much more to offer, including 1 year express tax returns and even a full doc option. The pool of opportunity to offer financing for your borrower is vast – come find out why! Register today!

Today, mortgage lenders are looking for ways to reduce compliance costs without sacrificing quality. Finding a solution that can respond to the ebb and flow of your business needs will be essential in forming a savvy and time-saving solution. With tailored compliance packages, Strategic Compliance Partners (SCP) can accommodate your ever-changing needs. Click here for a free savings survey and we’ll show you how SCP can help you save up to 20% on compliance costs.

I’ve indicated in several posts Conquering Shifts is a must read. Make it a part of your 2019 business plan. “Learning how top producers excelled during the hard times of ’07 and ’08 reinforces that salespeople are able to prosper in any economy.” Jordan Eller, Capital Mortgage Services. “The benefit of owning this book is two-fold. First, it’s inspiring. Secondly, it’s a fantastic resource to be used during our sales meetings. The book does a great job showing how some of the industry greats went from ground zero to mega producers” Ben Holloway, Mountain West Financial. "Conquering Shifts is truly unique in that instead of simply teaching success principles or techniques, the reader sees exactly how they were implemented." Marty Preston, Benchmark Mortgage. If you have not taken advantage of the 15% discount offered by Authors Cindy Douglas and Kathleen Heck, Do Not Delay. Ends December 15th. Click here to purchase.

Jobs

American Capital is excited to welcome Brad Hodge as Retail Division Manager.  Brad’s 45 years of industry experience will help grow ACC / Lionsgate by recruiting LO’s, Branch Managers, Area Managers and Branches to join our dynamic platform of Loans and Real Estate together under one roof.  If you are looking to improve your ROI and be your own best referral source, the Hybrid offering is the most powerful strategy available. The ACC / Lionsgate Hybrid offering is more than just a logo change – it’s a transformation. Contact Brad for more information (909-702-6924).

FirstBank Correspondent Lending is looking to hire an Account Executive with a proven track record and customer base in the Southeast, including the states of TN, SC, GA, AL, MS, & FL. “Backed by FirstBank, a successful financial institution with $5B in assets, we have the technology, pricing and marketing to ensure your growth and success and a wide array of products including Jumbo, USDA Single Close Construction, FHA, VA, USDA, Freddie FNMA, Doctors Programs, etc., to give you the ability to fully support the changing needs of your clients. Come thrive in a culture-driven environment where your voice is heard, your opinions matter, and the client comes first. Excellent compensation package included.” To learn more, please visit FirstBank Careers.

A motivated and experienced investor is seeking to acquire a FULL EAGLE/HUD Designated lender. Licensed in CA would be preferred but is not required. The ideal situation is for current shareholders to liquidate all or a large portion of their equity through the transaction. Principals would be willing to negotiate/keep the existing team. Interested parties should contact me to forward their note; please specify the opportunity.