GNMA Single Loan Securitization; Slow Recovery For Housing; GFE Guidance; FDIC & CRA News; More Originator Jobs

If you've never seen footage of an actual landslide (and I hadn't), this is the stuff of nightmares: WOW

Do people change over time? Of course they do. Do companies? They do as well. Coca Cola Inc., for example, doesn't just produce Coke. They own Gatorade, various water companies, bottling plants, even Vitamin Water. How many telegraphs do you think American Telephone and Telegraph (AT&T) produce every year? Mortgage companies can do the same. ABC Mortgage can start off as a broker, and then become a mortgage banker, branch into wholesale or retail lending, start a servicing division, etc. For public companies, where people own stock, it is important for stockholders to keep track of the business(es) that their company is involved in!

This autumn, issuance for Ginnie II multiple-issuer pools can occur on a daily basis, rather than once a month. So what? Well, Ginnie is hoping that this will allow lenders to better utilize warehouse lending lines and reduce interest costs associated with carrying loans until they can be securitized and settled. And to help the small guys, lenders will be able to securitize a single loan in Ginnie Mae multiple issuer pools (single family, GPM's, etc.), eliminating the current three-loan minimum requirement. The association said it expects to begin accepting single loans into multiple-issuer securities in July of 2010. Currently Ginnie Mae requires that a loan package include a minimum of three loans with a minimum dollar amount of $250,000. On and after June 21, issuers may submit a loan package containing one loan with a minimum dollar amount of $25,000. Katie bar the door! "Furthermore, effective for securities with an issue date on or after July 1, 2010, the security coupon rate must be either a half or whole rate, otherwise the pool will be rejected."

There are some long-term mortgage companies, however, who have stuck to mortgages - like Guild Mortgage which is 50 years old. The company is privately held as a result of a management-led buyout a few years ago, and expects to originate $3.5- 4 billion this year (80% retail and 20% wholesale, over 80% purchase business), and is servicing almost $6 billion. Guild has 75 branches from Colorado to Hawaii and wants to get bigger: it is looking for loan production staff in all existing branches and in possibly other western states. (This includes branches.) Interested and qualified managers and potential loan officers should contact Steve Hops who is Guild's EVP of production at shops@guildmortgage.net.

"First National Bank (MS), was closed by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with The Jefferson Bank (MS), to assume all of the deposits of First National Bank. On the other hand, no one was found for Arcola Homestead Savings Bank (IL), which was also closed. "TierOne Bank (NE) was closed by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Great Western Bank (SD) to assume all of the deposits of TierOne Bank."

The FDIC also released its "Monthly List of Banks Examined for CRA Compliance". READ MORE 

RealtyTrac, which has made a name for itself in all things foreclosure, announced that "roughly 3.5 million homes will face foreclosure this year, and it will be at least two more years before the housing market gets back to normal." Personally I am not sure what "normal" is anymore, but RealtyTrac doesn't see any improvements in the numbers until 2011, and 2013 until the banks to finally sell of their inventories even with the much-improved short sale procedures that have been developed. Eerily similar to the employment picture...

Wells Fargo wholesale came out with its "Top 5 Reasons a file is stopped at the GFE acceptance phase": no fee details/GFE/Application in the file, GFE is incomplete, GFE is not timely, Blocks 3-7 don't match, UFMIP, VAFF, and RD Guarantee Fees are improperly disclosed. Wells also told its brokers of the "Top 5 reasons loans are stopped in the Credit Package phase": the appraisal disclosure is missing from the file, the 1008's/FHA Transmittal Summary is missing, the asset documentation is missing the borrower's name or bank name and be complete & dated within 45 days of application, the 4506-T is not ordered, and (for FHA loans) the FHA case number is missing. 

Provident Funding released a memo on the GFE Audit at the time the Initial Registration is completed. Brokers should know that for Provident, "Important Date #1" should be converted to Pacific Time. For a borrower with multiple applications, "the terms of the GFE on a previous request for the same borrower do not apply if the new request is for a different property or if the request is for the same property but through a different broker. However, if the new request is for the same property and the same interviewer using a different broker company, then the new request will be treated as a duplicate submission and is subject to the terms of the GFE of the previous request." And "fee increases must be reviewed at either the individual fee or block level, according to how those fees are disclosed on the GFE. For example, block 3 fees must be reviewed individually, and block 4 fees must be reviewed in total."

What has Flagstar been up to recently, besides offering priority underwriting for first-time home buyer loans (to try to fund those loans by month-end) and offering a mandatory delivery option for ARM loans? Flagstar Bank will be requiring a 1% deposit on the "Other Investor" committed portion of the warehouse line in addition to existing line requirements as its warehouse lines come up for renewal. "This will also be in addition to the DDA (checking) account that all our warehouse lines require. Customers will need to keep these funds in a separate account with Flagstar. A pledge agreement will not be signed on these funds. If the balance goes below 1% of the Other Investor commitment amount, that portion of the line will either be removed or reduced accordingly." Following HUD, for its VA loans HUD/FHA/USDA condominium approvals will be accepted provided the project approval date listed in FHA Connection was prior to December 7, 2009. If the condominium project approval date is on or after December 7, 2009, the project is ineligible for inclusion on VA's approved condominium list without full project review and approval by VA. Flagstar also told its clients that Streamline Refinance refinances may be run through FHA's TOTAL Scorecard.

Pinnacle Capital, followed HUD's policy of no longer requiring that all transfer tax charges be disclosed in Block 8 of the GFE if it is the common practice for sellers to pay such charges. PCM also discontinued its jumbo IO and jumbo cash-out for 3-4 units programs. "Lock Requests and Extension Requests will not be accepted after this date. All loans must fund by 8/10." Lastly, in a sign of the times, Pinnacle updated its minimum credit score requirement to 640 for all loan programs, which included installing new FICO/LTV pricing adjustments for FICO scores from 640-659.

The hiring picture is pretty grim out there, in spite of some economists believing that, taken as a whole, the economic news last week continues to point to a recovery. Once again, there is talk of a jobless recovery. May nonfarm numbers were up 431,000 with the census payroll accounting for 411,000 of that. First quarter GDP came in at 3.0%, which is decent, Personal Income is up 3.4% over the past 3 months, but generally the news still points to subpar growth for the remainder of the year.

On Friday the 7-yr, 10-yr, and 30-yr Treasury instruments were all better by more than 1 point. It is easy to make a case for disappointing job growth, slow housing, an overall slow economy, and continued low rates. We had a sweet rally in MBS prices on Friday. Fannie/Freddie 4% securities are back near par, or a price of 100. Add some servicing on, deal with the buy-ups or buy-downs, and suddenly 30-yr mortgages ranging from 4.375% to 4.625% could have a little premium! And 4.5% securities, containing 4.75%-5.125% mortgages, are at around a 2.75 point rebate!

This week we start off with no scheduled news today or tomorrow, but on Wednesday have the Fed's Beige Book (which really is off-white). The Retail Sales report will be released on Friday. HERE IS THE ECON CALENDAR FOR THE WEEK AHEAD

There will, however, be Treasury auctions tomorrow, Wednesday, and Thursday. With stocks hitting a 4-month low, and 4.5% MBS's now having over a 2-point premium, what is left for this week? And originators are left wondering, "If things are slow with these rates, what about the rest of the year?" Heck, if you have the cash, it is probably a great summer to visit Europe! This morning's 10-yr yield is at 3.206% and after Friday's big improvement mortgage prices are about the same.

An old nun who was living in a convent next to a construction site noticed the coarse language of the workers and decided to spend some time with them to correct their ways. She decided she would take her lunch, sit with the workers, and talk with them.

She put her sandwich in a brown bag and walked over to the spot where the men were eating.

She walked up to the group and with a big smile said, "Do any of you men know Jesus Christ?"

They shook their heads and looked at each other very confused.

One of the workers looked up into the steelworks and yelled out, "Anybody up there know Jesus Christ?"

One of the steelworkers yelled down, "Why?"

The worker yelled back, "Cuz his wife is here with his lunch!"