Conversations at the MBA Secondary Conference; Lender, Conference, and Investor Updates

Here in the borough of Manhattan the 1.6 million residents are abuzz with the thought of the MBA's National Secondary conference being in town. Like other MBA events, it promises to be well attended, with the hot buttons being the CFPB ("They won't audit someone my size, will they?"), QM ("There won't be a secondary market for non-QM loans, so I hope the scope is broad with clear definitions"), new products ("New products? Heck no - our best products are our people and our process!"), compliance ("Do you know how many audits we go through every year? And they aren't cheap!"), HARP 2.0 ("We're still looking at the risk"), investors ("What do you hear about the Wall Street firms getting back in, Redwood Trust or PennyMac?"), Fannie & Freddie & Ginnie ("What's the latest on approval times?"), and servicing ("I'd rather own it than give it away! But how am I going to finance it?").

What is missing, of course, is any substantive talk about rates...they're fine.

In what some believe are second only to the "Sunday Funny Papers," as my Dad who sold newspapers during the 1930's calls the comics,  how about some somewhat recent lender/investor/agency/MI updates, and conference/training updates? As always, it is best to read the actual bulletin, but this will give one a flavor for what is happening out there. In no particular order...

Owing to the high volume of emails with post purchase document attachments Affiliated Mortgage has been receiving, it is asking correspondents to send such emails to postpurchasedocs@affiliatedcorrespondent.com. All loans delivered to AMC on May 7th or after that were closed with Power of Attorney will require a "Certified True Copy" confirming that the loan is a copy of the original.  The name of the company and the signature of the individual doing the certifying must be included as well. Lastly, AMC's Settlement Agent List Exhibit 5-01 has been revised to include additional agents that are not eligible to close transactions that will be delivered to AMC.  The full list is available at: http://www.affiliatedcorrespondent.com/wc/content/exhibits/5-01_Settlement_Agent_list.pdf.

On May 15th Wells Fargo Funding will be presenting a webinar on VA basics that will cover LTV ratios, purchase and refinance programs, and borrower eligibility.  Attendees will also have the opportunity to speak with a member of the Wells Funding Diverse Segments team about strategic positioning with the VA in their markets.  Registration will be available at www.wfhmevents.com until Friday, May 11th; the access code is VA 101.

Wells Fargo has corrected its communication on the Mortgage Electronic Registration System® (MERS) updates it published on February 13th.  The memo wasn't meant to imply that February 27, 2012 was the date on which compliance was required with the MERS Release 21.0 requirements-this date is when the changes were in effect in the system.  Wells has offered further clarification on the requirement that sellers are required to initiate the Transfer of Beneficial/Transfer of Servicing Rights (TOB and TOS, respectively); TOB here is defined as the date on which Wells purchased the loan, and TOS is the first payment due.

Clarification has also been provided on the timing of final document delivery and Mortgage Identification Numbers, a full table of which is available from regional Wells sales teams.  If the final documents are delivered prematurely, they run the risk of failing to transfer or not being matched to a Wells Fargo Funding-owned asset, and being returned to the Seller.

Wells has revised its rate sheets in accordance with Fannie's updates to the Desktop Underwriter Refi Plus Program.  This is effective for Best Effort Registrations and Best Efforts locks on and after April 28th and Mandatory Commitments on and after April 23rd.

A couple of reminders for Wells sellers: a copy of the most recent version of the completed Notice to HomePath Property Buyers Regarding Appraisals publication should be included in all closed loan packages and dated by the buyer, and all mortgages sold to Wells must be valid, existing, and enforceable first liens on the mortgaged property.  Recent rulings in Texas may affect the latter, as Texas properties with an agricultural exemption must comply with the Texas Department of Insurance's Title Insurance Basic Manual, and properties may be affected by rollback taxes if they are no longer used for agricultural purposes, thereby compromising first lien position.

Wells Fargo Funding now accepts life-of-loan policies from AFR Services, provided that the loans include a flood zone determination with life-of-loan service (a Third Party Flood Certificate) indicating if the property is in a Special Flood Hazard Area.  Sellers can procure a Third Party Flood Certificate from CoreLogic, Elite Lender Services, LPS National Flood, Wells Fargo Flood Service, or American Flood Research, Inc., all of which are approved by Wells, or have Wells net fund the loan $19 to do so.  A Third Party Flood Certificate can be obtained from any FEMA-approved vendor, but the loan will be net funded $19 regardless if the vendor is not one of those mentioned above.

To better reflect current wire authorization requirements, Wells has revised the Wire Authorization and Certification Form (Form 8).

Previously Flagstar announced that it would suspend the Freddie Mac Open Access Program, Freddie Mac Open Access II.  For table-funded transactions, loans must be funded and delivered by June 1, 2012, while loans for correspondent transactions must be closed and delivered by June 8, 2012.  Flagstar will continue to accept new registrations provided that submission, lock, and funding meet these deadlines.

Flagstar alerts clients of a glitch in the execution section of the online broker-correspondent agreement.  There is an error in the sections that ask for the customer and principal officer's names; the customer's name should actually be listed as "Seller," and the "By" field is where the principal officer should sign.  The glitch should be fixed soon, but for now the principal officer should sign the agreement in the "Seller" field.

Effective for all Flagstar-serviced HARP loans locked on or after April 6, 2012, the three Expanded Approval Risk Class price adjustments will be consolidated into a single price adjustment.  The new adjustment for EA Risk Classes 1-3 is now -0.250.

Flagstar has indefinitely suspended the Freddie Mac Open Access program Freddie Mac Open Access II, and any loans in the pipeline currently registered under the program will need to be locked and submitted to Underwriting on or before April 27th.   These should be funded and delivered before June 1, 2012.

Flagstar reminds sponsored originators that they are not permitted to close loans in their own name without being approved by the FHA.  These loans must close in Flagstar's name; loans from unconditionally approved lenders that are underwritten by the correspondent must close in the correspondent's name.  Loans from lenders who are still in the FHA test case phase must be closed in the correspondent's name as well.  In addition, non-approved lenders are required to be sponsored by at least one lender with FHA approval whom they have registered as a third party originator in the FHA Connection.

In light of California Senate Bill 183, which requires all existing homes "intended for human occupancy that have a fossil fuel burning appliance, fireplace or attached garage" to feature a carbon monoxide device, the FHA requires installation of such a device where an appraiser finds it absent.  Flagstar will not clear FHA loans to close until an inspection proves that the installation has been completed.  Fannie Mae Form 1004D competed by an FHA-approved appraiser, HUD Form 92051, or a paid invoice from a licensed carbon monoxide device professional are all acceptable forms of proof.

The Flagstar Conventional Underwriting Guidelines manual now includes revisions to guidance on condos, document expiration dates, and non-permanent resident aliens.

Flagstar has added Essent Guaranty to its Loantrac system; Essent can now be selected as the Mortgage Insurance provider when underwriting MI loans.

Following the tornado activity in Iowa, Kansas, and Oklahoma, Flagstar (and other investors) is requiring that properties in particular cities be re-inspected and deemed in satisfactory condition.  The re-inspection should indicate that the property hasn't sustained any flooding and/or windstorm damage, provide a statement on the neighborhood conditions, and include a photo, and standard FHA and VA regulations apply to relevant properties.  This affects properties in Creston and Thurmon, IA; Rush Center, Solomon, and Wichita, KS; and Norman and Woodward, OK.

As per the "Automated Underwriting Section" of the Fifth Third Correspondent Seller Guide and Product Manual that refers to the validation of AUS findings, the correspondent seller is required to submit the most current LP or DU findings that reflect the terms as approve and closed.  The information on the DU and LP assignment screens serves as sufficient verification and should be included in the loan closing package. And a 0.25 adjuster will be subtracted from the price on all HARP II products (HASP-Open Access and DU Refi Plus) that lock on or after April 16th.

Fifth Third reminds clients that the Broker Cert., listed prior to the underwriting form on the loan submission checklist, can be found on the Wholesale Connect task center page.  Clients are also reminded that any condominium documents submitted should be fully completed and sent to wholesale.newsubmission@53.com (documents included in a new submission file) or wholesale.underwriting@53.com (documents emailed as a condition).

The FHA's Basic Loss Mitigation training seminar series will include a session in Atlanta on May 11th.  This is aimed at HUD-approved housing counseling agencies, local servicing lenders, and nonprofits.  To register see https://eclass.hudtulsa.org/.  This training will be available in Jacksonville, FL on May 23rd as well.  The National Servicing Center is also offering free loss mitigation training for HUD-approved mortgagees, HUD-approved housing counselors, and nonprofit housing counselors in Oklahoma City on May 16th and 17th and August 15th and 16th.  To register for the Oklahoma City training, see http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/nsc/training.

The National Reverse Mortgage Lenders Association will be holding its Western Regional Meeting in Irvine, CA on May 16th and 17th.  More information is available at http://www.nrmlaonline.org/.

FHA-HUD provides online training for HOPE LoanPort Users every Tuesday and Thursday, registration for which is available at http://r20.rs6.net/tn.jsp?et=1109366403280&s=119&e=001w0Q3n_6lE0DyW21GTWXn8Uy9G3ZaxBEXSW1S4yof2WwPk8BNFVBxA3Fke2nONQxKDKVekWT2p8t6dDfoWmT0IV_bakXUW5Xv9mTnWw_pLbH9j6RO63iHIyWLICguVRJcaQlXC11lPw8sLOsThHwWlZcOu2KQixH0JLmhRt3PHLU=.

In the Great State of Texas, the Texas MBA will be holding its annual convention during May 20-23 in San Antonio. Head down there before the weather starts to warm up: http://texasmba.org/convention/default.asp.

The Warrior Sales Academy and Ron Vaimberg are hosting a 3 day elite training event called the "The Ultimate Warrior MLO" in San Diego on June 1st - 3rd.  This event is focused on teaching originators of all levels how to become top producers, build a predictable origination business, and never again be dependent on refinance business for a paycheck.  For more information you can go to www.UltimateMLO.com.

In honor of I'll Have Another's victory at Churchill Downs yesterday...

A city dweller came to a farm and saw a beautiful horse. He decided he had to have the animal. He bargained with the farmer and the farmer finally sold him the horse.

The city man jumped on the horse and said, "Giddyup!" The horse didn't budge.

The farmer explained, "This is a special kind of horse. He'll only move if you say, 'Praise the Lord.' To stop him, you have to say, 'Amen.'"

Keeping this in mind, the new owner yelled, "Praise the Lord!" whereupon the horse took off with great speed. Soon horse and rider were headed for a cliff. Just in time the rider remembered to say "Amen!"

The horse came to a screeching halt right at the edge of the cliff. Relieved, the rider raised his eyes to heaven and exclaimed, "Praise the Lord!"

If you're interested, visit my twice-a-month blog at the STRATMOR Group web site located at www.stratmorgroup.com . The current blog discusses the constantly changing appraisal environment. If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what's going on out there from the other readers.