CFPB Update on Credit Reporting; NMLS Changes for LO's; USDA Rural News; Non-depositories Continue to Buy Servicing
This one from an AE in a "red state": Q: Do you know what the
difference is between conservatives and progressives? A: About $16
trillion! Trillions - kind of like the money that Taylor Swift makes every time
she breaks up with a guy during lunch, and then mints a hit song about it by
dinner time. Seriously, within the Commerce Department, the Bureau of Economic
Analysis announced Friday that "Personal income increased $15.0 billion,
or .1%...and Personal consumption expenditures (PCE) increased $57.2 billion,
or 0.5 percent." By my HP-12C calculations, given those percentages, every
month we're making $150 trillion, and spending $114.4 trillion. I know this
is overly simplistic, but no wonder banks are flush with deposits!
Mortgage Capital Associates a Southern California-based Direct Lender,
operating in 32 states is seeking an Underwriting Manager (in the Los Angeles
area) and in-house underwriters. The ideal candidate should have
exceptional communication skills and thorough knowledge of Conventional and FHA
Guidelines in addition to multiple investor overlays. For over 28 years
Mortgage Capital Associates has been a leader online and is currently expanding
its Branch Operations to target the Jumbo Market, and is already doing nearly
$100/million per month in originations. Confidential resumes should be directed
to Jason Kravitz at jkravitz@mtgcapital .com.
And in the next state over, Phoenix-based The Lending Company is in search
of DE/CHUMS/LAPP Certified mortgage underwriters. "As an Underwriter
you will be responsible for managing and monitoring daily workflow. Act as the
subject matter expert on investor's loan guidelines and internal underwriting
procedures. Make sound underwriting decisions on large and complex loans
regarding credit worthiness of Borrowers. Relay these decisions in a
professional manner to Loan Officers and internal staff." A thorough
knowledge of Ginnie, Fannie, and Freddie guidelines is desired, along with hands-on
experience performing automated risk system data entry and output analysis. The
ideal candidate should have current knowledge of RESPA and MDIA regulations,
and know MS Excel, MS Word, Desktop Originator, Desktop Underwriter, Loan
Prospector, Lenders Office, Calyx Point. For more information on the company visit here, and
confidential resumes should be sent to Aileen Marcus at amarcus@thelendingco .com.
Yes, the CFPB is very concerned about all things consumer. Its most recent
missive focused on credit reporting, which is guaranteed to be required
reading at companies like Fair Isaac, VantageScore, Fitch, Kroll, and many
other credit-score reliant companies. As
required by the Dodd-Frank Act, the CFPB compared credit scores sold to
consumers to those sold to creditors to determine the impact of the different
scoring models used by consumer reporting agencies. The CFPB found that for a
substantial minority of consumers, the different scoring models yielded
meaningfully different results, i.e., the consumer and creditor purchased
different credit scores from the same reporting agency. In comparing different
models across various demographic subgroups, the CFPB found that different
credit scores did not appear to treat different groups of consumers
systematically differently than other scoring models. The CFPB cautioned
consumers against exclusively relying on credit scores they purchase as a guide
to how creditors will view their credit quality. More
And NMLS is very concerned about licensing and tracking loan officers.
To that end, it is making some changes later this month that LO's, and the
people that manage them, should know about.
Yes, Ops, compliance, and legal staff usually outnumber loan producers in lenders. I received this note from Penny Showalter, the managing director of Cognitive Options Group, about trends she's seeing. "There is a lot of uncertainty and angst surrounding all the proposals, new requirements and looming thought of a CFPB audit for mortgage bankers, community banks and credit unions. I am finding that most while doing a good job and handling lending in a compliant manner do not have the long list of required policies and procedures that are being asked for. In addition the typical company has one person in charge of compliance and do not have the time, even if there is expertise, to handle day to day issues and also prepare for what is coming. The need for outside expertise and assistance has never been greater in our industry. In order for lenders to meet the challenges initiated by Dodd-Frank and subsequently being implementing by the CFPB, processes need to be examined and reformed by subject matter experts that study the specific regulations and understand the ramifications to an organization. Vendor Management, SARs/AML reporting (new for mortgage bankers) and Fair Lending concerns specifically with disparate impart are keeping people up at night. But there is help out there from qualified mortgage professionals that can help ease the burden. Use LinkedIn, go to industry conferences to meet these experts and use the internet to search them out so you can make this long bumpy road a bit smoother and keep your mortgage lending practice successful." (Cognitive Options specializes in this - if you want more information on the firm go to www.cognops .com.)
On September 26, USDA's Rural Development office released an
Administrative Notice (AN 4679) announcing that, "all RD programs will begin
using 2010 Decennial Census population data ... on March 27, 2013." The AN
also states that, "until that time, and unless specifically directed otherwise,
programs are instructed to use the population data from the 2000 Decennial
Census." The 2010 Census data will render ineligible for RD programs many
areas that are currently eligible for such programs, including RD Section 502
direct and guaranteed single-family loans and Section 538 multifamily loan
guarantees. Here you go.
Here are some relatively recent banking, agency, and investor updates to
give you a flavor for recent changes and trends. As always, it is best to read
the full bulletin.
Yes, it is almost hard for residential mortgage lending not to make money. This will, of course, change, but bank earnings are certainly profiting due to the residential business.
Saturday's commentary gave a sampling of bank M&A for various
reasons, most notably increasing efficiencies. Bank closures are still with us,
however, but seem to be slowing down. Friday we had one in Illinois: First
United Bank for Crete, and the FDIC entered into a purchase and assumption
agreement with Old Plank Trail Community Bank, National Association, in
New Lenox, to assume all of the deposits of First United Bank.
Nationstar (which some dub "Wells Fargo Lite" given all the talent it
has brought over from Wells this year) is not the only non-depository buying
servicing. PennyMac Mortgage Investment Trust recently agreed to acquire
a nonperforming whole loan pool totaling $452 million in unpaid principal
balance. Although the seller is not known (it is often BofA, but that is just
conjecture), about 53% of the UPB is related to loans backed by houses in
foreclosure, while the rest is at least 90 days delinquent and most of the
loans are in FL, CA, IL, NY, and NJ. One report mentioned that during the
second quarter PennyMac bought $402 million in unpaid principal balances of
both nonperforming ($224 million) and "reperforming" loans ($178 million). It isn't
alone: Carrington Mortgage Holdings will close the year having bought
$800 million in nonperforming loans which have an unpaid principal balance of
roughly $1.6 billion.
As yet another reminder, temporary FHA guidance on condo project approval
replaces the current provisions on the definition of "under construction,"
owner-occupant principal resident purchases, mixed-use developments, investor
ownership, HOA dues delinquencies, project certification, HOA Fidelity Bonds
and Fidelity Insurance, pre-sale requirements, and owner occupancy. Full
details of the changes, which will remain in place until further notice, are
available here.
Freddie Mac is updating guidance on how servicers interact with state
Housing Finance Agencies when assisting distressed borrowers. Servicers
should participate in state HFA modification assistance programs that allow
them to apply funds as a partial principal curtailment for homeowners whose
mortgages are either owned or guaranteed by Freddie, a practice that provides
an additional way to help borrowers reduce their LTVs and achieve more
affordable payments. The funds received from the program must be put
towards paying arrearages and any other past due amounts and decreasing
principal so that the mortgage is recast or re-amortized without any other
changes to the terms. This should be done in conjunction with HARP or the
Freddie Mac Standard Modification program for approved borrowers. In
addition, servicers should ensure that the funds applied to interest-bearing
balances for borrowers who have partial forbearance don't go towards paying off
the interest-bearing balance.
When completing foreclosures for active duty service members, Freddie servicers
now have a maximum of 450 allowable delay days (increased from the previous
maximum of 365) to finish the process provided that the delay can be attributed
to military indulgence under the SCRA or similar state law. This will apply
to all foreclosure sales executed on or after November 1, 2012.
In compliance with the Fed's anti-steering rule, Wells Fargo Correspondent
requires that the Anti-Steering Loan Options Disclosure be presented to
consumers in cases where the safe harbor under Section 226.36(e)(2) of
Regulation Z applies. The disclosure must be signed and acknowledged by
all borrowers listed on the Note at least one business day before
closing. Loans that fail to adhere to the anti-steering guidance will not
be eligible for purchase by Wells.
GMAC encouraged clients to take advantage of its 30- and 45-day lock
prices, which weren't priced to comply with the November 1st g-fee increase,
and has issued a reminder than the spread between the 30- and 45-day price is
less than the cost of a 15-day extension. The g-fee increase is currently
being integrated into the 60-day lock price. The g-fee increases bring changes
for GMAC Freddie and Fannie products requiring extensions to close and disburse
after October 19, 2012. Loans with terms of less than 15 years are
subject to a 50 bps increase, while those with terms of 15 years or more are
subject to an increase of 25bps. This applies to loans with 5-, 7-,
15-, 30-, and 45-day lock windows that have locked with GMAC prior to September
24rd and to loans with lock windows of 60 days or more that were locked prior
to September 6th. The fee increases are in addition to the existing
extension fees as listed on the GMAC rate sheet.
Turning to the markets, sometimes I am tempted to write, "Rates are great" and leave it at that. But it is useful to talk about the economy, especially with last week showing us some disappointing reads on the economy. A good term would be "wallowing" or "slow growth trajectory." GDP is certainly less than expected, and the Durable Goods (items made to last three years or more) orders dropped over 13%. (Yes, it is volatile - in this case aircraft orders plunged more than 100%.) The "budding" housing recovery remains in-tact: new home sales in August missed on the headline, but remain near two-year highs, and the median price for a new home is now 17% higher than a year ago. July's Case-Shiller index also pointed to stronger prices.
For exciting scheduled economic news in the United States this week, there isn't much in the way of the 8:30AM EST numbers (the ones that can generally move rates more than other releases). That comment aside, later this morning we'll have some ISM Index number, and Construction Spending. Wednesday are the ADP number (of questionable worth in predicting the government unemployment data), another ISM number, and the FOMC minutes from the 9/12 meeting. (Those might be kind of interesting.) Thursday is the Challenger Job Cuts, Jobless Claims, and Factory Orders. But Friday is the Big Kahuna: employment. We closed the week with the 10-yr at 1.64%; this morning it's around 1.62% with agency MBS prices slightly better.
(Parental discretion advised.)
A little boy dressed up as a pirate knocks on the door on Halloween and an
older lady come to the door and says, "Oh my goodness! Now what are you?"
The little boy answers, "Look, lady, I'm a pirate"!
The lady replies, "Well, if you're a pirate, where are your buccaneers".
The boy answers, "Right here under my buckin' hat!