COFI Primer; Agency Stock Drama; Upcoming Events Including Bowling and Breakfasts
Any lender that is closing more loans than a year ago, or has a larger pipeline, should be proud of themselves. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity fell 3.1 percent in the week ended May 30. The MBA's seasonally adjusted index of refinancing applications fell 2.9 percent and the purchase number dropped 3.6 percent.
(Read More: Mortgage Applications Slightly Lower; Possible Holiday Effects)
The drama of Freddie and Fannie continues. Sure, GSE reform is pretty much dead as far as Congress is concerned due to political gridlock, but there is plenty of excitement about who owns their stock. Activist investor Carl Icahn acquired about $51 million in the common shares of mortgage financiers Fannie Mae and Freddie Mac from mutual fund manager Fairholme Funds in March. Icahn is known for taking big stakes in companies and pushing for management change, and now owns 6.8 million common shares of Fannie Mae and 5.7 million common shares of Freddie Mac. He joins the Pershing Square hedge fund, run by another activist investor, Bill Ackman, which invested half a billion dollars to acquire stakes of nearly 10 percent each in Freddie and Fannie. Fannie Mae and Freddie Mac posted profits of $5.3 billion and $4.0 billion, respectively, for the three months that ended March 31 - but much of that was from income from lawsuit settlements.
And speaking of money to be made from settlements, the US government is alive and well and its activities are best summed up in the WSJ story about it pursuing money from companies. "U.S. housing officials, fresh off billion-dollar settlements with bank giants, are zeroing in on smaller lenders...Now, they are probing smaller banks' mortgage lending and loan servicing in the run-up to the financial crisis, the government official said. Specifically, as part of continuing civil investigations detailed in banks' public filings, federal agencies are looking at whether several lenders submitted to the Federal Housing Administration loans that failed to meet underwriting standards. The FHA is the government mortgage-insurance agency that absorbs losses when borrowers default."
Reps and warrants certainly influence who might owe what. Who likes stagnant agency reps and warrants? Not me, ask anyone, they'll tell you. So it was with much joy on May 12th that I read an email informing me that Freddie Mac, along with Fannie Mae, announced in Single Family Seller/Service Bulletin 2014-8 that it is making a number of significant enhancements to the selling representation and warranty framework introduced in 2012. The recent enhancements include: relaxing the acceptable payment history requirement for determining when a Mortgage is eligible for relief from the selling representations and warranties, providing sellers with written notice of mortgages that have met the eligibility requirements for relief from the selling representations and warranties, introducing an additional path for eligible Mortgages to obtain relief from the selling representations and warranties. In addition to the payment history path, Sellers will also obtain relief from the selling representations and warranties if there is a satisfactory conclusion of a Freddie Mac quality control review of the mortgage. Version 1 of the framework is effective for Mortgages with Freddie Mac Settlement Dates on and after January 1, 2013 and before July 1, 2014. Version 2 of the framework is announced in this Bulletin.
And to continue with Agency catch-up, on May 16th Fannie Mae updated their delinquency management and default prevention policies. The announcement, in Servicing Guide Announcement SVC-2014-07, states that for a borrower who submits a completed Borrower Response Package (BRP) or incomplete documentation 37 days or less prior to a foreclosure sale, the servicer must explain its plans for evaluating the borrower for a workout option and suspending the foreclosure sale in the BRP acknowledgement notice. Also, the servicer is encouraged to work with borrowers who submit incomplete documentation to obtain a complete BRP but is not required to send an Incomplete Information Notice. Fannie Mae is eliminating all Servicing Guide requirements related to a substantially complete BRP, and thus servicers need no longer postpone foreclosure due to the receipt of a substantially complete BRP.
The Minnesota Mortgage Association has its June breakfast meeting on the 17th - check it out! You never know who might show up...
Integration is around the corner. Learn what you need to know about RESPA-TILA integration in Los Angeles on July 23. MBA is offering this deep dive, led by industry experts, is designed to help you master and implement new requirements and accompanying forms, going into effect on August 1, 2015. These courses are filling up fast, so register today to reserve your spot. Early registration, before June 21st, MBA member fee $500. Standard registration member fee after the June 21st registration date is $650. Nonmember fee is $1250.00.
The OMBA will be conducting a 3-part, in-depth class, to give your staff the knowledge and training needed to effectively understand, underwrite, originate and process VA loans. VA Loan Underwriting Training Webinar scheduled for June 6, 13 & 20, 2014, 12:00 pm - 3:30pm. The cost is as follows: OMBA Members $449 per person and Non-members $499 per person.
In Maryland, dust off your bowling shoes and get ready for Happy Hour! MMBA is hosting its 1st Annual Bowling Social on June 12th. Get your team together, or just come bowl individually! We will have snacks and sodas, cash bar all night. Happy Hour followed by a fun evening of bowling! MMBA Members - $25 individual or $115 team of up to five, Bring a guest at the member rate. Future/Non-Members - $35 individual or $125 team of up to five. For more information Email: info@mdmba. org.
Near San Francisco, Real Live is coming to the Greater East Bay. Real Estate Agents are invited to this FREE live event hosted by Todd Duncan, NY Times best-selling author. This event will be held Thursday, June 12th from 9:00am - 12:30pm at San Ramon Marriott in San Ramon; CA. Seats are limited to the first 250 agents.
Registration for the 2014 Housing Summit on September 15th and 16th in Washington D.C. is here. This 2-day event will focus an in-depth look at the key challenges in housing and explore solutions. Hundreds of private sector experts, elected officials, academics, and housing practitioners from across the country will be gathering with the nation's leaders in housing policy to contribute to the center of housing policy debates. Cost to attend both days is $495.
For companies originating ARM loans, how about a little primer on COFI? With 30-yr rates around 4% and the percentage of adjustable rate mortgage applications running at less than 10%, we're not in an ARM market quite yet. But indices continue to change, the most recent being COFI. Last week the Federal Home Loan Bank of San Francisco announced that the 11th District Monthly Weighted Average Cost of Funds Index ("COFI") for April 2014 is 0.682%. The index for March 2014 was 0.701%. "The COFI is computed from the actual interest expense reported for a given month by the Arizona, California, and Nevada savings institutions members of the Bank that satisfy the Bank's criteria for inclusion in the COFI. For April 2014, 14 eligible institutions reported COFI data. Changes in interest rates on adjustable rate mortgage loans offered by many financial institutions are tied to changes in the COFI."
There's a nice caveat. "Although the Bank makes a good faith effort to be accurate in the calculation and publication of the COFI, the Bank does not warrant, confirm, or guarantee the accuracy of the data it receives from its COFI Reporting Members, the accuracy of the COFI calculation, or the accuracy of the COFI as published. The Bank does not examine the books and records of its COFI Reporting Members for the purpose of confirming the accuracy of the data they deliver to the Bank used to calculate the COFI, and the Bank expressly disclaims all liability that may arise from any use of the COFI or the use of inaccurate data received from its COFI Reporting Members in calculating the COFI. In addition, the Bank expressly disclaims any liability to any person for any inaccuracy in the COFI, regardless of the cause, or for any resulting damages." "For additional information and disclosures about the calculation of the COFI, removal of a COFI Reporting Member, and other matters concerning the COFI, visit the Bank's website."
Which was is the economy going? It seems to be grinding along - but yesterday's auto and truck numbers from the last period showed sales hit a 9 year high! That must indicate something. Factory Orders were up .7% in April. And sure enough, Treasuries sold off, as did agency MBS, again Tuesday, and the signs of a slight pick-up in those parts of the economy. The 10-year Treasury note was down/worse .5 in price, closing at 2.59%, and prices on agency MBS worsened about .250-.375 on average.
Today is a new day, of course, with all kinds of economic numbers including ADP for May (a measure of employment not including government hiring/firing - it was up 179k, below forecasts), preliminary Q1 Productivity (-2.6) and Final Sales (+4.8) at 8:30 AM, May ISM Non-Manufacturing (55.5) at 10 AM, and 2PM's Fed release of the Beige Book in preparation for the June 17-18 FOMC meeting. Soon after the ADP number the 10-yr is at 2.58% and agency MBS prices are a shade better.
Jobs
In the retail LO hiring sector, Aspire is expanding. "Tired of working to fund executives' luxury cars and second homes? Aspire Lending turns that paradigm on its head. 'It's not about 50 people reporting to me,' says Steve Barton, Aspire's EVP of Production. 'The way I look at it, I report to them. As a leader at Aspire Lending, it's my job to earn the loyalty of our associates every day.' If you're looking for an organization that puts you first, it's time to join the Aspire Revolution." Email Steve at sbarton@aspirelending.com for more information.
Private Mortgage Insurance company Genworth Financial is seeking an experienced Account Manager in its Dallas Texas territory. Candidates should have exceptional customer interaction skills as well as a proven track record of sales execution and leadership. The person hired will be expected to provide the highest level of internal and external customer service, manage customer relationships and develop growth strategies for assigned accounts, develop calling plans to cover all assigned accounts, monitor branch volume and calling activity and take necessary actions to achieve account volume goals. The ideal candidate will have 4+ years of experience in a regional or territorial sales role, have a college degree or equivalent industry/sales experience, great presentation and communication skills, and have the ability to work flexible hours with occasional overnight travel. Candidates should contact Kristin Miller at Kristin.Miller@genworth.com for a complete job description and/or visit Genworth.
And "are you ready for your optimal career? Join us." SaaS provider Optimal Blue is expanding its sales team and is currently looking for successful Business Development Managers in the following regions Southeast, Northeast and Mid-West States. Positions are available for Optimal Blue Enterprise Lending Services, Product Eligibility. Business Development Managers are responsible for developing new customers and accounts in the designated market/region. The ideal candidates will have a proven track record of business development (ideally B2B) in the mortgage or technology industries. Optimal Blue is a cloud-based provider of managed-content, product eligibility, pricing (PPE), secondary marketing, point-of-sale and compliance technology and services. Based in Plano, Texas, Optimal Blue has developed an enterprise class suite of products and services designed to automate a lender's complex processes, improving efficiency and profitability while gaining a competitive advantage. For a complete job description, or to send your confidential resume, contact careers@optimalblue.com.