Credit Availability Increasing; CFPB's Supervisory Highlights; Student Debt

I don't know where this topic falls, somewhere between "That's mildly interesting", and, "So what?" Although I bike a lot, I might fall into the, "I can't believe someone got paid to compile this" camp, though. The Census Bureau's most recent report, "Modes Less Traveled - Bicycling and Walking to Work in the United States: 2008-2012," shows that walking to work has remained unchanged since 2000 after steadily decreasing since 1980. In 1980, 6% of workers walked to work, and that rate declined to 3% by 2000. However, from 2008-2012 the rate of walkers remained statistically unchanged from 2000. Among larger cities, Boston had the highest rate of walking to work at 15 percent.

The MBA announced that mortgage credit availability increased in May, according to the Mortgage Credit Availability Index, which analyzes data from the AllRegs Market Clarity product. A good chunk of this was due to the jumbo loan sector, and banks adding portfolio products to their line-ups.

The old saying "I don't know much about art, but I know what I like," can certainly apply to the CFPB and what they are looking for in compliance departments. One could certainly argue that the Bureau would never find fault with too many procedures or with too many employees...or could they? On May 22^nd, the CFPB published its 2014 Supervisory Highlights, the fourth such report for the Bureau. A large portion of the report summarizes supervisory findings at nonbanks, particularly with regard to consumer reporting, debt collection, and short-term, small-dollar lending. However, a small blurb on Compliance Management Systems (CMS) is worth a read, the CPFB write, "As CFPB has described in its Supervision and Examination Manual, CMS is how an entity: establishes its compliance responsibilities, by determining the regulatory requirements applicable to its business operations; communicates those responsibilities to employees; ensures that responsibilities for meeting legal requirements and internal policies are incorporated into business processes; reviews operations to ensure responsibilities are carried out and legal requirements are met; takes corrective action; and updates tools, systems, training, and materials, as necessary." So does the CFPB believe there are common attributes to successful management of responsibilities? You bet....(1) a Board of Directors and management oversight, (2) a compliance program, (3) a consumer complain management program, and (4) an independent compliance audit.

Late last year I ran into a portfolio manager I know who told me about the growing number of funds out there betting against student debt. He summed up the situation like this, "kids financing 4, 6, 8 years of education...all to end up working as the over-night manager at Target? Something has to give." I don't know. All I know is student debt has reached mortgage-like proportions in terms of originations. Recently, CFPB Director Cordray addressed the Boulder Summer Conference on Consumer Financial Decision Making, commenting on this very issue, saying that student debt is "a pressing problem and a matter of grave importance to public policy in America." Student loan debt is the second largest debt category in the nation, which has reached $1.2 trillion. Ballard Spahr writes, "According to Director Cordray, the "overhang of high student loan debt" is affecting not just borrowers, but the housing market, small business development, retirement savings, household formation, and rural communities. For example, he referenced a recent survey by the National Association of Realtors, which stated that 49 percent of Americans cited student loan debt as a "huge obstacle" to homeownership." Betting against student repayment rates is the equivalent of walking up to a busy craps table on a Saturday night and starting to play the "Don't Pass" line...it may be the smart play, but it sure doesn't make you many friends at the table.

"Women and cats will do as they please, and men and dogs should relax and get used to the idea." Speaking of adjusting to new ideas, congrats to Jennifer Hatcher, who recently took the position of Client Delight Representative in Suntrust Mortgage's correspondent division. "I have been in the division for many years as an Operations Manager for Purchase Review and Funding, and now am the new Client Delight Representative.  In this capacity, I encourage feedback from your teams on how we can improve our service levels to you, gain efficiencies in our processes, and help with any servicing issues which may need elevation. We have created a new email box for your suggestions and concerns: Correspondent.clientdelight@suntrust. com."

Let's continue on with news from lenders, investors, agencies, and upcoming events.

The pricing is certainly heating up out there. The latest example comes from 360 Mortgage Group. "During the entire week of June 9^th, 360 Mortgage Group is running a Friday the 13^th pricing special for their wholesale/broker business channel. ANY conventional loan locked during the week of June 9^th receives an additional 50bps above the published rate sheet price. The price adjustment is built in to the locking system so brokers will immediately see the results. The special expires with the close of business on Friday, June 13^th. 360 offers the full suite of FHA, VA, USDA, Fannie Mae and Freddie Mac loan products including unlimited LTV HARP and no overlay standard conventional products.  Additionally they specialize in niche government ARM products which have no price adjustments and can be used on VA IRRRL and FHA Streamline transactions."

AllRegs reminded clients of its loan guidance checklists and matrices covering topics such as state required disclosure matrices, permissible fee matrices, and state compliance checklists are part of this package. You can directly print these documents, or export them to MS Excel, print and insert them in front of every loan file and use them to be sure your file is compliant.

Penny Mac Correspondent has posted a lending announcement 14-29 regarding Fannie Mae evaluation of large deposits. Effective immediately on DU conforming purchase transactions, large deposit is defined as a single deposit that exceed 50% of the total monthly qualifying income. Contact your sales representative to discuss or review the announcement in its entirety.

Planet Home Lending, LLC announced the launch of its correspondent division. Planet will offer competitively priced FHA, VA, USDA and FHLMC fixed-rate loans, and will accept flow, mandatory, bulk and mortgage servicing rights from its clients. "Planet has streamlined the purchase process of closed loans to within 48 hours of receipt of electronic file by leveraging cutting edge technology." (Founded in 2007, Planet Home Lending is a privately held, national residential mortgage lender with multiple business channels.)

TRI Pointe Homes announced it will be acquiring Weyerhaeuser Real Estate Company, bringing Pardee Homes, Maracay Homes, Quadrant Homes, Trendmaker Homes and Winchester Homes under TRI Pointe during the 3^rd quarter. Operating the six brands under one umbrella in California, Pacific Northwest, Nevada, Arizona, Texas, and Washington D.C. markets, the company expects that the merger will position TRI Pointe as one of the top 10 largest public homebuilders in the United States.

New Penn Wholesale division rolled out E-Sign initial disclosures on June 2^nd; contact your Account Executive for the specifics. Guideline updates have been posted reducing overlays such as FHA and VA minimum FICO with foreclosures and/or bankruptcies removal and the addition of FHA compensating factors. Conventional guideline updates include removal of overlays on FL condos, revised overlays on eligible properties, and minimum FICO on escrow.

Ellie Mae announced that it has integrated Encompass Flood Service^TM into its Total Quality Loan^TM (TQL) program to provide mortgage lenders with the accurate, efficient and consistent ordering of required flood certifications from one centralized tool in their Encompass® mortgage management solution. "Using Encompass Flood Service, Encompass users can now order basic and life-of-loan flood certifications directly from the TQL tool without leaving the loan file or logging into another provider's website."

Fifth Third Correspondent Lending has updated its credit overlay regarding unemployment income on DU Refi Plus Expansion and Open Access. Effective immediately on new loan submission and loan currently in the pipeline, unemployment income may be considered as an eligible income source regardless of whether or not the benefits are related to seasonal employment.

For this week we'll have a new set of numbers upon which to chew. There is nothing on the menu for today, or much of substance tomorrow or Wednesday. Thursday's Blue Plate Specials will be the Retail Sales numbers, Import prices, and Jobless Claims. And the Chef's Special for Friday will be the Producer Price Index. Our friendly 10-yr T-note, an indicator for mortgage-backed security pricing, closed Friday with a 2.60% yield. That is easy to remember, not because it is a round number but because we've been sitting between 2.45% and 2.75% for the last several months. In the early going today we're at 2.61% and agency MBS prices are worse about .125.

Jobs

In the jobs arena, New Penn Financial is actively recruiting Account Executives for its Wholesale Division in the Southeast, Midwest, and Texas.  Founded in 2008, New Penn, "one of the largest and most well-capitalized independent mortgage bankers in the country, has forged a national industry presence built on competitive interest rates, exceptional customer service, and healthy lending practices. New Penn is nationally licensed and originates both agency and non-agency loan programs. Aside from a diverse product offering, New Penn Financial focuses on providing AEs and wholesale clients, the tools, content, and branding to ensure the development of new relationships while strengthening the bonds of old." Experienced candidates with proven success with sales in the wholesale channel should submit resumes to Aubrie Cusumano at acusumano@newpennfinancial. com.

"Adversity can cause some mortgage lenders to break, while others will break records.  In continuing to exceed its volume records month-over-month, ClearVision Funding, based in Orange County, CA, celebrates yet another record month. The company has the unique full offering of FHA, VA, (including FICO scores down to 560) JUMBO, FNMA and FHLMC loans and have direct relationship with the agencies, GNMA, FNMA, & FHLMC. CVF also offers a Non-Delegated Correspondent program with warehouse lines to help take their client's business to the next level." ClearVision Funding, a registered DBA of Pacific Union Financial, LLC is methodically growing its Sales and Operations teams and is actively recruiting Account Executives and Sales Managers in all approved states.  Additionally ClearVision has in need for a Regional Manager to oversee its Orange County, Los Angeles, and San Diego Regions.  Interested candidates with the drive to succeed with ClearVision should submit their resume to careers@clearfundings. com.

And Envoy's Correspondent Lending Division's energizing growth has brought in some valuable additions to their Regional Account Management Team:  Donna Houle (IL, WI), Cara Krause (PA, NJ, DE, MD), Tonya Mills (FL, GA, AL, TN, MS) and Joy Savage (TX) have joined in recent weeks. With strong momentum in growth, sales and development, Envoy is looking for seasoned Regional Account Managers in the following areas to complete its nationwide coverage:  Mid-Atlantic South (MD, VA, NC, SC), Southwest (AZ, NM, CO, UT, NV) and California. Envoy CLD is also looking to add an Eastern and Western Division Manager with impressive correspondent sales and management background. "If you like succeeding - be a part of a champion lending team and experience the difference at Envoy" by forwarding your resume to Todd Potter, SVP National Sales Manager, at tpotter@envoymortgage. com.