GSE Reform Analysis; Tons of Fannie and Freddie Changes; New Products
How bad is the housing market in San Francisco, California? Well, here's a "beauty" that is on the market for $350,000. Run that one by any investor's appraisal review department!
According to the IRS, 4.7 million taxpayers benefited from a deduction for private mortgage insurance in 2013, which increased from 4.1 million in 2012. Among the tax payers that took the deduction for private mortgage insurance, 82 percent had adjusted gross incomes between $30,000 and $100,000 and the average amount per return was $1,387, which was a slight increase from $1,304 in 2012. I mention this because a mortgage credit certificate from the Virginia Housing Development Authority could boost the tax benefits of owning a home - potentially saving thousands of dollars at tax time every year - for first-time homebuyers as long as they live in their home.
And the TRID training continues. "All You Need to Know about TRID" is a free, educational webinar for Real Estate Agents and Settlement Service Providers offered by Prospect Mortgage. Get the scoop regarding the October TRID deadline and closings could be impacted this fall. Audience members can submit questions during the one-hour webinar and get answers, live during the presentation. Register for the 9/24 or 9/30 session at www.LearnwithProspect. com.
360 Mortgage Group leveraged the TRID changes and is ready to train you on its website September 25th or October 2nd. Click here to sign up now.
Let's dig into some developments in the conventional conforming world.
Isaac Boltansky from Compass Point put out a piece titled addressing his thoughts on the Senate's push for "Jumpstart GSE Reform" through unanimous consent. "There is an effort in the Senate to advance a legislative package through unanimous consent that would reverse the recent GSE CEO compensation increase and prohibit the U.S. Treasury (UST) from selling or otherwise disposing of its shares in the GSEs without Congressional consent. The reversal of the CEO compensation increase is politically uncontroversial but there is opposition to the prohibition on UST sales of its shares in the GSEs which is based on Sen. Corker's 'Jumpstart GSE Reform' package. As a reminder, the 'Jumpstart GSE Reform' amendment had two core components. First, it prohibited Congress from using GSE G-Fees for budgetary purposes. Second, it explicitly prohibited the sale, transfer, liquidation, relinquishment, or divestment of the UST's senior preferred stock holdings in the GSEs. Passage of the 'Jumpstart GSE Reform' language would be a negative event for current GSE shareholders as it would foreclose on an administrative path for action and leave the issue squarely in the hands of Congress where it would surely languish until 2017 at the earliest.
"Although we have yet to see the language associated with this effort, we have gathered the following in recent days: (1) the GSE CEO compensation language is substantively similar to the House-passed version but may have certain limiting factors including a limited applicability to the CEOs only during conservatorship; (2) press reports suggest that the language at the center of the current unanimous consent package maintains the prohibition on UST selling its shares in the GSEs but does not include the G-Fee language; (3) press reports from Politico and Bloomberg state that Sen. Brown (D-OH) has a hold on the package; (4) reports state that Sen. Warren (D-MA) is opposed to the package because it no longer includes the prohibition on using G-Fees for general purposes; and (5) the package has reportedly cleared the Senate GOP through the hotline process."
Freddie Mac has eliminated the 5% LTV reduction for loans with secondary financing. This change impacts the Freddie Mac Only Fixed Rate product as well as the Fixed Rate Conventional product. Pacific Union Financial has updated it Program Guide(s) and Quick Reference Guide(s) to reflect these changes.
Freedom Mortgage is offering its new Freddie Mac Products. Freedom has updated and simplified instructions to get started with a tutorial to guide you through the process. Available products include conforming and super conforming, Home Possible and Open Access.
If you have missed any of the recent Loan Prospector Guide updates and requirements, the continuous flow continues. September 27, 2015 Update - Clarification of purchase eligibility requirements for Freddie Mac Home Possible Advantage. (Guide Bulletin 2014-22) October 1, 2015 Update - Removal of Minimum Borrower Contribution from Borrower Personal Funds requirements for certain loan scenarios. Effective for Settlement Dates on or after October 1, 2015. (Guide Bulletin 2015-16) October 3, 2015 Update - Removal of signature requirements on the Settlement/Disclosure Statement in response to the Truth-in-Lending Act (TILA)-Real Estate Settlement Procedures Act (RESPA) Integrated Mortgage Disclosure (the "TRID Rule") announcement. Effective for Application Received Dates on or after October 3, 2015. (Guide Bulletins 2015-10 and 2015-16)
October 25, 2015 Updates Increase in the maximum number of financed properties that a Borrower may own and/or be obligated on if the subject is an investment property or a second home. Effective for Settlement Dates on or after October 26, 2015. (Guide Bulletin 2015-12)Removal of the requirements for a two-year history of managing an investment property and rent loss insurance in order to use the income for qualifying purposes. Effective for Settlement Dates on or after October 26, 2015. (Guide Bulletin 2015-12 Updates to assets and reserves requirements. Effective for Settlement Dates on or after October 26, 2015. (Guide Bulletin 2015-16)
Lakeview Servicing Wholesale Lending posted agency updates including Freddie Mac Maximum LTV Ratios for Mortgages with Secondary Financing, HOA Dues as Interested Party Contributions - Abatements, and potential exclusion of a monthly payment from the DTI calculation when the Borrower is self-employed. Click the link to view Lakeview Servicing web page.
Fannie Mae has been in the process of converting lenders over to the new Pricing & Execution - Whole Loan (PE-Whole Loan) committing platform. The enhancements that have been introduced with the new system further simplify and improve the user experience. Please take a look the recent write-up on PE-Whole Loan in the Housing Industry Forum: Click here to check it out...
Per Fannie Mae's updates to its underwriting policies regarding the use of qualifying income and reserve requirements for conventional loans; Sun West has added more clarity to its guidelines regarding current policies on the submission of Fannie Mae conventional loans to Sun West. Clarification requirements regarding the removal of Conversion of Principal Residence requirements, use of other financial assets, and documentation of qualifying income have been updated.
In accordance with the Fannie Mae overlay removal regarding the Limitations on Financed Properties, BayView Loan Servicing has updated the section of its matrices to remove" if property is a second home or an investment property, the borrower must not own and/or be obligated on Notes secured by more than (4) 1-4 units (including subject property)".
Modification Interest Rate required for all Fannie Mae conventional mortgage loan modifications, excluding Fannie Mae HAMP Modifications. Click the link to view information on Fannie Mae SVC 2015-12 and Standard Modification Interest Rate Adjustment.
Fannie Mae's recent release informs lenders regarding its new UCDP appraisal sharing functionality Q1 2016. Freddie Mac released its own notification on the appraisal sharing function. The new release will enable correspondent lenders to easily share appraisal information in UCDP with their aggregators. Aggregators will have access to real-time results for their correspondents' appraisals to ensure they have the most up-to-date information.
Fannie Mae recent update contains policy changes related to e-filing and TX posting costs, adjustments to standard and streamlined modifications, an increase to Mortgage Release incentives, updates to the application of borrower HAMP incentives, the retirement of Form 181HFA, a correction to insured loss events requirements, a reminder of payment change notification requirements for mortgage loans subject to step interest rate adjustments, and also includes a miscellaneous revision.
Up some, down some, so go rates. Tuesday rates dropped. Once again there was nothing concrete about the move aside from a rally in the value of the dollar. In fact the Federal Housing Finance Agency's Housing Price Index rose 0.6% m/m in July after increasing by 0.2% in June, and Redbook Research reporting that national chain-store sales dropped a smaller-than-expected 1.4% m/m in the first three weeks of September.
Today we can look forward to... the results of the $35 billion 5-year note auction? We've already had the MBA's application numbers which don't move rates but indicate what most lock desks knew already: apps were +14% last week led by refis being up 18%. Purchase applications were up 9%. And there are no other scheduled news tidbits. We had a 2.12% close on the 10-year yield Tuesday and this morning we're at 2.15% with agency MBS prices worse about .125.
Jobs and Announcements
Speaking of California, in this case Northern, SoFi "is seeking a rock star mortgage professional to join our team in beautiful Healdsburg, CA as the Director of Mortgage Underwriting and Director of Quality Control. The person will report to the Vice President of Credit & Underwriting and play key roles in developing and monitoring the quality of originations." Check us out at www.sofi. com/careers." (SoFi now has ex-SEC Chairman Arthur Levitt as an Advisor.)
PRMG, currently licensed in 47 states and with production at 146% of 2014's, is "on the hunt" for several positions. PRMG is searching for motivated and experienced wholesale and correspondent AEs to help support and serve the state of Texas and the Midwest region including IL, IN, MO, OH and KY, and for a correspondent underwriting manager for its Correspondent division fulfillment center located within PRMG's corporate office in Southern CA. Lastly PRMG is searching for a Regional Manager to oversee PRMG's TPO (wholesale and correspondent) growth in the Pacific Northwest. With nearly 1,000 full time employees & 60 branches, "PRMG is ranked #1 of the 50 Best Companies to Work for in America by Mortgage Executive Magazine. Please send all resumes and inquires to HR@prmg.net
Product News
Roadrunner Solutions has a free service for LOs to help you connect your pre-approved borrowers with local Real Estate professionals that will reinforce your relationship with the borrower. "Roadrunner has a large network of Realtors that will respect the relationship between the LO and their borrower. This service will improve your closure rate and help deliver the high level of customer service required for the purchase money borrower. If you are a Call Center LO, run a Call Center Platform, originate loans outside of your local area, or just struggle to find quality Realtors, Roadrunner is a great service for you to try with no fees or any cost to the borrower. Roadrunner has also added website design and support to their product offering. If you would like to find out more e-mail us."
Deephaven Mortgage rolled outs its new Non-Prime 5/1 Jumbo ARM. "This program offers substantially lower rates for our wide Non-Prime credit box. Credit features include FICOs to 620, bank statements for self-employed income, loan sizes up to $2M, expanded ratios, and limited credit-event seasoning. Our original product offerings still help you responsibly serve borrowers with no seasoning for credit events at lower FICO scores. Join the 50-plus sellers nationwide that have gotten approved to take advantage of our industry-leading non-prime expertise and outstanding service. Please contact Brett Hively or complete the contact request form at deephavenmortgage.com to get started today!"
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