Slew of Vendor Updates; Will FHA News Lead to an MIP Cut?

I do a little traveling (this week, hopefully, is California, Colorado, and Kansas) so it was interesting to see that Pro Teck Valuation Services recently identified 29 of the hottest markets, with 21 of them west of the Rockies. Some of the top markets include, Anaheim-Santa-Ana-Irvine, CA, Bellingham, WA, Boise City, ID, Chico, CA, Durham-Chapel Hill, NC, Medford, OR, Olympia, WA, Phoenix-Mesa-Scottsdale, AZ, Portland, OR, Seattle, WA and Salt Lake City, UT. Coldwell Banker reports the most expensive housing markets (in order) the US are: Newport Beach (CA), Palo Alto (CA), Saratoga (CA), Cupertino (CA) and Los Gatos (CA). Meanwhile, the least expensive cities in order are: Cleveland (OH), Riverdale (GA), Wilkes-Barre (PA), Detroit (MI) and Alma (MI).

Lenders continue to outsource tasks to vendors, and there has certainly been plenty of vendor news!

MCT Trading, Inc., a mortgage risk management company which provides pipeline hedging, best-execution loan sales and centralized lock desk services, announced that it has acquired certain key assets of PLar Analytics, LLC, a provider of financial models for mortgage bankers, and of PB Pacific Partners, LLC, which offers consulting services on capital markets and mortgage servicing. The deal expands MCT's advisory services to include specialization in mortgage servicing rights (MSR) valuation business. This new MSR Services Group will be headed by Phil Laren, founder of PLar Analytics and PB Pacific Partners.

A while back Levy & Watkinson, a New Jersey law firm devoted to representing the mortgage industry in the New Jersey metropolitan area, announced that it is joining Offit Kurman Attorneys At Law, a full service law firm located in the mid-Atlantic Region. E. Robert Levy and Wayne Watkinson, partners in Levy & Watkinson, will join Offit Kurman as principals and as members of the firm's Financial Institutions Regulatory Practice Group.  

Playing some catch up, a while back (like 6 months ago) Flagstar Bank has joined The Lenders One Mortgage Cooperative as a new preferred investor. Read all the details in Flagstar and Lenders One agreement announcement.

The IRS has released a revised Form 4506-T (version 9/2015). The only significant change is the new form contains a borrower attestation box which must be checked (above the signature line).

Credit Plus announced a new feature that can be added to its credit reports to help validate a borrower's name, address, date of birth, Social Security number and phone number. In addition, FraudPlus ID goes even further and reviews the borrower's data against the Industry Standard Exclusionary Watch lists. Click here to read the latest news on FraudPlus ID from Credit Plus.

Quandis Inc has extended its Military Search Service to locate active military personnel. The White House announced the implementation of a new rule to protect Service members and their families from high-cost loans and predatory lending, which takes effect on Oct. 1, 2015. It closes loopholes in the 2006 Military Lending Act (MLA) by expanding the definition of "consumer credit" to include payday loans, vehicle title loans, refund anticipation loans, deposit advance loans, installment loans and credit cards. Quandis' Military Search Service works by performing automated bulk searches on the Department of Defense's (DoD) website to identify borrowers that are listed as active duty in all military branches. An official military status report is provided by the Department of Defense within 24 hours.

MortgagebotLOS solution has been endorsed by the American Bankers Association through its Corporation for American Banking subsidiary. MortgagebotLOS is D+H's all-in-one loan origination system that supports retail, wholesale and correspondent mortgage lending. The suite also includes MortgagebotPOS, a point-of-sale solution that is also endorsed by the ABA. To earn the ABA endorsement, D+H had to undergo a comprehensive due-diligence process that took into consideration the Company's financial soundness; management strength; training and support; and customer service.

FormsFree has successfully launched the integration of its flagship product, AccountChek, with Easy Mortgage Apps. The integration enables loan officers and underwriters to verify mortgage applicants' financial asset data through mobile devices, allowing for a more streamlined lending process for customers. FormFree's partnership with Easy Mortgage Apps, will enable lenders to utilize AccountChek securely through a mobile device.

With so much focus on remaining compliant, Dodd Frank Update interviewed some new technology solution providers to "help your business increase efficiency and maximize profitability at a time when compliance is king. Thanks to sponsor DataTree, the 2015 Mortgage Technology Special Report is available as a free download."

VRM University, the training division of VRM Mortgage Services, has launched a new Diversity & Inclusion Self-Assessment Tool Kit. The tool kit, reviewed and supported by the MBA, provides a free alternative for financial service businesses to benchmark, document and report their compliance with the proposed standards mandated by section 342 of the Dodd Frank Act. It is a confidential resource that includes a workbook and online assessment that maintains user anonymity as it does not store any of the data provided.

Real estate technology company Pavaso announced the completion of its end-to-end digital process for the mortgage/real estate industry. Starting with pre-closing, the consumer and real estate agent collaborate via Pavaso's sales contract negotiator tool, which allows the buyer, seller and their respective real estate agents to negotiate and sign a contract online. When completed, the buyer can utilize the Pavaso Certified Finder app to select from a list of service providers already using Pavaso or to invite one to join.

Switching gears to FHA news, tongues were wagging yesterday when the FHA released its annual actuarial report on the Mutual Mortgage Insurance Fund (MMIF) showing that it had crossed the Congressionally-mandated 2.0% capital ratio threshold for the first time since 2009, hitting 2.07% as compared to 0.41% in FY14. "The improvement is due to FHA's asset remediation efforts, the volume shift following the January 2015 pricing reduction, changes to the actuary's interest rate assumptions, and stronger home price appreciation forecasts."

Interestingly most of the increase is driven by the HECM portfolio, although the single-family forward portfolio capital reserve ratio also increased from 0.56% to 1.63%. Slicing and dicing the numbers, however, shows that the headline figures do not reflect deterioration in the underlying portfolio valuation from MIP cut announced this year. Namely the 2015 biz is less profitable than the 2014 biz, and future growth in MMI fund reserves has been curtailed due to lower MIPs.

HUD officials are currently denying any plans of reducing MIPs although HUD has strongly highlighted the positive aspects of the report, especially the reserve ratio threshold being exceeded, and downplayed the deterioration in future economics.

Peter Bell, President of the National Reverse Mortgage Lenders Association, scribes, "The positive FY2015 Actuarial Report is great news for FHA and the HECM program because it shows that the MMI is in a position to protect itself, and taxpayers, from volatility in the marketplace. The health of the MMI fund is bolstered by improvements in the HECM portfolio attributable to changes in the actuarial forecasting of home values and interest rates, and recent policies such as changes to upfront MIP pricing and new rules requiring a financial assessment for all borrowers."

USMI President and Executive Director Lindsey Johnson stated: "We welcome the progress made, but caution against a false sense of security from today's report. It is a reminder of continued taxpayer exposure to more than $1 trillion in FHA insured mortgage credit risk. The MI industry and FHA should serve as complementary ways to promote sustainable homeownership. But to do that, FHA still needs to become more financially resilient in line with the rest of the financial system, and remain focused on its core mission of serving underserved communities."

Scott Olson, Executive Director of the Community Home Lenders Association (CHLA), stated, "The Community Home Lenders Association commends FHA for its strong financial results - and renews its call made last month for a further premium cut now that the FHA Fund exceeds its 2% Net Worth target."  

Isaac Boltansky with Compass Point Research summed things up nicely. "We view the FHA pricing debate in three separate buckets: (1) annual mortgage insurance premium (annual MIP); (2) up-front mortgage insurance premium (UFMIP); and (3) cancelability. First, we do not believe that the FHA will lower its annual MIP as the 50bps reduction in January 2015 was proportionally significant and helped facilitate the recent market share shift. Second, our sense is that if the FHA does decide to lower its pricing it will likely focus on its UFMIP. As a matter of context, when the FHA proposed its HAWK program last year it offered a 50bps UFMIP and 25bps annual MIP reduction for borrowers who entered counseling programs. Therefore, for those anticipating a FHA pricing change, our view is that a 25-50bps cut of the UFMIP is the most to expect. Third, while the FHA could reverse its 2013 cancelability decision our view remains that the policy cost/benefit equation for doing so makes a change unlikely."

Looking for insight into the market for Monday? You aren't going to find it here today, so don't even look. It was pretty flat and quiet all day - like folks are more focused on the weather and next week's holiday. The only thing interesting was that the stock market rallied big time, having no impact on fixed income securities.

Today we've had some interesting, potentially market-moving news. The October CPI and Core CPI showed +.2% on both, as expected. Coming up are October's Industrial Production and Capacity Utilization figures along with the November NAHB Housing Market Index (10AM EST). As a proxy for mortgage rates we closed the 10-year Monday at 2.27% and this morning it is yielding 2.29% with agency MBS prices worse about .125.

Jobs and Announcements

For retail LOs looking at opportunities, Nations Reliable Lending LLC, also known as NRL Mortgage, is a Houston-based and rapidly growing mortgage company founded in 2007. The team over at NRL Mortgage has been awarded the prestigious 2015 Top Workplaces honor by the Houston Chronicle, and were ranked #46 in a group of the top 50 mid-size companies, an esteemed honor out of almost 400,000 companies! Ron Zach, President, noted, "We value our people and realize that the sky's the limit for NRL Mortgage as long as we continue to put our people first and provide them the most dynamic culture in the mortgage industry, hands down." With 50+ branches and counting and licensed in almost 40 states, the team over at NRL is expanding their national footprint with a combination of the right people, innovative mortgage products and industry-leading compensation packages. If you are interested in a confidential discussion with NRL on what it takes to be an integral part of this rock star team poised for lots more recognition in the future and strategic growth in 2016 and beyond, contact Ron Zach (713.275.1303). 

And in wholesale & operations news, Planet Home Lending, LLC continues to expand and currently has sales and operations openings in Texas and California. Planet Home Lending, an approved Fannie, Freddie, FHA and VA direct lender and $13 Billion mortgage servicer, is looking for experienced Wholesale Underwriters, Loan Processors, Loan Openers, Account Executives and Regional Sales Managers for their Texas, Pacific Northwest and Northern California regions. In addition, the Company is actively expanding its Servicing Division in its Dublin, California office location and is seeking Customer Service Representatives, Loan Counselors and Mitigation Coordinators. Planet currently offers wholesale and correspondent loans in nearly 50 states. The company offers competitive compensation and benefit programs, a dynamic work environment and unlimited growth potential. If interested in joining our employee-friendly, growing organization, please send an updated resume in confidence to Chase Gonzalez.

And for those looking for a management role, a lender, continuing its growth across the nation and that has both retail and wholesale channels, is searching for a National Operations Manager. The specialty & non-QM lender is headquartered in the greater Los Angeles area, was founded over 20 years ago, and is licensed in over 25 states. It is continuing to expand nationwide and the ideal candidate will be focused on providing a streamlined operational flow with the purpose of providing superior processing, underwriting, and funding timelines that exceed industry standards. The candidate should have experience in operations management, processing, funding, drawing docs, and understand the basic file flow of a loan from cradle to grave. In other words, being able to direct individuals and know how to manage a pipeline. Confidential resumes should be sent to me.