CFPB Offers Plans for TRID; Upcoming Events; Who's Afraid of HMDA?
“They” say plenty of things about time flying as you grow older. (“Life is like a toilet paper role – the closer you get to the end the faster it goes” comes to mind.) HMDA changes are a couple years out – so why are companies worried about them now? Because time flies. In my discussions with compliance & QC folks around the nation, the HMDA concern revolves not around borrower issues – most of the data is already being collected by lenders – but around the statistical testing, increased regulatory concerns, the increase in potential extreme penalties, and the increase in FTEs required in auditing every file. See an explanation below.
The residential lending biz was thrown a bone yesterday when the CFPB issued a letter in response to the industry, led by the MBA, seeking additional clarity on several aspects of the Know Before You Owe (KBYO) rule. The CFPB is not, at the moment, clarifying anything but instead is outlining an "expedited path" to issuing a formal Notice of Proposed Rulemaking (NPRM) to address many of the industry's outstanding questions and concerns, and incorporating many of the issues that have been addressed so far through informal oral guidance. The MBA notes that, "The CFPB has already begun drafting the rule based on the ongoing dialogue with MBA and other industry participants, and CFPB will be holding additional meetings with stakeholders prior to the targeted July NPRM."
So the CFPB announced that it will propose changes to TRID in July to provide "greater certainty and clarity" to the mortgage industry. This does not mean that TRID is going away. It means that they will make adjustments and provide more clarity. Though Cordray did not provide details of the changes, industry groups have asked for further guidance on a dozen significant issues, including how to cure errors, account for lender credits, and calculate cash-to-close transactions. the changes requested by the industry do not involve policy issues but rather resolving differing interpretations of the rule.
The news prompted one broker to write me saying, "We are about 7 months into the implementation and suddenly the CFPB blinked. Why? But worse yet, why are they waiting until July to announce the proposal. At best any changes wouldn't come until October 2016. And if the changes are real and we need software changes, the time would be out to next spring. What changed? Is there a major lender or lenders in trouble because of TRID? This isn't out of the goodness of their hearts. Are larger institutions being appeased while claiming they are asking small business for input. Something is amiss. Congress needs to ask the GAO to do a start to finish cost assessment of the sinking of the Titanic, I mean TRID. Just consider the losses on rate locks, compliance, manpower, software and hardware and the national economic impact to the RE sector of GDP all from TRID."
The CFPB also controls HMDA and its process. Sure we have until 2018 for collecting the expanded data required under the revised Home Mortgage Disclosure Act (HMDA). But lenders and their IT staffs are already at work on it - we have plenty of lead time, certainly more than with TRID. But experts think that the expanded version of HMDA may prove harder than TRID was/is. And with worse penalties. And not to look for any last-minute extensions that save lenders from non-compliance.
The new version of HMDA doesn't simply add to the number of data points being collected (from 26 to 48). HELOCs will be subject to reporting. The new rule applies to any residential loan that's secured by a dwelling, and thus more loans will be covered by HMDA on the residential side, and it expands the scope for commercial loans. Commercial loans covered under the rule still have to satisfy the HMDA purpose test, which is for purchase, home improvement or refinancing, but this is still a major change in how HMDA affects commercial lending.
Lenders are well advised to understand HMDA's new requirements since data will have to be integrated from multiple sources. And lenders have learned not to rely 100% on vendors. Lenders need to know what their technology and business processes will need to do to enable accurate compliance.
What could go wrong? Plenty: HMDA data is released publicly and it becomes fodder for fair lending cases and issues from the public, attorneys, and regulators. Even now companies are already conducting the statistical analysis that consumer advocacy groups would do on the HMDA data before lenders report it. Don't dally.
The lack of volatility continues in the bond market although on Thursday the MBS market ended higher in price and mostly tighter on spread, despite a rallying treasury market, as heavy Fed demand was joined by real money interest. As usual, the Fed was in buying billions of dollars of various securities and coupons. At the close, the 10-year note was better by nearly .250 to yield 1.84% while current coupon agency MBS prices improved about .125.
Today we've had more news. Anyone caring about employment costs noted the Employment Cost Index for March was +.6% (as expected). And Personal Income and Consumption/Spending, expected +.4% and +.1%, respectively, were indeed +.4% and +.1%. Coming up later are the Milwaukee and Chicago Purchasing Manager surveys as well as some University of Michigan Sentiment figures. After the initial bout of figures rates are higher with the 10-year at 1.87% and agency MBS prices worse .125.
Jobs and Announcements
In job news for ops folks, Southern Trust Mortgage - a billion dollar a year originator headquartered in Virginia - is growing rapidly and offering career opportunities for the following positions: Post-Closing Shippers, Junior Underwriters, Credit Underwriters, and Collateral Underwriters. Shipping positions will be located at the company's headquarters in Virginia Beach; the location of underwriting positions is flexible. STM offers competitive compensation plans and benefits. STM provides a dynamic work environment and career advancement. Interested candidates should send resumes to HR Director Jennifer Rawlings.
Radian one of the industry's largest private Mortgage Insurance companies, is growing again and the sales team has an excellent opportunity for a Senior Account Manager in the Georgia & South Carolina Territory. The Senior Account Manager is responsible for maintaining and growing existing account relationships in their assigned territory. "We are looking for a dynamic individual who has experience in Mortgage Insurance and/or Mortgage Industry Business to business Sales. If you are interested in joining the Radian team, we would welcome the opportunity to speak with you." Please send your confidential inquiry/resume to Sarah Keene.
PRMG Wholesale continues to expand in the Northeast Region: PRMG is proud to announce the recent promotion of Ryan Goldsmith as Wholesale Regional Manager for the Northeast Region. In his new position as a PRMG Wholesale Regional Manager for the Northeast Region, Ryan will be reporting directly to James Matarazzo, Regional Vice President, Eastern U.S. Territory, and will be focusing on the development, expansion and acclimation of Wholesale Sales teams within the Northeast Region. PRMG is a national leading lender, voted No. 1 of the 50 Best Companies to Work for in America. To learn more about PRMG and/or questions, please email Paul Lucido, National Marketing Director.
New Penn Financial will be hosting a job fair on May 5th from 11:00am - 4:00pm (PST) at the Newport Beach Marriott Hotel at 900 Newport Center Dr., Newport Beach, CA. The national lender, a Shellpoint Partners Company, will be looking for candidates with experience in the mortgage industry, and has over 100 job openings in the greater Orange County area. New Penn will be filling roles for Underwriters, Ops Leaders, Processors, Sales Managers, Loan Officers, and Closers; for more information please contact Aubrie Cusumano. (For the Philadelphia area lender, this is one of several westward expansions in 2016. Earlier this year, New Penn opened branchesin Salt Lake City and Las Vegas, and last year they opened an office in Pasadena. In addition to appearances on the Inc. 5000 Fastest Growing Private Companies list for four consecutive years, New Penn has been consistently recognized as a Top Mortgage Lender by Scotsman Guide and has appeared on Mortgage Executive Magazine's lists for Top Lenders and 50 Best Companies to Work For.)
New American Funding is holding a Latino Focus event, "The Hispennials Generation: Marketing to the Nuevo Latino," in Riverside, CA on May 18 from 3-5PM. This event, hosted by New American Funding President Patty Arvielo, will educate attendees on marketing to the millennial generation of Hispanic consumers, Hispennials, by hearing from expert-led panels.
The Real Estate Agent Panel will provide marketing insights about relationship building with Hispennials, the Underwriting Panel will discuss obstacles millennials face during the home buying process and how to better serve them, and the Industry Experts Panel will discuss how the mortgage industry addresses challenges facing Hispennial homebuyers. This event is produced in collaboration with Freddie Mac, Radian Guaranty, and Neighborhood Partnership Housing Services.
National MI is hosting a "Millennials in the Workforce" webinar session led by Kristin Messerli of Cultural Outreach Solutions. Participants will learn how to navigate the workplace dynamics between Millennials and other generations in their organization, which recruitment tactics will prove most effective in sourcing talent, and how to develop a loyal workforce of Millennial employees. Click here to register for National MI's May 2nd, 1-hour, free webinar.
If you're near Columbus Ohio this Monday or Tuesday, say hello. The Ohio Mortgage Bankers Association is holding its Annual Convention May 2-4.
May 1-3 are the dates to mark for TMBA's 100th Annual Convention in San Antonio. This is the largest gathering of Texas real estate finance industry leaders and top performers. Click here for more information.
May 9-11 is the Annual OMBA "Home" Conference in Catoosa at the Hard Rock Hotel. Don't forget about the Golf Tournament on the 11th! With a powerful line up of speakers, this year is sure to be a memorable one. Conference details and registration information is available here.
If you're near Oklahoma City on Friday May 13th you may want to take advantage of some HUD 184 training featuring Deanna Lucero, HUD 184 Senior Loan Guarantee Specialist and
Michelle K. Tinnin, Native American Program Specialist. Registration 8:30 - 9:00 Seminar 9:00 - 11:30; $25 NAPMW Member and $50 Non Member. Online Credit Cards payments are accepted. Registrations can made here. For additional information email Carol.Clark@guildmortgage. net.
Silicon Valley CAMP's upcoming May events are available via YouTube video, presented by its President, Richard Wang. Registration and details for events are available on the CAMP website.
Having trouble with BAML's warehouse monies? You're not alone. Apologies went out to lenders due to the "technical issues." "This was a bank-wide issue we were having with our wire system. The highest level of executives in our treasury team were involvedto resolve this problem as quickly as possible. We did not re-issue these wires because we were unable to cancel them; once the wire gets initiated in our system, it will eventually get funded. The bank was not comfortable sending out duplicate wires for every loan that is stuck in queue as this problem was not limited to just the warehouse group and impacted multiple warehouse clients. If you do decided to use another warehouse line, please let us know so that we can coordinate getting the funds back from the closing agents as the wires were released this morning." What lender, at month end, wouldn't have used another lender in order not to negatively impact their borrowers?