New FEMA Proposal and Random Sample of Disaster Policies From Lenders

It is hard to find a mortgage banker that isn’t hell-bent on expanding – sometimes just for the sake of expanding. But many companies soon find out how hard and expensive it is owning a far-flung empire of brick & mortar. Not in the mortgage biz, but near & dear to the hearts of many, is one very successful company that vows not to expand much farther: why In-N-Out Burger won't go East. Sorry Atlantic seacoast residents.

Turning to changes driven more by nature, fire & water, one can't help but see the diversity between the fire ravaged West Coast and the floods in other parts of the nation such as Louisiana. But did I read this right: JPMorgan Chase donated $200,000 for flood relief in LA? I guess bank profit margins are darned tight.

A coalition of unlikely allies are supporting a proposed rule announced Friday by the Federal Emergency Management Agency (FEMA). Organizations representing professional floodplain managers, insurance companies, fiscal conservatives and advocates, and environmental interests agree that the FEMA update will make the United States safer from the devastating impacts of flooding. "Once implemented, the regulation will require FEMA-funded projects to be built smarter and safer by accounting for the increasing likelihood of floods due to climate change. The rules will ensure infrastructure funded by FEMA grants are built to a higher level of resilience."

Private mortgage insurance company United Guaranty announced its Disaster Policy for Louisiana flooding - forbearance measures provide flexibility for homeowners coping with severe property damage. "With tens of thousands of homes sustaining damage from flooding in Louisiana, mortgage insurer United Guaranty has initiated a disaster policy and will work with mortgage lenders and servicers to provide flexibility for borrowers in the declared disaster area who are experiencing severe property damage and interrupted employment. Forbearance measures to prevent foreclosure actions on those coping with storm damage should follow the procedures on dealing with homeowners affected by disasters, natural or otherwise, found in the guidelines established by Freddie Mac and Fannie Mae. Per Brian Gould, COO at UG, "Servicers will not need prior approval from United Guaranty for workout terms on individual cases under these guidelines. We hope this action provides some support and relief to the many families who are dealing with this severe flood."

Wells Fargo's correspondent clients were told that, "In response to the FEMA declaration and flooding in Louisiana, Wells Fargo Funding reminds Sellers to follow our Disaster Policy (Seller Guide Section 820.19). Properties located in impacted areas, with appraisals dated on or before the incident date, will require acceptable property inspections reports. Please refer to the FEMA website for further details and restrictions."

NewLeaf Wholesale sent out, "Due to the effects of the Clayton Fire and the Chimney Fire, a state of emergency was declared by the Governor of California from August 13 (incident start date) and continuing(incident end date TBD) for Lake and San Luis Obispo counties respectively. Due to the effects of the Blue Cut Fire, a state of emergency was declared by the Governor of California from August 16 (incident start date) and continuing (incident end date TBD) for San Bernardino county. All subject properties in the areas impacted by the disasters listed above require evidence that the subject sustained no damage from the identified disaster."

Fifth Third's correspondents were told, "Please note the following areas have been declared a federal Disaster Area by President Obama: Louisiana - Acadia Parish, Ascension Parish, Avoyelles Parish, East Baton Rouge Parish, East Feliciana Parish, Evangeline Parish, Iberia Parish, Iberville Parish, Jefferson Davis Parish, Lafayette Parish, Livingston Parish, Pointe Coupee Parish, St. Helena Parish, St. Landry Parish, St. Martin Parish, St. Tammany Parish, Tangipahoa Parish, Vermilion Parish, Washington Parish and West Feliciana Parish

Correspondent Lenders must adhere to Fifth Third's Disaster Policy located in Chapter 7, Section C of the Correspondent Seller Guide Underwriting Guide and the disaster policy overlay in the Overlay Chart."

Plaza Home Mortgage: "As a result of severe storms and flooding per FEMA disaster declaration DR-4277 (Louisiana Severe Storms and Flooding), Plaza has updated our declared Plaza disaster areas... This incident period is for August 11 and is ongoing. The major disaster declaration was declared on August 14. Properties located in [the affected areas] must follow Plaza's Natural Disaster Policy, GD-PO-008. Some loans scheduled to close in these areas may need to be delayed until confirmation of the property's condition can be obtained. Plaza will reassess the collateral for these loans and prepare them for closing as soon as possible...Visit FEMA at http://www.fema.gov/disasters for an updated list of FEMA's declared disaster areas."

M&T Bank sent out a straightforward matrix showing the programs and the required measures that clients must take with those loans. "In response to the severe storms and flooding in Louisiana and in response to a Federal Disaster Declaration, M&T Bank will enforce the Disaster Re-inspection Policy for all properties located in the affected parishes." The action required includes re-inspection, and "Applicable Dates: Appraisals Completed prior to 8-14-2016

(Refer to Exhibit #03-600: Disaster Affected Areas, for expiration). POLICY: For loans secured by properties, in the designated disaster areas, and appraised prior to the Federal Government / State Government declaration, please refer to [M&T's matrix].

AmeriHome reminded its correspondent clients to, "See Seller Guide Section 10.10. Disaster Policy for property inspection requirements for properties located in FEMA declared disaster areas that are declared eligible for individual assistance. Re-inspection requirements are expected to remain in place for all properties with appraisal dates prior to the incident end date or for at least 90 days following the incident end date for loan transactions where an appraisal

inspection is not otherwise required, unless otherwise announced by AmeriHome. Sellers are reminded that they are responsible for determining potential impact to a property located in

an area where a disaster is occurring or has occurred. Irrespective of whether a property was included in the area covered by the declaration, if a Seller has reason to believe that a property might have been damaged in a disaster the Seller must take appropriate action to ensure that the property is free from damage and meets AmeriHome requirements at the time of purchase by AmeriHome. Employment re-verification requirements for declared disaster areas are not necessary at this time."

PennyMac: 16-30: Disaster Policy Implementation: Louisiana Severe Storms and Flooding.

SunWest Mortgage spread the word, "To view a complete list of FEMA disaster alerts in XLS format, click here: Annexure-I. To view FEMA's recent update on LA, click here: FEMA. For loans submitted with an appraisal dated on or before the incident period end date or for those submitted without an appraisal, Sun West will require an interior and exterior inspection prior-to-funding or purchase of any loans with subject properties that are determined to be at risk. The inspection must verify that the property is sound, habitable and in the same condition as when it was appraised. Our partners can access Sun West Seller Guide under HELP section in Sunsoft.

And here is a portion of Pacific Union's. "At this time, and until all impacted areas have been identified by FEMA and other sources, loans secured by properties located in impacted areas are subject to standard Pacific Union protocol. Standard requirements for disaster areas apply for these properties as they relate to expectations from appraisers for existing pipeline and new applications. For loans secured by properties in impacted areas, the appraiser must comment on the disaster and whether or not there is an impact to property and value.

"Upon delivery of a loan to Pacific Union Financial, the Correspondent must ensure that re-inspections have been completed and delivered to Pacific Union Financial for all impacted properties in accordance with Pacific Union's Disaster Area Policy.  In addition, Correspondents must ensure that Pacific Union's re-inspection standards are applied to any property where the Correspondent is aware of any adverse event that may impact the collateral. If the disaster end date occurred prior to the appraisal, no action is needed (as it is covered with the appraisal).  If the disaster date is after the appraisal, the Client needs to follow the Disaster Area Policy in the Correspondent Lending Guide."

Fortunately, the bond market has been rock steady as we head into the last few business days of August. Who needs rates jumping around? The U.S. Treasury market ended Tuesday's session slightly lower. We learned that new homes in the U.S. sold at their fastest seasonally adjusted annual rate of the recovery during July, and the 2-year Treasury auction was met with solid demand and the Richmond Fed's Manufacturing Index fell sharply for August.

This morning we've already had the MBA's tally of last week's applications which were -2.1%. Coming up at 9AM ET is the June FHFA Housing Price Index and then the July Existing Home Sales stats at 10 ET. And then it is time to dust off those pennies and bid on the $34 billion 5-year Treasury auction. In the early going the 10-year's yield, which ended Tuesday at 1.55%, and agency MBS prices are pretty much unchanged from Tuesday night.

Jobs and Announcements

Embracing the Atlantic Seaboard, on the other hand, is Impac Mortgage Corp.: actively seeking three experienced Correspondent Account Executives to take over three producing territories in the Mid-Atlantic (VA, WV, TN, KY, NC, SC), New England (CT, MA, RI, NH, VT, ME, Upstate NY), and Southern (TX, OK, MS, AR, LA) geographies. "Impac is approved to buy loans in 48 states, and offers a full line of products, including conventional, government, and a game changing non-QM series. We provide an extensive loan platform, cutting edge technology, corporate sponsored marketing support, and a single point of contact that provides clients unparalleled concierge service." Interested parties should send their resumes to Jim Modrycki.

Congratulations to 32-year industry vet Ron Voli who joins the Union Home Mortgage Corp.'s Wholesale team to head up the East. Union Home Wholesale is actively seeking quality AEs, and broker clients, from New Jersey down to South Carolina to support Ron in his effort to establish a strong wholesale presence along the East Coast. Union Home Mortgage provides a full array of loan programs and is committed to exemplary service to its mortgage broker partners, and its rapid growth has led to complimentary expansion in the East region. Jim Wickham, Vice President of Third Party Originations, said, "Union Home has provided me the best few years of my career up to this point, and I am confident that Ron will say the same a few years from now." For those interested in transitioning to a company focused on the strongest company culture, please connect with either Ron or Jim on LinkedIn, or email Jim.

A quick correction to a list yesterday for American Advisors Group and its AAG Advantage Jumbo Reverse Mortgage loan to wholesale partners in select states, for properties up to $6 Million. (This unique reverse mortgage loan can be used for some Non-FHA approved properties such as Non-FHA approved condos, opening up more options for brokers and borrowers.) The correct website for more information or to sign up is: www.aag.com/wholesale

Mergers and acquisitions for depository banks has quieted, but M&A for mortgage companies and production teams are heating up significantly; low rates, consumer demand and a slightly improved economy has swelled the pipelines for mortgage companies, which equates to higher volume numbers to bolster sales prices and purchase multiples. "I've been contacted by several companies in the last several weeks, looking for potential buyers", says Dr. Rick Roque, founder of MENLO a boutique investment and M&A firm for mortgage banks. "They aren't necessarily looking to 'sell,' but they are looking to organize a capital partnership that can provide them with access to more legal, regulatory resources and technology tools along with a wider array of products." If you are interested in inquiring about finding a capital or acquisition partner, email Dr. Rick Roque or call 413.297.6895. 

Along those lines, a national mortgage lender is looking for a Branch Retail Production Manager to lead an existing retail Realtor-based $200M per year ($17M per month) team in the Seattle/Bellevue, Washington market. The person's role will be to lead and support existing loan officers and act as a conduit between sales and ops/fulfillment.  Compensation is a base plus an override on existing production plus growth bonuses. The ideal candidate will have a $3-$5M/month branch to possibly merge with existing retail team to make one large fulfillment platform. There are strong growth goals for the Seattle market to reach $1B in 2017. Interested candidates, please respond to me to pass along a note of interest to the principal.

And while we're on personnel, congrats to James Hecht at Stearns Lending who was previously its EVP, Strategic Development but has now been promoted to a new position as Chief Operating Officer, Executive Managing Director. Besides its five-fold growth in four years, Stearns has been busy. It "will implement a multi-layered managing directorship structure and begin to use new designations - including Executive Managing Director, Senior Managing Director and Managing Director - at senior leadership levels. Titles of Corporate Officers and leaders in the Fulfillment & Production channels will also change.