HMDA Audit, QC, TPO Products; Conforming Conventional News; LoanCare Attack; Strong GDP Report; New Loan Limits

There is always non-mortgage financial news. Mark Cuban is both selling his share in the Dallas Mavericks and leaving Shark Tank. Berkshire Hathaway’s Vice Chairman Charlie Munger has died. When I want something bougie to give as a Christmas present, I go to… Alabama? U.S. airlines lose 2 million suitcases a year, and they all go here along with the contents up for sale. Will Rogers came up with, “Things will get better… Despite our efforts to improve them.” Things certainly aren’t getting better in the credit & verification world. Costs keep going up. Blame the CRAs (credit reporting agencies), Fair Isaac, or the bureaus (Experian, Transunion, or Equifax). Lenders of all shapes and sizes have a renewed interest in managing those costs... At this point, why wouldn’t you charge the borrower up front? Meanwhile, originators are continuing to scramble for business, despite rates having dropped somewhat in recent weeks. (STRATMOR’s current blog is titled, “Listening to Real Estate Agents Can Pay Off for Originators”.) $766,550 is the base conforming loan limit for 2024. Today’s podcast can be found here, and this week’s is sponsored by MCT. MCT’s technology and know-how continues to revolutionize how mortgage assets are priced, locked, protected, valued, and exchanged, offering clients the tools to thrive under any market condition. Hear an interview with Argyle’s John Hardesty on the company’s recent case study with NFM Lending.

Lender and Broker Products, Programs, and Services

A lot can happen in 10 days. JavaScript, a programming language still used by 98.7 percent of websites, was created in 10 days in 1995. Once, in 2001, Argentina cycled through five presidents in just 10 days. And now, thanks to the team at nCino Mortgage, Connecticut-based Northwest Community Bank is trying to figure out what to do with the 10 days it has shaved off the average time between conditional approval and final approval since introducing the nCino mortgage mobile app and hybrid eClosing. In the words of the bank’s SVP of residential and consumer lending, “With nCino, we’re offering an amazing and measurably better mortgage experience.” Download the case study to get the full story.

Industry vet Rich Swerbinsky’s Onward & Upward Consulting is having great success helping companies inside and outside of the mortgage industry scale & optimize their businesses as we head into 2024. Rich also provides career coaching services for individuals inside & outside the mortgage space. To learn more, contact Rich directly.

“Citizens Correspondent Lending is committed to our community of nationwide lenders, and we have successfully navigated the challenging environment of 2023. We are excited for new opportunities in 2024 as we continue to expand our presence and add new partners in all markets. We are the bank that is Made Ready to stand with you and grow with you, and we offer a full suite of execution and delivery options, including: Bulk Mandatory, Delegated Best-Efforts and Non-Delegated Best-Efforts. Our strength comes from our philosophy of providing unparalleled service with a competitive suite of products and pricing. Let’s talk! Find a Senior Regional Account Manager near you at correspondent.citizensbank.com.”

“loanDepot doubles down on serving those who’ve served our country. Our support for the military community started at the top when loanDepot Founder Anthony Hsieh created War Heroes on Water in 2018. Today, led by our new VP of National VA Lending David Smith, our industry-leading VA Council (comprised largely of Veterans) leads the way in outreach to both the military community and real estate professionals. Coming from a position of personal knowledge and trust, we’ve trained more than 28,000 Realtors and consumers to better understand the VA’s powerful home loan program so that more military families can take advantage of its benefits. If you’re looking to grow your VA business, our expansive VA product portfolio (which includes VA renovation loans and programs with a 520 minimum FICO), our proprietary tool that lets you identify in-market real estate pros with strong Veteran client lists, and our robust content library are just a few of the ways we can help. Contact David Smith to learn more.

Edge Out the Competition: Post-Closing QC eGuide Now Available. In QC Ally’s free eGuide, learn how to ditch perfection, embrace your flaws, and ultimately strengthen your quality control processes. With the risk of repurchases more costly than ever before, now is the time to look at your post-close audit findings as opportunities to not only manage risk but also potentially increase your bottom line. You might just find that your “flaws” are the key to unlocking hidden opportunities. Read Now.

“If you’re not reviewing your HMDA data, you’re the only one! Not only are regulators using HMDA data to measure fair lending compliance, but investors, competitors, and vendors are also using your data for due diligence and contract negotiations, so inaccurate data can be costly. With a HMDA data review by Firstline Compliance, our team dives deep into your loan-level information, leveraging our experience to uncover issues others might miss. We go deeper because we know what to look for. With the 3/1 data submission deadline just around the corner, contact Josh Weinberg now to schedule your review in January. Stay ahead, mitigate risks, and ensure your HMDA data works for you.”

It's not If, but When…

You, someone you know, or the parents of someone you know have been hacked, have been the victims of a cyberattack, or have been asked for ransomware.

US Mortgage’s Ira Selwin (thank you, Mr. Selwin!) alerted me to the fact that last Tuesday, Fidelity National Financial, or FNF, a real estate services company that bills itself as the “leading provider of title insurance and escrow services, and North America’s largest title insurance company,” announced that it had experienced a cyberattack.

Christine Youmans, who said she uses LoanCare to pay her mortgage, said she doesn’t know what to do. LoanCare, which is owned by FNF, offers “full-service subservicing to the mortgage industry, according to its website. “Everything is shut down and no one can pay the mortgage and you can’t get them on the phone,” Youmans told TechCrunch.

A call to a number on the www.LoanCare.com website responded with an automated message that said: “For those of you impacted by the recent catastrophe, we hope you and your family are safe. We are here to help you and your family return to normal.”

Time to Program the New Conventional Loan Limits

The Federal Housing Finance Agency (FHFA) announced the 2024 conforming loan limit values (CLLs) for mortgages Fannie Mae and Freddie Mac (the Enterprises) will acquire in 2024. In most of the United States, the 2024 CLL value for one-unit properties will be $766,550, an increase of $40,350 from 2023.

The FHFA has announced the 2024 Conventional Conforming loan limits. Effective immediately, lenders may request the 2024 loan limits on existing pipeline and new locks. Citizens is diligently working to update its systems and until the system update is completed and the 2024 limits are available through the website, lenders may utilize the manual process outlined in Citizens Correspondent National Bulletin 2023-20. Citizens will distribute a separate communication will follow when the system update has been completed and the manual process is no longer required.

On 11/21/2023, the Federal Housing Finance Agency (FHFA) announced a final rule modifying certain provisions of the Enterprise Regulatory Capital Framework for Fannie Mae and Freddie Mac (the Enterprises). “The Enterprise Regulatory Capital Framework is a critical tool to ensure the Enterprises responsibly manage their risks,” said FHFA Director Sandra L. Thompson. “Finalizing these proposed changes helps ensure the framework will continue to strengthen the Enterprises’ ability to provide liquidity throughout the economic cycle.”

PennyMac Announcement 23-83 states that effective immediately, Pennymac is aligning with the conforming loan limit increases for standard and high balance loans, as announced by Fannie Mae and Freddie Mac.

Per Pennymac Announcement 23-82, effective for all Best Effort Commitments taken on or after Tuesday, November 28, 2023, Pennymac will update Conventional LLPAs removing the ‘Loan Balance Adjustments’ LLPA from the ‘Conv LLPAs’ tab.

In line with the Federal Housing Finance Agency (FHFA) announcement, Freddie Mac will increase its maximum baseline conforming loan limits and high-cost area loan limit values on January 1, 2024.For a 1-unit property in most areas in the U.S., the 2024 maximum baseline conforming loan limit value will be $766,550. The maximum loan limit value for a super conforming mortgage secured by a 1-unit property will be $1,149,825. The Single-Family Seller/Servicer Guide (Guide) will be updated in a December Guide Bulletin to reflect the 2024 loan limit value. View Freddie Mac News Post for complete list of 2024 Loan Limit Values.

On November 1, 2023, Fannie Mae and Freddie Mac announced policy changes addressing multiple topics, including Fannie Mae’s updated requirements for employment offers or contracts. See the AmeriHome Mortgage Product Announcement - 20231108-CL for details.

PRMG allows conventional loans with the increased standard and high balance limits to be submitted, locked, and funded immediately. Polly PPE may not be updated to reflect the new limits until later in the week, but manual locks can be submitted to Lockrequests@prmg.net. Until Polly PPE is updated, any loans using the new limits will need to utilize the following process as shown in PRMG Product Update 23-54.

The Pennymac Correspondent Group Pennymac is aligning with Fannie Mae’s expanded LTV ratio limits to 95% LTV/CLTV/HCLTV for 2-4-unit, principal residence, purchase, and limited cash-out transactions. A DU Approve/Eligible is required. View Pennymac announcement 23-78 for details.

Effective for all Best-Efforts Commitments taken on or after Thursday, November 16, Pennymac updated Conventional LLPAs as follows: Improving the value in the ‘Loan Balance Adjustments’ LLPA Grid. View Pennymac announcement 23-79 for details.

Effective immediately, Pennymac is aligning with the updates announced in Freddie Mac Bulletins 2023-18 and 2023-19. View Pennymac Correspondent announcement 23-76 for details.

Effective immediately, Pennymac is aligning with the Fannie Mae changes regarding personal gifts and gifts of equity as outlined in SEL-2023-08. View Pennymac Correspondent announcement 23-77 for details.

Access all announcements for the Pennymac Correspondent Group on its website.

As discussed in the Integration Impact Memo, over the November 18th weekend, Fannie Mae updated desktop Underwriter® (DU®) Version 11.1 with enhancements to help reduce barriers and improve access to housing. Updates include an increase in the maximum allowable loan-to-value (LTV), combined LTV (CLTV), and home equity CLTV ratios for two- to four-unit principal residence properties to 95% and removing the number of borrowers included on a mortgage application as a risk factor. For additional information See What’s New in DU and Access the updated Eligibility Matrix.

On June 3, 2024, Fannie Mae will discontinue posting the 30- and 15-year Required Net Yield (RNY) and retire the Historical Daily RNY website. Fannie Mae has suggested using this time to develop alternative processes as needed. View the fact sheet for more details.

PHH Mortgage announced alignment with the DU changes the weekend of November 18th.

Citizens Correspondent National Bulletin 2023-19 includes information on Product Updates and Reminders. See the bulletin for additional information and all lock, delivery, and purchase by dates, if required. Citizens is announcing the following: Conventional Conforming Products, DU 11.1, Rental Income – DU, Self-employed Borrowers, FHA, and Rental Income from ADU – For Delegated Lenders Only.

According to Pennymac announcement 23-81, Pennymac updated Conventional LLPAs effective for all Best-Efforts Commitments taken on or after Monday, November 27th, improving values for the ‘2nd Home Additional’ LLPA on the ‘LLPAs by Product Feature for All Eligible Loans’ LLPA Grid.

Fannie Mae posted the November Appraiser Quality Monitoring (AQM) list.

Capital Markets

Another day, another rally, this time largely due to less Fed hawkishness. Two officials who led the push for higher rates last year signaled they may be comfortable holding them steady for now. Fed Governor Waller said that he is increasingly confident about the current policy stance returning inflation to 2 percent and that rate cuts would be warranted if inflation continues decelerating for several more months. He became the first Fed official to mention rate cuts. And Governor Bowman refrained from telegraphing an imminent hike. Fed swaps anticipate over 100 basis points of rate cuts by December of 2024 and investors have ramped up bets for large rate cuts in the latter half of the year. Some traders are betting on as much as 250 basis points of easing.

In terms of economic data, consumer confidence rose for the first time in four months as job market optimism grew. The disclaimer is that confidence “increased” in November from a downwardly revised number for the prior month, though confidence in future business conditions, job availability, and incomes for the next six months did improve. Separately, the S&P Case-Shiller 20-City Home Price Index was up 3.9 percent in September after increasing a revised 2.1 percent in August. The FHFA Housing Price Index was up 0.6 percent month-over-month in September after increasing a revised 0.7 percent in August.

Today’s economic calendar kicked off with mortgage applications from MBA increasing 0.3 percent from one week earlier, factoring in an adjustment for the observance of the Thanksgiving holiday. Markets have also received a second look at Q3 GDP (+5.2 percent; somewhat old news but stronger than the +4.9 percent expected). The core PCE prices were +2.3 percent, as expected. Additionally, the advance goods trade deficit for October ($89.8 billion) when it was seen improving to $80.0 billion from $86.8 billion. Personal consumption was +3.6 percent. Later today brings remarks from Richmond Fed President Barkin, Cleveland Fed President Mester, and the latest Beige Book. We begin the day with Agency MBS prices better by a few ticks (32nds), the 10-year yielding 4.31 after closing yesterday at 4.34 percent, and the 2-year down to 4.67.

Employment and Transitions

“Mega Capital Funding is continuing to invest and grow during these interesting times. With pressure on the lending community and challenges to the environment we lend in, Mega Capital continues to grow and evolve. Our sales force continues to grow as we add talented AEs across the country. Opportunity is available for New AEs looking to have the products Mega has from Conventional, Government, Jumbo and especially our Non-QM offerings. DSCR Including No Ratio, Bank Statement to 90%, WVOE only, P&L Only, 1099 Only, ITIN, Foreign National and now offering standalone Seconds both full doc and Bank Statement qualifications. Today we also announce our new broker portal, MGenius. The new improved portal will help the broker community submit, process and close loans with the Mega team more efficiently and quickly. Contact us at 818-657 2600 X340 Ed Darrow NSM. For all Non-QM opportunities Contact Brian Robinett at Ext 233.”

Noble Capital Doubles Down with Two New CEOs! From Austin, TX, comes news of a strategic move set to redefine the landscape of the private lending industry. Noble Capital proudly announces the appointment of two visionary leaders, Dana Georgiou, and Ashley Stephenson, to spearhead its journey from a regional powerhouse to a national force. The infusion of talent, focused on delivering tailored and exceptional service marks a pivotal moment in restoring emphasis on Partner-centric values for residential real estate investors and mortgage brokers serving the investor community. Dana Georgiou assumes the CEO Role at Streamline Funding Group, while Ashley Stephenson is appointed CEO of its partner company, the Private Lender Network. Both headquartered in Austin, Texas, these companies are uniquely poised to redefine lending and servicing in the private lending industry. With the addition of these two deeply tenured lending and servicing experts, Noble Capital is poised to revolutionize the industry and expand its national presence.