Deutsche Settles; Investor Requirement and Underwriting Changes
The mortgage world is full of acronyms. Some refer to Finance of America as “FOAM,” for example. There are new ones every year, making it hard for old-timers in lending to keep track. Speaking of which, I’m not old, but then again, does anyone ever think they are? Along those lines, if anyone is curious, the current HMDA data (another acronym) doesn't capture any info on the borrower’s age but rest assured it will be gathered for the 2018 HMDA data reporting. Let’s hope it shows a nice range for the folks at the CFPB to see.
Deutsche Bank signed a $7.2 billion settlement with the U.S. Department of Justice over its sale of mortgage securities in the run-up to the 2008 financial crisis. What will the government do when it doesn't have this income from settlements: $46 billion from U.S banks alone in the last three years?
Deutsche's agreement represents the largest resolution for the conduct of a single entity in misleading investors in residential mortgage-backed securities, the department said in a statement. "Deutsche Bank did not merely mislead investors: it contributed directly to an international financial crisis," Attorney General Loretta Lynch said in the statement. John Cryan, Deutsche's chief executive, said that the bank's conduct between 2005 and 2007 fell short of standards and was "unacceptable" and that Deutsche Bank had exited many of the underlying activities and improved standards.
As part of the deal, Deutsche Bank will pay a civil monetary penalty of $3.1 billion and provide $4.1 billion in consumer relief to homeowners, borrowers and communities harmed by its practices. The bank also agreed to a statement of facts that describes how it made false and misleading representations to investors about the loans underlying billions of dollars' worth of mortgage securities issued by the bank in 2006 and 2007.
Let's turn to something more forward looking, like recent changes that lenders and investors have made it their documentation, policies, procedures, underwriting, and programs. The devil's in the details. This will give you a flavor of the trends out there, but be sure to read the actual bulletins for details!
AmeriHome Correspondent issued an announcement stating beginning January 3, 2017, the requirements, timelines, and fees for missing or deficient final documentation (trailing documents) will be changing.
AmeriHome has a new Excel format Custodial Document Shipping Manifest form is now available on SellerWeb. The new form will help expedite tracking and clearing of outstanding custodial documents.
Fifth Third Mortgage's Correspondent lending news included the following information: The Down Payment Assistance Programs permitted on Delegated loans are no longer limited to FHLB of Cincinnati and FHLB of Indianapolis. The updated Ineligible Condo list is available in the Correspondent Connect Online Guides and Forms.
As a reminder, Flagstar Bank will be issuing 1098 statements to its borrowers over the next few weeks. However, your company may also be responsible for issuing its own 1098 statements depending upon how the loan was closed. Be sure to clarify the reporting responsibilities of each party and ensure proper disclosure to borrowers.
It is wholesaler Mountain West Financial's policy that once a transaction is registered, it must remain in the original compensation format throughout the process. Effective immediately, a workflow rule has been created to assist in adherence to this policy. This will affect all new loan registrations and all loans already in process.
Citi Correspondent Lending issued Loan Estimate and Closing Disclosure reminders. The Final LE must be received by the borrower(s) at least one (1) business day prior to receipt of the Initial CD. The Final LE must also be received by the borrower(s) at least four (4) business days prior to Loan Consummation. Note: Unless otherwise documented in the loan file (as outlined below), Citi will assume the documents are received three (3) precise business days after the issue date. There are four (4) methods to provide the Loan Estimate and Closing Disclosure: Hand Deliver: The document is considered received by the borrower on the day it is provided, signed and dated by the borrower(s). U.S Mail: The document is considered received by the borrower(s) 3 business days after it is placed in the mail unless documentation is provided in the file to support earlier receipt. Express Mail (FedEx, UPS, etc.) - Proof of borrower(s) receipt, such as a tracking summary, will be required. Electronically or faxed: If faxed, the document must be signed and dated. If emailed, an e-signed LE/CD is required.
Have you seen the Fannie Mae Standard Modification Interest Rate exhibit required for all Fannie Mae conventional mortgage loan modifications, excluding Fannie Mae HAMP Modifications?
Plaza's Wholesale Lock Policies WH-LP-001 have been updated. The update includes revisions to Section 8 of the Policy concerning Broker Compensation: increasing the allowable compensation dollar cap, clarifying discount pricing considerations, and VA loan considerations. In addition, references to the Mortgage Broker Fee Agreement and Non-Discrimination disclosure have been removed.
Wells Fargo Funding updated its Any Role-Individuals List and Any Role-Entities List within the Wells Fargo Funding Validation List. These lists are available on wellsfargofunding.com in the Info Gallery under Client Tools. Policies related to these lists are provided within the applicable tabs in the Wells Fargo Funding Validation List.
Speaking of "The Coach," suspense fee amounts, effective for Loans in Mandatory Commitments with a pool settlement month of February 2017 or later, will be added to page two of Wells Fargo Funding's Mandatory rate sheet as a reference on January 3, 2017.
M&T Bank has updated its FNMA High Balance product pages to remove 45% max DTI requirement and to add that DTI is per DU. Also, its Freddie Mac Open Access product pages are being updated to reflect that loans from any servicer are eligible.
FAMC Correspondent issued an update to its Conventional products: Borrower Minimum Contribution Requirements (Removal of Overlay) Primary residence > 80% LTV: Removed the overlay requiring a 720 FICO and 45% DTI to allow the entire down payment to be gift funds. FAMC will now follow standard agency guidelines on the following products for borrower minimum contribution: Standard Conforming Fixed Rate, HomeReady and Conforming Fixed 97. These changes are effective immediately.
NYCB Mortgage Banking announced High Balance opportunities with its Conforming Fixed (30 & 15 Year) High Balance LLPA Improvement. Outside of California, the High Balance LLPA has improved from -1.000 to -0.875 effective with loans locked on or after 1.13.17. For loans in California, the High Balance LLPA has improved from -1.375 to -1.250 effective with loans locked on or after 1.13.17. Maximum 97% LTV for purchases with a 620 Credit Score - Owner-Occupied (primary residence), 1 Unit.
Looking for a Jumbo 30 Year fixed product? NYCB Mortgage Banking's Jumbo key features include: Purchases on primary residences up to $1 million with a 90% LTV, 720 credit score and no MI Requirements. Rate/Term refinance on primary residences up to $1.5 million with an 85% LTV, 740 credit score and no MI Requirements. Cash-out refinances up to 70% LTV for primary residences. Second Home Purchase and Refinances up to $1 million at 80% LTV and 720 Credit Score.
From the primary markets on to capital markets and interest rates!
Rates slid further down yesterday. Not that I am any great prognosticator, but there are reasons why the economy might not expand so much, which may help rates. Of course, that comes at the expense of borrowers qualifying. If the survival of your business, and the success of your employees, relies on rates going back down, well...
Yesterday U.S. Treasuries and MBS prices began the business week nicely (the 10-year improved nearly .500; 5-year and MBS .250) as the Empire Manufacturing Index missed estimates and global equities traded lower. The "risk off" trade, where money is moved into less risky assets like US bonds, was attributed to profit taking ahead of Friday's Inauguration Day, increased protectionist trade rhetoric from the incoming administration with this week's World Economic Forum in Davos offering differing views led by Chinese President Xi, and concerns about a hard Brexit following some clarity from a speech from England's Prime Minister May.
Today we've already had the MBA Mortgage Index for the week ending 1/14. (It was flat, but refis were +7% versus purchases which were -5%.) We've also had a measure of December's inflation via the Consumer Price Index (+.3%, ex-food & energy +.2%, as expected), and soon a measure of manufacturing via December's Industrial Production and Capacity Utilization. Rounding things out we'll check on housing (January NAHB Housing Market Index) and the overall economy (January Fed Beige Book). After some initial numbers, after closing Tuesday at 2.33% we find the 10-year yield lurking around 2.37% with agency MBS prices giving back the .250 they improved yesterday.
Jobs and Announcements
In job news, Sierra Pacific Mortgage is looking for talented additions to its teams across the nation. Don't miss the opportunity to work for a company that has tons of growth, prioritizes its culture and employees and offers hands-on support from the leadership team! We're looking for talented and motivated loan officers and account executives for our California, Oregon and Maryland Operation Centers. Contact us about our opportunities just waiting for you. If you have the vision and the drive, we'll provide the support and tools you need to take your career to a whole new level. Send your resume to careers@spmc.com to learn more. Sierra Pacific Mortgage is an approved Fannie Mae, Freddie Mac and Ginnie Mae direct seller/servicer and was recently named one of the Top 50 Mortgage Companies to Work For by Mortgage Executive Magazine.
In MI job news, "Are you looking to join an organization with great history, culture, and opportunity? If so, MGIC, the founder of the private mortgage insurance industry, has a great opportunity for an ambitious sales professional in the Greater Sacramento Area. As an Account Manager, you will develop and maintain strong, long lasting client relationships as well as grow business by identifying new business opportunities. The ideal candidate must have strong presentation and communication skills, and the ability to occasionally travel overnight. This person will report directly to Jim Labbé, Sales Manager - CA/NV. If you are interested in joining a company with 60 years of industry leadership and legacy, please send your resume to Nancy Vang-Lee, Senior Talent Acquisition Partner.
Congrats to Bryan Moran who recently joined Fairway Independent Mortgage as Area Manager for the Mid-Atlantic Region. Bryan will be responsible for growing the DC, Maryland, Virginia and West Virginia markets and joins Fairway with over 18 years of mortgage production experience. s Fargo for the last 14 years. Over the last 3 years, Bryan was responsible for growing the DC Metro Area, increasing market share for his previous company by 4% with just under $1.5 billion in annual production. Bryan understands the tremendous opportunity in the Mid-Atlantic and believes that there is no Mortgage Company better positioned to achieve sustainable market share growth than Fairway Independent Mortgage. Bryan is searching for LOs and can be reached here or at 703-203-7394.
For companies looking for wholesale talent, a seasoned group of Wholesale Mortgage veterans with operations in Northern California and AEs throughout the West is looking to join an established wholesale mortgage banker. The group's footprint covers the Western states. Members of the group include Account Executives, regional managers, underwriters, account managers, funders/closers and set-up. The mortgage banker should be financially stable, customer service driven, and want to expand its presence in the Western US. "If you are a mortgage banker who shares a commitment to providing exceptional client service and would like to increase your monthly fundings," contact the group through me. Principals only please; please excuse delays in response due to travel.
With the first securitization completed and strong momentum building toward its next deal, SG Capital is actively helping partners grow their businesses via their broad correspondent offering. Due to the recent jump in interest rates and resulting refi slowdown, originators are focusing on avenues for incremental volume and new opportunities. One of the primary ways to sustain growth is via product expansion into Non-Prime/Non-QM originations. SG Capital offers dynamic solutions across the entire Non-Agency space with loan amounts that span from $100K-$2M. If you are interested in expanding your product book in 2017, send SG a note to inquire about products & pricing at SGCPConduitSales.