Vendor News and New Products; Agency News and Updates--Stocks Slammed by Mnuchin
How many people find fault seemingly every day with the FHA, Fannie Mae, and Freddie Mac programs or structure? Plenty – see below – they can’t seem to catch a break. What I really meant to ask is how many people live in the United States of America? The Census Bureau projected that the U.S. population was 324,310,011 as of January 1st. This is an increase of 2,245,347 (0.7%) since New Year’s Day 2016. Overall, the U.S. population is expected to increase by 1 person every 16 seconds. (It’s a global phenomenon. Throughout the world, the population increased by 77,849,375 from 2016 New Year’s Day to 2017 New Year’s Day. During January 2017, 4.3 births and 1.8 deaths are expected worldwide every second.)
In Agency & government program lending news, the news is coming fast and furious.
Yesterday's questioning of Secretary of Treasury Steven Mnuchin resulted in some news. For example, he said that although he favored the Volcker rule for FDIC-insured banks, it was overly complex and needed modification. Mnuchin also suggested that a "21st century Glass-Steagall" act might be worth considering.
His testimony didn't do the Agencies' stock price any favors. Fannie Mae turned negative, dropping as much as 11%, with Freddie Mac down as much as 11%, after Trump's Mnuchin said at the Senate hearing that he never endorsed the idea of "recap and release." He said that Fannie & Freddie are very important entities, that we need housing reform, and that we shouldn't leave Fannie, Freddie without a fix.
In other stock-related agency news, Freddie Mac (OTCQB: FMCC) announced that its request to delist its debt and mortgage securities from the Luxembourg Stock Exchange was granted on Jan. 17, 2017. The securities, as detailed in ANNEX A, will be withdrawn from trading effective Feb. 15, 2017.
Turning to FHA news, for quite some time everyone in the biz has been talking about the increased market share that non-depository banks compared to "regular" banks. And this is especially evident to the FHA program which has been a lightning rod for HUD and DOJ lawsuits against lenders. These penalties and the process of fighting them have caused some like Chase to scale back their desire to even originate these loans.
Residential lending veterans weren't surprised at the Wall Street Journal article yesterday pointing out how FHA-backed loan balances have topped $1 trillion for the first time in November and the rise of non-bank lenders in this corner of the market. It is creating concerns - again no surprise that those in the industry were already aware of. But yes, the nonbank share of FHA lending is worrying some in Washington. As banks have retreated from FHA lending, nonbank lenders like Quicken and Freedom have taken up the slack. GNMA is conducting a push to lure banks back into the business. But if GNMA offers preferential pricing to some, isn't that a form of discrimination?
The boss of Freddie and Fannie (the FHFA) requested input on the Duty to Serve Program. The statute requires the Fannie Mae and Freddie Mac to serve three specified underserved markets manufactured housing, affordable housing preservation and rural housing by improving distribution and availability of mortgage financing in a safe and sound manner for residential properties that serve very low-, low- and moderate-income families in these markets.
Fannie Mae's DU Validation Service Verification Report Vendors list showing vendors that can provide eligible verification reports to lenders has been updated and expanded.
The Fannie Mae Servicing Guide has been updated to include changes related to Investor Reporting Requirements, Retirement of Non-Eligible List and Miscellaneous Revision. Policy changes not applicable to Reverse Mortgage Loans. The full release is available for viewing. Or, if you prefer, view the video presented by Bill Cleary, Vice President of Single-Family Servicing Policy & Solutions.
The question was posed, "Does Freddie Mac require employees of each approved Seller/Servicer to complete annual fraud training?" MQMR sent out, "Yes. Chapter 3201.1 of Freddie Mac's Single Family Seller/Servicer Guide addresses Fraud Prevention and Detection. It indicates, in relevant part, that Sellers/Servicers must train employees, and certain non-employees, who are in a position to notice and report fraud or suspected fraud at least annually to ensure that these employees are aware of emerging fraud scenarios. Such individuals must be trained in all applicable areas of the Seller's/Servicer's mortgage business regarding: (1) Common and emerging fraud schemes; and (2) Red flags that may signal fraud and the need for further review. Non-employees who may require fraud prevention and detection training include, but are not necessarily limited to, contract underwriters and processors, contract quality control firms, borrower outreach companies, loss mitigation providers and collection companies. Trainings may be conducted by the Seller/Servicer or by a qualified third party. Alternatively, the Guide permits Sellers/Servicers to meet the training requirements by obtaining annual written verifications from the individuals requiring training. Verifications must confirm that training has been received from a third party and meets the requirements of the Guide."
Capital
markets news...
Recently Freddie Mac spread the news that it had transferred $8.4 billion in potential credit losses on nearly $215 billion of single-family mortgages to private market investors across its four single-family credit risk offerings in 2016. "Since 2013, the company has led the market in credit risk transfer on approximately $602 billion of single-family mortgages -- providing approximately $25 billion of loss protection to taxpayers."
Any LO waiting to lock in a rate for a borrower was disappointed yesterday when U.S. Treasuries and MBS prices declined for the second-straight session. (The 10-year yield hit 2.496% but closed at 2.46%; mortgages worsened .250-.375.) The European Central Bank rate decision and accompanying statement was just what the market expected this morning, but U.S. housing starts beat economists' estimates and saw an upward revision to the prior month's data. And the Philly Fed Index of manufacturing activity in mid-Atlantic states registered a two-year high. If that wasn't enough, initial jobless claims fell to a 43-year low for the week ending January 14.
For economic news today... there is none. There are a couple Fed speakers. (It is actually more noteworthy when there are NO Fed Presidents speaking.) In case you haven't heard today is Inauguration Day when Donald J. Trump will be sworn in as the 45th President of the United States. We find the 10-year's yield, as a barometer of the general interest rate environment, at 2.50% this morning with agency MBS prices worse .125 versus last night.
Jobs and Announcements
Everyone wants to make sure their clients are happy. Congrats to SocialSurvey's "2016 Winners for Customer Satisfaction in the Mortgage Industry" winners. SocialSurvey's annual MOCSI report is now available. The large company winner, Summit Funding finished with 9,000 reviews, and 4.8 Stars and collect feedback from 52% of their customers. The small company winner, Absolute Home Mortgage, finished with over 2,000 reviews and 4.9 Stars. View the full winner's list here.
In job news National MI is searching for a Sales Account Manager who will reside in or near San Diego, California and is responsible for promoting the sale of National MI products, services and programs to clients through a consultative selling approach via personal sales calls and email/phone contact. This individual will also assist in sourcing new business from originators, and will manage the relationships of specific clients by serving as a customer advocate, educator, and loan issue problem-solver. Experience in client relationship management and training is imperative, and strong research, process improvement, and presentation skills are required. Headquartered in the San Francisco Bay Area, National MI is a U.S.-based, private mortgage insurer enabling low down payment borrowers to realize homeownership. For the complete job posting, see National MI's careers page. http://www.nationalmi.com/careers/#jobs
Congrats to Joseph A. Zavac, MAI, a veteran real estate appraiser and a senior vice president at The William Fall Group, a national valuation firm, who has been named the 2017 president of the Ohio Chapter of the Appraisal Institute.
Vendors, licking their chops about next week's MBA Independent Mortgage Banker's Conference, continue to evolve. (I'm sure the conference will have its share of actual lenders!)
LoanTek, LLC spread the word that it "offers the most robust, mobile responsive widgets supported with complete API libraries. 2 million times per day on sites like Bankrate, Tree, and Zillow, and 6 million in the last year on 275 individual lender sites. LoanTek has its best execution pricing engine, but also focuses on specializing in digital marketplaces, custom web integrations, and turnkey consumer direct solutions. From website origination to the secondary market LoanTek has the pricing engine services you need. 'Everything Else is Just a Pricing Engine.' For more information visit www.LoanTek.com or call us at 888.562.6835."
Alight, Inc., a leading provider of cloud-based applications for real-time, dynamic scenario comparison and analysis, announced that GEM Mortgage, a division of Golden Empire Mortgage Corporation Inc., has selected Alight Mortgage Lending for continuous reforecasting. "Built by mortgage professionals, Alight Mortgage Lending is the industry's only application for
real-time multiple scenario and what-if analysis." David Chesney, EVP and CFO at GEM, noted, "We need to be nimble, and Alight's ability to forecast various economic scenarios will enable us to move quickly in response to changing economic conditions."
InSellerate, a provider of lead management and sales acceleration solutions to the mortgage industry, announced that they added Raj Parekh, a mortgage technology veteran as their VP of Business Development "Our commitment at InSellerate is to help mortgage companies grow, and hiring someone like Raj, with his extensive background and experience in lead management and lead generation, is our demonstration of this commitment," said Josh Friend, founder and CEO of InSellerate. "He is known in the industry as an innovator with integrity and passion, and that is the right fit in the organization we're building."
Movement Mortgage reported launching "Movement Mortgage Marketing," or M3, a new proprietary marketing, sales and customer engagement platform powered by technology from Total Expert Inc. "This is a difference-maker for our organization and our vision to be a movement of change in the mortgage industry," said Movement Mortgage Chief Brand Officer David King in a press release. Movement reported that the platform will help 2,000 sales professionals to better "manage their contact databases, connect with clients and prospects and spread their message through multiple media channels, including video, social media, email and print." Joe Welu, CEO of Total Expert stated, "Movement Mortgage is deeply passionate about innovation and building a company designed for the future of mortgage lending which makes them an ideal partner for Total Expert." To learn more about Total Expert, visit totalexpertinc.com.
Freedom Mortgage has begun using the Simplifile Collaboration service in its wholesale division to quickly and easily exchange data with its settlement partners. Simplifile Collaboration enables lenders to share, receive, and validate documents and data with their settlement partners via a secure platform and provides visibility into settlement partner processes, resulting in faster, transparent, and more compliant mortgage closings. The system also automatically notes file changes, updates, deficiencies, and statuses to craft an audit-ready compliance trail.
Credit Plus announced the availability of its Lost Sales Analysis by Equifax*, a new product that helps lenders gain a better understanding of the applicants they've lost, who they lost them to, and why. It provides loan-level competitive intelligence that can help them maximize their marketing ROI while improving closing rates and customer retention. With the detailed data contained in the Lost Sales Analysis, lenders can determine if their applicants closed their loans with a competitor, monitor portfolio run-off trends, and assess pipeline fallout. The specific output contained in the Lost Sales Analysis includes: Name of the lender associated with the lost sale, purchase/refinance flags and Characteristics associated with the consumer's new loan, such as the origination date and amount, loan type, estimated balance, purchase price, sale amount, and more.
Credit Plus' newest installment of America's Mortgage News is now available and reviews some of the things Credit Plus anticipates will impact our industry this year. There are some educated guesses based on the data that's out there and what mortgage experts are saying about the months to come. Certainly, as with any other year, events may happen that none of us could possibly predict. In this episode, Credit Plus does its best to shine some light on a few things that are likely to occur in 2017 and the mortgage industry's expected response to them.
Do you know what Day 1 Certainty can do for you and your borrowers? CoAmp provided links to Fannie Mae Day 1 Certainty overview, an audio collateral underwriting webinar and