Redfin Launches Mortgage Co; Lender's Appraisal, Pricing, and Disaster Updates
One would like to think that, as an industry, we’re emerging from the public relations nightmare. And yet the popular press continues the ordeal, the latest example being a murder. Quicken Loans had nothing to do with it, of course, yet the stories all have “Quicken” in the headlines. Is that germane?
Redfin, known as a real estate brokerage, has formed Redfin Mortgage to loan money to Redfin customers buying homes. "By integrating a lending operation with Redfin's existing brokerage and title businesses, the company's goal is an entirely digital process, with better service, a faster closing and lower fees. Redfin Mortgage plans to begin issuing loans in the first half of 2017, initially serving customers in Austin, Dallas, Houston and San Antonio markets. CEO Glenn Kelman announced that Redfin, which has helped 75,000 customers buy and sell homes, will "meet customers through digital channels to lower customer acquisition costs. We'll hire our own mortgage advisers with incentives that reward service, not just sales, so customers get advice they can trust. We'll track every aspect of the closing in a single system used by mortgage advisers, real estate agents, title experts and the customer so everyone works together on an on-time closing." Redfin has hired Jason Bateman to run the show from its Dallas office. The announcement read, "There will be no incentives for Redfin real estate agents to recommend a Redfin loan. Because Redfin's mortgage service depends on integration with its brokerage operation, the company does not initially plan to support refinancings or loans to consumers who buy a home without using a Redfin agent."
Recent weather has renewed the disaster declarations from lenders. As always many take their cue from FEMA's disaster declaration site. Here is a smattering of updates.
In response to the wildfires in Tennessee 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 in the counties of Sevier.
Federal disaster aid with individual assistance has been made available to counties in the State of Georgia to supplement individual, state, and local recovery efforts in the areas affected by Severe Storms, Tornadoes, and Straight-line Winds beginning January 2. Current active disaster declarations in Georgia includes Baker, Calhoun, Dougherty, Early, Mitchell, Turner, and Worth counties. Prior to closing and funding, ResMac, Inc. will require a property inspection for any loan secured by a property in the affected area. If the subject property is in one of the impacted counties and the appraisal was completed prior to the incident period end date, ResMac will require a post disaster inspection confirming the property was not adversely affected by the disaster.
AmeriHome re-inspection requirements are in effect for 4 counties in the state of Mississippi affected by severe storms and tornadoes January 20-21, 2017.
With the bond market shifting, companies are tweaking their fee and loan level price adjustment schedules, and in some cases, lock policies. And even the way money is handled. As an example...
To maintain proper disbursement schedules and data uploads for determination of payment due dates and calculations, Pacific Union has revised the window for prepaid collections and final settlement payment. Specifically, Correspondents are now required to collect or verify payment of any unpaid tax disbursements that will be due and payable within 60 days of the loan closing or 30 days from the Pacific Union Purchase Date.
LDWholesale has done away with escrow waiver fees for all conforming Fannie Mae and Freddie Mac products. Program Highlights are available on its website.
For new Best Effort commitments taken on or after Monday, January 23rd, PennyMac will reduce the minimum extension term to one (1) calendar day. Correspondents will be permitted to extend the commitment delivery due date of a Best Efforts commitment for the maximum cumulative term of the lesser of thirty (30) calendar days or the original (or relock) commitment term. PennyMac will reduce the commitment price by the extension fees as noted in its announcement.
Effective Monday, January 23rd, PennyMac will be making changes to values in select LLPA grids. No structural changes are being made at this time. Sample rate sheets highlighting the changes were placed onto PennyMac's Portal on Wednesday, January 18th, at approximately 6 PM PST. Clients should have reviewed the sample rate sheets, and notify their pricing vendor of the changes.
Effective immediately, Flagstar Bank's Marketing Department is now able to lock loans that are in underwriting, at an increased interest rate, without sending the loan to an underwriter for approval first.
As the industry know, the MIP change was temporarily suspended. Mountain West Financial published that its management foresaw that, and that the most recent MIP reduction (as published in HUD Mortgagee Letter 2017-01) would be rolled back. "This change will likely be effective immediately, and could create significant operational challenges for lenders and their customers. Given this information, if this reversal is implemented, Mountain West Financial, Inc wants its customers to know that we are preparing the contingency steps necessary to unwind recent changes due to the reduced MIP rates."
U.S. Bank has updated its portfolio interest only ARM notes and riders to reflect a lifetime floor rate equal to the margin. The new loan documents may be used immediately and are mandatory for U.S. Bank interest only ARM loans with notes and riders dated on or after February 1, 2017. The updated product forms are available in its Seller Guide.
Flagstar posted updates regarding The USDA has clarification that a Realtor Administrative Fee is an unallowable fee for the borrower to pay at closing. The fee may be paid by the seller and/or lender credits may be used to offset this fee and must be reflected in the Paid by Others column on the CD. Also, noted, Pro-rations reflected in Section L cannot be utilized towards the borrower's investment.
Penny Mac has updated requirements regarding Trailing documents and Unmatched data fees.
What about changes in appraisal requirements and evaluating collateral?
A recent Citibank bulletin referenced general credit policy updates that include Age of Appraisals, Citibank Assessment Areas, Detached / Site Condominiums: Limited Project Review Requirements, Property Inspection Waivers, Condominium Projects: Mixed Use Space. Clarifications include: Proof of TILA Error Corrections, Self-Employed Business income, Verifying Assets and Student Loans.
Wells Fargo Funding will no longer require a project review on site condominiums that meet Fannie Mae requirements and secure conventional Conforming Loans underwritten by Fannie Mae Desktop Underwriter® (DU®) effective for loans purchased on or after January 24th.
Capital markets & rates
Hunt Mortgage Group, a leader in financing commercial real estate throughout the United States, announced it provided a Fannie Mae loan facility in the amount of $5.3 million to enable the acquisition of a manufactured housing community located in San Andreas, California. The final loan covered approximately 75% of acquisition costs. Oak Shadows Mobile Home Park is comprised of one, one-story community building and 105 pads. The property was developed in 1977, is situated on a 17.8acre parcel and offers 230 parking spaces. It is age-restricted to 55 and older and is 100% occupied. Property amenities include the leasing office and clubhouse with a kitchen and fitness room. Outdoor recreational activities include a swimming pool and spa. All the pads at Oak Shadows are double-wide. Some of which can accommodate "triple-wide" homes.
Yesterday morning the bond market started off with losses but then recovered after we saw a plunge in new home sales for December and solid demand for the 7-year Treasury auction. On top of that, Initial Jobless Claims reportedly rose more than expected last week (but the absolute level of claims remains near historic lows and unemployment is a lagging indicator anyway), but the job market remains quite healthy. By the end of the day agency MBS closed higher in price (about .125) and spreads to risk-free Treasury securities mostly tighter, and the 10-year's yield at 2.51%.
This morning we've seen the first look at Q4 Gross Domestic Product (+1.9% but there are always revisions the next two months) and final sales (+.9%), and Durable Goods (-.4%, ex-transportation +.5%). Coming up is January's Michigan Sentiment. After the GDP and Durable Goods data, which are very complicated numbers, we find the 10-year's yield wandering around 2.51% with agency MBS prices better by a smidge versus Thursday's close.
Jobs and Announcements
In company opportunity news, Mortgage Equity Partners, a veteran independent mortgage banker in New England, is searching for lenders operating in the region who would like to merge or sell. The ideal candidate is funding less than $15 million a month, and there are several purchase options available depending on the situation. For a confidential discussion, please e-mail Mark Lance for a confidential discussion. Principals only please.
360 Mortgage spread the word that it ended 2016 "strong with another record breaking year. Having more than doubled from 2014 to 2015, 360 Mortgage once again experienced tremendous growth by growing another 50% in 2016. 360 Mortgage continues to represent over 70% of securities issuance for government 3/1 ARMs and places in the top 10 largest VA IRRRL lenders in the country per the VA's FYE2016. This week, 360 Mortgage successfully traded the industry's first MBS for VA IRRRLs with less than 6 payments of seasoning. As you may remember, GNMA killed this product for multi-issuer pools making it much more difficult to securitize any VA IRRRL which had less than 6 payments made. 360 Mortgage is actively accepting these loans today via its wholesale and correspondent channels both in best effort and bulk trades. Career opportunities are available.
After a record-breaking end to 2016, Angel Oak Mortgage Solutions is continuing its aggressive growth in 2017. "Recognized as the leaders in the non-Agency space, management is looking to add additional experienced Wholesale Account Executives across the country. By applying a fresh approach to today's lending challenges, their customers can close more loans by serving those unique borrowers that don't fit neatly into the agency box. In addition, they are looking for underwriters and other operations positions in their Atlanta headquarters. If you've been thinking about making a move into the largest growing segment of the mortgage industry, now's the time. Come join the nation's top Non-QM lender by emailing careers@angeloakms.com to start the conversation."
A top performing bank in the country, located in the Midwest, is looking for a qualified CFO to join its senior leadership team. The bank has a strong focus on mortgage lending, and is a Fannie Mae, Freddie Mac and Ginnie Mae approved lender. The candidate must have extensive experience with the accounting aspect of both banking and mortgage lending along with a proven ability to plan, develop, organize, implement, direct and evaluate the organization's fiscal function is imperative. If interested, please forward a confidential resume to me and specify the opportunity.