Lender Expansion; FHA, VA; Households Moving Toward Buying

I recently heard a CEO say, “I am fine competing on product, price, and service. But we shouldn’t have to compete on subjective interpretations of rules, regulations, and compliance issues.” While residential lenders wait for another “instructive” public enforcement action (plenty of them are negotiated privately with no fanfare), you can always see past publicized actions here or for something meatier and useful here are the CFPB's Supervisory Highlights. (For example, pages 5, 6, & 7 address underwriting borrowers on assets & down payment size and not income under the ATR rules.)

FHA & VA Trends and Program Changes From Around the Industry

Some originators will say that the FHA program is the "new" subprime channel - certainly the program appeals to lenders who like the profit margins, and it appeals to borrowers new to home ownership and who may not have the necessary down payment for other programs. Good LOs have a sense of demographics & population trends, and as it turns out, for the first time in a decade, more new U.S. households in the first quarter chose to buy homes than to rent, suggesting a long-term decline in home-ownership rates might be coming to an end

Following the Office of Management and Budget (OMB) approval received April 6, 2017, the Federal Housing Administration's Office of Single Family Housing issued updated forms in HUD's Client Information Policy Systems (HUDCLIPS)Form Library on HUD.gov that support its Claims and Disposition policy located in the FHA Single Family Housing Policy Handbook 4000.1 (SF Handbook), Section IV.B.2. The following list of forms, which expire April 30, 2020, are for immediate use: The forms were listed in HUD's 30-Day Notice of Proposed Information Collection (FR-5997-N-05) published in the Federal Register on February 1, 2017. The forms, which expire April 30, 2020, are posted on the Forms Resource pages on HUD.gov.

Beginning today, May 22nd, M&T Bank is changing its FHA and VA FICO adjustment in the Correspondent Channel. Also, M&T is increasing the FHA Best Effort Special from .200 to +.250 for all eligible loans above $250,000. The Best Effort special will also be extended to VA loans apart from VA IRRRLs.

Royal Pacific Funding has expanded its High Balance Government Loans down to a 580 FICO. Available for single-family, condos, PUDs & multi-family homes. Maximum loan amounts vary by county, call for full details.

Mountain West Financial announced the rollout of the Golden State Finance Authority (GSFA) Platinum Grant program for its wholesale customers. This is available for both conventional and FHA loans in the State of California. Some of the great features of this program are: a non-repayable grant for down payment and/or closing costs up to 5% of the first mortgage loan amount; not limited to first time home buyers; minimum FICO of 640, and is available for refinancing too. The home must be a primary residence and income restrictions do apply.

Sun West has Streamlined Underwriting and Expanded Policies for FHA Loans with FICOs Below 640. It has created a set of Comprehensive Credit Review Guidelines to assist in the substantive review of these borrowers. If the loan has a DU Approval or an LPA Accept (i.e. FHA Total Score Card), Sun West will continue to rely upon the automated approval along with the Comprehensive Credit Review Guidelines to evaluate the borrower's special circumstances.

 
Capital markets

Things were quiet on Friday, apparently warming up for this week, so I won't waste your time writing too much about the bond market. In fact, the 10-year yield spent the whole New York session confined to a 2.5bp range with the modest flattening of the yield curve at the open pared by the close. And there were some slight movements between coupons, securities, and maturities - but nothing to write home about. By the close of business on Friday the 10-year & 5-year Treasuries, along with agency MBS prices, had worsened a few ticks - certainly less than .125.

While the press is focused on President Trump's first official overseas trip since his inauguration starting in Saudi Arabia, this week's economic calendar includes a central bank decision from the Bank of Canada and the minutes from the Fed's May 3 decision. Today we had the Chicago Fed's National Activity Index for April (.49, higher than expected) - not a big market mover.  

Things pick up a little tomorrow with New Home Sales. Wednesday, we can look forward to the MBA's survey numbers for applications last week, the FHFA House Price Index, some Markit manufacturing numbers - whatever they are, Existing Home Sales, and the FOMC minutes from the 5/3 meeting. Thursday are some trade numbers, the usual initial jobless claims. Friday, ahead of the holiday weekend, are GDP, Personal Consumption Expenditures, and a volley of University of Michigan numbers. We start the week with rates a smidge higher compared to Friday afternoon with the 10-year yielding 2.25% and MBS prices worse a few ticks (32nds).

Jobs, Personnel, and Products

For any company looking for Ops talent, a "Credit Policy and Fulfillment Operations Manager with extensive national expertise in jumbo, conventional, and government production is searching for a new opportunity. Managed large national banking teams and mortgage bankers end to end mortgage processes with monthly funding's in excess of $500 million, including wholesale, retail, call center, builder, and relocation production. Implemented streamlined processes, vendor outsourcing on/off shore, P&L management, regulatory compliance management and reporting, implementation of complex initiatives, mergers and LOS system integration. Open to relocation. Contact me to have your note of interest passed along.

NRL Mortgage is extending an exclusive invitation to the attendees of the upcoming Mastermind Summit in June. They've arranged an exciting cocktail reception with music, food, fun and networking with the industry's elite top producers, and will be getting REAL with their special guest & friend, Josh Altman, star of Million Dollar Listing Los Angeles! This private event will be held at The Palms, Las Vegas "Real World" Suite; June 7th, 5-7PM, and is already drawing much attention. Those interested should RSVP quickly to NRLEvents. Click here to explore the potential of what NRL Mortgage offers, as it is licensed in 45+ states and growing nationally. Any top producers and top managers interested in having a confidential conversation regarding a new opportunity should reach out to President Ron Zach.

NFM Lending, a Baltimore-based National Lender welcomes new Executive Recruiter Sheena Kivette to the organization. Sheena brings with her a wealth of recruiting and management experience. Her primary focus will be on building out a platform for internal sales recruiting to backfill existing retail branch locations with high-producing loan officers. "Sheena has an abundance of enthusiasm and energy that fits our culture perfectly", said Chief Business Development Officer Greg Sher. "We are pouring a ton of resources into helping our branches grow and Sheena will be instrumental to that end." NFM Lending is Agency Direct and is celebrating its 20th year in business. Licensed in 30 states, the company recently received "Top Workplace" designation for the 4th year in a row. For information about NFM's Retail Branch Program, go to www.nfmbranch.com or call 877-765-1907.

Parkside Lending, LLC, a national wholesale and correspondent lender, is pleased to announce the expansion of our presence in New York with the addition of Rich Bloom as North Eastern Regional Manager and Elizabeth Squillante Nichols as Senior Account Executive. Highly-regarded in the industry, Rich has been in mortgage business for 31 years, 24 as a Sales Manager, and will be covering the east coast from Virginia to Maine. Liz, equally well-respected by her peers, has over 20 years as a Wholesale and Correspondent Account Executive in downstate New York specializing in Jumbo, Conventional, FHA and VA loans. Liz joins Katie Plezia, another recent addition to Parkside, in covering the NY Metro market. "With such seasoned talent joining the team, Parkside is excited to bring our expertise and strong commitment to customer service to the NY Market," said James Lamparter, EVP of Sales at Parkside. If you are interested in doing business with Parkside Lending, please email sales@parksidelending.com.

For anyone looking for a new correspondent buyer, GSF Mortgage continues to expand GSF Funding, the TPO/Correspondent lending division and welcomes David Kirchen as EVP Director of TPO/Correspondent Lending. "GSF Funding will service 100% of your loans and will direct your borrowers back to you should they have additional mortgage needs. GSF Mortgage is a direct seller/servicer to all agencies and will underwrite to the AUS findings to facilitate FNMA, FHLMC, FHA, VA, USDA loans. Within our wide array of products, GSF Funding offers WHEDA, GSF 100, and Doctor's loans, plus the ability to run your own GUS findings for USDA." To learn more about how to become a TPO partner, contact David Kirchen at (262) 901-1450.

On April 3, 2017, Truhome Solutions, a Lenexa KS based Credit Union Service Organization (CUSO), "converted its servicing of more than 38,000 credit union member mortgage loans to the Black Knight MSP system - the premier loan servicing technology available today. Since its founding in 2004, Truhome Solutions has helped credit unions across the US serve their members with a full suite of private-labeled originations, secondary marketing and servicing solutions. The conversion to the Black Knight MSP servicing system completes Truhome's collection of industry leading technology. 'We've provided private labeled mortgage servicing to credit unions for more than 10 years,' mentions Doug Hoelscher, President of Truhome Solutions. 'Our partnership with Black Knight Financial Services will bring tremendous efficiency to our mortgage servicing operation, and allow our team to place even greater focus on serving our credit union partners and their members.' For more information about Truhome Solutions, which is 100% credit union owned, please visit www.Truhome.com."

Nino Fanlo, the No. 2 executive & president/CFO at online lender SoFi, is exiting the company at the end of May to take over as finance chief at Human Longevity Inc., a four-year-old genomics company. After that time, Mr. Fanlo plans to remain a board observer and adviser to SoFi.

Speaking of SoFi and other lenders that use computers (is there a definitive definition of "fintech?"), the WSJ discusses how investors are returning to bonds backed by online lending securitizations.