Warehouse, Compliance; More Changes for Lenders/Investors
Fannie/Freddie, Both Conforming and Conventional News
In Freddie Mac news, "To ensure we continue to provide responsible financing options, we will change our requirements for Home Possible Mortgages, including Home Possible Advantage Mortgages. Gifts or grants from the Seller as the originating lender will only be permitted after a contribution of at least 3% of value (i.e., the lesser of the appraised value or the purchase price) is made from the Borrower's personal funds and/or other permitted sources of funds, including a gift from a Related Person, funds from government agencies, employer housing programs and Affordable Seconds...Gifts or grants from the Seller must not be funded directly or indirectly through the Mortgage transaction, including differential pricing in rate, discount points or fees."
As of June 19th, Freddie Mac has announced an option for collateral representation and warranty relief via is new automated collateral evaluation. This process will also be known as the "Appraisal Waiver" option (like the Fannie "PIW"). If an offer to accept an automated collateral evaluation is accepted, M&T is relieved of any representations and warranties related to the value, condition and marketability of the subject property. To be eligible for an appraisal waiver, the LPA feedback certificate must receive a feedback message indicating that the mortgage is eligible for an appraisal waiver. If not eligible, the feedback certificate will specify that an appraisal is required.
DU 10.1 will be implemented the weekend of July 29th. In reference to disputed tradelines, 10.1 will include an updated risk assessment and messaging for loan casefiles with disputed tradelines. If a casefile does not receive an approve, DU will advise that the file may be manually underwritten. Loans that do not receive an approve finding will not be eligible for sale to AmeriHome, manual underwriting is not eligible.
Fannie Mae is enhancing its expense reimbursement application, LoanSphere Invoicing, to include the new First Time Vacancy Date field, effective July 31. Information is available in the Servicer Expense Reimbursement Job Aid. (Note: The original effective date for this change was July 10, but it has been moved to July 31.)
To ascertain if a loan is eligible for representations and warranties relief on certainty one appraised value, Fannie Mae's Pre-Delivery report provides a list of loans that are eligible for rep & warrant relief on appraised value. If your loan doesn't appear on the report, it may be because the document file wasn't included in the loan casefile. The eligibility status will appear in the Post-Delivery report. In the future, be sure to include the document file to ensure your loan eligibility appears in the Pre-Delivery report. For more information, view the Day 1 Certainty Pre-Delivery report on Fannie Mae Connect and visit the Day 1 Certainty web page.
The September 25 mandate for the UCD is nearing quickly, and lenders should be focused on ensuring their UCD XML files are ready by this date for all loans delivered to Fannie Mae. On June 6, Fannie announced that the Closing Disclosure PDF is not required to be embedded in the UCD XML file until April 2018 (note that the UCD mandate is not impacted by this extension). There are resources to support your transition to UCD: Register for a live webinar and visit the UCD pageto learn more.
To ensure Fannie Mae and Freddie Mac compliance, PennyMac will require that Correspondents submit Uniform Closing Dataset (UCD) files to both GSEs and provide evidence of a successful submission via the UCD Findings Reports. This requirement applies to all conventional loans with a Note dated on or after September 25, 2017. Additionally, the GSEs have announced that the Closing Disclosure PDF will not be required to be embedded within the UCD XML file until April 2018. For additional information, please refer to the UCD Implementation Update dated June 6, 2017.
As previously announced, Fannie Mae eliminated servicer responsibilities to pay for some homeowner/condo association fees and property taxes on properties acquired through foreclosure or Mortgage Release/Deed-in-lieu of foreclosure. Read the updated Servicer Expense Reimbursement Job Aid to find out how we've made it easier for servicers to get reimbursement from us. Refer to pages 12 and 14-15 to see the changes to homeowner/condo association fees and taxes, respectively.
During the weekend of June 24, Fannie Mae Connect Version 7.0 was implemented, which gives you new features and an enhanced user experience. The new Fannie Mae Connect user interface was designed, based on customer feedback, to enhance and simplify your access to business analytics. It will deliver the dynamic functionality you've come to expect, in an attractive, simplified interface. View the Fannie Mae Connect video to review new features, and refer to the Fannie Mae Connect 7.0 Change Notification for more details.
To align with Freddie Mac Bulletin 2017-8, Plaza's Freddie Mac eligible -program guidelines have been updated to allow Automated Collateral Evaluation (ACE) appraisal waivers. Updated Programs: Conforming Fixed, Conforming ARM, Freddie Mac Retained, Home Possible, Super Conforming ARM and Super Conforming Fixed.
Capital Markets
Taking a 30,000-foot view for the moment, Wall Street had expected US economic growth to accelerate after Donald Trump became president, but hopes for a "Trump bump" are fading fast. Economists are revising down projections, with the Federal Reserve Bank of New York's Nowcast saying growth will fall to 1.6% in the third quarter. Looking at the labor market, the numbers Friday were interesting. Though expectations for employment growth had eased in recent months, statistics in June confounded those softer expectations as Average Hourly Earnings increased by 0.2 percent and, more notably, payroll employment rose by a strong 222,000 net jobs for the month. And with the civilian labor force showing even greater numbers with an increase of 361,000 workers, the labor market shows no signs of cooling down.
Overall this labor report "hit the trifecta," stating that more workers worked longer hours and got paid more for their work. Along with increasing housing prices, June's report brings good news for household wealth as well as consistency with the nation's increasing real GDP growth. And given that, one could expect higher rates.
Sure enough, Friday U.S. Treasuries, and MBS along with them, sold off again. The 10- and 30-year yields are the highest they've been in a month, with the 10-year closing yielding 2.39%. On top of that, Eurozone government bond yields were higher across the board on stronger industrial production data and that helped to nudge U.S. Treasury yields higher. Agency MBS prices closed out the week lower and mixed on spread as further curve steepening weighed on lower coupons.
It's a new week, with a new set of scheduled data. There is zip today. Tomorrow are some second-tier numbers (job opening stats, wholesale inventories, small business optimism) and a $24 billion 3-year note auction. Wednesday the non-crucial numbers continue with the MBA's application data for last week, the Fed's Beige Book, and a $20 billion 10-year T-note auction. Thursday holds Initial Jobless Claims, inflation data from the June Producer Price Index, and a $12 billion 30-year T-bond auction. Friday the inflation data continues with the June Consumer Price Index, but also June Retail Sales, June Industrial Production & Capacity Utilization, and some University of Michigan consumer stats. We start the week with the 10-year yielding 2.37% and agency MBS prices are up .125 - so rates are a shade better versus the end of last week.
Products and Jobs
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CoesterVMS has recently been approved with Freedom Mortgage Wholesale as one of a select group of appraisal management companies able to service Freedom's brokers nationwide. CoesterVMS offers its brokers a dedicated support desk and guarantees no fee increases ever on appraisals when using its TRID fee calculator. CoesterVMS currently supports 17 of the top 25 lenders in the U.S. and is known for its consistent delivery for its lender clients. Please email wholesale broker support, Matt Leith, for additional information.
The team at Alight announced closing their Series A funding round for $11 million including a strategic investment by Caterpillar Venture Capital Inc. Alight will use the funding to scale the firm's mortgage and mining businesses, as well as expand into new industries. "We couldn't be more excited to have Caterpillar as a strategic partner - it's among the most innovative and transformational companies in the world and together, the industry and our customers will enjoy the power of a global leader coupled with speed and nimbleness that a company like Alight can apply when bringing new innovations to market. It's the perfect match," said Alight's CEO, Michele McGovern. Alight is seeking similar partners for their mortgage vertical, as well as the pharmaceutical vertical slated to launch later this year. Alight is a provider of industry-specific, cloud-based solutions that help firms manage risk and make more money. Click here to learn more about Alight's relationship with Caterpillar.
PrimeLending is growing and adding branches throughout the nation. Most recently, the company opened a new branch in one of South Carolina's fastest growing metropolitan area - Charleston. The new branch is favorably located in downtown Summerville, SC, perfectly positioned to support the area's thriving housing market created by the influx of new jobs, a healthy economy and affordable home prices. Why are so many loan originators eager to join PrimeLending? Sustainable growth is one main reason. Nearly 40% of PrimeLending's producing LOs grew their production volume by at least 20% in 2016. Couple that with the company's proven track record in a pro-purchase market and impressive 83% pull-thru, and it's easy to see why so many successful originators are banking on PrimeLending. If you are a top tier producer ready to make a big move, contact Bill Harp (469-737-5767) for more information.
Republic Bank and Trust Company is seeking a highly talented and experienced Mortgage Warehouse Lending Relationship Manager to join its team. "This individual will join our existing team of other seasoned professionals who are actively expanding and supporting the customer base of the Warehouse Lending division at Republic Bank. Republic Bank is the largest bank headquartered in Kentucky and currently supports the warehouse financing needs of independent mortgage bankers on a national basis. Republic's warehouse offering provides competitive pricing, consistent ease of use, direct commitments up to $65 million and exceptional customer service. We offer a competitive salary, commission and benefits package along with the stability and support of a very profitable and more than adequately capitalized bank, relocation is not required. We were just voted one of the Top Places to work in the state. Resumes can be submitted online at Careers or send to Adam Perito, VP Talent and Recruitment Advisor." Republic Bank is an EOE Employer-Minorities/Females/Veterans/Individuals with Disabilities/Sexual Orientation/Gender Identity.
Acopia, LLC is seeking a VP of Compliance to join our management team in Goodlettsville, TN. Candidates must possess a working knowledge of consumer laws and regulations impacting the mortgage industry, including but not limited to the Truth-In-Lending Act (TILA) and Regulation Z (including experience with loan originator compensation rules), TRID, Qualified Mortgage Rules, Real Estate Settlement Procedures Act (RESPA), Equal Credit Opportunity Act (ECOA) and Regulation B, Home Mortgage Disclosure Act (HMDA), Fair Lending, Fair Credit Reporting Act (FCRA), Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act, and Privacy of Consumer Financial Information (Gramm-Leach-Bliley Act). A comprehensive understanding of the mortgage loan origination process and retail, wholesale and correspondent channels is also necessary. It's imperative that you can apply the necessary business maturity and judgement while communicating appropriately throughout the process to implement effective, compliant business solutions and/or process changes, in a manner consistent with the organization's mission and values. For consideration, please contact Kristi Bible.