Jumbo Product, Lender Tax Credits; Disaster Updates

Disaster-related news continues to be front-and-center for obvious reasons.  HUD announced it will speed federal disaster assistance to the State of Florida and provide support to homeowners and low-income renters forced from their homes due to Hurricane Irma.

In addition, HUD is 

• Granting immediate foreclosure relief (link)
• Making mortgage insurance available (link) 
• Making insurance available for both mortgages and home rehabilitation (link) 
• Assisting the State of Florida and local governments in re-allocating existing federal resources toward disaster relief (link) 
• Offering Section 108 loan guarantee assistan (link)

Freddie Mac is suspending all foreclosure sales through Dec. 31, 2017 in areas that the FEMA has declared eligible disaster areas because of hurricanes Harvey and Irma. In addition, Freddie Mac is suspending, until further notice, all eviction activities for borrowers in eligible disaster areas impacted by these hurricanes. Freddie Mac is working with servicers to ensure that no property inspection costs resulting directly from either Harvey or Irma are passed on to impacted borrowers. More information about mortgage assistance is available on Freddie Mac's web site.

As the damage assessment from Hurricanes Harvey and Irma continues, Fannie Mae is committed to supporting sellers, servicers, and homeowners. Fannie Mae published Lender Letter LL-2017-06: Additional Clarifications for Mortgage Loans Impacted by Hurricanes Harvey and Irma to help you originate and service loans for properties located in areas affected by these disasters. This letter contains both selling and servicing policy guidance, including updated information.

Visit the Fannie Mae Assistance in Disasters page to find guidance for working with borrowers in disaster areas.

In the aftermath of hurricane Harvey, Houston-based lender Network Funding is doing everything it can to help its own employees recover. Over 10% of Network Funding's Houston-based employees lost their homes, vehicles and personal belongings. The company is helping organize home demolition, food drives, laundry services and financial support to help their employees get through this disaster. One of the ways you can help is by purchasing one of their Harvey-relief t-shirts. All proceeds from these shirts will go straight to helping your industry colleagues in Houston. You can find the shirts at nflp.com/harvey

As Pacific Union continues to monitor the impacts of the various disasters recently experienced, it will update specific states and counties.  In the meantime, refer to the National Oceanic and Atmospheric Administration Website (NOAA Website) and Federal Emergency Management Agency Website (FEMA Website) for current information and maps that will assist in review of various locations for wind, tropical storm, storm surge flooding, and other impacts.

Plaza has resumed funding in both the State of Florida and Georgia. In accordance with Plaza's Natural Disaster Policy, inspections will be required in the following FEMA declared areas:

Florida Counties: Broward; Charlotte; Clay; Collier; Duval, Flagler; Hillsborough; Lee; Manatee; Miami-Dade; Monroe; Palm Beach; Pinellas; Putnam; Sarasota and St. John. The full extent of the damage caused by the storm is not yet known. Updates to the county lists will continue as new information is learned. Please refer to Plaza's Disaster Policy which indicates, based on loan program, when an appraiser or property inspector can complete the inspection. To review Plaza's complete disaster policy, please CLICK HERE.

Click here to view FCMKC's current disaster inspection requirements regarding areas impacted by Hurricane Irma.

Mortgage Solutions Financial has added more counties to the "Hurricane Irma - Disaster Alert".

Mortgage Solutions Financial will not require re-inspections for the Louisiana parishes included in EM-3882 and 16 of the Gubernatorial declared counties. These parishes have been removed from the list. (9/12/2017)

View the recent PennyMac disaster policy implementation in reference to Florida and Hurricane Irma.

WesLend Financial has a running list of current FEMA disaster declarations for the year as well as current requirements posted in Broker Connection. WesLend reserves the right to require additional inspections at underwriter/credit risk discretion, for properties within identified FEMA counties or any property in any county deemed by WesLend to be affected by the disaster in question.

A recent Flagstar Bank announcement stated that properties within declared counties and incident dates will require a re-inspection. FHA inspections are not permitted until FEMA issues an incident end date. At this time, no incident end date has been issued so FHA fundings and inspections are not permitted.

Funding may now resume for properties located in counties (parishes) in Texas and Louisiana listed in Flagstar Bank's memo located within the Seller's Guide once a satisfactory reinspection has been obtained. 

Due to Hurricane Irma, Flagstar Bank is suspending loan closings and funding for properties located in the Virgin Islands. Once closing and funding has resumed, Flagstar will provide the re-inspection requirements, as applicable. Loans that have already been issued a Final Approval Clear to Close status will be placed in an Approved with Conditions status until a re-inspection is performed. Please note that appraisal re-inspections are not required to be completed by the original appraiser; however, a Flagstar Bank eligible appraiser must be utilized. For loans that have an appraisal that was ordered via Loantrac, an appraisal re-inspection may be requested via the Appraisal Management module by selecting "Yes" to the "Do you need a Property/Disaster Inspection" question.  

As a reminder, Lenders represent and warrant that the properties securing all loans submitted to Citibank for purchase consideration have not been negatively impacted by any natural or man-made disaster as of the date Citibank purchases the loan. The Lender also represents and warrants that the borrower's credit qualifications for the underlying loan have not been negatively impacted by any natural or man-made disaster as of the date Citibank purchases the loan. 

Lenders must have a process in place for identifying disaster areas and potential impact to properties that are the subject of loans proposed for sale to Citibank. Lenders with loans in the pipeline should contact the Citibank Client Excellence Team if the Lender becomes aware of a property impacted by the storm. If the Lender's disaster policy includes a requirement for re-inspection of the property, the re-inspection should be included in the closed loan file submitted for purchase (i.e. appraisal ordered prior to the storm with closing after the event). For loans originated after the storm, it is important to note that section 501 of the Correspondent Manual must be followed. Please contact your Account Executive, Client Services Consultant, Pricing or Client Excellence Team with any questions or concerns.

Capital Markets

Investors in mortgages are, of course, worried about borrowers making their payments on loans backed by damaged homes. A little less than 7% of the $653 billion in collateral backing residential mortgage-backed securities (RMBS) that Kroll Bond Rating Agency rates have exposure to Irma. Slightly less than 6% of RMBS collateral had exposure to Hurricane Matthew and less than 3% of collateral is exposed to Hurricane Harvey.

In terms of actual rates, the U.S. Treasury market faced another round of selling on Wednesday, but the pace of the decline decelerated, and fortunately mortgages did well on a relative basis. Big deal. Rates still went higher due to peace around the world - or at least with North Korea. Yields are back to August levels. House Speaker Paul Ryan said that an outline of a tax plan, which is backed by tax writing committees, will be released during the week of September 25 - so another couple weeks of the press jawboning about it.

The 10-year yield ended Wednesday around 2.20%, 5-year notes worsened .125, but agency MBS prices only sold off a couple ticks (32nds). There was the usual shuffling between coupons and maturities, not noticeable on rate sheets.

This morning, besides rumors of "missile prep" in North Korea, we've had the August CPI (+.4%, +.2% core, both stronger than expected) and weekly jobless claims (-14k to 284k). And thus, we commence Thursday with rates higher versus last night: the 10-year at 2.22% and agency MBS prices down/worse .125.  

Personnel, Jobs, Products

Pacific Union Financial, LLC has continued to expand its Retail reach by opening a branch in Meridian, Idaho. This new branch will serve both potential homebuyers and homeowners who wish to refinance their current mortgages. Branch Manager, Bill Zimmerman brings over 21 years of mortgage origination and management experience and is eager to grow Pacific Union's Retail presence in Idaho. "Bill is an outstanding coach and mentor who genuinely cares for each one of his employees and customers," said Regional Vice President, Rich Johnson. "I am confident that Bill will have great success in his local market and we are thrilled to have him join Pacific Union's Retail Lending team." If you are a loan officer in the Boise City Metro Area and looking to grow your career with a successful company that offers first-rate tools and support, contact Bill Zimmerman to learn more about Pacific Union. 

"If you're in a market where traditional mortgage products don't apply, then you know the importance of having non-traditional options to offer your clients and partners - especially in the jumbo-heavy markets. In recent months, we've seen jumbo rates reaching all-time lows - at times even lower than conforming - and changes in income requirements have enabled a broader range of homebuyers to consider the jumbo loan option. That's why loanDepot recently launched the Jumbo Advantage program - a great alternative for high-end buyers, offering a 30-year fixed rate, 90% LTV up to $1.5 million and no mortgage insurance. This product is a perfect fit for clients looking to finance a higher value property with the peace of mind of a fixed payment schedule and an interest rate that won't change overtime. To learn more about loanDepot's Jumbo Advantage product, and other proprietary products on the way, contact Cassidy O'Sullivan."

While the Federal Credit for Increasing Research Activities (R&D tax credit) can provide great benefit to companies engaged in the development of software or other innovative technology, its applicability within the mortgage industry has historically been limited - despite recent claims to the contrary. Mortgage companies do engage in software development or enhancement activities that are at the heart of this tax credit, but these expenses don't often qualify for this credit because there isn't sufficient customization to software or development of truly proprietary software systems. With over 70 accounting and tax experts exclusively dedicated to the mortgage industry, and clients in 35 states around the country, Richey May & Co., LLP understands the opportunities available to lenders and advises clients accordingly. To learn more about the R&D tax credit and what activities and expenses qualify, read Richey May's latest white paper, "R&D Tax Credits and Their Application in the Mortgage Industry" or contact one of the firm's tax experts here.

Attending the NMN Digital Mortgage Conference in San Francisco September 28th? John Seroka, Principal and Brand Strategist at Seroka, a certified brand development, digital and strategic communications agency, will be there and is eager to meet with mortgage industry professionals to discuss strategic ways to target and capture more business and improve ROI. Learn about the new buyer path and how the proliferation of AI technology is impacting marketing, brand visibility, and ultimately, buyer behavior. Schedule a meeting with John during the conference to learn more or visit the Seroka website for more information.

Congrats to Brian Montgomery. He must be approved by the Senate, but President Trump has nominated him to become an Assistant Secretary of the Department of Housing and Urban Development (HUD) and commissioner of the Federal Housing Administration (FHA), a position that he held from 2005 to 2009.

Law firm Buckley Sandler announced that Christina M. Tchen has joined Buckley Sandler as a Partner and will lead its Chicago office. "Tina draws on more than 30 years of experience at the highest levels of private practice and government service, including eight years in the White House during the Obama administration, serving as Assistant to the President and as Chief of Staff to Michelle Obama. Prior to her government service, she handled complex litigation, enforcement and regulatory matters in Illinois and nationwide with Skadden." Congrats!

And 1st Reverse Mortgage USA, a division of Cherry Creek Mortgage Company, Inc., announced that Jeff Ausman has been promoted to the post of Director of Business Development responsible for leading the recruitment and development of traditional forward loan officers to the division's expanding forward business channel 1st Mortgage Solutions USA.