FHA Changes; NY, WV, and NJ Lending Updates

“These businesses are in a structurally disadvantaged position, given the challenging rate environment and marketplace,” Sanjiv Yajnik, president of financial services at Capital One, said in a memo to employees. “These factors do not allow us to be both competitive and profitable for the foreseeable future.” Capital One of Plano, TX is shutting down its mortgage & home equity operations and a call center. Depending on the report, 950 to 1,100 employees will be filing unemployment in time for the holidays. Of course, the news spawned rumors like, "Do you think that XXX will shut down its correspondent group with them losing their warehouse line because of the parent company going bankrupt?" 

FHA Developments

FHA's Electronic Appraisal Delivery Integration and Production environments are scheduled for planned system maintenance, and therefore, will be unavailable from 12:00 PM (Eastern) on Saturday, November 11, 2017, through 9:00 PM (Eastern) on Sunday, November 12, 2017. Normal operations are expected to resume once system maintenance is complete.

A bill was introduced to eliminate FHA's "Life of Loan" insurance premium. Cutting the life of loan policy, which requires most FHA borrowers to maintain mortgage insurance throughout their entire loan term, is a change that many in the housing business have wanted for years, and now, cutting the life of loan policy is officially on the table, thanks to a newly introduced bill in Congress.

FHA issued a waiver for four additional counties in California impacted by wildfires, allowing damage inspections to be conducted beginning November 2, 2017. This waiver is in addition to the waiver issued by FHA on October 24, 2017, of its policy on the timeframe for completing the inspection of properties prior to closing, or submitting the mortgage for FHA insurance endorsement in the Presidentially-Declared Major Disaster Areas (PDMDAs) in certain counties in the state of California impacted by wildfires.

FHA is extending its initial 90-day foreclosure moratorium for FHA-insured homeowners impacted by Hurricanes Harvey, Irma and Maria for an additional 90 days due to the extensive damage and continuing needs in hard-hit areas.  Read FHA's letter to lenders, servicers and counseling agencies. 

FHA announced the implementation of the "Suspended Claim Dashboard" in P260/Yardi, which is currently available for use. This dashboard will allow servicers to upload suspended documentation as an alternative to mailing hard copy documents to HUD thus increasing efficiency and limiting the amount of paper used. Servicers needing additional assistance with accessing or using the dashboard should contact FHA_SFClaims@hud.gov for instructions. 

Though reverse mortgages have long held a bad reputation, research and public policy in recent years are shedding new light on their potential uses in retirement. The vast majority of reverse mortgages in the United States are Home Equity Conversion Mortgages, which are regulated and insured through the Federal Government by the Department of Housing and Urban Development (HUD), and the Federal Housing Authority (FHA). Click here to read the full article from Plaza Home Mortgage.

State Changes in NY, NJ, and West Virginia

New York has amended NY Ins L § 6503(c), effective immediately. Mortgage insurers providing coverage on loans secured by a first lien on real estate may now elect to pay the entire indebtedness to the insured and acquire title to the authorized real estate security. Additionally, a mortgage insurer providing coverage on loans secured by a junior lien on real estate may now "elect to insure a portfolio of loans secured by instruments constituting a junior lien on real estate."

Effective immediately, New Jersey has amended the Law Against Discrimination (LAD). These amendments extend protections over liability for service in the Armed Forces of the United States in various forms. Housing and places of public accommodation, are now protected by LAD. This prohibition of discrimination based on such service includes, but is not limited to, the following industry pertinent activities:

Inquiring and creating application limitations based on the existence of service in the Armed Forces; Extending a loan or credit, for whatever purpose; Granting, withholding, extending or modifying in the fixing of rates, terms, conditions or provisions of any such loan; Representing either directly or indirectly, by any employee, agent or individual who induces a transaction for the sale or rental of real property from which any person or any of the entity's members may benefit financially, that the applicant's service in the Armed Forces may impact a geographical area in an undesirable manner.

The state of West Virginia amended its provisions regarding its Consumer Credit and Protection Act under two bills (SB 344 and SB 563). Whilst there are multiple changes, a few highlights include the following items. 

Code §46A-3-111 provides that all payments made to a creditor in accordance with the terms of a precomputed consumer credit sale or consumer loan shall be applied to installments in the order in which they fall due and then to delinquency and other outstanding charges. 

Furthermore, the statute permits lenders to hold payments which do not comply with the terms of a precomputed consumer credit sale or consumer loan in a suspense or unapplied funds accounts. 

Code § 46A-5-101(2) amends the statute of limitations from four (4) years to one (1) year for claims relating to the setting aside of a foreclosure sale. Also, the amendment provides that any counterclaim brought under this chapter is subject to the applicable statute of limitations. Code § 46A-5-108 itemizes the manner in which and the amount of days required on notice of right to cure as well as cure offer(s). 

Also modified were its provisions relating to fees the clerk of county commission may charge. The amendment provides changes to the fees when a writing is admitted to record, proof of acknowledgment, entering an order, endorsing clerk's certificate of recordation and indexing in a proper index. It also stipulates how much, and which fund, the fees will be deposited into. 

Provisions relating to trusts and their administration were also amended. It established insurable interest, defines "grantor", eliminates the requirement to give notice to a trustee of substitution under certain circumstances and increase the amount of non-charitable trust property to terminate trust without court approval from $100,000 to $200,000. 

Capital Markets

Despite plenty of news around the nation and world, in the financial markets things are pretty quiet, with supply and demand in the market keeping rates steady. (Today the Fed is scheduled to purchase $1.665 billion of Fannie and Freddie 30-year securities.) The Tuesday session was largely a repeat of Monday's affair as longer-dated agency MBS prices and U.S. Treasuries climbed in slow, but steady, fashion throughout the day while the short end remained little changed. The continued pressure on the yield curve compressed the 2s10s spread by another basis point to 69 bps while the 10-year closed at 2.31%.

The Job Openings and Labor Turnover (JOLT) Survey showed that openings increased in September. We also learned yesterday that total outstanding consumer credit increased by $20.8 billion in September, driven mostly by nonrevolving credit. The $24 billion 3-year Treasury auction went "ok."

There was a lot of news over the last 12-18 hours with a bunch of US & European companies announcing earnings, China's October trade data, Trump's North Korea speech, Trump's arrival in China, more US tax noise, the ongoing curve flattening debate (why and what does it mean?), and the US elections. For other thrills and chills today, we've had the MBA's survey of retail mortgage applications from last week (unchanged, with refis -1% and purchases +15). And the Treasury will conduct the second leg of this week's Refunding when $23 billion new 10-year notes are auctioned this afternoon. We start Wednesday with rates pretty much unchanged versus Monday and Tuesday: the 10-year is yielding 2.31% and agency MBS prices are indeed unchanged.

Events, Jobs, and Promotions

"American Advisors Group (AAG) invites you to a mixer to learn about the number one reverse mortgage lender in the U.S. We will be having an open house on November 14, 2017, 6-8 PM at our newly opened Austin Office at 13620 N FM620, Austin, TX 78717. AAG is looking for driven and ambitious professionals who want to advance their career in MORTGAGE LENDING. Pre-register for the mixer today by emailing recruiting@aag.com."

American Pacific Mortgage is excited to announce that Jeff Wilson has joined APMC as its new Director of Veterans Business Development and Operational Support. Jeff shares APMC's commitment to serving and providing our communities Veterans with the products, advocacy, and support deserving of those whom volunteered to serve and protect our great nation. Jeff, a Veteran himself, retired at the rank of Major with 21 years of active and reserve service with the US Army and served for the past 27 years with the Department of Veterans Affairs with his most recent assignment being that of the Loan Guarantee Officer for the Southwest US at the Phoenix Regional Loan Center. Michael Pankow, EVP of National Production, remarked, "We are thrilled as a company to have Jeff supporting our Branch Managers and Originators to grow market share with this important and underserved group." If you're interested in finding out more on how to serve our veterans, please reach out to Peter Schwartz (916-770-0053) or Dustin Block (303-378-3166).

It was announced that Guaranteed Rate has selected ARMCO's ACES Audit Technology. ACES Risk Management (ARMCO), the leading provider of financial quality control and compliance software, has announced that Guaranteed Rate, one of the largest retail mortgage lenders in the nation, has selected the company's award-winning quality control and compliance software, ACES Audit Technology, for its quality control processes. "Innovative companies like Guaranteed Rate know that a strong QC platform is a key component to growth and longevity," said Phil McCall, president of ARMCO. "They know that QC isn't limited to a reactive approach and they can proactively use QC data - like data that's easily available in ACES - to protect their profits and elevate their businesses. We're looking forward to supporting Guaranteed Rate as they continue to expand their reach and grow their market share."  

Assurance Financial, headquartered in Louisiana, is continuing our aggressive company and branching growth. We are looking for good markets and great people in all attractive locations across the country. Specific to Charlotte, North Carolina, we are seeking a producing branch manager and talented MLOs to build a dynamic production office while partnering with the "closing on time" support from our existing Charlotte loan operations center. In addition, we are seeking an experienced Eastern Regional Production Manager to assist us with supporting and expanding existing Eastern Time Zone branches as well as bringing on new branch opportunities in this territory. For immediate consideration and more information, please call or write Paul Peters, CMB, Recruiting Manager (225-239-7948).

Congrats to Virginia Martinez! New American Funding has named her as Regional Sales Manager to cover its Southern California market from the Central Coast to Coachella Valley, overseeing the daily operations of the region while simultaneously working to expand the territory with the opening of new branches.