Conventional Conforming Underwriting Updates, New Products

I remember when being worth a million bucks really meant something, and my parents occasionally pointed out someone who they thought was a millionaire. Now they’re a dime a dozen, especially in the United States where there are over 15 million people who are worth $1 million or more (almost half of the 36 million in the world). The wealthiest 1% of the world's population now owns 50.1% of the world’s wealth versus 45% in 2001. Certainly the gap between the haves and the have nots is widening as the total wealth in the world grew by 6% over the past 12 months to $280 trillion, marking the fastest wealth-creation since 2012, according to a new report from Credit Suisse. More than half of the $16.7 trillion in new wealth was in the U.S.

Lender News

Fannie Mae and Freddie Mac (the GSEs) announced updates to the Uniform Loan Delivery Dataset (ULDD) Phase 3 Specification. This includes changes related to the Home Mortgage Disclosure Act (HMDA) Final Rule for the collection of borrower demographic information, further aligning GSE loan delivery requirements, and other Phase 3 data point revisions. These updates are reflected in the ULDD Phase 3 Specification (Appendices A - E) and updated FAQs available on the ULDD page, and Fannie's ULDD release page.

The Fannie Mae Servicing Guide has been updated to simplify servicing and streamline processes. For a summary of key updates in Servicing Guide Announcement SVC-2017-10, view the executive perspectives video presented by Jenise Hight, Director of Servicing Policy.

The Fannie Mae EMortgage Calculator is here. "Customize and test scenarios, assess operational and warehouse funding expenses. Explore the possibilities with the eMortgage Calculator and visit the revamped eClosings and eMortgages page or additional resources."

To solve the Emortgage adoption barriers identified via survey, Freddie Mac increased its education and awareness efforts surrounding eMortgage processes and technology. Read the GSE Efforts to Improve eMortgage Adoption: A Follow-up to the 2016 GSE Survey Findings Report for details.

Fannie Mae's new Single Source Validation, a key enhancement to the company's Desktop Underwriter (DU) validation service that is now in pilot, will allow lenders to validate a borrower's income, assets, and employment through one report using source data rather than multiple paper documents - amplifying savings and making it easier to originate loans. "Fannie Mae's new Application Programming Interface (API) platform will make it possible for lenders of all sizes to easily plug into Fannie Mae data and technology solutions so they can quickly access the full set of DU Messages data driving efficiencies in their processes. And, the company's new Servicing Marketplace will connect servicers and sellers interested in partnering with each other for servicing transfers when sellers sell loans to Fannie Mae providing transparency to the system, while removing cost and friction."

The Freddie Mac Sellers Bulletin 2017-23 was recently released and includes updated requirements for calculating the monthly debt-to-income ratio for student loans and contingent liabilities. Pacific Union will not impose overlays to the requirements provided by Freddie Mac. 

In preparation of offering the Fannie Mae Day 1 Certainty and Freddie Mac Loan Advisor Suite options, Pacific Union will be discontinuing its Generic Conventional Loan Program. All Generic Conventional Loans must be locked on or before Friday, December 1, 2017 and funded on or before Friday, December 29, 2017.

FCM posted changes to its underwriting guidelines.

Flagstar Bank's Conventional Underwriting Guidelines will be updated to reflect the student loan cash-out refinance feature which allows for the payoff of student loan debt through the refinance transaction with a waiver of the cash-out refinance LLPA effective for loans registered on or after Monday, November 13, 2017. For current loans in process that meet the criteria, please contact the Underwriting or Delegated department after Sunday, November 12, 2017, to have the loan marked as a Fannie Mae Student Debt Payoff loan.

Fannie Mae's announcement on Desktop Underwriter (DU) updates to allow loans when a borrower has placed a freeze on one of the three credit repositories are ineligible for purchase by Wells Fargo Funding including Prior Approval Underwritten Loans with frozen credit.

Mountain West announced the roll out of Fannie Mae's Rate and Term Refinance that includes the pay-off of a student loan.

PennyMac is aligning with the updates announced in Freddie Mac Bulletin 2017-12 regarding rental income and self-employed income changes.

Effective with DU runs on or after the weekend of November 18, PennyMac is aligning with Fannie Mae's update to DU and will allow no more than one credit bureau to remain frozen.  DU will issue a message reminding Lenders that they are responsible for ensuring the borrower's identity has been verified and preventing fraud. DU will issue an error recommendation if two or more bureaus are frozen.  If the credit must be un-frozen, borrowers must unfreeze all frozen bureaus, and the DU rerun with the updated credit.

Effective for all commitments taken on or after Friday, December 1, 2017, PennyMac will be implementing multiple changes to the rate sheet.

AmeriHome Correspondent has removed the 15-acre, maximum lot size overlay for all Fannie Mae, Freddie Mac, FHA, VA, and USDA loans.

And AmeriHome's Seller Guide has been updated to clarify that the Wisconsin Tax Escrow Option Notice form or equivalent be included in the Loan delivery file for all Conventional Mortgage Loans secured by properties in Wisconsin, if that Loan has escrows for real estate taxes established.

Capital Markets

Another day, more yield curve flattening - usually not a sign of future robust economic growth. (Think of a world when short-term rates were the same as 30-year bond rates.) The 2s10s spread narrowed by a basis point to 70 bps after compressing to 68 bps intraday. One interesting thing to note from overseas: China's 10-yr yield went above 4.00% for the first time since 2014. (Compared to our 2.38%.)

Yesterday there was, once again, much ado about nothing: some intra-day volatility, some shifting among coupons, securities, and maturities, but nothing worthy of me droning on about and nothing dramatically impacting borrower's rate sheets. The risk-free U.S. 10-year note price improved .125 to yield 2.38%, while 5-year notes and agency MBS prices rallied a couple ticks (32nds).

This morning we've had the weekly MBA applications data from last week. Apps were +3.1%; refis were +6% and purchases +0.4%. Refis accounted for 51.3%, the highest since September, and the Purchase Index is higher than year ago by 17%. Of more impact on rates was the October Consumer Price Index which was +.2%, core +.2%, and October Retail Sales: +.2%, ex-auto +.3%. After this initial volley of numbers we find rates down, with the 10-year yielding 2.34%  and agency MBS prices better by a solid .125.

Employment, Products, and Promotions

Do you have an accomplished background in mortgage originations or secondary markets? Are you a market leader who wants to move the housing finance industry forward through innovative technology? Then Notarize may be the place for you. Our Subject Matter Expert of Mortgage is responsible for mapping and supporting lender partners as they implement Notarize's fully digital online closing solution. You will oversee ongoing management of lender relationships, educate on the best operational approach to meet their needs, and design elegant solutions amongst all partners to meet their strategic goals. This role will work very closely to inform product strategy, support sales efforts as the Mortgage expert, and interact across all internal stakeholders as the SME for Mortgage solutions. Review and apply for the role here.

Floify, the mortgage automation solution for top-producing LOs, has just rolled out its most exciting and powerful update ever - custom fields, layouts, business rules, and loan dashboard customization! These new updates can be used in several incredible ways, making the workflow for LOs and their borrowers unbelievably more efficient. Using custom fields, LOs can create purposed layouts that display tons of information for their borrowers or team ­- all on one centralized web-based dashboard. Additionally, business rules allow LOs to create conditional logic that can dynamically swap layouts. As you can imagine, the list of possibilities with the latest version of Floify is endless...These are just more ways they are continuing to improve mortgage automation for LOs like you! With Floify, LOs have reported being able to reduce workload by up to 5 hours/loan and dramatically improve the lender-borrower experience. To see the new features and experience how Floify can help you streamline your mortgage workflow, request a live demo.

"PrimeLending LOs now have more options to offer with new lower FICO score options down to 580 on FHA and VA loans. The top 10 purchase powerhouse also lowered pricing on some of the industry's most popular Govie programs, including FHA, VA, USDA and Conventional loans. What has been PrimeLending's strategy for remaining competitive in the industry for more than 30 years? Stay aggressive pursuing opportunities that strengthen its LOs ability to compete and gain market share one new application at a time. In today's tight housing environment, that mindset is more critical than ever. If you're a top producer, find how much more you could achieve when supported by an entire company relentlessly focused on helping you discover your best. Contact Bill Harp (469-737-5767)."

"Mortgage Originations is one of the few industries where salespeople can fail and have a job the next day. It's really an amazing phenomenon and it all stems from the lenders insatiable thirst for volume" says Jim Boghos, 25-year executive search veteran. The best companies partner with specialized firms to attract the best of the best. "It's not rocket science" says Boghos. "We focus on attracting the best athletes where failure rates are less but requires much more personal interaction during the recruitment phase. "Recruiting is not clicking a mouse. It's a contact sport," Boghos says. "You had better be on your game and have people with real industry knowledge reaching out to candidates. To recruit the best people, one must differentiate within the first minute of conversation." For companies looking to grow their presence, hire the right leadership, or expand its existing operations, reach out to Jim Boghos, President Boghos Search Group (407.790.7500, ext. 100).

Caliber Home Loans, the fastest growing top-10 mortgage lender in the nation, was honored to celebrate Veteran's Day with the Dallas Mavericks. Caliber partnered with the Dallas Mavs for the NBA's Hoops for Troops community outreach program. As a part of this exclusive partnership, Caliber employees joined Dallas Mavs players and local veterans to prepare 10,000 meals for families in the Dallas area. The meals will be distributed by Feeding Children Everywhere, a global organization that provides meals to children in need. As one of the premier companies recognized as a Military Friendly Brand and by the Employer Support of the Guard and Reserve, Caliber is committed to supporting the military and veteran community-during Veteran's day and beyond. Read more about Caliber's ongoing support for the military and veteran community here.

Informative Research is excited to introduce Kimberly Donovan as its newest VP of Regional Sales. With over 15 years of experience in the mortgage origination market, Donovan has held high-level positions for several companies. Known for her customer-centric mentality and unparalleled responsiveness, Donovan will be an integral member of the regional sales team and concentrating her efforts in the Midwest. "Kimberly's energy and enthusiasm are completely contagious, and this is exactly what IR is looking for," stated Informative Research's EVP of Regional Sales Tony D'Eccliss. "Not only that, she also has a diverse background that allows her to relate to our customers and prospects on a different level. She understands what their biggest pain points are and how our solutions can help solve those issues the best." Feel free to reach out to Donovan via LinkedIn.