Fannie and Freddie Guidelines, ULDD and Process Changes
Amazon Go opened its doors in Seattle as the first digital grocery store without any cashiers. (One initially simply downloads an app to use the digital shopping cart and check-out without waiting in line. Your shopping bag automatically identifies and adds up everything you gather, so you can just walk in and out and everything is simply charged to your credit card.) The latest car tech features were unveiled at the consumer electronics show and one of them from Nissan seems to connect the driver’s brain to the vehicle. (This new “brain to vehicle technology” is supposed to use driver brain waves to sense when the person is going to brake or swerve a fraction of a second faster.) And it takes…30 days to do a home loan? There is no argument, however, the industry is heading toward a “digital” mortgage. Whatever “digital” exactly means is a mystery to most, but companies seem interested in doing them.
Changes in the World of Freddie and Fannie
Where would MI companies be without Fannie & Freddie? They would probably go back to being recipients of risk, being laid off by various investors and programs.
That aside, everyone seems to have a plan for F&F and has had for several years now. The latest thoughts come this week from Dave Stevens, President of the Mortgage Bankers Association, who recommends keeping an open mind on GSE reform. “The recent release of the draft discussion text from the Corker/Warner Senate team on GSE reform is a strong step forward in the effort towards legislation to resolve the conservatorship of Fannie Mae and Freddie Mac in a productive manner. I encourage all lenders and stakeholders to read the draft text and form your own opinions as a lot of misinformation is circulating about what the text actually says…Given that a government guaranty can only come through legislation, administrative reforms could be even more disruptive. This is complex stuff, but this draft text has some good framework that could be the best of all options. We will keep an open mind, stay active in the discussions, and hope to find others with a rational view who can align with us in this effort.”
Fannie Mae and Freddie Mac have worked with the mortgage insurers (MIs), at the direction of the Federal Housing Finance Agency (FHFA), to revise the GSE Rescission Relief Principles. The new principles will improve clarity, more closely align with the GSE Representation and Warranty Framework, and allow more rescission relief without increasing risk to the GSEs' most significant counterparties. During 2018, the MIs will revise their master policies to reflect the new principles and obtain the required approvals from the GSEs, FHFA, and the state insurance commissioners. We expect that the new master policies will be finalized by the end of 2018. The GSEs and MIs will then coordinate an implementation date and notify lenders accordingly. The new principles can be found on its web page.
The Freddie Mac Guide Bulletin 2018-1 includes information regarding extending the effective date for the rental income revisions announced in Guide Bulletin 2017-12, the incorporation of the Uniform Loan Delivery Dataset (ULDD) Phase 3 requirements into the Guide, and the updated Guide Chapter 6302 with Loan Product Advisor® terminology.
Over the weekend of Feb. 3, Fannie Mae added new reports and improved the user interface in Fannie Mae Connect™. Repeating downloads is easy as Connect remembers the last set of criteria you entered. Prefilled Seller/Servicer information, report section, and report format will make downloading even easier than before. Fannie Mae has also launched three new reports and enhanced others. Review the Release Tracker and Report Directory for more information on these and all the latest changes in Fannie Mae Connect.
Beginning on February 1 Freddie Mac is offering a new cash execution opportunity for 30-year fixed rate mortgages with original balances of $200,000 or less. Its adding $200K as a low loan balance (LLB) attribute and will pay more for loans with original loan amounts that are >$175K and <$200K. Freddie Mac is sharing this opportunity with you in advance of implementation, so you can make the necessary preparations in your systems and processes. Read its article to learn more about this new opportunity or contact your Freddie Mac representative with questions.
Recent Freddie Mac news includes: The Uniform Loan Delivery Dataset (ULDD) Phase 3 mandate of May 20, 2019, for mortgages with an Application Received Date on or after January 1, 2019. Learn More. Beginning June 25, Uniform Closing Dataset (UCD) edits will turn critical/fatal and the Borrower Closing Disclosure PDF must be embedded for all loans with an associated UCD submission. Learn More. New Loan Selling Advisor critical edits, effective June 1, 2018. Learn More.
Fannie Mae has redesigned the Lender Record Information Form 582 to provide a better annual certification experience. Features of the new platform include intuitive navigation, progress indicators, information carry-over from previous years, download and print options, and more. Watch an overview of what the new annual certification process has to offer. Access the Form 582 web page for more information.
During the weekend of Jan. 20, Fannie Mae will implement enhancements in the investor reporting system. These changes will streamline Detail Reporting Loan Activity Report (LAR) processing under various scenarios. Review the release notes for details and find additional resources on the Investor Reporting page.
Capital Markets
CoreLogic announced it is redistributing credit risk transfer (CRT) loan-level data from Fannie Mae and Freddie Mac. The CRT redistribution will include Fannie Mae’s Connecticut Avenue Securities (CAS) data and Freddie Mac’s Structured Agency Credit Risk (STACR), STACR SPISM, Whole Loan Securities (WLSSM) and Seasoned Credit Risk Transfer Trust (SCRT) data. CoreLogic is providing this data from both GSEs to new and existing CoreLogic Non-Agency RMBS clients at no additional charge. In addition, RiskModel by CoreLogic is being enhanced to seamlessly integrate the reference pool data for Freddie Mac’s STACR® and Fannie Mae’s CAS programs. This will streamline RiskModel risk analysis capabilities for participants in both programs.
Resitrader has added Freddie Mac as a participant to its digital secondary market platform. Last month, Resitrader announced Fannie Mae’s participation on the platform. Having Fannie Mae and Freddie Mac on the platform will speed up buying and selling of conforming loans in the secondary market for its users. The streamlined interface with Freddie Mac enables participants to quickly and efficiently obtain loan-level pricing on Freddie Mac-eligible loans, including the full array of loan characteristics that qualify for “specified pay-ups”. Resitrader users then may compare Freddie Mac pricing with alternative executions such as bulk bids.
Turning to the actual markets, Tuesday was a day of reversal. Equities gained back some of Monday’s losses and bonds gave back some of Monday’s gains. At the end of the day the 10-year Treasury note was left yielding 2.79 percent, 2 basis points above Monday. Tuesday’s $15 billion four-week auction elicited a yield of 1.48 percent, which was high, signaling market concerns surrounding the yet to be resolved debt ceiling issue. A stopgap bill is expected by Thursday’s deadline, but there has been no news on progress towards raising the debt limit, which is expected to be necessary by early March. What does all that mean? The bond and stock markets don’t like uncertainty…
Tuesday’s economic releases showed that the US trade deficit jumped to $53.1 billion, the widest since 2008 due to a swell in imports of consumer goods. For 2017 the report showed the trade deficit with China at $375.2 billion, the EU at $151.4 billion, Mexico at $71.1 billion, Japan at $68.9 billion, and Canada at $17.6 billion. Though the deficit increased, the report also showed the exports increased by 2.5 percent, pointing to strong global demand.
Today’s calendar brings MBA mortgage applications (+.7%), petroleum status report, a 10-yr note auction and Consumer Credit. Yes, on the supply and demand side of things there will be a $24 billion 10-year Treasury note auction at 1PM ET and the Fed will conduct a $435 15-year conventional FedTrade operation at 3.0% and 3.5% between 2:00 and 2:30pm. While the stock market continues to grab headlines, bonds are quiet: the 10-year is yielding 2.78% and agency 30-year MBS prices are better .125 versus Tuesday’s close.
Business Opportunities, Jobs, Promotions
Waterstone Mortgage Corporation, a national bank-owned mortgage lender headquartered in Pewaukee, Wisconsin is looking to acquire small to mid-sized traditional retail, purchase-focused mortgage companies nationwide. “Today’s tighter margins and complex regulatory environment motivate many small mortgage companies to seek ways to expand their business, including strategic acquisitions to create additional synergies. Waterstone Mortgage has the strength and stability that mortgage executives seek when considering a sale of their retail business. The lender is a wholly-owned subsidiary of WaterStone Bank SSB (NASDAQ:WSBF), which has assets of more than $1.8 billion. As a Fannie Mae, Freddie Mac, and Ginnie Mae-approved lender, the company offers a broad range of products including FHA, VA, USDA, and conventional loans, one-time close construction financing, bank portfolio lending products, jumbo products, and condo financing. It produced $2.5+ billion in origination volume in 2017, 90% of which comes from purchase mortgage loans.” For more information, visit info.waterstonemortgage.com/acquisitions.
If being a part of a dynamic, fast growing, right-minded, 50-state, bank owned lender sounds like a place you could call home, Wintrust Mortgage would love to chat with you. Management is seeking solid originators, branch managers, and teams to build on their $5B organization. Wintrust is a mortgage company that happens to be a federally chartered bank owned and backed by a $27+ Billion holding company (as opposed to a bank that “happens” to own a mortgage company). Wintrust is also looking for acquisitions of well-run privately held mortgage companies and is well versed in how to structure and bring on those types of opportunities. If Wintrust Mortgage seems intriguing to you, contact Bob Shield, SVP of Sales (847.939.9361) for a confidential discussion.
Don’t miss out! APM’s VA Financing Boot Camp multi-city tour is in full swing! Become informed, inspired, and educated about the unmatched benefits of VA home loans and how you can better serve the VA community. Jeff Wilson, a national expert on the VA Loan Guaranty program having served for over 27 years with the Department of Veterans Affairs will dispel some of the common myths about VA financing. The VA Boot Camp is being held in key cities in California, Colorado, Missouri, Texas and Utah! Click here to find and register for an event near you.
Spruce, the technology-first title, closing, and technology company, is looking to fuel its growth by adding two key hires: a business development executive with a strong track record partnering with mortgage originators on technology solutions, and an experienced title & underwriting expert interested in working in a fast-paced, innovative environment. Interested parties should contact the CEO, Patrick Burns.
Orange Coast Title Company, an industry leader since 1974 and one of the largest independently owned title insurance companies, is growing again and has an excellent opportunity for a National Sales Executive. As our National Sales Executive, you will acquire, build, and maintain strong, long-lasting client relationships with the top mortgage lenders in the country. The ideal candidate will possess a broad knowledge of the loan origination and servicing space, have sales experience with a proven track record of exceeding goals, and be self-motivated to succeed in a fast-paced, competitive environment. Interested candidates should send their resumes to Tim Curtis, National Sales Manager.
Guaranteed Rate, aka G-Rate, announced it has hired Craig Lombardi as President, Online Division, to oversee the company’s loan origination from leads generated via the company's online marketing and advertising channels. Scott Stephen, who formerly held this position, has been named Chief Growth Officer and will oversee the expansion of ancillary entities such as Guaranteed Rate Insurance and Ravenswood Title Company as well as other growth initiatives across the company.
And Recovco Mortgage Management, LLC (residential and consumer loan fulfillment, due diligence, quality control, transaction management, and loan servicing solutions) announced that John Guyhas joined the company in the newly created position of Director, Business Development. Congrats!