Accounting, Subservicing, Warehouse Products; Freddie and Fannie Changes Roll On

With only week until Thanksgiving there’s a lot going on – every one of these stats impacts lenders. CoreLogic tells us that there are 48,390 homes at risk from the current California wildfires. Believe in climate change or not, or in science or not, one study shows 386,000 homes are said to be at risk in the coming decades due to rising sea levels and coastal flooding. And according to the RV Industry Association, there are now a million Americans living in RVs full time. (Try counting them in the census, figuring out where they vote, where/if they pay taxes, or if 500 KOA Kampgrounds are enough.)

Lender Products and Services

As of October 2018, 100 mortgage lenders have signed with Loan Vision to utilize its financial management and accounting solution. Martin Kerr, President of Loan Vision shared, “On a monthly basis there is approximately 60,000 loans and $14 billion being accounted for across the US using Loan Vision. When you annualize that, those numbers are staggering to me. We absolutely believe the lenders embracing Loan Vision are doing that to have best in class systems across the organization, to streamline their whole organization to better serve the borrower.” For more information, read the press release about Loan Vision’s journey to 100 customers or contact Carl Wooloff.

 

Unfortunately, as we have all witnessed, natural disasters and hurricanes will happen. The real question, though, is do you know if your subservicer is prepared to handle the aftermath of the crisis? Don’t wait until it’s too late to test the strength of your subservicer. They need to be proactive — not reactive! To help ensure your borrowers move through the recovery process as efficiently as possible, run through this new checklist from TMS that goes through everything your subservicer needs to be doing to successfully navigate a crisis.

 

Are you looking for a warehouse lender that understands your business needs? Maybe one that is not competing for market share with your branches or correspondent division? Comerica Bank’s approach to warehouse lending spans six decades and is just one piece of a much-larger, diversified business banking strategy. Comerica Bank is a $71 billion bank that focuses on serving the needs business owners. At Comerica Bank, our relationship begins with you, the mortgage banker. Please allow us the opportunity to tailor a warehouse solution to support your strategy and goals. With lines of credit from $5 million to over $100 million, we are proud to serve a broad spectrum of mortgage companies across the country. To see how Comerica Bank can raise your expectations of what a bank can be, contact Von Ringger (313-222-9285). Member FDIC. Equal Opportunity Employer.

Fannie/Freddie News

 

 

Let’s play some catch up on Agency news. It’s good to see what they’ve been up to in the primary markets over the last several weeks to keep things in context, especially as lenders inevitably follow their lead. So, in no particular order…

 

The Freddie Mac Guide Bulletin 2018-20 provides temporary selling requirements and flexibilities for certain mortgages secured by properties, or for borrowers with places of employment (as applicable), in eligible disaster areas impacted by Hurricane Michael.

 

...announcing an update to our Private Mortgage Insurer Eligibility Requirements (PMIERs), which will become effective on March 31, 2019. Many of the changes to the eligibility standards have been previously announced via the PMIERs Guidance. Our announcement underscores Freddie Mac's commitment to working with the Federal Housing Finance Agency (FHFA), mortgage insurers and other stakeholders in the housing industry to strengthen the housing finance system.” For more information see PMI Eligibility Requirements and Frequently Asked Questions.

 

So yes, under the direction of the FHFA, Fannie Mae has worked jointly with Freddie Mac to update the Private Mortgage Insurer Eligibility Requirements (PMIERs), which were issued Sept. 27. The effective date for these PMIERs is March 31, 2019. Refer to FHFA's news release and Fannie Mae's Mortgage Insurers page for more information.

 

Freddie Mac has expanded its support in shared equity and sweat equity . Read the Single-Family News Center article to learn more about financing opportunities for rural housing and preserving affordable housing.

 

For certain home purchase transactions in rural high-needs areas, Fannie Mae may offer to waive the appraisal in exchange for a mandatory home property inspection. The rural high-needs appraisal waiver seeks to help low- to moderate-income borrowers avoid unanticipated, potentially high-cost, post-purchase repairs. This offer will be considered only for property locations designated as rural high-needs by the Duty to Serve requirements. Click here to view a heat map of the High Needs Counties throughout the United States.

 

Freddie Mac has a Loan Advisor tool… its Condo Project Advisor. Request unit-level condo waivers for existing condo projects that need special review or consideration.

 

It's well known that Native Americans face homeownership challenges, which has made them one of the most underserved populations in the country. To better understand this group's unique cultural views on homeownership, Fannie Mae has conducted interviews with a small sample of lower-income Native Americans who plan to purchase, or have recently purchased, a home on tribal lands. Read the blog by Kellie Coffey, product development manager for rural initiatives at Fannie Mae, or check out the full report.

 

You can now submit to Loan Product Advisor® and start delivering Freddie Mac’s consolidated Home Possible® mortgage – with new flexibilities for your borrowers with very low to moderate incomes. Read the Single-Family News Center article for additional information on what’s been added to Home Possible and how it can help you expand your business.

 

As part of normal operations and prudent risk management, Fannie Mae is implementing DU® Version 10.3 the weekend of Dec. 8th. The release notes have been updated to include a reserve requirement for cash-out refinance loan casefiles with debt-to-income ratios exceeding 45%. This update is a part of adjustments to the DU credit risk assessment to account for 2018 market conditions (rising interest rates, waning refinances, and higher loan-to-value lending). Refer to the "Debt-to-Income Ratio" section of the release notes for details.

 

Fannie Mae issued a reminder that applications for DU Refi Plus™/Refi Plus™ under the Home Affordable Refinance Program® (HARP®), will be accepted through the end of this year. DU Refi Plus/Refi Plus applications must be started no later than Dec. 31, and loans must be delivered by Sept. 30, 2019. Visit the Making Home Affordable page for more information.

 

Freddie Mac has released its third, fourth and fifth white papers of the eight-part Duty to Serve series designed to shed light on underserved multifamily housing markets. The papers examine state incentives through the Low-Income Housing Tax Credit (LIHTC) program that encourage affordability in high opportunity areas, and the use of mixed-income housing in areas of concentrated poverty.

 

Fannie Mae has updated the Servicer Self-Assessment to help you effectively manage the Fannie Mae loans you service and ensure that you meet its requirements. Two new sections, "Master Servicer Oversight" and "Shared Processes," will provide additional guidance. Visit the STAR Program page to find more resources, and contact your Fannie Mae account team if you have questions.

Capital Markets

Rates have slid lower with the 10-year settling last night at 3.12%. Why? Thoughts that the Administration’s policies are hurting the U.S. economy, more international geopolitical news, this time surrounding Brexit. British Prime Minister Theresa May announced that her cabinet has approved the draft withdrawal agreement. Elsewhere, the Italian government replied to the European Commission's request for a corrected budget, but the main points of the plan were left unchanged. The European Commission will issue a formal reply next week. And China reported disappointing Retail Sales for October (+8.6% YoY; expected +9.2%).

 

Domestically, CPI figures point to a firming in consumer inflation, which fits the Federal Reserve's inclination to raise rates again in December. Markets this morning are digesting remarks from Fed Chair Powell and Dallas Fed President Kaplan, though neither showed much wavering in the Fed’s commitment to hike rates December, with odds still over 75%.

 

We’ve already had a busy economic calendar today: Retail Sales (+.8% vs. expected unchanged), import prices (expected unchanged, imports were +.5%), weekly jobless claims (216k, about as expected), and both the Empire State (expected to decline, it rose to “23.3”) and Philadelphia Fed’s (down to “12.9,” as expected) manufacturing indices. September business inventories are seen increasing 0.3% MoM versus 0.5% previously. Today’s Fed speak calendar also starts at 10AM ET with Governor Quarles, Chair Powell, Atlanta’s Bostic, and Minneapolis’ Kashkari all on the docket. After the initial spate of news, we find rates slightly lower with the 10-year at 3.10% and agency MBS prices better by .125. Deceleration?

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