Broker, eSign, Marketing Products; USDA, FHA, Freddie, Fannie News and Trends
I doubt if I have ever pressed “7” or “8” on my microwave oven keypad. Speaking of 7 & 8 (I know, a weak segue), originators are keenly aware of what builders are seeing, economy-wise, and 78 percent of them did not lower their prices in April. Not only that, but 41% of home sales had bidding wars, according to Redfin. “Demand for homes has picked back up after hitting rock bottom in April, and that uptick paired with a lack of supply is a recipe for bidding wars. Homebuyers are getting back out there, searching for more space as they realize using their home as an office and school may become the norm. But sellers are still holding off on listing their homes, partially due to economic uncertainty and concerns of health risks. In some hot neighborhoods, there may only be one or two homes for sale, with multiple homebuyers vying for them.” Heading into the pandemic low inventories and forbearance limited supply, while favorable Millennial demographics and low interest rates boost demand. And job losses from Covid-19 have hit lower-income workers hardest, and they typically rent. People still need a place to live and want to own a home.
Lender Services, Products, and Training Events
Caliber Home Loans is the proud recipient of Fannie Mae’s Servicer Total Achievement and Rewards (STAR) program recognition for excellence in mortgage servicing for 2019. For the 2019 report, the STAR team analyzed Caliber’s servicer capabilities across the fundamental components of people, processes, quality control, reporting and training. As an organization, Caliber’s top priority continues to be focused on delivering a seamless and exceptional experience to their customers. Now, more than ever, Caliber strives to make life easier, by providing options for customers impacted during these challenging times. Caliber extends its deepest thanks to its dedicated team members and remarkable customers! #FannieMaeSTAR #ServicingExcellence.
Check out the latest Clear to Close podcast episode from Maxwell titled, "How Leaders Guide Their Teams through Turmoil" where they sit down with The Mortgage Collaborative COO Rich Swerbinsky to look at what lenders are doing to get the most out of these times and setting themselves up to thrive. Another great episode from the series and this one is definitely worth finding time to listen to. Listen and download here: Apple, Google, Spotify, Browser.
Unemployment is on the rise, the market is contracting, and there are fewer new deals available. So, how do you drive growth? Customer retention. Register for this webinar with Total Expert and Sales Boomerang, hosted by HousingWire, on June 10 at 1 p.m. CT. You’ll walk away with the strategies you need to implement today to optimize the pre-close customer experience, master the post-close journey, and create customers for life. Register now.
Digital lending platform developer Blend has spent years enabling consumers to get pre-approved in one-tap, apply for loans, sign disclosures, and complete follow-ups from any device at any time. Actually closing a mortgage, however, has remained a singularly unpleasant event. Until now. With Blend Close, lenders will be equipped to empower consumers to close how they want. Surface the best possible closing experience for each loan while tapping into new levels of simplicity, efficiency, and ROI. With the launch of Close, Blend will offer a single, integrated closing experience with all of the necessary functionality for eSign, Remote Online Notarization or an in-person notary, eNote solutions, integration to an eVault, and eRecording. Visit the recent Blend Close announcement for a deeper look into an elevated borrower closing experience.
Register for MBA Education’s highly informative webinar, SUCCESSFUL SECONDARY MARKETING STRATEGIES IN VOLATILE TIMES, on Thursday, May 28th at 2:00 PM ET. Featuring industry veterans from Optimal Blue, this webinar will explore the economic and operational incentives when transitioning from a Best Efforts to Mandatory delivery model, counter-party relationships best suited to your business and current market conditions, as well as special risk mitigation strategies correlated to COVID-19 market impacts. For their guests, Optimal Blue has organized complimentary access to this MBA webinar. Please contact sales@optimalblue.com to receive a promo code that will waive your $499 registration fee.
Conquest from UWM. Grow your new business with 30-year fixed rates starting at 2.5%. Just in time for what could be the best purchase season our industry has ever seen, UWM has launched Conquest, a program designed to help brokers win new business by offering competitive rates at the lowest rate ranges on all purchases and on any refinances where the borrower hasn’t closed a loan with UWM in the last 18 months. With 30-year fixed rates ranging from 2.5-3.0% on purchases and rate/term refinances, it’s a great way to add new borrowers to your roster, build new relationships with real estate professionals and wow them all with UWM’s fast turn times, elite service, and groundbreaking technology. Talk to your UWM account executive or sign up today at uwm.com.
USDA, FHA, Fannie, Freddie Changes Continue
As we all wait for Ginnie to come out with its electronic promissory note policy, there is always a lot of focus on what Freddie Mac and Fannie May are up to, and where they should be after government conservatorship ends. The two of them now have $23.5 billion in capital, and the FHFA believes they should hold $240 billion, a high hurdle for raising capital in (probably) 2021. Investment banker Houlihan Lokey is advising the FHFA on recapitalizing the companies. Obviously, these capital standards will require higher pricing across the board and steeper risk-based pricing for higher LTV loans and other products.
Late last week Chris Whalen opined on what post-conservatorship GSEs might look like. And over the weekend Dave Stevens with Mountain Lake Consulting addressed the proposed capital rules and the need for industry to engage.
The GSEs published an announcement inviting lenders who meet eligibility criteria and prerequisites to participate in the Uniform Residential Loan Application (URLA) Limited Production Period (LLP) beginning on Aug. 1. During the LLP, participants will use the redesigned URLA (Fannie Mae Form 1003) and updated Desktop Underwriter (DU) specification to originate loans as part of a controlled implementation. Visit the URLA Page for more information. Yes, they are extending the implementation timeline for the redesigned URLA and updated automated underwriting systems (AUS) specifications to support the industry during the COVID-19 pandemic. The new mandate for required use of the redesigned URLA is March 1, 2021. The extension will provide lenders and other stakeholders additional time to prepare and implement the redesigned URLA.
Fannie Mae issued a reminder that June 1 is the effective date for updated ARM notes and riders. The joint GSE notes and riders and Fannie Mae-only ARM notes and riders were previously updated to include new fallback language for closed-end, residential ARMs. Special Feature Code (SFC) 785 is required for delivery of ARM loans closed on the updated documents to indicate the updated documents have been used (note: this will be a fatal edit at delivery).
Fannie Mae updated its Lender Letter 2020-04 with additional temporary guidance, including use of virtual inspections for appraisals and renovation loans, and flexibilities for condominium project reviews. Additionally, we’ve updated information about flexibilities for new construction loans and Homestyle® Renovation loans, as well as other temporary appraisal requirement flexibilities. And don’t forget LL-2020-07regarding COVID-19 Payment Deferral.
In a video message FHA Commissioner Brian Montgomery speaks directly to homeowners with FHA-insured mortgages experiencing financial hardships caused by the COVID-19 emergency. View the video message available in English and English/Spanish captioned.
FHA’s new, web-based platform, FHA Catalyst, provides enhanced digital solutions for stakeholders conducting business with FHA. The platform’s architecture allows FHA to respond quickly with technology solutions for evolving business needs in response to the COVID-19 National Emergency. The platform has two modules available today for mortgagees:
FHA Catalyst: Claims Module, which is now available to all servicers for the submission of forward mortgage supplemental claims. FHA Catalyst: Case Binder Module, which allows lenders to electronically submit case binder documents as an alternative to mailing paper binders. Details can be found in FHA’s Mortgagee Letter (ML) 2020-08.
In Mortgagee Letter 2020-12, FHA published multiple COVID-19 related policy and other updates to its Home Equity Conversion Mortgage (HECM) program. These updates include: Guidance for HECM Claim Type 22 (CT-22) Assignment Claims during the COVID-19 National Emergency. Temporary Partial Waiver for HECM Tax Arrearages during the COVID-19 National Emergency. Webinar: Updated Guidance for HECMs during the COVID-19 National Emergency. Housing Program Specialist Position (HECM) Available in Tulsa, OK.
USDA Rural Development issued an announcement to inform lenders of updated loan status reporting requirements for borrowers impacted by the Presidentially declared COVID-19 National Emergency, addressing how lenders report loan statuses to the Agency via Electronic Status Reporting (ESR) and does not address reporting to credit repositories. Lenders should start reporting the status reason code of 010- Neighborhood Problem and a status code of 06- Formal Forbearance. If any other forbearance code was previously reported for Borrowers affected by the COVID-19 National Emergency, stop reporting that status code and begin reporting with status code 06 – Formal Forbearance. The same default status date should be used as the date the borrower was approved for the forbearance if changing the status code. If the loan was not previously in default, the status code 42 must be reported first to open the default event and then Status Code 06 – Formal Forbearance can be reported in the following months.
USDA extended its temporary exceptions pertaining to appraisals, repair inspections and income verifications for SFHGLP until June 30, 2020. These temporary exceptions apply to the requirements in the program handbook HB-1-3555 for new loans. Additional guidance related to these exceptions on origination and servicing of USDA single family housing guaranteed loans is now available. Check out FAQs in the USDA LINC Training and Resource Library. Additionally, USDA has extended its 60-day foreclosure and eviction moratorium until June 30, 2020.
Capital Markets
Looking at all of last week, April’s data continues to confirm the severity of the economic downturn resulting from the stay at home orders in response to Covid-19. The Leading Economic Index declined 4.4 percent, the fifth decline in the last seven months. Housing starts plummeted 30 percent in April to an 891,000-unit annual rate with single family starts down to a 660,000-unit rate, and sales of existing homes fell 18 percent to the slowest annual rate since July 2011. Despite the drop in sales, home prices were up 7 percent year-over-year and are not expected to drop significantly due to the tight supply. Mortgage purchase apps were up for the fifth week in a row increasing 6.4 percent for the week ending May 15 although they are still 12.3 percent below 2019’s pace. The low interest rate environment, however, has led refinance apps to increase 3x from a year ago. New claims for unemployment insurance declined for the seventh consecutive week after hitting a record 6.9 million with 2.4 million new people filing for the week ending May 16.
Bond marketwise, the end of last week saw a quiet trading day ahead of the holiday weekend, though the Treasury yield curve flattened amid nervous risk sentiment following increased tensions between the U.S. and China. It was reported that the National People's Congress will vote on the Hong Kong National Security Law this Thursday, confirming fears about China's intent to strengthen its grip over the city. The U.S. condemned Beijing's plan to enact national security legislation in Hong Kong, with Secretary of State Pompeo saying the proposal would be a "death knell" for the city-state's autonomy. The 10-year yield closed the week yielding .66 percent, nearly unchanged for the week.
With bond and equity markets closed for Memorial Day yesterday, this week’s economic calendar begins shortly with the March S&P Case-Shiller Home Price Index and May FHFA Housing Price Index. Later this morning brings April New Home Sales and May Consumer Confidence, as well as the Dallas Fed Texas Manufacturing Index for May and remarks from Minneapolis Fed President Kashkari. Tomorrow sees just the Weekly MBA Mortgage Index before Thursday brings Jobless Claims, April Durable Orders, the second estimate of Q1 GDP figures, and April Pending Home Sales. The week closes with April Personal Income and Spending, PCE Prices, Core PCE Prices, April Advance Indicators, May Chicago PMI, and Final May Michigan Consumer Sentiment. As far as MBS purchases go, the NY Fed will continue its two daily FedTrade purchase operations. Today’s purchases will total up to $4.230 billion starting with $1.260 billion UMBS15 2 percent and 2.5 percent followed by up to $2.970 billion UMBS30 2 percent through 3 percent. We begin the week with Agency MBS prices worse/down nearly .125 versus Friday and the 10-year yielding .69.
Employment
Summit Valuation Solutions, a leading nationwide real estate property valuation company is expanding its sales force. Summit Valuation Solutions is looking for a Vice President of National Sales. The ideal candidate will have experience working in the Capital Markets or Loan Servicing space. Responsibilities include representing the firm regarding customized valuation solutions that support those in the secondary acquisition/sale space as well as those in the default loan servicing space. Professionalism and a commitment to a strong work ethic are a must. Experience in high end sales efforts is desirable. Resumes can be confidentially submitted to sales@summitvaluationsolutions.com.
Surprise and Delight. At Primary Residential Mortgage, Inc. (PRMI), we strive to surprise and delight our borrowers and referral partners in each interaction; and we strive to surprise and delight each other. Providing service that stands out like a pair of red shoes creates an unpaid salesforce of delighted customers and referral sources who are PRMI’s biggest champions. We also know that you’re only able to provide your best service when your own needs are met. This is why exceptional service isn’t just something we offer customers—it’s deeply ingrained in our culture. We’re committed to providing exceptional service to each other at every turn so that we can all serve our customers better. Join us in our efforts to surprise and delight our customers and each other with red shoes service at every turn. Visit branchpartner.com or contact Amy Gallow, VP of Business Development to learn more.