Purchase Originations, eNote Tools; FHA, VA, Ginnie News; Inflation and Savings

I hope that you’re not reading this while stuck due to the thousands of cancelled flights or road closures in Northern California! Kudos to Carol K. who sent, “One thing nobody ever talks about being an adult is how much time you debate yourself on keeping a cardboard box because it’s, like, a really, really good box.” Kudos is an interesting word. Do the governments/governors in California and Colorado deserve kudos for making these moves that impact residential lenders, providing money for distressed borrowers (in California) and creating more regulations for non-bank lenders (in Colorado). How about state funding for tracking down, arresting, and throwing away the key for people who steal the identity of others? Author Carol Gardner interviews 4iq’s Luke Wilson on how best to avoid identity theft. Millions of people around the U.S. are hitting that “unsubscribe” button from some company from which they bought Christmas presents. What is a “dark pattern?” Although there is no agreed-upon definition, many use, “A user interface that has been carefully crafted to trick users into doing things.” Ever encountered a “consent box” that doesn’t allow not consenting? An email that makes it difficult or impossible to unsubscribe? Technology is truly a two-edged sword. available here; questions about interviews and sponsorships should be directed to Robbie Chrisman.)

Lender and Broker Services and Products

The tradition of ringing in the new year in Times Square dates back to December 31, 1904, when The New York Times lit up its newly constructed building with fireworks and dynamite. But the midnight Ball Drop didn’t begin until 1907 when the city government outlawed fireworks shows, citing safety concerns. Lenders who want to keep their borrowers’ information safe use SimpleNexus’ eMortgage solution Nexus Closing, which automatically generates an electronic promissory note (eNote) to be stored in a secure eVault for delivery to the MERS eRegistry. More secure and accurate than their paper counterparts, eNotes give borrowers more time to review and understand closing documents and save lenders time and money by creating an automated audit trail that enables quick, efficient delivery to the secondary market. Find out how Nexus Closing can provide a safer, streamlined digital lending experience for your company.

Mortgage brokers understand that their long-term success in a purchase market is facilitated by working with account executives that function more as strategic advisors than pushy call-center reps. That’s why more brokers continue to send more loans to Homepoint. Feedback in the industry is that Homepoint is one of the most well-rounded lenders in the industry, in terms of pricing, product offerings, and hands-on partnership. If you’re a broker that still needs to get signed up with Homepoint before the New Year, visit Homepoint’s website.

Did you know that over 60% of buyers already own a home? As the market continues to favor purchase business, lenders need to get even more connected with their current customer's needs. Homebot, the leading client-for-life portal, recently released a new product that helps lenders in today's purchase-heavy market. Homebot Home Search is a reimagined home search experience that allows lenders to leverage their existing database to engage with clients the moment they start showing signals to buy.

Ginnie, FHA, VA News

Julia Gordon’s nomination to be FHA Commissioner was returned to the White House who will need to re-submit her nomination and redo all of the confirmation steps (i.e. confirmation hearing, Committee vote and then full Senate vote). Potomac Partners reports that it will now likely be a several month process to complete the confirmation process.

A coalition of attorneys general from 20 states and the District of Columbia sent a letter to the FHA urging the agency to address mortgage servicers’ alleged failure to adequately implement Covid-19 recovery loss mitigation options for eligible borrowers. Remember that five months ago the FHA issued Mortgagee Letter 2021-18 which required mortgage servicers to offer a zero-interest subordinate lien option to eligible homeowners who can resume their existing mortgage payments under the “COVID-19 Recovery Standalone Partial Claim” option. For borrowers that are unable to resume their monthly mortgage payments, FHA established the “COVID-19 Recovery Modification” option, which extended the term of a mortgage to 360 months at market rate and targeted a 25 percent principal and interest reduction for all eligible borrowers. (Here is the link to the audit report if you’re interested.)

In late November, the Mortgage Bankers Association and the Housing Policy Council jointly submitted recommendations to Ginnie Mae seeking an end to restrictive pooling measures put in place in response to the COVID-19 pandemic. The letter addresses situations in which Ginnie Mae issuers buy loans out of pools because the borrowers have gone 90 or more days without making a payment (likely due to a COVID-19 forbearance) and those borrowers ultimately resume making their payments without a loan modification (for example through a partial claim or reinstatement). Under existing policy, these loans may be re-delivered into Ginnie Mae securities only through custom pooling and only after a 210-day seasoning period.

These pooling restrictions were put in place by Ginnie Mae to discourage loan buyouts that were not required because the borrowers did not undergo loan modifications. In many cases, these borrowers were brought out of forbearance through a Federal Housing Administration (FHA) partial claim, and in some cases, borrowers simply reinstated their loans. At this late stage of the forbearance process, most of the borrowers who remain in forbearance are likely to require modifications to secure deeper payment relief, which obviates the need for any restrictions meant to slow prepayment rates.

Ginnie Mae issued APM 21-08 Extension of Permitting Alternative Procedures for Certain Aspects of Issuer Annual Audit Report. Ginnie Mae will accept audited financial statements and Audit Reports for Issuers with a fiscal year ending on or before March 31, 2022, where the independent auditor relied on alternative procedures to meet the Issuer’s document custodian annual audited financial statement and Audit Report review objectives. Recall that Ginnie Mae is extending the alternative procedures due to the continuing impact of the COVID-19 pandemic. Where necessary, auditors will be permitted to follow alternative procedures to evaluate processes and controls of document custodians.

Don’t forget that the VA published the maximum loan limits for veterans with partial entitlement. The new limits are consistent with the Freddie Mac conforming limit and will be effective for loans closed on or after January 1, 2022.

PennyMac posted Announcement 21-102: FHA and VA Loan Limit Increase for 2022.

Effective with case numbers assigned on or after 1/24/2022, PennyMac will be aligning with the updated FHA Streamline Refinance Net Tangible Benefit (NTB) requirements announced by FHA. PennyMac Announcement 21-105 provides a comparison of FHA’s current and new NTB requirements.

FAMC Correspondent National Bulletin 2021-56 includes information on 2022 Loan Limits – VA Products. Please see the bulletin for additional information and all lock, delivery, and purchase by dates, if required.

In FHA news, Mountain West Financial Wholesale issued 4506C Reminders in Bulletin 21W-085.

Effective as of December 1, 2021, the VA has increased appraisal fees and timelines. Mountain West Financial fee templates and Mortgage Works AMC appraisal fee sheets have been updated to reflect the revised VA appraisal fees in all states affected. Access MWF News Bulletin 21W-094 for more information including the VA announcement and schedule of appraisal fees and turn times.

loanDepot Wholesale WNTW 12-20-21 includes updated information on loanDepot Conventional Lending Guide, 2022 VA Loan Limit Expansions, and multiple FHA updates.

Wells Fargo Funding C21-067 covers various topics including FHA and VA loan limits, Overlay removals on group savings and flip transactions, and ineligible Freddie Mac offerings.

Capital Markets

The last week of 2021 is upon us and the markets are grappling with how the Omicron variant will disrupt economic activity in the coming weeks. Before cases started spiking worldwide last week, we already knew that consumer spending declined in November as households rushed to complete holiday shopping earlier due to shortages affecting the availability of many items. Personal consumption, which is another measurement of spending, was flat in November when accounting for rising prices but real spending on services actually rose for the month. This is encouraging considering inflation is at its highest since the early 1980s. 

That’s the spending side. What about the income side? While income growth (at the lower end) had been outpacing inflation, that was not the case in November. Many expect inflation to peak in the first quarter of 2022, however that likely means that real disposable income may not keep up through the first half of the year. Despite a slowdown in the personal savings rate to 6.9% in December, many households still have excess savings accrued over the last two years that will help to cushion the blow of rising prices. Expect the growth in consumer spending to wane in 2022 as 2021 was one of the highest spending years in decades.

Barring some omicron headline blazing around the world, this week should be quiet. If you follow equities, the period between Christmas and the New Year typically sees about 30% lighter trading volume than normal and some gentle stock price gains amid window dressing moves from fund managers. The stock market has gained 1.7% on average in the final week of the trading year and first two days of the new year, but could be tested this year with Omicron headlines running up into the traditional “Santa Claus Rally.”

Taking a glimpse at bonds late last week, aside from a little chop on Thursday in the abbreviated session, it was quiet. Second string traders manned the desks. The bad inflation data should keep the Fed focused on gearing its monetary policy toward battling inflation as opposed to the slowdown effect of the Omicron variant.

Thursday’s retreat lifted the 10-yr yield back above its 200-day moving average (1.49 percent) while the 30-yr yield finished about a basis point below its 50-day moving average (1.92 percent). The 2s10s spread expanded by four basis points to 80 bps over the course of this week. The 5-year Treasury yield was +6 basis points for the week (despite 30-year mortgage-backed securities being called “30-year,” their actual maturities more closely match 5 or 10 years) and the 10-year yield was +9 basis points for the week.

For some good news, Freddie Mac reported a decline in mortgage rates for the week ending December 23 with the 30- and 15-year declining to their lowest levels since the week ending November 11 at 3.05% (-7bp) and 2.30% (-4bp), while the 5/1 ARM fell 8bp to a new survey low of 2.37%.

Zip for scheduled news today, and the bond market seems to trade off of COVID news rather than economic news anyway. The 10-year treasury note is unchanged from Thursday, yielding 1.49 percent, and Agency MBS prices are nearly unchanged from Thursday’s close as well.

Jobs

“The Oakleaf Group is expanding again! To support our continuing growth, we have an immediate opening for a Senior Business Development Executive with experience selling technical resources into large financial services organizations who will add value on client enterprise transformation projects. This role is 100% REMOTE however Eastern/Central time zones are preferred. (NOTE: We also have one GSE-specific BD/Sales role open for someone with senior-level GSE business development experience.) Preferred candidates should have 4-6 years of experience and a proven track record of achieving financial targets and delivering consultancy/professional services sales with an emphasis in financial services, risk management, real estate, or mortgage banking/financing. To learn more, visit the BD/Sales job description and apply if interested and qualified or email your resume to Kerri Cufaro, Senior Managing Director, Talent Acquisition.”

Matt Perez, a mortgage professional with almost 20-years’ experience in the industry, joins AmeriSave as Regional Vice President of the Retail Division. Perez, with his previous experience as a top producing regional manager, hands-on work style, and team leadership skills aspires to make a difference in the community. “I’m passionate about helping families obtain the American Dream through homeownership. I believe our origination system at AmeriSave is second to none,” expresses Perez. "We are honored to be able to continue to work with a person of Matt's talent. His steady leadership will serve us well in the abundant market that is the Pacific Southwest,” said Leif Boyd, Head of Retail Production. Founded in 2002, AmeriSave Mortgage Corporation is a leading mortgage lender best known for pioneering the first truly digital mortgage experience to borrowers. For more information, visit Amerisave. NMLS ID #1168. Equal Housing Lender. Corporate Office: 3525 Piedmont Rd NE, 8 Piedmont Center - Suite 600, Atlanta, GA 30305.

If we can land on the moon, couldn’t we lend on the moon? Maybe not, yet… But that’s how we think at Sprout Mortgage and if that catches your attention, we hope to hear from you!  Are you satisfied selling the same products over and over or are you seeking adventure and growth with a refreshing take on uncommonly good lending solutions? We’ve got over 30 unique loan products, to serve investors, self-employed, professionals jumbo loan seekers, foreign nationals, retirees and more. We’ve got superior technology, sensible underwriting, outstanding marketing, incredible services and plans to continue growing nationally. And most importantly, we’ve got a place to foster your talents, Loan Officers. You’ve got nothing to lose and only professional growth and earnings potential to gain! Want to hear more? Reach out to the friendliest recruiter on the block, Cheri Brousseau, at 888-505-7568. NMLS ID# 1844521. For complete licensing information, visit Sprout Licensing. Sprout Mortgage is an equal opportunity employer.

Understanding the challenges facing our nation’s brave active duty servicemembers is one of the ways Caliber Home Loans proudly serves the military community. That caring spirit extended to 50 military families at Barksdale Air Force Base in Shreveport, Louisiana this Christmas. See this incredible story of Caliber volunteers who, in partnership with everywarrior.org, made sure these kids had presents to open this holiday season. If you want to work for a company that proudly serves those who serve, email Jonathan Stanley for Operations positions or James Hecht for Sales positions.