Production folks should know that Senators announced the introduction of S. 1753, the SAFE Transitional Licensing Act, which would amend the SAFE Mortgage Licensing Act of 2008 to provide a temporary license for loan originators transitioning between federally-insured depositories and non-depositories, as well as across state lines. The MBA and others are encouraging folks to write to your congressional leaders to quickly advance this important proposal through the Senate Banking Committee and to the Senate floor. “You can help NOW by taking action and contacting your Senator to encourage him or her to cosponsor S. 1753!”
New products, personnel, new bank, and jobs
Deephaven Mortgage LLC, the leading Non-QM correspondent investor, is excited to announce the hiring of Mike Brenning to the Executive Management Team as Chief Production Officer overseeing the company’s sales efforts. Mike brings 20 years of mortgage sales experience and has held key sales leadership roles at Quicken, HSBC, and RFC. Deephaven has purchased over $1.25 billion of Non-QM loans and is the leading issuer of Non-QM securitizations in 2017 with two rated deals totaling $471mm completed in the second quarter. Deephaven is seeing record monthly volume growth driven by its 100+ approved correspondents, and its innovative and flexible Non-QM products continue to attract more correspondents focused on diversifying their product set and growing their purchase business.
Brokers should know that Royal Pacific Funding implemented the recent Fannie Mae changes as of July 29. DTI Ratios: DU will no longer require additional compensating factors for DTI >45% and ≤50% allowing more borrowers to qualify. Self Employed: With the new DU update, more borrowers may be eligible for the one year personal and business tax return documentation. Maximum LTV/CLTV for ARM mortgages will be aligned with Fixed rate for all transactions, occupancy and property types up to a maximum of 95%.
In retail job news, “A solid regional lender with full product line has an opportunity for producing Branch Managers and Loan Officers to take advantage of established Realtor relationships. This is a perfect opportunity for anyone who has their own book of business, but would like to supplement that business with additional purchase volume from company established relationships. These opportunities are available in the Greenbelt, Maryland and Northern Virginia areas.” To start a discussion, please send your confidential resume to me.
What is the difference between a traditional Loan Officer and a Specialist? Probably a lot of money. When you excel at one specialty, people remember you, and you make more money. Because everyone knows that you are the specialist. That’s why Specializing in Reverse Mortgages is a great life. The Reverse Mortgage Specialists at RFS have that great life. No more waking up in the morning wondering where to go network or if there are already a bunch of MLOs already in that networking group. Because the Reverse Mortgage Specialist is rare and valued. If you are ready to make the transition in your business and start introducing your book of business to the next stage of mortgages for your aging client base, talk to us. RFS a premier Reverse Mortgage Bank with unparalleled training and support. RFS is all about building your brand and your business, not the other way around. We truly want you to make a lot of money. Unusual? Yes it is…. Call us and find out: 858-355-7398
DataVerify®, an Authorized Report Supplier of eligible verification reports for Day 1 Certainty from Fannie Mae, is pleased to announce that it now offers an automated process that populates required data elements for submission of 4506-T IRS tax transcript information to the Fannie Mae Day 1 Certainty™ data validation service through the Ellie Mae’s Encompass® all-in-one mortgage management solution and Total Quality Loan® (TQL®) program. This enhancement allows lenders to improve efficiency in the loan process while reducing errors from having to re key information into additional data fields. Their 4506-T IRS Tax Transcript Verification features the convenience of e-signature backed by the power of DataVerify’s revolutionary platform. The platform evolves dynamically through the origination process, providing lenders comprehensive data aggregation with user simplicity. The result is a highly efficient workflow with consistent results. And contact DataVerify with questions.
Listen to the latest episode of “Inside the Mind a Top Producer” from XINNIX. In this interview, XINNIX CEO Casey Cunningham speaks with Lori Richardson, Vice President of Cornerstone Lending. In Lori’s incredible 26-year career, she has become a top-performing industry leader and coach in creating scalable systems. She shares the 3 most important factors of her success as well as the one critical discipline that mortgage professionals must master. Click here to listen!
Casey Crawford, CEO of industry-leader Movement Mortgage, announced today the launch of Movement Bank, a community bank focused on loving and serving people. Earlier this year, Crawford, a Super Bowl champ from the 2002 Tampa Bay Buccaneers, became the majority shareholder of First State Bank in Danville, VA, and is leading its rebranding efforts to Movement Bank. “Movement Bank will make banking an enjoyable and empowering experience at a time when many banks have done just the opposite,” Crawford says. “Too many banks profit from cycles of dangerous debt that are destructive to the very people they’re supposed to be helping.” Movement Bank will help people become financially healthy, focusing on a simple, efficient customer experience and a product suite establishing healthy financial habits and reaching financial goals. Movement Bank will be owned and operated independently of Movement Mortgage. Crawford will serve on Movement Bank’s board, but the day-to-day operations will be executed by the bank’s management team and staff.
The ABSOLUTE Home Mortgage Corp, has named Matthew D Van Fossen as Chief Executive Officer and restructured its Executive Management Team with industry veterans from within. ABSOLUTE is a direct mortgage lender offering lending services in 10 states, employing more than 200 loan officers and support staff. “In his new role as CEO, Van Fossen, age 31, draws on a demonstrated acumen in centralized management and a talent for bringing creativity and technology solutions to the mortgage lending process.”
Aaron Samples, EVP and MSR Director of Stearns Lending LLC since 2013, has resigned from the company. During his time at Stearns, the company has grown to one of the largest independent mortgage originators in the market today. And one of the most prolific participants in the MSR markets under his management. It will be exciting to see where this industry veteran lands next.
Keeping with its theme of Z’s in names, Zelman & Associates announced the promotions of Kevin Kaczmarek and Mackenzie Aron to “broaden the firm’s research capabilities, expand our data platform and invest further into our differentiated mortgage finance franchise. Kevin is being promoted to Head of Data & Analytics, a new group that will focus intensively on data-oriented research and products. Mackenzie is being promoted to Vice President of Mortgage Finance Research, which includes heading the firm’s thematic mortgage work and her continued coverage of the mortgage insurers in addition to absorbing the title insurance stocks and leading any future equity coverage in broader mortgage finance.
Adjustable rate mortgage news
Globally speaking, Federal Reserve Governor Jerome Powell and Commodity Futures Trading Commission Chairman J. Christopher Giancarlo have written in support of Andrew Bailey, head of the UK Financial Conduct Authority, who has called for an alternative benchmark to replace the largely discredited London Interbank Offered Rate. Powell and Giancarlo propose the adoption of a rate derived from short-term loans, backed by Treasury securities as collateral, which would have the advantage of being based on real-time market transactions.
Here in this country, for mortgagors, what will happen to adjustable rate mortgages tied to Libor when it goes away? We have four years to figure it out, but many ARMs are pegged to Libor. What comes next is anyone’s guess. But we have four years to figure it out. Keep in mind that U.K. bankers are phasing Libor out is because of rampant allegations of manipulating the index. Most ARM contracts specify that if the underlying index is no longer available, the lender or investor will pick a new comparable index, possibly created by the FHFA (overseer of Freddie and Fannie) or the U.S. Treasury.
And ARMs still account for a hefty share of outstanding U.S. mortgages. Roughly $1.33 trillion of mortgages outstanding are ARMs, according to Black Knight Financial Services Inc. That’s almost 14% of the overall market.
ARMs drove a slight change (improvement or worsening, depending on your perspective) in underwriting Standards per the MBA. While adjustable rate mortgages (ARMs) make up only a fraction of mortgage originations (just over 6 percent in the most recent Mortgage Bankers Association’s (MBA’s) volume summary), changes to some of their underwriting parameters were reflected in mortgage access numbers.
NYCB Mortgage Banking table funding clients, effective for loans with an Initial AU Submission Date on or after 07.30.17: The maximum allowable LTV, CLTV, and HCLTV ratios for conforming standard adjustable-rate mortgages will be aligned with the fixed-rate mortgage LTV ratios for all transactions, occupancy and property types submitted to Gemstone AU, with a maximum LTV ratio of 95%. See Conforming Standard ARM (5/1, 7/1 & 10/1) for details.
PennyMac has posted changes to the cash-out LLPA for student loan refinances as well as information regarding ARM LTV increases.
Fannie Mae is changing the committing and delivering process for whole loan ARMs, effective Sept. 11, 2017: commit using the gross mortgage margin on the security instrument instead of the required net margin. To take advantage of the ARM market opportunity, view the updated Standard ARM Plan Matrix and ARM guidelines, and check out its online course, Overview of the Adjustable-Rate Mortgage. The course covers types of ARMs, major indices, how to qualify borrowers, and scenarios for real-world application.
In the secondary market, “Interest in ARMs is on the rise again and Incenter is out with a new offering for mortgage originators ramping up their agency ARM efforts. The Best Efforts ARM Program allows originators forming new agency loan pools to get a live MBS market price for a forward commitment on a loan-by-loan basis. If a loan falls out, the forward sale is cancelled without penalty – a feature that offers ARM originators flexibility and access to superior ARM MBS pricing levels. For more information about the Best Efforts ARM Program, contact Peter Harrison.”
Freddie Mac will implement new or revised disclosures for single-family fixed-rate and adjustable-rate mortgage-backed securities (MBS). The disclosures are being implemented relating to the Single Security Initiative, which is designed to increase liquidity and fungibility in the $3.5 trillion to-be-announced (TBA) MBS market. The disclosures are a key step toward the launch of the uniform mortgage-backed security (UMBS), which is expected to occur in the second quarter of 2019. Beginning on Aug. 28, 2017, Freddie Mac will release updated disclosures providing standardized loan-level and pool-level data for its mortgage participation certificates (PCs).
The Fed is nothing if not more transparent than it was 5-10 years ago. Fed San Francisco President Williams said he supports the Fed moving to cut their $4.5T portfolio starting in Sep. He also indicated he is comfortable with 1 more rate hike this year and 3 next year. Williams also indicated he thinks it will take about 4 years to completely unwind the balance sheet.
Looking at the bond markets, agency mortgage-backed securities (MBS) opened the week higher in price and tighter on spread – a good thing for LOs. But the 10-year sat in a small range all day – the lack of volatility is a good thing for capital markets folks – the 10-year note closed 3 ticks higher to yield 2.26% and agency MBS improved a couple ticks.
Today Tuesday sees the beginning of the quarterly refunding with $24 billion in 3-year notes scheduled for auction at 1PM ET. Prior to that, however, markets will have some second-tier releases to digest starting with July NFIB Small Business Optimism (+1.6% in July), weekly chain store sales from Redbook, and the JOLTS job openings figure. We begin Tuesday with rates unchanged versus Monday night: the 10-year is yielding 2.26% and agency MBS prices are the same.
After 10 years, the wife starts to think their kid looks kinda strange so she decides to do a DNA test. She finds out that the kid is actually from completely different parents!
Wife: “Honey, I have something very serious to tell you.”
Husband: “What’s up?”
Wife: “According to DNA test results, Liam is not our child.”
Husband: “Well, you don’t remember, do you? When we were leaving the hospital, we noticed that our baby had a dirty diaper. Then you said, ‘Please go change the baby, I’ll wait for you here.’ So, I went inside, got a clean one, and left the dirty one there.”
(Moral: Never give a man a job that doesn’t belong to him.)
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Does Everyone Want a Job?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2017 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
- Dec. 31: Rates, the Fed, world economies, affordability, and the shutdown – all tied together - December 31, 2018
- Dec. 29: FEMA reverses flood ruling; cybersecurity notes; observations on general housing trends - December 29, 2018
- Dec. 28: Doc automation product; FHA & VA changes around our biz; Agency deals continue to share risk - December 28, 2018