The interest rate environment is like the weather: we all talk about it, but no one can do anything about it. Lenders have certainly noticed that since Christmas the 2-year Treasury note yield has increased about .5% while the 10-year Treasury note yield has increased only .25%. There is increasing chatter that near-term Fed action (impacting the 2-year note yield) will slow the economy in the longer term, impacting the 10-year note yield, and thus mortgage rates. I even heard someone say something like, “We may have seen the highs of the year for mortgage rates!” Plenty of bankers hope so. Speaking of banks, Citigroup said job automation suggests it could eliminate almost 50% of its 20k technology and ops staff over the next 5 years. Yowza.
“How many more residential loans could you close with better back office support? You work too hard to experience the same chokepoints repeatedly. Assurance Financial offers you a full-scale team of experts who have spent the last 17 years with only one objective: to help you close loans on time, every time. If you even THINK you may be losing money in your current situation due to poor support, call Paul Peters, CMB (225.239.7948). Assurance Financial is a growing private residential mortgage banker with offices throughout the South, East Coast, and Midwest US, and we may be the answer you’ve been looking for. Watch this 2-minute video now.”
Stearns Wholesale welcomes Evelyn Fabelo as VP of Wholesale Operations, reporting directly to Teresa Reber, EVP of Wholesale Fulfillment. Evelyn will be working closely with Henry Novak, VP of Operations, to create operational efficiencies across all channels, and comes to Stearns with vast experience in multiple channels, system roll outs, process improvements, and managing production. Ms. Reber, EVP of Wholesale Fulfillment, says “Evelyn’s strategic vision coupled with strong multi-channel background will be instrumental in leading Stearns Wholesale to the next level in operational excellence.” Stearns Wholesale continues to make strategic advancements through leadership and technology. Reach out to Jesse Vazquez, Talent Acquisition Manager, to learn more about joining Stearns’ team!
Congrats to Bryson Bede whom lender Ethos Lending has promoted to VP of Wholesale Business Development. “Bryson will oversee building the outside sales team at Ethos Lending, and always has had a record of success throughout his career. It will be interesting where this company goes with him driving the ship.”
One of the biggest benefits of modern digital mortgage platforms for lending organizations is their ability to easily keep the borrower updated on process and status changes, without heavy lifting from the loan officer or assistant. A recent stat from the STRATMOR group stated that if you do this poorly, you could lower your borrower satisfaction by over 33%! Digital mortgage leaders like Maxwell are helping lending teams keep their borrowers up to date throughout the entire loan process in an intuitive manner via automated, fully customizable messages for milestones and task statuses. Finding the right technology can not only drive internal efficiency but also improve borrower satisfaction. If a digital mortgage platform isn’t on your roadmap for 2018, it needs to be! Learn More About Maxwell Here.
Media Center CRM has a new name: Usherpa! “Just as Usherpa’s exceptional marketing and CRM platform has evolved over time, the name change reflects the business’s growth and commitment to remaining flexible to best serve its members. Read the press release to learn more about what it means for Media Center to become Usherpa.”
One of the biggest opportunities and challenges lenders face is co-marketing. When done right, co-marketing is one of the most effective ways to drive growth as it empowers your loan officers to offer tremendous, mutually beneficial value to their referral partners and show why they should continue – or start – doing business with them. But, in the world of mortgage lending, there’s always a question about compliance, even if regulation has eased in recent years. Read the Total Expert blog, Creating a World Where Co-Marketing and Compliance Co-Exist to learn how your organization can fully leverage co-marketing opportunities.
Today we use our mobile phones for travel directions, grocery shopping and making reservations at nearby restaurants. It’s big data driving speed, accuracy and convenience. Resitrader is taking a page from the mobile phone industry by centralizing big data to make secondary market trading as convenient as possible. From one platform, buyers receive multiple loan offers from sellers simultaneously, and both buyers and sellers can view and negotiate pricing in real time. Entire loan transactions that once took hours now take place in minutes—with fewer errors. Someday, loan trades may even be made by phone. Who knows? Stay tuned…
Life in financial services
It’s not easy to be an Independent Lender. In the new issue of STRATMOR’s Insights report, STRATMOR Senior Partners Jeff Babcock and Garth Graham pick up a discussion I started in recent Blog post on STRATMOR’s website. In their new article, “Plight of the Independent Lender,” Babcock and Graham investigate the challenges facing Independents. They use the recent history and projected trajectory of mortgage origination volume and the purchase/refi mix for the industry as the context for their analysis. Then, they identify possible strategies by which Independents might mitigate these challenges, including the options of selling to or joint-venturing-with another lender. Graham says: “Any strategic investment, whether a sale or a joint venture is almost about timing. And, for Independents, the time to consider the options or to make moves to improve their performance is before they become yet another distressed seller in a consolidating market.” A very timely article in STRATMOR’s June Insights report.
Unison Home Ownership Investors, the leading provider of home ownership investments, today announced its Series B raise of $40 million led by F-Prime Capital, joined by Citi Ventures and Royal Bank of Canada. “The investment underscores the growing consumer demand for alternative home financing solutions, as well as Unison’s success in modernizing residential real estate for consumers and institutional investors. Unison has two programs: HomeBuyer increases housing affordability and purchasing power for prospective home buyers by doubling to quadrupling their down payment, and HomeOwner allows existing home owners to easily unlock a portion of their home equity without borrowing. Both programs enable consumers to use the money provided by Unison for up to 30 years without interest or monthly payments.”
VA, FHA, HUD, USDA, and Ginnie news in the primary and secondary markets
The Mortgage Bankers Association alerted the industry that, “We continue to receive numerous inquiries regarding the new requirements for VA refinances that have come from the recent financial regulatory relief legislation. MBA has put together a summary of the issue. In short, there are differing VA and Ginnie Mae requirements on VA refinances, which themselves now differ from the requirements on FHA and other government housing program refinances. And while many lenders continue to hold VA-guaranteed loans that are now no longer eligible for Ginnie Mae pooling, a secondary market is developing for these loans.”
Meanwhile, Ginnie sent out a new paper outlining the Ginnie Mae vision for the next few years. Residential lenders often poke fun at the government, and usually for good reason. FHA’s IT system, it seems, is still using Cobalt as a programming language and is tied in to HUD’s system. Fortunately, Ginnie’s is not so bad, but if you skim its publication you will see a move toward IT modernization – a welcome sight. You will also find talk of risk shifting, requiring servicers to have more capital, etc.
The Department of Housing and Urban Development (“HUD”) published an advance notice of proposed rulemaking seeking comment on proposed changes to HUD’s 2013 regulations concerning the Fair Housing Act’s “Disparate Impact Rule” (the “Rule”). The changes are primarily intended to ensure the Rule is consistent with the U.S. Supreme Court’s 2015 decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. The proposed rulemaking is also driven in part by the Department of the Treasury’s recommendation in 2017 for HUD to reconsider application of the Rule as it relates to the insurance industry.
FHA is transitioning its FHA Frequently Asked Questions website to a new platform. As a result, users may experience some changes in functionality. The FHA Resource Center has posted new advanced search tips to help users better navigate the new platform.
The new USDA ineligible areas maps are available on USDA’s Eligibility website.
Ginnie Mae has added “New Combined Multifamily Pool and Loan Disclosure File Layout.”
Ginnie Mae’s June 22, 2018 Notes & News outlines an overview of its key metrics and scoring enhancements for its Issuer Operational Performance Profile, and has added “Ginnie Mae enhances Issuer performance management tool with prepayment feature.”
Ginnie’s doing well and has added “Ginnie Mae MBS Outstanding Increases to $1.960 trillion.”
Wells Fargo Funding is expanding its loan age requirements for fixed-rate FHA, VA and Guaranteed Rural Housing (GRH) Loans. Wells will no longer reduce the Service Release Premium (SRP) for FHA and VA Loans greater than 10-months old. A recertification of value is no longer required for GRH Loans purchased more than 90 days after Closing. The maximum Loan age for GRH Loans has increased from 10 to 20 months.
Wells’ correspondent updated its SRP schedules with a standardized format. Government FHA and VA SRP schedules will no longer include Ginnie Mae (GNMA) I which will reduce the number of products on the government SRP schedule. Effective July 2 the following products will be removed from SRP schedules: GNMA I, FHA/GRH 20- 25- 30-year products, GNMA I VA 20- 25- 30-year products, GNMA I FHA 15-year product, GNMA I VA 15-year product.
Last month we saw the Economic Growth, Regulatory Relief, and Consumer Protection Act. In response, the U.S Department of Veteran’s Affairs (VA) issued Circular 26-18-13 and Ginnie Mae issued APM 18-04. Wells Fargo Funding is aligning with these changes. Clients are to follow the more restrictive of VA and Ginnie Mae policies. The Wells Fargo Funding Seller Guide will be updated to reflect these changes.
Mortgage Solutions Financial made changes to its Government Loan Level Price Adjustments.
Plaza has added to its USDA Guaranteed Rural Housing program guidelines that Oregon is now an eligible property state under the Manufactured Housing Pilot program.
ResMac is now offering ResExpress for FHA loans for FHA files meeting the applicable criteria.
The PennyMac Correspondent Group has posted a new announcement regarding aligning with the VA Circular 26-18-13.
Ditech announced the availability to originate and close USDA Section 502 Guaranteed Rural Housing Loans under a non-delegated partnership.
Ditech posted information regarding the seasoning requirements of the mortgage being refinanced for VA transactions based no Ginnie Mae’s updates. The seasoning requirements are based on two timeframe metrics that are described below. Ditech will require supporting documentation prior to purchase, such as online mortgage account transaction history, servicer-generated pay histories, front and back of cancelled checks, and credit reports evidencing that these timeframe standards have been met. For all VA refinance transactions (IRRRL and non-IRRRL) Ditech will require the following for loans purchased on or after June 5. When refinancing any loan to a new VA loan, the new note date must be on or after the later of:
the date that is 210 days after the date on which the first monthly payment was made on the mortgage being refinanced, and the date on which 6 full monthly payments have been made on the mortgage being refinanced. Clients will need to document when the first and sixth payments of these timeframes were made to ensure compliance with these requirements.
Of note is the 2-year/10-year spread falling to 34 bps, the lowest level since 2007. Remember that the NY Fed continues to buy 30-year paper, artificially increasing demand and keeping long-term rates low.
The 10-year closed down 2bps to 2.88% as the last week of the month and quarter kicked off with some increased volatility due to trade rhetoric from the Trump administration. China’s President Xi Jinping told a group of CEOs of multinational companies that China will fight back against escalating trade rhetoric from President Trump. Treasury Secretary Steven Mnuchin tweeted that planned restrictions on foreign investment in U.S. technology will target all countries that are trying to steal U.S. technology, and will not be exclusive to China. In the U.S., new home sales increased 6.7% MoM in May to a seasonally adjusted annual rate of 689k, beating expectations of 666k from a downwardly revised 646k in April. There was no growth in new home sales outside the South region, the largest region for new home sales as there is a concentration of lower-priced housing markets. This helps explain the YoY drop in median and average selling prices.
But it is a new day and we’ve had the Philadelphia Fed nonmanufacturing survey (39.1 vs. 45.3 prior). Next up is the Redbook Same-Store Sales Index and the S&P/Case-Shiller Home Price Index for April. June consumer confidence is expected to decline slightly, and we’ll see the Richmond Fed Manufacturing and Services Surveys for June. We also have some Fed speak with Atlanta’s Bostic and Dallas’ Kaplan. Tuesday starts with the 10-year yielding 2.87% and agency MBS prices little changed versus last night’s close.
I overheard two gals on the train. One pulled out a photo of her husband, and said, “He’s a hunk, isn’t he?”
Her acquaintance said, “If you think he’s gorgeous, you should see my boyfriend!”
She asked, “Why? Is he a stunner?”
The acquaintance said, “No, he’s an optician!”
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, “The Plight of the Small Independent Lender.” 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 2018 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.)
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