“Rob, in past decades, near the end of every credit cycle, lenders seem to head back down the credit score scale and seem to be more aggressive with underwriting guidelines. Are you seeing that out there?” Yup – same story, different year. There are investors out there hungry for more yield, so are willing to buy that product – which is fine. The issue becomes when risk and price are de-coupled, or LOs don’t realize that the two are linked. One thing that’s different this time ‘round is that some newer investors are working off models that weren’t “steeled” during the downturn, and therefore paint a rosier picture of risk, and servicing, than investors who suffered real losses.
Jobs & products
HomeFundMe by CMG Financial is making headlines nationwide. The first and only approved down payment crowdfunding platform allows home buyers to raise money for their down payment from friends, family, and anyone else who wants to contribute. The online platform makes it easy for users to get prequalified, build their campaign, and share on social media. HomeFundMe also functions as an alternative registry for weddings, baby showers, and other special events. The launch of the new Affinity Portal allows employers to add HomeFundMe to corporate benefits packages, with contribution and matching options just like a 401K or other retirement plan.
Focused on residential real estate entrepreneurs, with an obsession for customer service, Center Street Lending has built a reputation as a premier private money lender. Established as a portfolio lender in 2010, Center Street Lending has consistently and profitably grown year over year, with volume doubling in 2017. Headquartered in Irvine, California, Center Street Lending is expanding its team with open positions in sales management, sales, servicing management, underwriting and processing. If you are looking to join this national lending, growth-oriented company, contact them at firstname.lastname@example.org.
In advance of this spring’s funding activity, and as you evaluate your warehouse relationships and needs, whether that entails additional capital, reduction/reallocation of capital, or repricing of capital, you should consider BankUnited’s Warehouse Lending programs for competitive market rate terms (margins, advance rates, aging), expanding loan program eligibility, lines of up to $100 million, application to closing 60-90 days, and simple, straightforward, and efficient application and implementation processes. To learn more about what BankUnited Mortgage Warehouse Lending can do for you, call Paul Tirella, Business Development Manager (646-630-0295).
A fast-growing, mid-size mortgage lender located in Philadelphia suburbs seeks “a Controller for our dynamic company. The ideal candidate has 5 years’ experience in the mortgage industry, strong sense of self, managerial experience and can make solid financial decisions by enforcing policies and procedures. Job duties will include developing, managing and maintaining corporate and department budgets, protecting assets and managing cash flow while monitoring financial condition of the company by performing internal audits. Competitive compensation package, benefits and 401k included with an outstanding work environment.” If interested, send resume to me and specify the opportunity.
How easy is it for potential customers to find your business when searching online? If you’re not showing up in the top-three listings in Google’s Map Pack, the answer to that question is “not very easy.” Mortgage lending is a competitive business, so if you want to stand out in the crowd, you’ll need an online reputation that builds trust with consumers. Join Nick Miller and John Eyre of Podium and National Mortgage Professional Magazine for a FREE webinar on Thursday, March 8 at 2pm EST. Nick and John will walk you through best practices for improving your online reputation. Click here to register for free.
In its ongoing effort to provider broker and correspondent partners with programs and tools best suited to improve the service and product offerings for clients, AFR Wholesale is announcing its participation in a nationwide down payment assistance program, called The Advantage Program (TAP). Offered by an approved governmental entity, TAP is a nationwide down payment assistance program (not yet available in WA or HI), which brokers and correspondents may use with any FHA 203(b) program. Brokers receive their full lender paid compensation and there are no loan level price adjusters, may be used by a wide array of qualified borrowers, and is a completely forgivable grant (equals 2% of purchase price) and may be combined with up to a 6% seller concession for closing costs. There are no resale or borrower repayment restrictions. Borrowers do not need to apply separately, AFR will qualify them during underwriting. AFR Wholesale is also a proud supporter of BRAWL! For more information, contact your AFR representative, or visit The AFR Advantage Program.
We’re well into 2018, do you have a strategic growth and recruiting plan in place for your goals this year? Whether you’re an Owner, Executive Leader, Head of Production, Area/Regional Manager, Branch Manager or Business Development Pro, the Model Match Production Prospector will help you target the originators doing the type and amount of business that is best matched to your company. You customize the criteria for you ideal producers, we’ll find them and give you visibility into their previous years volume, trailing 12 months and most recent 90 days, as well as unit count, average loan, product mix, purchase percentage and all the details you need to make contact with them today. CLICK HERE to set up a time with a product specialist to learn more about Model Match and our Production Prospector. ” We help our clients grow their business organically through a strategic and structured recruiting plan.
NewDay USA, specializing in VA lending, has hired Garrison Foster as SVP to lead NewDay USA’s Purchase home loan division, which offers active-duty service members, veterans, and their families the ability to buy a home with their VA benefits.
Investor & lender conventional conforming changes
For conventional Conforming manually underwritten Loans, Wells Fargo Funding has expanded its policy on annuity income to allow income from all annuity sources. Also, Wells is eliminating its requirement for tax return transcripts when all income information used to decision a Guaranteed Rural Housing (GRH) Loan is made up exclusively of wage earner income reported on a W-2 and/or fixed income reported on a 1099, unless required by the AUS.
Starting 6/25/2018, UCD warning messages will become “fatal,” and Fannie Mae and Freddie Mac will require a PDF of the final CD to be embedded in loan files. AmeriHome will enforce requirements effective for loans delivered starting 3/1/2018.
Mountain West Financial Wholesale posted the following information regarding MI underwriting changes. Genworth, Essent Guaranty and MGIC have released documentation with new underwriting requirements for conforming loans with DTIs exceeding 45%. For loans with mortgage insurance that have not closed on or after March 1, 2018, any DTI exceeding 45% will require a 700 or greater FICO score. This change applies to loans with an Agency automated underwriting system (AUS) response. Radian will only require this on Single Premium MI coverage.
A while back MGIC adopted the new 2018 Agency conforming loan limits for loans with a valid DU Approve or Loan Product Advisor® Accept response. For all other loans, it will increase certain maximum loan amounts, effective with MI applications received on or after Dec. 27, 2017: In all states (except Alaska and Hawaii) where the maximum is currently $450,000, it’ll be $475,000. In Alaska and Hawaii, where the maximum is $650,000, it’ll be $700,000.
Effective as of February 22nd, Conforming Loans with a DTI greater than 45% with a credit score <700 are no longer eligible for MI (Mortgage Insurance) through Weslend Financial regardless of the AUS decision.
As of February 28th, M&T’s Co-op Project Review Questionnaire will be updated and required for use on all Cooperative project submissions. M&T has removes all overlays to Fannie guides. Note that M&T has a variance with Fannie that permits CLTV/HCLTVs up to 90%. These loans will receive an Approve/Ineligible response from DU. This is acceptable if the presence of subordinate financing is the sole reason for the ineligible response. Use of the variance requires review and approval from M&T.
In alignment with Freddie Mac and FHFA, Fannie Mae is replacing the current Imminent Default Indicator model with a rules-based evaluation of borrowers for imminent default for conventional mortgage loan modifications. The new Imminent Default Evaluation FAQs provide additional details on the new evaluation rules. Servicers may begin using the new Imminent Default Evaluation, available now in Servicing Management Default Underwriter™ (SMDU™), and must implement no later than July 1.
The Freddie Mac Single-Family Seller/Servicer Guide (Guide) Bulletin 2018-3, features important updates on the following topics: Mortgages in eligible disaster areas impacted by recent disasters, cash payups for mortgages with low loan balances, Condominium unit mortgages, and guide form 442.
If you haven’t seen the 16 major updates to Fannie Mae’s HomeStyle Renovation Program, you can read about it on the Land Gorilla blog.
Last week was in interesting week for economic data as survey data remained strong while US factory sector data has cooled. In sum, durable goods orders reported a 3.7 percent decline, primarily due to a pullback in non-defense aircraft orders, although the ex-transportation reading dipped 0.3 percent, capital goods also reported weakness, with core orders down 0.2 percent in January. (This comes on the heels of a 0.6 percent decline in December’s core orders.)
But survey data however, told a different story. The ISM manufacturing index reached its highest since 2004, affirming continued business confidence. Consumer confidence also touched a high not seen since late 2000, with the Conference Board’s Consumer Confidence Index climbing to 130.8 in February. This, combined with a report from the Department of Commerce showing disposable income growth because of the tax cuts, should bode well for consumption growth as the year continues.
Home sale data released last week failed to meet market expectations, with new home sales falling 7.8 percent versus an expected 3.5 percent gain. January’s weakness, however, was offset somewhat by upward revisions to previous months. The Pending Home Sales Index echoed the New Home Sales Index, declining by 4.7 percent in January. Once again, a tight supply of existing homes, rising prices and increasing mortgage rates could be keeping some buyers on the sidelines.
Republican lawmakers are reportedly looking at ways to prevent President Trump from imposing tariffs on steel and aluminum imports, which he seems focused on delivering unless NAFTA renegotiations progress to his liking. This caused the Fannie Mae 30-year MBS basis (the difference between agency MBS prices and Treasury securities) to widen versus both treasuries and swaps, following the overnight risk off trade that was further aided by the Italian election results. Italy’s general election resulted in populist parties receiving 60% of the vote, a significant rebuke of the European Union’s immigration policy.
The only news was that the ISM Non-Manufacturing Index slipped to 59.5 in February – but remember that last month’s reading was the highest level for the index since August 2005. On the “demand for MBS” side of the equation, the Fed purchased just $325mn 15-year conventional 3% and 3.5%. (Today will see greater purchase volumes that will include the purchase of 30-year 4.5% for the first time since January 2014.) On the “supply of MBS” side of things, February agency prepayments will also be released after the close today, where speeds are expected to slow for the fourth straight month.
But this morning, we already have RBA out with their latest monetary policy decision. The Redbook Same-Store Sales Index will be released shortly, as will January factory orders. Rates are a tad higher than last night’s close with the 10-year T-note yielding 2.90% and agency MBS prices worse a few ticks.
(Thanks to John R. for this one.)
A rookie police officer pulled a biker over for speeding and had the following exchange:
• Officer: May I see your driver’s license?
• Biker: I don’t have one. I had it suspended when I got my 5th DUI.
• Officer: May I see the owner’s card for this vehicle?
• Biker: It’s not my bike. I stole it.
• Officer: The motorcycle is stolen?
• Biker: That’s right. But come to think of it, I think I saw the owner’s card in the tool bag when I was putting my gun in there.
Officer: There’s a gun in the tool bag?
• Biker: Yes sir. That’s where I put it after I shot and killed the dude who owns this bike and stuffed his dope in the saddle bags.
• Officer: There’s drugs in the saddle bags too?!?!?
• Biker: Yes, sir. Hearing this, the rookie immediately called his captain. The biker was quickly surrounded by police, and the captain approached the biker to handle the tense situation:
• Captain: Sir, can I see your license?
• Biker: Sure. Here it is. It was valid.
• Captain: Who’s motorcycle is this?
• Biker: It’s mine, officer. Here’s the registration.
• Captain: Could you slowly open your tool bag, so I can see if there’s a gun in it?
• Biker: Yes, sir, but there’s no gun in it. Sure enough, there was nothing in the tool bag.
• Captain: Would you mind opening your saddle bags? I was told you said there’s drugs in them.
• Biker: No problem. The saddle bags were opened; no drugs.
• Captain: I don’t understand it. The officer who stopped you said you told him you didn’t have a license, stole this motorcycle, had a gun in the tool bag, and that there were drugs in the saddle bags.
• Biker: Yeah, I’ll bet he told you I was speeding, too.
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, “Servicing: All It’s Cracked Up to Be?” 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.)