Nov. 30, 2010: Mortgage jobs! HUD to impact warehouse lending; banks resisting buybacks; are underwriting overlays discriminatory?
Rob Chrisman

If one can borrow against their homes, why not borrow against their children? http://www.salon.com/entertainment/comics/this_modern_world/2010/11/02/this_modern_world

Everyone in the mortgage industry knows people who are out of work. The latest reports show that mortgage industry employment fell in the third quarter of the year, the first downturn in nearly a year. Total mortgage industry employment was estimated at 246,000, less than half the 535,400 government figures reported at the industry’s peak in October 2005. Here is the article: "http://www.mortgageloan.com/mortgage-industry-employment-declines-8142"
 
On the other hand, there are certainly signs of growth out there, and just not with the government or large banks. In Florida, for example, Home Financing Center is hiring – it has been around 26 years and is the largest independently owned and operated mortgage banker in South Florida. The company also services its own loans, and partners with Florida credit unions and community banks. The company is looking for licensed loan processors (a Florida mortgage broker’s license, 2 or more years of experience, and so forth) and loan underwriters (experienced with a good understanding of underwriting policies and procedures, as well as investor guidelines and regulatory updates including knowledge of FHA, FNMA & DU, and FMLMC & LP guidelines and standards, etc.). If you’re interested, contact Aldo Colli at aldo@benefitlife.com.

(Speaking of Florida, the SAFE deadline for existing licensees in Florida to successfully submit an MU4 filing and be in a “Pending – Review” status is December 31.)

HUD-FHA also has new career opportunities for qualified individuals, such as Supervisory Auditor. Its announcements are posted at www.usajobs.gov for jobs around the nation.
 
What if Freddie or Fannie wanted you to buy back a loan, and you didn’t? I guess we’ll see: http://www.bloomberg.com/news/2010-11-30/banks-in-u-s-resisting-calls-to-repurchase-fannie-mae-freddie-mac-loans.html
 
Should everyone be entitled to a home loan? Or maybe the question is, “Are investors allowed to have underwriting overlays?” According to a source at Buckey Sandler, attorneys for the financial industry, "the National Community Reinvestment Coalition (NCRC) sent letters to approximately 30 banks challenging their Federal Housing Administration (FHA) mortgage origination guidelines. The NCRC is alleging that banks with underwriting policies that include a FICO score cutoff above the minimum FICO score permitted by FHA guidelines are discriminating against African-American and Latino consumers who comprise a high percentage of FHA borrowers.  According to the NCRC, the FHA has issued guidelines that "require" FHA approved lenders to originate mortgages with loan-to-value ratios of 96.5 percent to qualified applicants with credit scores above 580.  Banks receiving the letter allegedly impose a higher FICO score minimum for FHA loans - some of which have a cutoff of 620.  The NCRC is claiming that this policy has the purpose and effect of discouraging the flow of credit into communities in which loan applicants are predominantly African-American and Latino in violation of the Equal Credit Opportunity Act and Regulation B. For more information, please contact infobytes@buckleysandler.com."

A reader wrote in about the 5% risk retention proposals. "Wells Fargo is are pushing to have any loan with an LTV that's greater than 70% to be considered not eligible for exclusion from the risk retention rule. The letter also suggested other provisions, including warranties on early payment defaults and a 5% vertical slice for risk retention that be held in trust. The company realizes that this would favor those with capital and ‘hose’ those without - Wells has capital." Here is a copy of the letter: http://www.robchrisman.com/references/Wells_Letter.pdf


Anyone servicing Fannie Mae loans who has had questions about problem drywall, policy, submitted 1099-A forms manually, or wondered about the delivery of repurchased loans, should check out Fannie's latest servicer bulletin: https://www.efanniemae.com/sf/guides/ssg/2010annlenltr.jsp https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/svc1017.pdf

A former Iowa mortgage banker has been charged in federal court with multiple fraud and conspiracy charge for allegedly defrauding banks and mortgage lenders. 56-year-old Winnifer Elvidge (they don’t make names like that any more) of LeClaire, Iowa, was arrested Monday and appeared in U.S. District Court in Davenport. (Davenport is where Cary Grant died from a stroke in 1986.) She has been indicted on three counts of mail fraud, four counts of bank fraud, 15 counts of wire fraud and one count of conspiracy in a scheme to defraud banks and mortgage lenders in 2005 and 2006 with the purchase of more than 20 properties in Davenport.
 
If a particular state temporarily stops foreclosures in order to complete all of the new legislative requirements, HUD will bear the cost of any delays in the foreclosure process when the Servicer had to comply with moratoriums that were beyond their control and they were not cited for non-compliance.  HUD announced that, “A 90 day extension to commence foreclosure is provided to those mortgagees where the initial legal action to commence foreclosure has been cancelled to comply with a new State legislation.” If you have questions, HUD will host an industry conference call tomorrow, 1:30 - 2:30 pm Central Time: call in #: 888-675-2535, Access Code: 4756986.
 
HUD also had some news regarding how duly licensed real estate brokers may participate as Listing or Selling brokers under FHA's Management and Marketing III (M&M III) program. All brokers may participate as selling brokers. To read this new Federal Register Notice in its entirety please visit: http://edocket.access.gpo.gov/2010/pdf/2010-29654.pdf

On top of that, HUD is considering issuing guidance under RESPA to address possible changes in warehouse lending and “other financing mechanisms used to fund federally related mortgage loans that have occurred since HUD issued regulations specifically related to this area in 1992 and 1994. In order to assist HUD in determining whether such guidance is needed and to formulate such guidance, HUD is seeking information on how funding mechanisms have evolved in recent years, and especially on how warehouse lending currently operates within residential real estate mortgage transactions.” http://edocket.access.gpo.gov/2010/pdf/2010-29663.pdf
 
MGIC came out with changes to its maximum DTI for primary residence purchases & refinances in all markets (“maximum DTI increases to 45% where: the credit score is 740 or greater and the loan is a fixed-rate product or a 5-year-or-greater ARM”), property flipping (“MGIC will now consider properties acquired by the seller fewer than 90 days before the purchase contract. A full-file MGIC underwrite is required if the seller acquired the property fewer than 180 days before the purchase contract date”), "Subject to Completion" appraisals, and construction-perm loans.
 
Wells Fargo’s wholesale group came out with a revised flood mortgagee clause for home equity “SIMO” transactions that brokers should use. Also, brokers were told “all loan files must contain a Verbal VOE dated within 10 business days prior to the note date for salaried borrowers and within 30 calendar days prior to note date for self-employed borrowers. The VVOE must be provided to Wells Fargo by an Enhanced broker and support the specified time frames above. The VVOE supplied by an Enhanced broker will be validated by Wells Fargo prior to authorization of funding.”
 
SunTrust came out with 10 new bulletins impacting its clients. They focus on “Revised Agency Product Description - Incorporation of Previously Published Updates and Additional Clarification”, “Upcoming Release of Fannie Mae's Desktop Underwriter (DU) Version 8.2, - Retirement of DU Version 8.0 and Eligibility Updates”, “DU Refi Plus’ Loan Program … Revision to the DU Refi Plus Opt Out OptionZ Requirements and a Reminder Regarding the Fidelity Snapshot”, “Revised Agency Affordable Lending Product Description - Removal of Lender Condition for Manual Confirmation of HUD Area Median Income Limits”, “SunTrust Credit Overlay Matrices”, “Update to the Compliance Overview Guidelines - Property Inspection Waiver, Property Inspection Alternative and Property Fieldwork Waiver Fees on the HUD-1 Settlement Statement”, “Update to Loan Delivery and Purchase Review - Incorporation of Previously Published Guidelines”, “Updates to the Agency Loan Program - Revised Cash Reserve, Rental Income and Short Sale Guidelines for LP Processed Loans”, “Revised SunTrust Ineligible Settlement Agent List”, and “Revised SunTrust Mortgage Approved Condominium Project List and Approved Attached PUD Project List”.
 
We ended a pretty uneventful day with MBS's better than Friday afternoon by .250-.375 in price. MBS volume was well below normal levels – did hedging get ahead of itself last week, or is production very, very low? Worries that Portugal and Spain will soon be next to need a rescue package following Ireland and Greece kept the flight to safety was/is in the news. The 10-year note closed up 11+/32s to yield 2.82%, helped by Federal Reserve bond purchases. Two weeks ago the yield on the 10-yr hit is recent high of 2.96%, and now we’re back into the middle of the recent range. Most believe that mortgage rates will chop around at these levels for some time.
 
As opposed to no data yesterday, today we have the S&P/Case-Shiller 20 city home price index (9AM EST), Chicago PMI (9:45 EST), and consumer confidence reports (10AM EST). (It continues to be hard for me to accept that minor numbers like this can move the markets much when we’re dealing with entire European countries receiving aid, and the US deficit climbing to record heights.) Ahead of those numbers we find the 10-yr down to 2.77% and mortgage prices better by .125-.250.
 
 
A little old lady was sitting on a park bench in The Villages, a Florida Adult community. A man walked over and sits down on the other end of the bench. After a few moments, the woman asks, “Are you a stranger here?”
He replies, “Kind of, but I lived here years ago.”
“So, where were you all these years?”
“In prison,” he replies.
“Why did they put you in prison?”
He looked at her, and very quietly said, “I killed my wife.”
“Oh!” said the woman. “So you're single…?!”