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May 9, 2011: Mortgage jobs; 100% loans for NASA? HUD & Fannie reducing paperwork? Signs of life in commercial & multifamily; lots of investor updates
Rob Chrisman
Today
the village of Plato, Mo., (population 109) will celebrate its
selection as the “2010 Census Center of Population” at 1PM CST
with a little party. “The mean center of population is the point
at which an imaginary, flat, weightless and rigid map of the
United States would balance perfectly if all 308.7 million
residents are counted where they live and all weigh exactly the
same.” (Pass the Twinkies so that I can shift it west.)
Don't do the crime if
you can't do the time. Former mortgage broker Michael Pahutski
was sentenced in federal court Friday to 19 years in prison. It
is not a funny topic, although in this fellow's mug
shot it looks like he just remembered certain prison-movie
scenes. http://www.charlotteobserver.com/2011/05/07/2278821/mortgage-fraud-term-is-19-years.html
The largest banks, which are also pretty much the same as the
largest servicers, are sitting on huge amounts cash. There are
various reasons for sitting on cash, but one of them is, “Citing
potential fines and penalties related to its mortgage practices,
Wells Fargo raised its reserves for legal expenses
by 42 percent to a maximum of $1.7 billion, according to a
filing with the SEC. http://www.startribune.com/business/121396454.html
These larger
investors have also been either laying off or shifting employees
into servicing roles to handle legacy loan issues. But there are
companies that are indeed expanding, especially in the retail
sector. As an example, National Residential
Mortgage (NatRes) is looking for retail LO's from Illinois
down to Texas and west to the shores of the Pacific Ocean.
NatRes is a part of Heartland Financial USA Company, a publicly
held company with $4 billion (yes, with a "b") in assets which
owns ten banks and has a successful retail mortgage platform
that’s in the midst of a major expansion. NatRes' LO's are able
to lend in all 50 states with no licensing requirements. The
company offers the standard agency products - but with a twist.
It will soon be a GNMA issuer, which is interesting, and also
offers a jumbo product through a Wall Street conduit. If you're
interest or know someone who is, contact Richard Pierce at rpierce@natresdirect.com.
It is not often that lenders have the potential of less
paperwork. Small lenders noted that HUD recently
waived the requirement that they submit annual audited
financial statements to HUD. The requirement states that
supervised lenders seeking FHA lender approval or renewal must
electronically submit audited financial statements to FHA within
90 days of their fiscal year end. The waiver which goes through
next April and which NCSHA sought in comments to HUD, suspends
the requirement for a calendar year only for supervised lenders
that possess less than $500 million in assets. Supervised
lenders that qualify for this waiver must complete all other
approval and renewal requirements, including submitting the
online certification and paying the renewal fee. In addition,
the waiver does not apply to the requirement that supervised
lenders submit an independent auditor’s opinion of internal
control and compliance with HUD programs. http://www.ncsha.org/blog/fha-waives-audit-requirement-small-lenders
Fannie Mae also announced that effective June 1
servicers are no longer required to submit Form 571
requesting payment of incentive fees for eligible
pre-foreclosure sales and deeds-in-lieu of foreclosures closed
in HSSN. Instead, servicers will receive payment of approved
incentive fees once per month during the month following the
pre-foreclosure sale or deed-in-lieu of foreclosure. Fannie Mae
also announced that it is modifying the Servicing Guide to
account for an extension of the expiration of stay of
foreclosure proceedings and other legal proceedings pursuant to
the Helping Heroes Keep Their Homes Act of 2010. Until December
31, 2012, foreclosure and other legal proceedings on eligible
mortgage loans must be stayed for nine months following the
termination of a service member's active duty. Here is the
announcement: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2011/svc1105.pdf.
Fannie Mae also announced that it will seek $8.5 billion in
Treasury Department aid to balance its books after reporting a $6.5 billion loss in the first quarter. Fannie
Mae is requesting the money to eliminate a net worth deficit of
$8.4 billion for the three-month period that ended March 31. The
first-quarter loss was partly attributable to a $2.2 billion
dividend payment to the Treasury, along with credit losses and
expenses for bad loans totaling $11 billion.
My Mom always told me that I should be an astronaut. NASA
Federal offers 100% LTV mortgage with no private mortgage
insurance. Don’t believe it? Here you go: http://www.bradenton.com/2011/05/06/3174598/nasa-federal-offers-100-loan-to.html.
If one's town had 1 foreclosure in 2009 and then 2 foreclosures
in 2010, statistically foreclosures were up 100% (doubled).
Increases in commercial and multifamily loan originations is a
fine thing, but keep in mind where the numbers were a year ago.
http://www.mbaa.org/NewsandMedia/PressCenter/76527.htm
As announced in 2008, Mark Oman is talking retirement. If anyone
is interested: http://finance.yahoo.com/news/Wells-Fargo-Senior-EVP-Oman-bw-326981259.html?x0&.v1
Fifth Third, echoing the FEMA website mentioned
in the commentary last week, noted Disaster Areas in over 60
counties in five states: Alabama, Tennessee, Arkansas,
Mississippi, and Georgia.
Flagstar (#10 lender in the
4th quarter with a 1.7% market share) recently told brokers that
Florida properties are exempt indefinitely if the NMLS
application was submitted prior to 12/31/10. (Proof of NMLS
status and date is required to be provided with each file when
submitted to underwriting.) The investor also reminded brokers
of its pre-funding QC review process implemented last July. “On
a daily basis, Flagstar Bank randomly selects loans that have
reached a Final Approval Clear to Close status and will review
these loans.” Flagstar Bank is making several updates and
pricing adjustments to the Guaranteed Rural Housing program, LO
comp-related policy & system enhancements, Calyx-related
changes since it has released its latest update to Point,
Loantrac changes regarding submitting a TBD loan to underwriting
where a GFE and TIL were not disclosed to the borrower, etc.
Flagstar continues “to require FHA Sponsored Originators (TPOs)
and FHA Authorized Agent correspondents who are not approved for
appraiser independence compliance to order all new FHA
appraisals through Loantrac Appraisal Management. Lenders were
pleased a few weeks ago when “Flag” lowered its minimum credit
score requirements for VA transactions to 600.
Flagstar is also embarking on an FHA training program, mandatory
for those who are applying for FHA Sponsored Originator approval
with Flagstar. “Customers who were converted from FHA-approved
Brokers or Correspondents to FHA Sponsored Originators on
January 1, 2011, are not required to take this class.” Live
Webex classes have been scheduled for May 11 and May 23 – check
with your rep for registration details. Flag also recently sent
out notices reminding brokers & correspondents that it is
their responsibility to warrant the subject property is in an
acceptable condition at the time of delivery, improving the
price adjustments on the Fannie and Freddie 10-Year and 20-Year
products, and stated that “all loan fundings will be temporarily
suspended for properties in Memphis and Millington Tennessee.
When funding resumes, a property re-inspection will be required
for loans with appraisals dated on or before May 6.”
Bank of America correspondent clients were
notified that, due to HUD Mortgagee Letter 10-36 which
eliminated the requirement that the sum of all liens not exceed
the geographical maximum mortgage limit for both purchase and
refinance transactions, for BofA’s clients only FHA-insured
first liens are subject to FHA maximum mortgage limits.
SunTrust Mortgage (#11 in the 4th
quarter of 2010) is revising the non-permanent resident alien
guidance to include additional visa classifications, additional
requirements for an expiring visa or an expiring I-797 Notice of
Receipt/Notice of Approval, and alternative income documentation
requirements for clients who do not have to file US tax returns.
The investor is also releasing a series of bulletins associated
with internal Quality Assurance audit results in an effort to
show clients a “best practices” way of (this month) handling AUS
loans closing but not consistent with the final AUS run with the
investor, income calculation/documentation for non-verbal VOE,
and limited denial participation and general services
administration verification.
On to the markets and
interest rates! For market-moving scheduled economic news this
week, today we will have zip, tomorrow are import & export
prices, Wednesday are some trade figures, Thursday things pick
up with the Producer Price Index, Retail Sales, and Jobless
Claims, and on Friday the 13th is the Consumer Price Index. That
all being said, eyes appear to be more on volatility in
commodity prices, especially after the killing of Osama bin
Laden which helped trigger the commodity selloff. Commodity
prices were already poised to fall, reflecting recent interest
rate hikes in China and India, designed to cool those economies
off, as well as higher margin requirements on certain metals
trading, most notably silver.
Friday’s Non-Farm
Payrolls was a surprise with 244k jobs (268K in the private
sector) but the unemployment rate did tick up by .2%. Recently
10-yr Treasury notes hit their lowest yields of 2011 (3.13%) and
agency MBS prices are indeed good. But this week is a new week,
with the economic news listed above along the refunding supply
starting tomorrow with $32 billion in 3-yrs, $24 billion 10’s,
and $16 billion 30s. The 10-yr is at 3.17%.
Mrs. Ravioli comes to
visit her son, Anthony, for dinner. He lives with a female
roommate, Maria. During the course of the meal, his mother
couldn't help but notice how pretty Anthony's roommate is.
Over the course of the evening, while watching the two interact,
she started to wonder if there was more between Anthony and his
roommate than met the eye. Reading his mom's thoughts, Anthony
volunteered, "I know what you must be thinking, but I assure
you, Maria and I are just roommates."
About a week later, Maria came to Anthony saying, "Ever since
your Mother came to dinner, I've been unable to find the silver
sugar bowl. You don't suppose she took it, do you?"
"Well, I doubt it, but I'll email her, just to be sure."
So he sat down and
wrote an email: “Dear Mama, I'm not saying that you ‘did’ take
the sugar bowl from my house; I'm not saying that you ‘did not’
take it. But the fact remains that it has been missing ever
since you were here for dinner. Love, Anthony.
Several days later,
Anthony received a response email from his Mama which read:
“Dear son, I'm not saying that you ‘do’ sleep with Maria, and
I'm not saying that you ‘do not’ sleep with her. But the fact
remains that if she was sleeping in her own bed, she would have
found the sugar bowl by now. Love, Mama”
Rob
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