Aug. 30, 2012: Dodd Frank diversity requirements; updates on TARP & shadow inventory
Rob Chrisman
I
can't walk by a magazine stand in a grocery store or an
airport without seeing a bunch of folks on the covers who are
either in better shape than I am or are better cooks. Here,
for something totally non-mortgage banking related are the
single-copy sales of the top 25 U.S. consumer magazines in
the first half of 2012. The figures are as reported by
the magazines to the Audit Bureau of Circulations, an industry
group. Food Network Magazine saw the biggest percentage gain,
while Weight Watchers was the top decliner. 1. Cosmopolitan,
1.4 million (-15% from the first half of 2011), 2. Woman’s
World, 1.1 million (-4%), 3. First For Women, 1 million (-6%),
4. People, 1 million (-19%), 5. Us Weekly 573k (-11%), 6.
Family Circle 567k (+8%), 7. In Touch Weekly, 561k (-13%), 8.
In Style, 545k (-4%), 9. People StyleWatch, 460k (-9%), 10.
National Enquirer, 457k (-9% - oh no!), 11. O, The Oprah
Magazine, 449k (-18%), 12. Glamour, 423k (-7%), 13. Food
Network Magazine, 400k (+18%), 14. All You, 395k (-11%), 15.
Men’s Health, 391k (-9%), 16. Star Magazine, 379k (-14%), 17.
Real Simple, 373k (-2%), 18. Woman’s Day, 360k (+6%), 19. Life
& Style Weekly, 343k (+2%), 20. Weight Watchers, 326k
(-28%), 21. Good Housekeeping, 319k (-6%), 22. Vogue, 301k
(-16%), 23. Women’s Health, 299k (-5%), 24. Vanity Fair, 284k
(-19%), 25. Seventeen, 267k (-9%).
Magazines are probably the last thing on the minds of Pacific
Mercantile Bank employees. Pacific Mercantile Bank
announced it is closing down the wholesale division for
the 2nd time just after over about a year of re-opening it.
(I received one note saying, "At least they gave us a 2 week
notice, not like New Century Mortgage where I used to work
that only gave us a 24 hour notice via a conference call.")
Here's one from "The Way Back Machine" - all you have to do is
change the dates: http://articles.marketwatch.com/2005-06-27/news/30896909_1_wholesale-mortgage-pacific-mercantile-bank-banking-business.
Is the housing market doing well, or not? There are
dozens of housing-related indices released every month, and
yesterday we all learned that Pending Home sales rose in
July to the highest level in over two years and remain
well above year-ago levels, according to the National
Association of Realtors. Now, I've never known anyone who
bought a house in Pending Home (note: wait for laughter to die
down), but seriously, the Pending Home Sales Index is a
forward-looking indicator based on contract signings. Lawrence
Yun, NAR chief economist, said the index is at the highest
level since April 2010, which was shortly before the closing
deadline for the home buyer tax credit. “While the
month-to-month movement has been uneven, more importantly we
now have 15 consecutive months of year-over-year gains in
contract activity,” Yun said. “All regions saw monthly
increases in home-buying activity except for the West, which
is now experiencing an acute inventory shortage...Falling
visible and shadow inventories point toward continuing price
gains. Expected gains in housing starts of 25 to 30 percent
this year, and nearly 50 percent in 2013, are insufficient to
meet the growing housing demand,” Yun said.
Speaking of remembering things, remember TARP? Of course you
do. But where does the Troubled Asset Relief Plan stand?
Investment banker Keefe, Bruyette & Woods released the
latest figures on the remaining CPP investments (Capital
Purchase Program) held by the Department of Treasury. Only
$9.6B remains in TARP CPP outstanding. Under CPP, Treasury
invested $204.9B in 707 banking institutions and as of 8/28,
received $218.2B in repayments and income (inclusive of
dividends, interest, warrant income, and other income).
Treasury received repayments totaling $192.2B, earned income
of $26.3B from dividends, interest, and warrant dispositions,
and posted losses of $3.1B.
KBW
reports that, “Of that $9.6 billion, the outstanding CPP
investments are in 301 banking institutions. Remember that it
has been selling off investments, and recently completed its
fourth public auction of $324M in total TARP CPP investments
in 12 banks (EXSR, Fidelity Financial Corp., Trinity Capital
Corp., MNAT, CBS Banc-Corp., Park Bancorporation, PFBI, FCMP,
Diamond Bancorp, First Western Financial, Commonwealth
Bancshares, & Market Street Bancshares) for aggregate
proceeds of $234M in late July.”
And
you can’t talk about mortgage origination without talking
about the CFPB and Dodd-Frank. For the IT folks out there, it
is rumored that the CFPB is considering requiring companies
to convert all document files into machine language HTML
– perhaps to make computer audits more efficient. I am the
first to admit that, besides knowing where the power button
is, I know little about computers, but wouldn’t that make
lenders convert PDF for TIFF to HTML? Is HTML even in use? Or
was it replaced by XHTML? And if this rumor is true, how does
the security of HTML stack up against the others?
And
this commentary has discussed it before, but compliance
officers know that Dodd Frank dictates lenders working with
vendors who have a diverse ownership. Catch the wave! Mark
DeGennaro, who heads up the Collingwood
diversity effort, wrote, "We see a real market need for
diverse suppliers, and all small businesses for that matter,
to have access to capital at a reasonable cost and assistance
in satisfying the rigorous counterparty requirements imposed
on them by government agencies, large systems integrators and
financial institutions." The Collingwood Group, mostly known
for consulting on GNMA issues, announced its move recently: http://www.prweb.com/releases/Collingwood/Asset-Management/prweb9736148.htm
or a summary of its division can be seen at http://www.collingwoodassetmanagement.com/.
(To reach Mark, his e-mail is MDeGennaro@Collingwoodllc.com.)
And
this note from Jay Patel with Salataris. "In the past few
months, we have seen a significant increase in vendor and
supplier diversity questionnaires. Both vendors and suppliers
are required to put together policies and procedures in order
promote diverse business participation for clients they want
to do business with. The questions range from requiring
vendors and suppliers to put a dollar and percentage goal of
supplier diversity to providing a list of existing diverse
suppliers currently used. What I am seeing is both vendors and
suppliers are unsure of how to verify whether or not their
vendors and suppliers hold any form of diverse supplier
certification. As we know, the CFPB will begin asking
regulated entities the same questions in the upcoming months
to ensure their interests are aligned with the CFPB Office of
Minority and Women Inclusion. In essence, vendors and
suppliers should begin taking a look at their vendors and
suppliers and begin asking whether or not they have any
diverse supplier cert." (As a side note, Salataris recently
hired Gary Vandeventer - MERS VP for Product Division - to
assist it in its sub-servicing and MERS third party annual
audits. If you want to reach Jay, write to him at jpatel@salataris.com
or learn more about his firm www.salataris.com.)
Nothing
like some recent agency, investor, and lender updates to give
one a flavor for lending and compliance trends:
First,
I received this note from Wendy Barnett with DataQuick: Fannie
Mae has no bulletin to be found, but has been notifying
clients in person and by phone that Custom DU (CDU) will no
longer accept new submissions after September 30, 2012 and
resubmissions after December 31, 2012. This was a tool that
used the DU engine to also provide decisioning on non-Fannie
Mae loans. DataQuick has been providing a solution for several
lenders, with our Mindbox - Art Enterprise component framework
for Pre-Qualification, Product, Pricing and Automated
Underwriting.” Shoot Wendy an e-mail if you have questions
about this: wbarnett@dataquick.com.
Pacific
Union
has added a VA Standard and VA Specialty product to their
offerings. These are available in FLOW to any seller who has
been approved to deliver VA loans to Pacific Union provided
that they comply with the requirements outlined in the VA
lending handbook. Both products are 30-year fixed rate loans
that permit amounts of up to $625,000 and purchase, cash out,
and IRRRL transactions. VA Specialty is available to
borrowers with minimum FICO scores of 560 for conforming base
loan amounts and 600 on high balance base loan amounts and
permits 100% purchase, cash out, and IRRRL financing. The VA
Standard product requires a minimum FICO score of 620 and
allows for 100% purchase and IRRRL financing and 90% cash out
financing. Any lock requests submitted to Pacific Union on or
after July 25th are subject to a loan amount minimum of
$50,000. This is effective for all loan types.
Some
weeks back SunTrust updated multiple guidelines within
the Non-Permanent Resident Alien Guidelines, as well as its
Permanent Resident Alien Requirements. The revised SunTrust
Mortgage Declining Market Index reflects a change for the
state of Arizona. For loans under the Key loan program and
Jumbo Solution Second Mortgage loan program, SunTrust no
longer includes the Tucson/Pima County Metropolitan
Statistical Area (MSA) as a moderately declining market. And
it clarified the mortgage history documentation requirements
for the Key Loan program.
In
late July Flagstar told clients that it is performing
a prefunding review of all Delegated loans to ensure all
applicable documents and disclosures are submitted in the loan
package.
The
head of FEMA announced on July 23, 2012 that disaster
aid has been made available in the State of West Virginia to
assist in recovery from the effects of severe storms and
straight-line winds during the period of June 29, 2012 through
July 1, 2012. For loans secured by properties, in the
designated disaster areas, and appraised prior to the Federal
Government / State Government declaration, the following
post-disaster guidelines will apply: An exterior re-inspection
must be completed. The re-inspection should be completed on
FHLMC Form 442 / FNMA Form 1004D. The re-inspection must be
completed by the original appraiser. The re-inspection must
contain an exterior photo of the property, as evidence of no
damage. The appraiser must provide a certification stating
that the property is free from damage, and is in the same
condition (or better) as when previously inspected and
appraised. The appraiser must include any appropriate
commentary concerning negative conditions which would affect
the marketability of the property.
(With
Isaac camped out in the South, watch for an increased number
of disaster updates.)
Non-warrantable condominiums are not eligible for non-same
servicer. Please check this link to HUD’s Condominium List:
https://entp.hud.gov/idapp/html/condlook.cfm
to verify if a condo project is on the exclusionary list or
not. There are a few different statuses: Anything declined
(and therefore ineligible) would show up as Rejected. Other
statuses (Approved, Approved - Expired, Withdrawn, or not on
the list) would fall under eligible. The FHA Streamline FAQ,
Exh 02-281 will be updated to reflect this information and
posted to MEME.
Frankly, there isn’t much going on in the markets.
Europe seems to be finishing up August vacations, here in the
U.S. vacations are going full bore. Here in the States
analysts are jawboning over what might or might not come out
of Bernanke’s speech in Jackson Hole concerning more
Qualitative Easing: QE3. Interestingly, given the Wall Street
research pieces I’ve seen, most do agree that Jackson is
likely to disappoint. By the end of the day on Wednesday
Treasuries recorded a modest sell-off with 10-year notes
marked lower by about .125 (1.65%), and agency, current coupon
MBS prices also worse by about .125.
For
thrills and chills today, at 8:30AM EST we’ll have Initial
Jobless Claims (expected slightly lower), Personal Income
(also expected slightly lower) and Personal Consumption (seen
higher). Later we have a $29 billion 7-yr note auction. Early
on we have the fixed-income markets nearly unchanged from
Wednesday’s close.
(Yesterday's
joke - "Parental discretion advised - nudity. Young Republican
Gals Go Wild at Pool Party" - received this great comment from
Brett M. at Bay Equity: "What nudity? Those gals have trunks
on!" Here is the link: http://www.youtube.com/watch?vfOoudtiA1pw.)
For today:
The
wife left a note on the fridge...
"It's not working; I can't take it anymore; I've gone to stay
at my Mom's!"
I opened the fridge, the light came on and the beer was still
cold. What the heck is she talking about?
If
you're interested, visit my twice-a-month blog at the STRATMOR
Group web site located at www.stratmorgroup.com.
The current blog discusses the new CFPB Rule combining TILA
& RESPA disclosures. 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.
