And
lenders continue to expand – business is good! In Kentucky and
Ohio Victory Mortgage, LLC, is seeking Loan Originators
and support staff for its new branch in Columbus, Ohio.
Victory is a subsidiary of Victory Bancorp based out of
Northern Kentucky and is expanding its branch network to
include the Columbus Ohio market. It is one of the top seven
largest lenders in the Greater Cincinnati Area and is “the
affiliate lender for Fischer Homes who has been the Greater
Cincinnati Area’s largest homebuilder for the past five years,
and Fischer Homes’ entry into the Central Ohio market is what
is driving Victory Mortgage’s expansion.” The LO position will
include developing and maintaining a quality network of
business relationships with Fischer Homes as well as other
referral sources including realtor and refinance business.
Resumes for Loan Originators should be emailed to Jason Welch
at jwelch@victorymortgage.com.
And a few states over, but without geographic restriction, Peoples
Bank (KS) is searching for retail loan officers, focused on
purchase business, across the nation. Peoples is a
federally-charted (FDIC) community bank that was founded in
the mid-1800's, has a solid mortgage banking culture which has
evolved over 30 years, and which will close $2.5 billion in
2012 in all 50 states. Peoples Bank has Fannie/Freddie
approvals, significant warehouse spread, proven and tested
compliance practice, scalable state-of-the-art Information
Technology platform and a solid back office which delivers
consistently competitive service levels (like consistent 72
hour underwriting turn times). Please send your confidential
resumes or questions to Marcia Robertson at mrobertson@bankingunusual.com.
TransUnion
reports the percentage of mortgage holders at least two months
behind on their payments declined in 3Q to 5.41% vs.5.49% in
2Q. This is the lowest level in 3Ys, but still well above the
1% to 2% historical level. Optimists say that this means things are improving,
while critics will say that those inclined to be behind on
payments have already been foreclosed upon.
Here are some relevant sites, questions, and observations
recently received:
"If the FHA would try to impose mortgage insurance for the
life of the loan they would be in violation of a federal
compliance law, the Home Owners Protection Act (HOPA).
There is even a covenant in security instrument regarding
mortgage insurance so this is not something FHA can change
easily, without changing the regulation. Congress would have
to vote on that and loan documents would have to be
changed. That would take a year! Just some information from an
aging compliance person!"
"Rob,
what happened to the train of thought that believed that
current housing policies, including the $25 billion servicer
settlement, harmed
those who have done the right thing—those who didn't
overleverage their homes, paid their mortgages on time, didn't
borrow more than they could afford, or saved all their lives
but are now punished with near zero interest rates?" Good
question and one that many in the industry wonder.
Here's another: "As I was filling out the NMLS call report
the other day and my numbers were not working out, it occurred
to me that they will rarely ever work our correctly. Here is
the situation. The call report asks for the number and total
dollar amount of applications taken and the number and amount
of loans closed, denied etc. So far so good. Except when a
loan is taken in one quarter and finalized in another with a
different loan amount. The math can’t work out and the system
will not allow it to not match. Kind of an interesting
quandary. I’m a pretty small shop but how do the big lenders
do it when it could be tens of thousands of dollars a
quarter."
Steve S. observes, "A couple of year ago there was a study out
on the FHA loans with down payment assistance. For
loans over 680 credit score there was no difference in the
delinquency or foreclosure rate as compared to standard FHA
loans with down payments. When you got below 680 the numbers
went off the charts. So the problem with FHA is that they
don't have a floor on credit scores. And raising the premiums
won't stop the bad loans." [Editor's note: it comes down to
ability to repay, right?]
John J. with Patriot Bank Mortgage writes, "HUD seems
to think there is no price elasticity for HUD loans by their
raising premiums and monthly go-alongs. The HUD fund up until
the euphemistically called financial crisis was healthy
because it had a broad spectrum of credit quality loans.
Certainly there were the edgier low-income, first-time home
buyer loans but there were also lows with very good credit
quality. The reason these better borrowers went with an FHA/VA
low was primarily for the low down payment requirements. The
HUD share of business waned in the early 2000’s because of
sub-prime lending which had fewer ‘hoops’ to jump through to
get a loan. The financial crisis hits and sub-prime
dissolves. Now where do these low quality loans go? Back to
HUD. Once the private mortgage insurance industry stabilized,
they decided to get back in the game. They must just love the
fact that HUD thinks they can work their way out of their
dilemma by raising premium rates. All that does is make HUD
the real lender of last resort. The better qualified
borrowers who might once have chosen an FHA/VA loan can now
scrounge up just a bit more down payment and get an agency
loan with private MI, which incidentally is cheaper than HUD
premiums and getting cheaper each time HUD raises theirs. The
answer for HUD is to lower premiums to encourage the higher
quality loans but tighten underwriting guidelines, principally
FICO/DTI ratios where the borrower is but a ‘flat-tire away
from defaulting’."
Turning to relatively recent lender & investor changes,
we’re no longer in the environment where payments were
calculated using algorithms and flood insurance was checked
against FEMA maps in house, no typos allowed on FHA or VA
submissions, credit reports were hand delivered and borrowers
had no access or right to view them, women of child bearing
age were excluded from using their income to quality (until
ECOA came out), conventional qualifying ratios were 25 and 33.
So…
360
Mortgage
raised the price cap on its government products from 4.50 to
6.00 points today. The price cap is the total of the
compensation paid to the broker (by the lender) and premium
credited to the borrower (after all adjustments are taken in
to consideration). The reason for this change is to increase
YSP available to credit to the borrower so that brokers can
offer low or no cost streamlines. (360 continues to offer
streamlines down to a 640 credit score and have no
requirements regarding the prior servicer.)
Residential mortgage lender Platinum Home Mortgage
Corporation (the one based in Rolling Meadows, Ill, not
the myriad of other Platinums) announced that Mike Azzarello,
CMB has been named senior vice president and managing director
of its “Traditional Correspondent” Lending Division. In his
new role, Azzarello will build the new traditional
correspondent program group, based out of Jacksonville,
Florida.
As
per the GSEs’ recent clarification, MGIC has announced
that it will not require lenders to represent the condition of
disaster-affected properties for HARP loans. MGIC has further
updated the disaster policy or its HARP Refi-to-Mod program to
state that lenders must obtain exterior-only inspections for
properties in areas that have been impacted by a natural
disaster to assess whether or not any damage has been
sustained. These inspections don’t need to be submitted to
MGIC but should be kept in refinance loan files. Provided
that there either isn’t any material damage or the damage has
been sufficiently repaired before closing, HARP RTM properties
remain eligible for the program. In cases where there is
material damage and the property isn’t restored to its
pre-disaster condition before the refinance closes, the
property will be rendered ineligible.
Veros, GMAC‘s appraisal management service, has added AMC
Axis to its appraisal rotation. Axis will be slotted
into the vendor distribution and can also be selected
manually.
Level1Loans and IntraPrise Solutions, Inc. announced
the creation of Level1Analytics LLC, a joint venture to
provide cloud-based mortgage valuation and other
financial modeling software to owners and managers of mortgage
and mortgage related assets. Each of the companies has a 50%
joint ownership in the private venture, which is led by Dr.
Thomas J. Healy, CMB of Level1Loans and Jeff Van Voorhis of
IntraPrise Solutions. Read more here: http://www.sacbee.com/2012/11/28/5015934/mortgage-industry-gets-1st-cloud.html#storylinkcpy
M&T Bank will no longer allow lender-funded
advances to establish new escrow balances on FHA Streamline
refinances as of November 28th. Loan packages received on the
28th and after where the HUD-1 discloses an escrow advance
will not be eligible for purchase. In cases where a loan has
been received by funding but not purchased by the deadline,
the lender should document that the package has been made
whole either by payment having been received from the borrower
or the paid-off lender before M&T can authorize purchase.
Premium pricing to defray closing costs and prepaids with
lender credits will still be permitted for FHA Streamline
refinances.
Let's all be careful what we wish for, as one trader noted
yesterday, "Treasuries were on the rise again Tuesday on the
strong demand for the US two year note auction and concerns
that US budget negotiations were not making progress." Does
that mean that if & when the U.S. government "mans up"
and settles the fiscal cliff issue, rates will rise?
Perhaps not, as the markets would rather have certainty than
uncertainty - but it is better than the alternative which
could easily harm our economy but push rates lower. But if a
LO’s borrower is out of a job because companies won't hire due
to the economic climate, a low possible refi rate won't help.
On Wednesday we saw some price movement during the day, but
for the most part MBS prices were pretty flat on below-normal
volume. We learned that New Home Sales decreased 0.3% in
October, but is up 17.2% year over year. The median sales
price was $237,700; the average was $278,900. The seasonally
adjusted estimate of new houses for sale at the end of October
was 147,000, which represents a supply of only 4.8 months at
the current sales rate. The press doesn’t seem to be focused
on that “shadow inventory” any more.
Treasuries
continued to move higher, and thus rates lower, due to risk
aversion associated with the uncertainty of a resolution to
the fiscal cliff crisis before year-end but prices on MBS were
essentially unchanged (spreads widening).
Today
we’ve had Initial Jobless Claims for last week (expected to
drop from 410k to 390k, it went from a revised 416k to 393k)
and the second reading on third quarter GDP (expected to move
from +2.0% to +2.8%, it came out nicely at +2.7%). Later we
have yet another in the seemingly endless chain of housing
numbers (Pending Home Sales) and the final leg of this week's
coupon auctions with $29 billion in 7-year notes. In the
early going the 10-yr is up to 1.64% and MBS prices are
roughly unchanged.
My
wife was screaming at me: "Leave!! Get out of this house!" she
ordered.
As I was walking out the door she yelled, "I hope you die a
slow and painful death!"
So I turned around and quietly asked, "So now you want me to
stay?"
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 some of the considerations facing
the FHFA regarding Fannie and Freddie. 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.
