Apr. 3, 2013: Mortgage jobs; the state of applications & pipelines; Goldman's new investment company; clever "joke"
Rob Chrisman


“I started out with nothing and still have most of it left.” But what if you’re a board member of a bank – what exactly do big bank board members earn? Maybe they don’t make as much as top loan officers, but is that justified? Who has more responsibility? Here is the story: http://www.cnbc.com/id/100604933.


ISGN is a top 100 global technology and services company focused on the mortgage market. With its recent expansion of technology and services, some great senior level opportunities have opened within the Sales and Marketing divisions such as VP (or SVP), Business Development focused on servicers, SVP Product Leader for settlement services, and SVP Product Leader for mortgage servicing. With over 1500 dedicated mortgage specialists,  ISGN has helped over 600 mortgage lender across all segments--mega, regional, credit unions, GSEs,  private mortgage insurance companies, and non-banks. “ISGN has driven down cost, improved underwriting precision, and reduced cycle times using transformational technologies such as its Catapult LOS, LSAMS Servicing platform and its most recent entry, the Tempo default management platform.” Interested candidates should contact Teri Edney via email at teresa.edney@isgn.com. You can also learn more about ISGN’s opportunities at http://www.isgn.com/Careers/careers.htm.


I have been asked to assist a Maryland lender in its search for a Residential Compliance Program Manager. The person will be responsible for providing administrative and management support to Residential Lending in performing compliance activities and engaging in compliance monitoring, testing and support to assure compliance with laws and regulations as they pertain to the Residential Lending Department. The person will direct department staff in the completion of ongoing mortgage lending compliance activities and related compliance program requirements, coordinate sampling and preparation, and monitor activities and responses to facilitate Post Closing Quality Control reviews. The ideal candidate will have a college degree and several years of work experience, and be able to manage and conduct the mortgage lending compliance activity for HMDA, Flood Insurance, Fair Lending, RESPA, Regulations B and Z, and Appraisal guidelines. The lender closed over 4,000 units in 2012 with $1.5 billion in volume, and six of its LOs made Scotsman’s top 200 originator list. Please send confidential inquires to me at rchrisman@robchrisman.com.


I am continuing to hear that a) pipelines and fundings are ahead of where they were in 2012 in early April, but that pipelines and fundings are down 20-30% of where they were around Halloween. And the MBA’s application index does not necessarily disagree with that. The figures this morning show that applications are down 4% week over week, last week. Purchases, for those hoping that purchases will replace refi’s in their pipelines, were up 1.4%, whereas refi’s were down 5.6% in spite of slightly lower rates. For those who love numbers, loan sizes on refi's were up slightly to $200.6k but have been holding around 200k for the last 5 weeks. Conventional refi's were down 7% while GNMA refi's were flat. But the MBA’s numbers show what lock desks and senior management teams are seeing: the 90 day moving average on refi's continues to drop, down 1% week over week and 13% off the peak in October.


Goldman Sachs Group has launched an investment company, Goldman Sachs Liberty Harbor Capital. The firm will invest in high-risk debt, and shares will be offered "as soon as practicable after the effective date of this registration statement." Am I the only one that thinks this sounds familiar? Goldman does not expect Liberty Harbor to fall under the Volcker rule, which would restrict its ability to sponsor or invest in such funds and “business development companies” are specifically exempt from the Volker rule. Liberty Harbor is expected to invest in bonds and loans that are not rated by credit ratings agencies, but would be considered less than investment-grade. Goldman has some pretty smart minds on this one: Liberty Harbor also qualifies as an "emerging growth company" under the JOBS Act, which will allow it to take advantage of reduced reporting and other burdens that would otherwise be applicable to a publicly traded firm: http://www.reuters.com/article/2013/04/01/goldman-liberty-idUSL2N0CO1LB20130401.


While we’re on corporate news, let’s catch up with some relatively recent agency, investor, and vendor news. As always, it is best to read the full bulletin, but these will give you a sense of what is going on out there – and there always seems to be a lot going on!


The big news yesterday was that Fannie Mae reported its largest net income in company history in 2012 of $17.2 billion for the year with a net income of $7.6 billion for the 4th quarter of 2012. Fannie said that the gains were due in part to improved credit results "driven by a decline in serious delinquency rates, an increase in home prices, higher sales prices on Fannie Mae-owned properties and the company's resolution agreements with Bank of America. With Freddie and Fannie making some ducats, it may take some pressure off regulators and Congress to do something drastic.


United States Appraisals, a national appraisal management company (AMC), announced that it has joined the Collateral Risk Network (CRN). Composed of chief appraisers, collateral risk managers, regulators and valuation experts, CRN is focused on resolving the risk and compliance challenges facing the collateral risk profession. (Headquartered in the Kansas City area, United States Appraisals is a nationwide appraisal management company providing a comprehensive suite of residential valuation products to lenders and other mortgage origination firms.)


James M. reminded me that ICON Residential is under new ownership and is now Rushmore Home Loans.


As a reminder, as per the recent Congressional resolution, USDA funds will be extended through the end of the fiscal year (September 30, 2013) and current designated USDA areas will remain the same.


Ginnie Mae has altered the formula it uses to calculate the Weighting Average Remaining Maturity, Weighted Average Loan Age, and Weighted Average Original Loan Term, and Weighted Average Coupon.  These were previously calculated using legacy formulas that used unpaid principal balance and number of months; effective with the March 2013 Monthly Consolidated Data Disclosure file that will be released on April 8th, weighted averages will be calculated using explicit calendar dates to calculate the remaining number of months directly.


Mountain West Financial has issued guidance to brokers on personal and business tax returns as they pertain to IRS transcripts for 2012 and prior year tax returns.  The guidance covers Conforming and Jumbo products and provides information for salaried and self-employed borrowers who haven’t filed their 2012 tax returns and whose loans are submitted to underwriting before April 15th, borrowers whose loans are submitted or underwritten before June 15th who have filed their 2012 tax returns, and borrowers who loans are underwritten or submitted after June 15th.  See Bulletin 13W-15 for more information.


Effective for Conventional Conforming, FHA, VA, and USDA transactions, MWF has begun accepting transactions where title to the real property is vested in an Inter Vivos Revocable (living) Trust that has been established in the State of California.  MWF requires that trusts comply with all federal and state regulations and that the loan is made to at least one credit applicant who is also the Settlor, Trustee, and Beneficiary and has the authority over the documents to mortgage the property securing the loan.  All trustees, including those who aren’t on the transaction, must sign the Notice of Right to Cancel, initial TIL, and final TIL.  Loan files must contain a completed copy of the Processor and Underwriting Trust Lending Checklist, the trust instrument, the executed and notarized Title Company Trust Certification, and either the MWF California Certification of Trust or an acceptable attorney’s letter addressed to MWF.  Before funding, the file must contain a fully completed MWF Doc Technician and Funder Lending Checklist.


US Bank has rolled out two new 10/1 ARM products, both of which are now available to register/lock.  The Elite 10/1 LIBOR ARM, which follows the same guidelines for adjustment and lifetime caps, margins, and underwriting as the Elite 5/1 and 7/1 LIBOR ARM products, allows purchase, rate/term refinance, and cash-out transactions with LTVs up to 80% and loan amounts of up to $2 million on 1-unit primary residences.  With the Interest Only 10/1 ARM, which follows the same guidelines as Interest Only 5/1 and 7/1 ARM products, purchase and rate/term refinance borrowers can borrow up to $1.5 million on 1- and 2-unit primary residences with a FICO as low as 700 if the LTV is below 65%.


MSI is reducing the maximum acceptable LTV for both DU and LP loans by 5% for all transactions where subordinate financing is used.  For DU loans, the revised maximum LTV must be applied at underwriting, as the system does not do this automatically.


Effective immediately, MSI is now permitting real estate-related obligations to be excluded from DTI calculations so long as the borrower can provide documentation that he or she is not the one making the payment.


PHH has issued updated guidance for Property Assessed Clean Energy loans, which states that any such loans originated after July 6, 2010 are not permitted to take priority over first liens and that if the terms do not allow for subordination to the new first lien, the loan must be paid in full with source-verified funds.  If the terms of both the PACE loan and the new first lien permit it, the PACE loan may be subordinated.  PACE loans originated and purchased prior to that date should be paid off and manually underwritten if there is sufficient equity; if there isn’t sufficient equity in the property, the loan can remain in place but only for HARP loans.


All Conventional Conforming borrowers whose income is derived in Puerto Rico are being required to sign the Modelo SC 2907 form, which allows PHH to review said income.  It is available in both English and Spanish and must be signed once during origination processing; note, however, IRS Form 4506-T still needs to be signed as well.  This applies to all relevant loans registered on or after April 5th.


In an effort to provide clarification and align with investor guidelines, PHH has revised guidance on its homeowner’s insurance requirements.  Coverage provisions and requirements for extended replacement cost coverage, detached or site condos and PUDs, special endorsement, and notices of change or cancellation have been revised for condo, PUD, and co-op master policies, while the definitions of insurable replacement cost and replacement cost coverage have been added for all transactions.  “Acceptable evidence” of hazard insurance has been clarified to include the full insurance policy, declarations page, certificate of coverage, or in-force binder (for purchase transactions).  Purchase transactions and refinance transactions where the remaining term is less than 30 days from the closing date require a receipt of payment for premiums on 12 months’ coverage.  Clarification has also been issued on mortgagee clause requirements for VA, FHA, and USDA loans.


Beginning with appraisals ordered on or after April 1st, PHH will require correspondents to follow the VA Lender Appraisal Processing Program.  Under the program, the Staff Appraisal Reviewer is required to review the appraisal to ensure that it conforms with industry-accepted appraisal practices and VA requirements, determine the value of the property and the conditions that must be met prior to VA guaranty, and send the borrower both a written notice of the value and the aforementioned conditions and a copy of the appraisal report within five days of it becoming available for review.


Green Tree (ex-GMAC) reminds wholesale lenders that, when providing separate settlement or closing providers from lenders title insurance on the Settlement Service Provider List, they must also provide separate estimates for the cost of each service.  Effective immediately, Green Tree will not purchase loans that do not comply.


Affiliated Mortgage is no longer allowing conventional loans to be submitted to mortgage insurance providers for contract underwriting, applicable to loans locked, re-locked, or extended on or after March 27th.


In training and events news:


The New Mexico Mortgage Lenders Association will be hosting a luncheon at the Albuquerque Country Club that will feature speakers from the New Mexico Finance Authority and the Idaho Housing and Finance Association on April 11th.  Register at http://nmmla.com/ai1ec_event/nmmla-april-luncheon/?instance_id=156  by April 9th to attend.


Campus MBA will be offering its next School of Mortgage Servicing online course from June 4th-13th.  Designed for risk managers, analysts, auditors, and QC and compliance specialists as well as servicing staff, the upcoming course provide a comprehensive overview of the role of servicing in mortgage banking, including basic servicing functions, compliance risks, and default administration, over a period of two weeks.  For more information, go to http://www.campusmba.org/ProductsandServices/ProductsbyFormat/Instructor-GuidedOnlineCourses/SchoolofMortgageServicing.htm.


The markets? As I’ve been saying all week, there just isn’t much going on. The 10-yr closed at 1.86% yesterday, and some of last week, and that is exactly where we find it this morning. (MBS prices were almost unchanged yesterday as well.) Yesterday’s MBS sales volumes were 88% of the 30-day moving average, per Tradeweb, at about $2 billion. This morning’s ADP number disappointed forecasters saying that private jobs “only” increased by 158k, lower than the 200k expected. For Friday, economists were projecting +200k in jobs created with the unemployment rate holding at 7.7 percent.



I am part of a lost generation

And I refuse to believe that

I can change the world

I realize that this may be a shock but

“True happiness comes from within”

Is a lie, and

“Money will make me happy”

So in 30 years I will tell my children

They are not the most important thing in my life.

My employer will know that

I have my priorities straight because


Is more important than


I tell you this

Once upon a time

Families stayed together

But this will not be true in my era

This is a quick fix society

Experts tell me

30 years from now I will be celebrating the 10th anniversary of my divorce

I do not concede that

I will live in a country of my own making

In the future

Environmental destruction will be the norm,

No longer can it be said that

My peers and I care about this earth

It will be evident that

My generation is apathetic and lethargic

It is foolish to presume that

There is hope.


And all this will come true unless we choose to reverse it. Now reread this “joke” from the bottom up and it takes on the totally opposite meaning. It is a clever palindrome that reads the same backwards as forwards, but the meaning flips.



If you're interested, visit my twice-a-month blog at the STRATMOR Group web site located at www.stratmorgroup.com. The current blog is, “How Changes in FHA Loan Pricing Will Lead to Changes in Investor Demand." 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.


(Check out http://www.mortgagenewsdaily.com/channels/pipelinepress/default.aspx or www.TheBasisPoint.com/category/daily-basis. For archived commentaries or to subscribe, go to www.robchrisman.com. Copyright 2013 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.)




Copyright - Rob Chrisman