FHA Streamline Changes in the Blink of an Eye; News from Indiana and California; Mortgage Jobs in Production and Secondary

Regardless of size, regardless of defense, regardless of current QC
measures, buybacks are an issue at every level. PNC, #17 lender by
volume in the first quarter, saw its stock take a hit due to them.
(And at Stratmorgroup .com the
current blog discusses the issue of the Freddie Mac & Bank of America
buybacks, and its potential impact on the industry.)

Companies searching for employees continue. A Boston-area based $5
billion dollar regional bank is seeking an experienced high-energy executive to
run and grow their $500 million in-house retail mortgage lending operation.
The ideal candidate should be knowledgeable in all aspects of mortgage lending
from the point of sale through shipping and delivery, including secondary
marketing.  Interested parties should send their confidential resume to
Matt Lind at matt.lind@stratmorgroup .com.

In Manhattan MIAC is searching for help on its trading desk. MIAC
has been around since 1989, and provides pricing, risk management, and
accounting solutions for the mortgage and financial services industries. The
candidate will be responsible for providing assistance to account managers in
risk management, trading and customer service of mortgage pipelines for
multiple accounts, preparing best execution analysis and loan data files for
whole loan trading, preparing, reconciling, and transmitting trade information
to clients and investors, etc. Requirements include a Bachelor’s degree or 3+ years
equivalent work experience, strong working knowledge of Excel and SQL Server, strong
mathematical and analytical aptitude, and strong customer service skills. Resumes
can be directed to SSGResumes@MIACAnalytics .com.

The
ripple effect of Wells’ change in its FHA Streamline policy Tuesday was felt
loud and clear on Wednesday
, especially among institutions or branches that
rely on the product. In my discussions and communications with many lenders,
there are various states of confusion about if and when to stop offering or transition
this product. The lender notices below can provide a glimpse into what is
happening, and it seems that U.S. Bank (#3 volume-wise in the 1st
quarter) is the largest investor to offer the flexibility of “different
servicer,” and it is expected at any time to change their policy. It, like lenders
out there, may not want to be “the last one standing” and be adversely selected
against, but lenders are considering only doing same-servicer product as an
alternative.

And
there are smaller investors/lenders that are still offering it.
Presenting
an entire list would be problematic, so please don’t ask for one, but one
example is First Mortgage Corporation. It is committed to offering FHA
Streamlines as prescribed through the 4155 with minimum overlays.  “FMC
accepts Streamlines manually underwritten with no minimum FICO Score.  In
addition to FHA’s requirements, FMC requires all applicants be employed, an
independent verification of occupancy (e.g., no vacant dwellings), and a
minimum of 1 year seasoning on manufactured housing.  First Mortgage
Corporation limits its fundings to most non-judicial foreclosure states.” 
For inquiry related to this program, please contact Sharon Magnuson at smagnuson@firstmortgage .com.

Stearns
Wholesale
wrote brokers, “Due to unforeseen market changes for the FHA
Streamline Refinance program, we need to make immediate adjustments to our
pricing and guidelines…We will honor and close the existing pipeline of loans
that have been registered through SNAP or advanced locked on or before June 12,
without the new LLPA of 1.0 added to pricing. All loans must close by June 29th
and there will be no lock extensions. All new Wholesale Channel registrations as
of June 13 will be subject to a new LLPA of 1.0 added to all pricing for FHA
Streamline Refinance transactions and the new program parameters. We are
currently evaluating new program parameters that will be released at a later
date.

M&T is expected
to released its policy and pricing on Streamline refi’s June 18th.

MSI’s broker
clients received, “Due to sudden and unforeseen disruptions in the secondary
market, it has become necessary to implement the following changes to MSI’s
FHA/VA pricing parameters.  These new pricing adjusters will become
effective on Monday, June 18th, 2012, for any/all new locks/re-locks,
irrespective of loan submission or case assignment date. All new FHA streamline
refinance locks will require an additional .75 price adjustment. In
addition, MSI must temporarily suspend new FHA high balance Streamline locks,
effective June 18th. New credit score adjustments will also apply to
ALL FHA/VA product:  FICO scores between 640-659 will require a price
adjustment of 75 bps; FICO scores between 660-679 will require a price
adjustment of 50 bps. Based upon the foregoing changes, Friday, June 15th will
be the last day to lock FHA/VA product under the current pricing parameters.”

Effective June 14th, Kinecta Federal Credit Union will no longer
accept FHA Streamline refinance transactions. Deadlines for FHA Streamline
Refinances: Loans must be locked by 5:00 PM PST June 14, complete loan files
must be received by Kinecta by 5:00 PM June 26, Loans must fund by 5:00 PM PST,
Friday, July 13. Kinecta will continue to offer regular FHA Credit Qualifying
Refinances with an appraisal; those files will not be affected by the
retirement of Streamline Refinances.”

Turning to a little state-specific news, Richmond Monroe let
clients know about the “Important Update for Mortgages in the State of Indiana…As
you may be aware Indiana enacted a new law regarding the expiration date of
mortgages recorded in the state; SENATE ENROLLED ACT NO. 298. This law requires the maturity date of the
loan to be stated on the mortgage document. If the mortgage doesn’t contain an
expiration date, it will automatically expire 10 years after the date of
execution or recordation. Indiana is allowing lenders to record an affidavit
stating the mortgage due date. 
The lender has until July 1, 2012
to record the affidavit on all loans created before July 2002. If the affidavit
is not recorded the mortgage will expire 10 years after the date of execution
or recordation. This may or may not affect a volume of mortgages. Standard FNMA
and Freddie Mac loan documents contain the maturity date.  However, it may
be prudent to review all mortgages in Indiana to ensure that the maturity date
is present in the document or prepare and file the proper affidavits stating
the due date. This will preserve the mortgagee’s position. Please contact us to
receive a complete copy of INDIANA’S SENATE ENROLLED ACT NO. 298 or if your
company needs help in reviewing Indiana Mortgages or Preparing, Recording and
Tracking the necessary Affidavits.” Here is the web information: www.richmondmonroe .com or one can
write to sales@richmondmonroe .com.

And out in California, as California tries to pass its six Homeowner
Bill of Rights, the Center for Responsible Lending and the MBA have joined the
fray
.  The bills, to put it basically, are modeled on the recent
foreclosure abuses settlement, and seek to ban robo-signing, increase the
number of days a tenant has to leave the property after foreclosure from 60 to
90, and prohibit the practice of “dual tracking,” where servicers
simultaneously negotiate modification and head towards foreclosure.  The
bills have proposed a $25 fee that servicers would have to pay each time they
record a notice of default; this money would be put into a real estate trust
fund for the investigation and prosecution of real estate fraud. The MBA points
out that the bills would result in increased consumer costs and that
“California families” would end up “pay[ing] more for fewer choices.”  It
would also mean saddling lenders and servicers with additional regulation, and
with California’s shaky economy, have negative implications for the state.

The California Mortgage Bankers Association has a box on its homepage at www.cmba.com that provides complete background
information, video of legislative testimony, comment letters on the issue that provide
the latest on this. The CMBA, along with other financial trade associations,
have been participating in numerous meetings with legislative leadership and
senior staff over the course of the past two weeks.  They are reviewing
the aspects of the bills in discussion on a line-by-line basis.  While it
was expected that we’d see final legislative language on this package and a
vote this week, that most likely won’t happen until next week as the California
Legislature is “focused” on California’s budget crisis.

Here is a smattering of recent lender/investor updates. As always, it is
best to read the actual bulletin.

Flagstar is now requiring a completed Submission Review Checklist for
all loan types and documentation uploaded for a file to be sent to
Underwriting.  It is also advisable to have the Net Tangible Benefit
Worksheet completed prior to underwriting even though it isn’t on the
checklist.

Affiliated Mortgage has revised its Settlement Agent and/or Title
Company list, the updated version of which is available here
The list features settlement agents and title companies that are not eligible
to close transactions that will be delivered to AMC.

As of June 8th, Plaza has begun requiring all DU Refi Plus loans with
LTVs over 105% to be approved through DU with a Property Inspection
Waiver.  In addition, the LTV of DU Refi Plus and LP Relief Refi loans
will be limited to 105% starting on June 12th.  HARP loans with an LTV
that exceeds this should be locked prior to that date, and loans that Plaza has
received should have a valid lock, re-lock, or extension.

With all this going on, who cares about rates? Still, Treasury prices
rose yesterday with the weak economic news – a disappointing retail sales
report coupled with a three notch downgrade of Spain by Moody’s were catalyst
for the day’s movement. Our 10-yr yield went down to 1.60%, although traders
reported that the early morning action was dominated by origination selling (
about $2.5 billion for the day) which eventually was met with good buying from
the usual suspects: the Fed, hedge funds, insurance companies and some money
managers.

Prior to the 5:30AM PST numbers, rates were a shade higher after a quiet
day in Europe and ahead of the US Treasury’s auction of $13 billion of 30-yr. bonds.
In US economic news the Consumer Price Index was expected down .2% due to
falling commodity prices, with the core rate (which excludes volatile food and
fuel costs) expected +.2%. The CPI came in -.3% with the core rate +.2%. And weekly
Initial Jobless Claims came in at 386k, up 6k from a revised 360k – moving toward
that perceived 400k level at which it will be hard to make a case for job
growth. After this we find the 10-yr at 1.59% and MBS prices a shade better
than Wednesday’s close.

The 5 toughest questions for men. (Part 5 of 5; guaranteed to get me into hot
water, but I will gladly print the opposing view if someone sends it to me.)
1. What are you thinking about?
2. Do you love me?
3. Do I look overweight?
4. Do you think she is prettier than me?
5. What would you do if I died?
What makes these questions so difficult is that each one is guaranteed to
explode into a major argument if the man answers incorrectly (i.e. tells the
truth). Therefore, as a public service, each question is analyzed below, along
with possible responses.
Question# 5: What would you do if I died?
A definite no-win question.
(The real answer, of course, is “Buy a Corvette!”)

…(read more)

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