Solid Mortgage Earnings Continue as Citigroup Reports; More Investor Updates

This note
from Investor’s Business Daily reminds me why day-trading stocks never works for
me – even if you had the better-than-expected news ahead of time, you would
have lost money: “Even generally
positive results from JPMorgan Chase and Wells Fargo Friday failed to lift
their share
s, which fell along with the rest of the market on disappointing
Chinese growth numbers.” Wells, for example, reported a 42% increase in
income from its mortgage-banking business year-over-year, at $2.9 billion, up
$506 million from the fourth quarter of 2011, on $129 billion in originations,
compared to $120 billion in originations in Q4. Citigroup also came out with its earning this morning – better than
expected.
(For example, Citi released $1.2 billion in reserves – maybe things
really are improving.) Profit spreads are good in mortgage originations – we are
seeing hefty numbers.

And mortgage
companies are expanding, some in the wholesale investor channel. For example, Real Estate Mortgage Network is looking for
wholesale AE’s in the Southeast, Southwest and in Texas. (REMN is licensed
in 40 states.) The lender has been in mortgage banking since the 1980’s and
continues to expand throughout the country as its wholesale division has
continued to see success through “a mix of quality products, commitment to
retail partners and its industry-leading reputation for same day turnaround on
new files.” If you’d like to learn more about the company visit http://www.remnwholesale.com and
interested candidates should send their resumes to AErecruiting@remn.com.

I have
been retained by a highly successful,
privately owned mortgage bank in Northern California who is seeking a Sr. VP of
Mortgage Operations
who will be responsible for multiple operations
centers. (The company is originating well over $200 million per month.) This
position will be responsible for strategic leadership, team development, metrics
and the execution of the mortgage operations of the firm, and include designing
and implementing processes and procedures with effective standards for 
underwriting, closing documents, funding and post-closing teams; managing all
the operations employees, maximizing employee productivity, accountability and
effectiveness. The ideal candidate should have 10+ years of Senior Mortgage
Operations experience. If you know of someone who is a candidate, and is either
living in the SF Bay Area or be willing to relocate, they should send their
resume to me at rchrisman@robchrisman.com.

No banks
were closed Friday, and the pace of 2012 closures is less than that of 2011. Banks
that are closed usually have some forewarning, such as being placed under a
written agreement by bank regulators. If you’re working at a bank, and you
think that it might be under some type of “written agreement” with
the Federal Reserve, the place to check is here.
(These are the newly announced orders; you can search for existing orders
also.)

Turning to
lender & investor news, and a quick reminder that it is always better to
read the full bulletin from the investor, Franklin
American
has just implemented new pricing adjustments for Jumbo loans,
including increasing the LTV/CLTV adjustment to 0.375.  Further
adjustments have been made to Jumbo products in FL, NV, AZ, CA, MI, NH,NJ, CO,
DC, IL, MA, MN, MD, MO, both Carolinas, OH, OK, OR, PA, TN, TX, WA, and WI.

As of last Thursday, April 12th, US Bank
has removed the LTV/TLTV restrictions on using Property Fieldwork Waivers for
Fannie DU Refi Plus Programs 3523, 3524, 3525 and 3526.  Should the DU
response offer a PFW, it can now be used at all LTV and TLTVs per maximum
stated in the guidelines. US Bank will not accept any FHA loans submitted for
underwriting that have a DTI ratio greater than 50%, regardless of FICO
score.  This goes into effect on Monday but does not apply to delegated
correspondents using their own Direct Endorsement (DE) authority.

Provident Funding is no longer accepting loan
applications with borrower-paid broker compensation that exceeds 2% at the time
of the initial registration and GFE audit.  Existing locks will still go
through, but this is immediately effective for all new applications.

Effective
for all Flagstar-serviced HARP loans
locked on or after April 6, 2012, the three Expanded Approval Risk Class price
adjustments will be consolidated into a single price adjustment.  The new
adjustment for EA Risk Classes 1-3 is now -0.250. Flagstar also reminds
sponsored originators that they are not permitted to close loans in their own
name without being approved by the FHA.  These loans must close in Flagstar’s
name; loans from unconditionally approved lenders that are underwritten by the
correspondent must close in the correspondent’s name.  Loans from lenders
who are still in the FHA test case phase must be closed in the correspondent’s
name as well.  In addition, non-approved lenders are required to be
sponsored by at least one lender with FHA approval whom they have registered as
a third party originator in the FHA Connection. 

In light of California Senate Bill 183, which requires all existing homes
“intended for human occupancy that have a fossil fuel burning appliance,
fireplace or attached garage” to feature a carbon monoxide device, the FHA
requires installation of such a device where an appraiser finds it
absent.  Flagstar will not clear FHA loans to close until an inspection
proves that the installation has been completed.  Fannie Mae Form 1004D
competed by an FHA-approved appraiser, HUD Form 92051, or a paid invoice from a
licensed carbon monoxide device professional are all acceptable forms of proof.

As mentioned in Friday’s commentary, Flagstar has indefinitely suspended the
Freddie Mac Open Access program Freddie Mac Open Access II, and any loans in
the pipeline currently registered under the program will need to be locked and
submitted to Underwriting on or before April 27th.   These should be
funded and delivered before June 1.

The Flagstar Conventional Underwriting Guidelines manual now includes revisions
to guidance on condos, document expiration dates, and non-permanent resident
aliens.

Affiliated Mortgage has added to its Unacceptable
Appraiser List
.
AMC also reminds lenders of the new guidance issued on FHA Fixed Rate and FHA
Jumbo Fixed Rate products, the latter for which lenders must receive AMC
approval to be eligible.

Another reminder from AMC: images scanned for loan delivery should be
sufficiently clear so as not to delay the process.  Scanners should be set
to at least 200 dpi, and everything but the appraisal should be scanned in
black and white.  Using the original documents is best, and these should
be scanned in the vertical orientation.  AMC encourages using BlitzDocs to
submit loan files rather than using PDFs.

Mountain West Financial has
partnered with Condo Approvals LLC, a service that provides FHA condo complex
approvals as well as complimentary pre-screens to gauge probable
eligibility. 

Here’s a
name from the past: American Mortgage
Network
-formerly and currently known as AmNet. (Its successor company was
Vertice.) Certainly, as some lenders and investors have left the industry,
others are only too willing to step into the vacancy. In this case, wholesaler
AmNet is offering the standard products, with a “goal to meet or exceed our
prior monthly funding numbers of $1B in 2-3 years.” No, this isn’t a paid ad,
and if you’re a broker with questions contact Mike Lynch at mike.lynch@amnetwholesale.com.

The bond
market
seems to be taking care of itself, and mortgage rates are just fine.
This has come, however, due to another week of softer U.S. economic data. Wells
Fargo’s economics team, for example, has forecast that U.S. GDP growth slows to
a 2.8% annualized pace in the first quarter and continues slowing to a sub 2%
annualized pace in the second. Many economists are not expecting the Fed to start
another round of quantitative easing unless there is an adverse change in the
economy’s direction and the picture painted by last week’s Beige Book is somewhat
upbeat. Regardless, last Tuesday a flight to quality rally on continued euro
zone and global growth worries pushed the 10-year note yield below 2.0% for the
first time since early March, and it closed out the week just a shade below
2.00%.

The news
last night and over the weekend was hardly earth-shattering. Moody’s Investors
Service said it will postpone a decision on whether to downgrade the credit
ratings of more than 100 European banks. (Moody’s is facing pressures from the
industry, which is battling challenges from the sovereign-debt crisis – but doesn’t
a rating agency merely reflect the news that is already priced into the
market?)

We have a
decent amount of U.S. economic news this week to shift interest rates around.
Today we had Retail Sales (+.8%, ex-autos +.8%, a shade better than expected),
Empire Manufacturing (a huge drop), and later we’ll see one in the long series
of housing market numbers (NAHB Housing Market Index). Tomorrow is more housing
related news: the Starts & Permits combo, along with the Industrial
Production & Capacity Utilization twins.  Thursday is Jobless Claims,
the Philly Fed, Leading Economic Indicators, and another housing number:
Existing Home Sales. In the early going
the 10-yr yield is at 1.98%, nearly unchanged as are agency MBS prices

don’t look for big rate sheet changes.

A balding,
white haired man from Boca Raton, Florida, walked into a jewelry store this
past Friday evening with a beautiful much younger gal at his side.
He told the jeweler he was looking for a special ring for his girlfriend. The
jeweler looked through his stock and brought out a $5,000 ring.
The man said, “No, I’d like to see something more special.”
At that statement, the jeweler went to his special stock and brought another
ring over. ‘Here’s a stunning ring at only $40,000 the jeweler said. The lady’s
eyes sparkled and her whole body trembled with excitement. The old man seeing
this said, “We’ll take it.”
The jeweler asked how payment would be made and the man stated, “By check.
I know you need to make sure my check is good, so I’ll write it now and you can
call the bank Monday to verify the funds and I’ll pick the ring up Monday
afternoon.”
On Monday morning, the jeweler angrily phoned the old man and said
“There’s no money in that account.”
“I know,” said the old man, “But let me tell you about MY GREAT
WEEKEND!”
See? Not All Seniors Are Senile.

…(read more)

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