What’s your price hit for a non-owner-occupied loan? Currently, there are 12 million single-family homes being rented in the United States, 35 percent of all rental housing around the country, worth $2.3 trillion. Historically, single-family homes were rented out by owners or small real estate companies, but as we know that’s changing as large corporations have increased their ownership share. It is estimated that the homeownership rate decline, from 67% to 63%, from 2007 to 2014 means that about 1.5 million households shifted from owning their home to renting it. That’s $220 billion in housing wealth transferred from once-homeowners directly to larger corporations. Think Invitation Homes, American Homes 4 Rent, Progress Residential, Main Street Renewal, and Tricon American Homes who own approximately 200,000 single-family rental homes, much of it in the Sand States.
While other mortgage lenders are hiring temporary operations staff to manage the recent surge in business, Citizens Bank Home Mortgage is adding permanent operations staff and plans to grow the ops team by 20% in 2020. Citizens is looking for talented processors, closers and underwriters at our five regional operations sites in Marlton, New Jersey, Richmond, Virginia, Melville, New York, Franklin, Tennessee, and Warwick, Rhode Island. If you are looking to build your operations career at a company that is winning in the marketplace, apply to Citizens Bank today! For questions, please email Home Mortgage Recruiting today.
Lender products, training, & services
Are you ready to network with thousands of independent mortgage brokers? Join us for the largest gathering of independent mortgage brokers at the AIME Fuse 2019 National Conference. This year the AIME Fuse 2019 is a 2-day networking event that includes panels & training sessions with the industry’s top brokers. In addition, you can hear from keynote speakers including media mogul & serial entrepreneur Gary Vaynerchuk, Million Dollar Listing’s Ryan Serhant and UWM’s President & CEO Mat Ishbia. Swing by and see us this Oct. 11th & 12th at the Bellagio Hotel & Casino in Las Vegas. Use promo code FUSEChrisman for $25 off your ticket! Register here today: aimegroup.com/brokers
From Service 1st’s CEO, Curtis Knuth, “Rob, there was considerable discussion and fanfare about income verification/income analysis at the recent Digital Mortgage conference – and for good cause. Multiple team members in many mortgage shops are redundantly tasked with calculating income. They’re given the same tools, the same formulas, and they’ll often produce different results after 40 minutes of work – then lobby for who’s correct. These are skilled, often tenured members of a valued team! At MBA Annual, we’re introducing a simple, common-sense solution. No uploading endless documents to develop results. Our standards-based, but customizable rules engine is agnostic to the lending channel and uses validated data. In addition, we’re introducing a solution that reduces redundant verifications for wholesale lenders. E-mail firstname.lastname@example.org for a meeting in our reserved space at the Hilton.
Join National Mortgage Professional Magazine for another nmp webinar, One Thing You Can Do NOW to Increase Your Income Next Month [without doing any more loans than you’re doing right now!], being held on Thursday, October 10 at 2 pm ET / 11 am PT. Learn these hacks to legally and ethically optimize your comp with your employer. Many producers are leaving money on the table each and every month without even knowing it. If you’re a Mortgage Branch manager or a Loan Originator, you could be giving away money each month too! Market shifts, industry consolidation and margin compression have eaten into many producers’ monthly incomes which makes it vitally important to periodically analyze your compensation plan to make sure it’s fully optimized and that you’re getting the best deal possible. You can register here.
Another tool in the toolbox. Stearns Wholesale commits to equipping brokers and LOs with comprehensive solutions for a variety of partner and borrower needs. The FLEX Non-QM product series has combined innovative products with a personal touch including 12 or 24-month bank statement qualification, 1-year income documentation, and expanded ratios up to 55%. “The Non-QM launch represents a unique opportunity for Stearns to bring our best-in-class fulfillment experience to the Non-QM product line,” says Nick Pabarcus, EVP of Wholesale Lending. “If you want to learn more about these products or connect with your Account Executive, message us HERE.”
National mortgage lender, NewRez, announced today the formation of a new joint venture mortgage company to be added to its network of partners. NewRez and Shelter Mortgage Company, the NewRez business division focused on JV lending, have partnered with First Team Real Estate, the proven unit sales leader in Southern California, founded in 1976. The name of the new joint venture is Homeowners First Mortgage and will be led by James (Jaime) Barton. “First Team has clearly distinguished itself as the ideal resource for home buyers in Southern California, with the experience and innovative approach to make buyers’ dreams a reality,” says Randy Vanden Houten, SVP, Joint Venture & Retail Lending, NewRez. “At NewRez, we seek forward-looking firms like First Team to be part of our joint venture partnership program…” For more information on the NewRez/Shelter Mortgage joint venture platform, please contact Randy VandenHouten or go to https://www.newrez.com/joint-venture-retail/.
Looking for profits, efficiencies and peace of mind? Discover why ALTA has recently added String Real Estate Information Services to its ALTA Elite Provider Program. Be sure to take advantage of String’s laser-focused attention to metrics and quality, ever-expanding service offerings, and ability to make workflows exceptionally efficient. SCHEDULE time with the String team at ALTA One 2019 or MBA Annual. Or if you can’t wait, CLICK HERE to schedule something sooner. As an added bonus, ALTA members are entitled to a FREE workflow efficiency review. You will walk away with ideas that are immediately actionable and designed to increase profitability.
Q4 is here, and it’s a perfect time for all lenders to start evaluating their business, technology, and process to prepare for 2020. For those going to the MBA Annual Conference at the end of the month and looking to implement new technology in their process with a digital mortgage platform, the time couldn’t be better to meet the Maxwell team. Maxwell is a leading digital mortgage platform, working with over 150 lenders across the country, built to empower lending teams with customization and a powerful API. Click here to quickly and easily book a 30 min meeting in Austin!
USDA rural housing
Lenders know that the USDA offers a handful of lending programs to assist low- and moderate-income borrowers by reducing the down payment. There is one USDA program that funds loans directly to low- and very low-income individuals, but most go through an approved bank or non-bank lender. In general the loans have decent rates, no prepayment fee, and a payback period comparable to that of a conventional mortgage.
These programs were designed to encourage rural development, meaning city homes are excluded. The USDA has an interactive, online tool to help determine if a property is eligible.
The program requires borrowers to meet certain income requirements, agree to personally occupy the dwelling (primary residence), be a U.S. citizen, U.S. noncitizen national, or qualified alien, have the legal capacity to incur the loan obligation, have not been suspended or debarred from participation in federal programs, and demonstrate the willingness to meet credit obligations in a timely manner. The program charges a fee of 1% of the loan amount upfront but this can be added to the loan balance and paid off as part of the monthly payment over the life of the loan. And the USDA charges a 0.35% annual fee on the loan amount. Again, the department allows borrowers to pay that fee over time, but the annual fee must be paid off over 12 months.
The PennyMac Correspondent Group posted an Announcement regarding funding for USDA.
Plaza Home Mortgage is now only requiring transcripts in the following circumstances: On USDA and all Non-Conforming loans. When handwritten paystubs are used as verification of income. Borrower(s) is employed by a family member. If a relationship exists between the parties to the transaction.
USDA announced its commitment authority will be temporarily unavailable for approximately two weeks at the beginning of fiscal year 2020 which begins October 1, 2019. During this timeframe, Rural Development will issue Conditional Commitments “subject to the availability of commitment authority” (aka contingent Conditional Commitments). Wells Fargo Funding will temporarily purchase eligible Guaranteed Rural Housing (GRH) Loans with contingent Conditional Commitments if all other conditions have been satisfied according to USDA guidelines.
Bayview | Lakeview C2019-38 includes information on No MI and USDA and Affordable Updates.
Mountain West Financial posted the following information. USDA has announced a change for transactions containing Non-Fixed student loan repayment plans. Effective September 23, 2019, payments must be calculated and included as follows: Fixed Payment Loans: A permanent amortized, fixed payment may be used in the debt to income ratio when documentation is obtained to verify the payment is fixed, the interest rate is fixed, and the repayment term is fixed. Non-Fixed Payment Loans: Payments for deferred loans, Income Based Repayment (IBR), Graduated, Adjustable, and other types of repayment agreements which are not fixed cannot be used in the total debt to income ratio calculation. The higher of one-half percent (.50%) of the loan balance OR the actual payment reflected on the credit report must be used as the monthly payment in the debt to income ratio. No additional documentation is required.
Conventional conforming ramblings
Huh? Freddie Mac is testing artificial intelligence? According to this story, yes. All kinds of things going on with Fannie & Freddie as they head away from conservatorship, trying to support each other but compete at the same time. And changes aren’t confined to products & pricing & strategy either. Yesterday word spread that Freddie Mac’s Dave Lowman is moving on and will be stepping down from his position as EVP of the Single-Family business on or about November 1. I hope Freddie’s HQ hosts a Halloween-themed potluck for him! Donna Corley, SVP and Single-Family chief risk officer with 24 years at Freddie, becomes the interim head of Single-Family. Ms. Corley is no slacker, and folks who know her tell me she’s great. “As chief risk officer, Corley has led a team of 500 employees responsible for analyzing, modeling and managing the risks that impact our single-family business. In this interim role, she will oversee Single-Family’s relationships with its Seller/Servicers, the performance of its guarantee book, and all sourcing, servicing and business operations.”
Fannie Mae Selling Guide Announcement 2019-08 update announces changes to homeownership education requirements, clarifies policies on employment offers and contracts, revises rental income policy, establishes anti-money laundering activity reporting requirements, and more.
Starting October 23rd, 2019, Fannie Mae is waiving the Framework homeownership $75.00 course fee. Now through October 22nd, 2019, applications for loans requiring homeownership education will continue to be responsible for the $75.00 Framework course fee. Any outstanding pre purchased Framework coupons should be used by October 22nd. Unused coupons will not be reimbursed.
Rates are still low! U.S. Treasuries, with mortgages tagging along, ended Tuesday on a higher note, including the 10-year yield closing yielding 1.54 percent on a highly volatile day. Headline-grabbing news pushed markets around. Fed Chair Powell stated that the Fed would soon announce measures to increase reserve supply via the purchase of T-bills, providing some relief. Bloomberg reported that the U.S. imposed visa bans on Chinese officials linked to detention centers in Xinjiang. The day’s $38 billion 3-year Treasury note auction was met with tepid demand.
Going around the globe, markets received a spate of poor production data, China signaled it would retaliate after the Trump administration placed eight of the country’s technology giants and 28 companies overall on a blacklist Monday, the U.K. stepped up preparations for a no-deal Brexit in three weeks’ time as negotiations with the EU headed toward a breakdown, and UBS reported the Swiss National Bank will cut its policy rate deeper into negative territory in early 2020. The IMF Managing Director said that a “synchronized policy response” may be needed if global economic growth continued decelerating.
Domestically, the Producer Price Index for September showed broad based price declines indicative of weak demand, which strengthen the case for a Fed rate cut later this month. Chicago Fed President Charles Evans said he expects 2.0 percent GDP growth in 2020, adding that downside risks to the economy are stronger than upside risks, including weak business investment. The New York Fed accepted total bids of $37.5 billion in the day’s repurchase operation, below the $75 billion maximum. The New York Fed also conducted a 14-day term repurchase operation, accepting total bids of $38.85 billion, below the $45 billion limit.
Let’s turn to today. Mortgage applications increased 5.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending October 4. The Refinance Index increased 10 percent from the previous week and was 163 percent higher than the same week one year ago, while the seasonally adjusted Purchase Index decreased 1 percent from one week earlier.
Later this morning brings Job openings from JOLTS for August, August wholesale inventories and sales, and remarks from Fed Chairman Powell and Kansas City Fed President George. The Desk of the NY Fed will do its usual buying of MBS, followed by the $24 billion reopened 10-year auction and results. Finally, the minutes from the September 17/18 FOMC meeting close the afternoon. We begin with Agency MBS prices worse a few 32nds and the 10-year yielding 1.56%, for no real reason.
(Thanks to Stephen S. for this one.)
The topic of the day at Army Airborne School was what you should do if your parachute malfunctions.
We had just gotten to the part about reserve parachutes when another student raised his hand.
“If the main parachute malfunctions,” he asked, “how long do we have to deploy the reserve?”
Looking the trooper square in the face, the instructor replied, “The rest of your life.”
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “How Productive is Your Origination Team?” 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.
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 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.)