Millennials

Free
DU? You bet – Fannie couldn’t let Freddie offer LP at no charge and not
respond. “Beginning June 1, Fannie Mae will align DU and Desktop
Originator (DO) to the no-fee approach allowing more lenders and loan
originators to access the value of DU and DO in their underwriting
processes…press release.
But the herd is spooked. The June DU bills won’t reflect this change,
obviously, and should be paid to Fannie just like always. July’s will
reflect the change – but what about DU fees on loans prior to the
announcement where the borrower paid for it? Is it a “changed
circumstance” with unintended consequences? It sure would have been
easier to set the change date in the future. Under RESPA, underwriting
fees are a zero tolerance item – do lenders break out the DU fee or not?
Lenders have 3 business days to send new disclosures. What about
refunds? What about the impact on the APR calculation, and
tolerance…re-disclosure? Be sure to check with Fannie or your compliance
department. Are we having fun yet?

Axiometrics finds the national apartment occupancy rate reached 95.3%, the highest level on record,
as rental activity remains robust. There are plenty of Millennials
still renting, and let’s see what they’re up to (and I won’t make any
jokes about many of them wanting a trophy for renting). But the
mainstream media pointed out yesterday that rent is becoming a burden to anyone in the middle class as well – a big selling point for LOs who have good down payment assistance programs up their sleeves.

Do
your kids think money grows on trees? If only it were true! Some kids
(which for some mean Millennials) spend money thinking their parents
have an unlimited supply; but do they really know what money means? The
latest FDIC Consumer News
features tips to teach young people about money. What can you as a
parent do? You can discuss with your child what they are doing with
financial decisions and why they are doing it. As we all know, special
offers – at times- aren’t really that special. Teaching your child about
when a deal really is special is a good tip.

While
on the topic of finances, how can you protect them from financial
fraud? The FDIC Consumer News discusses security tips for bank customers
so you aren’t hurt by financial fraud. One of the most vital practices
you can live by in terms of computer security is being careful of where
and how you connect to the Internet. Social media can be fun, but it is
also a place where, far too often, people reveal personal information
that thieves can use to figure out and reset passwords.

The
FDIC’s link has plenty more, and has great information for LOs to pass
on to borrowers. Besides your finances, what is one of the most
important things you have control over? Your credit score. It could be
boosted with the latest change that medical debts will not appear on
credit reports until they are at least 180 days past due. And if you
have a special needs child there are some new ways to save money. The
Achieving a Better Life Experience Act (ABLE)
would allow you to pay for some qualified expenses such as education,
housing, transportation and health care tax-free as long as the
disability is document before age 26.

The Collingwood Group’s
chairman, Tim Rood, explained in an interview with radio show host Jim
Bohannon that although there has been a gain in new home sales, existing
home sales have flattened due to a lack of inventory. Part of this
problem can be contributed to the inability for homeowners to sell their
home because they are underwater or the low equity they have is not
worth the costs of selling and then buying another home. Rood explained
that the surge in home start numbers was in part due to apartment
construction in April, as developers begin to cater to Millennials. Rood
pointed out that if Millennials begin to settle down and look to
downsize, and baby boomers begin to move to urban areas, the demand for
those residences will increase. This may result in Millennial’s being priced out of the market or making lifestyle decisions that prevent them from buying a home. To read more about Tim Rood’s interview, click here.

Accenture recently published a banking survey showing that Millennials switch banks twice as often as other consumers
even though the survey found that millennials are satisfied with their
online banking experience at their primary bank. About one in five
millennials (18 percent) said within the last 12 months they switched
banks compared to 10 percent of customers between 35-54 years old and
only 3 percent of people 55 and older. Of those who switched banks, 17
percent of Millennials chose online-only banks and 31 percent of
consumers between 35-39 years old switched to online-only banks within
the last 12 months. Two-thirds (67 percent) of Millennials said the
traditional and digital banking experience at their bank is somewhat or
not at all seamless, 47 percent said they would like their bank provide
ways to help them monitor their budget and 48 percent said they would
like their banks to offer video chat on their website or mobile/tablet
application compared to 30 percent of those over 55 years old.

Dan Cutaia writes, “My response to an article about the MBA doing outreach to Millennials
to get them interested in mortgage banking as a career…One has to
wonder that if an old industry full of old people that is old in its
ways needs to “sell” itself to young people to add new-blood, then is
that PR noise really just a death gasp?  Back in 80s we did not need to
“get educated” about mortgage banking to jump in any more than the
Millennials need to get “sold” on the attractiveness of hi-tech jobs
today.  Way back then the mortgage banking business was new and booming
and the opportunities were plentiful, exciting and blatantly
apparent. What makes it attractive today? My point is that something
structural needs to take place. It’s going to take a lot more than PR to replace an aged mortgage banking work force of 2 million people.”

Along these lines Kristin Messerli
writes, “The final rule for Section 342 of the Dodd-Frank Act, issuing
industry standards for diversity and inclusion, was recently released.
While many companies have prepared for the rule or are simply in better
positions to comply, the majority of companies have not sufficiently
prepared for the regulated focus on diversity. The Joint Standards
issued in the final rule are collectively developed and regulated by six
of the federal financial agencies, including the Consumer Financial
Protection Bureau (CFPB). The standards reflect best practices in
diversity and inclusion in the following areas: Organizational
Commitment, workforce profile and employment practices, supplier
diversity and procurement practices, practices to promote transparency
of diversity and inclusion, and self-assessment.

“Many
companies are overwhelmed by the amount of information requested by the
standards however compliance with the rule can begin with a few initial
steps. First, begin with the self-assessment. This should include a
foundational evaluation of the company’s existing diversity and
inclusion activities and a quantitative and qualitative analysis of the
company’s compliance in meeting the previous four standards mentioned
previously.

“The
second step for initial compliance is company-wide training on
diversity and inclusion, as listed in the standard for organizational
commitment. Before recruiting for a diverse workforce, it is critical
that the entire staff is culturally competent and prepared for that
shift. Take the opportunity here to leverage this training as an
occasion to train loan officers and managers to diversify their business
channels and better serve emerging market segments.

“The
third step is simply preparation for implementation. Take the results
of the assessment and identify what your objectives and priorities are
as a company, and develop a strategic plan to meet those goals. This
plan should include specific action steps to meet the objectives, who
will be responsible for each action step, and the target launch date and
reassessment date.

“Lastly,
begin making your commitment to diversity and inclusion public.
Structure your website so that your commitment is clear. Publish the
strategic plan created in the previous step, list employment and
procurement opportunities, and describe the company’s commitment to
diversity and inclusion. This is another opportunity to leverage
compliance as a competitive advantage. Studies show that Millennials are
more likely to work with companies that show an appreciation and value
for diversity.  Additionally, the majority of household formation in the United States is comprised of minorities.
Companies that do not show a clear commitment to diversity are not only
putting themselves at risk with regulators but they are putting their
business at risk.” Thanks Kristin!

Turning
to the markets, Tuesday we had plenty of more news about our economy –
once again showing a mixed bag. New home sales rose 546k in May, higher
than the 523k expected and at its highest level in 7 years. But Durable
Goods Orders fell 1.8% in May and April was revised downward from -0.5%
to -1.5%. But wait – home prices rose 0.3% in April, according to the FHFA.
The index is now roughly 2.3% below its March 2007 peak and corresponds
to Feb 2006 prices. Note the FHFA index is narrower than the other
indices like Case-Shiller in that it only looks at homes with a
conforming mortgage.

But
these monthly numbers continue to be overshadowed by what is happening
with entire countries – like Greece. And on Tuesday we sold off again,
with rates moving higher, after a renewed global appetite for risk left
the U.S. fixed income markets without much buying interest. The
authorities are ruminating on a Greece proposal to its official
creditors (the IMF, European Commission, and ECB) that appears to make
enough concessions to obtain more financing. The proposal raises VAT on
many goods and services, raises pension contributions, and increases
business taxes. Will Germany be happy?

This morning in an early report CNBC tells us
that the MBA’s application numbers showed apps rose 1.6 percent
week-to-week on a seasonally adjusted basis in the week ending June 19 –
still 11% higher than one year ago. Refis were +2% and are up 4 percent
from a year ago whereas purchases rose 1% and are 18 percent higher
than a year ago.

Mid-week
economic news consists of mortgage applications (w/e 6/19) at 7 a.m.,
and final update on Q1 GDP at 8:30 a.m. which is expected to be upgraded
to -0.2% from the preliminary -0.7%. Treasury will hold two auctions;
$13 billion reopened 2-year floating rate notes and $35 billion of
5-year fixed rate notes. We ended Tuesday with the 10-yr sitting at a yield of 2.41% and in the early going we’re at 2.39%.

Jobs and Announcements

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AmeriHome
Mortgage
, “a top 10 national correspondent lender out of Woodland
Hills, CA, prides itself on being ‘built for its clients’ and is adding
correspondent customers.
Greg McElroy, who leads Operations for AmeriHome attributes their
consistent industry leading turn times to their ‘philosophy to keep
clients at the center of all business decisions.’ Great pricing,
outstanding client service and a broad array of products continue to
propel AmeriHome into the top ranks of all national tier correspondents.
Don’t miss out on an opportunity to become a partner and experience for yourself the world class service and speed of execution AmeriHome Mortgage has to offer.”

Congrats to Michael Barone. Lenders Compliance Group, Inc. (LCG),
the nationwide risk management firm, announced that he has been
appointed to the position of Executive Director of the firm. Mr. Barone
will also remain as a Director of Legal Regulatory Compliance for
LCG. (LCG provides a suite of services to banks and nonbanks,
residential mortgage lenders, servicers, investors, closing and title
agents, and other vendors in all areas of mortgage banking.)

Article source: http://www.mortgagenewsdaily.com/channels/pipelinepress/06242015-price-of-du.aspx

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