Possible CRA Changes; Freddie QC Software; Compliance Boot Camp in Hawaii

News

Who says that everything on the web is spellchecked? One glance at this website
will tell you otherwise – those mortgage brokers had better fix it.
Mortgage people may need to start our own club, complete with special
handshakes, something which says ‘hey, I know the difference between a
1003 and a 1008,’ maybe even work on a secret motto…it appears to be a
growing trend with big investment firms.

The
Community Reinvestment Act is certainly full of policies and
procedures, and you might have a new set of them to contemplate. Using
the Federal Register, the Office of the Comptroller of the Currency
(OCC), Board of Governors of the Federal Reserve System (Board), and
Federal Deposit Insurance Corporation (FDIC) published proposed
revisions to their “Interagency Questions and Answers Regarding
Community Reinvestment,” which provides guidance on the above federal
agencies’ (collectively the Agencies) regulations implementing the CRA.
The Agencies also requested public comment on the proposed
revisions. Titled “79 FR 53838”, the proposed revisions seek to revise
three questions and answers that address (i) alternative systems for
delivering retail banking services and (ii) additional examples of
innovative or flexible lending practices, revise three questions and
answers addressing community development-related issues, including
economic development, community development loans, and activities that
are considered to revitalize or stabilize an underserved nonmetropolitan
middle-income geography, and add four new questions and answers, two of
which address community development services, and two of which provide
general guidance on responsiveness and innovativeness. Lenders
interested in commenting on the proposed revisions must submit comments
to one or more of the Agencies in the manner set out on page 53838 of
the September 10, 2014 Federal Register, and they must be received on or
before November 10, 2014. Read about it straight from the horse’s mouth.

I
recently received a note from a mortgage vet asking if I had seen
Ocwen’s restatement of 1Q14 and 2013 earnings. Yes, I had, and note that
this also pertained to Home Loan Servicing Solutions, too. For those
who don’t know, on August 12, 2014, Ocwen filed a restatement of earnings with the SEC, in part it read, “Angelfter
consultation with Deloitte Touche LLP, the Company’s independent
registered public accounting firm, determined that the Company’s
financial statements for the fiscal year ended December 31, 2013 and the
quarter ended March 31, 2014 can no longer be relied upon as being in
compliance with generally accepted accounting principles (“GAAP”).
Accordingly, the Company will restate such financial statements.
Similarly, related press releases, Deloitte Touche’s reports on
the financial statements, including the effectiveness of internal
control over financial reporting, and shareholder communications
describing the Company’s financial statements for these periods should
no longer be relied upon. The decisions of the Board of Directors and
Audit Committee to restate these financial statements follows a
recommendation by management.”

Ocwen’s
restatement relates to the sale of mortgage servicing rights to Home
Loan Solutions and the subsequent financing transaction, which are
comprised of MSRs pledged in connection with certain rights to receive
servicing fees, excluding ancillary income. The amount of the liability
on the books of Ocwen was $634.4 million, or approximately 10% of total
liabilities. An asset of similar size was booked by Home Loan and valued
using the same accounting methodology, and a restatement was submitted
to the SEC on the same day. Both parties have indicated in their public
filings that the restatements came about because of a change in
accounting treatment for the MSR transaction. Kroll Bond Rating Agency writes,
“We believe that the restatement came about because of a change in the
advice provided to OCN by Deloitte Touche, not because of any
actions or omissions by either OCN or HLSS. Based on our review of the
public information from both OCN and HLSS, we see two significant
changes in the treatment of the MSR transaction: (1)
First, both OCN and HLSS are restating their financial statements for
Q1 2014 and 2013, specifically changing the valuation of the MSR
transaction in these periods. Both OCN and HLSS indicate that they do
not expect any change in reported income as a result of these
restatements, and (2) both OCN and HLSS are changing the methodology for
valuing this transaction, apparently upon the advice of Deloitte
Touche. The change will require both OCN and HLSS to adjust the
valuation of the MSR position based upon “the best available estimate of
fair value, in accordance with GAAP”

Let’s
play catch up with some lender, investor, and agency updates to see any
trends out there. As always it is best to read the actual bulletin for
complete details.

Flagstar announced its annual recertification for all Non-Delegated Brokers and Correspondents began on Monday, August 18.

Given the impact lender repurchase anxiety is having in the market, Freddie just upgraded a tool designed for managers who want a better way to track loan quality trends. Quality Control Information Manager
is the name of the tool and the new function is called Management
Reporting.  Management Reporting expands a manager’s ability to analyze
QC trends, track underwriting deficiencies and spot and fix possible
loan manufacturing process problems.  It also makes it easier for
customers to exchange important information with Freddie on loan
remedies and loan quality trend analyses. Managers can customize date
ranges depending on their particular needs and interest in zeroing in on
QC trends during particular periods.

AFR Wholesale is now offering Fannie Mae HomeStyle® Renovation Mortgage Program.

AmeriHome
has expanded program pricing options and various guideline updates.
Programs include limited overlays and the following portfolio product
highlights: 89.9% LTV with no MI to $1.5M, Interest Only option at 80%
to $2M for OO properties, $500K Cash out options available, and 2nd
Homes purchase or cash out.

First Community Mortgage Wholesale posted NMLS-Company Identifiers regarding NMLS requirements in Delaware and Missouri.

Citimortgage posted tips to avoid most common errors specifically on bank or brokerage statements.

The Data and Analytics division of Black Knight Financial Services
has formed a new Advisory Services Group to provide clients with custom
solutions for specific issues clients need to resolve. The group’s
primary offerings will include advisory consulting services, research
and strategic insights, and configurable data and analytics. The full article outlines Black Knight’s goals and services.

PennyMac is aligning with Fannie Mae’s guidelines significant derogatory credit events. Changes
include waiting periods for mortgage debt discharged through
bankruptcy, waiting periods following a preforeclosure sale (short sale)
or deed-in-lieu of foreclosure, and Charge-offs of mortgage accounts.

EverBank
retail offers up a 365-day rate lock with a float down option. I am
sure it is priced accordingly… (The bulletin I saw came from Dave.Taormina@EverBank. com so he would have more information.)

For VA applications and VA loans in process, U.S. Bank Home Mortgage
is removing the VA Guaranty requirement of 30% on VA loan amounts of
$650,001 to $1,000,000. The standard 25% Guaranty consisting of
Eligibility and/or down payment will be required on all VA loans. In
addition, new FHA applications and FHA loans in process, is removing the
additional reserve requirement on FHA loans when a borrower is vacating
the primary residence and converting it to an investment property. The
current requirement of 6 months PITIA reserves for both properties is
being reduced to follow the current FHA requirement of 3 months PITIA
reserves for both properties.

US Mortgage Insurers, a trade association composed of multiple private mortgage insurance companies, submitted its response letter
regarding the Federal Housing Finance Agency (FHFA) request for input
(RFI) regarding the guarantee fees (g-fees) that Freddie Mac and Fannie
Mae charge to lenders.

Turning
to the markets (zzzzz), mortgage-backed securities made some technical
moves yesterday, but nothing so dramatic as to impact rate sheets. Much
of the focus has shifted from this week, with very little news or
overseas drama, to next week and the Fed meeting. Any Fed levels of
Treasury and agency MBS purchases now is expected to drop further and
the actual announcement comes out next Wednesday. But not so fast…we had
Import Export Prices and Retail Sales this morning. Retail Sales
came in stronger than expected at +.6% (although only up .3% ex-auto)
and Import Prices were -.9%/Export Prices were -.5%. For numbers, we had a 2.53% close on the 10-yr T-note Thursday and this morning we’re at 2.58% and agency MBS prices are worse .250-.375.

 

Jobs and Announcements

On
the jobs recruiting side, “if you are reading this job posting,
you know every mortgage company in the US is hiring loan officers. What
you may not know is that Network Recruiters has more options for loan officers than any other company in the industry.  Now is the time to look at all your options and to make your next move, the right move. Most loan officers have never worked with a recruiter. Our job is very similar to yours: find the best mortgage platform for our clients. LOs have multiple lenders and investors they shop to find the best loan for their clients.  We represent many of the top mortgage banks in the industry, to provide more options for our loan officer clients. Network Recruiters is a mortgage only recruiting firm.
We provide loan officers with market intel, real time information that
saves you time, protects your confidentiality and that will ultimately
help you understand what makes each company unique. Unlike employment
boards and industry websites, at Network Recruiters you work directly
with one of our professional recruiters. Our process starts with a
confidential consultation, which helps us uncover your goals and needs.
 Then we schedule multiple interviews, conduct post interview
debriefings and help negotiate the terms of your new position. Contact Steve Samuelson with confidential inquiries.

And congrats to Michael Sheffield. Allied Mortgage Group,
a leading wholesale mortgage banker on the east coast, has announced
his addition to the wholesale division and the increase in AE hiring up
and down the East Coast. “I joined Allied Mortgage Group because of
their deep industry experience, solid reputation and commitment to
wholesale lending. Our goal is to build relationships one at a time and
provide the best service available. Allied Mortgage Group has been
serving wholesale clients for more than 20 years and I am excited to be
part of this team.” Allied
Mortgage Group
is growing and is currently seeking experienced
Wholesale Account Executives in NJ, CT, MA, NC, SC, GA FL. Send confidential inquires to Michael Sheffield.
Allied Mortgage Group has been serving mortgage brokers and financial
institutions for over 20 years and is licensed in 28 states. For more
information on wholesale lending visit GoAllied.

And
I received this note for compliance folks. “Hey Rob, We just received
approval from the American Bankers Association for our compliance policy writing boot camp
to count towards 20.75 clock hours of CRCM (Certified Residential
Compliance Manager) continuing education. I know, it sounds really
exciting! The boot camp is a collaborative event where 10 compliance
officers work together for 3 1/2 days polishing every compliance policy
the CFPB cares about. The CFPB has made it clear that generic template
policies are not the best way to create and maintain a compliant
company. You need to write policies that actually apply to your company
and make sense for the reader. That’s what we do for 3 1/2 days. We still have space in our next event in Maui from November 4-7.
We have reserved ocean view rooms and spend our days with our laptops
open in front of the beach where we have reserved the entire patio of
Japengo restaurant at the Hyatt Regency Maui Resort and Spa. If you are going to write policies all day you might as well be in a gorgeous setting! Attendees can contact Ken Perry for pricing and additional details.

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