Settlement Agent Poll; Fannie & Freddie Continue to be Discussed; Apps Continue Downward


the focus of this 6-day a week commentary is residential, it is good to
have an awareness of commercial lending – especially as it competes at
some banks with residential lending in terms of portfolio usage.
Throughout the early 2000s, commercial and multifamily property prices
and mortgage debt outstanding grew alongside one another. From January
2001 to November 2007, apartment property prices rose 82% and mortgage
debt outstanding rose 91%. Then in 2008, property prices significantly
decreased (a 40% drop in property values). Since the beginning of 2010,
apartment property prices have grown 92% and multifamily mortgage debt
outstanding has increased 19%. Commercial and multifamily property
values have risen 68% and mortgage debt outstanding has grown by 6%.

LOs out there are well aware that the NMLS posted a notice regarding proposed changes to the functional specification for all NMLS approved courses regarding webinars.
In October of 2014, the NMLS updated the Functional Specification for
all NMLS Approved Courses, which require providers to utilize two-way
video cameras so both the student and the instructor can be monitored.
This requirement became effective on January 1st,
2015. Recently, the NMLS held a conference call with providers
explaining the need for the two-way video camera, and many providers
expressed their concern with the new standard. For example, providers
will have difficulty identifying a vendor that can support the large
number of video streams associated with a typical size of a webinar
course (40-60 students), they will also have difficulty to continuously
display and monitor students and they expressed concerns that the NMLS
is mandating requirements that will be difficult for some MLOs to meet.
In response, the NMLS said they will accept “rotating” or “random”
display of student’s presence. Final comments were wrapped up last week,
and we will see what is next.

Also as a constant reminder, there are 111 business days left until the RESPA-TILA changes. Secure
Settlements conducted a poll of 1743 settlement agents nationwide from
2/20-2/24 inquiring about their preparation for the CFPB’s new
integrated disclosure rules taking effect on August 1, 2015.  92%
of the respondents were familiar with the new rules, however only 36%
were familiar with the new closing disclosure form, which is available
with instructions on the CFPB website. A majority, 61% said that they
had taken steps to prepare for August 1st, while 39% have not done so
yet.  Interestingly
only 33% or one third of the respondents had been contacted by their
lender clients to review the new form and process and to coordinate
preparation and deliver of the disclosure.  Asked how the new rules will impact their business, some of the  comments included: the new form is “not necessary,” will  “create confusion for the borrower,” will “increase fees and costs to consumers,”  will
“delay closings,” and “seem designed to put small shops out of
business.” Only a minority of the respondents thought the new form was a
positive thing for consumers, the industry and their practice.

There continues to be a lot to think about in recent weeks with regard to Freddie Fannie…

month at the ABS conference comments by Barney Frank (of Dodd Frank
fame) were back in the news, and I was reminded of this statement from
2010: : “I hope next year we’ll have abolished Fannie and Freddie…it was
a great mistake to push lower-income people into housing they couldn’t
afford and couldn’t really handle once they had it. I had been too
sanguine about Fannie and Freddie”, Barney Frank (D-Mass.), former chair
of the House Financial Services Committee (In an interview with Larry Kudlow on CNBC, August 2010 – the interview is worthwhile but you can skip ahead to the 7 minute mark.)

The Community Mortgage Lenders of America (CMLA) renewed its call for Treasury Secretary Jack Lew and chief GSE regulator Mel Watt to take immediate action to recapitalize/cure the under-capitalization of both Fannie Mae and Freddie Mac.
“The CMLA in December of last year – as the GSEs were reporting record
profits – called for immediate action that would allow them to retain
some of those profits to build a reasonable risk capital base. Now, as
profits plummet – due in large part, to losses on derivatives – that
call gains prophetic urgency. The GSE capital levels, already minimal,
will hit zero within just the next few years. Low or zero capital,
coupled with declining earnings, could require yet another Federal
bailout. Fannie’s Chief Executive Officer Tim Mayopoulos, for example,
said the ‘fact that we don’t have a significant amount of capital
increases the likelihood’ that Fannie will need additional capital from
Treasury at some point. The GSE capital depletion is a direct outcome of
the repayment terms embedded in the Preferred Stock Purchase Agreements
(PSPAs) between the GSEs and the U.S. Treasury. That agreement requires
the GSEs to remit 100 percent of profits, which precludes building

The Federal Housing Finance Agency expects early this year to issue new rules governing the sale of long delinquent Fannie Mae and Freddie Mac mortgages
and what will be required of the firms that purchase them, the agency’s
director Mel Watt will tell the House Financial Services Committee in prepared remarks.

Isaac Boltansky from Compass Point Research Trading, LLC
published takeaways from the testimonial FHFA Director Mel Watt gave
before the House of Financial Services Committee on January 27th.
The takeaways suggest that legislative GSE reform will most likely not
occur before 2017 and the FHLB eligibility rule may be softened due to
the overwhelmingly amount of negative feedback that was received from
the proposal, leading to a finalized rule to be implemented in the
latter part of 2015. The proposed finalized G-Fee timeline has remained
the same, but a final decision may not be made until mid-2015. The FHFA
is still mulling over principal reduction and determining whether a
targeted principal reduction effort would be efficacious, but it’s
plausible that the FHFA may not embrace a large-scale principal
reduction program on GSE-backed loans through HAMP. The topic on
Mortgage Servicing Rules was barely touched during Director Watt’s
testimony but he did say that the rule would be supportive of
transferring MSRs to appropriate services. The FHFA may also continue to
push the GSEs to adopt alternative measures of credit, resulting in a
positive impact on credit availability. To read more about FHFA hearing
takeaways and learn about Compass Point Research Trading, LLC,
email Isaac at isboltansky@compasspointllc. com.

outlined several plans the agency announced in its 2015 agenda and
defended changes it has already made to make mortgages and rental
properties more affordable and better shield taxpayers while Congress
continues to debate what to do with the two companies. For instance,
Watt said in his prepared remarks that the agency will issue a progress
report in the coming months on the development of a new mortgage-backed
security both companies could one day issue. The agency expects to
finalize the structure of the new bond this year and begin planning how
to implement it into the market.

Don’t forget that a couple weeks ago the Federal Housing Finance Agency (FHFA) announced proposed minimum financial requirements for Fannie Mae and Freddie Mac Seller/Servicers.
FHFA anticipates that these minimum requirements will be finalized in
the second quarter of 2015, and will go into effect approximately six
months after being finalized. FHFA issued a press release on the requirements, and FAQs,
both located on the FHFA website. Experts think that the requirements
are a non-event has the vast majority of companies in this role are
already there.

lose track of all the housing price indices that come out every month,
but this week we have a slew of them. Yesterday SP/Case-Shiller
told us, simultaneously, that home prices grew at twice the rate of
inflation in 2014 yet posted their weakest full-year gain since home prices were falling in 2011.

big news yesterday did not come from Greece but instead was Janet
Yellen saying that it is unlikely that the Fed will raise short term
rates prior to mid-year. But the Federal Reserve Chairwoman did lay the
groundwork for interest-rate increases later this year and sounded
positive notes on the economy’s performance in the past six months. Mortgage rates, of course, will be determined by supply and demand – the Fed doesn’t set those.
There are phrases in her testimony that can be interpreted as being
hawkish because she makes it clear that the FOMC expects to raise rates
in the foreseeable future. There are also phrases that can be
interpreted as being dovish because she avoided making a commitment to
the timing of the removal of “patient” for forward guidance and offers
an ambiguous interpretation of the interpretation of this change in
forward guidance.

we’ve had the MBA weekly survey: Mortgage applications fell for the
third consecutive week. The Market Composite Index decreased by 3.5
percent on a seasonally adjusted basis from one week earlier. On an
unadjusted basis, the Index decreased by 12 percent compared to the
previous week.  Refis
were 62% of all apps, FHA loans were 15%, VA 10%, USDA 1%. Later we’ll
have more housing-related data with January New Home Sales which printed
481k last month. After closing at a yield of 1.99% the 10-yr is sitting around 1.97% with agency MBS prices a shade better.


Jobs and Announcements

In the job market, Fannie Mae is searching nationally for Directors in their Customer Engagement Division.
The impressive job description includes, “Coordinate B2B account
strategy execution and direct operations in managing local and/or
national customer accounts holistically to maximize relationships,
facilitate the contract process, and offer mutually beneficial solutions
to the customer. Lead teams effectively, articulate goals, allocate
resources, and manage workflow. ” We are focused on advancing the
housing recovery, improving our company, and leading change that results
in sustainable homeownership.  Join our diverse, high-performing team
and make a difference.  Fannie Mae is an Equal Opportunity Employer.” 
For more information, see the job posting here.

Cooke Mortgage
LLC (CCM) is expanding and actively seeking highly
skilled and experienced Branch Managers and their teams.
“CCM is one of the few lenders in the country that is a direct
Fannie/Freddie/Ginnie seller/servicer, which means amazing speed and
control of your files.  We’re
looking for branch managers and their teams that are seeking a platform
that provides the support, technology, and advances needed to be an
industry leader in today’s marketplace.  The
position reports directly to the SVP of Sales Marketing and
requires at least 2 years in branch management experience. Candidates
being considered for this position will be subject to additional
background checks as required. Please contact Christopher Jensen for further information, or go to Castle Cooke’s website. (EEO
Statement: All qualified applications will receive consideration for
employment without regard to race, color, sex, national origin,
protected veteran status, or disability.)

In California Citizens Business Bank, the Top Ranked Bank in California
according to BankDirector Magazine continues to expand their home
lending presence across California. Citizens Business Bank, Home Lending
is a direct lender specializing in Jumbo mortgages, both QM and non-QM
Being a true portfolio lender, they draw on their existing base of
top-tier and high net-worth customers in addition to attracting new
customers by leading with their portfolio mortgage products. All
residential lending leads referred by the business banking team are
driven directly to the home lending team. They
are hiring top-producing retail mortgage originators across California
to help expedite these bank referrals and to originate self-sourced
transactions.  For more information about their available positions, email your questions and resume to CareerOne@cbbank. com.

successfully expanded our retail partner network that contributed to
more than doubling monthly production volume in 2014, a
multi-billion dollar nationally-recognized mortgage lender is once
again searching for top-tier mortgage professionals capable of rapidly
progressing into a multi-branch Regional Management role. Licensed
across the country, our unique regionalized model and superior service
offers unparalleled opportunity for growth.  The
ideal candidate is currently a mortgage broker or an existing retail
branch manager with monthly production of $3-5+M. Our system allows the
branch/regional manager direct input into operating margins and MLO
compensation, while a culture of dedicated corporate support and
recruiting assistance allows the manager to focus strictly on sales and
branch network growth.  Qualified candidates in search of benefiting
from superior pricing, 100% branch credits and multi-branch overrides” are encouraged to submit a letter of interest and/or resume to me at rchrisman@robchrisman. com.

A quick congrats is due to Michael J. Dirrane who National MI has selected as its Chief Sales Officer!

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