State-Level Updates; Derogatory Credit Policies; LoanDepot Pulls IPO

News

Lots
of people love Friday the 13ths – we’ve had a few this year but there
will be only one in 2016 (May). The Gregorian calendar is full of
wonderful mathematical quirks, and here’s one of them: under its regime,
a century will never start on a Sunday. Or a Wednesday or Friday, for
that matter since the Gregorian calendar completely cycles every 400
years; add 400 years to any date, and the day of the week will be
exactly the same. That means that there are only four different days
with which a century can begin, and they happen to be Monday, Saturday,
Thursday, or Tuesday. Who says that you never learn anything from this
danged commentary? Speaking of learning things, how about this graphic on data breaches? If you don’t think it is going to happen to you, just wait…

Bank MA Announcements

Stifel
Financial Corp. said Monday it has agreed to buy Eaton Partners LLC, a
Connecticut-based global fund placement and advisory firm that has
raised over $68 billion since its founding. Virginia’s United Bankshares
Inc. announced it has signed a definitive merger agreement with Bank of
Georgetown, a privately held community bank headquartered in
Washington, D.C., and with $1.2 billion in assets. In Florida Seacoast
National Bank ($3.2B) will acquire Floridian Bank ($453mm) for about
$76.5mm in cash (35%) and stock (65%) or roughly 1.4x tangible book.
Bank of America will sell its $87B cash management money market mutual
fund business to BlackRock. In the home of the Green Bay Packers
Chippewa Valley Bank ($297mm) will acquire State Bank of Drummond
($44mm). In the Volunteer State Citizens National Bank ($885mm) will
acquire National Bank of Tennessee ($143mm) after National’s holding
company files for bankruptcy.

Ameris
Bank ($5.2B, GA) will acquire Merchants and Southern Banks ($473mm, FL)
for about $50mm in cash. In the home of the Dallas Cowboys Wellington
State Bank ($241mm) will acquire Security State Bank ($118mm), and
Incommons Bank ($117mm) will purchase 2 TX branches from Allegiance Bank
Texas ($2.0B). The branches have $27mm in loans and $30mm in deposits.
Ameris Bank ($5.2B, GA) will acquire 18 GA and FL branches from Bank of
America. The branches have about $812mm in deposits. HomeTrust Bank
($2.8B, NC) will close 6 NC and TN branches as it adjusts to increased
customer usage of online and mobile technology.

LoanDepot pulled its initial public offering (IPO).
LoanDepot Inc., a nonbank mortgage lender aiming to sell shares to the
public at a valuation of up to $2.6 billion, postponed its initial
public offering Thursday, citing market conditions, the company said.
Originally it had planned to sell 30 million shares at a price range of
$16 to $18. At $18, the business would be valued at about $2.6 billion,
and the stake of founder and Chief Executive Anthony Hsieh would be
valued at more than $1 billion. LoanDepot has expanded in just half a
decade to be the country’s 11th-largest mortgage lender by dollar
volume, according to IMF. Its loan volume swelled by more than twofold
in the past year compared with the prior 12 months, thanks in part to a
$38 million acquisition and an aggressive push in loans ultimately sold
to government-backed entities. In recent months investors
fretting about the potential for rising interest rates and increasing
stock-market volatility have become more nervous about sky-high private
valuations that had been attached to many companies with a goal to go
public.

State residential lending changes? We have a random sample so one can see the trends…

Vermont
has revised rules regarding non-discrimination in financial services.
The revision states that when an adverse action is taken, the financial
institutions must provide the applicant with a written statement of
reasons for the action. The statement must be received by the applicant
and a disclosure of the right to a statement of reasons is not a valid
substitution. A statement of reasons must be provided to the applicant
when an adverse action is taken, regardless if the applicant has
requested one or not.

Texas updated regulations for mortgage loan companies and contract provisions, which became effective on November 5th.
Revisions include that any advertisement must contain the name of the
originator followed by the name of the sponsoring mortgage company, the
originator’s NMLS and Registry Identification Number, and the company’s
office physical address. Updates have also been made to ensure
compliance with the TILA/RESPA Integrated Disclosures, as well as the
provision on late charges for high-cost mortgage loans.

Oklahoma
requires one hour of state-specific education for those submitting an
application for an Oklahoma mortgage license on or after November 1st. The one hour of education is to be included in the twenty hours. Also effective on November 1st
is the removal of the requirement for the completion of annual
continuing education in a classroom setting at least every two years.

Florida
has adopted escrow disbursement provisions to include that the names
and license numbers of the title insurance agency issuing the title
insurance policy, and the settlement agent responsible for disbursing
the escrow funds must be provided to the parties of the transaction
before funds can be distributed. A separate form must be provided to all
parties if there is more than one title insurance company involved in
the transaction. When a CD is completed by the lender and the title
insurance policy purchased is a different cost than the premium
calculated on the CD, the title insurance agency must provide the
parties with a written comparison of the cost of the lender’s policy
against an equivalent policy based on Florida rates. The title insurance
agency is also responsible for providing the parties with a written
explanation regarding the true cost of the policy and the amount of
premium to be paid by each party.

California
has updated mortgage loan disclosure statement requirements to comply
with TRID. The announcement highlights that the mortgage loan disclosure
statement (MLDS) is required when broker is arranging a loan on any
type of real property, regardless of residential or commercial. The MLS
must also be provided within three days of the broker or agent receiving
the borrower’s completed loan application. Brokers must use Bureau
forms RE 882 or RE 883 and may use RE 885 for nontraditional loans. The
LE is compliant with TRID if the borrower signed and is provided a
separate disclosure. If compensation that is paid by someone other than
the borrower cannot be disclosed on the LE, a separate disclosure is
required.

Folks sometimes ask me, mistakenly, for details about borrowers being able to finance a home purchase after a foreclosure or bankruptcy. I’ll give it a shot. (I say “mistakenly” because I am not an underwriter, but I ran this by a few folks who are in the know.)

FHA requirements:

Foreclosure: 1-3 years from completion date. (As little as 1 year if borrower qualifies for “Back to Work” see Mortgagee Letter 2013-26 for qualifying criteria.)

Short Sale Deed-In-Lieu: 3 years from completion date.

Chapter 7 bankruptcy: 2 years from discharge date.

Chapter
13 bankruptcy: 2 years from discharge date. (Anything less than 2 years
but greater than 1 year must be downgraded to a manual underwrite.)

VA requirements:

Foreclosure: 2 years for loan amounts $417,000 – 7 years for loan amounts $417,000.

Short Sale: 2 years for loan amounts $417,000 – 7 years for loan amounts $417,000.

Chapter 7 bankruptcy: 2 years for loan amounts $417,000 – 7 years for loan amounts $417,000.

Chapter
13 bankruptcy: 1 year if the repayment period has elapsed, 7 years for
loan amounts $417,000. (Applicant must also receive written
permission from the bankruptcy court/trustee to enter into a mortgage
transaction – if not minimum waiting period is 2 years.)

USDA requirements:

Foreclosure: 3 years from completion date.

Short Sale: 3 years from completion date.

Chapter 7 bankruptcy: 3 years from discharge date, 1-year possibility with proven extenuating circumstances.

Chapter
13 bankruptcy: 1 year of the repayment period has elapsed. (Applicant
must also receive written permission from the bankruptcy court/trustee
to enter into a mortgage transaction – if not minimum waiting period is 2
years.)

Conventional:

Foreclosure: 7 years from completion date, 3-year possibility with proven extenuating circumstances.

Short Sale: 4 years from completion date, 2-year possibility with proven extenuating circumstances.

Chapter 7 bankruptcy: 4 years from discharge or dismissal date, 2-year possibility with proven extenuating circumstances.

Chapter
13 bankruptcy: 2 years from discharge date 4 Years from dismissal date,
2-year possibility with proven extenuating circumstances.

Turning to capital markets news, the Department of Housing and Urban Development plans to sell about $1.3 billion of nonperforming residential loans on November 18th
as part of HUD’s Distressed Asset Stabilization Program. The sale of 24
pools of nonperforming single-family loans is scheduled for Nov. 18,
according to a news release. The sale will include 19 pools of Neighborhood Stabilization Outcome loans and five pools of diversified national loans.

The bond market saw a little rally Thursday, for no other real reason than it was weary of selling off. The
$16 billion 30-year auction was met with strong demand despite (or
perhaps because of) significant weakness in Treasuries since late
October. St. Louis Fed President James Bullard (not a current FOMC voter
but will vote in 2016) said that the Fed should begin normalizing
rates. He also said that low rates may be paradoxically keeping
inflation low, which certainly separates him ideologically from most of
the FOMC.

But
that was yesterday. Today we’ve had the October Producer Price Index
figures (-.4%, ex-food energy -.3%, weaker than expected) and
October’s Retail Sales (+.1%, ex-auto +.2%, below forecasts). Later are
the November University of Michigan Consumer Sentiment figures. Trying
to figure out where mortgage rates are going to be on today’s rate
sheets? We closed the 10-year at 2.32% Thursday and this morning we’re at 2.29% with agency MBS prices, the basis of rate sheet prices, better by .125.

Jobs and Announcements

For a wholesale job update Michigan Mutual,
an agency direct seller/servicer/issuer based in Port Huron, Michigan,
is expanding its national wholesale/correspondent presence
in CA, OR, WA, CO, TX, AZ, UT, FL and GA. “We are committed to helping
our team members and clients succeed by ensuring a comprehensive product
offering, consistently competitive pricing and an unparalleled customer
experience. If you are a Wholesale Account Executive looking for the “right fit” for you and your customers please contact Julie McCan, Southwest Regional Sales Manager (949.381.1003), Chad Northington, Central Regional Sales Manager (414.758.3370), or Al Crisanty, National Wholesale Director (916.761.1624) directly. 

On the retail side Norcom Mortgage,
one of the fastest growing mortgage companies in the Northeast, is
actively expanding its retail presence in the state of Florida. Norcom,
a privately held, family oriented company, is a direct Fannie Mae,
Freddie Mac Seller Servicer and an Active Ginnie Issuer.  If you are a
branch manager or loan originator looking to join a progressive positive
sales environment please contact Tyler Rhea or Steve Harris for more information.

In personnel news Terry Aikin, CMB, was recently named CEO of Synergy Appraisal Services headquartered in Troy, MI.
 David Dill, founder, says “Terry was the ideal candidate to lead our
organization to shape our strategic national and regional growth plan
with his intense focus on enhancing the lender, borrower and appraiser
experience.” Dill will remain active in his client facing and board
level activities while Jim Baumberger will continue to lead the
operational execution as President Chief Operations Officer.
Synergy also has an office in Denver, CO to serve its mountain states
and west coast clients.

And a quick congratulatory shout out to Kevin Cuff, MPA.
Many became acquainted with Kevin when he was the Executive Director
for the Community Mortgage Lenders of America (CMLA). He is now the
Deputy Commissioner of Mortgage Supervision with the Massachusetts
Division of Banks.

If you are looking for lenders that do Non-Warrantable Condos and/or Co-ops, Mortgage Elements just added Non-Warrantable Condos as a new category on its Mortgage Periodic Table.
This is new so management is still building the list of lenders for
this category. If you are a TPO lender that does Non-Warrantable Condos
and/or Co-ops, contact Mark Paoletti to get added to this category so LOs can find you.

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