Written By: Joel Palmer, Op-Ed Writer
Low mortgage rates since the end of May have boosted the housing market and Freddie Mac economists expect that trend to continue for the remainder of the year. In its July 2019 Economic and Housing Research Forecast, Freddie Mac revised down its quarterly forecasts for the 30-year fixed-rate mortgage for this year and next year, predicted a recovery in housing starts, and forecasted an increase in originations.
Written By: Joel Palmer, Op-Ed Writer
What was once a top priority for the Donald Trump administration when he took office may not happen until the end of the President’s potential second term. Last week, Federal Housing Finance Agency Director (FHFA) Mark Calabria told Reuters that it was his “hope” that Fannie Mae and Freddie Mac would be out of conservatorship by 2024. That is the year Calabria’s term as FHFA director ends.
Written By: Joel Palmer, Op-Ed Writer
Mortgage lenders should evaluate how much cash a potential borrower has to make payments more than the size of their down payment, according to research released last week. A JPMorgan Chase Institute report showed that borrowers with at least three months available to pay their mortgages were far less likely to default than other borrowers.
Written By: Joel Palmer, Op-Ed Writer
Freddie Mac has launched a mortgage product that enables buyers to finance a home and renovations with a single-close transaction. The CHOICERenovation loan is available for purchases and no cash-out refinancing to eligible lenders nationwide.
Written By: Joel Palmer, Op-Ed Writer
Multiple reports in the last week indicate that the Trump administration is close to releasing a plan to end conservatorship of Fannie Mae and Freddie Mac. Fox Business reported that Wall Street bankers and Trump administration officials have started outlining a stock deal to finance Fannie and Freddie’s recapitalization plan.
Written By: Joel Palmer, Op-Ed Writer
Federal Housing Finance Agency (FHFA) Director Mark Calabria told attendees of the Mortgage Bankers Association’s annual National Secondary Market conference that a privatization plan for Fannie Mae and Freddie Mac is in the works. In addition, the agency plans to finalize a housing reform plan that would begin to raise capital for Fannie and Freddie in the beginning of next year.
Written By: Joel Palmer, Op-Ed Writer
Housing experts continue to forecast a busy rest of the year for mortgage processors and underwriters. Fannie Mae, Freddie Mac and the National Association of Realtors (NAR) released forecasts last week indicating that a strong economy, healthy labor market and low mortgage rates will keep the housing market steady for the remainder of 2019.
Written By: Joel Palmer, Op-Ed Writer
Last month, the Federal Housing Administration (FHA) announced changes to underwriting requirements to mitigate high-risk mortgage applications. The agency has updated its Technology Open to Approved Lenders (TOTAL) mortgage scorecard “to manage the decrease in average borrower credit scores and the excessive risk layering that results when multiple risk factors are present.”
Written By: Joel Palmer, Op-Ed Writer
Last month, the U.S. Senate confirmed the appointment of Mark A. Calabria as director of the Federal Housing Finance Agency (FHFA). Calabria, who was nominated by President Donald Trump in December, was confirmed on a 52-44 vote. The vote went along party lines, with the 52 affirming votes coming from all Republicans and all 44 no votes coming from Democrats.
Written By: Joel Palmer, Op-Ed Writer
Both Freddie Mac and Fannie Mae have programs that provide refinance options for borrowers whose loan-to-value ration on a new mortgage would exceed the maximum allowed for standard limited no cash-out refinances. The programs were announced last year in conjunction with the end of the the Federal Housing Finance Agency’s Home Affordable Refinance Program (HARP).
Written By: Joel Palmer, Op-Ed Writer
Freddie Mac’s asset and income modeler (AIM) is now available for self-employed borrowers through Loan Product Advisor, the company’s automated underwriting system (AUS). Freddie Mac said in a statement that its offering is on the only AUS-integrated solution in the industry that can assess self-employed income.
Written By: Joel Palmer, Op-Ed Writer
The Federal Housing Administration (FHA) published a mortgagee letter last month that provides guidance on the use of third-party verification (TPV) services to verify a borrower’s employment, income, and asset information. The guidance applies to all FHA Title II forward mortgages and Home Equity Conversion Mortgages (HECM).
Written By: Joel Palmer, Op-Ed Writer
Fannie Mae has revised downward its forecast for first-quarter economic growth as well as home sales and purchase mortgage originations. Fannie’s February economic forecast includes a prediction of 1.7 percent annualized economic growth during the first quarter of 2019. That’s down 0.1 percent from its previous forecast. It’s also well below the 2.8 percent growth Fannie expects to be reported for the fourth quarter of 2018.
Written By: Joel Palmer, Op-Ed Writer
Fannie Mae expects the Federal Reserve to limit itself to one rate hike in 2019, which it says will help home sales stabilize this year. In its recently released January Economic and Housing Outlook, Fannie said it expects mortgage rates to hover around the 4.5 percent mark, where they ended 2018. It also predicts slower house price appreciation of 4.2 percent in 2019, compared with 5.5 percent in 2018.
Written By: Joel Palmer, Op-Ed Writer
Fannie Mae has released guidance on selling and servicing policies impacted by the federal government shutdown that began before Christmas. Fannie said in a letter to lenders that the guidance is based on the assumption that the shutdown will be temporary. Once the shutdown is over, the policies covered in the letter will expire immediately. Fannie also said that it may provide additional guidance if the shutdown lasts for a prolonged period.
Written By: Joel Palmer, Op-Ed Writer
What can mortgage processors and underwriters expect in 2019? According to housing experts, overall home sales should increase next year, but there are areas of concern. Freddie Mac Chief Economist Sam Khater said home sales should “modestly increase” in 2019, provided that economic growth remains stable and mortgage rates stay below 5.25 percent.
Written By: Joel Palmer, Op-Ed Writer
The Federal Housing Finance Agency (FHFA) released a proposed rule to validate and approve third-party credit score models used by Fannie and Freddie Mac. The proposal is required by Section 310 of the Economic Growth, Regulatory Relief, and Consumer Protection Act enacted in May.
Written By: Joel Palmer, Op-Ed Writer
The biggest question facing the mortgage industry heading into 2019 is whether current negative housing trends will continue or if the market will resume modest growth. That’s the question posed by Freddie Mac in its recently released November Forecast.
Written By: Joel Palmer, Op-Ed Writer
The Federal Housing Administration’s (FHA) Mutual Mortgage Insurance (MMI) Fund remains relatively sound but continues to be dragged down by its reverse mortgage portfolio. Last week, FHA released its 2018 Annual Report to Congress on the economic condition of the MMI Fund.
Written By: Joel Palmer, Op-Ed Writer
As a mortgage lender, you’re likely working with multiple clients at any one time. To process and close their mortgages, you need a host of documents. The busier the season, the more documents you’re juggling and trying to organize in your email inbox.
Written By: Joel Palmer, Op-Ed Writer
Mortgage processors and underwriters may notice less overall activity in the next year. Several industry organizations and agencies have revised projections for the remainder of 2018 and 2019, and those new projections tend to be lower than previously thought.
Written By: Joel Palmer, Op-Ed Writer
Mortgage processors and underwriters who deal with reverse mortgages may have to provide a second property appraisal in certain scenarios. The Federal Housing Administration (FHA) announced the policy recently to reduce what it calls “appraisal inflation” on reverse mortgages, officially known as Home Equity Conversion Mortgages (HECMs).
Written By: Joel Palmer, Op-Ed Writer
Earlier this month, the Federal Housing Finance Agency (FHFA) issued its proposed rule to require Fannie Mae and Freddie Mac to “align programs, policies, and practices” that affect the prepayment rates in their securities.
Written By: Joel Palmer, Op-Ed Writer
The Consumer Financial Protection Bureau (CFPB) has issued a ruling to clarify a key provision of the Economic Growth, Regulatory Relief, and Consumer Protection Act. Section 104(a) of the law, signed by President Trump in May, amended the Home Mortgage Disclosure Act (HMDA). This section was designed to decrease the HMDA compliance burden for smaller institutions.
Written By: Joel Palmer, Op-Ed Writer
Mortgage underwriters are averaging annual salaries between $52,000 and $74,000, while mortgage processors are typically earning average salaries between $36,000 and $46,000.
Written By: Joel Palmer, Op-Ed Writer
Mortgage underwriters and processors have one less form to manage on Fannie Mae loans. As part of its latest Selling Guide updates, Fannie announced that it is not longer requiring Form 1004MC. This was Fannie’s Marketing Conditions Addendum.
Written By: Joel Palmer, Op-Ed Writer
After spending months assessing and asking stakeholders for input, the Federal Housing Finance Agency (FHFA) has put on hold an initiative to change credit scoring models used by Fannie Mae and Freddie Mac.
Written By: Joel Palmer, Op-Ed Writer
The Consumer Financial Protection Bureau (CFPB) announced earlier this month that it is implementing the changes to the Home Mortgage Disclosure Act (HMDA) that were part of the recently passed Economic Growth, Economic Growth, Regulatory Relief, and Consumer Protection Act. The FDIC released a similar statement.
Written by: Nick Allen, FileInvite Op-Ed Writer
In the current environment of leaks, phishing and hacked passwords, keeping access to your systems secure is paramount. Take the following as a preliminary check for..
Written By: Joel Palmer, Op-Ed Writer
Freddie Mac is making condominium purchases and refinances available for an automated appraisal waiver, joining fellow GSE Fannie Mae, which started the practice more than a year ago. Freddie Mac made the announcement last week. Its automated collateral evaluation (ACE) will accept eligible condo loans beginning Monday, July 16.
Written By: NAMP® Staff Writer
2016 has seen numerous changes in guidelines for reviewing student loan qualifying payments. In this two part series, N.A.M.P. and N.A.M.U. will provide tools for processors and underwriters to use when determining which calculation should be used for qualifying student loan payments. Part I reviewed Fannie Mae and Freddie Mac’s guidelines. We continue this series by exploring USDA, FHA and VA rules.
Written By: NAMP® Op-Ed Ghost Writer
2016 has seen numerous changes in guidelines for reviewing student loan qualifying payments. In this two part series, N.A.M.P. and N.A.M.U. will provide tools for processors and underwriters to use when determining which calculation should be used for qualifying student loan payments. We will begin with Fannie Mae and Freddie Mac’s rules on this topic. Part II will explore USDA, FHA, and VA rules.
Written By: Carlette Emperator
There’s been several times that reimbursement from employee business expenses have been used against the borrower for mortgage qualification. This has caused the borrowers monthly income to be reduced based on the information noted in the two most current tax returns on schedule A or form 2106.
Written By: Carlotta Emperator, Op-Ed Writer
In recent year, FHA has published updates to the rules that affect how to process a FHA Reverse Mortgage or Home Equity Conversation Mortgage. This process is completed through what is a “Financial Assessment” that was added to the Reverse Mortgage effective date April 27, 2015. FHA required each lender to process a prospective mortgagor on all HECM transaction type.
Written By: Angelique Jackson, Op-Ed Ghost Writer
On March 29, 2016 Fannie Mae issued an updated regarding DU 10.0 and Multiple Financed Properties. Previously, we lenders had to manually calculate the reserve requirements because DU did not provide that information. Well, that will all change the weekend of June 25, 2016. DU will now calculate the number of financed properties the borrower has and calculate the reserves for both the subject property and the “Other financed properties.” But before we get into the calculations for the total number of financed properties and reserves, let’s talk about the multiple finance property rule and when it applies.
Written By: NAMP® Op-Ed Ghost Writer
Although the automated underwriting system provides guidance on loan analysis, it is critical to hone your guideline reviewing skills. Underwriting guidelines contain critical definitions, clarifications, and rules that must be applied on all loans. In some cases, the AUS will refer to the guidelines for the full list of requirements to address a particular loan characteristic. As a result, let’s review some best practices for using guidelines.
Written By: NAMP® Op-Ed Writer
In the age of green technology the mortgage industry is beginning to see more properties with Solar Photovoltaic (SPV) systems, more commonly known as Solar Panels. In this 2-part article we will cover what solar energy is, how it works, the types of financing available and the documentation requirements. What are some of the benefits of using solar energy? It helps conserve our fossil fuel resources and reduces our reliance on imported fuels.
Written By: Angelique Jackson, Op-Ed Writer
Last week we covered the different types of financing available for solar panels such as a Solar Lease, Power Purchase Agreement (PPA), a Solar Loan and the Property Assessed Clean Energy (PACE) program. With a Solar Lease or Solar Loan, the lease/loan payments are included in the DTI (a solar loan payment is added to the PITI as subordinate financing),while payments for a PPA are excluded from the DTI since the homeowner only pays for the energy that was produced.
Written By: NAMP® SOp-Ed Ghost Writer
Underwriters and processors that work for non-delegated lenders must submit loan packages for review. Those packages are subsequently reviewed by the MI or investor underwriting team. These packages may also be reviewed by management, sales professionals, and auditors. As a result, it is important to put your best foot forward and present as clean and transparent a package as possible.
Written By: NAMP® Op-Ed Ghost Writer
We have seen frequent changes in the requirements for including student loans over the last year. There was a time where student loans could be excluded from the qualifying ratios if the borrower was able to verify certain terms of deferment. In addition, income-based repayment plans and other temporary reduction plans were permitted. However, the agencies have recently released lender updates that are changing the student loan game.
SOURCE: Mortgage News Feed
GUS, or Guaranteed Underwriting System, is USDA’s automated underwriting engine. GUS can take some getting used to if you are most familiar with Desktop Underwriter or Loan Prospector. Here are some tips to help you navigate GUS and get the most accurate findings for submission to USDA.
Written By: NAMP® Op-Ed Ghost Writer
As the weather warms and the housing market gains steam, volume will increase. Production standards will be revisited by management and rush requests will become the new normal. The pressure to get loans out of the underwriting queue will increase. As a result, we must tighten up our process flow and put some best practices in place. One of the most fundamentally important best practices is the validation of the findings.
Written By: Angelique Jackson
On March 9, 2016 the final rule published in the Federal Register in February is now in effect. We have been working under the interim final rule since December 1, 2014. There are a few new items in the handbook along with the restructuring of the handbook similar to FHA’s 4000.1 where all information is gathered in one single source and divided in sections for Manual Underwriting and GUS Accept. Chapters 5-16 were updated with new guidance and/or clarifications to old guidance. I am not going to go over all of the changes but I will talk about some of the more pertinent changes and clarifications that were done.
Written By: NAMP® Op-Ed Ghost Writer
USDA introduced several changes on December 1, 2014. These were the interim rules that became effective with the introduction of the new guaranteed loan program regulations 7 CFR Part 3555. Since then, USDA has finalized these rules. Those final changes became effective March 9, 2016.The first highly anticipated change is that discount points may now be financed for all applicants.
Written By: NAMP® Op-Ed Ghost Writer
Recently Fannie Mae has issued communication regarding some upcoming changes with Desktop Underwriter (DU), the Single Family Selling Guide, and Collateral Underwriter (CU).
Written By: NAMP® Op-Ed Ghost Writer
The busy season in the mortgage industry is fast approaching! Soon, the weather will break and homebuyers will come out of hibernation to begin searching for their next home. As a result, this is a good time to think about some best practices for maximizing productivity and efficiency. Time management is one of the most critical of these practices.
Written By: NAMP® Op-Ed Ghost Writer
Most underwriters and processors have the basics of calculating income down to a science. The hourly, bi-weekly, semi-monthly, and annual calculations are second nature to those of us who calculate income every day. As a result, many processors and underwriters will manually execute their calculations on an underwriting or processing worksheet. Many underwriters will also type their calculation on their underwriting transmittal. However, there are some drawbacks to manual calculations that an income calculation worksheet can overcome.
Written By: NAMP® Op-Ed Ghost Writer
The past year has seen sweeping changes in almost every area of loan origination, underwriting guidelines, and loan disclosures. USDA and FHA have both created new handbooks that came with completely new guidelines. The CFPB introduced the Loan Estimate and Closing Disclosures which replaced the Good Faith Estimate, TIL, and HUD-1. Fannie Mae and Freddie Mac introduced new guidelines for many topics including review of Schedule-A Unreimbursed Expenses and required reserves for borrowers retaining their home as a secondary or rental property.
Written By: Carlotta Emperator, Op-Ed Writer
Many borrowers have deferred student loans. A deferment, like forbearance is a temporary suspension of the obligation to repay a federal student or parent education loan. In order to qualify for a home mortgage, these obligations were being “omitted” or calculated incorrectly. Therefore, the borrower’s ratio would be affected based on the mortgage product.