State Regulators Target Nonbanks; Top-Producing LO Departs Wells for GR - IMFnews

Share Register Advertise February 24, 2021 State Regulators Plan Streamlined Exams, Will Finish Standards for Servicers bivey@imfpubs.com State regulators have two mortgage-related priorities this year: implementing a streamlined exam process for nonbank residential lenders and completion of long pending standards for servicers. John Ryan, president and CEO of the Conference of State Bank Supervisors, provided selected details in a speech this week at the NMLS annual conference. The Nationwide Multistate Licensing System is the platform state regulators use to license and register nonbank companies. Ryan said state regulators plan to launch a pilot this year with a “one company, one exam” approach, as opposed to the current practice that can lead to uncoordinated exams by numerous regulators. And while a proposal by CSBS last year to establish capital requirements and other benchmarks for nonbank servicers was deeply unpopular among industry participants, Ryan said regulators plan to issue final standards this year. For more details, see the new edition of Inside Mortgage Finance, available Thursday afternoon. A New Yearly High for the 10-Year; Applications Tumble, LOs Weigh In… pmuolo@imfpubs.com The yield on the benchmark 10-year Treasury increased to 1.42% Wednesday morning, the highest reading in a year and a troubling sign the rate rally may finally be over. As for residential loan applications, the latest figures from the Mortgage Bankers Association were not pretty. MBA reported Wednesday morning that new business tumbled 11.4% for the week ending Feb. 19, with the refi share dropping to 68.5% from 69.3% previously. Last week, the trade group reported a 5.1% decline in new applications. Of course, just because the 10-year moves that doesn’t mean mortgage rates will follow in lockstep. This observation from New Jersey-based loan broker Brian Benjamin: “I’m doing a pre-qual for a borrower I spoke to at this time last year. I opened the old folder. The mortgage rate today is only .125 better than last year but she has to pay a point. So, in reality it’s probably higher than last year.” Kraningers’s QM Standards Put on Hold; ‘Seasoned’ Rule Could be Revisited lburden@imfpubs.com The Consumer Financial Protection Bureau has decided to delay the July 1 mandatory compliance date for the qualified-mortgage standards promulgated by Trump appointee Kathy Kraninger. In December, the CFPB issued two final rules for QMs: one replacing the 43% debt-to-income ratio with a pricing threshold and the other creating a seasoned QM category. The new QM standards were scheduled to go into effect on March 1, with a mandatory compliance date of July 1. In a statement issued Tuesday afternoon and available on the agency’s website, Acting Director Dave Uejio said that to provide consumers with the options they need as well as to provide maximum flexibility to the market, “We expect to propose a rule to delay the general QM final rule’s July 1, 2021 mandatory compliance date. An extension of the compliance deadline would allow lenders more time in which they could make QM loans based on a debt-to-income ratio or whether the loans are eligible for sale to Fannie Mae or Freddie Mac, and not just a pricing cut off.” Uejio also said the CFPB is considering whether to revisit the seasoned QM final rule through rulemaking. “If we do so, we would consider whether any potential final rule amending or revoking the Seasoned QM Final Rule should apply to transactions where an application was received during the period from March 1, 2021 until the effective date of that final rule.” The bottomline: The current QM standards, including the GSE patch, will remain in effect. For more on the story, see the new edition of Inside Mortgage Finance, available Thursday, and the next issue of Inside the CFPB. On the Road to Recovery: The Non-QM Market bivey@imfpubs.com Originations of non-qualified mortgages are once again gaining ground at some of the top shops in the nation. And even lenders that have so far avoided the sector plan to enter the mix. When the non-QM secondary market ground to a halt in March due to pandemic, a handful of originators weathered the storm without stopping production while others laid low for a few months and then re-entered the market. But two of the top originators of expanded-credit mortgages didn’t feel the need to get back into the market until recently. And now both those companies — NewRez and Redwood Trust — have plans to originate significant amounts of non-QMs. “I would expect that to be a bigger part of our business as we look forward,” said Michael Nierenberg, chairman, president and CEO of New Residential Investment, the parent company of NewRez. For full details, see Inside Mortgage Finance, now available online. Short Takes: Top Wells Fargo LO Departs / Seizing an Opportunity / GR, a Preferred Destination?/ MSR Auctions Proliferate / Late Mortgage Payments? Blame the USPS? pmuolo@imfpubs.com Brian Scott Cohen, a top-performing loan officer based in the Greater New York metropolitan area for Wells Fargo, has parted ways with the megabank for a position at nonbank Guaranteed Rate, IMFnews has learned. According to his LinkedIn profile, Cohen now holds the title of senior loan officer for GR Affinity, a unit of the Chicago-based lender/servicer… In the fourth quarter, Wells slipped to number four among all residential originators (according to Inside Mortgage Finance) after spending most of the past 15 years ranked either first or second. Competitors have seized on the stage coach’s less aggressive role in mortgages to raid some of its talent, particularly its LOs… As one industry headhunter quipped: “For a while now, GR seems to be the preferred choice for Wells Fargo’s top-producing LOs. It’s all about the money…” A bunch of servicing auction notices flew across the computer screen late Tuesday. Among them were offerings from Incenter Mortgage Advisors, Phoenix Capital and The Prestwick Group. The latter is selling a $3.6 billion Fannie Mae/Ginnie Mae bulk package. Texas leads the collateral count at 27.9%. THE LATENESS OF MAIL: True story: In mid-December I mailed a Christmas card with a compact disc (remember those?) to a friend in Michigan. He received it this past Monday, nine weeks later. I received a Christmas card from my sister five weeks after she mailed it to Maryland from upstate New York. Last month I received a late notice from my electric company for a payment I made four weeks earlier. Where am I going with this? There’s been selected media coverage lately about how slow the U.S. mail has been the past few months. And it stands to reason that mortgage servicers must be receiving scores of monthly payments late from their residential customers. This happening at your shop? Drop me a line at: pmuolo@imfpubs.com. Most Top Lenders and Servicers Run Some Operations Overseas For years, mortgage companies — servicers in particular — have looked overseas for an employment solution. By some estimates, the majority of the top 25 lenders and top 50 servicers are handling at least some functions in facilities outside the U.S., whether they own the companies or contract with a third party. Are you thinking about taking some of your operations offshore? Learn more about the benefits and burdens of moving mortgage functions to international locations in IMF’s brand-new Guide to Offshoring. To ensure delivery to your inbox, add news@imfpubs.com to your address book or safe sender list. Home | Update Your Account | Mortgage Data | User Agreement | Unsubscribe © Copyright 2020 Inside Mortgage Finance Publications 7910 Woodmont Ave., Suite 1000, Bethesda, MD 20814 Tel: (301) 951-1240; Fax: (301) 656-1709

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