State-Level Policy Updates; Eyes on Fed Rate Increase

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Trio is a lease with an option to purchase that you can use to finance your new home.” Its sister company is Ownoption Mortgage, doesn’t appear to be licensed either. And in the Seattle area, Loftium continues to offer a service to provide down payment funds in exchange for a share of future Airbnb income. “Homebuyers who need Loftium’s down payment help simply agree to rent out a spare bedroom and share the income with us for 12-36 months after buying their new home.” (Questions about the program should be addressed to founders Adam Stelle or Yifan Zhang.) And real estate agents should be aware of a new way to sell a house: Offer Pad, sent to me by Amy Ramsey with First Community Bank. 

State News 
 
California has recently enacted the Building Homes and Jobs Act, effective January 1, 2018. The purpose of the Act is to establish a permanent, ongoing source of funding for affordable housing development.  This funding will go to existing state programs aiding for emergency housing, multifamily housing, farm-worker housing, home ownership for very low and low-income households, and down payment assistance for first-time home buyers.
 
The state legislature has created this new source of funding in response to a severe need in California. To provide a new stream of funding for these programs, beginning on January 1, 2018, a fee of $75 will be paid at the time of recording of every real estate instrument, paper, or notice required or permitted by law to be recorded, except for transfers subject to a transfer tax and/or transfers to an owner-occupier. The aggregate fees for a single transaction will be capped at $225.
 
On November 7 Texas voters approved Proposition 2, the amendment relating to the home equity provisions of the Constitution, Article XVI, Section 50(a)(6), changing several provisions regarding Texas 50(a)(6) loans. Fannie Mae plans to update the Selling Guide on December 19, 2017. “We are also working with Freddie Mac on updating the Fannie Mae/Freddie Mac Uniform Texas Home Equity Security Instrument (Form 3044.1) and the Texas Home Equity Affidavit and Agreement (First Lien) (Form 3185), and plan to publish both forms on our website by the end of December. There are no changes to the applicable notes and riders.”
 
For these Texas Section 50(a)(6) loans originated in 2018, Fannie Mae is notifying its customers that because the State of Texas is implementing new requirements for Texas 50(a)(6) refinance loans effective January 1, 2018, including a revised form of 12-day notice, Fannie Mae will not purchase these loans closed during the first 12 days of 2018 due to the new requirements. Fannie Mae will purchase Texas 50(a)(6) loans that meet its requirements that are closed on or after January 13, 2018. More details will be provided with a December 19 Selling Guide update.
 
Loans closed on or after September 1, 2017, Citi will accept TX50(a)(6) transactions for purchase consideration when a Power of Attorney (POA) was used, subject to the following: All requirements provided in applicable state law must be met, including that the POA must have been signed in the office of the lender, title company or attorney. Citi requires a completed and notarized Certification of Durable Power of Attorney along with the Power of Attorney document. A new exhibit, 61- Certification of Power of Attorney, has been added to the manual. Note: Use of this exhibit is not required; another format providing the same information is acceptable.
 
Michigan’s Department of Insurance and Financial Services has released the schedule of fees under the Mortgage Loan Originator Licensing Act for the licensing year January 1, 2018, to December 31, 2018. The fees are as follows: LICENSE APPLICATION – Loan Originator License fee: $250.00. AMENDMENT – Change in Employer/Sponsor fee: $100.00. Loan Originator Name & Business Address Amendment fee: $15.00
 
Vermont’s Commissioner of Taxes issued a memo regarding the average prime loan rate charged by banks for 2018. This rate is the basis for determining whether a loan is a high-rate/high-point loan. Title 32 V.S.A section 3108 requires the commissioner to set rates for calculating interest on underpayment and overpayment of tax liabilities. The annual rate for overpayments is rounded to the nearest quarter percent; the average prime loan for October 1, 2016 to September 30, 2017 was 3.91% so the annual rate for overpayment of tax is 4%. The annual rate for underpayments is 200 basis points above the rate for over payments, in this case it is 6%. Under Title 32 V.S.A section 3108(a) the monthly rate is rounded up to the nearest tenth which means the interest rate applicable to overpayments is 0.4% per month and 0.5% per month for underpayments. The rates are effective January 1, 2018 and apply to interest that accrues in the 2018 calendar year.
 
Ohio’s Senate passed the OMBA’s licensing bill, HB 199 that was previously passed by the House. Due to minor technical corrections added in the Senate, the bill must go back to the House for a final vote, which should take place the first week of December. The bill, which will become effective January 1, 2018, will move all loans secured by residential real estate (both 1st and junior liens) into Section 1322 of the Ohio Revised Code. Mortgage bankers, mortgage brokers and loan originators would only need to obtain one license. Registration/licensing under Section 1321 of the ORC would apply only to non-depository lenders making loans secured by collateral other than residential real estate and unsecured loans.
 
New Jersey’s Department of Banking and Insurance released its new “NJ Application Disclosure Form”. The Department expects the form to be used with applications taken on or after January 1, 2018.  The Department has no objection to the use of the new form prior to that date if a company chooses to do so.
 
MBANJ/NJAMB/PAMB announced S3455, its Bill amending RMLA, was introduced in the New Jersey Senate. It revises the New Jersey Residential Mortgage Lending Act (RMLA), sections 1 through which provides for the Licensing of residential mortgage lenders and brokers as required by the SAFE Act, which sets forth the minimum criteria for state licensing statutes. One of the problems that mortgage lenders and brokers have had in the past was caused by the allowable fees set forth in RMLA. These fees were included in New Jersey law prior to the SAFE Act. The bill also makes other changes, all of which will be addressed by the MBANJ and PAMB in subsequent emails to member and at a seminar with the Department to be announced shortly.
 
The attorneys at Black | Mann & Graham publish residential mortgage industry specific news and changes in state and federal law to educate its community of attorneys, lenders, and customers. In its recent publication, the final rules on exemption threshold for consumer credit transactions and increased threshold exemption from required appraisals for higher-priced mortgage loans are examined.

Capital Markets

U.S. Treasury prices, and with them agency MBS, ended Thursday on a lower note with longer maturities bearing the brunt of the selling. With the price move down, and thus rate move higher, the yield curve steepened a bit, but again, this move would have to continue to put a stop to the flattening trend. The 2s10s spread expanded four basis points to 57 bps while the 2s30s spread expanded five basis points to 97 bps. Higher coupon, lower duration conventional MBS put in another impressive performance, but the 10-year sold off .375 to close at 2.38% while 5-year Treasuries and MBS worsened about .125.
 
As mentioned in the commentary yesterday today we’ll have the unemployment data, and it will take a big surprise to dissuade the Fed from raising overnight rates another .25% next week. Look for November Nonfarm Payrolls to be up about 200k, a 4.1% unchanged unemployment rate, and Hourly Earnings up about .3%. At 10AM Atlanta time the University of Michigan Sentiment Index and October wholesale inventories and sales will be released. Don’t expect them to move the market much. (Catching an early flight from Atlanta to San Diego, too early for a read on the bond market.)

Employment, Products, and Webinars
 
LoanCraft now has more than 250 banks, mortgage companies, and credit unions using its innovative Tax Return Analysis. This is a report service, not software. LoanCraft does the work of scanning the data from returns and setting up the file. “Simply upload tax returns and receive a full income analysis within four hours for a standard price of $25. Loan officers like it because it gives them immediate visibility about whether a self-employed customer will qualify. Underwriters like it because they receive a completed analysis without the back and forth in getting returns and K1s and filling in worksheets. Managers like it because they get more production. Contact Ron George.”
 
Sanjiv Das, CEO of Caliber Home Loans Inc., provided his perspective on the industry outlook for 2018 to DS News. Click here to read the article, starting on page 62. “It’s difficult to know what the final package (on tax reform) will look like,” Das said. “While there may be some impact if mortgage interest deductions are modified, we believe the overall impact will be relatively minor and may only affect a relatively small number of high-priced markets.” Das isn’t worried about regulatory changes or cyclical changes in the market. Caliber looks forward to a successful year in 2018. As the market presents challenges for many players in the industry, Caliber continues to rise as America’s fastest growing mortgage company. Caliber is looking for dedicated loan officers to join its national distribution force. If you’re interested in joining the premier purchase company, contact Jeremy DeRosa or visit JoinCaliberNow.com.
 
Academy Mortgage has been honored with a Glassdoor Employees’ Choice Award, recognizing the Best Places to Work in 2018. Academy ranks #18 on the list of large companies, which includes household names like Facebook, Bain & Company, In-N-Out Burger, and Google. Academy Mortgage is the only home loan lender on the list of 100. The company’s overall rating is 4.5 out of 5, with more than 350 reviews. Unlike other awards, there was no self-nomination process; instead this distinction is entirely based on an evaluation of feedback Academy employees voluntarily and anonymously shared on Glassdoor over the past year. Employees cite Academy’s family culture, focus on work/life balance, community service initiatives, and myriad of company benefits as reasons for their high satisfaction working for Academy. Contact National Recruiting Manager John Owens to join a winning team that loves their company and what they do!
 
As the year comes to an end, smart brokers and bankers across the country are working to build their pipeline for the New Year. To support that stride, REMN Wholesale will be hosting two educational webinars on critical legislative changes and products to help them thrive in 2018. In Texas, Proposition 2 will bring major changes and fees regarding home equity loans beginning January 1. REMN will host a webinar on December 12 that outlines the critical details anyone doing business in Texas needs to know about. Space is limited. And while many are aware of 203(k) renovation loans, HomeStyle mortgages tend to be grossly overlooked. REMN is known for their nationwide expertise in renovation lending and on December 14, it will be hosting a webinar outlining the lucrative benefits and differences between HomeStyle loans and their FHA counterpart. REMN continues to look for entrepreneurial account executives in all territories interested in becoming part of a thriving team. Interested applicants should email aerecruiting@remn.com.
 
MGIC is seeking an ambitious sales professional to be a part of its dynamic Sales team in the Houston market. As an Account Manager, you will develop and maintain strong, long-lasting client relationships as well as growing the business by identifying new sales opportunities. The ideal candidate must have a college degree, strong presentation and communication skills, and the ability to travel with occasional overnight. “This person will report directly to Jeff Raich, Sales Manager. If you are a self-motivated, and experienced sales professional with an entrepreneurial spirit, then MGIC may be the right fit for you! Please send your resume Nancy Vang-Lee, Senior Talent Acquisition Partner.”
 
Congrats to Christie Visconti who Dart Appraisal, a nationwide independent AMC, has named Vice President of Finance and will oversee finance, accounting, and human resources for Dart Appraisal. 
 
On the flip side, Farmer Mac (AGM) announced that the Board of Directors has terminated Tim Buzby, the company’s former President & CEO due to violations of company policies unrelated to financial and business performance. Lowell Junkins, Chairman of the Board since 2010 will become the Acting CEO until a replacement CEO is found. Mr. Buzby, who had been CEO since 2012, will not be entitled to any severance pay, and must forfeit his unvested and unexercised stock awards.
 

 



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