Mortgage firms are concerned they may be sanctioned or penalized if they make a mistake, but the FHA at this time likely will not take any action because the system is so new.
“If the cap is 2.75 percent, it doesn’t leave much, but you have to keep in mind that the lender is building ‘everything else’ into the note rate,” said Marc Savitt.
One California-based mortgage broker had this to say: “All the CFPBs is doing is driving up costs, further confusing the consumer, and wasting even more tax payer dollars.”
Mortgage brokers who read the guidance said it reveals how little the young regulatory agency understands about the industry. If a broker has the financial ability to obtain a warehouse line of credit...
Redwood Trust took three months off from issuing jumbo MBS but came back with something of a doozy this week: a $306.05 million deal that will include some loans that don’t meet standards for qualified mortgages and some loans that weren’t subject to third-party due diligence reviews. Sequoia Mortgage Trust 2014-2 is set to receive AAA ratings with credit enhancement of 7.75 percent on the top-rated tranche. While the credit enhancement requirements are somewhat high, a jumbo MBS from Redwood in November had even higher credit enhancement levels, suggesting that the non-QMs and lack of full due diligence aren’t a major concern. Only three of the 438 mortgages to be included in the deal are...
New GSE repurchase requirements are now in effect, including the “MI stand-in” option, which Fannie defines as “the full mortgage insurance benefit that would have been payable under the original mortgage insurance policy if the mortgage loan liquidates.”
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