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Volume 2014 - Number 20

September 26, 2014

News Briefs

  • Some 64 percent of 884 community banks originating mortgages offer non-QMs, according to a survey conducted by the Conference of State Bank Supervisors. The results were published this week in a report from the Federal Reserve and the CSBS.
  • Homewood Mortgage is the latest non-agency lender to announce a stated-income product. The program is available only for self-employed borrowers, with stringent requirements regarding liquidity and assets. Homewood said a minimum of three months of bank statements for both business and personal assets must be provided, and bank deposits must reflect average monthly deposits to support stated-income levels. The value of certain assets will also be discounted for liquidity calculations. For example, stocks, bonds and mutual funds will be discounted to 70 percent of the current balance and business account assets will be discounted to 33 percent of the current balance. The lender’s stated-income jumbo is available as a 5/1 adjustable-rate mortgage and a 7/1 ARM. Loan amounts of up to $2.0 million are allowed, with credit scores as low as 700 and loan-to-value ratios as high as 70 percent.
  • Major banks have significantly reduced their use of principal reduction when completing loan modifications, according to new data from the Office of the Comptroller of the Currency. Some 5.0 percent of the nearly 70,000 loan modifications completed in the second quarter of 2014 by seven big banks and one thrift tracked by the OCC included principal reduction. That was down from a 12.2 percent share for principal reduction on mods completed in the second quarter of 2013.
  • DBRS has added loan-level reporting standards that it expects third-party due diligence firms to include in their assessments of mortgages in non-agency mortgage-backed securities. The rating service said it expects due diligence firms to assign loan-level grades of A through D. DBRS also expects due diligence firms to verify the qualified mortgage status assigned by lenders to loans in non-agency MBS.
  • Bank of New York Mellon’s rating as a master servicer for non-agency mortgage-backed securities was downgraded by Fitch Ratings. “The downgrade reflects an increase in instances of material non-compliance in BNY Mellon’s Reg AB reporting, management and reporting restructuring, and the low level of new master servicing responsibility being taken on in new residential MBS transactions,” Fitch said. The rating service said BNY Mellon still maintains high standards for master servicing and Fitch views the firm as a fully capable master servicer.
  • Privlo Wholesale is using due diligence services provided by Comergence to track licensed mortgage originators that work with the non-agency lender, according to Comergence. The firm said it aggregates data on licensing, criminal and civil records, financial sanctions and bankruptcies and foreclosures, helping lenders to ensure that they are in compliance with state and federal regulations.

Other areas of interest


How many new retail loan officers (net) is your shop looking to hire in the first quarter of 2018?

1 to 10. We’re being careful.
11 to 30. We’re feeling slightly bullish.
31 or more. We’re in expansion mode.
None. We’re staying right where we are, for now.
We’re cutting back.

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