Movement Mortgage

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Apache is functioning normally

Past Ginnie Mae president Ted Tozer has argued that the FHA should lower or completely eliminate its current 3.5% down payment requirement.

He discussed the controversial take during a Community Home Lenders of America Roundtable in Washington, D.C. earlier this week, per Inside Mortgage Finance.

This isn’t the first time he’s floated the idea of turning the FHA home loan program into a zero-down-payment program.

In the past while arguing this same position, he noted that the Bush administration even proposed such a change all the way back in 2004.

The question is does this invite more risk at a time when home prices and mortgage rates are already out of reach for most?

Most FHA Loan Borrowers Need a Minimum 3.5% Down Payment

At the moment, FHA loan borrowers need to scrounge up 3.5% of the purchase price when buying a home, assuming they have a 580 FICO score.

Those with scores between 500 and 579 need at least a 10% down payment.

While this is seemingly a pretty low bar, it still acts as a roadblock for many prospective home buyers, especially low-income borrowers with little savings.

According to a semi-recent Federal Reserve study, the average American household had about $42,000 in savings.

But if you break it down by age, those under 35 only had $11,250 and those 35 to 44 only about $28,000.

A home purchase, even with a small down payment, could easily wipe out these accrued savings. And remember that these numbers are an average.

Many households have much less, which is why they’re probably still renting if their desire is to own.

Tozer has argued that after accounting for rent, taxes, food, utilities, and other necessities, prospective first-time home buyers have little left to save for a down payment.

The FHA Minimum Down Payment Was Increased in 2009

If you recall, the FHA Modernization Act of 2008 resulted in the FHA minimum down payment rising from 3% to 3.5%.

It also banned seller-funded down payment assistance, which correlated with much higher default rates on FHA loans.

Ironically, these types of loans resulted in a near-$5 billion loss for the FHA and put the entire program at risk.

Around that time, some lawmakers argued for even higher down payment requirements, such as a minimum of 5% down. That didn’t happen.

Back then, the big argument was about having skin in the game, as those with little invested had no problem walking away from an underwater mortgage.

That’s why the timing of this idea is a bit of a head-scratcher, with home prices at/near all-time highs and mortgage rates more than double their early 2022 levels.

While it isn’t quite 2006 all over again, there has been a lot of speculation in the housing market and prices are certainly not cheap.

The saving grace is that most homeowners hold boring old 30-year fixed-rate mortgages at ultra-low rates this time around.

And zero down loans are generally few and far between, other than homebuyer assistance offered by some state housing finance agencies (HFAs).

What’s the Argument for a 0% FHA Loan Today?

At the moment, you need a minimum 3.5% down payment to obtain an FHA loan, slightly more than the minimum 3% required on conventional loans.

Interestingly, you used to need 5% down to get a conventional loan before they introduced 97% LTV offerings in 2014.

This 3.5% is also significantly higher than what’s required for other government-backed home loans.

Tozer pointed out that both VA loans and USDA loans don’t require a down payment (100% financing OK!).

The thing is those loans are reserved for members of the military or those buying in rural areas, respectively. Conversely, FHA loans are much more widely available.

Regardless, he argues that underwriting should focus on a borrower’s credit history as opposed to the down payment.

But if we recall from the prior mortgage crisis, credit scores got a big share of the blame for the sharp rise in defaults.

So relying on credit score alone might not be the best policy either. While defaults certainly rise as credit scores fall, a holistic approach is best when formulating underwriting standards.

This means looking at layered risk, such as credit score, down payment, DTI ratio, employment history, and more.

The Skin in the Game Is the Cost to Relocate

As for skin in the game at zero down payment, Tozer said the skin is the cost to move.

In other words, once low- and moderate-income homeowners move in, it would cost them way too much to relocate.

And this is apparently what would keep them there. While that might be true, would they continue making payments?

Tozer’s proposal is unlikely to materialize as it would require Congress to act at a time when housing supply is already dismal and affordability historically low.

However, there is other proposed legislation that would offer 100% financing to first responders who need a mortgage, via the HELPER Act of 2023.

In the meantime, other options already exist to get an FHA loan with zero down.

As noted, many state HFAs have programs that offer deferred-payment junior loans that cover the down payment and even the closing costs.

There are also private lenders that offer FHA with zero down, such as the Movement Boost from Movement Mortgage, which relies on a repayable second mortgage.

So options already exist without the need for an across-the-board elimination of the FHA’s down payment requirement.

Source: thetruthaboutmortgage.com

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Apache is functioning normally

This article is reprinted by permission from NerdWallet. 

Mortgage rates have risen to their highest levels in more than 20 years, making it harder to afford a home. And yet, out of necessity or desire, hundreds of thousands of people buy homes every month.

With the 30-year fixed rate topping 7%, NerdWallet asked real estate agents and mortgage loan officers for advice on how home buyers can stretch their homebuying dollars in this time of high interest rates. Here are nine tactics that they suggested.

1. Ask the seller to reduce the mortgage rate

Temporary mortgage rate buydowns have become commonplace since rates surged in early 2022. With a temporary rate buydown, the seller pays a portion of the buyer’s interest payments upfront. This reduces the house payments for the first one, two or three years of ownership.

“This is a common strategy for new-home builders, but it can also be used in the purchase of resale homes,” said John Bianchi, executive vice president for loanDepot. (All sources in this story commented via email.) “Negotiating a temporary buydown with the seller can help soften the blow of high interest rates, reducing your monthly payment for one to three years.”

In one typical setup, the seller’s payment effectively cuts the buyer’s interest rate by 2 percentage points in the first year, and by 1 percentage point in the second year. After that, the buyer pays the full interest rate. This is known as a 2-1 buydown.

Another option is to reduce the mortgage rate permanently, using discount points. One discount point equals 1% of the loan amount; each point typically reduces the interest rate by around 0.25 percentage point.

“Home buyers have an opportunity to get a seller to pay for these methods to lower their interest rate,” said Chuck Vander Stelt, a real estate agent in Valparaiso, Indiana. “Some home buyers should seriously consider offering a more generous price to the seller in exchange for a large closing cost concession and then use those funds to buy down the interest rate as much as possible.”

Also see: Avoiding the 30-year mortgage loan trap can save you hundreds of thousands of dollars

2. Use part of your down payment to pay down debt

When you apply for a mortgage, the lender considers your total debt payments for the house, car, student loans and credit cards. Sometimes it makes sense to divert some of your intended down payment money to cut the higher-rate debt first, said David Kuiper, vice president and senior mortgage banker for Dart Bank in western Michigan.

“While the mortgage payment will be slightly higher, the total debt/payments is lower, making the proposed purchase more affordable,” Kuiper said.

3. Use home buyer assistance programs

State and local governments sponsor an abundance of programs to make homes affordable for home buyers, especially first-timers. Some programs offer down payment assistance and help with closing costs. Others offer favorable interest rates or tax credits.

Details differ from state to state. Some programs are targeted to certain counties, cities or neighborhoods. Others are intended for specific groups of people, such as teachers, first responders or renters who live in public housing. Some programs have income limits.

Don’t miss: We bought a falling-down 100-year-old home. We tried to renovate, but things took a turn for the worse.

4. Ask the seller to finance the purchase

You can give the seller an IOU for part of the home’s value and make monthly payments directly to the seller at an interest rate that’s lower than you could get from a bank. This arrangement is called “seller financing” and has its roots in the early 1980s, when mortgage rates zoomed as high as 18%.

You might wonder why a seller would agree to such a deal. “They will often do this in order to get the price they want,” said Janie Coffey, who leads the Coffey Team with eXp Realty in St. Augustine, Florida. The seller gets full price while you get a break on the interest rate.

Seller financing usually has an end date: Within three, five or 10 years, the buyer must get a mortgage from a lender to pay off the amount owed to the seller. Coffey explained that the type of seller open to this arrangement often has paid off the mortgage “and is OK to wait for their big payoff.”

Seller financing is complex. Use an experienced real estate attorney to draw up the contract.

Related: How the U.S. housing market got stuck in the ’80s

5. Don’t wait for a rate you like better

“If the right house comes along and the payment is affordable (even if you don’t like the interest rate), you should buy the house,” Kuiper said.

You often hear that you should buy now and refinance someday, after interest rates fall. That’s not Kuiper’s point. His point was this: If mortgage rates fall, more buyers will rush into the market. They’ll make competitive offers and drive home prices higher, “essentially wiping out any advantage of the lower interest rate.”

6. Don’t get distracted by things you don’t need

Some sellers want flexibility about the closing date, would prefer the buyer to make repairs, and are scared of accepting an offer from a buyer who ends up failing to qualify for the mortgage.

Vander Stelt advises staying focused on price with these hassle-avoidant sellers, while being flexible on the rest of the offer on the house. “Do this by offering the best terms you can, including buying the home as-is, a closing date and possession that works best for the seller, and illustrating how strong of a candidate you are to get your mortgage approved,” he said.

You can demonstrate that you’re a strong mortgage candidate by showing a preapproval letter and by sharing financial information, such as account balances that prove you have the cash for the down payment.

7. Buy a house that needs work

Buying a fixer-upper is an old-fashioned, time-tested way to save money. “If you can be patient, it’s worth buying a home that needs work and slowly fixing it up over time or taking a renovation loan to acquire the home and do the work upfront,” said Brian Koss, regional sales director for Movement Mortgage, in Danvers, Massachusetts.

Read: Should you buy a fixer? These are the 5 cheapest states to make home renovations.

8. Build a house or buy a brand-new one

“Building a new home can provide more certainty around how long you will have to wait to move in, it can provide more cost certainty, and it can save you money in the short and long term by avoiding costly remodels, appliance repairs and unexpected repairs of older parts of the home,” said Jeffrey Ruben, president of WSFS Mortgage in the Greater Philadelphia area.

Buying a new home in a development has some of the same advantages. And today’s buyers have good reason to shop for new construction because there’s a shortage of existing homes for resale.

Read: U.S. construction spending rose in June, marking seventh straight monthly increase

9. Rent out part of the house

Coffey suggested using an old strategy with a trendy name — house hacking — “buying a property like a duplex, where you live in one unit and rent out the other,” she said.

If you buy a duplex, triplex or quadplex, and you live in one unit, you can include the expected rental income for the others when qualifying for a loan. In some cases, you can qualify for a mortgage using expected rental income from an accessory dwelling unit, such as a basement apartment or a tiny house in the backyard.

Also see: Homeowners locked into ultralow mortgage rates consider short-term rentals, but cities are cracking down

If you buy a home today, you’re stuck with high mortgage rates for the time being. But by employing some creativity, you might find a way to afford homeownership.

More From NerdWallet

Holden Lewis writes for NerdWallet. Email: [email protected]. Twitter: @HoldenL.

Source: marketwatch.com

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It’s no secret that homes just aren’t as affordable as they used to be.

An unwelcome combination of significantly higher mortgage rates coupled with ever-higher asking prices has put a major dent in affordability.

In May, the monthly mortgage payment on a median-priced home ($401,100) was over $2,000, up from around $1,000 back in 2020, according to the National Association of Realtors.

And that assumes a 20% down payment, something that just isn’t a reality for many home buyers these days.

The good news is there are lots of creative financing options out there, whether it’s from a state housing agency or even a national lender.

What Is Homebuyer Assistance?

In short, homebuyer assistance is a special program or series of programs offered by a local municipality, state, or private lender that reduces borrowing costs and promotes homeownership.

This can come via down payment assistance, closing cost assistance, reduced interest rates and mortgage insurance premiums, or a combination of these and other programs.

Collectively, it makes homeownership more attainable, especially for first-time home buyers and/or those with low-to-moderate income.

As noted, there are countless homebuyer assistance programs available, many of which are offered at the state or municipality level.

For example, the California Housing Finance Agency, or CalHFA for short, offers a series of homebuyer assistance programs.

The same goes for every other state in the nation. Programs are also offered for certain cities or underserved areas throughout the nation.

At the city level, one example is LA’s Home Ownership Program (HOP) loan, which provides a second mortgage for first-time home buyers up to $85,000, or 20% of the purchase price (whichever is less).

Beyond that, there are also homebuyer assistance programs offered by individual mortgage lenders, banks, and credit unions.

Private companies often have affordable housing goals and initiatives, which are sometimes geared at specific areas or priorities like increasing minority homeownership.

These offerings include both government options (FHA loans, USDA loans, VA loans) and conventional options (Fannie Mae and Freddie Mac).

Homebuyer Assistance Program Examples

The CalHFA has been around since 1975, with a stated goal of helping low- and moderate-income renters and home buyers via down payment and closing cost assistance.

It’s important to note that they aren’t a lender, but rather offer their products through private loan officers who have been trained and approved to originate them.

It may also be possible to work with an independent mortgage broker who is approved to work with a CalHFA-approved wholesale lender.

Anyway, to give you an idea of what they offer, let’s look at their CalHFA Conventional loan, which is a Fannie Mae HFA Preferred first mortgage.

This means the loan isn’t subject to costly loan-level price adjustments (LLPAs), and reduced mortgage insurance coverage is offered to those with limited incomes.

But wait, there’s more. This loan may be combined with the MyHome Assistance Program, which is a deferred-payment junior loan (second mortgage) that can be used to cover down payment and/or closing costs.

As you can see in the table above, which is just a sample, the monthly payment is deferred ($0) until the loan is refinanced, paid off, or the home sold.

But interest does accrue on the balance over time if you don’t pay it off.

There’s also the CalPLUS Conventional Loan Program, which combines a conventional 30-year fixed first mortgage with the CalHFA Zero Interest Program (ZIP) for closing costs.

That ZIP loan is both deferred and interest-free, meaning no payments or interest, as seen in the table.

Your closing costs can effectively be set aside until you refinance or pay off your loan, or sell your home.

You can actually combine all three programs if needed to get a more affordable first mortgage, a second mortgage for the down payment, and a third mortgage for the closing costs.

Aside from these standard offerings, the agency also launched the “Dream For All Shared Appreciation Loan” earlier this year.

As the name suggests, borrowers share future appreciation in lieu of a down payment.

Regarding the LA City homeownership program known as HOP, you get a 0% interest loan with a deferred payment.

And repayment is required if the home is sold, if there’s a title transfer, or the home is no longer owner-occupied.

You must be a first-time home buyer, income limits apply, and the property must be in an eligible area.

Tip: If you work with a housing agency, inquire about a mortgage credit certificate before you apply to potentially save money on taxes.

Homebuyer Assistance Via Private Banks and Mortgage Lenders

To give you an idea of a private offering, there is the recently launched U.S. Bank Access Home Loan.

It comes with up to $12,500 in down payment assistance and a lender credit up to $5,000.

Then there’s the Guild Mortgage 1% Down Payment Advantage, which combines a 2% non-repayable grant offered by the company and a 1% temporary buydown in year one.

Speaking of grants, some may be fully forgivable, while others might be required to be paid back when you refinance or sell.

Be sure to pay attention to details like that when researching potential down payment assistance or homebuyer assistance programs.

One such example is Movement Boost from Movement Mortgage, which is a zero down FHA loan that features a repayable second mortgage.

Despite having to be paid back, it eliminates the roadblock of needing cash at closing, and instead spreads it out slowly over a 10-year loan term.

Then there’s Rocket Mortgage ONE+, which offers a 2% grant from the Detroit-based lender and private mortgage insurance at no cost.

I could go on and on, but you should get the idea. There are lots of grants, credits, special purpose credit programs (SPCP), and other specials out there.

But it’s up to you to do some digging to find them. So when you’re shopping around for the lowest rate, also inquire about homebuyer assistance if you want/need it.

Who Qualifies for Homebuyer Assistance?

  • Typically need to be a first-time home buyer (but not always)
  • Area income limits often apply to those receiving assistance
  • May also need to purchase a property in a specific location/city
  • Property must be owner-occupied and usually only 1-unit is permitted
  • Still must qualify for a mortgage (e.g. min. FICO score and max DTI ratio)

While it might sound pretty good to buy a home with little or nothing down (and sans closing costs), not everyone will qualify.

Many of these programs are geared toward first-time home buyers, generally defined as someone who hasn’t had ownership interest in the past three years.

This means those who have never owned a home, or an individual who sold their former home three or more years ago and hasn’t owned since.

Depending on the program, you may be required to complete homebuyer education and counseling. While it might seem like a pain, you may actually learn something valuable along the way.

Beyond that, income limits often apply as well, typically based on the state agency’s limits or area median income (AMI) limits.

You can look up income limits via Fannie Mae’s website to see where they stand in your desired purchasing area.

Speaking of income, non-occupant co-borrowers or co-signers are typically not permitted.

There are also loan limits to worry about, which are usually based on the conforming loan limit, but sometimes even lower.

And in most cases, the property is going to need to be your primary residence, aka the one you occupy full time.

Homebuyer assistance programs are geared toward those in need, not investors or second home buyers.

To that end, 2-4 unit properties are generally not permitted, though condos/townhomes, and manufactured housing are.

Lastly, you will still be subject to a minimum credit score requirement and a maximum debt-to-income (DTI) ratio.

So you’ll still need to qualify for a mortgage like you would any other type of loan, though there may be more flexibility via state housing agencies.

In closing, if you’re not sure homeownership is in reach, take a moment to research the many homebuyer assistance programs out there. You might be surprised at what you come across.

Source: thetruthaboutmortgage.com

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Academy Mortgage recently celebrated its 30th anniversary, having been founded back in 1988.

It began as a humble family-owned company opened by Duane Shaw, and remains one today with his son-in-law Adam Kessler in charge, serving as CEO.

With three decades under its belt, it’s clear Academy is a mature player in the mortgage space, which now includes all types of fintech-focused newcomers like Better Mortgage and Movement Mortgage.

It’s a very competitive business, so those who are able to stick out it for so long have proven staying power if nothing else. They must be doing something right, right? Let’s find out.

Academy Mortgage Prides Itself on Doing Everything In-House

  • They are an independent direct mortgage lender based in Utah
  • That only operates via the retail direct-to-consumer channel
  • Licensed to do business in 49 states and DC (not licensed in NY)
  • Have over 260+ branch offices nationwide

The Draper, Utah-based company’s claim to fame is that it’s a direct lender “100% focused on retail mortgage banking.”

What it means is they only work with borrowers directly, instead of dabbling in the correspondent or wholesale channels. So they’re laser-focused on the customer.

Perhaps this is how they were able to navigate through the mortgage crisis that occurred in the early 2000s, only to grow bigger and stronger since then.

Additionally, they do all the loan underwriting, processing, and funding in-house, instead of having a fragmented sales and operations team offsite.

Everything is carried out in one of their 260 branch offices throughout the country. Speaking of, they’re licensed to do business in 49 states and Washington D.C.

Some of those branches were the result of their acquisition of Republic Mortgage back in 2014, which allowed them to grow to 200 branches and 2,100 employees.

In 2017, they also acquired Oklahoma-based First Mortgage Co., which operated many branches in the Southwestern United States and Texas.

They also pride themselves on quick turn times, and refer to themselves as the “Gold Standard” in loan origination.

So it’s obvious that customer satisfaction reigns supreme with the company.

Getting a Home Loan with Academy Mortgage

  • The company employs hundreds of loan officers nationwide
  • You can call them directly to get paired up with an employee
  • Or visit their website and use their online directory to choose someone specific
  • It’s also possible to visit one of their many branches if you prefer face-to-face interaction

The company employs thousands of individuals, including a large fleet of mortgage loan officers throughout the country.

If and when you apply for a home loan with Academy, you can call them directly or choose a specific loan officer to work with.

They have a loan officer directory on their website that allows you to search by zip code, by name, and by branch (city and state location).

I imagine many of the loan officers are referred to clients, either by a real estate agent, or by a former customer who had a good experience with the company.

You can also visit a branch if face-to-face is your thing, though these days folks seem more interested in using a smartphone to make contact.

The one downside here is it appears that you can’t apply for a mortgage online.

Academy Mortgage a Top-40 Mortgage Lender

  • They’re a top-40 mortgage lender nationwide
  • The company closed more than 35,000 mortgages in 2019
  • The majority of those loans were for home purchases (about 70%)
  • With the remainder tied to home refinance transactions and HELOCs

Based on the latest HMDA data, Academy Mortgage was the 37th largest mortgage lender overall in the nation based on total loan volume in 2019.

The company closed 35,000 residential mortgages throughout the year on nearly $9.5 billion in total loan volume.

While that’s fairly big, it pales in comparison to Quicken Loans, which mustered over $81 billion during the same time period. However, it shows they’re no slouch either.

For home purchase loans, they tend to rank in the top 20 nationally since a large share of their mortgages are for that purpose.

For home refinance loans, they rank quite a bit lower due to lower volumes, but they’ve still got plenty of options for borrowers either way.

But it is clear that the independent home loan lender focuses heavily on home purchases as opposed to refinances, likely partnering up with local real estate agents to generate business.

Academy Mortgage Interest Rates

  • They don’t disclose their mortgage rates on their website
  • So it’s impossible to know where they stand without getting a quote first
  • My guess is their rates are average relative to other mortgage lenders
  • If super low they’d probably openly advertise them to draw in business

Unfortunately, the company doesn’t advertise their mortgage interest rates anywhere online. So it’s impossible to know how competitive they are pricing-wise.

If we consider the fact that most of their loan volume comes from purchases as opposed to refinances, we could guess that their mortgage rates probably aren’t super competitive.

Or at least not necessarily lower than the competition. After all, if they had the lowest price out there they’d probably want to advertise it, or at minimum make it known somewhere.

My guess is their rates are run-of-the-mill, but again, that’s just speculation.

If you do include Academy in your mortgage loan search, be sure to compare rates and closing costs to other lenders to see where they stand.

What Academy Mortgage Offers

  • The company offers a variety of home purchase and refinance solutions
  • Including conventional, jumbo, FHA, VA, and USDA options
  • You can get any number of fixed or adjustable-rate products
  • And even a zero down home loan via their exclusive GSFA Platinum Program

The company calls itself a “top-tier lender” when it comes to purchase loans, FHA loans, and builder loans.

This includes home purchase loans, refinance loans, renovation loans, and streamline refinance options.

You can get the basic Fannie Mae and Freddie Mac-backed conventional loans that allow for down payment as low as 3%.

They come in a variety of fixed-rate options, including 30-year, 25-year, 20-year, 15-year, and 10-year terms. That’s typically more choices than most lenders offer.

Academy also offers the usual adjustable-rate mortgage options, including a 10/1 ARM, 7/1 ARM, 5/1 ARM, and 3/1 ARM.

If you’re interested in a government home loan, they offer all the usual suspects including FHA loans, VA loans, and USDA loans, including FHA 203k renovation loans and FHA Energy-Efficient Mortgages.

It’s also possible to get a zero down home loan if you’re a first-time home buyer via their so-called exclusive GSFA Platinum Program, which includes a grant for up to 5% of the loan amount to cover down payment and closing costs.

The grant funds, which are provided by the Golden State Finance Authority, aren’t required to be paid back if certain conditions are met.

Lastly, they offer jumbo home loans up to $1.5 million loan amounts, with down payment requirements as low as 10%.

You may also be able to avoid PMI even when putting just 10% down!

Academy Mortgage Also Offers Commercial Loans

  • While they only operate a retail channel for residential mortgages
  • They do have a commercial lending division as well
  • It offers a very wide range of commercial and small business loans for commercial and multi-family properties

It should be pointed out that the company also offers commercial loans via a separate lending division.

Their offerings range from life insurance company loan programs to Fannie Mae and Freddie Mac programs for apartment buyers.

They also offer conduit loans and conventional loan programs for those wishing to purchase a commercial property.

Additionally, they offer multi-family loan programs, including those backed by the FHA/HUD, along with construction and bridge loans.

Lastly, you can get your hands on a variety of Small Business Administration (SBA) loans, including the SBA 7(a) Program and the SBA 504 Program.

So the appear to have you well covered if you need a commercial loan for just about any purpose.

The Verdict on Academy Mortgage

  • What they appear to lack in technology might be more than made up for by their excellent customer service
  • They have a near-five star rating on Zillow (4.96 out of 5 at last glance)
  • Which is even more impressive based on the many reviews completed (nearly 25,000!)
  • So if you want a great home loan experience they might be a great fit

While they seem to be a good lender on paper, with both high marks on customer service and awards for being a great place to work, we don’t know much about their rates and fees.

For those interested in securing the lowest-cost mortgage, some more digging and comparing will be necessary to see if they’re the right choice.

Academy doesn’t highlight any technology either, which seems to be a major factor these days for a lot of consumers.

There’s no mention of a digital or paperless process, a smartphone app, or anything really on that front. That’s not to say it doesn’t exist, but chances are if it did, it’d be emphasized.

But they’re a top-20 home purchase loan lender, which that says something, especially since they don’t seem to advertise very much.

Perhaps the service speaks for itself, and they receive a lot of referrals from past customers and real estate agents.

They have an excellent rating on Zillow, with 4.96 stars out of 5 on nearly 25,000 reviews at last glance.

(photo: m01229)

Source: thetruthaboutmortgage.com

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The Federal Housing Finance Administration is looking to make it easier to put entities and people into its Suspended Counterparty Program, a proposed rule change states.

This would require Fannie Mae, Freddie Mac and the Federal Home Loan Banks to report to the FHFA any individual or company they do business with that committed “certain forms of misconduct” in the past three years. The current program was established by FHFA letter in June 2012 and amended in December 2015.

Today, the SCP list is limited to those that have committed and are convicted of criminal offenses. “However, in FHFA’s experience of administering the SCP, it has determined that this standard is too narrow; specifically, it does not authorize suspension of counterparties that have been found to have committed various forms of misconduct in the context of civil enforcement actions,” the proposed amendment to the rule said.

It is looking to broadly expand the definition of misconduct “to all manner of civil enforcement proceedings,” including cases before administrative law judges, as well as qui tam actions (also known as whistleblower cases) such as those brought under the False Claims Act.

While many of those civil cases are settled without an admission of misconduct, the proposal noted, the change could allow the FHFA to put those entities on the SCP list. “FHFA has determined that it is appropriate to permit suspension where enforcement claims are resolved without admission of misconduct,” the proposal said.

For example, in the most recent qui tam settlement involving Movement Mortgage, the company specifically did not admit any legal liability for the False Claims Act violations. 

Other changes would allow for placement on the SCP for criminal or civil misconduct in connection with the management or ownership of real property.

“Amending the Suspended Counterparty Program will help strengthen FHFA’s ability to protect its regulated entities from business risks presented by individuals or institutions who engage in misconduct,” said Director Sandra Thompson, in a press release. “The proposed rule will strengthen FHFA’s ability to ensure the regulated entities remain safe and sound so they continue to serve as reliable sources of liquidity.”

The changes would also create an ability to vacate suspension orders in certain circumstances.

Currently, the SCP list has 170 individual or company names, most of which have a definitive end date for the suspension. The person on the list the longest time, starting on April 15, 2013 with an indefinite suspension, is Lee Farkas, the convicted mortgage fraudster who ran Taylor, Bean & Whitaker.

First Mortgage and its convicted founder and chairman Ron McCord — a former Mortgage Bankers Association chairman — are both also on the list. Live Well Financial, the defunct reverse mortgage lender, was the most recent addition.

This proposal will be opened for a 60-day comment period once it is published in the Federal Register.

Source: nationalmortgagenews.com

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As more of this generation enters the workforce, lenders are finding new ways to attract young customers. Joe Welu, CEO of Total Expert, a customer relationship management software company, and Shashank Shekhar, CEO of InstaMortgage, a web-based lender partnering with Total Expert, discuss their strategies.

Read the full story here.

Source: nationalmortgagenews.com

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FHA, VA, Reverse News and Training; EverBank Name to Return; Movement Mortgage v DOJ in False Claims Violation?

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FHA, VA, Reverse News and Training; EverBank Name to Return; Movement Mortgage v DOJ in False Claims Violation?

By:
Rob Chrisman

Mon, Jul 3 2023, 10:25 AM

The other night my cat Myrtle began squeaking in her sleep and moving her paws. She was either dreaming about a Chupacabra, a CFPB exam, or the Department of Justice holding on line 2. Movement Mortgage, LLC, was caught up in the latter, and has agreed to pay the United States $23.75 million to resolve allegations that it violated the False Claims Act by “failing to comply with material program requirements when it originated and underwrote mortgages insured by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA)… Movement Mortgage admitted that it certified for FHA mortgage insurance and VA home loan guarantees a material percentage of loans that did not meet applicable requirements and, therefore, were not eligible under those programs, despite inaccurately representing to HUD and the VA that such loans complied with applicable program requirements. Movement Mortgage also acknowledged that HUD and the VA would not have insured or guaranteed the loans but for its submission of false certifications. Movement Mortgage further admitted that it failed to adhere to HUD and the VA’s applicable self-reporting requirements.” (Today’s podcast can be found here and is sponsored by Gallus, the premier business intelligence tool for the mortgage industry. With hassle-free insights and user-friendly functionality, Gallus empowers you to make faster, data-driven decisions for enhanced profitability. Hear an interview with Black Knight’s Frank Poiesz on how AI and associated technologies are helping streamline the origination process and what the future of originations looks like.)

HUD, FHA, Reverse, and VA News and Training

Guess who’s back? “EverBank,” a respected name in the biz, is seeing its name return. “The name change is being timed to the closing of the bank’s sale to investors later this summer. Following an earlier acquisition, the bank’s name was changed from EverBank to TIAA Bank in 2018. TIAA Bank is rebranding to EverBank. The stadium of the NFL team the Jacksonville Jaguars will be renamed from TIAA Bank Field to EverBank Stadium. In November 2022, the parent company TIAA sold TIAA Bank to private investors to help the bank move in an independent direction. TIAA will hold a minority stake in EverBank. The transaction is expected to close later this summer, with the name change taking place officially at the same time.”

EverBank/TIAA do its share of government loans, and in general those products constitute about 25 percent of applications. The U.S. Department of Housing and Urban Development’s Federal Housing Administration (FHA) announced that it will require lenders making FHA-insured mortgage loans to use the Fannie Mae/ Freddie Mac Supplementary Consumer Information Form (SCIF) to collect a mortgage applicant’s language preference. Using the form will enable lenders to make information available in the languages that borrowers will understand best.

Recall that last month, the FHA also launched its new language access web page, which provides translations of key FHA mortgage documents in the top five languages most commonly spoken by borrowers with limited English proficiency (LEP).

So yes, the U.S. Department of Housing and Urban Development (HUD) recently announced in Mortgagee Letter 2023.13 that lenders must use the Supplemental Consumer Information Form (SCIF) of Fannie Mae and Freddie Mac in connection with FHA insured mortgage loans with application dates on or after August 28, 2023.

As previously reported, in May 2022 the Federal Housing Finance Agency announced that for residential mortgage loans to be sold to Fannie Mae or Freddie Mac with application dates on or after March 1, 2023, the lender must present a SCIF to collect information on the applicant’s language preference.

Revisions to the Single Family Housing Guaranteed Loan Program (SFHGLP) technical Handbook-1-3555, Chapter 5, Origination and Underwriting Overview; Chapter 13, Special Property Types; Chapter 15, Submitting the Application Package; and Appendix 4, Agency Contact Information. These changes became effective upon the recent issuance of a Procedure Notice (PN).

And there is some training which revolves around government loan programs.

This August, The Single-Family Housing Guaranteed Loan Program (SFHGLP) is offering two Live and In-Person, training conferences at no cost to lending partners in St. Louis, MO. Loan Origination Training, August 15th and Loan Servicing Training, August 16th. Register for one or both, seating is limited. Training conferences will be offered in Lewisville, TX., September 12th and 13th

The FHA’s Office of Lender Activities and Program Compliance will conduct a series of free webinars on the FHA Lender Approval Application process as outlined in FHA’s Single Family Housing Policy Handbook 4000.1. This training series is designed to assist entities interested in becoming FHA-approved mortgagees (lenders). The three webinars will conclude with a live question and answer (Q&A) session. Session 2 – Non-Supervised Applicants on July 11, 2:00 PM – 3:30 PM (Eastern). This webinar will provide a detailed overview of the FHA Lender Approval Application process, the eligibility requirements, and required documentation for supervised and government mortgagees. Common application deficiencies will be addressed and tips for submitting a successful application will be provided.

FHA is conducting Application Workshop Series, free virtual webinars, designed for entities interested in becoming FHA-approved mortgagees (lenders). The webinars will conclude with a live question and answer (Q&A) session.

Session 1, Financial Requirements for FHA Approval was recorded on April 13, 2023.

Session 2 – Non-Supervised Applicants webinar on July 11, 2023 │2:00 PM – 3:30 PM (Eastern) will provide a detailed overview of the FHA Lender Approval Application process, the eligibility requirements, and required documentation for non-supervised mortgagees. Common application deficiencies will be addressed and tips for submitting a successful application will be provided.

Free, In-Person FHA Underwriting Training in Minneapolis, MN., July 11, 9:00 AM – 5:00 PM (Central). FHA representatives will provide an overview of FHA underwriting procedures and address a number of industry-related frequently asked questions (FAQs).

Free, In-Person FHA Appraisal Training in Minneapolis, MN., July 12, 9:00 AM – 5:00 PM (Central). FHA representatives will cover FHA appraisal requirements, including appraisal protocol and updates to appraisal policy and an in-depth look at a variety of appraisal-related topics including property acceptability criteria; minimum property requirements; property defects; appraiser responsibilities and requirements.

Join the leading minds in reverse mortgages at NRMLA’s Southern Regional Meeting, on July 13, in Austin, TX. Join other business owners, underwriters, compliance staff, attorneys, counselors, servicers, processors, and loan originators to be part of these discussions. Gain a competitive edge in the industry by learning from our expert speakers, who will share insights on the latest trends and developments in reverse mortgages. From market analysis to loan servicing best practices, this conference covers it all. Plus, network with fellow professionals, share experiences and discuss strategies for success. With a wide range of informative sessions, this conference is sure to provide value for all attendees.

Servicing is a critical, yet misunderstood, part of the reverse mortgage process. Even the most experienced reverse mortgage professionals who have years of experience originating reverse mortgages will sometimes find themselves misinformed. At NRMLA’s Southern Regional Meeting on July 13, 9:00 am – 5:00 pm, in Austin, TX, three of the top servicing experts in the business — Gail Balettie and Rex Lamb from Celink and Richard Burke from Longbridge Financial LLC — will provide pro tips on the most commonly asked questions that loan officers have.

Capital Markets

The second quarter rounded out with a “risk-on” feel that put Treasury and MBS prices down, and rates up, as month and quarter end indexing offset the beginning of the summer Friday lull. Don’t fight the Fed: Markets finally are coming to terms with Fed Chair Powell’s persistent statements about rates being higher for longer. Broader fixed income markets sold off and 10-year U.S. Treasury yields broke north of 3.80 percent in Friday’s session. Fed Chair Powell commented that a good part of the reason the Fed can continue to raise rates is due to the strong labor market. “Though policy is restrictive, it may not be restrictive enough, and it hasn’t been restrictive for very long,” he said last week. For most of 2022, the fed funds rate was below the inflation rate, which means that real interest rates were negative and thus stimulating to the economy.

Economic data released over the last week remained stronger than anticipated, certainly stronger than the “experts” who have been forecasting a downturn predicted. Durable goods orders for May rose 1.7 percent versus forecasts for a decline of 0.9 percent. Core orders rose 0.7 percent. Meanwhile, house prices appear to have bottomed out as limited supply pushed prices higher in April and new home sales were significantly higher in May than expected. Consumers also continue to spend as inflation-adjusted personal consumption rose at a 4.2 percent annualized rate in the first quarter, according to the final Q1 GDP release. Jobless claims data retreated from a recent, but brief upswing, and remains well below levels that would indicate a recession is looming. The strong data pushed rates higher over the week and expectations for an increase to the Fed Funds target in July are now at 87 percent. Fed speakers have commented recently that two more hikes may be on the table this year and the market is pricing in the timing for the second towards the end of the year.

We begin the abbreviated trading week, and today’s early close, with final S&P Global manufacturing PMI for June, May construction spending, and June ISM manufacturing PMI for June, all due out later this morning. Fixed income futures will settle at 1:00pm ET with SIFMA recommending a 2:00pm ET close for cash ahead of the Independence Day holiday. Not that anyone cares about locking in a loan today, but Agency MBS prices are unchanged from Friday’s close, the 10-year yielding 3.85 after closing last week at 3.86 percent, and the 2-year is up to 4.95 percent!

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Source: mortgagenewsdaily.com

Apache is functioning normally

A Movement representative did not return a request for comments. 

A spokesperson for loanDepot said, “Inducing individuals to breach contractual prohibitions against employee solicitation and misuse of confidential information in order to steal business and customer relationships crosses the line into unfair competition, and we will continue to vigorously protect our interests.”

The California-based lender claims employees in Virginia, Pennsylvania, and Florida left the company to join Movement after an “orchestrated” move and “all-expenses-paid recruiting trips,” including to Movement’s headquarters in South Carolina. Additional Maryland, Washington, D.C., and Delaware employees also transitioned to the retail competitor. 

In some cases, Movement offered a $125,000 signing bonus to loanDepot loan originators to come to the company, the lawsuit claims. 

“To date, several loanDepot branches have been effectively gutted and loanDepot has lost at least 25 employees at the hand of Movement’s predatory raiding,” the lawsuit states.

The lawsuit follows: “In the weeks leading to their departures, the former employees accessed and misappropriated confidential and trade secret documents about loanDepot’s business, its employees, and its clients; information that, in the hands of Movement, was used to convert customers to Movement and away from loanDepot.”  

loanDepot has ongoing arbitrations with certain of the former employees. 

The lender seeks damages and permanent injunctive relief against Movement for misappropriation of trade secrets, aiding and abetting breaches of fiduciary duty, unfair competition, unjust enrichment, unfair trade practices, and tortious interference with loanDepot’s contracts and prospective economic advantage. 

That’s not the Orange County, California-based lender’s only poaching legal battle.

Since April 2022, the company filed three lawsuits against CrossCountry Mortgage in New York, California and Illinois. 

In early June, a judge in the N.Y. case ruled in favor of loanDepot in a preliminary injunction by prohibiting CrossCountry and employees who switched companies from using data they obtained from their prior employer. It follows a decision from a judge in the Chicago lawsuit. However, according to the judge, as loanDepot has not shown an “actual and imminent” risk of irreparable harm, its request for a preliminary injunction against the solicitation of loanDepot’s employees was denied. The judge mentions “loanDepot is likely to succeed on the merits of its Defend Trade Secrets Act claim.”

Source: housingwire.com