Jun. 10, 2012: Training, M&A news in our business; but mostly lender, agency, and investor updates

Jun. 10, 2012: Training, M&A news in our business; but mostly lender, agency, and investor updates Rob Chrisman

I wish that I had a higher opinion of people who seem to be famous for being famous. Because I don’t. I mention this, not because Snooki is back in the news, but because I had to look twice at the “Kim Kardashian gives Kanye West Lamborghini For Birthday” headline: $750,000. Seven hundred and fifty thousand dollars?! But we have something they don’t, like the knowledge of the difference between a 4506 and a W9, what “DTI” stands for, and the differences between HARP and HARP 2. There is sure a lot going on with investors, MI companies, the agencies, lenders, mergers, and available training sessions. As always, it is best for you to read the actual bulletin for specifics because I sure don’t, but this should give you a sense of how the general market is moving. So with no rhyme or reason: Turning to California for a little training news, the California Mortgage Bankers Association (CMBA) is teaming up with attorneys Ari Karen and William Heyman at Offit Kurman to provide industry pros with a webinar Tuesday (June 12) focused on the new anti-money laundering rules from FinCEN that will take effect August 13th.  Register for the one-hour webinar, which is free to members of the CMBA ($35 for non-members), by clicking here: http://www.cmba.com/new/brochures/AMLWebinarReg.pdf.  This webinar will explain everything you need to know about AML, and will provide the essentials to understand, prepare, and implement required procedures.

Anyone with a warehouse line with ViewPoint heard the news that, “the Registrant’s subsidiary bank, ViewPoint Bank, N.A. (the “Bank”) and the Bank’s wholly-owned subsidiary, ViewPoint Bankers Mortgage, Inc. (“VPBM”), entered into a definitive agreement (the “Agreement”) with Highlands Residential Mortgage, Ltd. (“HRM”) to sell substantially all of the assets of VPBM to HRM, subject to certain closing conditions. The terms of the Agreement provide for HRM to, subject to certain conditions contained in the Agreement, (i) purchase VPBM’s loan pipeline and all of VPBM’s existing construction loan portfolio, together with certain furniture, fixtures and equipment, (ii) assume substantially all of VPBM’s loan production office leases and its equipment leases, (iii) hire no less than 95% of the current VPBM employees and satisfactorily release VPBM from certain employment contracts, and (iv) make additional earn out payments to VPBM.” There are other details, but per a senior manager within the warehouse group, “The Warehouse group continues to remain a strong position within VPB.”

Upon noticing an increase in errors when submitting documentation, US Bank has issued a reminder about Note and Truth in Lending requirements.  Note errors such as listing an incorrect change date or margin, using the wrong index, and discrepancies between the late fee on the Note and the late fee in the documentation all decrease a loan’s chances of being eligible for purchase.  Putting down the wrong late fee can result in a Fair Lending violation.  Common Truth in Lending mistakes to avoid include incorrect Note, disbursement, and one month prior to payment dates for ARM programs where the first change occurs after 60 months; using the wrong change date in the “Maximum Ever” column; incorrect margins; and inaccurate mortgage insurance or escrows. Following the announcement that MERS registry would require the ORG ID as of June 4th, Flagstar will be using the Originating ORG ID Exception for transactions where it is generating the MIN number and the originator closes in their own name.  Flagstar will continue this practice until July 5, 2012, by which time all clients should have provided their ORG IDs by emailing their confirmation and Flagstar Bank Lender ID to brokerdelegatee@flagstar.com. Flagstar reminds clients that it will not purchase FHA loans from DE Delegated Correspondents if the escrow balance was deducted from the principal balance on the payoff statement and/or listed in the 100 or 200 sections of the HUD-1 Settlement statement as a credit.  This applies to FHA loans that closed on or after May 1, 2012. West coast wholesaler Pinnacle has rolled out its 30-year fixed rate VA Jumbo loans, which are available for amounts less than $1 million for purchase and cash-out refinances.  The down payment must be at least 25% of the purchase price or Notification of Value, whichever is less, and borrowers must have a minimum credit score of 660, no bankruptcies or foreclosures within the past seven years, and no housing lates in the past 12 months in order to qualify. A number of topics in the PCM Guidelines have been clarified and updated, including the sections on conforming and conforming high balance loans, enhanced DU Refi Plus loans, HomePath loans, Good Neighbor Next Door guidance, Pinnacle Plus products, the condo-PUD matrix and questionnaire, and the PCM Mortgage Clause.  The sections on FHA, VA, and USDA loans have also been updated.

Equity Bancshares ($600mm, KS) will double its asset size and buy First Community Bank of Lee’s Summit ($637mm, MO) for an undisclosed sum. And Peoples Bancorp ($1.8B, OH) will buy First Federal Savings Bank ($48mm, WV) for $9.8mm in cash. Chemical Bank has agreed to purchase 21 branches from Independent Bank in northeast Michigan and Battle Creek.  The deal will comprise about $420 million in customer deposits and $40 million in loans, and Chemical Bank plans to pay a deposit premium of 2.93% of deposits and acquire the loans at a 1.75% discount.  The one-time transaction costs are currently estimated at around $2.3 million, and the deal represents investment bank Keefe, Bruyette & Woods’s 95th thrift or bank transaction in the US since 2009. Trustmark Corporation and BancTrust Financial Group, Inc. have signed a merger of BancTrust’s 49 Alabama and Florida offices into Trustmark.  The deal will comprise $1.3 billion in loans, $1.8 billion in deposits, and $55.4 million in common stock.  The transaction, another one by KBW, is expected to close in late 2012. Berkshire Hills Bancorp, Inc. and Beacon Federal Bancorp, Inc. have signed a definitive merger agreement that Berkshire will acquire Beacon for approximately $132 million.  East Syracuse-based Beacon comprises seven offices with deposits of $677 million, while Berkshire currently has three offices in the region.  Beacon’s Chelmsford, MA office will serve as Berkshire’s first Eastern Massachusetts office.  Once again KBW acted as the exclusive financial advisor. The summer lineup of the FHA’s Basic Loss Mitigation training for HUD-approved housing counseling agencies includes Greensboro, NC on June 5th; Louisville, KY and Chicago, IL on June 14th; Nashville, TN on June 19th; Memphis, TN and Indianapolis, IN on June 20th; Flint, MI on June 22nd; and Birmingham, AL on July 24th.  The training will also be available on September 13th in Las Vegas, NV and September 30th in Phoenix, AZ.  Loss mitigation webinars that focus on different aspects of the foreclosure process will be held throughout the summer as well. Additional loss mitigation training is available at the FHA’s National Servicing Center in Oklahoma City, OK on August 15th and 16th. (Hope they have air conditioning!) Designed for HUD-approved housing counselors, nonprofit housing counselors, and HUD-approved mortgagees, these seminars cover delinquencies, defaults, mortgage collection activities, and initiating foreclosure.  More information can be found at http://portal.hud.gov/hudportal/HUD?src/program_offices/housing/sfh/nsc/training. The Mortgage Bankers Association of New Jersey is hosting a seminar on LO compensation and CFPB regulations in Wednesday, June 27th in Jamesburg. (Are those important issues?) Speakers will discuss the processing of the new CFPB regulations and what they could mean for the mortgage industry. Register at http://events.r20.constantcontact.com/register/eventReg?llrngb5z8dab&oeidka07e5zhk80fb91f2b96&oseqa02abvgz75rk1h.

GMACB (yes, still in the business!) will begin issuing Adverse Action Notices directly to the applicant(s) on all wholesale and correspondent loans submitted to GMAC Bank for underwriting and subsequently denied by GMACB. This action is being taken to enhance controls related to the notification of adverse action required per Regulation B.  SunTrust Mortgage, all a-twitter over its new president, published updated State-Specific Service Release Premium (SRP) schedules for lenders to use beginning June 1, 2012. Same-sex marriage has been officially recognized by the State of Washington, which means that any domestic same-sex partnership registered in Washington in which both partners are under age 62 will be converted to a legal marriage on June 30, 2012. Partnerships in which one member is over 62 will continue to be recognized as domestic partnerships but will have the same privileges, immunities, rights, benefits, and responsibilities as married spouses. The VA, however, does not recognize the statute due to the fact that it doesn’t meet the federal definition of marriage. HUD has released a pair of reports on the impact of its housing counseling for first-time homeowners, which “significantly improved” the chances of such borrowers avoiding foreclosure and remaining in their homes.  It was found that 35% of the participants enrolled in late 2009 and early 2010 purchased homes within 18 months of pre-purchase counseling and that only one of these buyers fell behind in their mortgage payments.  With a counselor’s advising, about 70% of the participants found a solution that let them retain their homes, and 56% cured their defaults to become current on their loans. Fannie Mae reminds Uniform Collateral Data Portal users that the interface and Submission Summary Report for submitting appraisals were both updated Saturday.  Meanwhile, the July 23rd Uniform Loan Delivery Dataset mandate is approaching. The UMDP June Monthly Yardstick, accessible at https://www.efanniemae.com/home/index.jsp, includes tips, testing information, and additional tools to help with the transition. Fannie has obtained blanket delegation of authority on behalf of all United Guaranty servicers, which means that they can apply Fannie guidelines to process a preforeclosure sale or deed-in-lieu of foreclosure without getting separate approval from UG.  eFannieMae.com (https://www.efanniemae.com/home/index.jsp) has a complete list of mortgage insurers from which blanket delegations of authority have been obtained. There are more than you think! Other additions to eFannieMae.com include an interactive video simulation as part of the WaysHome initiative designed to educate borrowers about avoiding foreclosure (editor’s note: how about ‘make your payments’?) , along with an Affordable Foreclosure Alternatives job aid that provides details on eligibility and the necessary processes for short sales and deed-in-lieu transactions. With the implementation of the Uniform Appraisal Dataset and the UCDP, Freddie Mac, as of June 15th, is beginning to compare data entered into the UCDP with the loan delivery data in the selling system.  Users should ensure that the data for loans whose applications were received on or after December 1, 2011 is consistent with the appraisal data submitted to the UCDP. Following the July 23rd ULDD deadline, the Mortgage Submission Schedule (Form 11) and the Mortgage Submission Voucher (Form 13SF) will both be retired. (Cake in the lunch room at noon.) As a reminder, all Fannie and Freddie loans whose applications are received on or after August 1st and delivered on or after November 26, 2012 will have to include the two additional data points required by the SEC’s Rule 15Ga-11. Wells Fargo Correspondent has updated its lock offerings to include the new Rate Financed Extended Lock Option (REFLO), which lets sellers lock an interest rate for a 120, 180, 270, or 360-day period by paying an up-front fee and an interest rate adjustment.  Conforming fixed rate and conforming 3/1, 5/1, 7/1, and 10/1 LIBOR ARMs are all eligible.  The 1% fee, a portion of which may be refundable at the time of purchase, must be paid within five business days of locking, and the note rate add-on adjuster is applied to the Best Effort 60-day price that is in effect on the date when the loan is locked.  The Rate Negotiation and Float-to-Current Options are both available provided that the REFLO lock meets Wells guidelines; REFLO locks may also be changed within the product offering and extended for the fee listed on the Wells rate sheet.  The Float Down, Extended Lock, and Rate Cap programs have all been discontinued. The 5 toughest questions for men. (Part 1 of 5; guaranteed to get me into hot water, but I will gladly print the opposing view if someone sends it to me. I think they’re from Dave Barry.) 1. What are you thinking about? 2. Do you love me? 3. Do I look fat? 4. Do you think she is prettier than me? 5. What would you do if I died? What makes these questions so difficult is that each one is guaranteed to explode into a major argument if the man answers incorrectly (i.e. tells the truth). Therefore, as a public service, each question is analyzed below, along with possible responses. Question # 1: What are you thinking about? The proper answer to this, of course, is: “I’m sorry if I’ve been pensive, dear. I was just reflecting on what a warm, wonderful, thoughtful, caring, intelligent woman you are, and how lucky I am to have met you.” This response obviously bears no resemblance to the true answer, which most likely is one of the following: a. Baseball. b. Football. c. How much you weigh. d. When can I take a nap. e. How can I find the time to run some errands. (Perhaps the best response to this question was offered by Al Bundy, who once told Peg, “If I wanted you to know what I was thinking, I would be talking to you!”)  

If you’re interested, visit my twice-a-month blog at the STRATMOR Group web site located at www.stratmorgroup.com . The current blog discusses the question, “Does the Industry, and the Borrower, Need a HARP 3.0?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.