Prime Wholesalers Cut Back as Commercial Gets Aggressive

Homecomings Financial LLC advised mortgage brokers that it will require them to re-disclose the good faith estimate when fees change by more than 10 percent or when a new lender or broker fee is added after its initial disclosure package has been issued. Yield-spread premiums need to be disclosed as a dollar amount.

Wells Fargo Home Mortgage’s wholesale lending division recently announced a 3.00 price adjuster will be applied to every loan commitment in the pipeline not locked or re-locked prior to the effective date of a retraction.

The Des Moines, Iowa-based company is now requiring a minimum 700 loan score on non-conforming transactions, though high-balance conforming loans are not impacted. While investor properties are no longer acceptable on non-conforming programs, REOs are now allowed.

CitiMortgage Inc. advised its correspondent customers that loan-to-values on agency Alt-A SIVA and SISA programs have been cut to 75 percent, with a 70 percent LTV limit on three- to four-unit cashout transactions. Citi also limited LTVs on Fannie Mae expanded approval and Freddie Mac A-Minus loans to 80 percent. The changes are effective on loans locked on or after May 24.

Countrywide issued a bulletin to mortgage brokers indicating the maximum mortgage with full or alternative documentation has been reduced to $2 million on second homes and $1 million on investor properties. On SIVA reduced documentation loans, the loan cap has been lowered to $1.5 million on second homes, while investor financing has been eliminated.

Countrywide eliminated the online “Fast & Easy” option, according to the bulletin. In addition, 3/1 interest-only LIBORs will no longer be offered, conforming 40-year fixed-period ARMs have been eliminated and non-conforming 2-unit properties are no longer allowed on the Fast & Easy program.

LTVs and combined LTVs on conforming loans at the Calabasas, Calif.-based lender are now limited to 97 percent for Flexible, House America and MyCommunity programs. On loans over 95 percent LTV, the minimum credit scored has been increased to 680.

On government programs, automated underwriting system approval will now be required on FHA and VA borrowers with credit scores between 580 and 599. Also, VA borrowers with scores below 580 are no longer allowed, and VA interest rate reduction refinance loans will only be available on loans already serviced by Countrywide.

But Countrywide has eliminated the 5 percent loan-to-value reduction in soft markets on rate-and-term refinances for owner-occupied single-family residences under conforming and MyCommunity programs. The enhancement is available on full- and alternative-documentation loans with a maximum 95 percent LTV and applies to purchase transactions that don’t utilize a flexible source of funds.

Georgia-based AME Financial Corp. claims it is the “the fastest growing A-paper lender in America.” The company, which noted it focuses exclusively on prime programs, said on its rate sheet that full-documentation programs pay as much as 3 percent in yield-spread premiums.

Accredited Home Lenders issued a marketing piece that indicated the loans it funds have an average FICO score of 600, an average LTV of 70 to 75 percent and an average par rate of 8.5 percent.

In commercial wholesale lending, Blackburne & Brown reported its permanent hard-money commercial programs are 15-year first mortgages with no prepayment penalties and points ranging from zero to 2.5 percent.

“Commercial deals come to us when the borrower’s credit is slightly below that required by the Wall Street lenders or when the borrower cannot accept a lock-out clause,” Blackburne said in a statement. “Our sweet spot is $200,000 to $2 million.”

Nationwide Commercial Lenders is advertising stated-income multifamily loans to $30 million with 30-year amortizations, 80 percent LTV and minimum FICO scores of 660. On other types of commercial properties, FICOs go down to 600, LTVs go up to 90 percent and loan amounts can be as low as $100,000.

Another commercial lender, GMC Mortgage Capital, promotes hard-money bridge loans with 12-month terms and with loan amounts from $1 million to $20 million that ignore credit scores. Small-balance deals, for loans between $250,000 and $3 million, have rates as low as 7.0 percent and allow FICO scores down to 650.

Firstrust Bank-subsidiary APEX Mortgage Corp. advertised that its portfolio commercial loan programs allow credit scores down to 550 and loan amounts from $25,000 to $750,000. The minimum prepayment penalty is 3 percent, and the Pennsylvania-based company handles all processing.

APEX touts one $400,000 loan it funded on a dentist’s office where the broker made $12,000.

Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com.

e-mail: mtgsam@aol.com