Loan forms, loan programs and loan guidelines have been impacted by recent secondary marketing changes at government-owned and -controlled entities. While some firms hope to help secondary players better navigate the current market — secondary mortgage market participants will have ample opportunity to learn all about secondary marketing issues at an upcoming New York conference.
The Mortgage Bankers Association’s National Secondary Market Conference & Expo 2010 will be held from May 23 to May 26 at the Hilton New York. Prior to April 23, the cost is $995 for MBA members and $1,195 for nonmembers. After April 23, the respective prices rise to $1,095 and $1,395. Among sessions being held at the conference are Secondary Market Investors – Buyer and Seller Perspectives; Whole Loan Sales – Priming the Pump for Private Label Securitization; and Bringing Back the Jumbo Market. Other sessions include What New Risk Management Strategies Can be Leveraged to Help Restore Investor Confidence in RMBS; A Perfect Hedge Undone by a Bad Model, Bad Data or Bad Assumptions; and Warehouse Lending and Other Funding Alternatives. In Bulletin No. 2010-7, Freddie Mac said it will no longer purchase initial-interest mortgages or any loan with an interest-only option beginning with June 13 applications and Sept. 1 settlements. The letter, issued on March 11, also announced changes to minimum indicator score requirements on some manually underwritten loans, the addition of a minimum indicator score of 620 for non-assumable Rural Housing Service Section 502 GRH Mortgages and amended requirements for age of credit and capacity documentation and seasoning.
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Hilton photo of Hilton New York |
The McLean, Va.-based company also said requirements have changed for eligible borrowers on loans secured by newly constructed homes, while super-conforming mortgages now includes new construction. Requirements have also been revised on properties with incomplete improvements.
In addition, approved sellers will be required to use specific versions of FICO scores, while guides were provided for appraising leasehold estates. (read full Bulletin No. 2010-7)
Freddie said in Bulletin No. 2010-6 on March 2 that its Relief Refinance Mortgage offering was extended to loans with note dates on or before June 30, 2011. The same day, the Federal National Mortgage Association said in a selling notice that its lenders could continue to apply the Home Affordable Refinance Program flexibilities to loans originated under Refi Plus and DU Refi Plus with note dates through June 30, 2011, and delivery dates through Oct. 31, 2011.
Bulletin No. 2010-5 last month indicated that Loan Prospector has been enhanced to provide a point value estimate from Home Value Explorer. Freddie said the change will improve the quality and accuracy of appraisals. The bulletin additionally indicated that a copy of the note will now be required in the mortgage file and that sellers cannot delegate endorsements of notes through a power-of-attorney.
Freddie said in Bulletin No. 2010-2 that it would no longer accept condominium project approval by other secondary market participants for loans insured by the Federal Housing Administration, guaranteed by the U.S. Department of Veterans Affair or closed under the Guaranteed Rural Housing program or HUD Guaranteed Section 184 Native American program. On such loans, Freddie will only accept projects with FHA Condominium Project approval. The new requirement was effective in February.
In Selling Guide Announcement SEL-2010-01 issued March 2, Fannie Mae explained changes to its selling guide as a result of its recently implemented loan quality initiative. (read full SEL-2010-01) Fannie noted in Selling Guide Announcement SEL-2010-02 a number of other selling guide miscellaneous clarifications or omissions that have been updated. (read full SEL-2010-02)
Loan agreements for home-equity conversion mortgages have been revised, the U.S. Department of Housing and Urban Development said in Mortgagee Letter 2010-07 this month. HUD said Fannie Mae Form 1009, Residential Application for Reverse Mortgages, was also updated. While the revised forms can immediately be used, they become mandatory for all HECMs with case numbers assigned on Aug. 1 or later. (view Form 1009)
A Webinar about Fannie’s requirement to digitally provide appraisal information was hosted by FNC Inc. last week. Among the speakers were FNC executives, a Quicken Loans business consultant and a loan risk and recovery executive from SunTrust. FNC expects other secondary players to follow Fannie’s lead.
On April 1, Ginnie Mae issuers will no longer be able to access loan-matching feedback or e-Notification through e-Access, according to letter No. APM 10-03. Issuers will instead need to use the RFS matching and suspense module within the Ginnie Mae Enterprise Portal to access loan-matching feedback, while e-Notification will only be accessible through the portal.
In letter No. APM 10-02, government-owned Ginnie reminded issuers that the minimum net worth requirement for all single-family MBS and HMBS issuers rises to $1.0 million on Oct. 1. Issuers approved since Oct. 1, 2008, were already subject to the higher net worth requirement. The multifamily net worth requirement, however, remains at $0.5 million.
Aite Group Senior Analyst John Jay warned in a recent statement that the potential requirement that banks retain ‘skin in the game’ for originations they securitize would act as a disincentive to lend. He called for greater regulatory clarity from the U.S. Capitol.
