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  • 01 Mar 2017 9:36 PM | John McCully (Administrator)

    To Presidents and Founders

    Recently, two Independent Processing Companies (IPC for this email).  ​gave their interpretation of the IPC regulation to mean that as long as the company was licensed and they had one senior processor that held a MLO license and was sponsored by the IPC, then many other processors can work on a W2 basis for that IPC without a license as long as they were directed by the MLO that was licensed there.

    The SML has carefully considered the matter and given the opinion that ALL processors working for an IPC must be licensed and sponsored by the IPC.  The appropriate individual license is an MLO license.

    ​Please announce this at your meetings as they occur.  You will have processing companies that are not in compliance with this rule.

    I have asked the Commissioner consider putting out an announcement and perhaps notify all the processing companies. 

    ​Thank you for all you do.




    Everett Ives

  • 28 Jul 2016 9:53 PM | John McCully (Administrator)

    We appreciate the partnership with NAMB and the opportunity to deliver today’s webinar discussing Fannie Mae’s HomeReady® product. HomeReady® is designed to help lenders confidently serve today’s market of creditworthy, low- to moderate-income borrowers, with expanded eligibility for financing homes in low-income communities.

    We wanted to provide the webpage link to the information and the slides that were discussed on today’s call as well as other Fannie Mae website links that may be helpful to you. 

    ·         HomeReady® -

    Please note the Fannie Mae, Single Family webpage which provides easy access to a variety of topics to better serve our industry.

    ·         Fannie Mae Single Family-

     Lastly, Fannie Mae offers mortgage brokers and correspondents access to many of our technology tools. Please visit our Mortgage Broker and Correspondent webpage for more information, or contact the Industry Partner Solutions team, for assistance with your technology needs.

    ·         Mortgage Brokers and Correspondents

    Again, we appreciate the opportunity to serve the members of NAMB.

  • 09 Feb 2016 8:08 AM | John McCully (Administrator)

    By Edward J. Pinto
    February 5, 2016

    A recent Associated Press poll found more than six in 10 respondents expressed only slight confidence — or none at all — in the ability of the federal government to make progress on important issues facing the country.

    The public's skepticism is well founded, especially when it comes to federal housing policy. Notwithstanding an alphabet soup of government agencies and federally backed companies — Federal Housing Administration, Fannie Mae, Ginnie Mae, Freddie Mac, Federal Housing Finance Agency, etc. — and trillions spent on government-mandated "affordable housing" initiatives, our homeownership rate today is no higher than it was in the mid-1960s. What is best described as a nationalized housing finance system has failed to achieve its two primary goals: broadening homeownership and achieving wealth accumulation for low- and middle-income homeowners.

    The U.S. homeownership rate as of the fourth quarter of 2015 is 63.8%, the same as in the fourth quarter of 1966, and only marginally higher than the rate in 1956. More troubling, our housing policy has been unsuccessful at building wealth — the antidote to poverty. Between 1989 and 2013, median total accumulated wealth for households in the 40th to 60th percentiles has decreased from $76,100to $61,800, while median wealth for households in the 20th to 40th percentile has decreased by more than 50%, from $44,800 to $21,500. It was precisely these groups that were targeted to be helped by affordable housing policies.

    For the last 60 years, U.S. housing policy has relied on looser and looser mortgage lending standards to promote broader homeownership and accomplish wealth accumulation, particularly for low- and middle-income households. Leverage first took the form of low down payments combined with the slowly amortizing 30-year term mortgage, which resulted in rapidly accelerating defaults, foreclosures and blighted neighborhoods. Since 1972, homeowners have suffered between 11 million and 12 million foreclosures. During the 1990s and early 2000s, new forms of leverage were combined with declining interest rates. With demand increasing faster than supply, the result was a price boom that made homes less, not more affordable, necessitating even more liberal credit terms. We are all familiar with the outcome—a massive housing bust and the Great Recession.

    Today, in the shadow of Fannie and Freddie's continued existence, taxpayers are again driving home prices up much faster than incomes — particularly at the lower end of home prices. U.S. housing policy has become self-justifying and self-perpetuating — loved by the National Association of Realtors, many housing advocacy groups, and the government-sponsored enterprises, but dangerous to the very homebuyers it is supposed to help.

    To help achieve sustainable, wealth-building homeownership opportunities for low- and middle-income Americans, our current government-backed command and control system should be replaced with market-driven antidotes. For most low- and middle-income families, the recipe for wealth-building over a lifetime contains three ingredients: buy a home with a mortgage that amortizes rapidly, thereby reliably building wealth; participate in a defined contribution retirement plan ideally with an employer match; and invest in your children's college education.

    Here are three steps to make the first goal — quickly amortizing mortgages — more of a reality:

    First, housing finance needs to be refocused on the twin goals of sustainable lending and wealth-building. Well-designed, shorter term loans offer a much safer and secure path to homeownership and financial security than the slowly amortizing 30-year mortgage. Combining a low- or no-down-payment loan with the faster amortization of a 15- or 20-year term provides nearly as much buying power as a 30-year FHA loan. A bank in Maine offers a 20-year term, wealth-building loan that has 97% of the purchasing power of an FHA-insured loan. By age 50 to 55, when the 30-year-term loan leaves most homeowners saddled with another decade or more of mortgage payments, the cash flow freed up from a paid-off shorter-term loan is available to fund a child's post-secondary-education needs and later turbocharge one's own retirement.

    Second, low-income, first-time homebuyers should have the option to forgo the mortgage interest deduction and instead receive a one-time refundable tax credit that can be used to buy down the loan's interest rate. Borrowers who participate in a defined contribution retirement plan might receive a larger tax credit, enabling them to lower their rate even more.

    The one-time tax credit would support wealth-building by being available only for loans with an initial term of 20 years or less. To avoid pyramiding subsides and reduce taxpayer exposure, only loans not guaranteed by the federal government would be eligible. This would provide a big start to weaning the housing market off of government guarantees. With the Low-income First Time Homebuyer — or LIFT Home — tax credit in place, the Fannie and Freddie affordable housing mandates could be eliminated, ending the race to the bottom among government guarantee agencies.  Reductions in the Department of Housing and Urban Development's budget and other budgeted amounts supporting "affordable housing" should also be used to fund LIFT Home. Better to provide the dollars directly to prospective homeowners, than to be siphoned off to bureaucracies and advocacy groups.

    Third, the home mortgage interest deduction should be restructured to provide a broad, straight path to debt-free homeownership. Today's tax code promotes a lifetime of indebtedness by incenting homeowners to take out large loans for lengthy terms so as to "maximize the value" of the deduction. Current law should be changed to: limit the interest deduction for future home buyers to loans used to buy a home by excluding interest on second mortgages and cash-out refinancing; for future borrowers, cap the deduction at the amount payable on a loan with a 20-year amortization term; and provide a grandfather on the deduction cap for existing home loan borrowers with 30-year loans as long as their interest savings go toward shortening the loan's term.

    A 21st-century market approach to wealth-building offers a safe and secure path to homeownership and financial security, something we haven't had for decades.





    Edward Pinto

    Codirector and Chief Risk Officer

    International Center on Housing Risk

    American Enterprise Institute

    1150 17th St. NW, 11th fl.

    Washington, DC 20036

    Cell: 240-423-2848 (preferred phone number)

    ICHR Logo (3)

  • 08 Jun 2015 9:22 AM | John McCully (Administrator)

    NAMB Applauds CFPB Announcement On TRID Enforcement, Calls For Defined Hold Harmless Period

    CFPB Director Tells Congress The Bureau Will Be "Sensitive"

    Washington, D.C., June 3, 2015 - NAMB - The Association of Mortgage Professionals, has tirelessly advocated for a delay in the August 1, TRID enforcement deadlines. The certain disruption of the home buying process during one of the busiest times of the home purchasing cycle would hurt consumers, mortgage professionals, and the U.S. economy. We have learned that requests by NAMB and our fellow housing industry leaders have been heard and the CFPB is willing to be sensitive to industry concerns. 


    "We very much appreciate the acknowledgement by Director Cordray that the August 1 deadline is problematic and encourage him to take the definitive step of granting a "bright line, hold harmless period" for the mortgage industry while his agency determines whether their regulatory scheme is, in fact, workable," said John Councilman, President of NAMB.  

    On June 3, 2015, Director Cordray sent a letter to Congress explaining that the CFPB and other regulators "will be sensitive to the progress made by those entities that have squarely focused on making good-faith efforts to come into compliance with the rule in time".

  • 07 Dec 2014 9:01 PM | John McCully (Administrator)

    Updated Dec. 1, 2014 7:35 p.m. ET

    Home appraisers are inflating the values of some properties they assess, often at the behest of loan officers and real-estate agents, in what industry executives say is a return to practices seen before the financial crisis.

    An estimated one in seven appraisals conducted from 2011 through early 2014 inflated home values by 20% or more, according to data provided to The Wall Street Journal by Digital Risk Analytics, a subsidiary of Digital Risk LLC. The mortgage-analysis and consulting firm based in Maitland, Fla., was hired by some of the 20 largest lenders to review their loan files.

    The firm reviewed more than 200,000 mortgages, parsing the homes’ appraised values and other information, including the properties’ sizes and similar homes sold in the areas at the times. The review was conducted using the firm’s software and staff appraisers.

    Bankers, appraisers and federal officials in interviews said inflated appraisals are becoming more widespread as the recovery in the housing market cools. While home prices are increasing generally, their appreciation is slowing, and sales have been weak despite low interest rates. The dollar amount of new mortgages issued this year is expected to be down 39% from last year, at about $1.12 trillion, according to the Mortgage Bankers Association.

    That has put increasing pressure on loan officers, who depend on originating new mortgages for their income, as well as real-estate agents, who live on sales commissions. That in turn is raising the heat on appraisers, whose valuations can make or break a sale. Banks generally won’t agree to a mortgage if the purchase price or the refinancing amount is higher than the appraised value.

    The practice is garnering broader notice. The Office of the Comptroller of the Currency is reviewing the mortgages banks are doling out, concerned that some of them are based on inflated values, according to Darrin Benhart, a deputy comptroller who focuses on identifying areas of risk in the federal banking system. The OCC oversees national bank and federal savings associations lending practices. Separately, Freddie Mac , the mortgage-finance giant, said it has opened fraud investigations related to appraisals of homes backing mortgages it bought.

    Almost 40% of appraisers surveyed from Sept. 15 through Nov. 7 reported experiencing pressure to inflate values, according to Allterra Group LLC, a for-profit appraiser- advocacy firm based in Salisbury, Md. That figure was 37% in the survey for the previous year.

    “If you thought what was happening before was an embarrassment, wait until the second time around,” said Joan Trice, Allterra’s chief executive and founder of the Collateral Risk Network, which represents appraisers employed by lenders and other companies and has been meeting with regulators to discuss concerns about appraisers being pressured into inflating values.

    To determine a home’s value, appraisers assess a property’s condition, size and location, among other factors. They use similar properties that have been recently sold as one key basis for comparison.

    Digital Risk found that some appraised values were off the mark based on discrepancies that appeared unintentional, though, “at other times, the appraiser’s selection of [comparable properties] very hard to justify,” said Thomas Showalter, chief analytics officer at Digital Risk. The firm saw cases where values for decades-old homes were determined based on sales prices for newly constructed ones, and homes blocks from shorelines were compared with waterfront properties, he said.

    New houses under construction in Golden, Colo., in August. Some in the mortgage industry say inflated home appraisals are increasingly a problem. REUTERS

    To be sure, inflated appraisals aren’t a problem everywhere. Real-estate agents, for example, say they sometimes encounter appraisals that come in below the agreed-upon purchase price and derail the deal.

    Twenty-four percent of real-estate agents surveyed in March 2014 reported that low appraisals resulted in sales contracts being canceled, delayed or negotiated to a lower price, according to the latest data from the National Association of Realtors. But that figure has been declining in recent years: In March 2013, 29% of agents reported such problems, and the figure was 31% in March 2012.

    Brandon Boudreau, chief operating officer at Metro-West Appraisal Co. LLC, a national firm based in Detroit, says he and his appraisers often feel pressured by aggressive real- estate agents.

    “It’s a daily thing,” Mr. Boudreau says. “They say, ‘Your appraiser is incompetent. They don’t know what they’re doing.’ ” In such instances, Mr. Boudreau says he tells the real- estate agents to contact the loan officer handling the borrower’s application with evidence the appraiser undervalued the home.

    Much of the pressure, appraisers say, is being applied by companies hired by banks to assign appraisal work, known as appraisal-management companies, or AMCs. A much larger share of appraisals have been filtered through these companies since the introduction of new financial rules and other requirements that seek to prohibit appraiser coercion.

    Banks turned to AMCs to help maintain a distance between loan officers and appraisers. That distance is intended to eliminate pressure on the appraiser to hit a certain price. But some in the industry say AMCs are now applying pressure in a bid to keep the lenders’ business.

    Within lenders’ ranks, tensions are also rising. While loan officers may be trying to boost the number of home loans they give out, their superiors and risk officers are charged with ensuring the quality of those loans.

    “The lender is held accountableundefinedthey need the appraisal to be accurate and to defend it years down the road,” said Michael Fratantoni, chief economist at the Mortgage Bankers Association. He cited the agreed-upon purchase price as among the best measures of a home’s value.

    Tom Allen, who says he has been an appraiser for 44 years, recalled appraising a house in April for about $450,000 for a loan application with J.P. Morgan Chase & Co. About a week later, Mr. Allen, 68 years old, says he received a request from the appraisal- management company to use two different properties as comparables that had recently sold for around $525,000 and $540,000. Mr. Allen says he refused because the homes were larger, in a more expensive neighborhood and built about 10 years after the property in question. Since then, Mr. Allen says he mostly accepts appraisal requests for homes that have several similar nearby sales.

    A J.P. Morgan spokesman declined to comment.

    Mr. Allen declined to name the AMC. “If they get negative feedback from an appraiser in a small market they’re in, it’d be easy for them to never give me any more work,” he said.

    It isn’t uncommon for the lender or the loan applicant to supply comparable sales if there are legitimate concerns with the appraisal report, said George Demopulos, vice president of the National Association of Appraisal Management Companies, which is based in Providence, R.I. The group represents about a dozen AMCs that receive assignments from large and small lenders and who work with thousands of appraisers across the country.

    “Most AMCs abide by best practices,” he said. “Any legitimate AMC would not pressure and should not pressure any appraisers.” Mr. Demopulos acknowledged he has heard of instances similar to the one described by Mr. Allen.

    Mr. Benhart, of the Office of the Comptroller of the Currency, first warned of problems with how banks review appraisal reports last year in a speech to mortgage bankers. He says the agency has been spending more time at banks this year scrutinizing the home- valuation paperwork used to help originate mortgages. The OCC found cases in which bank staff didn’t have enough training, Mr. Benhart said. In some cases, for example, they didn’t have experience with the type of property or the area, he said. It also found banks that didn’t thoroughly check reports or provide oversight of AMCs.

    “This is rising as a risk,” said Mr. Benhart.

    Freddie Mac has found cases of appraisers submitting a suspiciously high number of reports in one day, as well as reports for properties in places where they aren’t certified or licensed to operate, according to a spokesman. It has also received tips from employees at lenders and other insiders warning of inflated valuations, he said.

    The firm is looking “into whether or not some of the lines have been crossed from compliance to noncompliance with regard to appraisal independence,” he said. “We are watching it closely and are very aware of the issues.”

    Write to AnnaMaria Andriotis at

    Copyright 2014 Dow Jones & Company, Inc. All Rights Reserved

    This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit 

  • 07 Nov 2014 9:59 AM | John McCully (Administrator)

    AN IMPORTANT MESSAGE FOR OUR LENDERS: To implement regulation-related conversion changes that will streamline processing and save you time and money, Rural Development will not accept new Single Family Housing Guaranteed loan applications from the close of business on November 21, 2014, through the start of business on December 1, 2014.

  • 26 Aug 2014 10:13 AM | John McCully (Administrator)

    There is a growing body of evidence is showing that the housing market, which has been largely disappointing in 2014, may have turned a corner this summer. Builder sentiment/confidence has increased. After four months in contraction territory (below 50), the National Association of Homebuilders index crested above 50 in July and climbed higher, to 55, in August. July housing starts jumped to an eight-month high in a welcome affirmation of the improvement in homebuilding sentiment. Building permits also shot up. Single-family housing starts reversed two straight monthly declines to rise to the fastest pace reported yet in 2014. The number of properties listed for sale by U.S. homeowners climbed to nearly 2.4 million, the highest number of listing since August 2012, and the pace of existing home sales rose to a 10-month high of 5.15 million at an annualized rate.

  • 07 Aug 2014 4:43 PM | John McCully (Administrator)

    Changes Could Lead to More Bank Lending, Easier Credit for Some Consumers


    Aug. 7, 2014 4:32 p.m. ET

    The producer of the most widely used credit score in the U.S. on Thursday announced a major overhaulof its scoring model that could boost bank lending and lead to thousands of dollars in savings forborrowers with debts that are in collection.FICO, which is based in San Jose, Calif., and whosescores carry its name, said it would no longer factor in anydebt or account that is with a collection agency and thatconsumers have paid off or settled. FICO also announcedit will place less weight on unpaid medical debt that is inthe collection process.Most lenders check applicants' FICO scores to helpdetermine whether to extend credit to consumers and atwhat interest rates. The company will begin rolling out thenew scoring model, named FICO 9, to credit bureaus thisfall and to lenders later this year.FICO says the changes come after months of discussionswith large lenders and the Consumer Financial ProtectionBureau to determine ways to boost lending withoutinjecting new risk into financial institutions.The new scoring model is expected to provide a muchneededboost to consumer lending, with lenders likely togreenlight loans for some borrowers who have been shutout since the recession or charged high interest ratesbecause of their low scores.

  • 04 Aug 2014 7:45 PM | John McCully (Administrator)

    Donna Beinfeld, President of compliance firm Donnashi, contributes, "Training on Desktop Underwriter Version 9.1 August update is available and is considered 'Open Registration.' 'DU Version 9.1 August Update Live Web Seminars: Join Fannie Mae for a live web seminar to learn more about the Desktop Underwriter® (DU®) Version 9.1 Update, scheduled for release the weekend of Aug. 16, 2014. The webinar will review the updates being made to DU, including foreclosure message updates, deed-in-lieu of foreclosure and preforeclosure sale message updates, the addition of a charge-off policy message, 2014 Area Median Income limits, a special feature code retirement, and updates to align with the Selling Guide.'"

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