Non-Bank Servicers Under the Microscope – Who Will Service Loans?; HELOC Problems Ahead?

In July 1776, the estimated number of people living in the newly independent nation was 2.5 million. (Nowadays, this is approximately the number of people on the freeway in Atlanta or Seattle during rush hour.) The nation’s estimated population on this July Fourth is over 318 million. So we should all invest our money in anything that appreciates with population growth, right?

California has gobs of people, and as California goes, so goes the nation, right? The California State Assembly approved SB 1459. The bill is now enrolled and sent to the governor for signature or veto. The California Mortgage Bankers Association “has vigorously supported the legislation, which will allow use of the Uniform State Test (UST) for California MLOs.  The bill would also modify hourly education requirements, requiring MLOs to get 2 hours of state-focused pre-license education (as part of the 20 hour requirement) and 1 hour of state-focused continuing education (as part of the 8 hour requirement).”

(This reminded me of a note I received a while back from an LO at a large bank. “Are any of the guys emailing you about bank registration versus LO licensing actually producers? I was licensed in more states than most, and it means zilch. Realtors don’t care; clients don’t care. Everyone wants the same thing which is to hit contract dates without excuses. Like everyone else I crammed before the test, bought some practice exams, did some forgettable education, passed the tests and the next day I quickly forgot it all then went back to originating. The same goes for Continuing ED; I click through a bunch of screens and forgot everything a few hours later. At my bank they flood us with training – do the vast majority of LOs remember the minutiae? Big producers will produce regardless of if they are licensed or registered and their referral sources don’t care.

“The Community Home Lenders Association (CHLA) urged the Federal Housing Finance Agency (FHFA) to take actions which could facilitate a transition to mortgage market reform, in a manner that protects consumers and promotes competition. In a letter to FHFA Director Mel Watt, the CHLA said that any transitional actions that FHFA takes should focus on these pro-consumer objectives, by promoting competition and consumer access to community-based lenders and by preserving GSE infrastructure to maintain securitization access and a non-discriminatory cash window. Specifically, the CHLA urged FHFA to: Carry out its risk sharing pilots in a manner that preserves competitive access to securitization, prohibits vertical integration, prohibits volume discounts, and tests out a risk sharing guarantee at the loan level; conduct research into the impact of various reform structures on the preservation of a cash window that meets the needs of all lenders and the consumers they serve; complete work on a common securitization platform and single security; adopt immediate G Fee parity and equal terms and conditions for all lenders; and evaluate access and affordability under different risk sharing options.”

Read on.

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