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- Save time and money easy MERS registration
- MBS on the road again
- Compliance
- Investor Updates
- Question of the Month |
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| Save time and money with easy MERS registration |
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No one can argue the importance of Mortgage Electronic Registration Systems (MERS) to the mortgage industry. An electronic registry designed to track servicing rights and ownership of mortgage loans in the U.S., MERS affords significant benefits to both lenders and consumers. MERS eliminates the need to file assignments in county land records (reducing county recording fees from real estate transfers) and provides a central source of information and tracking for mortgage loans. The key to immediate and substantial time and money saving benefits to lenders is in the way they register loans with MERS.
MERS is widely used in the industry, with new registrations daily. According to Inside Mortgage Finance, six of the top ten mortgage originators are originating or purchasing MERS-registered loans. Other major players are integrating MERS into their operations this spring and summer, now including Fannie Mae, Freddie Mac, Ginnie Mae, Federal Home Loan Bank, VA, FHA and major Wall Street rating agencies. Many warehouse lenders actually require all loans to be purchased to be MERS-registered. All lenders and investors can accept MERS-registered loans, which stands to revolutionize the industry.
With the benefits, however, come drawbacks that would annoy any Operations VP. In the loan process, it is a risk any time the same data must be entered at least twice. This repetition is not only inefficient, but also opens the door to errors – a potential compliance nightmare waiting to happen (cue the Compliance Officer wiping his or her brow). Isn't there a better way?
The answer is Yes: Mortgage Banking Systems' software provides lenders with a system that extracts all relevant information from their ProClose® closing software in just one click. ProMerge® significantly simplifies electronic registration of loans and allows lenders to register as few as one, or as many as a batch of hundreds of loans through a Virtual Private Network (VPN) established within ProClose.
ProClose reduces the time it takes to register a MERS loan by anywhere from 5-15 minutes. Think about it: for 100 loans a month, you save at least one – possibly two – business days per month using ProMerge! Why use a valuable employee to retype and re-review data already in your closing system?
ProMerge also eliminates potential errors caused by multiple entries, allowing Post Closers to focus on verifying the accuracy of loans rather than moonlighting as Data Entry Specialists. Furthermore, the Compliance Officer now has at least one less thing to worry about.
Boost the benefits of MERS with our ProMerge software from ProClose. Save time, increase accuracy and streamline your loan processing.
Still deciding? Read more about the ProMerge advantage and start saving time and money today. |
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Recently, Mortgage Banking Systems' (MBS) Client Support Representatives (CSR) took to the road to visit ProClose Clients. Nothing provides more insight than seeing closers doing live loans in ProClose and experiencing their daily tasks with them. What steps do closers go through from LOS export to final closing documents send? We also wanted to see first-hand how the RESPA 2010 changes are affecting lenders and how our clients are managing their business processes to accommodate the changes.
These visits are great learning experience for all parties involved. ProClose CSRs are former loan processors and/or closers. For us, sitting with a client is a great refresher course. We also know each lender is different. We get a better understanding of the issues encountered by the user personally on a daily basis. For the client, we are able to make immediate suggestions, share shortcuts and assist the user to take full advantage of ways ProClose simplifies the closing process.
Most recently, Betsy Payne toured the Mid-West to visit both ProClose Classic and Platinum clients. "Clients are always encouraged to ask questions or request alternative ways to do things, but when you meet face-to-face, they're more likely to do so. They open up more. I enjoy showing them shortcuts in ProClose and I come back with ideas and ways to improve and streamline their processes. Visits are always good and really make a difference," Betsy said.
The majority of questions we get from our clients are currently fee related. What is the easiest way to complete fees so the HUD-1 is accurate; and, how do they best communicate the fee information to the Settlement Agents? Since every office completes fees a little differently, it is most beneficial to be sitting right there and understand what closers are trying to accomplish and hopefully help right away. Even clients we haven't visited yet benefit from what we learn and the great ideas suggested on how we can improve the ProClose software. No doubt, the best compliment we receive is about our outstanding and dedicated Customer Service.
Here's what we heard:
"ProClose is user friendly. The MBS staff is very knowledgeable, accessible and ready to help".
Barbara Spinning, Mortgage Loan Coordinator
Blue Ridge Bank, Blue Springs, MO
"It was so nice to meet you and I appreciated the time you spent here at the office and the lessons on ProClose. We are still getting used to the ProClose system here. It is so pleasant talking to the support staff at ProClose and their friendliness and helpfulness is always a day brightener."
Carol Wegscheid, Loan Processing Coordinator/Supervisor
Mid-Central Federal Savings Bank, Wadena MN
"We have been a ProClose Customer for 2 years during which many federal lending regulation changes were implemented. ProClose has always been on top of all these changes and has been there to help guide us through and become comfortable preparing closing documents after the RESPA changes that began January 1, 2010. I would recommend their services to anyone in the mortgage industry that needs to rely on the accuracy of the system they use. My calls are always answered by a person that can respond to my questions."
Linda Eggleston, VP-Operations Manager
Excel Mortgage Company a division of Excel Bank, Clayton MO
"I would just like to take the time to say how impressed all of us here in the residential department at Hawthorn Bank are with not only the quality of the ProClose product but with everyone on the ProClose staff. In a time filled with stress at our company due to all of the new regulations and having to start fresh with a new processing system, Betsy, along with everyone else on her team, have made this transition smooth and easy. Anytime we needed anything, they were there to take care of us and they did it with a smile. Customer service at ProClose has far exceeded any we have known or expected."
Ronna Tresslar, Supervisor
Hawthorn Bank, Jefferson City, MO |
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FHA Receives Authorization to Raise Annual Mortgage Insurance Premium
On June 10, 2010, the House of Representatives approved by a 406-4 vote, the Federal Housing Administration Reform Act, a law designed to shore up the FHA, which now guarantees nearly one-third of the nation's mortgages.
The new law gives the FHA the authority to raise the ceiling on the annual premiums it charges borrowers for its guarantee, raises the loan limits on multifamily housing in certain high cost communities and in elevator buildings, and authorizes some previously announced provisions to better protect FHA from fraud and increase enforcement of FHA lenders.
Under the law passed, the agency will be allowed to increase its annual premium from .55 to 1.50 percent of the unpaid balance of the loan. This shift will allow for the capital reserves to increase with less impact to the consumer because the annual Mortgage Insurance Payment (MIP) is paid over the life of the loan instead of at the time of closing.
The bill must still get passage in the Senate. You can find more information on the Federal Housing Administration Reform Act here.
Fannie Mae LQI
In Lender Letter LL-2010-03, issued February 26, 2010, Fannie Mae announced a new Loan Quality Initiative (LQI), aimed at “improving the lender's ability to deliver mortgage loans that meet Fannie Mae's underwriting and eligibility guidelines and thus mitigate repurchase risk.” The Agency identified enhancements in policy, process, and technology to attain the goal of greater integrity of loan delivery data. To this end, Fannie is issuing periodic announcements and updates to its Selling and Servicing Guide describing the changes falling under the LQI.
Primary among the stated goals is validation of critical loan data in all stages of the loan process, even through loan delivery. Targeted areas include - among others - confirmation of the borrowers' identity and occupancy status, as well as debt obligations. On March 2, 2010 Fannie released corrected Announcement SEL-2010-01 outlining the resulting changes to the Seller Guide, effective with applications on or after June 1, 2010. We want to note one change in particular that may be greatly impacting all parties, including the borrower: “Lenders must determine that all debts of the borrower incurred or closed up to and concurrent with the closing of the subject mortgage are included in the qualification for the subject mortgage loan.”
Lenders are required to thoroughly assess all debts and liabilities impacting a borrower's ability to repay the mortgage in full, and reflect these on the final loan application. All credit inquiries must be verified, and any new debt thereby incurred must be included in the qualifying ratios. While this procedure isn't new, the requirement to perform all these steps basically through the time of closing IS, and lenders now must have procedures to handle this process.
Investors doing business with Fannie Mae are responding accordingly. For example, GMAC announced new policies effective with applications for conforming loans on or after the June 1st effective date, including:
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Retrieval & review of a new or refreshed credit report just prior to the closing for additional credit lines.
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Direct verification with a creditor listed in the inquiries section of the credit report to determine whether a borrower has entered into a financial arrangement with the creditors, which may not be listed on the loan application.
- Running of a MERS report to determine if a borrower has undisclosed liens or another mortgage being established simultaneously.
Any new liabilities or increase in existing credit must be used to requalify the loan, and the final loan application must be revised accordingly.
These changes led columnist Kenneth Harney to examine the ramifications for homebuyers particularly in a Washington Post article published May 15, 2010. Harney points out that in the past, approved borrowers have often given into the temptation of shopping in anticipation of a new property, sometimes incurring substantial additional debt for furniture or other goods (and even, at times, purchases of non-related large ticket items such as cars). Realistically, these new obligations may now result in a failure to qualify for a previously approved loan, or at the least delay the closing while the appropriate diligence is performed by the lender. He writes, “How should home buyers and refinancers prepare for the new credit check procedures? Lenders and credit reporting company executives say everybody needs to follow just one basic rule: abstinence. Between your application for a mortgage and the date of closing - which might be a span of 45 to 60 days or more - resist the irresistible.” Excellent advice, but only time will tell how well it's heeded and what kinds of complications may arise from this heightened scrutiny.
Colorado updates recording fees
Colorado Governor Ritter signed House Bill 1007 on April 5, 2010. Effective July 1, 2010, the bill establishes consistency for filing and recording documents where a fee is not specifically provided: $10.00 for the first page and $5.00 for each subsequent page. Specific counties may charge higher recording fees. There are no longer additional charges for multiple entries in the grantor and grantee index.
Mississippi revises SAFE ACT legislation
Effective July 1, 2010, Mississippi H.B. 223 amends several definitions including the "mortgage loan originator" to include individuals who take residential mortgage loan applications or who offer or negotiate terms of a residential mortgage loan. The term "principal officer" replaces "qualifying individual." Definitions were also added for "taking an application for a residential mortgage loan" and "offering or negotiating a residential mortgage loan." |
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The removal of programs and specific program options continued over the last few months. As MBS receives Secondary announcements and notices, we apply expiration dates in our closing software to retiring programs, while allowing time for already locked loans to close.
Bank of America
Due to the current uncertain nature of the USDA Rural Housing Program, Bank of America suspended all commitments on USDA Rural Housing programs as of June 3, 2010. Bank of America plans to reinstate the program once the new product and details on the guarantee fee are released.
Flagstar Bank
Flagstar Bank's current ARM programs were modified to incorporate Freddie Mac guidelines into their Fannie Mae Standard LIBOR ARM programs. The new combined program is called Agency 3/1, 5/1, 7/1 and 10/1 LIBOR ARMs (#5331). MBS ProClose updated all programs in our ProClose closing software.
Following recent Freddie Mac changes, Flagstar suspended all Freddie Mac interest only option loans effective June 1, 2010. Suspended products are Freddie Mac Interest Only #5332 and Freddie Mac Super Conforming #5347.
GMAC
GMAC Bank continued to eliminate more Interest Only products by discontinuing the following Flexible Interest-Only programs. Loans had to be locked by April 26, 2010:
- T48 30 Yr Flexible Fixed IO (10-year IO)
- T49 30 Yr Flexible Fixed IO with Subordinate Financing (10-year IO)
- T58 Flexible 5/1 IO LIBOR ARM (10-year IO)
- T59 Flexible 5/1 IO LIBOR ARM with Subordinate Financing (10-year IO)
- T62 Flexible 7/1 IO LIBOR ARM (10-year IO)
- T63 Flexible 7/1 IO LIBOR ARM with Subordinate Financing (10-year IO)
The following GMAC Jumbo Interest Only Product Codes were discontinued June 7, 2010. Loans had to be locked the same date:
- C99 - 3/1 Jumbo IO LIBOR ARM 2.25% Margin
- A49 - 5/1 Jumbo IO LIBOR ARM 2.25% Margin
- T94 - 5/1 Jumbo IO LIBOR ARM 2.25% Margin (10 Year IO)
- D19 - 7/1 Jumbo IO LIBOR ARM 2.25% Margin
- T95 - 7/1 Jumbo IO LIBOR ARM 2.25% Margin (10 Year IO)
- 929 - 10/1 Jumbo IO LIBOR ARM 2.25% Margin
- J90 - Fixed Rate Interest Only
- R01 - 3/6 Jumbo IO LIBOR ARM
- E57 - 5/6 Jumbo IO LIBOR ARM
- E58 - 7/6 Jumbo IO LIBOR ARM
- Q90 - 10/6 Jumbo IO LIBOR ARM
3-4 Unit Cash-Out Refinance transactions were removed for all GMAC Jumbo Products.
US Bank
A new 30-year fixed-rate Second Mortgage product #3105 was introduced by US Bank. The new program replaced US Bank's 30-year amortizing 15-year balloon program #3101.
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| Question of the Month (from HUD Letter): |
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ProClose Classic was reinstalled on my new PC. Which ProClose properties should I verify?
Answer
We recommend the following ProClose properties be checked periodically as well as when you get a new PC:
- From the ProClose Launch Pad, select FILE.
- Select PROPERTIES.
- On the ProClose tab, verify "Enable updates on this workstation" is selected if you are the person to download ProClose updates.
- On the ProClose Preferences tab, "Auto Save" and "Run Print Time Script" should be enabled.
- On the ProClose Courier tab, if you use ProClose to electronically courier your closing packages, "Enable Proclose Courier FTP" should be selected.
- On the ProClose Courier Email tab, we recommend selecting "Integrate with Microsoft Outlook" if you select "Enable ProClose Courier Email."
- Once all your Properties are selected, click the APPLY button.
- Click OK.
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