news flash
Please send resume to: hr@mortgageinvestors.com or call 877-215-9950
6
NationalMortgageProfessional.com
MARYLAND MORTGAGE PROFESSIONAL MAGAZINE
last year. Even before last year’s actuarial study, FHA management began instituting sweeping reforms to strengthen the MMI Fund. These policies have improved loan quality, strengthened lender enforcement, and helped to protect future performance. As a result, the FY 2010 and future books-of-business are expected to generate significant amounts of net capital resources that will help pay losses on earlier books and rebuild the capital position of the MMI Fund. In addition, FHA eliminated approval for loan correspondents and increased net worth requirements for lenders. FHA introduced a new premium structure that is more in line with private mortgage insurers’ pricing, and is estimated to provide approximately $300 million per month of additional capital to the MMI Fund. Furthermore, FHA has changed its credit score and down payment requirements to ensure that FHA provides access to borrowers who have historically performed well. Specifically, a minimum downpayment of 10 percent is now required of borrowers with credit scores below 580 and applicants with credit scores below 500 are no longer eligible for FHA insurance. For more information, visit www.hud.gov.
CSBS makes available all unique state test components for MLOs
/RDQ 2ULJLQDWLRQ 3ODWIRUP
DECEMBER 2010
continued from page 4
$OO WKH )HDWXUHV DW +DOI WKH 3ULFH ‡ (DV\ WR 8VH ‡ 1R 6RIWZDUH WR ,QVWDOO 8SGDWH RU 0DLQWDLQ ‡ )XOO\ &RPSOLDQW 6WDWH 6SHFLÀF 'RFXPHQWV ‡ 3HU /RDQ 3ULFLQJ ‡ +LJK 7RXFK &XVWRPHU 6XSSRUW
/RDQ 2ULJLQDWLRQ 0DGH 6LPSOH $JDLQ FDOO RU YLVLW XV RQOLQH WR VFKHGXOH D GHPRQVWUDWLRQ *2 ;(786 ZZZ [HWXV FRP
The Conference of State Bank Supervisors (CSBS), which operates the Nationwide Mortgage Licensing System and Registry (NMLS) on behalf of state mortgage regulators, has announced unique state test components are now available for all 50 states and two territories—the District of Columbia and the Virgin Islands. The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) requires mortgage loan originators to pass a written qualified test to become licensed through NMLS. The SAFE Mortgage Loan Originator Test, which has been developed by NMLS, consists of two components: a National Component and a Unique State Component. Mortgage loan originators must take and pass the National Component and a Unique State Component for each state in which they are seeking a license. “This announcement marks the successful completion of another requirement assigned to NMLS by the SAFE Act,� said Bill Matthews, CSBS senior vice president and president of the State Regulatory Registry, the whollyowned subsidiary of CSBS that operates NMLS on behalf of state mortgage regulators. “This is one more illustration of how state regulators are committed to providing enhanced and efficient supervision of the regulatory mortgage industry by their full commitment to
implement the many provisions of the SAFE Act.� The National Test Component and the first 11 Unique State Test Components were launched by NMLS on July 30, 2009. Since that date, NMLS has administered over 332,000 tests across the nation. For more information on how to enroll for the SAFE Mortgage Loan Originator Test, please visit the Testing Page of the NMLS Resource Center. For more information, visit www.csbs.org.
Freddie Mac finds fixed-rate is the predominant choice for refis Freddie Mac has announced the results of its quarterly Product Transition Report that concludes in the third quarter of 2010, refinancing borrowers overwhelmingly chose fixed-rate loans, regardless of whether their original loan was an adjustable-rate mortgage (ARM) or a fixed-rate. While 30-year fixed-rate mortgages are still the most preferred product chosen for the new loan among borrowers who previously had that product or an ARM, borrowers who previously held shorter-term fixed-rate mortgages showed a stronger preference for staying with a 15-year or 20year fixed-rate loan than they have in recent quarters. Overall, fixed-rate loans accounted for more than 95 percent of refinance loans. “Fixed mortgage rates fell throughout the third quarter in Freddie Mac’s Primary Mortgage Market Survey, with 30-year fixed rates dropping to levels we hadn’t seen since the early 1950s,� said Frank Nothaft, Freddie Mac vice president and chief economist. “We ended the second quarter excited that borrowers could lock in a rate of 4.75 percent for 30 years, and we ended the third quarter with rates at just a touch over 4.25 percent. It’s no wonder borrowers are attracted to fixed-rate loans.� These estimates come from a sample of properties on which Freddie Mac has funded at least two successive loans and the latest loan is for refinance rather than for home purchase. Some loan products, such as one-year ARMs and balloons, are based on a small number of transactions. Year-to-date through September, the ARM share of applications was six percent in Freddie Mac’s monthly ARM survey, which includes purchase-money as well as refinance applications. “The share of borrowers shortening their amortization terms remains high,� said Nothaft. “There is always a discount for shorter terms but the payments are often about 50 percent higher than a 30-year amortizing payment and thus are unaffordable to many homeowners. What we’re seeing now is