[David] Alice Alvey, let's get over to you. Vice President of Partner Education at Union Home with the Legislative Update and then I'm really just talking about a loss mitt and you can kick that off FHAs some of the changes.
[Alice] Yes. Hello, Dave. Hi, everyone. Thank you. First up is since our last episode, we did get the maximum loan amounts formally published by the agencies. So, we're up to 806, 500 by FIFA. I never thought I guess I shouldn't say never. There are 2 words you never say in mortgage banking, which I just said 1 of them is never and always right. Avoid those words. But to see that an FHA high-cost number for a single family could be 1.2M is just mind boggling, right? FHA being at their standard 65% of that 225. You all know the math or if not, you can look that up, but you will see that we can get those with case numbers as of January 1st. So, we got a bump again this year for our max loan amounts, not unexpected. But the big news is really this is big news. I think checking out the FHA changes in their loss mitigation is on the drafting table. So, you do need to go to FHA's website. That section of the guide is over 200 pages. There's a lot of edits that they're proposing with the idea being of dropping the COVID requirements that exist out there and then implementing different framework for all of that on how this will work and it is very detailed. There is a lot to digest. Companies and the MBA are already going through this and you need to spend a lot company, if you are a servicer, you need a dedicated team of people who sits down, reads through this whole thing line by line, put together your edits, and really asks a lot of questions because what you can see when you read this is there is a different two different mindsets working here. There's the old school FHA that wants to document everything and then there is what's reality in what is reasonable for consumers and several of the changes that they're proposing are going to be real big ones. And so, I think the first thing on everybody's mind is what's the effective date. This is going to require technology changes. Need a long tail on this and then whatever happens to implement this, COVID is going to need an extension. The COVID forbearance stuff goes through April. There's no way we're going to have all of this in place by April and so we have to advocate for that as a group also is, maybe they'll rush and they'll get something done and published before January 19th. But on January 19th, the new administration takes over. And so, are they going to turn around and throw all or part or pieces of this out or change it? So we have a lot of questions as an industry to say, all right, we'll respond to this now but you've got to keep us in the loop. There are several tables in here to take a look at and one of the ones I was just taking a look at was the new documentation requirements that they want, which are just. To me, a lot of cases don't make a lot of sense. So, Marc Helm, you're our servicing expert. I think I'm just going to turn the mic over to you and see what your first blush was as you, if you had a chance to look at these changes.
[Marc] First I got to ask David, do we have time for a two hour podcast today? I'm joking. I'm joking.
[Alice] We just spent an hour on it and only got to page 50.
[Marc] Did a great summary on that. I'll give you my two cents for. I'm going to go back to the political part, the January deadline that they're looking at and the implementation timeline and details we talked about because all those are important. The 1st thing I'll tell you that on the political part, the appointees I salute Trump for his appointees and change in the mode of how we run organizations, particularly HUD and other things. But what happens when you don't bring people in that have an understanding of the business? It's really detrimental to us as we go through out there because they kind of March time where they are and can't make positive changes to what's happening in the industry and that's what I fear from the political appointees. What we really need to do if the political appointees come in and really mind what they're doing, no matter what aspect of financial services are dealing with whether federal the Fed Bank or whether a HUD or whatever direct new director for Ginnie Mae, may they need to form some advisory panels of industry actors like Mr. Kittle and others, they really understand how this industry works so that we can get some of this stuff fixed. I think for the hood to push through for something that would be out there and go in effect by January 9th. It's the stupidest thing I think they could do right now because I think people are going to look at it and throw darts at it and tear it all apart anyway and you don't want to do something like that in a rush and then you got this long tail of implementation. The technology is for it. Why do it half ass if you're going to do it the right way and take the time to do it. Our customers deserve that, our customers deserve our consideration. Our really meaningful thought process in this. and I'll say those things and rest my case.
[David] Yeah, good point. Alice, any follow on thoughts or questions for Marc?
[Alice] I think just in general to play a little bit off of what Marc was saying, is that, the industry has to provide feedback. You have until December 23rd, right? Give FHA a Christmas present and respond to them ahead of time and make sure the feedback is solid. You've got to go, they don't make this easy. They want line by line feedback. So, you have to fill in their Excel spreadsheet, say what page it was on, what line number it was on, and how you would edit that sentence It is okay to go in and add other thoughts, right? If something doesn't have to be in yellow highlights for you to comment on it. But if they see that the industry feedback is that there's a lot wrong with this. There's some stuff we have to make adjustments to. Then, we'll be telling them you've got to slow down your timeline. Maybe some of them thought, hey, we're doing exactly what the industry wants and, this will be a slam dunk, but I don't think so. I think there's some things in here that consumer groups should take a look at that are not necessarily in the benefit of the consumer by saying, hey, we want more documentation to prove that you had a medical issue for your hardship. I don’t like that. I don't want to be collecting someone's medical documents as a lender and I would think consumer groups don't want that either. So, I think that we can be on the same page on a lot of this with consumer groups, and we need their feedback too. So that's my two cents.
[Marc] I'm going to give you one more comment on that, and you made a very good point on that, Alice. To have a something like this, it's final comments are due December 23rd is the most asinine thing any government regulatory group could ever do. That is so stupid. You don't get things done in this industry during or any industry during the month of December and to have that as a deadline is ridiculous. That's the part I'm hyping on more than anything else. We need time to do it right and I said, doing that, if anything, I don't know all the things the MBA has or has not done to try to push that date out, but there's other people that I think, David, Mr. Kittle, I think that I think even The Mortgage Collaborative, there's a whole bunch of people should be pushing this. thing out there to get this date moved down the road a little bit. And, much better would be the end of January, not the 23rd. And then when the end of January, I think they're just trying to do it to slip it in under the administration that's in power right now and not have it something that the new administration gets to say anything about and I don't like that at all.
[David] I think that's very good. Mr. Kittle?
[Kittle] I couldn't add anything to what Marc said. It's atrocious, but to sit here, I don't think anybody on this podcast and any of our listeners are naive enough to think that this administration is not political, especially given what happened in the last 24 hours, pardoning his son. But I throw that out there to say they have no shame, and this is horrible to do this this time of year, and to put this on the incoming administration. They haven't had a good housing policy anyway the last four years. To be fair, Trump didn't have much of a housing policy his first four years, so I hope they come in with something strong, positive. I think Marc Helm made the comment earlier. They need lending, banking and mortgage people in these positions that understand it and hopefully that's what's taking place.
[David] They've tried to bring you in the last time. And it was, there was so much. A resistance in roadblocks to confirming the people that the appointees that were coming, that were being put before Congress. and it was just a log jam. I think we've got a clear mandate or they have a clear mandate from the voters that change is expected. It's going to happen. Also, Trump has the tendency to make, drive some things to make things happen. It's going to be really fascinating. Good discussion on that. Alice, anything else that's on the legislative calendar that you're paying attention to that's a pretty big one, but you just talked to it.
[Alice] That's our big one for now, Dave. We've got to get through all the pages of that. Make sure we have a full scope so we can provide our feedback, but just encourage lenders to do and I'll be checking, we don't get a lot of new things introduced this time of year for exactly what you guys described. So, I'll go check, see what else is hanging out there and Let keep y'all posted next week.
[David] Appreciate it very much. Thank you very much, Alice, be sure to tell everyone there at Union Home, how much we appreciate them lending you to us for this hour. So, we get the chance to share your insights with the market and with our other service. Great job.
Alice Alvey, Master CMB
Vice President Partner Education and Training at
Union Home Mortgage
8241 Dow Circle
Strongsville, OH 44136
D: 440.420.4294
C: 248.941.1939
She handles development of their World Class Training program designed to support UHM partners and organizational effectiveness.
Prior to UHM, Alice served as Senior Vice President at Indecomm leading the Indecomm-Mortgage U division, Internal QA and Compliance and SaaS technologies. Indecomm acquired Mortgage U in 2013, where Alice was President/Co-founder, providing training and consulting since 1996. Prior to MU she served as SVP of Operations at a national bank overseeing operations for wholesale, retail and correspondent from underwriting through servicing, and compliance.
She has been in the trenches of mortgage lending operations from application through servicing for over 30 years. Her authoring work in training content, policies and procedures and the FHA/VA Practical guides illustrates her ability to bridge regulatory requirements with day-to-day operations.
Alice has been a weekly contributor to the Lykken on Lending show since its beginning in April 2009 and has made her weekly contributions to 450+ episodes!
