[David] What I’m interested in is getting over to Alice and get your commentary on your report, on the legislative update, what you got and really interested in your thoughts on the GSEs putting back more loans on us, dear God, as if we need any more head widths.
[Alice] Yeah, because it all started. So, I guess real quick on the legislative front, no action as you heard in the report from the MBA on their bill for the trigger leads that hasn’t moved, that hasn’t even gone to committee yet. There are two companion bills now for this VA Home Loan Awareness Act, which is really small, simple. It’s about adding a sentence to the loan application. If you indicate you have military service, it would just be adding a sentence. If yes, you may qualify for a VA home loan, consult your lender regarding eligibility. But it’s interesting that not a lot’s getting a lot of movement, but that one actually now is bumped up to having a 30% prognosis of moving forward. So, I’m watching a couple of things, But that you, that too, not audit committee. Yeah. Nothing major. Back to Pulte’s comments on X which was about four days ago, I think now to this thought of potential shifts toward more stringent enforcement against fraudulent activity. So he used the word, focusing on recalling loans. So, I went back and took a look at what the agencies have done over the last several months. There was a good letter from the Community Lenders Association for those of you who want a quick read to walk through every, all, a summary of things. It covers several other topics. It was their letter to Pulte March 25th to say, here are the issues that are important to the industry and when they talk about, and others talk about this repurchase piece, we live this a lot. Every lender lives this, and you guys have been in the industry long enough to know. That’s a rollercoaster ride, right? There’s times that they’re not paying attention, and then there’s all of a sudden these times where they just zero in. Sometimes it’s a single issue, other times it’s full file reviews and that this whole fee only approach is really one of the things that the agencies came up with at the end. Freddie put it out for all their lenders in January. So the idea that, alright, I have a moderate defect, not a significant defect, but I have a moderate or minor defect, and it’s, I gotta pay you money, pay you more money, half point, maybe a full point, depending on the risk that the agency determines it is and I gotta pay you money in order to keep my rep and warrant relief on this loan for that single issue. So it’s not throwing away that anything else couldn’t be brought up on the loan at some other time, and the loan has to be performing. So when you hear in the news about that is there going to be a change, we’re all gonna just see and wait. Is he planning on adding new procedures or taking away some of the things that we already have and that all remains to be seen and we don’t know until he tells us more. Right now it’s status quo, but it’s really just even some have said, is it a shot across the bow? I say, you always gotta look for a shot across the bow with you always do. That risk never goes away.
[David] It’s more of a tone thing than anything else. Yeah. Go ahead, bill.
[Bill] I look at it as a bit of a Trojan horse where, the main pronouncement was around calling loans because of fraud and I’m not sure how you do it, but undoing the transaction and, but I think as you dig deeper into it, step number one is that is gonna be put it back to the lender and say you guys figure out how to deal with the borrower and then you get into a messy loan by loan, right? What are the lender’s legal rights around fraud? and how realistic is it for a lender to be going, loan by loan and trying to call loans because of fraud. But he’s accomplished the putback of we’re just sending it back to the lender. They’ll figure it out with the customer. I’m sure it’s not our problem. So I think the overall message was a bit disingenuous.
[Alice] I see your point now I see the different viewpoint that you have on that. That makes sense. Yeah.
[David] Yeah. Marc, jump in.
[Marc] Yeah, I come. Sorry about that. There you’re every one of us has a different opinion on these things as we talk about them and my, my position somewhat in these things is sometimes you gotta, in some respect, leave some things lying focus on the the big things. Growing up as a kid used to watch the Walt Disney World on Sunday night, and I mentioned this before in podcast, and you gotta accent to Jimmy Cricket would say you got accent to positive and maybe we’ve been to access to positives that’s coming out because we know there are some positives that we see around. But we really gotta get people focused more on the positives and, we can talk about this and talk it into the ground, but we know that each one of us, or each one of us is a team added and made a team are not gonna facilitate change unless the people in the right positions are gonna stand up and take a change. It’s just I’m gonna give you a for instance, we’ve talked to the last couple weeks a lot about the Redfin and the Rocket.
[David] Yeah. Rocket Redfin. Yep.
[Marc] Yeah. And the and Mr. Cooper and all that. I’m very cautious about that transaction and I don’t wanna be the one that said I said it, but sometimes when you do something that looks so perfect on paper, less of a, there’s less of an intent to execute it. And I’m gonna be really interested to look at the numbers on that transaction, two, three, and four years from now and I’m gonna bet money that they won’t be anywhere close to what everybody’s expecting. That’s just my experience.
[David] in a positive way. You’re not expecting the positive.
[Marc] I expect there will be a positive, but I did not expect it to be at the level that expect. Okay. Okay. Yeah.
[Kittle] I’ll just throw one thing in there. The thing I, in my opinion, that destroys mergers and acquisitions once they occur, is the combining of cultures that don’t interact well together. So, you don’t know how the culture’s gonna be. And on all three of these things putting together.
[David] There’s three distinct cultures. When you look at Redfin, when you look at Mr. Cooper and Rocket, you have three very distinct different cultures there and leadership style,
[Kittle] Board, boards, egos, everything’s got a mesh on that too. Yeah. So acquisition, Alice can speak to that. Everything, cause has done over the last few years, but if you don’t mesh internally, doesn’t matter how.
[Marc] My experience from selling a company a number of years ago to a big player in the industry was, I’ll tell everybody the phone call is we, somebody tells you we love the way you are, we’re not gonna change anything you do. Go buy steel underwear ’cause you don’t, you know what’s gonna happen and I watched the company buy us and destroy our company in less than two years.
[David] Yeah, I know it. I went through the same thing that’s I love you in the morning. I promise. It’s one of those things you just I think it’s gonna be.
[David] Only good news is if it happens again, I don’t have to bow steel underwear or still have it.
[David] You all bring us some really good points about the different things that I’ve been talking about and what’s going on in the market. May you live in interesting times. We live in interesting times. It’s the most extraordinary.
[Kittle] I’ll guide a song for Les coming up, as we talk about this, right? He can sing Carol King’s song. Will you still Love me tomorrow? Will You Still Love Me? Sounds like Carole King, right?
[David] We’ll see how Les that’s mimicking that. That’s funny. I bet you’ll be using that pretty soon. That’s really good. Good discussion around all this. I think where we’ve got the volatility that lies ahead, at the end of the day, we still gotta do business and you know what’s I’m finding really interesting, Mr. Kittle, is volumes are still holding up pretty strong everywhere. I’m not hearing, business is getting done and it’s because of life events that are going on with people more than anything else that’s driving these things. And I think it comes back to this one thing. Pay attention to what we talk about here. Really, we get some great points of view at the end of the day, get back to work, do loans, they’re being done and what’s your focus? So anyway, great stuff a went all the way around.
Alice Alvey, Master CMB
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!