It may be getting chillier outside, but things are still plenty hot in the mortgage industry. In the November edition of 3Points, United Wholesale Mortgage President and CEO Mat Ishbia discusses VA changes, FHFA plans, and the Temporary Authority to Operate Rule—a few things to digest before the turkey in a few weeks’ time.
Earlier this year, the Blue Water Navy Vietnam Veterans Act was signed into law, which adjusts loan fee rates and eliminates the limit on guaranty amount limit based on Freddie Mac’s conforming loan limit, providing 100% financing over the $484,000 loan limit without having to put down 25% over that limit. It’s now been announced that will go into effect January 1st, 2020. The VA is also increasing its funding fee for most VA borrowers as of January 1st, so any of those loans in the pipeline will cost borrowers less money if closed before December 31st.
It’s clear that the FHFA intends for Fannie Mae and Freddie Mac o return to private ownership, and that was reiterated at the recent MBA conference. The road to get there, however, may be a little bumpy. Ishbia thinks that the industry may see fewer pilots and innovation from Fannie and Freddie in the short-term as they prepare to break out of government control, but originators should keep their eye on the long-term benefits as the FHFA focuses on their goal.
Temporary Authority to Operate Rule
The Temporary Authority to Operate Rule becomes effective on November 24th, just in time for loan originators to get in those last few loans before the end of the year. Under this provision, originators are allowed to continue originating loans as they transition to the broker channel, even if they aren’t fully licensed yet. Under this provision, originators have a 120-day grace period to become licensed—good news for recruitment efforts.