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Winter Storm Harper Set to Sweep Across Country

Posted on January 17, 2019January 19, 2019 by Safeguard

Updated 1/19/19: The Weather Channel published a report titled Winter Storm Harper Will Intensify as it Tracks From the Midwest to the Northeast This Weekend With Heavy Snow, Sleet and Ice.

Link to article

Updated 1/18/19: New Jersey Governor Phil Murphy issued a statewide emergency declaration in anticipation of Winter Storm Harper.

Link to declaration

Link to associated ZIP code list

NOTE: This is independent from any FEMA Declared Disaster.

Updated 1/18/19: Kansas Governor Laura Kelly issued a statewide emergency declaration in response to a severe winter storm.

Link to declaration

Link to associated ZIP code list

NOTE: This is independent from any FEMA Declared Disaster.

Updated 1/18/19: Pennsylvania Governor Tom Wolf issued a statewide emergency declaration in anticipation of a severe winter event.

Link to declaration

Link to associated ZIP code list

NOTE: This is independent from any FEMA Declared Disaster.

Updated 1/18/19: The Weather Channel published a report titled Winter Storm Harper Is Moving Into the Plains and Will Be a Major Snowstorm Into the Weekend From the Midwest to the Northeast.

Link to article

Disaster Alert
January 17, 2019

Source: USA Today

NOTE: This is not currently a FEMA Declared Disaster.

After hammering California with rain and snow, a ‘blockbuster’ winter storm is taking aim on the East, where as much as 40 inches of snow could fall over the weekend. Road travel may become “impossible” due to the heavy snow; flight delays and cancellations are also likely.

After the storm heads offshore on Sunday, the intense cold will be the main weather story as bitterly cold air straight from the Arctic will roar in, bringing below-freezing temperatures to 200 million Americans.

As for the storm, “freezing rain, heavy snow and heavy rain are expected through the central and eastern U.S. over the next few days,” the National Weather Service warned.

On Friday, the heaviest snow will hit South Dakota, Nebraska, Minnesota, Kansas, Missouri and Iowa, AccuWeather said.

Then, the storm will wind up and roar into the Northeast and New England on Saturday and Sunday, where the heaviest snow will fall.

AccuWeather said 40 inches is possible in parts of northern New England, while close to 30 inches of snow may fall on parts of central and northern New York state and the northern tier of Pennsylvania. Snowfall rates could reach 2-3 inches per hour.

The storm “will be a blockbuster in terms of impact and dangerous conditions,” said AccuWeather meteorologist Alex Sosnowski.

Snowfall of 12-24 inches is likely to be more common in the heaviest band from the storm, AccuWeather forecasts. But blowing and drifting at the height and conclusion of the storm could cause the snow depth to vary by several feet.

“Plows are not likely to be able to keep up,” Sosnowski warned. “As the storm strengthens, winds will cause major blowing and drifting of snow.”

“Those who are on the road through the heart of the snow and ice area will be at risk for becoming stranded for many hours,” Sosnowski said, adding that they “may have to face temperatures plummeting to dangerously low levels.”

The combination of winds and heavy snow could lead to numerous power outages, particularly in the heaviest snow swath in the interior Northeast, according to the Weather Channel.

Boston should finally see its first inch of snow of the winter season.

The Weather Channel warned that a thin band of sleet and freezing rain is also possible in parts of the Ohio Valley eastward into the mid-Atlantic states.

The Weather Channel has named the storm Winter Storm Harper. No other private weather company, nor the National Weather Service, is using that name.

Following the storm, the coldest air of the season will roar across nearly the entire eastern half of the country by Monday: Some 200 million people will wake up to below-freezing temperatures on Monday morning, as far south as Florida, according to weather.us meteorologist Ryan Maue. Maue added that some 85 percent of the Lower 48 states will see temperatures at or below freezing.

A “flash freeze” could develop late Sunday, causing any standing water to quickly freeze, creating dangerous and slippery conditions.

Lows will be below zero in the upper Midwest and northern Plains with wind chills approaching 40 degrees below zero. Although the cold blast is expected to only last a day or two in most spots, it will likely mark the beginning of what is expected to be a cold end to January east of the Rockies, the Weather Channel said.

In fact, forecasters say the brutal, punishing stretch of intense cold should last well into February. The cold is partly due to the fracturing of the polar vortex earlier this month, which has slowly pushed unspeakably frigid air from the Arctic into the United States.

Western woes

On Thursday, California dealt with heavy rainfall, mountain snow and flooding that threatened to trigger mudslides in areas previously scarred by devastating wildfires.

In Northern California, trees and power lines toppled in some areas deluged by up to five inches of rain in recent days. The scenic Pacific Coast Highway was closed overnight near Big Sur due to mudslides and flooding.

In Southern California, the San Bernardino County Fire Department said 19 vehicles crashed and 35 people suffered “minor to modest injuries” in a crash in fog near mountainous Cajon Pass.

“This is a life-threatening situation,” the weather service said of the storm’s rampage.

Areas under evacuation orders included parts of fire-scarred Malibu, where all public schools were closed Thursday. Several vital canyon roads in the area were closed due to rock fall danger.

Three feet of snow or more were forecast high in the Sierra Nevada, where blizzard warnings were in effect deep into Thursday, the weather service said.

At least five deaths have been reported during the week of stormy weather.

Precipitation in California will begin to wind down by Thursday night and into Friday morning as the storm heads east.

HUD: Specific Program Shutdown Questions and Answers

Posted on January 15, 2019January 15, 2019 by Safeguard

Investor Update
January 11, 2019

Source: HUD

Like all federal agencies HUD is required to develop a plan in case there is a lapse in appropriations, often referred to as a government shutdown. The plan is a publicly available document and can be found at
http://portal.hud.gov/hudportal/documents/huddoc?id=hudcontingencyplanfinal.pdf.

Please click the source link above to access government shutdown FAQs.

CFPB: Reports on the Ability to Repay and Qualified Mortgage Rule and the RESPA Mortgage Servicing Rule

Posted on January 15, 2019 by Safeguard

Investor Update
January 11, 2019

Source: CFPB

Today, I am pleased to announce we have published two reports assessing significant CFPB rules: The first assesses the effectiveness of our Ability to Repay and Qualified Mortgage Rule. The second assesses the effectiveness of the Mortgage Servicing Rule we issued under the Real Estate Settlement Procedures Act (RESPA).

For each of our significant rules or orders, section 1022(d) of the Dodd-Frank Act requires the Bureau to conduct an assessment addressing, among other relevant factors, the effectiveness of the rule or order in meeting the purposes and objectives of title X of the Dodd-Frank Act and the specific goals stated by the Bureau. Section 1022(d) further provides that an assessment shall reflect available evidence and any data we reasonably may collect. It also requires us to publish a report of that assessment no later than five years after each rule or order’s effective date.

This somewhat unique statutory requirement places a responsibility on the Bureau to take a hard look at each significant rule we issue and evaluate whether the rule is achieving its intended objectives, as well as title X’s purposes and objectives, or whether it is having unintended consequences with respect to those purposes and objectives. I see this as a valuable opportunity to assure that public policy is being pursued in an efficient and effective manner and to facilitate making evidence-based decisions in the future on whether changes are needed.

The Bureau issued the Ability to Repay and Qualified Mortgage Rule in January 2013 to implement provisions of the Dodd-Frank Act. Those provisions require lenders, before making a residential mortgage loan, to make a reasonable and good faith determination that the consumer has a reasonable ability to repay the loan. The rule took effect in January 2014.

The Bureau also issued the RESPA Mortgage Servicing Rule in January 2013 to implement certain provisions of the Dodd-Frank Act imposing new obligations on mortgage servicers who are generally responsible for billing borrowers for amounts due, collecting payments, disbursing funds, and providing customer service. The rule also added new protections, which the Bureau deemed appropriate or necessary to carry out the consumer protection purposes of RESPA. This rule also took effect in January 2014.

The CFPB’s Office of Research took the lead in conducting our assessments of these rules. Our researchers began work over two years ago in identifying the questions that needed to be asked and in exploring the available data sources to answer those questions. Bureau researchers then developed and solicited public comment on research plans.

The researchers determined that the effects of the rules could be studied to an extent through public and commercially-available data, and, in the case of the Ability to Repay and Qualified Mortgage Rule, with the National Mortgage Database, which the Bureau developed in collaboration with the Federal Housing Finance Agency. The CFPB also obtained a unique dataset comprised of deidentified, loan-level data from a number of servicers for the assessment of the servicing rule and a separate dataset of deidentified application-level data from a number of creditors for the ATR-QM assessment. Our researchers also supplemented those data, including with (among other things) results from a survey conducted by the Conference of State Bank Supervisors; by surveying lenders, housing counselors, and legal aid attorneys; by conducting structured interviews with a number of servicers; and careful review of public comments received in response to Bureau requests for information.

I am confident that these reports provide numerous useful findings and insights for stakeholders, policy makers, and the general public about developments in the mortgage market and the effects of the rules on consumers, creditors and servicers.

The issuance of these reports is not the end of the line for the Bureau. I am committed to assuring that the Bureau uses lessons drawn from the assessments to inform our approach to future assessments and future rulemakings. We are interested in hearing reactions from stakeholders to the reports’ methodologies, findings, and conclusions. The Bureau anticipates that continued interaction with stakeholders will help inform our future assessments as well as future policy decisions.

FHFA: Refinance Report – November 2018

Posted on January 15, 2019January 15, 2019 by Safeguard

Investor Update
January 15, 2019

Source: FHFA

•Total refinance volume increased in November 2018 after falling throughout most of the year in response to rising mortgage rates. Mortgage rates increased in November: the average interest rate on a 30‐year fixed rate mortgage rose to 4.87 percent from 4.83 percent in October.

In November 2018:

•Borrowers completed 449 refinances through HARP, bringing total refinances from the inception of the program to 3,493,961.

•HARP volume represented less than 1 percent of total refinance volume.

•One percent of the loans refinanced through HARP had a loan‐to‐value ratio greater than 125 percent.

Year to date through November 2018:

•Borrowers with loan‐to‐value ratios greater than 105 percent accounted for 16 percent of the volume of HARP loans.

•Thirty-three percent of HARP refinances for underwater borrowers were for shorter‐term 15‐ and 20‐year mortgages, which build equity faster than traditional 30‐year mortgages.

•HARP refinances represented 2 percent of total refinances in Florida and Illinois compared to 1 percent of total refinances nationwide over the same period.

•Borrowers who refinanced through HARP had a lower delinquency rate compared to borrowers eligible for HARP who did not refinance through the program.

•Nine states and one U.S. territory accounted for over 70 percent of the nation’s HARP eligible loans with a refinance incentive as of June 30, 2018.

Fannie Mae: Lender Letter LL-2019-01: Impact of Federal Government Shutdown (Servicing)

Posted on January 15, 2019 by Safeguard

Investor Update
January 11, 2019

Source: Fannie Mae

In response to questions and feedback from servicers and other industry participants, we are issuing this Lender Letter to clarify our expectations and requirements with respect to credit reporting regarding mortgage loans made to government employees and other workers impacted by the federal government shutdown. These temporary requirements will provide servicer guidance to assist borrowers who have been impacted by the shutdown that began on December 22, 2018. This guidance is effective immediately and will automatically expire when the federal government resumes full operations. If the shutdown lasts for a prolonged period, we may provide additional guidance.

Clarification Regarding Credit Reporting for Borrowers Impacted by the Shutdown

Fannie Mae extends the flexibility to servicers to determine the appropriate method for reporting the status of a mortgage loan for a borrower impacted by the federal government shutdown to the credit repositories. Servicers are permitted, but not required, to suspend credit reporting in these instances. As a reminder, servicers are responsible for complying with all applicable laws when reporting a mortgage loan status to the four major credit repositories.

Contact your Fannie Mae account team, Portfolio Manager, or Fannie Mae’s Single-Family Servicer Support Center at 1-800-2FANNIE (1-800-232-6643) with any questions regarding this Lender Letter.

Carlos T. Perez
Senior Vice President and
Chief Credit Officer for Single-Family

Freddie Mac: FHLMC Guide Bulletin 2019-2: Credit Reporting Guidance Related to the Federal Government Shutdown

Posted on January 15, 2019January 15, 2019 by Safeguard

Investor Update
January 11, 2019

Source: Freddie Mac

Single-Family Seller/Servicer Guide (Guide) Bulletin 2019-2 provides temporary guidance to help you assist borrowers impacted by the federal government shutdown. Today’s Guide Bulletin includes guidance related to:

•Credit reporting requirements.

•Eligible hardships and forbearance plans.

Thank you for your continued support of borrowers during this time. We will continue to monitor the shutdown and issue additional guidance if necessary. For complete details on our temporary requirements, please read Guide Bulletin 2019-2 [pdf].

Mortgage Industry Chief Gets Some Federal Employees Back to Work with Pay

Posted on January 14, 2019January 14, 2019 by Safeguard

Industry Update
January 13, 2019

Source: The Real Deal

“Could you make these guys essential?” the chief executive of the Mortgage Bankers Association asked Steven Mnuchin’s senior adviser

Despite the ongoing government shutdown, hundreds of clerks at the Internal Revenue Service are back at work with pay after the Mortgage Bankers Association successfully lobbied the Treasury Department.

The association’s president and CEO Robert Broeksmit spoke with officials including Craig Phillips, a senior adviser to Treasury Secretary Steven Mnuchin, about restarting the IRS’ processing of tax transcripts — a service which verifies would-be homebuyers’ incomes — and a day later Broeksmit heard that clerks were being called back to work, the Washington Post reported. Sources confirmed to the publication that the IRS income verification service resumed last week.

Broeksmit described his exchange with Phillips to the publication: “I said, ‘Look, this is starting to be a problem for the lending industry,’ ” he recounted. “Could you make these guys essential?”

Phillips wrote in an email to the Post that the decision to call 400 clerks back to work “was not taken to benefit the industry. It benefits the consumers that have made loan applications.”

The funds to pay the reinstated workers will come from the fees charged to homebuyers to have their mortgage applications processed. The IRS claims it will be similarly reinstating other services that levy user fees.

“I’d like to take some credit,” said Broeksmit, whose trade association represents 2,300 entities working in the country’s $1.3 trillion mortgage industry, to the Post. “Our direct request got quite rapid results.”

Sunday marked day 23 of the longest government shutdown in U.S. history. An estimated 800,000 workers are furloughed, or working without pay, and this month these federal employees owe a combined $438 million in mortgage and rent payments. [WashPost] — Erin Hudson

Democrats Move to Prevent Foreclosures, Evictions on Unpaid Federal Workers

Posted on January 14, 2019January 14, 2019 by Safeguard

Legislation Update
January 11, 2019

Source: HousingWire

Additional Resource:

U.S. Congress (S.72 information)

22 Democrats introduce legislation to protect federal workers

There are approximately 800,000 federal workers who are either furloughed or working without pay thanks to the government shutdown. The Federal Housing Administration has already asked the mortgage industry to help those workers with their mortgages, but a group of nearly two dozen congressional Democrats want more protection than that.

This week, a group of 22 Democrats introduced legislation in both the Senate and the House of Representatives that would protect federal workers and their families from foreclosures, evictions, and loan defaults during a government shutdown.

The legislation, titled the “Federal Employee Civil Relief Act,” would prohibit landlords and creditors from taking action against federal workers or contractors who are affected by a government shutdown and unable to pay their rent, mortgages, or other loans.

The bill would also give federal workers the ability to sue creditors and landlords who violate that protection.

Specifically, the bill would protect unpaid federal workers from the following: being evicted or foreclosed; having their car or other property repossessed, falling behind in student loan payments; falling behind in paying bills; or losing their insurance because of missed premiums.

According to the Democrats, this protection would last during a government shutdown and for the 30 days following the resolution of a shutdown to allow federal workers to catch up on their bills.

The effort is being led by Sen. Brian Schatz, D-Hawaii, and Rep. Derek Kilmer, D-Washington.

“While the President and Senate Republicans struggle to get their act together, real people are suffering,” Schatz said in a statement. “Right now, thousands of federal workers and their families are struggling to pay rent and make ends meet. It’s absolutely unacceptable. Our bill will protect federal workers and make sure they aren’t harmed because of a political stunt.”

Kilmer added: “Across 800,000 kitchen tables today, hardworking people are trying to figure out how to pay bills and provide for their families without an income. Federal workers are public servants, they deserve better than being treated like pawns in a negotiation. This shutdown is wrong, and it’s time to reopen the government – but until that happens, it’s Congress’s responsibility to help out the families most affected. This bill gives them some much needed relief.”

Joining Schatz in the Senate are Sens. Ben Cardin, D-Maryland, Chris Van Hollen, D-Maryland, Maggie Hassan, D-New Hampshire, Martin Heinrich, D-New Mexico, Cory Booker, D-New Jersey, Chris Murphy, D-Connecticut, Tammy Baldwin, D-Wisconsin, Sherrod Brown, D-Ohio, Mazie Hirono, D-Hawaii, Mark Warner, D-Virginia, and Catherine Cortez Masto, D-Nevada.

And joining Kilmer in the House are Reps. Sean Maloney, D-New York, Gerald Connolly, D-Virginia, Susie Lee, D-Nevada, Cheri Bustos, D-Illinois, Dan Kildee, D-Michigan, Ann McLane Kuster, D-New Hampshire, Debbie Dingell, D-Michigan, Brendan Boyle, D-Pennsylvania, and Katherine Clark, D-Massachusetts.

“Federal workers are already suffering the consequences of the government shutdown. I’ve heard from many of my constituents facing rent and mortgage payments, student loan bills, and childcare costs that they don’t know how they’ll afford without a paycheck,” Van Hollen said. “This is unacceptable. No federal employee should be punished for a government shutdown they had nothing to do with. I will continue working to reopen the federal government and support our civil servants during this unnecessary Trump shutdown.”

The Shutdown’s Impact on Financial Services

Posted on January 14, 2019 by Ashley Shepherd

Industry Update
January 13, 2019

Source: National Mortgage News

The government shutdown is now the longest in American history, officially hitting that mark over the weekend. Though only a partial shutdown, it is having an outsize impact on banks, credit unions and mortgage lenders across the country. Some of these have been mitigated due to actions by the Trump administration, while others continue largely unaddressed.

With President Trump refusing to end the shutdown until Democrats agree to fund a wall on the southern border, it is unclear when the shutdown will end. Some predict Trump may eventually give up and instead seek to invoke emergency powers to build the wall, a strategy that carries significant legal risk. Others argue the president will keep the shutdown in place in the hopes pressure builds on Democrats to make a deal.

Following is a look at where financial services are most affected.

IRS income verification

The government shutdown, which began on Dec. 22, has already caused a backlog of mortgage applications and was threatening to do even worse.

Some lenders had become wary of closing loans without IRS documentation known as Form 4506-T, which provides official income verification and tax return transcripts. The form was unavailable with the government closed. But after mortgage officials began lobbying the Treasury Department on the issue, the Trump administration opted to declare personnel who deal with the form as “essential,” thus allowing them to return to work, according to a story that The Washington Post broke late last week.

Though the Post story couched it as the administration doing a favor for a powerful lobby, it may be as much about self-preservation as helping the industry itself. Without access to the form, the mortgage market was in danger of grinding to a standstill, a prospect that would worsen the economic damage from the shutdown. With most polls showing that Americans blame Trump, not Democrats, for the shutdown, the administration was highly motivated to find a way around the issue.

Broader mortgage impact

The Federal Housing Administration has continued to process government-backed loans during the shutdown, but since only a fraction of the mortgage insurance agency is at work, a paperwork backlog has built up and is expected to grow as the shutdown goes on.

The FHA has also stopped assisting financial institutions in underwriting loans. That move mostly doesn’t hurt larger lenders that use the FHA’s automated underwriting system, but it is potentially causing delays for smaller banks, credit unions and other lenders.

House Financial Services Committee Chairwoman Maxine Waters, D-Calif., has warned that worse is yet to come, noting that 95% of Department of Housing and Urban Development employees are on furlough. She noted other areas beyond the FHA that could be affected, including those that rely on HUD’s rental assistance programs.

SBA lending grinds to a halt

The shutdown is eroding confidence in the Small Business Administration as it is unable to process and approve loan applications, creating a backlog that is pushing small businesses to costlier alternative financing.

“Depending on how long the shutdown is in effect, we could see some negative impact to the program and economy,” said Miguel Maldonado, senior vice president at the $9 billion-asset Randolph-Brooks Federal Credit Union in Live Oak, Texas. “The delay … can affect small businesses and their ability to operate, or even get off the ground.”

The longer the shutdown drags out, the worse the impact is liable to be, according to financial services executives.

Alternative lenders, meanwhile, have tried to fill the void, positioning themselves as able to help while banks and credit unions cannot.

Flood insurance

After protest from lawmakers and the mortgage industry, the Federal Emergency Management Agency has resumed selling and renewing flood insurance policies during the shutdown.

The turnabout came after earlier guidance that said FEMA would suspend sales as a result of a lapse in funding.

The agency faced backlash from Waters and industry groups because Congress had voted in December to extend the National Flood Insurance Program through May 31, 2019.

Banks, credit union cut rates

Banks and credit unions across the country are waiving fees and offering low- to no-interest loans to help federal workers affected by the partial government shutdown.

U.S. Bancorp on Friday began offering loans of $100 to $6,000 at low rates to qualified federal employees who have an existing U.S. Bank account so they can cover expenses until they return to work.

Many other large and regional banks have taken similar steps. Citigroup, for example, will make adjustments to fees and interest rates to affected customers across several lines of business, a company spokesman said. Bank of America said late Friday that it had contacted its customers who are affected by the shutdown to let them know about the bank’s assistance programs.

The five federal banking regulators issued a joint statement on Friday encouraging banks and credit unions to assist customers in these ways. The agencies said that assistance offered to workers “should not be subject to examiner criticism.”

Impact on federal employees

Among the hardest hit are federal employees, many of whom are either furloughed and not being paid or forced to work without pay.

For those 800,000 or so employees, not including government contractors, many will miss their ability to pay mortgage or rent payments. Zillow estimated $249 million in lost residential mortgage payments, and further noted that many employees will be scared off from buying new homes or moving.

For now, many lenders are treating the shutdown as if it were a natural disaster.

Overall economic impact?

One thing is clear: The longer the shutdown goes on, the bigger overall economic impact it’s going to have.

S&P has said that if it lasts two more weeks, it will cost the economy roughly $6 billion, more than the $5.7 billion in funding Trump wants to start building the wall.

There are also fears, however, that a prolonged shutdown will depress stock prices, hurt consumer confidence and possibly even start a recession. Retailers, too, may feel pain, though it would be mild if the shutdown ends soon. But with no end to the shutdown in sight, it’s hard to predict what the full toll will be.

MBA’s National Mortgage Servicing Conference & Expo 2019

Posted on January 14, 2019January 14, 2019 by Safeguard

February 25-28
Orlando, FL

Safeguard is proud to introduce New York Times Best-Selling Author Janine Driver at the MBA National Mortgage Servicing Conference Feb. 25-28, 2019 in Orlando, Fla., as part of our Diamond sponsorship. Join us as we lead a roundtable discussion on the New York Zombie Properties Law from 2-5 p.m. on Feb. 26 or meet us in booth 601 on the exhibit floor. We would love to share with you all of the new and exciting services Safeguard has to offer!

For more information on this event, please click here.