JANUARY 2021
In This Issue Partner Updates Ask the Underwriter Conforming Loan Limits Rise for 2021 Adverse Market Fee Only Applies to Refinances Over $125,000 What’s New at Servion Mortgage? Are You Ready for the New URLA Starting March 1? Servion LO Featured in Top Agent Magazine The Buzz: Recent Feedback
PARTNER UPDATES
Everyone likes to start a new year strong, and we’re ready to help our newest partners do exactly that. Please help us welcome the financial institutions who became Servion Mortgage partners in November and December!
New Retail Lending Partners Quad Cities Postal Credit Union Moline, IL
Strait View Credit Union Port Angeles, WA
New Correspondent Lending Partners Cobalt Credit Union Papillion, NE
Sentinel Federal Credit Union Box Elder, SD
LEARN ABOUT OUR PRODUCTS & PARTNERSHIP OPPORTUNITIES
COMMERCIAL LENDING. Simplified. Ready to grow your lending portfolio? Few things help a financial institution grow better than commercial lending.
The Answer: The Question: How do you overcome costs like infrastructure and talent and make your commercial lending program successful?
By taking advantage of Servion’s full suite of Commercial Loan Resources. Full Portfolio Servicing ALLL Development Loan Policy Review and Development Risk Rating Assessment MBL Portfolio Auditing Tailored Portfolio Servicing Documentation Services A La Carte Services
Grow your credit union or community bank. Serve your local business community. A true win-win. Visit myservion.com/CLR or contact our dedicated CLR account executive, Brian Mielke, at bmielke@myservion.com.
In this edition of Ask the Underwriter, we’re answering a couple of questions asked by multiple partners in recent weeks. The subject property has an encroachment of a shed built in the utility easement. Is that acceptable? A shed that is built in the utility easement on the subject property is acceptable, so long as the shed is completely within the property boundaries.
Can Servion finance an 80-acre parcel with a home on it? Are there any acreage limits? The answer to this question varies depending on what type of loan is under consideration: Conventional loans: Yes, we can finance an 80-acre parcel with a home on it, provided that the appraiser indicates that the highest and best use of the property is residential and provides like-size comparables. The property cannot be a working farm. If it is a working farm, then we cannot finance it. Government loans: Servion has a 20-acre limit. ARM programs: Servion has a 20-acre limit.
If you have questions you’d like our underwriters to answer in a future issue, please send an email to underwriting@myservion.com!
Conforming Loan Limits Rise 7.4% for
2021
The Federal Housing Finance Agency has announced an increase in conforming loan limits for loans to be acquired by Fannie Mae and Freddie Mac. In most areas of the country, the 2021 maximum conforming loan limit is $548,250. This is a 7.4 percent increase from 2020’s limit of $510,400. This also marks five straight years of increases by FHFA. In designated high-cost areas, where 115 percent of the local median home value exceeds the baseline conforming loan limit, the maximum limit will rise to $822,375, or 150 percent of $548,250. Find conforming loan limits in your area
To find the conforming loan limit for any county in the U.S., use FHFA’s interactive map.
Why the increase? Under the Housing and Economic Recovery Act of 2008, the FHFA is Why with the increase? tasked keeping the conforming loan limit in line with home values. FHFA data showed that home prices increased an average of 7.4 percent between the third quarters of 2019 and 2020. Therefore, the agency raised the conforming loan limit by the same percentage.
Adverse Market Fee Only Applies to Refinances Over $125,000 The Federal Housing Finance Agency’s new 0.5 percent “adverse market fee” on refinances went into effect on December 1, and since then we’ve noticed some confusion from our partners regarding when the fee applies. We’ll do our best to clear things up!
When does the 0.5% refinance fee apply? The adverse market fee only applies to refinances of mortgages over $125,000.
When does the 0.5% refinance fee not apply? • The fee does not apply to refinances of $125,000 or less. • Refinances through government-based mortgage programs (FHA, VA and USDA) are exempt from the fee. • The fee only applies to conforming loans, so jumbo loans are exempt. • The fee does not apply to purchase transactions. • The fee does not apply to Home Ready loans.
Why does the fee exist in the first place? The adverse market fee is mandated by the FHFA, which oversees Fannie Mae and Freddie Mac. The agency says the fee is intended to offset a projected $6 billion in losses related to loan forbearances and rising default rates due to high unemployment and economic uncertainty caused by the pandemic. The fee has been criticized by the Mortgage Bankers Association and other industry groups, who believe it could become a costly hit to homeowners trying to make ends meet during these challenging economic times.
What’s New at Servion Mortgage? 2020 was a challenging year for obvious reasons, and it brought plenty of change to Servion Mortgage. Fortunately for us and our partners, it also brought growth. We’ll discuss some of the newest goings-on at Servion Mortgage in this article.
First, a brief look back. In March, we switched our entire staff to working remotely. Then, like many businesses, we had a few employees over the next few months who either contracted COVID or needed to care for a family member who did, so there were some staff absences/leaves sprinkled in. And of course, amid all this, record low interest rates led to unprecedented business volume. We’ve learned a lot about our process and found opportunities for improvement thought all of this. By adding new team members and internal changes to our process, we are raising the bar on quality and preparedness to better serve you and your borrowers.
Staffing is the priority In 2020, we added two experienced loan officers. And, all loan officers are now getting more direct training on a weekly basis. We also have two additional people licensed as loan officers that can carry full pipelines if needed, plus we will be adding another internal employee to the loan officer staff in the Spring of 2021.
add 1-2 additional team members soon. We were excited to welcome another closer back from maternity leave at the end of December.
internal employee to the underwriting staff and look to promote another internal candidate in early 2021.
Underwriting and pipeline
Conclusion and thank you
Turn times in underwriting are, thankfully, trending downward as refinance transactions are reviewed and pushed to closing. For perspective, historically our average underwriting pipeline is around 300 files. Three new retail In 2020, our pipeline processors are getting ballooned to over 1,500 up to speed with our software with two more files in June. After adding three new team processors started in members, that number early December. In contract processing, we finally started to come hired two processors at down in October and at the end of the year and the start of January was would like to add one or sitting at roughly 400 two more by the end of files. We believe things will be back to a more January. targeted level very soon. To manage the volume, We have three new we added three team members in great underwriters, training in the Closing Department and look at promoted another
More Servion employees have been crossfunctionally trained than ever before in an effort to serve you better. The additional staff and process improvements set us up for whatever the future brings to our industry. Thank you for your business during the unprecedented times of 2020. We look forward to being your mortgage solution for many years.
Are You Ready for the New URLA Starting March 1? After years of delays, including a yearlong delay due to COVID-19, the release of the new Uniform Residential Loan Application (URLA) is about to happen. Starting March 1, 2021, all lenders who intend to sell closed residential mortgage loans to Fannie Mae or Freddie Mac will be required to use the new URLA.
Why is the URLA changing? The redesigned URLA was spearheaded by Fannie Mae and Freddie Mac (the GSEs). The idea behind the redesign, according to the GSEs, is to have a more consumer-friendly loan application experience while also moving the lending industry closer to digitizing the loan origination process. Biggest changes on the form The URLA is much longer than before. It is now 9 pages. The redesigned URLA will replace Freddie Mac Form 65 and Fannie Mae Form 1003 and will require lenders to request more borrower information than ever. The new data fields include a wide range of information, such as: • Borrower’s mobile number(s) • Borrower’s email address(es)
• Military service history • Current housing expenses
Part of the idea with the new fields is to comply with the Home Mortgage Disclosure Act (HMDA) and eliminating the need for the demographic information addendum. Another big change is that the new URLA’s layout will make it easier for technology to ingest, supporting the industry’s move toward digitization.
Tips to prepare for the new URLA The GSEs have identified several tasks you should complete in the lead-up to the March 1 start date:
1. Familiarize yourself with the updated URLA The redesigned URLA and additional supporting resources are available on the GSE websites. Visit the Fannie Mae URLA page and the Freddie Mac URLA page to see the interactive URLA components and get familiar with the form.
3. Prepare your people Who in your organization works with the URLA regularly? Review updated URLA instructions with those staff to be sure they understand the intention of each form field. Update any internal trainings so they will be ready to hit the ground running when it’s time to make the transition.
4. Think about borrower experience
We know borrowers don’t like being asked for information more than once. The new 2. Make sure your technology is URLA has more than twice as many fields to complete, which means the risk of a lender ready missing something increases. You should take If you are a Servion correspondent partner who some time to plan out how you might respond uses your own LOS, make sure your software to possible borrower concerns about how partner has completed their update. To check, much information is being collected and how to visit each GSE’s approved software partners respond if you miss something and need to ask page. Here is Fannie Mae’s and here is Freddie the borrower again. Mac’s. Contact Us with Any Questions! If you have any questions about the new URLA or what Servion is doing to get ready for it, don’t be afraid to ask. Call your Servion Account Executive any time. Additional Resources • Freddie and Fannie joint data sheet • Mortgage Bankers Association
• DocMagic article
Servion LO Featured in Top Agent Magazine Some of you may recognize the name Matt Bartlett. He is Servion’s relationship manager and also works as a loan officer. He’s been here since 2016 and has since become an integral part of the team. He communicates with partners (usually in the retail channel) and with borrowers directly. He even spearheads our efforts to help borrowers improve their credit so they can qualify for a mortgage. Recently, Matt was featured on the cover of Top Agent Magazine’s Minnesota Mortgage edition. We are so proud of Matt and everything he has achieved. The article below is a reproduction of Top Agent’s article.
MATTHEW BARTLETT Matthew is both a producing Loan Officer and Relationship Manager with Servion Mortgage, where he works in large part with first-time home buyers.
Matthew Bartlett – Relationship Manager and Loan Officer at Servion Mortgage in St. Paul, Minnesota – has more than a decade of experience helping his clients achieve the American dream of home ownership. Honest, hardworking and deeply empathetic, Matthew has built a solid reputation as a trusted mortgage advisor who consistently places his buyers’ needs front and center during every transaction. You can see the original here.
Matthew began his journey in the world of mortgages following stints selling office supplies. “After college, I bounced around a bit before I got a job selling business to business, and one of my sales prospects was a Countrywide Mortgage branch,” recalls Matthew. “The manager didn’t buy anything from me, but he did invite me in for an interview. I got the job, and initially it was a fake-ituntil-you-make it situation, but I was surrounded by very experienced people, and they were more than helpful.”
“I’m their resource for any questions they might have while they search for a home,” he explains.
Matthew truly loves what he does for a living. “I get to work with some of the most interesting people from all over the country. Helping them get into the home of their dreams is the most rewarding job I’ve ever had.” Matthew is extremely proud of his association with Servion Mortgage and the wide array of loans they offer to suit any buyer’s needs. In addition to the conventional Within a year, Matthew was VA, FHA and USDA products, promoted to a management Matthew has partnered with a position. The Great Recession construction lender to assist and its accompanying clients with home rehab and economic downturn led to new construction. “That’s one layoffs at Countrywide and of the ‘outside of the box’ led Matthew to pivot into products that I’m involved property management. For six with,” he explains. years he managed well over 400 rental units and a variety But more than anything, of small to medium-sized Matthew thinks Servion’s commercial properties. Once team and structure are what the economy rebounded, make the company special. Matthew returned to the For example, Servion has mortgage industry, signing in-house real estate and title on with Servion Mortgage in companies, which means 2016. Servion can meet every need a buyer has throughout the Today, Matthew is both a purchase process. Matthew producing Loan Officer and is quick to note that he is one Relationship Manager. In this of seven Loan Officers who all dual role he works largely value their clients as people. with first-time home buyers. “All of our LOs, including
myself, view our borrowers as more than just another file. We always remember, no matter how busy we get, that every file represents a person’s life, and we are privileged to be a part of it.” When he’s not working in his office, Matthew can frequently be found working at home. “I’m available to my clients until nine in the evening,” he says. “I’m basically on call for my clients, and it’s not uncommon for me to be making dinner while I’m talking via Bluetooth to one of my buyers.” More than anything, how-ever, Matthew enjoys spending time with his wife and his young daughter, and also loves going on walks with the family’s German Shepherd. Matthew has many plans for his future, chief among them being his intent to obtain his real estate license to help facilitate private investments. His overarching objective, however, is to continue providing his clients and real estate partners with the careful, detail-oriented and top-notch customer service that has become synonymous with his name, and with Servion’s.
Your service not only to our staff but our membership has helped us serve more members this year than we have previously with no sacrifice to service.
I want to thank you for getting this CD out even before final approval. I appreciate you trusting me and accommodating a buyer who has been put through the ringer by the seller.
THE
BUZZ
Hear what our partners are saying about us!
A mortgage department is only as strong as the folks doing the work and Servion has been just absolutely wonderful. You have helped guide our MLOs through various situations and provided invaluable insight into how the secondary market works.
You totally hit a home run on this one. Thanks for all your diligence and hard work accommodating a rather unique request.
HAPPY NEW YEAR!
2021
From all of us at
SERVICE. SOLUTIONS. SUCCESS. 651-631-3111 • myservion.com Servion Mortgage is a DBA of Servion, Inc. NMLS #1037. Equal Housing Lender.