David MotleyPresidentColonial Savings

Fort Worth Mortgage Bankers Association

January 14, 2015

2

Happy New Year from FHA!

MIP reduced by .50

- Effective with Case Numbers obtained on and after 1/26/15

- Available for loans with terms > 15 years

Process

- Existing case numbers may be cancelled beginning on 1/15/2015

- This Temporary process must be completed by 2/26/2015

- Appraisals ordered under old case numbers may be used with new case number

- Additional instructions in ML 2015-01

Suggest

- Identify status of each FHA loan in pipeline

- Compare contract dates and MIP change dates

- Discuss options with Applicants

- Listen to the FHA call Thursday afternoon at 2pm ; 866-233-3842; code 350538

3

And did you see this yesterday from CFPB??

CFPB Launches 'Unbiased' Mortgage Rate Tool

by Rachel Witkowski

JAN 13, 2015 12:01am ET

Let’s Check Our Pulse

Systemic Shift

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A Picture Tells Our Story

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Estimated Residential Originations

Source: MBA – October 2014 Mortgage Finance Forecast

7

The Regulatory Ecosystem

Author of Policy/Rule/Regulation

Stakeholder of Policy/Rule/Regulation

DISCLAIMER: The policies/rules/regulations shown, as well the corresponding authors/stakeholders, are illustrative and thus may not be an exhaustive list.

…for what has become a very complicated web of relationships and interdependencies.

Confidential: Not for Distribution

Origination Servicing

Securitization/Secondary Markets

CFPB

FHFA/GSEs

HUD/FHA

HUD/FHEO

DOJ

Federal Reserve

FDIC, OCC, SEC

ATR/QM

LO Comp

Appraisals

HMDA

RESPA/TILA

Escrow

HPML

SAFE

Servicing Standards

Loan Limits

G Fees

Buybacks

LLPAs

Disparate Impact/Fair Lending

Basel

Risk Retention/QRM

MIP Policy

Indemnification

QC Policy

False Claims

Minimum Servicing Fees

Volcker Rule

Reg AB

Margin Rule

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70 Change in Owner Households Change in Renter Households Homeownership Rate (right)

Source: Mortgage Bankers Association and Census Bureau

Thousands of households

Homeownership rate (%)

Owner- and Renter-occupied Households & Homeownership Rate

9

Estimated Residential Originations

Source: MBA – October 2014 Mortgage Finance Forecast

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First-time Homebuyers – Only 29%

Source: National Association of Realtors

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Share of First Time HomebuyersAs percent of home sales

NORMAL RANGE

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Lower Credit Borrowers In GSE Purchase Market – Declined & Not Returned

10%

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620-720 FICO Share Of GSE Purchase

Source: U.S. Mortgage Insurers

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Entry-level Housing Market Still Weak

Source: MBA application data and MBA analysis of NAR data

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Minorities Will Account for Three-Quarters of Household Growth Over the Coming Decade

1414

THE CHALLENGE:

BRINGING OUT THE FIRST-TIME HOMEBUYER

15Source: FRBNY / Equifax

Challenge: The Delay

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Student Loans Have Driven Up Consumer Debt Burdens

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Making the Dream a Reality?

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What We Need To Do

1. Get Finalized• GSE 97% LTV product—done!!• Up-front risk sharing—let the MI companies take a

bigger piece of the risk —limited experience

2. Fixing the Rules• Regulation-induced credit overlays. Need more clarity• Rep and Warrant relief --in the works

3. Access to Credit• Opportunity Gap—reach out to the future household

4. FHA – Increase Availability & Affordability

19

A couple of things you can do:

- Support the Mortgage Political Action Committee ( MORPAC)

- Join the Mortgage Action Alliance

How can you help??”

Mortgage Bankers AssociationPolitical Advocacy Programs

21

Mortgage Action Alliance (MAA)

The easiest way to become a industry advocate is to join

the Mortgage Action Alliance.

The Larger the Group, the Louder the Voice

300,000 real estate finance professionals

8,800 MAA members

633 active members from TX

22

Mortgage Action Alliance (MAA)

Why Me?YOU are a leader in your community

YOU are an expert in your field

YOU are the person that your elected officials want to

hear from

If not YOU, then who?

Every day they are making decisions about your

business – don’t let them do it without your input.

23

Mortgage Action Alliance (MAA)

How Can I Help?Join MAA TODAY

Run an enrollment campaign at your company –

send an e-mail with the registration link

Promote Calls to Action with your industry friends and

colleagues

Attend National Advocacy Conference in April, 2015

Make an effort to regularly communicate with your

legislative representatives

24

Mortgage Action Alliance (MAA)

Advocacy Test CaseEarlier in 2014 the Senate took up a flood insurance bill

Merkley Amendment – added duplicative federal oversight to the force-

placed flood insurance process

MBA’s response: Federal lobbying efforts Industry coalition letter MAA Call to Action – 400 members took action

Between lobbying, coalition and MAA member action, Merkley withdrew

his amendment

25

Mortgage Action Alliance (MAA)

MAA Allows You To…

Stay informed about the latest industry-related legislation and

regulations

Be heard by giving you the tools to quickly and easily communicate

with your legislators

Play an integral role in MBA’s overall advocacy efforts

Amplify your voice by connecting you to a national network of industry

professionals who share your concerns and priorities

Build relationships with elected officials

26

MORPAC

The ONLY political action committee (PAC) representing the entire real

estate finance industry.

MORPAC is a vehicle that allows us to pool our individual contributions

together to help elect and re-elect Members of Congress who

understand and listen to our industry’s concerns.

MORPAC is non-partisan.

MORPAC is another avenue we have to speak up in Washington. It is

crucial that our industry’s voice is heard, and our policymakers need to

be educated and informed about the potential benefits and

consequences legislation could have on the real estate finance industry.

In order for MORPAC to have a strong voice, we need the participation

of the members of the MBA.

27

MORPAC

MORPAC by the Numbers

MORPAC is made up of over 1,000 unique industry

professionals giving individual contributions

MORPAC has gave over $1.3 million in contributions to

over 200 members of Congress and candidates

MORPAC Raised $1.43 million in the 2013-2014 cycle – a

new record by over $170,000.

28

This is a Great Business!

1) Credit Expansion – Nowhere to go but Up!

2) More Professional Industry• Viable for all lenders – small to large• Dedicated expertise to manage the complexity