US Bank Runs From Florida Housing Faster Than OJ Simpson In A Hertz Commercial And Without Warning
In what might be a sign of a larger exit from the lending business, US Bank recently terminated its long-time relationship with Florida Housing Finance Corporation aka FL Housing.
FL Housing is the state’s agency for, “Affordable housing opportunities.”
It offers a range of programs for down payment assistance, rate relief, and more. Most banks and independent mortgage banks (IMBs) begrudgingly participate in the myriad overlapping and generally unhelpful programs.
FL Housing doesn’t really offer anything all that special. Their programs are usual mix of FHA and USDA loans. They also offer a mish-mash of VA and Fannie/Freddie loans with their own overlays and byzantine requirements.
Some of the programs offer a silent second mortgage that serves as a down payment. Consumers and realtors mistakenly refer to this as the “Bond” program though it was renamed years ago.
One drawback to these programs is they may abruptly run out of state funding at any time and without warning.
On top of being confusing and time consuming, FL Housing loans pay the originating lender a measly 2.5%. All servicing, until now, has gone exclusively to US Bank. US Bank is chintzy when it comes to paying the origination fees. They also make it impossible for originators who have their own servicing. And of course, US Bank is notoriously slow and difficult to work with. But that’s another story altogether.
On September 13, 2022, FL Housing announced they were severing ties with US Bank effective October 3, 2022.
Will Lakeview/Bayview Be Any Better Than US Bank?
Now, all new loans will go through Lakeview aka Bayview in Miami. Anyone who has ever dealt with Lakeview/Bayview knows they are an even worse operator.
Lakeview/Bayview appears to change their name at the drop of a hat. Rumor has it Bayview had to change their name to Lakeview because they had some “issues.”
This is similar to what Nationstar did 5 years ago. In June 2017, Nationstar changed their name to Mr. Cooper because they lost several high profile consumer lawsuits.
It’s pretty obvious that the company is still going through an identity crisis and using its bayviewloans.com emails. The question is, can they handle the exclusive rights for one of the crappiest pools of paper coming out of the Sunshine state.
FL Housing refused to supply participating lenders with an explanation as to the change. Out of the blue, FL Housing issued mandatory orders for new training to be completed by the end of the month. FL Housing’s email said there would be multiple sessions. However, they only offered one date. Brokers and other participants are assuming they will start the web meeting the usual 15 to 20 minutes late. Yes, FL Housing is not very punctual in a industry where time is money and money is time.
Is US Bank Signaling That It’s Abandoning Mortgage Origination Like Other Depository Lenders?
Why the sudden change? Most likely, it is a sign that US Bank is abandoning the low end of the market. Something other large depository lenders have been doing over the past 24 months.
Wells Fargo and Citi have already made massive cuts in their mortgage operations. Only Bank of America appears committed to growing its lending operations. The key word is, “appears.”
Bank of America’s new 0% down program for minority communities is nothing more than a PR stunt. Its geographic and other restrictions will make it nearly impossible for any marginalized homeowner to qualify for a mortgage.
Why is Lakeview/Bayview picking through US Bank’s dumpster? Well, what else are they going to do? Employees at their boiler room refi call centers are sitting around playing Spit & Catch or Angry Birds.