News

Aug. 16: LO jobs; trailing doc and non-QM products; tech & vendor updates; white paper on reasons for margin compression

Trillions of dollars of securities are tied to LIBOR, but the London Interbank Offered Rate is scheduled to be phased out at the end of 2021. Companies servicing adjustable rate mortgages tied to LIBOR are concerned, understandably, about the transition to another index. So far, the front runner substitute seems to be the Secured Overnight Financing Rate. Floating-rate bank bonds tied to SOFR could be brought to market within months. A name to watch: TD Securities. TD Bank has aided issuance of SOFR-based bonds from the World Bank and Fannie Mae.
 
Employment
 
“Branch Managers and Loan Officers are moving to Planet Home Lending because its strategic leaders know how to thrive in tough market cycles, its balance sheet is strong, and it’s growing. Build your career and expand your reach as a Planet Home Lending branch manager in Manhattan Beach, California, an MLO in Las Vegas; Manhattan Beach, Chino Hills, City of Industry, or Alhambra, California; and in other key markets. You’ll get locally flavored marketing, great jumbo, non-QM and no-overlay agency products, a full suite of benefits including 401(k) match, and the best onboarding in the industry. For a confidential interview, contact Nicole Flannery at 818-669-1559 or email joinus@planethomelending.com.”
 
Lender products & services
 
Mr. Cooper is now an approved Co-Issue investor for Fannie Mae’s Servicing Marketplace! “Our participation in Fannie Mae’s Servicing Marketplace complements our institutional offerings to include: Correspondent, Direct Agency Co-issue, FHLMC XChange®, GNMA PIIT, and GN PIIT transactions. In addition to our continued focus on expanding our program offerings, we continue to invest in products including recently launched Non-Traditional Credit, Modified Construction to Perm Loan Notes, Manufactured Housing and FHLMC HomeOne® products. Want to learn more about lending for Manufactured Homes? Join our WEBINAR in conjunction with Radian on August 21. And in development are E-Notes and Temporary Buydowns. Mr. Cooper is a premier Correspondent and Co-Issue investor and the largest non-bank servicer with a servicing portfolio of ~ $500B. For information, please contact Bryan Budd.”
 
There’s no doubt that times have been tough recently for independent lenders across the country. In Q1 of 2018, the MBA reported average pretax production losses of 8 basis points (a loss of $118 on each loan they originated)!  To put this in perspective, only two years ago in Q1 of 2016 the industry averaged 33+ basis points! These numbers should not be surprising, but it doesn’t mean you cannot achieve greater profitability by reassessing your strategy to focus on the right metrics of your business. A great eBook from Maxwell, 3 Steps to Profitable Growth,” outlines key focus areas for lending managers to drive profitability in a challenging, purchase-heavy market. A must-read for all mortgage managers: Download your free copy here!
FinLocker, a financial data and analytics company, announced today the approval of its asset verification solution as part of Fannie Mae’s® Desktop Underwriter® (DU®) validation service. Lenders now have access to FinLocker’s asset verification reports via DU and are eligible to receive Day 1 Certainty® from Fannie Mae, which includes representation and warranty relief, when asset data is validated through the DU validation service. FinLocker is a consumer-enabled financial data platform that gives lenders access to critical borrower information via trusted 3rd parties that can be used to streamline the origination and underwriting processes for mortgages and other financial products. It reduces costs, time, and risks for all participants in the loan life-cycle, while expediting the data collection, verification, approval and analytics processes. “FinLocker is proud to offer this additional benefit for our customers utilizing our asset verification service”.  
  
New Penn Financial’s SmartVest product, part of the non-QM SMART series, offers financing for experienced real estate investors who may have complex finances. Borrowers may have up to 15 financed properties. Cash flow analysis used in lieu of DTI; no tax transcripts, tax returns or TRID disclosure required. Fixed 30, ARM 5/1, 7/1, 10/1, all optional interest-only, available for loan amounts up to $1.5 Million. Call your rep for more information or go to www.gonewpenn.com
 
DocProbe, the nation’s premier Trailing Documents Service for Mortgage Companies’ Post-Closing Operations, helps lenders collect final (trailing) documents post loan closing in a systematic and efficient process. We offer complete fulfillment by retrieving the documents, auditing, ensuring corrections, and shipping to investors/custodians. Our cloud – based software is fully integrated to allow the final documents to flow into our clients’ LOS system. All documents are sent to your investors on time. Find out why correspondents and investors are working with DocProbe, specifically in today’s climate, to cut costs and work with a partner who understands the business. We are seeking a Business Development Rep to represent the Central-Northeast Region.  DocProbe will be attending the TMC conference in Chicago next week. We look forward to spending time with the TMC team and the TMC membership. Email Nick Erlanger to set up a call to learn more about our service or to submit your resume.”
 
Technology & vendor news
 
Lenders can now participate in STRATMOR’s Technology Insight Study, a unique STRATMOR study that gets at the heart of the mortgage technology experience from the lender’s viewpoint. It is the only independent technology survey in the industry today that gathers data to give voice to mortgage executives’ observations regarding their technology perspective. Time is running out to participate in 2018, as the last day to take the survey is August 31.  
 
“Our goal is to offer lenders much needed, non-vendor-provided data on the technology at work in the mortgage marketplace,” says STRATMOR Senior Partner Garth Graham. “Vendors are definitely paying attention to this study as they want to improve their systems, and they want to hear what their clients have to say." The 2017 Technology Insight Study reported that, for the third year in a row, Ellie Mae Encompass was the clear leader in loan origination systems (LOS) with 32 percent lender share. LendingQB with 15 percent and Mortgagebot with nine percent of installs rounded out the top three based on overall survey participation.
 
The 2018 report is expanded to also include the latest Digital Mortgage innovations, customer satisfaction survey programs, closing and collaboration tools and other mortgage technology solutions to provide lenders with an end-to-end view of available offerings. The results of this study will be available for the MBA’s Annual Convention in October. Take the Technology Insight Survey today: Technology Insight Study.
 
Rick Triola, founder and CEO of the remote online notarization solution, NotaryCam, calls the Department of Treasury’s recommendations in its July 31 report to the President: A Financial System That Creates Economic Opportunities: Nonbank Financials, Fintech, and Innovation  “a cure to the persistent drags on real estate transactions that have prevented the consumer from experiencing the benefits now possible with digital technologies.” Triola specifically cited the positive impact of recommendations in the report’s section Electronic Closing and Recording (p. 107 – 110), in advancing the industry’s adoption of remote online notarization. “Getting to a full complete electronic real estate mortgage transaction has been an achievable goal for years, but the laws were not on the books that allowed for this to happen,” Triola said. He went on to say the Treasury’s recommendations are a great and necessary start, encouraging all states to get on board, but thinks national legislation will be needed.
 
The Mortgage Collaborative announced the release of its TMC Benchmark 2.0, an enhanced benchmarking solution for its lender members. In collaboration with TMC Preferred Partner LBA Ware™, TMC Benchmark now has an improved user interface, augmented reporting dashboards and peer segmentation. The new version provides an easy-to-use platform for members to submit production, operational, execution and staff compensation data and receive visual analytics for their organization, along with peer averages from across the TMC member network. It also offers the option for TMC Lender Members to have their data automatically extracted from their LOS and brought directly into to the platform with little to no manual work required to receive a customized monthly benchmarking report.
 
Total Expert has released its Expert Content, a comprehensive set of marketing content designed to help lenders and banks increase marketing and sales velocity. It is a collection of customizable content and campaigns that marries targeted web, social, email, print and video with best practices and cutting-edge automation. Expert Content is available through the Total Expert MOS, a centralized platform for managing brands at an enterprise level, attracting and retaining customers and partners and driving revenue.
 
Ellie Mae launched a new major release of its Encompass® digital mortgage solution – Encompass 18.3. “The latest release will help lenders of all sizes originate more loans, lower origination costs and shorten the time to close with compliance, efficiency and quality. Key highlights of Encompass 18.3 include enhancements to support Know Before You Owe 2 (KBYO2) rule changes, a new customizable TPO workflow, new correspondent investor integrations, and product and pricing enhancements.”
 
Digital lending company Blend unveiled Blend Insurance Agency, an independent insurance agency that enables borrowers to seamlessly shop for and purchase home-owners’ insurance digitally within the mortgage application process. With launch partners like nationwide providers MetLife, Stillwater Insurance and Swyfft, Blend Insurance Agency brings the antiquated, paper-heavy insurance industry into the digital age, helping borrowers get a quote and bind their home-owners policy in a fraction of the time it traditionally takes.
 
Lenders One Cooperative announced the launch of Lenders One® eClosing by DocMagic, a complete eClosing solution for borrowers, lenders and investors providing an entirely paperless workflow that integrates every component of the closing process and guides users through each step. When using the solution, the average loan closing “at the table” can be reduced from 60 minutes to 15 minutes, helping to dramatically improve the borrower experience.  Features include integration with all the major LOS platforms to generate e-enabled documents.
An embedded compliance engine that automatically audits documents and data against applicable industry laws and regulations to help ensure compliance throughout the loan lifecycle. eNotary technology for in-person electronic notarization or remote online notarization where permissible. The ability to deliver a MISMO SMARTDoc® eNote with direct connectivity to the MERS® eRegistry. A secure, certified eVault provides long-term storage and eDelivery to warehouse banks and investors, featuring a date-stamped and time-stamped audit trail to help show proof of compliance at all times.
 
Effective August 15, 2018, all FAMC closed loans submitted for purchase must be delivered electronically through the secure FAMC website. Hard file delivery through the mail will no longer be a delivery option that is offered. Also note, correspondent lenders must transfer FHA Mortgage Records to Citizens Bank, N.A. on FHA loans purchased on or after August 1, 2018.
 
Capital markets
 
One of the most frequently discussed challenges facing lenders this year has been pressure on margins. Read the latest whitepaper from MCT to learn what caused lender profit margin compression. Market trends and a deep dive into aggregate data from lender clients are complimented by context from Director of Analytics Bill Berliner. Lender competition, decreasing volumes, increasing interest rates, and weakening of relative pricing of mortgage-backed securities are explored as contributors to margin compression. You may even pick up a few hints about what to expect for the rest of the year.
 
Turning to Wednesday’s bond market price action, which is another term for interest rates, the 10-year closed 5bps lower at 2.85% after it was reported that Qatar pledged to invest $15 billion in Turkey. (Have to do something with that oil money!) The country’s banking regulator moved to deter short-selling in the currency, which alleviated some concerns, but there is still a lot of uncertainty surrounding the ripple effects on the yuan or the rand or rupee.
 
In the United States, we continue to see solid news. Downward revisions to June Retail Sales mitigated the July headline beating estimates, though the strong reading is a positive input for Q3 GDP forecasts. Second quarter productivity increased 2.9%, the strongest increase since the first quarter of 2015. The uptick in Q2 productivity was the result of output increasing 4.8% and hours worked increasing 1.9%, and with labor costs in check, this will facilitate a gradual tightening path for the Federal Reserve. Industrial production increased 0.1% in July as figures pointed towards continued strength in manufacturing output, which offset declines in mining and utilities production. Finally, June business sales continued to outpace inventory growth, which is a favorable trend that carries the potential to lead to a better pricing environment for businesses.
 
Turning to today, we’ve had weekly jobless claims (212k), housing starts & permits (starts weak at +.9%, permits decent at +1.5%), and the Philadelphia Fed Manufacturing Index (weak at 11.9). Also expected to impact sentiment Thursday is the 9AM ET investor call with Turkey’s Treasury and Finance Minister Berat Albayrak hosted by Citigroup, Deutsche Bank, HSBC and DOME Group. We start with the 10-year yielding 2.86% and agency MBS prices little changed or worse a smidge from last night’s close.
 
 
ABOUT GROWING OLDER…
Eventually you will reach a point when you stop lying about your age and start bragging about it.
The older we get, the fewer things seem worth waiting in line for.
Some people try to turn back their odometers. Not me; I want people to know “why” I look this way. I’ve traveled a long way, and some of the roads weren’t paved.
When you are dissatisfied and would like to go back to youth, think of Algebra.
 
 
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “With Regulations, Be Careful What You Wish For.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
 
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Aug. 15: AE, LO jobs; fulfillment, non-QM products; corporate name changes; in MBS Land, what is a Mirror Security?

Bond prices and mortgage rates, like nearly every commodity, are driven by supply and demand. I mention this because early last week prices of US government bonds declined while the yield on the benchmark 10-year Treasury note increased (although it reversed itself due to turmoil in Turkey). Investors bought $34 billion of three-year Treasury notes amid relatively soft demand, with the week bringing the first sales of Treasury notes since the Treasury Department announced it is looking to increase its borrowing in the second half of 2018 to $769 billion, a 63% year-over-year increase. Just something to keep in the back of your mind if you’re hoping for lower rates, or relying on them to help your business model.
 
Jobs & personnel moves
 
Towne Mortgage Company is looking for experienced Account Executives with a book of business throughout the Southeast, Mid-Atlantic, Texas, Ohio, Northern Illinois, Western Pennsylvania and Iowa. This position will have access to multiple operation centers and a wide range of product offerings including FHA, 203K, Fannie Mae HomeStyle, HomePath, HomeReady, DU Refi Plus, VA, USDA, and Manufactured Programs. Towne is looking for a seasoned, high-energy, salesperson who can partner with Towne to expand their lines of business. “We are looking to fill positions in our financial institution channel working with Banks, Credit Unions and AgBanks as well as our traditional broker channel. Delivery mechanisms include both wholesale and mini-correspondent relationships. Towne offers competitive compensation packages including Medical and 401K. Sound Interesting? Email Cassi Sluka.”
 
“We know you hear the same pitch from every mortgage company that is trying to recruit you. Sierra Pacific Mortgage, its different. Sierra understands how to adapt when the market changes, and what it takes to not only survive, but to thrive after 30 years in the industry. Be it in technology, regulation, or product, Sierra is a leader in the industry because they aren’t afraid to try new things. Check out this video. It’ll make you smile. Sierra Pacific Mortgage is a great company, and if you are ready to work for real people, who really care about you and your success, visit the careers site today.”
 
“Realtors, Builders, Closing Agents and Borrowers are praising Cornerstone Home Lending’s EXPRESS CLOSING processwhich reduces the industry-average time at the closing table from an hour to UNDER 15 minutes. Laura, a Closing agent in Colorado, was elated last month when she closed 3 separate Cornerstone loan transactions in less than 38 minutes total. In July 78% of Cornerstone’s closings took less than 15 minutes to complete, giving Sales agents and clients more time away from the closing table. To learn how Cornerstone’s EXPRESS CLOSING results in more customer referrals for Cornerstone Loan Officers, contact Tom Lott.”
 
“Want to make more money from your current production? Are you losing deals over pricing? Is your volume down? Great news for LO’s/Branch Managers: LOWER RATES + BETTER PRICING = A PAY RAISE FOR YOU! Increase your compensation AND offer lower rates to your customers by joining the Mortgage Right family. Check this testimonial out: We recently signed up a Branch Manager from Georgia who was able to improve his overall comp by 117BPS by making the move to Mortgage Right. Here’s how he split the winnings up: He gave himself a 50BPS raise and is passing the remaining 67BPS on to his clients, giving them a 1/8th better pricing than his competitors! He’s winning more deals AND he’s making more money! It only takes 10 minutes to see how much extra you could be getting paid from your current production. Give us a call at (866) 228-7703 or visit our site at www.branchright.com.”
 
Congrats to Laura LaRaia who has been appointed General Counsel for First Guaranty Mortgage Corporation and be located in the Plano, Texas.
 
Trinity Oaks Mortgage has named James Hinton, who brings 46 years of mortgage industry experience to Trinity Oaks, as EVP. Mr. Hinton will work closely with the Post-closing and Secondary Department to increase secondary marketing and secure government entities such as Fannie Mae and Freddie Mac for post-closing procedures.
 
Lender products & services
 
What is sim·pli·fi·ca·tion? A noun. The process of making something simpler or easier to do or understand – Deephaven Mortgage has taken this strategy straight to their products over the last three months to put you at the forefront of innovation & simplicity. The most recent simplification involves two dh•mtg products, Expanded Prime and Non-Prime. Both products now offer 90% LTV’s to further strengthen your available options for lower down-payment lending options. Non-QM doesn’t have to mean complex. To find out more about Deephaven’s products contact brokerinfo@deephavenmortgage.com (Wholesale) or sales@deephavenmortgage.com (Correspondent) or visit www.deephavenmortgage.com. Non-QM = Simplified = dh•mtg.”
 
Are you rejecting loans you should be closing? Verus Mortgage Capital’s responsible non-QM programs can help you tap into the $200 billion in annual unmet demand from creditworthy borrowers. With flexible guidelines and solid underwriting, Verus helps correspondent lenders grow. Take advantage of loan products for self-employed borrowers, credit events, single-family rental units and more. Verus is an experienced investor that is committed to helping correspondents succeed in non-QM with its innovative products and partnership program. Verus has purchased over $2.6 billion in expanded, non-QM loans and completed six rated securitizations. Contact Verus today to learn more.”
 
Reasons to Leverage End-to-End Fulfillment: In today’s mortgage environment, loan manufacturing takes longer, costs more and carries more risk. How can you stay competitive? This infographic highlights the most important reasons to leverage end-to-end fulfillment. Interested in learning more? Contact Gary Hughes to find out how you can achieve improved profitability through Trelix Mortgage Fulfillment Services.”
 
Corporate name changes
 
After 17 years, Georgetown Mortgage, LLC, has outgrown its original name, and is rebranding as Thrive Mortgage, LLC. “We are a company focused on delivering unparalleled service to borrowers and originators and cultivating an all-around atmosphere of growth and achievement,” states Michael Jones, the company’s Chief Financial Officer. “If you’re not living, you’re dying. But just living isn’t good enough. Why simply get by when you can enjoy life to the fullest and Thrive?” The name change is accompanied by several strategic hires. Brian Hurd, VP National Builder Division, is blowing the doors off construction lending. Brian Nachlas, Chief Strategy Officer, is a Social Media guru with amazing vision and an expert understanding of building an online brand. Erin Dee, Director of Business Solutions, spearheaded the implementation of a new Point of Sale platform making the company’s technology, processes, and loan production more efficient and effective. The company is on track to fund $1B in originations this year, up 14% over last year, and the future is very bright.
 
Riivos! Last month Alight, Inc. — parent company of Alight Mortgage Solutions, the leading provider of cloud-based applications for budgeting, forecasting, financial reporting and scenario analysis for the mortgage industry — changed its name to Riivos, Inc. “Riivos connects your organization to the data that comprises the mortgage value chain — GL, LOS, payroll, BI and other systems — allowing you to see your whole business in a way that is natural to you, enabling collaborative discovery, exploration, analysis, and tracking of opportunities that optimize financial performance and value creation. Contact Scott Walker for a demo.”
 
Capital markets
 
The preparation for the fabled single security (both Freddie and Fannie loans in the same mortgage-backed security) continues and is set for next year. 80-90% of current originations are, in effect, backed by the U.S. taxpayer, and both agencies continue to shift risk to parties willing to absorb it through credit risk transfers and other mechanisms. Originators should cheer this on, as the eventual product is a healthier secondary market for what lenders are producing in the primary market.
 
Last month Freddie priced a new offering of Structured Pass-Through Certificates (K Certificates), which are multifamily mortgage-backed securities. The company expects to issue approximately $1.1 billion in K Certificates (K-078 Certificates), which are expected to settle on or about July 19, 2018. The K-078 Certificates are backed by corresponding classes issued by the FREMF 2018-K78 Mortgage Trust (K-78 Trust) and guaranteed by Freddie Mac. The K-78 Trust will also issue certificates consisting of the Class X2-A, Class X2-B, Class B, Class C, Class D, and Class R Certificates, which will not be guaranteed by Freddie Mac and will not back any class of K-078 Certificates. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.
 
On August 2, Freddie Mac priced a new offering of Structured Pass-Through Certificates (K Certificates) that are backed by underlying collateral consisting of supplemental multifamily mortgages. The company expects to issue approximately $251 million in K Certificates (K-J20 Certificates), which are expected to settle on or about August 10, 2018. Freddie also expects to issue approximately $465 million in K-I02 certificates, which are expected to settle on or about August 14, 2018. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.
 
Additionally, on the 2nd Freddie announced that it will begin issuing new 55-day “mirror” mortgage-backed securities for the current population of exchange-eligible 45-day Freddie Mac Gold Participation Certificates (PCs) and Giant PCs to facilitate the implementation of the Single Security Initiative on June 3, 2019. The company expects the initial issuance of mirror securities to take approximately 8 weeks beginning on August 7, 2018. Freddie expects to issue over 70,000 mirror securities during this 8-week period, corresponding to the population of exchange-eligible PCs and Giants, and will continue to issue mirror securities as new exchange-eligible 45-day securities are produced.
 
The deal helps pave the way for a combined Freddie Mac and Fannie Mae $3.5 trillion market of a To-Be-Announced Uniform Mortgage-Backed Security, intended to strengthen the U.S. mortgage market by providing more liquidity and lowering costs for borrowers.
 
On August 3, Freddie priced a new offering of Structured Pass-Through (K) Certificates backed by fixed-rate mortgages on multifamily properties affordable to working households earning low- to moderate-incomes. The company expects to issue approximately $599 million in K Certificates (K-W06), which are expected to settle on or about August 10, 2018. K-W06 is the sixth K-Certificate issued under the K-W series. The underlying mortgages backing K-W06 are on workforce properties, which generally have rents that are affordable to individuals earning 80 percent or less of their area median income, excluding high cost housing markets. On August 9, Freddie priced a new offering of K Certificates backed by floating-rate multifamily mortgages with seven-year terms. The approximately $1.1 billion in K Certificates (K-F49 Certificates) are expected to settle on or about August 17, 2018.
 
What is a mirror security? It is a step in the process, and for a primer read page 15 of this Playbook.
 
On August 7 Fannie began issuing new 55-day “mirror” mortgage-backed securities for the current population of exchange-eligible 45-day Freddie Mac Gold Participation Certificates (PCs) and Giant PCs. This is a milestone that supports the launch of the Single Security Initiative on June 3, 2019.
 
Freddie plans to issue over 70,000 mirror securities over an 8-week period, and then continue to issue mirror securities as new exchange-eligible 45-day securities are produced. Holders of 45-day TBA-eligible and non-TBA-eligible PCs and Giant PCs will have the option, beginning in May 2019, to exchange these securities for corresponding 55-day mirror securities. The cash flows of these mirror securities will be backed by the same loans as the original PC or Giant PC.
 
Looking at the bond markets and interest rates, on Tuesday the 10-year displayed the same action as on Monday, rising another 2bps as investors brushed aside Turkish turmoil that has dominated headlines over the last few days. The ramifications of what is happening in Turkey could still have far-reaching consequences for the global economy, as Turkish borrowers make up roughly $140 billion in debt to Italian, French, and Spanish banks. Import figures from yesterday morning did reflect some of the effects of a stronger dollar as nonfuel import prices declined month-over-month in both June and July.
 
It has been a slow start to the week as economic releases go, but that changed today. We have already seen the MBA weekly mortgage application figures for the week ending August 10 (echoing what lock desks already knew, -2%), July Retail Sales (+.5%, core +.6%, strong), the release of the Empire State Manufacturing Index for August (expected to decline, it was up to 25.6). We also received Q2 productivity (seen increasing 2.0%, it was +2.9%). Next up is July industrial production and capacity utilization, expected to be unchanged. To close out the day, we receive June business inventories, the EIA Weekly Petroleum Status, and the Treasury will release June TIC data. We start the Wednesday U.S. trading day with rates versus Tuesday’s close: the 10-year is yielding 2.87% and agency MBS prices are better by nearly .125.
 
 
(Warning: Rated R. Don’t read if offended by puns dealing with the human body.)
 
Health Alert for Men:
If you are taking the Viagra pill, make sure it says, “Made in USA"!
We do not want the Russians meddling in our erections!
 
 
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “With Regulations, Be Careful What You Wish For.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
 
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Aug. 14: LO jobs; warehouse, new bankruptcy products; remote training this week; Agency changes continue

A Zen master visiting NYC approaches a hot dog vendor and says, "Make me one with everything." The hot dog vendor fixes a hot dog and hands it to the Zen master, who pays with a $20 bill. The vendor puts the bill in the cash box and closes it. "Excuse me, but where’s my change?" asks the Zen master. The vendor responds, "Change must come from within." Most believe that, despite thoughtful and continuous efforts by those in the industry, there won’t be any change coming from Congress this year, perhaps even next, on Freddie and Fannie’s status. There’s not a lot of urgency, nor is it an election issue, nor, it can be argued, are consumers being hurt by current policies and procedures. The FHFA and industry will be adjusting things as time goes on regarding guidelines, policies, mortgage insurance, the common security, and so on. There is change from within.
 
Employment, opportunities & promotions
 
A EVP/ C-Suite executive is looking for opportunities in Sales, Operations, Marketing, or Business Intelligence. The 15-year veteran is geographically mobile, with a proven track record of building exceptional teams and counts Morgan Stanley, JP Morgan, Waterford, & PIMCO, along with some Fin-Tech startups. Career highlights include strategic sales vision and business development (generated $2 billion + media mentions during 30-day promotion), leadership and change management (transformed 10th ranked sales division to #1 in three months; division originated $10 billion for the year), performance optimization and tactical execution (created real-time reporting across marketing and business intelligence, increasing productivity by 270%, conversion by 42%, and funded units by 2.3x), and innovation and Creative Problem Solving (reduced ~1M loss/month by ~85% in six months). Interested parties can contact me to forward their note to the candidate.
 
Residential Bancorp is expanding and seeking to partner with motivated mortgage loan officers, brokers and branches nationwide. The company has increased its territories in Texas, Florida, Colorado, Arizona and Nevada, and is providing a unique opportunity for qualified applicants to open new branches across the U.S. Offering substantial growth potential, aggressive compensation and competitive rates, Residential Bancorp also provides professional marketing support with a fully-integrated LOS/CRM/Mobile App and has a 14-day closing guarantee program. Ready to double your volume and increase your income by 300%? Open a branch in your area today! To learn more or apply online, visit
bancorp.com/Retail or call (888) 998-3364. Residential Bancorp has been providing exceptional service to customers and integrity in lending for over 29 years. We are a Direct Servicer with Fannie Mae, Freddie Mac & Ginnie Mae.  #YourMortgageTeam.
 
Congrats to Ben Green whom Movement Mortgage announced is its Business Development Manager to lead loan officer recruiting in the western U.S. He will lead Movement’s business development team covering 23 states across the western half of the U.S. after helping lead and grow recruitment operations for another major mortgage lender.
 
And to Brett Boman who has joined Alta Mortgage Bankers as its Southeast Regional Sales manager. Located in Florida, he brings over 25 years’ experience of mortgage sales and will be the Regional Sales Manager for the Southeast and will be managing all AEs and sales efforts in the Southeast.
 
And to Gordon Miller, joining Buckley Sandler as a Senior Counsel in our Washington, D.C., office, strengthening its Bank Counseling & Compliance practice.
 
Sierra Pacific Mortgage Company, Inc. announce that Mike Cass has joined the company as a Regional Manager to oversee the company’s retail sales teams in the northern, midwestern states.   
 
Lender products & services
 
The rapid pace of innovation in the industry has changed how modern lenders market to consumers. Yet, many lenders today are trying to build their marketing and sales growth engine on outdated technology and practices. To position your salespeople for success – and your company for growth – you need the right tools, processes and support. Leveraging technology to increase the productivity of your loan officers requires commitment to digital transformation. Learn from Movement Mortgage and Total Expert how to build a marketing ecosystem that reduces costs and increases ROI in their on demand webinar: Leading Digital Transformation in MarketingThis webinar explains the framework of the modern marketing stack and cover best practices for executing your marketing strategy across your entire organization at scale. 
 
Attracting and retaining top originator talent is an increasing challenge in this market. Technology can play a big role; however, not all providers are created equal. The right platform enables your LOs to be more productive and efficient, delivering trust in your organization to invest in their future. Maxwell stands out from all other digital mortgage providers. They allow entire teams of LOs to incorporate technology as a natural extension of their work, allowing them to accomplish more every day, delight their referral partners, and attract new business. Maxwell was developed with input from thousands of LOs. The efficacy of their intuitive design is apparent in their high adoption rates across lending businesses. Request a demo to learn more about Maxwell today.
 
New Penn Financial recently announced the SMART product series, which includes SmartTrac, a product designed for borrowers with a bankruptcy, short sale or deed-in-lieu just over one year or multiple 30-day mortgage lates. This product features no pre-payment penalties and fixed 30, ARM 5/1, 7/1, 10/1, all optional interest-only. A minimum 620 FICO is required with 80% LTV purchase, 75% cash out. The SmartTrac product offers flexibility to a variety of borrowers; call your rep for more information or go to www.gonewpenn.com
 
PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE: HTH), is looking for mortgage bankers and lenders that offer renovation products and programs.  PlainsCapital Bank National Warehouse Lending currently funds multiple renovation programs and products with little to no additional requirements.  Whether it is a FNMA HomeStyle, FHA 203K Full, Limited or even an USDA Rural Housing renovation loan, PlainsCapital Bank National Warehouse Lending wants to be your preferred warehouse provider for these programs and products.  Please ask us about our competitive rates, utilization and deposit incentives and other ways that we can reduce costs and time to exceed your loan funding needs in 2018. If you are interested in learning more about PlainsCapital Bank National Warehouse Lending please contact Pamela Robinson, SVP National Sales or Deric Barnett, EVP National Warehouse Lending.
 
Upcoming events
 
“Big happenings in the mortgage biz as of late. Zillow throwing their hat into the ring, margin compression, M&A, and disruption. The question is what are you going to do about it? At The Agent Marketer, we believe that if you are in survival mode as opposed to seizing the opportunity for growth, then you are going to be in for a rough ride.  We recently wrote an article for HousingWire and recorded a podcast on the subject that has had thousands of views and downloads. With all the questions we have received we decided to hold a FREE live webinar on Friday, August 24th at 10:30am PDT. Join our founder, award-winning marketer and industry speaker Jason Frazier, as he talks about the ‘silver bullet’ for how Lenders and Loan Officers can step on the neck of disruption. Register now, as seats will be limited!”
 
The California MBA and Blend is hosting an event this evening in San Francisco at Blend’s offices – come on by and say hi! The gathering is from 5-7 pm. Here’s the link, or you can just come.
 
Attend Plaza’s upcoming live training and see how to create a Loan Estimate (LE) within BREEZE in less than 15 minutes, on average. Plus, send it to the borrower for e-signing – all right at the point of sale.  This new feature is being added on August 13th. There are two training sessions available: Tuesday, August 14th and Wednesday, August 15th.
 
On Wednesday, August 15th, join Plaza for a webinar as its panel of title and settlement experts provide information surrounding Trusts & POAs and offers guidance that can help you avoid future oversights.
 
On August 15th, join Metrostudy Housing for its quarterly Webcast to get an update on the state of housing in the United States as well as a close-up look at the West Coast metros.
 
The Plaza VA Renovation Program allows VA-qualified borrowers to easily fund the purchase or refinance of a home and – at the same time and in the same loan – fund the extra financing needed to remodel or repair their home. Register for a live training on Thursday, August 16th.
 
California Mortgage Bankers Association is hosting a deep dive into the “E-Mortgage” during the group’s August webinar presentation from the Mortgage Technology & Marketing Committee (MTAM). Dawar Alimi, Founder and President, Lender Price and Amy Moses, Director of Marketing and Media at MERSCORP Holdings will help you learn how to bring the mortgage of the future to your clients today. “Specifically, we’ll cover how to evaluate and select digital mortgage technology to meet your needs, streamline pricing and product selection at the point of sale, simplify document management and e-signatures, make mortgage closing a painless process, and enable a seamless transition to servicers and investor. Register for this exclusive webinar presented by the CMBA Mortgage Technology & Marketing Committee on August 22 at 11 AM PST.”
Mountain West Financial is accepting registrations for its August 23rd webinar: Energy Efficient Mortgage (EEM) with speaker Julie Gregory.
 
EXCLUSIVELY FOR MORTGAGE WOMEN WHO ORIGINATE LOANS: The 13th Annual Mortgage Girlfriends Mastermind Retreat will be October 4-5, 2018 in the Chicago area. With workshops and panel discussions, topics of discussion include: How to Get People to Show Up for Your Events, Sell Like a Girl: How Women Succeed In Sales, Staying Out of Compliance Jail and How to Build a Pipeline with Credit Challenged Clients. Space is limited to only 80 women. 
 
Conventional conforming changes
 
Want a primer on the single security efforts, and a status report? Here’s one. Loan originators should care because anything that contributes toward an active and liquid market for mortgages helps rates for borrowers.
 
For LIBOR fans, know that Fannie has issued $6B in adjustable rate securities tied to the secured overnight financing rate (SOFR). This is the first large issuance tied to the index. SOFR is overseen by the Fed and is meant to replace Libor by the end of 2021 when that index officially expires.
 
Fannie Mae issued a new fraud alert identifying 10 apparently fictitious employers being used on loan applications in Northern California. This scheme is like the one identified in a fraud alert we issued in May (updated June 28), but the geographic area is different. View the fraud alert and other resources on our Mortgage Fraud Prevention page.
 
Quicken Loans has rolled out its new exclusive MI rate sheet. There are no DTI restrictions, no additional underwrites or different pricing buckets. The same is true with multiple borrowers. Its savings do not show up in 3rd party pricing engines, you must utilize the Quicken Loans portal to price out a BPMI. For additional details, watch this video.
 
Fannie Mae has made updates and provided clarifications to its allowable foreclosure title costs guidance to address questions received after recently announcing new requirements, effective September 1st. Get some answers and tips in the updated Allowable Title Costs for Fannie Mae Foreclosures and Mortgage Default Counsel Retention Agreement Amendment 2018-03, located on the Delinquency and Default Management page.
 
Fannie Mae’s recent updates in Selling Guide Announcement SEL-2018-06 includes the high LTV refinance option, which will be available for applications received on or after Nov. 1. The high LTV refinance option is for Fannie Mae borrowers who are making their mortgage payments on time, but whose LTV ratios exceed our maximum allowed for standard limited cash-out refinance transactions. For more information, visit the high LTV refi option page.
 
Freddie Mac announced an innovative financing initiative that will incentivize multifamily property owners to keep rents at levels affordable to working families without any federal, state or municipal subsidy. Freddie Mac Multifamily’ s new Mezzanine Loan Pilot effectively operates as a subordinate loan, delivering additional debt capital necessary to fill in the gap between borrower equity and the first lien mortgage loan amount.
 
Freddie Mac confirmed its disaster relief policies for people whose homes or places of employment have been affected by the ongoing, historic California wildfires. Freddie Mac’s disaster relief options are available to borrowers with homes in Federal Emergency Management Agency (FEMA)-declared disaster areas where individual assistance programs have been made available to affected individuals and households. In areas where FEMA has not made individual assistance available, mortgage servicers may leverage Freddie Mac’s forbearance programs to provide immediate mortgage relief to their borrowers that have been affected by the devastating wildfires.
 
Capital markets
 
It’s still kind of a snoozer out there in bond-land, despite a little Turkey-inspired turmoil. International volatility withstanding, U.S. rates rebounded up after last week’s dip, with the 10-year closing yielding 2.88%. Turkey has been the headliner, with the Turkish lira depreciating 12% overnight, but Italy also added to the volatility when ‘s the League’s chief economic, Claudio Borghi, suggested via twitter that the ECB should guarantee EU sovereign issuance with BTP / bund spreads blowing out in the process.
 
Elsewhere, the Indian rupee and Argentine peso fell to new record lows against the dollar, and an overnight flash crash in the South African rand briefly had the dollar trading higher by 10% against the rand. The Central Bank of Argentina unexpectedly increased its policy rate by 500 bps to 45.0%. The interest rate on seven-day liquidity notes was also increased by 500 bps.
 
Looking to today, it’s light. The July NFIB Small Business Optimism Index was the second highest level in history! Also out were July Import Prices (flat) and Export Prices (-.5%). Tuesday begins with agency MBS prices little changed from Monday’s close and the 10-year yielding 2.88%.
 
 
Joke du jour? Lead off paragraph. I hope I didn’t offend any Buddhist Monk readers, but I doubt it because they can laugh about themselves.
 
 
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “With Regulations, Be Careful What You Wish For.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
 
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Aug. 13: Subservicing, LO comp, non-QM products; Agencies active in capital markets

Don’t think that correct mortgage documentation is important? Think again, or ask Citigroup. The Federal Reserve said Friday it had fined Citigroup $8.6 million over poor quality mortgage documentation practices at its CitiFinancial subsidiary in 2015. The Fed said Citi mishandled customer files as it was preparing to wind down its mortgage servicing business, doing so in 2017. But there is good news! The Fed said that the problem was corrected, and the Fed is terminating a separate 2011 enforcement action against Citigroup on a separate residential mortgage loan servicing matter, citing sustainable improvements by the bank. Dot those i’s and cross those t’s!
 
Lender products and services
 
“Interest only payment options for your Jumbo Borrowers? We can do that! Stearns Wholesale introduces our Non QM Jumbo Product. With no private mortgage insurance required and eligibility based on FICO scores from 720 and up, the Non QM Jumbo provides flexible guidelines to help your clients qualify for more financing options. Income flexibility that allows for asset depletion, DTI > 43% and projected income. First time homebuyers with FICO scores less than 720 may access loan amounts up to $1M; experienced homebuyers can access loan amounts up to $1.5M. Big Win? We’d call this a Jumbo Win. Contact us for more details on the Non QM Jumbo and all the ways Stearns Wholesale can help you qualify more borrowers!
 
CMC Funding, part of the Computershare Group, is aggressively buying servicing through its co-issue platform. With the co-issue process, the asset is sold directly to Fannie or Freddie while CMC Funding is simultaneously designated as the servicer. Why should you consider adding this delivery to your arsenal? Historically, with co-issue delivery your back-office expenses are lower – by some estimates up to 12bps. Additionally, you get all the benefits of selling agency direct without retaining servicing, you have readily available cash flow plus there is no servicing asset to maintain or value monthly – worth exploring!
 
Gateway Mortgage Group, announced its intentions to merge with Farmers Exchange Bank located in Cherokee, Oklahoma. Following regulatory approval and completion of the merger, Gateway will become a bank. “We believe this acquisition is an important next step for Gateway Mortgage Group that will allow for growth, providing greater opportunity for employees and the communities they serve,” said Stephen Curry, Gateway Mortgage Group’s newly appointed CEO. “Through this acquisition, both Farmers Exchange Bank and Gateway Mortgage Group can expect to gain improved products and technology that will enhance their ability to strengthen the families in their communities. We’re excited about this new venture and the benefits it will provide to our customers.” For more information, visit Gateway’s Newsroom
 
Have you outgrown your LO comp management system? Silverton Mortgage did. On its path to becoming one of the fastest growing mortgage companies in the nation, the Atlanta-based lender quickly realized its growth had outpaced its ability to calculate commissions and manage comp plans for its sales staff using Excel spreadsheets. Having already enlisted LBA Ware’s help to integrate its multiple internal systems using the LOS Talker middleware platform, Silverton Mortgage Vice President of Development Jason Strain realized that the vendor’s automated commission platform CompenSafe was exactly what Silverton needed to streamline payroll operations and harness loan origination data to drive additional 
revenue and profit growth. To see how, download the free case study.
 
“Originators Love Zip, the POS with a 76% borrower completion rate. Are you interested in a point-of-sale solution that will elevate your borrower experience and convert more leads to loans? Zip is the only POS that you can launch today to engage your leads and streamline doc collection, making home buying more fun and freeing. After all, fintech shouldn’t slow you down. We power your pipeline with an expedited pre-qual, automatic verification of assets, digital doc exchange management and deliver an experience that your borrowers will love. And like you, fearless LO, we like to be first. That’s why Zip customers are ahead of the game with access to the new 2019 URLA.  Be a hero to your borrowers and gain an edge your competition can’t touch. Get a Zip demo today or join our next webinar.
 
Capital markets
 
The various high-ranking officials within the Federal Reserve know just as much about the direction of the economy, short-term rates, and financing than anyone else, right? Fed Governor Quarles said the Secured Overnight Financing Rate (SOFR) is more liquid than Libor and should be used by banks when lending to one another going forward. Fed Kansas City President George said she believes “gradual further increases in our policy rate will be necessary to return policy to a neutral stance.” Fed Chair Powell said in Congressional testimony that the global growth outlook “remains solid” and the US economy is in a “really good place” and the “best way forward is to keep gradually raising the federal funds rate.”
 
The markets continue to expect the Fed to increase rates twice more this year baring any surprises in economic data or world events. The expected timing for those rate increases remains at the September and December meetings. Any questions?
 
As mentioned in this commentary, Fannie Mae issued the market’s first-ever Secured Overnight Financing Rate (SOFR) securities, a three-tranche $6 billion SOFR debt transaction scheduled to settle on July 30, 2018. This transaction should accelerate the development of the SOFR market and encourage other issuers in the debt markets to follow suit. The floating rate notes, offered in three maturities, 6, 12, and 18 months, were met with strong investor demand.
 
What else have those crafty Agencies been up to? Here’s a primer on the single security efforts. Loan originators should care because anything that contributes toward an active and liquid market for mortgages helps rates for borrowers.
 
On July 26, Freddie announced its offering of the Multifamily Aggregation Risk Transfer Certificates, Series 2018-KT03 (KT03 Certificates), which will be backed by multifamily mortgage loans that are awaiting sale into K-Series securitizations. This offering of $1 billion in KT03 Certificates is expected to settle on or about July 30, 2018 and is the first offering of Multifamily Aggregation Risk Transfer Certificates (KT Certificates) this year. KT Certificates are designed to transfer a portion of the credit risk associated with eligible multifamily mortgage loans to certain investors prior to sale into K-Series securitizations. KT03 is designed to transfer the risk on multifamily mortgages that are in their lease up period (Lease Up Loans), which occurs before the collateral is fully stabilized. The initial pool contains 20 Lease Up Loans, eight of which are seasoned more than 24 months. After the closing date, Freddie Mac may also include loans backed by student and seniors’ housing in the pool. On the settlement date, Freddie Mac will sell to the FMPRE 2018–KT03 Multifamily Aggregation Risk Transfer Trust (KT03 Trust) approximately $1 billion in eligible mortgage loans. During a 42-month revolving period Freddie Mac will purchase mortgage loans eligible for repurchase from the KT03 Trust for inclusion in K-Series securitizations and replace them with additional eligible mortgage loans. The KT Trust will issue Class A, B, C, D and E Certificates. Freddie Mac will guarantee timely payment of interest, reimbursement of realized losses and ultimate repayment of principal on the Class A Certificates but will not guarantee the Class B, C, D or E Certificates. Freddie Mac will purchase the Class A and E Certificates.
 
Fannie Mae Announces Two Credit Insurance Risk Transfer Transactions on $22 Billion of Single-Family Loans, its fourth and fifth traditional Credit Insurance Risk Transfer (CIRT) transactions of 2018 covering existing loans in the company’s portfolio. The two deals, CIRT 2018-4 and CIRT 2018-5, which together cover $22 billion of loans, are a part of Fannie Mae’s ongoing effort to reduce taxpayer risk by increasing the role of private capital in the mortgage market. To date, Fannie Mae has acquired about $6.9 billion of insurance coverage on $278 billion of loans through the CIRT program. These new transactions transferred $663 million of risk to seventeen reinsurers and insurers, representing the largest amount of risk transferred in a single CIRT transaction set.  In CIRT 2018-4, which became effective June 1, 2018, Fannie Mae will retain risk for the first 60 basis points of loss on a $19 billion pool of loans. If the $116 million retention layer is exhausted, reinsurers will cover the next 300 basis points of loss on the pool, up to a maximum coverage of approximately $580 million. With CIRT 2018-5, which also became effective June 1, 2018, Fannie Mae will retain risk for the first 60 basis points of loss on a $2.7 billion pool of loans. If this $16.5 million retention layer is exhausted, an insurer will cover the next 300 basis points of loss on the pool, up to a maximum coverage of approximately $82.5 million. The covered loan pools for the two transactions consist of fixed-rate loans with loan-to-value ratios greater than 60 percent and less than or equal to 80 percent, and original terms between 21 and 30 years. Since 2013, Fannie Mae has transferred a portion of the credit risk on single-family mortgages with unpaid principal balance of over $1.4 trillion, measured at the time of transaction, through its credit risk transfer efforts.
 
On July 13, Freddie Mac announced the pricing of the SB51 offering, a multifamily mortgage-backed securitization backed by small balance loans underwritten by Freddie Mac and issued by a third-party trust. The company expects to guarantee approximately $457 million in Multifamily SB Certificates (SB51 Certificates), which are anticipated to settle on or about July 24, 2018. Freddie Mac Small Balance Loans generally range from $1 million to $6 million and are backed by properties with five or more units. This is the seventh SB Certificate transaction in 2018. Freddie Mac is guaranteeing three senior principal and interest classes and one interest only class of securities issued by the FRESB 2018-SB51 Mortgage Trust. Freddie Mac is also acting as mortgage loan seller and master servicer to the trust. In addition to the four classes of securities guaranteed by Freddie Mac, the trust will issue certificates consisting of Class B and Class R Certificates, which will not be guaranteed by Freddie Mac and will be sold to private investors. The Small Balance Loan (SBL) origination initiative was first announced in October 2014 and expands the company’s continuing effort to better serve less populated markets and provide additional liquidity to smaller apartment properties. Freddie Mac has a specialty network of Seller/Servicers and SBL lenders with extensive experience in this market who source loans across the country.
 
Looking at the day-to-day bond market and rates, we had a nice rally to close out last week, including the U.S. 10-year dropping 8bps to 2.86% as investors saw significant weakness in the Turkish lira and its impact on European banks with exposure to Turkey as some tariffs take effect. Headline CPI figures from Friday showed consumer inflation trends are running above the Federal Reserve’s longer-run inflation target, which will keep the Federal Reserve inclined to raise the target range for the fed funds rate.
 
Turkey obviously remains in focus although US sentiment isn’t as panicked as some of the media reports suggest. Turkey ranks about #17 in the world in GDP, so it is important. But there isn’t much else of the media to focus on, so…Turkey!
 
We have a pretty busy week for news, although we start with zip today. Tomorrow are import and export price numbers. Wednesday we’ll look forward to the residential application numbers for last week, NonFarm Productivity, Retail Sales, Unit Labor Costs, the Industrial Production and Capacity Utilization couplet, and the NAHB Housing Market Index. Thursday brings the usual Initial Jobless Claims, but also the Philly Fed numbers, and Housing Starts & Building Permits. Friday ends with a whimper with only some numbers from the University of Michigan. We begin the week with the 10-year yielding 2.87% and agency MBS prices little changed from Friday’s rallying close.
 
 
Will Rogers, who died on August 15, 1935 in a plane crash in Alaska with bush pilot Wiley Post, was one of the greatest political country/cowboy sages this country has ever known. Some of his sayings:
1. Never slap a man who’s chewing tobacco.
2. Never kick a cow chip on a hot day.
3. There are two theories to arguing with a woman. Neither works.
4. Never miss a good chance to shut up.
5. Always drink upstream from the herd.
6. If you find yourself in a hole, stop digging.
7. The quickest way to double your money is to fold it and put it back into your pocket.
8. There are three kinds of men: The ones that learn by reading. The few who learn by observation. The rest of them have to “piddle” on the electric fence and find out for themselves.
9. Good judgment comes from experience, and a lot of that comes from bad judgment.
10. If you’re riding’ ahead of the herd, take a look back every now and then to make sure it’s still there.
11. Lettin’ the cat outta the bag is a whole lot easier’n puttin’ it back.
12. After eating an entire bull, a mountain lion felt so good he started roaring. He kept it up until a hunter came along and shot him. The moral: When you’re full of bull, keep your mouth shut.
 
 
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “With Regulations, Be Careful What You Wish For.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
 
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Aug. 11: Readers weigh in on Zillow’s acquisition, Realtors being LOs and vice versa

We know that, as an industry, we’re constantly dealing with old issues and new. In today’s commentary let’s see what some readers thought about Zillow’s move into mortgages, and re-visit regulations governing loan officers having the ability, or lack thereof, to wear multiple hats in the FHA loan process.
 
Folks weigh in on Zillow’s purchase of Mortgage Lenders of America
 
Several readers wrote in to discuss the announced acquisition, and I’ve posted a few of those letters below. Some were lengthy, others less so. (“Why doesn’t MLS cut off Zillow now?”) Readers should know that this week’s commentaries contained quotes about Zillow’s acquisition of MLOA, and those were not my own comments, but rather those of a Zillow spokesperson.
 
Here is an interesting take from Garth Graham, Senior Partner at STRATMOR Group who 20 years ago founded mortgage.com, so he sure has some background in online disruption. “Rob – Here are some comments that I would make regarding Zillow. Over 75% of all search is done on Zillow properties. It makes tools that borrowers want to use, and the adoption of the tools keeps going up. Zillow is a large driver of consumer interactions, and it will continue to be a force in driving online consumer behavior. The company is here to stay.
 
“Now Zillow is going to own a lender (or at least will after the transaction closes in a few months). A key thing to keep in mind is that its model has always been (and Zillow states will continue to be…) to provide leads on an exclusive basis. That is different from other competitors who sell leads to multiple lenders, so if you purchase those leads you are always competing with others on the platform. At least with Zillow, if you receive the lead then the lead is exclusive to you (at least exclusive other than the borrower’s inclination to keep shopping). So, from a lender perspective, would you rather receive a set of exclusive leads from an entity that also owns a mortgage company OR buy leads from other entities who are providing the leads to multiple lenders but none of the lenders who receive the leads are owned by the lead provider itself? I am not sure that choosing the non-exclusive path is really a benefit for lenders who have a proven track record of being able to close Zillow leads. 
 
“Also, I think the number of leads that the lender in KC could handle is very small compared to the vast universe of opportunities that are generated by Zillow. The other option for lenders is to find their own leads – organically – but that is a tough business to compete with Zillow who dominates Real Estate search, so you might have your own leads but at a cost that is higher than the Zillow cost per funded loan. I think lenders need a strategy to continue to grow their business, and I think Zillow is a key component of that for the foreseeable future.”
 
Rich Swerbinsky titled a piece titled, “The Zillow Bomb.” “I see this as being the first of a series of acquisitions in the mortgage lending space for Zillow, and a further catalyst for the industry towards increased online originations and reduced margins for mortgage originators.”
 
An originator wrote saying, “Rob, as I read this information about Zillow it makes me ask, ‘What would I do in their position?’ In a recent conversation with a Zillow employee, I was emphatically told that their focus was on customers who visit their website. I asked, ‘Since I’m a paying customer, shouldn’t your focus be on me?’ As a public company, their loyalty must be to their shareholders. Along that line of thought, paying customers must at least initially be a significant priority. Their recent move to become a player in the mortgage business, however, causes me to look longer term into that avenue of potential income and profit stream – from a shareholder and profit perspective.
 
“Zillow is a clever company. It uses Realtor’s data that they get for cheap to create a market to take business from other Realtors. Now it has mortgage companies paying them money (for leads) to build their mortgage business. Brilliant! And then I ask myself, if I could generate 23 million loan requests, could I make more money selling these leads for a few dollars, or would I want to make the amount of money I’m promising the brokers they can make from the leads they purchase from me?
 
“If I truly believe the Zillow lead proposition and ROI that can be generated, why wouldn’t Zillow buy a mortgage company (or companies) that have nationwide coverage and use all of those leads themselves? If NAMB and other organizations stood up to them and required long term non-compete agreements, what do you think Zillow would say? I think we all know the answer to that question. My bet is that three to five years from now we are going to be looking at a VERY different mortgage dynamic.”
 
And Aaron sent, “Your piece on Zillow barely touches on the ‘feelings’ of the real estate and mortgage community. Upon release of the news yesterday, I had several LOs contact me about their cancellation of Zillow lead programs and similar calls feeling out my thoughts by agents I work with. Zillow is increasingly moving into the exact same competitive space as the people who pay their bills. It started with buying homes in select markets as flips, and now it is financing those. All paid for by the people they are taking market share from. 
 
“Something tells me this is not going to work out well, and to look no further than the current events surrounding Facebook as proof. When the decision is made to earn profits while working against those who created your business in the first place, you will struggle to keep that revenue stream coming in. And, ultimately, that is what has made Zillow profitable — not trying to enter the space they are ultimately supporting. Everyone has heard the adage that the people in the Gold Rush who made the most money were the ones who sold the picks and shovels. Well, Zillow has decided to give up on picks and shovels and enter the mining game. And history suggests that this might not be the right move.”
 
BB typed, “There’s a new Trojan horse in town and it’s called ZILLOW. ANYONE that doesn’t think Zillow is trying to squeeze the agent and loan officer out of the buying & refinancing transaction needs to take a business class at their local community college. The Zillow responses you included in your email below are 100% BS. Zillow CEO has made it perfectly clear of his intentions. Anyone with half a brain saw this train coming down the track YEARS ago.
“If agents and loan officers want to keep funding Zillow’s take-over of the purchase and real estate market along with the MLS’s giving Zillow 100% access to all the data needed (listings) then the MLS, agents and loan officers get what they deserve. NOTE to the MLS, agents and loan officers – STOP funding and financing Zillow’s take over YOUR industry!!! Can you name one other example of an industry that gave its competition 100% access to its product (data) AND then funded the competitor’s growth and eventual takeover of the industry? This is an epic fail.”

 
Licensing
 
This topic, along with LO comp, continues to be puzzling for some. “Rob, I am hearing about people acting as a ‘hybrid’ agent. We do things by the book and have always been under the impression that you could not actively do both (and especially in the same transaction). Has there been any change in the HUD/FHA rules regarding Realtors acting as Loan Originators or vice versa?  
 
“This was from a 2013 column you wrote: ‘Sometimes I am asked, "Can I work for a lender as a loan officer and as a realtor for another company at the same time?" or, "Can a loan officer of a sponsored third-party originator also be a real estate agent?" Fortunately, there are some talented folks, and government agencies, that know the answers to these. Barbara Werth (Mortgage Training Today) wrote to HUD and writes, "I went to the reference listed in the second section, 4060.1 Chapter 2, page 6. I don’t think you can do both (as a sponsored TPO – not an Eagle lender – or ‘broker’, carrying a real estate license and mortgage originator license even if a state supposedly allows it)."
 
In HUD’s "FAQ, #7 Can I work for a lender as a loan officer and as a realtor for another company at the same time? No, FHA does not permit "dual employment" on a full or part time basis in any mortgage lending, real estate, or related field. The restriction applies to all employees who are employed by an FHA approved lender that work on FHA loans. This also applies to a lender’s "wholesale account representatives" that originate loans through sponsored third-party originators (brokers). This includes working as a real estate agent or broker for another company. A loan officer may hold a vocational or professional license in real estate but may not engage in realtor activities or make use of the license while employed by an FHA approved lender."
 
One can also visit 4000.1 I.A.3.c.ii. in the Bible, uh, I mean FHA Housing Handbook.
 
HUD also notes, "The following information is regarding if a mortgage broker can work as a real estate agent. FAQ: Can a loan officer of a sponsored third-party originator also be a real estate agent? Yes, if the sponsored third-party originator is not an FHA approved lender or an employee of an FHA approved lender. However, the loan originators of non-FHA approved entities must comply with applicable federal, state, and local requirements governing their FHA loan activities. If the sponsored third-party originator is an FHA approved lender, it is subject to the staffing and employment requirements in Handbook 4060.1, Chapter 2. FHA does not prohibit loan originators of FHA approved lenders from maintaining a real estate broker or sales agent license, as long as the FHA approved lender has controls in place to ensure the individual does not make use of their license."
 
Attorney Brian Levy with Katten & Temple, LLP contributed, “HUD has relaxed the conflicts of interest rules a bit since 2013 (see below for excerpt from Section I A. 6. f. of 2016 Guide), but the conflict remains on FHA loans. In addition to FHA conflict concerns, however, there are other issues with dual employment conflicts. “f. Conflicts of Interest: The Mortgagee may not permit an employee to have multiple roles in a single FHA-insured transaction. Employees are prohibited from having multiple sources of compensation, either directly or indirectly, from a single FHA-insured transaction.”
 
Let’s repeat that. “The Mortgagee must require its employees to be its employees exclusively, unless the Mortgagee has determined that the employee’s other outside employment, including any self-employment, does not create a prohibited conflict of interest…Employees are prohibited from having multiple roles in a single FHA-insured transaction. Employees are prohibited from having multiple sources of compensation, either directly or indirectly, from a single FHA-insured transaction.”
 
 
Thanks to Spencer D. for this one:
Manure: An interesting fact.
In the 16th and 17th centuries, everything for export had to be transported by ship. It was also before the invention of commercial fertilizers, so large shipments of manure were quite common.
It was shipped dry, because in dry form it weighed a lot less than when wet, but once water (at sea) hit it, not only did it become heavier, but the process of fermentation began again, of which a by-product is methane gas. As the stuff was stored below decks in bundles you can see what could (and did) happen.  Methane began to build up below decks and the first time someone came below at night with a lantern, BOOOOM!
Several ships were destroyed in this manner before it was determined just what was happening
After that, the bundles of manure were always stamped with the instruction, “Stow high in transit” on them, which meant for the sailors to stow it high enough off the lower decks so that any water that came into the hold would not touch this "volatile" cargo and start the production of methane.
Thus evolved the term…the acronym for “Stow High In Transit.” (You can figure it out.) It was stamped on all the bundles. So it’s really not a swear word which has come down through the centuries and is in use to this very day.
I did not know the true history of this word. I always thought it was a golfing term.
 
 
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “With Regulations, Be Careful What You Wish For.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
 
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Aug. 10: LO & AE jobs, AMC opportunity, corresp. product; corp. structure changes – M&A going bonkers

This week in Salt Lake City, mPower hosted an event at the Lenders One Summer Conference, drawing nearly 400 people. The executive panel, led by MBA’s Tricia Migliazzo, presented challenges and solutions in today’s workplace and shared insights for what it takes to lead in the mortgage industry. The session marks the 13th in-person mPower programming event for 2018. mPower, MBA Promoting Opportunities for Women to Extend their Reach, is MBA’s networking and professional development platform for women in real estate finance.
 
Employment, business opportunities, & promotions
 
A national appraisal management company is looking to acquire or partner with regional or lender-owned appraisal management companies that are looking for a competitive edge in pricing, software and business process. If your company is slowing or struggling, or you’re not sure what to do in this competitive market, we’d like to talk with you. Please contact me and I will forward your confidential note along.
 
American Pacific Mortgage is excited to announce the reset of its Production Leadership Team having recently boarded Darren Nolander, Regional VP – Southwest and Les Bedford, Regional VP – Northwest. Darren & Les, along with three additional RVP’s, are led by EVPs of Production Ned Payant & Melissa Wright. “With a passion for serving Managers and Originators, this stellar leadership team will provide solid support to our Branches, enhanced tools and resources, and growth in APM’s market share.”
 
Paramount Residential Mortgage Group, Inc. (PRMG) has recently added Michelle Lilley, Regional Vice President to its Wholesale team!  Michelle will be reporting to Alex Del Haro, Wholesale Divisional Vice President. In her new role with PRMG, she will be responsible for bringing on new talent, overseeing operations and growing market share in the Northern California region. According to Michelle, “I spend months carefully considering many factors before choosing where to land. I did the research – ask me why I chose PRMG!” If you’re located in Northern California and are an Account Executive ready to make a change, please contact Michelle Lilley (408.772.6802) to find our why she chose PRMG!
 
Seroka Brand Development announced that Amy Hansen has been promoted to VP Public Relations and Strategic Planning. Amy’s been with Seroka since 2002 and has served as Director of Client Service and Public Relations for the last 11 years, and in her new role will continue to oversee and set protocol for Seroka’s client service division, directly participate in planning the agency’s future expansion, and “mentor others in the art of delivering the level of service our clients have a right to expect.”
 
Products & services for lenders
 
There’s no doubt that times have been tough recently for independent lenders across the country. In Q1 of 2018, the MBA reported average pretax production losses of 8 basis points (a loss of $118 on each loan they originated)! To put this in perspective, only two years ago in Q1 of 2016 the industry averaged 33+ basis points! These numbers should not be surprising, but it doesn’t mean you cannot achieve greater profitability by reassessing your strategy to focus on the right metrics of your business. A great eBook from Maxwell, “3 Steps to Profitable Growth,” outlines key focus areas for lending managers to drive profitability in a challenging, purchase-heavy market. A must-read for all mortgage managers: Download your free copy here!
 
“Following Freddie Mac’s initiative, Mr. Cooper Correspondent is pleased to announce the addition of Freddie Mac’s HomeOne® program to our comprehensive menu of product offerings effective July 30, 2018. Program highlights include 3% down payment minimum, affordable option for first time homebuyers and borrowers with low to moderate income, and no income or geographic limitations. We attribute much of our success in 2018 to the recent accomplishments including the addition of Non-Traditional Credit, Modified Construction to Perm Loan Notes and Manufactured Housing products. And in development are E-Notes and Temporary Buydowns. Mr. Cooper is a premier Correspondent and Co-Issue investor and the largest non-bank servicer with a servicing portfolio exceeding $500B. For information, please contact Bryan Budd.”
 
June was a big month for Caliber Home Loans, Inc. It were listed in Scotsman Guide’s annual Top Mortgage Lenders issue at #1 for Top Overall Volume in 2017, and began offering Elite Access, a jumbo loan product that offers up to $3M with no MI requirement. “This addition to Caliber’s Portfolio Lending Suite fills a gap in the jumbo market among traditional mortgage programs. The reaction to the new Elite Access product has been favorable throughout the marketplace and the broker community. Caliber Wholesale received feedback from CEO of MBS Highway, Barry Habib, who describes Elite Access as having ‘a very high loan-to-value on high loan amounts with no MI, which makes it compare really favorably on a monthly payment to some other options that would require MI.’ See other reasons he’s impressed with Elite Access here.”
 
Corporate changes and M&A
 
Corporate changes continue, whether it is at small lenders across the nation, National MI, or last week’s news from Wells Fargo for its warehouse clients. “The Mortgage Banker Finance Group (MBFG), Wells Fargo Securities’ (WFS) warehouse lending business, is and has always been a part of the greater WFS Mortgage Finance Group. Going forward, MBFG will simply identify as WFS Mortgage Finance Group or just MFG. We are discontinuing the MBFG distinction. The Mortgage Finance Group, within the Asset-Backed Finance and Securitization Group of WFS, provides financing and capital markets solutions to entities that originate, own, or service residential real estate loans and related assets. The one MFG structure allows us to better serve our client base by bringing all the MFG financing capabilities through one MFG coverage team.”
 
Regions Bank ($122B, AL) said it will cut 500 more full time positions this year in addition to the 700 it has already eliminated as a part of company’s “Simplify and Grow” strategy.
 
Small lenders, who can’t continue to pay for on-staff attorneys, senior people heading all departments, vendor managers, etc., are interested in merging with larger lenders. Larger lenders, arguably able to weather this environment, want to find those lenders. (As a quick aside, the STRATMOR Group is interested in speaking with lenders doing as little as $20-$50 million a month, below what some M&A firms are interested in pursuing – shoot Senior Partner Garth Graham an email.)
 
Gateway Mortgage’s owners are acquiring the majority interest in Oklahoma’s Farmers Exchange Bank and will merge the lender into the depository. The Stitt Family Trusts, which collectively own all the shares of Gateway Mortgage, are purchasing an 85% stake in Farmers Exchange, which has five branches in Oklahoma. The bank has $274 million in deposits, and $321 million in assets.
 
American Mortgage Consultants (AMC), a nationwide due diligence and consulting services provider, announced a strategic acquisition of certain personnel and the operations center of Des Moines, Iowa-based The Barrent Group. In addition to this acquisition adding 50 highly skilled residential mortgage professionals to its platform, AMC also plans to hire up to 150 additional mortgage professionals within the next year for its Des Moines office.
 
Q2 Holdings  (Q2 is a leading provider of secure, experience-driven digital banking solution) entering an agreement to buy Cloud Lending Solutions (a cloud-based lending and leasing platform of choice for lenders).   
 
When it comes to financial institutions, management teams, boards and investment bankers are always trying to figure out an acceptable ROI for any possible M&A transaction. That makes sense when you consider that bank consolidation continues to grind away. When it comes to M&A, larger community banks are hot. In 2017, larger banks snapped up 34 banks with assets between $1B and $10B, according a Deloitte study and numbers from Keefe, Bruyette & Woods. That’s a 26% increase over 2016 and more than double the number of banks from that group that changed hands in 2011.
 
When it comes to sellers, banks have been driven by compliance costs, which grew by a total of just under $1B in the past 2Ys to around $5.4B. That is a whopping 24% of community bank income, according to a study by the Fed. A sizeable 97% of survey respondents who had considered buying or selling a bank in the past year said regulatory compliance costs were from moderately important to very important factors in their thinking.
 
Steve Brown with PCBB warns, “While a merger or acquisition might help your bank reach greater scale, deal with growing compliance costs and stay competitive in a fierce market, it isn’t for everyone. Acquired banks can undergo radical changes in lending practices, customer service and other factors. These can lead to customer displacement and other issues… community banks need to closely evaluate and revisit their short and long-term goals. Some may be able to diversify or augment the loan portfolio to keep growing; others may edge into growing nearby counties and still others may develop innovative products and services to attract a higher density of customers.”
 
Mortgage Compliance Magazine recently published an article written by John Guzzo, Managing Director of investment bank Berkery Noyes. The piece provides some perspective on the outlook for mergers and acquisitions (M&A) in the mortgage technology sector.
 
Lenders and banks aren’t the only ones merging or acquiring. For example, remember that KB Home is taking ownership of Jacksonville-based Landon Homes. (In fact, the builder industry has undergone a large amount of consolidation.)
 
The tally of bank M&A deals for the 2nd quarter of 2018 shows the highest deal volume in 10 quarters. Recall that when President Trump signed legislation modifying regulations imposed after the credit crisis, banks with assets greater than $10 billion immediately surged onto the radar screen as acquisition targets. That’s due in large part to the fact that the new law raises the asset threshold for systemically important financial institutions to $250 billion from $50 billion. As such, banks with assets of $25 billion on up to about $200 billion can now buy smaller banks without having to deal with onerous regulatory scrutiny and limitations as to how they deploy capital. Banks $10 billion or larger in assets will likely see a significant surge in selling in the next few years, as larger banks ramp back up their M&A activity.
 
Many banks have substantial cash on hand, and everyone wants to grow, so activity continues. Another factor is the expectation that the recent Dodd-Frank legislative rollback will likely add more fuel to a market that’s already burning. In the last few weeks…
 
Peoples Bank SB ($957mm, IN) will acquire A J Smith Federal Savings Bank ($194mm, IL) for $34.6mm in cash (45%) and stock (55%) or 1.09x tangible book. In Indiana First State Bank of Middlebury ($528mm) will acquire about $41mm in trust assets from Farmers State Bank ($706mm). PeoplesBank ($2.4B, MA) will acquire The First National Bank of Suffield ($273mm, CT) for about $60mm in cash (100%) or 2.02x tangible book. City National Bank of West Virginia ($4.1B, WV) will acquire Farmers Deposit Bank ($122mm, KY) for about $24.9mm in cash (100%). First-Citizens Bank & Trust Co ($34B, NC) will acquire Palmetto Heritage Bank & Trust ($166mm, SC) for $135 per share in cash (100%). In Washington Banner Bank ($10.5B) will acquire Skagit Bank ($922mm) for $191.1mm in stock (100%) or about 2.37x tangible book. In Ohio the Richwood Banking Co ($513mm) will acquire Home City Federal Savings Bank of Springfield ($168mm) for $31.7mm in cash (100%) or 1.55x tangible book. BofI Federal Bank ($10B, CA) will acquire $3B in deposits and 100,000 customers from Nationwide Bank ($7.1B, OH).
 
In Massachusetts bankESB ($2.1B) will acquire Pilgrim Bank ($263mm) for $53.9mm or 1.51x tangible book, Easthampton Savings Bank ($2.1B) will acquire Pilgrim Bank ($263mm) for $53.9mm in cash (100%) or about 1.51x tangible book, and State Street Bank and Trust Co. ($250B) will acquire financial data firm Charles River Systems as it seeks to increase its opportunity in wealth advisory solutions. In Florida IBM Southeast Employees’ Credit Union ($1.1B) will acquire The Oculina Bank ($342mm), and Drummond Community Bank ($520mm) will acquire Peoples State Bank ($85mm). In Texas Keystone Acquisitions will become a bank holding company and acquire the voting shares of Ballinger National Bank ($42mm), Spirit of Texas Bank ($1.1B) will acquire The Comanche National Bank ($358mm) for $55.9mm in cash (22%) and stock (78%) or 1.65x tangible book, Inter National Bank ($1.4B) will acquire Vantage Bank Texas ($551mm), American State Bank ($285mm) will acquire Texas State Bank ($137mm), and Veritex Community Bank ($3.1B) will acquire Green Bank ($4.4B) for $1.0B in stock (100%) or 2.5x tangible book.
 
In Pennsylvania Brentwood Bank ($619mm) will acquire Union Building and Loan Savings Bank ($33mm). Synovus Bank ($31.3B, GA) will acquire Florida Community Bank ($11.5B, FL) for $2.9B in stock (100%) or 2.3x tangible book. In Illinois 15-bank holding company Wintrust Financial ($29B) will acquire American Enterprise Bank ($210mm), and Athens State Bank ($132mm) will acquire National Bank of Petersburg ($150mm). The First ($2.3B, MS) will acquire Farmers & Merchants Bank ($480mm, FL) for $80mm in cash (20%) and stock (80%) or 2.06x tangible book. In West Virginia Summit Community Bank ($2.1B) will acquire First Peoples Bank ($131mm) for $25.5mm in cash (50%) and stock (50%).
 
In Nebraska Platte Valley Bank ($566mm) will acquire American Bank of Sidney ($93mm). In South Dakota Bryant State Bank ($37mm) will acquire Richland State Bank ($42mm). In Illinois First Secure Community Bank ($267mm) will acquire First Secure Bank and Trust Co ($121mm). City National Bank of West Virginia ($4.1B, WV) will acquire Town Square Bank ($450mm, KY) for $93.5mm in stock (100%) or 1.57x tangible book and acquire Farmers Deposit Bank ($122mm, KY) for $24.9mm in cash (100%). In New Jersey ConnectOne Bank ($5.2B) will acquire Greater Hudson Bank ($501mm) for $76.3mm in stock (100%).
 
Capital markets
 
Compass Analytics continues to innovate with the August update of CompassPPE™ (CPPE™), their product, pricing and eligibility engine. Their August release, the 4th major release this year, is headlined by two key features that dramatically improve the loan officer experience. The first new feature is a user-defined input screen (mobile and desktop) for LO’s to run scenarios and quote pricing even faster than before. The second major feature is prompted LO workflow automation, which seamlessly works with CPPETM pipeline monitoring to further automate and accelerate relocks and extensions as relevant data changes in the LOS.  No more stare and compare, LOS/PPE data disconnects or surprise concessions at closing!  If you’re looking for a sleek, flexible, pricing engine with built-in automation and a full-featured API library, there has never been a better time to consider CompassPPE™. Request a live demo at sales@compass-analytics.com to learn more!
 
Like Turkish currency turmoil today, increased geopolitical tension means lower rates – it is why all of us were rooting for a nuclear war a few months ago in the hope the 10-year yield would drop back below 2% and we could all keep our jobs. Seriously, as markets continued to digest the latest advancements in the trade war with China and sanctions against Russia, the U.S. 10-year yield dropped 4bps yesterday to close at 2.94%. These geopolitical tensions between the U.S. and other countries are setting the tone for markets, dwarfing any economic releases we have had this week.
 
Speaking of economic releases, yesterday we saw the Producer Price Index for final demand was unchanged in July which will help keep the market grounded in the idea that the Fed can maintain its gradual approach to raising interest rates.
 
We close out the week today with a light economic calendar, aside from the Turkish uncertainty pushing rates down. Headlines revolve around the release of the July CPI report. Expectations were for both headline and core to both increase 0.2% MoM, and they came in right on the screws . Friday starts with the 10-year yielding 2.90% and agency MBS prices +.125 versus Thursday’s close.
 
 
I was applying for Australian citizenship and the interviewer asked, “Do you have a criminal record?”
I said, “No. Is that still required?”
 
 
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “With Regulations, Be Careful What You Wish For.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
 
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Aug. 9: LO jobs, promotions, capital raises; wire fraud & training products; Zillow/MLOA Q&A; rates treading water

Lots of originators are fascinated by demographics. Every year, about 27,000 people move from New York City to Philadelphia, making that specific move one of the largest region-to-region migration flows in the United States. New York in general is often the first stop for immigrants coming to the U.S., and Philly is appealing to both young families trying to get a lower cost of living as well as immigrant populations seeking a long-term community after arrival – and the chance to spend the summer at a beach house with all your next-door neighbors from back in Philly! The number of Philadelphia residents born abroad has increased by 69 percent since 2000.
 
Jobs & promotions
 
In retail news, Mason-McDuffie Mortgage Corporation “is pleased to announce it has raised significant additional equity capital committed to our long-term growth and carry on the Mason Mac tradition that started in 1887. We pride ourselves in being a loan officer centric company and we endeavor to provide our loan officers with the best in class service and tools to help them achieve maximum success in a team work environment. Our new SWIFT Success platform is designed so our loan officers can leverage technology for their success. Swift includes Blend Digital Application and the Salesforce CRM just to name a few. We are proud to have been named a Top 10 Mortgage Company in Customer Satisfaction by SocialSurvey, along with being a Top Workplace by the Bay Area Newsgroup since 2012. If you are interested in learning more about a career, please contact Kevin Conlon (925-242-4430).”
  
 Study after study shows that company culture is a leading indicator of success, both for the company and for the loan officer. Assurance Financial is seeking high-producing loan originators who want to work with a company that believes in them, and one they can believe in. We’ve just completed three of the best months in our company’s history and a new record month of sales-yes, even in these market conditions. We’ve partnered with St. Jude Children’s Research Hospital to change lives for real, and this is your chance to make a difference, too. Sound like a nice place to work? Close more loans on time with the same effort you’re giving now. Your family deserves it. Call Paul Peters, CMB (225.239.7948). Assurance Financial is a growing full-service independent mortgage banker seeking dynamic producing branch managers and MLO teams throughout the South, Southeast, Southwest, East, and Midwest. Watch this 1-minute video now.
 
Gateway Mortgage Group, which is on track to originate $6B in new mortgages and surpass $20B in its servicing portfolio this year, recently appointed Stephen Curry as Chief Executive Officer. Curry brings more than 30 years of experience in the financial services industry to his new role and has held leadership positions at Bank of America, NationsBank and various other executive positions in Dallas, Charlotte, New York and Boston. Most recently, Curry ran Everett Advisory Partners, an advisory firm that provides corporate strategy, governance, M&A, transformational change management, compliance, information technology and operations advisory services to CEOs and Board of Directors of community and regional financial institutions. “It is an honor to have the opportunity to lead a great company like Gateway,” said Curry. “This company is full of people who are fiercely committed to enriching the lives of their customers, their communities and their fellow team members.” (See below for more Gateway news!)
 
Kimberley Veeder-Caffrey has joined Planet Home Lending, LLC as correspondent regional sales manager for the northwestern U.S., serving lenders in Washington, Oregon, Idaho, Montana, Wyoming, Alaska, and Northern California. “She’s a top-notch sales professional with a strong following because she helps customers grow their business,” said Planet Home Lending Director of National Sales-Correspondent Division Jim Loving. “I joined Planet because they have the veteran leadership, a strong balance sheet, and the ability to prosper in all market conditions,” Veeder-Caffrey said. “I also wanted to be able to offer manufactured homes, 203(k), and non-QM products that can lift volume in a purchase home loan market. You can reach her at kcaffrey@PlanetHomeLending.com or (425) 652-0029.
 
PrimeLending welcomes Danny Talia and Joe Sesi, powerhouse mortgage experts based in San Diego with a combined 50 years of mortgage experience. Danny will lead the new branch, which adds strength to the company’s already well-established Southern California footprint. Why was PrimeLending the perfect fit for Danny and Joe? The company checked every box this dynamic duo was looking for, including leadership, sustainable stability, vast product offerings, advanced technology, powerful marketing tools, and stellar operations and support. But more importantly, it was the people and the culture – PrimeLending’s relentless focus on providing outstanding service combined with a genuine team-oriented approach creates an environment in which Danny, Joe and their entire team can take their performance to the next level. What do you need to raise your game and achieve greatness? Contact Sherri White at 469.737.5743 to explore your options.
 
Services and products for lenders
 
FundingShield is pleased to announce Jerry Halbrook has joined its Senior Advisory Board. Jerry has held senior leadership roles as CFO of Prudential Home MortgageCIO of Bank of America consumer real estate and as President of Black Knight Origination Technology and Business Intelligence Divisions to name a few. “Jerry’s extensive experience, relationship network and understanding of the mortgage & real estate markets will drive strategic partnerships, product expansion and fuel further rapid growth for Fundingshield. We are excited to have a tenacious and well-connected partner who has a similar vision on the impact fintech will have on financial institutions’ bottom line, risk and operations,” shared Ike Suri, Chairman & CEO. “I am excited to work with the talented and diverse team at Fundingshield to achieve new heights assisting their rapid growth to deliver to the market need for validated & verified parties and actionable intelligence at the loan level,” added Jerry. Contact Sales@fundingshield.com or call 800 295 0135 x2 to prevent wire fraud from impacting your firm.
 
Are you challenged to build new referral partners? Are you losing the price war to your competition? Do you have the support system in place to take your business to the next level of success? If the answer is no, check out Cindy Ertman’s Mortgage Mastermind Elite (MME) coaching group starting October 2018 at www.MortgageMastermindElite.com. As one of the industry’s Top 100 Mortgage Loan Originators in the U.S. for over a decade, Cindy’s MME group brings together a vetted community of High-Performance Mortgage Professionals committed to sharing best practices, increasing their income, and expanding their referral partner network. Learn more at www.MortgageMastermindElite.com and receive her FREE training guide!
 
nmpU’s Purchase Bootcamp 2-for-1 tickets are almost gone. If you are concerned at all about the slowing market, then now is the time to act and register for the next nmpU Purchase Bootcamp Weekend Event. Taking place at the San Francisco Airport Marriott Waterfront Hotel in San Francisco on Saturday and Sunday, September 15th and 16th, originators from around the country will converge to attend this high-performance, hands-on purchase focused success program. Purchase Bootcamp is not a multi-speaker infomercial event disguised as training.  Presented by Ron Vaimberg, the President and Head Coach of nmpU, a division of National Mortgage Professional Magazine, and one of the nation’s leading leadership trainers and coaches, Purchase Bootcamp is a complete step-by-step system for increasing purchase production regardless of where you are today.  To see what others say about Purchase Bootcamp, and to take advantage of the 2 for 1 ticket purchase, visit www.PurchaseBootcamp.com. Remember to use the code “CHRISMAN” to save an additional $200 on registration.  
 
Impac Mortgage Corp. (IMC) continues to drive the NonQM marketplace. The company recently entered into a strategic partnership with a global private equity firm to sell up to $600 million of NonQM loans over the next 12 months. Based on IMC’s current NonQM growth rate, tech advancements, and product roll outs such as their new “Premier Series”, production should substantially outpace the commitment. The private equity firm is currently working on an initial securitization that is 100% backed by IMC’s NonQM loans and IMC expects to co-invest in future securitizations. The strategic partnership allows IMC to return to its securitization roots and signals the relevant private investor demand for its NonQM products.
 
Zillow
 
I keep being asked, “Will Zillow Mortgage/MLOA use Zestimate as a home’s value?” (On a serious note, what happens when the two do not match?)
 
Zillow provides a nationwide bridge to the MLS through the internet for buyers to potentially bypass real estate agents. What will happen? Agent advertising makes up nearly ¾ of Zillow’s revenue, and Zillow values the role agents play in transactions recommending that home buyers use a real estate agent, and Zillow listings include a list of local buyer’s agents. “Many home shoppers begin looking for a home online, and engage an agent later in the process, when they are ready to begin taking tours of homes, want advice about neighborhoods, or need guidance about making an offer. In fact, for Zillow Offers, we pay a commission to an agent and broker on each transaction.”
 
Will the same thing happen on the mortgage side? Will Zillow continue to send leads to mortgage lenders? The answer is yes. Zillow is not planning to make changes to the role of lending professionals in its mortgage advertising marketplace and will continue to support all its lender advertising products. “With 23 million loan requests last year, our lender partners are vital to fulfilling the needs of those consumers.”
 
Will/can Zillow’s lender contact anyone who uses Zillow for rental searches to get them to buy? Mortgage Lenders of America will be focused primarily on supporting Zillow Offers.
 
Will Zillow pre-qualify and give consumer’s information to its lender? When this transaction closes, Zillow Group will own a lender, Mortgage Lenders of America, which will pre-qualify consumers who request a pre-qualification from MLOA.
 
Will Zillow’s lender allow its LOs to broker loans out to wholesalers? Today, Mortgage Lenders of America operates as an independent mortgage banker and does not broker out loans to wholesalers. “Post-closing, we don’t expect that will change.”
 
If Zillow will send out a pre-qual letter, will that cost the real estate agent more, since that lead is pre-qualified? The acquisition isn’t expected to close for several months. You can bet that Zillow will be exploring various ways it can make Zillow Offers transactions as seamless as possible for buyers.
 
Capital markets
 
There is still a lot of Fed talk out there. Despite our Central Bank holding rates steady in the July meeting, expect another increase next month. The FOMC held the fed funds rate target steady as expected after its last meeting via unanimous decision, keeping it at 1.75-2.00% although the FOMC upgraded its assessment of the economy from the previous meeting citing strong growth in household and business spending, both of which were strong in the latest GDP data. Given the Fed’s duel mandates of full employment and price stability, the FOMC signaled the need for “further gradual increases in the target rate” to achieve those goals. Presently, the economy can be at full employment given the low unemployment rate and overall tightness in the labor market. Additionally, as measured by the PCE inflation rate, inflation is running near the Fed’s target of two percent.
 
Things are a bit slow in the dog days of summer. The U.S. 10-year closed yesterday unchanged despite trade tensions ratcheting higher with dates now set for billions in tariffs against China and new sanctions put on Russia. The sanctions are in response to the Russian government using a chemical weapon against an ex-spy and his daughter in Britain in March. As far as treasuries went, yesterday’s largest-ever 10-year ($26 billion) auction saw robust demand.
 
Today’s calendar kicked off with July PPI (expected +0.3%, it was flat, as was the core number, so lower than expected) and weekly jobless claims (expected to increase slightly, they were -6k to 213k). Ahead is June wholesale inventories are seen unchanged MoM. Finally, at 2PM ET the NY Fed will report MBS purchases for the week ending August 8. We also have some Fed speak, with Chicago Fed President Evans taking the stage. We have the 10-year at 2.95% and agency MBS prices little changed versus Wednesday’s close.
 
 
ACME Steel, feeling it was time for a shakeup, hired a new CEO.
The new boss was determined to rid the company of all slackers. On a tour of the facilities, the CEO noticed a guy leaning against a wall. The room was full of workers and he wanted to let them know that he meant business.
He asked the guy, "How much money do you make a week?"
A little surprised, the young man looked at him and said, "I make $400 a week. Why?"
The CEO said, "Wait right here."
He walked back to his office, came back in two minutes, and handed the guy $1,600 in cash and said, "Here’s four weeks’ pay. Now GET OUT and don’t come back." The fellow scampered out.
Feeling pretty good about himself, the CEO looked around the room and asked, "Does anyone want to tell me what that goof-ball did here?"
From across the room a voice said, "Pizza delivery guy from Domino.”
 
 
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “With Regulations, Be Careful What You Wish For.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
 
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Aug. 8: Ops, AE, LO jobs; digital, LOS products, 1003 products; Q&A on Zillow/MLOA deal; misc. product & UW updates

The U.S. Census Bureau knows a thing or two about numbers, and it tells us that over the 10 years from 6/30/07 to 6/30/17, the number of “renter” households in the USA increased by 8.4 million to 43.4 million while the number of “owner” households increased by just 0.9 million to 76.1 million. Over the latest 12 months, however, from 6/30/17 to 6/30/18, the number of “renter” households in the United States declined by 0.1 million to 43.3 million, while the number of “owner” households increased by 1.8 million to 77.9 million. Thanks in no small part to folks who read this commentary! There’s a spate of home vacancies across the United States, especially in cities in decline. A healthy rental vacancy rate is about 7 to 8 percent and a healthy homeowner vacancy rate is something like 2 percent. In “legacy cities” like Flint, Gary, Cleveland and Detroit, it’s enormous, about 17 percent in small cities and 15 percent in large ones.
 
Employment
 
Glassdoor is one of the fastest growing job sites with a database of millions of employee reviews on thousands of companies. Cornerstone Home Lending, a Texas based lender with 175 offices in 23 states ranks among the ELITE companies in the U.S. in terms of Employee Satisfaction with a Rating of 4.8 stars (0-5 scale). In addition, 95% of reviewers would recommend Cornerstone to a friend, 98% approve of CEO, Marc Laird, and 93% say that there’s a Positive Business Outlook for Cornerstone. These are remarkable ratings, especially given the current state of the lending industry! Go to Glassdoor Cornerstone Review for the details, AND you can also check out the employee ratings on other companies. For more information about careers at Cornerstone contact Tom Lott.
 
Yesterday the commentary had a note for ClearEdge Lending, a new direct wholesale lender of non-QM loans, who is actively recruiting account executives, operations, and credit staff to its Orange County location. I apologize for including the incorrect company link which is now correct. ClearEdge lender is entering the non-QM mortgage space with an array of industry leading, simplified and competitively priced loan products aimed at helping mortgage brokers build and scale their non-QM volumes. It has originated over $1 billion in non-QM loans since 2015 and has completed four non-QM securitizations over the past two years. For a career with ClearEdge Lending, email Matt Shaw for sales positions and Kelly Blackburn for operations and credit. 
 
Envoy Mortgage is searching for a Head of Mortgage Underwriting. “As a top mortgage employer, our growing and changing company is looking for a talented head of underwriting in Houston, TX. This is a key leadership role in our retail-focused organization that will require exceptional skill in inspiring innovation, taking quality risks and streamlining processes among Envoy’s underwriting teams. By leading a team of dedicated and experienced industry professionals, this position will have significant influence in directives and business strategies to evolve and innovate Envoy’s underwriting operations. The candidate will have a direct impact on advancing process, cycle times, systems and technology to be the best in the business while driving a top-notch work culture of continuous improvement. We are looking for a knowledgeable, energetic candidate that can provide their experience and input to our award-winning team. If you want to lead in a retail and purchase-focused, well-capitalized and forward-thinking shop, email Human Resources.”
 
Looking for a career in Wholesale? Look at Angel Oak Mortgage Solutions. Employees already know Angel Oak is a great place to build a career as industry accolades are piling up. Named a “Legend of Lending” by National Mortgage Professional Magazine, a four time winner of the AJC’s Top Workplace award, a three-time winner of the ACG Fast 40, and individual awards like Account Executive MVP Award, Elite Women 2018 and MPA Hot 100, the industry is taking notice. Employees are passionate about our service-first culture and it shows in our growth. Fresh off a record Q2 for non-QM production (up 90% year-over-year), the company is looking for Account Executives across the country.  To learn more, view the latest job openings on the Careers Page or email Regional Sales Manager, John Wise
Lender products & services
 
The “1003” should be called the “1030” because it’s missing at least 27 very important pieces of information at a minimum. “PerfectLO is designed with underwriting intelligence and asks all the right questions. Your borrower will answer them all as the questions are easy to follow and they know the answer, however they can skip any question. We all know that a completed ‘1003’ is quite useless even when completed. The real pain in your operation begins and ends with a perfect loan interview and thorough doc checklist. PerfectLO creates a spot-on doc checklist and an easy to 2-way timestamp secure upload. Also check out its new release featuring a customizable milestone notification portal to keep your borrowers and agents updated. Sign up for a free trial and demo to see why top producers love the system. PerfectLO’s online questionnaire takes a non-intimidating, logical, and systematic approach. Easy to adopt and onboard. PerfectLO is a multi-language software solution that talks to all LOSs.”
 
“If your job involves a lot of keyboard hitting then you’re less likely to have a happy future,” warned Barclay’s President Tim Throsby in a recent Financial Times article, when asked about the impact automation will have on our future. This is a concerning prediction for many LOs, particularly those who are still originating loans and communicating with borrowers the old-school way. Fortunately, Floify, the leading mortgage point-of-sale, is helping LOs make the switch to a fully-automated mortgage office and remain competitive in an increasingly digital marketplace. Coupled with an impressive suite of integrations, a brilliantly redesigned 1003, and branding options galore, Floify makes it easy for LOs to get on the leading edge of mortgage tech. If you’ve been considering bringing your mortgage operation up to speed, now is the perfect time to make the transition to this powerful automation solution. Request a demo to learn more!
 
Informative Research (IR) announced its complete integration with LendingQB’s Loan Origination System (LOS). Now, LendingQB users have access to IR’s streamlined service and can order several products including but not limited to Credit Supplements, 4506-Ts, PreClose Monitoring (UDM), Flood Reports, and their popular SoftQual solution, “which lets you pull a soft inquiry on an applicant’s credit report before pulling a hard inquiry, so you can prequalify them without triggering competition or affecting the credit score. ‘Informative Research really took the reins when it came to integrating into our LOS,’ explained David Colwell, Vice President of LendingQB Strategy. ‘Our integrations team worked very closely with Informative Research to bring out the full potential of our OpenAPIs to offer our customers a wider variety of enhanced products. Integrations like these are living proof of the value of maintaining powerful partnerships in the digital mortgage age.’” Click here to read the full article!
 
HomeScout-HBM asks, ‘What’s your plan to protect your business from the behemoths who have decided to go into the mortgage business?’ If your customers are on the HomeScout-HBM lead and conversion technology platforms, you have nothing to fear. Lenders who introduce leads and preapproved borrowers to HomeScout can protect and nurture them by monitoring their search activities, providing timely communications when they need it most; earning their trust and referral business for years to come. HomeScout provides the convenience of 100% MLS listing data, in a private search environment where buyers are protected from the pit-falls of inaccurate listings and the onslaught of unwanted solicitations from strangers who would purchase their information from public search sites. See what our proven, worry-free, lead and conversion solutions have done for thousands of loan officers by contacting them HERE  and scheduling a demo or give them a call at 952-831-0623.”  
 
Zillow/MLOA
 
The Zillow/Mortgage Lenders of America deal is causing some discussion out there. Zillow was downgraded by Bank of America on “greater risk” to profits from adding mortgage lending.
 
There were questions right off the bat.
 
“As an LO, will this relationship affect my referrals from real estate agents?” I believe you’re asking about whether this will impact Zillow’s co-marketing advertising product. Zillow intends to support all its lender advertising products as it does today – lender co-marketing, along with Connect and Custom Quotes. All those advertising products remain an important part of Zillow’s business, and it intends to support and grow that marketplace over the long term. “Zillow Group receives millions of loan requests from consumers each year, 23 million loan requests in 2017, and its mortgage partners are vital to continue to serve these borrowers.”
 
“Real estate agents try to show up on Zillow. If an agent is giving their business to another lender, will it impact Zillow’s relationship with that lender?” Real estate agents appear on Zillow by paying to advertise. Zillow’s new mortgage business won’t affect the way it distributes contacts to its network of agents, and Zillow will continue to support its advertising products for lenders.
 
“I know that builders have relationships with lenders that are legal, and that builders will offer incentives to buyers to use their lender (lower closing costs, granite counters). Will Zillow and its lender do the same thing?” The acquisition isn’t expected to close for several months. The folks at Zillow told me that they’ll be exploring various ways they can make Zillow Offers transactions as seamless as possible for buyers.
 
Underwriting updates
 
In Monday’s commentary was a note regarding conventional wholesale products for BOFI Federal Bank being discontinued. I received this note from management: “Our conforming/government product line is alive and well and in fact we’ve dedicated an entirely new wholesale channel called ‘WME: Wholesale Mortgage Express’ to originate these loans nationwide – we are expanding our wholesale footprint, not reducing it. Our existing Wholesale-Correspondent Portfolio business remains focused on originating non-conforming loans for the Bank’s balance sheet, offering a full suite of aggressively priced products including FHA, VA, Agency, Prime Jumbo, and Non-QM through a highly automated and efficient fulfillment process. Our Broker partners can choose which channel better supports their business needs, but we do not allow approvals in both wholesale channels (Portfolio and WME) due to lender paid compensation restrictions. Brokers can apply online here or through Comergence directly. For more information on our new business, please call us at 844-WME-2967.” I apologize for any confusion.
 
Mortgage Solutions Financial now requires a minimum FICO of 640 when using gift funds for all loan programs. Effective with submissions on and after August 1, 2018 and loans funded September 1, 2018. Loans in the pipeline with gift funds and FICO < 640 must fund by August 31, 2018.
 
MWF Jumbo RC & R90 program updates include maximum loan amounts increases for multiple Jumbo RC programs. New maximum loan amounts for Primary & 2nd Home Purchase & Rate/Term to $2,000,000 and cash Out to $1,500,000. Refer to the updated MWF Jumbo RC Product Matrix for complete guideline information.
 
Capital markets
 
Stock market moves don’t drive interest rates, but yesterday the U.S. 10-year closed the day up +3bps to 2.97%, taking a cue from across the Pacific as Chinese equities climbed off their lowest levels of the year. Speaking of China, and we have been doing a lot of that lately, there was a slight cooling in rhetoric from both the U.S. and China, which allowed for yesterday’s selloff. Today’s market moves will also be impacted by Asian headlines as the Bank of Japan will release a summary of opinion later today from its July 30-31 meeting, at which it tweaked elements of its stimulus policy to make it more sustainable.
 
Not that U.S. economic news seems to move rates much for the last few months but circling back to a few economic releases of note yesterday, the Job Openings and Labor Turnover Survey (JOLTS) showed that job openings increased to 6.662 million in June from a revised 6.659 million in May. Consumer credit increased by $10.21 billion in June, falling short of expectations on top of a revised $24.26 billion increase from May. Finally, revolving credit decreased by $0.2 billion from May to $1038.75 billion, only the third decrease in almost five years.
 
Today’s light calendar kicked off with the MBA weekly mortgage applications for the week ending August 3: -3%, a 19-month low (refis down 5%). The only other release today is the EIA Weekly Petroleum Status Report for the week ending August 3. We start with rates little changed (yawn) from Tuesday’s close: the 10-year is yielding 2.97% and agency MBS prices are unchanged.
 
 
(Warning: don’t read this if you’re easily offended by…whatever.)
Sport of choice by males
1. The sport of choice for the urban poor is BASKETBALL.
2. The sport of choice for maintenance level employees is BOWLING.
3. The sport of choice for front-line workers is FOOTBALL.
4. The sport of choice for supervisors is BASEBALL.
5. The sport of choice for middle management is TENNIS. 
And…
6. The sport of choice for corporate executives and officers is GOLF.
THE amazing fact is, the higher you go in the corporate structure, the
smaller your balls become.
There must be a boat load of people in Washington playing marbles.
 
 
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “With Regulations, Be Careful What You Wish For.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
 
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Aug. 7: Ops, AE, LO jobs; recruiting, digital products; training & events; Zillow to acquire Kansas’ MLOA

People sometimes ask me how many loans underwriters or closers are doing these days. I turned to the MBA and the STRATMOR Group for hard numbers. Based on the last round of the MBA and STRATMOR Peer Group Roundtable (PGR) benchmarking program, the average applications per retail underwriter per month was 34 for the mid-sized independents. This translates just under 2 files per day. For the same group and same period, the average closer closed 34.5 loans per month.” (Contact Nicole Yung for details about participating in the next set of peer group sessions.) While we’re on metrics, nonbank mortgage lenders and brokers employ 345,400 people, according to the Bureau of Labor Statistics. In comparison, non-depositories employed 339,600 people 12 months earlier.
 
Employment & promotions
 
Freedom Mortgage Corporation is one of the nation’s largest non-bank full service mortgage companies. It is a leader in conventional and government-insured lending and ranked as a top 5 residential lender (Source: IMF, 2017). “We are actively recruiting seasoned, proven Wholesale Account Executives in the following markets: California, Kentucky, New Jersey, Pennsylvania, and in the following cities: Nashville, TN, and Atlanta, GA. To learn more about growing your business with a market leader, contact Cheri Brousseau to schedule a conversation with one of our Wholesale Regional Vice Presidents.”
 
ClearEdge Lending, a new direct wholesale lender of non-QM loans, is actively recruiting account executives, operations, and credit staff to its Orange County location. The lender is entering the non-QM mortgage space with an array of industry leading, simplified and competitively priced loan products aimed at helping mortgage brokers build and scale their non-QM volumes. “With agency originations and margins declining, mortgage brokers are looking for new avenues of business,” says ClearEdge CEO Steve Skolnik. “Backed by our local full-service branch business model and end-investor driven capital, ClearEdge’s easy-to-follow and competitively priced loan programs are an excellent way for brokers to expand into non-QM lending.” The company has a solid foundation built on substantial investment capital. It has originated over $1 billion in non-QM loans since 2015 and has completed four non-QM securitizations over the past two years. Those interested in a growth-oriented career with ClearEdge Lending should email Matt Shaw for sales positions and Kelly Blackburn for operations and credit. 
 
Study after study shows that company culture is a leading indicator of success, both for the company and for the loan officer. Assurance Financial is seeking high-producing loan originators who want to work with a company that believes in them, and one they can believe in. We’ve just completed three of the best months in our company’s history and a new record month of sales-yes, even in these market conditions. We’ve partnered with St. Jude Children’s Research Hospital to change lives for real, and this is your chance to make a difference, too. Sound like a nice place to work? Close more loans on time with the same effort you’re giving now. Your family deserves it. Call Paul Peters, CMB (225.239.7948). Assurance Financial is a growing full-service independent mortgage banker seeking dynamic producing branch managers and MLO teams throughout the South, Southeast, Southwest, East, and Midwest, U.S. Watch this 2-minute video now.
 
Lenders One Cooperative, a national alliance of independent mortgage bankers, announced that Michael Kuentz has been promoted to the role of Chief Executive Officer of Lenders One by its Board of Directors. Mr. Kuentz previously held the title of President and going forward will assume responsibility for Lenders One’s day-to-day operations and strategic execution as well as continue to lead and manage the cooperative’s sales effort. Congrats!
 
Lender products and services
 
The industry is on the move!  It’s vital to find the right producers for your organization – the first time. By becoming a strategic growth partner, Model Match can get you meetings with the right candidates, guaranteed!  If you’re looking to get in front of quality originators that are matched to your company profile and production requirements, we are the partner for you! Model Match is changing the way the industry recruits and providing visibility into the process like never before. Ready to increase your production and bottom line? Model Match can help!  CLICK HERE and let us show you how. Model Match is at it again, sharing our headhunting secrets and creating value for the industry through our FREE monthly educational series.  Please join us Wednesday, September 12th at 1pm EST as we discuss, "Cold Call Reluctance: And Why most Fail: A Deeper Dive"  CLICK HERE to register.
 
What does XINNIX have in common with the Miami Dolphins, Oakland Raiders, and Jacksonville Jaguars? They’re each a part of the story of Mkristo Bruce, XINNIX Certified Originator. A former NFL player, Mkristo transitioned into the mortgage industry less than 2 years ago. After plugging into ORIGINATOR, XINNIX’s proven process for developing new loan officers into powerful producers, Mkristo closed $24M during his first year of production and made his company’s President’s Club! CLICK HERE to hear his full story on Inside the Mortgage Mind, a XINNIX Podcast. If you’re interested in being part of this dynamic team that leads mortgage professionals in every stage of their career to incredible success, CLICK HERE. There are open positions in the Midwest, Southeast, and Texas.
 
Total Expert announced the release of Expert Content, a powerful and comprehensive set of marketing content designed to help lenders and banks increase marketing and sales velocity. Fueled by input and best practices from some of the nation’s largest lenders and banks, Expert Content empowers salespeople to increase production by enabling best of breed web, social, email, print and video content and campaigns. Leveraging cutting-edge personalization and automation, Expert Content delivers the right message at the right time to the right person which helps producers acquire and convert leads, capture repeat business and develop and maintain business relationships with partners. “The team at Total Expert listened to our needs, and have created a high quality, professional plan for multichannel content and campaigns – even allowing many opportunities to customize, edit and make our own.” said Jena Norton, Senior Marketing Manager at J.G Wentworth Home Lending.“ These are truly best practices in action.” Read more about Expert Content here.
 
Back by popular demand, we’re giving you exclusive access to a new eBook, “The Digital Mortgage Buyer’s Guide” that was released a few weeks back. For executives and managers, software shopping can be a daunting and unfamiliar task. Without the right shopping strategy, it’s easy to make a decision that could come back to haunt you down the road. This eBook shines light on this process, touching on questions to ask and areas to focus on for those considering adopting new digital mortgage technology in their business. An exclusive to Rob Chrisman subscribers today (and a must-read for all lending managers), Download your complimentary copy here.
 
Upcoming events & training
 
Have you registered for Usherpa CRM and Sales Boomerang’s joint webinar yet? Tomorrow this information-packed webinar will offer actionable advice about how to leverage artificial intelligence to more easily build authentic relationships with clients and prospects — you don’t want to miss it! With AI in your tool belt, you’ll know exactly the right time to connect personally with your contacts for maximum effectiveness. Don’t you want to save time, build stronger relationships, and close more deals? Then make sure to register now, before it’s too late!
 
Caliber Home Loans, Inc. is hosting the first of two webinars today at 11:00AM CST for its wholesale brokers who want to hear about the new Elite Access program! Elite Access can provide borrowers with up to $3 million in funding with no Mortgage Insurance (MI) requirement. Elite Access provides brokers an exciting opportunity to offer a financing solution to your “just miss” jumbo borrowers. Please join us for this INTERACTIVE SESSION with John Gibson, Head of Wholesale, and Will Pendleton, SVP Wholesale Lending. To accommodate as many brokers as possible, Caliber is hosting a second webinar on Wednesday at 3:00PM CST. Register for either webinar here!
 
Why you should be texting customers in 2018! The way that consumers communicate is different. No longer will phone and email be enough way to maintain contact and interact with your customers. Today’s consumer is much more comfortable communicating via text or other messaging apps. Businesses that aren’t catering to these differing communication preferences could be left behind. On Thursday, August 9th at 2:00 PM EDT National Mortgage Professional along with Podium we will discuss in this complimentary webinar how using messaging to augment your service will significantly boost your customer service, while vastly improving your retention. They’ll also give you tips and tricks for implementing a messaging strategy that works best for your business. To learn more or sign-up for this complimentary webinar, please follow this link.
 
“Want to grow your business? HomeReady can help. Now is the perfect time to learn how HomeReady® mortgage can help more of your low- to moderate-income borrowers become homeowners with as little as 3% down. Join us on August 16 at 2 p.m. ET for a live webinar geared toward loan officers (but open to all lenders and housing professionals). This webinar will demonstrate how HomeReady features can help you serve more borrowers and close more loans. We’ll also discuss flexibilities specific to HomeReady and leave plenty of time to answer your questions. Register today.
 
Join Matt Coles, Plaza’s Southern California Sales Manager, on August 9th as he leads a “virtual” roundtable discussion with participants on strategies for using technology in your sales approach to help you better leverage technology tools in today’s competitive environment.
 
Join Citadel’s Will Fisher, Senior Vice President, Sales and Marketing on August 9th, for a webinar to learn about Citadel’s better programs for non-prime borrowers.
 
FAMC has posted its August 2018 Wholesale “Customer Training Calendar”.  This month’s calendar offers a variety of training opportunities such as Mortgage Fraud, Working Virtual, Leverage the Power of Social Media: Lower Risk and Protect your Reputation, Next Generation Marketing and Sales, and Loan Officer’s Checklist for Success.
 
Arch MI’s August complimentary’ webinars on topics such as loan processing, appraisals, analyzing tax returns are available for registration.
 
On August 22nd, MTAM is offering a free webinar featuring MERS and Lender Price “Where is the E Mortgage” with Dawar Alimi and Amy Moses.
 
There is still time to register for the MMLA Annual Lending Conference, August 15th – 17th, held at Crystal Mountain Resort in Thompsonville, MI.  
 
AmeriHome’s underwriting management team will be offering Core Jumbo webinars on  Tuesday, August 14th and Tuesday, August 28th.
 
Zillow
 
Zillow is launching a suite of property management tools that lets consumers apply for apartments and pay for rent.
 
But that’s not all those clever folks at Zillow Group are up to. Not only is Zillow well-licensed up, but Zillow Group has entered into a definitive agreement to acquire Mortgage Lenders of America, a consumer-direct mortgage lender based in Overland Park, KS to support mortgage origination for today’s consumers who purchase a home through Zillow Offers.
 
Unfortunately stock analysts didn’t care for the news, and Zillow’s stock plunged.
 
“A little over a year ago, Zillow Group began testing a home-selling option for homeowners who want a certain and predictable sale on their timeline. Homeowners in participating markets can request an offer from Zillow by providing their address and answering some questions about their home. Zillow reviews the home details and local market conditions, then responds with a cash offer within a few days. This is consistent with Zillow Group’s strategy to create a better home-buying experience by building products that ease and simplify the transaction.
 
“We will continue to support all of our lender advertising products as we do today. Our advertising products for lenders – Connect, Custom Quotes and lender co-marketing – remain an important part of our business, which we intend to support for the long term. With 23 million loan requests from consumers in 2017, our mortgage partners are vital to fulfilling the needs of those consumers in the future.”
 
Capital markets
 
It was another snoozer of a summer day in the bond market yesterday. The 10-year closed yielding 2.94% yesterday as China’s state-run media intensified criticized President Trump of turning international trade into a zero-sum game. This comes after the Chinese government moved on Friday to cushion the yuan after a record string of weekly losses saw it approaching the milestone of seven per dollar.
 
Last week our Fed/Central Bank weighed in, and this week the markets will now shift their focus toward the slew of other central bank decisions. The latest decision from the Bank of Japan was released (the central bank will permit its 10-year yield to trade a bit more widely, tweaking the long-term interest rate component within yield curve control language). The target rate in the June statement was zero percent for 10-year JGBs, and there is talk that it may be allowed to move higher or subscribe to a range. Today’s Reserve Bank of Australia meeting is forecast to produce no change in either the record-low cash rate or the long-term guidance.
 
Today is slightly busier on the economic calendar than yesterday. First up is Redbook same-store sales for the week ending August 4 at 8:55am ET. June job openings from JOLTS will be released at 10AM ET with expectations for an increase of 66k to 6.704 million, which if realized would be the second highest on record (April: 6.840 million). Tuesday commences with rates doing little versus Monday’s close: the 10-year is at 2.95% and agency MBS prices are basically unchanged.
 
 
My neighbor knocked on my door at 2:30am this morning. Can you believe that? 2:30 am?!
Luckily for him, I was still up playing my bagpipes.
 
 
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “With Regulations, Be Careful What You Wish For.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
 
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Aug. 6: Business opportunities; subservicer product; conv. conforming changes from lenders & investors everywhere

In July I was fortunate to spend time in Colorado, Hawai’i, Nevada, Utah, and California, and I look forward to time in Illinois, Montana, Virginia and Utah during August. As I visit with different groups, inventory and affordability continue to be issues, as well as down payments. Forbes came out with a list of 30 state programs around the nation to assist with down payments, or have no private mortgage insurance. Along those lines, HUD’s latest definition of the “low” income level to qualify for certain affordable housing programs stands at $117,400 per year for a household of four people in Northern California’s San Francisco, Marin and San Mateo counties.
 
Business opportunities
 
A national title Insurance agency in New York State is looking for a partner to increase its sales. The title and escrow agency has been around for over 12 years with a staff of 12 including two attorneys. “The ideal partner is someone with many banking and real estate connections looking to either merge, joint venture or become partners with the sole principal of the title agency. This individual or company understands the profitability within the title industry and is looking to get involved on the title side. It’s a dream scenario for someone(s) to walk in here and use this national platform to get involved in the title industry.” Interested principals should send a confidential note of interest to me and I will pass it along to the president of the company. Please specify opportunity.
 
“We’re looking for partners.” “Let’s face it, the old mortgage business we knew is never coming back! We recognize that volume and margins are down, but our expenses are up! The reality is that many groups are going to have to join forces to survive this extremely competitive business. We are a multibillion dollar bank in Texas with a very strong balance sheet with all the agency approvals and a great customer service infrastructure that understands the mortgage business. We have the platform, but we need the production. So, if we join forces, utilizing each other’s strengths, we want just to survive, but we will all thrive! We need each other more than ever! If you are interested in making a very strategic decision that could positively affect your future, contact Rob Chrisman to forward your note and have a confidential discussion.”
 
Lender products & services
 
Len Patton CMB, a 20 year industry veteran, is now SVP of Business Development for Specialized Loan Servicing. SLS, part of the Computershare Group, is one of the nation’s highest-rated mortgage servicers. Len will be responsible for working closely with Capital Markets Cooperative’s Patrons, as well as other mid-market banks, credit unions, and independent bankers, searching for an industry-leading subservicing solution. Len can be reached here or by cell (904) 504-3268.
 
“Let’s be honest. Networking can suck. But it’s necessary in this business of ours, which is why on Thursday, August 9th from 10-11 AM PST/1-2 PM ESTSierra Pacific Mortgage is providing a free webinar called ‘The Networking Playbook: How to Strategically Navigate the Room & Score Big Time!’ This free, engaging, info-training course focuses on how to make networking less awkward, less sales-y, and a much better use of your time. And all you have to do to register is click here. Make networking your thing and start cultivating relationships that generate sales in your future.
 
Fannie & Freddie news in the primary markets
 
Despite the industry’s continuing best efforts, GSE (government sponsored enterprise – namely Freddie Mac and Fannie Mae) reform this year is unlikely, especially with an election three months away. And the history of the sweep of their profits into the government coffers. Lending veterans know that not everyone who wants to own a home should own a home, and not everyone who applies for a loan is going to be approved. But the National Association of Realtors believes GSE reform is important to increasing home ownership. (Anyone remember HUD’s mandate to FNMA/FHLMC to buy poor loans and increase the home ownership percentage?)
 
NAR hosted a roundtable event a while back examining the scope and status of comprehensive Government-Sponsored Enterprise, or GSE, reform. Isaac Boltansky, director of policy research with Compass Point opened the event. “It is deplorable that Congress has left the GSEs in conservatorship for 10 years, but it isn’t all bad news. There have been meaningful administrative improvements that have made the system safer and have advanced the debate. As a result, the broader policy conversation has shifted from a consideration of remaking the mortgage finance system to an acceptance that a package of narrower reforms could suffice. Effectively, we’ve gone from consideration of tearing down the whole house for a rebuild to the belief that we should just tweak the house’s plumbing and do some landscaping.”
 
David M. Dworkin, president and CEO of the National Housing Conference, commented on the necessity, and corresponding complexity, of enacting comprehensive housing finance reform.
“Housing finance reform remains the single largest unfinished business of the housing crisis. The failure of Fannie Mae and Freddie Mac, the taxpayer bailout and repayment that followed, and their unresolved conservatorship continue to demand final resolution, even if Congress does not,” he said.
 
Recall that the Administration put out a proposal to remove the federal charter from statute and fully privatize the GSEs and called on policymakers to decrease the federal subsidies supporting housing by reducing the role of Freddie Mac and Fannie Mae in the housing market. Good luck.
 
Freddie Mac’s Bulletin 2018-12 updates lender credit requirements, leasehold estate requirements, Delivery instructions for: Automated collateral evaluation appraisal waivers, Homeownership education and the Uniform Loan Delivery Dataset (ULDD) specification addendum.
 
In early July Chase Correspondent removed several overlays for its clients.
 
Plaza Home Mortgage will be offering Freddie Mac’s HomeOne Mortgage  program starting July 30th. HomeOne’s eligible terms in our Conforming Fixed program provide 97% financing under a Freddie Mac program for borrowers whose income exceeds Freddie Mac’s Home Possible income limits. Plaza also offers 97% financing on Fannie Mae’s standard and HomeReady programs as well as Freddie Mac Home Possible.
 
BoI Federal Bank Wholesale has discontinued its Conforming product line(s). As a result, these products will no longer be offered in the Optimal Blue system. Customers utilizing this content for proprietary products have six months from 7/23/18 to reconfigure eligibility/adjustment sourcing.
 
The UCD mandate is in effect and, if you’re still figuring things out, Fannie Mae can help you ensure your Uniform Closing Dataset (UCD) file submissions are successful. Watch this quick overview video about UCD and visit the UCD page and the UCD Collection Solution page for more information. You can also Email the UCD team if you have additional questions.
 
In reference to the Fannie Mae published Selling Guide Announcement SEL-2018-05, AmeriHome is reminding lenders that it does not purchase loans secured by manufactured homes or HomeStyle loans.
 
PennyMac Correspondent Group has posted a new announcement: UCD Requirement Reminder.
 
Citibank Correspondent Lending continues to make changes, and I found this posted bulletin on conventional conforming loans I’d missed mentioning from January 19th. My apologies.
 
Fifth Third Correspondent Lending’s recent Communiqué addressed Loan Product Advisor (LPA) enhancement to now calculate the additional required reserves when the subject property is a second home or investment property. These are no longer required to be a manual calculation and doing so will result in an over-calculation of required reserves. This update applies for Loan Product Advisor (LPA) only.  Loans using Loan Prospector (LP) still require a manual calculation for the required additional reserves.
 
For all DU approved conventional loans, PennyMac is aligning with the various updates in Fannie Mae SEL 2018-05 and DU Release Notes 6.23, Read its release notes for details.
 
The Fifth Third Correspondent Seller Guide Underwriting Guide has been updated to support the changes in Fannie Mae’s DU Version 10.2 release the weekend of June 23rd. These changes will apply to new loan casefiles submitted or resubmitted to DU on or after the weekend of June 23rd. In addition, effective immediately, the Fifth Third Conforming and Jumbo product Flipping Policy has been eliminated.
 
Arch MI has outlined its position on the topics covered in Fannie Mae Announcement SEL-2018-05. Review its Customer Announcement for details.
 
Mountain West Financial Wholesale has updated it Conventional guidelines 6.9.15 regarding use of business funds. When a borrower intends to use business assets as funds for the down payment, closing costs, and/or financial reserves, a business cash flow analysis must be performed to confirm that the withdrawal of funds will not have a negative impact on the business.
 
Mountain West Financial has revised its Delegated Mortgage Insurance (MI) requirements to now offer delegated MI on LTV’s above 95%, with a maximum LTV of 97%. All other Delegated MI requirements currently remain the same.
Effective immediately, M&T Bank Correspondents’ Fannie Mae HomeStyle product pages are updated to reflect that interim inspections performed by a HUD consultant may be completed on a HUD Draw Request Form (HUD-9746-A) as oppose to an FNMA Form 1004D. All final inspections, whether completed by an appraiser or consultant must be completed on FNMA Form 1004D and state the project is completed in full.
 
Franklin American Mortgage Company, a division of Citizens Bank, N.A. announced it has removed multiple previous overlays on Conventional, FHA, and VA products, effective immediately.
 
Plaza Home Mortgage now offers the Freddie Mac HomeOne Mortgage.
 
MWF Wholesale posted underwriting guideline changes to allow Delegated MI on standard conforming with LTVs up to 97%. These updates have been implemented within its UW Manuals/Product Matrices.
 
MFW Wholesale is now offering the Freddie Mac HomeOne Mortgage. Review its Conforming Product Matrix for complete guideline details.
 
Ditech Financial announced the Fannie Mae Student Loan Cash Out Refinance feature, a cost-effective alternative to use existing home equity to pay off student loan debt. This feature provides the opportunity for borrowers to pay off one or more student loans through the refinance transaction, potentially reducing monthly debt payments. To register, contact the Ditech Lock Desk at 877-700-4622, option 5. The cash out loan level price adjustment will be waived, and loan will be subject to review prior to purchase to confirm eligibility.
 
Fannie Mae has revised AAA matrices to include the foreclosure-related title cost guidance issued June 6, which is effective for referrals on or after Sept. 1. Please note that the title search allowable cost and/or title update standard excess cost may have changed. To view the updated matrices, visit the Excess Attorney Fee/Cost Guidelines page.
 
On Aug. 18, Fannie Mae will update Condo Project Manager™ (CPM™) to align with the June 5 changes to its condo policies and to enhance the user experience by providing links to applicable Selling Guide policy. To accommodate the update, CPM will be unavailable from Saturday, Aug. 18 at 5 a.m. ET until Monday, Aug. 20 at 7 a.m. ET. For more information, review the release notes on the CPM page.
 
The Desktop Underwriter® (DU®) validation service Frequently Asked Questions (FAQs) have been updated to incorporate four new FAQs, three about Verification of Employment (VOE) and one about Verification of Income (VOI). These questions have been added to provide clarity around the time-sensitive VOE and VOI requirements and options for re-verification.
 
Wells Fargo Funding updated its Seller Guide to clarify that Fannie Mae HFA Preferred, Freddie Mac HFA Advantage, and any other HFA programs are ineligible for purchase.
 
Capital markets
 
Despite JPMorgan’s CEO Jamie Dimon suggesting that the 10-year yield will hit 5%, rates dropped on Friday, including the 10-year closing 3bps lower at 2.95% after the release of a July Employment Situation report. (It missed headline estimates.) In addition, the markets were forced to digest news indicating Chinese officials have prepared a list of $60 billion worth of U.S. goods that may become subject to new tariffs. In addition to the jobs report on Friday, we saw the U.S. trade deficit widen to $46.3 billion in June, a wider figure than expected as June exports were $1.5 billion less than May exports while June imports were $1.6 billion more than May imports. On a positive note, the year-to-date goods and services deficit is up $19.6 billion, or 7.2%, from the same period in 2017, pre-trade war. Finally, the ISM’s Non-Manufacturing displayed a cooling off that could feed expectations for a slowdown in third quarter real GDP growth. 
 
This week’s calendar starts with a slow Monday: today we only have the July Employment Trends Index at 10am ET. Tomorrow, things pick back up with JOLTS job openings, June Consumer Credit, and a monetary policy decision from the RBA. Wednesday, we have the usual Weekly MBA Mortgage Index and weekly crude inventories before PPI, claims figures, and Wholesale Inventories on Thursday. The week concludes with July CPI figures and Treasury Budget on Friday. We start Monday with agency MBS prices nearly unchanged from Friday’s close and the 10-year yielding 2.95%.
 
Numbers can be misleading. Statistically, 6 out of 7 dwarfs are not Happy.
 
 
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “With Regulations, Be Careful What You Wish For.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
 
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)