News

Oct. 20: Straight talk on lending environment; primer on manufactured housing: definitions, primary, secondary markets

When is residential lending a “piece of cake”, a “walk in the park”, or “a cake walk”? Never. There is always uncertainty in the future, always challenges and competition in the present. Yet the industry will help borrowers with about $1.5 trillion in residential loans this year, and something north of $1 trillion next year, assisting borrowers in an efficient, compliant manner. Business models are shifting, however. Why?
 
I received this note from James Johnson. “Rob, there have been a number of postings in your recent commentaries about how tough the mortgage market is today, and I would like to share a few of my thoughts with you and your readers. These are directed to both company owners as well as production teams. For starters, I don’t see anything on the horizon that is going to lead to a quick turnaround, with the possible exception of a big drop in rates. It is possible that we will see another Central Bank bailout in the next year or two that leads to some sort of refi boom, but barring that, this market of shrinking volume and margins will be with us for quite some time. By that I mean 3-4 years, maybe longer.
 
“No doubt we are in a bear market for rates and people should be thinking about what happens when rates hit 6% in the next year or so, because that is where we are headed. Unless you were in the business prior to 1983 you have never seen a bear market, and I can tell you from experience, it is not much fun. Thirty plus years of falling rates created a whole series of excesses that are being corrected right now. I am finding too many company owners employing their bull market strategies in this bear market, and I think that is a very dangerous game plan. Bigger companies have their struggles, but I see the smaller companies ($1 billion and less annual) as being particularly vulnerable, They must staff every operations function without enough units to create any efficiency, a model that many are questioning. This operating leverage (fixed costs) will be brutal in Q4 and Q1, 2019.
 
“In many cases I think that owners of the smaller companies might be better off going back to being brokers and eliminating most of their operations expense. Or they can go the other direction and try to affiliate with a bigger company. Staying where they are today in no man’s land is probably the toughest route. The whole market is rolling up to capital, scale, technology, and cost efficiency, and not much doubt about that. In many cases owners could affiliate and eliminate most of their risk, take their capital out, and make more money with fewer headaches over the next few years. That should be compelling. The same is true for production teams, as they should be seeking scale and technology to compete going forward.” (If anyone would be interested in talking about this further or looking at your options, contact James Johnson.)
 
Manufactured housing in the primary & secondary markets
 
Recently I heard someone joke, regarding any house built in a factory, “Hey, if there’s a dog on a chain in the appraisal photo, or a license plate, we’re not going to lend on it!” But there is a lack of inventory of traditional stick-built homes available. With sales still decent many analysts believe that the market could be poised for a dramatic increase in manufactured housing. Creative and innovative companies are building manufactured housing today that rivals the quality of more traditional homes. Fortunately, homebuyers and originators are seeing an increase in financing options for this type of housing, as well.
 
I was fortunate to have spent some time last week in Washington DC with Dr. Lynn Fisher. (Most know her from her days on the economics team at the MBA. She is now Resident Scholar, Codirector, AEI Center on Housing Markets and Finance.) She observed, “The belief that housing can be produced more efficiently than is currently done is not a new idea at all. In fact, Americans have experimented with alternate ways of producing homes since at least the mid-1800s when sectionalized houses helped them to expand westward. But attempts to fully modernize and industrialize the production of housing have never had staying power. Over the last decade, we estimate that 87% of new homes, including mobile and manufactured housing, were built on-site and not in a factory. That number, however, ignores the extent to which prefabricated components are increasingly used in on-site construction – for example, window and door assemblies, prefabricated trusses and structurally insulated panels.
 
“In 1971, two scholars wrote in a report to the President’s committee on Urban Housing that the, ‘popular literature is filled with charges that the construction industry is inefficient and that it consciously inhibits cost saving innovations’ (Burns and Mittelbach, 1971). While the report, and many since, partially refute the claim about low productivity growth in housing construction, it seems fair to say that perceptions of homebuilding in the U.S. have changed little. A June 7, 2018 New York Times article proclaimed that the, ‘global construction industry is a $10 trillion behemoth whose structures determine where people live, how they get to work and what cities look like. It is also one of the world’s least efficient businesses’ (Dougherty 2018).
 
“Despite such claims, there is a lot going on in housing construction, and some if it could truly be game-changing. For example, next week at AEI’s Seventh annual AEI-CRN conference on housing markets and finance, we’ll be hearing from Jason Ballard of ICON. His company is developing the technology to allow 3D printing of houses. We’ll also hear from Jerome Smalley of Blueprint Robotics whose company, as the name suggests, is using robotics to flexibly produce a wide range of housing designs in its factory
 
Dr. Fisher’s note went on to clarify some definitions. “In addition to site-built housing, a surprising variety of off-site housing production techniques have been tried in the US (and around the world) over time. We distinguish between two main groups of off-site production: manufactured or mobile homes on one hand, and panelized and modular housing on the other. In the case of manufactured homes (called mobile homes before 1980), the home has a chassis for over road travel and is built to the national Housing and Urban Development (HUD) building code first established in 1976 for such housing (confusingly also called HUD-code housing). By contrast, panelized or modular housing is at least partially built in a factory setting, must meet state and local building codes and typically does not have a chassis for towing. Panelized housing is usually shipped from the factory as components (floor systems, wall panels and trusses) to be assembled and completed on-site, whereas modular housing is typically shipped in three dimensional sections connected together at the site.”
 
Lynn mentioned one great (failed) example. “Following World War II the need for housing, a scramble to re-purpose the industrial war machine and a massive government intervention combined to spur the next boom in prefabricated housing firm start-ups even as on-site homebuilders continued to learn how to take advantage of economies of scale, as famously demonstrated by Levitt and Sons.
 
“The Lustron Corporation was a poster child of this era both in its massive government backing and the extent of its attempt to industrialize the homebuilding process. It invested more than $39 million in capital, the clear majority of which was financed by the national Reconstruction Finance Corporation (RFC), to produce a projected 100 homes a day out of porcelain enameled steel (both inside and out) in a former aircraft factory. Its government backing was highly controversial, its start-up delayed and its products launched during the 1949 recession. The RFC called its loan for a variety of reasons and as Carl Koch relates, almost as soon as it started producing homes, ‘the Lustron Corporation hoisted sail, and moved slowly and majestically into receivership’ (1956), It produced just over 3,000 homes.” Thank you, Lynn!
 
We’ve had advancements in robotics so fewer skilled workers are required in the building process. The final delivery and assembly of the homes, however, is done locally (skilled labor, plumbers, electricians, mason, landscapers) thus supporting the local economy.
 
Anne Elliott and Don Elliott, Jr. thought it important that lenders and investor know the terminology involved in the factory-built housing industry, and the associated risks. “Manufactured houses are built in a factory. Double-wides and triple-wides are too wide to be hauled on a trailer down the highway so are assembled on-site. Single-wides, double-wides and triple-wides (typically 16’, 32’ and 48’ in width respectively) are typically rectangular. Houses with more complicated exterior footprints are most costly to build. Inexpensive stick-built houses may also be rectangular, but usually differ from factory-built because they have non-standard width. 
 
“Loans on manufactured housing are considered higher risk than stick-built housing for multiple reasons. Loan performance is poorer. The average borrower has a lower credit score and more problematic credit. Most manufactured housing is less durable and shows wear earlier than stick-built housing. Consequently, value depreciates like automobiles rather than appreciating like stick-built housing. In most areas, manufactured homes are less marketable. Much of the public does not distinguish between trailers and manufactured homes, despite the latter being permanently attached to a lot.
 
“Permanent attachment may be impermanent. Appraisers and servicing agents tell stories of arriving at an address and discovering an empty lot where a manufactured house once stood. Stick-built houses are capable of being moved from one lot to another, but manufactured housing can be moved more easily. Documentary requirements on manufactured housing (principally title- and appraisal-related) are complex.
 
“Manufactured housing may be an affordable option in an appreciating market, but value suffers in a depreciating market when borrowers can afford more structurally sound and centrally located stick-built housing. In some areas such as the Pacific Northwest, manufactured housing has better market acceptance and less of a stigma. Manufactured homes in California coastal communities may sell for prices consistent with or higher than luxury home prices in non-coastal states. 
 
“Several years ago, when I announced that our correspondent division was discontinuing purchasing loans on manufactured housing, spontaneous cheering broke out. I cheered as well. For me, it meant fewer audit errors to research, less internal training and re-training, and no further repetition of my standard warning to originators: Assign manufactured housing loans to your most detail-minded and risk-savvy underwriters.  
 
“Be aware of distinctions between manufactured, modular and prefabricated housing. Manufactured housing is assembled in the factory and transported to the site. Modular is built in sections, transported and assembled on-site. Prefabricated housing is factory-built with panels or walls attached to framing on-site. Some view the minor distinctions between modular and prefabricated as inconsequential. Unless the appraiser distinguishes and the investor does also, it may not make a difference. In most cases, modular and prefabricated housing are typically considered the equivalent of stick-built by investors.”
 
(Anne was kind enough to send a Kindle link to a good reference book titled “Mortgage Risk: A Blueprint for Smarter Origination.”)
 
In the secondary markets, there are certainly programs. FHA sets out rules for its manufactured home guidelines. FHA loans can be used to purchase mobile homes, manufactured homes and/or modular homes. HUD, of course, has its Title 1 program.
 
Freddie Mac has a page on its program with various links. Fannie Mae recently introduced the MH Advantage initiative, a mortgage program for specially designated manufactured homes with features comparable to traditional stick-built single-family homes. These manufactured homes can include interior features like drywall, energy- efficient appliances and upgraded cabinets in kitchens and bathrooms, as well as exterior amenities such as porches, garages, and architectural features like eaves and higher pitch rooflines. Once a manufactured house meets eligibility criteria, including construction, architectural design and energy-efficiency standards that are more consistent with site-built homes, an MH Advantage sticker will be affixed by the manufacturer for easy identification by lenders and appraisers.
 
Contractors know that manufactured homes have been architecturally like stick-built homes for years. This Fannie Mae program simply validates that quality for the mortgage industry and prospective homeowners alike.
 
Through MH Advantage, qualifying borrowers can secure financing with a down payment as low as 3 percent. Loans also feature cancellable mortgage insurance and can be combined with other Fannie Mae programs like HomeReady or HFA Preferred mortgages.
 
If you want to know more about MH Advantage™, the latest Fannie Mae Appraiser Update provides tips for appraising MH Advantage homes, information about a revised policy for manufactured homes with additions, and updates on its condo project standards.
 
And the Urban Institute’s Housing Finance Policy Center posted a blog: New evidence shows manufactured homes appreciate as well as site-built homes. In their blog, the researchers look at new data available from the Federal Housing Finance Agency and determine that the prices of manufactured homes guaranteed by the government-sponsored enterprises perform similarly to those of site-built properties. This is great news for expanding affordable housing, since manufactured homes are one of the most affordable and underused types of housing. This new evidence suggests a need to reevaluate the presumption that manufactured homes do not appreciate at the same rate as site-built homes – a presumption that may be contributing to their low demand.
 
 
A photographer goes to a haunted castle determined to get a picture of a ghost on Halloween. The ghost he encounters turns out to be friendly and poses for a snapshot. The happy photographer later downloads his photos and finds that the photos are underexposed and completely blank.
Moral to the story: The spirit is willing, but the flash is weak.
 
 
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, “The Rise of the Credit Unions.” 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 hundreds of 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.)

 

 

Oct. 19: Loan mod, LO jobs; data filter product; appraisal white paper & valuation news; cap mkts. products

Everyone, and their brother, knows that the costs for builders to build a home are increasing. Politics aside, it turns out that the tariff changes are indeed impacting the cost of remodeling and building, and NAHB released a list of products affected by tariffs, including nails. Did you know that, per a Freddie Mac poll, 78% of Americans now say that renting is more affordable than owning? Higher rates and home prices are the obvious factors although in some areas wage growth has overtaken house price appreciation. New rental supply, on the other hand, has hit a three-decade high.
 
Jobs & new positions
 
Community Banks Mortgage in Colorado is looking to add MLOs to its Downtown Denver Office. This office is in a vibrant, dynamic, bustling part of the city that has one of the strongest markets in the country. They can do all loan types in all 50 states and have a robust portfolio product offering. Send a resume to, or contact, Will Stingley (719-338-4970) for more information.
 
EMM Wholesale is looking for a dynamic inside sales manager with a book of wholesale broker business. Candidate must be familiar with FHA, VA, FNMA, FHLMC and other Wholesale Lending loan products and have a clear understanding of TRID. Candidate will be sales oriented and not afraid to do cold calls out to new brokers. Must be friendly and courteous in working with outside and inside staff. Motivated and able to build a team of inside Wholesale Account Executives, the candidate will have 5 Years Wholesale Mortgage experience. All resumes are held in confidence. Only candidates whose profiles closely match requirements will be contacted during this search. For more information visit us at: joinemmwholesale.com or send resume directly to: hr@emmloans.com
 
Prime Choice Funding, Inc. is a national leader in mortgage lending and while many in the mortgage industry have been struggling, PCF has been experiencing exponential growth and is looking to expand nationwide. To keep up with its growth, management has recently welcomed Evan Kidwell as Chief Strategy Officer and are looking to hire loan officers across the US to join the team. Prime Choice provides loan officers with highly competitive compensation, top tier fulfillment and paid marketing that actually drives business growth. It offers a variety of loan programs to fit any situation like FHA, VA, Conventional, Jumbo, Non-QM, Reverse, Reno and many more. If you’re interested in joining the team, contact Evan Kidwell (714-640-5905).
 
When was the last time you closed a loan 10 days after taking the application? At Network Funding, 10-day closings are a way of life. With the addition of our sophisticated point of sale system, Simpl, to our industry leading operations team and our own Appraisal Management Company to guarantee appraisals within 72 hours, 10 day closings set Network Funding apart and allow everyone in the transaction to get paid sooner. Call or e-mail EVP Brett Snortland to start closing your loans in 10 days (832-545-4653).
 
AHP Servicing, Chicago’s growing crowdfunded financial services company, is recruiting for a licensed Mortgage Loan Originator to serve as a Modification Specialist. AHP Servicing invests in non-performing residential mortgages and restructures the debt to keep families in their homes. It also actively services and sells both non-performing and re-performing loans. “This is a salaried, high impact role with growth potential. This is a great opportunity to broaden your residential lending career. If this profile sounds like you and you’re ready for an exciting career opportunity with a dynamic company, visit Careers at www.ahpservicing.com to submit your resume. Contact mdoyle@ahpservicing.com or call us at 312-778-6061. AHP Servicing, LLC is an equal opportunity employer.”
 
Congrats to Fobby Naghmi who recently accepted the position of SVP of the Eastern division at Planet Home Lending. “He is responsible for strategically building and managing the branch network in addition to recruiting, onboarding and transition activities in the division. His efforts will help Planet Home Lending continue to grow in new markets.”
 
Lender products & services
 
We’re all in the data business – accumulating it from borrowers and vendors, creating it, verifying it, acting on it, and forwarding it to investors and servicers. Your business floats on a deep pool of data.  Unfortunately, most lenders are frustrated by fragile reporting and a cloudy data story — data rich, knowledge poor. Teraverde Management Advisors created the Coheus Profit Intelligence solution to converge and shape your data to foster clear vision and insight, creating knowledge. Coheus associates loan data with your people, status transitions, costs, revenue, and payroll events. Coheus provides a mortgage-specific, coherent, highly-flexible way to explore, visualize and interpret your data. With Coheus you get a complete perspective on your business, allowing you to Manage Differently, maximizing profitability, productivity, and customer service. With Coheus you can clearly see through the deep end of the data pool. Contact Frank Poiesz or visit Coheus.com today.
 
Amidst rising interest rates and declining origination volume, lenders must cast a wider net for customers, a growing number of which are self-employed. To capitalize on this trend, lenders need a simpler, faster way to underwrite mortgages for Americans who are their own bosses. To this end, Freddie Mac has integrated fintech vendor LoanBeam’s technology with Loan Product Advisor®, our  automated underwriting system, to introduce the first and only integrated self-employment income solution for the market. LoanBeam’s software uses optical character recognition technology to extract and digest a borrower’s tax returns and other financials, and then calculate a total income figure that aligns with Freddie Mac’s guidelines. This integration offers lenders several advantages, including an automated review of the accuracy of qualifying income, eliminating the need to chase down unnecessary documents that support residual/excess income and certainty that the income calculation is eligible for representation and warranty relief. Learn more.
 
Appraisal and valuation news
 
In 2017, more than six million homes were sold in the U.S. and there were more than two million licensed real estate agents. By contrast, there were only about 80,000 appraisers. The appraisal business is changing. Technology is becoming more prevalent and with rising turn-times and costs, the need to adapt is more apparent. As appraisers begin to embrace new methods of collecting and sharing data, the industry will likely see a dramatic increase in efficiencyProperty Solutionspart of the Computershare Group, recently conducted a survey of its network partners. The results, which take into account 400+ responses, contributed to Property Solutions’ latest white paper and lends insight into current industry thinking.
 
AVM cascades, the go-to application for Home Equity lenders and other lending needs, can carry unintended and potentially unpleasant consequences. Although most properties are viable candidates for AVM use, it is increasingly important to know if an AVM is not appropriate for a specific property. To understand the limitations of AVM cascades and the benefits of optimizing AVM valuation performance by determining viability for each subject property, download Veros Real Estate Solutions’ new white paper, “The Case for Choosing AVM Accuracy and Suitability Over the Traditional AVM Cascade”. Then, test VeroPRECISION™ free of charge.
 
ditech announced that streamline refinance applications do not require a disaster inspection and may proceed to closing and/or endorsement. Applications that have closed but are pending mortgage endorsement require an exterior disaster inspection with photographs completed by an FHA Roster Appraiser. Streamline Refinance applications do not require a disaster inspection and may proceed to closing and/or endorsement. If the original appraiser is not available, another FHA Roster Appraiser may complete the disaster inspection. The original appraisal report must be provided to the appraiser completing the damage inspection report. The inspector must include a statement that the property has not sustained any fire damage. If the property sustained damage, all damage, regardless of the amount, must be repaired and the dwelling restored to pre-loss condition before the loan is sold to ditech.
 
Per the FHA waiver issuance of its policy on the timeframe for completing the inspection of properties due to the California Wildfires and High Winds declaration in Lake and Shasta Counties, Ditech has posted the following: Applications with pending mortgage closings require an interior/exterior disaster inspection with photographs completed by an FHA Roster Appraiser.
 
Mr. Cooper continues to monitor FEMA Disaster Declarations and concerns regarding ongoing flooding resulting from Hurricane Florence. Accordingly, Mr. Cooper is announcing the following update. Effective October 4, 2018, FEMA has approved 2 additional counties in South Carolina for Individual Assistance: Darlington and Florence.
 
Capital markets
 
There are changes with investors and vendors in the secondary marketing arena. For example, Fannie’s Flash MBS “offers more flexibility, saving time and money.” “Use Fannie Mae’s Flash MBS® to receive book-entry delivery as soon as 4 days after we receive your Loan Delivery submission. Or, select Fannie Majors and receive book-entry delivery on Fannie Mae’s published Majors as soon as 3 days after we receive your submission. Both options provide additional business days for pooling, up to 2 days for Flash MBS and up to 3 days for Fannie Majors, compared to the standard pool processing option. Plus, there are no processing fees. Please see the pool settlement calendar, which includes eligible flash dates, on the Loan Delivery page.”
 
MCT announced the addition of Multi-Factor Authentication to its MCTlive! Secondary Marketing Software. This addition is the latest in MCT’s ongoing effort to lead the secondary mortgage market toward stronger data security. MCT also rolled out a program for “broken loans.” MCT’s S&D service has a deep network of solid, well-vetted end buyers. Its whole loan desk has years of loan trading experience helping to ensure maximum execution for our clients.
 
Compass Analytics announced that over $200B was bid through its whole loan trading platform, CompassBid, in the last quarter. CompassBid “remains the only bidirectional, fully self-contained whole loan trading platform in the industry, providing sellers the full breadth of investor eligibility, best execution delivery analytics, accounting, investor bid history, and integration capabilities, while giving bidders a loan bid calculation process that includes a secure portal, data normalization, eligibility determination, best execution, spec-payups, LLPAs, loan-level cash-flow MSR calculation, CRA determination and value, seller bid history, and a dynamic margin and incentive engine!
 
MAXEX LLC, a residential mortgage loan exchange provider, announced that it successfully closed a $38 million new funding round led by Moore Asset Backed Fund, LP, an investment
fund managed by Erik Siegel of Moore Capital Management, LP.
 
In relatively recent LIBOR replacement news, entities including government agencies, global institutions, banks and municipalities have issued more than $9 billion in debt tied to the Secured Overnight Financing Rate during the past two months, indicating increased adoption since the Libor alternative launched nearly six months ago. However, market participants say SOFR has progress to make, and concerns have been raised about volatility. A few issues need resolution, but industry groups are hard at work developing alternatives to Libor, panelists said at the SIFMA Annual Meeting. The Secured Overnight Financing Rate is promising because it is based on the repurchase agreement market, which handles "north of 700 billion daily transactions" and complies with standards of the International Organization of Securities Commissions, said Christian Rasmussen, managing director at UBS Securities.
 
There isn’t much going on in the ol’ bond market lately. Are investors regretting the big jump in rates recently? They aren’t that sentimental. Yesterday there was some intra-day volatility due to random influence from stock market volatility, strong job numbers, Treasury Secretary Steven Mnuchin saying that he will not participate in next week’s Future Investment Initiative Summit in Saudi Arabia, U.S. manufactures being optimistic, and the Italian debt market slumping compared to other countries like Germany. Our 10-year closed the day yielding 3.18%.
 
As I send this out due to travel, it is too darned early to know where rates are. But today’s calendar is light (no 5:30AM PT potentially market-moving numbers) with Existing Home Sales (thought to be little changed from last month’s figures) and a couple Fed speakers. So one would expect little or no volatility, and rates could be close to yesterday’s closing levels.
 
 
Top Ten signs you have been doing loans too long.
Number ten: You think Fannie would be a cute name for one of your kids. Number nine: You still have a WAMU T-shirt you sleep in. Number eight: You review your kid’s homework and you separate the corrections into PTD’s (Prior to desert) and PTF’s (Prior to Fun) categories. Number seven: You still use an HP35 Calculator. Number six: You wish you could go back to the good old days when everything was a wet signature. Number five: All your friends still smoke. Number four: At cocktail parties, the only thing you can talk about is HARP 2. Number three: Your bucket list includes doing one last stated income loan. Number two: You remember when making money was an okay thing. And, the number one sign you have been doing loans too long: You fantasize about members of the opposite sex’s FICO scores.     
 
 
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, “The Rise of the Credit Unions.” 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 hundreds of 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.)

 

 

Oct. 18: Service & sales jobs; HELOC & digital products; coast to coast upcoming events & training

Whether it is reducing the number of cookies in a package and keeping the price the same or putting less ounces of cereal in a box and keeping the price the same, both are ways of slyly passing on costs to consumers. In housing, the same thing can be done. It turns out that 10% of the homes in Seattle consist of a single room! Is this 1720? (Think your job is tough? What about appraisers appraising, and investors valuing, homes with only one room?) As we head toward winter, and higher rates, on the flip side Trulia analysis shows 17% of U.S. listings have dropped asking prices. Housing outpacing wage gains is not a long-term recipe for success for real estate.
 
Jobs & promotions
 
Fiserv/PCLender is searching for a Client Services Manager. This senior position leads a national customer support team and reports to Fiserv/PCL Director of Client Experience. A successful candidate will work directly with clients, professional services and sales to ensure highest level of customer support services and relationship management for LOS Clients. Send inquiries to Resumes@PCLender.com or apply online for R-10098051-1.
 
Guardian Mortgage, a division of Sunflower Bank, N.A., has announced that due to unprecedented retail growth, that it will move resources away from its less profitable Correspondent Lending division to focus on the rapidly growing retail platforms. Even in a rising interest rate environment, with refinances slowing, Guardian’s volume is up over 119% in 2018 alone, beating projections. The decision was solidified with their 2019 expansion plans for new and existing retail markets, and the addition of new sales teams in several states to fuel further growth. “Due to balance sheet or cash flow concerns, others are retracting and we’re expanding. We just purchased $50 million in servicing when others are selling. For Originators, is your current company experiencing this kind of growth? If not, maybe we should talk.” said Guardian Mortgage president Mischelle Weaver. Guardian Mortgage is growing, and they’re always looking for top performers. Please visit its website.
 
Do you have the niche products you need to win business from builders and REALTORS? Can you increase your market share via MSAs or desk rental agreements? Planet Home Lending branches can. Join Planet and get a robust product portfolio with no agency overlays, plus: no MI and near-miss jumbo, bank statement, Debt Service Coverage Ratio (lease income), foreign national, and asset depletion non-QMs, 203(k) renovation and 203(h) 100% post-disaster loans, TDB (lock and shop), non-warrantable condos, manufactured homes, USDA, 80/10/10, and DPA. Call 888-792-8480 for a confidential consultation or email Planet Home with a note of interest.
 
Assurance Financial offers branch managers and top producing loan originators something they seek: consistency – a way to close more loans on time with the same amount of effort. “Our team is designed, built, and marketed to support the LO-every time. We deliver what we promise. Assurance Financial is a growing private residential mortgage banker with offices throughout the South, East Coast, and Midwest US, and we may be just what you’re looking for. Contact Paul M. Peters, CMB (225-939-6353) for a confidential discussion today.” 
 
The Equitable Mortgage Corporation (EMC) welcomed Todd Reigle as its new Vice President of Marketing. Reigle joins EMC with over 24 years of marketing experience in the Columbus area various radio and nonprofit organizations including Radiohio Inc./97.1 The Fan, Canine Companions for Independence, Goodwill Columbus and Make-A-Wish.
 
Sun West Mortgage Company, Inc. has expanded its distributed retail division with the launch of new DBA, Mortgage Possible. Congratulations to industry experts Ty Kern, Jeff Onofrio, Eddie Brown, and John Brumund who are managing the launch of this new DBA.
 
Lender products & services
 
Government submissions are on the rise. JMAC Lending is offering Appraisal Fee Credits of up to $500 at closing for all Government Purchase loans submitted in October and November and closed by Dec. 31, 2018. “JMAC provides flexible credit and income guidelines manual underwriting (DTI to 50%) manufactured home loans (FHA) and reduced seasoning for credit events such as foreclosure, short sales, DIL and bankruptcy,” Regional Sales Manager Robin King says. “We are closing government purchase loans in 14-21 days. Plus, you can get your borrowers pre-qualified to save more time.” Click here for details on the Govt. promotion. To speak with an AE, and to submit a scenario, contact sales@JMACLending.com or call 844.888.5622.
 
TCF Bank’s Relationship Lending Unit (RLU) is happy to announce the addition of four new sales leaders to grow its HELOC business nationwide. Mark Mazzenga will lead the eastern United States team, Jim Sprick will lead the western United States team, Ken Cudia joins as the southern Florida business development manager and Douglas Smurthwaite joins as the northern California business development manager. “These four individuals bring decades of experience to the TCF RLU team,” said Mark Zierott, national sales manager, relationship lending unit at TCF Bank. “With expanded loan sizes, reduced FICO scores, lower margins, and our concurrent and standalone offerings, TCF RLU continues to be the number one choice for HELOCs in the TPO channel.” If you are interested in becoming an approved partner with TCFRLU, please contact Mark Zierott.
 
Are You Ready to eClose the Digital Loop? Nancy Pratt, Pavaso’s Vice President of Partner Relations and Government Affairs, says front-end origination technologies have made enormous strides toward digital mortgages and improved the borrower experience with intuitive designs and automated approvals. Now, she says, it’s time for lenders to take the next step toward eClosing loans. “Today’s lenders have the ability to expand the digital experience by letting customers view closing documents online prior to close, in the comfort of their own homes and at their own pace,” Pratt says. “They can even access educational links, videos and explanations about individual documents. When given a more transparent eClosing process, we’ve found borrowers spend a fraction of time at the closing table, often executing documents in 15 minutes or less.” To learn more about Pavaso’s eClose solutions, visit
www.pavaso.com, reach out to sales@pavaso.com or give them a call at (866) 288-7051.
 
Did you sell off yourself along with your loans? This new white paper from TMS will stop you in your tracks and make you rethink what you know about correspondent lending, or, as TMS calls it, CAREspondent lending. It’s time you start caring about who you choose as a correspondent investor because your customer sure does. As it stands, less than 10% of customers return to their original correspondent lender when they decide to get another mortgage or refinance. The Correspondent lender loses connection with the borrower when they dump them onto a correspondent investor and never explain the process. If you want to secure future growth and create repeat customers, it’s time to start caring about who you partner with, and how you’re communicating to borrowers. Read more here.
 
Amidst rising interest rates and declining origination volume, lenders must cast a wider net for customers, a growing number of which are self-employed. To capitalize on this trend, lenders need a simpler, faster way to underwrite mortgages for Americans who are their own bosses. To this end, Freddie Mac has integrated fintech vendor LoanBeam’s technology with Loan Product Advisor®, our automated underwriting system, to introduce the first and only integrated self-employment income solution for the market. LoanBeam’s software uses optical character recognition technology to extract and digest a borrower’s tax returns and other financials, and then calculate a total income figure that aligns with Freddie Mac’s guidelines. This integration offers lenders several advantages, including an automated review of the accuracy of qualifying income, eliminating the need to chase down unnecessary documents that support residual/excess income and certainty that the income calculation is eligible for representation and warranty relief. Learn more.
 
Trainings and Events
 
Join me for lunch next week! On Thursday, October 25th at Wente Vineyards in Livermore, CA join me, the California MBA and their President’s Council member Riivos for a CFO Peer Group Luncheon event.  My colleague, Joe Garrett, and I will speak on planning for 2019, mergers and acquisitions and other top of mind issues for independent mortgage bankers. This event is designed exclusively for mortgage banking CFOs and senior finance executives. Normally these CFO round table events are a benefit of membership in the California MBA, but Riivos is extending the invitation for this event to non-members as well. Doors open at 11:30 am (reservation required) with lunch and the program beginning at noon. If you’re interested in attending this free event, please contact Susan Milazzo to make your reservation.
 
The hurricane season has been particularly rough on the Southeast this year and last.  The Mortgage Bankers Association of Georgia in connection with NAMMBA, GREFPAC and NAMPW are hosting a charity event to raise money for the hurricane victims in their state and neighboring states. The first ever MBAG Connect for a Cause will be held on Thursday October 25th at Three Sheets in Sandy Springs from 5:30pm – 8:30pm with the Red Cross onsite collecting donations. Registration and more information at www.mbag.org and if you can’t make it, donations can be made online via www.rdcrss.org/mbag.
 
Would you like to attend one of the California MBA events for free in 2019?  Take advantage of its October Membership Month promotion and join the organization before 10-31-18 and you can receive a complimentary registration to any of their conferences next year.  It’s a great time to join this valuable organization.  If you do business in California, it’s time to support the organization that supports you and your company. Join today!
 
Join MBA NJ on its November 6, 2018 for its Webinar Series. Demystifying Credit Repair: Your Tools for Closing More Loans, Saving Time and Building Referrals. Hear Vic Melillo discuss Credit Repair and the different tools to help close more loans, save time and build a referral system. There will be time for Q & A at the end of the session.
 
If you’re in the Kansas City area, register for the MBAKC Luncheon on November 15th. Speaker Rob Chrisman, questionable industry newcomer, will discuss, “What the Industry can expect in the First Half of 2019 – Without Making Forecasts.”
 
National MI is pleased to bring the following four webinars to you in November.
Freddie Mac’s Home Possible Mortgage: Nov 7 10AM-11:30AM PST, Learn more about how Freddie Mac has combined their Home Possible Mortgages into one low down payment offering and how it provides new flexibilities to expand homeownership opportunities for borrowers with low-to-moderate income. This webinar is led by 30-year mortgage industry veteran, Tom Ward, National Training Manager, Customer Education Services in Freddie Mac’s Single Family Strategic Delivery organization. Advanced Self-Employed Borrower: Nov 8 10-11:30AM PST Need help navigating the complicated self-employed borrower process? In this advanced session, led by Marianne Collins of Diehl Mortgage Training and Compliance, participants will get a deep dive into the various schedules and tax code rules that come into play when underwriting the self-employed borrower.
 
National MI continues with: Oh, Shift! Session #2 – Oh, Shift. Nov 13 from 12:00 pm – 1:00 pm PST. Words give you power and control. National MI University presents the second webinar in a powerful six-part series. Best-selling author and Executive Coach, Jennifer Powers, MCC’s “Oh, shift!” will teach you how to use your words to affect your mindset, motivation, relationships, results and reality. This is a big-time game-changer. Building Partnerships That Work: Nonprofit and Community Outreach: Nov 15 @ 12:00 pm – 1:00 pm PST, 75% of household growth is projected to come from minority segments over the next five years. Millennials and Generation Z are more likely to choose providers associated with a social cause. Join Kristin Messerli of Cultural Outreach and learn how to identify and build the right community partners, how to develop strong relationships through networking and communication and how to convert community outreach initiatives into a new channel of sales and recruitment!
 
Capital markets
 
Steady as she goes. (For now.) The U.S. 10-year closed at 3.18% after the release of a disappointing Housing Starts (20k below expectations) and Building Permits (32k below expectations) report for September. The supply of new homes isn’t picking up fast enough to meet the demand for new homes at more affordable price points, and overall home sales activity should continue to be repressed by affordability constraints. The afternoon release of September FOMC Minutes showed that policymakers are ready to increase the fed funds rate range past the neutral policy rate, acknowledging the presence of strains on emerging market economies but without significant concern. The implied likelihood of a hike in December increased to 83% from 80%, but the implied probability of another rate increase in March dropped slightly 50%.
 
Weekly jobless claims and the Philadelphia Fed Manufacturing Index began today’s calendar (-5k to 210k, -.7 to 22.2, respectively) followed later by September Leading Economic Indicators. “Fed speak” consists of messages from St. Louis Fed President Bullard, and Governor Quarles. Finally, the NY Fed will be back with likely the last MBS large-scale purchase recap of the year at 2PM. We begin Thursday with the 10-year yielding 3.20% and agency MBS prices roughly unchanged from Wednesday’s close.
 
 
Last Halloween there was a knock on the door. I looked out of the window and then shouted upstairs to my wife, "Honey there’s a witch at the door. What should I do?"
She shouted back, "Just give her some candy and tell her to get lost."
My mother-in-law hasn’t spoken to me since.
 
 
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, “The Rise of the Credit Unions.” 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 hundreds of 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.)

 

 
 

Oct. 17: LO jobs; digital, warehouse, self-employed UW products; appraisal & valuation updates

As thousands of MBA conference attendees head for the DC airports, what’s the chatter? Regulators who want to remind lenders that not being able to afford a compliance department doesn’t allow a company to make RESPA violations. That it is perfectly legal for builders to offer granite countertops, and to have a preferred lender. Companies who seem afraid, with the current industry-wide appetite for LOs, to tick off loan officers, so “drudgery” like teaching them compliance, how to use the LOS, etc., has fallen by the wayside. About how great a start Bob Broeksmit is off to as president of the MBA, and the value of the MBA’s charity, MBA Opens Doors Foundation, has in helping families.
 
Jobs & promotions
 
Congratulations to Gavin Ekstrom and his team on their move to CrossCountry Mortgage. Gavin has been an industry trailblazer in the mountain region for 27 years and has joined forces with CrossCountry Mortgage, an Ohio based lender with over 200 offices, and licensed in all 50 states. With a platform focused on growth, automation, and technology,
CrossCountry Mortgage is teaming up with Gavin to dominate and expand their footprint in CO, UT, AZ, and NV. As a Divisional Vice President, Gavin will be helming the launch of an operational hub and aggressively growing both internal and external sales. If you’re looking to align with a visionary leader, a company built around culture, a solid support team, and direct servicing, contact Gavin Ekstrom (720-231-6999).  
 
VIP isn’t a status, it’s a mindset. At Evergreen Home Loans, the VIP mindset starts on day 1 with a world-class on-boarding experience. You’re teamed up with an onboarding specialist (think of them as your Evergreen Concierge) who helps ensure you have all the tools and resources you need to be successful. This includes setting up your new platforms, syncing your smartphone to email, and assistance with your database. Changing workplaces can be stressful, let us make it feel like you’ve always been here. If you’re a high-touch loan officer looking for VIP service and a great place to work, check out the Evergreen careers page. In addition to our national awards, we’re proud to note that we were recently named the #1 best place to work in the state of Washington by the Puget Sound Business Journal. 
 
In hiring news, Home Point Financial is on the move. With the recent addition of Phil Shoemaker as Chief Business Officer, Home Point is narrowing its focus on providing its broker and correspondent clients the best service in the industry. It all starts by attracting top sales talent, and Home Point is committed to building a platform that supports the most productive Account Executives in the industry. Ready to take your career to the next level with a national mortgage lender looking to aggressively grow? One that retains most of its servicing, leverages cutting-edge technology and delivers the dedicated operational support you need to succeed?  One that is 100% focused and committed to Third Party Originations? Contact Paul Wyner today: Home Point Financial is pointing you home.
 
National MI is pleased to announce that Cheri McCarthy has been promoted to Regional Sales Director for the Northeast Region. Cheri has a strong background in mortgage insurance and has been a strong Regional Team Leader with us for several years in the New England market. Rob Melton has been promoted to Regional Team Lead for the SE Region, reporting to Domenic Melillo. He will be joined by Dana Abernathy in his new role.
 
Lender products and services
 
Gearing up for 2019, Lenders must reassess their annual compliance solutions. “Are we continually up-to-date on both federal and state regulations and changes? Is our staff “hatted” on all changes? Who’s ensuring that compliance is on the ball?” These are questions that must be asked. Yet with so much already on the Lender’s plate, that can be a tall order. Fortunately, Strategic Compliance Partners can help — whether the Lender is augmenting an existing compliance infrastructure or outsourcing to a fully integrated turnkey solution. Better yet, the services are budget-friendly as they are often less than the cost of hiring additional internal staff. Give Leslie Benjamin a call at 646.418.6635 for a free compliance savings evaluation.
 
Did you know? Maxwell and HW recently teamed up to survey lenders across the country and found that 70% of lending institutions are either actively purchasing or already have a digital mortgage solution in place. Even in a challenging and constrained market, lenders understand the impact that a technology-fueled process can have on internal efficiencies, close times, borrower satisfaction, and referral volume. Maxwell’s robust but easy-to-implement technology empowers your team to amplify productivity, delight borrowers, and close more loans — faster. Today, lending teams on Maxwell are closing loans 45% faster than the national average, helping them achieve the ROI they deserve from a technology partner. Request your custom demo today! 
 
Are you a Broker looking to become a Correspondent Lender or an established Correspondent Lender looking for a good Warehouse Lender to help grow your business? If so, Goldome Warehouse Lending would appreciate the opportunity to help your business achieve its goals. Goldome is an established Warehouse Lender with experienced sales and operations teams. The program was acquired by Independent Bank of McKinney Texas in 2017, and it continues to grow. Now, we want to be a part of your success story! Our flexible warehouse lines are a great fit for delegated correspondent lenders and non-delegated correspondent lenders looking to fund a wide variety of programs and products. We offer lines up to $100 million and can support the small lender all the way up to the large aggregator. Our seasoned sales team of Drey Roberts, Steve Harris, Jim Harrison, or Roxie Montoya is ready to assist. Please reach out today to learn more about Goldome Warehouse Lending!
 
Amidst rising interest rates and declining origination volume, lenders must cast a wider net for customers, a growing number of which are self-employed. To capitalize on this trend, lenders need a simpler, faster way to underwrite mortgages for Americans who are their own bosses. To this end, Freddie Mac has integrated fintech vendor LoanBeam’s technology with Loan Product Advisor®, our automated underwriting system, to introduce the first and only integrated self-employment income solution for the market. LoanBeam’s software uses optical character recognition technology to extract and digest a borrower’s tax returns and other financials, and then calculate a total income figure that aligns with Freddie Mac’s guidelines. This integration offers lenders several advantages, including an automated review of the accuracy of qualifying income, eliminating the need to chase down unnecessary documents that support residual/excess income and certainty that the income calculation is eligible for representation and warranty relief. Learn more.
 
Borrower care and feeding
 
What’s the number one complain borrowers have about the mortgage loan process?  Poor communication. Starting on the right foot with communication means providing your borrowers with a clear (and preferably complete) list of items they will need to provide, otherwise known as an initial checklist. According to data from STRATMOR Group’s MortgageSAT Borrower Satisfaction Program, giving the borrower a checklist of the information they will need to provide results in a very high Net Promoter Score (NPS) of 90. Borrowers who do not receive an upfront checklist quickly get confused and frustrated, and NPS plummets to -26. In the new October MortgageSAT tip, Mike Seminar offers three steps lenders can take to make sure that an initial checklist gets to the borrower and loan process communications start and go well.
 
Appraisal news from lenders, investors, and vendors
 
Values, of course, are a factor of supply and demand, and home builders help directly determine supply. Zelman & Associates summed up the current environment for builders. "For homebuilders, we expect market conditions to remain choppy through year end and anticipate that a greater need for incentives could pressure 2019 profit margins when those homes are delivered. With that said, unit growth should reaccelerate next year as demand laps the slower current activity, new communities come online and buyers inevitably adjust to the new rate environment as they have in almost all prior instances of large rate moves. We expect builders at more affordable price points to be best positioned."
 
Wells Fargo Funding posted a policy update on Environmental Hazards and Environmental Deed Restrictions for Non-Conforming Loans effective on October 30, 2018.
 
Effective FHA case numbers assigned on or after October 01, 2018 through September 30, 2019 FHA will perform a collateral risk assessment of the appraisal submitted for use in the HECM origination. Based on the outcome of the collateral risk assessment, FHA may require a second appraisal to be completed prior to approving or closing the HECM loan. The second appraisal report should not be ordered from the first appraisal company. The cost of the second appraisal report is eligible to be financed as part of the closing costs. The lower of the two appraised values will be used to calculate the maximum claim amount. Additionally, FHA no longer requires appraisal from another appraiser if the re-sale date is between 91 days and 180 days following the date of acquisition by the seller and the re-sale price is 100% over the purchase price. For additional questions not answered by the guideline, please email Sun West’s underwriting scenario desk at uwscenarios@swmc.com for more information.
 
From now, until the end of the year, Royal Pacific Funding is offering free appraisals applicable to all loans $300K or greater, on all products including FHA**, VA, Conventional** and NonQM. Just submit a new loan*** on or after October 1st and close the loan by December 31st and Royal Pacific Funding will credit your borrower for the price of the appraisal, up to $500*. Restrictions apply, contact Royal Pacific Funding for details.
 
Veros and SWBC have partnered to provide Veros’ VeroPRECISION™ valuation engine and AVM solutions, including Veros’ proprietary VeroVALUE™ suite, as part of SWBC’s comprehensive selection of collateral valuation and analytics solutions. “By adding VeroPRECISION to its product line, SWBC now offers next-generation AVM decision logic technology. In cases where VeroPRECISION instantly deems a property appropriate for AVM valuation, those customers will immediately receive one of the industry’s top performing AVMs. Based upon machine learning in a production environment, the VeroPRECISION decision engine determines the most accurate valuation at the subject property level.”
 
Circumstances sometimes arise that require an appraisal report to be transferred from one lender to another. This process is often more complex than it may seem, and clients are oftentimes confused about the restrictions associated with this process. Coester VMS can help with the process.
 
Appraisal Pilot is a Potential Boon for Corelogic and helpful to Radian. Fannie Mae is testing if appraisers can determine a home’s value without visiting the property through a pilot. According to National Mortgage News, Fannie Mae is asking appraisers to combine local market data with property-specific details from a home inspection to create a “hybrid appraisal” report. This is not an entirely new approach, has been being pushed by larger/technology focused companies in the industry, and is more often used for home equity loans today. According to data provided by Moody’s, a hybrid appraisal can be completed in 3-7 days for $125-$450, while a traditional appraisal takes 3-30 days (rural markets and hot markets are longer) for $450+. If this becomes an option in the conforming mortgage market, we would expect it to be limited to a subset of loans when homes are more homogeneous and not be used for more distinct properties. Also, there will always be the “20 cats” issue as the data cannot tell how bad a home might be damaged aesthetically, while being structurally sound.
 
The move prompted one industry vet to opine, “With respect to the Fannie’s appraisal waivers, they only grant the waivers if there is a former appraisal of the property in their database already, if the borrower is in the database already (for refi’s), and if the borrower is very strong from an income, equity and credit perspective.  I think these waivers are a great idea, too slow to come, and long way from another mortgage meltdown.”
 
Capital markets
 
Rates were roughly unchanged yesterday, the U.S. 10-year closing -1bps to 3.16% as headlines centered around potential Saudi acknowledgement for the murder of a Washington Post journalist, and a September Job Openings and Labor Turnover Survey that markets shrugged off (7.136 million; prior 7.077 million). International financial news was highlighted by the report that Italian officials have finalized the budget for 2019, but the European Commission is expected to reject the plan. European Commission President Jean-Claude Juncker said the eurozone would "revolt" if Italy’s 2.4% deficit target for 2019 gets approved. MBS supply was on the light side with many mortgage bankers still here in Washington for the MBA’s Annual Conventional & Expo, which concludes today.
 
MBA mortgage applications for the week ending October 12 came out, dropping over 7% (refis down to 38% of overall apps). Next up is September housings starts and building permits, with starts expected to decline while permits should go in the opposite direction. We also have some Fed speak, with Fed Governor Brainard speaking just after noon. Finally, the minutes from the September 25th FOMC meeting will be released at 2PM DC time. In the very early going Agency MBS prices are little changed from Tuesday’s close and the 10-year is yielding 3.16%.
 
 
I scared the postal carrier today by going to the door completely naked.
Not sure what scared her more; my naked body or the fact that I knew where she lived.
 
 
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, “The Rise of the Credit Unions.” 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 hundreds of 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.)
 

Oct. 16: LO jobs, title co. opportunity; tech products run the gamut; Agency deals helping liquidity and risk transfer

What’s not being covered by the mainstream press here at the MBA conference? How about, given the rough financial conditions, monthly (and not quarterly) financials being requested by warehouse & correspondents? How about some attendees bunking up two to a room to save money? Lenders trying to hire LOs, but the top LOs not wanting to move as we enter the 4th quarter and companies not wanting to hire the low-producing LOs? Both originators and management saying that regulator-impacted comp plans have continued to cause confusion, inequality, and hasn’t helped the borrower? And perhaps using net, or residual, income instead of gross income in the DTI calculation ahead of the “QM patch” expiring in January 2021?
 
Jobs & business opportunities
 
CoastalStates Bank continues to grow its warehouse offering and is looking to add Relationship Managers in key markets. Applicants will be responsible for business development, credit analysis and managing customer relations. As a depository headquartered in Hilton Head, South Carolina, CoastalStates has developed a warehouse offering with sound lending practices while providing mortgage bankers competitive pricing with excellent customer service. Interested individuals can forward confidential inquires to Tim Haug, VP, Warehouse Lending (843-341-9969).
 
Assurance Financial offers branch managers and top producing loan originators something they seek: consistency – a way to close more loans on time with the same amount of effort. Our team is designed, built, and marketed to support the LO-every time. We deliver what we promise. Assurance Financial is a growing private residential mortgage banker with offices throughout the South, East Coast, and Midwest US, and we may be just what you’re looking for. Contact Paul M. Peters, CMB (225-939-6353) for a confidential discussion today.”
 
A national title company is looking for lenders that are interested in partnering to open up a title and settlement company. Lenders must be closing over 50 units a month. Please email me with information on your company for forwarding.
 
One shouldn’t forget that the Agencies have career opportunities: Fannie Mae and Freddie Mac are hiring, as is HUD.
 
Lender products and services
 
“Here’s a hi-tech breakthrough in lending to self-employed borrowers. Amidst rising interest rates and declining origination volume, lenders must cast a wider net for customers, a growing number of which are self-employed. To capitalize on this trend, lenders need a simpler, faster way to underwrite mortgages for Americans who are their own bosses. To this end, Freddie Mac has integrated fintech vendor LoanBeam’s technology with Loan Product Advisor®, our automated underwriting system, to introduce the first and only integrated self-employment income solution for the market. LoanBeam’s software uses optical character recognition technology to extract and digest a borrower’s tax returns and other financials, and then calculate a total income figure that aligns with Freddie Mac’s guidelines. This integration offers lenders several advantages, including an automated review of the accuracy of qualifying income, eliminating the need to chase down unnecessary documents that support residual/excess income and certainty that the income calculation is eligible for representation and warranty relief. Learn more.”
 
As loan production volume shrinks, production costs explode and competition ramps up, loan officers want to know: How do I get borrowers to commit to me before they shop around with other lenders? Borrowers demand an experience as seamless as their digital coffee ordering app. So how do you satisfy borrower demands, capture leads and reimagine workflows to empower your LOs? With the right technology it is possible. Lenders have started dedicating too much time and money toward streamlining digital platforms to give borrowers app-enabled experiences. This “shiny object syndrome,” which prioritizes flash over the larger loan experience, is a fool’s errand. Stop spending time and money on glittery APIs and reimagine your approach. Dig deeper, rethink your process, digitize beyond the first touchpoint and strive for true innovation. Read the Total Expert guest blog by Kyle Kamrooz, Co-Founder of Cloud Virga: Solving the Cost-to-Produce Problem in Mortgage Lending. 
 
PerfectLO is the only POS that makes ‘bad’ LOs ‘great’ and ‘great’ LOs more productive. Your back office is likely to waste 25% of their day looking at loans or conditions they never should’ve. PerfectLO’s ownership speaks “mortgage,” not “code,” and has solved for the pain in your office. Its unique application has built in intelligence that digs in and asks all the questions that ‘live’ inside and outside of the 1003. PerfectLO creates a unique doc-checklist based off the borrower’s answers and offers a secure file sharing portal. Customizable milestone updates sent by SMS messages to all parties in the transaction. Your borrowers have a dashboard to view deadlines, timelines, closing location, etc. PerfectLO talks to all LOSs and is multi-language Replace your ‘Apply Now’ button today. Sign up for a free trial and demoClick here to see the most digital mortgage process in the industry.  
 
At the MBA Convention this week, XINNIX, The Mortgage Academy, shared some monumental news with the industry. It has been the leader in sales and leadership development for years, but now, you can engage with their incredible services in a powerful new way. THE XINNIX SYSTEM is a proven platform that includes training, accountability and coaching to drive results with clearly defined achievement and production milestones for mortgage professionals at every state in their career. Students execute requirements to achieve metrics that advance their business to the next level while earning industry respected designations. To learn more about how XINNIX can you help take business to the next level, contact them HERE!
 
If there’s a word that creates angst with lenders, onboarding is probably it. However, there is one subservicer who describes their 7-step onboarding process to SIME, Servicing Intelligence Made Easy, as “Onboardacious.” That’s TMS.  Because they believe “onboarding shouldn’t get in the way of taking care of your borrowers,” their process is faster, easier, totally transparent and hassle-free. And who wouldn’t welcome that? As if that wasn’t enough, TMS even conducted a side-by-side comparison so you can see how other subservicers stack up against SIME. If you’ve been thinking about switching subservicers, the results are definitely worth checking out.
 
Stearns Wholesale Lending continues to support the Mortgage Broker with the introduction of its Preferred Vendor Program. “Through this program, approved Stearns Brokers can access our preferred title and credit vendors at a reduced cost. Reltco, a nationwide title agency, provides our brokers a $200 settlement fee*; Credco is the largest provider of merged credit reports and offers them to Stearns Brokers for $24 tri-merge (individual or joint); Informative research is an innovative technology leader in credit reporting solutions and provides our brokers with $28 credit reports with supplements included. Strength in partnerships has been a defining trait in our success for over 25 years, and it can be in yours, too! Click here to learn more and start saving today! *Certain restrictions apply.”
 
HomeScout® National MLS pioneered the first-of-its-kind online real estate marketplace where consumers can find a home and get preapproved by a lender in a single platform. Helping loan officers and agents build a robust buyer pipeline and converting up to 2-3 more transactions every month. HomeScout is the only private, mobile search platform to offer consumers 100% MLS listing information from coast to coast and gives lenders more control over transactions by introducing them to buyers prior to meeting an agent. Engage and retain buyers with HomeScout and keep them off public search sites where they will be sold to your competition. Watch as your contacts convert to commissions via the HBM DASH® reporting interface, with real-time updates of your buyer’s activities on HomeScout. Find out more by contacting them HERE  and scheduling a demo or call 952-831-0623.
 
Capital markets
 
In the secondary markets the Agencies are doing deals, laying groundwork for a single security, and transferring credit risk away from taxpayers to willing buyers. Originators should know that all these help rates for their borrowers.
 
On September 21, Freddie Mac priced approximately $725 million in K Certificates (K-1507 Certificates), which are expected to settle on or about September 27, 2018. The K-1507 Certificates are backed by corresponding classes issued by the FREMF 2018-K1507 Mortgage Trust (K-1507 Trust) and guaranteed by Freddie Mac. The K-1507 Trust will also issue certificates consisting of the Class X2-A, X2-B, B, C and R Certificates, which will not be guaranteed by Freddie Mac and will not back any class of K-1507 Certificates.
 
On the 25th, Freddie priced a K-C Series offering of approximately $912 million in K Certificates (K-C02 Certificates), which are expected to settle on or about September 27, 2018. The K-C02 Certificates are backed by a majority of 7-year, fixed rate loans that feature longer than typical periods of reduced prepayment penalties before maturity.
 
On September 14, Freddie Mac announced the pricing of the SB53 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 $530 million in Multifamily SB Certificates, which are anticipated to settle on or about September 25, 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 ninth SB Certificate transaction in 2018. Freddie Mac is guaranteeing four senior principal and interest classes and one interest only classes of securities issued by the FRESB 2018-SB53 Mortgage Trust. Freddie Mac is also acting as mortgage loan seller and master servicer to the trust. In addition to the five 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.
 
Also on the 14th, Freddie priced a new $1.1 billion offering of multifamily mortgage-backed Structured Pass-Through K-Certificates, which are expected to settle on or about September 26, 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.
 
On September 6th, Fannie Mae completed its first Credit Insurance Risk Transfer Transaction of 2018 on over $11 Billion of Multifamily Loans, part of their ongoing effort to reduce taxpayer risk by increasing the role of private capital in the multifamily mortgage market. This transaction transferred $166 million of risk to seven reinsurers and insurers, representing the largest amount of credit risk transferred in a multifamily CIRT transaction. The covered loan pool for the transaction consists of 1,106 loans for 1,111 multifamily properties acquired by Fannie Mae from October 2017 through January 2018. Each loan has an unpaid principal balance of $30 million or less. With CIRT 2018-M01, which became effective August 23, 2018, Fannie Mae will retain risk on the first 225 basis points of loss on the $11.1 billion covered pool of loans. Reinsurers will cover the next 150 basis points of loss.  Once the pool has experienced 375 basis points of losses, the credit protection will be exhausted and Fannie Mae will be responsible for any further losses.           
 
On September 11th, Fannie Mae announced an offering of New Issue 5-year Benchmark Notes due September 12, 2023. The settlement date is September 14, 2018 and the payment dates are each March 12 and September 12 beginning March 12, 2019. The deal will have an issue size of $2 billion, a coupon of 2.875%, and a price of 99.590 yielding 2.964%.
 
Also on the 11th, Fannie Mae priced a $857.2 Million Multifamily DUS REMIC (FNA 2018-M12) under Its GeMS Program, its 8th in 2018. The M12 provides investors with the opportunity to invest in a 12-year, fixed-rate, call-protected tranche, a response to more borrower demand for longer-term lending as we see a flattening in the yield curve. All classes of FNA 2018-M12 are guaranteed by Fannie Mae with respect to the full and timely payment of interest and principal.
 
Looking at the rates, the U.S. 10-year closed +2bps to 3.16% despite heightened geopolitical uncertainty (normally decreasing rates) as President Trump stated that Saudi Arabia will face "severe punishment" if it is proven responsible for the disappearance of Washington Post columnist Jamal Khashoggi, who vanished after visiting the Saudi consulate in Turkey. Saudi Arabia has denied any involvement in his disappearance. Saudi rhetoric has threatened any sanctions on Saudi Arabia would hurt the U.S. economy, though America now imports less Saudi oil than in the past due to renewable energies and fracking. As far as strict economic news went, Retail sales for September drastically missed expectations. The silver lining is Core sales, which factor into GDP figures were up 0.5%, which will factor favorably for Q3 real GDP growth. Finally, the Treasury Budget for September showed a surplus of $119.1 billion versus a surplus of $7.9 billion for the same period a year ago. The budget deficit for fiscal 2018 totaled $779.0 billion versus $665.8 billion in fiscal 2017.
 
Today’s calendar kicks off at 9:15am ET with industrial production, capacity utilization and factory output for September releases, expected to fall, rise, and remain unchanged, respectively versus prior readings. Following at 10am is the August Job Openings and Labor Turnover Survey (JOLTS). We also have one Fed speaker, newly appointed San Francisco President Daly. The 10-year is currently yielding 3.17% and agency MBS prices are worse .125 versus last night’s close.
 
 
I threw a boomerang at a ghost the other day.
I knew it would come back to haunt me.
 
 
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, “The Rise of the Credit Unions.” 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 hundreds of 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.)

 

 

Oct. 15: LO jobs; digital products, new book for LOs; big bank mortgage earnings; M&A rolls on

What’s new here at the MBA’s conference in Washington DC? Plenty of secretive M&A closed-door meetings, continued talk that Ginnie is carefully eying non-bank approved Ginnie issuer’s financial situations, conjecture of MI reps’ jobs in the future if all the MI companies roll out pricing engines, and Fannie & Freddie eliminating some “pricing inefficiencies” to end cherry-picking. The FHFA (overseer of F&F) continue to focus on maintaining access to credit, reduced taxpayer risk, and the infrastructure for a single security. There’s also talk about the BofA/NACA 0% down, 4.5% program. We’re going there again?
 
Jobs
 
Do you have what it takes to take your mortgage lending super powers to the next level? Nations Lending is proud to announce its new initiative to grow its footprint across the U.S. where the company is licensed in 47 states, by expanding our retail branch outlets.  This is an amazing, one-of-a-kind opportunity for an LO whose tired of the same routine, and ready to take that next career step as a leader, to advance in an established company with a proven track record of getting loans closed. Ideal candidates for our Retail Branch Sales Manager will have a minimum of 2 years’ experience in the LO field, as a well as a regional footprint showing a track record of success. If interested, contact Division Sales Manager, Jordan Gerard (337 501-0155).  Or Allison Schock, SR Talent Acquisition Consultant (440-527-6718). For more information and opportunity on how to join our growing organization, please visit the company’s website.
 
Products, services, books, and events for lenders
 
Lendsnap, The Digital Mortgage Company™, is hosting private consultations on going digital at the MBA® National Convention Monday and Tuesday only. For a free review of your originations flow, signup here. “Powerfully simple.” The new Lendsnap Point of Sale (PoS) system makes every member of your origination team 30% more productive with a single app for qualifying borrowers that includes importing original financial statement PDF’s from consumer-connected accounts, eSignatures, and an Intelligent 1003. Learn more today at lendsnap.com.
 
Conquering Shifts is a must read. “I’ve been originating loans since 2003 so I related to many of the stories within. Learning how top producers excelled during the hard times of ’07 and ’08 reinforces that salespeople are able to prosper in any economy.” Jordan Eller, Capital Mortgage Services. “I LOVED this book…It reminded me that building relationships, NOT selling products…still works. I especially liked the story about the LO who interviewed 17 different companies to find that right culture fit and is still with his company 19 years later.” Elizabeth Douglass, Wintrust Mortgage. “The benefit of owning this book is two-fold. First, it’s inspiring. Secondly, it’s a fantastic resource to be used during our sales meetings. The authors, Cindy Douglas and Kathleen Heck do a great job showing how some of the industry greats went from ground zero to mega producers” Ben Holloway, Mountain West Financial. To purchase:
www.conqueringshifts.com.
 
Sierra Pacific Mortgage is hosting a free one-hour webinar that demystifies liquid assets on Thursday, October 18 at 11:00 am (PST). This is a great session for any mortgage professional looking to build their knowledge of the most common asset types used to qualify your borrowers. Register today so you can be more knowledgeable in the future.
 
ARMCO’s Q1 2018 QC Trends Report Reveals Risks Associated with Lender Downsizing –“The distribution of critical defects for the first quarter of this year differed significantly from those we saw during the last quarter of 2017,” said Phil McCall, ARMCO’s president. “What the report reveals is consistent purchase-dominant contracting markets. One of the newest trends is a spike in defects associated with loan package documentation. This is often a result of lender downsizing and staff consolidation, which occurs when declining loan volume becomes a trend—as it did in the beginning of this year.”  The report revealed the leading critical defect categories for Q1 2018 were (1) Income/Employment, (2) Assets and (3) Loan Package Documentation. Purchase transactions continued to outpace refinances in Q1 2018, comprising 62.98% of all transactions reviewed. View the full report here.
 
Despite how often things change in the mortgage business, one thing has remained constant –Comerica BankSince 1965, Comerica Bank has been a warehouse partner with mortgage bankers across the countryComerica Bank takes pride in its unwavering commitment to mortgage warehouse lending. Offering lines from $5 million to over $100 million, Comerica continues to grow year over year. If you are seeking a reliable, flexible and consistent warehouse partner, Comerica Bank is here for you. Comerica Bank will customize your warehouse line to meet your needs, including construction financing, non-QM, and second liens. With state-of-the-art technology, Comerica Bank funds loans within seconds, ensuring satisfied borrowers and happy loan officers. Warehouse lenders come and go, but Von Ringger, Department Manager of Mortgage Banker Finance at Comerica, and his team are committed to mortgage banking. To see how Comerica Bank can raise your expectations of what a bank can be, contact Von Ringger at (313) 222-9285. Member FDIC. Equal Opportunity Lender. Loans subject to credit approval.
 
In this purchase-heavy market, a steady stream of referrals means the difference between standing out as a top performer and being at the bottom of the pack. According to Pipeline ROI, 77% of agents only have one lender they regularly partner with, so there’s room for new relationships…if you understand what agents truly want in a loan officer. Maxwell interviewed real estate agents across the country to get their perspective on what they value in a lender. Their new eBook, “Winning Agent Business,” reveals lucrative insights from agents themselves on how to earn their trust and build a lasting partnership. An exclusive to Rob Chrisman subscribers today (and a must-read for all lending professionals), Download your complimentary copy here.  
 
Bank and M&A news
 
Higher interest rates have enabled banks to increase profitability in recent years, but that benefit could be ending, industry experts say. Banks can increase rates they charge borrowers, but they must also increase returns for savers amid tightening in the refinancing market. Record profits are expected as US banks prepare to release third-quarter earnings reports, but mortgage and other lending, fixed-income trading, completed mergers and acquisitions, and bond and stock offerings appear to be slowing. Citigroup, JPMorgan Chase and Wells Fargo all reported earnings on Friday. Citi has ceased to be the dominate mortgage player it once was, so let’s look at Wells Fargo and JPM fared in the third quarter, mortgage-wise.
 
In general, mortgage banking came in stronger than some had expected, primarily driven by gain-on-sale margins. Both companies saw their retail share tick down. Origination volumes at WFC were -8% Q/Q but JPM (+5%) exceeded expectations. In fact, compared to estimates by the MBA (-1%), Fannie (-1%), and Freddie (-2%), JPM did darned well. GoS margins reversed their two consecutive quarter slide, rising +26% (from 77 basis points to 97 bps) at Wells and +12% (43 bp to 48 bp) at JPM, both exceeded company and industry expectations of “flat.” Mortgage servicing rights (MSR) valuations rose around 4% Q/Q at WFC/JPM, respectively, on the jump in interest rates during the quarter as everyone expected. At WFC, the carrying value increased to 102 bp from 98 bp, and the MSR revenue multiple increased to 4.18x from 4.15x. At JPM, the carrying value increased to 122 bp from 116 bp, and the MSR revenue multiple increased to 3.49x from 3.31x.
 
Turning to M&A, the industry is talking about builder Lennar looking to sell its lending arm Rialto. It is not necessarily a defensive move, given the slowdown in building and increase in rates. Remember that since at least mid-2017, even before Lennar announced its plan to acquire CalAtlantic last year, the company has clearly telegraphed plans to pivot strategically to a more pure-play home builder. This plan, which included the spin-off of its Five Point Communities unit via an IPO into a separate public company, meant looking to "harvest value" for its Rialto unit so that it could concentrate on core home building businesses, operations, and investments. Rialto’s purpose as part of the Lennar business empire has been to serve as an asset management investment platform. Rialto identifies and funds investments in portfolios of commercial real estate opportunistically. This is not a core Lennar business in the "pure-play home builder" sense, but one that served, particularly during an earlier era of distressed real estate and bargain-basement pricing, as a high-margin way to use relatively inexpensive capital.
 
Once Rialto is sold, Lennar may be aiming to re-invest capital in newly emerging technology and data businesses adjacent to its home building operations, like Ring (now owned by Amazon) and Opendoor.
 
Banks continue to merge, acquire other banks, or be acquired. Since the end of September these were announced. In Virginia Union Bank & Trust ($13.0B) will acquire Access National Bank ($2.9B) for $610mm in stock (100%) or 2.43x tangible book, and American National Bank and Trust Co ($1.8B) will acquire HomeTown Bank ($558mm) for about $95.6mm in stock (100%) or 1.82x tangible book. Out in California Redding Bank of Commerce ($1.3B) will acquire The Merchants National Bank of Sacramento ($218mm) for $37mm in cash (40%) and stock (60%) or 1.86x tangible book. In Nevada JBNV Holding Corp has filed with bank regulators to acquire Kirkwood Bank and Trust ($321mm).
 
Core system provider Fiserv will acquire the third-party debit card processing services of US Bancorp known as Elan, for $690mm. (Although the move doesn’t include the credit card payments solutions, the move further solidifies Fiserv’s debit card processing and expands its digital offerings.) In the land of Dorothy and Toto, Citizens Bank of Kansas ($238mm) will acquire Verus Bank ($143mm). In PA Citizens & Northern Bank ($1.3B) will acquire Monument Bank ($348mm) for about $42.7mm in cash (20%) and stock (80%). In the cornhusker state, BankFirst ($467mm) will acquire Iowa – Nebraska State Bank ($213mm).
 
Capital markets
 
Compass Analytics announced today that over $200B was bid through its whole loan trading platform, CompassBid, in the last quarter. CompassBid remains the only bidirectional, fully self-contained whole loan trading platform in the industry, providing sellers the full breadth of investor eligibility, best execution delivery analytics, accounting, investor bid history, and integration capabilities, while giving bidders a loan bid calculation process that includes a secure portal, data normalization, eligibility determination, best execution, spec-payups, LLPAs, loan-level cash-flow MSR calculation, CRA determination and value, seller bid history, and a dynamic margin and incentive engine! CompassBid is fully integrated with Compass’s product, pricing and eligibility engine, CompassPPE, and its API, Compass’s pipeline risk management and MSR valuation engine, CompassPoint, Compass’s investor portal, CompassDirect, along with commercial and proprietary LOS systems. If you would like to learn more about CompassBid and Compass’s full list of products, contact us
 
Last week we learned that prices ticked up slowly in September despite trade tariffs and a tight labor market. The Producer Price Index increased 0.2 percent for the month and 2.6 percent year over year as both food and energy prices fell. The Consumer Price Index ticked up 0.1 percent in September and 2.3 percent year over year with consumer food prices remaining unchanged. Both indexes are down from their peak year over year increases seen this past summer. Initial jobless claims remain incredibly low as 214,000, consistent with a strong labor market. Additionally, the National Federation of Independent Business’s Small Business Optimism Index remained near its 45 year high in September though it did ease slightly. Job openings are high, but businesses reported having trouble filling the positions.  Mortgage rates jumped to their highest level since April 14, 2011, according to the Freddie Mac Primary Mortgage Market Survey and the markets continue to expect another 25-basis point high to the Fed Funds target in December and are looking ahead to March 2019 for another potential high as well.
 
The bond market is looking at higher rates, a more hawkish sounding Fed, uncertainty regarding US-China trade relations and downgrades to global growth. Tough to follow all that! When the dust settled Friday the bond market didn’t do too much to impact rate sheets. The slope of the yield curve faced flattening pressure this week, as the 2s10s spread compressed to 30 bps from last Friday’s 35 bps as the 10-year closed yielding 3.14%.
 
For scheduled news this week, we have the Empire State Manufacturing Index for October (21.1) and retail sales (+.1%) for September today, both expected higher. Tomorrow are the industrial production capacity utilization couplet, JOLTS (job openings), Philly Fed and leading indicators, along with the October NAHB Housing Market Index. Wednesday, as weary conference goers head home, we have the weekly MBA Mortgage Index, September Housing Starts and Building Permits, and the September FOMC Minutes. Thursday we’ll see weekly Initial Jobless Claims, October Philadelphia Fed, and September Leading Indicators. Friday things wrap up with September Existing Home Sales. We start Monday with rates versus Friday’s close: the 10-year is yielding 3.15% and agency MBS prices are a shade better.
 
 
(Parental discretion advised.) A little boy dressed up as a pirate knocks on the door on Halloween and an older lady come to the door and says, "Oh my goodness! Now what are you?" The little boy answers, "Look, lady, I’m a pirate"! The lady replies, "Well, if you’re a pirate, where are your buccaneers". The boy answers, "Right here under my buckin’ hat!
 
 
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, “The Rise of the Credit Unions.” 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 hundreds of 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.)

 

 

Oct. 13: Compensation, margin compression, setting passwords & cybersecurity update; corny joke front-runner

Lots going on out there as lenders continue to work on helping their borrowers, vendors strive for name and brand recognition, and the industry faces higher rates in the future and lower volumes. Not to mention thousands packing their suits and heading to DC. Let’s jump in on margin compression, compensation, appraisal waivers, blockchain, and cybersecurity.
 
I received this note from Rich Swerbinsky, COO of The Mortgage Collaborative. “Rob, after months of discussing these issues with our members, I penned a couple short pieces on the tough industry climate in general and on how we compensate employees in our industry.
 
On the subject of appraisals, this comment was received from Jon Weimer. “Interesting commentary on the Fannie Appraisal Waiver, but I have a hard time believing it’s not being utilized because borrowers want to know the property’s value. People apply to borrow money, and the appraisal is just typically a means to that end. If they know they can achieve what they want to achieve without the variable of the appraisal, I imagine most people would take that option. Probably saves a few bucks too. Just a guess, but I’d think it has more to do with lenders erring on the side of caution, not paying close enough attention to the findings, or not knowing if their investors would accept the waiver. And of course, maybe there are other variables that I don’t know based on things that happen post-closing.” Thanks Jon!
 
October is National Cybersecurity Month
 
Banks (and lenders who work for banks) should know that for 2019, the OCC said it will focus regulatory examination efforts on: cybersecurity and operational resiliency, commercial and retail credit loan underwriting, concentration risk management, credit risk, ALLL (including CECL), BSA/AML compliance, compliance-related change management process, internal controls, and end-to-end processes necessary for product and service delivery.
 
I’m thinking about changing my password from “MyrtleRules” to something more complex, like “Passwerd1.” Seriously, passwords are usually only changed minimally when they must be changed very often, and these changes aren’t effective.
 
Information on passwords and cyber risk is paramount for lenders and banks – one hack and a company can lose its entire net worth, reputation, and future. Now that hackers use sophisticated tools to detect versions of commonly used passwords, the National Institute of Standards and Technology (NIST) issued revised password guidelines to help people create passwords only they would know (and that would be difficult for thieves to crack). If you can picture it in your head and no one else could, that’s a good password.
 
Check out Special Publication 800-63B on Digital Identity Guidelines. Gone are recommendations to make passwords overly complex. Now, the important thing is for them to be personal and unique. Anything that you could easily think of might be a good password (a unique experience or diverse interest perhaps). Moreover, with these uniquely crafted passwords, you may not need to change them as often either. NIST’s guidelines continue to call for restricting sequential and repetitive characters (such as 12345), words that pertain to the particular site that the person is using, and commonly used passwords (such as p@ssw0rd). Management warns both employees and customers not to use passwords they may have had at other institutions or websites that subsequently suffered breaches. NIST says hackers often search for those first.
 
In prior commentaries I’ve mentioned that banks and other companies should still employ multi-factor authentication measures to lessen the chance of successful breaches. Indeed, more organized crime rings are successfully performing account takeover attacks on web and mobile applications. So, thwarting them with both unique passwords and additional authentication puts up two walls of defense.
 
Steve Brown with PCBB warns, “Know that criminals typically buy lists of commonly used user name and password combinations on the black market, and input the pairs into password cracking software called automated credential stuffing tools. Cybercriminals then use botnets to infect websites and mobile apps, enabling them to then use these credential stuffing tools to crack user names and passwords.”
 
Is a dollar in my wallet better than a dollar on the internet? Blockchain and artificial intelligence will not be adopted as quickly as expected, multiple industry experts say. Speaking at the SIFMA annual meeting, Bank of America Chief Operations and Technology Officer Cathy Bessant said distributed-ledger technology has potential but is so far "untested and untried," while Rostin Behnam of the Commodity Futures Trading Commission told a CFTC conference that industry processes work reasonably well and have benefited from considerable investment.
 
How are lenders and banks viewing blockchain? Blockchain technology has many other uses that may be useful to banks & lenders beside those related to cryptocurrency. It uses a distributed ledger method of tracking and accounting, and that same technology can be used for contracts and business transactions. Some countries are even using blockchain to fight fraud and corruption.
 
Regulators are beginning to look at blockchain and provide clues as to how the use of it might eventually be regulated. As a reminder, cryptocurrencies rely on blockchain technology. The regulatory view of cryptocurrencies is evolving quickly. One of the first agencies to attempt a regulatory framework was the New York Department of Financial Services (NYDFS). In 2015, they published final rules for any crypto/virtual currency companies doing business in New York, which require these companies to apply for a Bit License.
 
The Commodity Futures Trading Commission (CFTC) has determined that at least some cryptocurrency tokens are commodities, and thus, subject to CFTC regulation. That is a big step for banks and non-depository mortgage banks that may have customers who want to use cryptocurrencies in transactions.
 
FINRA notes in its latest Regulatory and Examination Priorities Letter that it will be focusing on the sales practices of initial coin offerings (ICOs) and cryptocurrencies. The SEC is very interested in these areas, so more information and regulation is likely.
 
The FinCEN Improvement Act of 2018 just passed in the House. It seems to broaden the scope of FinCEN’s responsibility from protecting the financial system from illicit use and fighting money laundering, to a more active role of working with foreign financial intelligence units to prevent the use of cryptocurrencies potentially used by terrorist groups. While it still needs Senate approval, this bill could affect other regulations on this matter as well.
 
Rep. Tom Emmer, R-Minn., co-chairman of the Congressional Blockchain Caucus, says he will introduce three bills that call on the US to "prioritize accelerating the development of blockchain technology and create an environment that enables the American private sector to lead on innovation and further growth." The bills urge regulatory clarity and government support for the blockchain industry.
 
This week the Senate Banking Committee held a hearing titled: “Exploring the Cryptocurrency and Blockchain Ecosystem.” The committee will hear from two witnesses: Dr. Nouriel Roubini (NYU) and Mr. Peter Van Valkenburgh (Coin Center), two are capable witnesses with diametrically opposite views of the cryptocurrency ecosystem. Dr. Roubini once described blockchain as "one of the most overhyped technologies ever" and said that most initial coin offerings (ICOs) were "created by con artists, charlatans, and swindlers looking to take your money and run." Mr. Van Valkenburgh works at Coin Center, which is the “leading non-profit research and advocacy center focused on the public policy issues facing cryptocurrency and decentralized computing technologies like Bitcoin and Ethereum.” Asking a 75-year old Senator to understand any of this is ludicrous, but analysts believe that the primary policy focus in the near-term will be on policing the industry and individuals rather than introducing a sweeping federal overhaul. Who can do a federal overhaul anyway?
 
In addition to all the regulatory agencies, leaders in the Crypto/Virtual currency industry have proposed a self-regulatory body called the Virtual Commodity Association (VCA). It would require member firms to commit in writing to operating their offerings in compliance with safe and sound practices and "provide a sanctions-based accountability program to compel ongoing member compliance."
 
The North American Securities Administrators Association is ahead of federal regulators in support of a formal cybersecurity rule for financial professionals, and that likely makes sense, said President Michael Pieciak. Small firms are regulated by states and "are some of the most vulnerable shops," he said.
 
No, this is not a paid ad, but the Northwest Credit Union Association (NWCUA) and IP Services announced a partnership that will provide cybersecurity and Information Technology (IT) systems management solutions to its member credit unions. “National safeguards and standards are being established to protect financial institutions and consumers from constant threat of breaches. Individual credit unions should adopt the same strategy to thwart off next generation cyber-attacks. It is critical that credit unions deploy a proactive security strategy that manages IT assets, ensures service availability, and manages risk mitigation. IP Services solves these challenges by using an integrated set of processes and controls to ensure uninterrupted systems and business performance while adhering to strict compliance and security requirements.” Northwest credit union leaders will have the opportunity to meet the IP Services team during the NWCUA’s annual MAXX Convention in Tacoma Oct. 16-18. IP Services is an exhibitor at the Strategic Link Trade Show during the event.
 
The news is not confined to the United States. Five thousand nine hundred miles away in China, the Chinese Central Bank announced it has officially launched testing of a blockchain trade finance platform designed to conduct trade and financing activities. And last month in Russia the Raiffeisen Bank issued a digital mortgage using blockchain.
 
 
Bob Hill and his new wife Betty were vacationing in Europe – as it happens, near Transylvania. They were driving in a rental car along a rather deserted highway. It was late and raining very hard. Bob could barely see the road in front of the car.
Suddenly, the car skids out of control! Bob attempts to control the car, but to no avail! The car swerves and smashes into a tree. Moments later, Bob shakes his head to clear the fog. Dazed, he looks over at the passenger seat and sees his wife unconscious, with her head bleeding! Despite the rain and unfamiliar countryside, Bob knows he must get her medical assistance. Bob carefully picks his wife up and begins trudging down the road. After a short while, he sees a light. He heads towards the light, which is coming from a large, old house. He approaches the door and knocks. A minute passes. A small, hunched man opens the door.
Bob, badly wounded, mumbles, “My name is Bob Hill, and this is my wife Betty. We’ve been in a terrible accident, and my wife has been seriously hurt. Can I please use your phone?”
“I’m sorry,” replied the hunchback, “but we don’t have a phone. My master is a doctor; come in, and I will get him!”
Bob brings his wife in. An older man comes down the stairs. “I’m afraid my assistant may have misled you. I am not a medical doctor; I am a scientist. It is many miles to the nearest clinic, however, and I have had a basic medical training. I will see what I can do. Igor, bring them down to the laboratory.”
With that, Igor picks up Betty and carries her downstairs, with Bob staggering after them. Igor places Betty on a table in the lab. Bob collapses from exhaustion and his own injuries, so Igor places Bob on an adjoining table.
After a brief examination, Igor’s master looks worried. “Things are serious, Igor. Prepare a transfusion.” Igor and his master work feverishly, but to no avail. Bob and Betty Hill are no more. The Hills’ deaths upset Igor’s master greatly. Wearily, he climbs the steps to his conservatory, which houses his grand piano. For it is here that he has always found solace. He begins to play, and a stirring, almost haunting melody fills the house.
Meanwhile, Igor is still in the lab tidying up. His eyes catch movement, and he notices the fingers on Betty’s hand twitch, keeping time to the haunting piano music. Stunned, he watches as Bob’s arm begins to rise, marking the beat! He is further amazed as Betty and Bob both sit up straight!
Unable to contain himself, he dashes up the stairs to the conservatory. He bursts in and shouts to his master: “Master, Master! The Hills are alive with the sound of music!”
 
 
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, “The Rise of the Credit Unions.” 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 hundreds of 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.)

 

 

Oct. 12: AE & LO jobs; construction, acquisition/lease program; slicing & dicing Wells’ deal worth a read for LOs

“Rob, are you hearing about investors taking more of a hard line on every issue right now? In recent years they would give an extra day, or waive something, but they are not doing this right now.” Yes, I am hearing that, and that “hard line” approach impacts the primary markets as well, and LOs should set borrower expectations. The “big guys” are testing the security market right now. (See the capital markets section for an interesting review of Wells’ deal.) Remember that in recent years plenty of securitizers have lost billions in fees and settlements due to loans in securities not being what they represented and want to avoid that at all costs. You can’t blame them dotting the i’s and crossing the t’s. Hopefully minor issues, unlike Sears and Kmart. Trepp reports that their locations have more than $10.6 billion in retail debt which features Sears as a top-five tenant at the underlying property.
 
Jobs & promotions
 
A lot of expansion is going on over at Thrive Mortgage with the addition of Randell Gillespie as National Sales Director. The legendary past of this company has perfectly prepared it for the growth they are experiencing. When asked about joining Thrive, Randell said, “They got my attention with their complete Construction Lending platform, ‘Lock & Shop’ program, competitive pricing, and quick processing. Once I visited corporate and witnessed the leading technology, resources, and passion; it was clear this platform was unmatched when considering the things I wanted as a former top-producing loan officer.” Randell’s extensive background ensures that Thrive will continue with their streak of success and growth in a compressed marketplace. The first lender in Texas to complete a 100% digital mortgage, Thrive is continually at the forefront of innovation seeking to enhance the client experience. Reach out to Thrive’s talent acquisition team today via Kim Rea (512-843-0225).
 
“Are you tired of managing a corporate P&L? Then maybe it’s time to start managing your own instead. Introducing Motto Franchising, LLC, the very first national franchised mortgage brokerage network in the U.S. When you join the Motto Mortgage network, you have the freedom and flexibility to run your own business while taking advantage of an out-of-the-box mortgage company solution. We even streamline the process of starting a new business by providing a strong wholesale lender mix, franchisee setup support, LOS training, licensing, marketing tools and more. It’s time to manage your future, on your terms. To learn more on how this innovative model is breaking the mold, contact our team at mottomortgage.com/franchises or 866.668.8649.”
 
Plaza Home Mortgage, Inc. is currently looking to grow its Sales Team. Plaza has a rare opportunity for an Account Executive role to handle the WA, ID & MT, with having access to existing clients and prospects, and is looking for a knowledgeable and motivated individual that can add to their book of business with Plaza. Join a growing team with a very competitive compensation plan, some of the best training in the industry, real-time marketing support and a regional operations center, along with a diverse product menu including Renovation Loans, soon to have Construction Loans with a team to support along with FHA, VA, FNMA, FHLMC, Jumbo and Non-QM! For more information on this opportunity, please contact Diane Saenz, (HRBP)Plaza is an EEOC employer and follows all laws relating to fair employment.
 
National MI continues to add Sales Advisor across the country. “We are excited to announce that Linda Boyle will be joining National MI and will work with Ernie Grue as an Account Representative in Maryland, DC and Northern VA. Linda brings extensive knowledge and strong relationships that will help National MI continue to grow in the region. Annie Chae will be taking on the role of Account Representative in Illinois. She has 25 years of industry experience, mostly as a loan originator, but also has background as a Wholesale Account Representative. She was previously with Pinnacle Mortgage Funding, PNC Mortgage and BMO Harris Bank. Joey Shoemaker will be joining us as an Account Representative in Illinois. Joey comes to National MI from Guaranteed Rate where he was the Director of Online Lending. In this role, he supervised a team of loan officers and originated on his own as well. Joey also has back office experience at Wells Fargo.”
 
Lender products & services
 
Lenders One is pleased to welcome Jason Wright to the new role of Director of eMortgage Services to drive implementation and support of the L1 eClosing by DocMagic solution. Previously, Wright worked at PeirsonPatterson, LLP, guiding deployment of their eClosing platform since its release in 2008. He’s facilitated thousands of eClosings, working extensively with investors, warehouse banks, attorneys, settlement agents and real estate professionals in educating and onboarding them to eSign technology. Wright will be available to meet with Lenders One members and prospective members next week on the topic of eClosing at MBA Annual. Reach out to Jason directly if you’re interested in setting up a meeting.
 
Responsible consumers unable to obtain traditional mortgages can still get what they want using the innovative Real Estate Acquisition-Lease (“REAL”) Program, offered by Seashine Real Property Services. REAL provides solutions for consumers facing qualification challenges such as income documentation, divorce, sourcing of funds, isolated credit blemishes, citizenship, etc. REAL can be used on almost any property letting consumers choose their home, lock in current-market prices and keep 100% of any net-appreciation (no equity-sharing). With a simple qualification process, REAL can accommodate customers with as low as a 580-credit score and eliminates the difficulties of income and asset documentation and verification. Seashine is currently looking for real estate and mortgage company partners in the Southern CA and UT areas that are interested in looking for ways to close more deals while building lasting customer relationships. For more information, call 888-401-0285, email contact@realhomeownership.com or visit www.realhomeownership.com.
 
With 2018 the year of transition, lenders across the U.S. are struggling to find ways to produce more revenue and are searching for innovative products to support or recruit for their origination platforms. CFSI Loan Management is a full-service construction risk mitigation company, helping lenders manage the construction process from beginning to end. “We help our lending partners to ensure that the contractor and project feasibility phase is set prior to loan approval and after loan funding we provide full service fund control (including lien releases) and a national inspection platform that allows our clients to ensure that the project is progressing on time and the percent complete is accurate for funding each draw. Lenders manage credit risk, CFSI manages construction risk. Let CFSI Loan Management help you with your renovation or ground up construction loan programs.” Please contact President Brian Mingham for information.
 
Capital markets
 
This week Wells Fargo began the marketing for its first private label securitization that pools $441 million of residential mortgages since the financial crisis. The pool is comprised of mostly 30-year fixed-rate mortgages to borrowers with strong credit profiles and high credit scores, While other big mortgage lenders have already gotten back into the business of securitizing home loans without government guarantees, including JP Morgan and Redwood Trust, this marks a seminal moment for Wells Fargo. The new Wells deal will include mostly Triple A rated notes of 2.78 to 9.25 years and a mezzanine tranche of Aa1/AAA rated 4.93-year notes, with weighted average credit scores of 779. Wells is expected to price the deal next week. Most recently, Wells paid $2.09 billion to regulators in August to settle claims that it mis-sold mortgage bonds to investors.
 
Moody’s Investors Service looked at the 24 classes of residential mortgage-backed securities (RMBS) issued by Wells Fargo Mortgage Backed Securities 2018-1 Trust ("WFMBS 2018-1"). The ratings range from (P)Aaa (sf) to (P)Ba1 (sf). The mortgage loans are originated by Wells “generally in accordance with the non-conforming underwriting guidelines. All of the loans are designated as qualified mortgages (QM) under the QM safe harbor rules.” Wells will service all the loans and will also be the master servicer for this transaction.
 
Moody’s’ thought the following factors were the strongest features of this transaction. All loans came from Wells’ retail division. All the loans are QM, the borrowers have high FICO scores, significant liquid cash reserves and sizeable equity in their properties. The weighted average original FICO score of the underlying borrowers is 774 and the weighted-average combined loan-to-value ratio (CLTV) is 73.1%. 87.2% of the borrowers have more than 24 months’ liquid reserves. The pool is seasoned for approximately 17 months and has perfectly clean pay history.
 
The transaction structure “benefits from a senior subordination floor: WFMBS 2018-1 has a standard shifting interest structure, with a subordination floor to protect against losses that occur late in the life of the pool when relatively few loans remain (tail risk). When the total senior subordination is less than 1.25% of the original pool balance, the subordinate bonds do not receive any principal and all principal is then paid to the senior bonds. In addition, if the subordinate percentage drops below 5.00% of current pool balance, the senior distribution amount will include all principal collections and the subordinate principal distribution amount will be zero.”
 
“The loan-level Reps & Warranties meet or exceed the baseline set of credit-neutral R&Ws we have identified for US RMBS. R&W breaches are evaluated by an independent third party using a set of objective criteria. Like JPMMT transactions, the transaction contains a ‘prescriptive’ R&W framework. The originator makes comprehensive loan-level R&Ws and an independent reviewer will perform detailed reviews to determine whether any R&Ws were breached when loans become 120 days delinquent or the loan is modified due to mortgagor hardship or the property is liquidated at a loss above a certain threshold. These reviews are prescriptive in that the transaction documents set forth detailed tests for each R&W that the independent reviewer will perform.
 
“WFHL is one of the largest residential mortgage originators in the U.S. WFHL’s guidelines are well written and unambiguous. In addition, WFHL leverages technology and has solid processes and procedures in place to ensure the quality of loan production. Wells Fargo has the necessary processes, staff, technology and overall infrastructure in place to effectively service the transaction.”
 
Moody’s also noted risks led by credit challenges. “Due diligence results show credit underwriting exceptions. The due diligence results showed a number of loans with a final B grade where the exception remains. Many of the grade B loans were underwritten using the underwriters’ discretion. Areas of discretion included missing verbal verification of employment, verification of closing funds and assets and explanation for multiple credit exceptions. The due diligence firm noted that some of these exceptions are minor and/or provided an explanation of compensating factors…the responses provided by the issuer were adequate and outweighed the limited compensating factors in some cases.
 
“Borrowers with multiple finance properties: Borrowers with two or more mortgages represent 30.8% (by loan balance) of the pool. Borrowers with more than one mortgaged property could be more likely to default than borrowers with one property especially in a distressed housing market. However, high income borrowers with stable employment may support debt payments on vacation properties. Borrowers with two to three mortgages represented 28.8% (by loan balance) of the pool. Borrowers with more than three mortgages represented 2.0% (by loan balance) of the pool.”
 
Large loans are an issue. “The pool contains a number of loans with high principal balances, which exposes the transaction to the risk of losses at the tail of the transaction, when few loans remain. At that time, a default of a large loan would significantly reduce enhancement and result in losses to the bonds.”
 
In terms of newer companies, Angel Oak just set its fourth straight record for quarterly production and continue to churn out larger and larger securitizations. Here are AO’s third quarter numbers for non-QM.
 
Rates continued their recent drastic volatility yesterday, the U.S. 10-year yield dropping to 3.13% in the wake of President Trump criticizing the Federal Reserve’s tightening policy, saying the Fed is "out of control." That statement is ludicrous. Headlines surrounding economic releases revolved around both headline and core CPI registering below estimates, though it should ease concerns about rising inflation. President Trump is certainly frustrated both readings are above the Fed’s 2% inflation target, making a rate hike in December likely a formality. The CPI readings showed labor is tight, but prices are calm as trade tariffs are adding price pressure to specific products that don’t necessarily show up in the headline reading.
 
Today’s calendar kicked off with September import / export prices (+.5% and flat, respectively). Next up will be the University of Michigan Sentiment Index, out at 10:00am, expected to rise. There are also three scheduled Fed speakers starting with Chicago’s Evans, continuing with Atlanta’s Bostic, and closing with Governor Quarles. We have already had Q2 bank earnings from JP Morgan, Citigroup, Wells Fargo and PNC – solid! Friday begins with the 10-year yielding 3.16% and agency MBS prices roughly unchanged versus last night’s close.
 
 
A man is walking home alone late one foggy Halloween night, when behind him he hears:
BUMP… BUMP… BUMP…
Walking faster, he looks back and through the fog he makes out the image of an upright casket banging its way down the middle of the street toward him.
BUMP… BUMP… BUMP…
Terrified, the man begins to run toward his home, the casket bouncing quickly behind him.
FASTER… FASTER… BUMP… BUMP… BUMP….
He runs up to his door, fumbles with his keys, opens the door, rushes in, slams and locks the door behind him. However, the casket crashes through his door, with the lid of the casket clapping.
clappity-BUMP…clappity-BUMP… clappity-BUMP…
on his heels, as the terrified man runs.
Rushing upstairs to the bathroom, he locks himself in. His heart is pounding; his head is reeling; his breath is coming in sobbing gasps.
With a loud CRASH the casket breaks down the door.
Bumping and clapping toward him.
The man screams and reaches for something, anything…
All he can find is a box of cough drops! Desperate, he throws the cough drops at the coffin …
…and… of…course, …the coffin stops!
 
 
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, “The Rise of the Credit Unions.” 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 hundreds of 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.)

 

 

Oct. 11: AE jobs; non-QM, digital, tech products; MSA compliance webinar; vendors raising money, partnering

We’re in the middle of mortgage conference season. (Are there any apple orchards left with all the applewood smoked bacon served at breakfasts?) The MBA’s National Conference begins Saturday – yes, nearly every conference eats into the weekend – and attendees will be watching the LTV (lender to vendor) ratio. Plenty of vendors are merging or partnering, raising money, offering new products – lots of news below. And in legal news, there’s even an app that lets people sue anyone! Great – just what we need, huh?
 
Jobs
 
“Closing Q3 with a flourish, Angel Oak Mortgage Solutions, the leader in non-QM, added 7 new account executives in September to teach brokers and correspondents about growing their business with non-QM. Adding additional coverage across the country, Jen Bradley came on-board in Nashville, Craig Forney in Salt Lake City, Charles Nichols in Greenville, Bridget Trevino in Detroit, Michael Williams in Inside Sales with Texas adding John Combs in Houston and Trisha Fedrick in Austin. Primed to continue setting record volumes, AOMS is looking for new Account Executives in markets across the country. Why work with anyone but the best? To learn more, view the latest job openings on the Careers Page or email Regional Sales Manager, John Wise.”
 
Lender products and services
 
Royal Pacific Funding (RPF) is offering its broker partners more value to their borrowers. RPF will apply a credit at closing for your borrower equal to a free appraisal (up to $500) on all purchase and refinance transactions with loan amounts $300K or more, for Conventional, FHA, VA and NonQM loans. This special applies to all new submissions from October 1st through the end of 2018 that fund by December 31st, 2018. Some limited exceptions apply so please contact your AE for full details. If you are a mortgage broker and not yet approved with Royal Pacific Funding, please contact us here and we will get an AE assigned to your account, so you can take advantage of this incredible offer. RPF offers FHA and VA loans as low as 550 FICO, Conventional loans for DACA borrowers, CalHFA, NonQM and an amazing operations staff that cares about your borrowers as much as you do.
 
Non-QM and Jumbo products are critical in today’s lending environment. But you need non-agency products that fit. JMAC Lending’s Newport Streamlined First Lien Jumbo Alternative is one of those products. Approved eligible/Ineligible DU findings are followed for income and assets – an incredible feature. If the DU findings say one-year tax returns or W-2 only, that’s all JMAC needs. If guidelines call for six-months reserves, but the DU says no reserves, we go with no reserves. No question. Plus, JMAC accepts appraisal transfers on this program. Purchase, rate-and-term and cash-out go up to 95% LTV to $1.5 million with no MI. Add in the 40-year fixed with interest-only and the Newport Streamlined First Lien becomes a go-to tool in your jumbo/non-QM toolbox. Check out this innovative jumbo alternative product here. Contact us today to learn more: sales@JMACLending.com or call 844. 888.JMAC.
 
The new TMS white paper is so dead on when they talk about how it’s odd that “our industry uses the term ‘servicing’ when every other industry has ‘customer service.’” Lenders sell off customers without a thought about how they will be taken care of or even considering the future value of that customer. Looks like we should start thinking about what our customers are really worth after the closing table. Download the entire white paper for free here.
 
Center Street Lending is excited to announce that Robert Newcomer has joined its Sales Team. “With over 20 years of experience, Robert is a highly creative, solution-driven individual who is always willing to go above and beyond his client’s expectations. Prior to joining the Sales Team at Center Street Lending, Robert worked at Banc of California as a Mortgage Advisor focused on purchase money lending then transitioning to Caliber Home Loans as a Residential Lending Specialist. Robert also worked at Nationstar Mortgage where he was responsible for assisting customers nationwide through all facets of the lending process. Center Street Lending has built a reputation as a premier private money, portfolio lender. It provides business-purpose loans through wholesale and retail channels for investments in: fix and flip, fix and rent, buy and rent; buy, tear down and build; new construction, and bridge loans. Contact Robert for more information.”
 
You have a deadline but it is after business hours and you need an answer now. Ugh, what do you do? You cannot take the chance of giving inaccurate information to your customer. This is not a #LoanOfficerGoals moment. If only you had 24/7 access to underwriting knowledge that could provide you with all the answers you need. Well, with a subscription to The Rule Tool you do! If you ever have an agency guideline question, The Rule Tool has an answer! It was made to be an advocate for Loan Officers. They understand the struggle is real working with underwriters, so they provide tips on file structuring and documentation. So, you can make over-conditioning a thing of the past! For only $20 per month you can put an Underwriter in your pocket and get the answers you need today! Sign up by clicking here.
 
Fintech leader Informative Research (IR) announced today its new integration with MortgageHippo’s digital lending platform. “Our cutting-edge technology combined with MortgageHippo’s robust digital platform was a perfect match,” commented Scott Horn, COO of Informative Research. “Lenders need better tech solutions and simplified service, so we’re thrilled about this partnership and for MortgageHippo users to experience a more streamlined lending process.” With IR now fully integrated with MortgageHippo, users can order multiple credit products under one vendor including but not limited to the customizable TriMerge Credit Report, PreClose Credit Report, QuickLook, and their popular SoftQual solution, which lets lenders pull a soft inquiry on an applicant’s credit report before pulling a hard inquiry so they can prequalify them and save time and money. “We are proud to partner with a trusted provider like Informative Research,” said Joe Dahleen, EVP and Chief Strategy Officer at MortgageHippo. “Providing lenders with accurate and reliable credit data is a key element of the digital mortgage experience that today’s borrowers demand.” Read more here.
 
Chip Glover EVP, Director of Capital Markets at Townebank Mortgage (Virginia Beach, VA) says, “We couldn’t be more pleased with the support we have received from DocProbe.
They have been a partner with us for about a year and it has been proven time and again what a good decision it was to outsource our trailing docs process to them. From day one, DocProbe was helpful and accessible to address any issue we had. Implementation of the DocProbe structure with our loan origination system was quite easy. The representatives with DocProbe have been very helpful and they are willing to accommodate us in any way possible. Communication has been professional, friendly, prompt, clear and concise and they have taken the art of overseeing trailing docs and turned it into a science. I would recommend DocProbe to anyone wanting to utilize their services.DocProbe will be exhibiting at the MBA Annual in DC next week. Reach out to learn more and to set up a call or meeting.
 
Did you know that LendingQB is a product of MeridianLink, one of the largest providers of SaaS technology to the financial industry? Did you also know that you can meet representatives of LendingQB and MeridianLink at the MBA Annual Convention and Expo? Over the years, LendingQB has become a leading provider of LOS technology to the mortgage industry, but when combined with MeridianLink’s LoansPQ consumer lending LOS and data services platform, MeridianLink as a whole offers multi-faceted solutions for financial institutions that impact more than 20,000 businesses nationwide. Reach out to Linn Cook at 949-419-5627 or David Colwell at 949-371-4669 or visit www.meridianlink.com and www.lendingqb.com to learn more.
In recent news from this week, more top lenders across the industry continue to choose Maxwell as their digital mortgage and point-of-sale technology partner. Most recently, Maxwell has announced partnerships with Triumph Mortgage and Guaranty Trust wholesale as part of their new TPO and wholesale platform. Their new TPO and wholesale solution ads to their already successful and industry-leading point-of-sale for retail lenders. "TPOs and wholesale lenders are in a competitive environment that requires differentiation, flexibility, and incredible service," said John Paasonen, Maxwell’s co-founder and CEO. "The release of our TPO and wholesale platform allows TPOs and wholesale lenders of all sizes to easily launch and manage a point-of-sale partnership across their networks." To find out why  lenders across the nation are continuing to choose Maxwell, visit www.himaxwell.com or request your demo here.
 
Legal news
 
James Brody, Chair of Johnston Thomas’s Mortgage Banking Practice Group, is hosting a complimentary webinar at 10:30 AM PST, on Thursday October 18, titled “Compliance Tips and Trends: The Resurgence of Marketing Service Agreements, Affinity Relationships, Joint Ventures, and Affiliated Businesses”. Per Mr. Brody, given companies ever shrinking margins and the always present pressure being placed on them to maximize profits, this webinar is meant to provide all such companies with invaluable tips on whether to utilize a Marketing Service Agreement or otherwise, as well as how to do so in a compliant manner. In addition, if you were not able to attend and would like to access a complimentary recording of Johnston Thomas’s most recent webinar program, click on Loan Officer Compensation Tips and Trends: How to Gain a Competitive Edge While Remaining Compliant. Questions regarding either of these two programs? Contact Mr. Brody or, if possible, meet with him and his colleagues in person at the MBA’s upcoming Annual Convention and Expo in Washington D.C. on October 14-17 or the ACI’s Residential Mortgage Conference in Dallas, TX, on October 22-24.
 
Robot lawyer DoNotPay now lets you sue anyone via an app.
 
Builders are encouraged that a new administration will ease the shortage of buildable land caused by increased environmental regulations. They may be overoptimistic about what can be done, however. Many of these laws are local, which the Federal Government can’t do much about. Changing regulations takes a long time, with comment periods, and environmental groups have lawsuits at the ready if they sense the administration is no longer enforcing existing laws. 
 
Vendor news
 
Secure Insight and DocMagic announced collaboration on an eMortgage and eClosing training program designed for closing agents. DocMagic developed the online program and will train agents to handle the eClosing process via DocMagic’s Total eClose solution. Secure Insight built and will host the online training site and make it available to its database of nationwide attorneys, title agents and escrow officers.  Ultimately, lenders working with both companies will have access to the trained and certified agents who have completed the program. Tim Anderson at DocMagic stated, “We are excited to announce this new venture which has been in development for some time. It connects attorneys and title agents trained in eClosings with lenders who are ready to step up to a digital mortgage platform.” Andrew Liput, CEO of Secure Insight states, “We were thrilled to work with Tim and DocMagic on this program, which is one of several new industry advances we have been working on this past year. We’ll continue to fulfill our reputation as thought leaders in closing fraud prevention and vendor management.”
 
Credible.com announced the launch of its first-of-its-kind mortgage marketplace. “Credible.com is the only mortgage marketplace that provides actual rates from top lenders in 3 minutes (without affecting a borrower’s credit score), and a streamlined digital origination process. The platform is designed to save borrowers frustration, time and money. The first product offer through the Credible.com mortgage marketplace is mortgage refinancing, which went live today in 20 states that collectively represent 65 percent of mortgage originations. Credible’s technology automates much of the origination process, so borrowers can close their chosen loan without leaving the Credible.com marketplace. At launch, Credible is partnered with six mortgage lenders – including several of the nation’s top 10 lenders – to offer a diverse range of mortgage products: Quicken Loans (the largest retail mortgage lender), Caliber Home Loans, United Wholesale (the largest wholesale lender) and more. Credible’s product roadmap includes home purchase loans, more states and more lenders.”
 
Total Expert announced it has raised $20 million in Series B funding. The round was led by Emergence Capital with participation from Rally Ventures and Arthur Ventures, bringing Total Expert’s total funding to $34 million. "We started Total Expert to ensure banks and lenders stay ahead of how customers expect to communicate, shop, and manage their financial lives in the digital/social era," said Joe Welu, founder and CEO. "People expect digital simplicity and real human relationships, and financial services companies too often lose these relationships when they don’t engage with personalized, automated communication as people go from awareness to lead to transaction. We solve this using data to drive each customer’s journey toward a relevant transaction, then manage each customer relationship for life."
 
Capital markets
 
Stocks grabbed the headlines yesterday as global equity markets came under sustained pressure amid fears the trade dispute between the US and China and rising US Treasury yields will lead to a correction. The U.S. 10-year resumed last week’s ascent, closing yesterday up +2bps to 3.23% as outflows from the stock market were directed into Treasuries, despite a poorly received Treasury auction.
 
We received the usual worries about trade tensions with China ratcheting up, with fears now centering around decreased profits for companies as financial conditions tighten. News from the White House included U.S. Treasury Secretary Steven Mnuchin reportedly warning Chinese officials not to engage in competitive currency devaluation and President Trump announcing that the next summit with North Korea’s Chairman Kim Jong-un will take place after the midterm elections. President Trump once again called the Federal Reserve raising interest rates a “mistake” and argued the recent decline in the stock market and the VIX “fear” gauge rising its most since May merely a long “overdue correction.”
 
September CPI and jobless claims for the week ending October 6 kicked off news (expected to be unchanged at +0.2% while core CPI was expected +0.2%, both were +.1%, inflation running at about the Fed’s target). Initial jobless claims clocked in at 214k, about as expected. Later today is another Treasury auction – stay tuned. We also have some Fed speak, with Atlanta Fed President and FOMC voter Raphael Bostic delivering remarks tonight. Thursday begins with the 10-year at 3.17% and agency MBS prices almost unchanged, so rates aren’t doing much.
 
 
Ahead of next week’s MBA conference, here’s some trivia for you. Scientists suggest that you can recognize up to 5,000 faces. A facial vocabulary!
 
 
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, “The Rise of the Credit Unions.” 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 hundreds of 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.)

 

 

Oct. 10: LO jobs; warehouse and non-QM products; Agency appraisal & inspection changes; builder bear market

;widows: 2;-webkit-text-stroke-width: 0px;text-decoration-style: initial;text-decoration-color: initial;word-spacing:0px”> What do ghosts drink at breakfast? A. Coffee with scream and sugar.
Where does a ghost go on vacation? A. Mali-boo.
Where does a ghost go on Saturday night? A. Anywhere where he can boo-gie.
Where did the ghost get its hair done? A: At the boo-ty shop.
What do they teach in witching school? A. Spelling.
 
 
 
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, “The Rise of the Credit Unions.” 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 hundreds of 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.)