News

Nov. 21: AE & LO jobs, construction & recruiting products; CRA changes; new lender; mortgage & appraisal books for your staff

What is more relaxing than breakfast in bed? IHOP is there for you, and is testing IHOP home delivery in various states. Roshambo to see who answers the doorbell? In even more exciting news, we now have a new threshold for the smaller loan exemption from appraisal requirements for higher-priced mortgage loans. Heavyweights CFPB, OCC, and the Fed ratcheted it up slightly.
 
Products & jobs
 
“Prime Mortgage Lending, Inc. is pleased to announce that Adam Haller, a Chartered Financial Analyst and leader in CFA Society North Carolina, has joined us as Director of Mortgage Finance Technology. Adam will focus on implementation of automation in mortgage loan origination, development of mortgage industry accounting software, and financial analysis to support best execution of mortgage sales into secondary market. Adam is an experienced business professional, delivering financial and economic analysis to banks and institutions. Since 2008, he has been developing proficiency in risk management within the mortgage banking industry. Prime Mortgage Lending will benefit from Adam’s areas of focus which include interest rate risk, mortgage valuation, behavioral finance, technology, and process improvements. Adam earned a Masters of International Business Studies from the Darla Moore School of Business at the University of South Carolina. Prime Mortgage Lending is growing, to join our team or to learn more about Prime Mortgage Lending, visit www.GoPrime.com.”
 
GSF Mortgage Corp. has recently launched its Single Close Construction Program for FHA, VA, and USDA construction lending. Since its launch, GSF has approved more than 60 builders to offer their products. This low down payment construction option is a great alternative in markets that are strapped for inventory. GSF Mortgage is one of the few lenders in the country offering new construction lending for the 100% LTV USDA product. If you are a branch manager, loan originator or processor with construction lending experience or would like to offer construction lending products please, reach out to Rich Obermeier at (262) 957-8901.
 
loanDepot has announced a partnership with a Texas-based real estate technology company, OJO Labs. As the new mortgage provider for the artificial intelligence-powered assistant known as OJO, consumers will be able to engage in a personalized mobile experience leading up to their home purchase, accessing invaluable mortgage information prior to interacting with a Loan Officer. This will give the LO a complete picture of the borrower’s needs before even speaking with them. As consumer behaviors continue to evolve, merging loanDepot’s digital lending platform, mello, with OJO’s breakthrough technology is generating a powerful tool to drive value for LOs and local real estate agents. OJO, the interactive assistant, will deliver homebuyers personalized micro experiences through human-like conversations via text message and offer digital mortgage pre-qualifications through its integration with mello. Yet another example of loanDepot’s constant effort to remain at the forefront of an increasingly digital mortgage industry. Interested in being on the cutting edge of the mortgage industry? Contact Peter Tenfjord.
 
Priming for a head start on 2018, Angel Oak Mortgage Solutions is continuing to build its stellar team by adding Wholesale Account Executives in markets across the country, specifically in San Francisco, Seattle, Los Angeles and New Orleans. To continue to deliver an extraordinary customer experience while realizing record monthly volumes, it is also hiring underwriters and other operations positions in its Atlanta headquarters. As more companies realize the benefits of offering non-QM products, it only makes sense to work with the market leader. Visit JoinAngelOak.com or learn more about what it’s like to work for Angel Oak by watching the Top Mortgage Employer’s interview from the Mortgage News Network.
 
Tired of paying per click charges for MSP and Fiserv? Well now you can stay on MSP and Fiserv without paying those massive fees. How you might ask? A group of servicing technology veterans have developed a new software that sits on top of MSP and Fiserv which gives your team a full digital interface for your servicing team while eliminating all click charges. Due to the enormous disruptive threat of such a software, the company and software are in stealth mode still. If you are interested in learning more, email me and I will forward your note.
 
“Mortgage Branch Leaders are largely in the dark regarding compensation opportunities available today. Companies are now willing to open the vault. Much like pro sports, ownership is sharing revenue down to the playing field. Many offer lucrative P&L Models but the new trend is the equally rewarding hybrid plan geared up for those who want the financial benefits of managing a P&L without the hassle of becoming a CPA. The Hybrid is 100% compliant. “A valued client once told me at the end of the day, it’s just math". In the hybrid model, companies simply agree to pay into an increased static Basis Point Model. For companies looking to grow their presence, hire the right leadership, or expand its existing operations, reach out to Jim Boghos, President Boghos Search Group (407-790-7500, ext. 100).”
 
Congrats to Ken Whisler who New American Funding has named Regional VP to cover and expand the company’s presence in its Central and Southern Texas market.
 
Startup
 
Under the category of bank-owned lenders, bemortgage is “the new kid on the block.” Operating out of Chicago, the company is a division of Bridgeview Bank Group founded by industry veterans…that collaborated to develop an innovative and strategic company in an evolving industry. On the LO role, Rob Sampson, CEO and co-founder, stated, “They will have access to the best programs, pricing, and tools so they can grow their business and deliver the highest levels of customer service. Top industry performers will be provided real mentorship opportunities by pairing them with peers and mentoring emerging talent. This approach is the backbone of our new company.” To aid in their growth, the company will launch a New Truth in Lending, a campaign intended to speak candidly about the mortgage process from each loan officer’s point of view.”
 
Books for the holidays
 
Congratulations to anyone who can write a book, and there are several (that I know about) in the biz. And with the reasonable prices, good gifts for your staff. Or for your boss! No, these are not paid ads. In no order, we have…
 
“My Client the FBI: How a real estate appraiser assisted the FBI before and after the mortgage crisis in cleaning up a broken system.” Written by Donald Gossman, you can read more about it here along with thank you notes from the Feds and a link to Amazon to purchase.
 
Michael Rosser and Diane Sanders penned “A History of Mortgage Banking in the West,” a “book that should be read by politicians and business leaders everywhere.” Order at www.upcolorado.com and use promo code ROSS17 to knock 20% off the price.
 
“Buy Your First Home Today” was written by John Mallett is a good book for LOs to give their clients. “Empower your life, build your wealth, own the home of your dreams.”
 
Anne Elliott composed “Mortgage Risk: A Blueprint for Smarter Origination.” The book is meant for underwriters, sales managers, LOs and appraisers.
 
“Hacked. Screwed. Gone.” By Jim Deitch is a “A-Z blueprint to protect your business from accidental & malicious information security threats.”
 
Jason Myers authored “Becoming the Successful Mortgage Broker.” Jason also wrote “The Successful Mortgage Broker.” “Becoming a millionaire in the mortgage industry doesn’t happen by chance. When you lay the proper foundation, you create the opportunity.”
 
From Texas comes Michael Jones (Georgetown Mortgage) with his tome, “Reset” about a loan officer who is bumping along the bottom and re-ignites his career with some simple process changes and effort.
 
“The Uncommon Commodity: A Common-Sense Guide for New Managers” was composed by Doug Thorpe. “A collection of many thought provoking stories, tips, anecdotes, and life hacks to help you grow as a manager.”
 
Bank news
 
Federal bank regulatory agencies have amended their respective Community Reinvestment Act (CRA) regulations primarily to conform to changes made by the Consumer Financial Protection Bureau (CFPB) to Regulation C, which implements the Home Mortgage Disclosure Act (HMDA).
 
As mentioned in this commentary last week, a story in the Wall Street Journal ran a story that indicates some larger banks have dropped their holding company structure regulated by the Fed, to reduce costs and simplify oversight. Some of the largest banks operating without a holding company structure are First Republic Bank ($81.0B, CA), Signature Bank ($40.8B, NY), Sallie Mae Bank ($19.4BUT), Bank of the Ozarks ($20.1B, AR), BancorpSouth Bank ($14.9B, MS), BMW Bank of North America ($9.9B, UT) and Towne Bank ($8.4B, VA). There are pros and cons, of course.
 
Certainly, the cost of regulation enters the decision making of some banks to be acquired or merge with others. In the last week or so it was announced that Heartland Financial ($9.8B, IA) will acquire Signature Bank ($390mm, MN) for about $53.4mm in cash (9.5%) and stock (90.5%) or about 2.06x tangible book. In West Virginia WesBanco Bank ($9.9B) will acquire First Sentry Bank ($666mm) for $101.4mm in stock (100%) or about 2.02x tangible book. In Minnesota Deerwood Bank ($501mm) will acquire Plaza Park State Bank ($210mm), and down in The Sunshine State First Federal Bank of Florida ($1.5B) will acquire CBC National Bank ($651mm) for $83.2mm in cash.
 
Banks borrow money, typically in the form of deposits, which are liabilities, and make loans, which are assets. They are keenly aware of interest rates and the spread between the two. If one looks at interest rate cycles from 1990 through October 2017 one sees that there are similarities between them – and differences. So far in 2017 the Prime and 1 yr. CMT (Constant Maturity Treasury) rates increased over 50 bps, but the 10 yr. CMT yield has taken a different course.  In prior rising interest rate cycles, the 10 yr. CMT rate has been roughly the same as the Prime rate at this point in the cycle which means today’s 10 yr. CMT rate would be closer to 4.25%. Instead it is wallowing around 2.35%. Does this mean some or all interest rates will continue to rise, or does it mean the rising interest rate cycle is nearing its peak?  Nobody knows the answer to this, and if they say they do, guard your wallet.
 
Most banks are prudently holding down their regular deposit rates, with varying degrees of success. Savvy depositors want to earn more on their deposits, and aren’t afraid to change banks to receive it – or negotiate with their current bank. These deposit rates are often much higher than the posted rates. Non-standard deposit pricing and special promotions are not included in the FDIC national average deposit rate calculations which hold down both the average rates, and the FDIC rate caps. 
 
This is causing more deposit activity to occur above the FDIC rate caps than in the past, and is creating a concentration of funding for some banks which could be “taken away” by the regulators under adverse circumstances – not unlike what can happen with brokered deposits. Something else for us to worry about, huh?
 
Capital markets
 
Monday saw a further narrowing of the spread between the 2-yr yield and the 10-yr yield, down to 62 basis points versus 125 basis points at the start of the year. Does it seem to be slowing the economy? No. Could it? Yes. Just something to be aware of. It doesn’t help the adjustable rate mortgage share of the overall market. The 10-year treasury yield hit an overnight low of 2.326% from 2.354% at Friday’s close then slowly and steadily trekked higher to close at 2.37%.
 
In other news that isn’t seeming to matter, at this point, Fed Chair Yellen announced she will resign from the Board of Governors, effective when Jerome Powell is sworn in as Fed Chair. President Trump will have four seats to fill on the seven-seat Board of Governors. The economic news that was released, the Leading Economic Index for October +1.1% with a revision higher for September, made economists continue to say that the hurricane impact was short-lived and that underlying economic activity in the U.S. is solid. 
 
This morning: the Chicago Fed National Activity Index for October (+.65) and Philly Fed non-manufacturing index for November (-8.3). Coming up is October Existing Home Sales which is projected to increase 0.6% m/m to 5.42mn annualized. Things are definitely fading into the holiday as we find the 10-year yielding 2.36% and agency MBS prices ever so slightly better than last night’s close.
 
 
A little trivia, with no theme. (Part 2 of 3.)

On a Canadian two-dollar bill, the flag flying over the Parliament building is an American flag.

Our eyes are always the same size from birth, but our nose and ears never stop growing.
Peanuts are one of the ingredients of dynamite.
Rubber bands last longer when refrigerated.
"Stewardesses" is the longest word typed with only the left hand; lollipop" with your right. (The term stewardess was officially phased out in the 1970s.)
The average person’s left hand does 56% of the typing.
The Bible does not say there were three wise men; it only says there were three gifts.
The cruise liner, QE2, moves only six inches for each gallon of diesel that it burns.
The microwave was invented after a researcher walked by a radar tube and a chocolate bar melted in his pocket.
The sentence: "The quick brown fox jumps over the lazy dog" uses every letter of the alphabet.
 
 
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, “Servicing: All It’s Cracked Up to Be?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2017 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.)
 

Nov. 20: Controller job, LO & branch jobs; reverse mortgage webinar; CFPB’s moves; capital markets product

Thanksgiving week already! Let’s temporarily shift from residential lending to economics. According to the SalaryforPilot website, Air Force pilots earn an average yearly salary of $107,950, while Naval and Marine aviators earn $70,550 per year. That’s decent, given the benefits. Yet the U.S. Air Force has a 2,000-pilot shortage. With unemployment already low, and commercial airlines offering signing bonuses when existing pilots are up for reenlistment, market forces are impacting employment – just like the mortgage biz.
 
Jobs & products
 
A top 20 lender is looking for an experienced leader to fill the role of Controller. Candidate will oversee the growth of the accounting department, and should have experience with all aspects of loan origination including securitization and servicing. The position is in the Philadelphia/Southern New Jersey area and relocation packages are available for the right candidate. If you are interested, please send me your confidential resume me for forwarding. 
For lenders, Direct Valuation Solutions has redefined its three divisions – DVS Direct, DVS-AMC and DVS Review Services. "DVS Direct offers lenders who want to work directly with the best appraisers an efficient and seamless Web-Based Software platform. We are the only software that has fully integrated borrower and appraiser payment processing (no more accounting hassles). DVS-AMC utilizes the technology developed by DVS Direct to provide exceptional communication, quality, and speed as it relates to the appraisal process and, DVS Review Services, when coupled with DVS Direct, assists lenders with appraisal quality control, offering the expertise of an ‘in-house’ appraisal review staff without the overhead. Want to make 2018 exceptional & successful? Contact us – we can help (888.931.0040).
My good friends at NRL Mortgage in Houston, TX have weathered the storms with no problem at all. “They have a culture that is infectious and a ‘work hard, play hard’ mentality. There is a reason why top branches and originators are gravitating towards this lender with over 55 locations throughout 46 states (including DC). Join a company that makes decisions every day for the benefit and improvement of the sales team. If your numbers are stale due to the lack of support, experiencing anxiety from an unorganized team before closing or need solid processing support – then this is the right opportunity for you. Interested branches that produce $5M – $30M monthly or independent mortgage companies that produce $100M – $600M annually that are looking to leave some of the headache behind and focus on production and earnings are encouraged to send a message.” If interested please confidentially email President, Ron Zach.
Assurance Financial, headquartered in Louisiana, is continuing our aggressive company and branching growth. We are looking for good markets and great people in all attractive locations across the country. Specific to Charlotte, North Carolina, we are seeking a producing branch manager and talented MLOs to build a dynamic production office while partnering with the "closing on time" support from our existing Charlotte loan operations center. In addition, we are seeking an experienced Eastern Regional Production Manager to assist us with supporting and expanding existing Eastern Time Zone branches as well as bringing on new branch opportunities in this territory.” For immediate consideration and more information, please call or write Paul Peters, CMB, Recruiting Manager (225-239-7948).
 
Events
 
Lenders One has opened registration for their 2018 Winter Conference in Scottsdale, Arizona at The Westin Kierland Resort & Spa. The March 4-7, 2018 event is focused on the theme, Visualize, homing in on the data and technology we see for the future of our industry. Michael Kuentz, recently named President of the co-op, is most excited for the innovation Lenders One seeks to bring in 2018. Since his hire 18 months ago, the cooperative has grown with 37+ new members, proprietary technologies and more opportunities for members to connect in small formats. See why some of the best industry relationships are formed at our conferences with a special offer only available through December 31, 2017. Contact Lauren Ketchum for more information. Members can register through December 22 for an early bird discount.
 
“There’s a great opportunity in the 62+ market. Are you prepared to capture it? Today’s redesigned reverse mortgages are key to aligning your business for the future – with refinance, home purchase and HELOC alternative options. Learn how you can increase revenue and better serve this growing demographic by adding reverse mortgages to your product mix. Click here to register for an upcoming educational webinar.”
 
CFPB
 
Here’s something to think about. If the CFPB “dials things back,” wouldn’t the states step in and increase their consumer-focused regulatory levels? Multi-state lenders certainly wouldn’t like that. Since the state regulators have been in regular communication with the CFPB and knowledgeable as to the Bureau’s regulations and impact upon consumers (the protection of whom the states have always viewed as their primary function) it can be expected that we will see more state regulation as the CFPB’s role is reduced. In Pennsylvania, for example, a recent bill supported by the Department of Banking and Securities to license mortgage servicers, incorporated the CFPB servicing regulations. This is a trend that may become viable for other states regarding those CFPB regulations that might be eliminated or reduced in effect.  This is, of course, speculative at this point but it should be considered as we move ahead representing the industry in the states.
 
According to media sources, President Trump is expected to select Mick Mulvaney, the current Director of the White House Office of Management and Budget (OMB), to serve as the interim Director of the CFPB upon Richard Cordray’s resignation at the end of this month. The CFPB is not going away, and neither is Dodd-Frank, although policies and procedures may change. And do we really want it to, given that lenders and vendors in the industry spent billions of dollars implementing the Dodd-Frank framework in our businesses. 
 
Mulvaney is a former South Carolina congressman and served on the Financial Services Committee. Mulvaney had previously been quoted during interviews as being dissatisfied with the CFPB’s performance and even said its lack of accountability showed it to be a “joke”. He was one of those in Congress who reportedly wanted the CFPB to be eliminated. Certainly, the administration intends to reduce federal regulations and the CFPB would make a prime target.
 
Julian Hebron of The Basis Point issued his thoughts on the future structure of the CFPB.
 
Ever heard of Think Finance? It doesn’t matter – the CFPB has. On November 15, the CFPB announced it had filed a complaint against Think, a Texas-based service provider, alleging that it had assisted in the collection of loans that were, in whole or in part, void under state law. The complaint filed in the U.S. District Court for the District of Montana alleges that the service provider, which provided services to three tribal lending entities engaged in the business of extending online installment loans and lines of credit, along with two companies responsible for the collection process (collectively defendants), assisted in the collection of loans that consumers were not legally obligated to pay based on identified states’ usury laws or licensing requirements.
 
And last week the CFPB published two RFIs (Request for Information) concerning free access to credit scores. The first RFI requests information related to (i) consumers’ experience when accessing free credit scores, and (ii) the experience of companies and nonprofits when offering free access to credit scores to their customers and the general public. The Bureau plans to use the information gathered through the RFI to, among other things, “identify educational content that is providing the most value to consumers, and additional educational content that the Bureau or others could develop to increase consumers’ understanding of credit scores and credit reports.”
The
second RFI requests information on companies that provide existing customers free access to a credit score. This information will be used to update OFE’s March 2017 list of companies that offer this service. Law firm Buckley Sandler wrote, “Following its update to the list, the CFPB intends to publish information to educate consumers about the availability of credit scores and credit reports and how this information can be used effectively.”
 
And firm Ballard Spahr points out that the CFPB’s final payday loan rule was published in the Federal Register. Lenders covered by the rule include nonbank entities as well as banks and credit unions. In addition to payday loans, the rule covers auto title loans, deposit advance products, and certain high-rate installment and open-end loans. Capital markets
 
Compass Analytics announced expansion of its suite of industry-leading products with new API methods, deeper pipeline and LOS integration and automation. Building on its mobile-friendly platform and full-featured API that provides clients with innovative customization, greatly expanded lock desk automation and a modern user experience, Compass Analytics has added multiple new features to their product, pricing and eligibility engine, CompassPPE (“CPPE”). To support its ongoing expansion, Compass has also hired two industry veterans. Ralph Armenta has joined as Managing Director of Strategic Sales and will build on Compass’ strategic initiatives and Investor Services, through which Compass will enable Investors to source CRA, and implement more granular pricing/margin strategies. Nancy Pollard joins as Managing Director of Pricing Technologies and will lead CompassPPE strategy, CPPE implementation, account management and investor guideline teams.
 
Turning to the economy, last week we had the release of the Household Debt and Credit report. Overlooked by many, LendingTree Chief Economist Tendayi Kapfidze had some comments. “Although debt is at a new high, household debt servicing is not. The financial obligations ratio and household debt service ratios remain favorable because of income growth and low interest rates. In particular, the mortgage debt service ratio of 4.44% for Q2 2017 is the lowest since 1980.
 
“Mortgage debt is at a high but the ratio to home values is not as home price appreciation is outpacing new mortgage debt. Owner’s equity in real estate of 58.4% in Q2 was the highest since Q1 2006, when home price weakness began. HELOC balances continue to fall indicating that home owners are not accessing their record equity for consumption. This favorable picture is dependent on low rates, which may face some upward pressure but not to an extent we think will put borrowers under significant pressure. It is also dependent on strength in home prices which we expect to continue given tight housing inventory and a strong labor market.”
 
For the actual bond market, the yield curve is the story. The 2-yr note (think ARM pricing) settled unchanged for the week while 10s and 30s recorded solid gains. The continued pressure on the yield curve compressed the 2s10s spread to 63 bps from 74 bps one week ago, and the 2s30s spread contracted to 107 bps from 122 bps ten days ago. Typically, yield curve flattening reflects the market’s belief that a growth slowdown is in the cards, but some analysts believe that this time around demand for longer-dated Treasuries is being driven by yield differentials rather than growth concerns.
 
This week will see US bond markets closed Thursday with an official early close on Friday (and an unofficial one on Wednesday). For excitement this week, besides Turkey Day, today we have October Leading Economic Indicators, tomorrow October Existing Home Sales, some Chicago Fed figures, Wednesday is the weekly MBA Mortgage Index, weekly initial jobless claims, October Durable Orders, final November Michigan Sentiment, and the minutes from the November FOMC meeting.
 
Overnight the big news we saw the collapse in German coalition negotiations, although the financial market fallout has been very mild. For those quantitatively inclined, last week ended with the 10-year yielding 2.35%. This morning rates are nearly unchanged with the 10-year at 2.35% and agency MBS prices worse about 1 tick (1/32nd) versus Friday’s close.
 
 
A little trivia, with no theme. (Part 1 of 3.)

Al Capone’s business card said he was a used furniture dealer.

Almonds are a member of the peach family.
Babies are born without kneecaps. They don’t appear until the child reaches 2 to 6 years of age.
"Dreamt" is the only English word that ends in the letters "mt".
February 1865 is the only month in recorded history not to have a full moon
In the last 4,000 years, no new animals have been domesticated.
It’s impossible to sneeze with your eyes open.
Leonardo Da Vinci invented the scissors.
Maine is the only state whose name is just one syllable.
No word in the English language rhymes with month, orange, silver, purple, ninth, pint, wolf, opus, dangerous, marathon and discombobulate.
 
 
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, “Servicing: All It’s Cracked Up to Be?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2017 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.)
 
 

Nov. 18: Career advice from women & people of color for those in the lending biz

Tolerance is in the press, but we often hear about how we need to be more “equal.” Despite the progress we’ve made in the residential lending industry, there still exists a divide that is totally unwarranted when it comes to minorities and women. Women are underrepresented at every level. As a society we are still largely segregated, but that that doesn’t mean lenders can’t take the lead in continuing to press for equality. “The best person for the job, regardless of race or gender.” What could be simpler?
 
And there is indeed movement. For example, the hit of the MBA’s National Conference last month in Denver was the mPower event led by Marcia Davies. And National MI has partnered with the National Association of Minority Mortgage Bankers (NAMMBA) to further its outreach to women and minorities in the mortgage industry.  
 
I asked people of color and women in the industry about their early careers, and appreciate the time they spent responding. I will happily circulate more responses if you care to write, and have more already to publish. “What do you think the best advice you can give women starting out in the mortgage industry?” or “What is the boldest move you made that helped advance your career?” or “What do you wish someone would have told you about being successful in this industry?” 
 
Maria Vergara, President of NAHREP Consulting Services, thought, “I wholeheartedly believe in the motto ‘Everything happens for a reason’ but even so, I reflect on a few things that if I could do differently, I would have early in my career. After twenty-five years in this industry, I still admire those that stick their neck out to express their ideas or opinions. I was way too quiet… even when I had a good idea or answer. Mostly, I wanted to make sure it was fool proof before I shared it. Many times, after thinking of a brilliant idea and while mustering up the courage to speak it aloud, someone (many times a man) would beat me to the punch.
 
“Though not a male versus female issue, I do believe more men speak out and ‘lean in’ much more than women do, albeit things are changing. I encourage my daughter, nieces and other young women to take a chance and speak up. I recently read a great book by Elizabeth Gilbert called ‘Big Magic – Creative Living Beyond Fear.’ The book is a great read and had many thought provoking ideas of how to live creatively regardless of career. In one chapter the author likened ideas as ‘floating around in the universe waiting to be matched with an owner’ (I don’t do the author justice). When I read that, it hit home because so many times I’ve been in situations where someone articulated the exact idea, thought or opinion and ran with it. As I mature, it’s still counter intuitive for me, but I make a conscious effort to speak up and express myself. It’s opened so many doors of opportunity both personally and professionally that otherwise I would never have had.
 
Paola Kielblock, EVP of Products with Fairway Independent Mortgage Corp., replied to the question, “What do you think the best advice you can give women starting out in the mortgage industry?” “In looking back at my 19 years in the mortgage business, the best advice I would give women who are starting their career in the mortgage industry is to be persistent about learning and educating yourself and seek out multiple mentors. People that can help educate and guide you through the different facets of the industry. It is so important that we see the entire vision, have a good working knowledge of what we do, and how all those pieces fit together.
 
“The boldest move I have made to help advance my career was taking a leap of faith and doing something outside of my comfort zone, something completely different than what got me into the business. I moved away from loan origination, and threw myself fulltime into product development and secondary markets. When you start to feel complacent and unchallenged in your role, that’s your sign it’s time to make a move.”
 
And when asked, “What do you wish someone would have told you about being successful in this industry?” Paola replied, “In order to achieve long term success in this business, you have to act thirsty and be humble. The mortgage industry is consistently evolving, and changes will occur daily. Embrace the challenges and mistakes and more importantly learn from them both. The knowledge you gain from those real time, real life experiences will catapult you to the next level of leadership.”
 
Annemaria Allen, CEO & President of The Compliance Group, Inc., remembered, “When I first started in this industry I was just out of high school. We didn’t have a lot of money growing up, so it was impressed upon me to get a job that paid decent and provided health insurance. The only place I could think of where I didn’t need a degree was working for a bank which also meant weekends off. At that age weekends were way more important than health insurance. Nonetheless, I spent 12 years in operations, processing, funding, underwriting and appraising. I never felt completely fulfilled. 
 
“What I didn’t realize at the time about myself was that I was very methodical, analytical and creative and those areas of the mortgage industry that I was working in just didn’t hit my heart. I felt like I was pigeon holed in this area of the business and there was no growth for me. It wasn’t until 12 years in… that I started really looking at the entire industry. I had no idea there were so many facets to our industry, all the way from taking an application to selling a loan into the secondary market and beyond. I found that I loved researching all the legal requirements that pertained to WHY we make a loan. It was fascinating to me to understand the history of RESPA and the REASON I was providing a Good Faith Estimate. When my eyes opened to the road of possibilities, I quickly found my niche in Compliance. 
 
“When the compliance door opened up I decided that it was extremely important for me to educate myself as much as possible on all the laws surrounding the mortgage industry and take as many courses available to make this happen and allow me to grow and be successful in my job. As I continued with my compliance career and kept up with my education and networking one day I realized, that from the time I was a little girl I always wanted to have my own company. After 5 years of practicing compliance with my employer an opportunity arose to open my own company. This is where I was able to really tap into my creative talents which had significantly been missing in my life. Now, after almost 18 years as a successful business owner and 30 years in the industry, I look back and reflect, and I tell that young girl and all the other women entering our industry:
 
“Don’t limit yourself
Educate yourself and keep growing
Network to your heart’s desire and ask lots of questions
Know yourself and what makes you happy and don’t allow yourself to be pigeon holed
Work hard
Follow your dreams.”
 
After a career in finance, Jan Miller has been appraising Bay Area properties since the early 1980s and runs Miller & Perotti in San Rafael, CA. “The day after graduation I had two jobs waiting for me and in the final hour, a decision had to be made; the corporate world or a government job. I was told the government job, while it paid less had more benefits, so I took the government job. I gave 110% each day, learned what I could from every person I met, and took every bit of education they made available. I soon realized I was finding my ‘niche’. I also learned very few others gave 100%. I then took my skills and went to the corporate world. 
 
“My next job was seasonal, and I was coming in on the end of a big project. They explained all my duties and the timeline of what I would be doing during the ‘high season’, I could hire 50 to 75 additional support staff. Again, I gave 110%, met everyone I could and learned everything about the business in general. Computers were just coming into the business world and I took every class I could (remember I had 5 months with virtually nothing to do except create a plan to accomplish the job). With my newly learned computer skills I created an amazing ‘spread sheet’ that I believed would make my seasonal project easier with less support staff. As it turned out, the project was completed in half the time and I used no support staff at all.  I thought I would get some ‘atta boys,’ but what I got was attitude that I was ruining the company budget by not hiring more staff! Shortly thereafter, I decided to leave and when I left they did not what to know or understand anything about my amazing ‘spread sheet.’
 
“I moved to another corporate position, one where I had a great amount of people contact and realized that, as much as I like numbers and computers, I really enjoyed interacting with people.  Again, I gave my usual 110% effort, shared ideas and learned every job that was around me.  When the market went sideways they kept me on longer than any other employee. They just kept moving me around to do whatever job was needed.
 
“When I was asked to work with a friend in a ‘one man’ shop I jumped at the chance. I had an amazing mentor and followed my own work ethic, we became an amazing success. 
 
Eventually, I went out on my own with a family member/ business partner.  Now 25 years since that last move, when I look back there is not a day or a move that I would change.  I wake up each morning looking forward to my job and to all the amazing people I will meet and talk to that day.
 
“My advice to anyone entering the business world would be to give 110% each day, start each day with a smile, learn as much as you can from every person you inter act with and take every educational opportunity offered to you. It will take time to find your ‘niche’ it is not typically something you learn while in school. It takes life experience.”
 
Marina Walsh, VP, Industry Analysis, Research and Economics with the Mortgage Bankers Association, advised, “First, try and get your credentials early. Life gets busy, which makes it tougher to pursue your CMB, CFA or other career-building credentials as time goes on. Second, know that your career is a marathon and not a sprint. That means that the pace in which you work, and your career ambitions, may ebb and flow depending on your other priorities and needs. Accept it as part of the process. Finally, if you don’t like the mortgage business, get out. It can really be a tough business given its innate cyclicality and you have to be of a certain mindset to deal with the highs and the lows.”
 
And this from a mortgage veteran in the Southeast. “The best advice I would give women just starting out in this industry would be to find a mentor. Someone you truly respect and feel you can learn from. Then spend the time to establish and nurture that relationship. My mentors, that I started my career with over 20 years ago, are still my mentors and great industry friends today. Make time to network with your peers. Again, you will find some of your connections will become great friends and a wealth of support throughout your career. Lastly, truly love what you do and who you work with/for or make a change.”
 
(Thank you very much to these folks who took the time to write these. More soon!)
 
 
(Warning: Rated PG for language.)
A cowboy appeared before St. Peter at the Pearly Gates.
“Have you ever done anything of particular merit?”, St. Peter asked.
“Well, I can think of one thing,” the cowboy offered.
He went on. “On a trip to the Black Hills out in South Dakota, I came upon a gang of bikers who were threatening a young woman. I directed them to leave her alone, but they wouldn’t listen.  So, I approached the largest and most tattooed biker and smacked him in the face, kicked his bike over, ripped out his nose ring, and threw it on the ground. I yelled, ‘Now, back off or I’ll kick the —– out of all of you!”
St. Peter was impressed, “When did this happen?”
“Couple of minutes ago.”
 
 
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, “Servicing: All It’s Cracked Up to Be?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2017 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.)
 

Nov. 17: MI & CLO jobs; Wells Fargo mgt. upheaval; borrowers & online reviews; HUD, FHA, VA, Ginnie news – HECMs hurting capital

Here’s a tidbit for Happy Hour tonight. Currently, about 21 percent of filers take the mortgage deduction, but under the new framework only about 4 percent would, according to recent estimates from the Tax Policy Center. Here’s a good summary of how the current proposals, which we’ll be hearing about for months and months, impact home owners. More below, but no one (Senate, House of Representatives, White House) have put a firm plan/proposal in front of the public – and heading into the Thanksgiving and Christmas breaks, no single plan has emerged.
 
Employment
 
MSA, an Executive Search Firm focused solely on the Financial Services industry, is actively seeking candidates on behalf of one of its clients, a small Midwestern community bank, to assist in identifying a new Chief Lending Officer, a position which is anticipated to accelerate into the Presidency and/or CEO role within the first year. The ideal candidate will have firsthand experience in running a small or mid-sized bank, including having working relationships and experience with state banking regulators and other financial institutions. Experience in broker direct / Correspondent lending a plus. Candidates should have experience in providing or participating in digital technology strategies in consumer banking and an entrepreneurial mindset, while participating in a rapidly growing asset base from a leadership perspective. Qualified candidates should send a resume in confidence to Tami Coffey.
 
National MI is looking for a Sales Account Representative to work with its current Account Manager in the Greater Houston market. Their responsibility would be to promote the sale of National MI products and services to clients through a consultative selling approach. This individual will also assist in sourcing new business from originators, and potentially manage the relationships with specific clients. Experience in client relationship management is imperative. Headquartered in the San Francisco Bay Area, National MI is a U.S.-based, private mortgage insurer enabling low down payment borrowers to realize homeownership.  National MI has a great culture, compensation and benefits.  For the complete job posting, see National MI’s careers page.
 
This retirement stuff is getting out of hand. The Community Mortgage Lenders of America (CMLA), announced that Executive Director Glen Corso will retire effective December 31, 2017.
 
Being dismissed is another matter, which is what Wells Fargo did to Franklin Codel who was a senior executive VP and head of its Consumer Lending organization. “The company said the dismissal was the result of Codel’s acting in a manner that was contrary to the company’s policies and expectations of its senior leaders during a communication he had with a former team member regarding that team member’s earlier termination. The company said the reasons for the dismissal did not involve the business or operations of Consumer Lending, the servicing of its customers, or its performance or financial results. The dismissal also did not pertain to sales practices at the company.” A new head of Consumer Lending should be announced by the end of the year, and in the interim Michael DeVito (interim head of Wells Fargo Home Lending and head of Mortgage Production) will report directly to CEO Tim Sloan.
 
Odds & ends
 
How are borrowers using online reviews? According to recent research conducted by the STRATMOR group, 64 percent of borrowers are reading online reviews, but fewer say online reviews are the main factor in selecting their lender. In this month’s MortgageSAT Tip, STRATMOR’s Mike Seminari shares more of the results of this research, including information on which sites borrowers prefer and how influential these online reviews are in the borrower’s selection of a lender. Find out more about the value of testimonials and reviews in driving organic growth, and get suggestions about where your social media focus should be in this new article.
 
Congrats to Nashville’s Built which reached a pivotal point in the company’s three-year history with a $21 million Series A investment led by global venture capital firm Index Ventures, with participation from New York-based Nyca Partners, a FinTech-focused VC firm.  The new Series A brings the total capital raised to date by the company to $25 million.
 
HUD, VA, & FHA news from the government, investors, and lenders.
 
The U.S. Department of Housing and Urban Development (HUD) announced it is charging the owner and landlord of several rental properties in Wichita, Kansas, and his wife, who co-owned one of the properties, with housing discrimination after the landlord allegedly sexually harassed two female tenants at his properties and that he also made discriminatory statements based on one of the women’s race.
 
Wells Fargo Funding will no longer offer FHA and VA 7/1 and 10/1 ARM products as of December 11, 2017. 
 
Provident Funding has added the following states to its FHA offerings: AZ, FL, GA, MA, MI AND NC.
 
There is an industry awareness that the Dept. of VA may soon dissolve its Condo approval process and turn it back over to lender approvals. Until there is a formal announcement, M&T Bank will still require verification within the loan file that the Condo Project appears on the list of VA approved Condo Projects.
 
FHA has issued a waiver covering all municipalities in Puerto Rico impacted by Hurricane Maria (Maria), allowing damage inspections to be conducted beginning November 9. This waiver is in addition to the waiver issued by FHA on October 24 of its policy on the time frame for completing the inspection of properties prior to closing, or submitting the mortgage for FHA insurance endorsement in the Presidentially-Declared Major Disaster Areas (PDMDAs) in municipalities in Puerto Rico impacted by Maria.
 
Ginnie Mae posted its News and Notes regarding first payment date reporting responsibilities.
 
FHA has issued an additional waiver regarding the timing of the property inspection for properties located in Lake, Napa, Mendocino, and Sonoma Counties in California.  Effective immediately, PennyMac is aligning with FHA’s waiver and will accept property inspections dated on or after November 2, 2017 for all loans secured by properties located these counties. Click here to read all the information contained in its update.
 
Effective immediately for all Delegated Fannie Mae, Freddie Mac, FHA, and VA programs, PennyMac is no longer requiring tax transcripts for borrowers qualifying solely with W2 wage earner income and/or fixed income reported on a 1099. Tax transcripts will continue to be required for all borrowers where tax returns are required to document qualifying income and all qualifying income sources for Non-Delegated, USDA and Jumbo loans.  This includes but is not limited to self-employed borrowers, commission greater than 25% of income, borrowers working for family, etc.
 
Pacific Union Financial announced improvements to its Overlay Matrix effective Monday, November 6. All loan products submitted to DU or LPA that do not receive a credit approval may now be submitted to the other automated underwriting system. FHA Loans with an AUS Approved Decision – Minimum credit score will now be determined by DU Approve Eligible or LPA Eligible Accept. Credit Scores < 560 with an AUS approval will be subject to an LLPA. Loans Manual Underwritten (Refer, Refer Eligible or Manual Downgrade) – Minimum credit scores apply; refer to Overlay Matrix. VA Loans with an AUS Approved Decision – Minimum credit score will now be determined by DU Approve Eligible or LPA Eligible Accept.
Credit Scores < 560 with an AUS approval will be subject to an LLPA. Loans Manually Underwritten (Refer, Refer Eligible or Manual Downgrade) – Minimum credit scores apply; refer to Overlay Matrix.
 
Of more interest to the “higher ups” and industry analysts was the release this week of the annual report by the FHA on the Financial Status of the Mutual Mortgage Insurance Fund.) It dimmed prospects for a MIP cut, when the report indicated deterioration in the capital ratio of the MMIF (Mutual Mortgage Insurance Fund) from 2.35% to 2.09%, still above the 2.00% minimum. The statement went on to say had the previous reduction (which was suspended less than an hour after President Trump was sworn in) gone into effect, the capital ratio would have fell below the minimum hitting 1.76%. The FHA’s volatile reverse mortgage program (HECM) was a large contributor to decline with the statement indicating that the FHA would “closely monitor” the recently implemented changes to the program.
 
FHA reports that at the end FY 2017, the MMI Fund had a total economic net worth of $25.6 billion and the Capital Ratio that remains above the statutory minimum for a third straight year. Dave Stevens with the MBA sent out, “The full report can be found here, but we wanted to call your attention to some quick highlights.
 
“The current MMIF capital ratio is 2.09%, a decrease from 2.35% a year ago. Fiscal Year 2017 also marks the first decline in the MMIF capital ratio since Fiscal Year 2012. Had the pending decision to reduce premiums not been reversed in January 2017, the MMIF capital ratio would have been only 1.76%.
 
“The economic net worth of the MMIF is $25.6 billion, a decrease of $1.9 billion from a year ago. Total MMIF capital resources increased $4.4 billion in Fiscal Year 2017, though this gain was more than offset by a deterioration in the net present value (NPV) of future cash flows. This decrease in the NPV of future cash flows is largely attributable to the Home Equity Conversion Mortgage (HECM) portfolio…Much of the weakness in the MMIF is attributable to the HECM program. The capital ratio of the HECM program is negative 19.8% (a decrease from negative 11.8% a year ago), with an economic net worth of negative $14.5 billion.
 
Death and taxes
 
Our industry is focused on anything impacting housing, of course. Did you know that only 32 percent of taxpayers itemize in the first place, and of those 79 percent claim the MID? Homeowners who simply take the standard deduction on their taxes get no benefit from the MID. And neither do households who rent. Capping the mortgage interest deduction on loan principal eligible for the deduction to $500,000 from the current $1,000,000, as the proposal includes, would impact just 5% of home owners.
 
Sure, the House voted to approve its tax plan. But its tax plan will go nowhere in the Senate, which isn’t supposed to vote on its own plan until after Thanksgiving. The House of Representatives passed H.R. 1, the “Tax Cuts and Jobs Act,” a bill National Association of Realtors President Elizabeth Mendenhall has called an all- out assault on homeownership.
 
What does NAR have to say about it? “It’s disappointing to see this legislation move forward, but the real work to shape this debate is just getting started. Realtors will now look to the Senate as we make our case that the tax reform proposals pending before Congress overwhelmingly remove the tax incentive to purchase and own a home in America…Make no mistake: Middle-class homeowners will see their home values fall if this proposal moves forward, while large corporations walk away with the bulk of the tax cuts.”
 
Capital markets
 
Communication is a good thing, and previous Fed officials who held the chairman role ran the gamut in terms of keeping the markets informed. The heads of the four biggest central banks said they will keep investors fully informed of their intentions to smooth the adjustments that will have to be made as they begin scaling back stimulus measures. The leaders of the Federal Reserve, European Central Bank and Bank of England largely supported advice from Bank of Japan Governor Haruhiko Kuroda to keep the message straightforward.
 
Most prices, and in turn interest rates, are a result of supply and demand. In demand news, China’s U.S. Treasuries Holdings Dip, Remain Near Year-High. China’s holdings of U.S. bonds, notes and bills declined for the first time in eight months, dropping by $19.7B to $1.18T, according to Treasury Department data released Wednesday in Washington. China remains the biggest foreign holder of U.S. Treasuries, ahead of Japan, which owned $1.1T, down by $5.7B from August. 
 
In terms of daily price fluctuations, up some, down some, and yesterday U.S. Treasuries and agency MBS prices were broadly lower. Yield curve watchers saw the 2s10s spread expand to 66 bps from 65 bps at the end of Wednesday’s session. We certainly had a slew of news: the weekly jobless claims numbers were released (the 141st straight week initial claims have been below 300,000), import prices increased slightly while export prices were unchanged, the Philly Fed Index slipped, industrial production increased 0.9% in October, capacity utilization increased, and the NAHB Housing Market Index hit its highest reading since March. “Dem” builders are happy!
 
This morning we’ve had Housing Starts and Building Permits (+13.7% and 5.9% – huge!). After closing Thursday with a yield of 2.36%, this morning we find the 10-year wallowing around 2.37% with agency MBS prices unchanged versus last night’s close.
 
 
A man comes to his doctor’s office all battered and bruised. The doctor sees him and asks him how he got injured.
The man said there was a knock at his front door. When he opened the door, there stood a six-foot cockroach. He said he tried to shut the door quickly but before he could react the cockroach knocked him back against the far wall. He said the cockroach threw him around from wall to wall, punched and kicked him and then just turned and left.
The doctor said, "This is the flu season. I’ve been trying to contact all my patients and let them know there’s a real nasty bug going around this year."
 
 
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, “Servicing: All It’s Cracked Up to Be?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2017 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.)
 

Nov. 16: MI, branch jobs appraisal products; another lender acquired; training events; thoughts on Mr. Cordray

I think the rumors out there about Richard Cordray taking a much deserved break and then, forget that governor stuff, stepping into Dave Stevens’ shoes running the MBA are farfetched. Now, forgetting for a moment about comp issues (Cordray is earning about $180k per year), if Dave were to have a desire to run the CFPB, that would be interesting indeed. Musings aside, law-abiding lenders value the role of the CFPB, and there have been positive contributions. It’s the methodology, consumer complaint portal, governing by enforcement action, and the terrible punitive nature of its activities that the industry objects to. In additional personnel news, industry Sherpa David Kittle withdrew his name for nomination as President of Ginnie Mae. Given the lengthy and easily delayed endorsement procedure and the rigors of the approval process, this is understandable, yet not in any way a positive for our industry. Dave will do well wherever he serves.
 
Jobs & products
 
For appraisers, Direct Valuation Solutions has redefined its three divisions – DVS Direct, DVS-AMC and DVS Review Services. “DVS Direct offers lenders who want to work directly with the best appraisers an efficient and seamless Web-Based Software platform. We are the only software that has fully integrated borrower and appraiser payment processing (no more accounting hassles). DVS-AMC utilizes the technology developed by DVS Direct to provide exceptional communication, quality, and speed as it relates to the appraisal process and, DVS Review Services, when coupled with DVS Direct, assists lenders with appraisal quality control, offering the expertise of an ‘in-house’ appraisal review staff without the overhead. Want to make 2018 exceptional & successful? Contact us – we can help (888.931.0040).
 
“If your belief is that branch managers want new Realtor office set ups to their branch, a professionally deployed lunch & learn strategy into their market for MLO usage, powerful and self-developed CRM with full automation and encompass integration, a loan retention plan for past funded clients, a full service marketing team, a loan officer recruitment plan for the branch, consistent and efficient closings, high client satisfaction ratings, and a consultative engaging company culture that runs both a P&L or retail model, then consider to join a company that has the resources to take your motivation and turn it to action, and that action into success! AnnieMac Home Mortgage is looking to expand new branch acquisitions in 2018. Learn more here and contact SVP of Business Development, Paul Zinn (856.577.7749).”
“Freddie Mac is Reimagining the Mortgage Experience to create a smarter, simpler, and less costly origination process. We’re using big data and advanced analytics to offer an automated alternative to an appraisal through our new automated collateral evaluation (ACE) for certain loans submitted through Loan Product Advisor, our next-generation automated underwriting system and the gateway to Loan Advisor Suite. As of Sept. 1, ACE is available for purchase and refi transactions. This means you can potentially shave 7-10 days off the time it takes for loans to close, and save your borrowers in some instances up to $300 to $700 on the appraisal fee (Source: Freddie Mac Strategic Delivery and lender feedback). Ready to learn more? Visit the Loan Advisor Suite web page.”
Radian is currently seeking an experienced Senior Account Manager in the Dallas/Ft. Worth area to join our dynamic sales team! Interested? If so, you will be responsible for maintaining and growing existing account relationships, developing and implementing strategies and initiatives to achieve NIW growth objectives, and building on and ensuring customer loyalty. Qualified candidates will have 3+ years of sales experience, preferably within the mortgage industry. This is a great opportunity to put your industry knowledge to work for one of the top mortgage insurers in the country! Please apply directly on our Radian Careers page.”
 
Montana’s Mann Mortgage is excited to announce Gary Bellmore has joined as COO. “We are building the best back office in the industry,” said CEO Jason Mann. “With the executive leadership team finally in place, we can take full advantage of our business model by allowing entrepreneur based originations the autonomy they need to grow their business with operational support and expertise unmatched in any market we do business in.” Gary brings more than two decades of residential lending experience in areas such as underwriting, process design, LOS enhancement/integration, appraisal management, leadership and strategic development to Mann Mortgage.
 
Lender M&A
 
From Texas comes news that Mid America Mortgage, Inc. has signed a letter of intent to purchase the assets of Oklahoma City-based American Southwest Mortgage Corp. and an affiliated firm, American Southwest Mortgage Funding Corp. “As part of the agreement, Mid America will incorporate American Southwest’s operations into Mid America’s mortgage platform and secure an interest in their respective pipelines and select assets. Further, Mid America (which has retail, wholesale, and correspondent divisions, and is the nation’s leading provider of Section 184 home loans for Native Americans) will also offer employment to loan production staff members from each organization.”
 
Training & events…always good things
 
Genworth Mortgage Insurance is offering a new live webinar, Data Security – The First Line of Defense, for mortgage executives and professionals who are focused on ensuring comprehensive approach to a secure data environment. Join George Reichert, Chief Information Officer, and Dave Murray, Chief Information Security Officer, on Friday, November 17th, 1:30pm ET, as they share their expertise and experiences with protecting Genworth’s sensitive information and discuss the importance of employee training and modeling best practices.
 
If you’re in Southern California, join Alight and the California MBA on November 30th for an evening of cocktails and dinner. Independent mortgage banker CEOs, CFOs, and senior executives are invited to the Capital Grille in Costa Mesa starting from 4:30-7:30. I’ll be giving a presentation on what lenders around the nation are focused on, and thoughts for 2018. Reach out to Randall Crail for a program and to RSVP.
 
Register here for the MMBBA’s 2-day loan essential seminar on December 5th and 6th in Columbia. The class covers industry specific information from fundamental lending basics to more advanced calculation skills needed to succeed in today’s real estate finance industry.
 
On Thursday, December 7th National MI is offering a session on “Gender Diversity in the Workplace” from 12-1PM PT. “Improving gender diversity in the workplace is increasingly a trending topic in business with women largely underrepresented, particularly in leadership roles. This 1-hour session will discuss fostering women in the corporate pipeline as critical to mortgage companies’ success, and business practices that cultivate executive talent among women at all levels of an organization. Presented by Kristin Messerli, Founder/Manager of Cultural Outreach, and Managing Editor of Mortgage Women’s Magazine. Register here.
 
National MI has partnered with the National Association of Minority Mortgage Bankers of America (NAMMBA) as part of its continuing effort to help lenders work more effectively with minority borrowers. NAMMBA provides education and career development training for minorities and women who are in the mortgage industry. “NAMMBA is delighted to welcome National MI to our partnership program,” said Tony Thompson, NAMMBA founder and CEO. “In the housing sector, women, Hispanics, African Americans and Asians are expected to become a key driver in the first-time homebuyer market and will comprise as much as 75% percent of new home purchases.” National MI will be a sponsor at NAMMBA’s CONNECT2018 event to be held April 12-15, 2018 in Atlanta, GA.
 
Director Cordray
 
Here’s some trivia for you. Name one government official that President Trump, who ran on a populist platform that harnessed Americans’ anger toward Wall Street, never mentioned on Twitter? Sure enough, he has not commented on, or criticized, the consumer bureau or Richard Cordray on Twitter. Mr. Cordray announced that he is leaving, but did not discuss his future plans in his email. A bureau spokesman declined to comment.
 
One director, or a team of leaders? Mr. Trump will be able to reshape the agency to look more like other financial regulators, many of which are now run by former industry executives. Senator Elizabeth Warren (D Mass) originally picked Mr. Cordray to be the agency’s enforcement director before Mr. Obama appointed him to bureau director. Yesterday she praised Mr. Cordray for holding banks accountable and forcing companies to return money “to the people they cheated.”
 
Mayer Brown Consumer Financial Services partner and former CFPB official Ori Lev had some thoughts. “…While I didn’t always agree with his aggressive enforcement approach, Rich Cordray was a dedicated public servant who worked tirelessly on behalf of consumers and did a remarkable job of building a brand-new federal agency. The difficulty of that task is often overlooked by his critics. His departure will mark a stark change for the CFPB…
 
“It is unlikely that the announcement will have any immediate impact on pending CFPB litigation. Once a new Director is named by President Trump – either on an Acting basis under the Federal Vacancies Reform Act or on a permanent basis after Senate confirmation – the new Director may review pending litigation to determine if he or she wishes to continue to take the same legal positions the agency has been taking. It wouldn’t be surprising if the agency backed off some of its more aggressive legal positions. In the interim, defendants in such cases will likely seek to delay proceedings pending new CFPB leadership.”
 
House Financial Services Committee Chairman Jeb Hensarling (R-TX), stated, “We are long overdue for new leadership at the CFPB, a rogue agency that has done more to hurt consumers than help them. The CFPB tramples on the fundamental economic rights of American citizens, taking away their choices and opportunities. The extreme overregulation it imposes on our economy leads to higher costs and less access to financial products and services, particularly for Americans with lower and middle incomes. It has routinely denied market participants their due process rights. All this harm is made even worse by the fact that the CFPB is structurally unconstitutional and completely unaccountable to the American people.
 
“The resignation of the Bureau’s director is an excellent opportunity to enact desperately needed reforms. The Bureau has an important mission. Properly designed and led, it can truly protect consumers by ensuring they have access to competitive markets that are vigorously policed for fraud. That’s the best way to provide consumers with more affordable choices for the financial products and services they want and need. Americans deserve the opportunity to choose the checking account they want, the mortgage they want and the credit card they want. I look forward to working with President Trump’s choice for CFPB director to protect consumers.”
 
Isaac Boltansky with Compass Point Research and Trading opined, “Following Director Cordray’s departure, the CFPB’s rulemaking agenda will grind to a halt and its enforcement profile will dramatically diminish.
 
“The acting deputy director – David Silberman – could conceivably take the CFPB reins, but that would likely catalyze fierce industry opposition. We expect the Trump administration to use the Vacancies Act to appoint a previously Senate-confirmed person to serve as Acting Director for up to 210 days. The likeliest pick would be Secretary Mnuchin, who could then designate one of his staff to handle day-to-day operations (e.g., Craig Phillips, Jared Sawyer). Meanwhile, we doubt that there will be a Senate-confirmed pick in place until late 1H18. Potential replacements include VP Pence’s Chief Economist Mark Calabria, GMU professor Todd Zywicki, outgoing House Financial Services Committee Chair Jeb Hensarling, Rep. French Hill, former Rep. Neugebauer, or acting head of the OCC Keith Noreika.
 
“What happens immediately? We could see the Bureau settle or drop outstanding litigation against TCF, NAVI, or OCN (TCF is the likeliest settlement in our view). WRLD still has a NORA letter outstanding so a shift in CFPB leadership would conceivably lower the odds of an enforcement action. The debt collection rulemaking will likely slow or stall during the transition, but the Bureau will continue working towards updated rules for the third-party debt collection industry. And the effort to advance a bank overdraft rule is effectively dead.
 
“…The CFPB will face substantive changes in the years ahead as policymakers recalibrate the regulatory environment, but Director Cordray’s work ensures that the Bureau will continue to play a fundamental role in the consumer finance ecosystem for the foreseeable future.”
 
The American Land Title Association (ALTA), the national trade association of the land title insurance industry, sent, “During this leadership transition, ALTA will continue to support CFPB staff to help provide positive and compliant real estate settlement experiences for consumers and lenders, and serve as a resource on important consumer issues such as wire transfer fraud, third-party oversight and mortgage disclosures.”
 
“Currently, Congress is considering a bill that would correct the inaccurate disclosure of title insurance premiums on the TILA-RESPA Integrated Disclosures (TRID). Under the current regulation, the CFPB does not allow title insurance companies to disclose available discounts for lenders title insurance on the government mandated disclosures. This creates inconsistencies in mortgage documents and causes confusion for consumers. The TRID Improvement Act of 2017 (H.R. 3978) provides a straightforward fix that would benefit consumers across the country. By an overwhelming 53-5 bipartisan vote, the House Financial Services Committee passed this bill today. ALTA is hopeful Director Cordray values the significance of this vote and approves a change in CFPB policy before he departs.”
 
The Progressive Change Campaign Committee sent, "If Rich Cordray runs for governor of Ohio, he would be a very strong candidate. With his record of advocating for consumers against predatory banks and credit card companies — an agenda popular with Democrats, Independents, and Republicans — Cordray would tap into the economic populist vein of the electorate that Sherrod Brown and Donald Trump both tapped into in Ohio. We would hope to see a race to the top on these issues in the primary.”
 
Capital markets
 
Looking at the bond markets, the yield curve flattening theme remained intact yesterday as the spread between the 2-year and 10-year notes compressed to 65 bps from 70 bps at the end of Tuesday’s session. Once again, the 30-year bond was the star performer on the yield curve as its yield dropped relative to the short end. 10-year yields dropped as well, heading down to 2.31% as its price improved .375.
 
This morning we’ve had the usual Thursday initial jobless claims (249k) but also import/export prices and the Philadelphia Fed Manufacturing Survey. October industrial production and capacity utilization are due out later, as is the NAHB Housing Market Index. With one week to go until Thanksgiving we find the 10-year yielding 2.35% and agency MBS prices are worse .250.
 
 
I went to the liquor store Tuesday afternoon on my bicycle, bought a bottle of rum, and put it in the bicycle basket.
As I was about to leave, I thought to myself that if I fell off the bicycle, the bottle would break.
So I drank all the rum before I cycled home.
It turned out to be a very good decision, because I fell off my bicycle seven times on the way home.
 
 
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, “Servicing: All It’s Cracked Up to Be?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2017 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.)
 

Nov. 15: Servicing, LO, vendor jobs, recruiting service; conventional conforming underwriting & process changes everywhere

I remember when being worth a million bucks really meant something, and my parents occasionally pointed out someone who they thought was a millionaire. Now they’re a dime a dozen, especially in the United States where there are over 15 million people who are worth $1 million or more (almost half of the 36 million in the world). The wealthiest 1% of the world’s population now owns 50.1% of the world’s wealth versus 45% in 2001. Certainly the gap between the haves and the have nots is widening as the total wealth in the world grew by 6% over the past 12 months to $280 trillion, marking the fastest wealth-creation since 2012, according to a new report from Credit Suisse. More than half of the $16.7 trillion in new wealth was in the U.S.
 
Employment, products, promotions
 
Do you have an accomplished background in mortgage originations or secondary markets? Are you a market leader who wants to move the housing finance industry forward through innovative technology? Then Notarize may be the place for you. Our Subject Matter Expert of Mortgage is responsible for mapping and supporting lender partners as they implement Notarize’s fully digital online closing solution. You will oversee ongoing management of lender relationships, educate on the best operational approach to meet their needs, and design elegant solutions amongst all partners to meet their strategic goals. This role will work very closely to inform product strategy, support sales efforts as the Mortgage expert, and interact across all internal stakeholders as the SME for Mortgage solutions. Review and apply for the role here.
 
Floify, the mortgage automation solution for top-producing LOs, has just rolled out its most exciting and powerful update ever – custom fields, layouts, business rules, and loan dashboard customization! These new updates can be used in several incredible ways, making the workflow for LOs and their borrowers unbelievably more efficient. Using custom fields, LOs can create purposed layouts that display tons of information for their borrowers or team ­– all on one centralized web-based dashboard. Additionally, business rules allow LOs to create conditional logic that can dynamically swap layouts. As you can imagine, the list of possibilities with the latest version of Floify is endless…These are just more ways they are continuing to improve mortgage automation for LOs like you! With Floify, LOs have reported being able to reduce workload by up to 5 hours/loan and dramatically improve the lender-borrower experience. To see the new features and experience how Floify can help you streamline your mortgage workflow, request a live demo.
 
PrimeLending LOs now have more options to offer with new lower FICO score options down to 580 on FHA and VA loans. The top 10 purchase powerhouse also lowered pricing on some of the industry’s most popular Govie programs, including FHA, VA, USDA and Conventional loans. What has been PrimeLending’s strategy for remaining competitive in the industry for more than 30 years? Stay aggressive pursuing opportunities that strengthen its LOs ability to compete and gain market share one new application at a time. In today’s tight housing environment, that mindset is more critical than ever. If you’re a top producer, find how much more you could achieve when supported by an entire company relentlessly focused on helping you discover your best. Contact Bill Harp (469-737-5767).”
 
"Mortgage Originations is one of the few industries where salespeople can fail and have a job the next day. It’s really an amazing phenomenon and it all stems from the lenders insatiable thirst for volume” says Jim Boghos, 25-year executive search veteran. The best companies partner with specialized firms to attract the best of the best. "It’s not rocket science" says Boghos. “We focus on attracting the best athletes where failure rates are less but requires much more personal interaction during the recruitment phase. "Recruiting is not clicking a mouse. It’s a contact sport," Boghos says. “You had better be on your game and have people with real industry knowledge reaching out to candidates. To recruit the best people, one must differentiate within the first minute of conversation.” For companies looking to grow their presence, hire the right leadership, or expand its existing operations, reach out to Jim Boghos, President Boghos Search Group (407.790.7500, ext. 100).
Caliber Home Loans, the fastest growing top-10 mortgage lender in the nation, was honored to celebrate Veteran’s Day with the Dallas Mavericks. Caliber partnered with the Dallas Mavs for the NBA’s Hoops for Troops community outreach program. As a part of this exclusive partnership, Caliber employees joined Dallas Mavs players and local veterans to prepare 10,000 meals for families in the Dallas area. The meals will be distributed by Feeding Children Everywhere, a global organization that provides meals to children in need. As one of the premier companies recognized as a Military Friendly Brand and by the Employer Support of the Guard and Reserve, Caliber is committed to supporting the military and veteran community—during Veteran’s day and beyond. Read more about Caliber’s ongoing support for the military and veteran community here.
 
Informative Research is excited to introduce Kimberly Donovan as its newest VP of Regional Sales. With over 15 years of experience in the mortgage origination market, Donovan has held high-level positions for several companies. Known for her customer-centric mentality and unparalleled responsiveness, Donovan will be an integral member of the regional sales team and concentrating her efforts in the Midwest. “Kimberly’s energy and enthusiasm are completely contagious, and this is exactly what IR is looking for,” stated Informative Research’s EVP of Regional Sales Tony D’Eccliss. “Not only that, she also has a diverse background that allows her to relate to our customers and prospects on a different level. She understands what their biggest pain points are and how our solutions can help solve those issues the best.” Feel free to reach out to Donovan via LinkedIn.
 
A Southern California independent mortgage banker is seeking a Loan Servicing Manager. Responsibilities will include overseeing the servicing of loans for the Agencies, subservicer oversight, and operational compliance. This Manager (and eventual team) may be able to work remotely from any location in the US, with the possibly of being home-based. An experienced Loan Servicing Manager looking to take on a (temporarily) lesser role (as the transactions and portfolio grows), but not ready to fully step out of earning an income, may be a good fit. This Manager’s background & experience must satisfy the FNMA/GNMA requirements of Approved Servicer, including at least 3 years of experience. Experience in Agency Securitization, selling of Loan Servicing, Co-issuing, is a plus. Please send confidential resumes to me for forwarding.
Conventional conforming, F&F changes from the Agencies, lenders, & investors

 

Fannie Mae and Freddie Mac (the GSEs) announced updates to the Uniform Loan Delivery Dataset (ULDD) Phase 3 Specification. This includes changes related to the Home Mortgage Disclosure Act (HMDA) Final Rule for the collection of borrower demographic information, further aligning GSE loan delivery requirements, and other Phase 3 data point revisions. These updates are reflected in the ULDD Phase 3 Specification (Appendices A – E) and updated FAQs available on the ULDD page, and Fannie’s ULDD release page.
 
The Fannie Mae Servicing Guide has been updated to simplify servicing and streamline processes. For a summary of key updates in Servicing Guide Announcement SVC-2017-10, view the executive perspectives video presented by Jenise Hight, Director of Servicing Policy.
 
The Fannie Mae EMortgage Calculator is here. “Customize and test scenarios, assess operational and warehouse funding expenses. Explore the possibilities with the eMortgage Calculator and visit the revamped eClosings and eMortgages page for additional resources.”
 
To solve the Emortgage adoption barriers identified via survey, Freddie Mac increased its education and awareness efforts surrounding eMortgage processes and technology. Read the GSE Efforts to Improve eMortgage Adoption: A Follow-up to the 2016 GSE Survey Findings Report for details.
 
Fannie Mae’s new Single Source Validation, a key enhancement to the company’s Desktop Underwriter (DU) validation service that is now in pilot, will allow lenders to validate a borrower’s income, assets, and employment through one report using source data rather than multiple paper documents – amplifying savings and making it easier to originate loans. “Fannie Mae’s new Application Programming Interface (API) platform will make it possible for lenders of all sizes to easily plug into Fannie Mae data and technology solutions so they can quickly access the full set of DU Messages data driving efficiencies in their processes. And, the company’s new Servicing Marketplace will connect servicers and sellers interested in partnering with each other for servicing transfers when sellers sell loans to Fannie Mae providing transparency to the system, while removing cost and friction.”
 
The Freddie Mac Sellers Bulletin 2017-23 was recently released and includes updated requirements for calculating the monthly debt-to-income ratio for student loans and contingent liabilities. Pacific Union will not impose overlays to the requirements provided by Freddie Mac. 
 
In preparation of offering the Fannie Mae Day 1 Certainty and Freddie Mac Loan Advisor Suite options, Pacific Union will be discontinuing its Generic Conventional Loan Program. All Generic Conventional Loans must be locked on or before Friday, December 1, 2017 and funded on or before Friday, December 29, 2017.
 
FCM posted changes to its underwriting guidelines.
 
Flagstar Bank’s Conventional Underwriting Guidelines will be updated to reflect the student loan cash-out refinance feature which allows for the payoff of student loan debt through the refinance transaction with a waiver of the cash-out refinance LLPA effective for loans registered on or after Monday, November 13, 2017. For current loans in process that meet the criteria, please contact the Underwriting or Delegated department after Sunday, November 12, 2017, to have the loan marked as a Fannie Mae Student Debt Payoff loan.
 
Fannie Mae’s announcement on Desktop Underwriter (DU) updates to allow loans when a borrower has placed a freeze on one of the three credit repositories are ineligible for purchase by Wells Fargo Funding including Prior Approval Underwritten Loans with frozen credit.
 
Mountain West announced the roll out of Fannie Mae’s Rate and Term Refinance that includes the pay-off of a student loan.
 
PennyMac is aligning with the updates announced in Freddie Mac Bulletin 2017-12 regarding rental income and self-employed income changes.
 
Effective with DU runs on or after the weekend of November 18, PennyMac is aligning with Fannie Mae’s update to DU and will allow no more than one credit bureau to remain frozen.  DU will issue a message reminding Lenders that they are responsible for ensuring the borrower’s identity has been verified and preventing fraud. DU will issue an error recommendation if two or more bureaus are frozen.  If the credit must be un-frozen, borrowers must unfreeze all frozen bureaus, and the DU rerun with the updated credit.
 
Effective for all commitments taken on or after Friday, December 1, 2017, PennyMac will be implementing multiple changes to the rate sheet.
 
AmeriHome Correspondent has removed the 15-acre, maximum lot size overlay for all Fannie Mae, Freddie Mac, FHA, VA, and USDA loans.
 
And AmeriHome’s Seller Guide has been updated to clarify that the Wisconsin Tax Escrow Option Notice form or equivalent be included in the Loan delivery file for all Conventional Mortgage Loans secured by properties in Wisconsin, if that Loan has escrows for real estate taxes established.
 
Capital markets
 
Another day, more yield curve flattening – usually not a sign of future robust economic growth. (Think of a world when short-term rates were the same as 30-year bond rates.) The 2s10s spread narrowed by a basis point to 70 bps after compressing to 68 bps intraday. One interesting thing to note from overseas: China’s 10-yr yield went above 4.00% for the first time since 2014. (Compared to our 2.38%.)
 
Yesterday there was, once again, much ado about nothing: some intra-day volatility, some shifting among coupons, securities, and maturities, but nothing worthy of me droning on about and nothing dramatically impacting borrower’s rate sheets. The risk-free U.S. 10-year note price improved .125 to yield 2.38%, while 5-year notes and agency MBS prices rallied a couple ticks (32nds).
 
This morning we’ve had the weekly MBA applications data from last week. Apps were +3.1%; refis were +6% and purchases +0.4%. Refis accounted for 51.3%, the highest since September, and the Purchase Index is higher than year ago by 17%. Of more impact on rates was the October Consumer Price Index which was +.2%, core +.2%, and October Retail Sales: +.2%, ex-auto +.3%. After this initial volley of numbers we find rates down, with the 10-year yielding 2.34%  and agency MBS prices better by a solid .125.
 
 
His request approved, the CNN News photographer quickly used a cell phone to call the local airport to charter a flight. He was told a twin-engine plane would be waiting for him at the airport. Arriving at the airfield, he spotted a plane warming up outside a hanger. He jumped in with his bag, slammed the door shut, and shouted, "Let’s go!" The pilot taxied out, swung the plane into the wind and took off. Once in the air, the photographer instructed the pilot, "Fly over the valley and make low passes so I can take pictures of the fires on the hillsides." "Why?" asked the pilot. "Because I’m a photographer for CNN," he responded, "and I need to get some close-up shots." The pilot was strangely silent for a moment. Finally he stammered, "So, what you’re telling me, is…You’re NOT my flight instructor?"
 
 
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, “Servicing: All It’s Cracked Up to Be?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2017 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.)
 

Nov. 14: LO jobs & branches wanted, capital market product; lender acquired; Mr. Cooper & Matic insurance; Ginnie news

Are we destined to have robots making home loans? I sure hope not, although no one has ever accused robots of being shilly-shally. And I sure hope that the cover of this recent New Yorker is not prophetic.
 
Opportunities, employment & products
 
“Success in sales has everything to do with being with the right company that embodies strong leadership and an operations team whose slogan is always ‘Production First.’ There is a reason why top branches and originators are gravitating towards this local-Houston lender with over 55 locations throughout 46 states (including DC). Join a company that makes decisions every day for the benefit and improvement of the sales team. If your numbers are stale due to the lack of support, experiencing anxiety from an unorganized team before closing, or are in need of solid processing support, then this is the right opportunity for you. Interested branches that produce $5M – $30M monthly or independent mortgage companies that produce $100M – $600M annually that are looking to leave some of the headache behind and focus on production and earnings are encouraged to send me a message.” Interested parties should confidentially email me for forwarding; please specify opportunity.
 
A 2-year old Capital Markets Arbitrage and Analytics Firm is looking to add a small number of new clients. This market arbitrage produces regular results more than 8 basis points of monthly gains above standard capital markets best execution, and over 15 basis points of expected gains for Correspondent Lenders using our platform. If you are a Wholesale or Correspondent Lender that’s interested in capitalizing on an existing imperfection in the mortgage trading market, please email me and you will be sent a short confidential questionnaire. Potential new clients will be contacted by the firm directly after they’ve been vetted as a good fit, and after they have agreed to the NDA terms that will be provided.”
 
“Still looking for an efficient and cost-effective way to manage your vendors? With ShareDiligence, Strategic Compliance Partners collaborative approach to vendor management, Lenders share the results and costs of due diligence. All you need to supply is your vendor’s name and email address and they do the rest! Sound too good to be true? Contact Leslie Benjamin for a demo.
 
Last Wednesday the Sales Mastery and Maxwell teams released the Official Recap of Todd Duncan’s 2017 Sales Mastery Event exclusive to Rob Chrisman subscribers. Because so many asked for it, we have released it again today! I have known Todd for many years and he and his team put on an incredible event. It should be on the short list of must attend events for all performance driven lending teams and loan officers. For 2017 they celebrated the 25th Anniversary of the Sales Mastery Event in San Diego and beyond the incredible weather, it was one to remember. Whether you attended or not, this recap will be a treat. Inside you’ll find a conference overview, professional guidance from the nation’s top producing LOs, plus tips and notes from sessions that you can start implementing in your approach today. Download your exclusive copy today!
 
“Did you know video marketing is boosting open rates by 20% and increasing click-through rates by 2-3 times more than standard email? Reliable sources estimate that 74% of all internet content in 2017 will be videos. In other words, video marketing is where it’s at. Why video? Because it’s easy to consume, especially in an age where most consumers don’t take much time to read. One lender that is attacking this is loanDepot: They are pioneering video marketing. Whether it be about top loan officers, our employeesour customersrecruiting efforts, or even a national branding campaign – they cover it all in the form of video. If having innovative marketing like this important to you, contact Peter Tenfjord to schedule a private demo of loanDepot’s premier marketing platform. You won’t regret it.”
 
Lender news
 
The CEO of Stifel Financial said while the number of bank M&A deals has been flat from 2017 vs. 2016, he expects an increase in bank M&A in 2018 due to regulatory changes. For mortgge banks, this isn’t the first, won’t be the last… another lender was purchased, this time in Northern California. The Capital Corps, LLC, which caters to “non-traditional borrowers,” has made a “strategic investment” in Commerce Home Mortgage. Commerce has 25 lending offices located in California, Arizona, Colorado, Florida and Georgia. For its part, “The Capital Corps target borrowers come from the 27% of the U.S. population the FDIC identifies as underbanked who are unable to obtain loans from banks due to overly burdensome or technical documentation requirements that do not reflect on the borrower’s true credit-worthiness…”
 
Of course, a mortgage company doesn’t have to invest in other mortgage companies. Nationstar, uh, I mean Mr. Cooper, the nation’s largest non-bank mortgage servicer and a leading mortgage lender, confirmed its role in Matic Insurance Services’ funding round and announcing the forthcoming availability of Matic’s services in Mr. Cooper’s digital mortgage application interface (coming in 2018). Yes, Matic Insurance Services announced the completion of a $7M Series A Funding round led by Mr. Cooper and leading insurance carriers Nationwide and National General Insurance with support from VC firms Anthemis and ManchesterStory Group.
“Matic’s technology connects homebuyers with insurance carriers, mortgage lenders and mortgage servicers to make homeowner’s insurance a more integrated part of the home purchase process. The result is a simpler, faster policy selection process that can save borrowers money and reduce loan delays…Mr. Cooper’s integration with Matic will make it easier and faster for borrowers to secure a homeowner’s insurance policy when purchasing a home through Mr. Cooper.”

 
J.D. Power does more than just rank cars. It released its 2017 U.S. Primary Mortgage Origination Satisfaction Survey showing which lenders hold the highest marks in consumer satisfaction. Tied for first place are Guild Mortgage Company and Quicken Loans. “One revelation of the survey showed the mortgage industry’s promise of technology creating a faster and easier mortgage origination process does not appear to be fully recognized, as mortgage customers are reporting slower purchase processes. The study also found that overall satisfaction with mortgage originators decreased, eight points on a 1,000-point scale, from last year due to a perception of a slower process, despite a significant increase in the number of customers applying online.
 
“For the first time in the survey’s history, refinance and purchase customers cite online as the most frequent method of submitting a mortgage application. A total of 43% of borrowers indicated they applied digitally in 2017, up from just 28% the year before. However, satisfaction among consumers who applied online plummeted by 18 points from last year, and trails in-person applications by 10 points.”
 
Mr. Smith Goes to Washington
 
A gaggle of Senators, including Senate Banking Committee Chair Mike Crapo, proposed a plan for rolling back parts of the Dodd-Frank Act for small and regional banks. Nope, no independent, non-depository mortgage banks involved. And I’d put the odds of it going through at about 100:1, but it shows the sentiment of some politicians. Perhaps some part of will make it through, so there is a slim chance of Congress making a change to rules passed after 2008.
 
A change to the definition of “mortgage originator” under TILA that should benefit the manufactured housing industry? Present. Cutting compliance costs for community banks? It’s there. Raising the threshold for labeling banks as too big to fail to $250 billion in assets from the $50 billion set in the 2010 Dodd-Frank Act? That too, over 18 months. Banks with less than $100 billion in assets would get immediate relief. Some QM portfolio lending changes? Yup.
 
Past GOP efforts to overhaul Dodd-Frank have failed because Democrats argued they went too far in gutting safeguards that are meant to protect consumers and to ensure Wall Street doesn’t cause another meltdown. What is the wisdom of rolling back so many of Dodd-Frank’s protections with almost no gains for working families? “Banks made record profits last year and it looks like executives will get bigger bonuses this year. Hourly wages have stagnated for 40 years, and too many Americans are still feeling the impact of the 2008 financial crisis. Who needs help the most?"
 
Isaac Boltansky opined, “We continue to believe that odds favor passage of a regulatory relief package, but our sense is that the package will take months to fully form and therefore expect passage in mid-2018. Given the package’s bipartisan support, it represents the most significant legislative step toward a regulatory realignment in the financial services sector since the Dodd-Frank Act was enacted.
 
QM Portfolio Safe Harbor. The package includes a provision that would appear to extend the Qualified Mortgage (QM) rule’s safe harbor to loans originated and retained in portfolio by banks or credit unions with less than $10B in assets. The GOP had previously pushed for all depositories to enjoy the portfolio safe harbor, but the $10B asset threshold is a sound compromise. Our sense is that this provision could help covered banks at the margin, but its impact on the mortgage market will likely be limited.”
 
And don’t forget that the Department of Veterans Affairs has been aware that lenders have been repeatedly selling military homeowners new loans, often with risky terms that are detrimental to the borrower, for over a year but has yet to act. "Consumers, including veterans, may be being harmed. We know investors are being harmed. Borrowers from FHA are being harmed," said Chris Killian, managing director and head of securitization at SIFMA. "The sooner they fix it, the better.
 
With that in mind, last month Ginnie Mae and VA joined forces and announced the formation of the “Joint Ginnie Mae – VA Refinance Loan Task Force.” The task force will focus on examining critical issues, important data and lender behaviors related to refinancing loans and will determine what program and policy changes should be made by the agencies to ensure these loans do not pose an undue risk or burden to Veterans or the American taxpayer. The task force will focus on examining critical issues, important data and lender behaviors related to refinancing loans and will determine what program and policy changes should be made by the agencies to ensure these loans do not pose an undue risk or burden to Veterans or the American taxpayer. It will also examine the impact of establishing stronger seasoning requirements for VA-guaranteed loans that are securitized into Ginnie Mae Mortgage Backed Security pools. Additionally, the task force will work to ensure Veterans understand the costs and benefits of refinancing, and ensure robust borrower outreach and education programs are augmented for this purpose. 
 
Capital markets
 
Ginnie Mae’s recent announcement details its new Platinum WAC ARM pool types and eligible collateral related to the anticipated new Platinum WAC ARM pools and Platinum Jumbo Only pools planned for December of 2017.
 
Although it bounced a little last week, the persistent flattening of the US yield curve may have far-reaching effects and ultimately lead to a slowdown in the US economy, according to several market participants. For a decent primer, here is a story that explores the causes behind the flattening and possible future scenarios.
 
Yesterday there was much ado about nothing: some intra-day volatility, some shifting among coupons, securities, and maturities, but nothing worthy of me droning on about. Yield curve flattening resumed after a brief respite at the end of last week. The 2s10s spread compressed by three bps to 71 bps. The 10-year yield touched a low of 2.37% early in the day before spending most of the session grinding higher to close unchanged at 2.400%. As did much of the agency MBS market.
 
In terms of supply and demand in mortgage land, we can expect the Fed to buy a daily average of $1.17 billion per business day of various securities and coupons. Of course, this will gradually fade away as the NY Fed lowers its balance sheet.
 
For today we have a bevy of Fed President speakers. But for actual numbers, an increase this morning in the NFIB Small Business Optimism Index for October showed small businesses were more optimistic in October as sales expectations grew. We’ve also had the October Producer Price Index (remember when inflation even existed?) which was +.4%, core +.4% for goods & services – stronger than expected. Tuesday begins with the 10-year at 2.40% and agency MBS prices not much different versus Monday’s close, so rates are roughly unchanged.
 
 
(This one explains some of the policies and procedures at lenders.)
One caller to Butterball’s Thanksgiving Turkey Talk-Line had always cut the legs off the turkey before putting it in the oven, thinking that was how you had to cook a turkey.
She later learned that the only reason her mom had been doing that was because their oven had been so small that that was the only way to get the bird into the oven.
 
 
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, “Servicing: All It’s Cracked Up to Be?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2017 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.)
 

Nov. 13: Cap. markets product & LO jobs; bank M&A; events & webinars this week; jumbo & non-QM product updates

Wells Fargo’s retail lending division & core bank have really “taken it on the chin” in the last year or so, what with the car insurance, sales practice, and rate lock extension scandals, and reminding us that a good reputation can take years to build and a few headlines to destroy. Given that we’ve just finished up the Veteran’s Day weekend, something you don’t often hear about is Wells Fargo continuing to team up with Wounded Warriors to provide free houses for disabled vets. Thousands of lenders across the country, like Fairway Independent, CMG Financial, and Bank of America, continue to help countless veteran’s charities, often with no headlines. Kudos to all of them, publicity or not.
 
Jobs & products
 
Assurance Financial, headquartered in Louisiana, is continuing our aggressive company and branching growth. We are looking for good markets and great people in all attractive locations across the country. Specific to Charlotte, North Carolina, we are seeking a producing branch manager and talented MLOs to build a dynamic production office while partnering with the "closing on time" support from our existing Charlotte loan operations center. In addition, we are seeking an experienced Eastern Regional Production Manager to assist us with supporting and expanding existing Eastern Time Zone branches as well as bringing on new branch opportunities in this territory.” For immediate consideration and more information, please call or write Paul Peters, CMB, Recruiting Manager (225-239-7948).
 
“What happens when you combine one of the top places to live with one of the top places to work? You get PrimeLending’s newest branch in Bozeman, Montana. And as Bozeman experiences extraordinary growth in its booming housing market, PrimeLending is growing right along with it, planting our flags across the US with exceptional results. Our Bozeman branch is proof of that. Led by Branch Manager Jeremy Bordner, Bozeman represents an additional $58 million in anticipated volume in 2018. When you work with the best, have the best products, technology and support, it’s easy to see why success follows you to PrimeLending. Are you a premier loan officer ready to achieve your absolute best? Contact Bill Harp (469-737-5767).”
 
“Wanting or needing a change? Tired of not closing loans on time? Stanford Mortgage is looking to bring on Mortgage Advisors and / or teams to our unique platform. Stanford Mortgage (a division of Finance of America) is a multi-branch, full service lender, located throughout the greater Sacramento area. We are a direct lender with local support to close loans on time, build your business, and have fun. If you and your team are looking to take your business to the next level, confidentially send your resume to Tim Rowen or Barry W. Pearson, Jr..”
 
“Never heard of MiMutual Mortgage? You’re not alone. This may be the best retail platform most people don’t know about. Celebrating 25 years in business and numerous Top Company awards and just last week recognized as a Best Place to Work by the Detroit Free Press, the agency-direct lender and servicer is now expanding in select markets. With a fanatical focus on service, efficiency and branch support, MiMutual Mortgage specializes in conventional and FHA renovation lending with an internal draw administration, delegated Jumbo, FHA section 184, FHA 203(h) disaster recovery lending, manual government underwriting, correspondent non-QM lending and state DPA/Bond programs. Successful Branch managers and originators seeking a true partnership rather than an employee ID number, better support, training, smoother operations and real marketing support should contact National EVP of Retail Lending Daniel Jacobs (888-994-6698) or visit us. Seeking the best talent nationwide, with a current emphasis on CA, AZ, MD, FL, SC, NC, MO, and TX.”
 
In capital markets news, MCT has released new online functionality that automates the process of product selection and delivery of loan commitments to Fannie Mae. The new solution, which was developed as part of MCT’s ongoing technology collaboration with Fannie Mae, is called Rapid Commit and resides within MCT’s award-winning secondary marketing software platform, MCTlive! “Working within MCTlive!, users leverage Rapid Commit to run initial best execution and determine that the loan meets Fannie Mae selling guidelines, followed by product-specific best execution that intelligently analyzes the optimal subset sizes and products to deliver as individual commitments,” stated Phil Rasori, COO of MCT. "Previously, this analysis was a manual, laborious process but it is now completely automated – all with the simple click of a button." Learn more about Rapid Commit and MCT’s strategic collaboration with Fannie Mae for the benefit of mutual clients.
 
Events & webinars
 
Learn about Plaza’s 203(k) Standard and Limited products November 14th.
 
Digital mortgage information is important to keep up on, and the California MBA is hosting a FREE webinar featuring some of the top tech minds and hottest products from the Digital Mortgage Conference on November 15 at 11AM PT. Special guests include Austin Kilgore, Editor-in-chief of National Mortgage News, Bob Brandt, Optimal Blue; Linn Cook, LendingQB, Kirk Donaldson, LoanBeam, and John Seroka, Seroka Brand Development.
 
AmeriHome’s underwriting management team will be providing a Core Jumbo Underwriting Webinar on Wednesday, November 15 at 8AM PT and Thursday, November 16 at 2PM PT.
 
Don’t miss the MBA of Metropolitan Washington Residential lending celebration on November 15th, 6PM ET at the Westwood Country Club. “Enjoy good times with your colleagues, network, have fun!! Attendees will receive two drink tickets along with a great spread of hors d’oeuvres.”
 
Join MBA ST. Louis on November 16th for lunch, networking, and discussion on driving profits with Craig Palubiak at Strategies to Grow Your Business. Lunch will be held at Ces and Judy’s beginning at 11AM.
 
New York MBA and Freddie Mac are providing a free webinar, “Smart ways to combat mortgage fraud”, on November 16th. Topics include: Emerging Fraud Issues, Scams That Target the Elderly/Seniors, Spoofing Schemes and How Consumers Can Protect Themselves and Freddie Mac Fraud Resources for You and Your Customers.
 
Several provisions of the New York Department of Financial Services’ (DFS) landmark cybersecurity regulation will be enforced starting in February 2018. Buckley Sandler’s Privacy, Cyber Risk & Data Security practice will be hosting a webcast on November 29th to discuss the soon to be enforced provisions as well as the proposed registration requirement for credit reporting agencies, which would make them subject to the cybersecurity regulation. The panel will also discuss efforts by DFS to promote the cybersecurity regulation as a model for other states to follow. 
 
Fannie Mae is offering a new series of Ask-the-Expert live webinars intended to offer guidance and information to support your Uniform Closing Dataset (UCD) file submissions. The webinars feature live demos and feedback messaging in the UCD collection solution plus Q&As with our subject matter experts. Register for an upcoming session on the UCD Collection Solution page.
 
Bank news
 
By “bank news” we’re not talking about Apple or Amazon quite yet, but plenty of folks are watching their interest in banking – especially those in their 20s and 30s who grew up seeing plenty of bad headlines about commercial banks but not many about Apple or Amazon. On the mortgage side, only 40% of the top 10 home lenders by volume are banks. The remaining group is garnering more business in this area as they do not have to follow strict banking rules post crisis and as such is offering more creative structures, better terms, and, some say, looser underwriting.
 
Banks firing the Fed? Bank of the Ozarks and other smaller banks are eliminating their holding company structure to gain release from regulation by the Federal Reserve. Acting Comptroller of the Currency Keith Noreika supports the move, saying "banks should be able to structure themselves in whatever way they want." 
 
Bank mergers and acquisitions continue. In the last week or so it was announced that in California Suncrest Bank ($529mm) will acquire Community Business Bank ($325mm) for about $62.5mm in cash (50%) and stock (50%) or about 1.86x tangible book. The Old Point National Bank of Phoebus ($948mm, VA) will acquire Citizens National Bank ($48mm, VA) for about $7.9mm in cash (100%) or about 1.0x tangible book. In the Garden State, 1st Constitution Bank ($1.1B) will acquire New Jersey Community Bank ($104mm) for $7.6mm in cash (40%) and stock (60%) or about 0.82x tangible book. And Banterra Bank ($1.5B, IL) will acquire 3 IL branches plus associated loans ($91mm) and deposits ($84mm) from First Bank ($6.2B, MO).
 
Jumbo & non-QM news
 
Analysts will tell you that the private label MBS market is still a shadow of its pre-crisis self. Production isn’t necessarily down, which means that these loans are retained on a bank’s or REIT’s balance sheet. One could argue that this limits the available credit, however, the most puzzling aspect is that a lot of lenders want to get into the non-QM business, but the demand for non-QM credit has been disappointingly small. People are ramping up the non-QM product, but the loans just haven’t been there yet. 
 
Mortgage Solutions Financial has discontinued all its Non-Conforming (Jumbo) 501 and 701 products. No new lock requests or submissions will be allowed for these products.
 
Wells Fargo Funding expanded acceptable property types for Non-Conforming Loans, on or after October 24th, to include log homes (with at least two log home comparable sales that support marketability and value).
 
AmeriHome Mortgage posted, effective for Fannie Mae, Freddie Mac, FHA, and VA loans delivered on and after November 1, tax and W-2 transcripts will no longer be required when all qualifying income is W-2 income. For all other income types, transcripts are required for each tax year with qualifying income. As a reminder, Sellers are required to provide a completed IRS Form 4506-T, as required by the applicable Agency. Tax transcripts are required for all qualifying income sources for USDA and Core Jumbo loans.
 
Beginning with Core Jumbo loans locked on and after November 1, 2017, AmeriHome fees will be as follows: $345.00 Administration Fee (previously $295) and $75.00 Tax Service Fee (unchanged).
 
NewLeaf’s Non-QM highlights include: 5/1, 7/1 qualifies at higher of note rate or fully indexed rate (not + 2%). Listed property is eligible for refinance. Departing residence – utilize a rental survey (no release agreement). Add back pension contribution for self-employed borrowers.
 
Pacific Union Financial posted some policy updates. First, all parties to Non-Delegated loan transactions will be checked via applicable databases required by regulation, investors and insurers. If a party is listed in one of these databases, Pacific Union will contact the affected party’s Non-Delegated Lender for assistance. Next, due to an increased regulatory focus on the accuracy of recording fees, Pacific Union has been asked to produce evidence (receipts) to show that only the exact amount is charged to the consumer at closing.  Pacific Union has begun including this review as a part of our standard Quality Control practice; thus, our lenders may be asked to provide this documentation on a post-purchase basis. Please ensure that your organization is readily able to produce these receipts if they are required. 
 
Pacific Union announced the release of its new FlexKey: A Foreign National loan program as an addition to the FlexKey program suite. Refer to its Program Guide for complete product requirements.
 
Capital markets
 
Rates: up some, down some. And so it goes – Friday rates were up, and the 10-year sold off .625 to yield 2.40%. LOs and lenders are more focused on helping their clients with odd underwriting twists rather than hoping rates drop .125. U.S. Treasuries & agency MBS prices ended last week on a broadly lower note, erasing their gains from the earlier portion of the week. Many trading operations were closed on Friday in observance of Veterans Day, which likely reduced participation. The only news during the day was the preliminary University of Michigan Survey of Consumers for November indicating that consumers’ anticipated wage gains recorded the highest two-month level in a decade.
 
Moving rates slightly could be US tax skepticism as the House and Senate work on bills with substantive differences: the SALT and mortgage interest deductions. Thus, while each chamber will make progress on their respective bills (the House could pass its version by Thursday), the reconciliation process promises to be long and arduous.
 
It would take some dramatic negative news to dissuade the Fed from raising short term rates again next month: the news as of late has continued to point to a decent national economy. After zip today, scheduled news this week includes tomorrow’s October NFIB Small Business Optimism Index and October Producer Price Index. Wednesday is the weekly MBA applications from last week, Empire Manufacturing, October Consumer Price Index, October Retail Sales, and September Business Inventories. Thursday is the usual jobless claims, and October Import Prices & Export Prices, November Philadelphia Fed Survey, October Industrial Production & Capacity Utilization, and then on Friday is a smidgeon of housing news with October Housing Starts and Building Permits. We start the week with rates slightly lower versus Friday: the 10-year is yielding 2.38% and agency MBS prices are better by .125.
 
 
A guy walks into a bar with a pair of jumper cables around his neck.
The bartender says, "It’s OK for you to come in here, but just don’t start anything."
 
 
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, “Servicing: All It’s Cracked Up to Be?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2017 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.)
 

Nov. 11: Notes on ECOA & HMDA, blockchain & credit reporting; corporate tax fallacies; tallying mortgage production

Pass this along to any veteran(s) in your life, as I did earlier this week to my father who was in the U.S. Navy from 1942 to 1962: free things for veterans. And check out the cool story for today’s “joke.”
 
While everyone is focused on HMDA, ECOA is coming
 
Lenders hoping that their vendors will cover them on the upcoming HMDA changes are making a mistake. They need to make sure “all systems are go” with themselves. What about ECOA, which is also governed by the CFPB? Let’s look at changes to lending operations. Specifically, the new data collection and reporting requirements under the Equal Credit Opportunity Act (ECOA) for loans and loan applications for small businesses and firms owned by minorities and/or women. The new requirement will probably impact new loan applications, where banks will need to register for business loan data collection and submission.
 
The requirement will be entirely separate from the data collection and reporting requirements of both the HMDA and the Community Reinvestment Act (CRA) and apply to financial institutions as the ECOA defines them. This includes banks, though it’s not clear whether any banks will be exempt based on asset size or loan volume.
 
Lenders will have to collect and report data for any credit application made by a small business or one owned by women and/or minority members, with “application” defined as an oral or written request for defined or open-ended credit, secured or not. “Minority” members include African Americans, Native Americans, Hispanic Americans, and Asian Americans. “Ownership” means that the person in question owns more than 50% of the business, or receives more than 50% of the profit or loss.
 
Steve Brown with PCBB states that, “According to the law, a ‘small business’ is the same as a ‘small business concern’ in the Small Business Act (SBA). As anyone who regularly deals with the SBA can tell you, however, this is not always a particularly helpful definition. Banks have asked the Bureau to either follow the definition in the CRA or permit flexibility based on bank practices. In any case, the ECOA will have to clearly indicate what constitutes a small business, and banks will need to identify the businesses, applications, and loans that qualify for reporting.
 
“All commercial loan officers will need to develop procedures for asking loan applicants about their status, as well as for making sure underwriters have no access to the answers. In an instance where that isn’t possible or practical, banks will have to tell applicants that underwriters will know their demographic information, but that this will not affect the decision to grant or withhold credit. The statute requires that banks collect and submit a list of information including the census tract of the applicant’s principal place of business, the business’s gross annual revenue during the fiscal year before application, the primary owner’s or owners’ race, sex, and ethnicity; and any other information the ECOA ultimately deems necessary.
 
“The bank’s record of that required information may not include any information that could personally identify the applicant: name, phone number, email address, or any specific address beyond census tract information. Again, this means keeping the records separate from the application.
 
“Once the bank has the information, it will have to report that data to the ECOA and make it available to the public on request, deleting or modifying anything private. Banks can also aggregate data for their own use and must make that data publicly available. Aggregated data is the overall point, after all. This rule’s purpose is to facilitate the enforcement of fair lending laws. Ultimately, this national data will help all banks analyze small business lending. Although nothing has been set in stone yet, it may be in your bank’s interest to start planning to meet such requirements as you continue to monitor things.”
 
Double counting loans
 
“Rob – Thanks for continuing to point out the insanity that is the counting of correspondent loans as ‘originations.’ A correspondent transaction is a secondary market transaction – the buying of an already closed loan. If purchased loans are truly considered ‘originated’ loans then Fannie and Freddie are, by far, the largest originators on the planet. It’s hard to understand why this misleading approach lives on. It seems easy enough to separate ‘originations’ where the company’s funds are used at the table from ‘correspondent’ where a firm buys another firm’s closed loans. These two things are wildly different. Putting them together is simply irresponsible.”
 
Death and taxes
 
Certainly, no accountant wants to simplify the tax code. Making tax preparation easier for everyone is not in their best interest. And it’s easier for a company to change countries than it is for an individual. “While the final Republican tax plan is still a work in progress that may never become law, one thing’s very clear; its philosophy is to tax people, who are relatively immobile, and lower taxes on corporations, which can much more easily move their money. Yes, while workers will generally get short-term relief, two-thirds of the tax cuts will go to corporations.” So observed Elliot Eisenberg.
 
Steve N. penned, “I read your column every day and these ‘alleged’ tax cuts are a myth. Rarely does a corporation pay 35% in taxes. There are various newspaper articles with ‘real facts’ about the corporate tax rates and all of the multi-billion-dollar corporations that pay no taxes. If the government just stops giving tax subsidies to corporations, it could save $527 billion (yes billion) dollars in 10 years. That is what the government has already given corporations. 
 
“I’m just the little middle-class guy trying to get the word out. It’s ‘all about the wealthy.’ Tax rates are very misleading. Apple reports its effective tax rate as 25.8%, which is quite a bit lower than the statutory 35% rate. Microsoft’s income tax expense was $3.3 billion, for an effective rate of 16.5%. Alphabet, the parent company of Google, posted a $4.7 billion tax expense, or 19%. General Electric earned $10 billion last year, but recorded a tax benefit of $400 million for a 12-month tax rate of -4.5%. ExxonMobil, because of the collapse in oil prices, had an odd income statement in 2016, with EBIT (earnings before income tax) of $4.2 billion, net income of $7.8 billion, and a $406 million income tax benefit. That would imply that Exxon paid no taxes in 2016.
 
The 35% corporate tax rate is a myth. Profitable corporations are subject to a 35 percent federal income tax rate on their U.S. profits. But many corporations pay far less, or nothing at all, because of the many tax loopholes and special breaks they enjoy. This report documents just how successful many Fortune 500 corporations have been at using loopholes and special breaks over the past eight years. As lawmakers look to reform the corporate tax code, this report shows that the focus of any overhaul should be on closing loopholes rather than on cutting tax rates.
 
“As a group, the 258 corporations paid an effective federal income tax rate of 21.2 percent over the eight-year period, slightly over half the statutory 35 percent tax rate. Eighteen of the corporations, including General Electric, International Paper, Priceline.com and PG&E, paid no federal income tax at all over the eight-year period. A fifth of the corporations (48) paid an effective tax rate of less than 10 percent over that period. Of those corporations in our sample with significant offshore profits, more than half paid higher corporate tax rates to foreign governments where they operate than they paid in the United States on their U.S. profits.”
 
Steve’s information went on. “One hundred of the 258 companies (39 percent of them) paid zero or less in federal income taxes in at least one year from 2008 to 2015. The sectors with the lowest effective corporate tax rates over the eight-year period were Utilities, Gas and Electric (3.1 percent), Industrial Machinery (11.4 percent), Telecommunications (11.5 percent), Oil, Gas, and Pipelines (11.6 percent), and Internet Services and Retailing (15.6 percent). Each of these industries paid, as a group, less than half the statutory 35 percent tax rate over this eight-year period.”
 
“Congress should repeal the rule allowing American multinational corporations to indefinitely ‘defer’ U.S. taxes on their offshore profits. This reform would effectively remove the tax incentive to shift profits and jobs overseas. Limit the ability of tech and other companies to use executive stock options to reduce their taxes by generating phantom ‘costs’ these companies never incur.
Having set ‘bonus depreciation’ on a path toward expiration at the end of 2019, Congress should take the next step and repeal the rest of accelerated depreciation, too. At a minimum, lawmakers should resist calls to expand these tax breaks by allowing for the immediate expensing of capital investments. Reinstate a strong corporate Alternative Minimum Tax that does the job it was originally designed to do.
 
“Facebook, Aetna and Exxon Mobil, among others, saved billions in taxes by giving options to top executives to buy stock in the future at a discount. The companies then get to deduct their huge payouts as a loss. Facebook used excess tax benefits from stock options to reduce its federal and state taxes by $5.78 billion from 2010 to 2015, the institute found. Individual industries have successfully lobbied for specific tax breaks that function as subsidies: for instance, drilling for gas and oil, building NASCAR racetracks or railroad tracks, roasting coffee, undertaking certain kinds of research, producing ethanol or making movies (which saved the Walt Disney Company $1.48 billion over eight years, the report says).
 
“Companies take advantage of an array of tax loopholes and aggressive strategies that enable them to legally avoid paying what they owe. The NY Times did a good story on how billion-dollar companies pay no taxes. We’d all be advised to at least skim it.” Thanks Steve!
 
Blockchain in the credit reporting arena
 
Regarding the potential for blockchain to change consumer financial services, Jeremy Potter wrote, “American Banker published an article that implied blockchain could upend the traditional credit bureau.  The idea, at least from what I can see, would be a new system that does a better job rating creditworthiness and secures information. Unfortunately, it’s not that easy.
“For instance, ‘I would not believe for one second that the big three players in the U.S. are going to let some startup blockchain company take their franchise away from them,’ said Steve Ely, CEO of the alternative credit bureau eCredable. ‘There’s way too much money at stake for them to allow that to happen. As much as they compete with each other, they’re also smart enough to know that they do have the goose that lays the golden eggs every year.’
“This is the catch, right? On one hand, we’re all suspicious of the traditional credit models. Lenders want to know the models account for student debt, medical debt and alternative sources of repayment. On the other hand, blockchain remains an unproven technology. The real estate finance industry is looking for an application of blockchain but it’s an old school industry. So, there are still experts on both sides banking on the success or failure of blockchain (pun intended). What do you think? Will the Equifax breach threaten the entire credit bureau model? Is blockchain technology a threat or solution to the traditional credit bureau model?”

 
The Anthem Veterans Memorial, located in Anthem, Arizona, is a monument dedicated to honoring the service and sacrifice of the United States armed forces. Once a year at 11:11 am the sun shines perfectly on this Memorial. At precisely 11:11 a.m. each Veterans Day (today, Nov. 11), the sun’s rays pass through the ellipses of the five Armed Services pillars to form a perfect solar spotlight over a mosaic of The Great Seal of the United States.

 

 
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, “Servicing: All It’s Cracked Up to Be?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2017 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.)
 
 

 


 

 

Nov. 10: Business opportunities, products; upcoming events & webinars; agency disaster updates; Freddie & Fannie news

In lending we should all continue to champion and applaud the individuals and companies that are making a difference in our quest for equality, especially when it comes to women and minorities. In law firms – a similar occupation – women over 40 make up 40 percent of lawyers at but women over 50 only make up only 27 percent. That phenomenon is the focus of the American Bar Association’s Long-Term Careers for Women in Law initiative. “If women are leaving because they’re just tired of having fought for all these years and still not being treated how they perceive to be fairly and equally with men, that’s a problem we need to address,” said ABA President Hilarie Bass.
 
Jobs, promotions, & products
 
Movement Mortgage has hired industry veteran Ryan Rosenthal as its Regional Builder Manager for the California and Hawaii markets. “Rosenthal brings exceptional experience in new home mortgage sales, products and processes in addition to a focus on recruitment and talent support. Prior to joining Movement Mortgage, Rosenthal served in a variety of capacities for top lenders in the West, most recently as a Division Builder Manager.” Movement Mortgage also created a program for proprietary down payment assistance grants that make homeownership more accessible for first-time homebuyers.
 
Have you heard? Mr. Cooper Correspondent announced new credit offerings and product solutions – including FICO score reductions for government products (FHA, VA and USDA Standard and FHA Streamline). Correspondents can now also take advantage the new Conventional HPML and FHA Rebuttable Presumption loan offerings.  Mr. Cooper’s Correspondent team no longer requires government insuring certificates, and tax transcripts will only be required for self-employment and rental income sources.  Lastly, Fraud Guard will no longer be required on FHA Streamline and VA IRRRLs.  Read all the details in the latest Seller Guide Update. Special thanks to all our clients, friends, and partners who visited the Mr. Cooper MBA Client Reception and met with us in Denver, CO! We hope you had as much fun as we did, and we always value an opportunity to speak with you directly. If you have any questions, contact your region’s Account Executive.”
 
A "Top 5 National Retail and Wholesale Lender, with deep-pockets parent, is looking to purchase/merge originating independent lenders with production of $500M to $10B annually. We offer extremely competitive compensation, pricing and sales support structure. Key areas where we would like to add new teams as part of our family are Chicago, IL, CA, MI, OK, New England, DC, OH, AL, LA, MS, MD, VA, ID, MN, NM, TN, WV, WS, OR, NM, WA, and KS. We are not opposed, however, to other areas of the country as well.  We will negotiate the best terms for the best companies commensurate with their current financial status and footprint. A ‘plug n play’ approach allows for smooth transitions with little interruption to business flow. If interested in having an initial discussion, please confidentially email me so a direct connection can be made.”
 
For the fifth consecutive year, Loan Vision will be a gold sponsor of the Mortgage Bankers Association’s Accounting and Financial Management Conference hosted in San Antonio, Texas on November 13-15, 2017. “This year, we’re excited for the opportunity to dive in and show lenders how we can help reduce business expense and increase profit through greater control and insight into exactly how and where their dollars are being used.” said Carl Wooloff, Business Development Manager at Loan Vision. In addition to their sponsorship, the Loan Vision team will also be booking private meetings with attendees and hosting two round table discussions on trending industry topics, including leakage management and preparation for 2018. To schedule some time to meet with the team, please contact Carl Wooloff
Upcoming events
 
With more than a decade of experience working with originators producing 50+ loans per month, Maximum Acceleration master coach Erik Janeczko knows the secrets to their success … and now you can too! Register for the upcoming webinar “Breakthrough 2018: Build your strategy for limitless growth”, presented by Vantage Production on Tuesday, November 14th at 12:00 p.m. ET, and you will leave with a step-by-step process to virtually guarantee limitless growth in 2018 – no matter what the market brings your way! Save your seat now when you click here. Can’t make it at this time? Register for the webinar to get access to the replay.
 
Non-disclosure disputes are the most common real estate legal disputes in California. Thus, it’s imperative for the real estate community to understand disclosure laws, principles, and practices. On Tuesday November 14th, the Law Offices of Peter N. Brewer will be producing a free webinar about real estate disclosures in California. Real estate attorney Adam L. Pedersen will discuss the real estate disclosure laws, as well as the processes for prosecuting and for defending against non-disclosure actions.
 
If you’re in Kansas next week on the 16th, come to the Mortgage Bankers of Greater Kansas City’s membership luncheon and say hi – I’ll be there.
 
On Thursday 11/16 from 2-3 ET Mortgage Capital Trading, Inc. (MCT) will be holding a complimentary educational webinar discussing many important changes to the Financial Industry Regulatory Authority (FINRA) Mark to Market Rule. The webinar, hosted by the Community Mortgage Lenders of America (CMLA), will guide lenders through all the mandated rule changes in advance of the required implementation date of June 25, 2018. Lenders will leave the webinar with a good understanding of the rule details, how it will affect their businesses, and how to prepare for it. (FINRA Regulatory Notice 16-31 establishes amendments to Rule 4210 that will change margin requirements for Covered Agency Transactions, including the TBA transactions. FINRA members will be required to collect daily MTM margin from all counterparties on these transactions under certain circumstances.)
 
Register for the MMLA’s Southeast Chapter’s HR panel on how to recruit, train and retain Millennials on Thursday, November 16th.
 
MBA Education is busy. There’s a webinar on November 15th covering recent changes to the National Institute of Standards and Technology (NIST) guidelines for digital identities. These new guidelines revise password security recommendations and propose changes to standards and best practices for organizations that use digital identity services.  The panel of security experts, including representatives from NIST and the U.S. Department of Homeland Security, will review the changes and discuss the impact of the requirements on mortgage lenders. And in San Antonio the MBA will have its Accounting and Financial Management Conference from November 13-15.
 
People like lists. And residential lenders also like to know what other lenders are thinking. After polling its lender members, The Mortgage Collaborative covered both with a piece titled, “As 2018 Approaches, Here’s What’s Most Important to Mortgage Lenders.” The list is worth a gander since hearing about the usual “increased technology” and “increasing efficiency” – has, frankly, although important, grown somewhat stale. It is good to see things like “file flow” and “benchmarking” on our collective minds.
 
Disaster news: lenders & investors react to fires & hurricanes
 
Fannie Mae published Lender Letter LL-2017-09 to provide policy guidance for loans secured by properties located in a Federal Emergency Management Administration (FEMA) Declared Disaster Area eligible for Individual Assistance.
 
In response to Wildfires in California and in response to a Federal Disaster Declaration, M&T Bank will enforce the Disaster re-inspection Policy for all properties located in the affected counties: Butte, Lake, Mendocino, Napa, Nevada, Orange, Sonoma and Yuba.
 
The FHA issued a waiver covering all municipalities in Puerto Rico impacted by Hurricane Maria, allowing damage inspections to be conducted beginning November 9, 2017. This waiver is in addition to the waiver issued by FHA on October 24, 2017, of its policy on the time frame for completing the inspection of properties prior to closing, or submitting the mortgage for FHA insurance endorsement in the Presidentially-Declared Major Disaster Areas (PDMDAs) in municipalities in Puerto Rico impacted by Maria.
 
For mortgages in process secured by properties in a PDMDA that have not closed or are pending endorsement, mortgagees must follow the guidance contained in the Single Family Housing Policy Handbook 4000.1 (SF Handbook) Section II.A.7.c, Inspection and Repair Escrow Requirements for Mortgages.
 
Freddie & Fannie
 
Freddie Mac had net income and “Comprehensive Income” of $4.7 billion in the 3rd quarter, and hit $1 trillion of mortgages. Freddie Mac posted strong Q3 earnings nearly tripling its net income in Q2. Fannie Mae was no slouch in the 3rd quarter, and it saw $3 billion added to its, uh, I mean the government’s, balance sheet.
 
During the weekend of Nov. 18, Desktop Underwriter (DU) 10.0 and 10.1 will be updated to underwrite loan casefiles when a borrower has placed a freeze on their credit report at only one of the three credit repositories. This change will apply to DU 10.0 and 10.1 loan casefiles submitted or resubmitted to DU on or after the weekend of Nov. 18. When credit is frozen at one of the three repositories, the loan casefile will be underwritten using the credit data received from the other repositories, and DU will issue a new Potential Red Flag message. Review the release notes for more information.
 
Don’t forget that the FHFA announced its decision to add a preferred language question to the new Uniform Residential Loan Application (URLA). This question will enable borrowers who prefer to communicate in a language other than English to identify that language.  It also provides clear disclosures that the mortgage transaction is likely to be conducted in English and that language resources may not be available. Lenders may begin using the redesigned URLA in July 2019, but use of the redesigned form will not be mandatory for Fannie Mae/Freddie Mac loans until February 2020.
 
Orion Lending introduced FUEL, a new enhancement to its existing product line up.  ORION FUEL is a premium priced product, available on select FHA, VA Fannie Mae & Freddie Mac Products down to a 680 FICO.
 
As clarification to Wells Fargo Funding’s Newsflash C17-048bp, dated September 25, 2017, Sellers are reminded they represent and warranty compliance with Freddie Mac’s selling program. This includes adherence to the Uniform Closing Dataset (UCD) mandate to submit UCD XML files to Freddie Mac’s collection solution for all bifurcation Loans with Notes dated on or after September 25, 2017.
 
For delegated conventional Conforming, FHA and VA Loans, Wells Fargo Funding removed its documentation overlay for tax transcripts when all income used to decision a Loan is made up exclusively of wage earner income reported on a W-2 and/or fixed income reported on a 1099, unless required by the AUS.
 
Fannie Mae has updated the Cash Remittance System (CRS) remittance codes. These updates streamline the remittance process, enable transactions to be reported under unique remittance codes, reduce the commingling of funds within a single code, and more. Visit the CRS page to view the updated CRS User Guide, which contains all updated codes, their definitions, and purposes.
 
Capital markets
 
Once again volatility in the bond market was muted. U.S. Treasuries ended Thursday on a mixed note as the long bond posted a modest loss while the 2-yr note recorded a slim gain. Any volatility was attributed to Congress where differences between the Senate tax plan and the House version are in the press. For example, the Senate plan would delay the implementation of the corporate tax cut until 2019. We did have a strong $15 billion 30-yr bond auction, so investors are still very interested in our fixed-income securities. The Senate Banking Committee plans to hold a confirmation hearing for Federal Reserve Chairman nominee Jay Powell on November 28.
 
For Thursday’s session the new 10-year note worsened .125 to yield 2.33% at the end of the day. The 5-year and agency MBS prices were down/worse slightly – a few ticks.
 
In government news, yesterday Senate Republicans released their version of a tax overhaul plan while House Republicans on the Committee on Ways and Means advanced their reform bill that was initially announced last week to the House floor. The differences in the two versions must be reconciled to create one uniform plan to pass through Congress
 
Today the U.S. government is closed but banks are open. The Internal Revenue Service and Social Security Administration Service Centers are both closed although today is considered a specific business day for purposes of Closing Disclosure delivery/waiting period and rescission timeline calculations; however, Saturday, November 11 will NOT be considered a specific business day due to the holiday. Please note that this change may impact Closing Disclosure deliveries/waiting periods and the rescission timeline calculations.
 
We start the day with rates a shade higher versus yesterday (“more sellers than buyers”): the 10-year is yielding 2.37% and agency MBS prices are worse about .125. There is only minor scheduled economic news in the form of the preliminary November Michigan Sentiment Index.
 
 
Tip of the Day:
Next time you are too drunk to drive, walk to the nearest pizza shop and place an order. When they go to deliver it, catch a ride home.
 
 
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, “Servicing: All It’s Cracked Up to Be?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2017 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.)