News

Feb. 20: Sales jobs, large and small, new products, expansion; legal & political updates – gfee chatter

Welcome to Day 1 of the longest period in the United States without a federal holiday: President’s Day to Memorial Day. Some will think, “That’s a drag,” while others will think, “That’s more days to fund loans!” Speaking of fundings, the precise HMDA information for 2017 won’t be out until September. But if you want a solid estimates for single family originations in 2017, Marina Walsh, VP of Industry Analysis with the MBA, points out that its website is a good place for information on units and dollar volume, and thoughts about 2018.
 
Employment, products, expansion, and ownership changes
 
Short and sweet: Citi is looking for someone to run its U.S. mortgage group. The Head of U.S. Mortgage will be an integral part of the U.S Retail Bank and Mortgage leadership team and will be responsible for growing the CitiMortgage business in the United States and meet the on-going needs of current and potential clients for Citibank.
 
XINNIX introduces new Strategic Partnerships to empower every office, branch, regional, and divisional manager with the ability to elevate their team’s production. After countless conversations with managers around the country, the nation’s premier provider of mortgage sales and leadership development has found yet another way to move the needle for the mortgage industry. Strategic Partnerships will allow managers to bring XINNIX’s transformative sales and leadership development to branches and divisions who are ready to explode their production. By engaging in XINNIX Performance Programs, individuals and teams typically see a 50% increase in production. To learn more about how you can elevate your entire team, call your XINNIX Account Executive or CLICK HERE
 
Business has not taken off in 2018 the way many were hoping for. The lack of inventory has buyers in a holding pattern, and rising rates have caused a significant drop in the refi segment. But there are solutions! To help brokers and bankers jumpstart their 2018, REMN Wholesale is hosting a free webinar with Frank Garay of National Real Estate Post. Frank will reveal his proven strategies for success, share his personal scripts and tips for identifying the best targets and closing the deal. The webinar takes place on February 22 at 2PM ET, but space is limited, so interested participants should register ASAP here. While business is slow for some, REMN is still on a hiring spree and looking for entrepreneurial account executives in all territories. If you know someone looking to join a thriving wholesale lender, have them email REMN’s recruiting team.
 
PHH Mortgage, a leading provider of subservicing and portfolio retention services, has promoted Marc Field to Senior Vice President, Originations. Marc will be responsible for all aspects of fulfillment operations and growing originations in PHH’s portfolio retention business. Marc joined PHH in early 2016 as Vice President, Business Development for Portfolio Retention, responsible for leading the company’s marketing and business strategy as well as various analytics and technology programs to support the portfolio business segment. Prior to PHH, he was a senior leader involved in Sales, Retail, Call Center and Information Technology.
 
Welcome Texas Tech Credit Union Mortgage to the Dallas/Fort Worth area! Chartered by Texas Tech University Alumni in 1953, the Texas Tech Credit Union (TTCU) has proudly provided exceptional products and service to thousands of alumni, teachers, medical professionals, service providers, and charitable foundation employees across the great state of Texas and beyond. This dynamic organization is home to a successful and growing mortgage operation, and a unique, high-performance corporate culture. The expansion provides an attractive career opportunity for a Mortgage Lending professional who is established in the local mortgage and real estate market, and eager to help us grow in the greater Dallas area. To learn more about this exciting opportunity, please contact Jay Herrin, TTCU Mortgage Team Manager.
 
“Commitment is strengthened through action. Stearns Wholesale has supported the mortgage Broker community for more than 25 years. Through the depths of the financial crisis and the industry’s technology revolution, Stearns has been unwavering in our support of the Mortgage Broker. With millions invested in technology over the last two years, Stearns continues to leverage tools like bSNAP, SNAP 2.0, SNAP 2.0 Mobile and Instant VOI that give our Brokers an edge in a highly competitive marketplace.  We do not have a Consumer Direct group dedicated to portfolio retention, but we do distribute leads back to our Broker partners through a program called “Stearns Returns.” It is more than just business at Stearns; it is about our partnerships, our people and finding a better wayTo learn more about how you can partner with a Wholesale lender that has your back, please visit StearnsWholesale.com. Work with Stearns and you experience the power of more than 25 years of mortgage lending experience.”
 
4506-Transcripts.com has become an approved vendor for Ellie Mae’s Encompass® Digital Mortgage Solution. “Encompass is an all-in-one mortgage management solution that offers a digital mortgage experience covering the entire loan lifecycle, so lenders can originate more loans, lower origination costs, and reduce time to close. With this integration, 4506-Transcripts.com makes it possible for lenders to use their favorite LOS platform accompanied with our outstanding customer service and unbeatable turnaround times.” And 4506-Transcripts.com has become a Fannie Mae approved vendor for Desktop Underwriter® (DU®) Validation Service. “Fannie Mae’s Day 1 Certainty™ gives lenders freedom from representations and warranties plus greater speed and simplicity and enables an improved borrower experience. With this integration, 4506-Transcripts.com makes it possible for lenders to request tax transcripts and protects lenders from related buyback risk through Day 1 Certainty. If you are using any of these platforms, please contact us today (925.927.3333)!
© [2018] Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, DataTrac®, Ellie Mae Network™, Mavent®, Mortgage Returns®, Prospect Manager®, Total Quality Loan®, True CRM®, TQL® and the Ellie Mae logo are trademarks of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

 

USA Mortgage transferred the ownership of the company to its employees, forming an ESOP.
 
New Penn Financial, a mortgage lender that is owned by Shellpoint Partners, is expanding into Nevada by launching Synergy Home Mortgage. Synergy Home Mortgage is licensed to operate thought the state of Nevada but based in Reno. The lender is also a joint venture between New Penn and local real estate firms Dickson Realty and Ferrari-Lund Real Estate.
 
EverBank was acquired by TIAA and the integration process is expected to be complete by this summer. When its name changes, very little will change for clients who have an existing loan. The accounts and account numbers remain the same. If you have clients who are in the process of getting a mortgage, the name change will not change their loan terms or delay closing. To learn more about TIAA and the transition, click here.
 
Legal & political updates
 
There have been developments in repurchase/make-whole litigation. Although the number of repurchase suits appears to have been slowing down, James Brody, Chair of the Mortgage Banking Group at Johnston Thomas, PC, is an attorney who has kept his finger on the pulse of such matters.
 
According to Brody, whose firm has experienced a large influx of demands that were triggered by EPDs caused by Hurricanes Harvey and Irma, “[a] good practice for any correspondent lenders that may have received EPD related repurchase demands, for collateral that is situated within those areas that were hardest hit by Hurricanes Harvey and Irma, is to promptly request copies of the servicing notes and copies of any insurance claims that may have been made in connection with these natural disasters. Through an examination of these documents, as well as the underlying agreements, lenders can discover invaluable information about whether appropriate loss mitigation steps were taken, identify what the true cause of the EPDs were, and improve their overall chances of negotiating favorable resolutions.”
 
In addition, Brody advises that there is big news to report regarding developing case law, specifically as it relates to demands made by CitiMortgage (“CMI”). First, Brody reports that “There is good news for correspondent lenders who have received such demands from CMI, in that CMI recently lost its motion for reconsideration in CitiMortgage, Inc. v. Equity Bank (Case No. 4:15-CV-230-SPM), providing lenders with the possibility of raising an argument that CMI cannot enforce repurchase demands for loans that were foreclosed on prior to related repurchase demands being issued.” Second, CMI recently filed an appeal with the 8th Circuit, concerning a loss it suffered in the case of CitiMortgage, Inc. v. Platinum Home Mortgage Corp. (Case No. 17-3158). Although the Platinum case had been the subject of speculation, given the fact that the pleadings in the Platinum case have been under seal in the district court, CMI’s appeal has brought much of the pertinent information to light.  Per Brody, “. . .the district court had found that, under the Form 200 Agreement, CMI was required to notify Platinum of the prescribed time to “correct or cure” the alleged defects and, because CMI’s demands did not prescribe a time to correct or cure the loan defects, the district court held that the duty to repurchase never arose.” 
 
If interested in learning more about the latest developments in the repurchase landscape, you may contact James Brody directly at (415) 246-3995.
 
Regarding lender-specific government news, things are haltingly move along. The House passed a bill that included a TRID fix and SAFE Act amendment. Encompassing five measures and garnering support from the financial services industry, the House passed H.R. 3978, also known as the “TRID Improvement Act.” The package is named after a formerly free-standing measure to amend the Real Estate Settlement Procedures Act, and includes a provision pertaining to loan officers who relocate or go to work for different types of entities.
 
The White House released its fiscal 2019 budget request, Efficient, Effective, Accountable, an American Budget (2019 budget proposal), along with Major Savings and Reforms (MSR – as if we need another acronym) and an Appendix.

 

Why should every loan officer in America care? Contained in the details, and thus open for negotiation, is a provision to increase FNMA and FHLMC guarantee fees by 10 bps through 2023. This provision also would extend the expiration of the 10 bps in guarantee fee that was implemented as part of Temporary Tax Cut Continuation Act from 2021 to 2023.  These proposals are likely to meet stiff resistance from housing advocates concerned about housing affordability, especially in a rising rate environment and on top of the recently approved tax changes that limit the deductibility of mortgage interest and real estate taxes. Since Congress ultimately controls spending, it’s uncertain which elements of the President’s budget might eventually be enacted.
 
Capital markets
 
What are the “experts” saying about rates? Bond fund manager PIMCO forecasts that the 10-year Treasury yield is unlikely to surpass its recent rise to just below 3%. Goldman Sachs analysts expect the cost of servicing US debt will surge due to climbing bond yields and the expansion in borrowing amid a growing economy. "In the past, as the economy strengthens and the debt burden increases, Congress has responded by raising taxes and cutting spending," the analysts wrote, noting the opposite is now true.
 
Markets are open again after the holiday and a flat Friday for treasuries. The biggest news for investors at the end of last week was an announcement by the Commerce Department that some viewed as a catalyst for a trade war should the recommendations be enacted. The announcement was highlighted by a recommended global tariff of 24.0% on all steel imports (an additional tariff of up to 53.0% on steel imports from 12 countries, including China), quota on imports from elsewhere, or a quota on all steel imports. The Department made similar recommendations regarding aluminum, and President Trump has until April 11 to accept or reject the recommendations on steel, and April 19 to accept or reject the recommendations on aluminum.
 
Economic releases at the end of last week showed continued strength & expansion, and provided a positive input for Q1 GDP. The University of Michigan’s preliminary Index of Consumer Sentiment for February jumped to 99.9, the highest print since April 2004. Fortunately, consumer sentiment doesn’t seem to have been hampered by the recent stock market volatility, and showed optimism over government policies, improved financial conditions, and expectations for larger income gains in the year ahead.
 
Turning to this week, we have zip for concrete news although today sees $28 billion of 2-yr auction results at 1pm ET, while tomorrow we have $15bn 2-year FRNs and $35bn 5-year notes, the release of the minutes from the January 30-31 FOMC meeting, and January Existing Home Sales. Thursday, we have weekly Initial Claims and Continuing Claims, January Leading Indicators, and weekly natural gas inventories and weekly crude inventories. We start the business week with the 10-year up to 2.90% and agency MBS prices worse .125-.250 versus Friday’s close on the continued thinking that the economy is doing well.
 
 
Okay, I admit it. As a kid I was mesmerized by the “drinking bird” toy that continually bends over to drink, and then falls back, incessantly. How? It turns out that you may want to have your high school physics and chemistry student explain it.
 
 
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 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Feb. 17: Notes on AIME, cybersecurity site, free phishing test, site for tracking breaches; some HELOCs still tax deductible

Yes, it is a holiday weekend, but there are notes from readers that may be of interest to many.
 
AIME
 
From New Jersey Anthony Casa sent, “Your readers should know about The Association of Independent Mortgage Experts (AIME). It is an organization committed to empowering independent mortgage professionals and strengthening the wholesale mortgage channel to levels that haven’t been seen in the last decade. The association will centralize its mission on providing ‘independent’ mortgage experts – brokers, loan originators, processors and the like, who own or work for or in support of a company or entity that does not underwrite its own loans – with real tangible and financial value.
 
“AIME is 100% committed to independent mortgage experts, and it’s a solidified, organized solution to what mortgage brokers have been calling for, especially since the BRAWL movement made such big waves. There will be no confusion about the association’s agenda, in terms of ‘is it pro-broker or pro-banker?’ The purpose of AIME is to fight solely for independent mortgage professionals in as biased a way as possible, and to make sure they have what’s needed to double their business within the next three years.
 
“The association is operating with a growth-focused strategy, providing tools and resources to propel the wholesale channel beyond 20% share of the mortgage market by 2020. Thousands of supporters have already signed up for AIME. Part of that strategy is consumer-focused, as AIME plans to implement an aggressive branding campaign to rebrand mortgage brokers as ‘mortgage advisors’ in the public eye. The campaign will target homebuyers, realtors, builders, financial advisors and real estate attorneys to effectively tell the story of why independent mortgage experts are the best choice for getting a mortgage.
 
“’People have had a misinterpretation of our profession for years, and the goal of AIME is to shift that into a more positive light,’ said Marc Summers, President of Advantage Mortgage, who will serve as the President of AIME. ‘Independent mortgage experts are more than transactional middle-men that push money from Point A to Point B, they are true specialists in the mortgage field within their respective local communities. Just like financial advisors are trusted resources for families’ finances and investments, independent mortgage experts are that go-to professional advisor for borrowers and real estate agents.’”
 
Anthony’s note continued. “AIME will serve as a community-growing platform, cultivating idea-sharing among mortgage professionals nationwide, providing exclusive benefits to its members, and spearheading progressive legislative and social measures through continued advocacy and education. As such, AIME will dedicate a lobbyist in 2018 focused on issues impacting independent mortgage experts.
 
“Select AIME membership benefits will include recurring Regional and State multi-day training sessions designed to help independent mortgage experts build their business through hands-on training and consultation, discounted lead generation through major industry partner companies, talent development opportunities for loan originators and processors who support AIME members, a range of other discounted services, including Mortgage Educators and Compliance (MEC) training, and additional benefits are listed on the association’s website.
 
“AIME membership costs $79 annually and allows members to take full advantage of a variety of benefits. AIME Fuse 2018, the first official AIME event and national conference, will take place on Saturday, October 20, 2018 in Las Vegas at the Bellagio. The association is actively seeking sponsors and vendors for the October event, as well as members interested in joining the inaugural AIME community. For more information on the benefits associated with an AIME membership, and for wholesale-focused lenders and vendors interested in sponsoring AIME, visit www.AIMEGroup.com.”
 
Technology & cybercrime protection
 
Here is everything you need to know about bitcoin.
 
“Rob, could you advise what you are hearing other lenders are doing to protect themselves against all of the cybercrimes that are on the rise?”
 
I turned to STRATMOR’s IT Advisory Practice Partner Len Tichy for a solid answer. “Cybersecurity and cybercrime are becoming a growing concern for all financial services firms every day, and not an easy one to deal with. It’s the kind of thing that takes preparedness, vigilance and a comprehensive program to assess vulnerabilities and mitigate the associated risks.
 
“In your role as Director of Risk Management I recommend that you take look at the Federal Financial Institutions Examination Council (FFIEC) Cybersecurity Awareness initiatives. You may already be aware of this organization and their Cybersecurity and Critical Infrastructure Working Group, but if not, I think you will find the material on the FFIEC website well organized and a great place to start: https://www.ffiec.gov/cybersecurity.htm. I work with a lot of CIOs and believe you will find that companies who are taking cybersecurity seriously look to the FFIEC as perhaps imperfect, but the closest thing we have to a gold standard.
 
“If you follow the above link, you will find a downloadable, comprehensive Cybersecurity Assessment Tool that we suggest our clients use to understand this growing threat, assess their current state, and develop a more robust program suitable for mortgage originators like Supreme.
 
“To put the FFIEC into context, the Council is ‘… a formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB), and to make recommendations to promote uniformity in the supervision of financial institutions. In 2006, the State Liaison Committee (SLC) was added to the Council as a voting member. The SLC includes representatives from the Conference of State Bank Supervisors (CSBS), the American Council of State Savings Supervisors (ACSSS), and the National Association of State Credit Union Supervisors (NASCUS).’
 
“The FFIEC tool can help you can address this risk management challenge on your own. Or, if you think you want help, STRATMOR can assist companies with a program to 1) evaluate their ability to protect itself and its customers against both current and anticipated levels of information security risk exposure, and 2) demonstrate that a qualified independent consultant (e.g., STRATMOR) has assessed the Company’s processes for identifying, managing, and mitigating information security risks in keeping with industry best practices.”
 
Lee Brodsky, President of Mortgage Banking Insurance, recommends cyber liability insurance. With an average $7 million loss, sounds worthwhile, although there are 60 carriers that offer it with no consistency in policies – so buyer beware. “Your readers should know that this insurance helps protect your firm from expenses and liability from the release of customer or employee personally identifiable information (PII).
 
“Policies may include prevention, education & planning, 24/7 breach response services, forensic investigation, crisis management & public relations, customer notification, credit monitoring, business interruption, data restoration, and liability provisions.
 
“In recent years attacks on small to midsize companies has increased. Hackers know these companies are less likely to have a data security plan in place, making them an easier target. Even more, it’s becoming easier for them to initiate attacks through automated malicious code that gains access to your system and sends back the data. Thanks to these unmanned attacks, they don’t need to expend much energy to attack smaller companies, making it more worth the effort.
 
“What are they seeking? Generally, PII: real names, home addresses, birth dates, and government ID numbers (social security, tax ID, driver’s license). This information gives the thieves flexibility. They can open countless credit cards in another person’s name. The hacker can also obtain fraudulent government IDs, apply for loans, commit health insurance or Medicare fraud, file for fraudulent tax refunds, resell the data, and more.
 
“Your readers should be aware of the Identity Theft Resource Center (ITRC) website which tracks breach information made publicly available.
 
“Lenders can protect themselves by first reviewing current processes and inherent risks. Some of the main questions to ask include what data do you store? Where is the data stored? What protections are in place? Is it backed up? What protections are in place for backups? Who has access? What devices are being used (computers, tablets, smartphones, printers, etc.)? Are they encrypted? What are your agreements with third-party vendors?
 
“Everyone should us strong passwords (10 characters with a good mix), password protocols, update aggressively, back up regularly, and educate their team. The biggest threat to a lender’s business is inaction.” Thanks Lee!
 
Rene Ballesteros, SVP of Operations and IT at Broadview Mortgage, highly recommends multi-factor authentication. Multi-factor authentication (MFA) is a method of confirming a user’s claimed identity in which a user is granted access only after successfully presenting 2 or more pieces of evidence (or factors) to an authentication mechanism: knowledge (something they and only they know), possession (something they and only they have), and inherence (something they and only they are).
 
Two-factor authentication (also known as 2FA) is a type (subset) of multi-factor authentication. It is a method of confirming a user’s claimed identity by utilizing a combination of two different factors: 1) something they know, 2) something they have, or 3) something they are. A good example of two-factor authentication is the withdrawing of money from a ATM; only the correct combination of a bank card (something that the user possesses) and a PIN (personal identification number, something that the user knows) allows the transaction to be carried out.
 
KnowBe4 offers a free test that you can provide your employees to improve phishing knowledge and awareness.
 
Taxes, lending, and the budget
 
Friday’s commentary noted, among other things, that the tax law plan that was passed hit citizens of the United States, and that the interest deduction on home equity debt is eliminated. This is any debt that is secured by a qualified residence other than acquisition debt.
 
An article in Forbes points out that, “…unlike the deduction for interest on primary mortgages, home equity deductions are disappearing for both new and existing borrowers. No one will be grandfathered: all home equity loans will become more expensive in 2018.”
 
But, “…A close reading of the final language rushed through Congress last month reveals that interest-deductible HELOCs and second mortgages should still be available to homeowners provided they qualify on two criteria: they use the proceeds of the loan to make “substantial improvements” to their home, and the combined total of their first mortgage balance and their HELOC or second mortgage does not exceed the new $750,000 limit on mortgage amounts qualified for interest deductions.”
 
Sure enough, several readers were kind enough to write in saying things like, “The comment about home equity debt not being deductible is contrary to the opinion of my CPA. If it is used substantially to improve the property it is still deductible up to the allowed limits.” And, “Home equity lines used for home improvements will continue to be tax deductible.  You will need to show all the dollars went to home improvement.”
 
Although Section 11043 of the new tax law eliminated home-equity debt interest deductions, it left virtually untouched interest deductions for primary home mortgage debt (“acquisition indebtedness”) that is used to buy, improve or construct a new home. As long as you follow the rules on what constitutes a capital improvement — spelled out in IRS Publication 530 — and do not exceed the $750,000 total debt limit, it is deductible.
 
The Trump budget was released this week. One can debate the odds of it passing intact (very, very low), but it provides a guide as to where the Administration’s priorities are centered. Jeff B. observes, “Also hidden within the proposal, and a bit of a surprise to the MBS market, was the proposal to increase the FNMA and FHLMC’s g-fee from 10bp to 20bp from 2019 to 2021 and extend the 20bp fee through 2023. The White House estimates that the increase will generate $26bn over the 10-year budget window while claiming it will level the playing field with the private sector. The increase would also slow conventional premium speeds on the margin while further dampening G2/FN swaps.
 
“This would be very concerning if there was a strong chance of the budget getting passed.  The budget (as a whole) probably does not have much of a chance, but I would think that the Republicans would like this idea to pay for some of the tax cuts. Looks like a mortgage tax to me. When a GFEE of under 20 bps worked in normal underwriting times I would think a GFEE of 70 would create a great deal of revenue.”
 
 
Yes, companies continue to design robots and artificial intelligence. Some of it, like this 45-second video, is very unnerving.
 
 
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 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Feb. 16: LO & secondary jobs, subservicing product; tax changes’ impact on the business; LOs & attending closings

Mortgage rates are greatly influenced by supply and demand. And if both the U.S. government and individuals need to borrow money, the government usually wins. Total U.S. household debt hit an all-time high of $13.15 trillion at the end of 2017. That’s up $193 billion from the previous quarter. Mortgage debt is at $8.88 trillion, up $139 billion. The Fed Funds futures are now predicting an 83% chance of a hike at the March meeting. By the end of 2018 the odds are good we’ll have seen 3 hikes this year taking overnight Fed Funds rate to 2.0% – 2.25%. And if the slope of the yield curve remains constant, we can expect the 10-year note to yield in the mid-high 3% area, and IF mortgages tag along, 30-year rates will be in the low 5% area. Ready for all that?
 
Employment
 
Compass Analytics, a leading provider of pricing software, mortgage analytics and risk management services to the mortgage industry, is growing! Our Irvine office is looking for a Mortgage Pricing Analyst to work with our product and pricing engine team. CompassPPETM (CPPETM) is revolutionizing the way home loans are priced and sold using innovative real-time technology that we support with services, expertise and guidance. We are looking to add a team member who will configure, test and support clients with their CPPETM set up and activity. The ideal candidate will have a background in secondary marketing and experience implementing mortgage technology platforms. If you’re interested in joining our collaborative, high energy team that supports this innovative pricing engine, send your resume to Smitha Menon.”
 
"If you’re reading this, you are most likely in the top group of mortgage originators in the nation and know how to see beyond the noise and hype and get to the deal – so do we. Assurance Financial is quietly growing into a nationwide leader in lending. Yes, our compensation structure is excellent, and yes, our back-office support is second to none – 16 years of working, changing, and perfecting it. And yes, we have a full-service marketing team at your disposal with a budget and commitment to helping you do what you do best. And yes, we have an unwavering mission to close loans on time, every time! We have immediate openings for proven, successful producing Branch Managers and MLOs in Wilmington, Charlotte, Denver, Austin, and many other branch locations throughout the country, as well as an Eastern Regional Production Manager for our expanding East Coast operationsFor immediate consideration and more information, contact Paul Peters, CMB, Assurance Financial, Recruiting Manager (225-239-7948)."
 
PrimeLending’s newest branch in Gilbert, Arizona is giving the area’s nickname — Valley of the Sun — a new meaning. That’s because Branch Manager Andrew Augustyniak and his team are blazing a trail of success with their scorching start. Andrew saw his opportunity in this thriving Phoenix suburb, the most populous incorporated town in the U.S., and he knew PrimeLending had the winning formula to take his team’s success to the next level, which is exactly what’s happening. This team of 7 mortgage professionals is already operating at full speed, thanks to PrimeLending’s seamless onboarding process and award-winning training program. Are you ready to put your career on the fast track? If you’re a top LO waiting for the opportunity to discover your best, your time has arrived. Contact Dudley Strawn at (469) 737-5743 to start down a new path.”
 
“2018 continues the biggest digital revolution that our industry has ever seen. No time for static thinking, it is a time to be dynamic and tactical with your business. A time to be different and write a new book about a mortgage experience for today’s consumer. Where Loan Officer websites and marketing are integrated with the latest social technology to build relationships. One that includes coaching programs and media tactics inspired by thought leaders like Gary Vaynerchuk. Where partnerships with innovators like Blend and Social Survey are common place. And finally, a book that is founded on a Consumer Experience framework developed in Silicon Valley. This message of being different is what our Chief Strategist Jason Frazier delivered on stage at Inman Connect New York to a captive agent audience. This is the book that MasonMac is writing in 2018 and we invite you to be a part of it here.
 
Stearns Wholesale has invested millions in technology to equip Brokers with a better way to do business. SNAP 2.0 features numerous enhancements over the last 18 months, including fast, free and secure Instant VOI. Using just a Social Security number, this 24/7, on-demand service delivers results in 60 seconds. bSNAP is our consumer mobile app branded with yourlogo. This app simplifies and expedites the application process for your Borrowers. Featuring a Digital 1003 and the ability to e-sign forms, it’s also easy to upload documents by snapping a quick photo. Borrowers can view their loan details, receive reminders, check loan status 24/7 and view the tentative closing date. Stearns Wholesale is streamlining your business and giving you a better way.
 
This is your last chance to sign up for the American Pacific Mortgage VA Financing Boot Camp in San Antonio, TX or St. Louis, MO. Become informed, inspired, and educated about the unmatched benefits of VA home loans and how you can better serve the VA community. Jeff Wilson, a national expert on the VA Loan Guaranty program having served for over 27 years with the Department of Veterans Affairs will dispel some of the common myths about VA financing. Click here to register!
 
With the MBA’s servicing conference concluding last week, attendees got proof that the servicing industry has finally stepped up its game. Companies can either innovate or get left in the dust by game-changing companies like The Money Source (TMS). TMS looks at the bigger picture and focuses on the relationship with the borrower. While there needed to be innovation in the origination process, the change can’t stop there. The change needs to carry into servicing, and TMS is committed to making this happen. Thanks to TMS’s servicing solution, SIME, it’s able to maintain a relationship with its customers, creating a lifelong partnership. SIME provides real-time transparency into a lender’s loan portfolio and borrower data. It’s time for the servicing industry to step into the high-tech revolution, and the way to do this is through technology like SIME.
 
LO strategy
 
The practice of loan officers attending closings seems to have lost steam in recent years, but according to STRATMOR Group, LOs who don’t attend closing run a serious risk of disappointing their borrowers, consequently losing recommendations and referral business. STRATMOR’s MortgageSAT National Benchmark data shows that when the loan doesn’t close at the expected rate and fee, the Net Promoter Score drops 51 points, which means 51 fewer people out of 100 will recommend the LO. In this month’s MortgageSAT Tip, STRATMOR’s Mike Seminari examines both defensive (problem mitigation) and offensive (referrals) reasons for LOs to attend closings.
 
Taxes, the budget, and the home loan biz
 
Intaxicaton: Euphoria at getting a tax refund, which lasts until you realize it was your money to start with.
 
Donald Trumps proposed 2019 budget has an 18% cut in HUD’s budget, with the cuts largely coming from the end of the Community Development Block Grant program. But experts know, and we should understand, that this budget is a messaging document and has 0% chance of becoming law as-is.
 
But taxes, and the budget, do impact residential lending. For example, Fannie Mae had a $6.5B Q4 loss.  Fannie Mae stated that it will need $3.7 billion from the Treasury Department. Timothy J. Mayopoulos, president and CEO of Fannie Mae, blamed the government-sponsored enterprise’s dismal fourth quarter data on a "one-time accounting charge" tied to the recent tax reform legislation. Of course, unfortunately the headlines focus on Fannie turning to taxpayers rather than the reason for the loss. For some reason the press cut Freddie more slack after Freddie Mac suffered its loss and mentioned the accounting reason.
 
Taxpayers continue to come out way ahead with respect to the GSEs’ conservatorship agreement, even after the draws that will be needed to cover 4th quarter losses. Both had one-time write-downs arising from accounting changes in response to the new tax bill – not that the current gfees and business model isn’t sufficient and that has been returning a significant amount of money to US taxpayers.
 
Both Freddie Mae and Fannie Mae posted strong full-year incomes for 2017 despite that both also suffered fourth quarter losses courtesy of the new tax law.  Fannie’s comprehensive income was $2.5 billion after a loss of $6.7 billion in the fourth quarter. Freddie Mac’s numbers for the two respective periods were $5.6 billion and a $3.3 billion loss.
 
Fannie Mae said its full-year results were down from $12.3 billion for all of 2016 although its 2017 pre-tax net was higher, $18.4 billion versus 18.3 billion. The $6.5 billion net loss for the quarter was down from net income of $3.0 billion in Quarter 3. The fourth quarter loss was the result of a remeasurement of the company’s deferred tax assets due to the enactment of the Tax Act. The result was a one-time $9.9 billion provision for federal income taxes.
 
How can a builder lose money in this environment? Hovnanian attributed its $337 million loss in the recent quarter to a decline in community count and losses related to tax allowance and debt extinguishment hit the bottom line.
 
But to remind everyone, the tax plan that was passed hit citizens of the United States. For mortgages taken out after December 15, 2017, only interest on up to $750,000 in acquisition debt is deductible, for both primary and secondary homes. (Interest on up to $1 million in acquisition debt incurred on or before December 15, 2017 is still deductible.) The $1 million limit will still apply to anyone who refinances existing qualified residence debt that was incurred before December 15, 2017 to the extent the new loan does not exceed the old loan. The interest deduction on home equity debt is eliminated. This is any debt that is secured by a qualified residence other than acquisition debt. Deductions for state and local income tax, real property tax, and sales tax is limited to an aggregate of $10,000. The deduction for mortgage insurance premiums (PMI) was not reinstated.
 
Effective January 23rd, to accurately report borrower income to the IRS, Wells Fargo Funding is updating its W-9 form requirements for all Loans as follows:  W-9 form is required for every borrower who has a tax ID number. W-8 form is required for every borrower who does not have a tax ID number.
 
Ditech’s approved Delegated Clients: should note that USDA has suspended its requirements regarding obtaining IRS Form 4506-T tax transcripts for all adult members of the household. It is no longer necessary to complete or process an IRS 4506-T for the borrower(s) or for any other adult member in the household prior to funding. Verification of adjusted annual household income continues to be required and documentation must be retained in the loan file.  The following is still required at closing for each borrower: 4506-T for each borrower whose income is used to qualify (regardless of income type) must be signed at closing. 4506-T for the business tax return transcript(s) must be signed at closing when business returns are used for qualification.
 
Capital markets
 
Turning to capital markets, most U.S. Treasuries ended Thursday higher after being hit hard on Wednesday. That was a response to the myriad of data released, headlined by January PPI meeting expectations, while core PPI was better than expected. Rising prices will increase concerns these costs will be transferred from producers to consumers.
 
The February Empire Manufacturing survey and Philadelphia Fed survey showed upward pressure on prices, but a negative Industrial Production report for January kept investors from complete optimism. The downturn in production was entirely attributable to a decrease in mining output. Additionally, the U.S. Treasury sold $7 billion in 30-yr TIPS with a high yield up from the previous sale. Low initial jobless claims reflected a tight labor market as we are in a period of increased demand when employers don’t normally make cuts to staff.
 
Today’s calendar includes Housing Starts and Permits (+9.7% and +7.4%, strong but January is known to be volatile), Import Prices (up a strong 1%), and the Michigan Sentiment numbers. Finally, there is a Class C Notice and a Class A FedTrade Operation scheduled for $1.015 billion of 3.5% and 4%. Heading into the holiday weekend we find the 10-year yielding 2.89% and agency MBS prices are better by .125 versus Thursday’s close. There will be no commentary Monday due to the holiday.
 
 
Puzzle of the day from a grade school teacher.
“I am the beginning of everything, the end of everywhere. I’m the beginning of eternity, the end of time and space. What am I?”
“The guess from one of my 1st graders was ‘death,’ and such an awed, somber, reflective hush fell over the class that I didn’t want to tell them that actually the answer is the letter ‘e’ which just seemed so banal in the moment.”
Our thoughts and prayers go out to the families and survivors from the horrific shooting at Marjory Stoneman Douglas High School in Parkland, FL.
 
 
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 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Feb. 15: LO jobs, new programs & products; ARM & jumbo changes; upcoming events & training

If you claim that many areas of the nation have few houses for sale, no one will disagree. (“Rob, when are those big funds that own tens of thousands of rentals going to start selling?” With rents and values going up like they are, don’t hold your breath.) Arguably inventory is at an all-time low. At the end of the fourth quarter, there were 1.48 million existing homes available for sale, which was 10.3% below the 1.65 million homes for sale at the end of the fourth quarter in 2016. On the other hand, based on responses to its Builder Application Survey (BAS), the Mortgage Bankers Association estimates that new home sales will increase dramatically this year.
 
Employment & promotions
 
Lakeview has significantly expanded eligibility for its Agency No MI program, increasing the potential to help high LTV borrowers looking for the lowest payment possible. Income limit requirements now include any loan that receives a HomeReady® or Home Possible® "Eligible" message from DU or LPA. The Lakeview Agency No MI program is changing the way originators sell payment, with both purchase and refinance options. As a true Agency No MI Program with LTV’s up to 97%, the program helps boost volume, re-engage with agents, and combat the all-to-common "what’s your rate?" question from rate shoppers. Contact your Lakeview Correspondent Business Development Director or Wholesale Account Executive to learn more. With the Lakeview Agency No MI Program, It’s All About the Payment.
 
GSF Mortgage Corporation is offering the ability for branch managers and loan originators to build their own tailored brand – making them more appealing to their local communities by adding a personal touch that counters the big box image of mortgage lending. President Chad Jampedro was recently featured in the MPA Power Originator and explained his belief in the power of building a personal brand, especially in smaller markets where it is critical to be “hyper-connected to the community”. If you are interested in a branch opportunity and have the desire to build or maintain your personal brand, please reach out to Chad directly.
In job news, Sierra Pacific Mortgage is looking for talented additions to its teams across the nation. Don’t miss the opportunity to work for a company that continues to experience growth, prioritizes its culture and employees and offers hands-on support from our leadership team! We’re looking for talented and motivated loan originators throughout the US. Contact us about our opportunities just waiting for you. If you have the vision and the drive, we’ll provide the support and tools you need to take your career to a whole new level. Send your resume to careers@spmc.com to learn more. Sierra Pacific Mortgage offers renovation loans, diverse jumbo products, a powerful technology suite and excellent marketing to set you apart. We’ve also been named one of the Top 50 Mortgage Companies to Work For by Mortgage Executive Magazine several years in a row.
 
Resitrader reports growing interest in its loan trade data. As more volume moves through the platform every month, Resitrader is generating “big data” on loan pricing – not just the winners, but the spreads between investor pricing at the loan level. “We’re seeing a great deal of variation, volatility, and granularity in bids,” says John Ardy of Resitrader. “This is the result of having over 30 investors aggregating agency product through Resitrader, each with their own proprietary pricing models, variables, and inputs.” The upshot is that Resitrader data is a valuable and growing source of actionable intelligence for participants in the secondary market. 
Blackstone Group LP elevated Jonathan Gray, who turned the buyout firm into the world’s biggest real estate investor, to president and chief operating officer.
 
Jumbo & ARM news
 
Note that last week’s residential application data showed that with the steeper yield curve, ARMs increased slightly as a percentage of total applications to 6.3% (unit basis).
 
Mountain West Financial will begin offering the Jumbo A program. This program is available as a 30-year, 15-year, 5/1 Libor ARM, 7/1 Libor ARM or 10/1 Libor ARM option. The Jumbo A programs have replaced the Jumbo II programs on the rate sheet. The Jumbo II programs are still available through BOLT.
 
CALCAP’s "Investor Edge:" CALCAP Lending’s 7/1 ARM Program with rates as low as 7.25%. Call (855) 372-0960 for information. 
 
Banc of California announced an Interest Only Qualification. Interest Only loans will qualify over the remaining term after the initial fixed period. For example, a 5/1 ARM will qualify over a 25-year term. A 7/1 ARM will qualify over a 23-year term. (Previously a 20-year qualification term was used.) Guidelines remain at up to 47% DTI (all programs but expanded).
 
Check out the Wholesale Product and Pricing Bulletin 2018-2 JUMBO GUIDELINES RELEASE for an introduction to FCM’s new Non-Conforming Jumbo product offerings. 
 
Effective immediately, the Non-Agency Jumbo Fixed Rate products in Fifth Third Correspondent Lending’s LendingSpace have been separated from the ARM products. The ARM product will continue to offer the Standard, Preferred and Reserve options. The Fixed rate products have been condensed into one streamlined option with less expansive parameters than the ARM offerings. Additionally, the Correspondent Underwriting Guidelines have been updated to include Appendix Q guidance for the Non-Agency Jumbo product.
 
Effective January 26, improvements were made to the Fannie Mae Homestyle Renovation products. The Fannie Mae Homestyle Renovation High Balance products have had all overlays removed and now are aligned with the conforming loan limit products parameter requirements. This includes offering three and four-unit options on purchases and refinances of a primary residence. Flagstar Bank also introduced 3/1, 5/1, 7/1, and 10/1 adjustable rate products at the conforming loan limits. The adjustable rate products will also be aligned with the fixed rate conforming parameters. For the new ARM products please use the existing agency ARM pricing on page four of the rate sheets along with the Homestyle Renovation -1.000 LLPA found on page two. See Fannie Mae HomeStyle Renovation, Doc. #5719 for the full product description.
 
Franklin American Mortgage Company has expanded its FHA to allow 1-unit investment properties for Streamline Refinance transactions on the FHA standard products. Investment property Streamlines will remain as not permitted for the FHA Jumbo product. FAMC has also updates its VA guidelines. An AVM/appraisal is no longer required for owner-occupied VA Interest Rate Reduction Refinance loans (IRRRLs), regardless of credit score. The maximum loan amount has been increased to $1,500,000 for all transaction types. Loan amounts greater than $1,000,000 will require a 700 minimum FICO.
 
Wells Fargo Funding has increased the maximum loan amount for cooperatives (co-ops) on Non-Conforming Loans. Eligible geographic locations remain the same; however, loan amounts now align with the LTV/CLTV matrices in Section 950: Non-Conforming Conventional LTV Matrix.
 
Events & training
 
Mortgage Compliance Magazine is proud to support the Mortgage Compliance Professionals Association of America. MCPAOA Members are eligible for events like the upcoming Free Webinar with Industry Expert Mitch Kider reviewing the CFPB/PHH changes. Sign Up for free to become a member, then register for the webinar! then register for the webinar!
 
It’s time to join your industry colleagues in attending the 2018 Annual GREFPAC Conference on Wednesday, March 7th in Atlanta. Get the latest information on trends and schemes from industry experts that are relevant to you and your business. Leaders from QuestSoft Verification and Audit Services, the FBI, Johnson|Thomas, D.S. Murphy & Associates, DataVerify, CoreLogic, Freddie Mac, Fannie Mae, and the Georgia Department of Banking and Finance will lead discussions on topics such as CyberSecurity, Ethics, Risk Management, and Credit Policy.
 
MQAC is offering a free webinar on February 22nd on the Implementation of HMDA Rules.
 
Two fantastic companies unite to bring you one of the most important webinars you’ll see this whole year. Insellerate and Sales Boomerang have come together to show you how to automate your loan growth with borrower intelligence. The webinar starts at 10:30am PST / 1:30pm EST on Wednesday the 21st of February. IMPORTANT NOTE: This webinar will not be recorded so if you don’t attend you will miss the content.
 
The Title Report is hosting the Blockchain: Your Questions Answered webinar for anyone who has questions about Blockchain and the real estate transaction. On Feb. 21st Factom, Inc.’s Jason Nadeau and National Association of Realtors Mark Lesswing will discuss how the technology is being used in land title management, where it is being used and what the industry can expect in the future. Get your questions answered by registering today.
 
MBA’s CRA Residential Lending Workshop is just a few weeks away and there’s no better time to learn about the latest on improving or expanding your CRA lending programs. The Federal Reserve recently announced that federal bank regulatory agencies will give favorable CRA consideration to revitalization activities in disaster areas affected by Hurricane Maria. Read more, and then learn more when you join us in Charlotte, North Carolina to have your specific CRA questions answered by the experts.
 
Down in California, the California MBA is hosting its first Chairman’s Conference. For “C-Level” executives from member companies. To be held April 8-10 in La Jolla, “You’ll be networking with and learning from colleagues in the mortgage industry who face the same challenges you face!”
 
If you are a mortgage or title agent looking to tap into the largest home buying segment (Millennials) in the US, join The Zillow Consumer Insights for Mortgage Lenders on February 22nd at 2PM EST.
 
Find out the best and easiest ways to protect yourself from cybercriminals with expert Scott Augenbaum. Don’t become a statistic – attend this webinar on February 27th at 2PM EST and learn how to spot criminals before they strike.
 
AmeriHome’s underwriting management team will be providing an Appraisal Review Webinar on additional dates this month. The webinar will focus on reviewing appraisals for Fannie Mae and Freddie Mac loans. Tuesday, February 20, 2018 – 11 am Pacific / 2 pm Eastern. Thursday, February 22, 2018 – 1 pm Pacific / 4 pm Eastern. Tuesday, February 27, 2018 – 9 am Pacific / 12 pm Eastern.
 
Capital markets
 
The U.S. economy is doing well, which by itself pushes rates higher. Inflation hasn’t been a problem in decades, but yesterday the bond market was reminded that the Federal Reserve might really raise interest rates three or more times this year and several more next year. The Fed has forecast three rate hikes for this year and another three for next year, but economists have been changing their forecasts for this year to include another rate hike. And so the benchmark 10-year yield surged to a 2.92% yield, the highest its been in years. And, as a reminder that it’s not a rule that they move in opposite directions, even as yields moved up the stock market continued to gain.
 
There is no nice way to put what happened to U.S. Treasuries on Wednesday aside from they were crushed. Bond ignored the weaker-than-expected Retail Sales for January and focused on the Consumer Price Index data that beat expectations with the largest month-over-month change in more than a year. You would think strong CPI data would be welcomed, but all it did was stoke inflation and rate-hike concerns that hurt Treasuries across the entire curve. Elsewhere, Business inventories increased 0.4% in December, while total business sales increased 0.6%, showing that sales growth is outpacing inventory growth. The 2-yr note yield hit its highest level since September 2008 while the 10-yr note yield rose to its highest level since January 2014. The data did help the stock market, which saw the S&P 500 close over a percent up.
 
Following up on the Fed Trade Operations I mentioned yesterday, and not that 99% of you care, but Class B was the target of today’s modest Fed support when the Desk purchased $298mn 15-year conventional 3% and 3.5%. The Fed will turn its attention towards Class C today, when they will purchase up to $710mn GNII 3.5% ($340mn) and 4% ($370mn) during the usual 11:15 to 11:45am time slot.
 
Today has a heavy economic calendar with the Producer Price Index (+.4%), weekly jobless claims (230k), the NY Fed Manufacturing Index (weakest since July) and the Philadelphia Fed Manufacturing Survey (stronger than expected). That is followed by January industrial production and capacity utilization, and finally, the February NAHB Housing Market Index is out at 10AM ET.
 
In lesser news, the Treasury will announce the auction sizes for next week’s 1-, 3- and 6-month T-bills, will auction $7bn new 30-year TIPS in the afternoon, and the NY Fed will report MBS purchases for the week ending February 14. The 10-year is currently yielding 2.92% and 30-year agency MBS prices are worse .125.
 
 
From a gal pal. “I have OCD, ADD, and menopause. I want to cry, and eat, and be all fit, and what was I saying? This dang hot flash is making me sweat in paces I didn’t even know I had! I can’t focus right now because I didn’t sleep last night, and wow is that dust on the coffee table?”
 
 
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 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Feb. 14: LO jobs, LO products; new association in the biz; upcoming training; Radian changes; Flagstar’s Ginnie response

Two men are sitting in a bar when Mark Zuckerberg walks in. One of the men says to his friend, “This is awesome! On average, everyone in this bar is worth $20 billion!” It’s important to remember the difference between “mean” and “average.” Now, apparently, in the most expensive housing markets in the country, a $1 million home is considered average, while homes priced at $5 million and above are considered luxury homes.
 
Employment & products
 
“Good things are happening in 2018 at Premier Nationwide Lending! We are pleased to have been named as one of National Mortgage Professional Magazine’s 2018 Top Mortgage Lenders. In the coming months, the company is rolling out new branding and several automated marketing platforms, we have an outstanding operations team that is committed to closing every loan on time, as well as a full-service marketing department to support your business growth. Our company culture promotes management to lead with this definition of a leader in mind, ‘someone who helps others achieve more than they would have achieved if left to themselves.’ Premier Nationwide Lending is committed to assisting our colleagues in achieving their best, and we are seeking experienced loan officers in multiple states. If you are interested in learning more about our winning team, please contact Joe Collins, National Recruiting Director, today at (214) 680-0216.”
 

Caliber Home Loans, Inc. has career opportunities for Loan Officers you’ll LOVE. From our wide range of products to local underwriting and processing to our expanding technology resources – Caliber is the perfect match for you! And because we’re both an originator and servicer, you can still be in a relationship with your borrowers after their loan closes. Contact Jeremy DeRosa to learn more reasons why the best in the industry love working at Caliber.”

 
Building on their mission to create an all-inclusive mortgage automation platform for their more than 270,000 users, Floify just launched an exciting and highly-anticipated feature to further boost your borrowers’ experience – progressive web apps! Floify’s progressive web apps (PWAs) feature is a lightweight and customizable solution that allows your borrowers to easily access their mortgage point-of-sale directly from their mobile device – all without the need to download and install bulky applications. Floify’s PWAs function just like a regular website but resembles a traditional native mobile app, complete with an icon that is displayed on the home screen of your borrowers’ phone or tablet for easy, one-touch access. With powerful new features like PWAs, and more on the way, Floify has helped LOs close loans an average of 8x faster and increase annual loan volume by more than 11%. To learn more about how Floify can help you streamline your lending processes, request a live demo.
 
Association news
 
There’s buzz surrounding a new association that has emerged to support independent mortgage professionals and grow the wholesale channel. The Association of Independent Mortgage Experts (AIME) launched with strong support from brokers, loan originators, processors, etc., and expects to surpass 5,000 members. AIME intends to push the needle further than ever before in terms of broker advocacy, aiming to provide real tangible financial value to its members. Ultimately, the association’s goal is to grow the wholesale channel beyond a 20% market share within the next three years. “There will be no confusion about AIME’s agenda, in terms of ‘is it pro-broker or pro-banker?’ AIME will fight solely for independent mortgage professionals,” said Anthony Casa, AIME founder. Find more information on AIME membership benefits at www.AIMEGroup.com
 
If you haven’t yet joined the America’s Homeowner Alliance – you should join today! It is set up for existing and all future homeowners, built to protect and promote sustainable homeownership for all segments of America. If you go to the AHA website and use the promotional code “rcc2018” to get your first-year membership free. “Anyone who cares about homeownership should join for free. LOs or escrow agents can give a free first-year membership in AHA as a housewarming gift to any applicants or to anyone closing a loan. You’ll be a hero for your customers and will be doing something great to build the advocacy voice of the homeowner of America.”
Events
 
Despite being considered one of the more cost-effective ways to renovate your home, the Fannie Mae HomeStyle program is still cloaked in mystery. REMN Wholesale’s next free educational webinar will focus exclusively on how to unlock the power hidden behind this often-neglected product. REMN’s upcoming HomeStyle Lending Decoded webinar will be led by Damon Richardson, Renovation Lending Specialist. The webinar will explore the benefits of HomeStyle loans, what borrowers should be using them, and how to convince Realtors to bring them up to finicky buyers who can’t seem to find a home that meets both their needs and their budget. The webinar will be held on February 20 at 3 pm EDT. Space is limited, so interested attendees should register ASAP at www.tiny.cc/homestyledecoded.
 
Two fantastic companies unite to bring you one of the most important webinars you’ll see this whole year. Insellerate and Sales Boomerang have come together to show you how to automate your loan growth with borrower intelligence. This is going to be a MUST-SEE webinar. The webinar starts at 10:30am PST / 1:30pm EST on Wednesday the 21st of February. IMPORTANT NOTE: This webinar will not be recorded so if you don’t attend you will miss the content. Sign up now!
 
Find out how to manage your marketing tech through API architecture by registering for a FREE webinar this Friday, February 16 at 11 a.m. (Pacific).  You’ll learn about the state of the API ecosphere in the mortgage industry, examples of mortgage software vendor APIs, the difference between System, Process and Experience APIs, some best practices, and a real-life case study. The webinar is a presentation of the California MBA Mortgage Technology & Marketing Committee (MTAM), and will feature Brent Elmer, Velma.com; Gina Torvik, Broadview Mortgage Corp.; Mike O’Meara, Infoview Systems; and John Seroka, Seroka Brand Development.  Click here to register.
 
On February 15th, learn the possibilities of a reverse mortgage. Register for “How to grow your business in reverse” webinar hosted by President of HighTechLending, Inc. and Nancy Davidson, V.P. of Reverse Mortgage Division.
 
Radian org chart & news
 
Radian Group Inc. announced a reconfigured its sales team to create a unified focus on selling all Radian products and services across the mortgage continuum. Chief Franchise Officer Brien McMahon will continue to lead the Radian Enterprise Sales team to offer a comprehensive suite of products and provide increased support to the company’s growing customer base, steered by Mike Dziuba, SVP, Real Estate Services. The senior relationship managers will work closely with the mortgage insurance (MI) sales team, under the leadership of Marshall Gayden, SVP, MI Sales, to drive an even better customer experience by offering a unified focus on all Radian products and services. The team consists of Tony Bruschi, Senior Relationship Manager, Credit Unions, Gary Egkan, Senior Relationship Manager, Banks, David Kittle, Senior Relationship Manager, Mortgage Bankers, Andy Pollock, Senior Relationship Manager, Wall Street, Investment Banking/Private Equity and Fund Managers, and Shelly Schwieso, Senior Relationship Manager, GSEs.
 
“The creation of this new enterprise sales team further demonstrates our commitment to growing our MI and services businesses including due diligence, title and settlement services, real estate valuation, surveillance, and REO asset management, all of which continue to have their dedicated sales teams respectively,” said Mr. McMahon. “The senior relationship managers will work closely together with each of our sales teams to provide the exceptional service that our customers expect from Radian.”
 
Radian Group Inc. announced that it received the 2017 Risk Maturity Model (RMM) award for the third year in a row. The award, presented by RIMS, the risk management society™, highlights organizations with industry-leading enterprise risk management (ERM) programs.
 
Lastly, recently Radian reported earnings and the sentiment was generally positive. Management noted that the company expects IIF growth to remain at the high single digit levels. On credit, the company noted that the default to claim rate could fall to the 8-9% range. Insurance-in-force growth was 9.4% in 2017 and given expectations for NIW and persistency, management expects IIF growth to remain in the same range in 2018. Analysts reported that, “While there is still some modest downward pressure on average premium yields, the increased production in higher LTV loans should partially offset this. When asked about the possibility of MI pricing pressures due to lower tax corporate tax rates, management noted that they had not heard anything from regulators… The company noted that the claim rate, now down to about 10%, could come down a little further, but historically has not dropped below 8-9%.”
 
Flagstar/Ginnie news
 
Last week Ginnie released information about certain lenders allegedly churning borrowers who are veterans. Flagstar Bank, one of those named, sent a note out reaffirming “its commitment to responsible lending and the overall strength of its VA lending program, and addressed recent news articles alleging that certain lenders, including Flagstar, churned loans to veterans. ‘We value our VA business for many reasons, but most of all because it benefits veterans,’ said Alessandro DiNello, president and CEO of Flagstar Bank. ‘That’s a trust we would never even consider violating, which is why we put every effort into ensuring we adhere to the rules and regulations that protect veterans who are buying or refinancing homes.’
 
“’We have been a VA partner for 30 years and a long-time leader in VA lending. We highly value the VA program and the opportunity for homeownership that it gives to our veterans. We have policies and procedures in place to prevent churning. And, simply put, we do not churn.’
 
“Flagstar uses a number of tools to protect borrowers, investors, and itself, from serial refinancing or churning, including: An early payoff policy that requires third party originators (TPOs) to pay a penalty for any loan that is paid in full within 180 days of purchase. Our STAR Rating system, a proprietary measurement of a TPO’s performance in key risk categories that adjusts pricing to incentivize responsible long-term performance and assesses penalties for excessive early payoffs. Underwriting guidelines in place since 2008 in all origination channels (retail and TPO) that require a minimum net tangible benefit to the borrower on all refinance transactions. A requirement since 2016 for VA Interest Rate Reduction Refinance Loans that a minimum of six consecutive monthly payments be made on the loan before it is eligible for refinance.” (In 2017, Flagstar originated $4.8 billion in VA loans across the country out of its total mortgage originations of $34.4 billion.)
 
Flagstar Bank posted the following regarding the change in Ginnie Mae pooling requirements. VA Cash-out refinance, VA IRRRL, FHA Streamline, FHA Cash-out and USDA Streamline assist must meet the following when the loan being paid off is a government loan (FHA, VA, or USDA): The borrower must have made at least six consecutive monthly payments on the loan being refinanced, referred to hereinafter as the Initial Loan, beginning with the payment made on the first payment due date; and the first payment due date of the refinance loan occurs no earlier than 210 days after the first payment due date of the Initial Loan. Accordingly, loans where the borrower does not meet the above requirements are no longer eligible. The borrower cannot prepay payments to satisfy the six consecutive monthly payments requirement. Underwriters, including VA delegated and bulk customers, must ensure the above requirements are met.
 
Capital markets
 
After the last several trading sessions, Tuesday was a bit of the doldrums, though treasuries ended on a mostly higher note. The lone exception being the 2-yr note, which slid slightly lower throughout the day, while 5s, 10s, and 30s held modest gains and displayed little movement. The late morning FedTrade operation, the last on the current schedule, aided volume as they purchased $1.287bn 30-year conventional 3.5% and 4% with a 17.1% hit rate.
 
Supply and demand move long-term mortgage rates, and the new FedTrade schedule sees the Desk purchasing up to $6.825bn over the coming two-week period with 9 of the 10 business days seeing an operation and 30-year 3% and 15-year 2.5% no longer a part of the rotation.
 
Weekly mortgage applications from the MBA kicked off today’s calendar. Last week’s apps were -4%, with purchases -6% and refis -2%. January’s CPI and retail sales reports were +.3% and -.3%, respectively. The Consumer Price Index was expected +0.3% and retail sales was expected +.2%, so was weak. Budget Director Mulvaney testifies before the House Budget Committee on the recently released budget this morning. With the focus on inflation picking up, the 10-year is currently yielding 2.88% and agency MBS prices are worse .250-.375.
 
 
A retired guy sits around the house in Louisiana all day so one day his wife says, “Jay, could you do something useful like vacuum the house once a week?”
The guy gives it a moment’s thought and says; “Sure; why not. Where’s the vacuum?”
Half an hour later, Jay walks into the kitchen to get some coffee.
His wife says, “I didn’t hear the vacuum running; I thought you were going to use it.”
Exasperated, Jay answers, “The stupid thing is broken, and it won’t start. We need to buy a new one!”
“Really?” she says, “Show me – it worked fine the last time I used it.”
So, he showed her: https://videos.files.wordpress.com/Xblfe4qf/retired-vacum-cleaner_dvd.mp4
 
 
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 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Feb. 13: LO jobs, new products; Mr. Cooper has a new foster parent; capital market products; why LOs should care about the budget

Every lender has seen rates move higher, and nearly every lender has seen the inventory of homes for sale decline. With rates moving higher, which should not be a big surprise to anyone, the press has latched on to the question of the impact of 5% mortgages on the industry. With the economy doing well, and unemployment very low, we’ll have more borrowers qualify – but will the prequals merely stack up given the lack of places for sale?
 
Employment, products, promotions
 
Mortgage Professionals: Is your business managing you, or are you managing your business? Learn proven success strategies from Cindy Ertman, one of the industry’s Top 100 Loan Originators in the U.S. for over a decade. By popular request, Cindy is leading a spring Mortgage Mastermind Elite (MME) coaching group starting April 18, 2018. MME brings together a vetted community of High-Performance Mortgage Professionals committed to sharing best practices, increasing their income, and expanding their referral partner network. Learn more at www.MortgageMastermindElite.com and receive a FREE copy of Cindy’s ‘Time is Money Guide.’
 
“Not many lenders last 30 years anymore, especially with the same owners. But then, most lenders aren’t Mortgage Network, one of the largest and fastest-growing independent mortgage bankers on the East Coast. What’s their secret? ‘We’re 100% privately owned and in it for the long haul,’ says EVP Brian Koss. ‘We value happiness—there are no egos and no ivory tower here. We simply invest heavily to make sure our originators deliver the ultimate customer experience.’ The formula works: 98% of Mortgage Network customers say they’d refer the lender to family and friends. And with 40 offices in 27 states, Mortgage Network is looking to hire veteran originators as well as those just entering the field. Says Brian: ‘My mission is to find people who fit into our culture and help transform their business goals into reality.’ If you like how that sounds, contact Brian!”
 
Midwest Equity Mortgage’s roots are in direct to consumer mortgage lending. However, over time, its developed a significant retail presence in the 15 states it currently serves. In 2017 alone, MEM funded $119 million in retail production. MEM is seeking an established Retail Production Channel Leader to lead this channel, serve its dedicated retail production leaders through additional support, and grow its presence. Inquiries should be directed to Eric Meadow, COO.
 
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 a revenue sharing plan that is excellent for those teams that want to maximize income on production. If you are a lender who has been caught in the interest rate environment changes, and would like to focus on production, please contact us.  We were recently featured at the IMN Conference in the M&A breakout session as one of the key lenders in the Country still looking to expand. Areas of the Country that we would like to expand are: New England, VA, MD, Midwest from Chicago to Texas, and many other areas of the Country where we would like to fill-in with a great tea of people! 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 email me so a direct connection can be made.
 
A study by the STRATMOR Group stated that 85% of all senior mortgage executives are focused on building a borrower focused culture. Great loan officers paired with intuitive technology has become standard of borrower expectations. Of course, technology doesn’t just need to work, it needs to be simple, time-saving and designed for real people. Maxwell, recognized by HousingWire as one of the most Innovative Companies in Real Estate, is leading this charge. Maxwell’s digital POS was designed by leaders from Google and the Stanford Institute of Design. With a focus on design-thinking, embedded in behavioral theory, driven by powerful algorithms, the Maxwell experience is second-to-none. It’s no wonder than hundreds of lending teams across the U.S. use Maxwell every day. And best of all, with their white-label platform embedded in your website, you’ll get all the credit. To learn more about Maxwell request a live demo.
 
Vendor Surf is a B2B search engine dedicated to the advancement of premium vendors across the financial services ecosystem, especially within mortgage and credit unions, while guiding buyers to make wise decisions. With over 80 categories of vendors and 3,000+ search filters, Vendor Surf quickly and efficiently matches buyers to vendors that best meet their needs. Vendor Surf launched on December 13 and is growing quickly. In less than 60 days it has more than 2,800 unique site visitors and companies have gotten more than 100 impressions to their listing within the first week of being live on the site. They recently added these vendor partners: Blue Sage, Gulotta Grabner Law Group, PLLC, LodeStar, RE Auction Systems and RGR Marketing. If you are a professional looking for new vendor partners search Vendor Surf for FREE by visiting www.VendorSurf.com or contacting Scott Roller or Craig Leabig for more information.
 
Congrats to Kelly Morgan who NattyMac, Home Point Financial Corporation’s wholly owned warehouse lending company, promoted to Senior Director – National Relationship Manager.
 
M&A rolls on
 
It’s a rough environment out there, lenders, large or small, are looking for solutions and ways to survive, and entire company shifts shouldn’t surprise anyone, especially Mr. Cooper. The latest biggest example of this is Nationstar (NSM) announcing that it is entering into a merger agreement with WMIH Corp (WMIH). WMIH Corp. is a publicly-traded company, grouped under “insurance companies,” that is focused on acquiring other companies. WMIH’s shareholders include several institutional investors, the largest of which is KKR. NSM shareholders can elect to receive $18 in cash or 12.7793 shares of WMIH. The transaction is expected to close in the second half of 2018.
 
Nationstar shareholders may elect to receive $18 in cash (it closed yesterday at about $17 a share) or 12.7793 shares of WMIH common stock for each share of Nationstar common stock they own, subject to an overall proration to ensure that 32% of the total outstanding Nationstar shares are exchanged for the stock consideration. Upon completion of the transaction, Nationstar shareholders will own approximately 36% of the combined company and WMIH shareholders will own approximately 64%.
 
There have also been some recently announced depository bank mergers and acquisitions. In Georgia Ameris Bank ($7.8B) will acquire Hamilton State Bank ($1.8B) for about $405.7mm in cash (10%) and stock (90%) or about 2.05x tangible book. In Minnesota Hometown Community Bank ($32mm) will acquire Quality Bank ($28mm). Swiss banker Joseph Benhamou and certain members of his family have agreed to acquire Brickell Bank ($492mm, FL). The Benhamou family owns an $8.5B private bank in Switzerland. And in Texas Guaranty Bank & Trust ($2.0B) will acquire Westbound Bank ($228mm) for about $30.5mm in cash (21%) and stock (89%) or about 2.08x tangible book.
 
Capital markets
 
BlackRock plans to buy and hold stakes in companies, an approach taken by Warren Buffett’s Berkshire Hathaway, and is striving to raise more than $10 billion to fund the direct investments. The move would pit BlackRock against Carlyle Group, Apollo Global Management and other private equity firms. Anyone want to buy a commentary-writing company?
 
Banks that originate residential mortgage loans must decide how to manage the new asset, including whether to place the loan in portfolio or sell it into the secondary market. To ensure community banks get the top-tier pricing and service necessary to stay competitive in their local markets, a while back the American Bankers Association endorsed AmeriHome Mortgage Company’s secondary market services. AmeriHome offers consistent competitive pricing, as well as integrated and client-focused service, and the type of value banks are looking for in a long-term, mutually-beneficial, relationship with an investor. ABA member banks will receive enhanced pricing with AmeriHome.
 
Thomas Ho Company Ltd (THC) is a New York-based financial technology company that specializes in asset liability management solutions for banks and credit unions. THC introduced THC Loan Central Desk (“The Desk”), “a complementary offering to our current THC Network clients. The Desk is established to bring liquidity to our clients’ balance sheets by giving them the ability to buy and sell loans through a cloud-based system. Clients can transact on a broad range of loan types, including Residential Whole Loans, Auto Loans, Credit Card Loans, HELOCs, SBA 7a, SBA 504’s, Multifamily Loans (DUS), and CRE Loans.”
 
Switching to the markets, it is important to remember that the Fed is not going to sell anything from the portfolio. It is just not buying, which is a big deal in and of itself. Moody’s warned about a potential credit downgrade for the U.S. government due to deteriorating fiscal discipline following the morning passage of a budget that will increase spending on military and domestic programs by $300 billion over two years, leading to increased debt issuance at a time where there are growing concerns about the market’s ability to handle the incoming supply.
 
Despite no economic data released yesterday, markets still had much to react to. After last week saw asset repricing to reflect rising inflation expectations in an economy driven by excessive fiscal and monetary stimulation, the 10-Year Treasury yield rose to a 4-year high Monday as concerns over inflation continued, even as global stock prices rebounded.
 
Traders are waiting for new consumer price data coming Wednesday but fears that inflation numbers might creep up faster-than-expected were affecting the bond market Monday. Expectations are that central banks around the world will increase rates as well. The U.S. job market is strong, and coupled with the inflation mentioned above, many investors now expect the pace of Fed hikes is going to increase through the course of 2018.
 
Why should lenders care that President Trump presented a budget, which projects that deficits over the next ten years will total $7.095 trillion, up from previous expectations for total deficits of $3.150 trillion, and assumes GDP growth of 3.0% in 2018? Pricing of mortgages and other fixed-income securities depends on supply and demand, and if the U.S. government is issuing more debt, therefore increasing the supply, and demand is stagnant, well, prices will drop, and rates will move higher.
 
The annual budget will be sent to Congress next week, though it will be largely obsolete because the big decisions on government tax and spending priorities have already been made on Capitol Hill. The budget projects an $873 billion deficit (prior $440 billion) in fiscal year 2018 and a $984 billion deficit (prior $526 billion) in 2019. The Treasury Budget for January showed a surplus of $49.2 billion versus a surplus of $51.3 billion for the same period a year ago but is not seasonally adjusted, so the January surplus cannot be compared to the $23.2 billion deficit for December.
 
Also hidden within the proposal, and a bit of a surprise to the MBS market, was the proposal to increase the FNMA and FHLMC’s g-fee from 10bp to 20bp from 2019 to 2021 and extend the 20bp fee through 2023. The White House estimates that the increase will generate $26bn over the 10-year budget window while claiming it will level the playing field with the private sector. The increase would also slow conventional premium speeds on the margin while further dampening G2/FN swaps.
 
The Fed took a break yesterday but will be back today with a Class A operation targeting up to $1.305bn max 3.5% ($545mn) and 4% ($760mn) at the usual 11:45am time slot. In addition, the Desk will release a new two-week FedTrade schedule, commencing with Wednesday’s operation, in addition to tentative four-week MBS reinvestments which are estimated at $12.7bn based on $20.7bn in paydowns in January minus the $8bn taper cap.
 
Today’s economic calendar kicked off with the January NFIB Small Business Optimism Index (increasing slightly). The Redbook Same-Store Sales Index will be released at 8:55am and the New York Fed’s Quarterly Report on Household Debt and Credit (Q4 2017) will be released at 11:00am. And we should see more headlines on the back of the release today release of the administration’s FY2019 budget proposal with OMB Director Mulvaney also scheduled to testify before the Senate Budget Committee starting at 10AM ET. Versus Monday’s close rates aren’t much changed: the 10-year is at 2.85% and 30-year MBS prices are a tick or two better.
 
 
(Huh? Me…tell a politically correct joke?)
An Englishman, a Scotsman, an Irishman, a Welshman, a Latvian, a Turk, an Australian, a Kiwi, an Indonesian, an American, a German, a Peruvian, an Egyptian, a Japanese, a Mexican, a Spaniard, a Russian, a Pole, a Lithuanian, a Tibetan, a Swede, a Finn, an Israeli, a Romanian, a Bulgarian, a Serb, a Swiss, a Greek, a Singaporean, a Kazahk, an Italian, a Norwegian, a Dane, a Ugandan, a Nigerian, a Frenchman, a Colombian, an Argentinian and a South African went to a night club.
The bouncer said: "Sorry, I can’t let you in without a Thai."
 
 
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 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Feb. 12: AE, LO jobs, new products; layoffs & signing bonuses, productivity & margins – grim times ahead?

People are usually surprised to learn there are more boating licenses issued in Wyoming then in Hawai’i. Arizona and flooding? CoreLogic research finds 23% of residential and commercial properties in the US are at a “High” or “Moderate” risk of flooding, but are outside of designated special flood hazard areas, based on its proprietary analysis. The top 5 states with the greatest percentage in this grouping of the total properties analyzed are: AZ (68%), FL (54%), LA (49%), ND (40%), and NM (37%). Meanwhile, states at the other end of the spectrum with the lowest percentage in this grouping are: DC (4%), TN (9%), PA (10%), MO (10%) and NC (11%).
 
Employment & products
 
In wholesale job news, “Millennials are moving up! Residential lending is certainly starting to see some new faces in its top ranks. Coming off their most recent successful venture where Cory Tona, Aaron Iverson, and Tom Dinan founded a wholesale channel that funded over $8 billion in just four years, now they are back at it again with theLender.’ They are now able to implement some extremely unconventional strategies that the mortgage business has yet to see. Cory Tona says, ‘We are extremely excited for this opportunity that not many young mortgage professionals are fortunate enough to have in their careers. Our competition is putting far too little attention as to why top talent continues to leave them. People want to move up the ranks and if you don’t truly harness that, they will leave. We are going to change that!’ theLender is quickly growing and have very attractive offers for true rockstars in all positions. They will rattle the stagnate mortgage industry once again and looking for anyone that shares a similar vision.” Please contact team@thelender.com for more information.
 
Movement Mortgage set a new company origination record in 2017 with $12.8 billion in residential mortgages, despite declining volume industrywide. Movement has now increased purchase volume for 9 consecutive years. In 2017, Movement served more than 59,000 borrowers, expanded its footprint to 778 licensed branches in 49 states and added six new regional sales directors and 22 market leaders, according to the lender’s annual report. Movement credits its growth to an industry-leading 7-day loan process and its investments in sales coaching, leadership development programs and best-in-class technology. Loan officers and sales leaders looking for an opportunity to grow their careers while loving and valuing their colleagues and communities can go to www.movementlo.com to learn more.
Freedom Mortgage Correspondent Lending is dedicated to helping its clients grow in the Renovation Lending space. Part three of their Renovation Lending webinar series will take place on Thursday, February 22nd. The series is another step in furthering their commitment to client education. With over 70% of homeowners making a renovation to their home within the first year, according to Zillow, these loans have become increasingly popular. Looking to learn more about how you can offer a flexible Renovation Lending platform? Visit https://freedomcorrespondent.com/renovation/, or call 800-459-4850 x6807. Freedom Mortgage Corporation, NMLS: 2767. If you’re ready to enjoy the Freedom of a relationship-driven partner, find out how Freedom Correspondent Lending is your investor of choice.
 
Congrats to 4506-Transcripts.com which became an approved vendor for Ellie Mae Encompass® Digital Mortgage Solution. Encompass is an all-in-one mortgage management solution that offers a digital mortgage experience covering the entire loan lifecycle, so lenders can originate more loans, lower origination costs, and reduce time to close. With this integration, 4506-Transcripts.com makes it possible for lenders to use their favorite LOS platform accompanied with our outstanding customer service and unbeatable turnaround times. And 4506-Transcripts.com Becomes Fannie Mae Approved Vendor for Desktop Underwriter® (DU®) Validation Service. Fannie Mae’s Day 1 Certainty™ gives lenders freedom from representations and warranties plus greater speed and simplicity, and enables an improved borrower experience. With this integration, 4506-Transcripts.com makes it possible for lenders to request tax transcripts and protects lenders from related buyback risk through Day 1 Certainty. If you are using any of these platforms, please contact us today: P: (925) 927-3333
E: sales@4506-Transcripts.com, W: www.4506-Transcripts.com
 
Carrington Mortgage Services has added Bank Statements for the Self-Employed borrower to its Non-Prime Loan programs to validate income. 24 months of bank statements can be used, either personal or business to validate a borrower’s income. Bank statements may be used in the place of tax documentation for self-employed borrowers. Carrington’s Non-Prime loans include credit scores to 500, loan amounts up to $1.5 million with Jumbo financing, no MI required, expanded ratios, and borrowers with recent housing events on their credit may qualify. Available on primary, secondary and investment properties. Fixed and ARM programs available. Carrington began its journey to serve the underserved market four years ago by expanding guidelines and manually underwriting government loan programs for credit challenged borrowers. Today, mortgage brokers and their partners can further expand their support for the underserved borrower with these Non-Prime programs. To learn more visit www.CarringtonWholesale.com for more information or call 866-705-9506 to speak with an AE.
 
The mortgage loan officer (MLO) environment, productivity, signing bonuses
 
On February 6, the OCC published a notice and request for comment in the Federal Register concerning its information collection entitled, “Registration of Mortgage Loan Originators.” The OCC retains enforcement authority under the SAFE Act for financial institutions (including federal branches of foreign banks) with total assets of $10 billion or less. Comments on the notice must be received by April 9.
 
Here’s a tip for every broker and loan officer: spend the time to watch this video titled, “Rejection Therapy” by Jia Jiang. His goal was, on the way to be a top salesperson, to be rejected for 100 straight days.
 
KS sent, “Rob, here’s a short video put out by a company paying 275 basis points. I personally don’t know anyone who would rise to that bait, given that marketing scheme, but it is out there. Are we just in a waiting game to outlast our competitors? Are you seeing pure irrationality out there?”
 
Recently the Financial Times carried a story: 45,000 people could lose their jobs in the residential lending industry due to a drop in business? Some think so. Alistair Gray reported that, “Thousands of jobs in the US mortgage sector have been put at risk as lenders prepare for the weakest year for refinancings since the turn of the century. The drop in demand comes as interest rates rise and threaten to squeeze a sector that employs an estimated 450,000 people across the country at banks and specialist lenders. The Mortgage Bankers Association predicts refinancing volumes will come in at about $425 billion this year, the lowest level since 2000 and down almost 60 per cent from 2016. Guy Cecala, chief executive of Inside Mortgage Finance, said a decline of about 15 to 20 per cent in overall mortgage originations could equate to a headcount reduction across the industry of about 10 per cent…While rising demand for new mortgages should pick up some of the slack, Mr. Cecala doubts that will offset the refinancing decline. ‘If refis drop significantly, like 30 or 40 per cent, there’s no way home purchases can replace that drop.”
 
In my talks with CEOs and owners, I continue to hear tales of bonuses and guarantees. Will the big lenders continue to grow market share at the expense of smaller rivals? No doubt. I am no longer hearing about the “Lower margins or lower volumes, pick one scenario.” I am hearing that both volumes and margins are down. And smaller companies, though usually nimble, are often poorly equipped to handle smaller margins, and some are having trouble expressing their value proposition to potential hires. I was on the phone recently with the CEO of a large, fund-sponsored player in the correspondent space. "Getting killed" was his comment.
 
Stories of lenders exiting the business or cutting back are everywhere. Bank of the Ozarks, US Bank’s wholesale group, First California Mortgage, First Community Mortgage, big bank sales forces being gutted by ex-employees, the stories go on and on. Pressures mean competitors are “reducing margins to earn more business.” Capital One is cutting 1,100 jobs as it stops selling new mortgages, citing a “challenging rate environment” and “highly competitive” market. Venture capital funds and private equity investors probably won’t be pleased with their returns on residential lenders, and we can expect plenty of transition in 2018.
 
In the 2017 STRATMOR Originator Census study, STRATMOR found the top 20 percent of originators closed just over nine loans a month on average. Those same top 20 percent tended to have an average tenure of just under five years. (To participate in the survey, or to learn more about the Originator Census study, visit STRATMOR’s website or email STRATMOR.) STRATMOR also points out that banks are paying about 75 basis points on average versus non-banks at 120 basis points.
 
I was speaking to the CEO of a well-known privately held lender last week who told me that the hiring competition of LOs of any shape or size is a big problem for his company. Guarantees of $4-8k per month for 4-12 months is taking place. Loan officers are hearing about the profit margin squeeze, but most lender’s leadership is hesitant about passing that down to LOs in this environment, despite corporate margin compression.
 
Lenders are stuck. The first reaction is to try and “pay up” for volume and reduce margins – not a long-term solution. Compass Point LLC points out that, “The top 40% of loan officers originate 82% of industry loans and become the target in these phases. The next phase, in our opinion, will be for consolidation in the mid-to-small lender market that are unable to originate volume to be sustainable. We expect a combination of these, mostly private, players closing their doors or selling to larger providers with access to capital.” Of course, vendors will suffer from further consolidation in the business. Vendors whose clientele are the small-to-mid-size lenders could see their potential client base diminish.
 
Fun times ahead? That remains to be seen…
 
Capital markets
 
Bond traders are looking to the Federal Reserve for indications of how it intends to deal with the current spike in bond yields and volatility, with the installation of Jerome Powell as its new chairman adding to the uncertainty. Federal Reserve Bank of New York President William Dudley says the recent upheavals have no implications for long-term economic policy, but one market researcher says, "[W]e really haven’t heard from Powell and it would help if he made some soothing comments."
 
Those looking for a less volatile end to the week for U.S. markets were disappointed Friday, as equities continued their gyrations and the bond market also saw increased volatility, with the 10-year Treasury bond yield up to 2.84 during the day. The FN30 basis closed wider versus the swap curve, as much as 11bps steeper in the case of 2s/30s, and 2s/10s steepened as prices pulled back with spread sensitive buyers adding positions. The Fed also provided some early support when they purchased $829mn GNII 3% through 4% with a 13.6% hit rate, though GNIIs continued to struggle, particularly 4% following Thursday’s strong performance on the back of the GNMA announcement.
 
Last week’s volatility should not materially impede U.S. economic momentum in the near term, though many see it as a case for ongoing central bank monetary policy normalization this year and next, which will put upward pressure on bond yields. Market corrections are a normal part of investing, as is volatility, and many members of the Fed took time to remind us last week’s market action are “healthy."
 
Turning to today, the calendar is light with just T-bill supply and the January budget statement. Treasury will announce the auction size for Tuesday’s 1-month T-bill auction, followed by the $48bn 3- and $42bn 6-month auctions. The Fed will take a break from their buying schedule but resume tomorrow with a Class A operation, $1.305bn 3.5% and 4%, along with a new two-week FedTrade schedule and four-week MBS reinvestment estimate. Tuesday, we have the NFIB Small Business Optimism number – not a big market mover.
 
But things heat up Wednesday with the MBA’s survey of last week’s apps, the Consumer Price Index (CPI), and Retail Sales. On the 15th we can look forward to the Producer Price Index (PPI), Jobless Claims, Empire Manufacturing, Philly Fed survey, Industrial Production and Capacity Utilization, and the NAHB Housing Market Index. The week wraps up with import prices, and the Housing Starts and Building Permits duo. Friday begins Chinese New Year (The Year of The Dog). The week starts with rates higher, again: the 10-year is up to 2.88% and agency MBS prices are worse .125 versus Friday night.
 
 
With all the cryptocurrency and bitcoin chatter, here is some monetary trivia for you. Do Las Vegas churches accept gambling chips?
This may come as a surprise to those of you not living in Las Vegas, but there are more churches there than casinos.
Not surprisingly, some worshipers at Sunday Service will give casino chips rather than cash when the basket is passed.
Since the chips come from many different casinos, the churches have devised a method to collect the offerings.
The churches send all their collected chips to a nearby Franciscan monastery for sorting and then the chips are taken to the casinos of origin and cashed in.
This is done by the chip monks.
 
 
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 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Feb. 10: Notes on blockchain, selling leads, churning FHA & VA borrowers; a primer on how mortgage pricing works

Guess who turns 50 this year? The big news this week, arguably, was the Government National Mortgage Association (aka, Ginnie Mae, Ginnie, GNMA) issuing a press release on additional actions they have taken to control churning, and that they notified those outliers. Is “outliers” a politically correct term, like the CFPB using “bad actors?” Regardless, it’s shape up or ship out for those companies. Named in a Bloomberg article were NewDay Financial, Nations Lending Corp., Freedom Mortgage Corp, LoanDepot.com LLC and Flagstar. And no, I don’t know the others, at least in writing.
 
There are two sides to every story, of course. Here is the full statement sent by NewDay Financial (including the part that Bloomberg didn’t publish). “As company policy, NewDay USA does not publicly discuss its interactions with regulators, including Ginnie Mae. The record, however, is abundantly clear that NewDay does not churn veteran loans.
 
“NewDay is an outspoken supporter of measures to end this shameful practice. We support bi-partisan legislation introduced by Senators Tillis and Warren that seeks to end loan churning and we urge its swift passage. Policymakers should also ensure that well-meaning efforts to end loan churning will not have the unintended consequences of denying veterans’ access to their hard-earned VA benefits.
 
“Roughly one out of four veteran customers tell NewDay they have been rejected by major banks while applying for the VA benefits they are entitled to receive. When veterans cannot access their VA financial benefits, they pay much higher credit card interest rates (plus 20%) or are forced to go to extremely high-interest, payday lenders.
 
“We all have a common goal: to ensure that our veterans, servicemen and women, and their families are treated with the respect, deference and the dignity they deserve. At NewDay USA, our mission is to help Veteran’s families access the valuable VA home loan benefits they have earned.”
 
Denise Rohan, National Commander of the American Legion wrote, “On behalf of two million members of the American Legion, I applaud the efforts of Ginnie Mae to curb misleading mortgage refinancing marketing targeting veterans and the unscrupulous practice known as ‘churning’ – the refinancing of a loan multiple times to generate profits for lenders at the expense of veterans. Aggressive home mortgage churning creates uncertainty for investors and higher interest rates for borrowers. Our veterans didn’t serve their country around the globe to be taken advantage of by unscrupulous lenders at home. The American Legion stands with Ginnie Mae and Senators Warren and Tillis as they work to protect veterans from predatory home lending and ensure veterans have an affordable pathway to home ownership.”
 
Primer on loan pricing, especially FHA & VA
 
In December this commentary offered up a primer on how mortgage servicing rights influence mortgage pricing every day to borrowers. (If you didn’t read that, it is worth checking out.)
 
Nearly every lender is grappling with declining margins AND declining volumes – not a great combo. I received this note. “I know that cutting margins is not a long-term strategy for success. But everyone is doing it, hoping to outlast their competitors. But how do lenders set margins?
 
Good question. The key to margins five years ago was capacity. Now it is competition. There are 5 points of pricing which vary in importance over time: demand (capital markets have a buyer – think specified pools), competitive position, margin need or budget (required return on asset for a bank), market share (are you gaining or losing), and capacity. When your capital markets team sets their pricing, they are balancing all the above. 
 
And depending on the above, some lenders and products have had primary-secondary (P/S) spreading, and other’s not so much. What most articles are not considering when analyzing the P/S spread is the huge increase in costs – in the g-fee arena, increasing compliance, and the big one, servicing compliance and foreclosure costs. These costs, even though for prior funded loans, must be “covered’ by the current fundings and eat into margin and the spread.  Some companies have more, or fewer, costs, depending on their book of business.
 
Typically, it is not fair to compare revenue results from a pure FHA/VA shop versus a lender that originates a mix of products. There is more “meat” in government loans. Why? And what about high rate, premium, FHA loans – what is going on with the pick-up there? Brent Nyitray, Director of Capital Markets with iServe Residential Lending, did a fine job with explaining why. “A little background on how government loans are priced. Suppose a borrower wants to get a lender credit and is willing to pay a higher rate to do it. The TBA rate stock is used to determine the rate / fee that goes to the borrower. If a borrower wants a note rate between 4.25% and 4.625%, their loan will be sold into a 4% TBA, which is trading at 102.8125. The difference between par and 102.8125 +/- any lender credits is what pays LO comp, covers the cost of doing the loan, overhead, etc. The higher up you go in the rate stack, the more profit margin you have to play with, and therefore the bigger credit you can offer. If the borrower is willing to take a note rate of 4.75% to 5.125%, the baseline TBA price is 104.125 and that differential between the TBAs represents the increased lender credit the borrower can receive. Here is the problem: What happens if a borrower wants to go even higher and get a bigger credit? If there is no demand for the next TBA coupon (say 5%), then the increase might not be a point – it might only be half a point.  Note today that all the TBAs are down for the day except for the 5% note rates. That means those prices are stale and probably not real. 
 
“Why would investors not be interested in buying the 5% Ginnie note rates? It has to do with prepayment speeds. If you are an investor, you are paying well over par (in this case, maybe 4 or 5 points over par) to get something that will give you par back at some point. In other words, you are paying 104 and once the loan pays off you are getting 100, which is a loss of 4 points. You are betting that you will get back that 4 points over time because the note rate is higher than what you could typically get for an instrument with similar credit risk. So, if you buy a bond over par it might take a few years to recoup that premium you paid. If the borrower refis in 6 months, you lose.
 
“Ginnie Mae investors have been burned over the past several years paying 105 – 106 for a security that pays them par in a few months when the borrower gets a VA IRRRL. Investors have become gun-shy at buying the higher coupon TBAs, and that affects everybody, not just the veteran who rolled a 1.5% funding fee into a new mortgage for a smaller monthly payment of a couple bucks and the right to skip a payment or two.
 
“The Elizabeth Warrens of the world will focus on the veteran who is paying a big fee for a refi that will take several years to break even, but Ginnie will be focused on some of the unintended consequences of this, and it really becomes evident when you look at how it affects the more marginal borrower.
 
“Ginnie Mae was created to finance the tougher credits – the first-time homebuyer, the cash-strapped buyer, manufactured homes, lower income / credit buyers. These homebuyers usually have risk factors that will translate into bigger loan level pricing adjustments and will often require a higher note rate to make the math work. If those higher note rates are not available, then it becomes tough to finance those people, and Ginnie Mae’s mission is to help get these people loans. Which is why Ginnie is very sensitive to the actual investors of Ginnie Mae MBS as well as the veteran. The behavior of a few rogue lenders really does impact the whole market and pretty much everyone who takes out a government loans.”
 
Selling leads through credit reporting
 
Veteran loan officer ER observed, “After what’s happened to me this week, I think the order of the day should be to either reign-in the 3 credit reporting agencies (Equifax in particular) OR find another way in which to obtain credit reports and FICO scores. Not 6 hours after pulling credit on two, refinance borrowers, a telemarketer called both of my borrowers and said she had their credit info and was ready to proceed with their refinance. When the borrower questioned the name of the company (which was very similar to mine), she told them that ‘we’re the same company.’ Luckily, neither client bought it and I was able to hang-on to the loans.  
 
This business of selling ‘hot leads’ to anyone willing to pay their price must STOP. The CFPB tells me that the 3 agencies are private companies, not controlled by the government, and therefore have the right to make money any way they see fit. If anyone has found a better way around these crooks, I’d love to hear about it. Otherwise, BRAWL should be working on Equifax, in particular, to stop the theft of loans before they even get started.”
 
Technology
 
Noel Cookman with The Mortgage Institute wrote, “Hey Rob, forgive me if you’ve addressed this previously but, in your opinion, how will blockchain technology affect ‘the future of the industry?’ It appears as if technology (and specifically blockchain technology) will drastically shorten the distance between lent money and borrowing consumers.
 
“That is to ask, how will it (blockchain) affect or produce extreme transparency, the cost of the transaction (underwriting fees, escrow/title fees, etc. – i.e., closing costs), the speed of the transaction, customer service, customer retention, customer gathering, the number of people who work on a loan transaction, the underwriting process (automated underwriting > manual review of application docs), or the new technologies coming out (Maxwell, Day One Certainty, etc.)…are they a mere foreshadowing of what is to come…and at a lower, almost non-existent, cost?
 
“If I were a much younger man, I would take a hard look at any financial sector career that made its money by doing transactions…and, I think, I would have to try and envision exactly how speed-of-light transactions are going to affect how I make a dollar.
 
“Could it be that the biggest force that will keep money flowing in the ‘transactions business’ (loan originators, et al) is government compliance? If gov’t can continue their antiquated methodologies and policies, it could keep the relative transactional costs high – and mainly keep them cryptic enough so that the consumer doesn’t notice – and, thereby, keep originators and others employed. Basically, government could do what it’s always done so well – inflate the cost of doing business well beyond what it would otherwise be and keep a stream of consumer money flowing through an inefficient system. At that point, the bulk of the actual work of doing a loan will be compliance. Hell’s bells! It nearly already is.”
 
 
(A repeat, I know, but still pretty funny.)
Father Norton woke up Sunday morning and realizing it was an exceptionally beautiful and sunny early spring day, he decided he just had to play golf.
So, he told the Associate Pastor that he was feeling sick and persuaded him to say Mass for him that day.
As soon as the Associate Pastor left the room, Father Norton headed out of town to a golf course about forty miles away. This way he knew he wouldn’t accidentally meet anyone he knew from his parish.
Setting up on the first tee, he was alone. After all, it was Sunday morning and everyone else was in church!
At about this time, Saint Peter leaned over to the Lord, while looking down from the heavens and exclaimed, "You’re not going to let him get away with this, are you?"
The Lord sighed, and said, "No, I guess not." Just then Father Norton hit the ball and it shot straight towards the pin, dropping just short of it, rolled up and fell into the hole. IT WAS A 420 YARD HOLE IN ONE!
St. Peter was astonished. He looked at the Lord and asked, "Why did you let him do that?"
The Lord smiled and replied, "Who’s he going to tell?"
 
 
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 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Feb. 9: LO jobs, new products incl. mortgage cryptocurrency; lender & Agency FHA & VA changes; Ginnie names names

Here’s a riddle for tonight’s Happy Hour for snowed-in Chicagoans: What do New Day Financial, Nations Lending Corp., Freedom Mortgage Corp, LoanDepot.com LLC and Flagstar Bank have in common? Answer: they were singled out by Ginnie Mae as being "outliers" in terms of their prepayment speed profiles in multi-issuer pools, and not in a good way. And no one wants to be singled out by GNMA for this. “Such deviations from market norms are not acceptable and put a veteran earned benefit at risk.” (There were a few other lenders who received the letter, but not explicitly mentioned. The usual suspects are suspected.)
 
Employment, products, promotions
 
According to the most recent ARMCO Mortgage QC Trends Report, purchase transactions continued to outpace mortgage refinance originations in Q2 2017, with an increase of over 9% from Q1. The critical defect rate continued its upward trend, reaching 1.76% in Q2 2017, while the leading critical defect categories for Q2 2017 were Borrower and Mortgage Eligibility, Credit, and Income/Employment. Purchase transactions continued to dominate the percentage of loan originations, and defects associated with underwriting and eligibility made up most critical defects. View the full report
 
For the third consecutive year, Envoy Mortgage has won the Top Mortgage Employers Award from National Mortgage Professional Magazine. Polling its readers on criteria such as, compensation, corporate culture, long-term strategy, marketing support, training resources and innovation, this is further testament that Envoy Mortgage continues to sustain an environment built for growth and support. The company also launched several marketing and technology-driven tools in 2017 to provide their loan originators further ways to increase their business. In 2018, Envoy is transforming the consumer connection by increasing their focus on referral partner relationships and continuing to provide exceptional borrower experiences. To learn more about Envoy Mortgage and how you can become part of an award-winning team, email us.
 
“As the saying goes, ‘It’s lonely at the top.’ But as the #1 distributed non-bank retail lender in the country, Caliber Home Loans, Inc. isn’t lonely at all. In fact, from where we sit, the sky is the limit. Loan Officers ready to work for a lender that can elevate their careers should contact Jeremy DeRosa or visit www.joincalibernow.com. The view from here is great!”
 
Consistent with American Pacific Mortgage’s commitment to partner and add Independent Mortgage Banks to their growing family, APM has added 14 branches throughout the Rocky Mountains and Southwest of Catalyst Lending. Kevin Yamane, President of Catalyst Lending, said, “We are so happy to join such a good company and we look forward to a long and successful relationship.” If you’re interested in learning how other Independent Mortgage Banks have partnered with APM, click here to email Peter Schwartz (916-770-0053).
 
New products
 
LendingQB has added CoreLogic’s LoanSafe Fraud manager into its LOS to bring a more streamlined lending experience to LendingQB customers. This recent integration adds to the growing list of CoreLogic products offered in LendingQB and shows the LOS provider’s commitment to not just building partnerships but also strengthening existing ones. For more information, visit LendingQB.
 
Aperture announced the launch of Property Coin, a cryptocurrency backed by a diversified, professionally managed portfolio of real estate and mortgage loans. Aperture (led by long time mortgage industry/ investment banking/ banking tech pros Matt Miles, Andrew Jewett, Rudy Cortes, Dan Goldman and Pat Fogarty) has systematized the acquisition, rehabilitation and disposition of residential real estate ("flips") with over 50% unlevered IRRs produced to date. Property Coin is the intersection of real estate investment and cryptocurrency: 100% of the net proceeds from the sale of Property Coin will be invested in real estate and loans selected by Aperture’s team of investment professionals using their proprietary technology. “Property Coin is the first structured real estate portfolio on the blockchain, and the only way that we are aware of, anywhere, to invest in the residential "fix and flip" asset class with an institutional partner”, said Andrew Jewett, co-CEO.
 
From out in California comes news that Orange-based American Advisor’s Group (AAG), known for being a reverse mortgage provider, is “expanding into traditional home loans to help seniors who want an alternative for tapping into their home’s equity to help pay the bills during retirement.” Yes, AAG is expanding into conventional home loans. The firm announced Wednesday, Feb. 7, it recently leased an 11,000-square-foot office in Folsom where 70 to 80 new loan officers will oversee the company’s new mortgage operation.
 
Ginnie: Things are hotting up
 
“Hotting up” is a term they use in Scotland when things become tense, interesting, worthy of note. Ginnie Mae singled out "outliers" in terms of their prepayment speed profiles in multi-issuer pools, and not in a good way. And no one wants to be singled out by GNMA for this. “Such deviations from market norms are not acceptable and put a veteran earned benefit at risk. This work builds off the ‘Ginnie Mae – VA Loan Churn Task Force,’ which has been ongoing since September 2017,” noted the press release.
 
Ginnie put out a press release on additional actions they have taken to control churning, and that they notified those outliers. Is “outliers” a politically correct term, like the CFPB using “bad actors?” Regardless, it’s shape up or ship out for those companies. My guess is that all of them will “deliver a corrective action plan that identifies immediate strategies to bring prepayment speeds in line with market peers.” If they are unable to “demonstrate a path to improved performance, said issuers risk being restricted from access to Ginnie Mae multi-issuer pools. Thereafter, those issuers may only have access to Ginnie Mae custom pools."
 
Recall that the Veterans Administration (VA), on Feb. 1, 2018, enhanced disclosure requirements for interest rate reductions refinance loans (IRRRLs). The change outlined by the VA closes a prior reporting loophole and requires lenders to provide the Veteran’s Statement and Lender Certification no later than three business days after receiving a loan application. Per the VA, early disclosure in the application process affords Veterans the opportunity to make informed decisions and determine if the proposed IRRRL is in their best interest. This new policy goes into place for loans closed on/after April 1, 2018.
 
Ginnie Mae’s issuance of these notices directly follows recent announcements of program changes, APM 17-06, Pooling Eligibility for Refinance Loans and Monitoring of Prepay Activity, and APM 18-02, Risk Parameters Applicable to Single Family Issuers. These APMs outline acceptable risk parameters for mortgages backing Ginnie Mae securities and ongoing issuer evaluation.
 
 Todd Jones, President of BBMC Mortgage, a Division of Chicago’s Bridgeview Bank Group, sent, “BBMC fully supports the task force and the measures Ginnie Mae and the VA are taking to control churning and protect our veterans. The actions of a small percentage of Lenders have caused financial harm to 10’s of thousands of veterans, and their actions could drive up costs for all veterans utilizing their earned VA Loan benefit. Ginnie Mae’s action today, will certainly have an impact. If reports of the issuers being notified are accurate, due to each of their business models, those lenders will have no choice but to make immediate and meaningful changes that will benefit the veteran community as whole or risk their company’s very existence. BBMC Mortgage has always acted responsibly and even instituted our own overlays to ensure closing costs are recouped in a reasonable amount of time and have always required documenting the net tangible benefit for the veteran. These simple make sense solutions to ensure the veteran is being cared for properly, are not only the right thing to do for the veteran, they have now proven to be the right thing for the company’s bottom line.”
 
United Wholesale Mortgage has lowered its minimum FICO requirement from 680 to 660 on FHA and VA Elite loans, in addition to lowering the minimum loan amounts for Elite loans from $175,000 to $125,000 with no LTV cap. UWM also lowered its minimum FICO on non-Elite FHA, VA and USDA loans from 640 to 620. These changes give even more borrowers access to lower rates and fast turn times.
 
PennyMac Correspondent Group has posted a new announcement clarifying the Ginnie Mae seasoning requirements application when the underlying loan being paid off is a government loan. 
 
The changes issued by Ginnie Mae (GNMA) regarding seasoning and payment requirements are effective with pool issuance on or after April 1, 2018.  Pacific Union Financial, LLC must comply with the new GNMA requirements, therefore loans that do not meet the following requirements must be purchased on or before February 15, 2018. VA does not prescribe seasoning and payment history requirements for cash-out refinances; therefore, Pacific Union is adopting GNMA’s requirements for VA cash-out transactions. Documents impacted by this change will be published on February 12, 2018.
 
As announced previously by AmeriHome, the new Ginnie Mae seasoning requirements addressed in APM 17-06 will be required for loans delivered to AmeriHome on or after Friday, March 2, 2018. Affected loans that do not meet the new requirements must be purchased by AmeriHome on or before Tuesday, March 13, 2018. Also noted by AmeriHome: for 2018 HMDA reporting purposes, AmeriHome is identified as “Type of Purchaser: Code 71 – Credit union, mortgage company, or finance company.”
 
HUD recently announced a top-to-bottom review of all current and pending regulations related to manufactured housing as part of an effort to address affordable housing shortages. HUD will accept public comments about manufactured housing regulations through the mail or at regulations.gov until February 26, at which point comments will be submitted to the Manufactured Housing Consensus Committee—a statutory committee of mobile home producers, retailers, customers, and public officials—for review. Manufactured homes, which are built on a permanent chassis in a manufacturing plant and then transported, are constructed according to a code administered by HUD instead of according to state, local, or regional codes, like other types of housing. This gives HUD wide authority to regulate or deregulate them.
 
The Department of Veteran Affairs (VA) announced new loan limits effective for loans closed on or after January 1, 2018. The new county loan limits do not apply to VA IRRRL’s. VA will guarantee 25% of the loan amount on an IRRRL, regardless of whether the loan exceeds the limit for that county. NewLeaf allowed the new VA loan limits for loans closed on or after January 1.
 
Effective immediately, for all FHA transactions utilizing gift funds, NewLeaf Wholesale must include evidence of donor’s ability to give the gift, per HUD Handbook 4000.1.
 
M&T Bank Correspondent is requiring the following seasoning requirements, effective immediately, for all new VA Refinance & FHA cash-out Refinance registrations: The borrower must have made at least six payments on the mortgage being refinanced and at least six full months must have passed since the first payment due date of the refinanced mortgage and at least 210 days have passed from the closing date of the mortgage being financed. If the borrower assumes the mortgage that is being refinanced, they must have made six payments since the time of assumption. Loans that do not meet this requirement must be purchased no later than February 28, 2018.
 
Mortgage Solutions Financials’ VA cash out program highlights include: No Credit Score Overlay to VA Guidelines (VA does not have a minimum credit score). High Balance Loan Amounts Allowed – No restrictions to VA Guidelines! No overlays to VA LTV / HCLTV Guidelines (100% LTV is possible). No overlays to the amount of cash out allowed per VA Guidelines: Manufactured Homes Allowed. Manual Underwriting Approval Allowed per VA Guidelines LP or DU.
 
Mortgage Solutions Financial posted expanded Government Monitoring Information requirements effective January 1.
 
Capital markets
 
The markets were once again focused on the funding of the US government Thursday, which will increase because of the 2-year budget deal put forth by the Senate. The 10-year Treasury note rose a modest 1 basis point to a yield of 2.84 percent and reach a new intra-day high of 2.844 percent. A weak 30-year bond auction also reinforced the recent concerns about future Treasury supply. Retiring New York Federal Reserve President William Dudley spoke saying that if the economy continues to expand at its current pace, that the case could be made for a fourth rate hike this year. He also downplayed the current stock market declines as “small potatoes” when compared to the gains seen over the last few years.
 
Today’s calendar is another light one with only wholesale inventories and sales for December though the markets are digesting headlines from DC surrounding the budget deal. The US gov’t entered a “shutdown” technically but only for 5.5 hours as the Senate and House passed the 2-year spending, deficit-ballooning agreement. On to President Trump’s desk for signing. Rates aren’t much changed versus yesterday’s close: the 10-year is yielding 2.83% and agency MBS prices are roughly unchanged.
 
 
I don’t know why Cupid was chosen to represent Valentine’s Day… When I think about romance, the last thing on my mind is a short, chubby toddler coming at me with a weapon.
 
 
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 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
 

Feb. 8: Servicing, AE, LO jobs; upcoming events and conferences on origination, secondary, cybersecurity, M&A, etc.

People are usually surprised to learn there are more boating licenses issued in Wyoming then in Hawai’i. Arizona and flooding? CoreLogic research finds 23% of residential and commercial properties in the US are at a “High” or “Moderate” risk of flooding, but are outside of designated special flood hazard areas, based on its proprietary analysis. The top 5 states with the greatest percentage in this grouping of the total properties analyzed are: AZ (68%), FL (54%), LA (49%), ND (40%), and NM (37%). Meanwhile, states at the other end of the spectrum with the lowest percentage in this grouping are: DC (4%), TN (9%), PA (10%), MO (10%) and NC (11%).
 
Employment, products, promotions
 
PRMG Retail continues to expand its footprint nationwide by opening 6 new branch locations during the month of January!  Along with the drive and ambition to bring the American Dream of Homeownership to all cities across the country, PRMG has now opened its doors in Fayetteville, ARGlendale, CAOntario, CAOrland Park, ILTurnersville, NJ and Fort Worth, TX.  PRMG is devoted to growing their retail platform and is always looking for Motivated Loan Originators to support the mission to being “Progressively Better in All that They Do”. Voted TOP 5 of the 50 Best Companies to Work for in America, No. 1 Best in the Desert 2017, OC Register Top Workplace 2017, NMP Visionary Organization 2017, CAMP Corporate Affiliate of the Year 2017 and TOP 25 of 100 Mortgage Companies in America! PRMG employs nearly 1,700 people!  If you’re ready to join a top-tier team and company, then contact Chris Sorensen at 909.262.0452.
 
FUNDLOANS.COM is a residential wholesale jumbo A/non-QM lender with loan amounts between $400k-$15 million. “At FundLoans.com we take a common-sense approach to looking at your loan. We don’t underwrite like a bank, we underwrite like a private fund. We thrive in the super jumbo area and love working with self-employed borrowers. FundLoans.com, is looking for experienced Account Executives who thrive when challenged and inspired to deliver a level of service unparalleled in the mortgage industry. Elevated compensation for AEs with current book of Jumbo A/Jumbo QM business. Come join the nation’s newest Jumbo A/ Non-QM lender as we grow and thrive in this lucrative new space. We are hiring in the following markets: CA, FL, TX, AZ, CO, WA, OR, UT, MT, and MI. Please send all resumes to EVP David Hidy.
 
Wright-Patt Credit Union (WPCU) and its wholly-owned mortgage subsidiary, myCUmortgage (myCU), continued to grow membership, loans, mortgages, and assets at impressive rates in 2017 and into 2018. Within the past two years, myCU took the unique step to build an in-house servicing function, bringing all its loans back from a subservicer. The new platform is designed to focus on the unique relationship credit unions have with their members. WPCU is seeking to fill a new position of Director of Default Services to support myCU’s growing servicing operation. The position will report to the President of the mortgage subsidiary and has everything to do with keeping members/borrowers in their homes while protecting the assets of investors. The Director will be responsible for running operationally successful and compliant business units for collections, loss mitigation, default, bankruptcy, foreclosure and liquidations and will have strong leadership skills as well as a deep background in loss mitigation and default services for Fannie, Freddie and Ginnie lending. For consideration, email Marsha Pfeiffer.
 
BankUnited’s Mortgage Warehouse Lending division provides competitive warehouse lending rates and terms to mortgage bankers nationwide who originate agency/government and Jumbo mortgage loans across all origination channels. Its dedicated team of professionals has over 150 years of combined experience and offers personal best-in-class service with a competitive suite of products to get you to the next level. Features include: commitments up to $100 million; an expansive mortgage loan product set; comprehensive Treasury Management services; and a late daily funding window. The application and implementation processes are simple, straightforward, and efficient. To learn more about what BankUnited Mortgage Warehouse Lending can do for you, call Paul Tirella, Business Development Manager at 646-630-0295.
 
Two weeks ago loanDepot announced its expansion into the real estate market by launching mello Home, a network of local real estate experts for loanDepot customers who are prequalified for a mortgage, and now we learn that Chris Heller, former Keller Williams CEO (world’s largest realty firm) is joining mello Home as its new CEO.
 
Upcoming events
 
Michael Kuentz, the President of LendersOne, sent some observations on the current conference and industry climate, some of which I include here. “This is one of the best times for lenders to be attending conferences. We’ve heard from many of our members that they’re concerned about the year ahead and how to be profitable in this market, and sessions focused on this will be critical…Perhaps the topic we’re hearing about the most is the digital mortgage evolution, and how our members can respond to new entrants and large banks investing heavily in technology. During our March event we’ll have a panel of several of our members speaking on this very topic. We’re also excited to be launching a new eClosing solution we’ve been working closely with our members to pilot and launch. Based on initial conversations with some of our early adopters, I really think the time is right for eClosings to become commonplace in 2018. Digital isn’t the only thing on lenders’ minds, but it will be a major differentiator amongst lenders choosing to embrace it.”
 
Click here to check out the Franklin American Mortgage Wholesale training calendar for February. A few of the educational opportunities include “Explore the Possibilities with Home Possible”, “Mortgage Fraud”, “Time Management”, “Evaluating Borrower Assets”, “Artificial Intelligence, Bitcoin and the Future of Mortgage”.
 
ditech has release its February Client Development Calendar offering a comprehensive training curriculum on ditech products and processes. Various Government Basic Sessions (FHA, VA and USDA) and other customized sessions have been scheduled throughout the month. ditech has also started posting recorded process sessions to WebEx.
 
Mayer Brown has launched a Mortgage M&A Podcast designed to keep you up to date on the latest M&A trends in the residential mortgage industry. Information, just 25-30 minutes long, will include insight on legal issues in the mortgage industry relating to mergers and acquisitions and touch on relevant and timely topics. Session 1: Introduction on Trends in Mortgage M&A. Listen now. Session 2: Build v. Buy Strategies. Listen now. Session 3: Diligence and Regulatory Compliance Matters. Listen now.
 
Stop by the Fannie Mae booth in THE HUB during the MBA National Mortgage Servicing Conference & Expo and share in the innovative solutions for bringing simplicity and certainty to servicing. And be sure to catch Fannie Mae speakers during the conference: Jake Williamson, "Information Sharing for Effective Property Maintenance Solutions" today and Todd Barton, "Servicing Super Session," on Feb 9.
 
CAMP Silicon Valley Chapter is hosting its monthly breakfast meeting on February 9th. The topic of discussion is the “Scary” new tax rules for 2018.
 
The Mortgage Collaborative will host its 2018 Winter Conference in San Diego this Sunday through Tuesday. Contact Rich Swerbinsky for more information.
 
CalyxVision 18 starts this weekend. Receive 50% off your CalyxVision registration using discount code 50CV18. Register today!
 
Get your registration in today for next week’s 2018 Eastern Secondary Market Conference. Yes, the MBA of Florida’s 15th Annual Eastern Secondary Market Conference & Exhibits is coming up starting February 14th.
 
Join NAMB for NAMB Focus: Sales and Marketing Conference, February 15-17 at the Hilton Sandestin Beach Golf Resort & Spa in Miramar Beach, Florida. NAMB Focus will feature sales and marketing focused breakout sessions, a large exhibit hall and plenty of opportunities to network.
 
On February 12th, Plaza is offering the second of its 3-part Fundamentals series, learn about loan types and programs, questions to ask while completing the loan application, the importance of processing and complete documentation.
 
We have the MAA Quarterly Advocacy Update Webinar. Hear from Bill Killmer, SVP for Legislative and Political Affairs, along with MBA’s Legislative and Political Affairs team, on the current MAA Calls to Action and other topical issues impacting you and your business in the coming months.
 
Join the MMBBA on February 15th at 2:30 for Death by Cliché and Other Business Buzzwords with Steve Richman. Explore common business clichés and actions to update your business plan, improve communications and differentiate yourself from the competition.
 
AmeriHome’s underwriting management team will be offering additional dates in February for the Core Jumbo Underwriting Webinar. Thursday, February 15, 10AM PT, Thursday, February 22, 9AM PT.
 
Join MBA ST. Louis for lunch a discussion on the impact of the 2018 Tax Reforms on the housing industry and your business with Rubin Brown. This luncheon is on Thursday, February 22, 11:30 AM – 1:00 PM.
 
Register for “Zillow Consumer Insights for Mortgage Lenders” with Mary Kaye O’Brien, Director of Customer Insights at Zillow Group webinar on February 22nd at 2PM EST. This presentation will provide you insights from the Zillow Group Consumer Housing Trends Report.
 
On February 27th at 2PM EST, join special guest, former Special Agent Scott E. Augenbaum of the FBI’s Computer Intrusion/Counterintelligence Squad for the “Cybersecurity and You” webinar. Registrants will learn the best and easiest ways to protect yourself from cybercriminals.
 
If you would like to learn the “Top 10 Mistakes Made By Underperforming Lenders & How to Avoid Them” by industry veteran Joe Garrett of Garrett, McAuley & Co., register for this webinar scheduled for March 5th at 2PM EST.
 
National MI is hosting a couple webinars. On Thursday, March 8th, Creating Engaging Social Media Videos, 12:00 PM PST – 1:00 PST, presented by Scott Weghorst of Diehl Mortgage Training and Compliance. And Thursday, March 15th, Top 2018 Social Media Trends, 12:00 PM PST – 1:00 PM PST, Presented by Kristin Messerli of Cultural Outreach & Mortgage Women Magazine.
 
The Illinois Mortgage Bankers Association (IMBA) is sponsoring a one-day conference on March 14 at the Doubletree Hilton Oak Brook Hotel, 1909 Spring Road, Oak Brook, IL
 
Get ready for the all new Atlanta Mortgage Expo, being held Thursday, March 15 (with a bonus 8-hour NMLS class there on Friday, March 16). The Atlanta Mortgage Expo has numerous valuable sessions.
 
The National Association of Professional Mortgage Women will hold its Annual Education Conference at Harrah’s Casino in Las Vegas April 4-6. This year’s theme will be “Unmasking Mortgage.” Contact Tobi Libbra, Rolanda Legg, or Robin Hart for more information.
 
Join the MBA’s National Secondary Market Conference & Expo May 20-23 in New York. This conference brings together over 1,500 secondary market professionals.
 
NC Bankers American Mortgage Conference April 30th -May 2nd, brings together leading experts in the financial services industry, mortgage practitioners of every kind, policy makers and investors to discuss important issues in the mortgage field and to analyze what progress is being made in Washington.
 
Early Bird registration prices are underway the May 10, 2018 Annual MMBBA Conference for a limited time. Prices will increase on April 1.
 
Capital markets
 
Federal Reserve Presidents have been telling us for a long time that rates were heading higher. Believe them yet? The rise in yields continued Wednesday and the 10-year Treasury note finished the day yielding 2.84 percent, the highest since January 2014. This came amid more volatility and a weak 10-year note auction which saw a below-average bid-cover ratio and drew a high yield of 2.811 percent. It was also reported that the Senate reach a two-year budget deal that would see an increase in military and non-defense spending as well as an increase in disaster relief without any offsetting cuts. The deal would require more debt to be issued to pay for the spending, but there was no agreement reached regarding the debt ceiling and the deal still needs to pass the House. With more debt issuance on the horizon and the Fed balance sheet normalization also adding to supply, one would expect yields to continue to rise.
 
The calendar remains quiet today with initial jobless claims (hitting 221k – strong!), natural gas inventories, and a $16 billion 30-year Treasury bond auction at 1PM ET. As we saw with rates going up yesterday after the open, anything can happen during the day, but we start Thursday with rates versus last night: the 10-year is yielding 2.86% and agency MBS prices are worse .250.
 
 
(Part 2 of 2. Feel free to pass along to your kids taking physics or chemistry! And no, I don’t understand all of them, so don’t ask.)
Q: What to do with dead chemists? A: Barium.
Two chemists walk into a bar. The first one says, “I’ll have H2O”. The second one says, “I’ll have H2O too”. The second one dies.
Schrödinger’s Cat Food. Half the price but a 50-50 chance of the tin being empty. Or not.
In a dictatorship, do you think Ohm would join the resistance or flow with the current?
Neutron is out driving and gets pulled over, Electron and Photon are in the back seat. Electron: “Oh no, we’re all going to jail!” The others: “Stop being so negative!” Police officer: “Do you know how fast you were going?” Photon: “That’s all relative. But if you really want to know, call Heisenberg, he doesn’t know where we are.” Neutron: “Don’t worry guys, I know there’s going to be no charge.”
y = ln(x/m – as)/r^2
 
 
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Rob
 
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)