“Sometimes I wake up grumpy; other times I let him sleep.” Kids in NY are sleeping in since the schools are closed today. But if you worked for Deutsche Bank on the mortgage side you may not be sleeping well: the DOJ is “probing people who worked in DB’s mortgage unit.” No one likes being probed. Shifts in minimum wage may be causing people to lose sleep. Many cities and states have raised their minimum wages in recent years, but many of those laws leave at least one group out: tipped workers, such as waiters. The gap is most pronounced in Massachusetts, where minimum wage earners make $11 per hour while tipped workers make $3.75 an hour.
Compass Analytics is actively seeking Business Analysts to support expansion of the product teams in its Washington DC and Irvine, CA offices. This role will be very hands-on and involve all phases of product management ranging from analysis and requirements gathering to functional design, testing, and implementation. “Strong project management, communication, project implementation skills are required in addition to agile development methodologies. The ideal candidate will have mortgage or finance industry experience, 2+ years business analyst experience, and working knowledge of SQL and SDLC tracking systems. Compass is an innovator in the exciting and growing FinTech industry and offers a unique opportunity for growth and experience, with a casual-yet-focused, fast-paced work environment including an outstanding compensation and benefits package. Interested candidates should email a cover letter with resume to Marketing Manager Sarah Slagle.”
Pacific Union Financial, LLC continues to expand its national footprint and enhance the Distributed Retail management team with the hiring of new Retail Regional Vice President, Ron Agasar. Mr. Agasar has more than 30 years of experience in retail mortgage management and will lead sales efforts in the Northeast Region. If you’re considering a career move and want to explore opportunities with Pacific Union Financial, contact him at the link above.
Flagstar Bank has added a heavy hitter to its all-star team of warehouse lenders. The new team member is Heather Slapak who comes to Flagstar after an 18-year career as a relationship manager in warehouse lending. Flagstar’s been in the warehouse biz since 1991, and under the leadership of industry veteran, Joe Lathrop, since 1999. It offers lines from $1M to $100M with no minimum volumes required to be sold to Flagstar’s wholesale division. Borrowers receive a dedicated relationship manager and a dedicated processor—no phone queues. You can reach Heather at (248) 408-0078.
In more retail personnel news, congrats to Brian Jensen! Inlanta Mortgage, Inc. announced the addition of 26-year veteran Brian as its Regional Vice President of Business Development. Last year Inlanta moved its corporate headquarters to a new building to accommodate expanding staff, added 4 branches in the 4th quarter, and is focused on expand its footprint in Colorado, Texas, and in the North East. Inlanta Mortgage was established in 1993 and has grown to 39 branches in 16 states and over 250 employees. If you are a mortgage professional and looking to make a career change, please contact Brian Jensen at 630-927-0380.
“I rob banks because that’s where the money is.”
If Willie Sutton were alive he could probably count the number of new, de novo, banks in the last several years on two hands. But things are heating up, possibly in expectation of an easier regulatory environment. The U.S. is seeing startup banks: eight banks filed applications with the FDIC in 2016. This is a far cry from the peak when you would see 250-300 applications.
One thing non-depository mortgage banks don’t have to deal with is Basel. Bank for International Settlements General Manager Jaime Caruana expects the Trump administration’s approach to regulatory reform to affect coordination of Basel IV capital rules for banks. “This will probably take some time, but we need to wait for the position of the Americans — and we don’t know yet,” Caruana said. The word “limbo” popped up, and no one likes being there.
US bank stress test scenarios for the ’17 CCAR (Comprehensive Capital Analysis and Review) came out. As a reminder to non-bankers, since non-depository lenders don’t have to worry about it, CCAR is a regulatory framework introduced by the Federal Reserve to assess, regulate, and supervise large banks and financial institutions. The Fed seems to envision a more severe downturn in economic conditions compared to the 2016 testing cycle. And we’ll probably see more questions about commercial real estate in 2017 since the ’17 CCAR assumptions include a larger focus on commercial real estate prices compared to the ’16 scenarios.
Certainly depository bank M&A continues unabated. In Pennsylvania, the Bryn Mawr Trust Co ($3.4B) will acquire Royal Bank America ($828mm) for about $127.7mm in stock (100%) or about 2.47x tangible book. In Texas Vista Bank ($395mm) will acquire Hamlin National Bank ($84mm). Green Dot Bank ($1B, UT) will acquire prepaid debit card company UniRush, LLC for $147mm in cash and an earn-out of at least $20mm. UniRush has 175,000 active cardholders, offers RushCard and is backed by hip-hop mogul Russell Simmons. In Illinois Multi-bank holding company First Busey Corp ($5.4B) will acquire First Community Financial Bank ($1.3B)
for about $235.8mm in cash (10%) and stock (90%) or about 2.1x tangible book.
In divestiture news, French bank BNP Paribas will offer 25mm shares of its subsidiary First Hawaiian Bank (HI) as it seeks to reduce its roughly 83% ownership stake down to about 62% and raise an expected $984mm. Dutch banking giant ABN Amro said it will cut 60% of its senior management jobs and cut the number of top executives by 50%, as it moves to cut costs. The bank remains 70% owned by the Dutch government.
Servicing prices influences borrower’s rates.
Let’s see what’s been happening over the last month or two. The talk a few months back in MSR trading wasn’t credit or prepayment speeds, necessarily, but rather the size of offerings. MountainView Servicing Group was the exclusive sales advisor to a $3.19 billion FHLMC/FNMA/GNMA servicing portfolio. The 100% retail originated portfolio consists of Conventional: 100 percent fixed rate 1st lien product, 3.875% WAC, 752 WaFICO, 78% WaLTV, $191k avg loan amount, with top states: Texas (27.2 percent), California (8.0 percent), Virginia (6.0 percent), and Maryland (4.7 percent); and Government: 100 percent fixed rate 1st lien product, 694 WaFICO, 96% WaLTV, 3.78% WAC, $177k avg loan amount, with top states: Texas (20.8 percent), Florida (7.4 percent), California (7.2 percent), and Ohio (5.2 percent).
I’ve seen two Incenter Mortgage Advisor packages; the first was for $1.45 Billion in Fannie Mae & Freddie Mac Bulk MSR offering. The 6,500-loan package had a $222k average loan amount, 4.151% WAC, 90% O/O SFR, 77% purchase, 77% WaLTV; the second offering is for a $4 Billion FHLMC 23,000+ loan package. The portfolio has a 3.952% WAC, 76.6% WaLTV, 752 WaFICO, 92% O/O, 67% SFR 27% PUD, 56% Purchase, and a current escrow balance of $29mm.
Phoenix Capital’s Project Valor: a $2.4 Billion GNMA, 98% Fixed 30, 1% Fixed 15, <1% ARM, 3.837% (F30) Note Rate; 3.408% (F15) Note Rate; 3.134% (ARM) Note Rate, $200k average loan amount, 684 WaFICO, 99% WaLTV, Geography: 9% TX, 9% FL, 6% GA, and is 100% retail. Project Sparta is a $35-60 Million per month flow package. The seller estimates the flow will be on average similar to October through December production; Conventional: approximately $30-$35 million per month, 84% Fixed 30, 16% Fixed 15, avg bal $232K – $269K, 56% purchase origination, 100% retail originations, 90% single family/PUD properties, 91% OO, 42% MD, 40% VA, 12% NC, 750 WaFICO, 79% WaLTV; Government: approximately $20-$25 million per month, 59.7% VA, 36.6% FHA, 3.7% USDA, avg bal $245K – $252K, 82% purchase originations, 100% retail originations, 94% SFR/PUD properties, 99% OO, 39% VA, 36% MD, 19% NC, 705 WaFICO, and 97% WaLTV.
RoundPoint Mortgage Servicing has been selected as the sole servicing partner by Point, for its growing portfolio of fractional residential real estate assets. Under the agreement, RoundPoint will manage assets acquired by Point. Homeowners sell Point a fractional interest in their properties in exchange for a tax-deferred lump sum without interest rates or monthly payments. Within 10 years, the homeowner exits the agreement by either selling their home or buying out Point. Most homeowners use the capital to diversify their wealth, invest in their businesses, renovate their homes, or pay off debts. Point provides homeowners with a brand- new finance solution that aligns homeowner and investor interests and, for the first time, investors can buy fractional interests in owner-occupied residential real estate through a digital platform.
The weather outside is frightful…
This winter has been harsh in most parts of the country. Even California, at least the northern portion, has seen an unusual amount of rain and snow. What are lenders and investors doing in terms of disaster updates? Hey, and don’t forget, if you need a flood map, FEMA’s your place!
In response to the severe storms, tornadoes and Straight-line winds and in response to a Federal Disaster Declaration, M&T Bank will enforce the Disaster Re-Inspection Policy for all Georgia properties located in the counties of Berrien, Cook, Crisp, Dougherty, Turner, Wilcox. The same is true for Mississippi Counties of Forrest, Lamar, Lauderdale, Perry.
Because of severe storms, tornadoes and straight-line winds in Georgia (Georgia Severe Storms, Tornadoes, and Straight-line Winds (DR-4294 and DR-4297), FEMA declared a major disaster area. Loans scheduled to close in these areas may need to be delayed until confirmation of the property’s condition can be obtained. Plaza will reassess the collateral for these loans and prepare them for closing as soon as possible.
The SunWest Mortgage disaster area policy is as follows: For loans submitted with an appraisal dated on or before the incident period end date or for those submitted without an appraisal, Sun West will require an interior and exterior inspection prior-to-funding or purchase of any loans with subject properties that are determined to be at risk. The inspection must verify that the property is sound, habitable and in the same condition as when it was appraised.
Per FAMC’s Correspondent Lending Bulletin, effective immediately, a buyer will be allowed to assume the seller’s flood insurance policy and retain the same rates provided the loan is not a construction loan and the policy states it is transferrable. Please review the updates to the Flood Disaster Protection Act chapter of the manual for specific requirements. Also, FAMC has updated its guidelines to align with FHA’s current 4000.1 policy, as announced in FHA INFO#16-64. The total amount of required repairs must not exceed $10,000 for HUD REO properties insurable with a repair escrow.
NewLeaf issued the following information regarding active loans in the pipeline: Because of Severe Storms, Tornadoes, and Straight-Line Winds occurring in Georgia from January 21, 2017 (incident start date) through January 22, 2017(incident end date), the President issued a federal disaster declaration on January 26, 2017 for the following counties: Berrien, Cook, Crisp, Dougherty, Turner and Wilcox. All subject properties in the areas impacted by the disaster require evidence that the subject sustained no damage from the identified disaster. If the subject property is in an impacted area, with a completed appraisal dated prior to the incident start date, a 1004D re-inspection completed by the Appraiser must certify that the property is free from the applicable natural disaster damage.
Capital Markets: interest rates go up and down
And this week it’s been down. Those who follow the 10-year yield as a benchmark saw its yield hit 2.33% Wednesday morning. Why? Lack of turmoil overseas, perhaps. Or some thinking that the expected “Trump Bump” to the U.S. economy may not happen overnight. Who thought it would? We had the usual small movements between coupons, securities, and maturities, and the NY Fed was in doing its usual buying of $1-2 billion a day. The improvement paused when the Treasury auctioned off its 10-year T-note, but its yield still ended the day at 2.35% and its price improved nearly .375. The 5-year T-note and agency MBS prices improved .125-.250, depending on coupon.
This morning we’ve already clocked in with the usual Thursday Initial Jobless Claims (-12k to 234k; 101 weeks below 300k). At 10AM ET we’ll have December wholesale inventories, as if that stat ever moves markets, but later we’ll have the Treasury peddling $15 billion of 30-year bonds. The 10-year’s yield is sitting around 2.36% and agency MBS prices are down/worse .250 versus Wednesday’s close.
Usually folks make paper airplanes a) to amuse or show their kids, b) land it on a basketball court at the half-time contest, or c) to annoy the processor in the next cubicle. How cool would it be knowing how to make one that goes over 200 feet? Here’s a 45 second video on how to do it.
(Copyright 2017 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
Latest posts by Higher Source Sites
- Dec. 31: Rates, the Fed, world economies, affordability, and the shutdown – all tied together - December 31, 2018
- Dec. 29: FEMA reverses flood ruling; cybersecurity notes; observations on general housing trends - December 29, 2018
- Dec. 28: Doc automation product; FHA & VA changes around our biz; Agency deals continue to share risk - December 28, 2018