There are 293 ways to make change for a dollar. (A good one to set pesky kids with counting: 100 pennies, 95 pennies and one nickel, 90 pennies and one dime…)
Verus Mortgage Capital is excited to announce expansion plans for its Correspondent Sale team. Verus is hiring Account Executives for the East and West region. Verus provides correspondent sellers industry leading non-agency/non-QM products and exceptional customer service. Verus purchases loans in all 50 states with delegated underwriting and accepts TPO business. Interested candidates should have successful mortgage sales skills, correspondent experience and existing contacts within their market. If you are a wanting to work for a company with a great culture, commitment to its customers, employees and products, please contact Jeff Schaefer, EVP National Sales. Verus Mortgage Capital is backed by Invictus Capital Partners, a Washington DC based investment management firm.
“Plaza Home Mortgage, Inc. is growing and we’re looking to increase our sales force. We are excited to announce new career opportunities for Account Executive positions in the Utah market. Recently ranked as a Top 5 Wholesale Lender by the Scotsman Guide, find out what makes us different and separates us from the competition. Interested candidates will have plenty of opportunity to take over existing accounts and prospect lists. If you or someone you know is interested in applying, please contact Matt Coles, Sales Manager, at 818-421-0833 or firstname.lastname@example.org. Plaza is an EEOC employer and follows all federal, state, and local laws relating to fair employment.”
On the retail side, “Now is the time to consider a great opportunity with a growing mortgage bank. Assurance Financial is seeking experienced mortgage loan originators and branch managers to continue selectively expanding its footprint. The company is looking to hire great people in good markets across the southwest and southeast, including Arizona, Colorado, New Mexico, Texas, Oklahoma, Arkansas, Louisiana, Mississippi, Tennessee, Alabama, Ohio, Virginia, West Virginia, North Carolina, South Carolina, Georgia, and Florida. Assurance has a solid reputation for closing loans on time. Its back office supports its mortgage loan originators and branch managers so they can focus on originating more new loans rather than worrying about closing their pipeline. If you’re interested in learning more about these great opportunities, contact Paul Peters, CMB at 225-239-7948 or visit lendtheway.com/careers.”
Changes are constant. At National Mortgage Insurance Corporation (National MI) Claudia Merkle was named chief operating officer (COO). Ms. Merkle will continue to report to CEO Bradley Shuster. Congratulations! And hats off to Mike Clary, newly appointed President of Royal Pacific Funding, who promptly doubled production to over $100 million in his first month at the helm.
“Have you heard the latest statistics joke? Probably.” Statistically speaking we’re all going to stop working at some point. And although residential lending industry vets rarely seem to actually retire, here’s one: Tony Schmeck, CFO of Dallas’ Supreme Lending, has 16 more days. “Time for this old bull to take a break,” as he put it. And the MBA’s Jim Gross recently retired as well. Hats off to both of them – just think about never caring about HMDA data again!
Speaking of HMDA, free data is available on nearly 95% of mortgage originations nationwide thanks to the Home Mortgage Disclosure Act (HMDA). While the raw data is available to the public, Richey May & Co, LLP has scrubbed the data and organized it into a dynamic dashboard that allows lenders to drill down on specific companies and markets to aid in strategic business planning. Richey May is offering complimentary access to this dashboard on its website, along with other data analytics tools relevant to lenders. The 2014 HMDA data is available now, but once the 2015 data is released (any day now), Richey May will offer that free of charge until the following year. Visit this dashboard and others here.
In legal news, since it is intertwined with the residential lending business these days, the U.S. Justice Department proposed that Deutsche Bank AG pay $14 billion to settle a set of high-profile mortgage-securities probes stemming from the financial crisis. This news had not been previously disclosed, and, as one would expect, it is time to “lawyer up” and Deutsche Bank will fight it. It will take many months, if not years…
But legal matters impact individuals as well. A California man was sentenced to 16 years in prison for his role in a mortgage modification scheme involving more than 30,000 homeowners defrauded out of $31 million. Dionysius Fiumano, a former sales manager at Vortex Financial Management Inc., was sentenced by U.S. District Judge John Keenan in Manhattan, who said the harm to victims had been “enormous financially and emotionally.” Fiumano, who was also ordered to pay nearly $20 million in restitution was found guilty in May on conspiracy and wire fraud charges. Vortex, also known as the Professional Marketing Group, was a company that offered to help struggling homeowners persuade their lenders to agree to modify the terms of their mortgages. He instructed his salespeople to lie to consumers nationwide about what the firm would do for them in order to get homeowners to pay thousands of dollars each in fees in exchange for minimal or no mortgage modification services.
And 3,000 miles away in Boston, a woman was sentenced for defrauding mortgage companies in connection with multiple mortgages she obtained on a single residence.
Returning to the job market, and company-specific changes, things aren’t always unicorns and companies hiring out there. USAA said it will close 17 of its 21 financial centers nationwide next year as it adjusts to the reality that most of its members only use its mobile app and website to do their banking. USAA says only about 2.5% of its 11.7mm members use its financial centers. BB&T ($222B, NC) said it plans to close an undisclosed number of branches by year end, as it seeks to further downsize its network. Meanwhile, SNL Financial reports US banks and thrifts over the past 3 months closed 505 branches, with 120 in Aug, 236 in July and 149 in June. Ohio’s Fifth Third Bank ($141B) said it will close 44 branches as it seeks to cut costs and adjusts to changing customer behavior. The bank and previously announced it was closing 100 branches. Texas’ Comerica Bank ($71B) is laying off 450 employees as part of a plan to cut 9% of its 8,800 workforce over the next 2 years.
In terms of bank M&A news, there wasn’t much in the last week or so. I only saw that The Home Savings and Loan Company of Youngstown ($2.1B, OH) will acquire Premier Bank & Trust ($320mm, OH) for about $40.3mm in cash (50%) and stock (50%) or roughly 1.4x tangible book.
Commercial banks and savings institutions insured by the FDIC reported aggregate net income of $43.6 billion in the second quarter of 2016, up $584 million (1.4%) from a year earlier. The increase in earnings was mainly attributable to a $5.2 billion (4.8%) increase in net interest income and a $981 million decline in expenses for litigation reserves at a few large banks. Banks increased their loan-loss provisions by $3.6 billion (44.2%) compared to a year ago, partly in response to rising levels of troubled loans to commercial and industrial borrowers, particularly in the energy sector. Financial results for the second quarter of 2016 are included in the FDIC’s latest Quarterly Banking Profile released earlier this month.
The Urban Institute’s Housing Finance Policy Center has just released, “Why the surge in PMI activity won’t force FHA to cut premiums anytime soon.” “Research Associate Karan Kaul explains that, after years of back and forth with the Federal Housing Administration (FHA), the private-mortgage insurance (PMI) industry is again the biggest player in the US mortgage insurance market. This is big news: in an era when government is backing most mortgage originations, any increase in the role of private capital is welcome. But will the FHA be forced to drop its prices to avoid overexposure to higher-risk borrowers? Probably not anytime soon, given the pristine quality of today’s mortgages.”
Yes, loans featuring coverage by private market insurers (PMI) surpassed the market share of loans insured by FHA for the first time in two years. This switch is apparently due to the April adjustment of PMI premiums, which dropped the cost for low risk borrowers and raised them for those with a higher credit risk profile. There has probably also been some impact on the distribution from some larger lenders who have focused on marketing the lower down payment opportunities offered through new GSE products.
While we’re on FHA, VA, and the resulting Ginnie Mae security news…
PennyMac aligned with FHA and VA’s guidelines regarding properties with outstanding PACE loans. Click here to view the required criteria in order for a property to be eligible for FHA or VA financing with a PACE loan.
Wells Fargo Funding is changing the rounding value used to establish its Ginnie Mae (GNMA) I par rates for products with 15- and 30-year terms. Effective October 3, 2016, the rounding value for par rates in eligible GNMA I Commitments will change from the nearest .500 increments to the nearest .125 increments. As of September 19th, Wells Fargo is updating its FICO adjusters to more accurately reflect the market, risks, and associated transaction costs. The following programs are impacted: Government FHA both worsening and improvement in price for various FICO buckets. Government VA both worsening and improvement in price for various FICO buckets Guaranteed Rural Housing Development (GRH) worsening in price for various FICO buckets. Conventional conforming improvement in price for FICO scores less than 680 and greater than or equal to 620.
Envoy Mortgage’s CLD is offering manufactured home products: Conventional Conforming Fannie Mae, FHA 203B, and VA.
Sun West recognizes that in order to improve the services to FHA borrowers with credit scores below 640, specialized analysis is necessary to accommodate more home buyers in this end of the credit spectrum. For all AUTOMATED APPROVALS on FHA loans with FICOs below 640, the following guidelines will be followed: If the borrower’s credit characteristic DOES MEET the Comprehensive Credit Review Guidelines, the loan file will be conditioned per automated findings and there will be NO ADDITIONAL requirements or conditions. If the borrower’s credit characteristic DOES NOT MEET the Comprehensive Credit Review Guidelines, Sun West may ask for documentation, in addition to using the automated findings, to support the borrower’s demonstrated ability and willingness to make timely payments, including documentation related to the borrower’s extenuating circumstances.
For all FHA loans that DO NOT receive a DU Approval or an LP Accept (i.e. FHA Total Score Card), the loan will be evaluated based on manual underwriting guidelines in accordance with HUD handbook 4000.1 and the Comprehensive Credit Review Guidelines.
Banc Home Loans posted Policy and Guideline updates including: FHA and VA Energy Efficient loans are now acceptable at Banc Home Loans. For Fannie Mae loans, Banc will ignore unreimbursed business expenses (even with the 1040 tax transcripts in hand) for W2 borrowers with < 25% commission income. In addition, there is no minimum seasoning on the VA loan being paid off by a Non-Credit Qualifying VA IRRRL- provided the recoupment period < 60 months.
ThomsonReuters’ Michael Ehrlich put out a nice piece on the top 125 GNMA servicers, sorted by a variety of metrics. “The table shows outstanding RPB (remaining principal balance) of GNMA servicing by entity type. Non-Banks just surpassed banks over the past few months with 49.4% of all GNMA servicing RPB. “Servicing of GNMA loans pooled from 2010-2014 reside mostly in bank portfolios (59.02%). Once you jump to 2015 issuance outstanding, you will notice that non-banks are servicing 63% of the remaining current RPB. The top 20 FHA servicers are servicing 75% of the outstanding FHA RPB that are currently in GNMA MBS (8 are Banks, 12 non-banks).
“From January through August, 1,125,912 loans were removed from GNMA pools. Most were due to Mortgagor Payoff at (most being Refi) 678,000. 144,579 loans were removed by the servicer (repurchase of delinquent loans) with Wells Fargo accounting for 45K of those.”
With all this going on, who cares about rates? Yesterday agency the 10-year T-note worsened by .125 but MBS prices closed slightly higher, as did the 5-year T-note led by higher coupons as the treasury yield curve continued to steepen. We’re seeing diminished odds of a rate hike from the Fed next week, and the numbers from yesterday reinforced that.
Does anyone care about inflation anymore? We’ve already had the August Consumer Price Index figures (+.2%, +.3% core, a little stronger than expected). The University of Michigan Sentiment numbers will be released at 10AM ET. In the early going the 10-year is chopping around 1.68% with agency MBS prices are better a smidge versus Thursday’s close.
A waiter brings the customer the steak he ordered, with his thumb over the meat.
“Are you crazy?” yells the customer. “What’s with your hand on my steak?”
“Sorry,” answers the waiter, “I don’t want it to fall on the floor again.”
If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “The Fed’s QE: Help or Hindrance to Lending?” 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 2016 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.)