Oct. 21: AE jobs; non-QM, affordable housing, income products; vendor news; what is driving rates

Great MLOs keep up on events not only impacting their loans but on events impacting the everyone else’s loans as well. For example, the Supreme Court has agreed to rule on the constitutionality of the CFPB’s structure. Saturday’s commentary discussed new developments for the transition away from LIBOR and toward SOFR. For any clients with adjustable rate mortgages the Treasury Department and the IRS issued proposed regulations to help taxpayers avoid negative tax consequences in the transition away from the London Interbank Offered Rate and other interbank rates. And many companies breathed a sigh of relief last week when FASB held a board meeting to discuss the comment letters surrounding the proposed extension to the adoption date of CECL. The board unanimously voted to adopt the language in the exposure draft, which extends the effective date of CECL to 1/1/2023 for many calendar year end entities.

Jobs & products

AmeriHome will be out in full force at next week’s MBA Annual Convention & Expo 2019! With its new Income Flex Non-QM Program, enhanced Core Jumbo program, new BE rate sheet, Non-Delegated Close-on-Time Commitment, and more exciting updates to share, it’s a great time to find out what AmeriHome can do for you. If you’re a bank looking to fulfill CRA requirements, AmeriHome can help with that too! Reach out to the AmeriHome sales team at CLsales@amerihome.com to schedule a meeting, and follow AmeriHome Correspondent on LinkedIn to stay up to date on all of their new products, enhancements, events, job opportunities, and more!

Lender products and services

From Service 1st’s CEO, Curtis Knuth, “Rob, a big thank you to your newsletter team as we’ve received a great response to our product launch at MBA Annual. To your readers that didn’t see, we’re launching a simple income determination solution saving FTEs 40 mins per loan file. e-Mail info@srv1st.com to schedule last minute meetings. Lastly, we’re launching this same solution through NCS to our preferred Alliance Partner channel at the NCRA Annual Conference in Savannah, GA; Nov 5-7. To schedule meetings @ NCRA, please e-mail me directly at cknuth@ncstrv.com.”

Lending solutions provider Data Facts recently announced it is offering a webinar to examine why you should really be taking a second look at Fannie Mae’s Day 1 Certainty program. Data Facts will uncover how it’s been changing the game for lenders, and why it’s never been easier to implement D1C for your business. The free webinar is on Thursday, October 24that 9am CT. Click here to save your seat. Keep Data Facts in mind as a trusted partner you can rely on for credit reports, fraud products, tax return and social security verifications, flood certs, lead gen products, and more. Talk with a live person and take advantage of their personalized support. Offering a variety of seamless LOS integrations (Encompass, Calyx, Byte, etc.) and a 100% US based customer support team, helps lending clients close more loans, faster and easier.

Take charge of your 2020 production and profitability numbers by getting the book Conquering Shifts into the hands of all of your originators as part of your business planning. There are several reasons I recommend this book. First, it provides a road map to origination success, second it provides numerous examples of mortgage originators who made the necessary shifts in their businesses to grow and win. Mike Hardwick, Churchill Mortgage. The authors, Cindy Douglas and Kathleen Heck have done a masterful job of both selecting and interviewing a variety of experts from different regions. What sets this book apart from others is that instead of simply teaching success principles or techniques, the reader sees exactly how they were implemented.” Marty Preston, Benchmark Mortgage. For loan officers and senior management looking to boost production Conquering shifts is a must readDiscount pricing ends October 24.

Chenoa Fund: Helping Homebuyers Overcome Obstacles – Homeownership may be the cornerstone of the American Dream, but achieving it isn’t easy. Even couples with steady jobs and solid incomes sometimes struggle to secure a mortgage, perhaps because of past medical or financial difficulties or high rents that prevent them from accumulating a down payment. State housing programs are intended to support such borrowers with down payment help or other assistance, but many carry restrictions that lock out qualified buyers. Some limit assistance to lower incomes, while others help only first-time buyers. Many frustrated borrowers have found an ally in the Chenoa Fund. With reasonable credit controls and borrower education through a HUD-approved provider, Chenoa Fund programs are helping thousands of buyers escape the renters’ trap and buy homes. The Chenoa Fund is administered by CBC Mortgage Agency, whose mission is to increase affordable, sustainable homeownership across the U.S.

Freddie Mac Single-Family is ALL FOR building the future of home. Affordable lending is evolving and Freddie Mac is ALL IN on providing solutions that enable emerging populations to achieve the dream of HOME. We are changing perceptions by developing products and resources that drive real opportunities for businesses while creating a renewed sense of access for borrowers. Read an Executive Perspective from Danny Gardner, Senior Vice President, Freddie Affordable Lending and Access to Credit, that highlights the value of education and strategic outreach to overcome barriers to homeownership. In addition, don’t miss Freddie Mac’s take on The Future of Affordable Lending in Housingwire. Learn more about All For HomeSM, Freddie Mac’s approach to affordable lending, and discover key insights to inform your business and take advantage of solutions and tools that will further enable your borrowers to make Home Possible®. All in.  All of us.  All For Home.

Exciting things are happening at NewRez! With the acquisition of Ditech into the NewRez family of companies now complete, we combine the expertise and capabilities of the organizations to bring more than ever to our clients. NewRez Correspondent’s national team remains focused on GSE and government business, now under the leadership of John Davis. Lisa Schreiber is leading the growth of a new, national NewRez Non-QM team, delivering more product choices and technology solutions. We look forward to seeing you at the MBA to share more about how we can support your success – find us in the Capital Ballroom at the Omni Austin Hotel Downtown. To make an appointment in advance, contact mba2019@newrez.com.

Vendor vestibules

With hundreds of lenders vying or business from lenders, competition is fierce. Let’s take a random sample and play some catch up on who is doing what out there.

Appraisal management software developer, Anow has announced the release of Anow Enterprise, a cloud software suite that connects individual appraisal companies to form service networks that can efficiently provide localized service at scale. Anow Enterprise’s order management framework enables a true peer-to-peer system, where any participant in the network can originate an appraisal order and route it to others.

Unison launched a home volatility index showing that American homes, considered a bedrock asset and the key anchor of many Americans’ financial portfolios and retirement plans, are as volatile in value as a stock market index. New homeowners are particularly vulnerable to housing market risk, as they typically have the highest proportion of net worth locked in their home and are also the people taking on the most mortgage debt. For details, read the full Unison Volatility Index Whitepaper.

First Allegiance is offering to develop property inspections to meet the needs of its clients. Inspections include, but are not limited to, General Inspections, Occupancy Determinations, Property Condition Reports, Hazard, Insurance, Damage- storm, accident, other, Contractor Inspections- Quality control and more.

Fidelity National Financials’ new Digital Closing Hub is now open. This resource, available to FNF title agents nationwide, was created as the company continues to lead the way on the ever-evolving topic of digital closings. This Digital Closing Hub is another step in the plan to create a better experience for consumers wanting to take advantage of full and hybrid digital real estate closings. It is education-focused and will ensure that FNF’s independent agents have the knowledge and tools they need to utilize everything that adopting digital closings can give them and their customers.

Purchasing real estate auction properties just got easier for buyers with the Hubzu® free mobile app and SMS notifications. Buyers can find detailed property information, photos, receive auction alerts and place bids on properties. Click to learn more.

NRL Mortgage is now offering FormFree’s AccountChek automated asset verification to loan applicants. Bolstering borrower experience with AccountChek’s convenient and secure electronic asset verification, AccountChek gives borrowers a convenient and secure way to verify their assets without having to print, scan or fax bank statements.

Capital markets

Will the US consumer continue to spend heading into the fourth quarter? Last week we saw the first decline in retail sales in seven months due in part to a sharp decline in auto sales. Consumer confidence has stalled and job growth is slowing, albeit the unemployment rate is a very low 3.5 percent. With personal consumption roughly 70 percent of GDP, a slowdown in spending would have a significant impact on growth in the coming quarters. Industrial and manufacturing production is already seeing a slowdown, contracting 0.4 percent and o.5 percent respectively in September. While part of the decline was due to the strike at GM, manufacturing output excluding auto production was still down for the month and has been down six of nine months this year. One bright spot in the economy is single family housing starts, which rose for the fourth consecutive month. Additionally home builder confidence was at a 20-month high in September. Still, housing by itself only accounts for about 4 percent of the economy and the slowdowns in consumption and manufacturing have driven many market participants to expect a 25-basis point rate cut to the fed funds rate following the FOMC meeting at the end of the month.

Prime Minister Boris Johnson finally managed a new Brexit deal with the European Union last week, three months after his “do or die” promise to get Britain out of the E.U. by the Oct. 31 deadline. Markets were temporarily buoyed by investors’ optimism that the plan could actually get a nod from Parliament, but British lawmakers rejected Mr. Johnson’s proposal in a rare Saturday session / vote, bringing the entire mess back to square one. Three possibilities remain: a no-deal exit from the European Union, which could be economically disastrous, a second referendum on whether to leave at all, or a general election that could put new leaders in power. In addition to the uncertainty surrounding Brexit, there have been several notable revolts and protests around the world, forcing Treasury yields lower in the process.

 

Remember, U.S. rates usually go down the more uncertainty in the world/markets, and vice versa. There are rallies & demonstrations around the world grabbing headlines and causing unrest: More than 500k people rallied in Barcelona, Spain, Chile declared a state of emergency after a transportation fare increase set off violence and looting, Lebanese protesters marched in Beirut and other cities calling for the government’s overthrow, Haiti has seen weeks of violent demonstrations and left streets across the country barricaded because of a power struggle between its president and a surging opposition movement, and protestors continue to march in Hong Kong despite an official ban and attacks on the march promoters.

 

U.S. Treasuries ended last week on a mostly higher note, trading in “risk-off” fashion, though it was a dull session in general. Abroad, China reported its weakest year-over-year GDP growth rate in nearly three decades, while domestically, the Conference Board’s Leading Economic Index declined in September, abetting the narrative of a developing growth slowdown for the U.S. economy.

 

Ahead of this week’s FOMC blackout period, markets received some Fed speak on Friday. Fed Vice Chair Clarida affirmed the U.S. economy remains in a good place, despite “evident risks.” Kansas City Fed President George said that her assessment of the economy does not call for a rate cut at this time, though this came after she voted against the rate cut in September. The fed funds futures market currently sees nearly a 90 percent implied likelihood of a rate cut being announced on October 31. This week brings central bank decisions from the Riksbank on Wednesday and the ECB and Norges Bank on Thursday.

 

Today is a light economic calendar, with no economic data scheduled for release. However, markets will receive remarks from Fed Governor Bowman, in addition to the results of a joint BoE, FRB, and ECB conference. Tomorrow brings September Existing Home Sales, before the midweek session reveals the August FHFA Housing Price Index. Thursday sees September Durable Orders and September New Home Sales, before the week closes with a Final October Michigan Consumer Sentiment Survey. We begin today with the 10-year yielding 1.77% after closing last week at 1.75 percent and Agency MBS prices are worse/down a few ticks.

The best of Marcus Lam (part 1 of 5)

People are totally fine with eating the same exact thing for breakfast every day, but consider it too repetitive to have the same thing for dinner two nights in a row.

The only thing scarier than finding extraterrestrial alien life on another planet would be to find other humans on another planet.

Adulthood is finally making enough money to do the things you’ve always wanted, but can’t because you have to spend it on things you never knew you needed.

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, “How Productive is Your Origination Team?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 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.)

Dallas tornado leaves 15 miles of homes with at least 50% damage probability

A series of tornados touched down in Dallas Sunday night, one gliding along the ground for an estimated 14 to 16 miles. And much of that area has at least 50% destruction probability, new data from CoreLogic shows.

The sirens wailed across Dallas as a tornado was confirmed
to have touched down. CoreLogic Weather Verification Services also confirmed
that hail up to 2.5 inches accompanied the storm in North Dallas and up to 1.5
inches south of Dallas.

 The pictures below
show the debris that cluttered the streets and even a city bus turned over by
the storm. But that was even mild in terms of the destruction Sunday’s tornado
left.

CoreLogic meteorologists on the insurance and spatial team showed the area of Dallas the tornado touched down. In the chart below, the lighter magenta shows areas on the path where there is 50% damage probability, the darker magenta represents 70% and the green represents 90%.

The National Weather
Service
confirmed the tornadoes include an EF-3, the one shown above which
hit Dallas, and EF-1 which touched down in Rowlett and an EF-0 which hit Wills
Point.

Reports show at least six people have been hospitalized, but
there have been no major injuries or deaths reported.

Many residents are now displaced, and about 130,000 are
without power across North Texas, according to Oncor.

The post Dallas tornado leaves 15 miles of homes with at least 50% damage probability appeared first on HousingWire.

Harvard: Remodeling market to stall in 2020

Home renovation spending reached a record high this summer, according to Harvard University’s Joint Center for Housing Studies. Although they expected those numbers to continue to soar through the end of 2019, the JCHS now says it expects a complete stall come 2020.

(Image courtesy of Harvard University’s Joint Center for Housing Studies. Click to enlarge.)

The Leading Indicator of Remodeling Activity released by the Remodeling Futures Program at JCHS said that annual gains in homeowner spending for improvements and repairs will dissipate by the second half of 2020.

To that point, the LIRA states that the annual home improvement and maintenance expenditures will post a modest decline of 0.3% through the third quarter of 2020.

“Continued weakness in existing home sales and new construction will lead to sluggish remodeling activity next year,” said Chris Herbert, managing director of the JCHS. “Slowdowns in other key indicators of improvement spending—project permitting, sales of building materials, and home prices—also suggest the remodeling market may be reaching a turning point.”

Back in July, JCHS said that it expected remodeling spending to total a record $331 billion for all of 2019.

Now, the furthest projection in the index (the end of Q2 2020) suggests that spending over the prior 12 months will probably total $323 billion.

“At $325 billion, owner improvement and repair spending in the coming year is expected to essentially remain flat compared to market spending of $326 billion over the past four quarters,” says Abbe Will, associate project director in the Remodeling Futures Program at the Center. “However, today’s low mortgage interest rates may help counter some of these headwinds, which could buoy home improvement expenditure over the coming year.”

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Woodbridge founder Robert Shapiro gets 25 years in prison for $1.3 billion Ponzi scheme

Robert Shapiro, the founder of the Woodbridge group
of companies, will spend 25 years in prison after pleading guilty to charges
that orchestrated a $1.3 billion real estate Ponzi scheme that bilked thousands
of investors out of hundreds of millions of dollars.

Nearly two years ago, the Securities and Exchange Commission sued Shapiro for allegedly running a Ponzi scheme that defrauded more than 8,400 investors by promising high returns on real estate investments.

According to the SEC, many of Shapiro’s alleged victims were
seniors who invested their retirement savings into the supposed Ponzi scheme.

Last year, the SEC ordered Shapiro and the Woodbridge companies to pay back $1 billion for operating the Ponzi scheme.

According to the SEC, Judge Marcia Cooke of the District Court for the Southern District of Florida approved judgments against Woodbridge and its 281 related companies that order the companies to pay $892 million in disgorgement.

Additionally, Cooke ordered Shapiro to pay a fine of $100
million, plus disgorgement of $18.5 million in ill-gotten gains and $2.1
million in prejudgment interest.

But Shapiro’s troubles didn’t end there.

Shapiro also faced criminal charges from the U.S. Attorney’s Office, and according
to multiple reports, Shapiro was sentenced last week to 25 years in prison.

From the South Florida Sun Sentinel:

Shapiro, 62, learned of his fate after pleading guilty last month to mail and wire fraud and income tax evasion. U.S. District Judge Cecilia Altonaga, citing the heart-wrenching stories of a more than a half-dozen victims who testified in court about their losses Tuesday, rejected a defense argument that Shapiro deserved less time because he admitted his wrongdoing and helped authorities unravel his six-year-long fraud scheme.

According to authorities, Woodbridge’s main business model
was to solicit money from investors in exchange for promissory notes that
supposedly reflected loans to Woodbridge that paid high monthly interest rates.

“Woodbridge falsely claimed that these investments were tied
to real property owned by third parties and that the third parties would be
making the interest payments to Woodbridge and its investors; it was portrayed
as an investment in a hard-money lending business,” the U.S. Attorney’s Office
stated. 

“Using high pressure sales tactics, Shapiro and his
co-conspirators marketed and promoted these investments as low-risk, safe,
simple, and conservative. And at minimum, investors were made to believe that
Woodbridge’s real estate dealings would generate the funds used to pay the
return on their investments,” the U.S. Attorney’s Office continued.

But, many of the supposed properties didn’t actually exist.
Beyond that, the few properties that actually existed were secretly owned by
Shapiro.

“Unbeknownst to investors, Shapiro created and controlled a
network of more than 270 limited liability companies, which he used to acquire
and sell the properties pitched to investors,” the U.S. Attorney’s Office
stated.

The company advertised high rates of return for its
investments, but the SEC previously claimed that Shapiro’s companies received
more than $1 billion in investor funds, but only generated approximately $13.7
million in interest income from “truly unaffiliated” third-party borrowers.

And without true income from the supposed investments,
Shapiro allegedly used new investor money to pay the returns owed to earlier
investors – the hallmark of a Ponzi scheme.

In total, Shapiro and his co-conspirators convinced more
than approximately 9,000 investors to invest more than $1.29 billion with
Woodbridge. According to court documents, at least 2,600 of these investor
victims invested their retirement savings, totaling approximately $400 million.

And while the companies may not have been successful,
Shapiro certainly lived like they were.

According to federal authorities, Shapiro misappropriated $36
million in investor money for himself and for the benefit of his immediate
family members, spending  millions on
personal expenditures,

Included among those were $3.1 million for chartering
private planes and travel, $6.7 million on a personal home, $2.6 million on
home improvements, $1.8 million on personal income taxes, and over $672,000 on
luxury automobiles. 

Eventually, Shapiro’s alleged scheme collapsed when the companies were unable to repay interest payments to certain investors. Fundraising from investors then stopped, Shapiro resigned, and most of his companies filed for Chapter 11 bankruptcy.

As part of his plea, Shapiro and his wife agreed to forfeit
certain assets, many of which were seized during a search executed by federal
agents at his home in Sherman Oaks, California.

They include, but are not limited to: artworks by Pablo
Picasso, Alberto Giacometti, Marc Chagall, and Pierre-August Renoir; a
collection of 603 bottles of wine; a 1969 Mercury convertible; luxury jewelry,
including a pair of 14-karat, white gold earrings with two black diamonds
(61.81 carats), two grey diamonds (23.92 carats), two rose-cut diamonds, and
266 round diamonds; a platinum ring with an oval-cut ruby (10.91 carats), two
trapezoid diamonds and 70 round-cut diamonds; a platinum ring with certified
Colombia emerald-cut emerald (9.54 carats), trapezoid-cut diamonds, and 166
round-cut diamonds; and other items.

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Zillow Offers launches in another Florida market

The ever-growing iBuying service Zillow Offers has now expanded into Tampa, Florida.

Starting Monday, homeowners in the Tampa region can now receive an initial cash offer from Zillow within 48 hours of putting their home on the market.

Zillow Offers is already available in other parts of Florida, including the southern region and Orlando.

“With Zillow Offers, we’re eliminating the pain points that disrupt sellers’ lives, like coordinating repairs and showings, while giving them peace of mind on the timing and price,” said Zillow Brand President Jeremy Wacksman. “We’re excited to bring this service to the Tampa Bay area so homeowners can have a simpler, more enjoyable selling experience.”

A Tampa-based broker will represent Zillow in each transaction. Home sellers who request a Zillow offer but decide to sell their home traditionally can also be connected to a local real estate agent to represent them in the sale.

Since Zillow Offers first launched in Phoenix in 2018, it has expanded into 21 other markets across the country.

Zillow has also announced plans to launch Zillow Offers in Cincinnati, Jacksonville, Florida, Los Angeles, Oklahoma City, and Tucson, Arizona by the middle of 2020.

The most recent metro to join Zillow Offers was in Sacramento, its third California market.

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U.S. Bank brings on Peter Gordon as head of emerging payments product and strategy

U.S. Bank has hired industry veteran Peter Gordon as executive vice president of emerging payments product and strategy, the company announced late last week.

In this role, Gordon will be tasked with overseeing the strategy and product development of emerging payments products and services at U.S. Bank.

“Peter is not only a top leader in emerging payments, but his breadth of experience across banking and payments will help us create winning strategies that bring real value to customers,” said Derek White, chief digital officer at U.S. Bank.

While Gordon works to develop the strategy and product development of emerging payments products and services, the company said a key part of his initial focus will be maximizing the use of RTP and Zelle throughout U.S. Bank.

“I’ve had great respect for U.S. Bank throughout my career – in particular, the work that’s been done in emerging payments with real-time payments,” Gordon said. “Today, I’m impressed with the clear-eyed vision that U.S. Bank leaders have on where we will take emerging payments. I’m excited to get to work on the strategies that will deliver great experiences for U.S. Bank customers.”

Prior to joining U.S. Bank, Gordon served as chief revenue officer at PayFi. He has a deep background in real-time payments, including serving as chief executive officer of PRMPayments. He has held at companies such as Mastercard and RBS Citizens, in addition to founding a community bank in Massachusetts. 

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How to survive the disruption of the mortgage industry

We hear the term “disruption” so frequently that it’s started to lose its luster. As a startup founder, I can attest to its overuse. But as Mark Andreessen quipped in 2001, “software is eating the world.” Incumbents are being displaced by software companies in industries across the globe, ours included, and it’s worthwhile to understand where our industry is in the process so you can adapt to ensure your lending business – and people – survive the process.

Former Microsoft executive Steven Sinofsky identified four phases of disruption that typically occur in an industry once new technology challenges the status quo: initial disruption, rapid linear evolution, convergence and, finally, a reimagined industry.

Disruption is subtle at first. With profitable businesses and large customer bases, incumbents barely notice. If they do, they’re dismissive – remember the industry reaction to “Push Button, Get Mortgage” in 2015? The disruptor finds an underserved niche in the market and builds a small customer base. Look at Uber, which launched in June 2010 in San Francisco as an SMS-based black car service targeting Bay Area techies, costing nearly twice that of a taxi. Taxi companies paid no mind to the startup touting “your own private driver.”

By the second phase, disruptors are laser-focused on product development and pleasing their small, loyal base. They view the industry through a new paradigm, prioritizing “low-hanging fruits” that were too small or unprofitable for incumbents to touch. Incumbents are still skeptical; those that do react mount a weak defense. They believe disruptors are fighting a losing battle.

I believe we’re already witnessing the second phase of disruption. We’re seeing a simultaneous surge of point solutions alongside broader, end-to-end platform plays. Like Uber and Airbnb, successful disruptors find real pain points to solve and then leverage their platform to disrupt from a new angle, inviting early adopters to ride their wave of success.

For incumbents, it’s imperative to act before the third phase of disruption. In 2013, Uber entered markets in Europe, China and Africa and unveiled UberX to provide a cheaper, more consistent transportation experience. That same year, many taxi companies released their own apps or banded together on platforms like Taxify, but the damage was done. Scenes of taxi cabs blocking streets and lobbying local governments seem like dying gasps for air to customers who, by 2019, view taxis as a relic of a bygone era.

This is the crux of the “innovator’s dilemma” – an incumbent fears hurting their core business and thus fails to evolve to meet customer demands, making it easier for the disruptor to poach their customers once markets converge. As Netflix CEO Reed Hastings noted when they made the risky leap from DVDs to streaming, “Companies rarely die from moving too fast, and they frequently die from moving too slowly.”

Luckily, the mortgage industry is early in the disruption cycle, and there’s still time to act. Quicken Loans founder Dan Gilbert once called Rocket Mortgage the “iPhone of home financing” but, as more technology disruptors enter the space, their digital-or-die approach might itself be disrupted.

We built Maxwell on the premise that the human relationships at the center of the mortgage loan are the most valuable part of the process, and I’m unconvinced that an entirely digital experience can supplant our need for a personal touch. As software “eats the mortgage world,” we must protect what’s valuable as we ride the wave of disruption (or risk getting crushed beneath it).

It’s not about overhauling your process; it’s about embracing the opportunity to participate in disruption. I’m immensely grateful for our customers who guide our efforts to build software that meaningfully impacts their business. Some are eager disruptors; others treat it as an investment venture, experimenting, measuring and deploying as their investments bear fruit. Neither approach is wrong, and both allow for an enduring focus on their core while delegating the rest to specialists.

As an employer, you have the power to prepare your people for change. Some employees may lack the skills or experience to readily participate in this tech-driven evolution, but through education and engagement, you can ensure they get the necessary technical development and exposure to adapt to technology before the industry shifts and leaves them behind.

Don’t ignore the signs of disruption around you. It’s here and it will impact your business. Proactive measures now ensure that disruption’s impact on your business will be positive as we enter the third phase of disruption.

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This Isn’t Your Average Woodland Cottage

“We spend so much of our lives in boxes,” says Alexis Borsboom, owner of this cottage nestled among the trees on Mayne Island, BC.

The unique shape is just one reason she and her husband moved in. The rest of the story lies inside its walls – and begins with the walls themselves.

That’s because they’re made from cob: a combination of clay, sand and straw that’s mixed with water and then sculpted by hand. The couple fell in love after meeting in a cob-building workshop; later, they purchased the home and built a life constructing cob structures together.

With soft edges throughout and a wooden staircase, the interior of their home seems like something out of a dream – but subtle nods to 70s decor make it feel familiar.

Cob is a little like adobe. But unlike adobe, which is formed into bricks and hardened before building, cob structures are sculpted while the mixture is still wet.

Working with raw earth means there’s not much need for loud equipment on a cob site. And because most of the necessary materials can be gathered from the surrounding area, constructing a cob has very little ecological impact.

This construction style also informs the natural, organic shapes you’ll find throughout a cob home, like arched doorways and a space perfectly sized to fit the wood-burning stove.

The kitchen, which sits just off the living area, is a cozy space with enough room for the essentials – plus a breakfast nook for enjoying a morning cup.

Upstairs, a gently sloping ceiling gives the bedroom and workspace a uniquely homey vibe. And just above that ceiling sits a wide, undulating roof. It’s crucial – it protects the home from wind and rain. With a strong foundation and the right roof, a cob-style home can last forever. But “if it’s left out in the elements, it will turn back into dirt within a year,” Borsboom says.

The door on the second story leads out to a small deck that’s perfect for catching the magical sunsets off Canada’s western coast.

Alexis describes cob-style homes as a “gentle and beautiful way to live.” We couldn’t agree more.

Related: 

  • Quiz: What Does Your Dream Cabin Look Like?
  • Before & After: Low Country Cottage Renovation
  • From Scraps to Sanctuary: A $700 A-Frame Cabin

Traders now see Fed cut next week as a near-certainty

Futures traders now see a rate cut as the near-certain outcome of next week’s Federal Reserve meeting as a stagnant manufacturing sector weighs on the economy.

CME’s FedWatch tool on Monday showed a 91% chance of a 25 basis point cut at the October 29 and 30 meeting of the Federal Open Market Committee. Comments from Fed policymakers prior to entering the traditional pre-meeting quiet period indicated a bias toward a third consecutive cut.

“The U.S. economy confronts some evident risks in this the 11th year of economic expansion,” Fed Vice Chairman Richard Clarida said in a speech on Friday. “Business fixed investment has slowed notably since last year, exports are contracting on a year-over-year basis, and indicators of manufacturing activity are weakening.”

Earlier this month, the ISM index showed September’s manufacturing activity at the most depressed level in more than a decade as the U.S.-China trade war weighed on the economy. That conflict between the world’s two largest economies was the overriding concern of Fed policymakers at the September meeting, according to minutes released Oct. 10.

“The ISM manufacturing index plumbed its lowest level since the depths of the recession in 2009, heralding even more contraction in the factory sector,” Wells Fargo said in a note to clients on Monday. “Until trade policy is clarified in a way that has a degree of permanence, it is not clear what would signal to Fed policymakers that business fixed investment spending is set to improve meaningfully.”

Goldman Sachs on Friday credited the Fed’s prior two rate cuts with offsetting the trade war’s drag on the economy and said the central bankers probably have prevented a U.S. recession.

“While trade restrictions have likely tightened financial conditions – with an estimated growth hit of a quarter to a half of a percentage point – the Fed’s turn toward easing has offset this effect so far,” the investment bank said in a note to clients on Sunday.

Clarida’s warning on Friday of “evident risks” serves as the last word from the Fed before next week’s meeting. The central bank imposes a quiet period starting the second Saturday before an FOMC meeting during which officials refrain from commenting on the economy and monetary policy. The Fed refers to it as a “Blackout Period.”

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Will Supreme Court decision threaten CFPB independence?

On Friday, the Supreme Court agreed to hear the case to determine the constitutionality of the leadership of the Consumer Financial Protection Bureau – a move that has provoked a variety of responses.

As it stands now, President Donald Trump cannot fire the
CFPB director unless it’s for cause. The previous decision made the CFPB
director fireable at will, but that’s not the case anymore as the case
continues to be challenged in court.

And now the Supreme Court will have the final say.

Various groups are torn on the hearing, with some saying a
committee to head the bureau will keep it more accountable and others saying a
ruling against the current structure could threaten the CFPB’s independence.

“If the Supreme Court invalidates the CFPB director’s
for-cause removal protection, it would imperil the agency’s ability to function
as intended, and it would allow free reign for bad financial actors to
influence the agency,” said Yvette Garcia Missri, Center for Responsible Lending litigation counsel. “We’ve already
seen payday lenders successfully push their plan to delay and weaken the payday
rule, and restitution for consumer victims wronged by industry has
significantly declined under the agency’s current political leadership.”

“Congress intentionally created the current structure so
that the consumer bureau could make independent and unbiased decisions to
protect consumers—even when those decisions are opposed by intense lobbying,”
Garcia Missri said. ”The CFPB has been highly effective in responding to
unlawful, abusive practices within the financial services industry. Its
effectiveness and ability to respond to unlawful practices quickly, is
attributable in part to its leadership by a single director and its insulation
from political influence and industry capture.”

But others believe a change in CPFB leadership could
actually bring more accountability to the bureau.

“We urge the Supreme Court to rule that the CFPB as
structured is unconstitutional in order to help ensure government agencies are
accountable to American consumers and voters,” said John Berlau, Competitive Enterprise Institute senior
fellow.

“Under the leadership of current Director Kathleen
Kraninger, the CFPB has made some positive, free-market reforms that greatly
benefit consumers,” Berlau said. “But her good leadership doesn’t change our
belief that the CFPB must be made constitutionally accountable by having a
director subject to at-will removal by the person that Americans elect as their
president.”

Many in the housing industry agree that a board to lead the
bureau would be better than a single director.

“CUNA has consistently advocated for legislation that
provides for a multi-person, bipartisan commission to lead the bureau, as was
originally proposed by the Obama administration in 2009,” said Ryan
Donovan, Credit Union National Association chief advocacy
officer. “A commission is better for consumers because it would enhance the
independence of the bureau, bring diverse perspectives to the policymaking
table, ensure greater stability, and be more consistent with our country’s
democratic principles.”

But there is some worry that Supreme Court Justice Brett
Kavanaugh will be biased in this case.

“Justice Kavanaugh has demonstrated bias against the CFPB on
these exact issues and must recuse himself from this case,” Allied Progress Director Derek Martin
said. “He has previously weighed in on the specific question at stake in this
matter – whether the CFPB director can be fired without cause. This case
deserves to receive truly impartial judgment.”

Kavanaugh reportedly believes the CFPB, as it is currently structured, is unconstitutional.

And he’s written as much.

Back in 2016, Kavanaugh authored the Court of Appeals decision that declared the CFPB
unconstitutional due to its leadership structure. The case that led to the CFPB
being declared unconstitutional, which was brought by PHH, dealt
with how much power the agency’s director held.

In Kavanaugh’s mind, the director of the CFPB is the “single
most powerful official in the entire U.S. Government, other than the
President,” in terms of unilateral power.

The CFPB’s ruling could now change that.

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