Dec. 24: Rates go up, they go down; a deep dive into what is moving rates and deals being done by the Agencies

I’ve been in capital markets since the mid-1980s. No presidential administration has eliminated business cycles. Although stocks have given up their gains from 2018, rates have been moving lower as of late (including this morning due to political issues). At what point, if ever, do people and analysts talking about an economic downturn actually cause an economic downturn? The problem, of course, is that anyone with any money in the stock market has seen their net worth decline, including those saving up for a down payment. Lenders are focused on thinking about aligning their cost structures with current loam volumes, but it is good to know what is going on rate-wise.

Are we going to see another refi boom? Any investor who purchased a fixed-rate mortgage, as a whole loan or in a pool, in the last six months is suddenly concerned about their investment (the loan) paying off early. Can small lenders afford early payoff penalties? And if rates fall, generally a good thing for lenders, but property values fall 10%, what does that do to anyone who obtained a 90% LTV loan in the last year? Refinance with no equity? I’ve seen this movie…

Yes, mortgage prices are based on supply and demand, and MBS traders price them numerically as a spread off of the risk-free U.S. Treasury market. Most mortgage REITs tend to reference “basis” risk in their discussion around sensitivity to Agency MBS spreads. Spread, or basis risk, is simply the risk that Agency mortgage assets (or any other asset) will underperform a benchmark product with similar duration, such as interest rate swaps or treasury securities. Spreads are, therefore, one good metric to identify relative value for holding Agency MBS, or how much one is paid in excess of treasury yields to own the idiosyncratic risks inherent in Agency mortgages (the biggest being prepayment risk). While the duration of MBS and a hedge may be similar, spread widening implies the yield on mortgages has increased relative to that hedge, which all else equal, should improve the levered return available on new investments. Most mortgage REITs prudently hedge to a tight duration gap in their portfolio, but spread risk mostly goes unhedged.

Looking at the economy, many believe that a dramatic slowdown in our economy is imminent but not necessarily reflected in stats – yet. Sure enough, as we wind up 2018, going back to October most US economic indicators continue to look strong. Retail sales increased 0.8 percent in October following a small decline in September. October’s increase was driven by higher gasoline prices and service station sales are expected to fall in November due to declining oil prices. Most categories, however, were in positive territory for the month and consumer conditions are strong heading into the holiday season. Consumer prices increased in October, driven by energy prices as well. Again, these were expected to decline in November. Core CPI was up 0.2 percent in October and up 2.1 percent for the previous twelve months, in line with the Fed’s inflation target. Industrial production inched up 0.1 percent and manufacturing output increased 0.3 percent for the month despite a decline in auto production. Small business optimism remains high and many reported plans for hiring and capital expenditures. Respondents were less enthusiastic about earning expectations as wage pressures and borrowing costs continue to rise.

Non-depository lenders exist because warehouse banks exist and secondary market investors exist. In the secondary markets the Agencies are doing deals, laying groundwork for a single security, and transferring credit risk away from taxpayers to willing buyers. MLOs should know that all these help rates for their borrowers. And next year the secondary markets, and with them the primary markets as beneficiaries, can look forward to the single security!

On December 20, Freddie Mac priced a new $937 million offering of Structured Pass-Through K Certificates, which are multifamily mortgage-backed securities. The company expects the K-086 Certificates to settle on or about December 28, 2018. The K-086 Certificates are backed by corresponding classes issued by the FREMF 2018-K86 Mortgage Trust and guaranteed by Freddie Mac. The trust will also issue certificates consisting of the Class B, Class C, Class D and Class R Certificates, which will not be guaranteed by Freddie Mac and will not back any class of K-086 Certificates. The A-1 class has principal of $43.6 million, a weighted average life of 6 years, a coupon of 3.67%, a yield of 3.28%, and a dollar price of $101.99. Class A-2 has principal of $832.99 million, a weighted average life of 9.86 years, a coupon of 3.86%, a yield of 3.49%, and a dollar price of $102.99. Finally, the A-M class has principal of $61.35 million, a weighted average life of 9.91 years, a coupon of 3.92%, a yield of 3.55%, and a dollar price of $102.99. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.

On December 7th, Freddie Mac priced three new K-deals, structured pass-through certificates backed by floating-rate multifamily mortgages. The first deal, K-F54, mostly mortgages with 10-year terms, has a size of $818 million and is expected to settle on or about December 14, 2018. The pool has a weighted average life of 9.55 years, a coupon of 1-month LIBOR plus 48bps, and a dollar price of 100.00. The second deal, a K-P Series offering comprised of two groups, one group of first-lien and junior-lien mortgages with fixed interest rates and a second group made of first-lien and junior-lien mortgages with hybrid interest rates. Freddie Mac expects to issue approximately $684 million in K-P05 Certificates, which are expected to settle on or about December 17, 2018. The certificates are guaranteed by Freddie Mac and are backed by 60 seasoned multifamily mortgages from the company’s retained portfolio. There are two offered classes to this deal. Class A has a principal amount of $244.5 million, weighted average life of 2.36 years, a coupon of 3.203% with a yield of 3.13% and a dollar price of $99.99. Class AH has a principal notional amount of $440.5 million, weighted average life of 2.56 years, a coupon of 3.254% with a yield of 3.26% and a dollar price of $99.81. The third deal, K-J23, was backed by underlying collateral consisting of supplemental multifamily mortgages. The $161 million in K-Certificates are expected to settle on or about December 14, 2018. Freddie will have two offered classes, class A-1 consisting of $53 million with a weighted average life of 2.75 years, coupon of 3.17%, yield of 3.11%, and dollar price of $99.99, while class A-2 has a principal amount of $109 million, weighted average life of 3.71 years, coupon of 3.75%, yield of 3.26%, and dollar price of $101.4973. K-Deals are a part of Freddie’s business strategy to transfer a portion of the risk losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds, with the certificates normally featuring a wide range of investor options with stable cash flows and structured credit enhancement.

On December 17, Freddie Mac Multifamily priced a $1.1 billion offering of Structured Pass-Through K-Certificates backed exclusively by multifamily mortgages on seniors housing properties. The K-S10 certificates, Freddie Mac’s tenth K Certificate offering backed exclusively by seniors housing, are expected to settle on or about December 20, 2018, and include two senior principal and interest class, one interest-only class and one class entitled to static prepayment premiums, all unrated. Class A-7 has a principal amount of $648 million, a weighted average life of 6.81 years, a discount margin of 56, and a coupon of 1-month LIBOR + 56. Class A-10 has a principal amount of $537 million, a weighted average life of 9.60 years, a discount margin of 61, and a coupon of 1-month LIBOR + 61. Freddie Mac Multifamily sources its seniors housing loans from a select group of multifamily lenders and purchases a variety of seniors housing loans including those backed by independent living properties, assisted living properties, memory care properties and senior properties with a limited amount of skilled nursing care.

Also on the 17th, Freddie Mac priced a new $555 million offering of Structured Pass-Through K-Certificates. The K-1509 Certificates, which are expected to settle on or about December 20, 2018, are backed by corresponding classes issued by the FREMF 2018-K1509 Mortgage Trust and guaranteed by Freddie Mac. The K-1509 Trust will also issue certificates consisting of the Class X2-A, X2-B, B, C and R Certificates, which will not be guaranteed by Freddie Mac and will not back any class of K-1509 Certificates.

On December 18, Freddie Mac priced a new $634 million offering of Structured Pass-Through K-Certificates backed by floating-rate multifamily mortgages with ten-year terms. The approximately $634 million in K-F56 Certificates are expected to settle on or about December 28, 2018.The K-F56 Certificates will not be rated, and will include one senior principal and interest class, one interest-only class, and one class entitled to static prepayment premiums. The K-F56 Certificates are backed by corresponding classes issued by the FREMF 2018-KF56 Mortgage Trust and guaranteed by Freddie Mac. The KF56 Trust will also issue certificates consisting of the Class B, C and R Certificates, which will be subordinate to the classes backing the K-F56 Certificates and will not be guaranteed by Freddie Mac. Class A is offered with a weighted average life of 9.69 years at a discount margin of 56 and a dollar price of 100.00.

On December 13, Freddie Mac priced a new $794 million offering of Structured Pass-Through K-Certificates backed by floating-rate multifamily mortgages with seven-year terms. The K-F55 Certificates are expected to settle on or about December 20, 2018, will not be rated, and will include one senior principal and interest class, one interest-only class, and one class entitled to static prepayment premiums. The K-F55 Certificates are backed by corresponding classes issued by the FREMF 2018-KF55 Mortgage Trust and guaranteed by Freddie Mac. The KF55 Trust will also issue certificates consisting of the Class B, C and R Certificates, which will be subordinate to the classes backing the K-F55 Certificates and will not be guaranteed by Freddie Mac. Class A has a weighted average life of 6.71 years, and a coupon of 1-month LIBOR + 51 for a 100.00-dollar price.

On December 19, Freddie Mac priced a new $720 million offering of Structured Pass-Through K-Certificates, which are multifamily mortgage-backed securities. The K-SL1 Certificates are backed by one loan with floating and fixed rate components and twenty-three underlying properties controlled directly or indirectly by Starlight Group Property Holdings Inc. K-SL1 is expected to settle on or about December 28, 2018. The transaction collateral is part of Freddie Mac’s single-asset, single borrower (SASB) series of certificates, which transfers first loss credit risk on either one or multiple properties owned or controlled by a single sponsorship group. The K-SL1 Certificates will not be rated, and will include three senior principal and interest classes, one interest-only class, and one class entitled to static prepayment premiums. The K-SL1 Certificates are backed by corresponding classes issued by the FREMF 2018-KSL1 Mortgage Trust (K-SL1 Trust) and guaranteed by Freddie Mac. The K-SL1 Trust will also issue certificates consisting of the Class B, C and R Certificates, which will be subordinate to the classes backing the K-SL1 Certificates and will not be guaranteed by Freddie Mac. The AFL class, consisting of $160 million in principal, has a weighted average life of 4.87 years, a discount margin of 47bps, and a yield of 2.8335% for an even 100-dollar price. The $400 million AFX-1 class has a weighted average life of 5.90 years, with a discount margin of S+55bps, a yield of 3.2869% and a dollar price of $100.35.

On November 19th, Freddie Mac announced its second Agency Credit Insurance Structure Forward Risk Mitigation transaction, which transfers up to $400 million of credit risk on a reference pool of single-family loans with a maximum unpaid principal balance of $12 billion. ACIS AFRM is an innovative front-end credit risk transfer offering that allows Freddie Mac to transfer mortgage credit risk simultaneously with the acquisition of loans by securing committed private capital and by providing stable pricing over a pre-determined time horizon. The industry’s largest and most diversified loan reference pool and a multi-tranche structure that accommodates investors with varied appetite for risk. The transaction attracted high demand among insurers and reinsurers, more than doubling the number of counterparties compared with the first ACIS AFRM transaction announced in January 2018 on this reference pool consisting of 30-year fixed-rate loans acquired between Jan. 1, 2018 and June 30, 2019, with loan-to-value ratios between 61 percent and 97 percent. Since the ACIS program inception in 2013, Freddie Mac has placed more than $10.6 billion in insurance coverage while expanding its investor base. Since 2013, the company has transferred a significant majority of the credit risk on approximately $1.2 trillion of UPB on single-family mortgages and grown its investor base to more than 230 unique investors, including insurers and reinsurers.

The U.S. 10-year closed last week unchanged at 2.79% as news of the impending U.S. government shutdown dominated the media cycle throughout the day. The House passed a bill that funded several government departments and provided $5.7 billion in funding for border security but it did not pass the Senate. Separately, but adding to the confusion, U.S. Trade Adviser Peter Navarro told Nikkei that an agreement with China in 90 days will be difficult to attain. China’s annual Economic Work Conference concluded with a statement suggesting, among other things, “Significant cuts to taxes and fees will be enacted in 2019.” China is also said to be maintaining a course of “prudent” monetary policy, which some think leaves the door open for providing policy stimulus via rate cuts.

And to put a bow on the week of Fed news, New York Fed President Williams said that being data dependent means listening to the markets and that the balance sheet runoff is not “inflexible,” implying the Fed could reevaluate its view in 2019 if necessary. Finally, in other MBS-related news, President Trump named current Comptroller of the Currency, Joseph Otting, as acting director of the FHFA beginning on January 6 when he replaces Mel Watt, whose term is expiring. Mr. Otting is expected to serve in the role until Mark Calabira, who has been nominated, can be confirmed.

The only scheduled economic release on today’s calendar is the November Chicago Fed National Activity Index (+.22% versus +.02 expected). There’s an early bond market close ahead of Christmas Day tomorrow. Wednesday brings S&P Case-Shiller Home price Index for October before things pick up Thursday with MBA Mortgage Applications for week ending Dec. 22; Initial and Continuing Claims; FHFA Housing Price Index for October; New Home Sales for November; and Consumer Confidence for December. The week closes with Advanced International Trade in Goods for November; Advanced Retail Inventories for November; Advanced Wholesale Inventories; and Pending Home Sales for November. We begin today with the 10-year yielding 2.77% and Agency MBS prices roughly better .125 on the partial government shutdown spooking the markets – they don’t like uncertainty.

Thanks to Alabama’s Brandon Snider for sending this “Twas the Night Before Closing” video!

“’Twas the night before closing, when all through the house

Not a creature was stirring, not even a mouse;

The boxes were packed in the garage with care,

In hopes that their moving van soon would be there;

The realtors were nestled all snug in their beds,

While visions of commission checks danced in their heads…”

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, “Low Down Payments Can Help Borrowers AND Lenders.” 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 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.)

Dec. 22: Notes/news on the Flood Bill, current (ugh) lending environment, state laws, and LIBOR phase-out

The latest on politics and the Flood Bill? The bill to extend it through May 31, 2019 had passed the House. It had passed the Senate earlier, so it now goes to President Donald Trump for his signature. His signing it would be good, as there are some areas of the nation which have flood warnings as we start winter.

Forget the whole, “Winter is coming” thing. It’s here, both seasonally and, for many lenders, with business conditions. Staff cuts all done, down to skeleton crews? Expenses down far enough to be competitive? Reduced LO comp and lowered max caps? Shifted underwriting to your investors? Somewhat dire, yes, but the industry is expected to do about $1.5 trillion next year, and it has to be originated somewhere! Don’t forget that owners and managers of mortgage companies, and bank mortgage divisions, are smart, savvy business people.

All of that reminded me of a note from an industry vet in San Diego: “I remember the CFO of a San Jose-based mortgage company telling me in the early 1990’s that as year-end was approaching, he instructed the shipping group to work overtime to ship as many loans as possible. For accounting purposes, gains and losses were recorded when loans were shipped. He did not specify which loans to ship and the company needed to report income to maintain its minimum net worth test for its warehousing agreement covenants. But shipping shipped too many loans with losses and the warehouse lenders provided a one-month waiver as the company shipped the loans with gains in January.”

Industry vet James Johnson sent this note. “Rob: You might find this interesting. Last week I had a very nice Holiday lunch with a group of my mortgage banking buddies. These guys are all very current on what is going on in the biz, and we spent a good part of the day discussing today’s tough market and how this might play out. The next day one of the attendees sent me an email commenting, ‘I did not come away with any comfort on how long it will take for the market cycle to turn favorable.’ I think this is the question just about everybody is asking, so I will give you my opinions.

“With one possible exception (a big drop in rates), there is really nothing that is going to make things better any time soon. House sales are slowing, house prices are not going up like over the past few years and are softening in many markets, homebuilding is likely slowing as well. So, no obvious pick up in volume. Margins are not good right now and will not get better until we see a considerable reduction in capacity, both through failures, consolidations, and eventually people leaving the industry. During our lunch discussion, we all saw this process taking some time to play out.

“My personal opinion is this consolidation trend will accelerate in 2019, but things will not get better until 2020 or more likely 2021. In the meantime, it is only a guess how many casualties we will have. Your comments about owners bleeding capital and having to put personal money back into the business are right on the mark, and we all wonder how long that will continue? I think our consensus was that bleeding capital makes no good business sense, but owners are determined to ride out the storm and will continue to battle the trends. Most of the company owners I talk with are actually pretty realistic about what is going on but are reluctant to make moves to do something about it. That is why I see this whole down market dragging on with a slow bleed. Too many owners will either go under or lose half of their net worth before things stabilize. A sad commentary.”

The Mortgage Collaborative’s COO Rich Swerbinsky has some thoughts on where the residential lending industry will be in 2019, as well as the twenty things most “top of mind” for individual lenders.

State law changes impacting lenders

Things quieted down for state-level changes in December, but many states have residential regulations under consideration heading into 2019.

The Washington Department of Financial Institutions (DFI) has recently issued interim guidance on the use of a trust account when receiving reimbursement for payments to third-party service providers. The DFI plans to implement this guidance through rulemaking in 2019. Through this new guidance, the DFI seeks to clarify the Washington Mortgage Broker Practices Act as it applies to the use of trust accounts.  The DFI provides an interpretation for, but does not amend, the Act. As industry practices have changed over time, the DFI has determined that consumers can be protected, and the regulatory burden lessened, by providing a simplified interpretation.  The DFI’s new guidance states that: 1) funds received by a broker from or on behalf of a borrower for payment to third-party providers prior to closing are considered trust funds; and 2) funds received by a broker from a settlement agent or lender, on or after closing, for reimbursement to the broker solely for payment to third-party service providers, are not trust funds.

The Ohio Legislature has passed SB263, the Notary Public Modernization Act, a bill supported by OMBA. The legislation is on its way to the Governor to be signed into law. The bill will give the ability to consumers to choose to conduct their real estate finance transactions using remote online notarial acts and will modernize the notary function. Notarial acts are a necessary component of the residential loan closing process.  As the industry continues to serve consumers’ needs by using online, mobile and other electronic means, it had become clear that Ohio needed a law in place to support this technology shift. The legislation makes remote online notarizations equivalent to traditional notarizations without risks and unnecessary barriers. The legislation provides appropriate safeguards that ensure that fraud and capacity issues are appropriately addressed by the remote notarization process. The legislation also provides needed reform in the notarization process and raises the professional standards for those performing the notary act.

LIBOR developments

Most lenders have current adjustable-rate products, or servicing, tied to various indices. Including the London Interbank Offered Rate (LIBOR). At the current time the plan is to phase LIBOR out, given past indiscretions regarding fixing, and the Mortgage Bankers Association is watching it. Dan Fichtler reports, “The MBA is spending quite a bit of time on the transition away from LIBOR. On the residential policy side, MBA has a working group on the mortgage-related elements of the transition – this group is our main venue for all of our policy work on the issue. Our main goal (aside from educating our members…see more below) is to serve as a forum for establishing best practices and/or standardization for the industry. This will include discussions around criteria for choosing new benchmarks for future production, operational issues related to servicing legacy loans tied to LIBOR, new consumer and other disclosures, and changes to fallback language in contracts.

“We have also been covering the issue through our policy committees and conferences. Our Secondary & Capital Markets Committee and Community Bank/Credit Union Network have heard from senior officials from the Fed and ICE (the administrator of LIBOR). We have also had panels on the LIBOR transition at our Secondary and Financial Management conferences, with more coming in 2019. These efforts are largely meant to provide information and education to our membership.

“As far as the GSEs, our expectation is that they will be spending more time in 2019 determining: 1) what they will accept in terms of future production; and 2) what benchmark(s) they will use for servicers of legacy loans tied to LIBOR. We hope to work with them on issues like potential changes in the note language and the developments of timelines and implementation instructions (a la the Single Security Playbook, for example).

“Finally, we are encouraging all of our members to identify their LIBOR exposures now…that’s an important proactive step that institutions can take, even if they don’t have answers to questions related to future production and servicing just yet.”

The Swiss Financial Market Supervisory Authority has issued guidance on replacing Libor, warning that moving to alternative reference rates has legal, valuation and operational-readiness risks. FINMA says amending contracts that mature after 2021 “to include practicable fallback clauses could help minimize potential legal risks”.

SIFMA weighed in with some history and where the capital markets are on moving away from LIBOR and toward SOFR. “Another significant change impacting markets is the transition away from the London Interbank Offered Rate (LIBOR) as the standard reference rate. It is estimated $200 trillion of financial contracts and securities ($190 trillion in derivatives; $10 trillion in corporate bonds, mortgages, securitized products, credit card receivables, etc.) are tied to LIBOR, being used by small businesses, corporations, banks, broker- dealers, consumers and investors as a benchmark for short-term interest rates. In response to concerns regarding the reliability and robustness of LIBOR and other reference rates across the globe, the Financial Stability Board (FSB), as established by the G20, and Financial Stability Oversight Council (FSOC) called for the development of alternative risk-free benchmark interest rates supported by liquid, observable markets.

“In the U.S. in 2014, the Board of Governors of the Federal Reserve System and the New York Fed established the Alternative Reference Rates Committee (ARRC), which eventually selected the Secured Overnight Financing Rate (SOFR) as the recommended alternative reference rate for the U.S. LIBOR is based on thinner markets and is not fully transaction based – the most active tenor (three months) posts less than $1 billion transactions per day – and submitted rates typically include expert judgement from market participants when determining the rate. SOFR, however, is based on the overnight repo markets, with over $700 billion of transactions per day. It is fully transaction based and therefore regarded as more robust than LIBOR.

“The ARRC will continue to lead the transition away from LIBOR. Its objectives include, among others: identifying best practices for alternative reference rates and contract robustness; making recommendations for developing an implementation plan for orderly transitions away from LIBOR on a voluntary basis; and working with market participants to encourage the development of sufficient liquidity in futures and swaps markets referencing the new rate. The ARRC’s plan for a smooth transition away from LIBOR is ahead of schedule.”

While the ARC’s work in the U.S. is helpful, bank legal experts are concerned financial regulators in different countries may embrace inconsistent fallbacks to replace Libor. Uncertainty about Libor fallbacks is making it difficult for banks to plan and is prompting calls for a supranational approach. Stay tuned!

(Yes, this is a gal’s joke; I am merely passing it along.)

Looking in the mall for a cotton nightgown, I tried my luck in a store known for its hot lingerie. To my delight, however, I found just what I was looking for.

Waiting in the line to pay, I noticed a young woman behind me holding the same nightgown. This confirmed what I suspected all along, that despite being over 50, I still have a very “with it” attitude.

“I see we have the same taste,” I said proudly to the 20-something behind me.

“Yes,” she replied. “I’m getting this for my grandmother for Christmas.”

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, “Low Down Payments Can Help Borrowers AND Lenders.” 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 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.)

Dec. 21: AE, LO jobs; LO tools, loan defect report out; shutdown’s possible impact on lenders; Verus non-QM deal

Welcome to the Winter Solstice with more daylight in the Northern Hemisphere every day for the next six months. Today is definitely greeted by residents of Fairbanks, Alaska where the sun sets at 2:40 in the afternoon (with a high temperature of -14). More sunlight isn’t all that’s going to be happening. According to Private Communities Registry (PCR), an online resource for real estate shoppers interested in “amenity-rich, master-planned lifestyle communities,” buyers do their most serious research for a second home in the winter, right after Christmas. What else? Oh yeah, another potential government shut down. We’ve been through this before, right? Caribou and hibernating animals will have to leave the national parks. Lots more below.

Jobs & new roles

Mountain West Financial continues to expand its footprint in Wholesale. “We are pleased to announce a rare opportunity, as we are currently looking for top sales professionals with 3-5 years’ experience that have established, quality broker relationships to join our Elite Wholesale Team. In addition to our large variety of lending options, we are industry leaders in the affordable housing arena. There is a reason we have been voted a Top Workplace 4 years running; we excel in creating relationships. If you are interested in being a part of the Mountain West family, send your resume to Laura Martell.”

Angel Oak Home Loans is proud of our phenomenal growth and success due to exceptional customer service, commitment to clients, and an innovative line of structured portfolio loans. Our products are ideal for buyer’s diverse loan needs such as an in-house Jumbo program, Asset Qualifier, and Bank Statement among others. We help self-employed, those with a past credit event, and investors to name a few. Success is the goal for all of our partners whether you are a client, buyer, or loan officer. Loan officers receive internal leads to help develop and grow their business. If you are interested in joining our team of experts at Angel Oak Home Loans, please contact Lee Williamson.

Congrats to Maria Vergara who has joined Fannie Mae and will be overseeing Fannie’s affinity and industry partner relationships. Maria has over twenty years of experience and in-depth knowledge of the financial, investment and housing industries while serving in senior management roles at organizations such as NAHREP, CitiMortgage Prudential/Wachovia, and Edward Jones. (Maria is taking the place of long-time vet Beth Millstein who is retiring at the end of March.)

Lender products and services

If this challenging market environment has you searching for answers on improving your profitability and competitive position, why not tap into insightful benchmarking that is trusted by the industry and is based on current transaction level data specific by channel? ICON’s LendersBenchmark™ analytics platform delivers the actionable insights you need while there is still time to impact your performance. Insights on your competitive position and relative results in the marketplace are easily gained across product, risk and geographic segments by benchmarking your production and pricing versus the market. Focus less on trying to access and process data for reporting and spend more time understanding the actions you can take to positively impact your performance with LendersBenchmark™. Contact our VP of Client Success, John Sayre, to learn more.

Don Calcaterra, Jr., VP of the Community Home Lenders Association (CHLA), is testifying at today’s House Financial Services Committee hearing on GSE reform. CHLA will present its views from the small IMB perspective: Maintaining cash window and small/mid-size lender securitization execution and prohibiting volume discounts by guarantors and securitizers. CHLA will also raise concerns about proposals to use GNMA as the vehicle for what is currently the entire GSE market. This comes in the wake of reports that GNMA is curtailing small IMB commitment authority requests, raising net worth requirements beyond posted requirements, and taking other actions that could curtail smaller issuer participation.

CHLA is warning of small issuer scrutiny that appears disproportionate to credit risk, at a time when GNMA is making $1.5 billion in annual net profits. CHLA expects to issue a report on GNMA in January, with recommendations to preserve full participation of smaller IMBs as GNMA issuers.

Looking for ways to grow your business? Freddie Mac is collaborating with clients to deliver automation and insights that provide a competitive edge. Cut back on documentation and reduce time to close with Loan Product Advisor® automated income and asset assessment capabilities. Save borrowers time and money with ACE appraisal waivers, now available for certain condo unit loans. Grow your condo business with Freddie Mac’s unit-level condo exception tool, Condo Project AdvisorSM. Get greater efficiency with simpler collateral QC and underwriting in Loan Collateral Advisor® Get The Freddie EdgeSM.

ARMCO Q2 2018 QC Trends Report: Defect Trends Indicate Continued Lender Downsizing – “In Q2 2018, we saw continued increases in defects typically resulting from downsizing and understaffing,” said Phil McCall, president and COO of ARMCO. “This seems to indicate that many lenders are still responding to the reduction in business and compressed margins with personnel changes, even in a purchase-dominated market.” The report’s

Noteworthy findings for Q2 2018 include: A significant quarter-over-quarter increase (23.8% over Q1 2018) in defects related to Loan Package Documentation, which are often associated with downsizing and understaffing; the majority of defects were attributed to the Income/Employment category; core underwriting and eligibility issues were the most frequent cause of critical defects; defects attributed to Borrower and Mortgage Eligibility increased by roughly 70%, from 6.57% in Q1 2018 to 11.36%. READ THE FULL REPORT

PerfectLO.com has solved your problems in your office by designing the only true interactive loan interview that asks every question systematically. A completed 1003 is useless and is painful if your LO fails to ask the 2nd and 3rd level questions that don’t exist on the 1003. PerfectLO creates an exact doc checklist based off the borrower’s answers. PerfectLO now offers a customizable questionnaire for your HELOC, reverse, commercial, auto and personal loans. Customize your solution today!  Sign up for a free trial and demo. How can you have a digital mortgage if you still have to think and ask dozens more questions and figure out what you need for documentation? Schedule a live webinar with their team and you will see why PerfectLO is the smartest and best POS for mortgage on the market.  They speak ‘mortgage’ not . Multi-language, upload, realtor interaction, SMS dashboard updates and more.”

Shut down

A shutdown would further reduce confidence in government? Guess what? It can’t go much lower. Once again, we can all follow the inability of our government to come to a decision, or an agreement, about its fiscal responsibility. What happens to the process of making a home loan if the government actually shuts down? Too bad the government doesn’t produce a single source, but here is a good start: A list of contingency plans from 2015.

Because Congress has already approved a portion of the various appropriations bills, only certain agencies would be impacted by a shutdown, such as HUD (including FHA and Ginnie Mae), USDA (including RHS), and Treasury (including the IRS). Authorization for the National Flood Insurance Program is also set to expire at this deadline.

If the government shuts down today, every non-essential government employee should wake up really late and smile. After all, they are lucky. When private companies have budget problems, the people on the non-essential worker list don’t get a three-day weekend. They get a six-month ‘vacation’ of sending out resumes, eating Ramen noodles, worrying about their mortgages, and filling out applications. In comparison, the furloughed government workers will have some time to enjoy the holidays in D.C.

The mainstream press won’t let this happen, but what if the U.S. government shut down and no one noticed? Even worse (or better, depending on one’s point of view), what if all federal workers went on furlough and the public realized there were benefits, not just costs, to smaller government? Essential services will be maintained, including the distribution of Social Security checks. Employees involved in the military, national security and law enforcement will stay on the job. Non-essential workers will be furloughed.

Since it doesn’t rely on Congressional funds, the Federal Reserve (central bank) would remain open for business as usual, with normal staffing levels. The Fed would therefore be able to continue with its day-to-day operations. The SEC is expected to continue operations as well. But lenders and vendors were out warning originators about possibilities. Not so with the IRS or SSA – open but good luck avoiding delays. NMLS offices will probably remain open during any government shutdown. The Federal Home Loan Banks? Open.

HUD has a plan. Reportedly the FHA will be able to endorse single family loans, with the exception of Home Equity Conversion Mortgages (HECMs) and Title I loans, during a shutdown. It is said that the VA will continue business as usual during a shutdown. But any pending Case Number, LDP, GSA, CAIVRS, 4506T, and SSI Validation be ordered as soon as possible. If a shutdown does occur, FHA Connection and VA Information Portal may or may not be available, 4506T, IRS Transcript processing and SSI Validation will not be available.

MBA has created a guide should a partial Federal government shutdown take place on December 22.

Capital markets

Some say non-QM lending is doing just fine. Critics say its volume is a tiny percentage of overall originations. This week correspondent investor Verus Mortgage Capital (VMC) completed its seventh rated RMBS transaction for $442 million, the second largest in VMC history, and its fourth securitization this year. Rated by S&P Global Ratings and Morningstar, the transaction included 809 owner occupied non-QM loans as well as non-owner occupied loans from 61 lenders. VMC is backed by Invictus Capital Partners. VMC purchases loans in all 50 states and the District of Columbia and focuses solely on the non-agency market. VMC has purchased in excess of $3 billion in expanded, non-agency loans since its inception. In addition, through its affiliates, VMC has completed seven rated securitizations.

The U.S. 10-year closed Thursday +1bp to 2.79%, as we saw further yield-curve flattening with markets digesting Wednesday’s FOMC statement and preparing for a potential U.S. government shutdown as President Trump indicated he would not sign the stop-gap bill that passed through the Senate, which would have pushed the shutdown date back to February 8. Media outlets had a field day with the resignation of Defense Secretary Jim Mattis as speculation abounded regarding the future of the Trump administration. Separately, House Speaker Paul Ryan said that President Trump indicated he will not sign a stopgap funding bill that does not include funding for the border wall.

Internationally, the Bank of Japan made no changes to its policy stance; the Hong Kong Monetary Authority raised its base rate by 25 basis points to 2.75%, as expected; Sweden’s Riksbank unexpectedly hiked its repurchase rate by 25 basis points to -0.25%, noting that economic activity is strong and inflation is expected to remain close to target in the near term; the Bank of England voted unanimously to keep its key rate and purchase program at their respective 0.75% and GBP435 billion; and Banxico raised its overnight rate by 25 basis points to 8.25%, as expected.

Today’s heavy economic calendar kicked off with updates on Durable Goods and the final look at 3rd quarter GDP. GDP clocked in at 3.4%, lower than expected, but it is old news. Durable Goods were +.8%, less than forecast with plenty of negative numbers “under the headline.” Coming up is Personal Consumption Expenditures (PCE). The core PCE deflator is forecast unchanged at 1.5%. November personal income expected increasing 0.2% MoM with consumption rising 0.3% and the Core PCE Price Index rising 0.2% MoM and 1.9% YoY (versus 1.8% previously). The University of Michigan Sentiment Index, also ahead, is seen declining at 10:00am, as is the KC Fed manufacturing print 30 minutes later. We begin today with the 10-year yielding 2.79% and Agency MBS prices better by .125 versus Thursday’s close.

Santa was very cross. It was Christmas Eve, and NOTHING was going right.

Mrs. Claus had burned all the cookies.

The elves were complaining about not getting paid for the overtime they had worked making toys and were threatening to go on strike.

The reindeer had been drinking eggnog all afternoon.

To make matters worse, a few of the other elves had taken the sleigh out for a spin earlier in the day and had crashed it into a tree.

Santa was furious. “I can’t believe it! I’ve got to deliver millions of presents all over the world in just a few hours, and all my reindeer are drunk, the elves are walking out, and I don’t even have a Christmas tree! I sent that stupid little angel out HOURS ago to find a tree and he isn’t even back yet! What am I going to do?”

Just then, the little angel opened the front door and stepped in from the snowy night, dragging a Christmas tree.

The angel said, “Yo, fat man! Where do you want me to stick the tree this year?”

And thus, the tradition of angels atop the Christmas trees came to pass…

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, “Low Down Payments Can Help Borrowers AND Lenders.” 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 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.)

Dec. 20: AE & LO jobs; subservicer, AMC, warehouse predictive products; vendor news; rate hike squeezing lenders and banks

All kinds of things are being found. A woman in Missouri’s “tiny house” was found after being stolen. Then New York Times found more money to pay its crossword puzzle constructors ($500 for a weekday edition). Of the $300,000 scattered from a Brink’s armored truck in New Jersey, $125,000 has been “found” and turned in. (My guess is the $188,000 can still be found in wallets of turnpike travelers.) And I am pleased to announce that, after yesterday mentioning United Security Financial, a second Black/African American-owned mortgage bank has been “found” in the United States. President Mike Yates wrote, saying, “Best Capital Funding was established in 2008. We are a FNMA / FHLMC approved seller servicer in the San Fernando Valley of Los Angeles and are licensed in 25 states doing both wholesale and retail.” Thanks Mike!

Jobs & retirements

FirstBank Mortgage, a division of FirstBank with $5B in assets, is aggressively seeking loan officers and teams throughout TN, AL, & GA that possess an entrepreneurial spirit and love to work hard and have fun while doing it. “Backed by a management team of former producers, FirstBank Mortgage has the technology, training, pricing and marketing to help you exponentially grow your business and industry knowledge. Expansive product offerings include portfolio, jumbo, super jumbo, multiple down payment assistance programs and expanded credit programs. Come thrive in an environment where your voice is heard, your opinions matter, and the customer comes first. Excellent compensation package included.”

New Year – Fresh Start! Are you an experienced Wholesale Account Executive wanting to make a change? Looking for a company with an entrepreneurial mortgage culture of collaboration, team-based success, and the security of working for a bank? Then it’s time to call Florida Capital Bank’s Andrea Lefebvre, SVP, National Director of Production (617.899.1428), or Bob Eisendrath, National Account Manager (414.350.3986). “FLCB is agency approved and has a suite of portfolio products along with money back service level agreements that will set you apart from your competition. Come join our bank and have some fun again with a team environment where everyone is passionate about delivering an exceptional customer experience with every loan. We offer competitive compensation, an energized culture, and an experienced operations & support staff.” Florida Capital Bank is an Equal Opportunity/Affirmative Action Employer.

Caliber Home Loans, Inc. has made BIG strides in 2018. In Q1, Caliber introduced one of the industry’s largest suites of mobile apps – for its retail and wholesale producers, its customers and its real estate agent contacts across the country. The result? Big, of course! Over 100,000 app downloads and customer payments of over $340 million as of last week. In Q2 came big product news from Caliber, with the introduction of Elite Access – a jumbo non-agency loan product – which has a $3 million loan limit and no MI. This also yielded an increase of 122% in non-agency production for Caliber since June 2018. Caliber ended Q3 2018 with a year-over-year increase of 25.9% in government volume, earning a #3 ranking industry-wide, according to Inside Mortgage Finance. If you’re a producer with big goals in 2019, join a lender with big results. Contact Jeremy DeRosa or visit www.joincalibernow.com.

Primary Residential Mortgage, Inc. (PRMI), announced the retirement of two of its co-founders and long-time executives, CEO Dave Zitting and CFO Steve Chapman. Former VP of Finance and Board Member, Kenneth Knudson, will assume the role of CEO and president at the conclusion of 2018.

Congrats to Pennsylvania’s Sherry Wallace for her promotion to AVP overseeing of CNB Bank’s mortgage process to include product development, pricing, underwriting, documentation, funding and reporting for 41 branch offices of CNB Bank, ERIEBANK, FCBank and BankOnBuffalo. Wallace joined CNB Bank in 1995 as head teller.

Lender products & services

Mortech, the mortgage technology business Zillow Group acquired back in 2012, recently rolled out a new customer retention platform. The solution leverages property data on Zillow’s websites and mobile apps, which average more than 175 million unique users per month (according to Google) and capture more than 2/3rds of the U.S. market share of real estate internet traffic (according to comScore). Using a proprietary prediction model, the platform periodically identifies the likelihood that addresses within a lender’s database will be listed for sale within 90 days. These predictions provide lenders the advantage of proactively reaching out to customers via out-bound calling, emails, etc. who are likely to need a new mortgage at an opportune time with relevant messaging. For more information – contact Mortech Sales via email or call 1-855-298-9327.

Warehouse Line New Year’s Resolution: Don’t get caught on the short list. “With the industry facing reduced originations and compressed profit margins, you may find your warehouse lender revisiting the terms of your agreement. Now is the perfect time to make a change and partner with a bank that is more agile with the terms and conditions of a warehouse line. At FLCB (Florida Capital Bank) we’ll negotiate customer specific terms, regarding covenants, haircuts, pledge accounts, per loan fees, line rates, non-usage fees and more. We have over 80 approved takeout investors, in addition to our own competitive products. Don’t wait until the end of the year to partner with a cost effective and efficient warehouse team. Contact Dan Hastings, CMB, National Warehouse Sales Manager (318-547-1357) to ring in the New Year with a warehouse line tailored with the best terms to meet your 2019 business goals.”

SettlementOne continues to push the mortgage valuation industry to its limits. With a focus on removing all that was stale in the appraisal process and injecting a much-needed human touch, SettlementOne has reinvented the AMC model. In order to help get loans closed faster and with less hassle they have flipped the appraisal management model to be proactive instead of reactive. Finally, an AMC is using data up front to get the right appraiser to evaluate the property. The results are amazing when you start with the most knowledgeable appraiser, not just the most convenient. Furthering their commitment to innovation and excellence, SettlementOne also continues to expand its network of partnerships within the industry and is thrilled to announce a new partnership with American Financial Resources (AFR) for both retail and wholesale appraisal services. For more information on the partnership, click here.

Hurry! For every approved new lender that signs up with TMS before Dec. 31st, they’ll donate $250 to Family Reach —a national non-profit dedicated to alleviating the financial burden of cancer. You can sign up here.

Do you use Dovenmuehle, Cenlar or LoanCare as your subservicer? Richey May & Co., a public accounting firm recognized as the leader in providing audit, tax, and compliance services within the industry, is planning its 2019 subservicer oversight review program to assist companies with their monitoring and oversight responsibilities. Richey May’s program and subsequent 120+ page report provides value beyond the basic compliance requirements, including face-to-face interviews with all key department heads to observe their processes and challenges, a comprehensive review of business continuity and IT assessments to ensure client and consumer information remains secure, and a summary of the subservicer’s notable accomplishments and strategic initiatives for the future. The optional loan level testing provides succinct and valuable insight into how your personal portfolio is being serviced, potentially uncovering unobserved information and assisting in the client-subservicer relationship. To learn more or to participate in the 2019 oversight program, please contact Kevin Lohry.

2018 has been hard on lenders and who knows what next year will bring. The theme for 2019 will be efficiency and technology; how do you streamline processes without breaking the bank? Strategic Compliance Partners (SCP) has responded to the evolving mortgage lending industry with compliance technology solutions for vendor management and social media to help you increase productivity and streamline processes. SCP’s vendor management software ShareDiligence is a shared approach to vendor management that is often more affordable and time efficient than the competition. With SocialEyes for Lenders launching soon, SCP will be providing a secure and compliant way for Lender’s to promote employee advocacy on social platforms. To learn more about ShareDiligence or other SCP technology solutions, contact Leslie Benjamin (301.578.6002).

Simplify your underwriting process with Loan Product Advisor® asset and income modeler (AIM). Through the expertise of third-party service providers, AIM automates the manual processes of assessing borrower assets and income. AIM reduces the burden of traditional documentation, speeds up the loan origination process and helps you close loans faster. Freddie Mac is working hard to bring you solutions that create efficiencies for your business and improve the borrower experience – giving you a competitive edge. These capabilities are available for Loan Product Advisor submissions and resubmissions on and after December 9, 2018. Gain greater efficiency in your underwriting processes with AIM – get The Freddie Edge.

Vendor news

At its national convention, the National Association of Mortgage Brokers (NAMB) announced the launch of its new platform, NAMB All-In. Powered by Calyx Software, NAMB All-In provides mortgage professionals with the three essential components they need to conduct business: a point-of-sale solution (POS), a cloud-based loan origination system (LOS), and a single point of access to premier wholesale lenders—the Calyx Wholesaler MarketPlace. Participating wholesalers include Stearns Lending, Plaza Home Mortgage, Quicken Loans, Freedom Mortgage, Caliber Home Loans, and United Wholesale Mortgage. Additional institutions are scheduled to onboard in early 2019. In addition, because NAMB believes in an open market, brokers can still export a FNMA 3.2 file to work with any wholesaler that is not in the network. NAMB All-In is available to all NAMB members at no cost and will be ready for use in January 2019. For more information, visit www.NAMBAI.com.

Equifax announced the release of its Mortgage Lead Generation Models, a new solution that uses connected and differentiated data to help predict the likelihood that a lead will apply for a mortgage within the next two to six months. This solution aims to help mortgage lenders better identify prospective buyers earlier in the process and retain them. The solution uses credit, wealth/asset, property and demographic data, and includes four different models, which are segmented based on the consumer profile: New purchase, First-time home buyer, Refinance and HELOC. Equifax’s models create a score that appends to a name and address provided by the lender or even identify new leads for those likely to transact in specific geographic areas to assist lenders in better execution of marketing campaigns. In an internal test of the solution, Equifax found impactful lift across segments: The top 10 percent of the scores captured between 2.4 to 4 times more mortgage applicants than a randomly selected sample of equal size.

Finicity and Princeton Mortgage announced an integration agreement in which Princeton Mortgage’s digital mortgage platform, SnapApp, will leverage Finicity’s Verification of Assets (VoA) solution to give lenders access to the data insights they need to streamline the loan application process. “Borrowers want an effortless mortgage experience, and with our new SnapApp they get just that. Through SnapApp’s automated digital mortgage process, borrowers can apply, verify their income and assets, pull their credit, run an automated approval and even receive a pre-approval letter in the middle of the night, at their convenience,” said Nicole Gordon, Princeton Mortgage Sales Enablement Manager. “We are excited to partner with Finicity to help make this digital mortgage process seamless and simple.”

Capital markets

As expected, the Federal Reserve has raised the target range for its benchmark interest rate to 2.25% to 2.5%, despite opposition from President Donald Trump. (The central bank has trimmed projections for next year to two increases.) Fixed-income security prices rallied, pushing yields to the lowest point since early April 2018. The yield curve flattened even further, with the 2-year 10-year spread falling to 10 bps, while 2-year to 5-year spreads actually inverted. Mortgage rates also continued to fall with many lenders posting rates in the 4.5-4.625% range yesterday. Falling rates may help spark some uptick in production but the flat curve will continue to hurt mortgage banker margins (since warehouse costs go up) and bank net interest margins. Stock markets weren’t happy with the somewhat dovish elements of the statement, thus the slight yield-curve flattening and the S&P reaching a 2018 low.

The U.S. 10-year closed Wednesday -5bps to 2.78%, as Treasuries across the curve all moved in the same direction after the afternoon release of the December FOMC rate decision. Remember that even though the Fed raised interest rates, this had been expected and baked into market prices for a while. The fed funds target rate range is now 2.25%-2.50%, as expected, though the rest of the statement and economic projections were not as hawkish as prior meetings. The 2018 inflation forecast was lowered to 1.9% from 2.1% while the outlook for inflation in 2019 was lowered to 1.9% from 2.0%. The FOMC narrowed its GDP growth forecast for 2019 to 2.3%-2.5% from 2.4%-2.7% estimated in September, and the median estimate of the neutral fed funds rate was reduced to 2.8% from 3.0%. Rate hike projections expect the fed funds rate being increased above the rate that is perceived as neutral.

Following yesterday’s Fed decision, the Bank of Japan and Bank of England came out with their latest policy decisions ahead of today’s open. The US calendar is busy with the usual weekly jobless claims (214k) and the Philadelphia Fed Manufacturing Business Outlook Survey (dropped to 9.4). Finally, November leading indicators are seen rising 0.1% MoM at 10:00am ET. We begin today with the 10-year yielding 2.76% and Agency MBS prices worse .125-.250 from Wednesday’s close.

How about a little fun holiday from the USAF band? (Thanks to Robert K. for this one – definitely entertaining.)

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, “Low Down Payments Can Help Borrowers AND Lenders.” 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 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.)

Dec. 19: LO jobs; vendor search & tech tools; lender M&A continues; global slowdown pushing U.S. rates

There are lots of interesting questions out there. “Why didn’t Tarzan have a beard?” for example. Another is, “Do borrowers know about low down payment loan options?” Lenders and LOs should be educating borrowers on the advantages of these in the slow months. And, “Are there any African American-owned mortgage banks?” NAMMBA’s Tony Thompson answered with, “There are several African American-owned banks who usually reside in local minority markets with 3-5 retail branches but they focus primarily on deposits and SBA loans. There is only one African American owned mortgage bank. Utah’s United Security Financial primarily does servicing but originates some residential loans and is owned by Lois Johnson. It is licensed to operate in 49 states, she is the country’s only African-American Ginnie Mae lender and is also an issuer of Fannie Mae.”

Employment

FirstBank Correspondent Lending is looking to hire an Account Executive with a proven track record and customer base in the Southeast, including the states of TN, SC, GA, AL, MS, & FL. “Backed by FirstBank, a successful financial institution with $5B in assets, we have the technology, pricing and marketing to ensure your growth and success. A wide array of products including Jumbo, USDA Single Close Construction, FHA, VA, USDA, Freddie FNMA, Doctors Programs, etc., give you the ability to fully support the changing needs of your clients. Come thrive in a culture-driven environment where your voice is heard, your opinions matter, and the client comes first. Excellent compensation package included. To learn more, please visit www.firstbankonline.com/about/careers.

Considering a change? “At MortgageRight, we set ourselves apart by offering lower rates, better pricing and higher compensation! We’re making a name for ourselves across the nation by operating with thinner margins than other industry players. We saw the rising interest rate environment coming ahead of time and decided in advance to put several key strategic factors into place that would help our producers win in a market like this one! Very simply, we can offer lower rates and/or a higher comp, and we can back our claims up 100%! But don’t take our word for it. Check out this recent example: We recently on-boarded a branch manager who was able to increase his comp by 50BPS AND offer 1/8 better RATE to his customers! Give us the opportunity to show you how our model can help you win more deals in any environment. We’ll be happy to put any candidate in touch with recent hires and existing LOs to discuss our strengths, see what we have to offer, and hear our vision for the future. For a pricing engine walk through, contact Mike Russo at (866) 425-5456 or visit us.”

Lender products & services

Tomorrow is a webinar titled, “The Lender’s Guide to Frictionless Mechanic Lien Waivers” presented by Land Gorilla and zlien. Lien waivers are an essential part of ensuring construction lending payment processes are fair. They are seen as a major friction point for lenders and contractors alike, however, as problems here can lead to inefficiencies, higher risk of loss, and unnecessary project delays. By understanding the risks and pitfalls surrounding traditional lien waiver practices, lenders can create more modern, frictionless methods that protect loan stakeholders and provide better visibility onto any risks. Join Land Gorilla and zlien on Thursday, December 20th, 2018 at 10AM PST for a webinar to understand the risks associated with inconsistent, manual lien waiver processes, the common pitfalls and pain points for both lenders and contractors, as well as best practices you can use to ensure a seamless lien waiver process. Register today!

The holidays provide a perfect time for lending leaders to disconnect and think critically about their business and how they can improve for the new year. 2019 will bring with it a year of challenges to overcome. Still, conditions exist to shine and win, as long as you are willing to be agile enough to embrace change and lean into the winds of market challenges to find the opportunity within (opportunity, I might add, that many of your less-reflective competitors will fail to capitalize upon). A new eBook, “2019 Mortgage Lending Resolutions” is a great read to save for your holiday break as you begin preparing for a new year. Exclusive to Rob Chrisman subscribers today, it’s a must-read for all mortgage leaders and their teams. Download your Free Copy Here.

According to a recent IMF report, Home Point Financial is now the 5th largest wholesale lender in the country. In Q3, Home Point grew at 8.4% over Q2, the fastest reported growth in IMF’s Top Ten Rankings. With its ongoing focus on the TPO channel and retention of its Servicing, Home Point continues to build a platform that is attracting top-flight sales talent.  Says Home Point Chief Business Officer and Head of Production Phil Shoemaker, “We have taken strategic steps to focus on our TPO partners and enhance the tools our sales team needs to succeed in today’s marketplace. We look forward to working with AIME to help expand wholesale market share in 2019 and supporting the upcoming launch of the ARIVE platform in order to best support our broker clients and their customers.”

Looking for ways to grow your business? Freddie Mac is collaborating with clients to deliver automation and insights that provide a competitive edge. Cut back on documentation and reduce time to close with Loan Product Advisor® automated income and asset assessment capabilities. Save borrowers time and money with ACE appraisal waivers, now available for certain condo unit loans. Grow your condo business with Freddie Mac’s unit-level condo exception tool, Condo Project Advisor. Get greater efficiency with simpler collateral QC and underwriting in Loan Collateral Advisor®. Sharpen your edge.

What an exciting year it’s been for the mortgage tech industry! This is especially true for one major player in the space: Floify. Throughout 2018, this self-funded mortgage automation solution has introduced some of the most innovative features, integrations, and partnerships LOs have ever seen from a digital point-of-sale. Floify’s rise to the top has not only yielded massive ROIs for LOs who use the platform to efficiently automate their mortgage processes, but also helped many top-producers generate multi-million-dollar loan volumes without breaking a sweat. Newcomers to the Floify family, including industry titans like CBC Innovis, DocMagic, LendingQB, Equifax, AFR Wholesale, and more, have brought slick new automations and communications, as well as VOE/VOI, credit reporting and other necessary services, into one convenient and affordable solution. To learn how Floify will help you get on the leading edge of mortgage tech in time for the New Year, request a demo.

Movement Mortgage is expanding its product offerings heading into 2019. Movement, a top 10 national retail lender, has added a Construction-to-Permanent program in five states: North and South Carolina, Virginia, Texas and California. The pilot may expand to other states in the future. The Movement C-to-P offering boasts a single close, a stress-free draw process and other attractive benefits to custom homebuilders and buyers. Additionally, Movement has enhanced its Expanded Access loan program to include more options for credit-worthy borrowers that don’t fit the traditional credit box. Learn more about Movement’s wide range of products, technology and coaching programs for loan officers by clicking here.

FirstFunding, Finance of America Wholesale, Total Expert, United Wholesale Mortgage, Strategic Compliance Partners, Plaza Home Mortgage, Motto Mortgage, The Agent Marketer, Knowledge Coop, Tovuti, Mortgage Girlfriends and Summit Mortgage Training are some of the very first to join as Premier Plus Partners with The Mortgage List. Founded by industry veteran, Ginger Bell, The Mortgage List is a simple, one-stop location for those searching for vendors and service providers to the mortgage industry.  With the most complete database of providers The Mortgage List offers a free online resource where you can find everything you need to set up, grow, build and manage your mortgage business.  At The Mortgage List you can search for vendors, locate training, connect with other professionals and stay up to date with industry insight. The Mortgage List is the most comprehensive B2B mortgage industry platform allowing industry professionals to connect with businesses who provide services to the mortgage industry.

M&A continues

Southern California’s New American Funding announced its agreement to acquire the assets of Marketplace Home Mortgage (Minneapolis). This transaction is scheduled to close before year end and is expected to add over $1 billion in yearly production to New American with Marketplace’s management of Keith White and Elly Cummings staying on. “Marketplace has been growing steadily for almost 25 years and achieved a 29% annual national market share growth since 2014, and has achieved the # 3 market share ranking the Twin Cities MSA while being rated ‘The Best Mortgage Company’ in Minneapolis in 2018.  New American, led by Patty and Rick Arvielo, originates over $10B annually, has a servicing portfolio of over 108,000 loans for $27 billion, approximately 185+ branches, about 2900 employees.

The STRATMOR Group successfully represented Marketplace in this transaction and Partners Garth Graham and Jeff Babcock had some takeaways on M&A dynamics in the current market environment. “It is important to identify a buyer that brings a sufficiently tangible value proposition to the acquired company’s originators is critical to retaining its sales force, especially in a climate where aggressive recruiter tactics present a substantive risk in acquisitions. The buyer’s reputation assumes great importance in retaining the sale force, and NAF has proven this through its high organic growth. Structuring the transaction terms and conditions to motivate full adoption of the buyer’s acquisition synergies benefits all parties to the deal. Acquisitions can be the most cost-effective, low risk strategy for entering geographic markets.”

On the depository side of mergers & acquisitions, PCBB’s Steve Brown checks in on where bank activity is most active. “For this, we take a look at a really nice graphic from S&P Global Market Intelligence. It peppers a map of the US with dots of activity using various colors. At the highest level, what jumps out from that map comes by drawing a straight line right down the middle of the country. Doing so shows much higher bank M&A activity is occurring on the eastern side of the line than the western. By doing a rough count, it appears activity on the eastern side is running about 5 to 1 vs. the western side. It remains to be seen what impact rising interest rates and volatile equity markets will have on economic activity and bank deals by the time the calendar turns to 2019. However, as you think about this in context of all of your business priorities for the coming year, it seems like 2018 M&A activity will deliver deal flow that is about average, rising prices and low new bank formation, as the backdrop.”

(Speaking of banks, the American Bankers Association notes that through September, just 13 new banks launched since 2010. And the FDIC notes the number of community banks is steadily being whittled down in some areas, leading to bigger banks that cover broader geographic areas. The FDIC further notes this trend poses the question of whether the banking industry can serve the needs of smaller communities with fewer community banks, and whether some rural communities will begin to suffer from it.)

Capital markets

Lots going on there, not only in the U.S. but around the world. The U.S. 10-year closed Tuesday at 2.82% as Treasuries across the curve all moved a similar direction and amount (the 2-year yield and the 30-year yield to their lowest levels since September while the 5-yr yield settled at its lowest level since late May) ahead of today’s FOMC decision. Housing starts and building permits report exceeded headline expectations but driven by an increase in multi-family starts; starts for single-family units were at their lowest level in 19 months.

The housing report yesterday substantiates the weakening levels of homebuilder confidence and is a reflection of the impact rising interest rates are having on single-family construction activity. Builders are still challenged by several factors, including high input and labor costs. These results also likely reflect slower demand for new single-family homes, as emerging economic and financial market uncertainty, coupled with affordability challenges, are keeping some potential homebuyers away.

Internationally, British Prime Minister Theresa May confirmed that parliamentary debate on the Brexit withdrawal bill will resume on January 7, as a failure to approve the current withdrawal bill would lead to a “no-deal” Brexit. Australia sees no strong case for a change to monetary policy despite acknowledging recent softness in the housing market and sluggish income growth. Japan’s government lowered its growth forecast for fiscal 2019, the Italian government is expected to lower its 2019 GDP growth forecast, and Switzerland lowered its GDP growth forecast for 2019 to 1.5% from 2.0%. Around-the-world slowing?

Regarding our Central Bank, today’s FOMC statement, due at 2PM ET, is expected to see the Fed hike the fed funds target range by 25bps to 2.25% to 2.50% while the IOER is only expected to increase 20bp to 2.40%, which would be below where the Fed effective rate is expected to trade after the hike. The statement should emphasize the data dependency of their reaction function while equities will be looking for more dovish overtones given the recent tightening in financial conditions.

Outside of the Fed events, the calendar has already given us MBA mortgage applications for the week ending December 14. Did your applications pick up last week? Congrats! The industry’s, however, fell nearly 6%. Those saying refis are dead are incorrect as they currently account for nearly 44 percent of overall activity! (FHA & VA apps are each about 10 percent.) The Q3 current account deficit was released ($124.8 billion), and we’ll have November existing home sales, expected to decline to 5.14 million from 5.22 million, are due out. We begin today with the 10-year yielding 2.81% and Agency MBS prices are better by .125; rates are lower based on world-wide economic concern.

Tis the season when lots of people have packages on their doorsteps, either to be picked up or brought inside when you arrive home. You hope nothing is stolen, and if it is, wouldn’t it be nice to seek revenge? This clever inventor created something exactly for that.

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, “Low Down Payments Can Help Borrowers AND Lenders.” 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 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.)

Dec. 18: Co. for sale, LO jobs; MLO products; banks buying lenders and other banks, report on M&A

“Rob, I’m no stranger to bribes.” (I am not going to say which mortgage banking production manager jokingly made that tongue-in-cheek statement.) We trust that Fed officials are not subject to bribes or political influences. A poll of 60 economists shows an almost unanimous expectation that the Federal Reserve will announce an interest-rate increase tomorrow. But a significant number of respondents expect only two further increases in 2019, instead of the three that were widely predicted in a similar survey in November.

Jobs, business opportunities, & promotions

A multi-state retail and wholesale direct to consumer group is coming on the market for purchase. The group is profitable, expected to fund $2.0B in volume is 2018, and includes sales, ops and management. Ideal acquirers will be well capitalized, have a broad suite of agency products, and solid technology. Email me to forward confidential notes of interest, principals only please.

Summit Mortgage Corporation continues to expand nationally and is looking for “Top Sales and Sales Leadership talent.” Summit is a privately-held, well capitalized, retail lender headquartered in Minneapolis, MN. “Since 1992, we’ve been helping originators meet their client’s needs by providing all of the advantages of a large company with the entrepreneurial spirit of a startup. We are lean on layers and deep in capabilities; including full technology and marketing suites. Originators have direct access to in-house support teams which enable them to exceed client expectations and build their businesses. Innovative service offerings like our $10,000 Underwriting Guarantee set us apart from our competitors and give our referral partners the confidence their loans will close. If you are looking to work with an agile team that will execute on your behalf contact us at HR@Summit-Mortgage.com. Visit us at www.joinsummitmortgage.com.”

Will robots take your job? It’s no secret that the most crucial component of the Mortgage process is the Loan Originator. But according to online studies, LOs have an ‘Automation Risk Level’ of, ‘You are doomed’ (or 98% probability of automation). Many Originators are finding the pace of advancing technology is making it harder for them to remain relevant in the customer’s mind. Canopy Mortgage provides a solution for Loan Officers to harness technology/automation while highlighting the value of having a relationship to back up the transaction. Do LOs have a brighter future than WillRobotsTakeMyJob.com is suggesting? We think so. Unless of course, programmers end up building tech that actually ‘cares.’ Until then, Canopy Mortgage is expanding its national base of tech savvy-human LOs. Check out our business model that provides LOs with better pricing and technology and see why so many loan officers are leveraging their digital storefront. Reach out to Josh Neumarker at Canopy Mortgage for more information.”

GSF Mortgage Corporation is pleased to promote our Direct Originator Partnership Program for originators who are interested in a low expense and best execution opportunity in today’s market, while playing a critical role in delivering an exceptional customer experience during every step of the home lending journey. The program has no branch or lender fees, translating to better pricing and compensation for the originator. With access to management, technology, and a comprehensive set of products, we give you the tools to succeed and help you build solid and long-lasting relationships and engage all customers in a positive manner, ensuring the customer’s best interests are your number one priority. Originators participating in this partnership have enjoyed a 28-percent production increase, all while operating in a challenging market. Please reach out to VP of Retail Lending, Frank Papaleo.”

Lender products and services

Are you looking for a USDA One-Time Close product that can be sold to your correspondent investor right after closing and before construction has begun? Check out the new USDA One-Time Close purchase option TMS Correspondent recently rolled out for its partners.

XINNIX, The Mortgage Academy, is committed to helping you make next year your best yet. XINNIX is currently offering year-end pricing incentives to help leaders prepare their branches and companies to achieve incredible first quarter results. Don’t miss this opportunity to see how the proven XINNIX System can revolutionize your business growth.

Click here to contact XINNIX today and learn how.

From increasing productivity to having the ability to personalize marketing messaging at scale, your salespeople need more than a CRM to cut through the clutter and create customers for life. The software solution for the future of banking and mortgage is here. The Total Expert Marketing Operating System® (MOS) empowers you to centralize your entire Marketing technology stack, empowering salespeople to grow their books of business and the bottom line. As the pace of innovation in the financial services industry continues to accelerate, it is critical your salespeople have the technology in place to deliver a personalized customer experience. Download Total Expert’s guide to the 9 Critical Components of an MOS to improve business performance and create customers for life.

Join National Mortgage Professional Magazine for the complimentary webinar “How Lazy or Busy MLOs Get Referrals from Social Media” on Thursday, December 20th at 2 PM EST sponsored and presented by Jason Lutz of LO Socialbot. Do you hate making videos or don’t know where to start? Scared to annoy your friends and followers with boring business-related posts? Then join us for this webinar where you will learn how to get auto-created, self-branded videos served up for posting without lifting a finger, how to supercharge your existing, under-performing posts, getting more engagement from social media posts and videos with little or no work, and how to keep big banks from scooping up leads in your area. Sign up for this complimentary webinar here

Simplify your underwriting process with Loan Product Advisor® asset and income modeler (AIM). Through the expertise of third-party service providers, AIM automates the manual processes of assessing borrower assets and income. AIM reduces the burden of traditional documentation, speeds up the loan origination process and helps you close loans faster. Freddie Mac is working hard to bring you solutions that create efficiencies for your business and improve the borrower experience – giving you a competitive edge. These capabilities are available for Loan Product Advisor submissions and resubmissions on and after December 9, 2018. Gain greater efficiency in your underwriting processes with AIM – get your edge.

M&A and business moves continue

First, let me clarify a story that broke last week regarding a settlement between Gateway, the U.S. Government, and Finance of America (FAM). (The action is related to mortgages originated prior to Finance of America’s purchase of Gateway Funding in 2015.) This is Gateway Diversified. It has nothing to do with Texas’ Gateway Mortgage Group, LLC.

There’s no doubt about it—consolidation in the industry is increasing. In an article in the December issue of STRATMOR Group’s Insights report, “Something’s Got to Give: Lender Options for Navigating the Mortgage Industry Shakeout,” Senior Partner Jim Cameron reports on the big jump in M&A activity from 2016 to 2018.  And, he predicts there will be even more M&As deals in 2019. “These are tough times in the mortgage business,” says Cameron. “Industry indicators signal a down cycle, and lenders who are well-capitalized and well-run have an opportunity to be ‘consolidators,’ even while struggling lenders face the prospect of becoming reluctant (if not involuntary) ‘consolidatees’.” While conditions are challenging, Cameron says there are several tactics and strategies lenders can pursue and he outlines the pros and cons of eight possible lender options.

(In a second article in the report, “The Borrower Experience: Is This Simple Mistake Costing You $200,000 a Year?” MortgageSAT Director Mike Seminari shows the steep cost of asking borrowers for the same document multiple times. December 2018 STRATMOR Insights Report.)

Middletown Valley Bank ($429mm, MD) will acquire residential mortgage lender Millennium Financial Group for an undisclosed sum. Millennium offers loans to homebuyers throughout the Mid-Atlantic region.

And it appears that one of the largest lenders in Atlanta is being acquired. Ameris announced the acquisition of Atlanta-based Fidelity Southern/LION, which is ABCB’s (Ameris Bancorp) largest deal yet. LION’s $4.8 billion-in-assets, with a portion in residential mortgage, represents a notable 30% of ABCB’s $16.2 billion in pro forma assets. The deal is expected to be mid-single-digit earnings accretive to ’20E with under 3% TBVPS dilution, earned back in roughly 2.5 years. This 100% stock deal is worth $751 mm in total or $27.22 per LION share considering the 0.8x exchange ratio. This is a 27% premium on LION’s previous closing price and represents 1.76x TBV, 17.5x KBW’s ‘19E, 15.5x KBW’s ‘20E and an 8.8% core deposit premium. Deal closing is expected in 2Q19.

On the depository banking side of things, M&A continues as well. Research by S&P Global Market Intelligence finds that as of mid-October (10/17), there had been 209 bank deals completed or about 1 deal every 1.4 days or so this year, which, if projected through the end of the year, would be about 263 deals, roughly average when compared to the prior three years of 260 deals. When it comes to pricing levels, the data shows an up-tick however. Through this same mid-October period, the median deal value to tangible common equity was a reported 1.71x. If that holds or improves, it is poised to be better than both the 1.60x level reached for 2017 and the 1.31x level of 2015.

Just in the last three weeks it was announced that…

In California, United Business Bank ($1.3B) will acquire Uniti Bank ($344mm) for $63.9mm in cash (57.6%) and stock (42.4%) or about 1.37x tangible book. In Illinois First Midwest Bank ($14.9B) will acquire Bridgeview Bank Group ($1.3B) for $145mm in cash and stock or 1.30x tangible book, and SENB Bank ($219mm) will acquire Gateway Community Bank ($90mm) for cash. Cambridge Trust Co ($2.0B, MA) will acquire Optima Bank & Trust Co ($524nnm NH) for $67mm in cash (5%) and stock (95%) or 1.91x tangible book. In Texas Alliance Bank ($740mm) will acquire The First National Bank of Mount Vernon ($189mm), and Spirit of Texas Bank ($1.1B) will acquire The First National Bank of Beeville ($412mm) for $63.7mm in cash (51%) and stock (49%) or about 1.78x tangible book. People’s United Bank ($44B, CT) will acquire Belmont Savings Bank ($3.0B, MA) for $327mm in stock (100%) or 1.6x tangible book. In Iowa FreedomBank ($267mm) will acquire Farmers and Merchants Savings Bank ($158mm). CenterState Bank ($12.3B, FL) will acquire National Bank of Commerce ($4.1B, AL) for $850.4mm in stock (100%) or about 1.99x tangible book. Lastly, Faciam Holdings Inc. will acquire Summit Bank ($281mm, CA) for $56.13 per share in cash (100%).

Capital markets

Yes, the Fed is expected to raise short term rates again this week. Why? Recent economic data has been consistent with a moderate expansion as we approach the end of the fourth quarter. Payrolls increased by 155,000 in November and hourly earnings were up 0.2 percent. Unemployment remains very low at 3.7 percent. On the trade front, the US, Mexico and Canada signed a new trade accord known as USMCA and the US and China agreed to a temporary stay on the imposition of new tariffs. The ISM Manufacturing and Non-manufacturing indices both showed positive conditions in November. Yet new residential construction remains a cool spot as construction spending declined 0.5 percent and the months’ supply of new single-family homes continues to grow. Mortgage rates improved nearly 25 basis points, according to the latest Freddie Mac Primary Mortgage Market Survey and mortgage applications increased 2 percent due mostly to an uptick in refinance applications.

In the bond market, the same forces driving the weakness in stocks are pushing rates down. The U.S. 10-year closed Monday yielding 2.86% as Treasuries across the curve rallied after the NAHB Housing Market Index for December fell to its lowest level in nearly four years in the latest reminder of weakening housing data. Internationally, Australia lowered its 2018/19 GDP growth forecast, and lowered expectations for wage growth. South Korea lowered its GDP growth outlook for 2018 while the outlook for growth in 2019 was lowered as well. In Italy, officials have agreed on a deficit target for 2019, and will reportedly lower its 2019 GDP growth forecast to 1.0% from 1.5%. The French National Assembly President acknowledged that France’s budget deficit in 2019 will exceed the EU’s 3.0% limit in 2019 but is expected to be a cyclical peak rather than the trajectory. Finally, British Prime Minister Theresa May confirmed that the parliamentary vote on the Brexit withdrawal bill will take place during the week of January 14.

In the good ol’ US of A, today’s economic calendar began with November housing starts and building permits. +3.2% (driven by multi-family, single-family numbers were actually down, and +5%, respectively, although both were expected to decline from their respective previous readings. Most importantly, day one of the FOMC two-day meeting kicks off at 1:00pm. The Fed is expected to raise the Fed funds rate 0.25% tomorrow. We begin today with the 10-year yielding 2.83% and Agency MBS prices are better than Monday night by .125.

What do you get when you cross a snowman with a vampire?

Frost bite!

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: Don’t Underestimate Liquidity.” 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 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.)

Dec. 17: LO jobs; CRM, digital products; FHA & VA changes from Agencies & lenders across the nation

“Sunk cost:” “a cost that has already been incurred and cannot be recovered and is excluded from future business decisions because the cost will be the same regardless of the outcome of a decision.” Bought a new headquarters, or paid a big signing bonus for a group that continually sends in bad loans? Sunk cost. Of course, lenders try to avoid those by using a forecasting company like Riivos, but how many months or quarters in a row can a lender have losses before the warehouse bank or Wall Street counterparties say, “No mas?” Rumors of owners putting their own capital back into a mortgage bank abound. At least year-end is in sight – yay!

Jobs & promotions

New Penn Financial is looking for dynamic, growth-minded, mortgage loan originators to work in-house with a new Joint Venture partnership in the Tampa, Florida area. This opportunity is with a prominent agency and is one of New Penn’s newest partnerships. “We are very excited to launch this new venture and partner with another outstanding real estate agency,” said Corey Caster, SVP JV Retail. “This venture represents another major step in the growth of our industry-leading Joint Venture platform.” If you are interested in hearing more about how to step into an origination role with an in-house audience, contact Vince Daino, VP of Recruiting and Business Development. Additional opportunities are available for LOs and producing managers throughout the country within New Penn’s existing real estate partnerships. Contact Vince for more details.

Congrats! Sun West Mortgage has named John Brumund Senior Managing Director. With 25 years of industry experience, John brings a diverse background to the leadership team at Sun West. He has held roles as CTO, EVP Wholesale Channel leader and most recently as President of Direct Lending where he built a hybrid consumer-direct, distributed retail model solely focused on purchase business. Brumund has a long-standing relationship with Sun West Mortgage and played an important role in previous growth initiatives. “Sun West is in the perfect position to take advantage of the current market – the company has the desire to capitalize on rapid expansion across the U.S.,” said Brumund. “Trust played a major role in the decision to return. It is difficult to find a partner that keeps its word through the thick and thin, and that is why Sun West Mortgage is home to me.”

Lender products & services

Did you know that MeridianLink powers the lending technology for 67 of the top 100 credit unions and 23 of the top 100 banks in the U.S.? MeridianLink’s suite of solutions (LoansPQ, Xpress Accounts, and LendingQB) provide consumers with convenient, seamless and pure digital access to virtually any type of consumer loan. Vehicle loans, credit cards, HELOCs and mortgage loans are all available using MeridianLink’s innovative and industry leading platforms. For more information, please visit its website or email management.

Holiday shopping stressing you out? With Insellerate’s new eBook “Mortgage CRM: The Ultimate Buyer’s Guide,” there is one less item to worry about. Cut the fuss when it comes to figuring out what or how to buy for your business; start vetting technology solutions with this as your guide. Download the eBook to learn what the most advanced features sets are, important considerations to assess before buying, the debate between building vs. buying, how to properly prepare for implementation, and more! Download the Buyer’s Guide today.

Looking for ways to grow your business? Freddie Mac is collaborating with clients to deliver automation and insights that provide a competitive edge. Cut back on documentation and reduce time to close with Loan Product Advisor automated income and asset assessment capabilities. Save borrowers time and money with ACE appraisal waivers, now available for certain condo unit loans. Grow your condo business with Freddie Mac’s unit-level condo exception tool, Condo Project Advisor. Get greater efficiency with simpler collateral QC and underwriting in Loan Collateral Advisor. Sharpen your edge.

Momentifi is offering a FREE 60-day trial for enterprise accounts who register before the end of this year. While other companies cut back, you can give all your LOs and new recruits access to the CMPS certification course, weekly sales coaching, MBS Dashboard, LOS-integrated CRM and OB-integrated loan comparison software without paying anything at all until March 1. “An extra 1 loan per month, per LO could be all you need to become wildly profitable again,” says Gibran Nicholas, CEO of Momentifi. “The problem is that your LOs may not adopt or use the solutions you’re currently providing to help them grow their sales. This approach allows you to roll out an enterprise-wide solution on January 1, and only pay 60 days later for the LOs who actually use it.” Click here to watch a 3-minute video of the member benefits.

Email Gibran directly to schedule a demo or conversation.

FHA & VA

A large number of minorities and first-time home buyers use the FHA program to buy homes. There’s a lot going on around our biz about this program. The industry is very interested in the note in the Federal Register: “Streamlining Warranty Requirements for Federal Housing Administration (FHA) Single-Family Mortgage Insurance: Removal of the Ten-Year Protection Plan Requirements.” This final rule streamlines the home warranty requirements for FHA single family mortgage insurance by removing the regulations that require borrowers to purchase 10-year protection plans in order to qualify for certain mortgages on newly constructed single-family homes. The final rule also introduces greater flexibility and allows consumers to pursue cost-minimizing strategies without measurably increasing the risk to FHA of affected loans. This final rule becomes effective March 14, 2019.

We also have last week’s FHA announcement of the agency’s new schedule of loan limits for 2019, set by regulation at 115% of median house prices based on MSAs (Metropolitan Statistical Areas). Most areas in the country to experience an increase in loan limits in the coming year. These loan limits are effective for FHA case numbers assigned on or after January 1, 2019. Read FHA’s Mortgagee Letter on 2019 Forward Mortgage Limits or read FHA’s Mortgagee Letter on 2019 Home Equity Conversion Mortgage (HECM) Limits. In high-cost areas of the country, FHA’s loan limit ceiling will increase to $726,525 from $679,650. FHA will also increase its floor to $314,827 from $294,515. Additionally, the National Mortgage Limit for FHA-insured Home Equity Conversion Mortgages (HECMs), or reverse mortgages, will increase to $726,525 from $679,650. FHA’s current regulations implementing the National Housing Act’s HECM limits do not allow loan limits for reverse mortgages to vary by MSA or county; instead, the single limit applies to all mortgages regardless of where the property is located.

During last weekend’s NAMB conference session, Freedom CEO Stan Middleman made a comment to the audience that one of Freedom Mortgages responsibilities is to “provide the brokers with the best price possible so they can be successful.” Last Thursday Freedom Mortgage launched a “best price guarantee” for government loans 640+ FICO. “If you find a better price for a fixed-rate VA & FHA purchase/refinance with a FICO >=640, we’ll match it, and reduce our Lender Fee by $150. (Jumbo and High Cost loan amounts are ineligible.)

Plaza Home Mortgage is accepting the new FHA loan limits and the new VA loan limits for loans locked on or after December 18, 2019 and with case numbers assigned on or after January 1, 2019.

Recently I discussed Ginnie Mae news, and why MLOs should at least be aware of the Agency. Government (by that I mean VA, USDA, and FHA) is an interesting beast. It is more prevalent with some lenders, in some areas, and with some loan officers. In general, of the $1.5 or so trillion in residential originations expected in 2018, 20-25% of it is forecast to be government. It is estimated that FHA is about 12% of total market in 3rd quarter. (F&F is estimated at nearly 60%. 18% non-agency jumbo, non-QM/expanded credit 3%.

Recently the big news was the FHA actuarial study. The focus is on the he economic condition of the agency’s Mutual Mortgage Insurance Fund (MMI Fund), and the overall Capital Reserve Ratio, Congressionally mandated at 2%, clocked in last year at 2.18% but is now up to 2.76% – good news. The “forward mortgage” financial picture has improved nicely, but the overall number is weighed down by the HECM line.

Loan officers think, “Gosh, if the ratio improved, perhaps we’ll see borrower costs decline.” Not so fast. The Announcement was tepid about that, as was a statement by Brian Montgomery. The book of business shows an average DTI above 43% and average FICOs have dropped in the $1.26 trillion insured (an increase of 3%). Freddie and Fannie, and their workmates the private MI companies, are happy to see no premium or MIP decrease. Large banks (think Chase or Wells) are seen continuing to sit on the sidelines, despite FHA continuing to be very profitable for lenders.

Do you review the financials of your subservicer? I have not personally run the numbers but the word on the street has the percentage of non-bank FHA originations is 87% of total FHA originations. Ginnie is very concerned about this concentration, since a) many non-bank lenders are thinly capitalized and b) advances to investors for delinquencies and foreclosures must be made by the issuer, which is a concern. Ginnie Mae issued a memo about servicer quality and may ask for agreements that a servicer has with the issuer because many non-banks use subservicers and become dependent on subservicers’ financial stability. Just something to watch…

FHA is making several improvements in its Electronic Appraisal Delivery (EAD) system and other appraisal-related functionality in FHA Connection, including: Appraisal Logging screen changes; Appraisal Transfers; and Digital Signatures on Appraisals. Refer to the EAD Hard Stop Checks and Error Messages Fact Sheet for complete information on the revised Hard Stops. The EAD General User Guide, including the Hard Stop information found in its Appendix, will be updated at a later date.

FAMC wholesale posted a clarification on VA transactions regarding Privately Held Mortgages. A written VOM may need 12 months of cancelled checks or bank statements to support the payment history.

theLender offers FHA and VA Specialty products accepting FICO’s as low as 500. Contact Eric Turley for details.

Plaza Home Mortgage has updated its FHA FICO price adjustments with most LLPAs improving. There are improved FHA price adjustments for FICOs under 680: FICOs from 580 – 619 have improved by 1.75, FICOs 620 – 659 improved by .250. These improvements apply to all FHA programs. Improvements for FHA FICOs > 720 (excludes 203k), have been reduced by .250 or .500 depending on FICO.

Mortgage Solutions Financial posted an announcement in lieu of clarifications from GNMA regarding APM 18-04 and how enforcement is being implemented.

AmeriHome announced a new Escrow Holdback Program for Fannie Mae, Freddie Mac, FHA, VA, and USDA purchase transactions. The Program allows outstanding, undisbursed escrow funds for postponed improvements on new and existing homes.

LoanStream Mortgage offers “no hassle VA programs.”

Plaza Home Mortgage updated its Wholesale Administration Fee Schedule. Effective for loans with a FNMA 1003 and/or Loan Estimate (LE) with a date of December 1 or later. Fees will be effective in BREEZE and on rate sheets and are as follows: Standard Administration Fee: $945. FHA, VA and USDA Streamline Administration Fee: $495. Second Lien Administration Fee: $500 (Waived in VT and TX).

PRMG has updated various Product Profiles to the following: Agency Portfolio and FHA Standard and High Balance, VA and VA High Balance, Expanded Access – AA Credit Grade, Expanded Access – B-C Credit Grade, Closed End Seconds and TCF, and CHFA Programs.

PennyMac Correspondent posted an announcement regarding FHA and USDA updated seasoning requirements.

FHA published Mortgagee Letter (ML) 2018-08: Updated Guidance on Home Equity Conversion Mortgage (HECM) Claim Type 22 (CT-22) Assignment Requests. This ML provides consolidated and updated guidance regarding the submission of HECM assignment requests to the Department of Housing and Urban Development (HUD). It outlines the documentation and procedures required to demonstrate that a HECM has been serviced in accordance with applicable HUD regulations and meets all assignment eligibility criteria regarding the provision of evidence of: current hazard insurance; provision of alternative evidence of death of borrower; clarification of “current” taxes; submission of evidence of completion of repairs; and submission of clarification regarding mobile home title. The guidance in this Mortgagee Letter benefits both HECM borrowers and servicers as it allows alternative sources of documentation, as well as streamlines some of the claims processes. It also modifies or supersedes policy language in ML 2017-05, where applicable, and is effective immediately.

Capital markets

The Federal Reserve is expected to increase short-term rates this week, but the U.S. 10-year closed the week -2bps to 2.89% as positive domestic economic figures offset disappointing economic data from China and the eurozone. Growth in China’s Retail sales slowed to a pace not seen since early 2003 while growth in Industrial Production was reported at its slowest pace since early 2016. Both French and Eurozone Manufacturing PMI declined in December, as did Services PMI for the same time period. The U.S. Retail Sales report showed that core retail sales, which exclude auto, gasoline station, building materials, and food services and drinking places sales, and are used in the computation of the goods component for personal consumption expenditures in the GDP report, increased.

This week’s calendar began with the Empire State Manufacturing Survey for December (expected to decline, it indeed went to “10.9” from “23.3”). The NAHB Housing Market Index for December is up next. Things are light tomorrow, with only November Building Permits (prior 1263K) and Housing Starts (prior 1228K) at 8:30 ET. Wednesday sees the usual weekly MBA Mortgage Index but also November Existing Home Sales and the December FOMC Rate Decision. Thursday brings weekly claims figures as well as December Philadelphia Fed, November Leading Indicators, before the week closes with November Durable Goods; Q3 GDP – Third Estimate, November Personal Income and Spending, and PCE Prices. We begin the week with the 10-year yielding 2.88% and Agency MBS prices better a few ticks, so rates are a shade lower from Friday’s close.

The Perfect Man:

– wakes up at 5 am everyday

– exercises everyday

– makes his own bed

– cleans his room

– works sincerely

– does not touch alcohol

– helps in the kitchen

– does not indulge in night life

– always punctual

– prays daily

– hits the bed at 9PM sharp

Such a perfect man can only be found in jail.

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: Don’t Underestimate Liquidity.” 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 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.)

Dec. 15: AI mortgage predictions, borrowers who want to film transactions, First American & blockchain, the SEC & cybersecurity

Computers are everywhere, and there are plenty of people who’d like to get into yours. (Of course, security is not confined to computers. I was on the phone last night with a friend, and he told me that a few years ago his identity was compromised and several credit cards were stolen but that was about it. He never turned it into the police because he discovered that the thief was spending less than he did.) Not only that, but computer scientists are racing ahead with developments focused on artificial intelligence. And what about borrowers who want to film the transaction? Let’s check in.

Intelligence, artificial and otherwise

Lower, a technology company aimed at improving the online mortgage and refinance experience, announced the launch of its company and internal, proprietary artificial intelligence (AI) technology. “LOAi is a first-of-a-kind mortgage recommendation engine that uses AI to analyze thousands of data points and past loans to instantly provide loan advisors with personalized loan selections. The technology helps homebuyers who get their loans online but might not know if they are getting the best loan possible. Lower also offers a simple application that can be completed in minutes on a desktop or mobile browser. By answering a few straightforward questions in a conversational format, potential borrowers can get a personalized loan recommendation without the need to complete lengthy online forms or find, scan and submit paperwork. Lower was founded by Dan Snyder, co-founder of one of the nation’s fastest growing mortgage companies, Homeside Financial.”

What about monitoring sleepy underwriters? EyeSight, an Israeli startup, uses facial recognition processing and A.I. to track drivers’ eye-openness, gaze direction, and head position to determine overall attentiveness. When the system determines that the driver is distracted, it switches over to self-driving mode. The EU will require driver monitoring systems like this by 2020, so more distracted-driver watch bots are on the way.

AI Foundry president and founder Steve Butler has written the following predictions for 2019 for mortgages, AI, and banking. “AI kills OCR. In 2019 we will see rapid declines in OCR (Optical Character Recognition) use in document processing. OCR was invented a century ago and is losing its utility in modern times, because it can’t do anything intelligent with the text it scans. OCR will give way to artificial intelligence (AI) technology that enables machines to “read and react” to human-written content. This will enable a boom in “white collar automation” where manual document processes (such as mortgage processing) are replaced by software-based robotics processing.

The Veil Comes off ‘Instant Mortgages.’ In the coming year consumers will get more savvy and educated about claims of ‘instant mortgage approvals.’ It still takes weeks to process a mortgage and ‘approved in minutes’ applicants can still get turned down by underwriters. Mortgage lenders will turn to back-office automation to speed the byzantine mortgage-approval process, so consumers can have a true ‘Uber experience,’ where mortgages are approved in hours, not weeks. This will enable home buyers to have an approved mortgage in hand when they bid on a house, closing the competitive gap with cash buyers.

Mortgage Processing Comes Back to the U.S. – Most Americans do not know that when they apply for a mortgage, most often their personal financial information goes overseas to processing centers in India, the Philippines and other low-wage countries. We have seen more ‘onshoring’ recently and this trend will continue and grow in 2019, driven by a number of factors, including regulations, increased customer complaints (and resulting reputation damage) and companies gaining a better understanding of the true costs of offshoring. With state privacy regulations becoming stricter (California leading the way), lenders will bring mortgage processing back ‘onshore’ to the U.S. This will cause a spike in back-office automation investment as mortgage lenders try to keep processing costs down, while complying with emerging privacy regulations.

Lenders Turn to AI to Reduce the Cost and Time to Close a Mortgage – Today, it takes approximately three weeks to close a mortgage, starting from the time that the mortgage application is started, through providing information, processing, reviews and underwriting, and to finally closing. Artificial intelligence will drive a new generation of ‘software robots’ that automatically process mortgages, replacing slow and costly manual processes. In 2019 we will begin to see approval times drop from the current norm of 3 weeks, and “one day approvals” will become the norm within five years.”

Steve wrapped up with, “Real Estate Firms and Sites become “One Stop Shops” – In 2019 we will see more forward-thinking real estate firms and websites becoming “one stop shops” for the home buying experience. Examples include Keller-Williams (with Keller-Williams Mortgage) and Zillow acquiring Mortgage Lenders of America. This horizontal model is similar to how automobile dealers also offer financing, maintenance, etc. The new model will enable buyers to access everything they need (financing, legal counsel, accredited inspectors and contractors, etc.) from their realtors, rather than having to rely on referrals and research.”

Bitcoin & blockchain: things are moving fast

Thanks to Candace G. who sent along this note about how Ohio began accepting bitcoin as payment for 23 types of business taxes. The state treasurer’s office said Ohio is, “working to help make Ohio a national leader in blockchain technology.” (Not to mention the Football, Rock n’ Roll, Polka, and National Aviation Hall of Fames.)

From Southern California comes news that First American Financial Corporation announced the launch of a shared blockchain system designed by First American to “increase efficiency, reduce risk and improve the title production process. The system is intended to facilitate the exchange of prior title insurance policies between underwriters that contribute to the system. Old Republic Title Insurance Group, the nation’s third largest title insurance underwriter, has committed to be the first to participate. Each policy included in the blockchain system will be coded with a unique identifier by property, streamlining the search process and increasing the accuracy of searches for prior title insurance policies.”

The SEC is advising companies to disclose potential risks from the effects of Brexit, phase out of LIBOR and increased cyber risk.

Central banks may find uses for distributed-ledger technology in the future, but the case for using it today “remains unproven,” said Agustin Carstens, general manager of the Bank for International Settlements. Central banks in Canada, Japan and Singapore have looked at whether the technology could improve efficiency of securities and derivatives clearing, and blockchain was found to be “broadly similar to existing infrastructures, and not clearly superior to them,” he said.

On the constantly evolving topics regarding cybersecurity, Mitch Tanenbaum weighed in. This commentary noted, “In the world of cybersecurity, it is often difficult to know how much security is too much. This is important when you consider a recent survey from FICO. It shows how fed up consumers are with the security hoops they need to go through to verify their identity. This is despite the constant barrage of information about data breaches and card compromises.”

Mitch observed, “People (consumers) don’t care, for the most part, because they are made whole, even if it is their fault. One cell provider in Europe was charging customers for fraudulent online gambling charges because they chose bad passwords and that allowed the fraud to happen. If consumers were financially responsible when their poor cyber hygiene practices allowed fraud to occur, they would become very supportive of cyber security. I doubt that will ever happen in the U.S., but in reality, it does because the tens of billions of dollars that merchants lose is recovered in higher prices. I don’t know that they care as much about losing their data as they do about a bad guy emptying their bank account.

“I was interviewed on local TV recently about a situation where a lady’s phone was hacked and the bad guy used it to reset her online banking password (and this works even if you do not use online banking, by the way) and empty her bank account of $5,000 plus. She was seriously upset. Losing five grand will do that to you. Likely the bank will eat the $5k in the end but that day her bank account was empty.”

Cybercrime experts will tell you that the most common way into your organization is through email. Mitch noted, “We have had title companies and mortgage brokers come to us after the fact of having been spoofed out of more than a hundred grand each in several cases. In most of these cases, they ate that because the protections for consumers, for the most part, DO NOT APPLY to businesses. Businesses are supposed to be sophisticated. Will losing a hundred grand make you rethink your cybersecurity program? The SEC has been investigating some publicly traded companies who collectively lost close to $100 million to these email scammers. Why are they investigating them? Because the SEC wants to see if these companies violated the Securities Exchange Act of 1934 for not having sufficient security controls in place. They don’t care that these companies lost $100 Mil, they want to see if they should be sued in federal court for it.”

This commentary suggested that, “IT departments, along with folks at home, should use two-factor authentication (“2FA”) with remote access. A six-digit code is sent to you. Personal email (gmail, Outlook, iCloud) all offer two-factor authentication.” Mitch responded with, “I totally support you encouraging two-factor authentication but people should absolutely, positively NOT use text messages. Way too easy to spoof.”

Lastly, regarding experts saying that using “the cloud” for critical data storage is a mistake, Mitch responded with, “I guess that means that the cloud-based LOS should close their doors – OpenClose, Encompass Nextgen, Rocket Mortgage and a bunch of others that are hybrids – local application but the data is in the cloud. And also, I guess that Amazon should shut down too. The reality is that for most companies, the cloud is probably more secure than that poorly secured server sitting in the corner.” Thanks Mitch!

What about borrowers or bank customers recording every office visit on video? Steve Brown with PCBB advised, “No matter what your customers import into the branch when they visit, taking video on their phone is a definite no-no. Sadly, more and more customers are using their cell phones to videotape even routine commercial interactions. That increases risks for banks. Look no further than videos posted of employee-customer interactions gone awry on social media. These depict everything from passengers being dragged off airplanes to shouting matches and even fist fights. So far, banks as a group haven’t seen too much, but that’s not a reason to assume it won’t happen. Instead, it’s a reason to get ahead of the trend by training staff members and setting up guidelines.

“Your overall goal should be to prevent people from videotaping bank activities. This is for everyone’s security, so it makes sense well beyond just the issue of potential embarrassment.

Post clear signs stating that no unauthorized photography or filming is permitted on bank property. Tighten up procedures and train staff to be alert. Have scripts that employees can use when a customer starts taking unwanted photos or video. Make sure that procedures have been practiced by frontline employees, so it is second nature, if and when needed. Staff should smile and be polite to any customer, even an irate one that begins photographing or filming an interaction. If you are handling a transaction, put that work on hold until the customer has stopped filming. Explain that, because of concerns around security and confidentiality, no unauthorized photography or filming is allowed on the premises.”

Steve’s advice went on. “If the customer refuses to stop filming, point out the posted signs forbidding it. Tell the client that the bank is not public property, and it has the right to prohibit customers from filming interactions because of the sensitive nature of those transactions. These days, even some employees might feel tempted to record a rude bank customer or a heated conversation. They might even use a cell phone to videotape a customer who has begun filming. It is critical to train everyone to resist this temptation and to lead by example no matter what. Recording a customer — even if the customer is rude, wrong, or began filming first — is a sure way to escalate things.

“Besides taking the above measures, banks can avoid viral videos by reminding employees that you expect professional, cordial, respectful behavior at all times. Doing so will remind everyone to keep calm even when a customer is using their phone to record things.”

(Thanks to Ann M. for this one.)

When he was having a senior moment and couldn’t place people, journalist Charles Michelson (FDR’s speechwriter) used this ploy to avoid offending them.

When a person asked, “Do you remember me?” he would answer, “Yes, and it turned out you were right, didn’t 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: Don’t Underestimate Liquidity.” 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 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.)

Dec. 14: AE, LO jobs; Full Eagle wanted; compliance, documentation products; loan amount changes in the primary markets

Lots of folks in the mortgage biz like statistics and odds. They may not remember them, but they like them. (As Marcus L. writes, “People still play the lottery even though most of us can’t get the USB in the first time correctly and those odds are 50/50.”) Plenty of home loans are impacted by student debt. For every 100 students who enroll full-time in college or university, 42 percent will graduate within four years and 18 percent more will graduate within six. This means that 40% of college students get all the benefits of student debt without obtaining a degree. And put another way, of those 60 students of every hundred who graduate, 42 will leave with student loans and five will default on those loans by the age of 33. For the 40 who don’t graduate, 10 will default on those loans. Even more, 10 years down the line, 32% of the college grads end up in careers that didn’t require a college degree in the first place.

Jobs

American Capital is excited to welcome Brad Hodge as Retail Division Manager.  Brad’s 45 years of industry experience will help grow ACC / Lionsgate by recruiting LO’s, Branch Managers, Area Managers and Branches to join our dynamic platform of Loans and Real Estate together under one roof.  If you are looking to improve your ROI and be your own best referral source, the Hybrid offering is the most powerful strategy available.  The ACC / Lionsgate Hybrid offering is more than just a logo change – it’s a transformation. Contact Brad for more information (909-702-6924).

FirstBank Correspondent Lending is looking to hire an Account Executive with a proven track record and customer base in the Southeast, including the states of TN, SC, GA, AL, MS, & FL. “Backed by FirstBank, a successful financial institution with $5B in assets, we have the technology, pricing and marketing to ensure your growth and success and a wide array of products including Jumbo, USDA Single Close Construction, FHA, VA, USDA, Freddie FNMA, Doctors Programs, etc., to give you the ability to fully support the changing needs of your clients. Come thrive in a culture-driven environment where your voice is heard, your opinions matter, and the client comes first. Excellent compensation package included.” To learn more, please visit FirstBank Careers.

A motivated and experienced investor is seeking to acquire a FULL EAGLE/HUD Designated lender. Licensed in CA would be preferred but is not required. The ideal situation is for current shareholders to liquidate all or a large portion of their equity through the transaction. Principals would be willing to negotiate/keep the existing team. Interested parties should contact

me to forward their note; please specify the opportunity.

Lender products & services

Redwood is excited to be named as the number one purchaser of expanded-credit and Non-QM mortgage loans by Inside Mortgage Finance. Redwood’s expanded-prime and Non-QM programs have aided its numerous business partners in keeping volumes up as refinance opportunities continue to decline. Redwood encourages loan officers at any of their business partners to sign up for the many training sessions offered by Redwood’s program experts. Redwood’s expanded-prime and Non-QM programs are simple to understand and easy to implement. It’s the same Redwood process and program support, now with even more opportunities for loan officers and their customers. Come see why others are having so much success working with the largest buyer of expanded-credit and Non-QM mortgage loans.

Simplify your underwriting process with Loan Product Advisor asset and income modeler (AIM). Through the expertise of third-party service providers, AIM automates the manual processes of assessing borrower assets and income. AIM reduces the burden of traditional documentation, speeds up the loan origination process and helps you close loans faster. Freddie Mac is working hard to bring you solutions that create efficiencies for your business and improve the borrower experience – giving you a competitive edge. These capabilities are available for Loan Product Advisor submissions and resubmissions on and after December 9, 2018. Gain greater efficiency in your underwriting processes with AIM – get your edge.

Interested in offering your customers new products? The join Sierra Pacific Mortgage on December 19 at 1PM PST for a short webinar that can impact your business in a big way. You will learn all there is to know about these Sierra’s Access and Core products. You may have heard of these programs as the “Sierra’s Bank Statement Program” and while that is true, Sierra Access and Sierra Core has much more to offer, including 1 year express tax returns and even a full doc option. The pool of opportunity to offer financing for your borrower is vast – come find out why! Register today!

Today, mortgage lenders are looking for ways to reduce compliance costs without sacrificing quality. Finding a solution that can respond to the ebb and flow of your business needs will be essential in forming a savvy and time-saving solution. With tailored compliance packages, Strategic Compliance Partners (SCP) can accommodate your ever-changing needs. Click here for a free savings survey and we’ll show you how SCP can help you save up to 20% on compliance costs.

I’ve indicated in several posts Conquering Shifts is a must read. Make it a part of your 2019 business plan. “Learning how top producers excelled during the hard times of ’07 and ’08 reinforces that salespeople are able to prosper in any economy.” Jordan Eller, Capital Mortgage Services. “The benefit of owning this book is two-fold. First, it’s inspiring. Secondly, it’s a fantastic resource to be used during our sales meetings. The book does a great job showing how some of the industry greats went from ground zero to mega producers” Ben Holloway, Mountain West Financial. “Conquering Shifts is truly unique in that instead of simply teaching success principles or techniques, the reader sees exactly how they were implemented.” Marty Preston, Benchmark Mortgage. If you have not taken advantage of the 15% discount offered by Authors Cindy Douglas and Kathleen Heck, Do Not Delay. Ends December 15th. Click here to purchase.

Business news

Regarding the news about Gateway, the U.S. Government, and FAM… Readers should know that management reports there is no financial impact to FAM as this was prior claim indemnified by Gateway. “You may have seen some news that FAM has settled a pending matter with the Department of Justice and Department of Housing and Urban Development concerning False Claims Act allegations related to HUD-insured loans. This action is related to mortgages originated prior to Finance of America’s purchase of Gateway Funding in 2015. Finance of America has been fully cooperative with this inquiry and we are pleased that the matter is resolved. There was no admission of liability by FAM and no financial impact to FAM or UFG as a result of the settlement.”

Conventional conforming loan amount changes in the primary market

There’s a lot of chatter about the potential replacement of Mel Watt – Mark Calabria – but lenders are more focused on the “here and now” and helping their borrowers.

Every one knows that the FHFA announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2019. In most of the U.S., the 2019 maximum conforming loan limit for one-unit properties will be $484,350, an increase from $453,100 in 2018. As a result of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum conforming loan limit will be higher in 2019 in all but 47 counties or county equivalents in the U.S. Click this link for a list of the 2019 maximum loan limits for all counties and county-equivalent areas in the U.S.

To accommodate the new Freddie Mac and Fannie Mae loan limits, from now through January 1st, US Bank correspondent lenders will need to register or lock loans at the 2018 maximum loans limits and submit a change request.

Beginning December 14th, Wells Fargo Funding sellers can take down new Best Effort locks and Mandatory Commitments at the 2019 Conforming Loan Limits.

Mortgage Solutions Financial posted information regarding upcoming DU and loan limit changes.

As of December 6th, AmeriHome product codes and pricing are available at the new FHFA 2019 maximum conforming limits.

UWM is honoring the new increased loan limits. That’s an increase from $453,100 to $484,350 for regular conventional loans and from $679,650 to $726,525 for conventional high balance loans. “Don’t wait for the New Year to qualify more of your borrowers for conforming loans. Even though the FHFA announced the conforming loan limits will be increasing starting January 1, 2018, we are letting you submit and close your high balance loans now, no need to wait.”

loanDepot Wholesale is accepting the new 2019 GSE Conforming Loan Limits, click here to view the details.

PennyMac announced it is aligning with the conforming loan limit increases for standard and high balance loans.

With the FHFA announcement of new loan limits, PRMG will allow conventional loans with the increased standard and high balance limits to be submitted, locked and funded immediately. Loan limit changes for FHA, VA, USDA and Housing Authority products will be addressed in a separate communication later when announced by the agencies.

California’s Land Home Financial Services “will immediately accept locks at the new 2019 limit amounts! Lock the Loan using the applicable 2018 maximum loan amount for the transaction.

LHFS will update the lock manually until such time as our systems are updated through eXPRESS/Optimal Blue. Once the system is updated, you can lock at new limits. We will send out an announcement when the system has been updated. If you have any existing locks that you would like to update, please contact the lock desk: Locks@LHFSWholesale.com. (Please address questions regarding delivery and eligibility questions to Land Home.)

PennyMac’s Correspondent Group posted updates regarding FHLMC Home Possible and Home Possible Advantage, an announcement referencing its alignment with the updates in Freddie Mac’s Bulletin 2018-12 and 2018-13, and sent out 18-39: Updates to Conventional and Government LLPAs.

ditech’s Freddie Mac Conforming, Expanded Criteria and VA underwriting guidelines are being updated. The Client Guide and product matrices must be referenced for complete guideline requirements.

The Freddie Mac Guide Bulletin 2018-23 introduces automated income and asset assessment with Loan Product Advisor®, which are effective for submissions and resubmissions on and after December 9, 2018.

Sellers should recall that Freddie Mac made changes to its Scorecard and Manager Series. The Scorecard Metric – Total Timeline Trend Update will no longer be impacted by loans that are sold in non-performing loan sales (“NPL sales”). Currently, the total timeline trend metric excludes loans in NPL sales from the numerator. Now, loans in NPL sales will also be excluded from the denominator. Last year, two new disaster workout originator codes (“NG” and “OTM”) were introduced to support accurate disaster reporting; however, these two codes were excluded from the Scorecard Metric – Modification Pull-Through Rate Update. And it now includes the new Workout Originator codes for disaster modifications in the numerator. Servicers’ Scorecards will now reflect these workouts in the pull-through rate Manager Series – REO Manager® Update.

Capital markets

The U.S. 10-year closed Thursday +1bp to 2.91% as shorter dated Treasuries experienced curve flattening action on more of the same international news markets have been digesting throughout the week. (The markets are global!) People’s Bank of China Governor Yi Gang acknowledged that economic growth in China is nearing the potential rate of output and that there is increased downward pressure on the economy. Chinese authorities also confirmed the detainment of Canadian businessman Michael Spavor, who is accused of harming China’s national security, and a former Canadian diplomat, Michael Kovrig. Turning to Europe, Italy’s Prime Minister Giuseppe Conte confirmed that the Italian government agreed to lower its 2019 deficit target to 2.04% from 2.40%. In France, French Finance Minister Bruno Le Maire acknowledged that the country’s deficit will breach the 3.0% limit in 2019 as the government looks to quash protests by increasing entitlements. British Prime Minister Theresa May survived a no-confidence vote, but the prime minister will not stand in the next leadership election in 2022.

Today’s U.S. economic calendar kicked off with the November retail sales report (+.2%, stronger than expected, while the “control group” was seen increasing slightly over the previous reading but was +.9%). November Industrial production and capacity utilization at 9:15am are seen increasing from October figures. Markit will release both their manufacturing and services PMIs at 9:45am, 15 minutes before October business inventories are see increasing 0.6% versus 0.3% in September. We begin today with the 10-year yielding 2.88% and Agency MBS prices better .125 versus Thursday’s close.

(Thanks to several folks who sent this one in.)

One night a Viking named Rudolph the Red was looking out the window when he said, “It’s going to rain.”

His wife replied, “How do you know?”

“BECAUSE RUDOLPH THE RED KNOWS RAIN, DEAR.”

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: Don’t Underestimate Liquidity.” 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 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.)

Dec. 13: LO jobs; digital products; books by lenders, for lenders, or about lenders; False Claims Act rears up; a fun quiz you should take

“Why do people pay to go up tall buildings and then put money in binoculars to look at things on the ground?” It turns out that, in terms of grabbing their pieces of ground, first-time home buyers were more active in the first three quarters of 2018 than at any time since 2005, per Genworth Mortgage Insurance. Lenders wish they would be as active: Mortgage lenders are facing an even less profitable environment as purchase and refi biz fell for the ninth straight quarter. Fannie Mae’s Q4 2018 Mortgage Lender Sentiment Survey found that the outlook for profit among lenders in the fourth quarter reached an all-time survey low across all loan types: GSE-eligible, non-GSE-eligible, and government. “Competition from other lenders” was cited by survey participants as the top reason for their pessimism for the eighth consecutive quarter.

Employment & promotions

Sirius Lending Ushers in a New Era of Mortgage Lending, Led by Industry Veteran Brian Mitchell. Sirius Lending, powered by Sun West Mortgage Company, Inc. [NMLS 3277], is a full-service, forward-thinking service providing residential mortgages across the country, and is being led by Brian Mitchell. Mitchell has built Sirius Lending upon the foundation of integrity, industry knowledge and unparalleled service. Just as the star Sirius has been known as a guiding light to travelers, Sirius Lending is dedicated to guiding prospective homebuyers through their journey towards homeownership. An established industry veteran, Mitchell believes in well-rounded service from start to finish. That’s why Sirius Lending has created a vision to set the industry standard for homeownership by “taking ownership” of the entire process. “I’m thankful for the opportunity Sun West Mortgage Company has given me to lead Sirius Lending,” said Mitchell. I am committed to helping families and individuals achieve the dream of homeownership!”

“Lenders. Realtors. Technology. The convergence of those three forces drives Movement Mortgage’s innovation investments. Movement this month teased its newest offering: Movement Mobile. The app supercharges LO productivity by putting your favorite tools in a single interface on your phone. One app to manage your pipeline, communicate with agents and borrowers, access your database, issue pre-approvals and check calculators and calendars. More power. More productivity. More time. More freedom. Learn more about Movement Mobile and building a career on purpose by clicking here.”

Canopy Mortgage offers a better origination model. Canopy is blending the great price from brokering & the control you get as a Mortgage Banker. Toss in its proprietary LOS with a history of enabling LOs to originate more volume with less time and effort and you’ve found your ability to remain relevant in the rising rate market of 2019 and the future. Canopy Mortgage is in growing rapidly, expanding a National network of full-time loan originators. Do you have what it takes to be part of the Canopy Mortgage team? See how we’re disrupting the old way of doing mortgages.” Reach out to Josh Neumarker, Director of Hiring at Canopy Mortgage for a product demo (888-696-9076).

Congratulations to Steve Baselice who has been brought on by Optimal Blue’s Sales Solutions Specialist group to help grow OB’s hedge advisory and technology business.

And Gateway Mortgage Group has named Steven Patrick its new chief risk officer to oversee the Gateway’s enterprise risk management, compliance and quantitative analytics.

Lender products & services

For brokers, “Royal Pacific Funding is one of the fastest growing wholesale lenders in the nation because of its superior service and hands on approach to every loan. Now they are offering even more! Pricing on FHA and VA loans has been improved substantially for borrowers with 700+ credit scores. Royal Pacific also continues to offer free appraisals for any loan > $300K. But that’s not all! Royal has an extremely wide range of product offerings including Conventional, FHA, VA, NonQM and Reverse. Need solutions for DACA borrowers? They’ve got that too! Check out the latest special of .25 rate improvement on NonQM > $500K or .375 rate improvement on NonQM >$2M (applies to Leverage and Pivot products only). Brokers can contact their AE or brokers that are not signed up can email us for details.”

Are you looking to prevent against loan defects in 2019? Then we have a News Year’s resolution for you – improve loan quality by automating QC. Register for “Maximize QC due diligence reviews with OCR and Defect Management Technology” web seminar happening this afternoon. Your 1 hour that could mean faster closings, less defects and lower production costs in 2019!

Maxwell has released its groundbreaking new product, QuickApply for their digital mortgage point-of-sale platform. Maxwell QuickApply is an easy-to-launch modern mortgage application that, with consent from the borrower, gathers the borrower’s information from Maxwell’s network of data providers to pre-populate fields in the loan application, filling in personal information, employment history, income, real estate owned, financial assets, liabilities, and more. This new application enables clients to increase their application volume and improve borrower experience by reducing the burden on the consumer applying. This is just one more innovative step forward from an industry-leading player in the digital mortgage space. Along with QuickApply, their point-of-sale platform is a must-see for small- to mid-size lenders looking for a digital mortgage solution that will enhance and evolve the human relationship between borrower and loan officer. To learn more about Maxwell and QuickApply or request a personalized demo for your business, click here.

Go ahead, call your subservicer’s 800 number and see how fast they answer. Do they pick up in a minute or less? Or, are you left holding for 10, 20, or even 45 minutes? If the latter, then that’s the same infuriating service that you’re putting your customers through. And they think that it’s a direct reflection of you! Read this article from TMS to get tips on what your subservicer should be doing to deliver great customer service, so you can build a lifelong relationship with your customers.

2019 is fast approaching; are you ready? As the borrower experience continues to evolve–thanks to new mortgage technology–it’s important for lenders to adapt by taking advantage of the latest innovations that enhance their engagement strategy. Join next week’s webinar to learn how to build an effective borrower engagement strategy, so you can get a running start to 2019. Register to learn contact strategy best practices, what new solutions are available at your fingertips, how to continue selling to your existing database to build repeat business, and more! CLICK HERE to register. (Can’t attend the live session? No problem! Register to receive the recording immediately following the webinar.)

Borrower satisfaction

“A lender averaging 5,000 loan units annually is losing $243,000 each year because of poor communication in document collection,” says MortgageSAT Director Mike Seminari. “The cost comes with losses in referrals and repeat business, and in negative word of mouth.” Asking a second or third time for the same document makes a lender look disorganized and unprofessional, and it leaves borrowers, “Why can’t you keep track of things?” According to research from STRATMOR’s MortgageSAT Borrower Satisfaction Program, nearly one-third of borrowers report being asked multiple times for the same document, and the effects are devastating, with nearly a 50-point drop in Net Promoter Scores when this happens. Seminari offers five suggestions to help correct this problem in his December MortgageSAT Tip.

Books for the holidays

Congratulations to anyone who can write a book, and there are several (that I know about) in the biz. And with the reasonable prices, good gifts for your staff. Or for your boss! No, these are not paid ads, and the books are either written by folks in our biz or about our biz. In no order, we have…

Russ Van Buren’s Falling, inspired by the true events of 9-11.

There’s “Surviving Sosebee: A Lesson Plan On Life” by Mary Lee Gilchrest with First State Bank Mortgage in Kansas. (“I self-published so the book can be purchased from me by emailing me your address. My book is $15.00 with shipping and I enclose a return envelope for payment on the honor system that buyers will send money. My book tells about some that I have been through in my life and refers to my job many times, and the small profit I give the profit to ALZ and lung cancer research as those are the illnesses my mother and mother in law suffered with.”)

“My Client the FBI: How a real estate appraiser assisted the FBI before and after the mortgage crisis in cleaning up a broken system.” Written by Donald Gossman, you can read more about it here along with thank you notes from the Feds.

Conquering Shifts is for MLOs as part of a 2019 business plan. Authors Cindy Douglas and Kathleen Heck are offering a 15% discount for books purchased through December 15th.

Michael Rosser and Diane Sanders penned “A History of Mortgage Banking in the West,” a “book that should be read by politicians and business leaders everywhere.” Order here and use promo code ROSS17 to knock 20% off the price.

“Buy Your First Home Today” was written by John Mallett is a good book for LOs to give their clients. “Empower your life, build your wealth, own the home of your dreams.”

Anne Elliott composed “Mortgage Risk: A Blueprint for Smarter Origination.” The book is meant for underwriters, sales managers, LOs and appraisers.

“Hacked. Screwed. Gone.” By Jim Deitch is an “A-Z blueprint to protect your business from accidental & malicious information security threats.”

Jason Myers authored “Becoming the Successful Mortgage Broker.” Jason also wrote “The Successful Mortgage Broker.” “Becoming a millionaire in the mortgage industry doesn’t happen by chance. When you lay the proper foundation, you create the opportunity.”

“Demystifying Mandatory” by STRATMOR’s Jennifer Fortier is a good read for anyone starting out in capital markets.

From Texas comes Michael Jones (Georgetown Mortgage) with his tome, “Reset” about a loan officer who is bumping along the bottom and re-ignites his career with some simple process changes and effort.

“The Uncommon Commodity: A Common-Sense Guide for New Managers” was composed by Doug Thorpe. “A collection of many thought-provoking stories, tips, anecdotes, and life hacks to help you grow as a manager.”

Here’s a primer on the capital markets sector from SIFMA…a fundamental overview of U.S. capital markets and financial institutions including an overview of capital markets, role of financial institutions, investment banking, markets & securities, and more.

Civil War’s False Claims Act still the catch-all

The United States Department of Justice announced that Finance of America Mortgage, LLC has agreed to pay $14.5 million to settle a False Claims Act lawsuit involving mortgage fraud. The lawsuit relates to FHA loans originated by Gateway Funding Diversified Mortgage Services LP, which FAM acquired in 2015. The settlement resulted from a lawsuit filed under the qui tam whistleblower provisions of the False Claims Act by Debra McGeehan, a former quality control underwriter for Gateway. Ms. McGeehan, who receives $2.4 million, worked for Gateway during portions of 2009 to 2015. “It is extremely frustrating when a mortgage company identifies issues with loans as part of its quality control process, but then deliberately ignores those findings,” said McGeehan. “Gateway was only interested in its own financial interests and was willing to ignore its own quality control findings in order to defraud the FHA program.” HUD’s requirements require that lenders self-report loans that lenders determine have underwriting errors.

“According to the settlement agreement, Gateway did not maintain a proper quality control program as required by HUD for participation in the FHA program. While several of Gateway’s management team notified the company that Gateway’s loans had a high default rate, Gateway did not comply with HUD’s self-reporting obligations. For example, in a February 2014 email, Gateway’s SVP of Compliance and Credit Risk sent an email to Gateway’s executive team noting that there were specific underwriters and branch offices ‘who show a pattern of poor performance.’ While Gateway identified loans during the quality control process that had material underwriting errors, Gateway did not routinely report those errors to HUD, as required. As a result, HUD incurred substantial losses when those loans defaulted and insurance payments were subsequently paid to Gateway.”

Capital markets

The U.S. 10-year closed +3bps to 2.91% as the yield curve re-verted itself, the 2-year now below the identically-yielding 3-year and 5-year (2.77%). Optimism with Treasuries was associated with the release of Huawei’s CFO Meng Wanzhou from Canadian custody, viewed as a step toward improving relations between the United States and China although later in the day President Trump admitted that the release could be linked to a broader trade agreement, stirring concerns that the arrest was politically-motivated in the first place. In other international news, Shaktikanta Das became the Governor of the Reserve Bank of India. The Italian government is reportedly willing to reduce its 2019 deficit target to 2.0% from 2.4% and Prime Minister Giuseppe Conte pledged that campaign promises for retirement reform and a basic income for the poor will be kept. And British Prime Minister Theresa May faced a no-confidence vote today, but press reports suggest she will maintain her post.

The latest European Central Bank decision was announced this morning: The ECB decided to leave rates unchanged in this morning’s statement, with ECB head Draghi’s press conference about to begin. The ECB is expected to announce the end of their QE program, though, perhaps provide more guidance (including a timeline) for when reinvestment purchases will end. Besides the ECB, the SNB and Norges Bank also revealed monetary policy decisions.

The U.S. calendar kicked off with November import/export prices (-1.6%, -.9%) and weekly jobless claims (206k). Finally, and following yesterday’s rescheduling, the November budget deficit will be released at 2PM ET with CBO estimating $203 billion compared with $138.5 billion in the previous fiscal year. Thursday begins with the 10-year yielding 2.90% and agency MBS prices a shade higher versus last night’s close.

We all use the same words, right? Wrong. There aren’t too many things that make my jaw drop anymore but this multiple-choice quiz is one of them. It is a New York Times linguistics test, asking you how you say simple terms. Like how do you address a group of two or more people? What do you call a bug that rolls up in a tiny ball? Takes less than 5 minutes, no thinking, and at the end it tells most folks where you grew up within 50 miles. Incredible.

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: Don’t Underestimate Liquidity.” 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 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.)