CFPB Exam Procedures; Mortgage Training and Events; Can your Vendors or Investors Force your Hiring Decisions?
is a well-known fact that 5 out of 3 people struggle with fractions."
What fraction of your day do you spend exercising? Total health care
spending in the USA (i.e., total spending from all sources both
government/public and private) is expected to be $2.9 trillion in 2013.
Per the Center for Medicare and Medicaid Services, that total is
forecasted to climb +72% over the next 9 years (2022) to $5.0 trillion.
Park away from the office entrance, and skip that candy jar near the
underwriting department! Speaking of physical activity, the Olympics are
coming up. The Swiss must are always so confident in their chances of
victory: they included a corkscrew in their army knife.
Moving from sports to the job market, New Penn Financial, one of the largest and most well-capitalized independent mortgage bankers in the country, is actively recruiting Regional Sales Managers for its Wholesale Division. Founded in 2008, New Penn (http://www.newpennfinancial.com)
"has forged a national industry presence built on competitive interest
rates, exceptional customer service, and healthy lending practices. New
Penn is nationally licensed and originates both agency and non-agency
loan programs. Experienced candidates who are proven leaders in the wholesale channel should submit resumes to Aubrie Cusumano at acusumano@newpennfinancial .com. All inquiries will be kept confidential. One can also visit here.
And a well-known national lender on a growth trajectory has launched a non-captive warehouse lending platform and has an opening for a seasoned warehouse relationship manager
with a proven history of success in the Emerging and Small Cap Mortgage
Banker segment. The position does not require relocation. The warehouse
lender currently has a growing portfolio across the US, and as such
travel may be required depending on location of clients. The
responsibility will be to grow and manage a top performing warehouse
portfolio. The lender is FNMA/GNMA seller servicer and active in both
national and state MBA associations. Please send contact information and
resume to me at rchrisman@robchrisman .com.
"Rob, can our investors, vendors, Realtor clients, warehouse banks, and so on, influence our hiring practices?" My kneejerk answer is that in this counter-party laden environment, to some extent, yes. I turned to attorney Brian Levy (blevy@kattentemple .com)
since this is pretty "gnarly stuff. He wrote, "Rob, the question
regarding whether an investor can influence an originator's hiring
practices is timely and raises much broader issues I am observing in the
mortgage banking market. The regulations and other changes spawned by
the Dodd-Frank laws, coupled with recognition of the previously
underestimated impact of repurchase claims and buybacks, have resulted
in dramatic increases in the power of investors to control and dictate
the internal operations of correspondents and brokers."
note continued. "Regulator focus on risk in vendor management and an
oligarchy of large investors have accelerated this trend. As a practical
matter, mortgage lenders dependent on the secondary market must adhere to the compliance and risk interpretations of their investors.
You can hire and fire whoever you want, but if your primary investor
doesn't like your hiring practices, they do not have to buy your loans.
Likewise, you can seek to interpret the ambiguities of Dodd-Frank
regulations (such as LO Comp or the QM points and fees test) with your
own attorneys in the most favorable way to conform to your business, but
if a key investor disagrees (or, perhaps worse, your systems vendor has
programmed the issue differently) practically speaking, it doesn't
matter what your attorney says. You may still be asked to buy back a
loan if your interpretation makes the loan ineligible for sale to that
investor. Ultimately, originators are forced to calculate whether the
value of the relationship with the investor is more important than their
preferred interpretation on these matters. In the past, these kinds of
decisions were the province of the originator's internal risk analysis.
Whether these developments are a good or bad thing, however, remains
subject to further debate and examination." Thank you Brian - these are
indeed different times.
believe that, since we're about 50% through Dodd-Frank mandated
legislation, that counterparty considerations will rise to the top in
2014. For example, are you doing enough business with minority or
women-owned businesses? How well do you know your escrow and closing
agents? Secure Settlements, Inc. recently
conducted its second annual confidential survey of thousands of
lawyers, notaries, escrow agents and title agents to examine the status
of closing professionals in the increasing regulatory environment.
The recent survey, conducted January 13-17 comes nearly one year after
the previous industry survey seeking similar information. SSI uses data from confidential polling to support its mortgage industry pre-funding quality assurance risk management tools. In
the age of the Qualified Mortgage, data about personal experiences
relating to the closing process is a critical element to understanding
consumer and enterprise risk. Highlights of the poll included a) nearly
45 % of all business is being referred by real estate agents, up from
27% last year, and only 15% is coming from loan officers as opposed to
36% last year. This reflects the movement away from a refinance
market to a purchase market where the source of business is more
directly tied to the real estate industry; b) the rising cost of E&O
and surety bonds are troubling many agents. More than 60% of agents
polled are dissatisfied with the cost of their current coverage. This
may be a reflection of the insurance market's increasing concern over
historical losses surrounding escrow and closing fraud. A number of
insurers have recently left the market altogether for legal, title and
escrow liability insurance, increasing costs; c) nearly 20% of those
polled actually witnessed fraud at a closing last year, up from 16% in
2012, while 36% were asked to commit fraud at a closing and refused to
do so, up slightly from 33% last year.
a reminder, the CFPB has released updates to its mortgage origination
exam procedures and mortgage servicing exam procedures (link).
The Supervision and Examination Manual provides guidance on how the
agency conducts examinations. According to the agency the updates, "harmonize
existing procedures for handling mortgage origination and mortgage
servicing examinations with the revised interagency procedures that
address the new mortgage regulations issued in January 2013, which have
now taken effect." The exam procedures for both mortgage
origination and mortgage servicing now cover final rules issued by CFPB
through November 2013. These examination procedures will be incorporated into the Supervision and Examination Manual at a later date.
in September, the CFPB issued a final rule expanding the exemptions to
the requirement that creditors create escrow accounts for a minimum of 5
years for certain first-lien HPML's. The rule broadened the exemption
from the requirement available to certain small creditors that operate
predominantly in "rural" or "underserved" counties. Instead of limiting
the exemptions to such creditors that had operated predominantly in
rural or underserved counties in the preceding calendar year, the
exemption was broadened to include such creditors that operated
predominantly in rural or underserved counties in any of the previous
three calendar years. The change took effect January 1st,
which means that creditors will be able to qualify for the exemption in
2014 if they operated predominantly in rural or underserved counties in
calendar years 2011, 2012, or 2013. The CFPB has added a list of rural
and underserved counties for calendar year 2011 to the lists they had
already posted on their website. To view that list.
In a smattering of training and events news:
the course of January 27th and 28th, Plaza Mortgage will be offering
seminars on selling to the realtor market in Orlando, Tampa, Ft.
Lauderdale, and Miami, FL. Participants
will learn about effectively prospecting, setting appointments, making
sales calls, and implementing follow-up plans. To register for Orlando, Tampa, and for Miami.
The California Association of Mortgage Professionals
is putting on its annual sales and marketing event in Newport Beach, CA
on February 6th and 7th. Vendor management, Compliance Management
Systems, LO comp, and compliance marketing all feature on the agenda. To register, go here.
The SNL Knowledge Center will be hosting its Fundamentals of Banking Valuation educational program in Atlanta, GA on March 27th and 28th. The
course goes over key operating levers of bank financial statements, the
primary ratios used to analyze banks, discounted cash flow modeling,
capacity-to-pay/earnings dilution analysis, dissecting and interpreting a
fairness opinion, and various best practices. It is also eligible for CFA Institute and CPE continuing education credits. To register and find out more, go to http://pages.snl.com/080PQS12300034C005PGl00.
The Oklahoma Mortgage Bankers Association will be holding its annual conference, titled "Break Through," in Tulsa, OK from April 21st-22nd. Further details to follow.
Maryland Association of Mortgage Professionals will be hosting several
events over the next few months, the first being a seminar on
mini-correspondent lending on February 6th in Columbia, MD., and including its annual conference in April. More information and registration links can be found at http://www.mdmtgpros.org/.
On March 6th, the 2014 Examiner Seminar will be held in Arnold, MD (register, followed by the 2014 Regional Conference of MBAs in Atlantic City, NJ from March 9-13th.
This year NAMB's Ultimate Mortgage Expo will be held in New Orleans, LA from July 7-9th and will focus on marketing, product development, and lead generation. Sponsorship opportunities are available as well; see here for more information.
On January 28th, MGIC will be offering a webinar on evaluating income and assets. Participants
will learn how to identify various sources of income and assets and
document and calculate the relevant information. Go here for more information.
The Ohio Mortgage Bankers Association will be hosting a series of webinars entitled "The Secrets of Top Producers in a Purchase Market" on February 4th, March 4th, and April 1st. A
wide variety of topics will be covered, including referral sources,
business models, working with realtors and financial advisors, and
social media. To find out more and to register, go to omba@ohiomba .org.
conjunction with MBA Education, the Mortgage Bankers Association of New
Jersey and the Maryland Mortgage Bankers Association will be offering a
Compliance Essentials course designed specifically for smaller
independent and community-based lenders. The curriculum focuses on upcoming regulation and how to implement the necessary controls to comply. To register, go to www.mbaa.org/.
improved last week (the 10-yr closed at a yield of 2.74%) due primarily
to some weak manufacturing numbers out of China. And if China slows
down, watch out! We saw what the news did to stocks. But it is a new
week, with new news including the FOMC monetary policy statement on
Wednesday afternoon (more tapering?) and $106 billion in Treasury coupon
supply, which includes a 2-year floating rate note, auctioned from
Tuesday through Thursday. We'll have the first peek at Q4 GDP on
Thursday and Chicago PMI and Personal Income on Friday. New Home Sales
will come out today. Durable Orders, another important indicator of
economic growth, will be released on Tuesday. Pending Home Sales will
come out on Thursday. Personal Income, Core PCE inflation, and Chicago
PMI manufacturing will be released on Friday. And there will be those
pesky Treasury auctions on Tuesday, Wednesday, and Thursday. But the
most significant economic report this week will be Thursday's release of
fourth quarter Gross Domestic Product (GDP), the broadest measure of US
In the early going rates are slightly higher. The 10-yr is at 2.76% and agency MBS prices are about .125 worse than Friday's close.
average age of Realtors is 58, and for mortgage bankers it is 71. Okay,
just kidding about 71, but here are some handy-dandy texting codes for
ATD - At the Doctor's
BFF - Best Friends Funeral
BTW - Bring the Wheelchair
BYOT - Bring Your Own Teeth
CBM - Covered by Medicare
CUATSC - See You at the Senior Center
DWI - Driving While Incontinent
FWBB - Friend with Beta Blockers
FWIW - Forgot Where I Was
FYI - Found Your Insulin
GGPBL - Gotta Go, Pacemaker Battery Low
GHA - Got Heartburn Again
HGBM - Had Good Bowel Movement
IMHO - Is My Hearing-Aid On?
LMDO - Laughing My Dentures Out
LOL - Living on Lipitor
LWO - Lawrence Welk's On
OMMR - On My Massage Recliner
OMSG - Oh My! Sorry, Gas
ROFL..CGU - Rolling on the Floor Laughing...Can't get Up!
TTYL - Talk to You Louder
WAITT - Who Am I Talking To?
WTFA - Wet the Furniture Again
WTP - Where's the Prunes
WWNO - Walker Wheels Need Oil
Hope these help! GGLKI - Gotta Go, Laxative Kicking in