Bank of America has opened 3 completely automated branches without any employees. Customers can use ATMs or have video conferences with employees at other branches, and the branches are about 25% the size of a normal branch. Bank of America indicates that since 2009 it has reduced its branch footprint by 23%, as the percentage of customers doing automated transactions has jumped 94%.
Merger & Acquisition news.
For various reasons (age of
owners, shifting business models, cost of compliance) the mergers and
acquisitions situation has been off to a strong start, and expected to
continue. The latest example is Realogy Holdings Corp, a full-service residential
real estate services company, and Guaranteed Rate, an independent retail
mortgage company, announced a new joint venture, Guaranteed Rate Affinity, which is
expected to begin doing business in June 2017. The twist with this deal is that
it involves a company that has been scaling back: PHH. As Guaranteed Rate moves
in to work with Realogy, PHH announced it is exiting its existing joint venture
Under the agreement,
Guaranteed Rate Affinity will originate and market its mortgage lending
services to Realogy's real estate brokerage and relocation subsidiaries,
respectively NRT and Cartus, as well as to other real estate brokerage and
relocation companies across the country. With PHH pulling out, Guaranteed Rate
Affinity will acquire certain assets of its mortgage operations, including four
regional mortgage origination and processing centers, its relocation division
and employees across the United States.
(And in other news regarding
divvying up the still living body, LenderLive Network, LLC announced that it has reached
a definitive agreement with PHH Mortgage Corporation to assume its private
label fulfillment operations in Jacksonville. In late 2016, PHH
announced that it would exit the private label fulfillment business, and this
agreement is expected to facilitate a smooth transition for both PHH employees
Mergers and acquisitions
activity in the mortgage industry has significantly increased since the
financial crisis. Most of these deals involve the acquisition of assets, which
includes the data on all loans the acquired lender has originated or was in the
process of originating at the time of purchase. However, what often get
overlooked are the systems in which that data is housed. If the acquired lender
was using a different system than the acquiring lender, there will be some
significant issues and costs in maintaining access to that data. The newest whitepaper from MetaSource tackles these challenges.
In depository bank M&A news, this
week it was announced that Heartland Financial USA ($8.3B, IA) will acquire
Citywide Banks ($1.4B, CO) for about $203mm in cash and stock. Gulf Coast Bank
and Trust Co. ($1.5B, LA) will acquire SBA lending company CapitalSpring SBLC
(TX). In Alabama Progress Bank and Trust ($730mm) will acquire First Partners
Bank ($274mm) for about $41.9mm or roughly 1.37x tangible book.
It's not all rainbows and
unicorns. Research by BankRate that looked at the largest branch closures from
2010 to 2015 finds the top 5 were: Bank of America (closed 1,177 branches or
about 20% of its total), Wells Fargo (350, 5%), Citizens Bank (273, 24%),
SunTrust (253, 15%) and HSBC (251, 52%). Not in the top: Chase.
Chase has made a
well-publicized move away from FHA lending due to potential liabilities.
Certainly the FHA &
VA changes that
other lenders and investors make continue, however, as does Ginnie Mae, so
let's see what's new in that lending sector.
NAR took a look at the
aspiring homeowner in its latest survey.
Affordability was the #1 reason for people not owning a home, followed by
flexibility concerns. That said, 88% of non-owners eventually do want to own a
home. There still seems to be a disconnect between what people think they need
(as far as a down payment) versus what is actually required. FHA loans remain the best way to get these people
their first home.
Curious about FHA average credit scores on new endorsements?
While the average credit score on new FHA endorsements has fallen as the agency
has withdrawn from its counter-cyclical role during the crisis, the changes
have been uneven across products and loan purposes. A recent MBA chart
depicts the average credit scores on new FHA mortgage endorsements between 2010
and 2016. There is a clear drop in the average credit scores for all products following
policy changes in 2012 and 2013 that increased the effective mortgage insurance
premium (MIP). At the height of the refi boom in 2012, average credit
scores were higher for refinances than for purchase endorsements, while average
purchase credit scores have recently been a bit higher than refinances.
The MBA's team tells us that
with the subsequent reduction in the annual MIP rate introduced in January of
2015, there was a tripling in FHA refinance activity over the short term, and a
more persistent upward shift in FHA purchase endorsements over the longer
term. The MIP reduction also had the impact of stabilizing the credit
profile of the FHA book by drawing stronger credit borrowers to FHA via
conventional to FHA refinances. On the home purchase side, the typical credit
score for home purchases following the MIP decrease did not change compared to
projects funded in the Fannie Mae HomeStyle product at M&T Bank are given up to nine (9) months to
complete work, as opposed to a six-month renovation-term cap in FHA 203(k)
products. Larger size projects will
benefit from this, and should the customer need even more additional time,
extensions are always considered for viable, documented reasons.
Mae is informed its users of
changes that impact the web addresses (URLs) that are used to access Ginnie Mae's disclosure
updating overlays for VA
full doc and IRRL loans. PennyMac Correspondent posted a new announcement regarding VA student loan payment calculation.
Wholesale allows VA IRRRL's with less than 6
payments on its 30-year fixed product. For details, contact Justin
Bank issued an FHA 203(k) LTV
Calculation Reminder: The lender must calculate two (2) LTVs for an FHA 203(k)
transaction. 1. MIP LTV to determine MIP factor, and 2. CASE LTV (a/k/a/ Loan
LTV), which represents the overall LTV of the loan. The CASE (Loan) LTV is what
should appear on the Transmittal (HUD-92900-LT) under "Qualifying Ratios," on
the AUS Findings, and must also match Step 5-B from the 203(k) Online
Calculator. Lenders are reminded that Step 5-B (Case LTV) has instructions
printed on the 203(k) Calculator screen demonstrating how to calculate the Case
LTV. These instructions are not located in the FHA 4000.1 Handbook. M&T is
seeing many loans with an incorrect and/or mismatched Case LTVs and as a
reminder, please note that the Case LTV involves the LESSER of two
calculations. The published M&T FHA 203(k) Product Page (located on MEME)
lists the formulas used by the online calculator for lender convenience.
American Mortgage Company's overlay which capped Real
Estate Commissions to 8% has been removed. Its conventional, FHA, VA
& USDA product chapters have been updated.
Lenders using Prior Approval
process for VA loans or for one-off prior approval submissions should be aware,
effective February 13th, all VA prior approval loans
must be submitted electronically through the VA WebLGY system instead of being
mailed in overnight packages.
West Financial's latest bulletin informed lenders that effective immediately, VA has
confirmed clarification and new guides for Student Loan Debts and Obligations.
The clarification will apply to deferred student loans and the new policy will
provide guidance for student loans in repayment or, to begin repayment within 12
months of a VA loan closing. This policy will apply to all student
loan repayment types.
Correspondents should not that it is revising the seasoning requirement for VA
IRRRL transactions to require a minimum of six consecutive monthly payments
prior to loan closing date. If the credit report does not reflect six
consecutive monthly payments, the required payment history must be obtained
from the servicer. If the credit report/payment history does not reflect
six consecutive monthly payments when the loan is underwritten, the loan will
be conditioned for an updated payment history and a Clear to Close will not be
issued until the required payment history is provided. This is the removal of a
previous overlay as the GNMA seasoning requirement refers to "at the time of
Altisource announced a specialized
Federal Housing Authority (FHA) offering, taking advantage of its end-to-end
product suite to assist in improving controls and mitigating risk throughout
the lifecycle of servicing an FHA asset. FHA loans represent a growing
share of many Servicers' portfolios and require specialized processes to comply
with complex servicing guidance.
Treasuries and MBS traded lower (down in price) Wednesday as data for January
showed headline consumer price inflation accelerating to a four-year high of
2.5% year over year, retail sales growth exceeding expectations, and the Empire
State Manufacturing Index showed improving sentiment among purchasing managers
in New York state. And all the Fed speakers appear to be laying the groundwork
for three short-term-rate hikes this year. On the good news side of things, Fed
Chair Yellen has said that the Fed does not intend to sell MBS (preferring
natural runoff instead); remember that the NY Fed is buying $1-2 billion a day
using money from its holdings that pay off early.
numbers, the 10-year yield hit a session high of 2.52% after all those numbers
showed our economy is doing well, and inflation is nearing the Fed's target.
But its price bounced and the 10-year closed yielding 2.50% while 5-year
T-notes and agency MBS prices worsened about .250.
morning we've already had weekly Initial Jobless Claims (+5k to 239k), Housing
Starts for January (-2.6%, permits +4.6%), and the Philadelphia Fed Survey
(43.3, topping forecasts) - and that about does it for scheduled market-moving
news. We find the 10-year T-note yielding 2.48% and MBS
prices a shade better than last night's close.
Jobs and Announcements
For real-live people, EMM Wholesale is hiring Wholesale Account Executives with a book of business in the Northeast & New England region. EMM Wholesale is a division of E Mortgage Management, LLC, a privately held mortgage lender licensed in over 36 states and is an A+ rated, accredited member of the Better Business Bureau, member of the Mortgage Bankers Association and maintains the highest of compliance standards with the CFPB. E Mortgage Management has cultivated a fun team environment where there is opportunity to learn, develop and advance your career while contributing to the company. For confidential consideration e-mail your resume to John Miriello, Vice President, Human Resources.
Michigan Mutual, Inc. is currently seeking Wholesale Account Executives nationally to join its sales teams, specifically in the following key markets of Maryland, Virginia, and Washington DC. Michigan Mutual is an agency direct/seller/servicer/issuer established in 1992 and based in Port Huron, Michigan. "We are very excited about the success of our wholesale expansion efforts and look forward to welcoming new team members to the MiMutual family in 2017!" If you are a successful mortgage professional seeking an opportunity to join a thriving company with a positive culture, strong corporate values, and a clear vision for the future, please contact President of Michigan Mutual, Vince Parlove (248.943.3709) or HR Specialist, Karley Warwick (248.286.9490).You may also visit the careers page to complete an application.
Open Mortgage, a nationwide residential mortgage lender, is looking for Wholesale/Non-Delegated Account Executives to join our team. Headquartered in Austin, TX, "Open Mortgage is hiring talented, experienced AEs in key markets across the country. Open Mortgage offers a full product line and dedicated operational teams to provide our business partners with fast, efficient, and personalized service. Our business model is built on proven practices that emphasizes superior customer service and results in repeat business from our clients. Join our team, grow with us, and see why our motto is 'Where Better is Possible.'"
On the retail side, Assurance Financial continues to expand after increasing production by 29% in 2016 while opening several offices in new markets throughout the country! The company has a solid reputation for closing loans on time, appealing to anyone wishing to grow their origination business. Our back office supports its mortgage loan originators and branch managers so they can focus on originating more new loans rather than worrying about closing their pipeline. Assurance plans to expand its footprint further this year by selectively hiring producing branch managers and MLOs in good markets. For more information, contact Paul Peters, CMB at 225-239-7948 or visit LendTheWay.com/Careers.