Charles Dickens walks into a bar and asks for a martini. The bartender asks, "Olive or twist?" Some things have a clever twist, others not so much - and it is becoming increasingly hard to argue that values are not improving. Kroll Bond Rating Agency published a new research report titled "U.S. Real Estate Prices Show Signs of Rising Again." Highlights of the report include single family home prices in most areas in the U.S. have started to rise again based on November indices and the 12 month projection published by Weiss Residential Research. The correlation between rates, new mortgage applications and prepayments has fragmented. The low interest rate environment has increased home prices and prompted sales of mortgages into the agency market but it's not increasing lending. And attitudes about the US economy are finally turning around, according to the Fannie Mae National Housing Survey. More people think the economy is doing better, and that consumers sense that mortgages are becoming easier to obtain. Huh?

The MBA is hosting its second annual Single-Family Rental Finance Summit on April 1st in Arlington VA. to bring together owners, lenders, investors, government officials and others to identify opportunities - and challenges - for borrowers, lenders and others involved in the market. Attend this event to meet with industry leaders, to discuss market opportunities and challenges and to learn more about this trillion-dollar market.

The upcoming TRIAD rule is more than just updated forms. In Colorado the Association of Mortgage Professionals is providing an Integrated Disclosures Webinar on March 24th with Ryan Riesterer, of Riesterer Law & Consulting, detailing what to expect and how to prepare. Covered topics will include: review of the forms, timelines for delivery of the forms to consumers, which fees will have tolerance and zero tolerance, who will be responsible for disclosure accuracy and delivery, what policies and practices should you be aware to prepare. To register, click here.

And NAR is addressing the RESPA/TILA changes. Its next webinar is on Thursday, March 19, 2015 at 2:00 PM EDT. Realtors have produced a video explaining some of the changes coming up.

And the title biz is kicking into gear: here is a useful graphic done by ALTA on timelines for disclosures

A webinar presented by MGIC Friday, March 20 at 10:30AM CST will cover the following topics: Highlights of Fannie Mae's recent announcement on analyzing self-employed income, Tips for evaluating business income, Two methods for evaluating Partnerships and S Corps (K-1s) - Traditional and Distribution and Form 2106.

SNL Knowledge Center is hosting a workshop on Understanding Debt Capital Markets March 23-24 in New York. Participants will study the major debt instruments - notes and bonds, straight and convertible, investment grade and junk, public offerings vs. private placements - as well as their characteristics and risks. In addition, you will examine deals, from book building through final allocations. The role of credit ratings and credit spreads and their relationship to the pricing of securities will also be covered.

The 99th Annual Texas Mortgage Bankers Association's Convention, May 3rd-5th, will offer seasoned guest speakers and exhibitors as well as informative sessions.

Let's move on to the folks with the money...The Federal Reserve's stress tests found that all 31 of the largest banks in the U.S. have the capital needed to weather an economic crisis where unemployment surges, stock and housing prices decline significantly and the corporate debt markets crumble. "Higher capital levels at large banks increase the resiliency of our financial system," said Fed Governor Daniel Tarullo. "Our supervisory stress tests are designed to ensure that these banks have enough capital that they could continue to lend to American businesses and households even in a severe economic downturn."

And as usual M&A is alive and well, although things quieted down for a week (on a relative basis). The Edgar County Bank and Trust Co. ($391mm, IL) will acquire Sidell State Bank ($23mm, IL). Veritex Community Bank ($802mm, TX) will acquire Independent Bank of Texas ($121mm, TX) for $21mm in cash and stock or about 1.7x tangible book. Western Alliance Bank ($10.5B, AZ) snuck over the border and will acquire Bridge Bank ($1.8B, CA) for about $425mm in cash (11%) and stock (89%) or just over 2x book. BankUnited ($19.1B, FL) will acquire the small business finance division of CertusBank ($1.5B, SC) for a $20mm premium to the tangible net asset value of the assets & liabilities.

Mortgage banking fans took note that the J.G. Wentworth Company announced that it has signed a stock purchase agreement to acquire Virginia's WestStar Mortgage, Inc., a privately-held residential mortgage company specializing in conforming mortgage lending, for $54 million in cash and J.G. Wentworth Class A Common Stock, with a minimum of 75% of the transaction in cash. "WestStar...is licensed to operate in 40 states. The firm was founded in 2000 and has over 300 employees in 15 states across the country. In 2014, WestStar closed $1.5 billion of new loan originations, and the company sold or securitized approximately half of the loans it originated to government backed organizations and half to third party institutional investors in the secondary market. WestStar will join The J.G. Wentworth CompanyTM as a newly-rebranded division under the name J.G. Wentworth Home Lending, and the division will remain in the company's current headquarters in Woodbridge, VA.

The industry is buzzing about the court case involving the MBA. Attorney Benjamin Diehl of Stroock law firm (in Los Angeles) weighed in on the significance of the U.S. Supreme Court Perez v. Mortgage Bankers ruling that federal agencies don't have to go through formal rulemaking to make significant changes to rules interpreting regulations. Diehl said, "The potential importance of the Perez case is suggested by the concurrences, which indicate that the Supreme Court may be willing to reconsider how much deference, if any, to give to interpretative opinions in the future. The opinion suggests renewed litigation on that question, particularly if the CFPB and other agencies increase the use of advisory publications and those publications are then relied on in future enforcement actions or examinations."

The MBA, disappointed of course, sent out its own widely circulated take on the case, reminding the industry that "...It is important to note that the Court reversed the Circuit's court's approach on an issue of administrative law. As a consequence, this means that the Department of Labor's 2006 opinion letter issued to the MBA on the use of the administrative exemption for loan officers is no longer operative. However, the Supreme Court's decision does not mean lenders must pay loan officers overtime in all cases. Under the DOL's overtime rules, there are other exemptions to the overtime rules that may still apply to certain loan officers, most notably the 'Outside Sales' exemption and the 'Highly Compensated' exemption for certain well-paid individuals.  As a result of the Court's decision, MBA recommends that lenders should, in conjunction with their counsel, carefully reexamine their overtime policies and determine whether these or any other exemptions are applicable to particular employees.   Because state laws often go further than federal law in setting the rules for overtime pay, lenders should also determine to what extent any state law requirements must be satisfied."

The MBA's note discussed what is ahead. "Notably, last year, the President asked the Department of Labor to revise its Fair Labor Standards Act (FLSA) overtime regulations through the formal rulemaking process. A proposed rule from the Department of Labor is expected within the next few months.  During the regulatory process, MBA will seek members' views and advocate forcefully the need for reasonable rules that recognize the sophisticated advisory and other high-level responsibilities of today's loan officers, and provide clear standards for exemptions from overtime requirements."

Yesterday the MBA reminded lock desks everywhere of the trend: apps decreased 1.3% with refis dropping 3% although purchases were +2%. Probably more significantly the refinance share decreased to 60%, and the ARM share increased to 5.6%. The average loan size for purchase applications increased to the highest level in the history of the survey at $294,900.  The FHA share decreased to 14% and the VA share increased to 11%.

We also saw a continued rally in prices, drop in rates. Tensions between Greece and Germany increased as Greece and the troika's meeting scheduled for today became inexplicably postponed for a day. (Greece's justice minister did not help matters by suggesting that German property in Greece could be seized to compensate for the Nazi occupation during WWII.) But LOs don't mind the squabbling: low European yields are likely causing international investors to shift their allocations towards Treasuries instead.

For numbers we saw a 2.10% closing yield on the 10-yr Wednesday and in the very early going we're at 2.08% with agency MBS prices better by roughly .125.

 

Jobs and Announcements

Fannie is searching nationally for a Director, Strategic Customer Management and Director, Customer Account Management in its Customer Engagement Division. "Coordinate B2B account strategy execution and direct operations in managing local and/or national customer accounts holistically to maximize relationships, facilitate the contract process, and offer mutually beneficial solutions to the customer. Lead teams effectively, articulate goals, allocate resources, and manage workflow. We are focused on advancing the housing recovery, improving our company, and leading change that results in sustainable homeownership. Join our diverse, high-performing team and make a difference. Fannie Mae is an Equal Opportunity Employer."

Looking for an opportunity to build a retail mortgage team? A national mortgage company is seeking a retail Regional Manager to lead the charge in building the mortgage presence in the state of Texas. The person can work from home but the ideal locations include being near Dallas, Houston, or Austin. The lender is very stable and has a large servicing portfolio - no further details can be divulged. For confidential consideration, please send resume inquiry to me at rchrisman@robchrisman. com. (Today is a speaking day for me in Nashville and then travel, so please excuse any delays in responding.)

In "new product" news, FirstKey Lending recently launched an "Express" loan program, which has several features unlike any other loan products on the market today. "The Express loan program provides loans to rental property investors for the acquisition and refinancing of both single properties and portfolios of properties. The program offers 30-year fixed rate loans with no prepayment penalties, protecting investors from balloon payments and the risk of rising interest rates. There is no limit to the number of properties that a customer can finance with FirstKey Lending. For more information? Call Grace Soueidan at (646) 362-6484.

Stonegate Mortgage is hosting a job fair at its Lake Forest, CA location on Wednesday, March 18th from 3:30 - 7:30 PM PST. Stonegate is actively seeking to fill numerous positions for its TPO, Retail and new Direct to Consumer divisions in both sales and operations for their California, Illinois and Texas markets! The job fair will provide four informational sessions throughout the event. Founded in 2005, Stonegate Mortgage is a leading, publicly-traded mortgage company that originates, finances and services agency and non-agency residential mortgages through its network of retail offices and approved third party originators. "Why join the Stonegate Team? Associates enjoy flexible schedules, comprehensive benefits, paid training, paid licensure, great compensation plans, unique loan programs for today's market, supplied daily leads, and provided marketing to drive repeat/referral business. Applicants are encouraged to learn more about current career offerings by clicking here."

Nine of the nation's top producing loan originators are continuing to share their insights and best practices at the upcoming Top Producer Round Table event series that continues March 13-20 in New York, Boston, Philadelphia, Washington DC and Baltimore. The events are from 10:00am - 1:00pm local time, and feature a packed agenda with back-to-back presentations and live Q & A. Top Producer Round Table is designed to inspire originators with best practices from top producing loan originators from different parts of the country, and a 60-day plan of action to implement. Topics include how to save time and create more efficiency in your loan process, how to grow Realtor relationships in light of the CFPB's recent rulings on MSAs, and how to diversify your sources of business to include CPAs, attorneys and financial advisors. Registration includes audio recordings of all the presentations at all the events.