It seems the general public is not moving. Not because they don’t way to, but because of… the influence of government
The regulatory environment
Lenders took great interest
when ReMax Gold Coast and Keller
Williams Mid-Willamette were fined by the CFPB,
along with Prospect Mortgage, LLC. The reason? Illegal kickbacks relating to mortgage business
all know that residential lenders and title companies, among others, have been
fined before. But folks who pay attention to these things say that this is the
first time the CFPB has fined a real estate brokerage for the RESPA violations
noting, "we will hold both sides of these improper arrangements accountable for
breaking the law..."
Should Zillow be worried?
There are some out there saying, "Yes." Any time someone says that buying Zillow leads is
non-compliant in the CFPB's eyes is cause
There is news that CFPB examiners were asking questions about whether a lender
paying for leads or marketing on Zillow was a referral and therefore a RESPA
Sure, Zillow provides a "Lender Directory"
for consumers. And the website states, "Zillow is the leading real estate and
rental marketplace dedicated to empowering consumers with data, inspiration and
knowledge around the place they call home, and connecting them with the best
local professionals who can help." And remember when the
CFPB partnered up with Zillow to collect homebuyer information.
But RESPA is a wide-ranging
statute. RESPA section 8 prohibits exchanging "any
fee, kickback, or thing of value" for the referral of specific settlement
service(s) in connection with the closing of a mortgage transaction. You cannot
pay for business. Mortgage loan originators/mortgage lenders cannot exchange or
entice a "thing of value" with anyone in a position to refer the customer. Same
goes for title agents/attorneys. Since it is generally real estate agents
who find themselves in the best position to refer business, much of RESPA
section 8 activity has focused on real estate brokers, mortgage companies and
Jeremy Potter observes that,
"There are 2 RESPA-related activities around Zillow. Lenders can purchase leads
from Zillow or real estate agents on Zillow. Lenders can pay Zillow or
real estate agents on Zillow for a photo and contact info on the property
page...mortgage lenders and mortgage brokers advertise on Zillow. Financing
is relegated to the bottom of the property page. Nevertheless, real estate
agents are given top billing and often included prominently to the left or
below the property information. Zillow charges, not surprisingly, for this
advertising. Real estate agents often find themselves with several offers
from mortgage loan originators to pay for the cost, split the cost or otherwise
share in the advertising. RESPA and CFPB see the deferment of a payment
that someone would otherwise have had to make as a thing of value.
"So, by paying the real estate
agent's Zillow invoice, in exchange for customers (even, I suppose, potential
ones), a mortgage loan originator could violate RESPA. In response, most
companies that engage in this or allow their folks to do it on their own instruct
employees to split the cost based on the amount of advertising - 1 agent and 1
loan officer would split 50/50. 1 agent and 3 loan officers may split it
"Someone implied that during a CFPB exam the examiner took issue with the
purchase of leads from Zillow. This would be the second type of activity
mentioned earlier. It is not clear whether that means purchasing Zillow leads
from Zillow or purchasing Zillow leads from a real estate agent. Either
way, it is a further blurring of the line between sales
& marketing activity (ok under RESPA) and paying for referrals of business
(not ok under RESPA). The statute has always been vague,
the regulations are not much better - though they do provide for 'bona fide
services' at 'fair market value' which is some standard at least, and the
regulator(s) have been unwilling to go on the record with a new rule or formal
interpretation. Because its messy, most companies trying to steer clear of
regulatory risk also steer clear of any agreement that moves toward the
informal line in the sand. Unfortunately, that decision puts the 'good
guys' at a disadvantage. Without knowing the rules of the road, companies
trying to follow the rules start questioning any lead buying, sales activity
that comes from a referral source even if it's a giant, general website like
terms of rates, yes, the Federal Reserve's Open Market Committee meets this
week, and yes, it is anticipated that it will raise short term rates. Naysayers
were hoping Friday's job report would take some of the wind out of the Fed's
sails, but no such luck. First
American Chief Economist Mark Fleming summed it up, and added some context.
"The jobs report for February is very good news for the economy. The increase
of 235,000 non-farm payroll jobs soundly beat the already high expectation of
"The ISM manufacturing and
non-manufacturing employment indices For February already indicated a 215,000
non-farm payroll jobs increase. This combined with drop in the unemployment
rate to 4.7 percent and 2.8 percent year-over-year growth in wages are all
signs of a strong labor market. Specifically for the housing market,
construction employment continues to add jobs, 177,000 over the last six
months. It's interesting that specialty trade contractors, and heavy and civil
engineering job categories were highlighted -- a sign of growing demand for
home improvement and infrastructure development, perhaps."
He finished with, "Based on
CME Federal Funds futures prices before the release, the odds of a Fed rate
increase at the meeting next week were already over 90 percent. This employment situation report only
gives more reason for the Fed to move sooner rather than later."
Markets don't like
uncertainty, and certainly the jobs report removed some of that. So, rates
actually improved slightly Friday with the 10-year yield rallying back below
2.60%, after hitting an overnight high of 2.63%. The 5-year T-note and agency
MBS prices improved slightly.
Of interest was the release of
the NY Fed's tentative MBS reinvestment schedule. MBS reinvestments over the
coming four-week period are estimated at $18 billion, as expected by IFR
Markets, down from $25bn which was the estimate for the previous four-week
period. We're at about $1 billion a day - given reduced volumes probably a good
This week's economic calendar
includes monetary policy decisions from five major central banks starting with
the Fed on Wednesday, with the Bank of Japan, Bank of England, and Norges Bank
on Thursday, and the SNB on Friday. Here in the United States there is no news
of note today. Tomorrow we'll have the Producer Price Index, and on Wednesday
the MBA's application data from last week, the Consumer Price Index, Retail
Sales, and the NAHB Housing Market Index for March. But most importantly
will be the FOMC rate decision.
Thursday the 16th things continue with Housing Starts
and Building Permits, the Philly Fed Business Outlook, JOLTS job openings, and
Initial Jobless Claims. The economic week wraps up St. Patrick's Day and with
Industrial Production and Capacity Utilization, a series of numbers from the
University of Michigan, and Leading Economic Indicators. We start the week with the 10-year yielding 2.57% and
MBS prices roughly unchanged versus Friday's close.
Tomorrow join PCLender President Joe Langner and Vantage Production EVP Todd Ballenger as they help you uncover the secret sauce you need to succeed in today's purchase market. Learn how to optimize prospect conversion and retention rates with data-driven automated marketing, ensure 100% adoption of new technology solutions and close more purchase business in 2017; click here to register now!
2017 is the year of mortgage tech integration. Is your LO team ready? Join me on Thursday, March 23rd at 1-2pm ET for my webinar The Future of Mortgage Technology. Loan officers are placing increasing demands on the technologies they rely on to grow their businesses. At the same time, they are experiencing "tool fatigue" as inboxes fill with pitches for products that promise end-to-end nirvana. But most LO's will tell you they don't need new tools, they just want the great platforms they already use to talk to each other. Moderated by tech industry veteran and Floify CMO, Holly Hamann, I'll share insights on how the fusion of mortgage tech will impact LO's, which processes will be affected first, and what new skill sets you'll need on your teams. Register here!
Jobs and Announcements
In company job news, "Ever since Axia became 100% employee-owned, they have received a heavy influx of top talent. Chad Henry their newest Area Manager is the latest addition. Jon Lewis, SVP of Production for the Northwest, had this to say about Axia's newest family member, 'Chad becoming Axia's newest owner only further solidifies that the ESOP attracts top talent from around the country. Chad has a great ability to coach up loan officers by taking their production to the next level. With a stellar reputation and proven branch success, Chad will be a strong contributor in helping Axia grow in the Utah Market.' President & CEO, Gellert Dornay chimed in, 'Chad's leadership and Axia's comprehensive coaching and development program, Elevate, is attracting top producers that are committed to being the best not only for themselves but for their families, and the communities we serve.' If you are serious about growing your business and want something to show for it, become an owner of Axia by clicking here."
Pacific Union Financial LLC is pleased to announce that Greg Armstrong has joined the company as the new Senior Vice President and West Division Manager for Wholesale Lending. He brings more than 30 years of wholesale mortgage experience to his new role, and will lead Pacific Union's wholesale growth in the Western division. Most recently, Greg was Senior Vice President of Third Party Originations for Banc Home Loans. Pacific Union is growing its Wholesale sales team across the country and particularly in the West. If you are interested in joining the Pacific Union Wholesale sales team, please contact Susan Trejo.
Thousands of miles away, an Atlanta-based full service mortgage lender is looking for Experienced Loan Officers and Sales Managers to join its rapidly expanding team in Georgia and Florida. "Currently a relatively small bank with personal service, with our sights set on becoming a nation-wide industry leader, high performing individuals who join will have a significant role on who we become. We value our employees' opinions and believe our employees are the key to our success; we build your business with you, we support you, and we invest in you. We were founded on the principal that this isn't just a job; it's a passion in helping others grow and achieve their dreams of home ownership. Tools that are offered to accomplish this vision include a full product line, in-house underwriting/processing, and direct access to upper management. Join our team today!" Please submit confidential resumes to me to send to management.
AgStar, a leading financial services cooperative of the Farm Credit System, is seeking a Correspondent Account Executive who will enhance the profitability of the Home Mortgage Services portfolio by representing the RuraLiving home mortgage product on a national basis. The individual will identify and develop relationships with prospective banks and brokers, negotiate and authorize contracts and agreements, and manage the ongoing relationships and activities, as well as build strong client/partner relationships with proven loan volume and client satisfaction results. They will ensure all RuraLiving operations are carried out in compliance with applicable laws and regulations. This position works directly as an account specialist for third parties approved into the AgStar RuraLiving program, and must remain informed of market conditions and lending trends within the mortgage lending industry to assist in strategy development. They will serve as a resource and primary trainer/educator for approved banks and brokers selling AgStar's Home Mortgage Rural Living products. Please apply online.
Brokers should know that Carrington Mortgage Services, Wholesale Lending Division, has two important announcements. First, reduced LLPAs on FICO < 600 on Streamlines (FHA and VA IRRRLS) are available for all loan locked through March 31st. Check out our rate sheet for specific information and reductions. Next, Carrington removed several guideline overlays to make it easier to get those tough loans closed. Changes to FHA, VA and Conventional guidelines have been made to matrices. For example, no minimum FICO required for all FHA, VA IRRRL, and USDA Streamlines, with a 12-month current mortgage. These are just a few of the changes made recently in Carrington's ongoing effort to become easier to use and with a commitment to their "under-served' strategy!" Talk to your AE for details. Brokers new to Carrington should contact Matt Evans, VP Sales West, (949-517-6033) or Sam Bjelac, VP Sales East, (410-603-8053).