Number of Banks is Declining; New Interest in Condo Loans; Existing Home Sales Numbers Dissected
few weeks ago I wrote about the "over 65ers", the age demographic which
is very much a part of the baby-boom generation. Recently the U.S.
Census Bureau released "The Centenarian Population: 2007-2011,"
which focuses on those who have reached a milestone many of us won't
get to in life: 100 years of age. It's an interesting demographic, maybe
one which gets overlooked considering only 55,000 Americans fall into
this group (versus, say, 90 million Millennials aged 18-34).
In job news, TruHome Solutions, LLC is seeking a Vice President of Servicing to join its Leadership team as part of its long-range plan to increase its servicing portfolio. TruHome
services over $3 billion for its clients as both a servicer and a
sub-servicer, and has plans to significantly grow the servicing
portfolio over the next 10 years. This person will have oversight of
investor reporting, cash processing, payoffs, escrow, customer service,
default/foreclosure, and collections responsibilities. TruHome needs
someone "with the strategic and tactical experience to help us grow our
servicing portfolio. We are looking for someone who has an extensive
servicing background, is a proven leader, and possesses exceptional
communication skills. TruHome Solutions, LLC is a solid organization
that offers first in class benefits, great work life balance and
competitive compensation!" If you or someone you know may be interested,
please email for a complete job description or forward resume to Karen
Steen at ksteen@cacu. com.
The number of banks available to consumers is decreasing - but it is not because of failures. In fact, there has not been a bank failure in the USA since 2/28/14, a stretch of 54 days, and only 5 banks have failed YTD. (To put that in perspective, on 7/20/12, 5 US banks failed
in a single day.) And there has not been a new bank formed in several
years (the FDIC believes it addressed this concern in this recent ABA
entry). No, the number of banks has been declining due to mergers and acquisitions.
And the trend of financial sector companies merging continues, big and small. Just in the last week or so... Hilltop
Holdings Inc. (NYSE: HTH) and SWS Group, Inc. (NYSE: SWS) announced
that they have entered into a definitive merger agreement. Bankwell
Financial Group, Inc. (OTC Bulletin Board: BWFG) and Quinnipiac Bank
& Trust Company announced the execution of a definitive merger
agreement pursuant to which Bankwell will acquire Quinnipiac through the
merger of Quinnipiac into Bankwell Bank. The acquisition will add
approximately $100 million in assets to Bankwell, bringing total assets
to $880 million as of the most recent reporting period. In Massachusetts
Institution for Savings in Newburyport and Its Vicinity ($1.7B) will
acquire Rockport National Bank ($200mm) for $28.3mm in cash or about
1.9x tangible book. In Iowa First State Bank ($106mm) will acquire
Patriot Bank ($56mm) for an undisclosed sum. In Pennsylvania Community
Bank ($546mm) will acquire First Federal Savings Bank ($319mm) for about
$54.5mm in cash (35%) and stock (65%). U.S. Bank National Association
($360B, OH) will acquire the document custodian business of Ally Bank
($99B, UT) for an undisclosed sum. The move increases documents under
custody at U.S., such as collateral loan files, equipment leases, home
equity, improvement, vehicle loans and leases. In Texas Heritage Bank
($107mm) will acquire Nixon State Bank ($76mm) for an undisclosed sum.
In next-door New Mexico Grants State Bank ($120mm) will acquire Sunrise
Bank of Albuquerque ($41mm). And Centennial Bank ($6.8B, AR) will
acquire Florida Traditions Bank ($296mm, FL) for $43mm in stock.
of LP users received this note from Freddie yesterday: "Loan Prospector
is currently unable to process any new submissions. This issue impacts
all Loan Prospector access methods. We're applying all available
resources to resolve this issue and apologize for any inconvenience. We'll
inform you when this issue has been resolved." Uh oh - another case of
DDoS, similar to what Ellie Mae went through a few weeks ago?
And millions of readers read with concern about what
FHA Commissioner Carol Galante told The Washington Post about her
agency's position on not lowering the cost of FHA mortgages in spite of
the MBA and the NAR giving it a shot.
Continuing to play catch up on some recent MI, investor, and vendor news...
Per Agency guidelines, Genworth has expanded its underwriting guidance to allow gift funds to meet the borrower minimum contribution for FNMA products.
announced its "12 Month Rescission Relief" program:
Delegated/Non-Delegated. Just submit Origination & Closing Flies and
Opt-in for Enhanced Collateral Review. Or lenders/borrowers have the
option of a "36 Month Rescission Relief" program: Non-Delegated: Send
Origination File*. No Need to Opt-in for Enhanced Collateral Review. For
delegated, no additional file submission required in some situations.
For Essent's Master Policy Resource Center click here. Or, contact your Essent Business Development Representative.
Aliso Viejo, CA-based Platinum Data Solutions has been approved by Freddie Mac as one of the nine authorized distributors of Home Value Explorer and Home Value Calibrator. With
the approval, Platinum will be selling HVE to third party sellers in
addition to lenders, servicers, and other direct users.
Angel Oak Funding's
wholesale division reminded folks that it now allows loans for
non-warrantable condos. Contact Tom Hutchens, Wholesale head, at tom.hutchens@angeloakfunding. com.
And Coast 2 Coast Funding Group is interested in loans on condos involved in litigation, depending on the state. Here you go: Aaron Lowe, aaron@bestae. net
Congratulations to Brad Nease, who recently joined Silvergate Funding Inc.
as SVP, Manager/Correspondent Lending. (Silvergate Funding Inc.
"Silvergate" is a wholly owned subsidiary of Silvergate Bank in La
Jolla, CA.) Silvergate is a correspondent investor looking to expand
across the country with strategic mortgage banking partners. Silvergate
purchases conforming, FHA, and jumbo loans, and also has an excellent
non-QM portfolio ARM product. Forward inquiries to: Alan Peviani, apeviani@silvergatefunding. com.
Cole Taylor Mortgage has changed the cap structure on its 5/1 Conforming ARM product from 5/2/5 to 2/2/5, effective immediately. The margin will remain 2.25%.
Lots of folks weighed in on yesterday's Existing Home Sales figures.
(In recent weeks I have had the good fortune to spend time with
Realtors and lenders in Wisconsin, Tennessee, Washington, California,
Arizona, Colorado, Minnesota, and Kansas, and the big concern is a lack of inventory, and a lot of hope that this situation changes by the time Memorial Day hits.)
Existing Home sales were essentially flat in March, while the growth in home prices moderated. Jonathan
Smoke opined, "We can almost hit replay on our March analysis, but it
is worth repeating with updated data so the point we originally made can
really sink in: the existing home market is indeed getting stronger but
you need to get used to 'stronger' equating to 'fewer but better'
sales. A stronger resale market is one where we see increasing levels of
good ole fashioned, non-distressed sales consummated between normal
consumers amidst price appreciation and limited supply. We want to see fewer foreclosures, fewer REO sales, and fewer investors. And
indeed we are seeing less of what we don't want to see and more of what
we do want to see-it's just netting out that the totals are slightly
that's fine because the current rate of single family existing home
sales is still almost 15 percent above the 45-year monthly annualized
note continued, "Once again we can look at pricing as a key indicator
that conditions are improving and not deteriorating. According to the
NAR release, the median existing home price in March was $198,500, 7.9
percent up over this time last year. Supporting
continued price appreciation is the low level of supply, which remains
below normal at 5.2 months of supply. Despite continued rhetoric about
higher mortgage rates hurting the recovery, the facts don't support that
average interest rate on purchase mortgages on regular resales in the
first quarter of 2014 actually declined 7 basis points from the fourth
quarter of 2013 due in part to an increasing share of adjustable rate
average mortgage rate is up 12 basis points over the first quarter of
last year, but as we enter the second half of the year, the
year-over-year comparison will start looking better."
Meyer wrote, "Existing home sales continue to fall, declining 0.2% in
March to 4.59 million. Part of the reason home sales continue to decline
is due to fewer distressed properties - the share of sales that are
distressed declined to 14% from 21% last March. The share of investors
slipped to 17% (Feb: 21%) while the share of first-time homebuyers
ticked up to 30% (Feb: 28%) - part of that is seasonal as we approach
the spring selling season first time homebuyers naturally pick up as
share of activity. But nonetheless, this is a trend we think will
persist as the market gradually normalizes."
Yun, NAR chief economist, said that current sales activity is
underperforming by historical standards. "There really should be
stronger levels of home sales given our population growth...In contrast,
price growth is rising faster than historical norms because of inventory
shortages...With ongoing job creation and some weather delayed shopping
activity, home sales should pick up, especially if inventory continues
to improve and mortgage interest rates rise only modestly...With rising
home equity, we expect distressed homes to decline to a single-digit
market share later this year."
as if to echo these trends, the FHFA House Price Index was up 0.6
Percent in February. The purchase-only index for the U.S. has shown
increases for the last three months despite a harsh winter season. The
0.1% decrease in November 2013 ended a 21-month trend of price increases
that had begun in February 2012. The previously reported 0.5% January
increase was revised downward to 0.4%. Annually, US home prices rose
just 6.9% in the 12 months through February, the smallest gain in a
year, in a sign that the housing market's recovery is cooling. But hey,
nothing goes up forever, right? And this morning the MBA reported that apps last week were down 3.3%, with refis falling 3.7% and purchases dropping 2.6%
at the bond markets, volatility has been absent for several weeks now,
much to the relief of lock desks everywhere. Yesterday Thomson Reuters
observed buying from REITs, money managers, and banks, as well as, the
Fed which was focused primarily in 4% securities (containing 4.25% and
higher mortgages). But prices were basically unchanged from Monday, which were pretty much unchanged from late last week.
Today we'll see March New Home Sales (expected to rise slightly) and
the Treasury auction off $35 billion in 5-year notes at noon CST. For
numbers, the yield on the 10-yr Tuesday afternoon was 2.73% and in the
early going is down to 2.70% so we can expect a slight improvement in
agency MBS prices.