“Hospitality is the art of making guests feel like they're at home when you wish they were.” (Read that again – it’s pretty clever.) Millions of white and non-white people call the United States home, and the U.S. Census Bureau released the country’s top 1,000 surnames by race and Hispanic origin and those that occurred 100 or more times in the 2010 Census. The graphics show the top 15 most popular surnames and those with the largest increase and rank. Additionally, the Random Samplings blog discusses trends gathered from the tabulations. Visit the Census Bureau's Genealogy page to see frequently occurring surnames from previous censuses. Our tax money at work, hiring computer programmers and actuarials to figure this all out!

We have some news from the continuing Lehman Brothers saga. Josh Rosenthal, an attorney with Medlin & Hargrave, PC, writes, "LBHI just filed an adversary proceeding in the Lehman bankruptcy against Imortgage.com, Inc. and Loandepot.com, LLC, for indemnity related to the Fannie Mae settlement LBHI entered into in 2014.  LBHI has already filed some of these actions against nearly 200 loan originators (of the 3,000 or so loan originators that it has indemnity claims against).

"This action is related to claims LBHI has been making in demands to loan originators over the past year. LBHI has taken the position that loan originators that purchased certain assets of other loan originators that originated the loans that were the subject of the Fannie Mae settlement are also responsible for liabilities of those loan originators. It has convinced the bankruptcy court to force these alleged successor companies into the Alternative Dispute Resolution procedure it has in place which requires loan originators to mediate with LBHI in New York.  Now, LBHI is filing actions against these alleged successors based on asset sale agreements. 

"Due to a ruling by the 10^th Circuit Court of Appeal in February of 2016, the statute of limitations that may apply to indemnity claims related to the Fannie Mae settlement is the three year limitations period of Delaware, not the six year period of New York. So, Lehman may feel some pressure to get all of its claims on file by the end of next month or risk not being able to file any of the claims." Thanks Josh!

Residential lending and legal entanglements aren't confined to the United States. Spanish banks lost a court case over mortgage interest payments. The EU Court of Justice ruled that Spanish banks may have to refund billions of euros to mortgage customers who paid too much interest on home loans.

Lawsuits aren't cheap, and the increasing cost of regulation, coupled with the need to invest in technology, creates fixed costs that hurt residential lenders and community banks overall. Companies can mitigate these costs primarily by getting bigger, which has prompted increasing M&A activity among community banks - and we will see plenty more among lenders in 2017. Research by Deloitte finds the biggest impediments to achieving a successful M&A transaction cited by large corporate executives and private equity investor respondents are: insufficient due diligence process (88%), improper target identification (83%), not valuing the target accurately (81%), changing regulatory and legislative environment (81%) and failure to effectively integrate (78%).

The holidays have not slowed the M&A pace. Just in the last week or so it was announced that in Florida IBM Southeast Employee Credit Union ($947mm) has filed an application to acquire Mackinac Savings Bank ($110mm). In Virginia Sonabank ($1.1B) will merge with EVB ($1.3B) in a merger of equals transaction. The deal is valued at about $178.3mm & after close will result in Sonabank owning about 51% of the company and EVB owning about 49%. HomeTrust Bank ($2.7B, NC) will acquire municipal leasing company United Financial (NC). (United underwrites & originates municipal leases for fire stations & other municipal buildings.) First Republic Bank ($68B, CA) will acquire student loan technology company Gradifi. (Gradifi offers programs that help members pay down student loans faster.) Simmons Bank ($8.2B, AR) will acquire Bank

SNB ($2.5B, OK) for about $564.4mm in cash and stock or roughly 2.10x tangible book. In California Bay Commercial Bank ($653mm) will acquire United Business Bank ($451mm) for about $38mm in cash and stock. And in Texas Veritex Community Bank ($1.3B) will acquire Sovereign Bank ($1.1B) for about $162mm or roughly 1.74x tangible book.

Today we had the usual Thursday Initial Jobless Claims. Here's something regarding the employment situation. Research by the Bureau of Labor Statistics finds the share of farm employment has declined from 40% back in 1900 to only 2% as of 2014. And research by Smith finds 65% of Americans believe computers and robots will take over the work people do now within the next 50 years. Of note, research by Korn Ferry finds 44% of leaders of large global businesses believe robotics, automation and AI will make people "largely irrelevant" in the future (when it comes to work). Crowe Horwath Financial Institutions Compensation Survey. The survey noted that more banks are now willing to pay above-market rates given a tight jobs market - a trend that's risen sharply over the past 4Ys. Consider that in the 2016 study, almost 29% of banks reported plans to pay more than 10% above market for some jobs. That's up 5bp from the 2015 study, 10bp from the 2014 study and 15bp from 2013. Not surprisingly, as compensation has ticked up, employee turnover has also risen. According to the survey, bank employees are changing jobs at the fastest pace in 10Ys, with non-officer turnover peaking at almost 19% and officer turnover reaching nearly 7%. By contrast, only 1Y ago, non-officer turnover rates stood at about 16% and officer rates at fewer than 5%.

Rates? Heck, we could be here for the next couple weeks. Fixed-income securities started Wednesday with a slightly positive bias and it held that slightly positive bias throughout the session, with all securities respecting some pretty tight trading ranges. There was no news yesterday to move rates although November's Existing Home Sales were +0.7% to seasonally adjusted annual rate of 5.61 million. November has the highest sales pace since February 2007. Housing inventory is at 4 months of supply, versus 4.3 months in October, which should continue to drive up median prices and crimp affordability for prospective buyers. Median existing home price for all housing types increased 6.8% to $234,900, which is the 57th straight month of year-over-year gains.

Today we've already had a tidal wave of data, so let's wade in. (Like that one?) November Durable Goods (-4.6%), final Q3 GDP (revised higher to +3.5%, topping forecasts), Initial Jobless Claims for last week (+21k to 275k), and the Chicago Fed National Activity Index (-.27). Later, in a spread of indicators across months, we see the FHFA Home Price Index (Oct), leading indicators (Nov), and the KC Fed's manufacturing survey (Dec). And if you have some spare ducats at 1PM the Treasury will auction $14 billion of 5-year TIPS.

The 10-year note closed Wednesday better by nearly .250 in price and yielding 2.54% while 5-year securities and agency MBS prices were better by about .125. After this first volley of economic data the 10-year is yielding 2.56% with MBS prices worse a shade versus last night.

Jobs and Announcements

Since 1917, "Chemical Bank has been Michigan's leading community bank, helping communities grow and thrive. Our hometown banking approach helps us improve the quality of life in the communities we serve for almost a century.  Last quarter, Chemical Bank and Talmer Bank and Trust successfully completed our mortgage integration. Our combined team will produce an excess of $2 billion annually. As we expand into other Michigan markets and new Ohio and Indiana markets, we will be adding additional mortgage professionals during 2017. We plan to add an additional 30 loan officers and 40 operations staff members to our team.  Chemical Bank allows for "make sense" loans to our customers by utilizing the strength of our portfolio. Confidential questions and resumes should be sent to Recruiting." Member FDIC, Equal Housing Lender. Chemical Bank is proud to be an Equal Opportunity Employer-Minority/Female/Disabled/Veteran/Sexual Orientation/Gender Identity, committed to workplace diversity. VEVRAA Federal Contractor.

The StoneHill Group is looking to add a Manager of Quality Control to oversee the company's largest department, including all Pre, Post-Close and Servicing QC functions. Also currently open, the Sr. QC Audit Manager will be responsible for daily audit operations and the direct management of employees engaged in quality control auditing. The StoneHill Group is also actively searching for an experienced Fulfilment Operations Manager to oversee all department functions; including but not limited to, closing, post-closing, shipping/ funding, and investor delivery of FHA, VA, and Conventional loans. These roles will be key contributors to the growing organization and are located at headquarters in Atlanta, GA. The StoneHill Group, Inc. is a nationwide provider of QC outsource services and is headquartered in Georgia. The ideal candidates will have at least 10 years' in the industry and significant managerial and operational experience. To review the full job description and to submit an application and resume, please visit the StoneHill Group, Inc. Careers' Page. Questions should be directed to Stacy Nelson.

And Doorway Mortgage, a regional retail lender based in Orange County (the old International City Mortgage), is searching for a Chief Financial Officer. The ideal candidate will have several years of experience in the mortgage banking industry with senior management experience. An advanced degree or CPA and/or CFO certification is desired, as is expert knowledge of cash management, including warehouse lines. Doorway serves the Western United States, servicing a billion-dollar retained portfolio, with strong capital reserves, and an expansive product portfolio. "Join an experienced, energetic management team in our plan to grow the company to $1 billion in annual loan origination volume over the next two years." Confidential inquiries and resumes should be sent to Matt Danilowicz, President.

Per STRATMOR's LOS Technology Insight Survey, 30% of lenders report that are not satisfied with their LOS and are either actively looking to replace or are in the process of replacing their system. Lender Satisfaction is only one component of the detailed results report that is now available for purchase. The full report includes the results from more than 250 lenders and reports on LOS Functionality, Market Share, Overall Satisfaction, User Experience, Implementation Experience, Expenditures and Required Resources and other LOS considerations as well as Third-Party Integrations such as Document, Lead Management/CRM, POS and Pricing Engine software. The report also includes detailed lender feedback on 17 unique Loan Origination systems including satisfaction, user experience and a functionality assessment. To download a sample of the report or to purchase the full report, click here.  

Congrats to Radian Guaranty Inc., the mortgage insurance (MI) subsidiary of Radian Group Inc., which has been named Best Mortgage Company for Professional Women by Mortgage WOMEN Magazine. The award was announced and presented during the closing general session of the Mortgage Bankers Association's inaugural summit on Diversity and Inclusion in Washington, D.C. (The ranking is based on a survey sent to more than 1,400 financial institutions with mortgage company licenses recognized by the Nationwide Multistate Licensing System & Registry - NMLS for those who like acronyms.)