“A sea change:” A radical change or transformation. One wouldn’t call last Friday’s note from the CFPB a sea change, but the fact that the Consumer Financial Protection Bureau announced that it will be re-evaluating expanded reporting and data resubmission requirements under its Home Mortgage Disclosure Act, set to take effect Jan. 1, 2018, is viewed by many as a very good sign. Here’s what real estate agents see about this development.

Servicing

As mentioned yesterday in this commentary, Situs, a provider of strategic business and technology solutions to the real estate industry, announced that it has entered into a definitive agreement to acquire Denver's MountainView Financial Solutions.

Also, as a refresher, last week PHH entered into a $45 million settlement with 49 state attorneys general and the District of Columbia for alleged mortgage servicing delinquencies. Buckley Sandler writes, "The settlement resolves a complaint that alleges that between 2009 and 2012 the servicer, among other things, failed to (i) timely and accurately apply payments; (ii) maintain proper documentation to establish standing for foreclosure; (iii) respond to borrower complaints and reasonable requests for assistance; (iv) properly process loan modification applications; and (v) properly oversee third party vendors responsible for foreclosure operations. The $45 million settlement payment includes $30.4 million in restitution to homeowners; $5 million in attorney's fees and investigative costs and fees payable to the state attorneys general whose offices led the investigation; and almost $9 million in administrative penalties to state mortgage regulators. The settlement also requires the mortgage servicer to comply with a set of "Servicing Standards" outlined in the consent judgment and to submit quarterly reports to the state attorneys general Executive Committee for a period of three years."

PHH stated that it admits no wrongdoing and is currently using the adopted new Servicing Standards.

For folks who like lists, Fitch Ratings released its latest U.S. Residential Mortgage Backed Security Handbook. Basel III is not helping, and the report notes that, "Ongoing regulatory scrutiny is continuously pushing banks further away from servicing residential mortgage loans even as nonbanks continue to grow stronger." Portfolios for the largest bank servicers (namely Wells Fargo, JPMorgan Chase, Bank of America and CitiMortgage) dropped by 1.6% in the third quarter 2017.

Wells Fargo's servicing dropped 2.9% from last year's $1.5 trillion portfolio to $1.46 trillion in the third quarter of 2017. It is still the #1 servicer in the U.S. by portfolio volume. Wells saw a decrease in its servicing portfolio from last year, but that is balanced by its $51 billion acquisition of mortgage servicing rights from Seneca Mortgage Servicing. JPMorgan Chase Bank saw its servicing drop 4.87% from last year's $864 billion portfolio to $821.9 billion in the third quarter of 2017. Bank of America weighed in with a portfolio of $503.6 billion in the third quarter of 2017, ranking it #5 after a couple non-banks.

Fitch reported that CitiMortgage's portfolio dropped nearly 27% (last year's $235.6 billion portfolio to $172.6 billion in the third quarter of 2017), and is #8 based on portfolio volume.

Fitch also reported that many regional banks saw growth including Flagstar (+4.7%), HomeStreet Bank (+4.4%), First Republic Bank (+3.6%) and PNC Mortgage Services (+2.2%).

Lastly, Fitch's report tells us that the largest non-bank servicer, Nationstar Mortgage, aka Mr. Cooper, continued its acquisition activity through the year, growing 7.6% over the year.

A while back PennyMac has issued an announcement regarding updates to conventional SRP values.

Anyone servicing Fannie's loans knows that additional relief to borrowers impacted by natural disasters is available in the new Extend Modification for Disaster Relief, which brings an eligible borrower's loan current without having to incorporate capitalization. This new modification type was implemented in Servicing Management Default Underwriter (SMDU) on Nov. 18, 2017, and servicers are required to evaluate borrowers for the Extend Modification for Disaster Relief no later than Feb. 1, 2018. For additional information, refer to LL-2017-09 and the SMDU 7.5 Release Notes.

As a reminder, Fannie Mae has extended the suspension of all foreclosure sales for mortgages secured by properties in Puerto Rico and the U.S. Virgin Islands located in FEMA-declared disaster areas because of Hurricane Irma or Hurricane Maria, through Mar. 31, 2018. Read Lender Letter LL-2017-11, Temporary Suspension of Foreclosure Sales in Puerto Rico and the U.S. Virgin Islands.

There were a few packages of servicing for sale over the holidays.

IMAC #104525 a $28mm (86 loans) S&D package; 4.25 WAC, 81.78% CLTV, 3465 WaRemaining Term, 14 WALA, 706 WaFICO, 41.99 WaDTI, 95% Owner Occupied, with top states CA (19%) & NY (27%).

IMAC #SB1228-17 is a $3b (12,115 loans), FNMA/FHLMC, 100% retail, $248k average loan size, 3.862 WAC, 750 WaFICO, 89% Owner Occupied, 90% SFR, 66% Purchase, 19% R/T, Top States: CO (31.9%), TX (22.3%), WA (10.7%), and OK (10.5%).

MountainView Financial Solutions, LLC has had two packages recently; the first a $3.5 Billion FHLMC/FNMA Servicing Offering. The package was 98% FRM, 100% 1st lien product, 4.04 WAC (4.13% on 30yr product), $261k average loan amount, 755 WaFICO, 71% WaLTV, with top states: California (83.6 percent), Oregon (3.6 percent), Nevada (1.8 percent), and Arizona (1.7 percent); the second package was $1.4 Billion FNMA/Private Servicing Offering. The 100% retail package was 89% fixed rate, 100% 1st lien, 3.98 WAC, 762 WaFICO, 66% WaLTV, $331k average loan amount, low delinquencies, with top states: California (59.8%), Washington (16.6%), Oregon (11.9%), and New Hampshire (4.6%)

From MIAC Steve Harris offered up a $2.5mm S&D pool (MIAC# 401101) with bids due yesterday - but contact him if you have questions.

Capital Markets

Jobs and housing make up the lion's share of the economy, and looking back to Friday, December's nonfarm payrolls came in below expectations for December at +148k. While the number is not bad, recent labor related metrics, as well as a stronger than expected ADP Employment Report, set the bar high for Friday's data. Job gains were broad-based across must industries although retail employment fell by 20,300 despite a strong holiday shopping season. The unemployment rate was unchanged at 4.1 percent in December, which remains below the Fed's average estimate of longer-run normal unemployment of 4.6 percent. Many believe this signifies that the labor market is at full employment.

Average hourly earnings increased by 0.3 percent, or nine cents for the month. The Fed will keep a close watch on earnings as economic theory predicts lower unemployment leads to higher wages which should then lead to more consumer demand and then inflation. Wage growth, however, has been subdued and the inflation index favored by the Fed has remained below their 2 percent target for most of the last five years, and this will factor into the timing and magnitude of future short-term interest rate increases.

Looking at interest rates, Monday the 10-year Treasury note finished the day unchanged, yielding 2.48% after a quiet trading session. Agency MBS prices faded towards the close as supply out-paced demand by days' end. The only economic release of the day, consumer credit, blew through expectations in November in the largest monthly expansion since November 2001.  Both revolving and non-revolving credit saw large increased over the month. It is difficult at this point to say whether the increase was due to consumers not having as much reluctance to run up their credit cards or an easing of credit standards.

There were a handful of economic speakers from the Fed and IMF that all commented on the Fed's 2.0 percent inflation target. Comments ranged from it being arbitrary and lacking theoretical basis to reassessment to adopting a price-level target. The reluctance of inflation to rise above the Fed's 2.0 percent target has been one of the reasons cited in their policy statements for a gradual removal of accommodation. Today we've already had the NFIB Small Business Optimism Index (faded, and below forecasts); coming up is the November Job Openings and Labor Turnover Survey (JOLTS) reports at 10AM. The day starts with the 10-year yielding 2.49% and agency MBS prices worse a few ticks versus Monday night.

Jobs, Products, and Personnel Moves

James Brody, who was the senior managing member and face of the American Mortgage Law Group ("AMLG") since roughly 2007, made the decision to leave and join another one of AMLG's three founding attorneys, Ryan Thomas, as the Chairman of Johnston Thomas' Mortgage Banking Group ("MBG"). In addition, James will also be working with Ingrid Petersen who has joined Johnston Thomas as the MBG Co-Chair. According to James, "While the decision to leave was a difficult one, Johnston Thomas and its talented team of mortgage banking professionals have the resources, depth of experience and support necessary to aggressively and competently serve our diverse mortgage banking clientele, in connection with the many regulatory compliance, mitigation and/or litigation challenges that have been and will continue to face our industry in 2018 and beyond." If you would like to contact James to learn more, he may be emailed or reached at (415) 246-3995.

The Money Source Inc. isn't wasting any time this year, already announcing exciting news for 2018. The fintech company launched a new brand campaign on Tuesday, laying the foundation for its massive expansion plans for the next five years. The company announced it is igniting its mission to Grow Happiness, challenging the notion that mortgage finance is an impersonal industry. And remember wholesale lender Endeavor America Loan Services? Through the rebrand, the wholesale lender will fold into its parent company, The Money Source, creating a unified and streamlined megabrand, now called TMS, in support of all its lines of business. As TMS grows to become a one-stop fintech company, it plans to hire more than 400 new team members across all lines of business in 2018, taking its total headcount from 600 to more than 1000. Come join us as we look to Grow Happiness!

"A billion-dollar Community Bank headquartered in SE Michigan is looking to add like-minded mortgage professionals to our growing sales team. Would you like to add one-time close construction financing and doctor loans to your portfolio of products? Level One Bank offers great compensation packages while keeping our interest rates competitive and has put tools in place to help you achieve your goals. If you are looking for supportive processing, quick turn times with our on-site underwriters, automated and supportive marketing, Level One Bank may be a great fit for your 2018 production goals. We are looking for individuals or existing teams to fill our growing markets in Farmington Hills, Ann Arbor, and the Grand Rapids area." Click here to schedule a confidential conversation.

TPOs, third-party processors and wholesale lenders have the unique opportunity to differentiate their services with a proprietary digital mortgage solution. As the market contracts, delivering more volume will require a better experience to deepen relationships with originators and win new ones. Maxwell is a digital mortgage platform that also enables TPOs, third-party processors and wholesale lenders to create a seamless end-to-end experience with their origination partners - seamless collaboration on 1003 and borrower documents across multiple organizations from the beginning of the loan through clear to close. Maxwell can revolutionize your process with fast deployment. What's more, with custom white labeling and branding for each team, the borrower will enjoy a delightful experience. To learn more about Maxwell and see how they can help your business you can request a demo here, call 888-256-6067 or email VP of Sales, Scott Stein.

"Last year was more than another great year for Caliber Home Loans, Inc., a rapidly growing top-ten mortgage company in America. All areas of the organization worked together to break records, introduce new products and increase our purchase business. In November 2017, Caliber introduced its 5-Star ARM - which replaces the annual rate adjustment with a five-year adjustment - and closed over $15 million by the end of the year. Caliber participates in many state-sponsored down payment assistance programs and as a result closed over $700 million for families looking to purchase a home. Caliber's wide range of financing options includes its suite of Portfolio Lending products, which lent over $1 billion last year. And finally, Jumbo volume grew by 67% since 2016, with over $2.4 billion in closed loans. Caliber didn't just have a great year - it had its BEST year in its history. We are kicking off another prosperous year and we're looking for talented Loan Consultants to join us! To learn more about careers at Caliber, visit www.joincalibernow.com or email Jeremy DeRosa today."