Here’s some trivia for today’s potluck in the Shipping Department: Las Vegas has 150,000 hotel rooms and spending a night in each would take you 411 years. Less trivial, a couple “sand states” over, Apis Cor, a Russian 3D printing construction company, and Sunconomy, a U.S. construction company, have received permits to build their first 3D printed geopolymer additively manufactured house in Lago Vista, Texas. Helping first-time home buyers or those moving to the area? U.S. Census Bureau research finds 11% of people move in a year, but 62% of those who do, stay in their same county! The main reasons people said they moved were relocate to a better home, establish their own household, for other family reasons, for a new job or transfer, and to find cheaper housing.

Lender Products and Services

Attention brokers living in Irvine, California. There is a can’t miss event taking place in your area on Tuesday, February 12. Three of the major forces in wholesale lending are hosting a free event and networking reception to help brokers accelerate their growth through niche products. REMN is teaming up with Angel Oak Mortgage Solutions, and Liberty Home Equity Solutions, on the Diversify & Thrive Growth Summit series. These in-person events will educate mortgage brokers on the best ways to market and explain niche products, with a focus on renovation lending, non-QM loans, and reverse mortgages. They hosted a similar event on Tuesday, and the venue was filled to capacity, with most attendees staying around until the end of the free cocktail reception as well. If you’re interested in attending, register ASAP at http://diversifyandthrive.com.

Quicken Loans Mortgage Services (QLMS) offers an exclusive club to its best performing partners. Pinnacle Club members get a Fresh Start credit repair consultant to assist clients that need help boosting credit scores. All members also receive complimentary five-day rate lock extensions and EPO fees are waived if another originating company pays off the new loan within six months. Lastly, members can attend invitation-only events that combine industry education and once-in-a-lifetime experiences. More benefits will be added this month. To join the club, broker partners must have achieved certain milestones related to number of loans closed with QLMS and they need to have high satisfaction rankings from their clients. If you’d like to learn more about the program, contact your QLMS account executive or go to QLmortgageservices.com.

There is exciting news coming soon from ISGN Solutions - a leading Business Process Management company specializing in mortgage end-to-end fulfillment, process automation, omnichannel contact center solutions, title, closing, and loan servicing support. It has been working on this change for some time now. IGSN Solutions is committed to helping lenders lower operational costs, improve efficiencies and enhance the customer experience. Watch this space for more information – in the meantime, visit their website to learn more about the company.

Capital Markets

The volatility seen in December as stocks had a remarkably bad month to end a bad quarter has stoked fears of another recession amid slowing housing growth. Despite strong employment, solid U.S. corporate earnings supported by tax reform, and consumer and small business confidence remaining high, escalating global trade tensions, uncertainty surrounding the effects of global central banks removing stimulus measures, and signs of slowing global growth threaten to become the overriding narrative for 2019. The economy and capital markets are cyclical, expanding and contracting, and recessions and bear markets are simply part of the cycles of economies and markets.

For it to be considered a bear or bull market, the economy must move 20% or more from the previous high or low, and even that threshold isn’t a strict definition. Although recessions are fact of life, the economy is more often in expansion mode. If investors are now fearful of a bear market or recession, they have a few options. Long term investors should stay put. Even if you are fortunate enough to sell at the “right” time, the timing decision of when to buy back in, make the attempt to time the markets a bad idea. It is a good time to reassess your willingness and ability to take on risk. It is important to have a portfolio’s risk potential, volatility and short-term unrealized losses, aligned with your ability to withstand that risk. A long-term investment plan won’t work if you can’t stick with it long-term. Nearly every asset type disappointed investors in 2018. December’s S&P 500’s -9 percent return in December was the worst monthly showing since the financial crisis of February 2009 and the worst December return since the Great Depression in December 1931. Only two of the 11 market sectors, health care and utilities, finished with positives returns for the year, while the biggest loser was energy. Additionally, a broad list of 17 major asset classes (different types of bonds, U.S. and foreign stock market indices, listed real estate, and commodities, as compiled by Bloomberg) all had a return lower than the inflation rate last year.

In the U.S. the labor market is solid. Going back to the jobs report for December, it was a surprise as 312,000 jobs were added during December and hourly earnings and hours worked also increased. November and October’s were also revised higher by a total of 58,000 jobs.  Even with the substantial increase in the number of jobs, the unemployment rate increased to 3.9 percent due to a large increase in the labor force. The survey showed broad-based gains across industries including an 82,000 gain in education and health services as well as a 38,000 gain in construction. The strong jobs report comes amid other recent metrics that have suggested cooling economic conditions in the US and abroad which should provide for some interesting conversations around future economic policy.

Thursday the U.S. 10-year closed -5 bps to 2.65% as Treasuries across the curve moved similarly. For now our markets are taking their cues from Europe, and the day began with disappointing data out of Europe, with Germany reporting another sharp YoY decline in industrial production in December while Spain's industrial production also contracted sharply. Additionally, Italy reported a decrease in December retail sales while the European Commission officially lowered its forecast for 2019 Italian GDP growth while also lowering expectations for growth in Germany and across the eurozone (to 1.3% from 1.9%). The Bank of England voted unanimously to maintain its policy stance, which was widely expected. The BoE lowered its 2019 GDP growth forecast for the UK to 1.2% from 1.7%. Domestically, National Economic Council Director Larry Kudlow acknowledged there is a sizable distance to go in U.S. trade talks with China, while President Trump said he will not meet with China's President Xi Jinping before the deadline on March 1.

Today’s calendar has no market-moving announcements in the U.S. San Francisco Fed President Daly is speaking. As we watch Europe slow, rates begin today with Agency MBS a shade higher and the 10-year yielding 2.64%.

Jobs

There’s more exciting news from emerging banker Pinnacle Home Loans in Northern California. Nevin Miller is pleased to announce that Susan Roy, previously VP of National Operations & Underwriting for Pinnacle Capital Mortgage, has joined their growing team as VP of Operations. Susan brings nearly 30 years of experience in operations & underwriting and will be instrumental in their expansion and unique focus on the loan officer. Congratulations to Susan and Pinnacle for their new association. Branch managers and top MLOs are invited to have a discussion about the new Pinnacle. Interested parties can contact Nevin Miller.

What happens when over 1,200 PrimeLending teammates from across the country converge at our annual Sales Rally in Dallas, Texas? “A Breakthrough - our theme for 2019. This event was about broadening horizons, building goals and relationships, and discovering all the ways our industry-leading tools and technology can enhance the lives of our branch managers, loan officers, customers and business partners. Keynote speaker Daymond John, entrepreneur and star of ABC’s ‘Shark Tank,’ inspired our team with ways to break through barriers and find success by outworking and outperforming the competition. We were also joined by more than 50 recruits from other companies ready to experience the PrimeLending difference and take the final step in joining our powerhouse organization. As home of the Modern Originator, PrimeLending continues to create new, innovative ways to enjoy sustained success in the modern marketplace, and that will never change. 2019 will be another historic year for our company and we’re excited for our future. Contact Brian Miller to learn more about what your future could hold at PrimeLending.”

On Q Financial offers a $1,000 15 Day On Time Closing Guarantee and mobile origination via their app Simplicity, featuring Automated and Digital VOA, VOI, and VOE to end the paper chase for their customers and Originators. Now, they’ve announced a revolutionary Price Match Guarantee to ensure they won’t lose a loan to rate. On Q is simplifying the mortgage process for borrowers AND Originators who can double their business using the company’s innovative Closing Guarantee, paperless process, technology, marketing, and new Price Match Guarantee. On Q’s mission is to simplify the mortgage process to make the dream of home ownership a reality – for everyone. Learn more about On Q’s Price Match Guarantee.

PRMG continues to expand their national footprint and starts 2019 strong with opening 6 new Retail Locations during the month of January!  Along with the drive and ambition to bring the American Dream of Homeownership to all cities across the country, PRMG has now opened its doors in St. Paul, MN; Bethlehem, PA; Grove, OK; Minden, NV; Bakersfield, CA and Rochester, MI. PRMG is Built by Originators for OriginatorsTM and is devoted to continuously growing their retail platform.  If you are a Motivated Loan Originator who wants to be Progressively Better, contact Chris Sorensen at 909.262.0452.

Gateway Mortgage Group announced it had another record year in 2018, funding more than 29,000 loans totaling $6.1 billion in mortgage loans. The company also opened 40 new branches in 22 states last year and added over 340 team members, bringing its total to team members to 1,169. “Gateway continued its great momentum in 2018, performed better than our competition and continued to grow when others are retreating. We have some exciting news coming down the chute in 2019 that will bring even more opportunity to our Originators who want to increase their personal loan volume,” said Stephen Curry, CEO at Gateway. Gateway’s servicing portfolio grew to $18.6 billion and the company now services a total of 107,282 individual mortgage loans. If you want to bring your bright future to Gateway, contact Howard Hall.

Bank and M&A News

S&P Global Market Intelligence reports banks and thrifts closed 1,903 branches net or about 2.15% during 2018. We can expect more with the BB&T SunTrust deal.

The big bank merger yesterday prompted Virginia’s Joe N. to send, “Did you hear the new name of the SunTrust and BB&T merger? They are going to call it Buntrust.” Yes, certainly cost efficiencies will be achieved since their regional footprints are so similar. The BB&T/SunTrust all-stock deal worth $66 billion will create the sixth-largest US bank based on assets and deposits. Although BB&T (more rural) will buy SunTrust Banks (more urban) for $28.24 billion in an all-stock deal, the companies called it a merger of equals, valued at $66 billion, and is expected to close in the fourth quarter of 2019.

Both groups have sizeable overlapping correspondent channels, so one can expect cutbacks. Home loans making up 27% of the combined company’s total lending, with BB&T having roughly 6,000 MLOs compared to SunTrust’s 1,100.

Other deals have been announced in the last week or so. In a merger of equals Chemical Bank ($21.5B, MI) will combine with TCF Bank ($23.7B, SD) to create a much larger bank of $45B in assets. In the Sunshine State Central Florida Educators FCU ($1.9B) will acquire Fidelity Bank of Florida ($175mm). Over in Wisconsin Citizens Community Federal ($975mm) will acquire Farmers & Merchants Bank ($195mm) for about $21.6mm in cash (85%) and stock (15%) or about 1.02x tangible book, Greenwood's State Bank ($178mm) will acquire Fox River State Bank ($95mm), and Bank First National ($1.8B) will acquire Partnership Bank ($307mm) for $41mm in cash (35%) and stock (65%). Out in California SchoolsFirst FCU ($14.9B) will acquire Schools Financial ($2.0B). This is one of the largest credit union mergers in history. In the Sunflower State SJN Bank of Kansas ($147mm) will acquire Nekoma State Bank ($44mm). In New York Community Bank ($10.5B) will acquire The National Union Bank of Kinderhook ($637mm) for $93.4mm in cash (100%) or 1.93x tangible book.

Vendors merge too. CoreVest has entered into an agreement to buy the loan assets of Black Square Real Estate, a finance company providing bridge and rehabilitation loans on non-owner- occupied residential properties. As part of the transaction, the entire Black Square team will join CoreVest, including professionals in short-term lending and construction management oversight. "We see the combination as immediately accretive both to our clients and the company," commented Chris Hoeffel, Chief Financial Officer of CoreVest.  "The Black Square addition allows CoreVest to expand our product offerings with single asset bridge lending, ‘fix and flip’ renovation loans, construction lending and short-term lines of credit." Ryan McBride, Chief Operating Officer, added, "The expanded team will allow us to provide superior service to our borrowers, making CoreVest a single source for all the financing needs of residential real estate investors."