Plenty of people tell me that I’m “long in the tooth.” (A way of gauging a horse’s age.) Tooth? Thanks to Emily W. for sending in something that all of us have probably wondered about, even though you weren’t aware that you were wondering about it: an article on the origin of "Bluetooth," "eBay," "Google," and other terms and names. Nomenclature, and technology, are always changing. The car business certainly changes, and it appears that with the recent Toyota/Mazda plant announcement, foreign auto manufacturers are on a path to soon surpass the Detroit giants as the largest auto producers in the US by volume! Foreign automakers and their US competitors are expected to produce the same number of vehicles in the US for the first time ever in 1Q18.


Broker News - Skirmish in the Mortgage World

PennyMac Financial Services, Inc. (NYSE: PFSI) announced the launch of its Broker Direct channel, "offering mortgage brokers access to the Company's state-of-the-art POWER platform combined with its unique centralized sales, client engagement services and best-in-class fulfillment capabilities."

Certainly an interesting move, given US Bank's withdrawal from the identical wholesale channel late last year. Doug Jones, President of PennyMac Loan Services, LLC, an indirectly controlled subsidiary of PFSI, noted, "We spent considerable time evaluating this channel and believe it is the right time for us to participate. Our new broker channel will provide opportunities to grow volumes in attractive segments of the market, such as purchase-money and prime jumbo mortgages. We expect to leverage our leading market position to successfully grow our Broker Direct platform and achieve a leadership position over time."

"Through PennyMac's POWER platform, brokers will have unprecedented access to data and the ability to proactively manage their pipelines. By providing detailed, accurate and timely communication to their customers on every loan, brokers and their loan officers can provide best-in-class service for their customers and maintain trust with their referral sources. POWER enables the broker to self-serve for a variety of functions and seamlessly communicate with PennyMac's client engagement team."

Congratulations are due to Kim Nichols, Penny's Broker Direct organization's new Managing Director, Direct Lending Channels.

Effective Monday, February 5, 2018, Flagstar will no longer allow Borrower-paid compensation or a flat fee as part as part of the compensation schedule. Customers will still have the flexibility to choose a compensation plan up to 275 basis points, including amounts for minimum and maximum dollar amounts. Flagstar Bank is committed to providing our partners with the tools and services necessary to remain competitive and fully compliant in the marketplace. As a federally regulated financial institution we continually assess the regulatory landscape to ensure compliance for us and our trusted partners. We are making these changes to the Loan Originator Compensation Policy to best meet regulatory expectations. Flagstar remains committed to the broker channel.

Landmark Network, Inc. announced the launch of Wholesale365, a specialized program to enhance the service experience for wholesale lenders and their clients. This new program gives account executives and underwriters support 365 days a year via both phone and email from senior Landmark Network executives. The Wholesale365 program includes custom scorecards and turn time data, enabling executives to set proper expectations and monitor performance from day one. Wholesale managers will have deep visibility into their broker pipelines, including real time updates while the orders are still in progress. Underwriters will receive a similar menu of support tools to streamline their workflow.

United Wholesale Mortgage announced that it has lowered its Borrower Paid Mortgage Insurance (BPMI) premiums. With its cheap lender paid mortgage insurance, UWM has packaged them together as Elite M.I. The better pricing is available for 640+ FICO borrowers. "Since Elite M.I. is also Instant M.I., UWM will save brokers 3-7 days on every loan by eliminating the second underwrite. Elite M.I. won't show up in pricing engines."

UWM is accepting increased conventional loan limits that went into effect January 1. Regular conventional limit up to $453,100 from $424,100 and the high-balance limit has gone from $636,150 to $679,650.

And UWM introduced its latest partnership tool, the Client Loyalty Manager, which was created to further support mortgage brokers' abilities to retain past clients. The Client Loyalty Manager platform is built into UWM's EASE loan origination system, and features an interactive dashboard that allows brokers to create customizable parameters and proactively stay in front of their clients. Brokers will receive notifications and pre-written emails to send to borrowers for situations that include when rates change in their favor, when borrowers may be able to drop MI, and birthdays & loan anniversaries.

As mentioned yesterday in the commentary, Freedom Mortgage Wholesale announced the launch of its newly redesigned website, enhanced with their broker clients in mind.

 

Capital Markets

So much for Wednesday's China news that they were reducing U.S. Treasury purchases as their State Administration of Foreign Exchange (SAFE) went on the record yesterday saying, "We think the report might have cited wrong sources or may be fake news," according to a statement posted on their website. Thursday morning, minutes released from the European Central Bank were not bond friendly and reminded participants of improving European economic activity that will likely lead the ECB to cease asset purchases later this year.

While this affected European bonds more, it did help to move Treasuries lower at the open. A strong 30-yr auction, however, proved to be the catalyst for a course reversal and the 10-year Treasury note closed lower, yielding 2.53%. In other news, the Freddie Mac Primary Market Mortgage Survey saw mortgage yields increase with the average 30-year fixed at 3.99%, 15-year at 3.44%, and 5/1 ARM at 3.46%. Yes, mortgage rates are still very good - but there won't be any "rate and term" refis away from a 3.50% 30-year fixed rate loan.

Today's calendar brings the highlights of the week including the December Consumer Price Index (expected +0.4%) and December Retail Sales (expected +0.2%) at 8:30am, and November Business Inventories (look for +0.4%) at 10:00am. In the afternoon, Philadelphia Federal Reserve Bank President Patrick Harker speaks at 12:30pm and Boston Federal Reserve Bank President Eric Rosengren speaks at 4:15pm.

Don't forget that Monday is a bond market holiday, so beware of rate sheets which tend to be conservative. (It is hard to hedge pipelines when the bond market is closed.) In the early going, as I prepare to board this plane from Miami to San Francisco, and before the first set of economic numbers, rates are versus Thursday's close. The 10-year yield, which ended yesterday at 2.53%, is yielding 2.55%, and agency MBS prices are worse slightly.


Lender M&A

Isn't the first, won't be the last in 2018. Guild Mortgage announced plans to acquire Cornerstone Mortgage, Inc., of St. Louis, Mo., a fast-growing independent with 19 offices in three states and loan volume of $1.0 billion in 2017.

Co-founder Angi Stevenson, current president and CEO, will join Guild as regional VP of its newly established Midwest Region. For anyone who likes the branch model, Cornerstone is impressive: 19 offices in three states, $2017 loan volume of $1 billion, the 10th largest woman-owned company in St. Louis, more than 200 employees in Missouri, Illinois and Kansas, and #2 in mortgage volume in St. Louis the past three years, according to media surveys. The acquisition is expected to close by March 1, 2018.

Guild, of course, is no slouch. It had loan volume of $15.9 billion in 2017, some 4,000 employees nationwide, more than 250 branches in 27 states, servicing volume of $38.5 billion, and a top-10 national lender by purchase loan volume.


Business Opportunities, Personnel Moves, and Employment

"A fast-growing independent mortgage bank seeking either experienced retail branch leaders, retail branch managers or very successful retail loan officers (who are ready want to open up their own branch finally) to join their family-oriented company. This company is known for closing loans on time every time, has industry leading and award-winning technology along with a plethora of products. If you are tired of working for the big bureaucratic companies who take forever to close your loans and want to be a visionary and leader in your local market or region then please email your confidential resume asap to me. Looking for immediate opportunities in TX, CA, FL, GA and NC. (Please specify the opportunity.)

Wholesale Capital Corporation (WCC) is currently expanding and hiring Motivated Licensed Loan Officers in its offices located in Moreno Valley, Corona, Temecula, West Lake Village and Covina. It is also looking to expand its foot print in Central and Northern California. "Here at WCC our purpose is 'Serving Our Community with personalized homeownership Solutions.' WCC is a well-established direct lender for over 26 years. WCC sells direct to several of the largest aggregators, as well as FNMA Direct, and have a multitude of products to offer, as well as a dedicated operations staff. We provide professional services to our clients and give your files and business the individual attention it deserves. We are looking for loan officers that are self-motivated and have a drive to be the best they can be. Owner Ed Hoffman was voted one of MPA's HOT 100 Mortgage Professionals in 2017." Please Contact Ed Hoffman at 951-488-3112 or Ryan Ellis at 951-571-2721. For Temecula area interest, please contact Chris Wiggins at 760-519-7090.

Caliber Home Loans, Inc., one of the fastest growing top-ten mortgage companies in America, finished 2017 with over $2.4 billion in jumbo loan volume. This is a 67% increase over its 2016 jumbo volume. 2017 was a strong year for Caliber, producing its highest overall sales volume - in excess of $43B and reporting the largest year-over-year gain among all top-ranked mortgage companies. Caliber is committed to purchase lending and has plans for continued success in both jumbo and the purchase business in 2018 and is hiring Loan Consultants in markets across the country. Visit www.joincalibernow.com or email Jeremy Derosa to learn about a career at the fastest-growing mortgage company in America.

Consistent with American Pacific Mortgage's commitment to serve the Veteran community, APM has added 2 new branches that do 99% VA loans for over $30 million a month. Michael Pankow, EVP of National Production, said, "We're thrilled to have 2 new branches in Hawaii and San Antonio. Aligned Mortgage, formerly a branch of Veterans United, will help us further serve Veterans and their families." If you're interested in finding out more on how to serve our Veterans, please reach out to Peter Schwartz at 916-770-0053, or Dustin Block at  303-378-3166.

Freddie Mac announced that Jacqueline M. Welch has been named head of the Human Resources, Diversity & Inclusion (HRDI) division and chief diversity officer (CDO) of Freddie Mac. "In her expanded role as senior vice president of HRDI and CDO, Welch will be a member of the company's senior operating committee and will report directly to Freddie Mac CEO Donald H. Layton."

And CoastalStates Mortgage, the mortgage lending arm of South Carolina-based CoastalStates Bank, has named Ric Spiehs as the company's president and CEO.