Pesky technology… it just won’t go away. Online lending platform fintech player (including mortgages) SoFi has launched a banking app (SoFi Money) in beta testing and expects it to be ready later this year. It includes a debit card that allows P2P payments and accepts mobile check deposits, offers combined checking and saving accounts for 1.1% interest, and up to 6 ATM withdrawals per month. The product will allow it to be both a financial hub and recommendation engine for its members. JPMorgan Chase has launched an all mobile bank called Finn targeting millennials and allows customers to do all their banking from their phone like opening accounts, making deposits, sending money, using Zelle, and accessing ATMs across the US. And Ellie Mae launched Encompass Consumer Connect allowing borrowers to complete the mortgage application process online, will provide lenders access to credit, assets and income-to-mortgage ratio, among other qualifying information.


Bank News

Although not directly related to home loans, four months after the company announced it would reimburse customers overcharged interest on their credit cards, the Consumer Financial Protection Bureau revealed that it had settled with Citibank for $335 million in connection with the improper interest charges. The bank’s decision to self-report the issue was rewarded, with the bureau electing not to include a civil money penalty requirement in its consent order.

Many observers fret about the risk presented by nonbanks, yet the dependence of these institutions on bank financing means that the credit and market risk remain “in the bank.” If a large nonbank financial firm, in the future, experiences liquidity or solvency problems, the lender banks would almost certainly be compelled to acquire the nonbank. Non-banks, at the end of the day, are the customers of the big banks.

The Fed is limiting credit exposure between the largest banks. Going forward, the Fed will limit counterparty exposure the 8 “systemically important” US banks have with each other to 15% of capital and all banks with $250B or more in assets are limited to 25% of capital. The move was taken to limit the chance of spillover risk in the financial system during times of crisis.

Isaac Boltanksy with Compass Point Research and Trading points out that on July 6, the prudential bank regulators (OCC, FDIC, and Federal Reserve) released statements addressing certain operational and procedural matters following the enactment of the bank regulatory relief legislation (S.2155). Following our review of the statements, we were left with the following takeaways: (1) this is a mild disappointment for banks in the $100B-$250B asset band as there was no explicit signal of relief prior to the 18 month clock elapsing, but the push for early relief will continue; (2) the statement provides a modicum of clarity regarding HVCRE, but substantive questions remain; (3) the liquidity and capital off-ramp for banks under $10B in assets was not explicitly addressed, but the FDIC event on Wednesday could provide some guidance; (4) although there is practical relief for covered banks, the prudential regulators explicitly warn that “capital planning and risk management practices” will still be reviewed through normal supervisory process; and (5) given the already overburdened deregulatory agenda, our sense is that many – if not all – of the S.2155 rulemaking efforts will bleed into 2019. We continue to believe S.2155 will meaningfully reduce compliance costs for community banks, modestly lessen the compliance burden on regional banks, and will bolster M&A tailwinds.

Speaking of M&A, in the last week or so it was announced that Peapack-Gladstone Bank ($4.3B, NJ) will acquire wealth management firm Lassus Wherley & Associates PC. (Lassus manages about $500mm in assets.) In Tennessee SmartBank ($1.7B) will acquire Foothills Bank & Trust ($215mm) for about $36.2mm in stock (100%) or about 1.68x tangible book. Forcht Bank ($1.1B, KY) will acquire Watch Hill Bank ($163mm, OH). Border State Bank ($511mm, MN) will acquire Union State Bank of Fargo ($99mm, ND). FNB Bank ($526mm, AL) will acquire Capital Bank ($122mm, GA) in an all cash deal. First-Citizens Bank & Trust Co ($34B, NC) will acquire Securant Bank & Trust ($217mm, WI) for $28.1mm in cash (100%) or about 1.44x tangible book. Old National Bank ($17.4B, IN) will acquire KleinBank ($2.0B, MN) for about $433.8mm in stock (100%) or about 2.36x tangible book.

Capital Markets

MIAC’s capital markets group invites financing proposals for a small-balance, multifamily, acquisition and renovation loan. The request is based upon a $1mm down payment with acquisition debt of $5.5mm and renovation financing of $1.4mm to be distributed on a draw basis. Requested terms are a 2-year financing or a 1-year loan with extensions available and an 85% LTV. The collateral is a class B multifamily apartment complex located in Tennessee. Please contact your MIAC sales person or Steve Harris for details.

Looking at bonds, rates bounced up slightly yesterday as investor’s attention shifted from the pressures of a trade war, towards this week’s start of earning season. If you are looking for less subdued headlines, the U.K.'s Foreign Minister Boris Johnson, Brexit Minister David Davis, and Parliamentary Private Secretary to the Department of Transportation Chris Green resigned from government due to ideological differences with Prime Minister Theresa May. Back domestically, total outstanding consumer credit increased expanded in May at its largest clip since November 2017, fed by sizable increases in both revolving and nonrevolving credit, undoubtedly a catalyst for a strong pickup in consumer spending that should help Q2 GDP.

Today’s calendar kicked off with the NFIB Small Business Activity Index for June (.6 lower). The Redbook Same-Store Sales Index for the week ending July 7 is next up at 8:55am (previously -0.4% MoM, 4.4% YoY) followed by May job openings from JOLTS at 10:00am (previously 6.698 million). Finally, Treasury will auction $35 billion 1-month T-bills at 11:30am followed by the first leg of this week’s mini-Refunding when $33 billion 3-year notes are auctioned at 1:00pm. The 10-year is yielding 2.86% and agency MBS prices are a shade worse compared to last night’s close.

Lender Products

Correspondent lenders: Heading to the Western Secondary Market Conference July 16-18? Expand your borrower base. Here’s your opportunity to learn more about non-QM products that help creditworthy applicants who don’t fit into conventional programs. Today’s non-QM loans feature solid underwriting, strong performance—and powerful earning potential. Connect with Verus Mortgage Capital at our booth, contact us to schedule a meeting or catch Verus President Dane Smith speaking on the Non-Agency panel July 16. Verus has purchased over $2.4 billion in expanded, non-QM loans and completed five rated securitizations. Learn more about how Verus is committed to your success in non-QM.

First-time homebuyers represent an ever-important market to win over, especially in our purchase-heavy market. These are digitally savvy borrowers that expect a superior mortgage experience compared to what is typically offered by many lenders today. The good news is, this digital evolution makes loan officers more indispensable than ever. An extremely informative eBook from Maxwell, “Winning in the Digital Age” provides best practices to deliver impeccable service to the digitally savvy borrower.

The rapid pace of innovation in the industry has changed how modern lenders market to consumers. Yet, many lenders today are trying to build their marketing and sales growth engine on outdated technology and practices. To position your salespeople for success – and your company for growth – you need the right tools, processes and support. Prioritizing your marketing technology requires commitment across your organization. Join Total Expert, Movement Mortgage, and HW on Wednesday, July 11th for a live webinar, Leading Digital Transformation in Marketing: The Success Playbook. These digital transformation leaders will explore the framework of the modern marketing stack and cover best practices for executing your marketing strategy across your entire organization at scale.  

Leaders, training is an investment, not an expense. Would you spend $1 to make $10 in profit? That’s what you can expect when you engage with XINNIX. And that’s why they are launching theXINNIX 10X Challenge. When you put 10 of your MVPs in any role—loan officer, producing manager, sales leader or recruiter—through XINNIX training, you will receive 10 times the return on investment. How do they know? The XINNIX process is proven. Recently, a top national lender engaged XINNIX to train 10 loan officers. Their investment was $13,000. The return on that investment? In 2 months, they saw a net profit of $134,376, and their projected net profit for 12 months is $806,256! Results like this are waiting for you. Your team's success is absolutely worth the investment. CLICK HERE to begin the XINNIX 10X Challenge!

Stearns Lending, LLC, has entered into an agreement to acquire an equity interest in Certainty Home Loans, LLC, as part of the Stearns Preferred Partnership Program. This move will broaden Stearns market presence and geographical footprint resulting in accelerated growth in the Stearns retail channel. “These types of partnerships bring together complementary businesses with similar cultures, values and a joint commitment to delivering exceptional service,” said Stearns CEO David Schneider. Combining Stearns industry leading technology, direct access to capital market expertise, and operational excellence with Certainty’s retail platform will result in a partnership beneficial to both companies. This structure leverages the experience Stearns has with its current Joint Venture business model which currently operates under ten different brands nationwide. As many struggle to adapt to the changing market, Stearns is taking bold steps to build a stronger business model in the industry. Don’t just watch us, join us.

PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE: HTH), understands the importance of efficiency when it comes to meeting our customers funding requests.  That is why we make the funding process simple; “Express Funding” is how we help our customers reduce time needed to get their loans funded.  Express Funding allows our customers to submit multiple loans for funding in one simple data upload. Whether it is 1 loan or 100 loans, Express Funding is an easy and efficient way to get the funds they need quickly. In addition, we offer a growing list of 2,000+ closing agents with No Doc funding requirements and funding turn times averaging under 30 minutes. We believe in consistently providing service to exceed our customers’ expectations. If you are interested in having a conversation about PlainsCapital Bank National Warehouse Lending please contact Pamela Robinson, SVP National Sales or Deric Barnett, EVP National Warehouse Lending.


Jobs and Personnel moves

REMN Wholesale’s highly anticipated VA Renovation webinar on Thursday is filling up quickly, but that’s not the only high-profile event they’re staging this month. REMN will be hosting two additional webinars to give deeper insight into lesser-known renovation products, and ways to leverage them in the face of rising rates. On July 18, REMN’s Winning Sales Strategies in a Rising Rates Environment will share tactics for teaching clients how to combat the affordability crisis, and how to think outside the box with HomeReady. On July 24, REMN’s HomeStyle Lending Decoded webinar will focus on the key benefits associated with this loan, including its suitability for second homes and investment properties. More information on both webinars can be found at REMN continues to grow and is looking for entrepreneurial account executives in all territories. If you know someone looking to join a thriving wholesale lender, have them email REMN’s recruiting team at

Congrats to Michael Rago who is the new National Sales Manager for Alta Mortgage Bankers. He brings over 28 years of wholesale mortgage sales experience to the company and will be building a sales team to “deliver the AMB core value of offering the lowest rates on non-QM products.”