“Your loan officer should be given the opportunity to succeed elsewhere.” Ever heard a CEO recommend that to a branch manager regarding a poorly performing LO? Here in San Francisco, at the Western Secondary Conference, the talk is focused on secondary marketing and Fannie’s lower estimate of 2018’s volumes ($1.69 trillion). But LO performance and compensation creep into the conversation any time you have owners and CEOs in one room. Recently I wrote, “No one wants to be ‘the first penguin in the water’ when it comes to making LO compensation changes. But done the right way, these changes can have a very positive impact on an independent’s bottom line and chances of survival.” Lenders are heading toward taking LO comp monies and putting them toward better leads, better back office services, and better pricing. 80 basis points on something is better than 140 basis points on nothing, right?
State (California), Legal and Compliance
Here’s a story worth some attention about bankers calling for TRID revisions for single family construction loans. (Good in theory, but critics will say, “Just what we need: lenders who can ill afford it spending huge sums to have different compliance procedures and policies based on property.”)
Since California accounts for nearly ¼ of residential origination volume, it’s good to know what’s happening there.
From California Josh Rosenthal with Medlin & Hargrave writes, “I wanted to let you know, that as of July 9, 2018, the commissioner of the (now) Department of Real Estate is no longer Wayne Bell. As of July 16, 2018, there still has been no official announcement. The new acting commissioner will be the Chief Deputy Commissioner, Daniel Sandri. There is conjecture that this leadership change is in some way connected to the reorganization of the agency from the Bureau of Real Estate, a bureau within the California Department of Consumer Affairs, back to the California Department of Real Estate, an independent agency. We are happy to talk to your readers about licensing issues and if this shakeup could affect enforcement and discipline.”
A symposium in Los Angeles is one of several planned to discuss how to increase the supply of affordable housing in California, and nationwide. Co-hosted by Fannie Mae and the UCLA Ziman Center for Real Estate, information on the discussion is available here.
Long-term rates are a product of supply and demand, as are housing prices. Thousands of single family homes have been removed from the first-time home buyer market by being purchased by large firms – such is life. The REO-to-Rental Trade was a big winner over the past several years as hedge funds and pension funds bought foreclosed properties for pennies on the dollar, fixed them up and rented them out, earning high single digit returns. As home prices rise, you would think these people will start ringing the register. Turns out they are doubling down. Professional investors are buying up homes in urban areas with good schools. This is making things even tougher for the first-time homebuyer who is struggling to find a starter home. As Brent Nyitray points out, “That said, it isn't a ridiculous number - last year major investors bought 29,000 homes, which is a drop in the bucket compared to total existing home sales of 5.45 million.”
Looking at the bond market, rates were unchanged yesterday as Fed Chairman Jay Powell delivered the semiannual testimony on monetary policy to the Senate Committee on Banking, Housing, and Urban Affairs, without surprise. Chair Powell, who faces the House Financial Service Committee today, shared an optimistic view of the U.S. economy, making the case for continued gradual hikes to the federal funds rate range. The capacity utilization rate ticked up to 78.0% in June from a downwardly revised 77.7% in May, narrowly missing expectations. Manufacturing output bounced back sharply, reflecting good underlying demand, after a low May reading.
Today’s economic calendar started with MBA mortgage applications for the week ending July 13: -2.5% with refis accounting for a little over 1/3 of all applications. We’ve also had June Housing Starts (-12.3%, worse than expected) and Building Permits (-2.2%). Fed Chair Powell returns for another go-around on the Hill at 10AM when he testifies before the House Financial Services Committee. Finally, the Fed will release the latest Beige Book at 2PM ET. Today’s earnings releases include updates from US Bancorp and Morgan Stanley before the open with Dow components IBM and American Express scheduled to report after the close. The day begins, surprise, with rates little changes from where they’ve been for weeks: the 10-year is yielding 2.85% and agency MBS prices are up a couple ticks versus last night’s close.
Adam Mason, Executive Vice President, COO at Gershman Mortgage (St. Louis, MO) notes, “We were fortunate to have the foresight to utilize the services of DocProbe in advance of the current margin compression the industry is experiencing. DocProbe allowed us to move our Trailing Docs function to a variable cost model while adding operational efficiency. This move allows us to focus on building our business and cut operational costs. Our dedicated DocProbe account rep knows our business and ensures that all documents are error free and sent to the investors in time. Great company, great service, great team.” Here at the Western Secondary the last few days, we heard much about cost cutting by moving to a variable cost model. Find out why correspondents and investors are working with DocProbe, specifically in today’s climate, to cut costs and work with a partner who understands the business. To learn more, reach out to Nick Erlanger or Steve Rimmer.
My cat Myrtle is quite prolific on social media these days. Most lenders are allowing loan officers to use Facebook and LinkedIn to promote their services. How is your company monitoring those posts to ensure compliance with your own company policies? It’s been a challenge. Until now. SocialMonitor is now live in beta testing. SocialSurvey partners may monitor all connected social media feeds in their account. This simple & smart monitoring platform works like an inbox. It can focus on specific keywords in posts. Since LO users have already connected SocialSurvey to their social networks for reviews sharing, launching the product takes only minutes. It was designed by SocialSurvey customers and is available to partners now! Click to read the full article.
New technology and digital mortgage services have flooded the industry recently, and for good reason. For years, many mortgage lenders have procrastinated adopting digital technology to improve efficiency in their operations, making it harder to attract and satisfy new customers. Late-bloomers are finally coming around, though, as we are seeing more and more lending teams actively researching and purchasing technology solutions to help their business. With this, it’s hard to know the right questions to ask to help you find the right technology vendor. A newly released eBook - “Digital Mortgage Buyer’s Guide” - shines light on this process, touching on questions to ask and areas to focus on for those considering adopting new digital mortgage technology in their business. An exclusive to Rob Chrisman subscribers today (and a must-read for all lending professionals), Download your complimentary copy here.
Floify, the mortgage industry’s #1 point-of-sale solution, understands the need for LOs to have an efficient way to consolidate borrower documentation, without the stress of moving from application to application to collect files. With their comprehensive, end-to-end mortgage automation platform, Floify has been helping LOs save time and money by allowing them to eliminate the need for third-party document storage services like Dropbox or Google Drive, by safely housing an unlimited number of your borrowers’ files within the fully-encrypted Floify platform. Floify even auto-converts mobile photos to PDFs upon upload, which means you can seamlessly deploy to your LOS in the blink of an eye. When you implement Floify into your mortgage operation, you can focus on generating new business and keeping clients engaged, while letting their robust point-of-sale solution handle the heavy lifting. To experience to power of Floify’s document management system, request a live demo today.
Does your pricing seem a little bit too high? Are you losing deals over rates? Is your ability to earn money limited by your company's high pricing? If you answered yes to any of these, chances are your company has too much padding or extra margin built into their rates, costing you money, deals, and possibly even referral relationships! Even worse, some companies build even more padding into your rates when their business slows down to keep their ‘high-profit appetite’ fed. Now there's a way to see 'behind the curtain' to make sure you’re getting the best deal possible. Check out this "Pricing Lie Detector" -a free tool that shows you in 10 seconds how much money you may be leaving on the table due to over-inflated rate sheets from your company.
Level One Bank, a community bank headquartered in SE Michigan, remains committed to the growth of its Mortgage Division. After nearly doubling the size of the Mortgage Sales and Operations team in 2018, “Level One Bank is looking to add experienced producing teams or high producing individuals to join our family of mortgage professionals. We have a collaborative culture providing access to all decision makers including management, processing, and underwriting. In addition to our full suite of conventional/government loans, we offer great portfolio products like construction, physician, and jumbo loans. The Mortgage team has the support of our marketing department, executive team and Board of Directors. Contact us today to learn more about the career opportunities at Level One Bank.”
Wintrust Mortgage is growing its correspondent lending division by adding two experienced Account Representatives to help cover the country. Sam Alecci has been brought on to develop the Northeast region (NJ, NY, PA and CT) and Marisa Murphy will help spearhead the West (UT, CO, WY and NM). If you are interested in working with a first-class organization that treats their customers like family while offering a diverse menu of loan products, give Julie Janssen, Wintrust Mortgage’s Correspondent Account Manager, a call at 847.939.9390. She will be happy to make sure you get the attention you deserve! And, if you are a Retail group looking for a new home with a bank-owned mortgage company, contact Bob Shield, EVP of National Sales (847.939.9361) for a confidential discussion.
Strong History. Bold Future. 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.
GSF Mortgage announced the immediate expansion of its Conventional Single Close Construction product: primary and second homes, one unit, 95% LTV, 680 FICO, 45% DTI. This product does not require requalification of the borrower at conclusion of the build. No interest paid during the construction phases and it is a true one time close. For Retail Branch Opportunities please reach out to Chad Jampedro. Correspondent Lender Opportunities please reach out Bruce Olster.
MorVest Capital has a new EVP for expansion of liquidity and MSR advisory services: Ruth Lee. MorVest Capital is a financial services advisory firm specializing in liquidity and capital solutions for mortgage bankers, including MSR accumulation, valuation, finance and brokerage. “As our clients experience more liquidity challenges, we bring trusted, seasoned experience to bear in managing either the leverage or disposition of their MSR assets.”