When I spent an hour interviewing Angelo Mozilo on stage last week for the American Pacific Mortgage Summit, one of the issues we discussed was the competitive environment for lenders, and the evolution of the mortgage loan originator. Angelo, who is very much in command of his game, is a strong believer in the strength of the relationship that originators have with their clients, and the future that originators have in the lending industry. Lenders always have their eyes on the horizon, watching the changing competitive environment, and along those lines I penned a piece for the STRATMOR Group titled “The Rise of the Credit Unions.”
Fraud, Legal Chatter, Warnings
Jonathan Foxx published, entitled “Mortgage Fraud Challenges: How to Catch a Crook.” “Tracking down fraud is tough and not for the faint hearted! When my firm conducts audits of the loan flow process, it is not unusual to find gaps – perhaps ‘chasms’ is a better word! – in a company’s procedures for managing the risk of mortgage fraud. Maybe I can’t stop these swindlers and shysters from doing what they do, but I can let my clients, colleagues, and industry participants know some of the lessons Lenders Compliance Group has learned in knowing how to identify and trap these tricksters and so I wrote the foregoing article, which comes with indexed sections, checklists, and guardrails. The paper is over twenty pages. For ease of reading, it contains internal links to its twenty-one sections. I get past the basics and go for the red flags, weak links, and conniving tactics. Then I provide valuable checklists and tools to identify, mitigate, reduce or remove such threats. “Mortgage Fraud Challenges: How to Catch a Crook” can be downloaded straight from our Articles webspace.”
And from North Carolina Maggie Bizzell reports that NC is seeing a surge in malicious email. “Malicious emails sent to the state of North Carolina increased more than 60 percent during the days leading up to the landfall of Hurricane Florence…Cybercriminals often take advantage of natural disasters such as hurricanes to solicit personal information illegally and to take advantage of vulnerable infrastructures, disaster victims, and volunteers. People should remain skeptical about any email solicitations they receive at home or work.” Her note went on to suggest taking the following steps to help stop cybercriminals. “Carefully look at email and web addresses since cybercriminals will make them look as legitimate as possible, often using variations of spellings. The URL may have a different domain, such as .gov instead of .net. Do not click on links in emails from anyone unless you know and have verified the sender of the email. Take time to look at the sender’s email address. Do not click on any links until you are certain the organization is real. Check the organization’s website for its contact information and use sites such as www.charitynavigator.org to verify a charity organization. Make sure your all anti-virus software is up to date and that you have enacted the anti-phishing software provided by your email client. Phishing emails and phone calls may also try to pose as official disaster aid organizations such as FEMA. A true FEMA representative will never ask for personal banking information, a Social Security number, or a registration number.”
SafeChain is planning to integrate the National American Land Title Association Registry into its real estate wire fraud prevention platform SafeWire™. Through the integration, mortgage lenders will be able to search the Registry and verify the identity of title insurance agents and settlement companies, providing an enhanced level of efficiency and security to the real estate transaction. ALTA launched the ALTA Registry in 2017 as the first national database of title insurance agents and settlement companies. “The national ALTA Registry is a unique real estate utility created specifically for mortgage lenders,” said Paul Martin, ALTA’s Registry Director. “We’re pleased to offer this tool to SafeChain as it looks to deliver innovative products to its customers. The emergence of the ALTA Registry as an effective and easy to use source of data and information comes at the perfect time to help counter the alarming increase in wire fraud.”
A while back House Financial Services Committee Chairman Jeb Hensarling and Oversight and Investigations Subcommittee Chairman Ann Wagner announced that they plan to hold a joint hearing no later than Thursday, September 27, as part of its ongoing investigations into various allegations of waste, fraud and abuse at the FHFA and the housing GSEs. Current FHFA director Mel Watt and Fannie Mae CEO Tim Mayopoulos have both been asked to testify.
On the heels of Pacific Union shuttering its remaining retail lending group earlier this week comes news that Wells Fargo plans on laying off 5-10% of its workforce of 265,000.
And BMO Harris Bank is “eliminating most mortgage loan officers who meet customers face to face and now directs people who want to buy a house or refinance to its centralized mortgage call center. The Chicago-based bank…said the move — and a new online mortgage application platform coming soon — reflects changing customer behavior trends and actually offers time and ease benefits for mortgage applicants.”
As I’ve mentioned, as we approach the end of the third quarter, expectations for quarterly economic growth remain in the moderate-to-strong range as the labor market and business activity continue to show improving conditions. August payrolls showed an increase of 201,000 jobs but revisions to the prior two months reduced the total three-month gain by 50,000. Hourly earnings increased 2.9 percent year-over-year; the highest 12 months increase during the current economic expansion. Both the ISM manufacturing and non-manufacturing indices remain in strong territory despite concerns that tariffs and potential trade wars will have a negative impact on US businesses. Initial claims for unemployment fell to 203,000, a level not seen since 1969. On the negative side, the trade gap widened from $ 45.7 billion to $50.1 billion in June as exports dropped and imports increased. If this trend continues, trade could have a negative impact on Q3 GDP growth vs. the positive impact it had in Q2. The next FOMC meeting is rapidly approaching and the markets expect another 25-basis point increase to the fed funds range to be announced at its conclusion. Given the recent data as well as the rhetoric coming from Fed officials isn’t much to alter opinions at this time.
The U.S. 10-year dropped 1bps to 3.08% at yesterday’s close as most Treasuries rebounded from a recent wave of selling. China is said to be planning to cut the average tariff rate it charges on imports from most of its trading partners as soon as next month. We had a string of b-list news fill the day, starting with Japan's Prime Minister Shinzo Abe winning the LDP leadership election, which puts him on track to be Japan's longest-serving prime minister. Existing home sales were unchanged month-over-month in August with inventory stabilizing, implying that there could be some moderation in the pace of price increases.
Today’s calendar is light, consisting of just final September Markit PMI at 10:00am ET – it won’t move rates. Both manufacturing and services PMI are expected to rise. Next week’s scheduled news is light, with the headline being the Fed meeting on Wednesday. Rates aren’t dramatically different from last night’s close: the 10-year is currently yielding 3.07% and agency MBS prices are down/worse a few ticks.
Lender Products and Services
What if you could achieve a fixed expense per loan fulfillment at a fraction of the current cost you pay today? Equilibrium Mortgage Solutions allows small and mid-size mortgage firms to have an end-to-end loan fulfillment AND a quality production Team with a cost of under $895 per loan without institutional headcount. If you are looking to fully Eliminate variable fulfilment cost, ask us about our low-cost efficient Fixed FTE team model. Equilibrium provides Opening, Underwriting, Closing and Post Closing Functions and Post Fund Quality Control Audits along with daily Client Status Reports. Equilibrium is a top-notch outsourcing solutions game changer with an outstanding price point. We are backed by years of experience and expertise. If you want to drive revenue and really grow your business, get back in balance with the Equilibrium Edge. Contact Paul Campbell (760-774-7704) for information.
Looking to finance your Non-owner-occupied borrowers with an end-Credit decision maker? SG Capital Partners, who offers solutions across the entire non-agency spectrum, is launching its Investor Select product! The program offers DSCR and No Ratio options up to $2MM and allows first time investors. Partner with SGCP to experience its superior client service including collaborative product development, specialized training for UW/Loan Officers and direct access to their senior credit team for loan structuring. Contact SGCP today to learn more!
As part of a financial institution that has been doing business for more than a century, Origin Bank’s Mortgage Warehouse Lending team understands the importance of a strong partnership built on security, trust and responsiveness. We believe in building relationships to better understand you and your business, so we can create a strategy for your success. Our agility in the rapidly changing marketplace improves efficiency, profitability and security for our warehouse lending clients. We creatively partner with mortgage bankers to custom tailor our services to meet your needs. Offering lines from $5 million to $60 million, Origin is unique in every way, from eMortgages to non-qualified mortgages to how we fund loans. To start a conversation, contact Ken Johnson (972-407-3429). Ken is ready to help you take your mortgage business to the next level. Meet him at the MBA Annual Convention and Expo! Member FDIC. Equal Opportunity Lender.
Brokers should know that “Athas Capital Group is *NOT* entering the Non-QM, Alt-A or Non-Prime space – that’s because we’ve been in Non-Prime consumer, Business Purpose/N/O/O and Hard Money Bridge financing for over a decade. Athas Capital has been a source for Wholesale loans which didn’t fit the DU/LP box during the ten years of low interest rate refinancing, or Jumbo loans that only a handful of investors offered to the Mortgage Broker. That’s what we do! As part of Athas Capital’s growth, we have recently opened our Orange County office in Newport Beach, headed by industry veteran Rob Mally. As a mortgage originator, call the company that never left the Non-Prime/Non-Owner Jumbo at 877-877-1477.”
Jobs and New Positions
BankSouth Mortgage is seeking to hire an experienced mortgage banker who specializes in the suite of Fannie products with a specific focus on the Homestyle loan program. “With competitive rates, cutting-edge technology focused on serving the ‘on the go’ agent and client and a variety of financing options, BankSouth Mortgage is an excellent home to grow your personal loan production! Interested candidates should email email@example.com.”
Athas Capital Group, in Non-Prime consumer, Business Purpose/N/O/O and Hard Money Bridge financing for over a decade, is searching for Wholesale Account Executives who want to be part of the Athas team and part of its growth. Contact Jeff Gray or Rob Mally. (More on Athas Capital below.)
It is with great excitement Cherry Creek Mortgage Company introduces Carrie Gusmus as its newest SVP of Production. Formerly a member of the Cherry Creek family from 2008 thru 2010, she’s back home to help grow the company on a national level. Carrie has extensive and successful experience in mortgage banking. Most recently she spent the last 5 years growing a multi-state area including Colorado, Nevada, California, Idaho, Kansas, and Nebraska. Carrie is extremely gifted and brings a large team of people including loan originators, managers, processors and marketing talent that are equally amazing. Stacey Harding, EVP-National Production Manager, states “As one of the premier Independent Mortgage Bankers, Cherry Creek Mortgage is elated to have a professional and leader of Carrie’s caliber join the organization to help grow on a national basis. We are both thrilled and blessed to have Carrie on the team”.
The Consumer Direct division of one of the nation’s premier lenders, Angel Oak Home Loans is currently expanding into the Westlake/Thousand Oaks/Calabasas, Agoura Hills, CA area. Angel Oak Home Loans Consumer Direct division is seeking loan officers to sell and close conventional, FHA and VA residential home loans as well as the industry’s leading non-QM products.Angel Oak is growing this platform through on-line lead generation using paid search tools, social media marketing and a state-of-the-art lead distribution system, Velocify. Successful candidates for this role must possess excellent customer service skills, consistent work habits, and a proven history of meeting client expectations while achieving established company sales goals. If you are interested in growing your career, please apply here or contact JP Meglio (818-606-7348) or Eric Iannamico (678-468-0576).