Wells Fargo’s retail lending division & core bank have really “taken it on the chin” in the last year or so, what with the car insurance, sales practice, and rate lock extension scandals, and reminding us that a good reputation can take years to build and a few headlines to destroy. Given that we’ve just finished up the Veteran’s Day weekend, something you don’t often hear about is Wells Fargo continuing to team up with Wounded Warriors to provide free houses for disabled vets. Thousands of lenders across the country, like Fairway Independent, CMG Financial, and Bank of America, continue to help countless veteran's charities, often with no headlines. Kudos to all of them, publicity or not.
By "bank news" we're not talking about Apple or Amazon quite yet, but plenty of folks are watching their interest in banking - especially those in their 20s and 30s who grew up seeing plenty of bad headlines about commercial banks but not many about Apple or Amazon. On the mortgage side, only 40% of the top 10 home lenders by volume are banks. The remaining group is garnering more business in this area as they do not have to follow strict banking rules post crisis and as such is offering more creative structures, better terms, and, some say, looser underwriting.
Banks firing the Fed? Bank of the Ozarks and other smaller banks are eliminating their holding company structure to gain release from regulation by the Federal Reserve. Acting Comptroller of the Currency Keith Noreika supports the move, saying "banks should be able to structure themselves in whatever way they want."
Bank mergers and acquisitions continue. In the last week or so it was announced that in California Suncrest Bank ($529mm) will acquire Community Business Bank ($325mm) for about $62.5mm in cash (50%) and stock (50%) or about 1.86x tangible book. The Old Point National Bank of Phoebus ($948mm, VA) will acquire Citizens National Bank ($48mm, VA) for about $7.9mm in cash (100%) or about 1.0x tangible book. In the Garden State, 1st Constitution Bank ($1.1B) will acquire New Jersey Community Bank ($104mm) for $7.6mm in cash (40%) and stock (60%) or about 0.82x tangible book. And Banterra Bank ($1.5B, IL) will acquire 3 IL branches plus associated loans ($91mm) and deposits ($84mm) from First Bank ($6.2B, MO).
Jumbo and Non-QM News
Analysts will tell you that the private label MBS market is still a shadow of its pre-crisis self. Production isn't necessarily down, which means that these loans are retained on a bank's or REIT's balance sheet. One could argue that this limits the available credit, however, the most puzzling aspect is that a lot of lenders want to get into the non-QM business, but the demand for non-QM credit has been disappointingly small. People are ramping up the non-QM product, but the loans just haven't been there yet.
Mortgage Solutions Financial has discontinued all its Non-Conforming (Jumbo) 501 and 701 products. No new lock requests or submissions will be allowed for these products.
Wells Fargo Funding expanded acceptable property types for Non-Conforming Loans, on or after October 24th, to include log homes (with at least two log home comparable sales that support marketability and value).
AmeriHome Mortgage posted, effective for Fannie Mae, Freddie Mac, FHA, and VA loans delivered on and after November 1, tax and W-2 transcripts will no longer be required when all qualifying income is W-2 income. For all other income types, transcripts are required for each tax year with qualifying income. As a reminder, Sellers are required to provide a completed IRS Form 4506-T, as required by the applicable Agency. Tax transcripts are required for all qualifying income sources for USDA and Core Jumbo loans.
Beginning with Core Jumbo loans locked on and after November 1, 2017, AmeriHome fees will be as follows: $345.00 Administration Fee (previously $295) and $75.00 Tax Service Fee (unchanged).
NewLeaf's Non-QM highlights include: 5/1, 7/1 qualifies at higher of note rate or fully indexed rate (not + 2%). Listed property is eligible for refinance. Departing residence - utilize a rental survey (no release agreement). Add back pension contribution for self-employed borrowers.
Pacific Union Financial posted some policy updates. First, all parties to Non-Delegated loan transactions will be checked via applicable databases required by regulation, investors and insurers. If a party is listed in one of these databases, Pacific Union will contact the affected party's Non-Delegated Lender for assistance. Next, due to an increased regulatory focus on the accuracy of recording fees, Pacific Union has been asked to produce evidence (receipts) to show that only the exact amount is charged to the consumer at closing. Pacific Union has begun including this review as a part of our standard Quality Control practice; thus, our lenders may be asked to provide this documentation on a post-purchase basis. Please ensure that your organization is readily able to produce these receipts if they are required.
Pacific Union announced the release of its new FlexKey: A Foreign National loan program as an addition to the FlexKey program suite. Refer to its Program Guide for complete product requirements.
Rates: up some, down some. And so it goes - Friday rates were up, and the 10-year sold off .625 to yield 2.40%. LOs and lenders are more focused on helping their clients with odd underwriting twists rather than hoping rates drop .125. U.S. Treasuries & agency MBS prices ended last week on a broadly lower note, erasing their gains from the earlier portion of the week. Many trading operations were closed on Friday in observance of Veterans Day, which likely reduced participation. The only news during the day was the preliminary University of Michigan Survey of Consumers for November indicating that consumers' anticipated wage gains recorded the highest two-month level in a decade.
Moving rates slightly could be US tax skepticism as the House and Senate work on bills with substantive differences: the SALT and mortgage interest deductions. Thus, while each chamber will make progress on their respective bills (the House could pass its version by Thursday), the reconciliation process promises to be long and arduous.
It would take some dramatic negative news to dissuade the Fed from raising short term rates again next month: the news as of late has continued to point to a decent national economy. After zip today, scheduled news this week includes tomorrow's October NFIB Small Business Optimism Index and October Producer Price Index. Wednesday is the weekly MBA applications from last week, Empire Manufacturing, October Consumer Price Index, October Retail Sales, and September Business Inventories. Thursday is the usual jobless claims, and October Import Prices & Export Prices, November Philadelphia Fed Survey, October Industrial Production & Capacity Utilization, and then on Friday is a smidgeon of housing news with October Housing Starts and Building Permits. We start the week with rates slightly lower versus Friday: the 10-year is yielding 2.38% and agency MBS prices are better by .125.
Events and Webinars
Learn about Plaza's 203(k) Standard and Limited products November 14th.
Digital mortgage information is important to keep up on, and the California MBA is hosting a FREE webinar featuring some of the top tech minds and hottest products from the Digital Mortgage Conference on November 15 at 11AM PT. Special guests include Austin Kilgore, Editor-in-chief of National Mortgage News, Bob Brandt, Optimal Blue; Linn Cook, LendingQB, Kirk Donaldson, LoanBeam, and John Seroka, Seroka Brand Development.
Don't miss the MBA of Metropolitan Washington Residential lending celebration on November 15th, 6PM ET at the Westwood Country Club. "Enjoy good times with your colleagues, network, have fun!! Attendees will receive two drink tickets along with a great spread of hors d'oeuvres."
Join MBA ST. Louis on November 16th for lunch, networking, and discussion on driving profits with Craig Palubiak at Strategies to Grow Your Business. Lunch will be held at Ces and Judy's beginning at 11AM.
New York MBA and Freddie Mac are providing a free webinar, "Smart ways to combat mortgage fraud", on November 16th. Topics include: Emerging Fraud Issues, Scams That Target the Elderly/Seniors, Spoofing Schemes and How Consumers Can Protect Themselves and Freddie Mac Fraud Resources for You and Your Customers.
Several provisions of the New York Department of Financial Services' (DFS) landmark cybersecurity regulation will be enforced starting in February 2018. Buckley Sandler's Privacy, Cyber Risk & Data Security practice will be hosting a webcast on November 29th to discuss the soon to be enforced provisions as well as the proposed registration requirement for credit reporting agencies, which would make them subject to the cybersecurity regulation. The panel will also discuss efforts by DFS to promote the cybersecurity regulation as a model for other states to follow.
Fannie Mae is offering a new series of Ask-the-Expert live webinars intended to offer guidance and information to support your Uniform Closing Dataset (UCD) file submissions. The webinars feature live demos and feedback messaging in the UCD collection solution plus Q&As with our subject matter experts. Register for an upcoming session on the UCD Collection Solution page.
Jobs and Products
"Assurance Financial, headquartered in Louisiana, is continuing our aggressive company and branching growth. We are looking for good markets and great people in all attractive locations across the country. Specific to Charlotte, North Carolina, we are seeking a producing branch manager and talented MLOs to build a dynamic production office while partnering with the "closing on time" support from our existing Charlotte loan operations center. In addition, we are seeking an experienced Eastern Regional Production Manager to assist us with supporting and expanding existing Eastern Time Zone branches as well as bringing on new branch opportunities in this territory." For immediate consideration and more information, please call or write Paul Peters, CMB, Recruiting Manager (225-239-7948).
"What happens when you combine one of the top places to live with one of the top places to work? You get PrimeLending's newest branch in Bozeman, Montana. And as Bozeman experiences extraordinary growth in its booming housing market, PrimeLending is growing right along with it, planting our flags across the US with exceptional results. Our Bozeman branch is proof of that. Led by Branch Manager Jeremy Bordner, Bozeman represents an additional $58 million in anticipated volume in 2018. When you work with the best, have the best products, technology and support, it's easy to see why success follows you to PrimeLending. Are you a premier loan officer ready to achieve your absolute best? Contact Bill Harp (469-737-5767)."
"Wanting or needing a change? Tired of not closing loans on time? Stanford Mortgage is looking to bring on Mortgage Advisors and / or teams to our unique platform. Stanford Mortgage (a division of Finance of America) is a multi-branch, full service lender, located throughout the greater Sacramento area. We are a direct lender with local support to close loans on time, build your business, and have fun. If you and your team are looking to take your business to the next level, confidentially send your resume to Tim Rowen or Barry W. Pearson, Jr.."
"Never heard of MiMutual Mortgage? You're not alone. This may be the best retail platform most people don't know about. Celebrating 25 years in business and numerous Top Company awards and just last week recognized as a Best Place to Work by the Detroit Free Press, the agency-direct lender and servicer is now expanding in select markets. With a fanatical focus on service, efficiency and branch support, MiMutual Mortgage specializes in conventional and FHA renovation lending with an internal draw administration, delegated Jumbo, FHA section 184, FHA 203(h) disaster recovery lending, manual government underwriting, correspondent non-QM lending and state DPA/Bond programs. Successful Branch managers and originators seeking a true partnership rather than an employee ID number, better support, training, smoother operations and real marketing support should contact National EVP of Retail Lending Daniel Jacobs (888-994-6698) or visit us. Seeking the best talent nationwide, with a current emphasis on CA, AZ, MD, FL, SC, NC, MO, and TX."
In capital markets news, MCT has released new online functionality that automates the process of product selection and delivery of loan commitments to Fannie Mae. The new solution, which was developed as part of MCT's ongoing technology collaboration with Fannie Mae, is called Rapid Commit and resides within MCT's award-winning secondary marketing software platform, MCTlive! "Working within MCTlive!, users leverage Rapid Commit to run initial best execution and determine that the loan meets Fannie Mae selling guidelines, followed by product-specific best execution that intelligently analyzes the optimal subset sizes and products to deliver as individual commitments," stated Phil Rasori, COO of MCT. "Previously, this analysis was a manual, laborious process but it is now completely automated - all with the simple click of a button." Learn more about Rapid Commit and MCT's strategic collaboration with Fannie Mae for the benefit of mutual clients.