I think the rumors out there about Richard Cordray taking a much deserved break and then, forget that governor stuff, stepping into Dave Stevens' shoes running the MBA are farfetched. Now, forgetting for a moment about comp issues (Cordray is earning about $180k per year), if Dave were to have a desire to run the CFPB, that would be interesting indeed. Musings aside, law-abiding lenders value the role of the CFPB, and there have been positive contributions. It's the methodology, consumer complaint portal, governing by enforcement action, and the terrible punitive nature of its activities that the industry objects to. In additional personnel news, industry Sherpa David Kittle withdrew his name for nomination as President of Ginnie Mae. Given the lengthy and easily delayed endorsement procedure and the rigors of the approval process, this is understandable, yet not in any way a positive for our industry. Dave will do well wherever he serves.
Here's some trivia for you. Name one government official that President Trump, who ran on a populist platform that harnessed Americans' anger toward Wall Street, never mentioned on Twitter? Sure enough, he has not commented on, or criticized, the consumer bureau or Richard Cordray on Twitter. Mr. Cordray announced that he is leaving, but did not discuss his future plans in his email. A bureau spokesman declined to comment.
One director, or a team of leaders? Mr. Trump will be able to reshape the agency to look more like other financial regulators, many of which are now run by former industry executives. Senator Elizabeth Warren (D Mass) originally picked Mr. Cordray to be the agency's enforcement director before Mr. Obama appointed him to bureau director. Yesterday she praised Mr. Cordray for holding banks accountable and forcing companies to return money "to the people they cheated."
Mayer Brown Consumer Financial Services partner and former CFPB official Ori Lev had some thoughts. "...While I didn't always agree with his aggressive enforcement approach, Rich Cordray was a dedicated public servant who worked tirelessly on behalf of consumers and did a remarkable job of building a brand-new federal agency. The difficulty of that task is often overlooked by his critics. His departure will mark a stark change for the CFPB...
"It is unlikely that the announcement will have any immediate impact on pending CFPB litigation. Once a new Director is named by President Trump - either on an Acting basis under the Federal Vacancies Reform Act or on a permanent basis after Senate confirmation - the new Director may review pending litigation to determine if he or she wishes to continue to take the same legal positions the agency has been taking. It wouldn't be surprising if the agency backed off some of its more aggressive legal positions. In the interim, defendants in such cases will likely seek to delay proceedings pending new CFPB leadership."
House Financial Services Committee Chairman Jeb Hensarling (R-TX), stated, "We are long overdue for new leadership at the CFPB, a rogue agency that has done more to hurt consumers than help them. The CFPB tramples on the fundamental economic rights of American citizens, taking away their choices and opportunities. The extreme overregulation it imposes on our economy leads to higher costs and less access to financial products and services, particularly for Americans with lower and middle incomes. It has routinely denied market participants their due process rights. All this harm is made even worse by the fact that the CFPB is structurally unconstitutional and completely unaccountable to the American people.
"The resignation of the Bureau's director is an excellent opportunity to enact desperately needed reforms. The Bureau has an important mission. Properly designed and led, it can truly protect consumers by ensuring they have access to competitive markets that are vigorously policed for fraud. That's the best way to provide consumers with more affordable choices for the financial products and services they want and need. Americans deserve the opportunity to choose the checking account they want, the mortgage they want and the credit card they want. I look forward to working with President Trump's choice for CFPB director to protect consumers."
Isaac Boltansky with Compass Point Research and Trading opined, "Following Director Cordray's departure, the CFPB's rulemaking agenda will grind to a halt and its enforcement profile will dramatically diminish.
"The acting deputy director - David Silberman - could conceivably take the CFPB reins, but that would likely catalyze fierce industry opposition. We expect the Trump administration to use the Vacancies Act to appoint a previously Senate-confirmed person to serve as Acting Director for up to 210 days. The likeliest pick would be Secretary Mnuchin, who could then designate one of his staff to handle day-to-day operations (e.g., Craig Phillips, Jared Sawyer). Meanwhile, we doubt that there will be a Senate-confirmed pick in place until late 1H18. Potential replacements include VP Pence's Chief Economist Mark Calabria, GMU professor Todd Zywicki, outgoing House Financial Services Committee Chair Jeb Hensarling, Rep. French Hill, former Rep. Neugebauer, or acting head of the OCC Keith Noreika.
"What happens immediately? We could see the Bureau settle or drop outstanding litigation against TCF, NAVI, or OCN (TCF is the likeliest settlement in our view). WRLD still has a NORA letter outstanding so a shift in CFPB leadership would conceivably lower the odds of an enforcement action. The debt collection rulemaking will likely slow or stall during the transition, but the Bureau will continue working towards updated rules for the third-party debt collection industry. And the effort to advance a bank overdraft rule is effectively dead.
"...The CFPB will face substantive changes in the years ahead as policymakers recalibrate the regulatory environment, but Director Cordray's work ensures that the Bureau will continue to play a fundamental role in the consumer finance ecosystem for the foreseeable future."
The American Land Title Association (ALTA), the national trade association of the land title insurance industry, sent, "During this leadership transition, ALTA will continue to support CFPB staff to help provide positive and compliant real estate settlement experiences for consumers and lenders, and serve as a resource on important consumer issues such as wire transfer fraud, third-party oversight and mortgage disclosures."
"Currently, Congress is considering a bill that would correct the inaccurate disclosure of title insurance premiums on the TILA-RESPA Integrated Disclosures (TRID). Under the current regulation, the CFPB does not allow title insurance companies to disclose available discounts for lenders title insurance on the government mandated disclosures. This creates inconsistencies in mortgage documents and causes confusion for consumers. The TRID Improvement Act of 2017 (H.R. 3978) provides a straightforward fix that would benefit consumers across the country. By an overwhelming 53-5 bipartisan vote, the House Financial Services Committee passed this bill today. ALTA is hopeful Director Cordray values the significance of this vote and approves a change in CFPB policy before he departs."
The Progressive Change Campaign Committee sent, "If Rich Cordray runs for governor of Ohio, he would be a very strong candidate. With his record of advocating for consumers against predatory banks and credit card companies -- an agenda popular with Democrats, Independents, and Republicans -- Cordray would tap into the economic populist vein of the electorate that Sherrod Brown and Donald Trump both tapped into in Ohio. We would hope to see a race to the top on these issues in the primary."
Looking at the bond markets, the yield curve flattening theme remained intact yesterday as the spread between the 2-year and 10-year notes compressed to 65 bps from 70 bps at the end of Tuesday's session. Once again, the 30-year bond was the star performer on the yield curve as its yield dropped relative to the short end. 10-year yields dropped as well, heading down to 2.31% as its price improved .375.
This morning we've had the usual Thursday initial jobless claims (249k) but also import/export prices and the Philadelphia Fed Manufacturing Survey. October industrial production and capacity utilization are due out later, as is the NAHB Housing Market Index. With one week to go until Thanksgiving we find the 10-year yielding 2.35% and agency MBS prices are worse .250.
Training Events and Mergers
From Texas comes news that Mid America Mortgage, Inc. has signed a letter of intent to purchase the assets of Oklahoma City-based American Southwest Mortgage Corp. and an affiliated firm, American Southwest Mortgage Funding Corp. "As part of the agreement, Mid America will incorporate American Southwest's operations into Mid America's mortgage platform and secure an interest in their respective pipelines and select assets. Further, Mid America (which has retail, wholesale, and correspondent divisions, and is the nation's leading provider of Section 184 home loans for Native Americans) will also offer employment to loan production staff members from each organization."
Genworth Mortgage Insurance is offering a new live webinar, Data Security - The First Line of Defense, for mortgage executives and professionals who are focused on ensuring comprehensive approach to a secure data environment. Join George Reichert, Chief Information Officer, and Dave Murray, Chief Information Security Officer, on Friday, November 17th, 1:30pm ET, as they share their expertise and experiences with protecting Genworth's sensitive information and discuss the importance of employee training and modeling best practices.
If you're in Southern California, join Alight and the California MBA on November 30th for an evening of cocktails and dinner. Independent mortgage banker CEOs, CFOs, and senior executives are invited to the Capital Grille in Costa Mesa starting from 4:30-7:30. I'll be giving a presentation on what lenders around the nation are focused on, and thoughts for 2018. Reach out to Randall Crail for a program and to RSVP.
Register here for the MMBBA's 2-day loan essential seminar on December 5th and 6th in Columbia. The class covers industry specific information from fundamental lending basics to more advanced calculation skills needed to succeed in today's real estate finance industry.
On Thursday, December 7th National MI is offering a session on "Gender Diversity in the Workplace" from 12-1PM PT. "Improving gender diversity in the workplace is increasingly a trending topic in business with women largely underrepresented, particularly in leadership roles. This 1-hour session will discuss fostering women in the corporate pipeline as critical to mortgage companies' success, and business practices that cultivate executive talent among women at all levels of an organization. Presented by Kristin Messerli, Founder/Manager of Cultural Outreach, and Managing Editor of Mortgage Women's Magazine. Register here.
National MI has partnered with the National Association of Minority Mortgage Bankers of America (NAMMBA) as part of its continuing effort to help lenders work more effectively with minority borrowers. NAMMBA provides education and career development training for minorities and women who are in the mortgage industry. "NAMMBA is delighted to welcome National MI to our partnership program," said Tony Thompson, NAMMBA founder and CEO. "In the housing sector, women, Hispanics, African Americans and Asians are expected to become a key driver in the first-time homebuyer market and will comprise as much as 75% percent of new home purchases." National MI will be a sponsor at NAMMBA's CONNECT2018 event to be held April 12-15, 2018 in Atlanta, GA.
Jobs and Products
For appraisers, Direct Valuation Solutions has redefined its three divisions - DVS Direct, DVS-AMC and DVS Review Services. "DVS Direct offers lenders who want to work directly with the best appraisers an efficient and seamless Web-Based Software platform. We are the only software that has fully integrated borrower and appraiser payment processing (no more accounting hassles). DVS-AMC utilizes the technology developed by DVS Direct to provide exceptional communication, quality, and speed as it relates to the appraisal process and, DVS Review Services, when coupled with DVS Direct, assists lenders with appraisal quality control, offering the expertise of an 'in-house' appraisal review staff without the overhead. Want to make 2018 exceptional & successful? Contact us - we can help (888.931.0040).
"If your belief is that branch managers want new Realtor office set ups to their branch, a professionally deployed lunch & learn strategy into their market for MLO usage, powerful and self-developed CRM with full automation and encompass integration, a loan retention plan for past funded clients, a full service marketing team, a loan officer recruitment plan for the branch, consistent and efficient closings, high client satisfaction ratings, and a consultative engaging company culture that runs both a P&L or retail model, then consider to join a company that has the resources to take your motivation and turn it to action, and that action into success! AnnieMac Home Mortgage is looking to expand new branch acquisitions in 2018. Learn more here and contact SVP of Business Development, Paul Zinn (856.577.7749)."
"Freddie Mac is Reimagining the Mortgage Experience to create a smarter, simpler, and less costly origination process. We're using big data and advanced analytics to offer an automated alternative to an appraisal through our new automated collateral evaluation (ACE) for certain loans submitted through Loan Product Advisor, our next-generation automated underwriting system and the gateway to Loan Advisor Suite. As of Sept. 1, ACE is available for purchase and refi transactions. This means you can potentially shave 7-10 days off the time it takes for loans to close, and save your borrowers in some instances up to $300 to $700 on the appraisal fee (Source: Freddie Mac Strategic Delivery and lender feedback). Ready to learn more? Visit the Loan Advisor Suite web page."
"Radian is currently seeking an experienced Senior Account Manager in the Dallas/Ft. Worth area to join our dynamic sales team! Interested? If so, you will be responsible for maintaining and growing existing account relationships, developing and implementing strategies and initiatives to achieve NIW growth objectives, and building on and ensuring customer loyalty. Qualified candidates will have 3+ years of sales experience, preferably within the mortgage industry. This is a great opportunity to put your industry knowledge to work for one of the top mortgage insurers in the country! Please apply directly on our Radian Careers page."
Montana's Mann Mortgage is excited to announce Gary Bellmore has joined as COO. "We are building the best back office in the industry," said CEO Jason Mann. "With the executive leadership team finally in place, we can take full advantage of our business model by allowing entrepreneur based originations the autonomy they need to grow their business with operational support and expertise unmatched in any market we do business in." Gary brings more than two decades of residential lending experience in areas such as underwriting, process design, LOS enhancement/integration, appraisal management, leadership and strategic development to Mann Mortgage.