Another day, another settlement. Ally Financial Inc said it agreed to pay $52 million to settle claims made by the U.S. Department of Justice against its former mortgage unit related to alleged misstatements about its residential mortgage-backed securities (RMBSs). The investigations and potential claims were against former unit Residential Capital LLC and its units (ResCap RMBS).

"Buy land - they're not making any more of it." Can the same be said for banks? There are about 5,100 banks in the United States. But it doesn't take a rocket surgeon to see the bank numbers heading downward. As there is more and more wealth created, and the number of banks steadily declines, more money will be in fewer banks - it is being concentrated. They must get bigger, right? Within the last week the banking industry learned that First Interstate Bank ($9.0B, MT) will acquire Bank of the Cascades ($3.2B, OR) for about $589mm in cash (25%) and stock (75%) or about 2.15x tangible book. Simmons Bank ($8.2B, AR) will acquire First South Bank ($464mm, TN) for about $72.2mm in cash and stock. And Trustmark National Bank ($13.1B, MS) will acquire Reliance Bank ($210mm, AL) for approximately $25.6mm in cash (100%).

And banks, at least the large ones, are seeing their mortgage market share diminish. At this point, everyone in the industry knows that the latest Home Mortgage Disclosure Act (HMDA) data found that nonbanks' share of the mortgage market is rising while banks' share is shrinking. What is the reason for the shift? Banks have multiple income sources (fees, credit cards, auto loans, and so on) to lean on when mortgage income goes down whereas non-depository lenders don't - and therefore are entirely focused on profits, mortgage market share, and perhaps taking risks that a depository won't. Along those lines, we've seen this shift in FHA lending - some banks have scaled way back due to potential liabilities and litigation but non-depositories have been happy to absorb the market share.

And don't forget credit unions that represent a growing share of the 6,913 institutions who reported HMDA data for 2015. Credit unions avoided much of the bad press in the last ten years, and are experiencing increased visibility and are promoting their value proposition to bank depositors - and mortgagors.'s surveys showed that depository banks' market share declined from 47 percent in 2014 to 43 percent in Q4 2015. Meanwhile, nonbanks' share of the mortgage market increased from 44 percent to 48 percent from Q4 2014 to Q4 2015 and credit unions' market share stayed flat at 9 percent. Per, Wells Fargo was the largest mortgage lender in the country in Q4 2015 with $47 billion worth of mortgage loans originated, more than double the volume of the second-ranked JPMorgan Chase ($23 billion). The top-ranked nonbank lender was Quicken Loans, which placed third behind Wells Fargo and Chase with $19 billion in loans originated in Q4 2015.

The conventional loan limits for 2017 are expected to be released any time now. But let's see what's new in FHA & VA land.

Effective with loans locked on or after November 8, Pacific Union Financial will require a minimum seasoning requirement of six consecutive monthly for the following streamlined refinance transactions: FHA Streamlined Refinance (Simple Refinance, Credit Qualifying and Non-Credit Qualifying):  A minimum of six monthly payments must have been made prior to the case number assignment date for the new refinance transaction. VA Interest Rate Reduction Refinance Loans (IRRRL):  A minimum of six monthly payments must have been made prior to the loan application date for the new refinance transaction. USDA Streamlined Refinance and Streamlined Assist:  Due to the 12-month payment history requirement for USDA Streamline Refinance transactions, Pacific Union is removing the previously announced overlay of six months and will follow USDA guidelines for Streamline Refinance transactions. 

Stearns is making changes to its policy for submitting signed 4506T forms to the IRS for processing. Although Stearns will still require an executed Form 4506T on every loan transaction, at submission and again at closing, it will not submit the signed form for processing on most Conventional, FHA, and VA credit qualifying loans.

Flagstar's payoff statement expiration dates have been extended from 5 business days to a maximum of 15 business days when ordering from any of its automated systems.  FHA loans closed on or before January 21, 2015 where the interest is calculated through the first of the month will remain at the 5-business day expiration date. Also, as of November 21, Freddie Mac's Loan Product Advisor (LPA) is available in Loantrac. Existing LP pipeline loans that are rerun on or after November 21 will be automatically converted from LP to LPA.

Plaza has updated its VA IRRRL Program Guidelines. Effective for all VA IRRRLs funded on or after January 1, 2017, Plaza will require that, at the time of the refinance, at least six consecutive monthly payments have been made on the existing loan.

Effective for loans with commitments taken on or after 12/1, AmeriHome will require that at least 6 consecutive monthly payments must have been made on the existing loan for all Government streamline(d) refinance transactions per Ginnie Mae's APM 16-05.

Mortgage rates are set by supply and demand, not the government. Helping the demand side of things, AIG is looking to boost its investment in residential mortgages. Management intends to make "direct investments" into the sector, which may mean buying whole loans instead of MBS.

Rates haven't gone back to where they were November 7th. Or during the rest of 2016. And they probably won't, given the potential inflationary impact of the expected infrastructure build during the next four years. Given a sub 5% unemployment rate, where are those road pavers going to come from? The market remains focused on the anticipated effects of U.S. stimulus in 2017 on both economic growth and inflation. 

That aside, yesterday the bond market tried to rally a little but failed - just not enough reason to rally on no news. The $26 billion 2-year Treasury auction was met with mediocre demand and that helped to flatten the yield curve (short term rates edged higher relative to long term rates). But at least rates didn't go up relative to Friday's close, and the 10-year ended unchanged yielding 2.34%. Agency MBS prices didn't do much either. 

Today there isn't much news to move bond prices either. We've had the Philadelphia Fed's Non-manufacturing number (+15.6) for November. Later is Existing Home Sales (October) along with the Richmond Fed's Manufacturing and Services, Revenues Indices. And if you have some lose coins at home, feel free to bid: The Treasury will auction $55 billion 1-month bills, $13 billion in 2-year notes, and $35 billion in 5-year notes. We start the day with the 10-year yielding 2.30% and agency MBS prices better .125 versus Monday's close.


The events and training just keep coming!

What lies ahead in 2017 for the mortgage industry? Stay ahead of industry trends in this free exclusive Vantage Production webinar with Sue Woodard, president/CEO of Vantage Production, and me. The outlook will cover, "The Political Arena and What It Means for the Industry, When the Fed meets December 13 and 14 - then what? The Digital Mortgage Movement, and Housing Market Trends." Sign up here

"2017: your best purchase year? Rates skyrocketing. Refis plummeting. Yet the MBA is forecasting 2017 to be the best purchase market we've seen in a decade! That's why National Mortgage Professional's nmpU is offering a Purchase Bootcamp and Business Plan session on Tuesday, December 13. This is not a webinar - it is a live 90-minute video streaming broadcast. nmpU's Head Coach and Executive Director, Ron Vaimberg, an industry leader in originator purchase production growth and development, will help you prepare a purchase business plan that works for YOU! One that has an Action Plan that is easy to implement. There's even a Follow-up Accountability Conference Call. Your entire office can attend for one low price. Use code "Chrisman" on checkout to save $100.Learn more here."

Essent invites you to enroll in any of their professional skill-building classes. Two of the featured topics for December are Time Management skills for email composure and inbox triage, as well as Risk Management skills needed for warding off mortgage fraud.

HUD has training. December 7th Webinar: overview of FHA-Approved Servicer requirements including: early delinquency activity, timelines, general loss mitigation, and collection best practices. December 17th Webinar: HUD Loss Mitigation - Option Priority Waterfall, Forbearance Plans and Special Forbearance Option. January 4th Webinar: HUD Loss Mitigation - FHA HAMP Option. January 11th Webinar: HUD Loss Mitigation - Home Disposition Options.

MBA's National Mortgage Servicing Conference & Expo will be held near Dallas from February 14th-17th. This conference is designed to provide practical and relevant information needed to succeed now and in the future. This year, innovation in mortgage servicing will be at the forefront of discussions, including new strategies and tools to achieve results for today's and tomorrow's borrowers and investors, along with a close look at the future of loss mitigation, a timely conversation as HAMP ends just a few weeks prior to the conference. Early Registration ends on January 5th, find out the details today.

Jobs and Announcements

"A national mortgage lender, established in 1999, is looking for top Wholesale Account Executives in the following territories: CA, CO, FL, GA, MA, MD, NJ, OR, TX, VA. The company, offering attractive compensation and benefit packages, offers FHA, VA, JUMBO, Reverse Mortgage, FNMA and FHLMC loans, has a direct relationship with the agencies, and has seen extensive growth." Confidential resumes can be sent to me for immediate consideration. Please specify opportunity.

Also in wholesale news, "Wild West Opportunity! A publicly traded wholesale lender is looking for an established sales team to dominate the West Coast market, specifically Northern California, Oregon and Washington. We'll set you up for success with a full line of competitive products, backend support, and top notch marketing. If your team is so in sync you make each other better, and so competitive you make your competitors weak," submit your resume to me and describe your team and I'll pass it along. Please specify the opportunity.

A growing finance Company located in the Phoenix, Arizona metro area, is looking for a talented individual to join its Senior Executive Team as Chief Technology Officer. "Our company has been in business since 1999. The CTO will support the mortgage and finance operations with technical expertise in developing and implementing information technology initiatives. The person will be responsible for warehousing and mining all data, networks, data security, hardware, system structures and support, telecommunications, electronic delivery systems, and all other aspects of building and managing a high-level technology and information systems team in a specialized finance sector. Significant experience at a senior technology level with broad knowledge of operations; and banking/mortgage knowledge required. Contact me with inquiries and resumes. Please specify opportunity.

We recently told you about the X-Ray mortgage intelligence dashboard, which transforms massive amounts of information on loans, leads and accounting, as well as information from customer relationship management systems and loan operating systems, into easy-to-understand, readily available analytics and reports that drive top-level decisions at mortgage companies/branches. Well, Big Valley Mortgage is utilizing the dashboard, which was developed by Special Agent X, and has a glowing review. "The X-Ray dashboard offers Big Valley Mortgage a very efficient and reliable resource to capture the necessary information to allow our management team to quickly assess production levels, trends and business mix," said Michael Pankow, senior vice president of Big Valley Mortgage. "The simplicity of the X-Ray dashboard makes it an excellent tool to quickly dive into, grab the intel you are looking for and move on." Big Valley Mortgage isn't the only one either. Other clients of Special Agent X include American Pacific Mortgage Securus Group, AP Connect, Vitek Mortgage Group, Cobalt Real Estate and West Coast Mortgage Group. Schedule a demo at; questions can be directed to Dave Hoggatt. 

Congrats to Chirag Patel who Mason-McDuffie Mortgage Corporation has appointed as its National Sales Manager in the San Ramon, CA home office headquarters. Patel has extensive experience in leading large production teams and will be managing Mason-McDuffie's growth by actively recruiting new branches and loan originators on a national level. Mason-McDuffie is also excited to be expanding its retail banking network into the Pacific Northwest market with the opening of its newest branch office in Beaverton, OR.  Branch Manager Blair Bell will be heading up the new office. "Expanding our banking services into Oregon is exciting for the company, and we are proud to introduce our retail banking services to consumers in the market," said Mason-McDuffie CEO and President Marilyn Richardson. If you'd like more information on open positions within Mason-McDuffie, click here.