Sep. 10, 2012: Mortgage jobs; new CFPB exam procedure; states & NMLS expansion; do rates correlate directly to production?
Rob Chrisman
One
of Coke's slogans several years ago was, "Always Coca-Cola."
Unfortunately for SunTrust, who invested in the company almost
a hundred years ago, it was not to be, and SunTrust had to
sell its stake in Coke in order to cover bad loans: http://www.bloomberg.com/news/2012-09-06/suntrust-sells-coke-stock-overhauls-loans-for-750-million-gain.html.
SunTrust also took a $375 million provision for mortgage
repurchase losses, wrote off $3 billion in bad loans, and sold
$200mm in affordable housing investments.
I
have been retained by a Northern California Residential Retail
Lender, expected to do $3 billion in originations this
year, who is searching
for a Vice President of Mortgage Operations. I am told
that the role has enormous growth opportunity as the company
expands throughout the West Coast. “The right person should be
strategic, yet hands-on, and believe in growing and developing
people. Looking for a person committed to growing a team and
working well with the sales team. The candidate must have in
depth experience in managing and leading a high level Mortgage
Banking Operation; selling directly to agencies, and must have
experience in managing processing, underwriting, QC, doc
drawing, funding, shipping, and post-closing functions. He or
she will also have credit authority.” Please feel free to
pass this on if you know someone who’d be interested as it is
a very good opportunity to join a solid company with a
seasoned management team; resumes should be sent to me at rchrisman@robchrisman.com.
Kinecta Federal Credit Union continues to grow its business
and is hiring Retail Mortgage Loan Consultants in the
greater Los Angeles area and a Wholesale AE’s for the
Pacific Northwest to cover Washington, Utah and Oregon.
Additionally, Kinecta continues to hire Senior Underwriters,
Underwriting Assistants and Funders in their Southern
California and Chicago operations centers. Kinecta FCU is one
of the nation’s leading Credit Unions with more than $3.2
billion in assets and serving over 236,000 member-owners
across the country. Kinecta offers a competitive compensation
and benefits package in addition to a dynamic culture and a
large product line. Go to www.kinecta.org and click
on the Careers tab to view all openings, position descriptions
and apply online or send a resume to Daniel Borgstadt at dborgstadt@kinecta.org.
"Rob,
how
does mortgage volume correlate to interest rates?
We're already planning for 2013, and what might happen if
rates stay at these levels, or go up 100-200 basis points
if/when Fannie and Freddie exit stage left." This is just my
opinion, but I would say that it doesn't correlate - at least
directly. When rates were much higher, like 6 or 10 or 18%, we
could count on every drop of .5% resulting in a “refi
boomlet.” But overall mortgage volume relates to a number of
factors, rates being only one of them. General economic
conditions and ease of credit jump to mind, as well as the
overall population growth and recent mortgage production
levels. In addition, the reason why rates go up will influence
volumes. If rates go up because of the loss of Fannie &
Freddie, that has one impact. But if rates go up because the
economy is heating up, that would have a different impact.
That is a short answer to a relatively complex question, and
if you'd like to delve into the historical numbers a good
place to start is Freddie's statistics page: http://www.freddiemac.com/news/finance/refi_archives.htm.
And good luck with planning out rates, manpower, and volumes
for 2013 - remember that past performance is no
indicator of future gains or losses.
I
have a lot lately from lenders that with the recent refinance
activity slowing and pipelines continuing to shrink, week over
week, additional focus and resources has been placed on
obtaining newly originated purchase-money loans. Emphases by
some lenders have been directed towards advertising and
marketing, additional loan officer sales hires and maintaining
lower rates on primary home purchases. We’ve all seen the
pattern before, and lenders will cut prices to bring in
volumes to support overhead. I will suggest that regulators
don’t seem to be fond of pricing differences based on risk,
or servicing differences. Is it disparate lending that
most lenders have a separate rate sheet for California, for
example? California pricing is usually higher than other
states. Is it disparate lending that a few lenders charge an
additional fee (.125) for Nevada loans because Nevada has
declining property values? Will the CFPB understand this? I
hope so – pricing risk is one of the cornerstones of lending.
Here’s a good article on it: http://blogs.wsj.com/developments/2012/08/31/should-mortgage-rates-vary-by-state/.
There
has been some recent activity with NMLS. In mortgage banking,
loan officers are required to be licensed by the NMLS. LO's
put their number on their business cards. And now some states
are requiring non-mortgage "money handlers" to do the same.
(We’re not down to lemonade stand operators yet…) Starting
last week Idaho and Pennsylvania transitioned to NMLS the
state licensing process for certain non-mortgage consumer
financial service providers. In Idaho, all money
transmitters now have the option of using the NMLS to obtain
or renew their licenses, and in Pennsylvania all debt
management services, money transmitter, and accelerated
mortgage payment providers “can” begin to use the NMLS for all
licensing-related transactions – and it will be the law
starting November 1. For the Idaho regs. see http://mortgage.nationwidelicensingsystem.org/slr/StateForms/ID-PressRel-NMLS-08-27-2012.pdf
and for Pennsylvania see http://www.buckleysandler.com/uploads/36/doc/PA%20DOB%20Transition%20Plan.pdf.
Well,
the agency, investor, and lender updates just keep coming. It
is hard to keep up, and I squeeze them in, space permitting.
As always, it is best to read the actual bulletin, but these
will show you the trends.
First Commercial Bank of Bloomington, Minnesota, was closed
Friday with Republic Bank & Trust Company of
Louisville, Kentucky, assuming all of its deposits.
Freddie Mac’s Loan Prospector is scheduled for an
update on September 23rd. The Alt 97 Offering Identifier and
the new construction value of the “Newly Built” option for
conventional loans will both be removed, while feedback
messages will be revised to comply with changes to credit
underwriting, negotiated terms, mortgage eligibility, and
short sale fee guidelines as well as guidance on assessing FHA
loans and the use of LP feedback certificates. In addition,
LandSafe will be removed as a credit reporting company option.
FEMA announced on Monday, August 20th that disaster aid
would be available for the counties in Ohio that were affected
by the storm activity and straight-line winds in late June.
Properties in Adams, Allen, Athens, Auglaize, Belmont,
Champaign, Clark, Coshocton, Fairfield, Franklin, Gallia,
Guernsey, Hancock, Hardin, Harrison, Highland, Hocking,
Jackson, Knox, Lawrence, Licking, Logan, Meigs, Miami, Monroe,
Morgan, Morrow, Muskingum, Noble, Paudling, Perry, Pickaway,
Pike, Putnam, Shelby, Van Wert, and Washington counties are
all eligible for aid. Properties whose appraisals were
completed before July 2, 2012 should be re-inspected using
Freddie Form 442/Fannie Form 1004D by the original appraiser.
The re-inspection should include an exterior photo, a letter
stating that the property hasn’t been damaged, and the
appraiser’s commentary on any negative conditions that may
affect the property’s marketability.
In
the wake of Hurricane Isaac, Wells Fargo’s Wholesale and
Correspondent divisions both remind clients that all
appraisals completed prior to the storm will have to be
re-inspected. Neither Wells nor FEMA had issued an official
declaration designating specific disaster areas as of August
29th, but for any properties that show signs of damage,
clients should comply with the Wells disaster policy. This
primarily affects properties in Alabama, Florida, Louisiana,
and Mississippi, though FEMA is currently assessing the extent
of the damage. When this assessment has been fully carried
out, Wells will choose to apply its disaster policy either to
the complete list of counties specified by FEMA or its own
list of zip codes.
Last week the economic data were largely disappointing as the
ISM manufacturing index, construction spending and employment
reports all posted results below consensus expectations. The
manufacturing sector appears to be slowing due to sluggish
domestic and export demand, and the service sector remains in
positive, but slow growth, territory. Both seemed to
contribute to the poor 96,000 non-farm payroll jobs added for
the month of August. (The unemployment rate surprisingly
ticked down to 8.1%, though this was almost solely a function
of the participation rate dropping to its lowest level since
1981.) Economists continue to believe that U.S. growth will be
below 2% for the year.
This
week’s focus is clearly on the Fed and whether or not QE3 is
launched. The never ending cavalcade of economic news
continues this week. Besides the usual ups and downs
associated with Europe, which will probably be with us for
years, we have some Trade Balance figures tomorrow, and some
Import and Export Prices Wednesday. Thursday is Initial
Jobless Claims (gee, do you think that the President is hoping
for good news?), the Producer Price Index, and most
importantly the Federal Open Market Committee's meeting
results (no change expected, but we'll see what the verbiage
is). And Friday the 14th is a big day with Retail Sales, the
Consumer Price Index, Industrial Production and Capacity
Utilization, and a University of Michigan Consumer Sentiment
Survey.
Looking
back to Friday the 10-yr closed at 1.66%. With no real
news today we find the 10-yr at 1.68% and agency MBS prices
worse by a few ticks (32nds).
An elderly couple was celebrating their sixtieth anniversary.
The couple had married as childhood sweethearts and had moved
back to their old neighborhood after they retired. Holding
hands, they walked back to their old school. It was not
locked, so they entered, and found the old desk they'd shared,
where Andy had carved "I love you, Sally."
On their way back home, a bag of money fell out of an armored
car, practically landing at their fee t. Sally quickly picked
it up and, not sure what to do with it, they took it home.
There, she counted the money - fifty thousand dollars!
Andy said, "We've got to give it back."
Sally said, "Finders keepers." She put the money back in the
bag and hid it in their attic.
The next day, two police officers were canvassing the
neighborhood looking for the money, and knocked on their door.
"Pardon me, did either of you find a bag that fell out of an
armored car yesterday?"
Sally said, "No".
Andy said, "She's lying. She hid it up in the attic.
Sally said, "Don't believe him, he's getting senile"
The agents turned to Andy and began to question him.
One said: "Tell us the story from the beginning."
Andy said, "Well, when Sally and I were walking home from
school yesterday ...."
The first police officer turned to his partner and said,
"We're outta here!"
If
you're interested, visit my twice-a-month blog at the STRATMOR
Group web site located at www.stratmorgroup.com.
The current blog discusses the new CFPB Rule combining TILA
& RESPA disclosures. If you have both the time and
inclination, make a comment on what I have written, or on
other comments so that folks can learn what's going on out
there from the other readers.
