But
Basel issues are not stopping hiring in the mortgage sector! BluFi
Lending,
a San Diego County, CA based direct lender is expanding and
looking for a few key positions to enhance its existing
team. BluFi is actively licensed in 5 states with 4
more states on the way and currently has approximately 125
employees in California. BluFi is looking for a Controller
with 10 years of experience preferably in the mortgage
industry and a CPA license desired. BluFi is also looking for
an Underwriting Manager with both DE and VA designations, a
Post Closer with Investor Reporting Experience, and a
Processing Lead with 5 years of experience to round out their
existing staff. Local candidates are preferred but remote
candidates will be considered. To apply please visit www.bluficareers.com.
And
up the coast, a regional mortgage banker in the SF Bay
Area is searching for a Loan Officer Assistant to
support the Branch Manager and top producing Loan Officer. The
company is highly respected with a strong presence in the
local marketplace. Located in Berkeley, this office
currently produces $150-$200 Million annually with in-house
processing and local underwriting. The ideal candidate
currently supports producing loan officers, is highly
organized, understands the real estate transaction, customer
service oriented and proficient in technology including Calyx
Point, MS Office Suite and Optimal Blue. Candidates should
contact Paula Elazier at pelazier@rpm-mtg.com.
You
think it is easy being the Fed chairman? Guiding the economy
is kind of like steering an old steamer? Try again - this
little game will amuse someone out there. (And people wonder
what the folks at the Federal Reserve Bank do all day!) Here
you go: http://www.frbsf.org/education/activities/chairman/index.html.
No one will argue that mortgage rates are tied to the economy,
and the economy is influenced by politics, and the deficit.
There are vast differences in tax plans floated by President
Barack Obama and Mitt Romney, but one thing is certain:
regardless of who wins, his full proposal won't succeed. Both
plans come up short on revenue needed to help trim the federal
deficit, and let’s not forget Congress is the entity required
for passage. Good luck! (And today’s “joke” is about the debt
ceiling.)
Speaking
of the looming election, I received this note from a New
Jersey broker. “Sadly, I still don’t know who I’m going to
vote for as of today. It’s the lesser of 2 evils. One wants to
keep F&F alive until the real estate market rebounds but
thinks the CFPB Politboro is the “end all” of regulatory
problems, and the other wants to absolve all funding supports
for the real estate market and leave it to the free market.
But the free market only operates if there is a profit and
little risk. My co-workers and I believe that the CFPB is a
greater risk to the financial markets than if the markets are
left to their own unattended devises.”
But
the CFPB isn’t going anywhere soon, if at all, and the MBA
knows it. The Mortgage Bankers Association has sent a
letter to the Consumer Financial Protection Bureau,
stating that the agency's proposed amendments to the Truth in
Lending Act and the Real Estate Settlement Procedures Act with
regards to residential mortgage loan servicing need to
"accommodate borrower needs, balanced with a clear
understanding of servicer limitations." In the letter, MBA
President and CEO David Stevens wrote: "In developing
servicing standards, we believe it is important to pay careful
attention to the cost/benefit of change for both large and
small servicers and borrowers. When making changes to the
current model, we need to be mindful of unforeseen and
unintended consequences that could result ultimately in
higher costs for consumers, fewer benefits or options to
borrowers and reduced access to credit."
Folks
in the mortgage banking biz are looking forward to next
week's conference in Chicago. And at the same time, they
are wondering about the choice of having Bill Clinton and Rudy
Giuliani as keynote speakers. As Phil Hall, the editor of Secondary
Marketing Executive points out, "This upcoming lineup
brings considerable baggage, and I'm not talking about Clinton
and Giuliani's respective second term adultery scandals. Both
have another common bond: a dismal record in regard to
housing." Mr. Hall goes on to list tinkering with the CRA, the
repeal of Glass-Steagall, weakened government enterprise
underwriting guidelines, putting Henry Cisneros and Andrew
Cuomo in charge of HUD, and scandals in various New York
housing agencies. My bet is that the MBA's conference will be
good - I'll be there - but many may opt for business meetings
instead of listening to the speeches.
I
am sure that some of the conference chatter will be about the
recent Chase and Wells financial information, and what it
tells us about other mortgage banks. Basically, Wells Fargo’s
booming mortgage business accounted for much of its strength
in the quarter. Fees from the bank’s mortgage business added
to its revenue, and new mortgage loan originations rose to
$139 billion from $89 billion in last year’s third quarter. Low
mortgage rates have encouraged homeowners to refinance, and
although this leads to fee income it leads to less interest
income for Wells, Chase, and any other bank. In fact,
mortgage banking noninterest income surged 53 percent to $2.8
billion in the third quarter at Wells Fargo from the same
period a year earlier. Noninterest expense from foreclosed
assets declined about 9%. Noninterest income from servicing
plunged 81% in the mortgage banking business.
So
why did Wells’ stock drop? The stock fell mainly because analysts
are
concerned about Wells Fargo’s ability to make money on
interest from loans that it originates. Having a
portfolio of loans paying 3.5% doesn’t earn as much,
obviously, as a portfolio earning 4%. Wells Fargo and other
banks have a shrinking net interest margin — the difference
between interest it collects on loans and interest it must pay
to depositors and other lenders. Wells Fargo’s net interest
margin fell to 3.66 percent from 3.84 percent a year earlier.
JPMorgan
Chase’s (#2 in mortgages) earnings were helped by an increase
in mortgage lending. New home loans and refinancings at the
bank hit $47 billion, up 29% from the period a year earlier.
Refinancings accounted for roughly 75% percent of the
quarter’s mortgage volume, and Mr. Dimon said that it won’t
last. But with the improving credit environment, JPMorgan
set aside less money to cover potential losses, increasing
its profits. In the mortgage banking business, the bank
cut the amount of reserves by $900 million. Across the bank,
JPMorgan set aside $1.79 billion of such funds, compared with
$2.41 billion a year earlier.
How about some relatively recent agency & investor
news? It is best to read the actual bulletin for full
details, but these will give you an indication for current
events.
Don't forget that Fannie Mae expanded DU Refi Plus
Financing. On October 11, Fannie Mae announced that
existing mortgage loans with investor-paid mortgage insurance
that was obtained to meet credit enhancement requirements for
loans with LTV ratios greater than 80% are now eligible for DU
Refi Plus financing if the coverage is converted to
borrower-paid or lender-paid coverage. This change is
effective October 13: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2012/sel1211.pdf.
In response to the g-fee increase, Pinnacle Capital
updated its extension and relock policy. Agency ARMs and
fixed-rate products with terms over 15 years that locked
before September 18th will incur a fee of 50 bps in addition
to the current extension fees if they need to be extended past
October 15th in order to fund. An extra 25 bps will be added
to Agency ARMs and fixed-rate products with terms of 15 years
or less. Relock costs for Conforming loans locked before
September 18th remain unchanged, as do extension and relock
costs for Conforming loans locked on or after that date.
Upon assessing concerns over Fair Lending and disparate
treatment, Pinnacle has amended its broker compensation
policies. As of October 1st, broker compensation now
has a 50 basis point flexibility from the base that will be
set for each Regional Production center; brokers in regions
where the base is set at 200 bps may opt for a compensation
plan between 150 and 200 bps. Flat fees may still be charged
in addition to compensation up to $750, and minimum and
maximum compensation ability will continue to be allowed,
provided that maximum compensation does not exceed 300 bps,
including the flat fee. Borrower-paid compensation will no
longer be accepted.
MSI is requiring sellers to provide Anti-Steering
Disclosures for all loans with applications dated on or after
April 6, 2011 where the Regulation Z safe harbor is
applicable. Loans that do not meet the Anti-Steering
Disclosure requirements will be ineligible for funding.
In response to the USDA purchase funding situation, Freedom
Mortgage reminded clients that it does not permit
financing on conditional commitments that are issued “subject
to funding” and that all transactions that do not receive
conditional approval before October 1st must be disclosed or
re-disclosed with the new fee structure. FMC is accepting new
applications for USDA refinance transactions provided that all
disclosures reflect the updated g-fee structure. Clients
should note that such transactions will not receive final
approval or be permitted to close until after October 1st.
Turning
to
the markets, home loan rates continue to be just fine, and
last week, during a relatively quiet week, global concerns
caused investors to increase demand for safer assets – like
agency mortgage backed securities.
Stronger than expected US economic data had little impact. As
a result, mortgage rates ended the week a little lower. Europe
is certainly back in the news, and protests and riots have
been seen in Spain and Greece as a result of austerity
measures. Tensions have been rising in the Middle East.
Questions remain about economic growth in China. Strong
results for this week's US Treasury auctions and rising MBS
prices reflect the global appetite for US bonds, which is
positive for mortgage rates.
In
fact, Friday was snoozer of a day in the market, with MBS
prices going out within 1/32 of Thursday's 3PM EST closing
levels. As usual, the origination was offset by both Fed and
non-Fed buying. The 10-yr went into the weekend at 1.66%.
For
thrills and chills this week we have Retail Sales today, along
with an Empire Manufacturing number. (It's hard to be
excited about these second tier numbers when the Fed is
buying about twice the daily agency mortgage production.)
Tomorrow is the Consumer Price Index, the Industrial
Production & Capacity Utilization duo. We also have the
continuing stream of housing news with the NAHB Housing Market
Index tomorrow, Housing Starts & Building Permits on
Wednesday, and Existing Home Sales on Friday. Thursday is
Jobless Claims & the Philly Fed. (I am heading off to
Ontario, CA early this morning for the day, and it is too
early to know much about where rates are today – but it
appears that the 10-yr is roughly unchanged at around
1.67%.)
THE DEBT CEILING
* Democrats don't understand THE DEBT CEILING
* Republicans don't understand THE DEBT CEILING
* Liberals don't understand THE DEBT CEILING
* Conservatives don't understand THE DEBT CEILING
* NO ONE understands THE DEBT CEILING
SO - Allow me to explain...
Let's say you come home from work and find there has been a
sewer backup in your neighborhood. Your home has sewage all
the way up to your ceilings. What do you think you should do?
Raise the ceilings or pump out the "stuff"? Your choice is
coming in November. Don't miss the opportunity.
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 looming fiscal cliff brought on
by Washington DC. 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.
