May 8, 2013: Mortgage jobs; lots of state-level licensing changes; Zillow & Nationstar stock prices!
HUD tells us that at the end of 1991, there were roughly 60 million families that owned a home and 33 million families that rented a home or an apartment. At the end of 2011 (i.e., 20 years later and the most recent year for which data is available), there were 76 million families that owned a home (+27%) and 39 million families that rented (+16%). HUD also tells us that 3 out of every 4 American households added in the last 2 decades were homeowners as opposed to renters. Are housing statistics really bad enough for Congress to continue to grouse about them? After all, as any lender or Realtor will tell you, from a credit perspective many families are better off renting than owning.
Some lenders are continuing to hire! Stonegate Mortgage is expanding its correspondent and underwriting operations to Oak Brook IL, St. Petersburg FL, Scottsdale AZ, and Indianapolis IN. It will be hosting a career fair tomorrow on the internet – very interesting. “Join us for a virtual career fair on Thursday, May 9th from 11AM to 2PM EDT. To register and gather more information click on: http://bit.ly/10zMxmb
The wholesale/broker model is alive and well. Homeward Residential is seeking both Inside National Account Executives and AEs in many markets around the United States. Homeward Residential/Ocwen is one of the largest servicers in the market today with a portfolio approaching $500 billion dollars, and for more information one can visit http://www.ocwen.com/careers. AE’s should expect to develop a strategic plan to effectively expand the mortgage business (wholesale and non-delegated channels) into new markets, evaluate and enhance the current origination business in the region and recommend changes and or enhancements for our valued business partners, bring best practices to take the Client Select (wholesale)and Mini Correspondent lending business to the next level. Please submit resumes at http://www.ocwen.com/careers or forward to firstname.lastname@example.org.
What’s in a name? Plenty - just ask anyone about how the name Fifth Third came about, or the confusion resulting from RFC to GMAC to Ally to…Green Light? Anyway, Carrington Holding Company announced that it was renaming several of its businesses in an initiative designed to “bring the entire Carrington Family of Companies under one brand umbrella, more effectively leverage the Carrington name and capitalize on the full continuum of services offered by the organization’s various business units. All management, personnel, ongoing business operations and principal executive offices will remain the same. As part of the rebranding activities, the company’s national residential real estate brokerage, Atlantic & Pacific Real Estate, LLC will operate as Carrington Real Estate Services, LLC, while Atlantic & Pacific Foreclosure Services, LLC and Atlantic & Pacific Document Services, LLC will operate as Carrington Foreclosure Services, LLC and Carrington Document Services, LLC respectively. Specialized debt resolution services provider Compass Resolution Services, LLC will operate as Carrington Resolution Services, LLC and White Van Real Estate Services, L.P., which offers a full range of inspection, property preservation, maintenance and repair services to lenders, servicers and asset managers, as well as institutional clients, private real estate investors and real estate agents, will operate as Carrington Home Solutions, L.P. Carrington is also renaming its business units currently housed under the Telsi brand. Telsi Real Estate Solutions, LLC, and Telsi Escrow, Inc. will become Carrington Title Services, LLC, and Carrington Escrow, Inc.”
Financing company FirstREX, “not a lender or a bank,” is alive and well. The company (http://www.1rex.com/) will provide down payment funding in combination with the portfolio loans of HomeStreet Bank. The new program funds up to half of the borrowers down payment as an equity investment. The company earns a return on its investment when a home is sold, up to 30 years in the future. If the house has increased in value, the company earns a profit, but if it decreases, it suffers a loss. Call it a derivation of a down payment assistance program, with a catch. James Riccitelli, co-CEO says that by using their program, “Buyers can buy the home they really want today, with less debt and less risk, and retain some of their cash after closing for other purposes."
But according to a recent article in the Wall Street Journal, it's not just struggling homeowners and low-income buyers that are getting help these days. We’re seeing a rise of programs targeting jumbo mortgage borrowers. Both public and private money is stepping up in high-cost places like New York and parts of California. Lenders are finding ways to help doctors, professors, tech professionals, and others with some of the challenges in obtaining jumbo loans, particularly high down payment requirements. “While each of the programs has a different focus, there is one common denominator: each of the programs requires borrowers to have excellent credit, in one case a 720 credit score and a maximum 38% debt-to-income ratio.” Banks obviously like keeping their doctor, dentist, and rising professional clients: http://online.wsj.com/article/SB10001424127887323789704578443191845080704.html?KEYWORDS=mortgage.
Love ‘em or hate ‘em, since it went public in the summer of 2011 Zillow’s stock price has gone from $20/share up to $63/share. (Yes, you read that right.) Zillow just reported a 71% increase in first quarter revenue, although it was a loss of $3.7 million on revenue of $39 million. But it beat Wall Street expectations – Zillow lost less money than analysts had predicted it would. The company also beat revenue growth expectations, mostly due to rising traffic on mobile devices. Zillow says 55% of its traffic is now from mobile devices and up to 60% on weekends. The company has also increased its brand awareness among consumers, which attracts Realtors to subscribe and advertise on the site. Almost 52 million unique users visited Zillow's web or mobile sites in April, the company says. That's up from 50 million in March. Along with data on 115 million U.S. homes, Zillow has data on 600,000 rentals and recently launched services to help homeowners estimate remodeling expenses. And Zillow claims to be the first company to take earnings' call questions via Twitter and Facebook.
The same can be said for the stock price of Nationstar. In the spring of 2012 it was trading at $11 and now it is up to $40 per share. (Yes, you read that right – in one year.) And its price rose again after reporting earnings yesterday that beat expectations and “raised guidance for this year and next.” Nationstar also said it will buy Greenlight Financial Services, a privately held direct-to-consumer mortgage loan originator, for up to $75 million cash. Non-depository servicers are certainly on the rise, but Greenlight marks a strategic shift for Nationstar and moves up its loan originations by about $8 billion annually. Nationstar's first quarter originations rose 11% vs. the prior quarter to $3.4 billion. Earnings rose 27% versus a year earlier, revenue was up163% to $431 million, and loan origination revenue was $186 million. Nationstar’s servicing portfolio, measured by unpaid principal balance, jumped 50% to $312 billion versus the prior quarter.
Maybe the only cloud on the horizon is Nationstar’s disclosure that it had halted foreclosures in 23 states on a request by four state attorneys general, but resumed proceedings after an internal review.
Zillow and Nationstar are not the only ones watching their stocks rally. Yesterday, when the earnings came out, the stock price of Ocwen Financial rose 3%, Walter Investment Management was up 2%, and Home Loan Servicing Solutions was up 1% - pretty good for one day.
The good news even continued into the MI sector. Radian Guaranty Inc., the mortgage insurance unit of Radian Group Inc., said that delinquencies continued to decline in April, and said it wrote more than $4 billion in new insurance. The company said around 7,100 delinquent loans were cured or paid in April, and about 4,200 loans became delinquent. It had approximately 81,600 delinquent loans at the end of the quarter, down 4 percent from the end of March.
All of these companies do business across the nation, and it has to be a nightmare keeping track of national and individual state changes in lending and licensing rules. Law firm Ballard Spahr did a nice run down on some recent state-level changes in which originators might be interested. (I just don’t see how folks keep track of this stuff!) “Arkansas recently revised certain exemptions from the Fair Mortgage Lending Act. Previously, a subsidiary of a state or federally chartered bank, savings bank, savings and loan association, or credit union was exempt from the Act. Under the new revisions, however, only subsidiaries of state-chartered banks regulated by the Arkansas Bank Department will be exempt. This revision is effective July 18, 2013. Entities that were previously, but are no longer, exempt must submit the appropriate license application by this date to be in compliance with the Act.”
Three more state agencies have announced that they will be adopting the new national MLO test with the Uniform State Content: Wyoming, Indiana, and Montana will adopt the test effective July 1, 2013. With these announcements, a total of 30 state agencies have adopted the new test and will no longer require a separate state-specific test component as a prerequisite for MLO licensure.
Washington State amended the scope of its mortgage banking licensing requirement. The state amended its mortgage broker licensing statute so that effective July 29, under the new amendment, anyone who performs or holds themselves out as being able to provide residential mortgage loan modification services must obtain a Mortgage Broker License.
Oklahoma recently amended its Secure and Fair Enforcement for Mortgage Licensing Act to add a Mortgage Lender License. A mortgage lender is defined as any entity that takes an application for a residential mortgage loan, makes a residential mortgage loan, or services a residential mortgage loan and is an approved or authorized U.S. Department of Housing and Urban Development mortgagee with direct endorsement underwriting authority, Fannie Mae or Freddie Mac seller or servicer, or Ginnie Mae issuer. But Ballard Spahr points out that, “It is unclear whether an entity that does not have such approval or authorization but otherwise meets the definition of a mortgage lender is eligible for the new license. A licensed mortgage lender that also engages in activities falling under the definition of a mortgage broker is not required to obtain a separate Mortgage Broker License. We have been advised by the Oklahoma Department of Consumer Credit that further guidance on the parameters and implementation of the new license will be forthcoming, and we will provide an update when such guidance is issued. This amendment is effective November 1, 2013.”
The Hawaii Department of Financial Institutions has notified NMLS of a change to its pre-licensure education requirements. Effective July 1 individuals seeking licensure will be required to complete three (3) hours of HI-DFI-specific education: 3 hours of Federal Law, 3 hours of Ethics (must include fraud, consumer protection, and fair lending issues), 2 hours lending standards for Non-Traditional mortgage products, 9 hours of General Electives, and 3 hours of HI-DFI Defined Electives.
Over in Michigan, the Michigan Department of Insurance and Financial Services (DIFS) has notified NMLS of a change to its pre-licensure education requirements. Effective September 1, 2013, individuals seeking licensure with DIFS will be required to complete two (2) hours of DIFS-specific education. The new pre-licensure education requirements are as follows:
3 hours of Federal Law, 3 hours of Ethics (must include fraud, consumer protection, and fair lending issues), 2 hours lending standards for Non-Traditional mortgage products, 10 hours of General Electives, and 2 hours of DFIS Defined Electives.
Compared to all this, the fixed-income markets just aren’t doing much, so I am not going to waste your time. But for a quick update, the U.S. 10-yr t-note closed Tuesday at a yield of 1.78%, and that is exactly where it is this morning. And don’t look for much change in agency MBS prices.
The local news station was interviewing an 80-year-old lady because she had just gotten married for the fourth time. The interviewer asked her questions about her life, about what it felt like to be marrying again at 80, and then about her new husband's occupation. "He's a funeral director," she answered. "Interesting," the newsman thought...
He then asked her if she wouldn't mind telling him a little about her first three husbands and what they did for a living. She paused for a few moments, needing time to reflect on all those years. After a short time, a smile came to her face and she answered proudly, explaining that she had first married a banker when she was in her 20's, then a circus ringmaster when in her 40's, and a preacher when in her 60's, and now - in her 80's - a funeral director.
The interviewer looked at her, quite astonished, and asked why she had married four men with such diverse careers.
She smiled and explained, "I married one for the money, two for the show, three to get ready, and four to go."
If you're interested, visit my twice-a-month blog at the STRATMOR Group web site located at www.stratmorgroup.com. The current blog is, “How Changes in FHA Loan Pricing Will Lead to Changes in Investor Demand." 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.
(Check out http://www.mortgagenewsdaily.com/channels/pipelinepress/default.aspx or www.TheBasisPoint.com/category/daily-basis. For archived commentaries or to subscribe, go to www.robchrisman.com. Copyright 2013 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)