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Some would say it is grim out there, and no, I am not talking about Hostess
Brands, the manufacturer of Twinkies, Ho Hos, and Ding Dongs cake snacks,
filing for Chapter
11 bankruptcy. Is it right that 4,300 of our brethren were notified of
losing their jobs, after a potential sale fell through, in a letter to
clients with a dancing Snoopy in the letterhead?
"To Our Valued Customers...We have made the decision to wind-down all
MetLife Home Loans' (MLHL) forward origination business, including the
Institutional Lending Group (ILG)... We will continue to honor all of our
loan commitments and will maintain the necessary staff in place to ensure
each of your loan transactions closes (subject to the loans meeting all
investor and MLHL guidelines). Our sales and support teams will work with
each of you to ensure this transition is as transparent to your customers
and referral partners as possible. In return, we ask that you keep your
commitment by delivering your locked pipeline in accordance with our
agreements..."
The top five wholesale lenders for the 3rd quarter, volume-wise, were in
order:
Provident Funding, U.S. Bank Home Mortgage, Wells Fargo, Flagstar, and
MetLife Home Loans. The top twelve correspondent lenders for the 3rd
quarter, volume-wise, were in order: Wells Fargo, BofA, Chase, GMAC, Citi,
Flagstar, PHH, U.S. Bank, BB&T, Franklin American, SunTrust, and MetLife.
And when one adds in retail originations to the other two channels, for the
3rd quarter MetLife clocked in at #10 (per National Mortgage News).
I received this note: "If Fannie and Freddie don't wake up and expedite
their approval process the industry will be gone. Private investors such as
Wells are bogged down in operations. Companies aren't long for this world
when they don't have agency approval - we saw what happened last month to O
2 Funding. Every lender out there is grabbing onto the apron strings of the
agencies; the same agencies that many in the government want to shut down!
Where will that leave things?"
On top of this, investors in Residential Capital Corp., which does business
as GMAC Mortgage, have organized out of concern that the residential lender
and loan servicer could be headed toward bankruptcy. Parent Ally Financial
had hoped to take ResCap/GMAC public in 2011 but ultimately scrapped those
plans; it has since cited "risk factors"
with the unit but has not specifically discussed a possible bankruptcy
filing. And another top investor, PHH, was downgraded by S&P and raised its
doubts over continuing as a "going concern" if it failed to improve its
liquidity. PHH is also being investigated by the CFPB regarding its mortgage
insurance practices.
One can just hear large lenders talking in their boardrooms. "Do we really
want to be in this business, given the regulatory, legal, financial, and
public relations issues? Where the value of servicing has dropped
dramatically in the market, and could drop further depending on Basel III?
Where the mortgage insurance tax deductibility has gone away? Where every
week brings a new lawsuit - when will we have more attorneys on staff than
originators?"
The shutdown will cost insurer MetLife about $100 million. "We continue to
move forward with our plans to cease being a bank holding company," the CEO
said last month. Servicing and reverse mortgage origination will continue,
at least at this time. John Calagna, as spokesman for MetLife, noted that
most of the 4,300 employees at the unit will lose their jobs, 20% of whom
are in Irving, Texas. (Add this to Bank of America's announced 30,000 job
cuts, and Citi's 4,500, and one really starts to make a dent in financial
services.)
Perhaps some will contact Mason-McDuffie Mortgage Corporation, headquartered
in Northern California. The company has been around since 1887, is a
mortgage banker and broker, and is licensed in 28 states. MMCD is seeking
branch managers, LO's and all operations positions to join its expanding
workforce. "MMCD enjoys branch operations throughout the US with fulfillment
centers in the Bay Area, the Northeast and adding new centers in Southwest,
Midwest and East. Mason McDuffie Mortgage is a privately held mortgage
banking company funding jumbo, conventional, government, and rehab loans,
and has its Fannie, Freddie, and Ginnie approvals. The company website can
be found at MasonMcDuffieCareers
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109070495628&s=8721&e=001D3IdmB
J8hwa4v0GevkmByq4thFn62pbVbbYkmSXBXEql05e4PzILrf8d9p5rXs4io4NZZcC4m0iuIyG-0g
lLuc_C0OPIzMrzD_il7xJxJ8I3OxhKCtV27cZqAOTGugXfLvwoFrLo97VPOw6A-3cl-Uuv0kEODK
A8]
with a resume.
(By the way, previous job listings through this commentary can be found at
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109070495628&s=8721&e=001D3IdmB
J8hwZ4AMPfiRB1TqRdS2Hz1XMYWis_4Kyg428zxNUCr1dX7UKLvfI1a0W6do3bnKgZSRC7P3XqWY
bFjbvIq_ILosmCpsfUqEtMnjQqonVyQxuIGA==],
click on "archives," and look for "jobs" in any of the subject lines. One
can also subscribe through the site, and/or add their personal e-mail
address.)
That was one ray of good news. The news is not much better elsewhere.
JPMorgan Chase's mortgage originations in 2011 were the lowest in 10 years.
A video of Jamie Dimon discussing his housing forecasts can be seen on CNBC,
and mentions that the bank is originating $10 billion in mortgages per
month. HousingWire calculates that when the production numbers are put
together, JPMorgan Chase is likely originating its least amount of mortgages
in the last 10 years.
Lastly, Michael Williams announced his intention to step down as CEO of
Fannie Mae after 21 years with the agency. He's had that post since April
2009, and is viewed as the leader in guiding Fannie Mae through the
transition into conservatorship and in "directing Fannie Mae's efforts to
enhance loss mitigation strategies, including loan modification and
refinance options to help struggling homeowners." FHFA will work with the
Fannie Mae board of directors in searching for a new CEO.
Folks out and about looking for work might be interested in hiring trends,
especially in the mortgage industry in 2012. Here are some presented by Drew
Waterhouse, Managing Director of Hammerhouse
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109070495628&s=8721&e=001D3IdmB
J8hwbWx7Phl7qFdCdDxFBNGwIIL7dUFue0Yno-AYCI0KdjrwADaRf7rsNKae5tv5lbu2f1fIQPBj
ImForbIXOPcZtpewoLwXuyyqicBnhzoUhDp0X064aDhze5hlPaXtq1jx5AiTZyMw310A==].
Amid declinations to comment, Goldman Sachs and Citigroup are planning to
market about $1 billion of bonds backed by commercial property loans as
soon as next week as demand for the debt recovers amid optimism the U.S.
economy can withstand Europe's fiscal crisis. The deal will probably be the
first of its kind for 2012: Commercial
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109070495628&s=8721&e=001D3IdmB
J8hwbmeKVDLKg2wuRlTM9HBnmX4Y6zrjBz9YRzbNlWq3-E21g-XYillpL0plOeK_UQRbjvTrFxEm
fj3Rdsdr0HLB5lvuY3DJMjVsRa4KF07SNIjBq1Ad244quCnwoHiXlGqz4-TchCiiREwCNqcZZ3Ex
U9Dqq_NpqWxdgH7AhFLZs92DIyglmZJHM0f3Kl3s81K_vKQ3a6wC5tbY1Bftbj6lFF80_oNtthuN
L1ywt_o6P2yA==].
When I was at Cal grappling with the MBA requirements, taking accounting
classes was never a high priority. It should have been, and in the mortgage
banking biz, the MBA is here to help you remember if debits are on the left
and credits on the right (yes) or whether you can allocate a pair off loss
to individual loans (not really). "Taking place on Thursday, January 19,
2PM EST, CampusMBA and Mortgage Banking Solutions will present Mortgage
Accounting Part I: Drilling into Mortgage Accounting. The following topics
will be covered: Essence of Accounting, Measurement, Risks and Results, The
Mortgage Road -- How it Works, Mortgage Banking Process Flow
-- Who Does What, Performance Metrics -- KPIs, Internal Controls, History of
Accounting, Financial Reporting Complexity vs. Simple & Easy, Accounting
Methods & Accounting Systems, GAAP -- Rules of the Road, The Audit and your
CPA. Check it out: TurnYourCellPhonesOff
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109070495628&s=8721&e=001D3IdmB
J8hwaTaeykDkL1rfCDVqP4ZjvL0l8AUyTrbIwFhVm0ZHCkPzj6wGbjVw_LF0_NCIogS0_rVJ7EEz
8bDYLObwmqePregjVu02Cn3myWfxTvaQTcOCbzdAB4mh47wJltxBEWuU1jQmi9yeiqFVZ_6Ac7t7
VQt1bnaDjVO0_Nbg2eghjf_i9CNZGZ_lMq].
Parts II and III are the following weeks.
This morning we had the weekly MBA application stats. Sometimes folks ask,
"What constitutes an application?" The MBA notes that, "We ask our
participants to follow the HMDA definition of an app, the key portion of
which is a credit pull. As you know, the HMDA definition and the RESPA GFE
requirements are not quite aligned."
Maybe someone with time on their hands should align the two! This morning
the MBA released last week's application numbers which showed an increase of
4.5%. Refinancing was up over 3%, and purchases were up over 8% - nice to
see - although refinancing still accounts for almost 81% of application
activity.
At least the markets continue to be quiet: like Monday, Tuesday we were
virtually unchanged with the 10-yr closing at 1.97% although MBS prices were
worse by about .125. The focus on Tuesday was on the Treasury auction
supply, announced last week so there is no surprise, and continued rumblings
out of Europe that will be with us for years. Generally speaking, Reuters
reports that, "Supply and demand appear very favorable in aggregate for 2012
with projected demand from the Fed, banks, REITS, and money managers well
above estimated net supply. Still, there will likely be times when there
will be temporary imbalances with higher supply."
Today we'll have the second leg in the latest round of Treasury auctions
with $21 billion 10-year notes at 11AM CST. So far rates are slightly better
with the 10-yr at 1.94% and agency mortgage prices better by about .125.
(Warning: parental discretion advised.)
Last week, she checked into a motel on her 60th birthday and she was a bit
lonely.
She thought, "I'll call one of those men you see advertised in phone books
for escorts and sensual massages."
She looked through the phone book, found a full page ad for a guy calling
himself Tender Tony - a very handsome man with assorted physical skills
flexing in the photo.
He had all the right muscles in all the right places, thick wavy hair, long
powerful legs, dazzling smile, six pack abs and she felt quite certain she
could bounce a quarter off his well-oiled rump.
She figured, "What the heck, nobody will ever know. I'll give him a call."
"Good evening, ma'am, how may I help you?" Oh my, he sounded sooo sexy!
Afraid she would lose her nerve if she hesitated, she rushed right in, "Hi,
I hear you give a great massage. I'd like you to come to my motel room and
give me one.
No, wait, I should be straight with you. I'm in town all alone and what I
really want is passion. I want it hot, and I want it now. Bring implements,
toys, rubber, leather, and whips - everything you've got in your bag of
tricks. We'll go hot and heavy all night - tie me up, cover me in chocolate
syrup and whipped cream, anything and everything, I' m ready!! Now how does
that sound?"
He said, "That sounds absolutely fantastic, but you need to press 9 for an
outside line."
If you're interested, visit my twice-a-month blog at the STRATMOR Group web
site located at www.stratmorgroup.com
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106435366068&s=4179&e=001SVt-lj
bp53436QjxD9vbwURtIPPjV05jEcEKyBN3SjS2forXe0C_foO8RjEV-Uye0N7Z_Sh1il0SRXPx6P
jQauayNXQjni-Hc9Sseu-hhZcR1ujeZyAEpw==]
. The current blog discusses the time frames for borrowers returning to
A-paper status after a short sale or foreclosure. 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.
Rob
(Check out
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=m7pb77iab.0.epg7qedab.zy6u9cdab.8
721&ts=S0720&p=http%3A%2F%2Fwww.mortgagenewsdaily.com%2Fchannels%2Fpipelinep
ress%2Fdefault.aspx]
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=m7pb77iab.0.v7uif6dab.zy6u9cdab.8
721&ts=S0720&p=http%3A%2F%2Fwww.thebasispoint.com%2Fcategory%2Fdaily-basis].
For archived commentaries, go to www.robchrisman.com
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=m7pb77iab.0.fpg7qedab.zy6u9cdab.8
721&ts=S0720&p=http%3A%2F%2Fwww.robchrisman.com%2F].
Copyright 2012 Rob Chrisman. All rights reserved. Occasional paid notices
do appear.
This report or any portion hereof may not be reprinted, sold or
redistributed without the written consent of Rob Chrisman.)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Chrisman Inc. | 326 Mission Ave. | 326 Mission Ave. | San Rafael | CA |
94901
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