HMDA White Paper

Only in America... can a pizza get to your house faster than an ambulance.

Only in America... are there handicap parking places in front of a skating rink.

Only in America... do drugstores make the sick walk all the way to the back of the store to get their prescriptions while healthy people can buy cigarettes at the front.

Only in America... do people order double cheese burgers, large fries, and a diet Coke. (Guilty as charged, Your Honor.)

Only in America... do banks leave both doors to the vault open and then chain the pens to the counters.

Only in America... do they leave cars worth thousands of dollars in the driveway and put our useless junk in the garage.

Only in America... do they use answering machines to screen calls and then have call waiting so they won't miss a call from someone they didn't want to talk to in the first place.

Only in America... do they buy hot dogs in packages of ten and buns in packages of eight.

Only in America... do they use the word "politics" to describe the process so well; "Poli" in Latin meaning "many" and "tics" meaning "bloodsucking creatures".

Only in America... do they have drive-up ATM machines with Braille lettering.

 

 By most accounts 2015 was a decent year for many builders, lenders, and real estate firms - especially here in Texas where I'm spending a few days with Fairway Independent Mortgage. Speaking of which, here are the hottest real estate markets according to NAR. As expected, the Bay Area tops the list, and California urban areas are well represented. What wasn't so hot were the stocks of publicly held companies in real estate with names like Stonegate (-60%) and Nationstar (-52%).

On the other side of the coin we have news from Ditech. (For those displaced, they can always post a resume on www.LenderNews.com for free.) Yes, it isn't the first and won't be the last. Last week we heard about Blackstone's Finance of America exiting correspondent, and this week, sure enough, Walter Investment Management Corp. spread the word that Walter Investment's wholly owned subsidiary, Ditech Financial LLC, will exit the Distributed Retail channel effective January 8. Exiting the channel, which generated funded volumes of approximately $400 million of Ditech's total funded volumes of approximately $19.6 billion in the nine months ended September 30, 2015, is expected to impact fewer than 200 employees. Ditech will continue to close loans currently in the channel's pipeline. "Throughout 2015 we moderated our investment in the Distributed Retail channel given current and expected market conditions, as well as recent regulatory considerations, and subsequently made the decision to exit the channel. This decision will allow us to concentrate on the continued development of the Consumer Direct channel, and further enhance our focus on the relationships and opportunities available to us in our Retention and Correspondent Lending channels," said Denmar J. Dixon, Walter Investment's Vice Chairman, Chief Executive Officer and President."

 Under the banner of "upcoming events" on January 20 ATS Secured is hosting a FREE webinar, "Post-TRID Challenges and Innovative Solutions," presented by Richard Horn, Member at Richard Horn Legal PLLC. Horn will discuss the challenges lenders have been facing since TRID implementation. This webinar will also feature a panel of industry experts including Horn, Brent Laliberte and Wes Miller who will take questions from attendees, and provide innovative solutions. Don't miss out, have your top concerns addressed by leading industry experts! Click here to register.  

 Banks weren't snoozing over the holidays and mergers & acquisitions continue to be announced. In the last week we've learned that in Illinois the First National Bank in Amboy ($171mm) will acquire Franklin Grove Bank ($29mm). In Pennsylvania the Farmers National Bank of Emlenton ($580mm) will acquire United-American Savings Bank ($91mm) for $14.1mm in cash. Out in California the Bank of the Sierra ($1.7B) will acquire Coast National Bank ($145mm) for about $13.8mm in cash and stock. In "Joisey" OceanFirst Bank ($2.6B) will acquire Cape Bank ($1.6B) for about $208.1mm in cash and stock or roughly 1.41x tangible book. Johnson Bank ($4.1B) will acquire investment advisory and wealth management firm Cleary Gull Advisors Inc. (WI). And in South Carolina CresCom Bank ($1.3B) will acquire Congaree State Bank ($116mm) for $16.3mm in cash and stock.

 Jonathan Foxx of Lenders Compliance Group has published a White Paper on the new changes to HMDA and Regulation C. The new HMDA data collection requirements are considerable, requiring significant operational updates and regulatory mandates. For most institutions, the revisions will go into effect on January 1, 2018; but don't let that date fool you: now is the time to start planning for changes to your policies, procedures, and internal control plans.

 As a follow-up to a blurb I ran yesterday regarding the Campaign for Accountability calling for the Dept. of Justice to investigate three former members of the Obama administration

(including Mortgage Bankers Association president & CEO Dave Stevens) for revolving door practices, MBA spokesman Rob Van Raaphorst had this to say: "These false allegations are part of a smear campaign orchestrated by hedge funds and others, and perpetuated by a writer at the New York Times, designed to undermine the important work that MBA is doing to ensure that all lenders have equal access to a liquid and healthy market in which to do business. Unfortunately, this is the way Washington works. When you are effective, you get a target on your back and people start trying to knock you down. Dave has never violated the letter of the law or the spirit of the law. From the moment MBA approached Dave to discuss the CEO job he began meeting with ethics and legal officials at HUD to make sure he complied with all obligations while finishing up at HUD and after he left. Since leaving HUD he has continued to consult with counsel to make sure he did not approach the ethical or legal line. At every turn, he errs on the side of caution."

 Speaking of the MBA, over the course of my travels I speak to many MBA members, as well as executives considering membership. More often than not, executives from nonmember companies tell me that cost is the reason that they do not join. I reached out to Pete Mills, MBA's senior vice president of residential policy and member engagement, to ask him to expand on the value proposition of MBA.

 Pete replied, "How much would you pay to have lobbyists working on behalf of your business on Capitol Hill in Washington, D.C, dedicated policy analysts advocating on your behalf in front of the CFPB, HUD and other regulatory agencies in our nation's capital, and the data, research and policy analysis to help your state MBA fight for your business in state capitals across the country? It would cost your company $10,000 or more per month just to get a few hours of time with outside lobbyists, lawyers and consultants. This expense would only get you baseline reports and just triage the worst policy and legislative decisions.

 "MBA members get an experienced team of expert lobbyists, policy advocates and research professionals working for them in both Washington, D.C., and the states, around the clock. We are actively engaged on Capitol Hill and with the regulatory agencies, fighting for policies favorable for our industry. By engaging our members both through segment-specific networks and targeted policy committees, we advocate for policies that strengthen the entire mortgage market, not just narrow segments.

 "Our members also receive a wide-variety of networking opportunities, trusted industry data, forecasts and benchmarking information, the latest industry news and information about mortgage finance, robust corporate training programs curated to fit the needs of your  company, in-depth compliance guidance and model policies and procedures, and discounts on business-impacting offerings through our partnerships with the GSEs, industry cooperatives and a program for corporate health and wellness benefits.

 "For the typical member," concluded Mills, "our annual membership dues, which grant you access to all of these benefits for your entire staff, and much more, amount to about only two-tenths of one basis point of a mortgage lenders' total production. Your readers can learn more about how MBA Membership can benefit their business, as well as why approximately 170 community lenders have made the decision to become MBA Members in the last year, at www.mba.org/join or by contacting Tricia Migliazzo (314.497.6999).

 We did have a fair amount of economic news Wednesday. The ADP Employment Change came in at 257k, much better than the 198k Street expectation. (Tomorrow's jobs report is forecasting an increase of 200k in nonfarm payroll.) The ISM Non-Manufacturing Index fell to 55.3 from 55.9 last month. And Factory Orders fell 0.2% in November while durable goods orders were flat. The Treasury complex rallied sharply early in the day and stayed there all day as investors shrugged off a very robust December ADP employment report to focus on concerns about China's slowdown and a weaker-than-expected ISM Services reading in the U.S. Treasuries made fresh highs in the afternoon after the minutes from the December FOMC meeting showed less hawkish among the members than had been previously assumed.

 Today is a sparking new day, and China's equity market closed early, down (7%), with trading halted in the session's first 30 minutes as the new circuit breaker rules were triggered. We've have the December Challenger Job Cuts news (15-year low in lay-offs) and Initial Jobless Claims (277k, -10k). We closed Wednesday with the 10-year at 2.18% and this morning it is sitting around 2.17% with agency MBS prices slightly better.