Homographs are words of like
spelling but with more than one meaning. A homograph that is also pronounced differently
is a heteronym. You think English is easy? (Part 4 of 4.)
Sometimes I think all the
English speakers should be committed to an asylum for the verbally insane. In
what language do people recite at a play and play at a recital? Ship by truck
and send cargo by ship? Have noses that run and feet that smell?
How can a slim chance and a fat
chance be the same, while a wise man and a wise guy are opposites? You have to
marvel at the unique lunacy of a language in which your house can burn up as it
burns down, in which you fill in a form by filling it out and in which, an
alarm goes off by going on.
English was invented by people,
not computers, and it reflects the creativity of the human
race, which, of course, is not
a race at all. That is why, when the stars are out, they are visible, but when
the lights are out, they are invisible.
PS. - Why doesn't
"Buick" rhyme with "quick?"
Tomorrow is Bike to Work Day.
My cat Myrtle isn't a big fan, especially when the sedative wears off and she
realizes that she's in an old milk crate with chicken wire on top on the back
of my bike. Lots of people wish that they could afford real estate close enough
to bike to work, but real estate agents continue to warn clients that they have
to, "Drive until you qualify" when wanting to live near city centers.
Acquisitions and merger news
just doesn't stop, and in this kind of environment no one expects it to cease.
"M&A slowed its
pace in 2016 because mortgage volume was strong Q1 (remember Q1 of 2014?) and
remains steady", says Dr. Rick Roque (413.297.6895). "This year
is expected to be a relatively flat year as compared to 2015, but remember,
2015 ended up higher than every analyst predicted due to the micro-boom in
rates in the first quarter of 2015 driving many refinance pipelines and
maintaining rates for purchase transactions. But as the summer volume
transpires, M&A activity will increase substantially because the multiples
are there for the right buyers and sellers."
A leading Mergers
& Acquisitions (M&A) firm is seeking mortgage banks in the Midwest or
Mid-Atlantic markets to be purchased either by selling their stock or assets:
"applicable mortgage companies would have closed between $300M-$1.2B
in 2015, or on pace to doing so in 2016, either consumer direct or referral
partner (Realtor) based originations. No Agency approvals are necessary since
they are already in place. If you would like to have your firm acquired,
possibly receive a 2-4x after tax multiple, maintain your leadership and
control, but rapidly accelerate your growth with significant access to capital,
a broad array of new/innovative and non QM products," please send me a note of
interest to pass along for a confidential discussion. (Please specify
opportunity.)
Speaking of M&A, it isn't
the first and won't be the last as owners of lenders decide to "explore
other opportunities and agree to be acquired for a variety of reasons. Caliber
Home Loans has agreed to acquire First Priority Financial, a residential mortgage
lender with branches and originators serving California, Oregon, Washington,
Idaho and Iowa. "The transaction will expand Caliber's geographic
footprint in the Western United States, originally established through its
acquisition of Cobalt Mortgage in 2014. We welcome the talented First Priority
Financial team to the Caliber family and look forward to working together to
better meet the unique financing needs of homeowners across the country." STRATMOR
represented the seller First Priority in this transaction. If you wish to
discuss this deal and the underlying M&A market conditions, reach out to Jeff Babcock
or Jim Cameron.
During the conference
this week in New York news broke that Black Knight, its name coming from its
West Point connection, is purchasing the electronic document firm elynx. elynx is/was
one of hundreds of companies owned by American Capital. This may be more of a title company story
than a mortgage or real estate, but it certainly indicates a trend toward
larger companies becoming larger.
On the banking side this
trend isn't stopping either. Just in the last week the industry learned of a
new bevy of planned bank M&A. In South Carolina Coastal Carolina National
Bank ($176mm) will acquire VistaBank ($110mm) for about $12.2mm in cash (25%)
and stock (75%) or roughly 1.01x tangible book. Bar Harbor Bank & Trust
($1.6B, ME) went across state lines and will acquire Lake Sunapee Bank ($1.5B,
NH) for about $143mm in stock. In Louisiana the Bank of Montgomery ($285mm)
will acquire Tri-State Bank and Trust ($32mm). The Farmers National Bank of
Canfield ($1.9B, OH) will acquire Bowers Insurance Agency for an undisclosed
sum. (Bowers has annual revenues of about $2 million.) But last Friday the FDIC
closed First CornerStone Bank ($107mm, PA) and sold it to First-Citizens Bank
& Trust Co ($31.3B, NC) under a purchase and assumption agreement.
Events and training? Yes there
are...
If you're near San Jose tomorrow
come say hello at the Silicon Valley Chapter CAMP Spring Mini-Fair. The
event is 10AM-3PM and will be held at the Campbell Community Center (1 West
Campbell Avenue). It is free to members but $25 for non-members. Visit http://www.siliconvalleycamp.com/ or call TJ Roberts at
(408) 802-8522 for registration.
The California
Association of Mortgage Professionals announced that the 2016 Summer Convention is taking place in Napa this August
8th-10thThis exclusive event, which will take place at
Napa's finest resort, The Westin Verasa, provides attendees the opportunity to meet
exclusive vendors and learn from the best in the business. Registration
opens on-site on Sunday August 7. The Expo Courtyard opens Monday, August 8 and
closes Tuesday August 9. This convention is yours to customize with a variety
of break-out sessions and off-site excursions. On Wednesday August 10,
registered attendees have the opportunity to participate in a FREE 8-hour
accredited NMLS course ($129 value) presented by David Luna.
MBA Education is
continuing to crank out tons of education opportunities. Its next Multifamily Property Inspection Workshopis headed to
Chicago.
CRE Basics 2016
schedule is now available. Make sure you've got what you need for the road
ahead by enrolling today. Learn more. Also, stay tuned for details on the
Commercial Future Leaders Class of 2017. The application period will open in
late June. There are a variety of other topics and opportunities available. Click here to view MBA's additional training schedules.
On Thursday, June 16th, join South Carolinas Clean Energy
Business Alliancefor its
2016 Summit.
While we're on events,
last week I had the opportunity to listen to John Williams speak, in part
sponsored by Sacramento's Catalyst Mortgage. Mr. Williams has been the
Federal Reserve Bank of San Francisco's President and CEO for five years,
serving on the Federal Open Market Committee and bringing the Fed's Twelfth
District's perspective to monetary policy discussions in Washington.
It was a good speech, and
he used terms such as "talking our foot off the gas" when it came to
discussing reinvesting early payoffs from the Fed's mortgage holdings.
Certainly holding $4 trillion of debt is not the Fed's long-term goal - that 5%
unemployment and 2% inflation are good things to shoot for. He continually
stressed that the Fed cannot fix structural problems using interest rates - and
that it can't build human capital. The return on a college education is far
greater than what one earns on stocks & bonds.
Why would it be a surprise to
anyone that no one can accurately, consistently predict the future? Or know
everything about the current worldwide economy? There are lots of things that
that Fed, along with bond market traders, economists, politicians, and anyone
reading this, doesn't grasp right now. Few politicians are complaining about
unemployment because...unemployment has dropped to pre-crisis levels. But wages
for the middle class remain stagnant. (And just wait until the minimum wage
goes up to $15 an hour in a few states to see how automated systems and robots
increase in popularity.) The traditional relationship between job creation and
inflation seems to have broken down. The global economy is changing the rules,
if there are any rules anymore - and the Fed is trying to figure it out.
Certainly central
governments pumping $29 trillion into economies around the world is
unprecedented. What's done is done, of course, and they arguably needed to do
that to help restore some growth. Our economy is improving, at least according
to most statistics. Of course a major issue is that other economies aren't. The
Fed is focused on employment and inflation - and is more focused on employment
and inflation in this country than economies overseas - as they should be.
Bubbles? Higher rates
aren't the only way to stop them. (Unfortunately) regulation & supervision
can also help. The Fed has already issued cautionary notes about the technology
and commercial real estate sectors.
Shifting to the bond
markets, yesterday volatility returned to the fixed-income sector, driving up
hedge costs and driving down profits. U.S. Treasuries had their worst day in
months as the long-standing dissonance between the expectations of interest
rate markets and the guidance of FOMC officials is being resolved by the
capitulation of Treasury investors who are running for the hills: "don't
fight the Fed." And if the Fed is leaning toward raising short-term
rates in June, well, then the market had better pay attention to it. What
sparked it was the release of the minutes from the April 26-27th FOMC meeting.
The minutes showed that "most participants judged" that if the
economy continued to make progress in the second quarter (in terms of growth,
the labor market, and inflation) "then it would likely be
appropriate" to hike rates in June.
"Members judged that
information received since the FOMC met in March indicated that labor market
conditions had improved further even as growth in economic activity had
appeared to slow" and that the committee "noted that growth in
household spending had moderated, although households' real income had risen at
a solid rate and consumer sentiment had remained high. They also agreed that
since the beginning of the year, the housing sector had improved further, but
business fixed investment and net exports had been soft."
Today we've had all the
scheduled data we're to have: Initial Jobless Claims for the week ending 5/14
(-6k to 278k, as expected) and the May Philadelphia Fed figures (-1.8, worse
than expected). On Wednesday the yield on the 10-year had shot to up 1.88% -
still well within the range it has been in for several months - and this
morning we're at 1.87% with agency MBS prices little changed from last night.
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