GREAT TRUTHS ABOUT GROWING
OLD:
1) Growing old is mandatory;
growing up is optional.
2) Forget the health food. I
need all the preservatives I can get.
3) When you fall down, you
wonder what else you can do while you're down there.
4) You're getting old when you
get the same sensation from a rocking chair that you once got from a roller
coaster.
5) It's frustrating when you
know all the answers but nobody bothers to ask you the questions.
6) Time may be a great healer,
but it's a lousy beautician.
7) Wisdom comes with age, but
sometimes age comes alone.
Last night in Texas I had
dinner with Seattle AE Bryson Bede and regional manager Dennis Waller
from Parkside Lending. The discussion was focused on trends in wholesale
lending and the habits of top AEs, but included the fact that, party politics
aside, political orientation aside, forecasts on the victor aside, we have over
five more months of presidential election news dominating the press and
news stories. Time flies, but... five more months! Ugh.
"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 contact me for a
confidential discussion.
Yesterday the commentary
posted some updates on non-QM lending. According to Garth Graham of
STRATMOR, the Non-QM market has been primarily served by banks putting loans in
portfolio for their best bank customers. Very little Non-QM has been available
for smaller banks or independent mortgage bankers, making it hard for Loan
Originators to serve their market. To further understand the market's appetite
for this a new set of non-QM products being offered STRATMOR is conducting a free survey. This survey is
focused on a specific set of Non-QM products with higher interest rates
(typically 1.5% or higher than conventional products) that are available to
borrowers who can't qualify for conventional financing and lender's plans for
offering is type of product, and any obstacles to successfully selling such a
product in your market. There is no fee to take the survey which is
open through the month of June. All participants receive summary level
results and the survey should take less than 5 minutes to complete.
There are certainly
changes in mortgage-related technology tools and vendor news!
"From loan
origination to servicing, the push is now greater than ever to streamline
operations to make procedures safer and easier for borrowers and lenders,
without compromising compliance efforts. One of the newest advancements is the
ability to gather mortgage-qualifying documents, such as W-2s, pay stubs and
bank statements, on behalf of borrowers through account-linking technology." So wrote Mike Romano with
start-up Lendsnap. "Lendsnap is streamlining mortgage
originations, and making it easier and safer for borrowers/lenders to acquire
and share qualifying documentation during a mortgage application."
From PCLender's
Lionel Urban comes, "It used to be that small and mid-sized lenders didn't
have access to the same technology as larger lenders, even though their needs
are largely the same in terms of streamlining operations and ensuring
compliance. PCLender has stepped up to the plate with a solution that
levels the playing field for small to medium lenders, or those that fund 50 to
1,000 loans a month. I've deliberately chosen to hire former mortgage bankers,
who understand the impact of not meeting a sales contract deadline, missing a
lock delivery or working through a repurchase agreement. PCLender focuses on small to midsized lenders, who have been under-served and
may often be at a competitive disadvantage with their larger counterparts.
Strategic Compliance
Partners (SCP) is offering a new platform,
ShareDiligence, designed to revolutionize the way mortgage lenders manage their
relationships with third-party vendors. Developed in conjunction with Offit
Kurman, a leading law firm in the Mid-Atlantic region, ShareDiligence enables
users to share the results and costs of due diligence through online
community-based portal. "After lenders add vendors to the site
(accomplished simply by providing an email address) SCP obtains signed
agreements and initiates industry-specific vendor questionnaires prepared by
legal counsel. Once a vendor returns its completed questionnaire,
ShareDiligence disseminates the information to lenders and vendors on the
system, who agree to link to one another.
Guaranteed Rate
announced it launched The Intuitive Loan
Finder to help people narrow
down their loan options online in only a few clicks. "It is another example of the antiquated
lending industry going digital. The Intuitive Loan Finder's
online decision logic guides customers through a series of simple
questions to understand their unique situation and preferences. Key inputs
include the loan type (purchase or refinance), the type of structure (home or
condo), the purpose of the property (residence or investment), and expected
time frame to keep the property. The Intuitive Loan Finder then analyzes
this data to instantly generate a list of loan options with the best
matches for each customer's specific needs. Once the consumer finds the
perfect loan, they can use Guaranteed Rate's Digital
Mortgagesolution which
allows people to get approved for a loan online in less than 30 minutes -
anytime, anywhere."
Cloudvirga, the
company behind the cloud-based intelligent Mortgage Platform (iMP), is designed
to streamline the mortgage process. The platform is digitizing the mortgage
industry by leveraging data and deploying an automated workflow to reduce
overall cost, increase transparency, and shorten the time it takes to close a
loan for both borrowers and lenders. "Cloudvirga's platform is reducing
costs for lenders, increasing transparency for borrowers and shortening the
time it takes to close a loan for both."
CoreLogicannounced
the integration of LoanSafe Appraisal Manager on the Ellie Mae Encompass
all-in-one mortgage management solution. LoanSafe Appraisal Manager allows
lenders to quickly and easily review a loan application's appraisal quality,
potential risk of repurchase, valuation accuracy, market risk and more directly
from Encompass. LoanSafe Appraisal Manager provides Encompass users with
risk scores using an analytic model that identifies appraisals with the highest
potential risk of repurchase by rank-ordering the risk of over-valuation, early
payment default, foreclosure and appraisal non-compliance.
Lending & Banking Automation Software, also known as LBA Ware, a provider of compensation automation software for
mortgage lenders, recently announced a new preferred partnership with
independent mortgage lending cooperative, The Mortgage Collaborative. As a
Preferred Partner, LBA Ware will provide The Mortgage Collaborative's growing
list of Lender Members access to robust technology solutions that streamline
system integration, eliminate dependencies on error-prone spreadsheets, and
reduce repetitive manual workflow to help Lender Members achieve operational
efficiency and maximize profitability.
And
don't forget that about a month ago Black Knight Financial Services (BKFS)
announced that it has acquired eLynx, a lending document and data delivery
company.
OpenClose an enterprise-class, multi-channel loan origination
system (LOS) provider, announced that in conjunction with Mortgage
Capital Trading, Inc. (MCT) it has developed a solution that normalizes and extracts
a lender's committed loan sale and purchase advice data to be uploaded directly
into OpenClose's LenderAssist LOS, thus eliminating significant manual
intervention. Depending on the number of loans that have been executed,
time savings can be reduced from days to minutes.
Overture TechnologiesandATS Securedannounced
the launch of the Settlement Coordinator Workstation, a platform which
addresses originators' and investors' unsustainable high cost to originate and
buy loans. The solution combines the industry's leading independent
automated loan underwriting system with tools to conduct compliance checks,
coordinate loan settlement, distribute loan proceeds and secure loan data
integrity.
Turning
to the bond markets, they've gone quiet again - fine for capital markets folks
around the nation. Volatility doesn't help rate locks, pipelines, or hedging.
The yield on the 10-year T-Note has been range-bound for most of 2016;
yesterday it oscillated in a 5 basis point range, 1.804% to 1.856%, during the
session before closing nearer the highs and aiding the tightening of the MBS
basis: mortgage prices did well relatively but were still off a shade from
Tuesday's close.
Today we've already had
the ECB (European Central Bank) garnering early interest with their statement
(no change to rates). In this country we've had the May job cuts from
Challenger at 7:30am (job cuts dropped by 50% to 30k), followed by May ADP
(+173k) and weekly jobless claims (expected about unchanged, they were indeed
only down 1k to 267k). The upcoming treasury supply will also be announced for
next week's mini-refunding consisting of 3-year, 10-year, and 30-year
instruments. We closed Wednesday with the 10-year at 1.84% and in the early
going both the 10-year yield and mortgage prices are unchanged.
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