There are some clever marketing people out
there. Throw in a T-Rex, a car, and an Irish accent, well... a sweet commercial.
The management teams at residential lenders across the nation
have begun forecasting for 2017. Of course no one wants to tell their boss that
they expect a 20% decline in volume, as some are estimating volume to be next
year versus this year, so in some areas, and for some companies, grabbing
residential market share will be the name of the game.
For lenders looking for a new sub-servicer,
RoundPoint Mortgage Servicing Corporation spread the
word that, "Size does matter. RoundPoint is a top 20 servicer, so
clients should feel very comfortable facing off with us as a
counterparty. We are not so large, however, that we are unable to meet the
custom needs of our clients. If you are looking for an alternative, if
you want to avoid risk concentration with a single, mega sub-servicer, if you
want a sub-servicer that gives you the attention you deserve, then contact Allen Price,
Head of Business Development, at 704.426.8846. We make the entire process
much simpler than you might imagine."
Speaking of Radian, New American Funding and Alterra Home Loans, two national mortgage banks, announced
that Radian has been named as the preferred private mortgage insurance provider
for Your Path, a new loan program that makes affordable homeownership
opportunities available to the changing demographics of U.S. homebuyers by incorporating
criteria not used in traditional underwriting. Teresa Bryce Bazemore,
President, Radian Guaranty, said, "We continually strive to better
understand and remove the barriers that prevent many potential homeowners from
obtaining a mortgage. The Your Path program
will help address some of those issues and serve as an important support to our
ongoing efforts to make sustainable homeownership a reality for qualified
borrowers who have limited down payment savings."
Banc of California, owner of Banc Home
Loans,
was in the press yesterday, and not for the right reason. A
Seeking Alpha contributor wrote a post on the stock claiming ties with
fraudsters. The contributor, "Aurelius," says that most of the senior
officers at BANC as well as the company's board members have extensive
relationships with a man known as Jason Galanis. According to the post, Jason
Galanis is known as a fraudster. In fact, SA said that he has a "long
history of gaining control of lenders via front men and looting the
assets." But at this point no one knows that there has been any wrong
doing on the part of BANC.
On its behalf the Banc of California, Inc. (NYSE: BANC)
announced it is aware of allegations posted in a financial
blog. "The Company's Board of Directors has been aware of matters
relating to Jason Galanis including certain claims he had made suggesting an
affiliation with members of the Company, its Board, and/or its Executive
team. The Board, acting through its Disinterested Directors, immediately
initiated a thorough independent investigation...Mr. Galanis' claims to be
affiliated with COR Capital were fraudulent." The impact of all of this on
Banc Home Loans, and its broker clients, remains to be seen.
While we're talking about banks, with or without a
"k", research by the Fed finds compliance costs amount to 8.7% of
non-interest expenses at banks with assets <$100mm vs. only 2.9% for banks
with assets $1B to $10B.
In the last week or two several mergers and acquisitions were
announced. In Pennsylvania Dollar Bank, FSB ($7.4B) will acquire Progressive-Home
FSLA ($51mm). In Missouri Enterprise Bank & Trust ($3.7B) will acquire
Eagle Bank and Trust Co. of Missouri ($928mm) for about $130.6mm in cash (20%)
and stock (80%). In New England Salem Five Cents Savings Bank ($3.9B, MA) will
acquire Georgetown Bank ($300mm, MA) for about $49mm in cash or roughly 1.48x
tangible book. In the home of the Packers Stratford State Bank ($110mm) will
combine with Heritage Bank ($105mm) in a merger of equals (MOE) transaction.
And it isn't confined to banks buying banks: Berkshire Bank ($8.0B, MA) will
acquire wealth management company Ronald N. Lazzaro PC for about $10.2mm.
"Makes you wanna build a 10-percent down, white picket
fence house on this dirt." So sang Florida Georgia Line. A big chunk of
lenders follow developments with the USDA rural development program. For
those that don't, here's a good place to see recent news.
Lenders involved in rural housing noticed that Fiscal Year (FY)
2017 funding for Rural Development's Single Family Housing Guaranteed Loan
Program is now available. The funding is authorized by the Continuing Appropriations and Military Construction,
Veterans Affairs, and Related Agencies Appropriations Act, 2017, and Zika
Response and Preparedness Act (P.L. 114-223, H.R. 5325).
Requests that received Form RD 3555-18E, "Conditional
Commitment for Single Family Housing Loan Guarantee" (aka Conditional
Commitment), contingent upon the availability of an appropriation, will be obligated
in the Agency's financial system over the next 2-3 business days. An
updated Conditional Commitment will be electronically generated by the Agency
to remove the "contingent upon" language. Lender receipt of the
updated Conditional Commitment will signal the request has been successfully
obligated by the Agency. Closing transactions are not eligible for
submission to USDA until a loan is successfully obligated.
Lenders are adjusting. USDA announced its temporary lapse in
funding for the Single Family Housing Guaranteed Loan Program effective with
the start of the new fiscal year October 1, 2016. During this time, Rural
Development will issue Conditional Commitments "subject to the
availability of commitment authority" for purchase and refinance transactions.
Please note that this will NOT affect Plaza's ability to fund/purchase
USDA Guaranteed Rural Housing program loans. Click here for a link to the notice from the USDA.
Plaza is reminding its clients that for USDA
Guaranteed Rural Housing Conditional Commitments issued on or after October 1,
2016, both the upfront guarantee fee and the annual fee (collectively the
"fee schedule") for purchase and refinance loans will decrease. The
upfront guarantee fee is being reduced from 2.75% to 1%, and the annual fee is
being reduced from .5% to .35%. Refer to USDA's latest announcement for more information.
NewLeaf Wholesale provided its brokers
with the following information: USDA-Guaranteed purchase and refinance loans
obligated on October 1, 2016 through September 30, 2017 are subject to the
following fee schedule: Upfront guarantee fee: 1.00% and Annual fee: 0.35%. A
loan is considered obligated when the USDA approves a complete loan application
package and issues Form RD 3555-18 "Conditional Commitment for Single
Family Housing Loan Guarantee" to the USDA-Approved Lender. Loan guarantee
requests submitted to the USDA on or before September 30, 2016, are subject to
the Fiscal Year 2015/2016 fee structure ONLY if a Conditional Commitment has
been issued before the state USDA field office close of business on September
30, 2016. The Broker must notify the Borrower when Form RD 3555-18
"Conditional Commitment for Single Family Housing Loan Guarantee" is
not received prior to September 30, 2016, since the Borrower's loan may be
subject to the new fee schedule and require re-disclosure. The Broker may
originate loans with the new fee structure ONLY if the loan is not submitted to
USDA for conditional commitment prior to October 1, 2016.
Disaster news continues to come from
residential lenders.
FCMKC posted Wholesale Product and Pricing Bulletin 2016-15 FUNDING RESUMED regarding
loans in areas impacted by hurricane Matthew (Florida, Georgia & South
Carolina).
AmeriHomes' previous announcement
delaying loan funding due to the anticipated landfall of Hurricane Matthew in
the states of Florida, Georgia, North and South Carolina; purchasing has
resumed subject to any disaster re-inspection requirements that may apply for
those states.
Counties located in Florida, Georgia, South and North Carolina
declared disaster areas as a result of Hurricane Matthew will require
re-inspection. Please click here for a copy of Plaza's Natural Disaster
Policydetailing re-inspection procedures by loan type.
In response to Hurricane Matthew in North Carolina and the
Federal Disaster Declaration, M&T Bank will enforce the Disaster
Re-Inspection Policy for all properties located in affected Parishes for the
counties of Counties of Beaufort, Bladen, Columbus, Cumberland, Edgecombe,
Hoke, Lenoir, Nash, Pitt, and Robeson.
On October 11th, U.S. Housing and Urban Development
Secretary Julián Castro announced HUD will speed federal disaster assistance to
the States of North Carolina, Florida, and Georgia and provide support to
homeowners and low-income renters forced from their homes due to Hurricane
Matthew. This week, President Obama issued a disaster declaration for the
following counties: North Carolina: Beaufort, Bladen, Columbus,
Cumberland, Edgecombe, Hoke, Lenoir, Nash, Pitt, and Robeson. Florida:
Brevard, Duval, Flagler, Indian River, Nassau, St. Johns, St. Lucie and
Volusia. Georgia: Bryan, Camden, Chatham, Glynn, Liberty, and McIntosh.
The President's declaration allows HUD to offer foreclosure relief and other
assistance to certain families living in this county. HUD is Assisting the affected states and local governments in
re-allocating existing federal resources toward disaster relief, Granting immediate foreclosure relief, Making mortgage insurance available, Making insurance available for both mortgages and home
rehabilitation and Offering Section 108 loan guarantee assistance.
Good capital markets staff, although focused on the tiny details
of making a basis point here or there, are also interested in the big picture.
One item being discussed is a single security - why have different securities
for both Fannie and Freddie products, given their similarities - especially if
borrowers can benefit from the added liquidity and reduced complexity? Freddie
Mac published a proposal to outline the security conversion
mechanism it expects to offer to holders of its PC once the single security
(UMBS) goes live in 2018. It also poses several questions on which it is
soliciting feedback from market participants, beginning on page 8.
Keeping on with capital markets, we had a little rally in prices
Tuesday after core consumer price index growth for September fell short of
expectations. It likely that the Fed will raise rates two months from now - but
that is two months from now. We also had some spillover gains in bunds and
gilts: Parliament would likely get a final vote on Brexit, thus lowering the
fears for a hard-Brexit. One big global economic village... But the 10-year
closed at 1.75%.
This morning the MBA reported its survey results for last week's
apps: -.6%, purchases +3.0% but refi -1.0%. We'll also have the housing duo of
Housing Starts and Building Permits. Later we have the October Fed Beige Book -
the status of the economies of the various Fed districts. In the early going
the 10-year is at 1.75% with agency MBS prices close to unchanged versus
Tuesday night.
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