Tax Day...
The IRS decides to audit Grandpa and
summons him to the IRS office. The IRS auditor was not surprised when Grandpa
showed up with his attorney.
The auditor began with, "Well, sir,
you have an extravagant lifestyle and no full-time employment, which you
explain by saying that you win money gambling. I'm not sure the IRS finds that
believable."
"I'm a great gambler and I can prove
it," says Grandpa. "How about a demonstration?"
The auditor thinks for a moment and said,
"Okay. Go ahead."
Grandpa says, "I'll bet you a thousand
dollars that I can bite my own eye."
The auditor thinks a moment and says,
"It's a bet."
Grandpa removes his glass eye and bites it.
The auditor's jaw drops.
Grandpa says, "Now, I'll bet you two
thousand dollars that I can bite my other eye."
Now the auditor can tell Grandpa isn't
blind, so he takes the bet.
Grandpa removes his dentures and bites his
good eye.
The stunned auditor now realizes he has
wagered and lost three grand - with Grandpa's attorney as a witness. He starts
to get nervous.
"Want to go double or nothing?"
Grandpa says, "I'll bet you six thousand dollars that I can stand on one
side of your desk and piddle into that wastebasket on the other side, and never
get a drop anywhere in between."
The auditor, twice burned, is cautious now,
but he looks carefully and decides there's no way this old guy could possibly
manage that stunt, so he agrees again.
Grandpa stands beside the desk and unzips
his pants, but although he strains mightily, he can't make the stream reach the
wastebasket on the other side, so he pretty much urinates all over the
auditor's desk.
The auditor leaps with joy, realizing that
he has just turned a major loss into a huge win.
But Grandpa's own attorney moans and puts
his head in his hands.
"Are you okay?" the auditor asks.
"Not really," says the attorney.
"This morning, when Grandpa told me he'd been summoned for an audit, he
bet me twenty-five thousand dollars that he could come in here and piddle all
over your desk and that you'd be happy about it.
There are plenty of companies out there, banks and non-banks,
trying to raise money. Since lots of folks like lists, let's start Tuesday with
the top 10 things that investors don't want to hear during your sales pitch.
Products
For lenders searching for a new investor, LenderLive Correspondent Lending "delivers
boutique-level service. We understand that fees and turn-times drive profitability.
That's why our admin and underwriting fees are low, and our One Touch
Incentive further reduces your admin fee for loans purchased with only a
collateral condition. LenderLive is serious about purchasing loans quickly too.
Our loan review guarantee states that if we don't complete the initial file
review within our targeted time, we'll waive your entire admin fee.
Contact National Sales Manager, Bob Kallio to learn more."
The good news about mortgage technology is the increased
industry discussion about APIs and interoperability. Maxwell just announced its "Connected
Apps" platform. Its API will enable lenders to customize their digital
mortgage experience. The platform launched with a partnership with The Work Number
that will provide Maxwell customers and their borrowers a seamless verification
experience. Maxwell is actively expanding connectivity to more LOS platforms
and to home insurers to digitally retrieve declaration pages, and recently
launched FileFetch which connects borrowers to over 1,000 institutions to
retrieve the actual PDFs of W2s, paystubs, bank statements and tax returns.
"Maxwell believes the best technology works together. Our goal is to
provide a delightful experience for the lender and the borrower on a platform
that integrates with our customers' other technology choices," said John
Paasonen, CEO of Maxwell. "It's just one more reason lenders on Maxwell
close over 40% faster." You can reach out to the team at Maxwell to see
Connected Apps and FileFetch in action." Mention my newsletter to get a
free 15-day trial: www.himaxwell.com.
Training & webinars this week & next for
residential lenders
The MBA is putting on a webinar today at 2PM ET on, "Bank-Owned Mortgage Divisions: What Bankers Need to
Know." The webinar is for bankers who are thinking about getting
out of mortgage banking, thinking of getting into mortgage banking, or
just wanting to learn how to run their mortgage divisions more profitably. The
speakers are Mike McAuley and Joe Garrett of Garrett, McAuley & Co.
Also today at 2PM ET, 11AM PT, Ellie Mae is offering 60
minutes on, "Join HMDA compliance and CFPB experts in a discussion about
the updated HMDA regulation, and get what you need to be prepared. Speakers
include Tom Kearney Partner, Akerman LLP (Formerly HMDA team lead,
CFPB), Josh Weinberg, EVP Compliance, First Choice Loan Services Inc., and
John Haring, Director, Compliance Enablement, Ellie Mae. Register here for this free event.
"Join us for the upcoming complimentary National
Mortgage Professional Magazine webinar this Thursday, April 20 at 2PM
ET/11AM PT titled "Discover How One Mortgage Professional Closed
Just Under 100 Loans from Google in 2016 Without Pay per Click!"In
60 minutes, legendary online marketer Chris Johnstone, CEO of Connection Inc.,
will share what it takes to access Google's Artificial Intelligence to identify
ready to close borrowers. Learn why over 50% of your leads should be coming
from Mobile and how to convert them. Discover how to rank on the front page and
stay there long term and more. Please click hereto register."
"Is the Digital Mortgage on your roadmap?
If so, then avoid leaping blindly into an eMortgage process with knowing the
facts. Join experts from DocMagic, BeSmartee, and LendingQB for a FREE webinar on April 26
at 10AM PT and learn how to avoid the typical risks, gain a competitive edge,
and attract more of your target customers. Click here to register."
From June 7-9, National Settlement Services is holding its
Summit in San Antonio, Texas. "Speakers include former FHFA director James
Lockhart, MBA chairman-elect David Motley, Mid America Mortgage CEO Jeff Bode,
North State Bank President Ken Sykes, executives from Wells Fargo & other
mortgage company presidents, and several strong compliance experts. When you
need to find the best education and insight from one end of the real estate
transaction to the other, you'll get it all at the National Settlement Services Summit (NS3). Register todayand join us."
CFPB fun
My cat Myrtle has been strangely silent about her thoughts
on if Director Cordray will leave voluntarily, to run for governor of Ohio, or
leave involuntarily. Regardless, the CFPB is moving ahead with its
directives. For example, vendor management is risk management. For example,
the CFPB has always had the authority to examine the service providers that support
the top financial institutions and has begun actively supervising these service
providers. In theory, the vulnerability of the nation's top financial
institutions is, in part, related to critical vendors.
And the Home Mortgage Disclosure Act? The increased amount
of data which the CFPB has required lenders to report in 2018 has led increased
complications. Several lenders and trade groups have asked for clarification on
the definition and reporting requirements for new HMDA reporting categories,
such as "loan purpose" the unique identifier for the originator of
the loan. In a 150-page statement, the CFPB let firms know that they can
avoid reporting on those topics if they do not have the information due to
loans which were purchased from a third party.
We all have 30 days to comment. The CFPB proposed to
"clarify" what sort of information lenders must collect from
borrowers as well as from people who apply for a home loan but are rejected.
The information could help the CFPB determine lending patterns in different
neighborhoods. "The public and regulators can use the information to
monitor whether financial institutions are serving the housing needs of their
communities, to assist in distributing public-sector investment to attract
private investment to areas where it is needed, and to identify possible
discriminatory lending patterns," the CFPB said.
Put another way, on April 13, the CFPB announced the release of its proposal to amend
Regulation C (12 CFR Part 1003), the regulation that implemented the Home
Mortgage Disclosure Act (HMDA) and requires lenders to collect, report and
disclose data on home loan applications, originations, and purchases of
mortgage loans. Law firm Buckley Sandler helps us recall that in October
2015 the Bureau updated the HMDA reporting requirements to expand the
data collection scope, while simultaneously streamlining certain existing
requirements. We've all had plenty of lead time. "Specifically, the
regulation, as amended, will establish 'transition rules' for both 'loan
purpose' and the 'unique identifier' for the loan originator. The transition
rules will also allow financial institutions to report 'not applicable' for
these two data points. Furthermore, the proposal will make additional
amendments to clarify certain key terms, such as 'temporary financing' and
'automated underwriting system,' and create a new reporting exception for
certain transactions associated with New York State agreements."
Last week Director Richard Cordray delivered prepared remarks at the Operation HOPE Global
Forums Annual Meeting in Atlanta addressing, among other things, financial
challenges facing the "economically vulnerable"-most notably with
respect to credit reporting and the handling of consumer
disputes. Credit reporting was one of the top three consumer complaint
categories for 2016, and Cordray cited a FTC study that found that
"millions of people had an error on at least one of their credit reports
that was serious enough to materially affect their credit score" and
outlined the Bureau's position for addressing these concerns.
The CFPB's Office of Minority and Women Inclusion (OMWI) has issued its annual report to Congress covering the OMWI's activities in
FY 2016. The Dodd-Frank Act required the CFPB and various other federal
agencies, including the Fed, OCC, FDIC, NCUA, and SEC, to establish an OMWI.And
enforcement actions? Ballard Spahr reports that in New Orleans, during
the ABA Business Law Section Consumer Financial Services Committee program
about CFPB enforcement at the Section's 2017 Spring Meeting, the audience spoke up. The program was
entitled: "Too Much or Too Little? Is the CFPB Exercising its
Enforcement Power with Appropriate Restraint?"
The CFPB is in a pickle when it comes to arbitration.
If the agency pushes its controversial proposed rule banning forced arbitration
agreements in consumer contracts, it risks doing irreversible damage to its
ability to block such agreements going forward. That's because if the rule
is voided by the Congressional Review Act, the CFPB would be prevented from
enacting a "substantially similar" regulation unless it is supported
by a new statute. Such a setback would indefinitely handcuff the agency, stymieing its ability to
limit forced-arbitration agreements-often found in the fine print of consumer
contracts-that the bureau has described as "contract gotchas."
"That's the rock and the hard place that they're stuck
between," said Buckley Sandler counsel Kathleen Ryan, a former deputy
assistant director in the CFPB's office of regulations.
Capital markets
While foreign countries still hold $5.94 trillion in Treasuries
or about 43% overall, that is down from the 56% level of 2008. As the world has
stabilized following the crisis, investors have slowly reduced their holdings
in safe US assets too. The 10-year yield is at the lowest level since
mid-November because of international tensions (leading to a flight to quality
for U.S. securities), and weak retail & inflation data in the United
States. The Fed Funds futures are now factoring a less-than-50% probability of
a June rate hike, down from a 2/3 probability only a week ago.
In terms of actual rates, which are determined by the bond
market, it was a mixed bag Monday - Monday - maybe because they were tired of
going up from last week. The U.S. economic data recently has been a shade
weaker than expected but there is a glimmer of continued optimism at
manufacturing firms and homebuilders nationwide. Key market themes include the
French presidential election, the first round of which is set for next Sunday,
and fiscal policy changes in Washington. The 10-year note closed yielding
2.25%; 5-year Notes and Agency MBS prices were worse a shade.
This morning we've had Bank of America's earnings, March
Housing Starts and Building Permits (-6.8% & +3.6%). Coming up are March's
Industrial Production and Capacity Utilization at 6:15AM PT. After the initial
volley of numbers, we find the rates improved versus last night. The 10-year
is yielding 2.22% and agency MBS prices are better by .125.
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