(Thanks to Nick C. for this one.)
Two Tennessee rednecks are out hunting, and
as they walked along they came upon a huge hole in the ground. They approach it
and were amazed at the size of it.
The first hunter says, "Wow, that's
some hole; I can't even see the bottom. I wonder how deep it is?"
The second hunter says," I don't know.
Let's throw somethin' down there, listen and see how long it takes to hit
bottom."
The first hunter says, "Hey, there's
an old automobile transmission over there. Give me a hand, we'll throw it
in and see."
So, they picked it up and carried it over
and count one, two, three and heaved it in the hole. They are standing there
listening, looking over the edge, when they hear a rustling behind them. As
they turn around, they see a goat come crashing through the underbrush, run up
to the hole and, without hesitation, jump in headfirst.
While they are standing there staring at
each other in amazement, peering into the hole, trying to figure out what it
was all about, an old farmer saunters up. "Say there," says the
farmer, "You fellers didn't happen to see my goat around here anywhere,
did you?"
The first hunter says, "Funny you
should ask, but we were just standing here a minute ago and a goat came running
out of the bushes doin' bout a hunnert miles an hour and jumped headfirst into
this here hole!"
The old farmer said, "Naw, that's
impossible. I had him chained to a transmission."
It has been interesting talking to residential lending folks
around the nation about their mix of business and how it has changed - if at
all. It turns out that 49 percent of people who have refinanced their home in the first
quarter of the year did cash-outs. That's the highest rate in the
post-recession economy, up from 12 percent in mid-2012. To put things in
perspective, in the run-up to the recession, that figure was often over 80
percent.
Events, products, non-profit work
"Mastermind Summit in Vegas is around the
corner. Not too late to book an appointment with Scott Harris,
CEO of SocialSurvey and find out what all the buzz is
about. Find out why nearly 50 mortgage banking companies including
Churchill, Inlanta, PRMI, OnQ, New American Funding, and Embrace have signed on with
SocialSurvey in the past 9 months. Enterprise Reputation Management is a
new term that lenders are figuring out. Better to be ahead of the curve
than playing catch-up. Meet up with Scott in Vegas to learn more. Remember, if you
are not actively managing your online reputation, your unhappy borrowers will
be happy to do it for you!"
Gateway Mortgage Group, a mortgage banking firm
with over 145 locations nationwide, has signed a national partnership with Folds of Honor, a 501(c)(3) that provides educational scholarships to
dependents of fallen or disabled military service men and women.
"Freedom isn't free and more than two million dependents of disabled and
fallen soldiers live with this every day," said J. Kevin Stitt, CEO of
Gateway Mortgage Group. "We have chosen to stand with our military heroes,
and their families, who have made the ultimate sacrifice while serving our
country courageously." Since 2007, Folds has awarded more than 13,000
educational scholarships in all fifty states, including more than 2,800 in 2016
alone. Beginning on June 1, 2017, Gateway will make a donation to Folds for
every mortgage loan originated and closed in their Retail channel for the next
twelve months. In 2016, the Gateway Mortgage Group funded more than 15,000
loans in its retail channel and should surpass 20,000 new loans this year. For
more information on this program, please contact Mark Revard via email or by calling 918.392.8580.
Training and Events:
Tomorrow (6/1) is the California Mortgage Expo in Southern California.
MGIC is offering skill building training programs and special events
available throughout the month of June.
Plaza's newest webinar will
help you identify common fraud trends and schemes, the red flags that alert you
to potential fraud and the tools available to help you combat fraud. Register now for Plaza's June 1st webinar.
If you would like to refresh your knowledge on the latest
processing, appraisals, underwriting self-employed borrowers and other
essential lending topics, view the Arch MI course catalog of June webinars.
It is not too late to register for the National Settlement Services Summit
(NS3) being held June 7-9 at the San Antonio Marriott Rivercenter. One hot
topic of discussion slated ishas PHH changed RESPA compliance?RESPA experts
address the state of compliance today considering the ongoing case of PHH
Corp. v. CFPB.
Learn more about Fannie Mae's proposed Underserved
Markets Plan, developed in support of the Federal Housing Finance Agency's Duty
to Serve rule. Housing experts will review the actions Fannie is proposing to
help the manufactured housing, affordable housing preservation, and rural
housing markets identified by Duty to Serve. Fannie Mae welcomes your questions
and will share how to submit formal comments on our plan. Click on the links
to register for a session and add it to your calendar: Tuesday, June 6, 10-11
a.m. ET or Thursday, June 8, 3-4
p.m. ET. To learn more about Duty to Serve, visit the Duty to Serve page.
Vendor M&A and news
News broke yesterday that Optimal Blue is acquiring
Comergence Compliance, "the mortgage industry's leading third-party
oversight platform." "Comergence provides an array of third-party
originator (TPO), appraiser, and social media risk management solutions that
verify third-party compliance in real-time, a capability unmatched in the
industry...innovations in due diligence automation and ongoing surveillance
services." Michael Stallings, Executive Vice President of Comergence said,
"Recent Comergence innovations, including an analytics tool to help
account executives identify new TPO opportunities and a breakthrough solution
for social media risk monitoring, strongly complement Optimal Blue's existing
product offering."
Mortgage document preparation vendor International Document Services, Inc. (IDS), announced its Uniform Closing
Dataset (UCD) XML file has been certified to meet all UCD requirements by both
Fannie Mae and Freddie Mac ahead of the GSE's September 25 deadline for UCD delivery. To
have its UCD XML file certified by the GSEs, IDS underwent an extensive testing
process to ensure the dataset was delivered in a GSE-acceptable format.
The National Association of Women in Real Estate
Businesses (NAWRB) is proud to announce Ten-X as a Premier Strategic
Partner. A real estate technology industry powerhouse, Ten-X recognizes
the importance of growing the community of women and women-owned and small
businesses in the housing ecosystem. "Partnering with NAWRB connects us
with one of the fastest growing business segments in the country," said
Rick Sharga, Ten-X Executive Vice President. "On average, women have
started over 1,000 businesses a day since 2007; this strategic partnership will
assist Ten-X in expanding our business relations while contributing to the
sustainability, homeownership and success of women entrepreneurs."
Coming this fall: Equifax, Experian, and TransUnion
VantageScore 4.0 scoring. "VantageScore 4.0 is the first and only
tri-bureau model that leverages trended data to take into account the
trajectory of borrower behaviors, engages patent-pending machine learning
techniques to generate a more accurate score for those with sparse files,
aligns with the removal of tax lien and public record data under the National
Consumer Assistance Plan (NCAP), aligns with NCAP's exclusion of medical debts
for 180 days (allowing time for insurance payments), and as with VantageScore
3.0, this new model generates a score for 98% of all consumers with a credit
file. This translates into a scoreable universe 30 to 35 million greater than
conventional models, including 12 million more African Americans and Hispanics.
Also like its predecessor, VantageScore 4.0 excludes paid collections including
paid medical collections."
Cascade Financial Services, a manufactured and modular
home lender, has selected Alight Mortgage Lending for continuous
reforecasting and planning. With Alight Mortgage Lending, Cascade will be
able to better measure the excess servicing for future securitization purposes.
Because Alight is cloud-based-accessible from anywhere, anytime and from any
device-management will be able to make decisions in real time. "We
need to be able to provide our private equity investors accurate and meaningful
financial forecasting and modeling daily," said Michael Jones, CFO,
Cascade Financial. "We'll use Alight's scenario analysis to better
understand the ripple effects of changes in pull-through rates, as well as
expense and revenue triggers, to maximize profitability."
Capital markets
Freddie Mac has been busy with enhancements to Deep MI CRT Program, its second front-end credit risk
transfer offering. Through a forward credit insurance policy provided by a panel
of mortgage insurance company affiliates, this structured transaction provides
additional coverage beyond the primary mortgage insurance on 30-year fixed-rate
mortgages with 80-97 percent LTVs -- which is placed immediately upon their
sale to Freddie Mac. Transactions are executed via a competitive, transparent
auction process.
FINRA Rule 4210, which establishes margin
requirements for Covered Agency Transactions, are set to take effect in
December and mortgage originators are already preparing for the rule's
implementation. Some of the proposed solutions for mortgage originators include
applying structured mortgage financing or transacting in futures instead of the
TBA market, but Incenter has introduced an alternative option: Enterprise
Margin Offset. From a recent Incenter Brief on the subject: "Enterprise
Margin Offset seeks to optimize originators' existing balance sheet assets on
hand and margin at the enterprise level. Ultimately, by leveraging retained MSR
that they already have on balance sheet, originators can leverage MSR portfolio
hedging techniques to further reduce their overall income statement volatility
and now, just as importantly, reduce their overall cash margin burden."
(And no, this is not a paid ad.)
Looking at the bond markets, and thus interest rates, we
had a little rally yesterday (prices up, rates down) after Core PCE inflation
fell to a 1.5% year-on-year pace in April. Contrast that with Fed Governor Lael
Brainard's statement that another rate hike would likely be appropriate soon.
Take your pick: Fed optimism on the growth and inflation fronts versus investor
pessimism. The different opinions have served to flatten the yield curve and
the 2-year/30-year Treasury yield spread has narrowed to 158 basis points, near
a post-election low.
Housing? En fuego! If you believe the Case-Shiller
numbers, home prices rose at their fastest rate since 2014. The Case-Shiller
20-City Index of U.S. home prices was up 5.9% y/y in March, in line with
February's growth rate. MBS closed higher and mostly wider with treasuries
better bid.
When the proverbial dust settled Tuesday the 10-year
risk-free T-note price had improved nearly .375 and closed yielding 2.22% and
the 5-year note had improved .125. Agency mortgage backed securities were all
over the place, but for the most part had improved about .125.
We've had our usual MBA survey of last week's locks:
-3.4%, and -14% from a year ago. Coming up are the Redbook Same-Store Sales
Index, Pending Home Sales, Chicago Purchasing Manager's Index for May, and the
Federal Reserve's latest Beige Book at 2PM ET. Out of the blocks this
morning rates are almost unchanged: the 10-year is yielding 2.22% and agency
MBS prices are worse 1 or 2 32nds - not much.
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