Many banks and mortgage banks
have training programs for new people in the business. But many argue that
the vast majority of people in residential lending are pretty "white
bread" (there, I said it) and the industry needs to increase its diversity.
In fact, the Institute of International Education reports that 49% of the
819,644 foreign students studying at US colleges during last year's school
year (2012-13) are natives of China, India or South Korea. And the University
of Southern California (USC) has more foreign students than any college in
the United States.
Looking for opportunities, Carrington
Mortgage Services is expanding its Retail Branch Network, and is looking
for retail teams nationally. Carrington is a Ginnie
Mae Direct Servicer Seller offering an aggressive comp structure, benefits,
and a wide variety of loan programs: FHA/VA direct GNMA, Conventional, Fixed,
Jumbo, ARM, loans down to 580 FICO, and no overlays for FTHB on its FHA
purchase program. Its affiliate, Carrington Real Estate Services, works
closely with it in local community markets. Interested retail candidates
contact John Cervantes at john.cervantes@carringtonmh.com.
And a client of MenloCompany,
a mortgage consultancy firm, a National Retail Origination Lender,
headquartered in Minneapolis, Minnesota is expanding aggressively in
markets across the United States. Having been in business for nearly 10
years, the retail firm has built a strong culture focused on retail
transparency, stability, professional development and efforts to help you
grow your production. If you are a company looking to be acquired,
or an experienced Branch Manager with a team that does more than $1.5M per
month, or a Sr. Loan Officer with a track record for performance, please
visit BranchSmart or you
can email Rick Roque, at rick@menlocompany.com.
Tying in with information I
had last week regarding hedging non-QM loans...
The last survey I took was
regarding how happy I was with my long-distance carrier, and ended with me
hanging up right in the middle of the age-and-income bracket question. I
never get the cool interviews, but Barclay's Securitized Product Research
team does. The department recently conducted a two-week online survey of
clients to gauge views on hedging non-agencies against macro-risks.
The survey was distributed and conducted by a third-party firm contracted by
Barclays to conceal the identities of the individual respondents. As a
result, the survey results exclude any stratification across investor types.
Out of the 12 questions on the survey (examples being, on what would you
base your rate hedge ratios? What would you assume for housing across your
rate shifts?) I found: "In the current situation, how much current carry
are you willing to spend on hedging risks?" most interesting. Half
the respondents were willing to give up 10-20% of their carry as hedging
costs. Another one-third would only pay 5-10% but one-fifth were willing to
give up more than 20% of their carry to hedge out the risks. As Barclays
notes, in general, investors should be encouraged to consider some hedges for
their portfolios. However, it doesn't make sense for all investors to
attempt to fully hedge their interest rate and/or credit risks. The cost of
hedging using certain types of securities may be prohibitively high compared
with the carry on some non-agency positions. As a result, Barclays advises a "judicious
in sizing the hedges as well as opportunistic in putting on hedges when costs
are lower" approach.
The top wholesale lenders
& brokers sure like Moody's all of a sudden.
Third-party originated (TPO) loans previously maintained a reputation for
putting residential mortgage-backed securities investors at heightened risk,
but times are changing and TPO loans originated after the financial crisis
are exhibiting the highest of performance standards today. Moody's
Investors Service released a report saying loans
originated by third-party brokers and correspondent lenders continue to equal
retail loans in payment performance, thanks to higher underwriting guidelines
and additional scrutiny of loans sourced by third-party originators. The link
to the report is above, but one quote was, "The narrower gap in recent
loan performance is because of tighter lending and regulatory controls over
TPOs".
HUD recently released
Mortgagee Letter 2013-41. The letter clarifies the self-reporting
requirements of all single family FHA originations. The requirements
addressed include: what must be reported, the timeframe for lenders' internal
reporting to senior management, the timeframe for lenders' external reporting
to FHA, how findings should be reported, FHA's review process, and the
repercussions of failing to report to the FHA (gulp). Here's one take on the new rules.
What is the public reading
about the desirability of the FHA program? Here is the latest. At least
FHA allows 100% gifts, right? See next paragraph...
I am not an underwriter, but
that doesn't stop me from receiving questions about it. "Rob, do you
hear anything from the agencies with regard to using gifts as down
payments?" No, I don't - that is definitely an underwriting issue,
and whenever I write about underwriting, I receive plenty of input about
exceptions. That being said, coincidentally Guy Schwartz from CMG sent
out a note about this exact topic. "Sometimes we think there is very
little left to learn or there is some scenario we have not seen before. For
example, the following conversation, 'Where is your money for down payment
and closing costs coming from?' To which the client states after a long
pause, 'Ah, it's coming from my cousin, he owes me money.' It seems like
people lend lots of money to cousins on a hand shake, because if you ask for
the audit trail of this money it never exists. We get the cousin story
frequently, and all we can do is look at each other and think, 'oh no not the
cousin story AGAIN!' Thankfully FHA allows 100% gift of funds for down
payment and closing costs. For conventional loans we have always believed
that for a 20% down payment all of the funds may be a gift. Furthermore it
was our understanding that if the borrower has 5% of their own money for a
down payment they may get a gift for any amount. Well as Gomer Pyle use to
say, 'Surprise, Surprise, Surprise' we found a little known secret.
"FNMA says, 'All funds
for the transaction can come from a gift. Subject to MI if the LTV>80%.'
Provided the property is a 1 unit primary residence (non-applicable for
high-balance mortgage loans). Wow, we did not believe this until we saw it in
black and white. We did check with one MI company and they said they were
okay with this guideline. When a loan involves a non-occupant co-borrower,
however, Freddie Mac still requires the borrowers to have 5% of their own
money. FNMA will require the borrower to have 5% of their own money if: they
are purchasing a 2-4 unit primary residence, second home, or if the loan is a
high balance mortgage loan amount. Just a reminder here is a list of
acceptable donors: a relative (spouse, child, other dependent or individual related
by blood, marriage, adoption, legal guardianship) a fiancé, fiancée or
domestic partner. The donor cannot be, or have an affiliation with, an
interested third party to the transaction. So now when we get the cousin
story, instead of looking at each other we will ask, 'Do you think your
cousin can gift the money back to you?'"
On November 15th
the federal bank regulatory agencies with responsibility for CRA
rulemaking published their final revisions to "Interagency
Questions and Answers Regarding Community Reinvestment." The
revisions provide additional guidance to financial institutions, and to the
public, on the agencies' CRA regulations, and focus primarily on community
development. Community development activities are considered as part of the CRA
performance tests for large institutions, intermediate small institutions,
and wholesale and limited purpose institutions. Small institutions may use
community development activity to receive consideration toward an outstanding
CRA rating. The amendments mainly provided clarity to: how the agencies
consider community development activities that benefit a broader statewide or
regional area that includes an institution's assessment area, guidance
related to CRA consideration of, and documentation associated with,
investments in nationwide funds, and address the treatment of loans or
investments to organizations that, in turn, invest those funds and use only a
portion of the income from their investment to support a community
development purpose. For more information on the CRA, including the Q&A
portion of the report, and the agencies' CRA regulations, visit FFIEC.
What's so wrong with actor
Alec Baldwin and a bunch of guys pretending to be Vikings telling me I can
"earn" up to 2% cash back on credit card purchases? Well, the CFPB
believes these rewards programs can involve "detailed and confusing
rules" and they will be reviewing whether rewards disclosures are
being made in a clear and transparent manner. The CFPB's recent report on
credit card programs identified rewards product disclosures as one of many
card practices that "pose risks to consumers and may warrant further
scrutiny by the Bureau." Bloomberg News recently reported that the
examinations cover the marketing of rewards programs, "particularly
the marquee promise of a given card, such as cash back, or redeemable airline
miles, and what a customer needs to do to get it." The article notes
that there is no apparent sudden rise in consumer complaints about rewards,
but the CFPB has targeted the programs because they are the primary reason
consumers choose a particular card. Mr. Baldwin never returned our phone
calls regarding this story, and as to why they never made the Hunt for Red
October II. Here's the story from Bloomberg - the
mortgage industry likes it when the CFPB turns its gaze to some other
industry... like how car salesman earn different commissions for selling
different cars...
How about some recent vendor
& conference news?
Congrats to National MI,
which announced that it has been approved to write mortgage guaranty
insurance in Florida. Approval by the Florida Office of Insurance Regulation
marks the 49th state for mortgage insurer.
Starting December 16, Essent
is decreasing monthly premiums by 5 basis points across all rate categories
effective for commitments issued on or after December 16, subject to
regulatory approval. Updated rate cards can be found in the full announcement. For availability of rates by state,
please see the Rate Availability chart that will be posted to Essent's
website by 12/16.
LoanSifter
announced its new "Fair Lending Compliance Tools" for clients who
need to "help stop a Fair Lending compliance violation before it
happens? Ensure you have a proactive Fair Lending review policy that can be
audited? Quickly see how differently originators are pricing loans to
borrowers? Automate your Fair Lending process?" LoanSifter has added new
resources to proactively
ensure compliance to Fair Lending and other regulatory requirements.
For industry events, the
MBA is presenting its second-annual Independent Mortgage Bankers Conference
next month in Florida "...designed to address the myriad challenges
facing the non-bank lender and to provide critical information, strategies
and connections needed to get an important leg up in both today's and
tomorrow's markets." Sessions include a panel of warehouse lenders, an
open discussion with warehouse lenders and independent mortgage bankers, a
special networking reception to connect warehouse lenders and independent
mortgage bankers, and Industry Outlook featuring leading independent bank
leaders focusing on business challenges including refocusing on production
efforts. For more information go to IndependentConference.
As a quick note, the world's
largest alternative asset manager, Blackstone Group, has reportedly
spent $5 billion to buy about 30,000 single family homes in the US in
a bet prices will rise and renting them out will be no big problem. Watch out
if they don't, or it is: the fear among Realtors is that if Blackstone's
return on these properties is not satisfactory, it will be time to sell
30,000 properties.
Turning
to the markets...darn there's a lot of news this week, especially for a
shortened week when many companies are closed Friday in addition to the
holiday Thursday. Today is Pending Home Sales. Tomorrow we'll have the
Housing Starts and Building Permits duo, along with Consumer Confidence (were
you one of the 5,000 households asked?), and the S&P/Case Shiller Indices
with their two month lag telling us what happened back in September.
Wednesday will be Durable Goods - always volatile, since a couple aircraft
orders can swing the number - Initial Jobless Claims, the Chicago Purchasing
Manager Survey, and the University of Michigan Consumer survey. Friday we
had a 2.75% close on the yield on the 10-yr. T-note; this morning we're at
2.75% and agency MBS prices are worse a couple ticks - taking back some of
Friday's improvement.
A
computer programmer's wife tells him: "Run to the store and pick up a
loaf of bread. If they have eggs, get a dozen."
The
programmer comes home with 12 loaves of bread.
If you're interested, visit
my twice-a-month blog at the STRATMOR Group web site located at www.stratmorgroup.com. The current blog is, "A
Primer on Swaps, and the Implications of Change in the Secondary
Markets". If you have both the time and inclination, make a comment on
what I have written, or on other comments so that folks can learn what's
going on out there from the other readers.
Rob (Check out http://www.mortgagenewsdaily.com/channels/pipelinepress/default.aspx or www.TheBasisPoint.com/category/daily-basis. For archived commentaries or to subscribe, go to www.robchrisman.com. Copyright 2013 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)
What is on the agenda for this week?
We have a holiday-shortened week with the bond market closed on Thursday. It will reopen on Friday but then close early at 2:00EST. We do have some big name economic reports this week with Durable Goods, Initial Jobless Claims, Chicago PMI, Consumer Confidence and Consumer Sentiment getting the most attention. We also have three Treasury auctions this week: 11/25 - 2 year Note. 11/26 - 5 year Note. 11/27 - 7 year Note. Wednesday is the most important trading day of the week. Many bond traders will react to the data and then take off for the weekend by lunch even though the bond market will remain open until 5:00EST. So, volumes will be thin in the afternoon and on Friday as well. So, a relatively small block of trades will cause the market to be "skewed". This is only temporary. When traders return on Monday in full force, volumes will return to normal levels. So for our Taper gauge remains at same level as Friday:  For the week, our downside is limited as many traders will "park" their funds into the safe-haven of bonds to avoid any international volatility while they are off for the holiday. Durable Goods Orders is very key on Wednesday. We have seen some very strong volatility with MBS after the last couple of reports. A strong report will cause a sell off....a weak report and MBS will rally. |
Global Home Finance Inc is saving Texas One Home Owner At a Time. We offer Conventional, FHA, VA, Jumbo, and USDA Rural Development products to help refinance or purchase a home. Visit us online: http://globalhomefinance.com
Monday, November 25, 2013
Mortgage Company Oppurtunities
http://globalhomefinance.com
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