Arrgghh...
I read in Pirate Quarterly that you could take the entire human population of
the earth, put it inside of Texas, and it would still be less crowded than New
Yorrrrk City. (So I checked. NYC is 469 square miles, 8.3 million people, so
17,700 people per square mile! Texas is 268,820 square miles, which at 17,700
people per square mile would accommodate 4.75 billion people.) But there are
7.2 billion of us. Fortunately Alaska is twice the area of Texas, so at least
we can say one state would hold the earth's population at the same density as
Manhattan. For something a little more relevant, check out this cool
mortgage map. It shows lending trends over the last several
years here in the United States (click on "interactive
map" in the text to watch it).
In
2002 I remember looking out my office's window and seeing employees of another
mortgage company taking boxes of loan files out to the dumpster without being
shredded. The situation was corrected, but it appears that people are still
capable of doing these things - and thus comes a similar tale from Colorado
and Centennial Mortgage.
"Who will regulate the regulator?" The CFPB once again
turned some heads Wednesday, this time addressing nonbank car lenders. "The
CFPB is proposing to oversee larger nonbank auto finance companies for the
first time at the federal level. The Bureau also released a supervision
report that details the auto-lending discrimination that the Bureau has
uncovered at banks. The report highlights that the Bureau's supervisory actions
against banks will result in about $56 million in redress for up to 190,000
consumers harmed by discriminatory practices...Currently, the Bureau supervises
large banks making auto loans, but not nonbank auto finance companies. Today
the CFPB is proposing to extend its supervision authority to the larger
participants of the nonbank auto finance market. Under the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), the CFPB
has authority to supervise certain nonbanks the Bureau defines through
rulemaking as "larger participants" in a market. Today's proposed
rule would generally allow the Bureau to supervise nonbank auto finance companies
that make, acquire, or refinance 10,000 or more loans or leases in a year. The
Bureau would be supervising them to ensure they are complying with federal
consumer financial law. The Bureau estimates that about 38 auto finance
companies would be subject to this new oversight. These companies originate
around 90 percent of nonbank auto loans and leases, and in 2013 provided
financing to approximately 6.8 million consumers." Let's face it - the
critics are gaining momentum saying that possibly every fiscal transaction
involving a consumer will be eventually overseen by the CFPB.
While we're on the CFPB, nearly a month ago news broke of Flagstar's "eminent"
settlement with this bureau. I haven't seen any settlement, but it
bears repeating & clarification that this information is a result of
Flagstar's servicing operation, and has nothing to do with channel issues such
as mini-correspondent. Flagstar's Form 8-K states, "Flagstar Bancorp,
Inc., the holding company of Flagstar Bank, FSB (the "Bank"),
announced today that the Bank has commenced discussions with the Consumer
Financial Protection Bureau, or CFPB, related to alleged violations of various
federal consumer financial laws arising from the Bank's loss mitigation
practices and default servicing operations dating back to 2011. The Bank
previously provided the CFPB with documents and other information concerning
the Bank's loss mitigation practices and default servicing operations in
response to Civil Investigative Demands received from the CFPB. While the Bank
intends to vigorously defend against any enforcement action that may be
brought, it has commenced discussions with the CFPB staff to determine if a
settlement can be achieved. Those discussions are ongoing."
Returning
to bank news, is $8 trillion in loans on the books of banks, a good thing, or a
bad thing? I guess, like most things in life, it's all relevant. My answer
would be: sometimes good, sometimes bad. The American Bankers Association's
Chief Economist, James Chessen, writes, "Banks
reached a historic milestone in the second quarter, holding more than $8
trillion in loans on their books for the first time ever. The double-digit
increase in business lending reflects increasing confidence, with businesses
more likely to consider expansion in an improving economy. We're seeing the
natural link between businesses being willing to borrow and a growth in job
creation, with around 210,000 new jobs created each month. There has never been
a better time for businesses that want to borrow and expand their operations.
Rates are low, and a highly competitive marketplace ensures banks will offer a
broad menu of options when it comes to structuring loans." While bank
assets grow, residential lending continues to under-perform, as Mr. Chessen
points out, "total lending is up $377 billion year-over-year,
residential mortgage lending remains weak. New regulatory requirements on mortgage
lending are not helping, and will continue to dampen a key economic driver.
First-time homebuyers are feeling the pinch most intensely."
I head off to the Mortgage Bankers Association of the
Carolinas annual conference tomorrow, which made me realize that
there are a lot of upcoming events - many of them free and educational. So in
no particular order...
In compliance news: Mortgage technology innovator Mortgage
Coach and renowned compliance expert Mitch Kider (Mitch is Chairman
and Managing Partner of Weiner Brodsky Kider PC and represents his clients
in investigative and enforcement matters before the CFPB, the Department of
Housing and Urban Development, the DoJ, FTC, Ginnie Mae, Fannie Mae, Freddie
Mac, and more) are hosting an online Sales and Marketing Compliance Clinic
Tuesday 11AM PST. "Mitch will be covering topics like cooperative
marketing with Realtors, disparate treatment, MSAs and desk rentals, how loan
officers can best protect themselves, the vital importance of transparency and
consistent borrower rate quoting to both the CFPB and states and much more.
This call will be attended by the industry's best; from top C-Suite execs to
dedicated loan officers. Join the call and learn how to change compliance from
a weakness to a competitive advantage. Click here to register.
The MBA/MW's Mid-Atlantic Lender Conference is coming up on
Thursday, October 9. It will be held at Waterford at Fair Oaks (in Fairfax,
VA), and anyone interested should register by October
2 for the early bird rate. Lunch and happy hour are included at no extra cost. Click
on the link above to download pdf with speaker details. Hey, it includes a
trade show and happy hour!
In Oklahoma, the OMBA Conference on October 3rd will be
presented by Bricker & Eckler LLP and INCompliance. This one-day conference
covers the most critical regulatory, compliance and litigation issues facing
the industry. Event details include
agenda and registration information.
Get ready for a jam packed agenda on mortgage compliance next
steps and latest best practices at the Mortgage Regulatory Forum
taking place September 22-23, at the Westin Arlington Gateway, Arlington, VA.
On Wednesday, September
24, join WAUSAU Financial Services and Treasury Strategies in a webinar discussing key
reasons why paperless onboarding should be on every bank's 2015 project list.
Late November in Washington D.C., American Conference
Institute is offering a 2-day conference. Register by September 23rd
and join the mortgage servicing compliance summit, topics include MSR transfer
risks and much more.
Save the date: Colorado Mortgage Lenders Association 24th
Annual Rocky Mountain Mortgage Lenders Expo on April 9th, 2015, more information
to follow in the coming months.
Social Media Bootcamp: OC C.A.M.P. registration scheduled on October 1st, Katie
Wagner will discuss what not to do with social media for your business.
Speaking of Orange County, CA, the 2nd Annual Orange County C.A.M.P Golf
Tournament supporting worthwhile organizations
is scheduled for October 6th.
Turning
to the markets, jobs and housing are keystones of any economic recovery, and
yesterday we had updates on both. Housing Starts fell 14.4% in August
(following hitting its highest level in seven years) to a 956,000 annualized
rate following July's revised 1.12 million pace. And Building Permits for
future projects dropped 5.6% to a 998,000 pace in August from a 1.06 million
rate the prior month. But Jobless Claims fell 36,000 in the latest week, and
are down near post-recession lows. The four-week moving average of
claims, which smooth out weekly volatility, was down 4,750 to 299,500.
Thursday
saw the standard buying by the Fed, helping the demand side of the supply &
demand equation. Supply from mortgage bankers wasn't anything to be excited
about. And thus we find ourselves today not much different from rates during
the entire week with the only scheduled economic news being the 10AM data with
August's Index of Leading Indicators. The 10-yr's yield, which closed
Thursday at 2.63%, is back to 2.60% and agency MBS prices are better nearly
.125.
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