"i
before e except after c" except when you run a feisty heist on a weird
beige foreign neighbor. Pretty clever. Is there anything new and
"clever" going on in lending out there? Yes there is - here's an
interesting story on a company in San Francisco
that is doing its best to refinance student debt, which in turn lowers the
debt level of younger people and as a result eventually helps the first time
home buyer market! And as we know, first time home buyers lead to move up
buyers. (The article notes that SoFi is "moving into moving into the
mortgage and consumer loans business.)
Three
thousand miles away, a rapidly-expanding mortgage lender is looking for loan
officers to work out of its newly-opened East Coast headquarters in New York
City. The company is launching a next-generation online platform that will
enable you to close qualified leads (from both your personal network and our
lead engine) with unparalleled speed and ease. Competitive pricing and a
veteran processing staff will support you in delivering a superb borrower
experience, with many of our borrowers returning for subsequent home financing
needs. The company is seeking LOs licensed in select Northeastern states (NJ,
CT, PA, DC), with special consideration being given to LOs holding additional
licenses in other Northeastern states. If interested, please send your
confidential resume to me at rchrisman@robchrisman.com
and I will forward them on.
And
in the middle of the country, Jordan Capital Finance (JCF) is hiring in its
Northbrook IL office a Chief Financial Officer, to lead all financial,
accounting, banking, and reporting systems for the Company. JCF provides
private money financing for real estate investors who buy, renovate, or rent
residential real estate. We operate in 12 states. JCF is growing aggressively
and is extremely well capitalized (by a leading private equity firm). The CFO will
work closely with the CEO (Mark Filler) on all aspects of the business. The
candidate will have ten years accounting experience (CPA required). Please send
inquiries and resumes to Ms. Aeron Berg.
On the flip side of new jobs, about 60
percent of the workforce at Milwaukee's Shelter
Mortgage Co. will be laid off in November, following the company's acquisition earlier this month by New Penn,
according to a letter filed with the Wisconsin Department of Workforce
Development.
Mergers and acquisitions continue to be
rampant. The latest FDIC data on bank branches
finds the number of US bank branches slipped to the lowest annual level in 9
years in Q2 2014. The number came in at 94,725 vs. 96,339 1Y ago (-1.7%) and
99,550 from the peak in 2009 (-4.8%). Let me know when the consumer starts
being better off...
On the mortgage side, a few weeks ago this
commentary mentioned rumblings of Mutual of Omaha and Guild. Sure enough,
"Mutual of Omaha Bank is expanding its correspondent lending
relationship with Guild Mortgage Co." - read that however you see fit,
but here is
the release. The Lincoln Journal Star noted,
"Mutual of Omaha Bank is outsourcing its mortgage origination
business."
On
the banking side during the last week, the boards of FHLB
Des Moines and FHLB Seattle have agreed to merge, moving the first-ever
merger of this sort into the hands of the FHFA for approval and then to the
members of each for ratification. The combined FHLB would have $119 billion in
assets, be headquartered in Des Moines and have 1,500 members in 13 states. On
a smaller scale, Metcalf Bank ($1.2B, MO) will acquire Douglas County Bank
($295mm, KS). In New York Putnam County Savings Bank ($976mm) will acquire CMS
Bank ($273mm) for about $25mm in cash. In John F. Kennedy's home state East
Cambridge Savings Bank ($882mm) will acquire Chelsea Bank ($58mm). In Barack
Obama's political home state, Busey Bank ($3.4B) will acquire Herget Bank
($273mm).
Speaking of mergers,"Over
the last 15 months, the mortgage industry has been predicting an inevitable
movement towards consolidation, especially among the independent mortgage
banks. Last week, we received news that affirms this trend with announced
acquisition of Cobalt Mortgage (Seattle) by Caliber Home Loans (Dallas). In
representing Cobalt, the STRATMOR Group has some insight into the motivations
of both buyer and seller. Although Cobalt will originate almost $4
billion in 2014, ownership recognized that greater production 'critical mass'
is rapidly becoming a requirement to compete in a marketplace where compliance,
technology infrastructure and scale economies are key success factors.
Capital strength will be essential to developing and funding non-agency product
menus and the retention of loan servicing. At the same time, Caliber Home
Loans determined that acquiring a high performing platform with an outstanding
Regional reputation was the most expedient strategy to accomplish its ambitious
growth objectives. This transaction may prove to be the largest deal of
year among the independent mortgage banking sector. The confluence of
shared objectives between buyer and seller made this a natural marriage of
highly respected powerhouse organizations. As always, STRATMOR would welcome
conversations with mortgage banks who are considering their sell-side strategic
objectives. (Certain principals of STRAT MOR are licensed investment
banking agents of M&A Securities Group, Inc., an unaffiliated company).
Are there any new correspondent
lenders out there gaining market share?.... There aren't really any
new lenders, exactly. What we're seeing, however, is a business shift. As has
been mentioned numerous times in the commentary, Freddie and Fannie have done a
masterful job going around the aggregators and picking up business directly
from small and mid-sized lenders. I won't engage in a discussion of the pros
and cons of that strategy, but suffice it to say that well-known investors are
not only dealing with a dwindling overall market, but due to Fannie &
Freddie's efforts a smaller piece of that smaller market. Not only that, but
there has been a reshuffling of the usual suspects. Wells Fargo & Chase are
still on top, but Citi was not even in the top 10 in the 2nd quarter
(it was #13), per National Mortgage News. The top five were rounded out by
PennyMac, U.S. Bank Home Mortgage, and Flagstar Bank.
Coming
up fast are Franklin American Mortgage, Freedom Mortgage, BB&T, and
Stonegate. And sneaking into the top 10 is Walter Investment Management - not
exactly a household name. We then go on to SunTrust, Redwood Trust, Citi,
Nationstar Mortgage, and Caliber Home Loans. All have different stories,
demands for servicing, geographic and product specialties, and so on. But you
can see the shuffling when one compares it to, say, the 1st quarter
of 2013 when the top 10 were Wells, Chase, U.S. Bank, PennyMac, Flagstar,
BB&T, Franklin American, Ally, Citi, and SunTrust.
And
if anyone is thinking about entering the correspondent channel, there is even a
book telling you how to do it. And no, this is not a paid announcement. "Correspondent
Lending Best Practices" is the subject of a new "eBook" from
OpenClose. "Unsure about the correspondent market? Don't have the proper
tools or fail safes in place? Now there's a free eBook that give you best
practices on how to proceed as well as help you avoid some common mistakes.
'Not So Fast, Correspondent Lenders' will help correspondent lenders through
the precarious, road and suggest checks and balances that are needed to do it
successfully. The eBook provides insight on what to ask, how to avoid common
pitfalls, and help on choosing the right tools and staff." And heck,
"free" is a good price, right?
One
hears about the big names involved in lawsuits. But I am often asked who the
small guys are? Who are the entities behind class action lawsuits? News this
week helps shed some light on "the small guys" involved. "The
Triaxx entities withdrew their objections to the proposed Countrywide $8.5
billion settlement." As the resolution of modification repurchase
claims raised by Triaxx was the largest impediment to approving the settlement
in its entirety, this event is a very positive sign for RMBS bondholders.
However, other objectors also mentioned mod repurchase claims in their appeal,
so it is not obvious that Triaxx's withdrawal completely resolves this issue.
The remaining objectors to the settlement include the Chicago Policemen Funds,
US Debt Recovery Entities, American Fidelity Assurance Company, among others.
Given that the Chicago Policeman Funds requested that the case be reargued in
its entirety, and other objectors appealed the settlement for different
reasons, there is still some uncertainty as to how the legal process would work
going forward for this case, or whether remaining objections would be
resolved/settled before court hearings are scheduled.
The
Federal Home Loan Bank of San Francisco announced that the Cost of Funds
Index for August 2014 was 0.667%, a slight decline from a month earlier
when the index was 0.676%. The August COFI index is based upon the average
interest expenses incurred by 12 financial institutions; this data is then used
to calculate variable rate loans. As a discretion, The FHL Bank of San Francisco
states that they do not guarantee the accuracy of the data that they receive
from participating institutions. Furthermore, if the bank reported information
in error, they will not revise the data. So after two consecutive months of
increases, the COFI relented and returned to its all-time low. In May, COFI
fell to 0.667 percent -- the lowest it's ever been based on the oldest
available data going back to July 1981. ARMs accounted for 11.9 percent of all
pricing inquiries in the U.S. Mortgage Market Index report from
LoanSifter/Optimal Blue and Mortgage Daily for the week ended Sept. 26.
This
leads us to the markets. Anyone truly wishing for lower rates - be careful what
you wish for as we'd rather not have the U.S. economy go back into a recession.
The 10-year's yield closed Wednesday at 2.40%, and although agency MBS prices
did not fully participate in the rally, it is only a matter of time. They still
improved about a half a point, with many lenders leaving rate sheets alone to
see how things settle out. This time rates were pushed down due to rampant
rumors of Ebola incidents sparked another "flight to quality".
Thomson Reuters reports that, "Overall, yield based buyers are again
sidelined until they throw in the towel on return or are otherwise convinced
these rates will hold. Hedge funds are better sellers from the recent wides,
supply is average at just above $1 billion today, with many likely digging in a
drawing a line in the sand ahead of Friday's payrolls."
The
only news out today is the usual Initial Jobless Claims (+293k last). Also out
is 10AM EST's August Factor Orders which are expected lower from the +10.5%
print last time around. In the early going there isn't much changes in pricing
with the 10-yr sitting at 2.41% and agency MBS worse about .125.
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