I had
the toughest time of my life. First, I got angina pectoris and then
arteriosclerosis.
Just as
I was recovering from these, I got tuberculosis, double pneumonia and phthisis.
Then
they gave me hypodermics. Appendicitis was followed by tonsillectomy.
These
gave way to aphasia and hypertrophic cirrhosis.
I
completely lost my memory for a while.
I know
I had diabetes and acute ingestion, besides gastritis, rheumatism, lumbago and
neuritis.
I don't
know how I pulled through it.
It was
the hardest spelling test I've ever had.
I head
to Colorado today, and nearby Wyoming's Alan Simpson said, "You could give
him an enema and then afterward bury him in a shoebox" when discussing
Donald Trump. Who says clever insults have gone away? Mr. Trump has siblings,
so is not celebrating "National Only Child Day" which happens to be
today. Speaking of little known national days, every CPA out there knows that
in the District of Columbia, this Friday, April 15th, is Emancipation Day. Therefore, taxes aren't due until
Monday the 18th. Who said you never learn anything by reading
this commentary?
Can
anyone have enough training and opportunities to mingle with mortgage banking
brethren?
All
MLOs should block out Thursday, April 14 at 2:00 PM EDT on their calendar to
join another quality webinar from our friends at National Mortgage
Professional Magazine. This webinar presented by Ron Vaimberg will give
strategies and tactics on "How to Get the Appointment with Any New
Referral Partner." With closed offices and real estate agents that rarely
come into the office, connecting with them is getting almost near impossible
unless you know the secrets to getting their attention. The secret is you have
to know exactly what to say and do. Click here to reserve your seat for this FREE Webinar.
"No
one will be 'singin' the blues' at this year's sold out Great River Mortgage Bankers Association Conference
(formerly Tri-State MBA)! Exhibitors and attendees from the States of
Tennessee, Arkansas, Mississippi and, new this year, Missouri, will gather
April 13th - 15th at The Peabody Hotel in Memphis, Tennessee. The
conference kicks off with a golf tournament at Windyke Golf Club. Speakers
include, David Luna, President Mortgage Educators and Compliance, Scott Nowak,
Assistant Director of State Government Affairs MBA, Barry Habib, Founder/ CEO
MBS Highway, Ralph DeFranco, Economist Arch MI, and myself along with some very
talented industry leaders such as Chrissi Rhea, Mortgage Investors Group, Hank
Cunningham, Cunningham and Co., Retta Gardner, Guaranty Trust, Logan Pichel,
Regions Bank, Rob Henger, FirstBank, and David Bryles, Iberia Bank.
If
you have some time on Thursday, April 28, at 11AM PDT, the California MBA
is offering up a free webinar on, "Internal Audit Best Practices for Mortgage Companies."
One can dig in, to their heart's content, to the purpose and benefits of
internal audit, internal audit mission and standards, structure and
independence, and the internal audit process. And don't forget risk assessment,
executing the audit plan, and remediation & follow up. The speakers are
Heidi Weir, Managing Director, CrossCheck Compliance, and Steve Mikolajczak, VP
of Internal Audit, Guild Mortgage. (Materials will include instruction on how
to spell Steve's last name.)
May
9-11 is the Annual OMBA "Home" Conference in Catoosa at the
Hard Rock Hotel. Don't forget about the Golf Tournament on the 11th!
With a powerful line up of speakers, this year is sure to be a memorable one. Conference details and registration information are available
here.
What's
new with PHH? Plenty, and its critics are being vocal. PHH announced that
Bank of America Merrill Lynch intends to "in-source" some of its
fee-based originations volume starting in two weeks. In conjunction with the
announcement, PHH stated that it was withdrawing its previously announced
earnings guidance to analysts of "breakeven to modest profitability"
in 2016. PHH estimated that this change could represent a reduction of 20% of
Merrill Lynch's 2015 volume (or 5% of total PHH closing volume). Merrill Lynch
will also in-source its subservicing portfolio no later than December 31. The
sub-servicing portfolio is about $40 billion UPB, or 18% of PHH's total MSR
portfolio.
While
this is a negative for PHH, and the profitability of the private label
contracts remains uncertain, stockholders are hoping that this could be a
further catalyst for the company to take strategic action. For example, on the
flip side, Morgan Stanley exercised its right to extend its contract to October
2017 and has informed PHH it is assessing the arrangement beyond that point.
Morgan Stanley will maintain its sub-servicing portfolio with PHH. We'll hear
more about it during the earnings call in early May. Critics, however, wonder
what PHH's role will be in residential lending going forward.
But
wait - there's more! The industry is watching as PHH's court case based on
captive insurance will be heard. Oral arguments start tomorrow on the CFPB's abuse of power,
although don't expect a verdict until later this year. Perhaps Richard Cordray,
in his efforts to "weed out the bad actors," will try to overturn
that as well if the court sides with PHH.
Lenders
aren't the only ones grabbing headlines. Annaly Capital Management (NLY)
announced yesterday that it is acquiring Hatteras Financial (HTS) for
$15.85 per share, or 0.85x of book value at the end of February. This
represents about an 11% premium to the closing price of HTS shares on 4/8. The
transaction is structured as an exchange offer and over two-thirds of
shareholders need to exchange their shares in order for the transaction to
close.
Analysts
suggest that the acquisition will provide Annaly with some portfolio
diversification, and that this transaction raises the possibility that we could
see more acquisitions of mortgage REITs that trade poorly. This is the fourth
mREIT buyout of the year and most expect more deals in the space to occur. But
will some larger potential acquirers be willing to clear the hurdle of
management fees owed to break up an externally managed mREIT.
And
lenders and mREITs aren't the only ones grabbing headlines. Yesterday federal
prosecutors announced a $5 billion deal with the Goldman Sachs Group Inc.
to resolve claims over Goldman's misconduct in packaging and selling
mortgage-backed securities from 2005 to 2007. The deal includes $1.8 billion
for consumer relief.
That's
a lot of ducats, although The New York Times reports that, "But that is
just on paper. Buried in the fine print are provisions that allow Goldman to
pay hundreds of millions of dollars less - perhaps as much as $1 billion less -
than that headline figure. And that is before the tax benefits of the deal are
included. The bank will be able to reduce its bill substantially through a
combination of government incentives and tax credits. For example, the
settlement calls for Goldman to spend $240 million on affordable housing. But a
chart attached to the settlement explains that the bank will have to pay at
most only 30 percent of that money to fulfill the deal. That is because it will
receive a particularly large credit for each dollar it spends on affordable
housing.
"They
appear to have grossly inflated the settlement amount for P.R. purposes to
mislead the public, while in the fine print, enabling Goldman Sachs to pay 50 to
75 percent less," said Dennis Kelleher, the founder of the advocacy
organization Better Markets, referring to the government announcement.
"The problem all along, with all of these settlements - and this one
highlights it even more - is that they are carefully crafted more to conceal
than reveal to the American public what really happened here - and what the
so-called penalty is."
Goldman
and other banks were given extra credit for activities that the government
wanted to encourage, like funding development of low-income housing or
providing relief to areas hit by natural disasters. And the final bill for
Goldman is less than the settlements of mortgage giants like JPMorgan, which
the government said was paying $13.3 billion, but more than the $3.2 billion
settlement the government secured with Goldman's closest competitor, Morgan
Stanley.
How
about something a little more constructive, like some recent news about new
products offered by lenders?
In
addition to Weststar Mortgage's new website, it has new ARM Loan
options with 3/1 and 5/1 ARMS now available. New enhancements include Delegated
Service Level review, pricing, agency alignment. Product enhancements include
Leasehold properties, escrow holdbacks, 203K streamline with construction
consultant, and coming soon; two-time construction loans.
Jordan Capital Finance, one of the nation's largest
lenders to residential real estate investors, spread the word about its suite
of products to be a one stop shop for all types of residential investor loans.
"Products include single family and small multifamily, fix and flip,
ground up new construction, long term rental loans, renovation, and refinances.
Jordan offers free pre-approved lines of credit from $100,000-$7.5 million.
They can close loans in as little as a week, because they lend their own
funds." Also offered are "ground up new construction, free lines of
credit, long term rental loans, and paying broker fees."
NYCB's
Warrantable Condos and attached PUD's will be available up to 90%
LTV/CLTV/HCLTV for a second home, purchase and rate/term refinance transactions
for new loans registered on or after March 4th.
12-month
bank statements to 2.5 million, 1-year BK seasoning, minimum 660 FICO -
interested? Contact Justin
Smith for HomeBridge product offerings.
Turning
our attention to interest rates, if you don't mind a touch of intra-day
volatility things pretty much ended Monday as they ended Friday. An overnight rally
in global equities ebbed throughout the course of the day. The U.S. economic
calendar was empty and the next big releases are retail sales and producer
price data for March on Wednesday morning. U.S. One news source sagely
observed, "Treasury yields have become more responsive to economic data
over the past year than they were during the prior four years, suggesting that
investors are increasingly viewing monetary policy actions as data
dependent." Is this news?
Today
we'll have March Export Prices ex-ag. and Import Prices ex-oil - not typically
much of a market mover, and the Treasury will be selling $24 billion in 3-year
T-notes. What may be of more importance to interest rates are weak earnings
announcements from U.S. corporations, like Alcoa's this morning. We closed
Monday with the yield on the risk-free 10-year T-note at 1.72% and this
morning it is up to 1.76% with agency MBS prices worse about .125.
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