Memorial Day is a
federal holiday in the United States for remembering the people who died while serving
in the country's armed forces. But this week news came of a
different sort, and thanks to Josh F. for sending along word that after 70
years of waiting, WWII 'Memphis Belle' gunner Air Force Master Sgt. Melvin
Rector, 94, revisited Britain - and died quietly there. "U.S. Air Force
Master Sgt. Melvin Rector long carried Britain in his heart after he helped
defend it during World War II, but 70 years passed without him stepping foot in
the country. The 94-year-old finally decided to leave his home in Barefoot Bay,
Fla., to visit Britain earlier this month. The National World War II Museum in
New Orleans conducts a travel program through which interested parties can
visit certain sites of the war. He signed up for one..."
Do you think your company's
computer system is immune from hacking? It's not a matter of "if" but
"when" - just ask Equifax about its data breaches hitting the press. Not
only that, but one can buy practically anything on the internet: hackers are
selling 117mm LinkedIn passwords on the web. Hackers will likely use such data
to mine it and then gain access to email and bank accounts (because so many
people reuse passwords for their various accounts). Change your passwords
regularly (like from "Passwerd" to "abc1234") and don't use
the same one for every account. The largest bank in Africa, Standard Bank Group
Ltd., reports it has lost $19 million due to a sophisticated attack carried out
in Japan: thieves forged 1,600 cards and withdrew money from 1,400 ATM machines
all over Japan within two hours.
This week I have been
discussing Section 342 of the Dodd Frank legislation. Section 342, part of the
Dodd Frank legislation, continues to be a topic of conversation in some
quarters of financial services. You can read the details here.
CFPB's Office of Minority and Women Inclusion (OMWI) has spent the last several
years ensuring that the Bureau conforms to inclusion policies mandated in 2010
by Dodd Frank. Now it says it is turning its attention to the entities
regulated by the CFPB: "OMWI has begun work on plans related to the new
standards, including creating processes and procedures for entities to
voluntarily assess and report on their internal diversity and inclusion."
So if your company is not taking extra steps to hire women- and minority-owned
businesses, you should probably pay attention.
AnneMarie Allen,
CEO and president of The Compliance Group, writes, "In my opinion 342 of
Dodd Frank is hardly recognized...not totally surprising. I will say, though,
that some of our bank clients do ask us if we are minority owned and also some
of the Federal Home Loan Banks - mortgage lenders (non-banks) have not asked.
"Growing up with
parents who immigrated to the United States taught me several character traits,
but two that always stick in my mind and have sincerely helped me build a
successful business: perseverance and honesty. My mom said never give up and my
dad always said your word means everything. First and foremost, don't get
caught up in the fantasy of having more personal and financial freedom any time
soon...that doesn't come for many years. You gotta do the time - hence
keeping perseverance close and when you start earning clients- remember, your
word means everything. For The Compliance Group, our biggest challenge in the
17 years in business was surviving the financial housing crisis. Part of our
survival was our ability to not overspend in the previous good years and
operate conservatively - many startup businesses don't have a business plan and
in particular don't save for a rainy day. Our industry requires a keen eye on
the market and the ability to maneuver through many various cycles quickly.
"What did Benjamin
Franklin always say? 'By failing to prepare,
you are preparing to fail!' There are some specific areas to keep at the forefront
of your mind. Secure outside legal counsel for contracts and human resources.
Secure a good CPA firm (Taxes...taxes...taxes, don't be blind sighted). Make
sure you set up the right corporation (S Corp, C Corp, LLC). Cash Flow, Cash
Flow, Cash Flow (this really should be #1). Be strategic and thoughtful about
who you are as a company and master it - you can't be everything to everyone.
Hire smarter people than you. Your employees and your clients are your greatest
assets. Marketing strategies are very important. Budgets are a work in progress
and flexible but don't deviate significantly. No good deed goes unpunished -
run your business like a business.
"For me some of the
greatest benefits of owning a company have been creative independence, but remember,
not everything ends up being a win so you either re-work it and try again or
know when to fold it! In any industry, especially the financial services
industry, relationships are key. It's a big industry but small...if you know
what I mean. Take the time to cultivate your relationships, listen to your
clients, care about your services, take care of your employees and...here it is
again...your word means everything. Take the time to determine if a client is a
good fit for your organization. Sometimes, we get caught up in the win but at
the end of the day that win just turned into your greatest nightmare.
Understanding a potential client's company culture and each other's differences
are vital. It's important to know who you are doing business with and make sure
it's a win-win for both organizations."
Do you think your company
is too small to be on the CFPB's enforcement radar screen? Think again - individual loan officers are not
immune from enforcement actions. The Consumer Financial
Protection Bureau (CFPB) fined former Wells Fargo employee, and until recently
Bank of America employee, David Eghbali $85,000 and banned him from working in
the mortgage industry for a year for an illegal mortgage fee-shifting scheme. It seems that from
late 2013 through early 2015 Eghbali had an arrangement with New Millennium
Escrow Inc. that allowed him to manipulate the prices his customers would pay
for escrow services.
New Millennium would
reduce its fees for some of Eghbali's customers and make up for its loss by
adding fees to loans for other customers. This, per the CFPB, ultimately
increased the number of loans Eghbali closed, boosting his commissions at the
consumer's expense. Eghbali, who served as a loan officer at the Wilshire
Crescent branch in Beverly Hills, California, referred more than 100 loans to
New Millennium, the consumer bureau said. Per his Linkedin profile, he worked
for Wells for years, left a year ago and went to BofA, and then was terminated
by BofA this month.
Does all this regulation
cost money? Sure it does. A while back a study titled, "Government Regulation in the Price of a New Home" by
Paul Emrath, Ph.D., VP of Survey and Housing Policy Research for the National
Association of Home Builders (NAHB), estimates that 14 million households are
"priced out" of the market due to regulation. The report showed that government
regulations increase the new home price by an average of 24%, or an additional
$84,561. Granted, the study was done for & by the home builder group,
but this number is up significantly from 2011 when regulatory costs were
$65,224. This phenomenon prices out households so they no longer qualify for a
new home mortgage because of higher prices.
It noted that,
"Regulations come in many forms and can be imposed by different levels of
government. At the local level, jurisdictions may charge permit, hook-up, and
impact fees and establish development and construction standards that either
directly increase costs to builders and developers, or cause delays that
translate to higher costs. State governments may be involved in this process
directly or indirectly. Several states, for example, have adopted state- wide
building codes. And although impact fees are imposed by local governments, such
fees typically cannot be imposed without enabling legislation at the state
level. The federal government can also impact the price of a home-for example,
by requiring permits for storm water discharge on construction sites, which may
lead to delays in addition to the hard cost of filing for a permit."
Certainly the
regulation-related changes being made by lenders and investors don't stop.
A while back, due to the
diverse interpretations of TRID regulations being applied by Rating Agencies,
Due Diligence Firms and Investors, Caliber told its customers that it is
"changing the process flow for all Caliber Portfolio Lending (CPL)
products through our Correspondent Lending Division. It is offering
the ability to close CPL products in your name, with your funds, while Caliber
performs a Prior Review and issues the Closing Disclosure and Closing Documents
on your behalf."
Mortgage Solutions
Financial has made changes to its loan level price adjustments. Please
review Announcement 18-16W for more information.
FAMC revised its
Corrective Action/Cure requirements for loans that exceed the 3% origination
cap on points and fees. Loans originated or purchased by FAMC must be in
full compliance with Texas 50(a)(6) requirements. In cases where a loan exceeds
the 3% origination cap, the violation may be cured by the lender refunding the
amount that exceeds the 3% limitation within 60 days after the lender is
notified or otherwise discovers the error. The refund must be documented
following the cure provisions as outlined in the Truth in Lending Act
(TILA) chapter of the manual. Failure to cure the loan within 60 days will
result in a non-compliant loan.
Have your read PennyMac's
most recent TRID announcement?
Plaza sent out a
reminder requesting its clients to make sure its Loan Origination Software
(LOS) is up to date with the current version to support all the "Know
Before You Owe" elements. Plaza has identified that loans are still being
submitted that were processed through LOS's that are not using the most current
version, or have documents that are not updated to support TRID. Two of the
most widely used mortgage software systems are Point and Encompass. Here is
information about their current versions: In May, 2016 - Calyx Software recently announced Point Version 9.3 has
been released. Also in May, Ellie Mae has announced an updated version of Encompass 16.1.0.5.
AmeriHome's
TRID Quick Reference Guide has been extensively updated and clarified. The updated
guide is now available on SellerWeb.
Switching
gears to the bond markets, not that lock desks will be particularly busy today,
rates...headed back down?! There's an early close today, but yesterday agency
MBS (Fannie, Freddie, Ginnie) did well yesterday despite rallying treasuries on
strong Fed and retail support, some of which was month end-related ahead of
Friday's early close and long weekend. We also had a very strong Pending Home
Sales Index (April) report that kept the string of much better than expected
housing reports for the week going, growing 5.1% vs. expectations of just 0.6%
following March's revised 1.6% (from 1.45%).
Yesterday the 10-year
note ended the session nearly .5 higher in price, but of course mortgage prices
lagged due to refinance fears. Just think of all the money being lost by
companies that paid higher-than-market prices for servicing in the last six
months!
Today, with our
holiday-shortened economic calendar and holiday on Monday, began with another
update on GDP for the 1st quarter. Expected to come in around +0.7%
(versus +0.5% in the initial release), it was +.8%, the weakest showing in a
year. Later, at 10AM, the University of Michigan Sentiment Index will be
released. In the early going rates are about unchanged. The 10-year,
which ended Thursday at 1.82%, is at 1.83%.
No comments:
Post a Comment