(Warning: Rated PG, I guess, for content.)
I went to my nearby CVS Pharmacy, straight
to the back, where the Pharmacists' high counter is located.
I took out my little brown bottle, along
with a teaspoon, and set them up on the counter.
The Pharmacist came over, smiled, and asked
if he could help me.
I said, "Yes! Could you please taste
this for me?"
He took the spoon, put a tiny bit of the
liquid on it, put it on his tongue and swilled it around.
Then, with a stomach-churning look on his
face, he spat it out on the floor and began coughing.
I looked him right in the eye and asked,
"Now, does that taste sweet to you?"
Shaking his head back and forth with a
venomous look in his eyes yelled, "HELL NO!!!"
I said, "Oh, thank God! That's a
real relief! My doctor told me to have a Pharmacist test my urine for
sugar!"
I
can never go back to that CVS, but I really don't care, because they aren't
very friendly
As an industry, we continue to be reminded of a small minority's
wrongdoings. The latest example comes from New York where a Copiague man was sentenced last Friday to 12 ½ years in federal prison for
conning banks out of more than $30 million in a mortgage scam over a six-year
span. Before everyone starts hoping for fewer rules and regulations, and looser
loan guidelines, how can we convince politicians and regulators that things
like this won't happen again?
"What distinguishes a premier warehouse lender from
the other choices available in this market? BofI Federal Bank believes
it comes down to diverse product offerings, including a broad array of
non-agency/non-QM investors, exceptional service and basic economics. They
provide facilities from $5MM to $100MM for small to large mortgage bankers with
varying business models. BofI will fund non-QM loans to approved investors,
loan amounts up to $5MM, and agency and government loans with no
overlays. Their extended funding times up to 5:30 pm ET and a
comprehensive list of approved investors make BofI Federal Bank an essential
partner to help grow your business." Contact Robert Martini
or Robert Norine
at 888-764-7080 to learn more about BofI's warehouse program and its features.
Vendor updates - it seems like every
conference has fewer lenders and more vendors!
Origination is heating up, so with the race to cut cycle
times a streamlined borrower process is a must. Mortgage giants like
Quicken Loans and Movement Mortgage are leveraging technology to boost their
capacity. But even the smallest teams can compete using lightweight platforms
from players like Maxwell. For example, Maxwell's FileFetch
technology automates borrower document collection by linking to thousands
of financial institutions to automatically pull in actual bank statements,
W-2s, paystubs and full tax returns. Maxwell also keeps the borrower and real
estate agent in tune with regular notifications. The Maxwell team tells me that
loans facilitated with their technology close 22 days faster than the national
average. You can sign up for a demo of Maxwell using the link.
Bank of England Mortgage has chosen ReverseVision's
RV Exchange LOS to support the bank's new home-equity conversion mortgage
(HECM) division. Bank of England (based in England, Arkansas) is a depository
institution with branches in 39 states. It chose RVX primarily because of the
LOS's smooth integration with other software used by the bank. ReverseVision
technology supports more reverse mortgage transactions than all other systems
combined.
Matic Insurance Services, Inc., a digital
homeowner's insurance agency for mortgage borrowers, has partnered with Maxwell,
a provider of digital mortgage software. Matic's network of nationally A+ rated
insurance carriers enable borrowers to quickly find a customized homeowners
insurance policy with just a few clicks on their desktop or mobile device.
Under an agreement between both companies, Maxwell will integrate Matic's
homeowner's insurance software into its platform, allowing borrowers to receive
customized homeowner's policy options in seconds and helping Maxwell's clients
close loans faster. Lending teams on Maxwell collaborate with homebuyers in a
modern digital workspace, on any device, with connectivity to thousands of data
sources. Leveraging connectivity, like Matic Insurance Services, Maxwell
reports that loans on its platform close 22 days faster than the industry
average.
Servicing news? Yup!
Fitch reported that most U.S. mortgage servicer portfolios
are seeing their non-agency exposure continue to decline, though Select
Portfolio Servicing (SPS) is proving to be a notable anomaly, per Fitch's
latest quarterly U.S. RMBS Servicer Handbook. ThomsonReuters noted,
"The slow return of the new issue RMBS market continues, though not enough
to offset declines in non-agency portfolios. SPS is an exception as one of the
few non-agency servicers that has seen dramatic growth in its portfolio
over the last year. SPS' total non-agency portfolio totaled 410,286 loans with
a balance of $80.03 billion at fourth-quarter 2016 (4Q'16), a notable increase
from 333,520 loans with a UPB of $71.5 billion at 4Q'15. 'SPS has grown largely
through successful acquisitions of seasoned portfolios from large bank
servicers, with much of the new product coming in the form of subprime loans,'
said Managing Director Roelof Slump.
"Nationstar, normally the #2 servicer on this list
behind Ocwen, fell to #3 with the rise of SPS with 403,609 non-agency loans
($78.2 billion) at 4Q'16. Ocwen remains the servicer with the most non-agency
loans in its portfolio, totaling 1.01 million and $151.6 billion at the end of
last year. 'Nationstar will be an area of focus as 2017 progresses as they are
likely to inherit CitiMortgage's agency product as its gradual exit from
servicing continues,' said Slump. 'Another servicer of note will be Cenlar, who
stands to take over much of Citi's non-agency portfolio.'"
News broke yesterday that Ocwen Financial Corporation
entered into a new consent order with the NY DFS that ends the requirement
for a third-party monitor. The new order, however, still does not yet allow for
MSR acquisitions until a scheduled servicing exam is completed. The previous NY
DFS consent order was scheduled to end at the end of March though the regulator
had discretion to extend it for another year. The announcement comes about one
month after resolving similar matters in California.
Switching to agency servicing, servicers wonder when the
increase in rates, which one would think should increase servicing values, will
result in companies paying more for it. I've seen two Prestwick Mortgage
Group offerings recently. The first was an MSR package of $335 million New
England FNMA A/A. Go Pats? The 100% fixed rate, 100% retail originated pool has
a WAC of 3.743%, an average unpaid balance of $199k, 755 WaFICO, 66% WaLTV,
approximately 85.7% of the loans on properties in Massachusetts with the
remaining 14.3% on properties in New Hampshire. The bid date for the portfolio
is tomorrow, Wednesday, March 29, 2017, at 5:00 PM EDT.
The second was a $283 million FNMA/FHLMC + $120-180 million
FNMA/FHLMC Annual Flow Agreement. The pool is $164k average unpaid principal
balance, 4.009% WAC, 0.2504% weighted average net service fee, 100%
conventional and fixed rate, 95% retail originations of the seller,
approximately 36.7% of the loans are on properties in Florida; 28.1% on
properties in Michigan; 21.4% in Indiana; 10.6% in Alabama; and the rest in 8
other states, 0.754% delinquency ratio, with a WaFICO of 750. The concurrent
flow agreement will be based on production during 2016 and the projections of
the seller. The mix of product should be consistent with: 75/85% FNMA 15-25%,
85-90% 30yr 10-12% 15yr < 3% ARM, $180-190k avg, 92-95% O/O, 85% SFR, 750
WaFICO, FL (40%) MI (25%) IN (21%) TX (10%).
MountainView Servicing Group, LLC had a $1 billion
FHLMC/FNMA non-recourse servicing portfolio that is being made available to the
national market. The package is: 100 percent of 1st lien product,
239K average loan size, WaFICO of 744, WaLTV of 74%, a WAC of 3.90%, with top
states of California (21.5 percent), Florida (10.4 percent), Georgia (9.3
percent), and New York (8.6 percent).
Capital Markets
Altavera Mortgage Services (outsourced residential
mortgage origination services) has been approved by Standard & Poor's
Global Ratings (S&P) as a third-party due diligence provider for U.S.
residential mortgage-backed securities (RMBS) rated by that agency. Altavera
provides investors and correspondent aggregators with a full range of
closed-loan file review services for agency and non-QM residential mortgages,
including validation of product acceptability to investor guidelines, credit
decision and supporting documentation, QM/ATR requirements, regulatory
compliance, property valuation and closing documentation.
Looking at bond prices and interest rates, of course stock
and bond markets don't move in opposite directions. (Just look at the bond
rally and stock rally we've seen for a decade or two.) But the same economic
forces can move both markets, and lenders should keep in mind that Trump and Ryan
aren't the only reasons why stocks have enjoyed a months-long advance. Starting
in the 2nd half of 2016 nominal growth started improving markedly
not only in the US but globally too with impressive numbers witnessed in such
major economies as the European Union and China. This is good for stocks, bad
for rates - but can it keep going?
In the near-term, hopes for tax changes (realistic or
otherwise) and supportive nominal growth will continue to help stocks. But
"the smartest guys in the room" are cautious over the long term:
corporate earnings are doing well, the nominal growth backdrop is supportive,
and there aren't any dramatic imbalances in the economy (although we should
keep an eye on subprime auto loans, student loan defaults, farm values, and commercial
real estate). The economy is near full-employment, and regardless of one's
political leaning it is very difficult to "goose" a full-employment
economy facing the twin structural headwinds of mediocre labor supply and
productivity growth (which, let's face it, are the only two determinants of any
economy's growth potential).
Rates did well again yesterday, if for no other reason
than the failed health care changes could lead to problems for the
Administration putting forth a tax plan, which in turn would be
"un-inflationary" - and health care savings were supposed to help the
budget. Said another way, the markets reacted to the inability of Republican
leadership, including President Trump, to repeal and replace
"ObamaCare," and what it might mean going forward in getting other
items on Trump's agenda passed. Evans, the Chicago Fed President, said that
without that fiscal stimulus assumption, policymakers would have been forced to
see the late-2016 jump in interest rates as a contractionary development and he
didn't think that conclusion was appropriate. For those who like numbers the
10-year note rallied almost .250 in price (closing with a yield of 2.38%) and
the 5-year note and agency MBS prices improved slightly.
Today is a potpourri of economic events, probably none of
which will move the markets much. At 8:30AM ET is Leading Economic Indicators,
and at 9AM ET is the January S&P/Case-Shiller Home Price Indices. At 10am
is March Consumer Confidence, and then later a $34 billion 5-year note auction
along with several Fed officials speaking. In the very early going rates are
nearly unchanged from Monday's close.
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