"Viagra shipment stolen! Police
searching for gang of hardened criminals!"
Nature always bats last. Just ask singer Paul Simon who is moving his New York cottage away from the eroding ocean.
Thinking about things like "oceans" and "cottages" reminds
me...The National Association of Realtors reports sales of vacation homes
dropped 22% last year to the lowest level in 3 years: higher prices and a shift
in consumer behavior toward renting vs. buying led to the decline.
Personnel & correspondent news
Products & services
Nationstar Correspondent recently announced
expanded credit offerings, including overlay removals. "Sellers can
now take advantage of unlimited cash-out, no letter of explanation for cash-out
transactions required, delayed financing for owner occupied properties,
mortgage credit certificate allowances (MCCs), and FHA streamline eligibility
for investment properties; just another example of our continued focus on
enhancing the ease of doing business with us. Sellers also benefit from
expedited delivery experiences with initial doc bulk uploads via SFTP, as well
as the regional alignment of our sales and operations teams. Looking to
partner with Nationstar Correspondent? Contact your region's AE by clicking
on the 'Contact Us' tab of our website, or come say hi to our team at the National
Secondary Market Conference & Expo in New Yorkthis month! We always
value an opportunity to speak with you directly about how to better serve your
business needs. Contact your region's Account Executive to set up a meeting."
For those companies utilizing a subservicer, Richey May & Co. has completed its
oversight review over Dovenmuehle and will now be going on-site to Cenlar on
May 11th and 12th to conduct an annual review. Based on
requests from clients, Richey May has expanded its loan-level testing options
in numerous servicing areas to assist clients in fulfilling their oversight
responsibilities. Richey May & Co., an accounting and advisory
firm heavily specialized in the mortgage industry, has developed an oversight
review program that includes testing of subservicers' policies and procedures
and internal controls on behalf of multiple clients at the same time, thereby
sharing expenses and creating cost savings that are passed on to participating
clients. If you are interested in learning more about Richey May's subservicer
oversight review program, the expanded loan-level testing available, or how to
participate in the Dovenmuehle or upcoming Cenlar reviews, please contact Kurt Blohm.
Optimal Blue announced today that the
company has partnered with Total Expert Inc. to further increase
productivity and drive revenue with robust contact and database management
tools through integrating Optimal Blue via advanced API technology into
Total Expert's enterprise sales and marketing platform. This integration
provides enterprise lenders that utilize Total Expert's CRM and Co-Marketing
platforms to increase efficiency and time savings by eliminating the need
to navigate between multiple systems. In addition, users can further enhance
marketing campaigns with dynamic, real-time product eligibility and pricing
data down to the loan officer level. Loan officers will also have access
to their specific pricing across the country and be able to run various unique
scenarios. The seamless connection between Total Expert and Optimal Blue's
new API also empowers lenders to deliver dynamic marketing content that is
easily created, deployed, and tracked within Total Expert's central system of
record. Click here for more information on Total Expert.
Today, SocialSurvey released its annual Top 25 U.S. Loan Officers for Customer Satisfaction.
Congratulations to the winners. The list includes results from over 10,000
loan officers and nearly 50,000 verified customers. To qualify for the list,
the loan officer must be in the top 1% in customer satisfaction, have a minimum
average rating of 4.8 stars out of 5, and have received a minimum of 25
verified customer reviews in 2016. To say the least, making this list was
nearly impossible.
CFPB news
New Residential Investment Corp. investors are
watching its share price sink due to Ocwen Concerns. NRZ shares fell as much as
13.4% intraday and ended the day down 7.7% on concerns related to Ocwen.
Remember that last week the N.C. banking commissioner, along with 20 state
regulators, filed a cease-and-desist order against Ocwen. The CFPB also filed a
lawsuit. While these actions will likely prevent Ocwen from growing and keep
operating expenses high, most do not think there is a near term risk of Ocwen
filing for bankruptcy.
On April 19, House Financial Services Committee Chairman
Jeb Hensarling (R-TX) announced that the Committee will hold a hearing to
discuss the Financial CHOICE Act Wednesday, April 26. Touted as a potential
replacement for the Dodd-Frank Act, the proposed new law ("Creating Hope
and Opportunity for Investors, Consumers and Entrepreneurs") was unveiled
last June and eventually approved by the Committee last September. If enacted,
among many other things, it would repeal the Volcker Rule, strip the CFPB of
its examination powers and "UDAAP" enforcement authority, and
discontinue small business loan data collection. And, finally, the Act
would bring the CFPB, FDIC, OCC, FHFA, NCUA, and the Fed's supervisory
functions under the congressional appropriations process, thereby mandating a
cost-benefit analysis and, in some cases, congressional approval prior to the
release of any new regulations.
Although not exactly mortgage-related, the CFPB's unlucky streak
continues: A Washington federal appeals court on Friday rejected the agency's
attempt to investigate an embattled accreditor of for-profit colleges,
upholding a trial judge's ruling that faulted the Obama-era agency for straying
outside its jurisdiction. In a unanimous ruling, a three-judge panel of the
U.S. Court of Appeals for the D.C. Circuit said the CFPB's subpoena (targeting
the Accrediting Council of Independent Colleges and Schools) was overly vague.
The appeals court did not take a position on whether a more narrowly tailored
subpoena would be enforced.
The CFPB had asked the accrediting council to identify the
schools it had accredited since January 2010 and name a representative to
testify on the accreditations of seven specific colleges. The CFPB said it
wanted "to determine whether any entity or person has engaged or is engaging
in unlawful acts and practices in connection with accrediting for-profit
colleges." Writing for the D.C. Circuit panel, Judge David Sentelle said
the CFPB's subpoena "never explains what the broad and non-specific term
'unlawful acts and practices' means in this investigation. Tellingly, in
attempting to explain the scope of its investigation, the bureau merely repeats
the broad language used in the notification of purpose."
Capital Markets
Despite the lack of the purchase market taking off, BofA Merrill
Lynch Global Research announced it has revised its 2017 net supply higher by $118 billion. The
group has revise its 2017 MBS net supply estimate to $331 billion net from $213
billion based on strong housing and low bank loan retention.
The securitization mechanism is still working, the latest
of which involves Kroll Bond Rating Agency (KBRA) assigning preliminary
ratings to six classes of mortgage pass-through certificates from LSRMF
Acquisitions I, LLC's first non-prime securitization of 2017, COLT Mortgage
Loan Trust 2017-1 (COLT 2017-1).
Caliber Home Loans, Inc. is the originator and
servicer for 78.3% of the portfolio. COLT 2017-1 is the sixth non-prime
securitization from LSRMF Acquisitions I, LLC since its first post-crisis
non-prime securitization in 2015. "COLT 2017-1 is also the largest
securitization of non-prime assets to-date; with over $400 million in
collateral, it is nearly double the size of the next largest issuance, COLT
2016-3."
"The COLT 2017-1 mortgage pool comprises 853
first-lien mortgage loans with an aggregate scheduled principal balance of
$402.6 million...KBRA considers the underlying mortgage loans to have certain
non-prime characteristics including borrowers with prior credit events (23.4%),
loans using alternative income documentation sources such as bank statements
(21.7%), investor/business-purpose loans (1.1%), and/or loans to foreign
nationals (0.4%). A large portion of the pool is designated as either Non-QM
(69.3%) or QM-Rebuttable Presumption (26.1%).
"The underlying collateral consists of 74.1% hybrid
adjustable-rate mortgages (ARMs), with initial fixed-rate payment periods of
one (9.9%), three (7.8%), five (54.7%), seven (1.5%) or ten (0.2%) years, of
which 2.8% of these loans possess a 10-year interest-only (IO) period. The
remainder of the collateral pool consists of 25.9% fully-amortizing 30-year
fixed rate mortgages (FRMs). Loans in the pool exhibit substantial borrower
equity in each mortgaged property, as evidenced by the WA original LTV of 76.1%
and WA original CLTV of 76.1%, which are comparable to CLTVs in KBRA-rated
prime jumbo deals in 2016. The weighted average non-zero original credit score
is 713."
Interest rates are all relative, right?
Experienced LOs will tell you that they started when home loans were in the
teens. And that business was fine. Bloomberg's Matt Scully reports from
Colorado is taking two internet lenders to court over high interest rates, the
latest legal battle in a growing national debate over online banking. "Consumer
loans arranged by Marlette Funding LLC, an online lender registered
in Delaware, and Chicago-based Avant Inc. exceed maximum finance charges
under state law, Colorado said in two lawsuits scheduled for hearings in May.
The issue boils down to whether the companies can arrange loans online between
Colorado residents and non-state banks while charging interest rates as high
as 36 percent, exceeding the state's 12 percent cap. The cases are
part of a larger debate over regulation of so-called marketplace lenders...
Looking at the good ol'
generic bond market, on Friday fixed-income securities made some small gains on
some securities and was unchanged on others - depending on security, coupon,
maturity, etc. MBS volumes, interestingly, were 50% of recent averages, per
Tradeweb. (Tradeweb doesn't see every MBS traded, but bases its numbers on its
activity.) Friday MBS prices were about unchanged from Thursday night, and the
10-year's closing yield was 2.24%.
We start the week with the first-round results of
Sunday's presidential elections in France which have driven U.S. rates higher.
With the future of Europe in French hands, the continent's leaders have cast
aside their tradition of staying out of each other's elections and weighed in
by basically saying they'll root for the candidate who wants to make the
European Union stronger, not the one who wants to blow it up. They mostly
endorsed independent centrist Emmanuel Macron, and are not fans of the
far-right rival, Marine Le Pen, as France heads toward the actual election. The
European Central Bank may accelerate its timetable for easing bond-buying
efforts as concerns over French election results appear to be easing.
Several market participants say an announcement might be made as soon as June.
The French election outcome was largely consistent with
expectations as Macron and Le Pen made it to the second round. Macron making it
to the run-off removes a downside risk from the table, and that is moving
stocks and bonds this morning - especially stocks. If Macron wins on May 7th,
continental leaders are cautiously optimistic that he can steer France back
into an historically central role in European affairs. If Le Pen wins on 5/7,
modern Europe - defined by integration and growing cooperation across national
boundaries - could fall apart after already being jolted by Britain's planned
E.U. exit. Knowing what happens overseas impacts our bond markets, this week
we'll hear rate decision news from the Riksbank on Wednesday, and the European
Central and Bank of Japan on Thursday.
This morning we've had the only U.S. news for the day
with the Chicago Fed NAI for March (dropping to +.08 from +.27, whatever that
means). Tomorrow, if you care about news from two months ago, we'll hear
the February Case-Shiller 20-city Home Price Index and February FHFA Housing
Price Index, along with March New Home Sales and April Consumer Confidence.
Wednesday the only thing out is the non-market moving MBA Mortgage Index.
Thursday are March Durable Goods, Initial Jobless Claims, March Advance
International Trade in Goods, and March Pending Home Sales. Friday, we can look
forward to Q1 GDP, Q1 Employment Cost Index, April Chicago Purchasing Managers
Index, and April University of Michigan Sentiment figures - something for those
grad school students to do. After the French election, we begin the week
with U.S. rates higher versus late last week, and this morning the 10-year is
hovering around 2.30% and agency MBS prices are worse about .250.
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