Hoped-For TRID Leniency Won’t Stop Lawsuits; Banks Declining; MI Updates; Rates Decline on Job Data


arrives tomorrow, put into business practice on Monday. And the
industry wonders if, since under the Dodd-Frank financial reform law the
CFPB can impose civil money penalties of $5,000 per day per violation,
$25,000 per day for reckless violations, and $1 million per day for
knowing violations, companies and individuals should be terrified of
losing their savings or their company’s balance sheets. What will
lenders be responsible for right out of the gate? And
what about the myriad of rules that force lenders to do things that are
against rules set out by other regulators? Are we having fun yet?

CFPB sent a communication in direct response to the MBA’s and industry
stakeholders’ request for a definition of the Good-Faith Compliance
, in regards to the Know Before You Owe TILA-RESPA Integrated
Disclosure Rule. In this written communication the CFPB
stated that when it comes to the Good-Faith Compliance Standard,
regulators will consider institutions’ implementation plans, including
updates to policies and procedures, efforts to train staff, and how
technical and other implementation problems are handled during the
initial transition. The MBA reports that, “These standards closely track
the recommendation by MBA in our July 7thletter to Director Cordray.”

others believe that this is short of what the CFPB needed to say. For
any lenders that can’t issue the new docs on Monday, despite knowing
this date was coming all year, the loans are not eligible for sale to
GSEs and therefore many leading correspondent investors. Lenders should
indeed be worried about the ramifications of this.

even if Richard Cordray puts in some type of leniency period, that
won’t stop attorneys interested in class action lawsuits from pursuing
legal action against lenders that don’t adhere to TRID changes from the
start. One
would hope that the CFPB considers actions that would head off
increasing the legal liabilities of the residential lending industry
which is already spending millions of dollars around the nation on legal

The Association of Mortgage Professionals
renewed its call for passage of H.R. 3192 legislation directing the
Consumer Financial Protection Bureau to provide for a “hold harmless”
period until the end of 2015 for companies that make a good-faith effort
to comply with the TILA-RESPA Integrated Disclosures (TRID). “While
we’re encouraged by assurances made by CFPB Director Cordray to the
House Financial Services Committee that there won’t be punitive actions
taken against companies that make a good-faith effort to comply with
TRID,” said Rocke Andrews, President-Elect of NAMB, “we are still
hopeful that Congress will take action to protect consumers and reduce
disruption of the real estate market.”

In banking news, we continue to lose small community banks.
As of the end of 2014 there were 5,051 commercial banks with assets of
$1 billion or less. This compares to 5,538 at the end of 2012, or a net
decline of 487 banks (about 9% during that period). By asset size, the 2
year change for banks with assets of less than $100mm was a decline of
16% vs. banks with assets $100mm to $1B, which only declined 5%.

of which, in the last week or so we’ve learned that the owner of
Weststar Mortgage (NM) will acquire Goldwater Bank ($103mm, AZ). Alerus
Financial ($1.6B, ND) will acquire Beacon Bank ($352mm, MN) for about
$56mm. In Illinois First Midwest Bank ($9.7B) will acquire The Peoples’
Bank of Arlington Heights ($108mm). Multibank holding company Pinnacle
Bancorp Inc. ($8.5B, NE) will acquire Woodhaven National Bank ($461mm,
TX). HomeStreet Bank ($4.8B, WA) headed south and will acquire Orange
County Business Bank ($200mm, CA) for $5.5mm in cash and $49.8mm in
stock. Park Sterling Corporation of Charlotte, NC has agreed to acquire
First Capital Bancorp, Inc. (Glen Allen, VA). And Ameris Bancorp
(Moultrie, GA) has agreed to acquire Jacksonville Bancorp, Inc.
(Jacksonville, FL).

besides MA banks are also changing. Great Southern Bank ($4.1B,
MO) said it will consolidate 16 branches into other locations. Ameris
Bancorp ($5.2B, GA) announced it will close 10 of its 103 branches and
consolidate them in a move to reduce annual operating expenses by around
$5 billion. Fifth Third Bancorp ($139B, OH) has agreed to sell 12
branches with almost $300 million in deposits around St. Louis to Great
Southern Bancorp ($4.1B, MO).

in the week the commentary noted the Asian Real Estate Association of
America (AREAA) entering into a two-year exclusive partnership with
Radian Guaranty Inc. But what else is going on in MI Land?

U.S. Mortgage Insurers (USMI) named Lindsey Johnson as USMI’s President and Executive Director.  Johnson, a former senior member of the Senate Banking Committee staff, is currently a Director on PwC’s public policy team.

noted that President Jay Sherwood will be leaving the company in
January. Mr. Sherwood was a co-founder of NMIH, and most analysts think
that the decision to move appears to reflect the fact that the company
has successfully transitioned from a start-up to a more mature company.
Brad Shuster will remain as chairman and CEO.

If you believe that one indicator of the health of the business can be found in MI stats, MGIC
has published its monthly operating statistics for August reporting
that new notices declined by 16.1 percent YoY and declined 5.5 percent
MoM. Cures of 6,212 were up 15 percent MoM compared to a 4.1 percent
decrease in July. The cure ratio also rose to 99.5 percent from 81.4
percent in July. The ending delinquent inventory of 64,805 was down 2
percent MoM and declined 22.6 percent YoY. Paid claims dropped 8.2
percent MoM and net rescissions and denials dropped to 67 from 71 a
month prior. New insurance written equaled $4 billion in August,
dropping from $4.5 billion in July.

As a reminder late in 2014 Congress passed a one year extension of vital homeowner tax relief that included the tax-deductible treatment of mortgage insurance premiums for low and moderate income borrowers, after it had expired at the end of 2013. Although things are in limbo USMI believes that the ability of borrowers to deduct MI premiums from federal income taxes should be made permanent.

Arch MI has issued the summer 2015 edition of the Housing and Mortgage Market Review.
The index has identified that the average risk of home price declines
over the next two years remains low, as 82 percent of states have an
index of less than or equal to 8 percent. However, the five states at
greatest risk of home price declines include North Dakota, Texas,
Louisiana, Alaska and Oklahoma mainly due to their economic dependence
on oil and gas. The report also provides national unemployment and
housing data.

And as a reminder the American Bankers Association, after a comprehensive due-diligence process, endorsed the mortgage insurance solutions of Arch Mortgage Insurance Company. Details are available, ABA endorsement of ARCH MI press release.

Essent Guaranty, Inc.
announced an enhancement to its integration on Ellie Mae’s Encompass
all-in-one mortgage management solution. As part of the integration,
Essent’s customers can now submit non-delegated loans along with
documents through a seamless document upload. “…allows for unique
functionality for lenders to time when submitting non-delegated files
for underwriting. Lenders utilizing Ellie Mae’s Encompass LOS no longer
have to upload documents 1 at a time. Multiple documents can be sent
while continuing to work on other loans during the upload process. 
Essent is the only Mortgage Insurer that has this unique functionality
currently in place with Ellie Mae Encompass for non-delegated
submissions.” Details are available in Essent’s press release.

to the bond markets things were pretty quiet Thursday, and the
possibility that traders will be scooting out early today after the
unemployment data and before the storm intensifies. Yesterday we learned
that the ISM Manufacturing Index missed estimates but that construction
spending for August beat expectations but was accompanied by a downward
revision to the July number. Neither was really enough to do much to
rates and the 10-year closed at a yield of 2.04%.

we’ll have Factory Orders, but today we’ve had all the September
employment data. Nonfarm Payrolls were up only 142k, with major downward
revisions to July and August. Average Hourly Earnings were -.1%, and
the headline unemployment rate was unchanged at 5.1%. The weak numbers
call into question a 2015 Fed rate increase, and the 10-year yield is down to 1.95% and agency MBS prices are better by .50.

Jobs and Announcements

In job news Renew
Lending is looking to add two Regional Directors to be based in
Albuquerque, NM and the other based in Scottsdale, AZ to recruit, add
expand both its retail and its partner branch network. “Our company is rapidly growing and offers an excellent compensation package including stock options for originators. Renew Lending has introduced a residential NON-Qualified Mortgage program up to $5 million in CA, NV, AZ, CO, NM and TX
at very competitive interest rates for borrowers who need alternative
underwriting to traditional FNMA guidelines. We offer unlimited cash
out, underwriting using bank statements and asset depletion; investment
properties foreign nationals are okay and unseasoned bankruptcy or
short sales are considered; full program details available upon
request.” Confidential inquiries and resumes should be sent to CEO Joe Cunningham (916.939.2726).

Union Financial, LLC continues to grow and expand its Distributed
Retail Channel with the opening of several new branch facilities across
the country.
The most recent teams on-boarded in Canyon Lake (CA), Folsom (CA) and
Atlanta (GA). “Having experienced phenomenal growth over 16 consecutive
months, we continue to welcome top retail talent as we expand our footprint in strategic regions across the country,” said Rick Skogg, President and CEO of Pacific Union Financial, LLC.
“As part of our retail initiative, we are proud to announce the hiring
of Fobby Naghmi as VP, Regional Manager in the mid-Atlantic and Cheryl
Halverson as VP, Regional Retail Sales in Northern California,” said Mr.
Skogg. “Both individuals come to Pacific Union with great backgrounds
and are true builders of quality retail sales talent.” Want to make a
move and become part of an exciting and productive team? To apply or
inquire how you can join our team, email careers@loanpacific .com.

And VITEK Mortgage Group is growing in the Pacific Northwest and seeking high-performing branches to grow with us!  “VITEK is a purchase-focused retail mortgage bank;
we’ve been in business for more than 28 years and know what it takes to
succeed in this ever-evolving industry. We are built to be nimble, yet
we have a sophisticated delivery system and support structure. Local
leadership and operations, as well as accessible decision-makers truly
set us apart from the competition! We are delegated with Fannie,
Freddie, and Ginnie, have a large servicing portfolio, and have a full
scope of loan products available. If this sounds good to you, and you
have a team of solid producers generating at least $5M/month in volume,
contact George Charles for confidential consideration.

McLean Mortgage Corporation has announced it has hired
industry veteran Greg Crocker as CFO of the company.  Greg is a native
of Central Florida and a graduate of the University of Central Florida. 
his career in the mortgage industry of almost two decades, Greg has
served as CFO and COO for several major companies, including Taylor,
Bean and Whitaker, Pinnacle Financial and Aurora Financial Group.” Is
that TBW stint really something to crow about?

correction: yesterday the commentary mentioned that, “As readers
probably recall earlier this month Guaranteed Rate added 75 former
Discover Home Loans employees as well as the Irvine, Calif., call center
facility where they worked.” Guaranteed Rate actually added 75 former
Discover Home Loans loan officers, and 200 employees total.

Organizers for the AnnieMac Sales Summit
are overwhelmed at the response they’ve received so far. More than 400
people have already signed on – which perhaps should be no surprise, in
light of the fact that top industry professionals including Rick Ruby,
Steve Grossman, Craig Strent, Brent Hicks, and Gibran Nicholas will be
revealing their most effective business strategies. Space is limited, so
reserve your spot now: Apply what you learn. Get inspired. Grow your
business. It’s all waiting for you at the AnnieMac Sales Summit – register here.

Leave a Reply