UDAAP and Title Webinars; Allied Found Guilty; Lender Rankings

News

Numbers can be deceiving.  U.S. Housing and Urban Development (HUD) Secretary Julián Castro announced that public housing developments in the U.S. will now be required to provide a smoke-free environment for their residents. Secretary Castro said HUD’s new
rule
 will provide resources and support to more than 3,100 Public
Housing Agencies (PHAs) to implement required smoke-free policies over the next
18 months.

In legal news du jour, since
this often helps shape the public’s opinion of our industry, a jury found
Allied Home Mortgage and CEO Jim C. Hodge liable for civil mortgage fraud, and awarded
the United States over $92 million in damages
.
They are, “liable for violating the False Claims Act and the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 in connection with
over a decade of fraudulent misconduct related to ALLIED’s participation in the
Federal Housing Administration mortgage insurance program.”

Moving on to the general
industry, many companies are in the middle of forecasting their 2017 volumes.
Is it, “Tell me where rates will be, and I’ll tell you where volumes will be!”?
I hope not. But people like volume lists and rankings, and it is very
informative to check on the top
25 residential lenders so far this year. The source most turn
to is Guy Cecala,
CEO and Publisher of Inside Mortgage Finance. IMF pieces together the results
of surveys turned in by companies that report their results in a survey where
lenders are asked to report their 1-4 family residential mortgage originations.
Wholesale lending, including loans closed by correspondents, is included. 

Sources include the IMF lender
survey
, bank, thrift and credit union call reports, SEC filings, company
earnings and agency MBS data. For the first 9 months of 2016 IMF produced its
overall top originator ranking, which counts all first lien mortgages closed
regardless of whether they are sourced from retail, direct to consumer (call
centers), broker or correspondent. (Separately, IMF does rankings by channel –
retail, broker and correspondent, as well as rankings by product type: Fannie,
Freddie, FHA, VA, jumbo, etc. – check with Guy for details.)

So how’s it going in 2016? My
untrained eye detected 16 of the
top 25 that are NOT banks. And you can also see, of those 16,
which are owned by venture capital or money management firms versus those that
are individual or employee-owned. Here you go: #1 Wells Fargo, Chase, Quicken
Loans, Bank of America, PennyMac, US Bank, Freedom Mortgage, PHH Mortgage,
Caliber Home Loans, #10 – loanDepot.com, Flagstar, Amerihome Mortgage, Citi,
SunTrust, Stearns Lending, Guaranteed Rate, United Wholesale, Nationstar,
BBT, #20 – Ditech Financial, Franklin American, Fairway Independent, Guild
Mortgage, PrimeLending, and #25 Pacific Union Financial.

And as we move into more of a
purchase lending market, congrats to Fairway Independent. HUD
data
 shows that for the month of October 2016 Fairway was the number one originator of FHA purchase
loans in the country. Fairway has been in the top 10 and top
5 most of the last 24 months, but congratulations on snagging the #1 spot
helping borrower’s purchases.

Speaking of the FHA program,
thank you to Jennifer W. who points out that the FHA isn’t taxpayer supported or funded – it runs entirely on
the insurance fund itself. “The FHA is the only government agency that operates
entirely from its self-generated income and costs the taxpayers nothing. The
proceeds from the mortgage insurance paid by the homeowners are captured in an
account that is used to operate the program entirely.”

It’s been a good year to be in
financial services. The nearly 6,000 banks the Federal Deposit Insurance Corp.
insures reported total third-quarter income of $45.6 billion, a $5.2 billion
jump over the same period the previous year. “The banking industry
reported another positive quarter,” FDIC Chairman Martin Gruenberg said.
To say the least.

Yet bank mergers and acquisitions keep on keepin’ on.
SNL reports that Through Nov. 15, there have been 220 deal announcements in the
banking sector in 2016. Just in the last week or so the industry learned that
in the Sunshine State CenterState Banks, Inc. has agreed to acquire Gateway
Financial Holdings of Florida, Inc. Capital One Financial ($383B, VA) will
acquire World’s Foremost Bank ($5.7B, NE) for about $200mm in cash. World’s
Foremost is the operator of Cabela’s cobranded credit card program and Cabela’s
in turn is being acquired by Bass Pro Group. Independent Bank ($5.7B, TX) will
acquire the parent company of Northstar Bank of Texas ($1.7B, TX) and Northstar
Bank of Colorado ($609mm, CO) for about $434mm in cash (3%) and stock (97%).
Centennial Bank ($9.8B, AR) will acquire The Bank of Commerce ($196mm, FL) for
$3.8mm in cash. Two-bank holding company, Peoples Independent Bancshares, Inc.
($279mm, AL) will acquire Horizon Bank ($96.2mm, AL) in cash. ACNB Bank ($1.2B,
PA) will acquire New Windsor State Bank ($311mm, MD) for about $33.3mm in cash
(15%) and stock (85%).

Shifting to the capital
markets
, a note about a paragraph I had in yesterday’s commentary regarding
nonprime securitization, and FirstKey Mortgage New Residential Investment
potentially issuing nonprime MBS deals backed by seasoned loans. The credit for
the information is due to IMF’s Brandon Ivey who
detailed the information. (“FirstKey Mortgage, an affiliate of Cerberus Capital
Management, is planning to issue the $550.28 million… New Residential
Investment is preparing New Residential Mortgage Loan Trust 2016-4, a $263.91
million deal…”)

And Matt Scully reports that
“Lone Star Funds is preparing to sell bonds backed by home loans to borrowers
with tarnished credit for the third time this year…Caliber Home
Loans Inc., a Lone Star unit, filed papers with the Securities and Exchange Commission
on Tuesday in connection with the new mortgage-backed bond offering.”

Rates
went up
– again – Wednesday after the ADP employment numbers suggested – again
– that the employment picture in the United States is pretty rosy. Unless one
needs hundreds of thousands of road pavers, in which its going to be tough. Steven Mnuchin is set to be Donald
Trump’s nominee for Treasury Secretary and he said that the priorities for the
new administration will be corporate tax reform and deregulation. He will consider
issuing debt with maturities longer than 30 years.

We have another spate of
economic news today. The stuff just doesn’t end! We’ve already had the November
Challenger Job Cuts (-27k, the 2nd lowest level in 15 years!) and Initial
Jobless Claims (+17k to 268k, best streak since the 1970s). Coming up are
October Construction Spending and the November ISM Manufacturing Index.

Keep in mind that mortgage rates are set by supply and
demand, not by the government. That’s the reason that investors are very tuned
in to applications, prepayments, how much the Fed and banks are buying every
week, and so on. There is no one out there saying volumes are going up, which
means that if demand continues to be strong, well agency MBS prices should go
up, and rates should go down – relative to Treasuries. Like yesterday when the
10-year worsened .5 in price (closing at 2.37%) but MBS prices only dropped by
about .250.

After the first round of
economic news this morning the
10-year is yielding 2.41% with agency MBS prices worse .125 compared to last
night.

Training parties… tis the season!

“Work hard, play harder! NMP’s Holiday Networking Parties kick off this coming Tuesday, December 6 in Irvine, CA. The party continues on Thursday, December 8 in Fort Lauderdale, FL, then they wrap things up on Thursday, December 15 in Long Island, NY. If you are local to one of these areas, these parties are the can’t-miss events of the holiday season. There will be free workshops, music, food, prizes and much more. You can register for one of these parties here; just click on the party you would like to attend. The events are free for anyone in the mortgage industry, just enter code CHRISMAN in the NMLS number field of the registration form. Remember, the only thing better than a closed loan is a free party!

What lies ahead in 2017 for the mortgage industry? Stay ahead of industry trends in this free exclusive Vantage Production webinar with Sue Woodard, president/CEO of Vantage Production, and…me. The outlook will cover, “The Political Arena and What It Means for the Industry, When the Fed meets December 13 and 14 – then what? The Digital Mortgage Movement, and Housing Market Trends.”Sign up here

Franklin American just published its December Wholesale “Monthly Customer Training Calendar.” This month’s calendar offers a variety of training opportunities such as “Analyzing Appraisals”, “Selling to Millennials”, “Goal Setting 2017”, “Self-Employed Borrowers” and “Detecting and Avoiding Fraud Schemes”, to name a few. To access our Wholesale “Monthly Customer Training Calendar” click here (be sure to scroll to the December calendar to view our new courses).

Celebrate 2016 with the Colorado Association of Mortgage Professionals for its annual holiday party and dinner on Friday December 9th from 4:30pm-8:30pm at C.B Potts in the tech center. Beginning with the last board meeting of 2016, happy hour will follow with an open bar and appetizers and its private holiday dinner buffet at 6PM. The presentation will include an annual overview from our President, a government affairs committee chair update, and an awards ceremony recognizing the outstanding service of several the organization’s volunteers and affiliates.  

October Research’s Dodd Frank Update publication is offering a 90 minute UDAAP webinar on Wednesday, Dec. 14 from 2-3PM ET. Designed to help banks, mortgage lenders and financial services providers better understand, identify and mitigate potential UDAAP risks. Registration is open for October Research’s “Decoding UDAAP” webinar.

With some lenders not requiring any specific vendor oversight requirements to others mandating third-party certifications, it is essential title agents have useful tools to evaluate where they stand regarding compliance. ALTA’s next free Title Topics webinar Evolution of ALTA’s Best Practices will be held on Thursday, Dec. 15, from 3-4PM ET. After registering, you will receive a confirmation email containing information about joining the webinar. It’s recommended you perform a system check before logging on. You may need to download software to access the webinar.

Jobs and Announcements

Prospect Mortgage recently announced the hiring of 23 loan officers in the first 15 days following the signing of a definitive agreement under which HomeBridge Financial Services will purchase the Company’s operating assets. Chief Talent Officer Dan Nieto, who leads Prospect’s recruiting efforts, summed up why LOs continue to join Prospect. “We’ve had a successful hiring year because we have so many tools to offer Originators to grow their purchase business. Since the Nov. 1 announcement, there’s even more excitement in the market place about joining our Company.” Interested candidates can send their confidential resumes to Dan Nieto.

Established in 2008, “New Penn Financial quickly became a major player in today’s mortgage marketplace, gaining a national presence for all the right reasons- remarkable customer service, healthy lending practices, and strong relationships with industry partners. As part of the Shellpoint Partners family, we offer a wide range of loan programs. New Penn has been recognized by industry publications (Scotsman Guide) and general business organizations (Inc. 500/5000 lists, Philadelphia 100) for its growth and success. Our own employees voted New Penn to Mortgage Executive Magazine’s List of 50 Best Companies to Work For. We are currently sourcing proven and experienced Wholesale Account Executives nationwide for both Inside and Outside opportunities! Contact Aubrie Cusumano if you are interested in joining company that cares about your success and will help take your career to the next level.”

A national independent mortgage lender is hiring two new positions to help build its portfolio of loan solutions. The company is looking for a Renovation Products Program Manager, who will responsible for devising and implementing strategies to increase the company’s renovation loan business. The company is also hiring a Reverse Products Program Manager, who will be responsible for developing and executing tactics to increase the company’s reverse mortgage business. Both positions will be heavily involved in assisting originators across the country in utilizing these products to meet their homebuyers’ specific lending needs. Please email me directly, including your resume, if you are interested in either of these positions and specify the opportunity.

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