SEC Probe of Bankrate; AmeriSave & CertusBank; Impac, Macquarie, and Non-QM
How can we move forward as an industry when we can't even agree on how to pronounce the acronym for Truth-in-Lending? I have heard "TILA" pronounced "tee-luh" and also pronounced "till-uh." Not only that, but I have seen "RESPA-TILA" and "TILA-RESPA". I am sure the boys and girls at the Federal Reserve know how, especially as they'll be hosting a webinar on how the Integrated Rule will go into effect next August. "Join us on Wednesday, October 1 at 2PM EDT for a 90 minute webinar to answer some frequently asked questions about the TILA-RESPA Integrated Disclosure rule. This will be the third in a series of webinars to address the new rule as creditors, mortgage brokers, settlement agents, software developers, and other stakeholders work to implement it over the next year. In this session, we'll address the loan estimate form with a focus on questions raised by technology vendors."
The CFO of Bankrate has resigned and the company said its financial statements for 2011 to 2013 should not be relied upon, amid an examination by the SEC into improper accounting of accruals and expenses.
AmeriSave Mortgage Corporation has issued a Letter of Intent to CertusBank, N.A. to acquire a large portion of its mortgage division, including the majority of teammates and facilities. "AmeriSave has been seeking a strong mortgage originator for possible acquisition and this agreement will allow the company to expand its footprint by establishing a traditional retail mortgage origination channel to complement its online origination platform. CertusBank, headquartered in Greenville, S.C., has recently undergone a strategic transition toward a more traditional community banking business model and identified mortgage as an area with opportunity for significant changes. AmeriSave's acquisition will include mortgage offices in Georgia, South Carolina and North Carolina. These branches currently employ approximately 40 loan officers."
Does everyone deserve a home loan? Ask anyone in the industry, and the answer will be, "Of course not." But that doesn't stop lenders from trying to figure out how to lend to low income borrowers. The latest effort comes from Bank of America. Here's the story.
In other interesting news, Jody Shenn with Bloomberg reports that "Impac will exclusively sell new 'Alternative QM Program' originations to Macquarie Group, according to statement today. The loans are designed to provide home financing options for high-quality borrowers just outside of current government- sponsored guidelines. Products include Alt-QM Jumbo, Alt-QM Agency, Alt-QM Income, and Alt-QM Investor." These products were announced a couple months back, and advertise DTIs up to 50%, credit scores for all AltQM Products as low as 680, 5/1, 7/1 and 10/1 ARMs, primary, second home and investment properties, and LTVs up to 80% for primary residences. "We think this market is very similar to what we saw in 1995 when we first created Alt-A loans, and subsequently originated to $90 billion in that product from 1995-2007," Bill Ashmore, president of Impac Mortgage, said. Ying Shen and Richard Mele, research analysts with Deutsche Bank, estimate that there is currently $50 billion in non-QM volume origination a year - that's about 5% of current volumes.
"Rob, have you heard of brokers and borrowers claiming their loan is for a non-owner occupied property just to avoid the QM restrictions?" Yes I have. It is a flip from the past, and some borrowers are saying their home is a non-owner, are willing to take the (roughly) 1.5 point hit just to avoid the QM box. You can't make this stuff up...
But as the months go by, there is no question that compliance and regulatory burdens are impacting lenders' ability and desire to lend, which in turn impacts lending, which in turn impacts borrowers. Some readers might be interested in the following white paper from Tom Showalter at Digital Risk regarding the increasing regulatory headwinds facing lenders.
(Speaking of regulations and regulators, when the new stuff starts to die down, they seem happy to continue on old cases. Regulators continue to unwind Lehman Brothers Holdings six years after its collapse. About $88.8 billion is expected be recovered for creditors owed about $341 billion, with Lehman's parent company and its units so far paying out $57.1 billion to unsecured creditors, excluding Lehman affiliates.)
Everyone wants our opinions these days. (I can't check out of a hotel without receiving an e-mail asking how my stay went.) But the Collingwood Group believes your opinion matters and "we want to bring it to the people that matter. The monthly Collingwood Group Lender Sentiment Survey measures business confidence in our industry and the impact of regulation. As a participant you will get inside information from our survey. Be assured that your privacy is important to us and e-mail addresses and other contact information that you provide will be kept strictly confidential." Here is a link to the survey.
Some random lender updates...
Mountain West Financial Wholesale has enhanced its flipping policy. Pricing adjustment for conventional and government flip transactions will be reduced as well on locks taken on or after September 1st.
New Leaf Wholesale has updated credit requirements per Fannie Mae announcement, guidelines updates for conventional and high balance products. These updates include extenuating circumstances, bankruptcy, foreclosure, Short Sale, Pre-Foreclosure, Deed-in-Lieu, Charged Off Mortgage Debt, and Restructured Debt and Modified Mortgages.
As a reminder, Sun West Mortgage spread the word that effective for FHA case numbers assigned on or after 08/04/2014, Sun West is accepting HECM Loans with non-borrowing spouse. HECM Loans with non-borrowing spouse must comply with all FHA's requirements as specified in the Mortgagee Letter 2014-07.
FAMC Wholesale website updates regarding its EMB program were completed on September 1st. The complete guidelines for EMB delivery requirements are available for review. Power of Attorney guidelines have been updated to align with agency requirements located in the loan documentation guidelines, and clarification regarding electronic signature policy on USDA loans has been revised.
HomeBridge Wholesale is offering up an 85% LTV Cash Out with 580 FICO.
As noted above, Impac Mortgage Wholesale is offering AltQM Jumbo Loans with DTIs up to 50%. Purchase or Refi Loans up to $3M, Min 680 FICO, 5/1, 7/1, 10/1 ARMs, I/O allowed (in applicable states), and LTVs up to 80%.
Who isn't concerned with wage growth nowadays? It's an important issue, and as economists have been pointing out, wages and salaries have been lagging behind for quite some time (even with recent acceleration it is still below what it should be in the business cycle). This is a problem. Wells Fargo's Economics Group writes, "The labor market recovery has shifted into a higher gear in recent months, but concerns over job quality and weak wage growth linger. Wage growth has improved over the past year but, at 2.3 percent. Could the composition of job gains and wage increases be holding back aggregate wage rates?" Ultimately, lagged effects of the labor market weakness between 2007 and 2009 have contributed to growth in average hourly earnings. Specifically, some employers may have restrained wage growth in recent years to make up for the wage cuts they were reluctant to implement during the depths during that time. Joining with many economic papers I have read as of late, Wells concludes with, "We expect to see wage growth pick up gradually over the next year, which should reassure the more dovish members of the FOMC that the labor market is indeed tightening. However, unless wages jump unexpectedly in the next few months, which we do not expect, we believe that the Fed will not feel compelled to raise rates until mid-2015."
The news yesterday consisted of Industrial Production, which fell for the first time since January, and Capacity Utilization (which also fell). The report showed industrial production softening after strong gains during the spring. July's increase was revised down to 0.2% from 0.4%. We also noticed the Empire State Manufacturing Survey which shot higher. The 10-year Treasury note was marked higher by 6+/32, closing at 2.59 versus Friday's 2.61% close. Some of this was due to the weak numbers, some due to the increased risk aversion ahead of the Fed announcement tomorrow.
Inflation has not been a problem for years. (Eventually it will be, and all those "experts" warning us of inflation will be "right".) Today we had the Producer Price Index numbers, measuring inflation at the producer level - they were unchanged on the headline number. For numbers, since most folks in this biz are quantitative, we had a 2.61% close on Friday on the 10-yr., Monday was 2.59%, before & after the PPI numbers we are at 2.56%; agency MBS prices are better about .125 versus Monday's closing levels.
Jobs and Announcements
For jobs today...MB Financial Bank, formerly Cole Taylor Mortgage, is currently seeking qualified Account Executives interested in increasing their monthly loan closings. "At MB, the average AE closes 55+ loans per month in Wholesale and Mini-Correspondent production - something that is uncommon in other companies of that size. Account Executives who are looking to close significantly more business should contact Dan Ervin, Mortgage GSVP Director of Production. MB Financial Inc. is the Chicago-based holding company for MB Financial Bank, N.A., which has approximately $15 billion in assets and a more than one hundred year history of building deep and lasting relationships with middle-market companies and individuals. Equal Housing Lender and Member FDIC. NMLS#401467
Congrats to Michael Sheffield. Allied Mortgage Group, a leading wholesale mortgage banker on the east coast, has announced his addition to the wholesale division as National Sales Manager and the increase in AE hiring up and down the East Coast. "Mike has built a reputation on providing great service to wholesale clients for over 15 years," said Ken Turner, President of Wholesale Lending. "I joined Allied Mortgage Group because of their deep industry experience, solid reputation and commitment to wholesale lending. Our goal is to build relationships one at a time and provide the best service available. Allied Mortgage Group has been serving wholesale clients for more than 20 years and I am excited to be part of this team." Allied Mortgage Group is growing and is currently seeking experienced Wholesale Account Executives in NJ, CT, MA, NC, SC, GA & FL. Send confidential inquires to Michael Sheffield. Allied Mortgage Group has been serving mortgage brokers and financial institutions for over 20 years and is licensed in 28 states. For more information on wholesale lending visit GoAllied.
On the retail side, you have seen iServe Residential Lending mentioned previously by me over the years. In fact, you may recall that I recently participated in a panel discussion with iServe on VA financing. iServe is a national direct lender licensed in 23 states. "With a complete product menu, a knowledgeable support staff and a robust marketing/CRM platform, iServe continues to look for originators and new branches in key markets throughout the country. If your business model is referral based with Realtors or other referral partners, iServe understands and embraces the need for best in class service with creative marketing tools to support your business relationships." For the Western US, contact Allen Friedman or Rick Trew in the East for additional information. They have a presentation that can be emailed to you that gives some impressive highlights on the company. "When we talk about retention, the support of sales teams, and overall value of the client, iServe is one of the leaders of the pack. I would urge you to make contact."
And in new product news, "Western Bancorp, a premier California lender specializing in jumbo loans and built on a tradition of product innovation designed for the California market, announced today two new, exciting programs to drive increased production for its clients. The expansion of the Newport Jumbo ARM program allows LTV's of 89.9% with NO MI. Purchase / Rate and Term refinance transactions to $1.5 million. Western also introduces an aggressively priced High Balance program to compete directly with Fannie Mae's standard 30 year fixed product. Learn more about Western Bancorp's Newport Jumbo ARM, High Balance Program and the many other programs designed to help wholesale brokers provide more options for their borrowers at ask@westernbancorp.com. AEs looking to join a team focused on Technology, Innovation and Product Development visit our career site."