Mortgage Bank Acquisitions; Iowa's Cool TRID Grid; USDA Rural Housing Updates
I received this note from a veteran LO in a western state. "I was talking with a top-producing Realtor on broker tour this week. Unlike too many of his colleagues, he actually knew about TRID and we were talking about 8/1. 'Just another good reason to accept the cash offer,' is what he told me. How's that for consumer protection? Even the sellers have the potential to get hosed by this nonsense." Some people have a comment for everything - check out the comments at the bottom of this story about a Russian surgery who performed an appendectomy on himself. So much for Chuck Norris...
And in mortgage M&A (it isn't the first, won't be the last) mortgage lender and servicer Planet Home Lending announced that it has signed a definitive agreement to "acquire the employees and assets" related to California's HomeBridge Funding, the correspondent division of HomeBridge Financial Services. HomeBridge Funding offers delegated and non-delegated mortgage loan products to community banks, credit unions, national builders and independent mortgage banks. The deal includes a "technology platform." Planet Home announced it will hire the existing employees. For those playing along at home Planet Home Lending was founded in 2007.
Gateway Mortgage Group, a privately held mortgage company offering originations, servicing and correspondent lending, has announced that Lincoln Mortgage Company, formerly a Division of Gateway Mortgage Group, LLC, began operating under the Gateway Mortgage Group name effective yesterday. Lincoln Mortgage Company joined Gateway in early 2014, bringing with it three legacy offices in Wayne, Pa., Marlton, N.J., and Vineland, N.J., as well as a recently opened office in Philadelphia.
Depository banks don't want to be left behind, and, as usual, the last week saw several deals announced. In Tennessee (home of the Tri-State MBA conference) Pinnacle Bank ($6.0B) will acquire Magna Bank ($565mm) for about $83.4mm in cash (25%) and stock (75%) or roughly 1.5x tangible book. In Missouri ("Your Federal Flood Relief Tax Dollars at Work") Connections Bancshares will acquire Mainstreet Bank ($49mm). Simmons First National Bank ($4.6B, AR) will acquire wealth management firm Ozark Trust and Investment Corp. (MO) for about $20.7mm in cash and stock. Merchants Bank ($1.7B, VT) went across the border and will acquire Nuvo Bank & Trust Co. ($153mm, MA) for about $21.8mm in cash (25%) and stock (75%) or about 1.3x tangible book.
And there are branch-level changes. MVB Bank, Inc ($1.1B, WV) will acquire 2 branches in WV from Susquehanna Bank ($18.5B, PA) - the branches have about $69mm in deposits and $17mm in loans and the sale is part of a divestiture related to Susquehanna's merger with BB&T. South State Bank ($7.8B, SC) said it will consolidate or sell 14 branches over the coming quarters, as it seeks to improve efficiencies, drive organic growth and deploy excess liquidity.
Information is flying about TRID. Catch the wave! The Iowa Bankers Association put out an easy-to-read grid on the before and after rules and regulations.
Lenders continue to publish information. For example, CMG Financial Wholesale put out information in its March newsletter.
Over at STRATMOR, the esteemed Dr. Matt Lind tells me, based on their first PeerViews survey, which examined lenders' TILA-RESPA readiness and to which 111 lenders responded, that while most lenders appear to be on track to meet the August 1st TRID deadlines, 25% to 40% --- comprised mostly of independent mortgage banker ---- have not even considered important decisions and requirements; for example: post-closing repair procedures. Also, that participating lenders estimate, on average, that TRID compliance will cost roughly $160 per loan. Matt also told me that STRATMOR already has roughly 70 lender responses to the second PeerViews survey.
PeerViews is a small, fast-turnaround survey program designed to give senior mortgage executives a unique way to obtain specific qualitative mortgage industry information about: what senior executives at other companies think about hot topics, issues and significant new industry developments; and what actions they are considering, planning or have taken. The second PeerViews survey focuses on Outsourcing and addresses such questions as: How and why peer lenders are using or planning to use production outsource services providers? Are they trying to lower production costs, improve marketing and sales, reduce production risks and/or address other challenges they face? And what criteria do they use in selecting outsource vendors? Originally scheduled to close on April 30th, Matt tells me that the close date for the survey has been extended until May 8th, with results expected to be made available to participants about a week later. So, if you're a senior mortgage executive and interested in outsourcing, you can participate in this survey by clicking on the following link: STRATMOR PeerViews Outsourcing.
What have lenders and investors been up to lately regarding the USDA Rural Housing program? Let's play catch up on some relatively recent announcements. But lenders who offer the program tend to watch the USDA's website for news updates.
Mortgage Solutions Financial (MSF) announced it has expanded its relationship with Lenders One, joining as a Preferred Investor Partner. Lenders One members will receive single source access for Fannie, Freddie, FHA, VA or USDA loans and have delegated and non-delegated loan options with support from MSF. Additionally, MSF announced a risk management program for mortgage repurchases, offered as a complimentary benefit to Lenders One members through a partnership between MSF and CastleLine.
Nationstar, whose stock has really taken a tumble lately, has issued updates on the following topics, USDA - Verification or Mortgage, Conventional Underwriting, Income - Tax Transcripts Requirements using the 4506-T, overnight mailing address for borrower payments, available Markets/Geographic restrictions, customer service contact information for borrowers, as well as additional reminders. To download Nationstar's Correspondent Seller Guide update, click here.
Plaza Home Mortgage has published various article of interest including those pertaining to USDA products. Click on an individual link to view Plaza's information.
Sun West has added USDA Guideline Training Video to its repertoire providing easy access the underwriting guidelines for USDA Rural Development loan programs. This video covers general understanding of USDA guidelines and eligibility criteria of USDA RD Guaranteed Housing Loans.
According to research from TD Bank, a majority of Americans report that the value of their homes has increased within the past few years, meaning homeowners have more equity to borrow against. The big question as we approach the spring home buying season is - will these homeowners make the move? The trend so far has been to stay put. Many homeowners are deciding to stay in their homes and renovate rather than sell and buy a new home, which may stall the predicted growth of the housing market this year. However, if consumers are thinking about purchasing a new home this year, they should consider taking advantage of their increasing equity and current low interest rates. Move-up buyers also need to be aware that just because they are buying again doesn't disqualify them from many of the low-down payment financing options available in the marketplace.
While they may no longer be eligible for specific first-time home buyer products, move-up buyers can still take advantage of options with down payments as low as 3% provided they are within conforming loan amount ranges. In addition, a move-up buyer can even use FHA financing again provided they have paid off any prior FHA liens. On higher priced properties, we're seeing incredible activity for 80-10-10 Jumbo financing on properties in the $1.5 million price range for move-up buyers who want to make as low a down payment as possible.
Just to continue on this train of thought for another paragraph, remember that Zelman and Associates published their February Mortgage Originator Survey which revealed that purchase volume trends accelerated for the second month. Contact purchase applications increased 14 percent YoY, resulting in better than expected volume for 45 percent of survey contacts. The credit quality index decreased to 65.9, the lowest level since 2012 and the share of "boomerang" buyers slightly declined to 8 percent. Many lenders targeted marketing campaigns to increase awareness of FHA's recent premium cut and the GSEs' reintroduction of 97 percent LTV mortgages. To learn more, contact Ivy at ivy@zelmanassociates. com.
Yes, rates are gradually creeping higher - Tuesday had the 10-year up to 2.18%. No surprise as rates have been so low for so long and really couldn't go much lower. And our economy is doing pretty well. Regarding supply & demand, ThomsonReuters reported that, "MBS was decently situated for a modest tightening with supply holding in a recent lower pattern of roughly $1.5 billion per session set against yield based buying and solid Fed support (with the Fed buying about $1.5 billion using money from prepayments)."
Speaking of which, Carly A. wrote, "I heard our secondary marketing manager talking about current MBS pricing reflecting Fed purchases. How does he know who's buying and when?" Good question; on any given day there are two frequent conversations in most Secondary groups: (a) what's for lunch today?, and (b) who is moving the market? It used to be, good color on market activity came from broker/dealers who have eyes-on both sides of the trade. It still is, however, transparency is getting better. How much better? The Fed publishes their schedule of buying activity now.
This morning we've already had the MBA application index - a look at the collective numbers on 75% of the retail lenders out there. Apps fell 4.6% in the week ended May 1, echoing the previous week which was down 2.3%. Refinance applications were down 8.3% and purchase applications fell a more modest .8%. Is the bloom coming off the production rose?
We've also seen the best that ADP (Automatic Data Processing) has to offer: its Wednesday-before-Friday's-Nonfarm-Payrolls private employment data. At +169k, with a March revision downward, it was lower than expected. We've also had the preliminary first quarter Non-farm productivity and unit labor costs (-2.1% and +4.1% last, respectively, came in at -1.9%, labor +5.0%). Later the Treasury will tell us how much money it needs when it announces next week's May refunding: 3s/10s/30s ($64 billion expected). In the early going the 10-yr is at 2.20% and agency MBS prices are worse nearly .125.
Jobs and Announcements
In training & jobs news REMN Wholesale "continues to grow and expand market share across the country. A major part of their success has been preparing themselves and the brokers they work with for the future. As a part of their constant preparation, REMN recently brought on renovation lending specialist Damon Richardson to lead their weekly renovation lending training sessions. Yes, REMN is producing these weekly. This is on top of their free monthly TRID webinars designed to help prepare for the changes coming on August 1. And as REMN Wholesale continues to grow it continues to need underwriters in all time zones across the country. Know anyone? Have them send their resumes to REMN's Amanda Miele."
New American Funding, a national mortgage banker, is seeking an experienced Sales Manager for its Tempe, AZ call center in addition to expanding its retail sales branches nationally and its regional call centers in Tustin, CA, Tempe, AZ, Plano, TX, and Southfield, MI. With this expansion the company is seeking experienced and licensed loan officers for both its retail branches and its regional call centers. New American Funding is known for its direct marketing lead generation feeding its call centers with live inbound calls from direct mail, television, radio, billboards and more. Rated as one of America's Top 100 Mortgage Companies by Mortgage Executive Magazine the company is committed to its steady expansion reaching out to consumers nationwide. Please submit confidential resumes to recruiters@nafinc. com or call New American Funding at 877-478-5476