Using HMDA as a Business Tool; Goldman Settlement, Lehman, and State-Level Updates
I've spent some time going through airport security last week & this week with time in Texas, Northern California, Colorado, and now Ft. Lauderdale for a few days. Speaking of showing your ID, here is a story bound to thrill some & scare others: the story of a man who passed through airport security and boarded an airplane by using a chip implanted in his hand. Dogs & cats - why not humans? It was only a matter of time, right? May-as-well put my credit card on there too. Speaking of verifying who you say you are, the US is starting to require title companies to identify the people who pay cash for properties in NYC and Miami.
Some say that legal news will continue to be a part of residential lending forever. I received this note from Josh Rosenthal with Medlin & Hargrave. "I wanted to let you know that LBHI ("Lehman") is beginning to go after entities alleged to be successors in interest to lenders and brokers that Lehman has indemnity claims against related to loans it indemnified Fannie Mae for in 2014. Lehman has made some recent moves to drag entities into its collection efforts by claiming they are successors under applicable state law to the lenders and broker that originally contracted with Lehman. While that may be true as to some of the entities noted in Lehman's moving papers, we are experiencing claims against entities that, under no legally cognizable theory, could be viewed as a successor such that it would be responsible to indemnify Lehman's loss, such as entities wherein all that occurred was the hiring of loan officers from the now-defunct company and the same physical address. Clearly, Lehman is simply looking for extra 'pockets' and is hoping that the inconvenience associated with mediating or litigating in a distant forum might lead to an alleged successor's payment of a settlement simply to avoid litigation costs." Thanks for the note Josh!
Certainly all is not cheerful among law firms: Reed Smith has laid off 45 lawyers across its offices in the United States, Europe and the Middle East, along with an unidentified number of staff.
And settlements, big and small, continue. The latest one to grab headlines comes from Goldman Sachs Group Inc. as it agreed to settle a U.S. probe into its handling of mortgage-backed securities for about $5.1 billion, cutting fourth-quarter profit by about $1.5 billion and closing out a year of record legal and litigation costs. No one likes to be probed by the regulators! Plenty of entities are named: the Department of Justice and New York and Illinois attorneys general, the National Credit Union Administration, and the Federal Home Loan Banks of Chicago and Seattle.
Some markets see more all cash buyers than others. The Treasury Department knows that, and also knows that some portion of the cash for some of the deals comes from illegally gained sources. And thus we find new government regulations, viewed as a first step, which will force all-cash buyers in Miami and Manhattan to disclose their identities to the U.S. government. The Treasury Department's new rules require certain title companies (namely First American, Fidelity National, Stewart and Old Republic, known as the 'Big Four' underwriters) to disclose to the government the names of buyers who pay all cash for properties over $1 million in Miami and over $3 million in Manhattan. Buyer names must be disclosed if their ownership of a property is at least 25%, according to the rules. The temporary regulations go into effect March 1 and end August 27. But those doing the stashing are pretty clever, and critics say that illegitimate money may be diverted to markets outside the requirements, such as Los Angeles-at least for now.
And real estate agents know that Chinese buyers are pouring into US real estate. In 2015, their $30 billion in purchases will equal all purchases by Canadians, Indians, Mexicans, and the British, the next four most popular nationalities. Chinese buyers also account for the most number of transactions with 16% of foreign purchases, followed by Canadians at 14%. The most popular state for Chinese purchases is California.
(Speaking of China and going off topic for a moment, its cement production is up 3,000% since 1980. In fact, per National Geographic, since 2012 China has made more cement than the U.S. has since 1900!)
State news?
Borrowers in New Mexico are being warned about how "Know Before You Owe" is going to slow down their loans.
MBAC spread the word that, "We have received further clarification from the NCCOB on MLO Licensing in North Carolina. The NCCOB has determined that the expiration dates of pre-licensing and national testing will be 3 and 5 years respectively based on 12/31/15 and not when pre-education or testing actually occurred. Here is a copy of the communication received from Commissioner Ray Grace.
Oregon has updated its recordkeeping requirements to accommodate TRID. In addition to the books and record requirements, a mortgage banker or broker that takes an application for a residential mortgage transaction must prepare and maintain a copy of each executed loan application form, including the unique identifier of the mortgage loan originator that took the application, a copy of each executed fee agreement and a copy of the borrower acknowledged statement that a loan interest rate will float or a copy of the lock agreement. Other records that must be maintained include a copy of all correspondence with the borrower in writing or a format easily converted to writing, a copy of any documents noting approval or denial of a borrower's mortgage application, a copy of all documents submitted by a borrower, which include the authorization to release credit and the credit report. Mortgage bankers and brokers who fund a residential mortgage transaction must keep records of all documentation used to make a loan decision, a copy of the executed note and trust deed and a copy of the statement that notifies the borrower that loan documents associated with the transaction will be in English and advises the borrower to obtain assistance with any translations.
Last month, the Tennessee Supreme Court at Knoxville agreed with Hamilton County's judgement in favor of Ditto and holding that MERs' due process rights under the U.S. Constitution were not violated by the County's failure to notify MERS of a tax sale. The Tennessee Supreme Court affirmed that MERS did not have a constitutionally protected property right of its own, sufficient to entitle it to notice under the Due Process Clause although the court did acknowledge MERS' authority to act as an agent. MERS members are encouraged to review all Legal Filings that they receive related to Tennessee properties. MERS member should also notify MERSCORP Holdings, Inc., when they are aware of a lack of notice to MERS even for a tax sale.
Effective December 24, 2015 the Montana Department of Administration adopted the November proposed amendments concerning record keeping requirements for mortgage brokers and mortgage lenders and reporting forms for mortgage servicers. In addition to the existing record keeping requirements of 2.59.1710 and 2.59.1724, both mortgage brokers and mortgage lenders must maintain signed copies of the Loan Estimate and Closing Disclosure documents as required by the TILA-RESPA Integrated Disclosure rule (TRID). Although borrower signatures are optional under the federal TRID requirements, to comply with the Montana record keeping requirements the copies of the Loan Estimate and Closing Disclosure be signed and dated by the borrower.
With all of this going on, who can focus on rates? Still, they matter to some, and the yield curve steepened yesterday as longer-dated Treasuries took selling pressure (prices went down and rates went up). Why did that happen? I heard one person say it was the "unwinding of flight-to-quality long positions." Another trader told me that the market had no reason to rally. Yes, sometimes we just don't know. But we do know that the $13 billion 30-year Treasury auction met a warm welcome and jobless claims edged higher although remaining near historically low levels.
Today we've had our share of potentially market-moving data: December Retail Sales and Retail Sales ex-auto (-.1%, -.1% respectively), the December Producer Price Index and Core PPI (-.2%, +.1%), and the January Empire Manufacturing numbers (down 15 to -19 - very bad). Ahead of us are December's Industrial Production and Capacity Utilization duo and the January Michigan Sentiment figure. We saw a 2.10% close on the 10-year Thursday and we sitting around 2.00% with agency MBS prices better .375-.50.
Jobs and Announcements
In job news Stonegate Mortgage is on the move and growing and is seeking talented mortgage professionals for TPO Account Executive positions with the unique opportunity to sell products in all three TPO channels - broker, non-delegated and correspondent (including bulk mandatory), Mortgage Advisors for distributed retail and direct-to-consumer lending, and underwriters across the country. As a publicly-traded company (NYSE:SGM) Stonegate Mortgage "has been committed to making the dream of homeownership a reality and providing its associates the resources they need to succeed." Qualified candidates should email their resumes to Talent Acquisition Specialist Adrienne Camarata.
Congratulations are due to Bob Tyson who has re-joined NFM Lending as its Chief Operating Officer/Chief Administrative Officer (COO/CAO). In his new role, Bob will be responsible for managing all operational aspects, capital markets, and administrative functions of the company. He will provide the vision, leadership, and strategic direction necessary to ensure financial strength and operating efficiency. Prior to re-joining NFM Lending, Bob worked as Chief Operating Officer at CMG Financial. David Silverman, CEO, said, "His responsibilities and accomplishments at CMG will help guide NFM to a whole new level in the Industry. Bob's knowledge of the GSEs, experience in servicing and operations, and strong leadership abilities will no doubt be a crucial piece in the company's growth." Founded in 1998, NFM Lending is a residential mortgage lending company currently licensed in 27 states across the U.S. For more information click here, or write to pr@nfmlending.com.
In wholesale news MB Financial Bank is currently seeking qualified Account Executives in the following areas: Dallas, San Antonio/Austin, Minnesota, Wisconsin, and Tampa & South Florida. At MB, "AEs fund significantly more loans and make more income per month on average compared to peers,' per an industry survey. AEs, who believe they are funding fewer loans per month than they are capable of funding, and are looking to grow their business, should contact Buddy Dantin, SVP Regional Sales Manager (504.453.4961) for opportunities in Dallas, Texas; San Antonio/Austin, Texas, Minnesota, and Wisconsin markets; and Tim Bell, SVP Regional Sales Manager (404.316.0459) for South Florida and Tampa, Florida. 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
This from Tyler House at Richey May, "There has been a lot written of late about the increased reporting requirements under HMDA as set forth by the CFPB, but very little has been said about the potentially significant benefits of using the HMDA data as a business intelligence tool. We have worked with a number of clients recently that have used this data to influence business decisions regarding where to open or recruit new branches, or even to do budgeting and forecasting as they expand into new markets. The data allows users to drill down on, among other things, product mix, loan purpose, loan size, and borrower demographics by lender or financial institution within specific markets. Access to the raw data is available to the public for free on the FFIEC's website, but the time and cost of utilizing internal staff to mine the data and develop meaningful reports is often greater than the cost of buying customized reports from a 3rd party." Anyone interested in obtaining market data reports for specific MSAs or counties please contact Tyler House at Richey May.
And congrats to Terry Rouch who the HUD Federal Credit Union announced was now on its Supervisory Committee.
"Looking to improve your business? Join Home Point Financial on a complimentary webinar Monday, January 18 at 2pm EST with special guest speaker Barry Habib. During the call, Barry will cover a 2016 Industry Forecast, help you negotiate with your customers by showing them your value, and provide sales ideas that will improve your batting average in 2016. Click here to register."
AllRegs spread the word that its Academy February training available as follows: Appraisal Review - The Next Level - begins February 2, Intermediate FHA Underwriting - begins February 3, Servicing FHA Loans - begins February 4, and Underwriting VA Loans - begins February 4.
If you are in Michigan, LOs, sales managers, and account reps could sign up now for the March 3rd MMLA Sales Marketing Symposium.