Implications of Wells’ Penalty; FDIC and TPO Lending; Commercial and Fin-Tech Webinars
There is only one state that has 1 syllable, but there are 30 days in September. And this month is full of wacky “days” such as international Talk Like a Pirate Day (19th), and national Play-Doh day (16th). Along those lines, there are 7 days for “Unmarried and Single Americans Week” which takes place in the 3rd full week of September (18-24… coincidentally September 18 is National Wife Day). In terms of lending demographics, there are 109 million unmarried people in America 18 and older which makes up 45% of the total number of residents 18 and over. 47% of those people are women, the other 53% are men. The number of people who lived alone in 2015? 35 million, or 28 percent of all households, up from 17 percent in 1970.
The industry continues to digest the Wells Fargo penalty news, and wonder about its implications. After all, if Wells supposedly had the best compliance system going, and this was able to happen, what chance do other companies have in stopping what may be happening within their corporation? Wells stepped in this morning to eliminate, starting in January, of the retail product sales goals for its bankers.
Jonathan Foxx penned, "Wells Fargo, a Predator's Tale" in Mortgage Compliance Forum.
And this came from a national legal authority. "For me, this Wells thing is a watershed moment. My observation (based largely on the mortgage group) is that Wells probably has the most sophisticated compliance team and compliance/risk management structure in the business. So, compliance and risk management pro's like me must all be looking at what happened with jaws on the floor. What happened to the risk management 'lines of defense?!!' There is just no way that Wells wasn't getting thousands of calls from consumers who were charged fees on accounts they never opened. Customer service had to know about all the complaints. Quality control in their account opening process had to know what was going on in the documentation. HR or whoever paid the bonuses had to know there was inflated reports and the terminations because of that. Compliance had to know. Risk management had to know. Upper management had to know.
"If this was driven solely by lower level employees seeking compensation bonuses, I could see it happening for a couple months in an isolated branch or region or two, but then the feedback loop closes, controls are implemented and the faucet of problems gets shut down. Apparently, however, this thing went on for 2 or 3 years involving almost 2 million accounts and 5,300 employees fired over the same period! I'm just totally baffled how that can happen without either: (1) incompetent management and failure of compliance systems (again, virtually impossible to my knowledge), (2) top level complicity of risk and executive managers (perhaps to bolster cross sell numbers) and Wall Street's stock valuations (the fear of SARBOX and whistleblowers ought to prevent that), or (3) the greatest confirmation example in history that some banks have become just too big to manage notwithstanding the most sophisticated compliance and risk management resources available today (and the scariest new regulators designed to prevent such problems).
"None of the options above are good for Wells' top brass, but I think the problem is most likely #3 (#2 is possible, just hard to believe). If there is a better option, I'd like to hear it. I doubt many policymakers (or shareholders of big banks) today have the stomach to deal with the consequences of my conclusion either (who wants to revisit TBTF and the efficacy of our new consumer regulator?). For me, however, this was truly insightful and #3 may explain why CFPB seemed content to walk away just with the consumer redress and no scalps. Like Javert in Les Miserables, the jailor's survival depends on the criminal."
While were on banking and regulators, the Federal Deposit Insurance Corporation (FDIC) is extending the comment period for proposed guidance on third-party lending. Comments on the proposed guidance, which was published on July 29, now must be received on or before October 27. The 45-day extension was made in response to requests from interested parties who asked for additional time to consider the proposal. The proposed third-party lending guidance outlines the risks that may be associated with third-party lending as well as the expectations for a risk-management program, supervisory considerations, and examination procedures related to third-party lending. Comments should be sent to thirdpartylending@fdic.gov and will be posted on the FDIC's website here.
Stocks and bonds both rallied Monday, and thus interest rates went back down slightly. The reason? Who knows?! Dovish remarks from Fed Governor Brainard? "To the extent that the effect on inflation of further gradual tightening in labor market conditions is likely to be moderate and gradual, the case to tighten policy preemptively is less compelling." Atlanta Fed President Lockhart, who does not vote on the FOMC until 2018, said that the data seriously warrant discussion of raising rates. For something more concrete, all the Treasury supply that hit the market was soaked up without too much trouble.
Today for thrills and chills we have...a $12 billion 30-year Treasury auction, along with some short-term maturity sales that generally don't impact mortgage rates. Yesterday agency mortgage-backed securitiesclosed "higher and tighter" led by higher coupons, and GNIIs in particular.
We closed Monday with the 10-year at 1.67% - the same as Friday - but 5-year T-Notes and MBS prices were better about .125. Here this morning in the early going, without much scheduled news overnight or ahead of us today, the 10-year is hovering around 1.66% with agency MBS prices a shade better.
Free webinars coming up? Yes, there are.
This week the folks at National Mortgage Professional Magazine and Silver Hill Funding will show you how adding a profitable commercial mortgage division can be easy. Join them on Thursday, September 15th at 2PM EDT for a 60 minute complimentary webinar where commercial mortgage experts Ski Swiatkowski and Mike Boggiano show a simple paint by number approach on how to source leads, market, originate and close profitable commercial mortgages. In this webinar they'll reveal the top marketing channels and referral sources, how to optimize your presence on LinkedIn and other social networks and how create your multi-pronged marketing strategy. Reserve your complimentary space here.
There certainly has been no shortage of new technology entrants into mortgage lending. Join the Maxwell CEO as he hosts an exciting panel discussion with the former EVP Mortgages of Wells Fargo and now Founder and CEO of Varo Money and the Founder and CEO of Morty. The fast-paced session will provide an overview of the new tech-driven mortgage lenders in Silicon Valley and New York and how originators and branch managers can build a business to compete with these well-funded, determined competitors. Register for the 30-minute webinar: Digital Mortgage Lenders & the Battle for Borrowers to be held on Monday, September 26 from 12:00PM to 12:30PM Pacific time (replays will be available for registered guests). You'll walk away informed about the new digital lenders and tangible steps you can take as a loan officer or branch manager to combat the threat. Register your spot at the webinar and get ready to win!
Jobs and Announcements
Due to continued growth Network Capital, a direct retail lender, is interviewing candidates for an Operations Manager. The Operations manager should have experience with government programs, fast paced high-volume direct to consumer environment, and will report directly to the CEO; the operations manager should either live near, or prepare to relocate to Irvine CA. Network Capital has been in business since 2002, licensed in 26 states and has already funded over $1billion in 2016. "We are a highly technologically-advanced & automated company with everything being top of the line. We use Encompass but our team of in-house developers has made it like it is on steroids. If you google Network Capital and 'see inside' our Irvine offices, I think you'll be impressed. Located in Irvine, CA, we've been rated as one of the Best Companies to work for by the Orange County Business Journal for the past 4 years and the INC 500/5000 Magazine Honor Roll award for fastest growing companies for 5 consecutive years. We also produce 'The Mortgage Radio Show' with 4 million listeners a week." Interested parties should contact Janelle Johnson.
An entrepreneurial bank and mortgage production division is looking for a Mortgage Compliance Manager to drive the Mortgage Compliance Program as well HMDA and the Fair Lending (FL) Monitoring Program and will assist in ensuring the bank complies with various lending-related state and federal regulatory requirements as well as bank designated policies, procedures, and practices. Required: Bachelor's Degree and 7-10 years of progressive mortgage compliance experience. To submit your resume and read the full job description, please visit this site.
Ditech Wholesale is launching and is hiring talented experienced Account Executives in key markets across the country. "Because of our well capitalized position, we are able to provide loans that serve a variety of scenarios. We serve our clients with the highest compliance standards while ensuring a great customer experience. Our technology empowers Brokers and supports Account Executive in creating and building strong business relationships. Our leadership has proven success in strategically navigating through market volatility increasing our market share year over year. We are also looking to hire Underwriters, Processors and Client Managers. In addition to a $2,000 signing bonuses, we offer: Competitive Pay, Performance-driven Incentive Plans, Professional and Respectful Environment. Fort Washington, PA, Tempe, AZ, St. Paul, MN and Jacksonville, FL locations. Contact us TODAY, if you are ready to be a catalyst for a positive change for our customers, our partners and our company?" You can also contact Owen Welch.
Richey May & Co., the leading certified public accounting firm serving the mortgage industry, recently welcomed Seth Cohen as Director of Business Development for the firm's Mortgage Banking niche practice. Seth has deep experience in the industry, having worked at Structured Portfolio Management, Bank of America, Fannie Mae and KPMG. In his role as Director of Business Development at Richey May, he will identify and develop new client relationships with companies who would benefit from the firm's mortgage industry specialization and value-added services.
Assurance Financial continues to grow and is seeking experienced mortgage loan originators and branch managers to continue selectively expanding its footprint. "Assurance has a solid reputation for closing loans on time. It's what we do. Our back office supports its mortgage loan originators and branch managers so they can focus on originating more new loans rather than worrying about closing their pipeline," explains Sales Recruiting Manager Paul M. Peters, CMB. The company is selectively looking to hire great people in good markets in Arizona, Colorado, New Mexico, Texas, Oklahoma, Arkansas, Louisiana, Mississippi, Tennessee, Alabama, Ohio, Virginia, West Virginia, North Carolina, South Carolina, Georgia, and Florida. For more information, contact Paul Peters, CMB at 225-239-7948 or visitlendtheway.com/careers.
In personnel news, congrats to Carmel York who has been promoted to SVP, National Sales Manager at NattyMac, a wholly owned subsidiary of Stonegate Mortgage Corporation. Carmel assumes the responsibility for day to day sales activities for NattyMac.
And at JPMorgan Chase there are new co-heads of its originations business. Sean Grzebin will head up Consumer Originations (home equity, retail, and consumer direct business). Greg Beliles will head up Correspondent Originations. And Lawrence Bailey will be Chase's head of Retail Sales.