Product News; Training/Events; Bank News; UW Changes; How Big is Big?
Happy 121416, by the way, in the United States. Plenty of potential home buyers are still paying rent. You’re probably working in an office where the landlord earns rent from your company. When I play Monopoly and I land on someone’s property, I owe them rent. My cat Myrtle often demands I pay rent, even though she’s not on title. As it turns out, even when a plane from one country flies over another country, it owes rent! But of more interest to lenders and real estate agents is that for a typical family 28 percent of income goes towards rent as of 2014.
Bank news? There's always a lot going on.
A teleconference is being held on Thursday, Dec. 15 at 11AMam ET. Mayer Brown partners David Beam, Melanie Brody, Jonathan Jaffe and Jeff Taft will discuss the Office of the Comptroller of the Currency's announcement that it will begin considering applications for a special-purpose national bank charter from fintech companies and how this charter could benefit payment companies, lenders and other technology providers. Contact Keri Smith (212-506-2705) for registration.
The Basel Committee on Banking Supervision softened capital rules for banks to help ease European concerns that more restrictions will hurt lending, sources said. The panel, which met in Chile last month to complete the rules, reached a preliminary agreement on higher leverage ratios for the 30 top lenders and on changing the proposed "output floor" for capital.
Certainly, banks are paying attention to Basel, especially the large ones. Looking at the top 50 banks, JPMorgan remains the largest bank in the country at $2.5 trillion in assets. Bank of America is #2 at $2.2 trillion, 13% smaller than JP. (The difference between the two is $326 billion, or slightly larger than the 10th largest bank!) After that are Wells Fargo and Citi. The top four banks control 58% of the total assets ($8.48 trillion) of the entire group of the 50 largest ($14.69 trillion)!
US Bank is #5 on the list at $454 billion. US Bank is about 18% the size of Chase, or put another way it would take more than five US Banks to be the size of just one JP. At #50 on the list, EverBank Financial, FL, has $28.7 billion in assets - but is only 1.1% the size of JPMorgan Chase!
The next five on the list after US Bank, rounding out the top 10, are Bank of New York Mellon, PNC Financial, TD Group, Capital One and HSBC North America. If one were to combine all their assets the union would be only slightly larger than BofA with $2.21 trillion (vs. $2.2 trillion).
The top three largest US banks (JP, BofA, Wells) last reported a total of 104.9 million active online or digital customers. When you consider there are about 242.5 million adults in the United States as of the latest Census report, that means they have somewhere around a 40%+ market share. Good luck to anyone bent on breaking that up!
Analysts say several factors may increase M&A activity in 2017 such as relatively low interest rates, high cash levels, a slowdown in corporate share repurchases, and record prices due to rising stock markets. We continue to hear about it on the banking side. Just in the last week it was announced that Safra National Bank of New York ($7.9B, NY) will acquire the Miami private banking business of Bank Hapoalim B.M. ($7.2B, NY) for $16.5mm. In Pennsylvania NexTier Bank ($1.2B) will acquire Manor Bank ($40mm) for about $2.3mm in cash. And in California Pacific Premier Bancorp, Inc. will acquire Heritage Oaks Bancorp, headquartered in Paso Robles, for $405.6 million. Heritage Oaks has 12 branches located in San Luis Obispo County and Santa Barbara County and a loan production office located in Ventura County.
Executives, including JPMorgan Chase chief Jamie Dimon, have indicated that while they support a comprehensive review of the financial regulatory framework, they would not support total repeal of the Dodd-Frank Act. Banks have invested a great deal of time and hundreds of millions of dollars to implement current systems and are not eager to restart the process with rules that would strain their business models and management.
U.S. Bank posted a lender operation update in reference to SAFE Act reminders. U.S. Bank Home Mortgage is allowing its non-delegated correspondent clients to order their own MI certs prior to submission for underwriting. Clients are required to submit file documents to the preferred MI provider rather than use the MI Delegation. The MI Cert must be ordered using the clients specific Master Policy or Agreement with the chosen MI provider. The MI compliance underwriting decision and Commitment/Certificate must be in the UW package delivered to USBHM for full review. USBHM underwriting will determine if coverage is acceptable based on its underwriting guidelines.
Fifth Third Correspondent Lending posted that The Interest Credit Limitation has been increased from 5 to 7 days. Regarding Incomplete Improvements, if there is no cost of the incomplete improvement(s) provided (e.g. sales contract or new construction change orders), value of the incomplete improvement(s) may be documented with one of the following: Invoices or contractual bids for material and/or installation OR Builder provided cost if improvement(s) were included.
Flagstar's Lending Service Center aids with Flagstar's Wholesale Technologies as well as act as the liaison between the sales staff, wholesale customers, and other departments within the bank.
From December 1st--December 28th, NYCB Table Funding Clients may submit a change to their Lender Paid Compensation Election Percentage on file with NYCB's Client Management Department.
NYCB Mortgage has updated its Mortgagee Clause for property & flood insurance effective immediately. If the certificate and/or mortgagee clause does not read as below, the Client must include a copy of the letter requesting the change in mortgagee. (All States except Texas: New York Community Bank Its Successors And/Or Assigns, Insurance Center, P.O. Box 5932, Troy, MI 48007-5932 Re: Loan Number XXXXXX. And in Texas: New York Community Bank Insurance Center, P.O. Box 5932, Troy, MI 48007-5932 Re: Loan Number XXXXXX.)
Citi loans locked on or after December 9th, are subject to updates to its Community Reinvestment Act (CRA) Premium Schedule, resulting in the elimination of CRA Premiums for some MSAs. The complete updated CRA Premium Schedule is shown on page 8 of its Rate Sheet and is also posted on Agentsite under the Resources tab.
Wells Fargo Funding will now allow individual (borrower-maintained) flood insurance policies for Non-Conforming Loans secured by 2- to 4-unit, horizontal (non-stacked), condominiums.; and has expanded its current Home Opportunities eligibility for ARM Loans to include 3- to 4- unit properties.
U.S. Bank Home Mortgage spread the word that its Project Approval Department (PAD) has three types of condominium project reviews for portfolio loans. The three project review options are: #1: The project is currently listed as approved on the Reviewed Project List published on the Seller Guide. #2: A full review of the project documentation has been submitted to the Project Approval Department (PAD). PAD will determine eligibility and place the project on the Reviewed Project List. #3: The project has an expedited or streamlined review. The current process has been updated to address bank requirements when the project is not on the Reviewed Project List as approved (option 1) or a full review is not submitted (option 2).
Turning to the bond markets, the U.S. Treasury yield curve flattened Tuesday. That means that either short term rates went up, long term rates went down, or some combination offered. In this case, long term rates dropped a little as the 30-year bond auction came in better than expected. As a proxy for interest rates everywhere, the 10-year's yield declined to 2.44% but then bounced a little higher and ended the day unchanged at 2.48%.
That was all so... yesterday. Today we've had the MBA's weekly mortgage application survey from last week (-4%, purchases -3%), the Producer Price Index (+.4%, core +.4%, high), and Retail Sales (+.1%, ex-auto +.2%, lower than expected). Coming up is the Industrial Production and Capacity Utilization duo for November, along with Business Inventories. In the early going the 10-year is yielding 2.44% and agency MBS prices are better by .125-.250 versus yesterday's close.
But the big news is the announcement from the FOMC (Federal Open Market Committee) followed by 2:30PM ET's Chair Yellen post-meeting press conference. At this point the market will be stunned if the Fed does not raise Fed Funds to a target range to 50bp to 75bp. But everyone will be looking at the statement to see if there are any changes.
Upcoming Events
Your borrowers spend a lot of time on Facebook, yet most MLOs lack the skills to turn Facebook into a lead machine. Join National Mortgage Professional Magazine and Jason Lutz from TBWS Group for a complimentary NMP Webinar where you can learn How to Get Referrals from Facebook Without Begging or Annoying Your Friends and Followers. This takes place on Thursday, December 15, at 2PM ET, 11AM PT. "During this webinar, we'll show you proven strategies to get social media referrals without selling. Nothing worse than that guy on Facebook that is constantly selling their product or service. I know you've got one of those friends. Sign-up for this free webinar here."
Colorado's Peoples National Bank is hosting its 3rd annual sales summit for loan originators and real estate agents: the 2017 Colorado Mortgage & Real Estate Summit. "Understand the issues, changing laws, economic housing and interest rate forecasts affecting the real estate and residential lending industry in Colorado and at the national level. Learn innovative strategies and tactics to increase your business in 2017." Join speakers Eliot Eisenberg, Sue Woodard, Steve Richman, and myself on Wednesday, January 18th, in Glendale, CO. Admission is free but you must pre-register here.
Join California MBA on January 11th for a Cyber Security Info-narrative...
Jobs and Announcements
In job and personnel news, CMG Financial strengthens its Retail Lending presence in the Eastern and Central regions with the addition of Tony Giglio as Vice President of Retail Lending. "He is an accomplished mortgage banking leader with two decades of retail lending experience and several previous managerial roles. As the Vice President of Retail Lending, Giglio will be responsible for the development and expansion of the Retail Lending channel. Anchored in Raleigh, NC, he will focus on growing the Eastern and Central divisions while maintaining the personal management approach that preserves the company culture. CMG Financial has been deepening its nationwide coverage and Giglio will keep that momentum going." If you are interested in joining the growing Eastern or Central Divisions, please contact recruiting@cmgfi.com.
And congratulations to Randy Levine who has joined Sterling Bank and Trust, FSB as its Managing Director, Residential Lending. Established in 1984, Sterling has 25 branches and is expanding rapidly. Sterling has a unique opportunity for loan officers in Northern and Southern California, Seattle and New York. Sterling offers a proprietary portfolio product called the Sterling Advantage Home Loan and it is truly unique in the marketplace. Loan amounts to $5 million with flexible income verification and no minimum FICO requirement. Please send your resume to Lisa Wilkie.
Assurance Financial 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. Assurance is expanding its footprint, selectively hiring Branch Managers and MLOs in good markets. For more information, contact Paul Peters, CMB (225-239-7948) or visit Assurance Careers.
And in product news FormFree and Floify announced a partnership that integrates FormFree's AccountChek asset verification solution with Floify's mortgage automation technology platform. The partnership enables lenders to request, analyze and certify a borrower's financial data directly from their Floify account. Automated asset verification streamlines the mortgage underwriting process for both borrowers and lenders, who together make up Floify's 90,000 registered users. Fannie Mae recently named AccountChek by FormFree its first designated vendor for asset verification, and the software is the only patented, third-party solution approved by leading investors to deliver automated asset verification data and reports. "Lenders rely on us to help them scale loan production from origination to close and deliver that ability with the highest level of security and compliance," stated Dave Sims, Floify's founder and CEO. "The partnership with FormFree reflects our commitment to innovative products that help build trust between lenders and borrowers."
The Mortgage Industry Advisory Corporation ("MIAC"), a leading provider of capital market advisory services and software tools for financial institutions, announced that industry veteran Mike Bugbee has joined its team as Senior Vice President, Client Solutions Group. Congrats to Mike!
PennyMac announced some organizational changes. As of January 1, Stan Kurland, currently Chairman & CEO, will become the company's Executive Chairman. David Spector, currently Executive Managing Director, President and COO, will become President and CEO. Andrew Chang, currently Senior Managing Director and Chief Business Development Officer, will become Senior Managing Director and Chief Financial Officer. Anne McCallion, currently Senior Managing Director and Chief Financial Officer, will become Senior Managing Director and Chief Enterprise Operations Officer.