State-level Lending Law Changes; Servicing Trends and Packages
Congrats to Indiana’s Ruoff Home Mortgage and president & CEO Mark Music. Why? The lender helped sponsor the winning Indy 500 car this weekend!
Capital Markets
We're on Tuesday already, but looking back to Friday U.S. Treasuries and agency MBS prices hardly changed versus Thursday's close (only a few 32nds up or down) despite an upward revision to the official estimate for Q1 U.S. GDP growth. And durable goods orders for April missed expectations but March's numbers were revised up. The 10-year note closed a shade better yielding 2.25% and MBS prices roughly unchanged.
Rates are down a shade this morning in the U.S. Why? Mostly news and nervousness from Europe. Eurozone equities are under mild pressure due to ongoing Italian election worries, some Greek debt worries, soft regional inflation numbers in Germany & Spain, and dovish remarks from Mario Draghi are undercutting reflation sentiments in Europe.
This morning we've already had April's Personal Income and Personal Consumption/Spending (both +.4%, as expected), and April PCE prices. Coming up are the S&P/Case-Shiller Home Price Index for March, along with Consumer Confidence. Tomorrow is the MBA's read on last week's apps, as well as May Chicago PMI, April Pending Home Sales, and the May Fed Beige Book. Thursday are May Challenger Job Cuts, May ADP Employment Change, Q1 Productivity and Unit Labor Costs, Initial Jobless Claims, April Construction Spending, and May ISM Manufacturing Index. Friday, we can look forward to the May employment data and April trade balance.
We commence the work week with rates not much changed: the 10-year is yielding 2.25% and agency MBS prices up or down a tick, depending on coupon & maturity, versus late last week.
State-level Lending Changes
We continue to be reminded of the cost, and difficulty, of lending in multiple states.
Washington State enacted the Revised Uniform Law on Notarial Acts, which applies to a notarial act performed on or after July 1, 2018. The bill specifies that a notarial officer has the authority to perform a notarial act, subject to certain requirements. The bill requires that a notarial officer determine that the individual has the identity claimed or that the signature being verified is the signature of the individual. The bill specified requirements for applicant for a commission, details for the official seal or stamp and responsibility of the director to maintain an electronic database of notaries public.
Iowa has modified several minor provisions under the Consumer Credit Code. These provisions are effective as of July 1, 2017. The first amended provision is Section 524.213. This section modifies the rule that directors shall not be paid an interest rate on deposits by a state bank of which he or she is a director by adding that any waiver of customary charges related to deposit accounts shall not violate this restriction.
Montana amended its provisions to correct erroneous references in material that include updates regarding notaries, taxation, and mortgage servicer prohibitions. These provisions are effective on October 1, 2017. Other updates include provisions regarding disabled veterans, invoices of distributors and aviation fuel dealers, accreditation of schools, language programs, firearms, and license plates. The full text is available here.
Vermont modified multiple provisions through House Bill 182 that includes amendments regarding licensed lenders and loan servicers. Provisions in this bill range from effective immediately to effective on July 1, 2017; unless noted otherwise. Amendments affect pre-licensing education requirements for loan originator applications. Financial responsibility of money servicers, debt adjusters and loan servicers and how the Commissioner might evaluate such financial responsibility. The bill defines the term "virtual currency" and added new definitions for "lead generation" and "loan solicitation". Provisions have been added for individuals engaging in the financial services regarding suspension, revocation, and nonrenewal receivership.
Vermont also enacted provisions, effective on July 1, 2017, through House Bill 35. Sec. 1. 9 V.S.A. chapter 57 Subchapter 1 is now titled "Voidable Transactions" rather than "Fraudulent Transfers." Amendments were made to § 2285 to make minor changes to many of the definitions in the section. Also, an amendment was made relating to insolvency, burden of proof regarding the elements of the claim for relief by a preponderance of the evidence to a creditor making a claim for relief under the applicable subsection and the rules used to determine a debtor's location.
Vermont House Bill 152 revises the Vermont Revised Uniform Fiduciary Access to Digital Assets Act by adding Sec. 1. 14 V.S.A. chapter 125. The act clarifies the law regarding access to digital assets in the case of death or incapacitation and grants fiduciaries access to a user's online accounts, correspondences, and other computer files, if specified in his or her will, trust, or similar agreement. These provisions are effective on July 1, 2017.
Nebraska amended its provisions relating to fees for recording and the filing of certain documents through House Bill 152. These provisions are effective on September 1, 2017 (or 3 months following adjournment of the current legislative session). Allocations for a portion of the recording fee designates to preserving and maintaining public records and for modernization and technology needs relating to such records. The update further provides that the funds allocated under this subsection shall not be substituted for other allocations of county general funds to the register of deeds office or any other county office.
The General Assembly of North Carolina has enacted Senate Law 2017-10, which streamlines mortgage notice requirements, effective immediately. The Senate Law modifies North Carolina G.S. § 45-91 to state that the servicer shall not be required to send such a statement if the fee is included in a periodic statement sent to the borrower that complies with paragraphs (b), (c), and (d) of 12 C.F.R. § 1026.41, or if the fee "results from a service that is affirmatively requested by the borrower, is paid for by the borrower at the time the service is provided, and is not charged to the borrower's loan account."
Servicing News
Contrary to expectations about growing mortgage lending volumes, current industry trends suggest a gradual reduction in capacity for both lending and servicing that should alarm policymakers. Christopher Walen sent this piece out in September warning the industry.
Servicing can influence rate sheet pricing just as much as the MBS market: what investor is going to pay a premium for loans in a state that tends to pay-off earlier than other states? MountainView Financial Solutions' Matt Mauer sent out a nice chart on state-specific prepayment graphs.
Phoenix Capital is offering up, with bids due June 7th, a pool of $158 million Ginnie Mae servicing rights. Write to Steve Fleming if you'd like more information. 71% FHA, 15% VA, 13% USDA (by loan count), >99% Fixed 30, <1% Fixed 15, 1.7% DQ; 0.6% FC, 1.2% BKs, 3.937% (F30) Note Rate, 4.040% (F15) Note Rate, 0.366% wAvg Net Service Fee, Avg Bal $211K, 99% CA, <1% TX, <1% AZ (by ln ct.), wAvg orig FICO 680; wAvg Orig LTV 92%, wAvg Age 27 months, 89% Single Family Detached Properties, 100% Owner Occupied properties, 80% Purchase Originations 83% Retail Originations, 8% FHA Streamline, 1% VA IRRRL.
I have seen two Incenter Mortgage Advisor MSR packages recently. The first is a $2.1 billion, 7,800 loan, FNMA & FHLMC pool. The package has a WAC of 3.837%, $275k average loan size, 766 WaFICO, 72% WaLTV, 90% OO, 64% SFR, 21% PUD, 42% RT Refi, 40% Purchase, 16% C/O with state concentration: California (41%), and NJ/CO/MI 6%. The second package: $1.4 Billion GNMA, 3.87% WAC, $216k average loan size, 691 WaFICO, 94.8% WaLTV, 99.9% OO, 97% SFR, 95% Purchase, with Texas (47%), Colorado (16%), Oklahoma (12%) and Washington (7%) as the top state. Next up for IMAC is a $10 Million "Fix & Flip." The 33-loan portfolio has a 12% WAC, 685 WaFICO, 4/2018 Maturity Date, As Is LTV 79.8%, After Repair Value 59%, with properties exclusively in New York and New Jersey.
Phoenix Capital's Project Fiji: $585 Million Fannie Mae and Freddie Mac bulk servicing rights offering, 60% FNMA A/A, 40% FHLMC Gold, 88% Fixed 30, 12% Fixed 15, 4.029% (F30) Note Rate; 3.379% (F15) Note Rate, Avg Bal $269K, 100% of loans are located in Washington, 753 WaFICO, 79% WaLTV, 91% Single Family/PUD Properties, 91% Owner Occupied Properties, 65% Purchase Originations, 100% Retail Originations, 4% HARP loans; Project Alpine: $4.7 Billion Fannie Mae, Freddie Mac and Ginnie Mae bulk: 94% FNMA , 6% FHLMC, 67% Fixed 30, 33% Fixed 15, 3.663% (F30) Note Rate, 3.052% (F15) Note Rate, Avg Bal $214K, geography: 23% CA, 7% GA, 6% MA, 769 WaFICO, 58% WaLTV, 95% Single Family/PUD Properties, 88% Owner Occupied Properties, 91% Cash-Out Refinances, 80% Retail Originations....
Prestwick Mortgage Group had a $1 billion Massachusetts FNMA A/A package. Total portfolio characteristics were as follows: $263,677 average unpaid principal balance, 3.764% WAC, 68% WaLTV, 100% retail (of Seller or an affiliate of Seller), approximately 93.5% of the loans are on properties in Massachusetts 0.209% delinquency ratio (30+), with no loans in foreclosure or bankruptcy as of the data date.
Incenter Mortgage Advisors, sent out two servicing deals this week. A Ginnie Mae package for $1.4 billion includes mortgages originated exclusively through the retail channel with a weighted average interest rate of 3.57 percent and delinquencies of 2.27 percent based on number of loans. The loans are spread out across the U.S. Bids are due June 7. The second is tied to Fannie Mae loans. The Fannie portfolio has no delinquencies whatsoever. The average interest rate is 4.33 percent. Bids are due June 6.
Jobs and Products
NRL Mortgage is extending an exclusive invitation to the attendees of the upcoming Mastermind Summit in June. They've arranged an exciting cocktail reception with music, food, fun and networking with the industry's elite top producers, and will be getting REAL with their special guest & friend, Josh Altman, star of Million Dollar Listing Los Angeles! This private event will be held at The Palms, Las Vegas "Real World" Suite; June 7th, 5-6PM, and is already drawing much attention. Those interested should RSVP quickly to NRLEvents. Click here to explore the potential of what NRL Mortgage offers, as it is licensed in 45+ states and growing nationally. Any top producers and top managers interested in having a confidential conversation regarding a new opportunity should reach out to President Ron Zach.
"'Best of the Worst.' Does this describe your subservicing experience? That just about sums up the reason why The Money Source (TMS) brought their servicing in-house in 2015. By doing so, they saw their delinquencies improve by more than 50% and customer service levels have been at all-time highs. TMS is now offering state-of-the art subservicing for those of you tired of dealing with the 'Best of the Worst.' To learn more, visit www.getSIME.com."
Mountain West Financial is thrilled to announce the enhancements management has made to their TPO portal, BOLT. BOLT has been redesigned from the ground up to be more user friendly and provide loan level focus. Changes include an enhanced dashboard, a more robust document management system, and the highly anticipated Disclosure Portal which allows Brokers to seamlessly generate their own disclosures. "BOLT is a game changer for Mountain West. We have always been committed to giving brokers industry leading customer service, but now we are adding industry leading technology and a quicker, easier process of making homeownership a reality for their clients," said John F. Cady, SVP. For more information about MWF or BOLT, contact your BDM or if you are interested in becoming a Broker, email info@mwfinc.com.
"A Southern California-based mortgage lender is seeking highly talented and experienced Wholesale Sales Executive (Manager, VP, or EVP) to join our growing team. Our company has successfully been originating and servicing loans for over 20 years and is currently expanding throughout the country. We are Fannie, Freddie and GNMA approved coupled with a very unique non-QM product line. Our professional underwriting and operations team is second to none within the mortgage industry. We continue to be leaders in pricing & service. If you want a stable corporation with an entrepreneur growth mindset, then we are a great fit for you." Contact me with confidential resumes for forwarding.
Use Mastermind to UNIFY your Business! "We'll be there... Will you?" Unify has been an Enterprise solution for the Mortgage Industry since 2009. "With our enhanced platform 'any' sized organization can leverage the END to END solution. Unify will help loan officers build, track and manage all aspects of their business and increase productivity by 20% or more. Unify continues to add revolutionary features like our Mobile App, Mortgage Inquiry Alerts and RainMaker to meet the demands of its clients. Schedule your UNIFY DEMO at Mastermind now! Contact Scott Benson (651.288.7510) or Matt Zabbo (618.610.5868).