Lender M&A, Bank Mortgage News; FHA and Cybersecurity
We’re in the midst of state fair season, and with it all the wonderful organic health food. Have you tried deep fried butter? Have a hankering for fried beer? Always wanted to try Wisconsin’s “Fat Elvis on a Stick” or the king of fish: walleye? Here's a list of amusing state fair offerings.
Bank News and M&A
The new Comptroller of the Currency said the OCC has the authority to grant national bank charters for non-deposit taking fintech companies for special purpose charters. He said the OCC has not yet received any fintech applications, but would do so if such companies were interested in the charter. Varo Money will become the second fintech (after SoFi) to try and become a bank, as it seeks a charter from the OCC.
JPMorgan has partnered with PayPal to allow Chase customers to link cards to PayPal accounts. Meanwhile, Citibank has also partnered with PayPal to allow Citi customers to pay using ThankYou points at merchants that accept PayPal.
With aging owners looking to take some chips off the table, increased regulatory costs, and costs moving steadily higher, depository banks aren't much different than lenders in terms of eyeing mergers. In the last week or so (or even today) it was announced that Atlantic Bay Mortgage and Virginia Community Bank are set to merge in an all-stock transaction. The bank's holding company will be terminated and will be managed as the Atlantic Bay Bank. A $20 million offering of the bank's common stock is expected to be complete when it is closed sometime during the fourth quarter of 2017.
First Financial Bancorp. (Cincinnati, OH) will be merging with MainSource Financial Group, Inc. (Greensburg, IN). South Shore Bank ($1.1B, MA) will combine with The Braintree Co-operative Bank ($259mm, MA) under the South Shore Bank name. West Shore Bank ($428mm, MI) will acquire wealth management services firm Ellis Capital Management (MI). Equity Bank ($2.4B, KS) will acquire The Eastman National Bank of Newkirk ($254mm, OK) for about $48.91mm in stock (100%). Meanwhile, Equity will also acquire Patriot Bank ($320mm, OK) for about $50.5mm in cash and stock. Guaranty Bank and Trust Co ($3.4B, CO) will acquire Castle Rock Bank ($144mm, CO) for about $23mm in stock (100%) or about 1.45x tangible book. Associated Bank ($29B, WI) will acquire Bank Mutual ($2.7B, WI) for about $482mm in stock (100%) or 1.6x tangible book. First Federal Bank ($516mm, TN) will acquire Cumberland Bank & Trust ($175mm, TN).
Lenders have been paying attention to 2nd quarter bank earnings. To the surprise of no one, weak refinancing reduced national and regional banks' earnings, and loan growth remained sluggish. Volume everywhere seems to be down 20-30% versus a year ago at this time for most lenders, and revenue reflected that as mortgage banking income fell by double digits on a percentage basis at most regional banks.
BB&T Corp posted a 15 percent fall in mortgage banking income and U.S. Bancorp's revenue from mortgage banking fell 11 percent. Atlanta, Georgia-based SunTrust Banks Inc. said mortgage-related income fell $63 million in the quarter. This mimicked JPMorgan Chase & Co, PNC Financial Services Group Inc., and Citigroup Inc. which reported mortgage banking revenue declines of 33 percent to 41 percent last week.
Training, Webinars, and Conferences
Given costs I wanted to highlight that the early registration window for the annual MBA National Conference in Denver closes August 1! This savings is significant. Register now before the window closes.
Plaza's August training calendar is online and ready for registration including 4 new trainings.
FHA is offering a free, on-site training covering FHA appraisal requirements, including FHA appraisal protocol and updates to FHA appraisal policy as outlined in FHA's Single-Family Housing Policy Handbook 4000.1. Register for the FHA August 4th appraisal training in Fort Worth TX.
YMPA is sponsoring "Originator Connect" in Las Vegas. This three-day weekend event, August 18-20 at Planet Hollywood will be the Nation's first live, live-streamed and on demand mortgage event and you can attend for FREE with Discount Code: "YMPAOC".
CAMP announced that Summer CAMP 2017 will be held at the Coronado Island Marriott. The event will begin with CAMP Leadership events on Sunday, August 6. The Expo will be held Monday, August 7-Tuesday, August 8.
October Research, LLC will present "TRID 2.0: What you need to know" featuring Richard Horn, the founder of Richard Horn Legal, PLLC and one of the authors of the original TRID rule. On August 1 at 2PM ET, he will educate the industry on the major changes in the TRID 2.0 final rule; the effective date for the rule; areas the CFPB did not change; potential pitfalls of the changes and what all of it means for your business.
And if you'd like to learn about "Filling Cybersecurity Gaps," October Research, LLC will present Sun Title CEO and recent NS3 speaker Tom Cronkright along with Security Assurance Facilitation Experts (SAFE) CEO Matthew Froning for a 60-minute webinar at 2 p.m. Aug. 9. Topics include experience with cyberfraud and common mistakes our industry makes leaving their companies vulnerable and where training falls short in many organizations.
Capital Markets
Why the sell-off Tuesday? Some blamed the selloff in Europe and German bund prices heading down. Others blamed higher oil prices (we want some inflation but not too much), and record highs for U.S. equity indices (but the correlation is very strained - just look at the last 30 years of improving bond prices/lower yields and rallying stocks). Regardless, investors dumped safe-haven assets. The yield curve steepened as expectations for Fed policy remained mostly unchanged. The Conference Board's Consumer Confidence Index was stronger than expected. And the S&P/Case-Shiller 20-city Home Price Index rose by 5.7% y/y in May - that's a big jump but expected. Lastly, the FHFA Housing Price Index was up 0.4% m/m in May.
There was plenty of selling and our 10-year T-note benchmark price worsened .625, closing yielding 2.33%, and the 5-year and agency MBS prices dropped about .250-.375.
It's a new day, and we can look forward to the FOMC statement at 2PM ET. Besides that, we've already had the MBA's app data for last week (+.4% from the previous week - purchases -2% and refis +3%); coming up is June's new home sales stats and a $34 billion 5-year Treasury auction. We begin Hump Day with the 10-year yielding 2.33% and agency MBS prices unchanged versus last night.
Products and Jobs
For over 20 years, Freddie Mac has provided superior underwriting capabilities to lenders. "Now, we're leveraging the power of big data and advanced analytics to build game-changing solutions into Loan Product Advisor - our next-generation underwriting solution. Our goal is to drive efficiency in your loan manufacturing process, ultimately helping you cut costs and giving you rep and warranty relief sooner. For example, our automated collateral evaluation will speed up, simplify and save money in your appraisal process - you'll get your borrowers to closing faster, while receiving immediate certainty for collateral rep and warranty relief. Loan Product Advisor's automated asset and income validation will reduce paperwork helping to quickly confirm qualifications for borrowers. Finally, you can now expand homeownership opportunities through automated assessments for borrowers without credit scores. Plus, Loan Product Advisor is a simpler, more intuitive tool with easier navigation and data visualization, Ready to learn more? Visit our Loan Product Advisor web page."
First Cal's Retail Division has already added 24 Loan Advisors to our winning team this month and continues its nationwide expansion by looking for Loan Advisors who enjoy creating prosperity. We are adding Loan Advisors in all geographic locations, including, but not limited to, Colorado, Texas, Northern and Southern California, and Florida. Joining the First Cal team is becoming part of a family; put us to the test to find the success and opportunity you've always wanted in an employer. Visit www.joinfirstcal.net to learn more about joining our team. We are also collecting resumes for Processors and Government Underwriters. Inquiries and resumes should be sent to Shannon Thomson.
SoFi is looking for a Senior Mortgage Product Manager to join the growing product team. "As SoFi expands its portfolio to realize its vision of becoming an end-to-end financial institute, serving the entirety of our members' financial needs, we are looking for a hands-on, technology proficient, team player who can lead, define, and deliver innovative solutions for our mortgage products. By joining SoFi, you're joining a new kind of finance company based around speed, transparency, and alignment with our members' interests. Our goal is to be the center of our members' financial lives. SoFi has achieved significant growth, with big plans ahead. In just the last year, we've more than doubled our member base (300,000 strong), doubled loan volume ($8 billion in 2016), and grown our team from under 200 people to more than 1000. We're well capitalized to power all this growth, having raised $1.9 billion in equity backing. But we'll only be able to continue this growth with great talent, and that includes you. Please check out the full job description and apply here."
Total Expert announced this week that it has added advanced social media scheduling features to its marketing and CRM platform. "These advanced features allow enterprise customers the ability to manage all social media content in a central library and dynamically deploy social media posts on the user-level at scale to major social media networks including Facebook, LinkedIn and Twitter. With this most recent release, Total Expert now provides a marketing system of record for all print, digital and social media marketing materials wrapped in a compliance framework for proper tracking and brand control. "Our customers are becoming increasingly focused on building authentic brands and driving engagement at the community level, which has created the need for a centralized platform. We have configured our platform to allow front line salespeople (e.g., mortgage loan officers) to publish content to their personal networks on the social channels of their choice," said Joe Welu, CEO of Total Expert. Click here to learn more about Total Expert's Marketing Platform."
Frustrated with your rigid LOS dictating your mortgage operations? If so, you should consider Path®, a multi-channel, single platform LOS completely configurable to your loan workflow, roles within the workflow, and tasks associated with each role. Path dramatically increases efficiencies and transparency, ensures data integrity, mitigates risk, and improves your entire process from origination to secondary marketing. The compliance structure within Path is customizable based on your unique guidelines and is designed to also underwrite and price HELOC loans which will be HMDA-reportable for 2018. Path also provides detailed, real-time reporting for data-informed management. You define the system; the system doesn't define you. Learn more about Path online.
A federal tax law that provides up to a 20% non-refundable R&D tax credit was recently expanded to include mortgage companies that engage in qualified research and development activities. The credit can create immediate cash flow by reducing tax liabilities dollar for dollar. Spiegel Accountancy Corp. can help determine if your firm is eligible for this beneficial tax credit. Spiegel Accountancy Corp. has formed a professional alliance with Bedford Cost Segregation to assist firms in applying for R&D tax credits. To schedule an analysis to determine if your firm qualifiesinfo@spiegelcorp.com or call 925.977.4000. For more information, click here.
Motive Lending recently welcomed 30-year industry veteran, Keith Stubbs, to help grow its dynamic wholesale sales and operations teams nationwide. Stubbs noted that "Motive Lending's growth and success are a direct result of putting brokers and Account Executives as their primary customers. Their formula is simple; put brokers and Account Executives first, support them with the best operations teams in the industry, and continually improve process and technology in that pursuit. Motive's service oriented support structure enables producers to achieve levels of production they only dreamed of elsewhere." Stubbs is expecting to double Motive's production going into 2018 by teaming with top Account Executives in key markets throughout the U.S. Motive Lending offers FHA, Conventional, VA, USDA, Non-QM and Jumbo loan products. Highly motivated Account Executive candidates can reach Keith Stubbs.
BankUnited, N.A. announced the addition of Paul Tirella as a Vice President in the Mortgage Warehouse Lending Division, taking on the role of Mortgage Warehouse Lending Business Development Manager and will report to Michael Dunigan, Executive Vice President. Congrats!