HELOC, M&A, and Bank Updates; Chapter 11 for Ditech's Parent?
The average age of a loan officer is 73. Okay, just kidding. But as anyone in the lending industry and others age, they begin to worry about things such as dementia. (Insert capital markets joke here.) Early detection is critical, and the University of Chicago reports that a simple test smelling 5 different odors of peppermint, fish, orange, rose and leather may help. It seems about 80% of people who only detected 1-2 scents in the research were diagnosed with dementia when tested 5 years later. So, if the guy in the cubicle next door says something about “passing the smell test…”
Bank News
Regulators love to receive kudos from other regulators about penalties. Don't be surprised if something like this comes along in the home loan biz. Yesterday the Federal Reserve Board issued a Consent Order against Mid America Bank and Trust Company, Dixon, Missouri, for deceptive practices in violation of section 5 of the Federal Trade Commission Act related to balance transfer credit cards issued to consumers by Mid America through third parties. The Consent Order requires Mid America to pay approximately $5 million in restitution to nearly 21,000 consumers.
Soon after, not coincidentally and almost as if it was conditional, the Federal Reserve Board announced its approval of the application under section 3 of the Bank Holding Company Act of 1956 by Reliable Community Bancshares, Inc., and MAB Acquisition Corp., both of Perryville, Missouri, to acquire Mid America Banking Corporation and thereby indirectly acquire Mid America's subsidiary bank, Mid America Bank & Trust Company, Dixon, both of Missouri.
In branch news, Umpqua Bank ($25B, OR) said it will close 33% of its 310 branches by 2020, as it seeks to improve returns, invest more in digital and modernize the bank. First Bank ($1.2B, NJ) will acquire Delanco FSB ($126mm, NJ) for about $13.5mm in stock (100%) or about 0.99x tangible book. A while back Midland States Bank ($4.5B, IL) announced it will acquire Alpine Bank & Trust Co ($1.3B, IL) for about $181mm in cash (18%) and stock (82%) or about 1.72x tangible book.
Economist Elliot Eisenberg reports that, "After peaking at almost $375 billion in 2005, originations of home-equity lines of credit (HELOCs) plummeted to just $62.5 billion by 2010. Since then they have been steadily rising, and through 1H17 already total $84 billion, suggesting annual volume of close to $200 billion. Despite this rise, new originations are less than repayments. Bank holdings of HELOCs peaked in 2009 at $610 billion and now stand at $387 billion."
Per Flagstar Bank, effective with all invoices for EPD on and after Thursday, August 31, 2017, the number of delinquency days for monthly payments will increase from 60 to 90. Early Payment Default, Doc. #4623 will be amended to reflect these changes.
M&T Bank has posted its updated Exhibit 03-031, listing all counties reflecting declining markets effective 10/2/17. As a reminder, the Declining Markets exhibit is only applicable to loans registered in M&T Treasury products: Treasury Jumbo.
Is Ditech's parent, Walter Investment Management, going to declare Chapter 11 bankruptcy next month? So it seems. The good news, per the article, is that Ditech Financial and Reverse Mortgage Solutions will continue their ordinary operations.
Vendor News
Let's face it, nothing much new came out of lenders and investors in Denver. Fannie is still focused on Day 1 Certainty, Freddie is busy re-imagining the mortgage process, and the FHA/Ginnie/HUD consortium are focused on fast refinancing, servicing values, and its future role in housing. So, as I've been doing, let's see what some vendors have been up to recently.
The Mortgage Collaborative announced a new preferred partner relationship with national credit information service provider, Certified Credit Reporting. As a result, lender members of The Mortgagee Collaborative will receive discounted pricing on Certified Credit's suite of credit and verification services. "The Mortgage Collaborative is thrilled to add Certified Credit as a national credit service provider that is truly focused on best-in-class execution and customer satisfaction for its clients," said TMC COO Rich Swerbinsky.
TPG is partnering with The Mortgage Collaborative in the launch of the TMC Direct Loan Trading Platform powered by Resitrader. Today, over $1 billion is transacted on the platform. Contact Lynette Nelson to arrange a demonstration of this game changing Trading Platform.
Second Century Ventures, the strategic investment arm of the National Association of Realtors (NAR) has invested in Notarize to help scale online notarizations across the country.
Veros has launched VeroPRECISION - the mortgage industry's first Valuation Decision Engine, at the property level. A new artificial intelligence engine, VeroPRECISION is designed to provide the industry a quick and easy way to determine a property's suitability for an AVM, then when appropriate, the most accurate AVM for that property from top-performing AVM providers, Veros and Collateral Analytics.
FormFree has expanded its partnership with LexisNexis Risk Solutions to introduce a new product called AccountChek Plus that combines the features of FormFree's award-winning AccountChek asset verification app with liens and civil judgments data from LexisNexis. The first asset verification service to be included in Fannie Mae's Day 1 Certainty initiative, AccountChek has delivered more than one million asset reports and has been shown to help lenders close loans up to 15 days faster. LexisNexis employs industry-leading tech and hundreds of the most current data points available to ensure more than 99% precision in linking liens and judgments to the correct consumers. By combining both best-of-breed solutions, AccountChek Plus makes it easy for lenders to fill the data gap left by the July 1 removal of liens and judgments data from consumer credit reports furnished by Equifax, Experian and TransUnion.
CalyxSoftware announced a new partnership with Quicken Loans Mortgage Services (QLMS), a division of Quicken Loans Inc., to power its Quicken Loans Origination System (Q-L.O.S.). Q-L.O.S. is an easy to implement and use loan origination software (LOS) that enables community banks, credit unions and select brokers to originate mortgages compliantly, quickly and profitably. "Through Q-L.O.S., users can access QLMS' entire suite of mortgage products, giving them the ability to fully customize the refinance or home-buying experience for their clients. Q-L.O.S. also offers users the ability to receive premium mortgage services and support directly from QLMS underwriters, operations team members, dedicated purchase and refinance specialists, and experienced account executives."
Title Source and Quicken Loans have partnered with Pavaso to offer eCLosing services. This joining allows Quicken Loans' clients to finish the mortgage process the same way they started it - online. By choosing Pavaso as its digital closing provider, Quicken Loans can focus on building systems that will scale and allow closings nationwide.
Partners Credit & Verification Solutions' IncomeVerify 4506-T tax transcript verification product is now fully integrated to Day 1 Certainty services from Fannie Mae through Desktop Underwriter (DU) validation services. Partners' proprietary platform allows lenders multiple request options, including intuitive e-signing options within their consumer portal, allowing for expedited review and return of transcript information from the IRS. As an authorized supplier of Day 1 Certainty eligible tax transcript services, Partners can now provide freedom from reps & warrants on validated loan components, plus greater speed and simplicity.
Capital Markets
The Wall Street Journal reports large banks have launched new software trading systems in the $6 trillion investment grade corporate debt market. Believe it or not, the BIS reports only 40% of investment grade corporate bond trading is executed through computers while the rest happens over the phone. Look for this to shift more rapidly in coming years now that the largest banks are pushing for the change.
Looking at the bond markets, the possible news moving rates (tension between North Korea and the United States, news from the European Central Bank and Mario Draghi, strife in Spain, a lousy 7-yr note auction by the Treasury, more good job news from jobless claims) moved things somewhat during the day. The 10-year wrapped up the day yielding 2.45%.
This morning we've seen the first look at Q3 Gross Domestic Product. Most expected GDP to increase between 2.5%-3.0%, but was +3.0% - strong. The core PCE deflator was +1.3%, slightly stronger than expected. At 10AM ET the University of Michigan Sentiment Index for October is seen declining slightly. Rates are roughly in line with last night's close: The 10-year is currently yielding 2.46% and agency MBS prices not much changed. But that was a strong GDP number this morning.
Jobs, Products, and Promotions
On the West Coast, a rapidly growing independently-owned Mortgage Bank is looking for High Level Loan Advisors. "The company offers a fresh new business model that benefits and rewards everyone in the company. This company is offering Benefits, 401k, 100% commission, and STOCK in the company. How much of the rate you are selling is going to Branch Managers, Area Mangers and Regional Managers? Take advantage of excellent Rates with full branch margins and incredible service where the average purchase close is 23 days." Send confidential resumes to me for forwarding, and please specify the opportunity.
VITEK Mortgage Group is happy to announce that Janet Lewis has joined the team as VP of Operations. Janet notes, "I chose VITEK because of the dynamic leadership team and positive work environment that are hallmarks of the company. I feel that my knowledge and experience will be valued and that I can have positive impact. I look forward to playing a key part of VITEK's growth!" President Harry Duncan says that VITEK is very happy to welcome Janet to the team. "Besides being highly respected for her considerable knowledge and her ability to develop high-performing teams on a national scale, Janet is an expert in helping lead a growing organization. She keeps her Operations team focused on the business of originating loans, and on mutually beneficial partnerships with Production. Janet really sets the bar for Operations leaders everywhere." If you want to know what VITEK has to offer, contact Janet Lewis, VP Operations (916-486-6441) or go to www.teamvitek.com
Synergy One Lending is pleased to announce Steve Majerus will serve as Divisional President of Synergy One Lending and its affiliate, MORE Lending. Steve will be responsible for all Retail/TPO origination, operational, underwriting and post-closing activities, and will continue to report to Synergy's CEO, Torrey Larsen. "Steve has demonstrated to us his unrelenting commitment to an exceptional customer experience. The foundation of this fact has been built on a combination of superior technology, a commitment to local origination talent, and an unmatched level of product expertise.", stated Larsen. "We are excited about the direction of Synergy One/MORE Lending, and look forward to the firm's future success under Steve's leadership." Synergy One Lending is FNMA/FHLMC/GNMA approved lender, licensed in 42 states, and distributes its products thru local loan officers in strategic market locations. For job inquiries, go to www.joinsynergy1.com.
Bay Capital Mortgage announced that Timothy J. Gough, has joined as CEO. After graduating from the University of Maryland with a degree in Economics, Mr. Gough brings over 30 years of experience in the financial services industry including the designation of being a Master Certified Mortgage Banker (CMB) recipient, the highest certification awarded a member of the industry.