TPO Product; Builder CEO Comp; State-Level Changes
Greetings from the American Mortgage Conference in Pinehurst, NC! Fun with numbers: A penny is about 1/16 of an inch, or 192 per foot. A mile is 5,280 feet. If one were to stack pennies 1.1 million miles high you’d end up with… darn, never mind. But it’s a big number, just like $1.17 trillion is a big number. That figure – $1.17 trillion – is how much China held in U.S. treasuries as of the end of January and selling them is a potential nuclear option should a trade war get out of hand. China is the second largest owner of U.S. government bonds after the Federal Reserve. Fortunately, the trade war talk has gone away as fast as it started, and mortgage prices, which are driven by supply and demand, probably won’t suffer.
Compensation
In builder news, multi-family construction is going strong, but SFH are doing okay too – but not enough to satisfy demand. How much do CEOs of publicly-held builders make? Here’s a list.
In big bank compensation data, proxy filings show the following pay ratios (CEO pay compared to median employee) for these major banks: JPMorgan (364 to 1), Bank of America (250 to 1) and Wells Fargo (291 to 1).
When it comes to hiring and retaining the best people for your organization, compensation matters. Did you know that in 2016, Processor turnover averaged 30 percent? Where do you go to find out if you are offering the right amount to attract and keep employees? STRATMOR’s Compensation Connection. Participants submit data and receive a report comparing their responses to survey averages on key company differences and characteristics, analyzed and separated into useful profiles and relevant categories. This analysis can help you justify to your stakeholders the compensation you’re paying to get and keep the talent you need. The window to participate in the 2018 Compensation Connection program closes May 15. Don’t miss your chance—sign up today. STRATMOR Compensation Connection 2018.
State-Level Lending Law Changes
The New Jersey Attorney General recently announced that the state’s governor will nominate Paul R. Rodriguez to serve as the Director of the New Jersey Division of Consumer Affairs, the state’s lead agency charged with protecting consumers’ rights, regulating the securities industry, and overseeing 47 professional boards. According to the AG’s press release, Mr. Rodriguez’s selection is intended “to fill the void left by the Trump Administration’s pullback of the [CFPB]” and fulfills the promise of the state’s governor “to create a ‘state-level CFPB’ in New Jersey.” Mr. Rodriguez will begin serving as Acting Director of the Division of Consumer Affairs on June 1, pending his approval as Director by the New Jersey Senate. The New Jersey announcement is consistent with announcements by other state AGs that they intend to fill any vacuum created by a less aggressive CFPB under the Trump Administration.
West Virginia has been busy. It modified its provisions relating to its Secure and Fair Enforcement for Mortgage Licensing Act that include license application fee requirements and pre-licensing and continuing education requirements. These provisions are effective on May 31, 2018. The amendment increases the licensure application fee from $50 to $200 and provides that a person must complete at least twenty-four hours of education to meet the pre-licensing education requirement. The twenty-four hours of education shall include at least four hours of training related to West Virginia mortgage and consumer laws or issues. Additionally, the amendment provides that a licensed mortgage loan originator must complete at least nine hours of education to meet the annual continuing education requirements. The nine hours of education shall include two hours training related to West Virginia law or regulations.
West Virginia amended its provisions relating to its Uniform Power of Attorney Act relating to limiting the ability of an agent under a power of attorney to take self-benefiting actions. The amendment removes the presumption that an act is not within the scope of authority granted in a power of attorney when an agent benefits from the act to the detriment of an ancestor, spouse, heir, or descendant. It also removes the prohibition of an agent from exercising authority under a power of attorney to create in the agent, or in an individual to whom the agent owes a legal obligation of support, an interest in the principal’s property, whether by gift, right of survivorship, beneficiary designation, disclaimer, or otherwise. These provisions are effective on June 8, 2018.
West Virginia enacted provisions relating to its Uniform Fiduciary Access to Digital Assets Act by creating the West Virginia Uniform Fiduciary Access to Digital Assets Act; provides a short title to the act and defines certain terms. The amendment sets forth to whom the article applies i.e. a fiduciary acting under a will or power of attorney, a personal representative acting for a decedent, a conservatorship proceeding, a trustee and a custodian if the user resides in the state. These provisions are effective on June 5, 2018.
And West Virginia modified its provisions relating to its Uniform Voidable Transactions Act that include establishing requirements for evidence and burden of proof. These provisions are effective on June 8, 2018. The amendment adds new and modifies existing definitions and establishes that a presumption imposes on the party against which the presumption is directed the burden of proving that the nonexistence of insolvency is more probable than its existence. The amendment provides that a creditor making a claim for relief has the burden of proving the elements of the claim for relief by a preponderance of the evidence and sets forth rules regarding the defenses, liability and protection of transferees.
Arizona amended its provisions relating to notaries public through House Bill 2178.effective on July 20, 2018. Arizona Revised Statutes Section 41-311 is amended to modify the definition of “Notarial act” or “notarization” as well as amendments to the definition of “satisfactory evidence of identity”. Revised Statutes Section 41-313 has been amended to remove language which permitted a notary to perform a notarial act on a document that is a translation of a document that is in a language that the notary does not understand.
Capital Markets
There wasn’t much rate movement yesterday, mostly due to today’s impending FOMC policy statement, due out today at 2pm ET. While no major changes are expected, the statement will be studied for hints about the expected rate path. The Fed is expected to hold rates steady while validating pricing for June where a 25bp rate hike is a near certainty at over 92% odds given what is expected to be above trend growth with inflation near target. With no major changes expected, investors will be looking at any news surrounding a potential NAFTA deal to change markets. The U.S. Trade Representative said the deal must be negotiated within the next two weeks to give the Congress enough time to ratify the deal.
Yesterday’s we learned that the ISM Manufacturing Index for April came in below expectations and down from March, though still showed expansion, but reflected some growth deceleration for the manufacturing sector at the start of the Q2 which will continue to feed concerns about the message of a flattening yield curve. Total construction spending declined 1.7% in March, well below expectations and February’s reading, as construction spending growth continues to run at a relatively slow pace, which is an inhibitor of stronger overall growth.
In supply and demand news, tomorrow the NY Fed continues buying agency MBS securities to the tune of $1-2 billion a day of various classes, maturities, and coupons.
We’ve had the quarterly Refunding announcement, the latest update (as of April 27) from the MBA on mortgage applications (-2.5%). Ahead of Friday's payrolls, ADP released its employment report for April. Estimates called for private payrolls falling 6k vs. the previous month to 235k; it came in at 204k. Coming up later is the latest FOMC statement, at 2PM ET. Look for no change to short-term rates. We start Wednesday with rates a tad higher: the 10-year yielding 2.99% and agency MBS prices worse .125.
Lender Products
In third party news, Norcom’s TPO group rolled out a new VA rehab loan to help its broker’s VA borrowers. “We’re very pleased with this program, which offers 100% financing of purchase price plus improvements, no monthly MI, and one closing for purchase and rehabilitation. The Norcom VA Rehab loan is available for purchase and refinance. Norcom is a direct lender licensed in over 40 states. For more details please contact Kyle Keagan, VP, Third Party Originations.
Solving the lingering issue of trailing documents, fees, and final title policies in post-closing continues to draw interest from lenders, especially as lenders seek to take as much of their processes electronic as possible. Simplifile’s Post Closing service automates the return of these critical documents and data to ensure lenders can submit full-and-complete loan files to their investors. Missed Simplifile Post Closing in action during the Tech Showcase at MBA Tech in Detroit? Schedule your own private demo here or contact Simplifile at sales@simplefile.com(800.460.5657) to learn more about how Simplifile can close the loop on your post-closing documentation.
“Are you tired of having your hard-earned preapproved borrowers being poached by Local Real Estate Agents and Builders? Contact Agent Find, your end-to-end borrower retention solution. Agent Find is a nationwide network of 7,000 highly vetted and trained real estate agents who will not poach your deal, but rather, help you close your deal. Agent Find real estate agents know your borrower has already been preapproved and focus only on finding your borrower a home and negotiating seller paid closing costs. Additionally, when a loan officer sends a borrower to Agent Find, that loan officer will receive a weekly update as to where that borrower is in the home buying process. Try Agent Find and you will see your borrower retention and preapproval to fund times increase. Increase your conversions by 50%, just by using our FREE service. Agent Find can integrate directly into your current Lead Management Software.”
“The highly anticipated rollout of Floify’s next-generation 1003 mortgage application is here! The game-changing, ‘interview style’ 1003 has not only been attracting the attention of countless LOs and brokerages, but some big enterprise players, as well, primarily because of the solution’s unmatched ability to provide a beautifully simple and secure mortgage application experience for countless borrowers. In addition to the 1003’s system-generated borrower ‘needs lists’, ongoing updates, which are scheduled to continue throughout the coming weeks, will give lenders even more access to powerful new automations, integrations, and branding configurations that are sure to push their lending efficiencies and capabilities to new heights. If you are considering upgrading your company’s workflow to include a leading end-to-end mortgage point-of-sale system, now is the perfect time to take advantage of Floify’s incredible automation solution and brand new 1003. Be on the leading edge of mortgage tech – request a live, 30-minute demo to learn more!”
Jobs and Promotions
An expanding Northern California mortgage bank is looking for a Director of Compliance with experience in licensing, reporting (state included), internal audits, and HUD renewals. “In addition, we are looking for this director to create, document, and execute new processes and procedures for the company.” Please send confidential resumes to me and specify the opportunity. Please excuse any delays in responding due to travel.
Wintrust Mortgage is looking to add Account Executives to its Correspondent Division to further penetrate the market. Wintrust Mortgage, a fast growing 50-state lender with an incredible menu of products and marketing tools designed to help Account Executives and Loan Originators grow their business. Wintrust Mortgage is also looking for quality production Originators, Branch Managers and Teams to build on its $5B platform. “Known for high integrity, transparency and right-minded prudent lending, Wintrust Mortgage is a mortgage company that happens to be owned by a $27+ billion bank holding company but is led by lifelong mortgage professionals invested in helping their salespeople grow their careers. Headquartered in Rosemont, IL with offices throughout the country, Wintrust Mortgage has the tools, products and commitment to mortgage lending so often missing in the market. If you are interested in a company you can call home in the long run,” contactBob Shield, EVP of National Production (847.939.9361) for a confidential discussion.
The Community Mortgage Lenders of America’s (THE CMLA) incoming Chair, Kim Curtis, announced the selection of Ed Wallace to succeed retired Executive Director Glen Corso. Congrats!