Legal, Private MI, MLO, Management Jobs; Renovation, Blockchain Products; MLO Education Trouble, RESPA Settlement
Last night, my wife asked me if I’d seen the dog bowl. I replied, “I didn’t know he could.” Words are important, and the press is spending plenty of them on conjecturing about the Federal Reserve Open Market Committee’s continued nearly daily asset purchases. Those purchases include both Treasury securities and securities backed by mortgages, and we’ll be hearing about the Fed lessening their daily volume as time goes on, as the economy (hopefully) improves. It is important for you to know that tapering isn't tightening. The Fed “taking its foot off the gas” is not the same as “braking.” We have a long way to go. Those involved in the secondary markets for residential mortgages will tell you that execution when selling loans is currently relatively stable, so lenders can leave your margins alone but improve your rate sheet price by increasing efficiency and lowering costs. Easier said than done, especially when lenders and MLOs run afoul of regulations (more on this below), but there are cost-effective ways to handle compliance. For example, today’s audio version of the commentary is available here and this week’s is sponsored by ActiveComply, making social media monitoring simpler, more compliant, and at a lower cost.
Products
According to the Leading Indicator of Remodeling Activity (LIRA), published by the Joint Center of Housing Studies of Harvard University, spending on home improvements and maintenance is expected to accelerate the second half of 2021 and stay elevated well into 2022. loanDepot Wholesale’s Renovation Lending Suite includes a full set of loan programs designed to accommodate both large-and small-scale home improvement and repair projects. We offer flexible solutions that include FHA 203(k) Limited and FHA 203(k) Standard programs as well as FNMA’s HomeStyle® program. Take your Renovation Lending to the next level or learn about how to expand your business with our experts. It’s time to work with a lender that has streamlined operations, best in class technology and pricing that helps you close more loans. Contact your Account Executive today!
Figure & Sagent Partner on Mortgage Servicing SaaS & Transformation Blockchain Vision: Hot off of Figure’s $200m series D fundraise and merger w/ mortgage originator Homebridge, Figure is in the news again, this time with a dimensional partnership with mortgage servicing fintech leader, Sagent. Three key facets of the partnership worth mentioning: 1) Figure will become a servicing customer of Sagent as it aggressively grows mortgage market share, 2) Figure/Sagent will partner on rapid modernization of Sagent’s platforms that power over $1 trillion in loans for servicers, 3) The deal accelerates Figure’s blockchain leadership across consumer finance and housing. Read more about Figure and Sagent’s strategic partnership here.
Legal News
RESPA class actions are not that common, but one popped up involving California’s Sierra Pacific Mortgage. Buckley writes, “On August 19, the U.S. District Court for the District of Maryland granted preliminary approval of a proposed class action settlement claiming a mortgage company engaged in an allegedly illegal kickback scheme with a title company. According to the memorandum in support of the plaintiffs’ motion for preliminary approval, the title company paid, and the mortgage company received and accepted, kickbacks in exchange for the mortgage company’s ‘assignment and referral of residential mortgage loans, refinances, and reverse mortgages to [the title company] for title and settlement services.’
“This conduct, the plaintiffs contended, violated RESPA and RICO. While the mortgage company denied all substantive allegations and liability, the parties reached a proposed settlement, in which class members (defined as borrowers with federal mortgage loans originated by the mortgage company for which the title company provided settlement services) will each receive approximately $3,200 from a $990,000 settlement fund. The preliminarily approved settlement also provides for class counsel fees and expenses and class representative service awards for a total not to exceed roughly $1.27 million…”
And here’s a new one. The Owners of REES (Real Estate Educational Services), Danny and Wendy Yen, are being investigated by the California DFPI and the NMLS for giving Real Estate and NMLS course certificates to Loan Originators without requiring the LOs to sit through the annual 8 hour NMLS course. Apparently for years LOs that renewed their NMLS registration through REES were told that they only had to read material and take a test for their NMLS required courses. This allowed hundreds if not thousands of Loan Originators to avoid sitting for 8 hours of course work the required NMLS Federal and or State course hours. Apparently, REES also did this same practice with state required Real Estate Licensing classes like DRE in California. The NMLS as usual is working with the individual state licensing departments in this investigation.
The NMLS require every LO to actually take a NMLS all of the required hours for each annual class plus any individual state requirements for each state the LO is licensed in. The course can be taken one of 3 ways: 8 hours live in person. 8 hours live on-line. Or by watching recorded classes online with exams and a final test, usually taking many more than 8 hours.
The NMLS take great offence if anyone attempts to get around these rules.
Unfortunately for the LOs that renewed their classes through REES since 2017, they are facing, at best, having to retake their 2020 and 2021 NMLS classes, and a recommendation that their license be suspended until they re-complete the 2020 class. All of the LOs in question face the possibility of the NMLS recommending that the state revoke the LO’s licenses. Some involved may be facing prison time.
The U.S. Supreme Court recently enjoined enforcement of Part A of New York’s COVID Emergency Eviction and Foreclosure Prevention Act (CEEFPA), which allows tenants to self-certify that they have suffered a COVID-19-related financial hardship as a defense to eviction proceedings.
Capital Markets
Angel Oak Capital Advisors announced the structured credit asset management firm has raised $1 billion in institutional equity capital on a year-to-date basis focusing on non-agency residential mortgage credit. Strategies managed by the firm are targeted to provide equity capital for approximately $20 billion in non-agency mortgage origination over the next two to three years. Angel Oak’s ambitious capital raise seeks to further increase the firm’s market share in the non-agency mortgage market while delivering attractive risk-adjusted returns for its institutional investor base.
Of course Powell is not going to lay out some precise schedule for scaling back asset purchases. But the bond market was once again cautious yesterday on the eve of Fed Chair Powell’s speech at the virtual Jackson Hole summit, where he may provide more clues about the Fed's approach to paring stimulus. The day began with a slight upward revision to Q2 GDP and a smaller than expected increase in the latest jobless claims report, and was followed by decent demand at the day's $62 billion 7-year Treasury note auction. The headline of the day was three Fed hawks (Dallas’ Kaplan, Kansas City’s George, and St. Louis’ Bullard) coming out in favor of accelerating the timeline for slowing asset purchases aimed at aiding the U.S. economy.
Kaplan said he favors an announcement at the central bank’s September meeting to begin tapering bond buying and implementing it in October. George said she prefers tapering to begin this year, and Bullard said that it should start in the fall and finish by the end of the Q1 2022. Fed Chair Powell has struck a more patient tone as of late, with rising COVID-19 cases potentially limiting what he can say about what comes next for U.S. monetary policy. Let’s see what he says in his speech.
Freddie Mac released the results of its Primary Mortgage Market Survey, showing that the 30-year fixed-rate mortgage averaged 2.87 percent, up 1 basis point from last week. Separately, Black Knight reported that the number of active forbearance plans edged slightly higher once again, and that as of August 24, 1.76 million borrowers remain in COVID-19 related forbearance plans.
Today’s highlight is the aforementioned speech by Fed Chair Powell, though markets receive some important data updates prior to that. We’ve already seen July PCE (+.4 percent, income +1.1 percent, spending ), with the core PCE deflator (+.3 percent). Later this morning brings final August Michigan sentiment and some inventory numbers. After releasing a new MBS purchase schedule with no changes to coupons covering the August 27 to September 14 period yesterday, the Desk will conduct just one UMBS30s operation today targeting up to $3.2 billion 2 percent and 2.5 percent. We begin the day with Agency MBS prices a few ticks higher and the 10-year yielding 1.34 after closing yesterday at 1.34 percent.
Jobs
Are you looking for the opportunity to join a hyper-growth startup and revolutionize homeownership? Knock is looking for a Chief Lending Officer to drive a mission-critical element of our business. You would oversee our Lending division in its entirety, with a focus on building and owning a scalable, customer-oriented lending operation. This is a dynamic opportunity to join a forward-thinking, tech-driven, and people-focused company. We are a 100% remote organization (meaning you live and work from anywhere in the United States!) and offer competitive compensation and benefits. To learn more about Knock, our values, and our benefits, head to Knock Careers. Please send all inquiries to John Eite.
Recognized for the sixth year in a row as a Great Place to Work® by FORTUNE Top 100 Best Companies to Work For,® National MI is looking to expand its Client Digital Experience team with two new roles, a Client Digital Experience Coordinator and a Sales Digital Experience Specialist. The Client Digital Experience Coordinator is responsible for assisting the Client Digital Experience team in various aspects to enhance the customer experience and to assist in growing the business. The coordinator will assist with customer training, CRM data entry, registration, and course assignments on the eLearning platform, creating reports and assisting with live webinar scheduling and preparation. The Sales Digital Experience Specialist grows and maintains relationships, in collaboration with the National and Field Sales teams, using virtual channels to engage existing and prospective clients. The Specialist will use customer data, social media tools, and digital content. To learn more, reach out to National MI today.
Industry Leading Compensation & Turn-Times. Recently named among Top 6 Best Large Mortgage Companies to Work For by National Mortgage News and #1 Mortgage Lender on Ranking Arizona’s consumer poll, Geneva Financial Home Loans is filling Branch Manager and Loan officer positions in 45 states. Close in as little as 10 days. Large volume branches can opt for same-day Underwriting with in-branch Ops option. P&L includes zero fees for credit reports, AUS, LOS, CRM, technology fees, employer taxes (commissioned employees), VOEs, 4506Ts, and warehouse costs. See why Geneva Financial has a 5-star Google rating with over 2,000 verified borrower reviews!
Norcom Mortgage expands its footprint into the Garden State, opening its first New Jersey branch in Marlton. This marks the Connecticut based lender’s 5th new branch within the last year. At Norcom, they believe you can have your cake and eat it too. Norcom is an Originator owned business that is small enough to be nimble, but large enough to be direct with Fannie, Freddie, and Ginnie. Norcom’s award winning marketing, technology, and sales support has driven their growth and record-breaking volume over the last year. Their top 25 Loan Officers have grown on average of 274%. If it’s time to grow your business, come grow with Norcom. Contact Mandi Garfield today for details.
A D.C. law firm, with a national mortgage banking and consumer financial services practice, seeks a paralegal/licensing specialist. Primary responsibilities include assisting with preparation of mortgage and financial-services related license applications, reviewing state and federal requirements for these applications, interacting with clients to obtain relevant information, filing and tracking applications, corresponding with regulators, handling related aspects of licensing project management, organizing and maintaining records, and drafting correspondence to clients and regulators. Candidates must have a four-year college degree, and 2 years of experience in the mortgage industry or other regulatory environment is preferred. Attention to detail and excellent oral/written communication skills are essential. The ideal candidate will be a self-starter with strong time management and organizational skills and solid computer skills, including a working proficiency using PDF software and Microsoft Office Suite. Familiarity with NMLS is a plus. Please send resume and cover letter to Liz Mesa, Assistant Administrator, at careers@thewbkfirm.com.