Latest posts by Rob Chrisman (see all)
- Apr. 29: Weed, lending, and business – home delivery? Notes on guarding against fraud & bad credit data, vendor mgt. – what is SSAE18? - April 29, 2017
- Apr. 28: Business opportunity, subservicer price offer; bank M&A – branches still popular; Agency updates & another GSE reform plan - April 28, 2017
- Apr. 27: Vendor products incl. non-QM sales tool; personnel moves; servicing: who’s brokering & buying & selling & why - April 27, 2017
Last month I had the privilege of spending some time at the Florida Ellie Mae Encompass event with CEO Jonathan Corr. I was reminded that he had coined the term “human spackle” in terms of lenders who seem to throw (“spackle”) employees at a problem or temporary situation, sometimes with decent results but often with results that indeed look like they were patched. There are better ways!
Guardian Mortgage Company is seeking producing branch managers and loan officers as it expands its presence in Michigan. Positions are available in the Grand Blanc office and a new location in Oakland County. “Serving generations of homebuyers since 1965, Guardian has an average tenure among loan officers of 10+ years dedicated to its origination platform of loan officer empowerment through origination assistance and in-house marketing and training departments. Management’s approach to the business of residential mortgage is one of integrity, honesty, and retained servicing focused on long term relationships and what is right for the needs of each borrower. For the top twelve reasons why Guardian would be a good fit for you and how you can join a partner you can trust, please visit the site above and/or forward your confidential inquiries and resume to LO-Employment@gmc-inc.com.
A progressive Northeast based closed loan aggregator of prime jumbo residential loans is looking for experienced sales people to fill VP of Correspondent Sales positions with a focus on middle market and regional jumbo lenders, relationships with Southeast concentrated lenders and willingness to be Tampa-based are pluses. Please send confidential inquiries to me at email@example.com.
Some news from Envoy Mortgage. Congratulations to John Felice (former Paramus branch manager) who was promoted to Regional Vice President of the Mid-Atlantic Region (VA, WV, MD, PA, DE, NJ, NY). A vital component of Envoy’s mission statement is to provide its associates with opportunities for growth as this indicates. “John is a U.S. Air Force veteran and a man of noble character, John has led a stellar career in the mortgage business. With 16 years of experience with GMAC Mortgage as a Regional Manager and 3 years of experience with Envoy Mortgage as a branch manager; John has the right resume of tenure and aptitude to take this region to the next level.
And New American Funding continues to expand its Wholesale sales coverage by hiring veteran Sales Manager Michael Rago. Michael brings over 29 years of mortgage sales and leadership experience to New American Funding. In his new position as Regional Sales Manager, Michael will be covering the Midwest and will be based out of Chicago. For new job opportunities as an AE with New American Funding Wholesale in the Midwest you can email Michael at the link above!
Well, all those Millennials are a few weeks older than when the commentary last discussed them. I don’t have any trophies to hand them, but Realtors and lenders sure hope they pair up, form households, and “bear fruit.” And I even have a joke about them down below. They are certainly the most talked about group in quite some time, and in fact I regularly receive e-mails suggesting they don’t need more attention. But I collected some recent news about them, with some of the information even conflicting…
While some data indicates that Millennials are starting to engage in home-buying activities, the Collingwood Group reports that the Millennial housing problem is not going away. As young adults begin to move out of their parents’ homes, they are initially looking to rent rather than buy. According to the Collingwood’s Mortgage Industry Outlook Report, 61 percent of respondents claimed to have not seen any evidence of new volume from the millennial generation. The usual suspects, high debt burden and low wage growth, are the primary reasons for delaying homeownership. Millennials are also delaying household formation, pushing the need to buy to later in life. Most of the respondents agreed that this generation will become homeowners in the near future. To read the report, click here.
Homeownership among young adults has dropped to 36.8%, from its peak of 43.1% in 2004. As such, more Millennials are living at home and renting with friends to offset the cost of living expenses. In a 2013 survey by Fannie Mae, 19% of adults aged 18 to 38 years old said one of the main reasons for renting was due to its flexibility and 23% of the same cohort said the number one reason for renting was affordability, with 26% stating that they were not ready to financially own a home and 8% noted that they could not obtain a mortgage. As most analysts have pointed out, student debt has bogged down young adults, delaying their ability to partake in homeownership activities. According to a Wells Fargo survey, the second biggest financial priority among Millennials is to purchase a home, only behind paying off debt. Apart from debt hindering some young adults form purchasing a home, Millennials are also delaying marriage, but homeownership rates often converge by the age of 35 to 39 years old. About 90 percent of young adults currently renting do want to buy a home at some point, but more often than not, Millennials will engage in homeownership later in their lives. To read more about Wells Fargo article, click here.
In line with most predictions, a millennial housing boom is coming. Tim Rood, chairman of the Collingwood Group has reaffirmed this expectation, suggesting that the size of the job market is supposed to peak in number of employees by 2016, and then drop off, as more people begin to retire and leave the job market. This will allow for a higher earning potential and greater employment opportunities among Millennials. Baby boomers are also beginning to retire in cities at higher rates, where Millennials currently reside. As more and more Millennials begin to settle down and raise a family (an amount that should increase by the end of the decade), they will move away from the city, ultimately swapping living environments with baby boomers. The rise in earning power for Millennials and their desire to settle down within the next few years will make Millennials the largest share of homebuyers in the near future.
Not all Millennials are struggling, as the mean net worth among Millennials is much higher than the median, indicating that a portion of young adults have a fairly robust balance sheet, according to Wells Fargo. Despite this, the decline in employment opportunities and earning potential among Millennials after the recession has led to an overall drop in assets among this generation. The median value of assets dropped from $38,200 in 2010 to $29,600 in 2013 and nonfinancial assets are more prevalent among young adults than financial assets. Among nonfinancial assets, Millennials are less likely to invest in real estate and business equity than any older cohort, as 35.6% of Millennials (a 2013 all-time low) owned a home and 6.5% of young adults had equity in businesses compared to 11.7% for all households. Millennials are also less likely to own a car and obtain a driver’s license – perhaps Millennials are in fact, more granola than their older counterparts. Compared to all households, young adults are only marginally less likely to hold financial assets, but the median asset value is $5,800 for Millennials, compared to $21,200 for all families. A 2013 Wells Fargo survey suggested that 60% of young people uphold the notion that the stock market is the best place to invest, but the inability to save money is preventing Millennials from doing so. Once the job market picks up for this generation, more Millennials will begin to invest in home buying, boosting the overall housing market.
The entire Millennial generation is now of employable age, and comprises about 35% of the U.S. working age population. Wells Fargo Securities, LLC Economics Group defines the Millennial generation as those between 16-34 years old. Currently, 85 million people make up the Millennial cohort and it is the largest generation in U.S. history, attributing to 30% of the U.S. population. Many Millennials graduated from school during the economic crisis, resulting in decreased employment opportunities and low wages. According to Wells Fargo survey, the recession taught 80% of Millennials to save money in order to mitigate future economic hardships, yet many Millennials are not saving for retirement. This may be attributed to the fact those most Millennials are tied down with debt obligations, as the survey suggested that student debt was the main financial concern among Millennials. More Millennials (between the ages of 25-34 years old) hold at least a Bachelor’s degree than the general population aged 25 and older. The educational achievements of the Millennial generation will ultimately lead to greater pay increases and employment opportunities, improving their financial situation. This will have a positive impact on the economy, as Millennials begin to engage in homeownership and investment opportunities. To read more about Wells Fargo’s article, click here.
Despite the fact that a greater share of Millennial workers is employed in low-paying industries, recent data indicates that Millennials should start experiencing a rise in income growth, according to Wells Fargo Securities, LLC Economics Group. Since 2008, median weekly earnings for full-time workers have increased about 1.9% per year, whereas the median weekly earnings for older Millennials (ages 25-34) have risen 1.6% per year compared to 1.5% for younger Millennials (ages 16-24). Throughout the past year, the median weekly earnings for younger Millennials have increased ahead of their older counterparts as younger Millennials are working more hours. The slow wage growth for Millennials compared to older workers can be attributed to graduating in a recession and entering careers in a weak labor market, resulting in long-lasting negative effects on wages. Starting salaries are often lower than the pre-recession environment, raises are modest and there are more underemployed workers. This wage loss can continue for around a decade. Between 2007 and 2013, younger households’ income (35 and younger), declined 14.6%, although Millennials are only slightly behind in median income compared to all households since the recession. For example, in 2013 the median income household income for those aged 35 and younger was 76.1% of the median income for all households, which has remained the same since 2004. There has been a recent surge in weekly earnings among Millennials, but an income gap still remains between Millennials and older workers, and is wider than prior generations. To read more about Wells Fargo’s article, click here.
According to an article posted on LinkedIn, Millennials are not job hopping and are more loyal now than they have ever been. A chart published by The Washington Post indicates that Millennials have stayed at their jobs longer than any time since 1982 and since the recession, the average length of employment occupancy has been on the rise, with an overall average of job tenure equaling 3.2 years. Similarly, the Bureau of Labor Statistics also indicated that job tenure has increased, with the median years of tenure in January of 2004 at 4 years, compared to 4.6 years in January 2014. The lack of job hopping can be attributed to the economy, as there are fewer new jobs being created that entail higher payer and room for advancement since more people would take those jobs leaving their current position. Since job hopping is at a low, the ratio between wages and corporate profits has never been higher since companies don’t have to pay their employees more. As the economy begins to improve, job hopping will increase again.
Switching gears to the markets, in yesterday’s economic news, advanced retail sales for February was the highlight along with weekly Initial Jobless Claims and February import prices. Feb retail prices were expected to be moderately strong at +0.3% after falling -0.8% in January but actually fell 0.6% in February amid rough weather. That was a huge miss by forecasters. Unemployment insurance claims were expected to have decreased in the first week of March, and sure enough they decreased by 36,000 to 289,000 in the week ended March 7. The four-week moving average for claims, which evens out weekly volatility, fell by 3,750 to 302,250 last week. Lastly import prices rose .4%, rising for the first time in eight months. Compared with one year earlier, prices were down 9.4%. That marked the largest year-over-year decrease since September 2009.
The U.S. fixed income market extended its gains for the week with the 10-year down 15 basis points since Friday closing at 2.10%. This morning we’re at 2.11% and agency MBS prices are roughly unchanged ahead of the news…
For thrills and chills heading into another wonderful weekend we have the February Producer Price Index and March Michigan Sentiment. The overall PPI final demand index for February is expected to post its first increase since October and largest since July, mostly due to the recent rebound in energy prices, and the preliminary March results from the University of Michigan consumer sentiment survey may show a marginal increase from the final February level.
Maybe you heard the story about the young business school graduate who was asked at a job interview what his biggest weakness might be.
“Honesty,” the young Millennial replied.
To which the hiring manager then said, “I’m not sure honesty is a weakness.”
After hearing this the Millennial said, “Who cares what you think?”
(Copyright 2015 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)