Apr. 7: Mortgage sales jobs, private money & scratched & dented outlets; subservicer review & the state of selling servicing

Rob Chrisman

Rob Chrisman began his career in mortgage banking – primarily capital markets – 31 years ago in 1985 with First California Mortgage, assisting in Secondary Marketing until 1988, when he joined Tuttle & Co., a leading mortgage pipeline risk management firm. He was an account manager and partner at Tuttle & Co. until 1996, when he moved to Scotland with his family for 9 months. Read more...

Things have a way of changing – even appearances. (Ray W. sent me news that recently there was a Kenny Rogers look-alike contest. Kenny Rogers came in 3rd.) Something else that is changing is confidence among potential homebuyers. TD Bank Mortgage Service Index indicates that consumer home buying confidence is up 10 percent year over year. The survey found that 30 percent of Americans consider now to be a good time to buy, compared to 20 percent in 2014 and 29 percent are likely to purchase a home this year, up from 21 percent in 2014. The amount of consumers who have purchased a home within the past two years have increased by 5 percent since 2014, but two in five consumers feel there is lack of inventory in their price range and 44 percent are not familiar with home affordability programs.

 

For something a little different than the usual ad, Wildcat Lending, a private money lender in the Dallas/Ft Worth area, continues to add clients. This area of lending is such an untapped or unknown area of lending that EVERY Real Estate Agent and Loan Originator needs to know about, especially in today’s lending market, to get more offers accepted and more loans closed. “Need a bridge loan or can’t approve a ‘subject to’ appraised value? Hard money will be the next ‘big’ thing in terms of demand in residential lending and Wildcat is willing to educate and show you how we do business, especially in the Texas markets. We lend on the After Repaired Value, or ARV, and our loans include both purchase and rehab funds. This is for investment properties only where generally an investor acquires, rehabs and either flips or keeps the property as a rental.  Turn times can be in a few days (remember those days?) and this can be basically considered a cash offer!  Please email Jeremy Rehwald or Kai Chandler to learn more about Wildcat Lending’s loan products and terms.

 

And Residential Recovery Partners, a boutique single family residential mortgage investment fund, is actively seeking newly originated mortgages that have underwriting exceptions or have been subject to investor overlay kick outs (scratch and dent loans). Mortgages may be delivered individually or on a pooled basis. To submit acquisition opportunities, please visit RRP’s website or email us here.

 

For opportunities, “Having successfully expanded our west coast retail partner network that contributed to more than doubling monthly production volume in 2014, a multi-billion dollar nationally-recognized mortgage lender is now searching for two top-tier mortgage professionals in the Northeast and Mid-South to fill a Regional Management role.  Licensed across the country, our unique regionalized model and superior service offers unparalleled opportunity for growth. The ideal candidate, capable of managing multiple branch locations, is currently a mortgage broker or an existing retail branch / territory manager with monthly production of $5+M. As a direct seller to all agencies, we offer a comprehensive suite of products with virtually no overlays and complete fulfillment within your region, direct input into operating margins and MLO compensation, and 100% branch credits & multi-branch overrides. Interested parties are encouraged to submit a confidential letter of interest and/or resume to me at rchrisman@robchrisman.com.

 

And Primary Capital Mortgage, LLC, is seeking Account Executives in the state of California. “Discover the advantage of working for one of the top rated mortgage lenders in the country! It’s no secret that happy employees are more productive. At Primary Capital Mortgage, LLC that’s not just something they believe in, it’s something that they have proven. Primary Capital Mortgage was recently ranked the 6th Great Workplace in Financial Services for 2015 by Great Rated and also awarded Top 150 Workplaces in Atlanta for the second year in a row by the Atlanta Journal Constitution. These recognitions were made possible by numerous anonymous votes from Primary Capital Mortgage employees. While others in the industry are focused on decreasing their headcount, Primary Capital Mortgage is invested in hiring ambitious staff, and providing needed training, fair promotions and personally challenging work for their current employees.  If you’re interested in learning more about working for one of the top mortgage employers in the country, please contact Sharon Bitz, VP, Western Division, or call 916-996-1620. Please send all resumes to Liana Thomas, Senior Vice President of Human Resources. To learn more about the company’s Non-Agency Jumbo product, new interface and customer portal, and LOS developed solely for Primary Capital Mortgage, please visit www.PCMexpress.com.

 

Servicing continues to be a hot topic! It is highly debatable whether or not non-banks earn much income from servicing loans, but that aside…

 

Richey May is conducting sub-servicer oversight.  Are you? For those companies using LoanCare or Dovenmuehle as their sub-servicer, Richey May is again conducting sub-servicer oversight reviews in 2015 to assist companies with their monitoring and oversight responsibilities. If you are an agency seller/servicer, or GNMA issuer, you are fully responsible for monitoring and overseeing your sub-servicer’s performance.  Richey May & Co, an accounting firm that is heavily specialized in the mortgage industry, has developed a comprehensive oversight review program that includes loan-level testing and testing of the sub-servicer’s policies and procedures and internal controls on behalf of multiple clients at the same time, thereby sharing expenses and creating cost savings that are passed on to clients. Richey May has already conducted a review over Dovenmuehle and will be starting its review over LoanCare in the upcoming weeks. If you are interested in learning more about Richey May’s sub-servicer oversight review program, or participating in either the LoanCare or Dovenmuehle reviews, please contact Kurt Blohm.

 

The first item sold on eBay was a broken laser pointer. On Labor Day weekend in 1995, computer programmer Omidyar wrote the code for what he called an “experiment.” He wanted to know what would happen if everyone in the world had access to a single global marketplace. To test his idea, he came up with an auction website, where he listed a broken laser pointer that he was going to throw away. In the end, a collector bought it for $14.83.…speaking of auctions, let’s get caught up on MSR’s before someone steals eBay’s idea of an electronic marketplace for servicing. In March MountainView Servicing Group offered a $1.7 billion FHLMC/FNMA non-recourse servicing portfolio. The 100 percent fixed rate 1st lien package has a 753 WaFICO, 74% WaLTV, 4.06% WAC, has no modifications or HARP loans, an average loan size of $208k, with top states: California (14.2%), Florida (12.0%), Pennsylvania (9.3%), and New York (9.1%). Phoenix Capital’s Project Golden was a $364M bulk Fannie Mae and Freddie Mac mortgage package which is 80% Fixed 30, 19% Fixed 15, 1% ARM, 3.96% WAC, 64% WaLTV, average loan amount of $250k, 98% Ca originations, with 80% Owner Occupied. Project Falcon was a $660M bulk Fannie Mae/Freddie Mac & $684M Ginnie Mae mortgage servicing rights. The FNMA/FHLC collateral is 78% Fixed 30, 22% Fixed 15, 4.11% WAC, 757 WaFICO, 79% WaLTV, $239k average loan balance; the GNMA collateral is 49% FHA, 39% VA, 12% USDA, 99% Fixed 30, 1% Fixed 15, 4.16% WAC, $178k average loan balance, 703 WaFICO, 97% WaLTV, 91% Retail originations. Project Inferno was a $692M bulk Fannie Mae and Freddie Mac servicing rights package. It’s 70% F30; 30% F15, 3.89% WAC, 760 WaFICO, 63% WaLTV, 73% Rate/Term Refinance, 96% CA geography, 90% Owner Occupied.

 

This month is a new batch. MountainView Servicing is offering a $10 billion FNMA/FHLMC portfolio which is currently available for sale. The package is 100% fixed rate, 1st lien product, with a 3.82% WAC, 763 WaFICO, 75% WaLTV, Avg loas size of $233k, with top states: California (25.5%), Colorado (11.8%), Washington (6.5%), and Massachusetts (5.6%). Bids for this package are due April 13th….MIAC is offering a $50M per month concurrent servicing flow deal; the flow servicing is being offered by a well-capitalized mortgage company that originates loans with a geographic concentration primarily in New York. The agreement will be for 100% fixed rate loans, with a $177.7k average loan size, GNMA – 40.81%, FNMA A/A – 59.19%, 85.80% loans are from the state of New York, an average escrow balance of $2,311 per loan, and average FICO of 729. Bids due 04/10/2015.…Prestwick Mortgage Group has two deals I have seen; the first is for $49 Million Texas FNMA A/A, 100% fixed rate, 4.519% WAC, 100% Texas origination, with a $110k average loan size. Bids are due April 13th. The second is for $167 Million Illinois FNMA/FHLMC plus $15-20 Million monthly flow; the package is approximately 77% Illinois, with Wisconsin (8.5%) and Minnesota (4.2%), 4.126% WAC, with an average loan amount of $171k. Bids are due April 14th.

 

And what are the guys “in the know” saying about the mortgage servicing rights (MSR) market? A while back Adam Quinones with Thomson Reuters published some quotes.

 

MountainView Capital’s Matt Maurer observed, “MSR market liquidity is still strong with required yields holding steady for majority of our offerings. Yes there’s been modest weakening for smaller counterparties who are offering smaller portfolios but these sellers are still receiving fair levels…Large amounts of servicing are definitely trading and we expect bulk and deal flow to continue.”

 

Stephen Fleming with Phoenix Capital noted, “Increased media attention on loan servicers and elevated rate volatility has spawned an ‘IS IT JULY YET?’ attitude in the MSR space. Liquidity is certainly there but it’s gotten more specific as has pricing analysis. Supply and demand are more dependent on structure (flow vs bulk vs IO, etc.), counterparty risk, investor profile, deal size, and loan-level attributes…buyers seem to be focusing more closely on heightened rate volatility, a pancaked yield curve, and policies such as new non-bank servicer liquidity requirements and updated FHA MIPs. This has translated into a wider dispersion of bid levels across a wide pool of demand.”

 

Mike Carnes of MIAC wrote, “Why are we seeing $3-4 billion public packages? Two answers: earnings and capital Constraints. As it turns out many shops underestimated their fully loaded ‘Cost to Service’ and decided it’s financially advantageous to sell. Despite the desire for many to own mortgage servicing rights (customer retention and it’s a natural hedge), for many capital constrained firms, the desire to keep lending outweighs the desire to own serving. Markets remain strong with most bids attracting 8-12 bids from an attractive circle of buyers at each ‘Size of Transaction’ level.  Given compelling yield levels, it’s still an easy decision for most sellers.”

 

In the primary markets most top LOs are focused on closing the loans and not so much on rates, but it is a pretty safe bet that rates will change and leave plenty of intelligent folks thinking about the “what ifs.” The latest piece comes from Christopher Whalen, Senior Managing Director with Kroll Bond Rating Agency, Inc.: http://tinyurl.com/qctsyb3

 

This week finds me heading to Kentucky, Iowa, and then Augusta, Georgia with First Bank Mortgage – someone told me there’s a golf tournament I should attend before I kick the bucket. What is puzzling is why a non-golfer is so interested in a golf tournament. What is also puzzling is why rates went up Monday. Treasury prices sold off sharply and rates moved higher: “a strong bid for risk as equities pushed back rate hike odds as a result of the unexpectedly weak March employment report.” The equity rally was not built on good economic data but rather the realization among traders that if an awful March employment report could not cause equities to go down, then this was not the place to be short/under-invested

 

So Treasury prices declined in sympathy with a global equity rally that reversed 55% of a 2-week correction in the S&P 500. The 10-year note, in particular, gave back all of Friday’s 19 ticks gain which helped alleviate the increased supply and prepayment pressures that faced the mortgage-backed securities market as trading got underway for the week.

 

So it was psychological, and thus the opposite could happen at any point this week with no scheduled news of substance. At the close Monday the 10-year note yield had eliminated Friday’s entire rally, going from 1.84% back to where it was on Thursday – 1.90%.

 

For thrills and chills today we don’t have anything much to talk about until the $24 billion 3-year note auction at 1PM EDT. In the early going the 10-yr is at 1.92% with agency MBS prices off a smidge (less than .125).

 

 

Part 2 of 3 of “Deep Thoughts.” (Rated PG – guaranteed to offend someone.)

  1. The most precious thing we have is life, yet it has absolutely no trade-in value.
  2. If life deals you lemons, make lemonade. If life deals you tomatoes, make Bloody Marys.
  3. I love being married. It’s so great to find that one special person you want to annoy for the rest of your life.
  4. Shopping tip: You can get shoes for a buck at bowling alleys.
  5. I am a nobody. Nobody is perfect, and therefore I am perfect.
  6. Every day I beat my own previous record for number of consecutive days I’ve stayed alive.
  7. That Claudia Schiffer must be a genius because I told a friend my plan for a never-ending refi boom, and he told me I have “Schiffer Brains.”
  8. No one ever says, “It’s only a game!” when their team is winning.

 

 

Rob

 

(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.)