Apr. 10: Ops jobs & company opportunity; ALTA & MBA give “tips” to the CFPB; TRID-o-rama; quick MI update

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...

I have one of the finest bottle cap collections on my block. Heck, it might be the only one. When I told my kids that it would be listed in my will, for some reason they seemed uninterested. Some would say downright hostile. It turns out that Millennials everywhere are nixing their parents’ “treasures.” “Which of you wants my Jack-a-lope postcard? Hey, where you guys going?”

 

On the jobs front, EagleBank is seeking two senior mortgage underwriters who specifically have government underwriting experienceEagleBank is a community bank which has assets in excess of $5 billion, is based out of Bethesda MD serving the DC metro area, and is licensed in all 50 states. It is a full service correspondent lender with annual origination volume in excess of $1billion. EagleBank has two residential lending offices, one in Reston, VA and another in Potomac, MD, and is seeking one underwriter for each location. For more information contact Mark Deitz, SVP, Area Sales Manager.

 

And a well-capitalized group of strategic/financial investors is seeking a mid-Atlantic retail mortgage bank for an acquisition. The residential mortgage bank should be full-service, Mid-Atlantic based, retail-focused, and licensed in MD, DC, VA, and PA at a minimum. FHA/VA endorsements, GSE approvals optimal. Principals only; send a confidential note of interest to me at rchrisman@robchrisman.com. (Please specify the opportunity.)

 

Three thousand miles away there is an excellent opportunity in Northern California for someone experienced in portfolio retention and/or consumer direct origination management. “This premier lender currently services in excess of $10 billion and needs an experienced leader to build out its retention platform. The candidate should have origination (NMLS Licensed) and management experience in this area and possess a desire to grow the platform exponentially. Send your resumes in confidence to rchrisman@robchrisman.com. (Please specify the opportunity.)

 

A quick congrats to Susan King who United Guaranty Corporation has named Regional Vice President of the West Region, and to Amy Butler Regional Vice President of the Heartland Region.

 

In my travels I meet plenty of smart mortgage bankers, and plenty of them are very concerned about the power that regulators have. “This month, the Supreme Court unanimously missed an opportunity to check the rising regulatory state. Its decision in Perez v. Mortgage Bankers Association marks the culmination of a long journey in American jurisprudence to transfer immense influence to federal regulators. Undoubtedly, Congress has been complicit in this handover by producing vague laws that leave the door open to a bounty of agency interpretations. However, until now, the Supreme Court stood as the only safeguard against this tide of legislative laziness and federal overreach. This judicial abdication marks the rise of the regulator.”

 

For its part The Mortgage Bankers Association sent a letter affirming its support for three bills that would restructure the Consumer Financial Protection Bureau.

 

The American Land Title Association (ALTA), the national trade association of the land title insurance industry, released the following statement today addressing the Consumer Financial Protection Bureau’s (CFPB) new “Your Home Loan Toolkit.” “Overall, the new consumer toolkit is a good resource and provides valuable information for consumers in an understandable manner,” said Michelle Korsmo, ALTA’s chief executive officer. “There’s a funny but necessary paragraph in the new “Your Home Loan Toolkit” that highlights the confusion consumers will experience when the real estate industry begins utilizing the CFPB’s new Closing Disclosure forms on Aug. 1. ALTA suggests that the CFPB accept three important alterations to the “Your Home Loan Toolkit.””

 

“First, we’ve long been concerned with the forms, and now the booklet, calling the title insurance policy ‘optional.’ The Bureau should not discourage any homeowner from purchasing an owner’s title insurance policy that financially protects one of the largest investments of their lives. For a one-time fee paid at the closing table, an owner’s title insurance policy protects a homebuyer from having to pay legal fees and claims that were not discovered during the title search such as back taxes owed by previous owners, compensation to an unknown heir for their interest in the property or even if there was a forged signature on a deed. The CFPB should provide an accurate description of the peace of mind an owner’s title insurance policy provides and allow the homebuyer to make their own decision about purchasing this protection for their home.”

 

“Secondly, for many consumers, buying a home is the single largest investment they will make in their lifetime and homebuyers should fully understand the costs of their investment. In the new toolkit, the Bureau asks homebuyers to overlook the flaws on these forms and states that a homebuyer may receive a final list of fees at the closing table that differs from the fees that are included on their Loan Estimate and Closing Disclosure. In nearly half of the United States, consumers will pay for title insurance rates that are different than how the CFPB requires ALTA members to inaccurately disclose these fees on the new forms. ALTA and its members request that the Bureau fix their confusing forms, and the accompanying language in the new toolkit, before the Aug. 1 implementation date.”

 

“Finally, the Bureau would better serve consumers by adding information about the additional costs of owning a home such as utility fees which include power, water, gas, electricity, etc. As a homebuyer considers the financial impact of homeownership they should be presented with all of the possible costs they might encounter to maintain their home.”

 

On the TRID pile…

 

HomeBridge Financial Services launched a free TRID Rule website full of informative videos, resources and a 6-part webinar series which includes extensive Q&A. These resources are FREE for ALL industry professionals regardless if they are HomeBridge partners or not – no strings attached.

 

The MBA is offering up its “TILA RESPA Integrated Disclosure (TRID) Virtual Forum on Thursday, April 16 – online. $275 for members, $850 for non-members. “Join us next week as we broadcast our sold-out TRID Forum live from Washington, D.C. Virtual attendees will have the opportunity to hear from panels of leading compliance, title, Realtor, settlement, operations and technology staff.”

 

As if preparing for TRID wasn’t enough, Ellie Mae released an infographic highlighting the top items that lenders should keep in mind this year, including the Credit Risk Retention/ Qualified Residential Mortgage rule with sections of the final rule taking effect on December 24th of this year and a possible new 1003 in 2016. We may also see a gradual increase to the 30 year fixed rate, jumping to as high as 5.6 percent in 2016. The overall volume for this year is expected to reach $1.20 trillion, with 61 percent purchase and 39 percent refinance compared to $1.17 trillion in 2016 with 68 percent purchase and 32 percent refinance. There are currently 4.6 million 23 year-olds in the U.S., which is more than any other age group and consumer direct lending accounted for 1 out of every 3 originations in 2014.

 

Perhaps as a proxy for the MI business in general, under the MGIC operating statistics banner…

 

MGIC Investment Corporation has published February operating statistics, reporting that new notices declined by 23.8% YoY and 27.4% MoM and delinquent inventory was down 5.8% MoM and 22.7% YoY. The cure ratio increased to 154.7% from 75.5% in January and paid claims increased 7.1% MoM. New insurance written equaled $2.5 billion in February, slightly down from January’s $2.9 billion value and net rescission and denials increased to 93 from 56 in January. To access KBW’s report on MGIC’s February statistics, click here.

 

MGIC reported monthly operating statistics for March, indicating that new notices were down 2.7 percent YoY, compared to being down 14.5 YoY in March of 2014. The cure ratio dropped to 130.8 percent from 154.6 percent a month prior and the ending delinquent inventory was down 21.3 percent YoY versus 22.7 percent in February. Paid claims saw a 1.3 percent decline MoM compared to a decrease of 7.1 percent in February. Net recessions and denials dropped to 72 from 93 in February and new insurance written equaled $3.6 billion in March, an increase from $2.5 billion in February. To read more about MGIC’s report, click here.

 

While we’re on MGIC, it has expanded uses for Non-Go! Rate/term Refinance proceeds to include certain Non-Purchase Money Second Liens. Effective with Mortgage Insurance Applications received on or after March 2, 2015, borrowers can use loan proceeds to pay off a nonpurchase-money lien. Requirements are as follows: The second lien seasoned for at least 12 months prior to the loan application date and where the second lien is a Home Equity Line of Credit, the total draws within the last 12 months cannot exceed $2,000.

 

A while back Arch Mortgage Insurance Company forecast low probability of home price declines in the next two years in its Winter 2015 Housing and Mortgage Market Review. The national average is 8 (where there is only an 8% chance of home prices being lower in two years). The states with the highest risk of future home price declines are North Dakota and Louisiana due to economic dependence on oil. Arch MI Risk Index predicts the probability of housing prices in a region will be lower in two years times 100 and found that the ten riskiest states include North Dakota (37%) and Louisiana (35%), followed by Oklahoma (27%), Texas (24%), Alaska (20%), New Mexico (19%), Colorado (17%) and Wyoming (17%). Home prices rose 4.7% YoY according to October’s S&P/Case-Shiller National Home Price Index and 4.4% according to the FHFA Purchase-Only Index for October. Delinquency rates are also down, but New York and New Jersey have seen slow improvement in this area within the last few years and mortgages more than 90 days in foreclosure declined to 4.7% at the end of Q3 in 2014. The YoY change in FHFA Home Price Index in the third quarter of 2014 was positive across the nation, with the fastest growth evident in the West, Florida and Texas. During this time period, the national unemployment rate fell to 5.6%, with the highest rates of unemployment in parts of the West, South and in Michigan.

 

Consumers are getting a little more bullish on housing, according to the Fannie Mae National Housing Survey. They expect home prices to rise 2.7% over the next 12 months. Last February had a blip where more people thought the economy was on the right track than the wrong track, but it has reverted back to normalcy.

 

And don’t forget: The McMansion is back. The median square footage of new homes topped 2,400 square feet last year. Builders are chasing the affluent because the first time homebuyer is still largely out of the market. That said, some builders, like D.R. Horton, are introducing new brands that are in the first time homebuyer price points.

 

The Fed owns $4.2 trillion worth of Treasuries and MBS. They have already said they do not plan to sell their MBS holdings, but Treasuries are more interesting. As of now, all maturing proceeds are being re-invested back in the market. Next year, about $216 billion will come due, which is about 5 months’ worth of peak QE buying. As Brent Nitray points out, “The other big concern at the Fed is the shape of the yield curve. They generally prefer a steeper, upward sloping yield curve. The fear is that an increase in short term rates would make the dollar so attractive that foreign money piles into Treasuries, making the yield curve flatter.”

 

Continuing on talking about the markets, yesterday the yield curve steepened, which is code for long term rates moving higher relative to short term rates. What moved rates? The answer is better-than-expected continuing jobless claims and February wholesale inventories, not to mention a weak 30-year bond auction. By the time the horses were put in the barn the 10-yr saw a close of 1.96%. And there isn’t a tremendous amount of news today either: the March Export Prices (ex-agriculture) and March Import Prices (ex-oil).

 

 

50 Shades of Golf

Four guys have been going to the same golfing trip to St Andrews for many years.

Two days before the group is to leave, Jack’s wife puts her foot down and tells him he isn’t going. Jack’s mates are very upset that he can’t go, but what can they do.

Two days later, the three get to St Andrews only to find Jack sitting at the bar with four drinks set up!

“Wow, Jack, how long have you been here, and how did you talk your misses into letting you go?”

“Well, I’ve been here since last night. Yesterday evening, I was sitting in my living room chair and my wife came up behind me and put her hands over my eyes and asked, ‘Guess who?’ I pulled her hands off, and there she was, wearing a nightie. She took my hand and pulled me into our bedroom. The room had candles and rose petals all over. Well she’s been reading ‘50 Shades of Grey’…… On the bed she had handcuffs, and ropes! She told me to tie her up and cuff her to the bed, so I did. And then she said, ‘Do whatever you want.’”

“So— Here I am!”

 

 

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.)