Dec. 7: Retail, wholeale, and Ops jobs; servicing transfer trends; investor’s view of CD & LE potential defect

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...

“Rob, you discussed TRID issues Saturday. Anything else you’re hearing from investors?” Sure. Remember that investors, whether it is Fannie or Freddie or any of the myriad of correspondent investors, require the seller/lender to rep & warrant that the loan is compliant. In other words, the lender agrees that the loan adheres to compliance guidelines, which include TILA-RESPA, and if not could be subject to repurchase. In my discussions with investors I am hearing that a major problem is a closing disclosure is dated prior to the loan estimate. Because either the settlement agent or the lender is allowed to issue a CD, sometimes settlement agents take it upon themselves without notifying the lender, and the mere existence of a CD before an LE renders a TRID defect. Another issue is that because CDs aren’t necessarily required to be signed, and there may be multiple CDs in a loan file, it is difficult for an investor to know that the most recent CD is the one that the borrower actually used in closing the loan. Therefore many investors are requiring that the closing CD be signed by the borrower. Let me know why the borrower is better off…

 

In wholesale job news JMAC Lending has two key open positions in sales. JMAC is looking for a talented Northwest Area Sales Manager to manage and grow its existing team of 6 Account Executives in OR, UT, WA, and Northern California. The Sales Manager is responsible for growing a specified territory and creating an efficient daily operation of their assigned area, including but not limited to, product sales, recruiting, and customer service in accordance with the Company’s strategic objectives. JMAC is also seeking an AE for Hawaii who will manage an existing approved broker list of 30+ companies and monthly production of approximately $5 million. If you fit either positions and are seeking a company that values your feedback and contribution, contact HR Generalist Vanna Nguyen (949-390-2656). “JMAC is focused primarily on wholesale origination and continues to expand our product line and technology. If you are looking to join a company that values your feedback and contribution, this is a place for you.”

 

Due to explosive sales growth, Movement Mortgage, with its “7 Day Mortgage Process,” is hiring over 400 new positions for experienced processors, underwriters and closers. “Movement is one of the nation’s fastest growing, privately held mortgage companies. Movement has streamlined the industry with an innovative loan approval process which begins with upfront, six-hour underwriting and aims to finish the loan process in seven business days to bring families home faster. We love our employees so we intentionally create a place where they feel valued and cared for in a positive and fun environment. Movement offers top benefits, exciting perks, competitive pay, community investment and numerous career growth opportunities. Visit MovementCareers to see available positions in Charlotte, Virginia Beach, Richmond and Phoenix, or send resumes to careers@movement.com.”

 

And in new product news Western Bancorp, a California Wholesale Lender, recently announced changes to its High Balance Mortgage Loan Eligibility. High Balance mortgages now align with the LTV, CTV and HCLTV grid for general loan limits, with LTVs up to 95%. The 5% minimum borrower contribution no longer applies on one unit principal residence transactions with LTV ratios greater than 80%. Field review of property requirement for loan amounts greater than $625,500, with an LTV, CLTV or HCLTV ratio greater than 80% has been removed. Western is committed to providing a variety of options for California Borrowers. Please view Western’s FannieReady guidelines or the Guidelines Page for more information, and contact ask@westernbancorp.com with any questions.

 

Wednesday the MBA and Phoenix Capital are offering up a webinar on Mortgage Servicing Rights. “Get guidance on how to manage the risks associated with owning Mortgage Servicing Rights (MSR), learn the pitfalls to avoid by doing so and explore lessons learned over the past several years. And Hank Davis with MetaSource sent out a whitepaper on Servicing QC Requirements.

 

As I mentioned last week servicing continues to change hands although at a slightly slower pace than earlier this year. And the top servicers continue to add servicing through their own retail branch networks: Wells Fargo (with about $1.7 trillion it has about a 17% market share), Chase (with less than $1 trillion), followed by Bank of America. Per Inside Mortgage Finance at the #4 spot we see our first non-bank with Nationstar ($400 billion), followed by Citi, US Bank, and then Ocwen with about $300 billion. After that you’ll notice the banks almost disappear: Walter Investment, PHH, Quicken Loans, PennyMac, then SunTrust, PNC, and BB&T (with about $120 billion). And then more non-banks: LoanCare, Caliber, Provident Funding, banks Fifth Third, Flagstar, and at #20 Bayview ($63 billion). Those who follow such trends are quick to point out that, aside from Nationstar, the top five all lost market share during the last year.

 

Occasionally I am asked who the larger servicing brokers are, and what the pools look like. Below is a collection of recent deals over the last several months, along with the pertinent information. As a quick aside according to Dr. Sheldon Cooper, when it comes to the most common street names, there are generally more “2nd Streets“, than there are “1st Streets“, in the United States. The general consensus for this phenomenon says the majority of cities and small towns have renamed 1st Street to Main Street….leaving 2nd Street as the most common. Who am I to argue with someone who has a Master’s degree and two doctorates?

 

Speaking of fun facts, Prestwick Mortgage Group is offering of mortgage loan servicing package for $150 Million of New England FNMA A/A first liens. The package, which is 100% FRMs, is $199k average unpaid principal balance, with a 3.587% WAC, 754 WaFICO, retail originations, with a state dispersion of: Massachusetts (643 loans) and New Hampshire (110 loans). Bids for this package were due Sep 29th….Phoenix Capital offered Project Piston:  a $1B FNMA + $617M FHLMC + $1.04B GNMA + $578M GNMA Bulk MSR package. The seller was an experienced independent mortgage bank, and the collateral is in line with what we’ve seen with agency product. MountainView Capital recently sold a $430M FNMA/FHLMC Servicing package which was 100% fixed rate, 1st lien product, with a 762 WaFICO, 64% WaLTV, 3.94 WAC, low delinquencies, average loan balance of $263k, located entirely in Hawaii.

 

Tis the season to shed some balance sheet weight. MIAC is the exclusive representative rep for a Seller of a $604 Million GNMA mortgage servicing portfolio. The portfolio is being offered by a mortgage company that originates loans with a national geographic concentration. The Seller will be providing full representations and warranties for the loans included in this offering. The package is: $111,233 Average Loan Size, attractive 0.578% Service Fee, low Actual CPR’s in the single digits, 100% Fixed Rate, 6.44% GNMA I and 93.56% GNMA II, 5.642% WAC, weighted average loan Age of 18 months, 98% Retail and 100% Owner Occupied. MIAC’s second offering is for a $122.8 million GNMA Multifamily MSR portfolio. The portfolio is being offered by a National Commercial Real Estate lender. The portfolio is: 100% GNMA Multifamily, $15.36 Million Average Loan Size, 3.604% WAC, 100% retail origination, weighted average loan age of 13 months, with a weighted average net service fee of 0.147%. Interactive Mortgage Advisors is the exclusive broker for the seller of a $70 – $120 million monthly South East MSR flow deal. The seller is a well-capitalized, state-chartered bank with experienced senior management well-versed in servicing transfers. The Seller’s objective is to begin delivery in January with full ramp-up in February. The Seller will be offering a subsequent bulk offering of approximately $1.5 Billion with a Q1 2016 Sale Date requirement. Therefore, this potential relationship could total up to $3 Billion in 2016. The FNMA/FHLMC flow portion out for bid is for $40-70M per month, 85% 30yr FRM, with an average loan balance of $196k. The GNMA portion of the deal is for $30-50M per month, 97% 30yr FRM, with an average loan balance of $176k. MountainView Servicing Group is offering a $121 million FHLMC/GNMA/FNMA servicing portfolio that is being made available to the national market. Quality features of this portfolio include: 98% fixed rate and 100% 1st lien product, WaFICO of 733, WaLTV of 78%, 3.76% WAC, low delinquencies, with top states: Utah (54%) and California (32.8%), and an average loan size of $252k.

 

Phoenix Capital recently put three deals into the marketplace; Project Wasabi was a $40-$50M per month conventional MSR flow offering. The buyer of this deal can expect to see 100% FRM, 90% 30yr term, 70-85% FNMA, 100% retail originations, 63% NJ, 12% PA, 5% NY geography, Avg Bal: $252k, 4.136% WAC, 95% owner occupied, with 753 WaFICO and 80% WaLTV; Project Viper (which I’ve been told has no connection to Maverick’s commanding officer at Top Gun….but maybe Stephen Fleming threw in a poster) is a $680M FNMA Bulk + $40-$50M conventional flow MSR offering. The bulk portion of the package is: 100% FNMA,  >99% Fixed Rate, >99% Retail Originations, <1% wholesale, geography: (48%) FL, (11%) CO, (8%) MI, Avg Bal: $180K, 4.367% (F30) Note Rate; 3.581% (F15) Note Rate, with 740 WaFICO and 81% WaLTV; Project Cypress is a monthly flow package of $30-$50M/mo. The winning bid will receive 100% FHLMC GLD, Fixed Rate, 92% 30yr term; 8% 15yr term, Average Balance $244-$254k, WaFICO 752, WaLTV 80%, geography: UT (47%), CO (36%), & CA (6%), with 100% retail originations.

 

Interactive Mortgage Advisors had two MSR packages out in the market recently; the first was a $4.0 billion GNMA bulk residential offering which has a 3.66% WAC, 94.2% WaLTV, 716 WaFICO, 99.6% O/O, 63% Purchase/32% Cash Out/3% RT, $167k Average Loan Balance, with a fairly even state distribution (OH/TN/FL/TX top states at 5-8%); the second offering is a $51 million bulk New York FNMA pool. The package has a 3.85% WAC, 59.9 WaLTV, 756 WaFICO, 86% O/O, 43% RT, 35% Purchase, 20% Cash Out, $302k Average Loan Balance, with all 170 loans in the state of New York. Phoenix Capital has offered Project Pistol, a $2.45B FNMA/FHLMC + $620M GNMA bulk package. The conventional portion of the package is: 87% Fixed 30, 11% Fixed 15, 2% ARM, 4.49% WAC (F30) and 3.60% WAC (F15), Avg Bal $254K, wAvg FICO 748, wAvg LTV 71%, 83% Owner Occupied properties, with a state distribution of: 79% CA, 5% MA, 3% FL. The Government portion is: 99% Fixed 30, 1% Fixed 15, 3.870% (F30) Note Rate; 3.498% (F15), wAvg FICO 684; wAvg LTV 95%, 99% Owner Occupied properties, with a state distribution of: 37% CA, 7% FL, 6% FL.

 

Looking at the bond market, remember that Friday we saw the unemployment data. Basically it came out as expected, and does nothing to change most analysts’ opinions that the Federal Open Market Committee will raise short term rates next week. In fact the new president of the Philadelphia Fed, Patrick Harker, said that the Fed is likely to raise rates “sooner rather than later”. Treasuries got battered on Thursday but they did find a relief rally Friday.

 

We do have a fair amount of news this week. There is nothing noteworthy here on Pearl Harbor Day, nor tomorrow although there is a $24 billion 3-year T-note auction, or Wednesday aside from the non-market moving MBA application figures, some forgettable inventory numbers, and a $21 billion 10-year T-note auction. Thursday is Initial Jobless Claims & some import and export price data along with a $13 billion 30-year bond auction. Friday is some meat: Retail Sales, the Producer Price Index (PPI), and some University of Michigan figures. If you’re trying to guess where rate sheets will be, we closed the 10-year Friday at 2.28% and this morning (in the very early going as I head toward Southern California) it’s 2.27% with agency MBS prices slightly better.

 

 

(Warning: don’t read if you are politically sensitive.)

During the 3-1/2 years of World War 2 that started with the Japanese bombing of Pearl Harbor in December 1941 and ended with the Surrender of Germany and Japan in 1945, the U.S. produced the following:

22 aircraft carriers, 8 battleships, 48 cruisers, 349 destroyers, 420 destroyer escorts, 203 submarines, 34 million tons of merchant ships, 100,000 fighter aircraft, 98,000 bombers, 24,000 transport aircraft,

58,000 training aircraft, 93,000 tanks, 257,000 artillery pieces, 105,000 mortars, 3,000,000 machine guns, and 2,500,000 military trucks.

We put 16.1 million men in uniform in the various armed services, invaded Africa, invaded Sicily and Italy, won the battle for the Atlantic, planned and executed D-Day, marched across the Pacific and Europe, developed the atomic bomb and ultimately conquered Japan and Germany.

Could today’s Congress put that in motion? It’s worth noting, that during the almost exact amount of time, that the CFPB reformed RESPA-TILA, and (remember back) the Obama administration couldn’t build a web site.

 

 

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.)