Feb. 10: Retail & wholesale jobs; Wells’ layoffs & settlement; more on TRID & the CFPB’s widespread impact; Redwood cuts commercial program

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...

The news about “Tiny Houses” continues to trend along: this one looks pretty darned nice, is only $20,000, and is changing zoning laws.

 

The Freedom Mortgage Correspondent Lending Division spread the word that it is now purchasing Government loans with FICO scores down to 500. With the formation of the Freedom Mortgage Specialty Lending channel Freedom has a dedicated sales and operations staff to help eligible correspondent clients with sourcing and originating these deals. Generally, the borrowers most appropriate for this low FICO (500-580 FICO) program have seen eroded scores due to excessive debt load or isolated credit challenges.  According to Randy Samels, Channel Manager, “While FHA allows for a 500 FICO deal at 90% LTV, Freedom Mortgage is experiencing a much lower LTV average. We feel that there is a sizable gap in lending to under-served borrowers and we are committed to fostering home ownership in these markets.”  For more information, contact your Freedom Mortgage Correspondent Lending Regional Manager or the Freedom Mortgage Specialty Lending team at 800.459.4850 Ext. 6809.

 

A successful and growing company is looking to expand its sales force on both coasts due to increase demand. PathSoftware, a division of Calyx Technologies, is looking for experienced software sales professionals to represent their new, enterprise level LOS. 5-8 years of experience and a passion for the industry required. Please send confidential resumes to Doug Mitchell.

 

Houston’s CLM Mortgage is looking to expand its retail footprint in the Texas market by acquiring additional branches. “CLM Mortgage offers a diverse portfolio of products from some of the best investors in the industry, an excellent technology platform, and a strong culture that allows for people to be their best. The ideal candidates would be small mortgage bankers or large mortgage brokers looking to transition into mortgage banking. We are particularly interested in candidates in the DFW area, but would like to speak with any interested parties throughout Texas. Come join our team, ranked one of the Top Workplaces by the Houston Chronicle for the last 4 years in a row!”

 

In wholesale news, congrats to Greg Austin! Impac Mortgage Corp. has announced his promotion to Executive Vice President, National Sales Director and he will now oversee all of Impac Mortgage’s wholesale and correspondent business channels. Additionally, Impac Mortgage Corp. has expanded its Wholesale Lending operations by opening a satellite office in Paramus, New Jersey, and led by newly hired Regional Wholesale Sales Manager, Robert Germano. Expansion into the East Coast is a critical 2016 strategy for Impac with a focus on increased volume and product diversification, and the company is currently recruiting for proven account executives nationwide. For more information on expansion plans and AE opportunities contact Marketing Manager Kelly Capps. (“Impac Mortgage Corp. Correspondent and Wholesale channels offer a full spectrum of mortgage programs both agency and NonQM. Impac Mortgage Corp. is a direct lender, approved with Fannie Mae, Freddie Mac and Ginnie Mae and work with approved sellers, brokers across the nation. Impac Mortgage Holdings, Inc. is a publicly traded company and celebrated its 20th year in 2015.”)

 

On the flip side Wells Fargo’s mortgage group is cutting over 500 jobs due to improving conditions. “The good news is that you’ve done a great job cutting delinquencies; the bad news is that you’ve worked yourself out of job. But here’s a list of other jobs in the bank…” Wells also made headlines by reaching a $16.2 million class-action settlement related to a kickback scheme where Genuine Title allegedly paid for marketing services for loan officers and paid loan officers at banks including Wells Fargo. (Needless to say, LOs everywhere noted that individual originators were named in the action.)

 

 

HSBC on Friday reached a series of settlements involving $601 million with federal and state regulators and law enforcement agencies to end U.S. probes into allegations of its mortgage origination, servicing and foreclosure practices.

 

Attorneys certainly reap the benefits of legal maneuvers. For example, Goldman Sachs is feeling the pain of mortgage litigation in the amount spent on mounting legal fees.

 

On January 28, the U.S. District Court for the Western Division of Washington, having determined that a mortgage loan servicer violated the Real Estate Settlement Procedures Act (RESPA) and committed the tort of outrage, ordered the servicer to pay more than $200,000 in economic and emotional distress damages to a borrower. Lucero v. Cenlar FSB, No. 13-0602 (W.D. Wash. Jan. 28, 2016). The borrower and servicer had agreed to a loan modification in early 2013. Buckley Sandler reports that “the borrower believed that the servicer was misreporting her loan as delinquent, in spite of the modification. In April 2013, the borrower filed a lawsuit against the mortgage servicer alleging ‘that [it] violated its credit reporting obligations’ and ‘seeking damages related to the way in which [the mortgage servicer] (and others) had sought to foreclose on her mortgage.’ The servicer then began charging the plaintiff for attorney’s fees and costs that it was incurring in defending the ongoing litigation.

 

Yesterday the commentary had information about the “Know Before You Owe” initiative, and I received several more comments about it, including several that are un-printable using nicknames that rhyme with “know” and “owe.” (Glad to see there is some humor out there.)

 

One note said, “Here is an article about Quicken Loans’ Super Bowl advertisement. Please see the bottom of the article. If the advertisement did not violate any FTC or CFPB advertising standards, who is the CFPB to take to Twitter to denounce or counter any company paying $5 million for 30 seconds of advertisement? This is tantamount to regulatory intimidation.”

 

John H. writes, “Here’s a website that is an eye opener and possibly a way to put this Jack back in the box.”
CEO Andrew Liput reports that Secure Insight has seen a spike in settlement agent registrations since the push to become TRID compliant really kicked into gear around 2nd quarter last year. “In January 2016 we vetted our 35,000th agent through our Closing Guard and Quick Check Tools.  We also have seen significant growth in the use of our shared database as a pre-closing fraud and quality control tool, as we have vetted agents in all 50 states (including Alaska and Hawaii), Puerto Rico and the US Virgin Islands, and  there are now almost 100 lenders who have conducted over 1.3 Million transactional database searches.  Our service continues to act as a general deterrent as the bad actors stay away; only 2% of those we evaluate and rate for risk receive a “caution” or “high” risk rating, and as we enter our fifth year of helping lenders manage closing risk there has not been one reported loss to any of our clients caused by an SSI “low” risk agent.”

 

Here’s what one broker from Florida wrote about the current state of “Know Before You Owe:” “As I sit here trying to upload another loan under TRID and screaming at the computer I have come to a common assessment of TRID: under TRID the clients are not always being sent to the lender with the best rate but the lender with the safest TRID compliance package. I have one lender thing fly right through, but the rates are .5-.75 higher in the fees. Because of TRID I must chose a lender not for the BEST rate and fee structure, but the BEST operating system to handle TRID – some benefit for the consumer: you get the EXACT fee cost and have to wait 3 days to sign your loan docs, which causes a delay in closing, which will cost $100.00 a day, per the contract. So far, I have not seen that the CFPB can void state contract law. For future transactions, the consumer will settle for a higher rate and fees structure because that lender has a better operating system so there are no delays that cost money. Those that think TRID is a wonderful thing must be with companies that charge higher rate and fees, and will have the business due to efficient operating system. Someone please point out the benefit to the consumer?”

 

And this note from a well-known attorney: “Your commentary reminded me about the CFPB’s advertising on the internet last summer. The part that is particularly galling is that the ads say “YOU HAVE THE RIGHT to less financial runaround and aggravation.” No such right exists in the US Constitution or the Dodd Frank Act let alone the CFPB’s own regulations. On the origination side of the business, many would argue that CFPB has actually increased runaround and aggravation. CFPB’s regulations may have made the loan products ‘safer’ and enabled some consumers to shop better, but no one can claim that QM/ATR and TRID have made it any easier or quicker for consumers to get a loan. Ironically, if the CFPB’s objective was to make sure consumers got the least runaround and aggravation when they apply for a loan, they would require every lender to offer stated income products again, not prohibit such products. This particular ad, from the agency that enforces UDAAP, is a real head scratcher.”

 

With all the attention being paid to TRID compliance and changes, per Equifax it seems that lenders have loosened some their credit standards in some areas to help make more loans. Or perhaps this is the result of more independent mortgage bankers doing more FHA lending? Who knows…

 

Along those lines, Zelman & Associates published its Mortgage Originator Survey, with survey contacts reporting a 20 percent YoY increase in purchase applications in December. Applicant credit quality index dropped to 62.9 in December from 63.2 in November due to an increase in applications from first time homebuyers and weaker-credit borrowers. Although the average credit score for purchase mortgages was 730 in the fourth quarter of last year compared to 727 a year ago. Underwriting criteria slightly dropped to 62.8 and 11 percent of lenders attested to modest loosening with 61 percent expecting more credit easing over the next year.  Private mortgage insurance index was flat at 72.3, up from 68.4 a year ago. Refinance applications dropped 15 percent YoY, bringing the fourth quarter’s average down to 10 percent.

 

Based on recent stipulation trends of loans closed under TRID, PennyMac has created this reminder highlighting specific delivery requirements to help ensure loans are compliant and purchased in an efficient manner.

 

Redwood Trust announced that it will discontinue commercial originations for its CMBS conduit, affecting 25 employees who make up about 15% of the company’s comp expense. While the company might look to opportunistically invest capital in commercial loans or CMBS, it will no longer originate senior or mezzanine loans for securitization. Management noted the challenging conditions that the CMBS conduit has faced over the past few quarters are worsening and they do not expect the environment to improve for the foreseeable future. Last year the commercial loan originations side of the biz lost about $3 million. Recall that the company recently announced its plan to discontinue the acquisition of conforming loans for resale to Fannie & Freddie.

 

Turning to the actual bond markets, since the Fed raised short term rates we have the DJIA down about 2000, the 10-year bond yield is at 1.73% down from 2.3%, oil is down below $30 per barrel from $44 and oil companies are cutting dividends. Leading up to the increase the Federal Reserve Open Market Committee wanted to see inflation before the increase. Now we have quite the opposite, and it is perplexing to many how any intelligent analysts would think that rate increases are a certainty later this year.

 

Yesterday the yield curve “flattened” (the difference between short term and long term rates narrowed) as equities found some buying interest. There really wasn’t much news to speak of aside from a December JOLTS Job Openings figure and the $24 billion 3-year note auction, so I won’t waste your time.

 

Today is already more interesting. We’ve had the MBA’s application figures (up over 9% with refis up nearly 16%). And Fed Chair Yellen’s testimony before the House Financial Services Committee, the transcript of which was released – more of the same. Ahead is a $23 billion 10-year note auction. As the markets continue to prove anyone who thought rates were heading higher wrong, we closed Tuesday with the 10-year sitting at 1.73%; this morning it is sitting around 1.76% with agency MBS prices worse .125.

 

 

Valentine’s Day is fast approaching, and in the world of romance, one single rule applies: Make the woman happy. Do something she likes and you get points. Do something she dislikes and points are subtracted. You don’t get any points for doing something she expects. Sorry, that’s the way the game is played. Here is part 3 (of 4) of a guide to the points system:

A NIGHT OUT WITH HER

You take her to a movie……………+2

You take her to a movie she likes…..+4

You take her to a movie you hate……+6

You take her to a movie you like……-2

It’s called Death Cop 3……………-3

Which features Cyborgs that eat humans….-9

You lied and said it was a foreign film about orphans…..-15

 

THE BIG QUESTION (a no win question)

* She asks, “Do I look fat?”

* You hesitate in responding…..-10

* You reply, “Where?”…………-35

* Any other response………….-20

 

 

Rob

 

(Copyright 2016 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.)