Sep. 22: LO & AE jobs, banks wanted; vendor news; flood, flood insurance, & lender disaster updates – what about escrow accounts?

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...

It’s not that difficult to tell alligators and crocodiles apart. One will see you later; the other will see you in a while. What a difference a word makes, or a term. A while back someone exclaimed, “Hey, let’s put ‘achieving’ in front of ‘home ownership.’ That’ll put us way ahead of everyone else. No one says, ‘Achieving car ownership’ or ‘Achieving pug ownership.’ And while we’re at it, let’s sub in ‘American Dream’ for ‘home ownership.’ Now we’re talkin’!”

 

Returning to the here and now, an East Coast mortgage banker is searching for banks who would like to add residential jumbo or portfolio loans to their asset mix. The independent mortgage banker has been in business for 30 years & licensed in 26 states. The greatest need is in the Southeast (particularly SC) & the Mid Atlantic, and the preferred bank/credit union partner would likely have an asset size of between $500 million to $10 billion, U/W with common sense, and a need for an additional $2million+ a month in closed loan production. Confidential inquiries can be addressed to me – principals only, and please specify the opportunity.

 

Heading to NAMB National this weekend? Then you probably heard the buzz about REMN Wholesale and their highly anticipated NAMB after-party. The date has shifted to Saturday, September 24th, to better accommodate the schedules of those who could not attend the party REMN usually holds on Sunday. Kicking off at 8 p.m. at the Skyfall Lounge on top of the Delano Hotel, a short walk from the Luxor, NAMB attendees will be treated to a stunning view of Las Vegas, a hosted bar and great music by The Edgar Family Band from “America’s Got Talent”. NAMB attendees can secure an invitation to the party online here or by visiting REMN’s booth during the event for VIP front-of-the-line entry passes. As REMN continues to maintain its commitment to a superior broker experience, the lender is looking to bring on experienced account executives in all markets who share the company’s dedication to speed and quality. If you know someone who fits that description, have them send their resume to AErecruiting@REMN.com.

 

Assurance Financial continues to grow with a simple strategy: find great people with great character who want to be part of a great team. The independent mortgage bank focuses on delivering second to none operational support to continue to achieve their goal of closing loans on time. The company is selectively looking to hire branch managers and loan originators to expand its footprint across the southeast and southwest markets including AZ, CO, NM, TX, OK, AR, LA, MS, TN, AL, OH, VA, WV, NC, SC, GA, and FL. For more information, contact Paul Peters, CMB at 225-239-7948 or visit lendtheway.com/careers.

 

On the flip side, Xenith Bank ($2.1B, VA) said it will exit the mortgage origination business due to high regulatory compliance costs. If this business line is too expensive even for a $2 billion bank to operate… Based in Richmond, Xenith Bankshares Inc. has agreed to sell certain assets of its unit, Gateway Mortgage Bank Inc., to Houston’s Cornerstone Home Lending.

 

Vendors do what they can to increase expertise and keep costs contained. Recent vendor news? Sure thing.

 

I’ve been hearing a lot of good things about LoanCraft’s Tax Return Analysis, which helps early in the process with the hardest kind of file: the self-employed borrower. “The process is simple: upload the tax returns to a secure portal, and LoanCraft provides a comprehensive analysis, typically in less than four hours. Along with a clear summary, the report includes trend analysis, liquidity analysis, scenarios, and identifies opportunities to document further income, saving time and increasing the consistency and value of the information. According to Dan Havel, Chief Risk Officer at Primary Capital Mortgage, LLC, ‘We are very happy with the service LoanCraft is providing. And our underwriting manager says they are efficient and very timely even on large/bulky returns.’ And this from Anne Elliott, industry veteran and author of the forthcoming book, Underwriting with Thought: ‘LoanCraft’s technology handles the tedious part of tax returns while allowing underwriter judgment in qualifying. Less time, far lower cost and no compromise in quality. It’s genius.’” Contact Ron George if you have any questions.

 

Servicing continues to garner attention, especially among regulators since it is a key touchpoint with consumers. MetaSource recently published a whitepaper on Mortgage Servicing Boarding Workflow & Document Management that is probably of interest to many readers. “In a recent National Mortgage News survey, the three pain points most often identified by servicing executives include moving mortgage data from loan origination to servicing systems, archiving and auditing for compliance and customer contact, and on-boarding new loans or acquired portfolios. This whitepaper addresses the best practices in tackling these challenges.”

 

Guild Mortgage and Union Home Mortgage have both signed on with Alight Mortgage’s Lending Platform to refine its forecasting process. Alight has also announced the expansion of its executive, sales and consulting teams to meet needs of growing marketplace momentum and new customer demands. “I’m thrilled to see the Alight Mortgage Solutions team expand during this time of high growth and customer acquisition,” said Jared Huff, managing director, Alight Mortgage Solutions. “We have one of the best teams in the mortgage banking industry – rich with experience across all key areas and a tireless dedication to helping our customers be successful.”

 

Switching gears to floods and flood insurance, August saw housing starts drop with bad weather to blame for disrupting building in the South. But a Louisiana Home Builders Association representative refuted claims that Louisiana has a shortage of licensed contractors. The flooding that damaged as many as 110,000 homes and more than 100,000 vehicles in Louisiana last month cost $10 billion to $15 billion, with most of the sum uninsured, according to a report Friday from Impact Forecasting, an arm of insurance broker Aon Plc.

 

I received this note from California’s Guy Schwartz on the “Escrow of Flood Insurance Payments for Loans with Triggering Events.” “A regulated lending institution, or a servicer acting on its behalf, must escrow all flood insurance premiums and fees for loans secured by residential improved real estate or a mobile home in a special hazard area unless the loan or the lending institution qualifies for one of several exceptions. The escrow requirement applies to any non-excepted loan secured by residential improved real estate or a mobile home that is made, increased, extended, or renewed on or after January 1, 2016. The rule also states that the escrow provisions of the Real Estate Settlement Procedures Act (RESPA) apply to flood insurance escrows if the loan is subject to RESPA, which applies to ‘federally related mortgage loans.’ The escrow provisions of RESPA generally limit the amount that may be maintained in escrow accounts and require escrow account statements. The rule also requires lenders to provide the escrow notice for any excepted loan that could lose its exemption during the term of the loan.”

 

Don’t forget that FDIC Directors’ Resource Center has some resources specifically directed at the responsibilities of directors, but also many basic presentations suitable for management and employees on operational and technical compliance, including cybersecurity, risk management, Bank Secrecy Act, loan originator compensation rule, flood insurance, vendor management, third-party risk, and appraisals and evaluations.

 

The nonprofit R Street Institute responded to the recent introduction by House Financial Services Committee Ranking Member Maxine Waters of legislation to forgive the National Flood Insurance Program’s estimated $23 billion in debt to the U.S. Treasury. R Street Senior Fellow R.J. Lehmann writes, “It long has been obvious to anyone paying attention that the NFIP’s so-called ‘debt’ to the federal Treasury amounts to an accounting fiction. The money has all already been spent, the bulk of it more than a decade ago. The program doesn’t generate sufficient revenues even to pay ongoing claims, much less to repay a debt that is several orders of magnitude larger than its annual premiums. “While it is inevitable that the program’s debt eventually must be forgiven, Congress should not act to do so until it has taken further steps to right the NFIP’s financial ship. The House already has moved in the right direction by passing legislation from Reps. Dennis Ross, R-Fla., and Patrick Murphy, D-Fla., clarifying how private insurance companies can participate in the market for flood coverage. We urge the U.S. Senate to move quickly to take up the companion legislation introduced in that chamber by Sens. Jon Tester, D-Mont., and Dean Heller, R-Nev. We also ask that the Federal Emergency Management Agency begin sharing its underwriting data with the private sector in anticipation of a growing private role in managing flood risk. “Moreover, as Congress looks forward to reauthorization of the National Flood Insurance Program in 2017, we recommend reinstating provisions included in the last authorization bill – co-authored by Rep. Waters – that would trigger rate increases when updated Flood Insurance Rate Maps show a property lies in a zone of elevated risk. Recent floods in South Carolina, Louisiana, Florida and elsewhere have hit many property owners who were unprepared for the flood risks they actually face, underscoring the need for updated, state-of-the-art mapping tools to reflect risks that a growing number of property owners continue to face.”

 

AmeriHome Mortgage posted FEMA issued Amendment No. 4 on 9/1/2016, with DR-4277, 2 additional Louisiana parishes were granted individual assistance to supplement recovery efforts in the areas affected by flooding.

 

Correspondents represent and warrant loans delivered to Citi secured by properties located in special flood hazard areas are located in communities participating in the National Flood Insurance Program (NFIP).  Citi requires evidence of adequate flood insurance on all loans secured by properties located in a special flood hazard area prior to purchase and completes a pre-purchase review. For complete details, clients should refer to the Best Practice and the Correspondent Manual, section 910.

 

Pacific Union is monitoring the impact of severe storms and recent disaster declarations throughout several states as published by the Federal Emergency Management Agency (FEMA).  See the FEMA Website and Declarations Summary at http://www.fema.gov/media-library/assets/documents/28318 for detailed information regarding recent declarations.  Please also refer to state-specific PDF Maps for areas recently impacted, as identified by FEMA.  Recently published/updated state-specific maps/impacted areas include the following:  Kentucky; Louisiana; Montana; Oklahoma; Texas; Wisconsin. In addition, Pacific Union is monitoring the impact of recent severe storms, flooding and disaster declarations in additional states for which specific impacted areas have not been identified by FEMA.  These include, but are not limited to: Maryland and Mississippi. In addition to the above, Pacific Union is monitoring the impact of ongoing wildfires and fire management declarations across several states including California, Idaho, Montana, Nevada, New Mexico, Oregon, Washington, and Wyoming. At this time, and until all impacted areas have been identified by FEMA and other sources, loans secured by properties located in impacted areas are subject to standard Pacific Union protocol.

 

M&T Bank will enforce the Disaster Re Inspection Policy for all properties located in the affected parishes in Louisiana’s designated areas of Acadia, Ascension, Avoyelles, East Baton Rouge, East Feliciana, Evangeline, Iberia, Iberville, Jefferson Davis, Lafayette, Livingston, Pointe Coupee, St. Helena, St. James, St. Landry, St. Martin, St. Tammany, Tangipohoa, Vermilion, Washington, West Baton Rouge, and West Feliciana.

 

Turning to rates, as with most days when the Federal Open Market Committee makes an announcement, it was pretty much a non-event, and the financial press will have to think about something else to discuss. “The labor market has continued to strengthen and growth of economic activity has picked up from the modest pace seen in the first half of this year… Household spending has been growing strongly but business fixed investment has remained soft. Inflation has continued to run below the Committee’s 2 percent longer-run objective…the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”

 

So sure enough, since markets don’t like uncertainty or surprises, and this wasn’t a surprise and it helped remove some uncertainty, bond prices rallied and rates sank. Odds makers, and financial modelers, now way there is a 17% chance of a rate hike at the November meeting and a 65% cumulative probability for a rate hike by year-end. By the end of the day the 10-year was down to 1.67% and agency MBS prices better by .125-.250, depending on security and coupon.

 

Today we’ve had our usual Initial Jobless Claims (252k, a decline from 262k). Coming up are more housing-related numbers: July FHFA Housing Price Index and August Existing Home Sales. We also have a 10-year TIPS Treasury auction. Currently the 10-year is at 1.64% with agency MBS prices better by about .125.

 

 

After boarding and taking off for a long flight over the ocean, the speaker comes on with an important message for passengers. “Ladies and Gentlemen, we are introducing you today to the latest and newest aviation advancement in history. This plane is flying without a pilot or co-pilot. It is controlled by way of radio from the ground. Sit back and relax and enjoy your flight. Be assured that absolutely nothing can go wrong, absolutely nothing can go wrong, absolutely nothing can go wrong, absolutely nothing can go wrong…” 

 

 

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.)