Apr. 1: LO jobs, personnel changes; upcoming events; Chase & Quicken, Embrace & Envoy in the news; Yellen’s speech

The National Association of Realtors, with a capital R, (“NAR”) shocked the real estate and lending world with the announcement that it discovered what many have believed to be the case: it has been double counting numbers. The press release suggested taking any statistic from NAR and dividing by two to give a more accurate description of local activity.


In job & personnel news


A formerly growing but now rapidly contracting and under-capitalized retail mortgage lender is seeking un-motivated, mediocre loan originators and branch managers to join us in hopes of originating enough loans to keep us afloat in a rising rate environment. “We offer an outdated origination platform with in house underwriters who seem incapable of approving loans without borrowers providing urine samples at application. We will allow you to set up the branches any way you see fit, and then hope for the best. We offer an unrealistic compensation package (that really won’t pan out for you) so that you can hope to earn a good living by closing one or two loans per month. If you consistently over-promise and under-deliver and are looking for yet another 6 month draw guarantee, then we have a place for you! Call whoever is currently in charge of recruiting at 555-1234, and they will tell you when you can start.” (Thanks to Alan R. Fowler, CMB, for this one.)


In personnel news, Jim Hedvane received yet another promotion, continuing his rapid advancement from receptionist to running Ops in an unprecedented six months. Contributing was, of course, the fact that everyone above him had left at Montana’s Acme Home Loans, a division of Acme Realtor, Builder, Lender, Title, and Servicing. Since joining the lender last October as a receptionist, Hedvane, 28, has been successively promoted to client service manager, doc drawing team leader, and director of underwriting, a swift ascent that office sources said stood as impressive proof of the large number of vacancies at their workplace. “If you look at where he started compared to where he is now, you can’t help but think, ‘Wow, a whole lot of people have been leaving,’” said Acme HR director Kris Lewis, marveling at just how much Hedvane had benefitted from the departure of colleagues in such a short time.


Having moved up the company hierarchy so quickly, sources confirmed that Hedvane has even earned the respect of the head of the company. “Jimmy is a living, breathing example of what you can achieve if you’re still employed somewhere when the people immediately above you have exited,” said the Acme CEO. “He’s just one of those guys who has what it takes to rise through the ranks partially by default at a company that’s been a revolving door for employees. It takes a special kind of worker to almost inevitably be promoted due to turnover,” added the CEO. “I could definitely see him in this chair someday, especially considering the enticing offers I’ve been receiving from other lenders lately…”


Upcoming conferences & events


The annual FHFA Easter egg hunt will be held on April 15th. If last year’s results are any indication, 70% of the eggs will be found by Fannie employees, 30% of them will be found by Freddie employees. I was not there at last year’s shindig, but reportedly each group then sold them to the public and used the proceeds to help pay a special dividend. It was also reported that some of the best hunters were contemplating moving on to other hunts that offered more eggs with prettier decorations and that didn’t have taxpayer judges watching the egg hunt. (The CFPB was not invited this year, apparently due to last year’s requirement of waiting until 3 days after the hunt to actually eat the eggs.)


The upcoming conference for MBMRGG (Mortgage Banker Mail Room Guys & Gals) will be held in Austin, Texas. “Mail room dudes and ‘dudettes’ from around the country will be converging on the Hilton Garden Inn on 4/20 for their annual convention in which they discuss their ponytails and tattoos. ‘It’s always fun to catch up with the other mail room folks, just so we can swap stories about postage price changes, LOs thinking they get free postage, and the impact of e-mail,’ said Joe Spencer, a mail room technician from Overland Park, Kansas whose 12-inch ponytail was poking out the back of his WAMU ball cap and obscuring the tour dates on his Megadeth T-shirt. “But despite our cool jobs, it’s pretty much like any other convention. We have break-out sessions on innovations in cart design, the latest Apple ear gear, and trade tips like keeping track of changing passwords on the postal meter.”


And in California the California Lenders Informative Mortgage Partnership is gearing up for its inaugural convention this summer in Oakdale, California, date to be announced. Cal LIMP will be focused on forging better relationships between lenders and vendors, and keeping a constant flow of information going through its daily 10,000-word missive. “No detail is too small to be overlooked” is the theme of this year’s convention, set to feature dozens of simultaneous break-out sessions guaranteed to tax anyone’s scheduling ability. Watch for details here.


Industry & company news


In case you missed it, JPMorgan Chase CEO Jamie Dimon in a press conference earlier this week said he’d had just about enough of Quicken and their endless Rocket Mortgage BS commercials on TV. “Everyone knows it’s just a marketing gimmick. Enough is enough, I want to just get through one Walking Dead episode without having to see some bogus astronaut selling mortgages. Quicken is about to have a stage 1 rocket failure” as he introduced the Hyperdrive Mortgage. In an attempt to connect with millennials, borrowers now have to simply open the Instagram app, take a photo of the house they want to buy, tag @JPMorgan, hashtag the loan amount (i.e. #800000) and hashtag #HyperDriveMortgage #OneThousandAndThreeForm #AintNobodyGotTimeForThat. Based on the photos in the user’s Instagram account, JPM has a metadata algorithm to identify if the borrower is rich rich, fake rich, middle class or straight up broke. Dimon warned users of borrowing their friend’s Rolex or renting a Ferrari F430 to take photos as it may cause invalid approvals due to overstating income or overstating expenditures.


Switching gears to events impacting the industry, MBA President Dave Stevens stated that, “Our lenders have been through a lot in the last several years, and many of them carry the psychological scars from the turmoil, so we were very disappointed that Delta Airlines announced a policy to start charging for emotional baggage.” “If they don’t want the MBA’s business, we’ll be happy to take it elsewhere,” he cried out.


Delta’s head of communications, Francie Luquot, explains that the exact amount of the fee will depend on the nature of the emotional baggage, how much space it will take up on the flight, and likely it is to interfere with the other passengers. “When it comes to the CFPB, bad press, or tiresome overlays, we’ll be charging $500 per issue,” she explains. “That kind of emotional baggage is quite heavy and nearly impossible to store safely. It takes tremendous effort on behalf of the cabin crew to make room for those kinds of issues.”


“But other worries like not wanting to sign up for the underwriter’s bowling league, growing weary of the shipping department’s potlucks, or some MI rep still bringing rubber mouse pads, we’ll only charge $250 to load those on board.” Luquot says the airline made the decision to introduce the fee last week after nine different capital markets people on five different flights loudly refused to turn off their electronic devices during takeoff and then proceeded to get blind drunk on tiny bottles of vodka and yell racial slurs at the person in the seat beside them – usually their own workmate!


Dave Stevens admitted that the staff of the MBA’s feathers were ruffled. “I haven’t seen the Research and Economics this fired up in years. They rely on adding up those Sky Miles to take family vacations, and without those, well, they’ll be hitting me up to stay at my understated yet elegant lake house within driving distance of HQ. And that sure ain’t happening – we’re still finding remnants of their last toga party.”


In other news, in a sign that tensions may at last be thawing between the bitter full service lender rivals, Envoy Mortgage and Embrace Home Loans reportedly agreed to a prisoner exchange Thursday following months of negotiations. Officials confirmed that five Envoy doc drawers incarcerated at Embrace Home Loans’ Newport headquarters will be freed to secure the release of seven Embrace underwriters – including two high-value DE underwriters and a junior Ops manager who went missing in 2013 – as part of a rare act of diplomacy amid the acrimonious conflict that has long raged between the lenders.


“After extensive talks, we have ensured the release of our team members and are eager to repatriate them to the nearest branch office,” said negotiator Lew Porterfield from Envoy’s corporate headquarters. “If our counterparts fulfill their end of the agreement, we will be proceeding with the exchange immediately.”


Porterfield continued, “Though many more of our personnel have either been hired away or remain captive in our competitor’s strip center branches across the country, we hope that this transfer signals a willingness to lessen the climate of mistrust and open hostility that has plagued Embrace-Envoy relations for decades.”


According to company representatives who spoke on condition of anonymity, the prisoner swap will occur at a neutral site in the parking lot of Freedom Mortgage in Mount Laurel, New Jersey. The exchange will reportedly be overseen by third-party mediator and an MI rep from Essent who has helped broker previous accords between the lenders, including a famous 2005 treaty that required lenders across the nation to do away with any underwriting overlays or credit score requirements entirely, as well as last year’s non-proliferation agreement that compelled both parties to reduce their massive stockpiles of recruiters and signing bonuses.


Insiders admitted that the prisoner transfer was delayed due to several sticking points, including Embrace’s refusal to come to the table until its rival agreed to remove all suspected point banks, free extensions, free employee loans, and “pizza Fridays” in the post-closing area. Envoy accused Embrace of employing the same tactics. Negotiations were reportedly also nearly scuttled due to Envoy’s refusal to turn over its RFC and Lehman Brothers jumbo underwriting manual collection from 1997-2001 in exchange for Embrace’s set of Fannie Gold Books, circa 1983-1988.


“While we are focused on welcoming home our underwriters, we must also remember that our rival’s history of abuse toward its prisoners leaves open the possibility that our staff members may have been tortured while in captivity,” said one Envoy exec, referring to persistent allegations that detainees held in Embrace’s locations had been shackled to steel fold-up chairs and forced to listen to motivational sales presentations. “Should we learn of such cruel treatment, it will leave us no option other than swift and devastating retaliation by offering non-QM products at QM rates, which will viciously undercut our competition and draw in considerable foot traffic.”


Capital markets


Janet Yellen earlier this week said that rates “fo sho” were going up this year. Employment has already reached the Fed mandate but inflation remains well below the Fed’s 2% target. That was until Janet was quoted as saying “the Fed word for 2016 is ‘Optics.’” Under the normal CPI calculation, analysts would use “normal” every day products to measure inflation. For example, the basket of goods might be bought from Target, Safeway and financial services would go through the local credit union. To bypass stubbornly low inflation, Janet revised the CPI basket of goods to come from Whole Foods, Salvatore Ferragamo, Porsche 911 GT3 running 100 octane, and Goldman Sachs Private Wealth Management. Literally overnight, inflation jumped from 1.5% to 34.5% thereby exceeding all expectations. In her clearest statement yet regarding monetary policy, she warned of an extra-large medium rate increase for 2017 and revised the dot plot to a 3D graph on a positive vector.


Traders in the residential mortgage-backed security (MBS) market have taken quite an interest in a new derivative: Mortgage Interest Lien Futures. They are similar to an Interest Only (IO) piece of a security, where the interest amount is stripped off from the total payment. The interesting thing about Mortgage Interest Lien Futures is that, for most traders, the maturities of the instruments are not a big factor in their attraction. “Look, if we can put a value on them, we can trade them, and charge our clients a mark-up” said one trader. Building on the definition of a bond, Mortgage Interest Lien Futures are an asset-backed security that represents a claim on the cash flows from mortgage loans through securitization. The “face value” of these securities changes throughout the life of the bond, with each phase appealing to certain segments of the market, but especially the male segment. Some fear that trading will be illiquid, since the attributes of one security may not appeal to different investors. At this point in time, open trading in the market may take the place of the current market and pricing of these instruments, which often takes place at little league games, supermarkets, and school car lines. The securities and lending industry is full of acronyms, and I am sure Wall Street will figure out what acronym to call these new instruments.



I couldn’t come up with a joke today. Sorry.






(Copyright 2017 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.)

Rob Chrisman