Dec. 1: Retail, correspondent, MI jobs; new products; Millennials in the workplace; Fed student debt study worth a skim; China to issue MBS

In response to yesterday’s blurb about the movie “Home Alone” being 25 years old Carol K. sent, “You know you’re old when you watch ‘Home Alone’ and wonder how much their mortgage is.” Pro Teck’s Home Value Forecast for November identified that the majority of the top real estate markets are located on the West Coast. Four out of the ten CBSAs are at all-time highs, which include Bellingham, Portland, San Jose, and Seattle. Two out of the ten CBSAs are anticipated to hit new highs by the first quarter of 2017, which include Boise and Mount Vernon. The ten best performing metros include, Bellingham, WA, Boise City, ID, Modesto, CA, Mount Vernon, WA, Portland, OR, Sacramento, CA, San Jose, CA, Seattle, WA, Stockton, VA and Vallejo, CA. On the other end of the spectrum, some of the ten worst performing metros include, Joplin, MO, McAllen, TX, Tallahassee, FL, Detroit, MI and Jacksonville, NC.


In job news Impac Mortgage Corp. Correspondent division is hiring 2 outside Correspondent Account Executive positions within the central US. One would oversee TX, OK and AR, and be ideally based in Dallas. The other would oversee LA, MS, AL, TN and KY. The two positions will be responsible for establishing new relationships and management of mortgage bankers and community banks who meet IMPAC Mortgage Corp.’s Correspondent eligibility. Impac Mortgage Corp. Correspondent is also hiring a Renovation Specialist supporting its 203(k) and HomeStyle programs. The position is located in Irvine, CA. Responsibilities include the creation and maintenance of all 203(k) and HomeStyle policies and procedures, guidance to Risk Committee members as well as provide online and field training to the Correspondent Lenders team (ops & sales). Interested candidates should email their resume to HR AVP Natasha Gilmore.


In retail branch news, “Looking for a new opportunity in the New Year? Academy Mortgage is interested in partnering with or acquiring companies who share the same drive for developing people, partnerships, and purpose. Academy is a purchase-focused, relationship-driven, customer-experience company with a unique corporate culture focused on “families versus files.” The Salt Lake City-based independent mortgage lender is on target for a record-breaking $8 billion in total loan volume in 2015, largely as a result of the following: a decentralized operations model that facilitates decision-making at the local level; significant year-over-year purchase business growth; direct lending to Freddie Mac, Fannie Mae, and Ginnie Mae; maintaining a servicing portfolio as high as $5 billion, with an upward goal of $10 billion; credit policy teams that ensure sustainable loans are closed timely and accurately; and in-house platforms for marketing, technology, and compliance support. Companies interested in confidentially exploring merger or acquisition opportunities should contact Scott Leishman or Kevin Haycock, Academy’s Senior Managers of Mergers and Acquisitions.


National MI seeks a dynamic Account Representative that will support the efforts of their assigned Account Manager and their clients by developing new and maintaining existing relationships in the Western Washington region. This individual will build strong relationships with client advocates and influencers, and assertively drive new business. He/she will meet with clients on a daily basis, clearly communicate the National MI value proposition, articulate industry and client trends, and use their superior presentation, communication and interpersonal skills to fearlessly develop opportunities, train and educate clients, and grow profitable market share within their assigned territory.  National MI is a U.S.-based, private mortgage insurer enabling low down payment borrowers to realize homeownership. For the complete job posting, see National MI’s careers page.


New products and lender changes continue.


Brokers should know that California Wholesale lender Western Bancorp has introduced new changes to its Fannie READY program. Effective immediately, Western is accepting registrations in preparation of the following enhancements to DU: Blended Rations when qualifying with non-occupant co-borrower. High Balance LTV’s now align with general (conforming) LTV matrix up to 95% LTV. Accessory unit rental income is now an eligible income source on a primary residence SFR. 5-10 financed properties LTV restrictions are eliminated. Western remains committed to helping California Borrowers with a variety of product offerings. Please see its Fannie READY guidelines or the Guidelines Page for more information! Contact with any questions.


And in retail news Network Funding launched its “Common Sense Lending Initiative.” NFLP’s Common Sense Lending Initiative is a collection of 5 Non-QM programs. “It’s our way of bringing a little common sense back for qualified borrowers who deserve it,” said President Matt Kiker.  “Our initiative includes five new programs we believe will give more families and individuals well-deserved access to the American Dream.” The initiative’s programs include the Homeowner’s Access Program, Fresh Start Program, Investment Property Program, Jumbo Alternative Program, and Foreign National Program. “Is your company giving you the products and support you need to compete in 2016? Check out JOIN.NFLP.COM to see what a better Network could do for you. Contact Executive VP Brett Snortland (832.545.4653) or VP of Sales/Branch Ops Richard Jefferson (480.370.3600) for more information.


In other residential lending news, once again SoFi is making waves about taking market share from the big banks and other, better known lenders.


SoFi made a name for itself in student lending, and the Federal Reserve Bank of Cleveland is out with a new study titled, “The Impact of Rising Student Loan Debt on Mortgage Borrowing.” “While it’s unlikely that student loans are the sole factor for the decline in mortgage borrowing across the United States, it is hard to ignore how the recent surge in student loan debt is changing the debt portfolio of young borrowers. With over 40% of young borrowers having a student loan, and debt payments comprising 20% of their income, it makes it more and more difficult for young people to take on a mortgage in the first few years after attending college. And as the number of student loans continues to rise, it is a trend that is likely to continue.”


Bank of America reports it finds millennials check their phones 45x per day on average. And narrowing that down even more research finds 90% of younger millennials (18 to 24Ys old) say they check their phones at least 1x per hour or constantly. And in job news Deloitte research finds about 40% of millennials will be freelancers, temps, independent contractors or solopreneurs in the next 5 years.


Why are researchers focused on Millennials, capitalized or not? Simply put, it is because as of Q1 of this year, millennials became the largest generation in the workplace. In fact, millennials represent about 35% of the workforce vs. 32% for Gen X, 31% for boomers and 2% for the silent generation (70Ys old or more). Another reason millennials are so analyzed is because they are the first generation to embrace smartphones, social media and all things Internet. This has shifted all industries, including banking & lending, as technology enables speed, simplicity and advancement more than we have ever seen before in our lives. This group grew up with the digital world, so it makes sense they embrace it, stay connected through it and share information using it. If you want to communicate effectively with millennials, you need to be technology-focused in your approach. Given the shift in the workplace to millennials, it is important for lenders and financial institutions to reestablish relationships with this generation of customers. Create strong social media strategies, communicate digitally, seek to enhance technology and keep the clutter down to a minimum to attract potential customers.


One of the reasons cited for folks born between 1982 and 2000 and is that they don’t want to be tied down to a house in the suburbs forever. Well, one way around that is to buy a rental, in which case there is no being tied down. And buying rentals appears to be what many are doing.


A Pew Research Center analysis of Census Bureau data finds 36.4% of women between the ages 18 and 34 lived with parents or relatives in 2014. That is the highest level since 1940, when 36.2% still lived at home. Of interesting note, the current group of young women is 50% less likely to be married as back then (median age has moved to 27Ys vs. 21.5 in 1940).


Kristin Messerli wrote, “I just published this article on the Millennial opportunity – I have realized recently that most lenders perceive the opportunity/shift in demand as a 3-5 year out problem. But I think that mortgage lenders need to act now or miss the Millennial market.”


That said, we still have a problem with the first time homebuyer. The percentage of first time homebuyers fell again to 32% from 33% last year and is the third straight annual decline. The 32% number is the lowest since 1987. “Normalcy” is about 40%. The big problem: affordability and a dearth of inventory.


Getting older isn’t much fun. Last week I got stumped while doing a crossword puzzle. It was a six-letter-word, and the first letter was an ‘S‘; part of the problem was I couldn’t find the clue. I finally quit after an hour when my wife handed me my reading glasses, and pointed out I was doing a Sudoku. Being a part of the boomer generation comes with its notorieties, one being that those who fall into this category appear to be a part of the highest percentage of home owners….a record which may stand for some time. This should come as no surprise for those in our industry; however, recent U.S. Census Data indicates it’s either an anomaly, a trend, or a systemic concern, depending on who‘s doing the talking. What we do know is that the U.S. home ownership rate peaked 10 years ago. Since then it has dropped from over 69% to under 64%, where it was a half century ago, with each percentage point representing more than a million households. An Urban Institute study this year predicted that in 15 years the home-owning rate will sink to 61%. Baby Boomers — far more apt to own than members of succeeding generations — will move or die. And Millennials, now 18 to 34, will be slow to own, either because they can’t afford to or don’t want to.


Switching gears to interest rates, any investor in fixed income securities has plenty of options. Another one just popped up: word went out from China that Shanghai will be selling $1.1 billion in bonds backed by public home loans. “China seeks to boost home sales and clear a nationwide property oversupply.” Sure this is a drop in the bucket compared to what the U.S. market churns out every day, but it might just be a sign of things to come…


There are mixed signals out there in the secondary markets in terms of the potential short term rate increase. There is currently about a 75% chance of the FOMC raising overnight Fed Funds, the Prime Rate, the Discount Rate… but remember that the Fed does not set mortgage rates. But its thoughts and actions do impact the demand for fixed-income securities. The Federal Reserve’s expected increase in interest rates has prompted investors to withdraw $4.1 billion from fixed-income funds in the US. And yet let’s not forget the old adage, “Don’t fight the Fed.” The New York Federal Reserve Bank continues with buying bonds, and said Friday that the central bank bought $5.974 billion worth of mortgage-backed securities in the week ending Nov. 25. It purchased $8.399 billion the week before. And yesterday it purchased nearly $1.5 billion in agency MBS.


Not much happened Monday with the bond markets. The Chicago purchasing managers’ index fell 7.5 points to 48.7 in November – readings below 50 indicate contraction – due to the emerging market slowdown, the strong dollar, and lower oil prices. And pending home sales in the U.S. rose 0.2% in October according to the National Association of Realtors, short of most expectations. Pending home sales have seen year-on-year gains for 14 consecutive months.


In terms of news there isn’t much out again today: October’s Construction Spending and November’s ISM Index, both at 7AM PST. But rate sheets will be a little worse today: we ended Monday with the 10-year at 2.22% and this morning it’s at 2.23% with agency MBS prices worse .125.



Thanks to Jeff B. who sent this one along – “It’s a Matter of Perspective”

Recently, a Southern California man was put under 72-hour psychiatric observation when it was found he owned 100 guns and had (by rough estimate) 1 million rounds of ammunition stored in his home. The house also has a secret escape tunnel.

The television reporter said: “Wow! He has about a million machine gun bullets!” and the headline referred to it as a “massive weapons cache”.

By California standards someone owning even 100,000 rounds would be called “mentally unstable”.

If he lived elsewhere, such as Arizona, he’d be called “an avid gun collector.”

In Oklahoma, he’d be called “a novice gun collector”.

In Utah, he’d be called “moderately well prepared”, but they’d probably reserve judgment until they made sure that he had a corresponding quantity of stored food.

In Montana, he’d be called “the neighborhood ‘Go-To’ guy”.

In Idaho, he’d be called “a likely gubernatorial candidate”.

In Wyoming, he’d be called “an eligible bachelor”.


In Texas, he’d be called “a Hunting Buddy “.





(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.)

Rob Chrisman