Feb. 13: AE jobs; reno, AUS, marketing products; lender legal news; news on OB’s index, flood insurance, ditech’s Ch. 11, Ellie’s purchase

Amazon accounts for nearly 50% of the ecommerce activity in the United States. With that kind of delivery service, it isn’t hard to see why malls are suffering. Which is why, all across the nation, malls are being re-developed, re-purposed, whatever you want to call it, into mixed-use and housing projects. Projects in Phoenix, Cincinnati, and St. Petersburg are all moving forward. I hope that lenders offer products that are tailored to this type of condo and mixed-use housing.


California’s Redwood Mortgage, a privately-owned real estate mortgage and investment company, seeks an Account Executive for the Orange County/San Diego area. “Redwood Mortgage has been one of California’s leading innovators in private mortgage lending and mortgage pools. The company offers the right candidate the opportunity to build a territory and career in our loan sales department. The ideal candidate has solid experience in commercial, multi-family and residential investment real estate lending, have an active Cal DRE real estate license, and NMLS. The person will learn and understand the commercial bridge loan product and private money loan product, and manage a territory and develop relationships with Bankers, Brokers and Retail borrowers. Benefits include 401K, dental, life insurance, medical, and vision. Interested parties should contact the Director of Sales and Marketing Steve Belleville.

Lender products and services

Nations Direct Mortgage is excited to introduce its new dedicated Non-QM Help team! “With the Non-QM market expected to explode to over $35B in 2019, we will provide expert resources to our broker partners so they can grow their Non-QM business” stated Martin Warren, Director of Lending. NDM’s expert team is highly experienced with pricing, structuring and underwriting Non-QM loans and will help you find the right fit for your borrower. Utilize this specialized team to answer guideline and pricing questions, run scenarios, analyze bank statements, and help structure Non-QM loans. Celebrating its 13th year, Nations Direct is solely focused on wholesale partnerships and they pride themselves on employing industry experts dedicated to delivering exceptional service. If you’re interested in learning more about this Orange County, CA based lender and its products, please contact Martin Warren.

Vendor Surf built what the industry asked for and continues to be rewarded, achieving over 100,000 page views in just 13 months. We proudly welcome MortgageHippo, Secure Insight, Property Registration Services, and The Gryphon Group. Partners renewing for another year: TENA Companies Inc., Agility 360, Professional Notary Services and AFR Wholesale. Vendor Surf excels at monitoring and reporting on the vendor landscape, providing you with the resources you need to excel in today’s market. For example, plan your event travel schedule and/or learning opportunities via our online calendars – with over 500 items. Find it all in ONE place. Vendors click here to schedule a demo. The industry’s original vendor search engine.”

Stearns Wholesale Lending just announced an extension of the initial appraisal fee waiver on FHA loans through February 28, 2019. Available for both purchase and refinance products, this waiver makes it easier for brokers to help borrowers save money when applying for financing. Because every advantage counts when building a solid customer base, Stearns also reduced the loan level pricing adjustment by 25 basis points for FICO scores between 580-619 and 660-679. To learn more about this limited-time fee waiver or discover additional ways Stearns supports their valued brokers, email wholesaleleadership@stearns.com.

Does your company brand convey what you think it should? Is it connecting with your target audience and employees? Or do you feel your brand needs to be re-energized? These were some of the important questions posed last week to John Seroka and other industry leaders during a panel discussion at the IMB Conference in San Francisco. Ideally, the perceptions of your brand line up with what you intended, are strong, connect with your audience and are well understood. When your brand is weak, it can show in sales volume/new client acquisition numbers, employee turnover, client satisfaction ratings, employee job satisfaction and much more. Find out if your brand could use a revamp by contacting Seroka today for a free consultation. Email info@seroka.com and get ready to #TurnUpYourBrand in 2019!

Simplify your underwriting process with Loan Product Advisor® asset and income modeler (AIM). Through the expertise of third-party service providers, AIM automates the manual processes of assessing borrower assets and income. AIM reduces the burden of traditional documentation, speeds up the loan origination process and helps you close loans faster. Freddie Mac is working hard to bring you solutions that create efficiencies for your business and improve the borrower experience – giving you a competitive edge. These capabilities are available for Loan Product Advisor submissions and resubmissions on and after December 9, 2018. Gain greater efficiency in your underwriting processes with AIM – get The Freddie EdgeSM.

“Originators, spending valuable time and resources trying to develop a technology platform for your company that competes against the big boys? LendGenuity, a web-based loan origination technology solution, is The Complete Solution offering POS+LOS+Decision Engine technology that out-performs most competing systems in the market today for a fraction of the cost. The POS is a customer-facing fully automated origination platform that sits directly overtop the high-powered LOS designed for mortgage professionals which renders eligibility, pricing, and loan stipulation results instantly via its fully evolved rules-based decisioning engine. Whether you are running 1 business channel or 3, LendGenuity is designed to make the business of originating loans less expensive with a far better customer and originator experience. Each component may be licensed individually or with any of the other components. Visit us for more information or demo request. Don’t forget to ask us about our new NONQM AUS.”

Here’s an on-demand webinar: Renovation Lending 101: Understanding Consumer Renovation Loan Products to Grow Your Business. The need and popularity for home renovations are growing at an expansive rate. The opportunity is present for lenders to capitalize on this potential business and provide borrowers with the loan products needed to renovate. Join Land Gorilla to learn how to get started with 203(k) and HomeStyle Renovation loans, typical renovation loan processes and costs, required disclosures, and key performance indicators essential to their success. Register to watch now.

What’s new under the sun

Obviously, there are personnel, lender, and correspondent changes taking place, the Chase correspondent layoffs late last week being the latest. I try to group things to provide context but sometimes there are things from such a wide variety of sources impacting so many segments of our industry I just have to blurt them out. In no particular order…

Congrats to anyone who owned stock at the beginning of the week of Ellie Mae. Thoma Bravo, LLC, a private equity investment firm, announced an all-cash purchase transaction of Ellie that values it at an aggregate equity value of approximately $3.7 billion. Thoma Bravo is no stranger to this: MeridianLink, the parent of LendingQB, an LOS, was purchased last year.

Recall that in the summer of 2017 Binh Dang, the co-founder and former president of LendingQB sought a court to force MeridianLink, the loan origination system’s parent company, to dissolve. At that point Dang owned 249,999 shares of MeridianLink while QBSolutions Group, which Dang is listed as the president, owned one share. I mention this because, regarding the announced acquisition of Ellie Mae by Thoma Bravo, Tim Nguyen, CEO and Co-Founder of MeridianLink, sent a note out to clients saying, “Firstly, I wanted to say congratulations to the team at Thoma Bravo and the team at Ellie Mae on the transaction… I want to state that we remain 100% committed to growing and investing in our LendingQB product line and (this news) does nothing to change that perspective… We will continue to fiercely compete and acquire market share as we have for the past 10+ years!”

Ellie’s fortunes, given its size, rise and fall with the fortunes of the residential lending industry. They also rise and fall with Ellie’s market share, estimated to be roughly 40%. All Ellie Mae shareholders will receive $99.00 in cash per share from the $17 billion fund. Meridian Link has a notable footing in credit union and bank software, and of course a smaller presence in mortgage with LQB. Thoma Bravo also has interests in McAfee, Barracuda, Compuware and other big software companies. Bloomberg reports that, “The deal includes a 35-day ‘go-shop’ period when Ellie Mae can seek other offers. The acquisition is expected to close in the second or third quarter of this year.”

To nearly no one’s surprise, ditech, aka Ditech, announced that it has entered into a restructuring support agreement (RSA) through a Chapter 11 reorganization to reduce its corporate gross debt by $800 million and continue to “explore strategic alternatives including a whole company sale, an asset sale, and outsourcing to a subservicer.”

Analysts were quick to point out possible ramifications for the servicing biz given its servicing of $187 billion of total UPB (unpaid principal balance), $83 billion related to the NRZ agreement leaving $104 billion that could be sold. Keefe, Bruyette & Woods (KBW) has some thoughts pulled directly from the note, which can be viewed in full here: Ditech Files Chapter 11; MSR Sale Could Impact Servicers and Black Knight. Ditech issued an 8-K a couple weeks ago noting NRZ planned to pull subservicing. In that note KBW analysts highlighted that that the NRZ subservicing portfolio is likely to move to Shellpoint, COOP, and potentially others.

Who could buy the free $104 billion of ditech servicing? New Res, Two Harbor, Mr. Cooper (ex-Nationstar), or Ocwen jump to mind. KBW points out that Black Knight could suffer a possible setback since some potential MSR acquirers don’t use it. “While most large servicers use Black Knight’s MSP, two notable servicers that do not are Mr. Cooper and Shellpoint. KBW analysts had originally estimated that NRZ pulling its subservicing would amount to servicing revenue headwinds for BKI of less than 1%. However, because the average loan size in that portfolio is below average, KBW analysts would revise that estimate up slightly to about 1.4% (assuming the entire NRZ portfolio leaves MSP which we continue to think is unlikely) … From conversations with NRZ’s management, we would expect NRZ to allocate that UPB among several servicers possibly including Shellpoint and COOP (neither on BKI’s MSP), as well as to some servicers on MSP.”

Switching gears to wholesale, brokers learned from United Wholesale Mortgage (UWM) that, “Being in business for yourself doesn’t mean you have to go it alone when it comes to health insurance. United Wholesale Mortgage has negotiated a discounted price with one of the nation’s leading independent insurance providers to make it easy to shop for group health insurance for you and your employees. Health insurance plans include options such as medical, dental, vision, short-term and long-term disability from the top health providers in the nation, such as Blue Cross Blue Shield. To learn more about this great benefit talk to your UWM AE or sign up with UWM and get access to health insurance plans tailored for your needs.”

From the Texas Dept. of Housing and Community Affairs comes news that the My First Texas Home special mortgage loan rate, 3.99%, is available to potential homebuyers “right now!” (The Texas Department of Housing and Community Affairs “is committed to expanding fair housing choice and opportunities for Texans through the administration and funding of affordable housing and homeownership opportunities, weatherization, and community-based services with the help of for-profits, nonprofits, and local governments.”)

Given rising ocean levels, anything to do with flood insurance is important. Five federal regulatory agencies issued a joint final rule to implement provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 requiring regulated institutions to accept certain private flood insurance policies in addition to National Flood Insurance Program policies. The OCC, NCUA, FDIC, FCA, and the Federal Reserve Board let us know that the rule, which takes effect July 1, 2019, implements the Biggert-Waters Act requirement that regulated lending institutions accept private flood insurance policies that satisfy criteria specified in the Act, allows institutions to rely on an insurer’s written assurances in a private flood insurance policy stating the criteria are met, clarifies that institutions may, under certain conditions, accept private flood insurance policies that do not meet the Biggert-Waters Act criteria, and allows institutions to accept certain flood coverage plans provided by mutual aid societies, subject to agency approval. Regulations implementing the federal flood insurance statutes prohibit regulated lending institutions from making loans secured by improved real property located in special flood hazard areas unless the property has adequate flood insurance coverage.

Final Rule

Yesterday, Optimal Blue launched a compelling new resource for lenders, loan officers, and consumers. Optimal Blue Mortgage Market Indices, or OBMMI, provides unparalleled transparency into mortgage rates by utilizing observed, real-time lock data from approximately 30% of the market. The data is aggregated daily into multiple national mortgage market indices and engaging visualizations for popular conforming, jumbo, and government loan products as well as unique loan scenarios based on standard LTV and FICO ranges. It will be interesting to see how this new national benchmark for mortgage pricing will help to streamline the mortgage shopping process and connect consumers with their lenders more quickly.

Legal and regulatory changes

Attorney Phil Stein with Bilzin Sumberg Baena Price & Axelrod LLP writes, “Here’s a case development that will likely be of interest to your readers. The case deals with the statute of limitations for many of the lawsuits facing lenders and LOs. The case should send some light on how an “indemnification” claim is in reality indistinguishable from a “breach of contract” claim.

The CFPB posted new compliance tool on its website specific to the TRID Rule. Its Frequently Asked Questions (FAQs) provides clarification to the following questions:

a financial institutions obligation to provide a new three-day waiting period along with a corrected Closing Disclosure (CD) when a term previously disclosed has changed. How creditors may use model forms that do not reflect the CFPB’s 2017 amendments to the Rule. The impact of a recent TILA amendment to the requirement for corrected disclosures.

Capital markets

Rates are gradually trudging higher, because they’re tired of going down? The U.S. 10-year closed Tuesday yielding 2.68% amid reports that partisan negotiators in Congress have reached an agreement to fund the government through the end of the fiscal year while providing $1.3 billion, well short of the $5.7 billion requested by the White House, for border security. President Trump said later in the day that he was not happy with the deal but conceded that another shutdown is unlikely to take place. Separately, there was continued speculation that the March 1 deadline for increasing the tariff level on $200 billion worth of imports from China to 25% from 10% could be delayed. There is said to be much optimism surrounding the U.S. trade delegation in Beijing this week. Finally, British Prime Minister Theresa May reportedly plans to step down after Brexit and hopes to have a say in naming a successor.

We began today with the usual mortgage applications from the MBA for the week ending February 8 (which dropped nearly 4%, purchases down 6%), the January CPI report (unchanged as expected, +.2% ex-food & energy). Real weekly earnings are seen increasing 0.1% MoM versus 0.7% in December. We have three scheduled Fed presidents speaking. Atlanta’s Bostic, Cleveland’s Mester, and Philadelphia’s Harker will all take the stage. We begin today with Agency MBS worse/lower a few ticks and the 10-year at 2.69%.

A successful marriage depends on communication & shared chores. A retired capital markets guy sits around the house in Missouri all day so one day his wife says, “John, could you do something useful like vacuum the house once a week?”

The guy gives it a moment’s thought and replies, “Sure, why not. Where’s the vacuum?”

Half an hour later, John walks into the kitchen to get some coffee.

His wife says, “I didn’t hear the vacuum running; I thought you were going to use it.”

Exasperated, John counters, “The stupid thing is broken and won’t start. We should buy a new one!”

“Really?” she asks. “Show me – it worked fine the last time I used it.”

So, he showed her: https://videos.files.wordpress.com/Xblfe4qf/retired-vacum-cleaner_dvd.mp4

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “How are You Going to Compete.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.


(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 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