Feb. 6: Capital markets job, construction, vendor mgt., recruiting products; compliance & Dodd-Frank notes

As all the pre-printed “Patriots: 2018 Super Bowl Champions” t-shirts are being shipped off for donation to 3rd world countries (yes, that is what happens), the real estate market in this country continues to be hot. What does $500k take down in Denver? Here you go – thanks to Brian B. who sent this along.

Jobs & products

A regional mortgage bank headquartered in Dallas-Fort Worth is seeking a Vice President of Capital Markets. The person will be responsible for supervising the lock desk and loan locking functions, policies and procedures; secondary marketing execution including investor relations, product management, hedging, trading and best execution; work with Executive Staff designing optimal loan pricing structures to optimize company profitability; outstanding communication skills including working closely with production personnel; analytical mindset providing analytical reports to Management regarding production trends and anomalies. Profit minded individual. Requirements include experience with: delivering whole loan, bulk and flow to the secondary market; selling loans to the GSE’s including Ginnie Mae MBS pools; working with hedge advisory firms; and working with pricing engine and mortgage banking software, specifically Optimal Blue and Encompass. Position requires a bachelor’s degree (preferably in finance, accounting, business or economics) and at least 5 years of progressive experience in a Secondary Markets department (preferably within a retail-based mortgage bank). Resumes should be submitted to me for forwarding; please specify the opportunity.

Over 50 years of combined experience and 19 of those with Stearns Wholesale Lending. That is the dynamic team of Jonathan McCash, Nick Pabarcus and Ryan Rathert who have been promoted to Senior Vice Presidents with the company. McCash, who joined Stearns in 2012 as an RVP, thrives on building energetic and top-performing sales teams. Rathert came onboard as SVP, Finance, in 2014 with analytical expertise that has been pivotal to the development of financial tools used for forecasting, reporting and making strategic decisions. Pabarcus has been with Stearns since 2011 where he first led the Correspondent Channel and most recently launched numerous successful initiatives in Wholesale. This leadership trio has brought enthusiasm and an innovative approach to the business that has energized the Stearns Wholesale Team and positioned them for increased growth and industry leadership.

“We’re well into 2018, do you have a strategic growth and recruiting plan in place for your goals this year? Whether you’re an owner, executive leader, head of production, area/regional manager, branch manager or business development pro, the Model Match Production Prospector will help you target the originators doing the type and amount of business that is best matched to your company. You customize the criteria for you ideal producers, we’ll find them and give you visibility into their previous years volume, trailing 12 months and most recent 90 days, as well as unit count, average loan, product mix, purchase percentage and all the details you need to make contact with them today. CLICK HERE to set up a time with a product specialist to learn more about Model Match and our Production Prospector. ” We help our clients grow their business organically through a strategic and structured recruiting plan.”

Still looking for an efficient and cost-effective way to manage your vendors in 2018? With ShareDiligence, Strategic Compliance Partners collaborative approach to vendor management, Lenders share the results and costs of due diligence. All you need to supply is your vendor’s name and email address and we do the rest! Sound too good to be true? Contact Leslie Benjamin for a demo.

Bank of England Mortgage now offers one of the top New Construction Loan Programs in the industry. Create stronger realtor and builder relationships while providing our borrowers with yet another home-buying opportunity. Since opening our doors in 1898 in England, Arkansas, our family-owned and FDIC insured bank provides big bank benefits with a community bank feel. We have survived the volatility of the mortgage industry for 119 years using a combination of stability, our flexible and entrepreneurial approach in helping you run your business and focus on the success of your team. Tired of changing companies and looking for your forever career home? Contact your regional Bank of England Mortgage representative: West – Randolph Winston, (615) 812-5885, Midwest – Jim Lind, (913) 972-0822, Southeast – Roger Phillips, (205) 910-9339, or Northeast – Chris Copley, (717) 440-3346.”

Compliance & Dodd Frank-related changes

I received this note from a lender in Sacramento. “One thing I’ve noticed in the past month or so, when comparing LEs or estimates from some lenders, are that discount points being charged but also a lender credit to offset fees. How is that someone can pay to buy down their rate, but at the same time receive a lender credit? As you know we are a very competitively priced lender, and usually I can either match or beat another company’s estimate. With these latest estimates we’ve been seeing recently our pricing is similar to the discount point being charged, but in NO WAY would we be able to provide the lender credit.

“For example, on a $300k loan I’ll see a discount point of 1% ($3,000) to buy down the rate and in turn I’ll see a credit of $3,000 to offset the discount point. Again, our pricing would be equivalent to the discount point, but we would not be able to provide the lender credit. So, my concern is that in this competitive environment, this tactic is nothing more than a pure ‘bait & switch.’ Get the client on board with a low rate, show them the lender credit so their fees are lower, have them go through the refinance and then at the end process a COC (Change of Circumstance) when the appraisal comes in slightly lower (or something similar) and voila! The lender credit disappears, the fees are higher, and this can be explained as the appraisal came in lower (or something similar). The client is too far invested (paid for appraisal, time, etc.) in the loan to cancel, and doesn’t want to start over again.”

I asked Ken Perry of The Knowledge Coop about the situation above, and he replied, “This is just one of the many things the CFPB could have dealt with had its priorities not changed. It’s still very deceptive and a potential violation of RESPA, but it will take attorneys to fight back in these situations.”

Politics certainly overlaps with lending, and I received this note on last week’s PHH vs. CFPB ruling. “MSAs are kickbacks, pure and simple. I would not expect Mulvaney to protect consumers given he is a Trump hack. Hopefully America will wake up in 2018 and beyond and run these carpetbaggers out of Washington.” As a reminder, acting CFPB Director Mick Mulvaney has taken the office of Fair Lending and Equal Opportunity and moved it under his direct control. Consumer advocates are unhappy, and lenders are focused on the big change – Mulvaney will be in charge of enforcement, which is in keeping with the philosophy he outlined in his memo to the CFPB.

Ken writes, “Of course NAR speaks out about MSAs and fees for service. Lenders are shaken down by brokers, owners and teams for arrangements to subsidize lopsided real estate commission splits and lender pay for access. I am disappointed the mortgage banking industry has not stood together to refuse these solicitations and allowing us to compete on an even playing field.”

And Les reminds us, “All these ‘Do Gooders’ forget one thing: That the compensation rules, while checking predatory lending, also prevent the consumer from negotiating a better rate. For those brokers and lenders that post rates, there is no compromise or negotiating. It therefore leaves the borrower unable to do so.”

The UCD mandate which had been put on hold in September 2017 is effective now and mandatory as of January 31, 2018. Pacific Union will now require the following elements for UCD processing from our Correspondent Lenders: All Lenders must register with both GSEs. The Lender must create a UCD XML file from the final Closing Disclosure (CD). The Lender must upload that UCD XML to both Fannie Mae and Freddie Mac and receive the appropriate response. For Fannie Mae, the Lender must transfer the UCD XML to Pacific Union, as well as get a Successful UCD Findings Report from FNMA. For FHLMC, the Lender must receive a Successful UCD Feedback Certificate. For FHLMC, the transfer process isn’t available but as soon as it is, we will send out instructions on how it will work. The Lender must submit those responses in their Legal Package upload to Pacific Union.

Pacific Union will require its delegated correspondent clients to provide the Universal Loan Identifier (ULI) number along with the new Demographic Information Addendum, which will be required for all mortgage loan applications taken on or after January 1, 2018. This is a new HMDA Requirement which becomes effective the first day of January.

PennyMac Correspondent Group has posted two new announcements. 18-05: FNMA SEL 2017-10: Title in an LLC and Premium Pricing and 18-06: FHLMC 2017-28: Updates Employment After the Note Date, Land Trust.

Wells Fargo Funding is updating its’ requirements to help remedy material Reg. Z discrepancies by removing the requirement for a lender attestation that rescission was re-opened and no notice was received canceling the transaction and retiring the Rescission Attestation Form (Form 13).

Mountain West Financial Wholesale has posted that the VA Debt Questionnaire is no longer required and will not be included in its documents package. The VA Debt Certification is not the same form and is still a VA requirement. In addition, the Certification of Military Activation disclosure will now allow the LO to check the originator box when eSigning the “Lender’s Certification” portion.

Due to the ever-growing threat posed to information and financial systems by nation-state, the New York State Department of Financial Services (DFS) is imposing new regulation under which each company will be required to assess its specific risk profile and design a program that addresses its risks in a robust fashion. Access Business Technologies (ABT) offers the compliant technology that financial businesses will need; effective March 1,2018. Learn more about how to become compliant from an expert in cybersecurity.

Capital markets

Stocks have been garnering all the headlines recently. Most are still labeling the equity sell-off normal and healthy, a period of digestion and consolidation amid a backdrop that remains favorable for risk assets (solid growth, strong earnings, reasonable valuations, etc.), although sentiment clearly has shifted over the last 72 trading hours.

As Jerome Powell takes over as chairman of the Federal Reserve, he will be faced with historical signs that an economical bubble ready to burst is in the making. Experts say the big challenge will be to maintain growth. Strong economic data and the possibility of rising inflation have sparked a brisk US government bond sell-off, pushing up Treasury yields and contributing to a stock market downturn.

Unlike Friday, Monday was typical of bond market / equity market correlation and the 10-year Treasury note improved by 7 basis points to finish the day yielding 2.77 percent. When equities sell-off it usually creates demand for safe-haven asset classes like bonds though given the recent volatility, bonds could change course today or over the remainder of the week. Based on yesterday’s movement, the expected probability of a rate hike decreased from 76% to 63% according to the CME FedWatch Tool.

This week has a light economic calendar and yesterday’s ISM Non-Manufacturing Index jumped to its highest reading since August 2005 and added another set of data pointing towards accelerating growth. Today’s calendar kicks off with international trade (widening to $53.1 billion, widest in almost a decade and likely to subtract from economic growth), Redbook same-store sales and December job openings. Additionally, we are staring down another budget extension later this week which many expect will be another short-term stop-gap. This looming issue is still the debt ceiling limit extension needed by early March to avoid a Treasury default. After yesterday’s rally we find the 10-year yielding 2.74% and 30-year agency MBS prices worse almost .125.

Some Pun-Jabs (part 2 of 2)

12. Need an ark to save two of every animal? I Noah guy.

13. Alternative facts are aversion of the truth.

14. I used to have a fear of hurdles, but I got over it.

15. Atheism is a non-prophet organization.

16. Did you know they won’t be making yardsticks any longer?

17. I used to be allergic to soap but I’m clean now.

18. The patron saint of poverty is St. Nickeless.

19. What did the man say when the bridge fell on him? The suspension is killing me.

20. Do you have weight loss mantras? Fat chants!

21. My tailor is happy to make a new pair of pants for me. Or sew it seams.

22. What is a thesaurus’s favorite dessert? Synonym buns.

23. A relief map shows where the restrooms are.

24. There was a big paddle sale at the boat store. It was quite an oar deal.

25. How do they figure out the price of hammers? Per pound.

26. The Norwegian Navy has begun placing bar codes on the bows of their ships. That way when they return to port they can… Scandinavian. (Thank you, John R., for this one.)

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, “Servicing: All It’s Cracked Up to Be?” 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 over 300 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 2018 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