Jan. 29: Mortgage jobs; MSI exits lending channels; Cherry Hill & Freedom concerns; floating note rate auction primer; MBS margin requirements

Darn it – I forgot to send the leprechaun a card! Lucky Charms turned 50 years old – but with Atlanta shut down due to snow (it’s 3 plows will be busy!) there will be plenty of time for a leisurely breakfast. Time is fast – how is it that we’re almost done with January? And just to think, anyone turning 50 this year was not alive when Kennedy was assassinated, 40 years ago the Eagles “Already Gone” was at the top of the charts, and 30 years ago Ronald Reagan was running for his 2nd term. Time flies… Certainly the job market is flying around, with various firms hiring and others cutting back.


CitiMortgage (Citi’s retail mortgage division) is currently recruiting Loan Originators in the following markets: Seattle, WA, California; San Francisco Bay area, Sacramento, Fresno, San Jose, San Diego, San Gabriel Valley, Orange County.  In addition, we are recruiting for New Jersey, Texas; Houston, Dallas and Atlanta, GA. “The channel’s unique approach redefines the traditional boundaries of the home purchase mortgage. CitiMortgage offers competitive pricing and product mix, operational superiority, compliance and regulatory support, competitive pay and benefit package as well as forward-thinking leadership.” Experienced candidates who are proven leaders in the mortgage industry should submit confidential resumes and qualifications to Citibank Recruiter Kenda Rice at kenda.l.rice@citi.com.


A well-capitalized regional mortgage banker licensed in 20 states is seeking a senior compliance officer. This dynamic, hands-on individual will be responsible for all compliance, compliance training, licensing, quality control and vendor management functions of the company. The company (located in the West) is currently actively engaged with Freddie and Fannie for approvals. Candidates should possess a high degree of knowledge of both existing and prospective rules and regulations as they affect both origination and servicing, and be able to recommend, develop, implement and administer initiatives to identify and eliminate/mitigate risks. 10+ years of progressive mortgage- or bank-compliance/QC/audit experience and/or relevant legal experience, along with 5+ years in a leadership/management position is preferred. Experience in servicing, servicing policies and procedures and/or sub-servicer oversight is highly valued. Confidential resumes can be sent to me at rchrisman@robchrisman.com.


And Gold Star Mortgage Financial Group announced the appointment of Dan Sugg as SVP-Retail Sales. In this role, he will lead Gold Star’s retail strategy for more than 30 branches throughout the United States. Sugg is a Certified Mortgage Banker with more than 17 years of Mortgage Banking experience with companies such as GMAC, PNC, Bank of America, and most recently he served as the National Sales Director at Michigan Mutual. . As an Inc. 500 & Inc. 5000 company Gold Star has been recognized as a Michigan Top Work Place and more recently recognized by Mortgage Technology Magazine as one of the nation’s Top Tech-Savvy Lenders. As part of an aggressive expansion Gold Star is offering entrepreneurial opportunities for experienced branch managers and loan officers nationwide. To learn more, contact Shawn Sirko at ssirko@goldstarfinancial.com.


Richard Donnie, formerly of Stearns Lending, Opteum Funding, and Impac, joined First Guaranty as an SVP and National Marketing Director.  He will head marketing for the correspondent, wholesale, and retail lending channels in addition to Capital Markets and warehouse lending.


And the face of Mortgage Resolution Partners, CEO Graham Williams, has left the company. MRP has been pushing the use of eminent domain across the nation, much to the consternation of the securities and lending industry – although things have quieted down as appreciation has picked up and the legal and moral challenges mounted. Paul Muolo with Inside Mortgage Finance reports that “Williams is now working as CEO of 10 Miles Capital Partners, which bills itself as a company that invests in ‘long term partnerships with top-tier management teams to build and grow great mortgage banks.’ 10 Mile is also headquartered in San Francisco.”


Another one bites the proverbial dust: “After much discussion, research and deliberation, Mortgage Services III (MSI) has decided to exit the Wholesale Mortgage Broker and Non-Regulated Financial Institution Correspondent mortgage business. Additionally, MSI will no longer offer Delegated Underwriting Authority for Correspondent business. The existing regulatory environment would force us to use too many valuable resources to remain competitive in the wholesale environment. We have decided to direct our primary focus towards non-delegated Correspondent/Mod Corr business from our Bank and Credit Union partners as well as Retail lending. The friends and relationships made over the past 7 years have been very rewarding and will be sorely missed. I would like to thank each and every one touched by this letter for your professionalism and loyalty over these many years and wish everyone future success Effective January 28, 2014, we will no longer be accepting new registrations. Loans that are submitted, but not locked, must be locked within 7 calendar days from January 28, 2013 to be honored. Existing locks will be honored and will be granted a one-time extension of no more than 15 days, if necessary.” I assume that this note from Bob Sword, president & CEO, meant to say “2014”. Nonetheless, many believe that we’ll continue to see similar announcements through Memorial Day, if not the 4th of July as the industry changes.


And while we’re on the Eastern Seaboard, Seeking Alpha reports that “Cherry Hill finds itself in the middle of a heavy conflict of interest in that the primary manager of Cherry Hill, Stanley Middleman, also owns 100% of Freedom Mortgage. Given the fact that Cherry Hill is purchasing MSRs primarily from Freedom Mortgage, one can see how there is a heavy conflict of interest dynamic at play. While I believe that Mr. Middleman truly wants Cherry Hill to succeed, and he should given his ~13% ownership, investors should be cognizant of this potential conflict. Cherry Hill has filed an S-8 in which they have stated that the company is setting aside 1.5M shares for its equity incentive plan. Given that there are currently only 7.5M shares outstanding, this is clearly a substantial amount of stock. As of now, I do not know what type of performance thresholds that management needs to hit to start issuing equity awards so investors should keep a sharp eye on developments in this plan to better understand what type of dilution they can expect in the future.” Here you go: http://seekingalpha.com/article/1924931-cherry-hill-mortgage-investment-corp-a-favorable-bet-on-rising-interest-rates. And there is certainly chatter out there that Freedom’s pricing has become very aggressive.


Yesterday the commentary discussed some current topics on appraisals, which reminded one reader of a recent article about the new appraisal rules supposedly helping consumers: http://www.washingtonpost.com/realestate/new-federal-rule-on-appraisals-will-be-useful-to-home-buyers/2014/01/15/9ca6c556-7c6c-11e3-93c1-0e888170b723_story.html?wpisrc=emailtoafriend. Thank you Sharon N.!


And Michael Simmons, SVP with Axis AMC (http://www.axis-amc.com/) writes, regarding the Newday article, “Fascinating mess of an article – stuck in a time warp and inaccurate on a number of levels. First, HVCC was never ‘retracted’ – it expired statutorily in, if memory serves, November of 2010 and was replaced, essentially intact, by AIR (Appraiser Independence Requirements). An even bigger distortion was the false assertion that HVCC mandated that appraisers work for AMCs. What it did require was there is a buffer between the appraiser and anyone in loan origination ordering an appraisal. The intent was to remove the potential threat of direct coercion upon appraisers. That did have a substantial effect on diminishing individual intimidation of appraisers by loan officers – but, in the view of some, replaced that personal intimidation with institutional pressure. In truth, the explosive growth in AMCs was the result of many lenders seeking ways to reduce their own costs and liabilities by outsourcing. What’s most disheartening in the article is the insinuation that all AMCs are evil and fail to use local appraisers or pay reasonable and customary fees. Under the regulatory environment today, lenders can ill afford to use an AMC that underpays appraisers or employs a bidding process for assignments or brings out-of-area appraisers in to do reports. While at times uncomfortable and inconvenient, and perhaps destined for some change, regulation that mandates best practices and compels compliant behavior will and should endure.”


Turning to the actual markets, rates are not doing much, which is fine for those in capital markets. The big news might be the Treasury holding its first Floating Rate Note (FRN) auction today of $15 billion. It raises many issues: why would any secondary guy look at floaters? Should anyone be hedging with USTs and short rising interest rates? What about the ARM market? EPDs risk? It’s tough to say, considering there’s no consumer credit built into treasuries. I did a lengthier write-up of it – check out “Rob Chrisman’s Recent Blog Posts” in the right-hand column of www.stratmorgroup.com.


Late last month when most people were fighting through their Christmas shopping list, Ginnie Mae announced the release of four new systems applications for issuers. The new applications are part of Ginnie Mae’s Integrated Pool Management System, or IPMS, modernization initiative. These new applications include: Request for Pool Numbers, Request for Commitment Authority, Submission of Master Agreements for Certification and Recertification, and Request Transfer of Issuer Responsibility. In the release GNMA writes, “The new applications will be available to Issuers via the GMEP and, with the exception of pool number assignments, will be accessed via an RSA token, rather than biometrics. The token will enable seamless and secure access to the new systems for purchasing commitment authority, submission of master agreements, and submittal and acceptance of pool transfers. The RSA token is a state of the user authentication process that replaces a very inefficient process to verify users of the system.” For more information on the system roll-outs, visit: http://www.ginniemae.gov/media_center/Pages/PressReleaseDispPage.aspx?ParamID=83.


There are plenty of companies buying and selling MBS (both agency and non-agency) and whole loan packages. MIAC Analytics announced a new whole loan trading platform.  MIAC is acting as a broker on various types of loan trades: Scratch & Dent, Investor Overlays, Portfolio Performing Loans, Non-performing Loans, and Re-performing Loans. “We have outlets for all FIXED/ARMs/Hybrids/1st liens/2nd liens/non-QM loans, pretty much anything that has a mortgage attached to it.” Contact Anjali Kumar is you’re interested at Anjali.Kumar@MIACanalytics.com.


Monday FINRA released proposed amendments to its rules governing margin requirements for TBAs. The proposed rule change provides that all FINRA members would be required to collect variation margin for transactions in Covered Agency Securities (which includes TBAs) when the current exposure exceeds $250,000. The MBA is currently reviewing the proposed amendment, but times are getting tougher for the mortgage company’s not wanting to post margin. There are only 2 or 3 regional dealers now willing to transact without the expectation of posting but with rules changing it just a matter of time before the regionals ability to post will be affected as well. The text of the proposed amendments can be found here: http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/industry/p439089.pdf. And additional FINRA commentary can be found here: http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p439087.pdf -comments are due to FINRA by February 26th.   


We did have some housing news yesterday in the form of the S&P/Case-Shiller Index, with its two-month lag. Home prices in 20 U.S. cities rose in November from a year ago by the most in almost eight years, providing a boost to household wealth: the index climbed 13.7 percent from November 2012, the biggest 12-month gain since February 2006, after a 13.6 percent increase in the year ended in October. In terms of prices, agency MBS prices closed “higher and tighter” Tuesday after a weak Durable Goods number – prices improved between .125-.250 on average volume and the 10-yr’s yield finished the day at 2.75%. (Rates are unchanged this morning.)


Besides the Floating Rate Note auction (mentioned above), today the MBA announced its applications index (basically unchanged last week), and we’ll have the results of the Federal Open Market Committee meeting – look for another cut of $10 billion. And as the next meeting is not until mid-March, there is the possibility that the FOMC could announce a cut for March as well, helping remove a little uncertainty from the market. Expectations have been that the Fed will wind down its outright purchases by around October; an equal monthly taper would conclude the program sooner and with less total purchases.



Language discrepancies naturally arise in different geographic regions, like the raging “pop” vs. “soda” debate. But the South undoubtedly takes the cake. Conversations south of the Mason-Dixon Line will befuddle anyone not born there, and here is part 2 of 5 of some of the more “interesting” Southern sayings with explanations.

4. “You can’t make a silk purse out of a sow’s ear.”

A pig’s ear may look soft, pink, and shiny, but you’re not fooling anyone by calling it your new Marc Jacobs bag. A Southerner might say this about her redneck cousin who likes to decorate his house with deer antlers.

5. “You look rode hard and put up wet.”

No, this isn’t Southern sexual innuendo. The phrase refers to a key step in horse grooming — when a horse runs fast, it works up a sweat, especially under the saddle. A good rider knows to walk the horse around so it can dry off before going back to the stable. A horse will look sick and tired if you forget this step, much like a person who misses sleep or drinks too much.

6. “He’s as drunk as Cooter Brown.”

Cooter Brown is an infamous character in Southern lore. Legend tells that he lived on the Mason-Dixon Line — the border between the North and South — during the Civil War. To avoid the draft on either side, Cooter decided to stay drunk throughout the entire war, making him ineligible for battle. Inebriated Southerners have measured their drunkenness by him ever since.



(Copyright 2014 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