June 11: Retail jobs, new product development, and training; a new Realtor/LO product; challenges to lending in California

A recent MBA “Chart of the Week” highlights the change in the number of households by age from 2004 to 2014. Household formation was negative for households with at least one adult under 50 years old during this time period and the majority of these households were non-Hispanic white. The loss in household formation can be attributed to loss of employment and financial stress and there was a net loss of population between 35 and 49 year olds. The slow recovery in single family housing is due to the decline in household formation by young adults but household formation began to pick back near the end of 2014. The MBA predicts that household formation and housing demand will strengthen this year.


Here’s an update from iServe Residential Lending: “Expansion is on the forefront.”  “According to Ken Michael, Co-CEO, ‘iServe is actively seeking Branches, Producing and Non-Producing Branch Managers, and Originators in our growing nationwide footprint, including key markets in California, Arizona, Texas, Connecticut, New York and Florida.’ iServe positions itself with a robust product mix and competitive pricing, often with few, if any, overlays. The newest addition is a jumbo and high balance product that is ‘aggressively priced and sets iServe apart in that market.’ Michael goes on: ‘Our goal is to be a market leader for the Jumbo and High Balance product mix, and our pricing will be reflected accordingly. We are a company fully focused on growth and differentiation.  We want talent with a priority of service, speed and a can-do attitude.’” Interested individuals can visit www.joiniserve.com. For more information on the Western US, contact Allen Friedman, and in the Eastern US contact Rick Trew.


As Mortgage Call Centers and “Lead-Driven” LOs focus more on purchases, converting pre-approvals and working with loyal Realtors is paramount for success. Here’s a novel twist: a FREE service offered by LoanAgentMatch.com that “Matches Pre-Approved Homebuyers with Realtors”. The president of LoanAgentMatch, wrote to me saying, “We’re looking out for our Lenders by promoting their loan products and services during the home shopping experience. We match borrowers with Realtors in our network, dramatically increasing loan conversions. We eliminate the steering that occurs when Realtors introduce borrowers to their “local LO”- Call Centers can focus on originating, we manage the Realtors”. Realtors aren’t only screened prior to joining; they’re interviewed by us prior to each match. This is a FREE service and each borrower gets an iPad Mini upon closing with their assigned Realtor. What lender or borrower wouldn’t want that? (If you’d like to learn more contact LoanAgentMatch.)


Most leaders today are looking for new ways to grow their teams’ production. XINNIX, The Mortgage Academy, has an upcoming Leadership Lessons webinar on June 17th at 11:00 AM EST for leaders who are looking to IGNITE their teams’ performance. Learn to lead, coach and grow your team for maximum results. As the premier provider of leadership and loan officer training, XINNIX’s insights regarding elevating results will be invaluable. This live webinar is complimentary, but registration is required.


AllRegs Academy has developed a 3-day classroom program, July 13th-15th in Denver designed to further develop the mortgage professional’s knowledge of core federal compliance topics. Providing practical exercises geared to industry professionals to assist in fully understanding these complex regulations. The course includes instruction on RESPA-TILA Integrated Disclosures. For more information and registration, click the link to view AllRegs School of mortgage compliance.


Looking for a high level introduction to the unique features and benefits of the USDA program? Sign up for AllRegs USDA webinar emphasizing the actions taken and processes completed to move a USDA loan through Origination, Processing, and Underwriting on August 6th. Register now for the AllRegs online USDA training.


MBA and the American Land Title Association (ALTA) are pleased to offer a 6th full-day workshop leading up to the August 1st implementation deadline. Click the link for registration and information on CMLA’s TRID Event, June 23rd in Denver.


Down Payment Resource is providing a webinar on June 11th with speakers Tonya Todd, SVP of Affordable Housing Programs for Mountain West Financial and Paige Omohundro, Homeownership Finance Manager for the Texas State Affordable Housing Corporation to discuss Real strategies to move millennials into homeownership.


Have you discussed TRID with your real estate referral partners? MGIC is conducting a webinar specifically designed to be a high level overview of the upcoming changes and how to explain them to a real estate agent audience. Click the link to register for MGIC’s June 19 webinar: explaining TRID to real estate agents.


As volume at most shops levels off, or worse, the questions about new products increases. Is there any product development occurring? I received an update about new products from John Boyles of Shelikof Advisors. “I have seen a number of folks taking advantage of today’s market to design products that gives their sales team an edge over the competition.  To cite one example, several mortgage bankers have grown their product suite as a result of gaining access to 5/5 and 15/15 ARMs through credit union relationships. While the new non-prime and alt-QM products stalled in 2014 due to the disjointed nature of buyers’ yield requirements and the prevailing retail rates for prime mortgages, a substantial amount of untapped capital is poised to enter the marketplace through several new buyers who are keen to give originators something other than an Agency- or Government-based product to sell on the street. This will be particularly salient in the latter half of 2015; even though lenders are still enjoying the robust refi business that we’ve been seeing since Q4 of last year, rates are targeted to rise in as soon as three months, at which point we can expect niche purchase products to gain considerable traction. To that end, we’re seeing many mortgage bankers turning their attention (and devoting their resources) to product development in order to set up 2015 and 2016 for what is expected to be another shrinking market cycle.” Thanks John.


(For the next several days I am doing some bicycling and traveling in Croatia. During this time several “guest writers” are doing the bulk of the 6-day a week commentary, some queued up in advance but in random order, and I hope that readers enjoy the change of pace as well as the interesting perspectives. I am sure everyone understands that there could be considerable delays in me responding to any e-mails, and you can write to the contributors directly.)


Dustin Hobbs, Communications Director with the California Mortgage Bankers Association, writes:


Well, it seems the Consumer Financial Protection Bureau (CFPB) is ready to give the mortgage industry a break when it comes to complying with the new TILA/RESPA Integrated Disclosure requirements.  An “open-ended” “good faith” grace period on enforcement sounds pretty good, although it’s doubtful that consumer attorneys will be so forgiving.  Same can’t be said for California’s regulators, particularly the state’s Department of Business Oversight (DBO).  A few weeks ago, the members of the California MBA and top DBO officials held a roundtable discussion on a variety of topics that should be of interest to firms licensed by the state.

DBO News, Round 1

The two sides discussed the ever-thorny issue of enforcement of per diem interest calculations.  According to the DBO, “under California law a residential mortgage lender is only permitted to charge customers one day of interest prior to the disbursement of their loans proceeds.” 

A quick perusal of the DBO’s website shows a number of actions against firms for miscalculation or application of the law regarding per diem.  During the meeting, DBO brass made it clear that mortgage companies and their compliance teams should be clear that the department will make no exceptions when enforcing the rule, and will not disclose any error threshold that could trigger penalties.  Bottom line: this is a zero tolerance issue for the DBO, so take no chances.  Make sure you keep a close eye on your escrow and post-closing processes, or you will undoubtedly suffer the consequences during your next DBO audit.

DBO News, Round 2

In other DBO news, the new TRID forms you’ll be using on August 1 are having ripple effects in California.  Although the new forms will not likely prompt any change in examination and enforcement practices, it will impact a set of California-specific documents.  State law requires the use of translated forms (based on the GFE) when the transaction is primarily negotiated in one of five specified languages: Spanish, Korean, Tagalog, Chinese, and Vietnamese.  Now that the GFE is being replaced by TRID, the California MBA requested that the DBO revise and reissue the translated docs.  The forms are now available – you can contact the California MBA at (916) 446-7100 for more information.

DBO News, Round 3

During the meeting, California MBA members expressed industry’s confusion over the DBO’s interpretation of Financial Code section S0124, subdivision (a)(lO), and Section 19S0.122.4.1, subdivision (a), of Title 10 of the California Code of Regulations (regarding the opening of new branch offices).

The industry believed that notice only was required prior to the opening of a new location, but the DBO practice was to require approval of new locations.

In response, the department has issued a bulletin that should help your team better understand the regulation.  According to the release, licensees under the California Residential Mortgage Lending Act (CRMLA) do not have to obtain prior approval from the DBO before opening (or moving) a branch office.  Licensees are required only to “notify the Department of a branch office by submitting the NMLS Branch Form to NMLS at least 10 days before engaging in business at the location.”

DBO News, Round 4

DBO officials asked if lenders were signed up with GovDelivery, the digital delivery software used by hundreds of government agencies, including for the Internal Revenue Service and FEMA.  They are looking at utilizing a secured delivery system to send exam reports within 30 days.  The DBO’s goal is to implement this system by Q3 or Q4 in 2015.

DBO News, Final Round

Finally, if you’re licensed by the DBO, be on the lookout for a survey from the department regarding your IT systems and processes.  Privacy issues and GLBA will be a focus of the survey and it also has a consumer component.  On the banking side the DBO does a survey every two years but they have not yet determined the frequency for the mortgage industry.  Licensees may get 30 – 45 days to complete the survey.  The survey is designed to assist in risk scoping and give DBO examiners a baseline understanding of where industry stands when it comes to IT, as future exams will include an IT review. 

Free Webinar on Marketing Service Agreements

Coming up in a few weeks on June 25, the California MBA’s Mortgage Quality & Compliance Committee will host a free webinar on marketing service agreements, presented by Burton Embry, Senior Vice President – Enterprise Risk Management, Primary Residential Mortgage, Inc.  For more details, contact the California MBA at (916) 446-7100.


I have a theory that the Food Network has done more for the restaurant business, than it has for the local grocery store. Wells Fargo notes that as retail sales have slumped, food and beverage businesses are flourishing, with year-over-year growth of around 10%. WF writes, “U.S. retail sales have been in the news, it seems, forever and not because sales are improving. Actually, retail sales have been disappointing month in and month out. However, the weakness continues to be located in the goods sector of the economy, while the service sector, that is, food services and drinking places, continues to boom.”


Well, in spite of rates going up the prior week, the MBA’s survey showed residential applications increasing nicely – up over 8%. It was the first increase since mid-April, and was led by purchases (up almost 10% – mostly Fannie & Freddie related apps). But refis were up 7%.


And rates went up again Wednesday with the risk-free 10-year T-noted ending the day at 2.48% and agency MBS prices worsened .250. It sure makes day-trading tough when the news (higher German bund yields, 10-year auction supply, corporate rate locks, short covering and real money buying) could have just as easily moved rates down. The Fed is doing its part by reinvesting its MBS early payoff monies to the tune of about $1-1.5 billion a day – what would happen if it went away?


For scheduled news today one can look forward to May’s Import Prices (+0.8 expected), Initial Jobless Claims (+278k), and May Retail Sales (+1.1% on headline and +0.7% ex autos). We also will see April’s Business Inventories (+0.2) and a $13 billion reopened 30-year bond auction.



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Here is a 90 second video with yet another reminder why one should never bet anyone in cards – this time with celebs.





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Rob Chrisman