Daily Mortgage News & Commentary

June 26: AE jobs; Is title insurance a scam? Reader’s notes on AMCs, compliance, Agency changes; Saturday Spotlight: PHH Mortgage

In the last fifteen months we’ve learned that work is a thing you do, not a place you go. (Feel free to use that one!) The Mortgage Bankers Association returns to “work from the office” on July 12. Lenders and vendors around the nation are gradually heading back into the office, often with staggered schedules or voluntarily. Investment banks are a little tougher. Morgan Stanley’s staff and clients will be barred from entering its New York offices if they are not fully vaccinated against Covid. Want to stay home? Probably not. James Gorman, chairman and CEO of Morgan, says, “If you can go to a restaurant in New York City, you can come in to the office, and we want you in the office… If you want to get paid New York rates, you work in New York. None of this, ‘I’m in Colorado and working in New York and getting paid like I’m in New York’. Sorry, that doesn’t work.” Bank of America’s vaccinated employees will be back in the office after Labor Day. “We encourage employees to enter their vaccination status in the company portal.” Yikes

Saturday Spotlight: PHH Mortgage, providing industry-leading mortgage services and helping countless homebuyers and homeowners find financing solutions to meet their needs.

 

In 3-5 sentences, describe your company (when was it founded and why, what it does, where, recent growth and plans for near-term future growth).

PHH Mortgage is a subsidiary of Ocwen Financial Corporation (NYSE: OCN) and a leading non-bank mortgage originator and servicer focused on creating positive outcomes for homeowners, communities, and investors. We serve more than 1.1 million borrowers and hundreds of clients with various mortgage products.

 

Our servicing portfolio is made up of owned mortgage servicing rights (MSRs) and subserviced loans. We are one of the largest and most experienced special servicers with a strong track record of supporting borrowers in need. Since the financial crisis, we have helped more than 1.5 million U.S. homeowners avoid foreclosure.

On the originations side, we’ve built a diverse, multi-channel lending platform that is delivering strong volume. In 2020, we achieved $57 billion of total volume, more than double the volume from the prior year. This year, we are targeting up to $150 billion of new servicing additions.

 

What does your company do to help elevate your employees’ growth? Describe any mentoring programs, outside classes or training, in-house training. How does the company help people develop?

Our culture and values prioritize our employees and their development as well as diversity and inclusion. We have put in place a training platform that focuses on both technical skills and competency-based programs to develop leadership capabilities and skills needed for the future.

 

We provide company-wide diversity and inclusion training for all employees and unconscious bias training for leaders. Employees at all levels are annually evaluated on sustaining an inclusive work environment. In 2018 we launched our Aspire Mentoring Program to foster the career development of mid-level female leaders and to continue increasing female presence in executive leadership roles.

 

In addition, we have affinity groups that support recruitment and retention initiatives for women across the organization; foster professional and personal growth for employees of all genders and sexualities; and a Black professionals’ network to increase inclusion by educating employees about Black culture.

 

Tell us how your company maintains its culture in the office, or in a work-from-home environment if applicable.

Roughly 98% of our global workforce is remote and the team continues to perform at very high level. We have conducted multiple employee engagement surveys over the past year to assess our employees’ welfare and productivity and to identify challenges and opportunities. We use weekly newsletters, virtual town halls and other employee engagement activities to provide employees with useful tips, tools, and resources to stay engaged, connected with our culture, help them operate productively in a remote work environment and have a little fun.

Things you are most proud of that don’t have to do with sales. 

We are proud of our culture and track record of helping homeowners. To date, our company has completed more than 800,000 loan modifications for borrowers in need. We have also provided more than 190,000 customers with mortgage forbearance due to the pandemic and partnered with the NAACP to conduct virtual borrower outreach events across the U.S. We conducted 40 outreach events in 2020 and are on track to hold 45 more this year.

 

Fun fact about PHH 

The initials PHH stand for the names of our founders: Peterson, Howell, and Heather, who started the company in 1946 as a vehicle leasing company.

 

(For more information on having your firm, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)

A couple wholesale opportunities of note

An established retail lender in the Southeast Great Lakes region is on the search for Wholesale Account Executives! “Our AEs have numerous opportunities to grow their own territories, help be instrumental in implementing changes, have access to a full FNMA, FHLMC, & GNMA agency product set, manual underwrites and more! This position offers a unique and pivotal role in helping grow the channel and will require previous Wholesale AE experience. Company has won Top Places to work year after year consistently and is heavily connected in the mortgage industry. This is an excellent opportunity for growth!” If interested, please send your resume to Chrisman LLC’s Anjelica Nixt for forwarding and specify this opportunity.

A wholesaler that is approved in over 45 states, and founded over 20 years ago, is searching for AEs and sales teams nationwide. This company is well-capitalized with Fannie and Freddie approvals, and is a GNMA approved seller/servicer. The company’s average monthly funding per AE has consistently been over $8mm (thought to be an industry record). The company has tremendous growth capability, and is looking for sales teams to cover a vast, untouched territories throughout the nation as well as AEs who want the tools to increase their production. If you are interested in working for an organization that understands success is more than focusing on just top producers, then this is the place for you. Additionally, this company offers amazing growth opportunity, unprecedented level of concierge service, aggressive compensation plan and competitive pricing (consistently ranked 5 to 10 on Loansifter). Contact Chrisman LLC’s Anjelica Nixt with a resume for forwarding if you are interested.

Letters from readers

A good chunk of my emails this week were from readers with opinions about the changes in organizations whose words and actions impact the vast majority of lenders. Not everyone is tickled with the prospects of the changes at the Agencies and at regulators

“Rob, I am sure that the ex-FHFA Director Mark Calabria thought that he was doing a good job. But he didn’t, and borrowers paid the price. Glad he’s gone the way of Richard Cordray.”

And this from a broker in Florida. “I don’t know the people President Biden has appointed to fill HUD, FHFA, nor the CFPB, but from an outsider’s perspective, I’m disillusioned with each of the selections. The individual at FHFA, yes, on paper is more than qualified, but she is a career government employee. For once, just once, I would like someone who has actually sat with a few borrowers and heard their stories, concerns, and goals in life before they made massive decisions based purely on assumptions. (Every time I use that word, I hear Walter Matthau in Bad News Bears about ‘assume’ makes and ass out of u and me.) But it’s true. After 4 years of a wealthy brain doctor running housing, the CFPB with lawyers (many of whom had not owned a home), and the FHFA refusing to supply data requested on FIOAs and being run by someone who has never been a fan of Freddie and Fannie, the regulation of the Housing sector is clearly out of touch with the nation’s housing goals.”

And this. “Do you think the FHFA nominee will change loan level price adjustments? I’m one of the folks that disagrees with most of the LLPAs (loan level price adjustments). They are anti-affordable housing. For example, if you charge five points for an investment property, who actually pays? The tenant, not the borrower. That hurts the tenant (typically lower income or starter from moving to permanent housing quicker) and it goes on and on.” Anything’s possible, right?

From Brian Brunkow, Senior Instructor for The Knowledge Coop, came on a note on COVID and complacency. “My favorite sushi restaurant down the block checked out about a year ago. It is the kind of place where (pre-COVID) plates of rainbow rolls, sashimi and edamame beans rolled by on a conveyer belt slow enough to destroy the weekend’s food & entertainment budget.

“During COVID the dining room shut down and it became ‘pick-up’ only. That is where the problem begins. The dining room is filled with stained cardboard boxes, mops and buckets, and assorted delivery items not stored or organized in any way. Messy and dirty. Unprofessional. Not a good impression. The customers see it. The staff, management and owners apparently do not.

“As we slowly work our way out of the pandemic it is a good time for compliance, with fresh eyes, to ‘really’ look over the company’s consumer (and regulator) facing platforms. We’ve all, understandably, been in a fog and become complacent. For 15 months we’ve looked past our own version of cardboard boxes, mops, and buckets. We should review the company’s website, social media sites and NMLS info. Did we lapse? What info is missing? What info should be deleted? What info now needs to be amended? Start with marketing claims, licensing, and product/service offerings. Is everything current, correct and complete?”

From New York Dave Lichtman, President of DML Mortgage Enterprises, Inc., relayed, “I think it is important for the industry to discuss this. I sent this note to my Governor who used this issue to get elected, and to my State Senator and Representatives.

 

“As we all know by now, any reactionary policy is not intended for long term. As such you should advise your colleagues to amend that part of Dodd Frank that implemented the use of AMC, Appraisal Management Companies. Not only are companies gauging and overcharging, but appraisers are being randomly assigned who have no experience or lack of training for deals in a given geographic area and/or unique in nature. Those as always being most adversely affected are first time buyers and minorities as their entry into the housing market typically requires winning bid on a home that may indeed need to close quickly, be unique in nature, bid up in price.

“We see time and again appraisers overcharging and delivering inadequate reports that Lenders question content and validity. Time to re-address this issue. The mortgage industry is heavily regulated and the need and ability for a Loan Officer to communicate and be transparent with all entities in the mortgage process saves the consumer time, money, and aggravation.

“Increase fines, penalties for manipulation and coercion but bring back communication. Enough already. Appraisal industry is out of control, and the ones who are paying the bill are the borrowers, including minorities and first-time buyers. My recent order for a Hispanic borrower’s single-family home is costing him $735!! No reason. The AMCs put out job requests, and when we question these fees, we wait extra 5-10 days and can lose the deal! This is no longer uncommon. In the height of the market we would see perhaps a $500 fee. We are up 100%+!

“Dodd Frank added oversight which will get anyone in hot water for manipulation, coercion, fraud, etc. The AMC has padded and done bad job managing their own processes. We have the Brito file unique home with office space that is Fannie Mae eligible but since we cannot communicate with appraiser directly, only through AMC, we cannot get the end appraiser to understand the nature of the use of the home. We had our wholesale lender pre-screen the listing to accept the deal, but are dealing with dead weight and lack of interest and response in addition to the $950 fee!!!!  Not only incompetence but robbery as well.”

Title insurance profits

When someone buys a new home in the U.S., the buyer needs to purchase title insurance. Some say that it is an odd little necessity, often required by the state, that essentially insures the sale in the event that a competing claim emerges, and the “wronged party” sues to reclaim the property that was unjustly sold out from under them. Though it can make for good drama, this is vanishingly rare. In practice, it usually means an extra grand or two tacked on to the sale price, and some states are worse than others. Texas’ title insurance premiums, on an average house, are $1,808, in New York it’s $1,125, and in Iowa it’s $110. Aside from the regional differences, the practice is essentially all profit for the title insurers: the loss ratio is just 1.2 percent, which is incredibly low. According to the Texas Department of Insurance, title companies sold $1.8 billion worth of title insurance policies, but only $24 million was needed to settle claims in title defects. That meant title companies held on to $1.5 billion and paid $335 million to underwriters, a ridiculously high profit margin.

 

(Thank you to Northern California’s Laurie K. for this one.)

You know why they tell blonde jokes really slowly?

So brunettes can understand them, too.

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, “The Secondary Market’s Presence in the Primary Markets”. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2021 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)