June 5: VAX pushback; the CFPB & forbearance; multifamily deals, vendor news; Saturday Spotlight: Trinity Oaks Mortgage
I decided to leave my office early the other day, so walked from the dining room into the kitchen to see if anything new was in the refrigerator. Alas, there was no cake. Speaking of cake (yes, one of my weaker segues), it is no cakewalk trying to plan a vacation this summer. But people are trying! An American Express survey found 61 percent of people plan to spend more than they normally would on a vacation this year because of an inability to travel last year. In the United States, the travel market has rebounded owing to high rates of vaccination: after being largely wiped out, as of April U.S. car rentals were at 104 percent of the level seen in April 2019, spending on lodging was at 95 percent, and flights were at 57.7 percent. Globally, lodging spending in April was at 52.7 percent of the 2019 level, car rentals were at 40 percent, and flights were at 34.8 percent. Good luck out there on your way to Wally World!
Saturday Spotlight on Trinity Oaks Mortgage: uncovering financial goals and creating a home buying experience that is easy to understand.
In 3-5 sentences, describe your company (when was it founded and why, what it does, and recent growth and plans for near-term future growth).
Founded in 2015, Trinity Oaks Mortgage was created as part of the John Houston Family of Companies to provide financing for clients building a JH Custom Home and has since expanded to offer a full range of residential mortgage products to any home buyer. With a determined focus on “Better Before Bigger”, Trinity Oaks has laid the foundation to build on the 40% YOY growth of the last two years and will continue an aggressive growth track that will take us to $2B annual production in the next two years.
Tell us about what type of volunteer work employees are encouraged to engage in, or charities your company supports, and why.
Our corporate mission is to “Reach People for Christ and Give to the Kingdom”, so substantially impacting communities locally and around the world is central to all Trinity Oaks does. Through JH Reach, employees work together to support charities, ministries, and missions both financially and through volunteer efforts. For example, team members serve as mentors to at-risk youth, lead non-profit boards, provide leadership training to area varsity sports teams, help provide food and shelter to those in need, coordinate donations of computers to area non-profits and supplies to schools, and more.
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?
Trinity Oaks is committed to investing in our employee’s personal and professional growth and offers numerous opportunities such as fitness & nutrition programs, Life Teams, counseling and financial help, marriage retreats and parenting resources, company-paid MBA education & accreditation, and professional leadership training and coaching.
Tell us how your company maintains its culture in a work-from-home environment, or how you plan on bringing employees back into the office, if applicable.
Trinity Oaks was intentional about scheduling times for our employees during quarantine to connect via group Teams lunches, virtual scavenger hunts, and our community outreach initiative called Hope Outbreak. As restrictions are lifted, we will be exploring flexible work schedules to allow employees to find the best work/life balance for their families.
Things you are most proud of that don’t have to do with sales.
Trinity Oaks was honored to be named this year’s #1 Best Company to Work For by National Mortgage News both in the Small Company category as well as the Overall Top 50 rankings.
Fun fact about Trinity Oaks Mortgage
100 percent of Trinity Oaks employees surveyed said they have fun at work and would recommend working there to friends and family.
(For more information on having your firm, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)
To return, or not to return, to the office. Turns out that it’s not just ops staff who aren’t so eager to get back to the office. Some lenders’ and vendors’ management are putting up a fight about continuing to work from home. Some CEOs with whom I have spoken tell me that allowing managers to work remotely on a permanent basis can be a valuable new recruiting tactic for firms. Or at least having the option. The trend has crossed over into people looking for jobs that only require the occasional office visit. But not every firm or department is embracing this new demand for remote positions, out of concern that a virtual work environment will stymie mentorship opportunities for younger employees and chip away at firm culture.
A Houston hospital has been hit with a lawsuit by 117 employees challenging its COVID-19 vaccine requirement. The plaintiffs are suing The Methodist Hospital, claiming they have been terminated from their jobs or are at risk of losing their jobs for refusing the “experimental” vaccine. The case will likely be closely watched in the employment law arena, as companies grapple with how best to manage their workforces as the pandemic wanes in the U.S. According to the suit, with the announcement from early April Methodist is the first major health care system in the country to make the COVID-19 vaccine mandatory for employees. The hospital says that 99% of its 26,000 workers have been vaccinated.
The CFPB and forbearance
Zaid Shariff, SVP at SLK Global Solutions, writes, “Rob, delinquencies and forbearance requests have not been the only things that spiked as a result of the pandemic. In March, servicing complaints filed with the Consumer Financial Protection Bureau soared to a three-year high. And when forbearance ends for financially struggling borrowers in six months or so, we’re likely to see even more complaints. The unfortunate thing? Many complaints could have been avoided entirely.
“Before they file a complaint with the CFPB or other governmental agency, borrowers often reach out to their servicers first. But because many servicers handle these complaints manually, the underlying problems are never corrected. A better option is implementing automated technology that enables the servicer to instantly identify and correct process deficiencies as they occur. This can keep servicers out the CFPB’s crosshairs while preventing future borrowers from experiencing the same frustrations.” (Go here to read about SLK’s automated QC and Compliance platform, Copasys.)
Company and vendor news from around our biz
Spruce, the proptech company powering online real estate transactions, announced a $60 million Series C funding round led by Zigg Capital. Existing investors, including Bessemer Venture Partners and Scale Venture Partners, also participated. This latest investment brings Spruce’s total funding to $110 million.
In the depository banking world, this week we all learned that First Bancorp (Southern Pines, NC) announced that it will acquire Select Bancorp, Inc. (Dunn, NC) and Old National Bancorp (Evansville, IN) and First Midwest Bancorp, Inc. (Chicago, IL) will merge.
To support the collective recovery of businesses and consumers, Experian announced its expansion into Employer Services and the release of its new suite of real-time income and employment verification products, Experian Verify™. Recent acquisitions of Corporate Cost Control (CCC), Tax Credit Co. (TCC) and Emptech, plus its growing network of direct payroll access, delivers unique and differentiated millions of employee records into Experian Verify and lay the foundation for Experian’s move into Employer Services. Experian is unlocking its collective strength to provide employers, HR, finance, and tax professionals with a one-stop-shop to outsource complex and time-consuming tasks more quickly, cost effectively and securely.
Top of Mind Networks announced the launch of Surefire Creative, an online library of award-winning marketing collateral designed to supplement mortgage lenders’ prospect, client and partner marketing programs. The collection, available as a subscription service, is hand-selected by mortgage industry experts from the full content library available to Top of Mind’s Surefire CRM customers can integrate with lenders’ existing marketing automation workflows.
Home Bay Technologies, Inc. recently launched a new real estate service, the Home Bay Trade-In program that enabling a homeowner to access the built-up equity in their house by “trading it in” to Home Bay so they can get a new mortgage and buy a new home before they sell their current home. Users of the platform are given a week to move into the new home. After the old home is vacated, it is then deep cleaned and professionally staged. When the old home is ultimately sold, the client receives the additional equity from the final sale after Home Bay’s fees. For more information, visit HomeBay.com.
LenderHomePage and its Loanzify POS application offers a user-friendly and interactive system that automates the loan application process. Compliant with the GSE’s ULAD and UCD, while also remaining aligned with the Consumer Financial Protection Bureau’s HMDA and national servicing rules, as well as the TILA-RESPA Integrated Discloser (TRID) rules. All of these requirements have been worked into the Loanzify application while also providing brokers and borrowers alike the access to automated document workflow and needs lists including a messaging center that connects borrowers with loan providers and realtors, a live updated “milestone tracker” that keeps users up to date on application statuses, and a pre-approval letter generator for brokers.
Most readers of this commentary are laser-focused on single family originations. But the Agencies are a huge buyer and securitizer of multifamily loans. Let’s take a gander at what Freddie Mac is doing what as 2020 wound down and 2021 kicked in.
In December, Freddie Mac priced a new $991 million offering of Structured Pass-Through K Certificates (K-F95 Certificates), which includes a class of floating rate bonds indexed to the Secured Overnight Financing Rate (SOFR). K-F95 includes one class (Class AS: $514.398 million of principal, 30-day SOFR average+30 bps) of senior bonds indexed to SOFR and backed only by SOFR-based mortgages, and another class (Class AL: $477.101 million of principal, 1-month LIBOR+26 bps coupon) of senior bonds indexed to LIBOR and backed only by mortgages which are currently LIBOR-based. The K-F95 Certificates are backed by floating-rate multifamily mortgages with 10-year terms.
Freddie Mac priced a $983 million offering of Structured Pass-Through K Certificates (K-F94 Certificates), which includes a class of floating rate bonds indexed to the Secured Overnight Financing Rate (SOFR). The K-F94 Certificates are backed by floating-rate multifamily mortgages with 10-year terms, which are currently LIBOR-based. K-F94 includes one class (Class AL – $583.407 million in principle, 1-month LIBOR+30 bps coupon) of senior bonds indexed to LIBOR and another class (Class AS – $400.000 million in principle, 30-day SOFR average+34 bps coupon) of senior bonds indexed to SOFR. Both classes have weighted average lives of 9.56 years and $100.00 prices. Freddie Mac will provide a basis risk guarantee on Class AS that covers any floating interest rate basis risk if the value of SOFR exceeds the value of LIBOR.
K-F100 ($952m) featured a class of floating rate bonds indexed to the Secured Overnight Financing Rate (SOFR) as it was backed by SOFR-based floating-rate multifamily mortgages with 7-year terms. Class AL ($258m) had a weighted average life of 6.20 years a coupon of 1-month LIIBOR + 13 bps and a $100.00 price. Class AS ($694m) had a weighted average life of 6.53 years, a coupon of 30-day SOFR average + 18 bps and a $100.00 price. K-F101 ($934m) had only one class of bonds and it was indexed to SOFR. That AS class had a weighted average life of 9.44 years, a coupon of 30-day SOFR average + 20 bps and a $100.00 price. Same goes for K-F102 ($939m) backed by floating-rate multifamily mortgages with 10-year terms, which are SOFR-based. That Class AS had a weighted average life of 9.47 years, a coupon of 30-day SOFR average + 20 bps and a $100.00 price. K-F103 ($938m) had identical structuring and AS had a weighted average life of 9.51 years, a coupon of 30-day SOFR average + 24 bps and a $100.00 price. K-F104 ($913m) had a weighted average life of 9.45 years and a discount margin of 25 bps.
In January Freddie Mac priced a new $1 billion offering of Structured Pass-Through K Certificates (K-F97 Certificates), which includes a class of floating rate bonds indexed to the Secured Overnight Financing Rate (SOFR). The K-F97 Certificates are backed by floating-rate multifamily mortgages with 10-year terms and were expected to settle on or about January 28. K-F97 includes one $866.185 million class (Class AS, 30-day SOFR average +25 bps coupon) of senior bonds indexed to SOFR and backed only by SOFR-based mortgages, and another $134.181 class (Class AL, 1-month LIBOR +22 bps coupon) of senior bonds indexed to LIBOR and backed only by mortgages which are currently LIBOR-based. Both classes are priced at $100.00.
Freddie Mac priced the $1.4 billion K-128 deal, certificates backed by underlying collateral consisting of fixed-rate multifamily mortgages with predominantly 10-year terms. Pricing for the deal is as follows. Class A-1 has $96.0 million of principal, a weighted average life of 6.38 years, a spread of S+8 bps, a 1.23 percent coupon, a yield of 1.219 percent and a $99.9979 price. Class A-2 has $1.172 billion of principal, a weighted average life of 9.72 years, a spread of S+14 bps, a 2.02 percent coupon, a yield of 1.677 percent and a $102.9965 price. Finally, Class AM has $173.5 million of principal, a weighted average life of 9.91 years, a spread of S+19 bps, a 1.75 percent coupon, a yield of 1.743 percent and a $99.9957 price.
And Freddie Mac priced the $751 million K-LU3 offering of Structured Pass-Through K Certificates which are multifamily mortgage-backed securities backed by two groups of loans. One group consists of 13 fixed-rate mortgages backed by 13 properties and the other group consists of 2 floating-rate mortgages backed by 2 properties. While the float pricing was not offered, pricing for the fixed group is as follows. Class A1 has $125 million of principal, a weighted average life of 6.50 years, a spread of S+14 bps, a 1.34 percent coupon, a yield of 1.33 percent, and a $99.9947 price. Class A2 has $520 million of principal, a weighted average life of 8.94 years, a spread of S+24 bps, a 1.76 percent coupon, a yield of 1.75 percent, and a $99.9976 price.
For a change of pace, since we’re all busy, how about a little grammar suggestion?
Do you ever end an email with, “Please do not hesitate to let me know if you have any questions or need further clarification.”?
To impress your clients and co-workers, keep your sign-off crisp and friendly. So… First, drop “do not hesitate to”; it means nothing; same for “any.” Second, remove the repetition: we ask questions because we need clarification; if we need clarification, we ask questions. Third, put the conditional clause at the beginning of the sentence. And thus we have:
“If you have questions, please let me know.”
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