Mar. 30: LO & sales jobs, branches wanted, new products; New Penn/Envoy deal; Barclays settles; RESPA & credit union lawsuit news

How are we at the last business day of the week, month, and quarter so soon? The Phoenix/Scottsdale area in Arizona is, some argue, a victim of its own success. Some move there because they like the community and the solitude of life in the desert, and yet the desert is being paved over by subdivisions. How expensive is land there? Not too bad on the outskirts: Toll Brothers just bought 80 acres for $12 million, so $150k per acre. (Funny how the story has a picture of the beautiful desert – soon to be houses?)

Employment, business opportunities, & promotions

David Massey has been named the new regional director for the Central Southeast at Movement Mortgage. He will lead Movement’s loan production, recruiting and community involvement in Georgia, Alabama, central and west Tennessee, and Arkansas. David has led Movement’s growth in Georgia for the last five years as a market leader based in Atlanta and has more than 26 years of mortgage industry experience, including leadership roles in retail, wholesale, underwriting and operations. Email him with questions about Movement Mortgage.

In TPO personnel news, Rey Maninang has joined Nations Direct Mortgage as the EVP of Production. “In this role, Rey will use his proven expertise to expand our footprint as we continue our 2018 initiatives of becoming the broker community’s lender of choice for Government, Conventional, and Non-QM products nationwide,” states Martin Warren, long-time partner at NDM. Established in 2007 and currently licensed in 36 states, Nations Direct Mortgage is solely focused on Wholesale and Correspondent partnerships with brokers and bankers. The company prides itself on employing highly skilled industry experts who are dedicated to delivering an exceptional experience for its partners and its customers. If you’re interested in learning more about joining this exceptional team, please contact Rey Maninang.

Bay Equity Home Loans continues its national growth plan in 2018 opening branches in Texas, Florida, California, Washington, and Kansas. Bay is now searching for production opportunities in the Mid-Atlantic region. “Our LO centric model can accommodate regional managers, branch managers or even top producers who want to operate and run a P&L in addition to a corporate branch model. Next month we kick off our internal Bay Equity mastermind program to share ideas amongst our producers to help them achieve their career goals. If you would like to learn more about Bay Equity and our unique family culture, please reach out to Sean Wilson.” Sean and the ownership will be in Washington DC area the week of April 8 to connect.

Towne Mortgage Company is looking for a Senior Account Executive in nation-wide geographical markets. This rarely available position will have access to multiple operation centers and all product offerings including FHA, 203K, Fannie Mae HomeStyle, HomePath, HomeReady, DU Refi Plus, VA, USDA, and Manufactured Programs. Towne is looking for a seasoned, high-energy, sales leader who can partner with Towne to expand their book of business. This AE will have the ability to add an array of account types including Brokers, Banks, and Credit Unions with Wholesale and Mini-Correspondent offerings. Towne offers competitive compensation packages including Medical and 401K. Sound Interesting?  Email Cassi Sluka for more information.

Caliber Home Loans, Inc. closed 2017 with record-breaking VA Loan volume, according to valoans.com. The organization ranked Caliber 7^th nationwide among VA lenders, an increase from 2016’s #10 ranking. Caliber is on a mission to guide America’s military home. Last summer Caliber closed its 10,000^th VA loan since January 2014, which contributed to the lender’s overall volume growth by 22%! Caliber has trained over 1,000 of its employees in the unique needs of military and veteran home buyers and remains committed to being a trusted resource in meeting the specific mortgage needs of the brave men and women of the United States Armed Forces. Caliber is currently looking for a few good loan officers as it continues to make a difference in the lives of veterans. Visit its website or contact Jeremy DeRosa to learn more.

In personnel changes, congrats to Perry Hilzendeger whom Wells Fargo announced is moving from EVP and head of Home Lending Servicing to become the new head of Home Lending Retail, effective April 16. “As head of Home Lending Retail, a newly created role, Hilzendeger will report to Michael DeVito, who was named head of Wells Fargo Home Lending in January. Hilzendeger will oversee nearly 15,000 retail production team members in mortgage and home equity sales, underwriting, fulfillment and support functions.” Perry’s a rookie at “The Coach” with only 28 years under his belt there.

Lender products

Flagstar has launched Jumbo Express to its already strong suite of non-agency products. The Jumbo Express product leverages automated underwriting and conventional guidelines which provides lenders with an operational and underwriting workflow on higher loan balances consistent with their agency conforming loan production. Flagstar will allow for these loans to be run through Desktop Underwriter subject to limited overlays, such as: DTI 43% and Full appraisals required, among others. The product is available on 30 and 15-year fixed as well as 5/1, 7/1 and 10/1 LIBOR ARMs. A minimum FICO of 680 is required which allows for an 80% LTV. Loans made to borrowers with FICO of 760 and higher can go to 85% LTV with no MI. As a reminder Flagstar’s Jumbo Advantage product allows for 90% LTV with no MI with 6 months reserves for borrowers with a minimum FICO of 680.

Altisource Origination Solutions offers a unique, integrated platform that provides comprehensive and coordinated end-to-end solutions for the mortgage origination market. Products and Services include  Trelix Mortgage Fulfillment Services, CastleLine Insurance Services, noteXchange Mortgage Trading Solution, Lenders One Mortgage Cooperative, Vendorly Third-Party Oversight, Premium Title and Settlement Services, Springhouse Valuations, Owners.com Loans, Mortgage Builder Loan Origination System and Granite Risk Management. To learn more, contact Justin Vedder.

M&A

One can’t help but notice plenty of small lenders and big lenders making news out there, joining up with other companies for various reasons. News came from Georgia of Renasant Corporation (NASDAQ: RNST) and Brand Group Holdings, Inc. announcing a definitive merger agreement pursuant to which Brand will merge with and into Renasant. These two have pretty good size mortgage units.

News on the latest headline deal comes from an agreement for New Penn Financial to acquire Envoy Mortgage’s National Correspondent Lending Division. “Envoy Mortgage is divesting its Correspondent Lending Division as part of its strategic plan to focus 100% of its resources on its core Retail Lending Division.” It’s fast: The anticipated closing date is scheduled for April 6, 2018. “On that date, our Correspondent Lending Division will begin conducting business as, New Penn Financial National Correspondent Lending Division.”

(The news wasn’t a shock. Some believe that the correspondent channel did not quite fit Envoy’s model, especially with the focus on the commoditized part of the correspondent market. It also calls into question their decision to bring servicing in-house. Building a cost-effective critical mass in servicing is crucial for any correspondent lender, and without the scale that correspondent brings…)

“The management team at Envoy Correspondent has been successfully providing expert guidance and sound correspondent solutions since 1984. With more than 170 current lenders and over $3.5 billion purchased in loans since inception, our team knows the importance of exceeding expectations and we stand behind our promise to make the correspondent lending process as efficient and stress-free as possible.”

“During this transition period, we would like to emphasize that there will be no change in the delivery of the high-quality services that we provide. In addition, there will be many new benefits such as jumbo portfolio products, bank statement products, MSR retention and highly competitive pricing.”

TPO clients were told, “The Loan Purchase Agreement between your company and Envoy Mortgage, LTD. will be assigned to New Penn Financial effective 4/6/18. All loans registered or locked with Envoy Mortgage as of 4/6/18 will be assigned to New Penn Financial. You will continue to work with the same friendly, experienced sales and operations staff that you have in the past. Our phone numbers will remain the same. Our email addresses and website will change after the closing date. The products and services that we have provided at Envoy will continue to be offered by New Penn Financial…Please feel free to contact your Regional Account Manager or Lender Support Specialist if you have any questions.”

Legal news

Barclays has agreed to pay $2 billion to settle allegations of misleading investors in mortgage-backed securities ahead of the financial crisis, according to the US Justice Department. The bank’s share price increased 1% after the settlement was announced – were folks expecting a higher penalty?

In credit union legal news, thank you to Ken S. for passing this news item along: “ABA Wins on Two Counts in Credit Union Field of Membership Lawsuit.” “A U.S. District Court judge today invalidated a portion of the National Credit Union Administration’s field of membership rule that further expanded the already loose fields of membership from which federal credit unions can draw their customers. The rule, adopted in late 2016, allowed community credit unions — which Congress by statute limited to serving a single ‘well-defined local community, neighborhood, or rural district’ – to serve large regions encompassing multiple metropolitan areas with populations in the millions.

“Judge Dabney Friedrich declared invalid and vacated two aspects of the rule that ABA challenged in a lawsuit against NCUA: the inclusion of Combined Statistical Areas with fewer than 2.5 million people, and the dramatic expansion of a ‘rural area’ to include areas with up to 1 million people — which in some cases could encompass entire states. She noted that NCUA’s actions in these areas ‘are manifestly contrary to the [Federal Credit Union] Act.’”

“It never made sense that an entire region could be declared a ‘local community’ or that an entire state could be declared a ‘rural district,’ and today’s ruling recognizes that fact,” said ABA President and CEO Rob Nichols. “Today’s decision also affirms what we have known for years — NCUA won’t hesitate to push the boundaries of reason for the credit union industry even at the expense of taxpayers, small banks and the communities those banks serve.”

“ABA also challenged the ability of credit unions to serve Core-Based Statistical Areas without serving the urban core that defines the area, and the ability to add ‘adjacent areas’ to existing well-defined local communities on a case-by-case basis. Judge Friedrich upheld both of those provisions, concluding that ‘neither [are] in excess of the agency’s statutory authority nor arbitrary and capricious.’ She added, however, that ‘the approach to Core-Based Statistical Areas pushes against the outer limits of reasonableness.’” (One can search for, and read, the opinion here.)

Attorney Brian Levy, with Katten & Temple, LLP, opined on the Borders & Borders rehearing denial reported by Phil Schulman. “Phil is absolutely right here. This decision is a bit of a head scratcher and any implications need to be carefully considered with counsel. The case was about affiliated business arrangements, which are an exception to the RESPA 8 (a) referral fee prohibition found in Section 8 (c)(4). The earlier decision was grounded in examination of the 8 (c)(4) requirements that the B&B court now claims to be ‘surplusage’ to its decision to deny rehearing.

“PHH, on the other hand, was a case involving RESPA section 8 (c)(2), which is the exception for payments for services rendered. PHH is a great decision providing clarity for how 8 (c)(2) is to be interpreted, but it is generally understood that 8 (c)(2) relates to payments between providers, not payments by consumers. In its decision denying rehearing, the B&B court essentially concludes that, in addition to 8 (c)(4) providing an exception, there was no referral fee violation because the consumers paid no more than reasonable value. That may be true, but because RESPA requires no showing of consumer harm in determining whether an illegal referral fee arrangement exists, the court’s reliance on whether consumers overpaid for services is interesting.

“When RESPA was enacted in the 1970’s, its drafters concluded that referral fees in settlement services unnecessarily increased costs for consumers. The policy basis for RESPA assumes consumer harm as a result of referral fees whether consumers overpay in any given instance. While it might be empirically debatable whether that policy position remains valid in 2018, the B&B decision seems to ignore that Section 8 (a) of RESPA is a ‘two-way violation.’ That is, both the giver and the receiver of a referral fee are equally liable for violating RESPA. It’s hard to imagine that had B&B’s consumers actually overpaid for title services that the court would have found that the consumers themselves had violated RESPA by paying referral fees to B&B’s title affiliates. As a result, until other courts weigh in on it, I would hesitate to establish relationships that rely too heavily on the reasoning of the B&B decision.” Thank you, Brian!

Capital markets

The markets are closed today for the Good Friday holiday. When lenders & investors are open but the bond markets closed, they will typically have hedged today’s expected production yesterday, or price very conservatively to discourage much lock activity. Or both.

Dear Carla,
I have been unable to sleep since I broke off our engagement. Won’t you forgive and forget? Your absence is breaking my heart. I was a fool, nobody can take your place.
All my love,
Mitch. xxxxoooxxxx

P.S. Congratulations on winning last week’s Powerball lottery.

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, “How Good is Your Company’s Cyber-Security?” 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.

Rob

(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.)