According to Gallup’s 2013 annual Economy and Personal Finance survey, the average retirement age has crept up by four years over the past two decades, “from 57 in 1991 to the current 61. Because most of the uptick came before the 2008 recession, this shift may reflect more than just a changing economy. It may also indicate changing norms about the value of work, the composition of the workforce, the decrease in jobs with mandatory retirement ages, and other factors.” And let’s not forget numerous people who failed to diversify their retirement funds, and losing it all as their company’s value sank. The survey continues to substantiate what a lot of people already believe, that we are working longer in our lifetime compared to past generations. For homeowners, age 60+ (maybe still in the workforce?) there appears to be some good news. According to the National Reverse Mortgage Lenders Association (NRMLA), “Americans 62 years old and older now have more equity in their homes than at any time since mid-2008…the third quarter (’13) was the sixth consecutive quarter in which the index has risen, but the $3.46 trillion estimated aggregate value of home equity owned by seniors eligible for reverse mortgages remains 14% below its peak level of $4.0 trillion in Q4 2006.”
Turning to the jobs market, BrightPath Mortgage, a retail division of a 26 year veteran of the mortgage industry, is seeking talented, experienced mortgage loan officers to join its family of professionals in its Atlanta-based headquarters. “This position has six figure earning potential!” The ideal candidate must be knowledgeable in current standards and practices of the mortgage industry and must be proactive to respond to customer inquiries and referrals both on their own and through company-assisted lead sources. Please do not apply if you do not have any experience as an LO. Interested parties should send any questions and resumes to Steve Quarles at [email protected].
And for company opportunities, MENLO Company (www.MenloCompany.com), a premier investment banking consulting and retail M&A firm, focuses on small to mid-market mortgage brokerage and mortgage banking firms whose purchase production ranges from $3M/month to $25M/month. “The market is consolidating due to the costs of legal and compliance for most firms”, says Rick Roque, MENLO’s founder, and also Managing Editor of Mortgage Compliance Magazine. “We are focusing on helping bona fide groups of mortgage professionals in all 50 states, connect with more mature and stable retail mortgage firms, and to get clients competent leaders in target markets”. If you or your team falls within this production range, contact Rick at [email protected].
“The mediocre teacher tells. The good teacher explains. The superior teacher demonstrates. The great teacher inspires.” It seems that some brokers need some teaching, of some kind, about the mini-correspondent relationship. Brokers continue to express interest in the “mini-corr” model, and some wholesale lenders are only too happy to move brokers into this hybrid channel. As many recall, it gained in popularity when the 3% cap on points and fees began to take shape. Brokers are warned, however, to do their homework. I am hearing reports that certain investors are not telling the truth to the new mini-correspondent partners. In the past brokers have seen wholesalers make underwriting mistakes, for example, and they absorbed the loss, but have now shifted the financial reps & warrants to the lender. In fact, underwriting is a sore spot with many, especially when some wholesale shops do not put their underwriting guarantee policies in writing.
A delegated correspondent should fully know their responsibility should an early payment default occur, as well as other problems that typically arise. Many brokers, now mini-correspondent clients, are non-delegated and have never underwritten a loan, preferring to pay the wholesaler to do it. But then if a mistake is made in underwriting, is the lender liable? One response letter that I saw noted that the agreement does not address the quality of the wholesaler’s underwriting practices and gives no relief to the correspondent for any underwriting issues. Sellers need to be careful about the differentiation between delegated and non-delegated reps & warrants in the relationship – be careful out there!
Here’s an interesting petition – one focused on the HARP. Any thoughts of a grandiose expansion have been pretty much squelched, and the smart money is thinking that something might be done in the lower balance segment, perhaps closing cost credits and reduced LLPAs. But hope springs eternal, and www.makeharp3happen.com is advocating the expansion of the Home Affordable Refinance Program. The actual petition simply exists to “remind policy makers that underwater homeowners are still here and growing impatient after two years of waiting for HARP 3.0.” Folks can view the petition here: http://wh.gov/lNIIm and here is a link to the press release about the petition: http://www.prweb.com/releases/2014/02/prweb11546980.htm.
Before I forget, yesterday the commentary discussed training for the upcoming UST March 31 deadline. (“LOs that were licensed prior to April 1, 2013 need to pass or register for the exam by that date if they wish to originate in a participating States after April 1, 2014…”) Per Barbara Werth, there was an occasional blip in the website which is now corrected. Anyone who tried but did not complete filling out the information should give it another shot for the calls scheduled for March 19th and 26th from 1-2:30 CST. The cost of the conference call is $75 which includes a study guide and unlimited sample tests for the exam. Anyone interested can go to Test to register. If you go to the link again you will receive $10.00 off for any orders. You can also email Barb at [email protected] with questions.
Mortgage originations plummeted at all but one of the nation’s four biggest banks in 2013. Bank of America bucked the trend and said that its mortgage volume increased 12.9% over the previous year. In fact, volumes were certainly hit or miss. At a recent session sponsored by the Colorado Mortgage Lenders Association (one of the industry’s effective regional associations), the STRATMOR Group presented its findings from a mini-survey conducted especially for this occasion. Participating lenders included CMLA members plus a sampling of other midsize originators from across the industry. Participants submitted a handful of performance metrics for the periods ending June 30/September 30/December 31 of 2013 and provided a projection of their expected results for the 1st Quarter of 2014. Since the first half of 2013 was largely an extension of 2012, STRATMOR’s survey objective was to measure the quarterly change in lender performance after mortgage rates began increasing in the late spring.”
STRATMOR’s survey findings were surprising in two respects. The average decline in production volume for the 2nd half of 2013 was only 11%, considerably less than what industry gossip had led us to expect. Secondly, lender staffing levels (including sales, fulfillment and total FTE’s) remained virtually flat during the last half of 2013. Where was the impact of all those staffing layoffs which lenders reported to have undertaken? As anticipated, net income margins declined by about 45% during this period, due mostly to an increase in expenses rather than a fall-off in revenues. Net Income margins for the full year 2013 averaged just north of 50 bps which was pretty much in line with the period from 2009 through 2011. Staff productivity was uniformly down for most all lenders. Purchase business averaged about 70% of total production, up 15 percentage points during the 2nd half of 2013.
Perhaps the bigger story is the grim outlook for the 1Q 2014 from this collection of lenders. Production volume is forecast to be down 30% from the 4th Quarter of 2013: about 48% of the participating lenders expect to breakeven or lose money for the Quarter. Surveys focus on averages and there were some notable exceptions where certain lenders predict decent performance during the 1st Quarter. Smaller lenders (those with volumes less than $1.5 billion) were more optimistic than their larger peers. Independent mortgage bankers anticipate better results than their bank-owned counterparts. (If you are interested in learning more about the findings and conclusions from this mini-survey, you may reach out to [email protected].)
This fellow Lawsky is out to make a name for himself. I am not an attorney, but I am sure he’s figured out that he can probe whichever non-regulated/non-bank he’d like even though he is a “banking regulator in New York”. With Ocwen on hold, now he’s turned his department’s gaze toward Nationstar: http://www.bloomberg.com/news/2014-03-05/lawsky-demands-documents-from-nationstar-mortgage.html. Meanwhile, the industry wonders which non-bank servicer will be next, the servicing brokers are concerned (although it is rumored that they are still receiving numerous bids on servicing pools from regional banks), and if this impacts the market for servicing it will be the borrowers that suffer. Let’s hope that the complaints that warranted the probing don’t consist of, “They made me send in my payments.”
If you’re near Alpharetta, Georgia, on Friday, Plaza Home Mortgage is presenting a 3-hour seminar on Realtor relationships. (And who wouldn’t want to have a relationship with a Realtor?) “This course will cover 5 key areas to a successful sales strategy: prospecting, appointment setting techniques, controlling the sales call, handling different Realtor personality types, and implementing a proven successful follow up plan. Topics include “The quick and easy way to get the Realtor at ease”, “Simple techniques to bond with Realtors”, and “The best and worst times of day to talk to Realtors.” The presenter is Dennis Black, who has trained over 95,000 people on the keys to building relationships and making more money in a challenging mortgage environment. You can visit www.plazahomemortgage.com but there are two sessions on Friday, March 7 (Atlanta Marriott Alpharetta, 5750 Windward Parkway): 8:30 am – 11:30 AM or 1:30-4:30 PM. To register, visit http://bit.ly/1f3pzUG for the morning session or http://bit.ly/1go6nDv for the afternoon.
The 31st Annual Regional Conference of Mortgage Bankers Associations, hosted by the Mortgage Bankers Association of New Jersey, will be held in Atlantic City, NJ from March 9-13th. Speakers will address CFPB enforcement, establishing compliance management systems, HMDA data and Fair lending, social media marketing, LO comp, mini-correspondent platforms, QRM, and third-party vendors as they have been affected by the new rules. To register, go to http://events.r20.constantcontact.com/register/event?oeidk=a07e8hny56w78775340&llr=ngb5z8dab
This year’s American Bankers Association Real Estate Conference will take place in Charleston, SC from April 6-8th and will focus on CFPB rules and the subsequent challenges to businesses. Key topics include safe and profitable non-QM lending, Fair Lending standards in a changing regulatory environment, CRE Stress Testing, and more. To find out more, go to http://www.aba.com/Training/Conferences/Pages/REL.aspx.
The Wisconsin Mortgage Bankers Association is still accepting sponsorship registration for its April 2nd conference in Pewaukee, MI. Opportunities range from having your company’s name on attendee lanyards to having a reserved table with your company’s logo and eight full conference registrations. See http://www.wimba.org/events?eventId=824705&EventViewMode=EventRegistration for registration details.
After some volatility Monday and Tuesday, rates are back to treading water – at least until tomorrow’s unemployment data. Sure, there is talk about the extreme weather that parts of the nation have seen, and the Russia/Ukraine conflict, but overall it is pretty quiet. In fact, the big news last night possibly was the Bank of England leaving rates unchanged.
We’ll have more news today here in the United States. We will have Initial Jobless Claims (expected lower to 338k from 348k), final Q4 Productivity (+2.6 versus +3.2 last), and final Q4 Unit Labor Costs (-0.9 from -1.6). At 10AM is Factory Orders for January, and then the Treasury’s announcement of next week’s 3-, 10-, and 30-year notes & bonds (estimated at $64 billion). Didn’t we just have one of these auctions? The U.S. 10-yr. yield closed Wednesday at 2.70%; in the early going we’re at 2.72% and agency MBS prices are worse a shade.
The Scottish Painter
There was a Scottish painter named Smokey McGregor who was very interested in making a penny where he could, so he often thinned down his paint to make it go a wee bit further.
As it happened, he got away with this for some time, but eventually the local church decided to do a big restoration job on the outside of one of their biggest buildings.
Smokey put in a bid, and, because his price was so low, he got the job.
So he set about erecting the scaffolding and setting up the planks, and buying the paint and, yes, I am sorry to say, thinning it down with turpentine.
Well, Smokey was up on the scaffolding, painting away, the job nearly completed, when suddenly there was a horrendous clap of thunder, the sky opened, and the rain poured down washing the thinned paint from all over the church and knocking Smokey clear off the scaffold to land on the lawn among the gravestones, surrounded by telltale puddles of the thinned and useless paint.
Smokey was no fool. He knew this was a judgment from the Almighty, so he got down on his knees and cried:
“Oh, God, Oh God, forgive me; what should I do?”
And from the thunder, a mighty voice spoke.
“Repaint! Repaint! And thin no more!”
(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.)