May 12: Ops & correspondent jobs; individual state notable changes to lending laws – and what is a spite fence?

I am attending a conference in Oregon and yesterday someone asked me, “Rob, have you heard of the MBA doing something to educate anyone in school that this industry even exists?” As a matter of fact I have. The MBA has been working with colleges and universities through career placement/planning offices to help promote careers in mortgage banking. Several lenders are participating in the promotion of this program with community colleges, primarily minority colleges, and more to identify potential new hires. Some lenders are paying the student’s fee to take the class and then hiring them upon completion. Others just want to help promote and are offering a chance to interview once the program is completed. Although classes began last week you can click on SchoolsNotOutForSummer to learn more.


Speaking of new hiring, Northern California’s Fremont Bank is searching for a Supervisor of Wholesale Underwriting (Livermore), a Supervisor of Loan Processing (Livermore), Wholesale Underwriters (Livermore and Aliso Viejo), Retail Underwriters and Processors (Livermore), and Wholesale Processors (Livermore). Fremont Bank was founded in 1964, is one of the oldest independently owned and managed banks in the Bay Area, and was voted one of the Bay Area’s Top Workplaces for four consecutive years  2011- 2014. “Over the past 50 years, we have grown in financial stability and character. We invite you to discover what makes Fremont Bank unique. For immediate consideration and to learn more about these exciting   opportunities, visit the site above and click on “Careers.”  Alternatively, you may submit your resume to jobs@fremontbank.comSign-on bonus opportunities may be available!


And Mortgage Solutions Financial continues growing. “Are you a DE and/or SAR underwriter who would like to work for a strong, family-oriented company, offering a very competitive salary and great work environment? In order to continue with the best turn times in the industry, MSF is looking for strong, experienced underwriters with a passion to deliver great customer service. Contact Linda Miller, HR Director. MSF is also looking for experienced correspondent Account Executives. MSF is a preferred investor for Lenders One, the mortgage cooperative that works to help independent mortgage bankers operate competitively within the industry, and exclusively offers the Certified Loan Program – virtually eliminating correspondent contingent liability. With 330 members, the Lenders One relationship offers MSF correspondent AE’s a unique opportunity to build a very special business. MSF is a direct FNMA/FHLMC, GNMA, VA lender, and offers a farm/ranch program direct to FarmerMac. Contact Greg Grandchamp if you have questions.


Next week is the big National Secondary Market Conference & Expo in New York City. Any MBA member employed by a community bank or credit union who is registered attend the MBA’s Community Bank and Credit Union (CBCU) Network’s in-person meeting on May 18th from 1:00 PM – 2:45 PM, in the Music Box/Winter Garden room at the Marriot Marquis. The Network had its first meeting in Las Vegas at MBA’s 2014 Annual Convention and it was a great success. The meeting is a closed event – only for community banks and credit unions members- so they can discuss their specific business concerns and share best practices while networking with their peers. If you do plan to attend any part of the meeting, please RSVP to Matt Jones. The special guest speaker will be yours truly. Not a MBA member?  Contact Tricia Migliazzo to learn more about MBA.


Let’s check in on some recent trends in state-level originator laws…


Attorney Julia Wei from the Law offices of Peter N. Brewer published an update on spite fence laws in California. A “spite fence” is a term for an overly tall structure that aims to annoy a neighbor. Spite fence laws were enacted in California in 1885 and it wasn’t until recently that courts considered whether trees could be a fence. According to California’s law, the fence has to be taller than ten feet, which many large trees without trimming could grow beyond. Also, the fence has to be “maliciously erected” or with “the purpose of annoying the owner,” but proving this may be difficult. In the case of Wilson v. Handley, the courts found that a row of trees could be considered a fence, but the decision went no further as to whether or not the trees were planted for privacy purposes or with malicious intent, as proving intent or ill will would need to be heavily fact based. The best situation is to not piss off your neighbor and have to go to court with them over unkempt trees.


The California MBA provided an important clarification recently received from the California Department of Business Oversight (DBO).  During a meeting with top officials at the DBO, the California MBA and its members expressed industry’s confusion over the DBO’s interpretation of Financial Code (regarding the opening of new branch offices). The department has issued a bulletin that should help your team better understand the regulation.


The NMLS has posted new education notices for Washington D.C. and Kentucky. The education notices are to notify providers of state-specific course content requirements and provide agency-approved references list.  The Education Notices are published every two years, but the state-agency may make changes to the notice at any time. The NMLS aims to have an education notice for all 28 agencies that have a state-specific requirement by the end of the year. Education requirements for Kentucky include 12 hours of CE with 4 hours covering Kentucky Department of Financial Institutions, Kentucky state law and regulation, compliance and disciplinary actions. Washington D.C.’s 20 hours of pre-licensure education must include a 3 hour DC law PE course which covers District of Columbia’s Department of Insurance, Securities and Banking, district law and regulation, license law and regulation, compliance, disciplinary action and district test areas. The new education requirements for Washington D.C. can be found here and updates to Kentucky’s requirements can be found here.


Ohio Congressman, Steve Stivers and Congresswoman, Joyce Beatty, introduced a bill to modify the SAFE Mortgage Licensing Act to allow for a temporary license for mortgage loan originators, transitioning between federally insured depositories and non-depositories, and across state lines. The introduction of this legislation came about through advocacy from the MBA during the MBA’s National Advocacy Conference last month. The MBA and members of the Mortgage Action Alliance will be working with stakeholders to obtain support and help advance the bill.


Nebraska has updated foreclosure provisions relating to the sale of a trust property, which will become effective on September 5th, 2015. The revisions mandate that a plaintiff must appoint a representative to receive notices of ordinance violations and the plaintiff must provide the name and address of the designated representative who will accept notices of ordinance violations by the owner of the mortgaged property on behalf of the plaintiff.  For notices of default, the trustee must file a notice of default within the county where the property is located and after the lapse of more than one month, the trustee may give notice of the sale. If the default is cured and the trust deed is reinstated, the beneficiary must request to the trustee that the trustee execute and deliver a cancellation of the recorded notice of default, which must occur within thirty days.


Arkansas amended provisions regarding lien release, allowing for a release of a mortgage, deed of trust or other lien based on an affidavit by an attorney or title agent that the lien has been satisfied. The amended regulation now states that if a mortgagee is requested to acknowledge satisfaction, or a trustee is requested to re-convey the property and fails to do so within 60 days, then a “satisfaction affidavit” may be recorded in the same county as the lien. The affidavit has the same effect as an acknowledgement of satisfaction or a re-conveyance of the property.


Utah has enacted and amended its Reverse Mortgage Act by defining key terms, providing program requirements as they relate to disclosures, loan proceeds, priority, foreclosure and lender default. The provisions include mandatory borrower home counseling where the housing counselor must provide the borrower with a disclosure that states a reverse mortgage may have tax consequences, affect their eligibility for assistance under certain programs and impact their estate and heirs. The loan payment made to the borrower must be treated as proceeds from a loan, rather than income and the undisbursed funds must be treated as equity in the borrower’s home. Amounts secured by a reverse mortgage have the same lien priority as the first disbursement under the reverse mortgage. Before a foreclosure proceeding can take place, the borrower must receive written notice that provides the reason for the default and foreclosure and then the borrower has at least 30 days to cure the default. A lender who fails to make an advance on a non-federally insured loan forfeits any right to repayment of the outstanding loan balance and voids the agreement.


West Virginia has revised deeds of trust laws and modification charges. Changes to trustee real estate sales include a requirement that a defendant in a civil action to recover a deficiency after a sale under a deed of trust may not assert as a defense that fair market value was not obtained for property sold at foreclosure sale. This will become effective on June 11th, 2015. Modifications have been made to the deed of trust form to now allow a memorandum instead of a deed of trust, as long as it’s executed by all grantors. A properly completed memorandum is valid against creditors and purchasers if the completed deed of trust is recorded on the date the memorandum was recorded.  These provisions are effective on June 8th, 2015. There is also an allowable maximum modification charge that can be collected in a real estate secured consumer credit sale or consumer loan. If the parties to a real estate secured consumer sale or loan reach a modification agreement, the seller or lender is permitted to collect a maximum modification fee of $250 or 1 percent of the outstanding balance. This will be in effect on June 12th, 2015.


Speaking of state-level news, Arch MI has published its spring 2015 edition of the Housing and Mortgage Market Review. Highlights of the article include the latest results from the Arch MI Risk Index, ranking the overall risk of home price declines at 8%. The states with the highest risk of potential home price declines are North Dakota, Oklahoma and Texas largely in part to the high employment rates in the oil industry.  There is also a higher risk of falling home prices in Louisiana, Mississippi, New Mexico and Wyoming. North Dakota is also of concern due to the decline in oil prices which may negatively impact the rapid home price appreciation and population growth the state experienced from the boom in oil extraction the last few years. According to the December Case-Shiller index, home prices increased 4.7% YoY, whereas home prices increased 5.5% according to the FHFA December Purchase-Only Index. The fastest growth in home prices was evident in the West, Florida and Texas and mortgages past 90 days late or in foreclosure fell to 4.7% at the end of 2014. Mortgage originations for purchase loans were $150 billion in Q4 of 2014, which was 13% lower than the previous year and mortgage originations for refinances was $128 billion a 16% decline from a year earlier. Finally, the lowest levels of unemployment are in the farming and energy industries but unemployment levels remain high in the West, South and in Michigan.


And, as a reminder, on the commercial side the MBA’s Fourth Quarter 2014 Commercial/Multifamily DataBook is now available. The DataBook compiles the most up-to-date information on topics of interest to commercial/multifamily real estate finance industry professionals and observers, including trends in the economy, property sales, originations, delinquencies and mortgage debt outstanding.


Turning to the markets – they are not helping anyone who is waiting to lock. In fact many of my e-mails yesterday were rate changes. I did not hear a decent specific reason for the sell-off although there were the usual culprits: this week’s quarterly refunding supply, rising European Government Bond yields, increased supply of rate locks, sizeable corporate issuance, and the thinking that yes, eventually short term rates will move higher. The 10-yr T-note worsened over a point in price – fortunately agency MBS prices did not worsen that much and were down .5-.75.


We don’t have much in the way of scheduled news that will move rates back down. At 10AM EDT are some minor job numbers, but the big event may be the Treasury refunding starting today with a $24 billion 3-year note auction. And the Fed will issue a new MBS purchase operation schedule for the two-week period beginning Wednesday, along with tentative reinvestment purchases received from April paydowns for the May 13-June 11 period.


We ended Monday with the 10-year at 2.27% and this morning the sell-off has continued: we’re up to 2.33% with agency MBS prices worse about .250.



(Next week for the MBA Secondary conference…)

I pointed to two old drunks across the bar from us and told my friend Art, “That’ll be us in ten years.”

He turned to me and said, “That’s a mirror, you idiot.”





(Copyright 2015 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.)

Rob Chrisman