May 26: IT & wholesale jobs; M&A opportunity; advertising compliance article; new jumbo & reverse products; Chase & Wells roll out low down payment programs

According to Reuters, the NY state financial regulator is gearing up to launch an investigation into the entire online lending industry. (The regulator has already been looking into LendingClub.) Never a good thing to hear your secretary say, “The NY Attorney General is holding for you on line 2.” On a more serious note, the lending and banking industries continue to suffer from various regulators a) being afraid of the CFPB, and b) basically competing with each other to create rules where there were none before in an attempt to make a name for themselves. Of course the consumer bears the ultimate brunt of this.


In job news Midwest Equity Mortgage, LLC is in search for a Director of IT. MEM is an independent mortgage banker operating in 14 states and is funding $1.5 billion annually. MEM operates in three distinct business channels: traditional retail, direct to consumer, and online (through two distinct brands). “A result of this diversified approach, we are able to reach, serve, and retain our customer base using means which are most convenient to them.  This naturally requires we rely heavily on technology and are always seeking better, more efficient ways to do things. The Director of IT is responsible for the overall leadership and strategic direction of the IT departmental functions, in support of MEM’s mission while planning and directing the operational activities of the IT Department.” Interested candidates should confidentially contact the Director of Employee Development Len Tortorice.


“The lack of inventory in desirable locations makes renovation loans one of the most in demand product categories for home buyers today. Few lenders have the expertise that REMN Wholesale has in the reno world and REMN is currently looking for account executives who really understand renovation loans and the value they offer. For brokers, working with REMN on reno products is a no brainer. Customers receive white glove support through REMN’s dedicated Renovation Concierge Service and they produce a constant stream of webinars and regional seminars designed to help brokers and Realtors explain to buyers how these loans turn existing properties into dream homes. Demand for these products is so high that REMN is specifically looking for AE’s in all regions who are true experts in this area. If you’re well versed dealing with 203(k) and HomeStyle products, then REMN definitely wants to hear from you. Drop them a line at to discuss more.”


“M&A slowed its pace in 2016 because mortgage volume was strong Q1 (remember Q1 of 2014?) and remains steady”, says Dr. Rick Roque (413.297.6895). “This year is expected to be a relatively flat year as compared to 2015, but remember, 2015 ended up higher than every analyst predicted due to the micro-boom in rates in the first quarter of 2015 driving many refinance pipelines and maintaining rates for purchase transactions. But as the summer volume transpires, M&A activity will increase substantially because the multiples are there for the right buyers and sellers.”


A leading M&A firm is working with a large, well-known residential lender seeking mortgage banks in the Midwest or Mid-Atlantic markets to be purchased either by selling their stock or assets; applicable mortgage companies would have closed between $300M-$1.2B in 2015, or on pace to doing so in 2016, either consumer direct or referral partner (Realtor) based originations. No Agency approvals are necessary since they are already in place. If you would like to have your firm acquired, possibly receive a 2-4x after tax multiple, maintain your leadership and control, but rapidly accelerate your growth with significant access to capital, a broad array of new / innovative and non QM products, please contact me for a confidential discussion – principals and agents only.


In banking M&A continues. In the last week the industry learned that in Georgia State Bank and Trust Co ($3.5B) will acquire S Bank ($109mm) for about $11mm in cash (50%) and stock (50%), or roughly 1.02x tangible book. First-Citizens Bank & Trust Co ($32.1B, NC) will acquire Bank of Virginia ($348mm, VA) for about $35mm in cash. And Simmons First National Bank ($7.5B, AR) will acquire The Citizens National Bank of Athens ($552mm, TN) for about $77mm in cash (52%) and stock (48%) or roughly 1.21x tangible book.


Regarding banking, marketing and advertising is high on the list of banking examination reviews. Jonathan Foxx, Managing Director of Lenders Compliance Group, has just published the article “Advertising Compliance: Getting Ready for the Banking Examination.” It is part one of a two-part series. Jonathan provides a lot of helpful insight into preparing for the inevitable examination of your advertising compliance. It will be published in the May edition of National Mortgage Professional Magazine, but for those interested, it can be downloaded here.


Yesterday I brought up the ignored or misunderstood topic of Section 342 in Dodd Frank. I took the opportunity to contact a handful of random of others on the forefront of this topic. Maria Zywiciel, who runs NAHREP Consulting Services, had some observations. “Mention Dodd Frank 342 and you many get a blank stare but it’s a regulation that needs some serious thought. The disproportionate impact of the economic downturn on diverse communities and minority and women owned businesses prompted legislators to seek stop gaps to future downturns. Congress passed Section 342 of the Dodd Frank Wall Street Reform and Consumer Protection Act, and Section 342 created the offices of Minority and Women Inclusion (OMVI) in federal agencies that regulate the financial services industry.


“These agencies published The Joint Standards that provide five areas that a regulated firm may consult to develop its diversity policies: Organizational Commitment to Diversity and Inclusion, Workplace Profile and Employment Practices, Procurement and Business Practices, Practices to Promote Transparency and Organizational Diversity and Inclusion, and Self-Assessment.


“Marketing and Recruiting often are the first things companies try to affect with regard to their diversity efforts, often not even considering their vendor procurement policies and diversification amongst their vendor partners. The small representation of diverse vendors doesn’t match the demographic trends of women and minority owned businesses. For example, Latinas own 36% of U.S. businesses by minority women and one in every 10 women owned businesses! Becoming a preferred vendor, however, is not as easy as applying for vendor status. Some requirements such as minimum net worth requirements or minimum number of years in business may make barriers of entry more cumbersome for minority or women owned firms to overcome.


“Much like the benefits of a more diverse workforce or customer base, having diverse vendors can enhance your business’ bottom line or avoid costly mistakes. Joe Nery, partner and cofounder of Nery and Richardson Law in Chicago draws on his Hispanic Heritage to help his clients. He once challenged an Illinois law that he argued posed a disparate impact on minority neighborhoods. ‘I have a perspective that is unique and could be overlooked if it weren’t for my background,’ Nery said. He added, ‘As the demographics of our country change, more businesses will be owned by individuals of diverse backgrounds. The consumers they serve will also be diverse or located in multicultural communities. Thus, the vendors that supply these businesses must be familiar with local or community customs and preferences. By employing diverse vendors that are sensitive to these nuances, companies will increase the attractiveness and eventual success rate of their products or services.’


“Sara Rodriguez, owner of EKKO, a women-owned title company in Virginia, says business is booming but like other vendors she had to go through the rigorous vendor approval process. ‘It can be very expensive,’ Sara said. ‘If you can afford it, you may want to consider hiring a company that can perform due diligence to make sure you can pass all federal, state and even individual lender requirements before you even apply for the lender approval.’ The benefits to her have outweighed the obstacles, ‘I can provide services in both English and Spanish and I understand where they are coming from. Lenders who use our services provide better customer service.’


“The advantages of applying the Joint Standards and the positive reaction from regulators to companies that do so should be encouraging to the financial industry. Embracing these standards from marketing, recruiting all the way to the diversification of vendors can give companies a competitive edge in an ever more diverse world.


And from the SF Bay Area business coach and trainer Kitty Cole provided some advice for women-owned businesses starting out. “My advice for your readers is to set yourself apart by keeping your target market small. Create some specialty or expertise that is rare in your field. Being the most knowledgeable on the product or service in your field goes a long way, so do lots of advance research so you know your competitors. Be prepared to make a list of possible questions so you have all the answers. (I travel to most of my coaching clients, which is uncommon in this industry, although I do coach by phone in some instances.) I have found that a key component of success is response time. Today most everyone expects you to respond within minutes. Although that is impossible at times be the first to respond with the most knowledge and useful information. Then be generous with your advice. Last, keep your reputation intact. Let nothing sully it – it is all you have. If it becomes marred by a lack of integrity, a lack of response or any other flaky behavior, it can stall your growth.”


More tomorrow on this!


New products? Sure there are.


Chase introduced the new Standard Agency 97%, an affordable loan product designed for first-time homebuyers who have limited cash for a down payment and closing costs. This new loan program requires only 3% from a customer’s own funds.  With LTVs greater than 95% to 97%, the remainder of the down payment and closing costs can come exclusively from gift funds and any LTV lower than 95% requires 0% of customer funds. Customers must have a 680 FICO or higher and at least one customer must be a first-time homebuyer.


The Wall Street Journal is reporting that Wells Fargo is rolling out a new mortgage for its retail borrowers making minimal down payments, an offering that could allow the bank to step back significantly from the Federal Housing Administration program. The yourFrstMortgage program is a 3% down payment program and will be a partnership with Fannie Mae. FICO scores can go as low as 620 and debt-to-income ratios can be higher than the usual 43% limit. These loans would require mortgage insurance. It is believed that weaker borrowers will likely still have to pay loan level price adjustments (LLPAs) which may make an FHA loan remain more attractive.


American Advisors Group has released its jumbo reverse mortgage loan, called the AAG Advantage, to its wholesale partner network in California. With AAG Advantage, California brokers and loan officers may originate reverse mortgages through AAG on properties valued at up to $6 million, versus the FHA loan limit of $625,500 associated with a traditional Home Equity Conversion Mortgage (HECM) loan. (The AAG Advantage was initially launched in select states by the company’s retail channel last September. The loan will roll out to other states through both retail and wholesale platforms in future phases.)


United Wholesale Mortgage has launched a new Jumbo Elite program that will enable mortgage brokers to offer their borrowers one of the easiest Jumbo processes along with highly competitive rates. The Jumbo Elite program’s simplified process will make brokers more attractive to savvy Jumbo borrowers throughout the country. Brokers will enjoy transparent guidelines and direct communication with their underwriter throughout the entire loan process. Highlights of UWM’s Jumbo Elite program include: Loan amounts up to $2 million, Exclusive rate incentives for borrowers with 740+ FICO, Eligible for primary and second homes, ARM and fixed-rate options available and Closings in 25 days or less. Visit UWM website for program details.


Not much, really, is happening with mortgage prices. The yield curve steepened a little on Wednesday based on no news but a solid $34 billion 5-year note auction. The FHFA Housing Price Index rose 0.7% m/m in March (6.1% y/y) after climbing 0.4% in February.


We’ve had more news this morning, however, although given the “out of office” replies I am receiving plenty of folks are already thinking about the Monday holiday. We saw Initial Jobless Claims for the week ending 5/14 (-10k to 268k) and April Durable Goods Orders and Durable Goods Orders ex-transportation (+3.4%, higher than expected). Coming up is the April Pending Home Sales number at 7AM PDT and a $28 billion 7-year note auction. We closed Wednesday with the 10-year yield at 1.87% and this morning, after the initial spate of numbers, it is 1.86% and agency MBS prices are better by nearly .125.



Was this really on Craig’s List?

“This is Lex, he’s an 8 week-old German Sheppard. I bought Lex as a surprise for my husband but it turns out he is allergic to dogs so we are now looking to find him a new home. His name is Chuck, he is 39 years old, a handsome and caring man who drives, helps occasionally in the kitchen, and earns an okay income.”





(Copyright 2016 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