The Census Bureau tell us that there were 23 million businesses without paid employees, or non-employer businesses, in the United States in 2013, up 4.4 million from 2003 and 269,705, or 1.2 percent, from 2012. Don’t ask me, in this age of computers, why it took them two years to count them. Many lenders are small businesses. “Small employers that have reimbursed or directly paid employee individual health insurance policy premiums may benefit from retroactive IRS relief that is now available. But this temporary relief from the market reform penalty only applies to reimbursements of health insurance premiums.”
Northern California’s Paramount Equity Mortgage, continues to add key positions to support growth. “We are looking for an Internal Auditor who will be responsible for auditing overall company compliance including policies, procedures, and initiatives. This individual will provide written reports to our Executive Team which will assist us in continuing to perfect our compliance process. This position will be located at our Roseville, CA headquarters. Paramount Equity Mortgage was founded in 2003, and we are committed to making a positive impact in the lives of our customers and employees. We aren’t just another mortgage company – we’re a family that’s dedicated to your success! We have been awarded the A+ Employers’ Award by the Sacramento Business Journal 7 of the last 9 years, recognizing Paramount Equity Mortgage as an exceptional place to work. If you are interested in being part of an amazing team,” please send your cover letter and resume to Paul Ueckert.
TruHome Solutions, an established mortgage lending Credit Union Service Organization (CUSO) located in Lenexa, Kan., is seeking a CFO to lead its financial growth. The company is a Ginnie, Fannie, and Freddie approved lender, issuer and servicer with a large servicing portfolio. TruHome offers leading mortgage originations and servicing solutions nationwide, with seasoned teams developing custom, branded applications, web lending applications and total loan services. Following a planned retirement, the CFO joining its leadership team should have deep experience with fiscal management and growth results, strategic financial planning and implementation and an ability to collaborate and effect change across departments. Additional experience in secondary marketing, servicing and originations is desired. Capital Raising and Loan Servicing experience a plus. Please submit confidential inquiries to Karen Steen.
In wholesale, Pacific Union Financial’s Wholesale Channel has grown their lending volume 62% since the beginning of 2015, and is actively seeking Regional Managers and Account Executives in the western U.S. states to continue this exciting growth trend. If you’re an experienced producer and focused on growing your production in these and other markets, this is an opportunity not to be missed. Highly productive professionals can send their resume to Corporate Recruiter, Susan Trejo.
On the flip side of all this, Ocwen Financial Corporation announced it will discontinue its residential servicing operations at its Houston facility. The decision was made to streamline the number of call center sites, eliminate redundancies, and increase effectiveness within the Company’s residential loan servicing operations. The Houston facility has 140 residential servicing employees, which is less than 5 percent of the Company’s approximately 3,200 employees in the U.S. All impacted employees will have the opportunity to apply for employment at other Ocwen servicing facilities. (Geez, who’d want to leave Houston?)
Bank mergers and acquisitions just don’t stop. Just in the last week it was announced that State Bank ($168mm, IL) will acquire Harvard Savings Bank ($165mm, IL) for 1x tangible book, minus transaction expenses plus a $3mm premium. Independent Bank ($2.2B, MI) sold a branch to Isabella Bank ($1.5B, MI) for a 6.0% deposit premium. The branch has $15.3mm in deposits. Three bank holding company American State Bancshares (KS) will acquire 3 branches in KS from Simmons First National Bank ($4.6B, AR). Fidelity Bank ($3.1B, GA) will acquire 8 branches in FL from First Bank ($5.9B, MO) for a 1.0% deposit premium. The branches have about $154mm in deposits and $32mm in loans. Valley National Bank ($19.0B, NJ) will acquire CNLBank ($1.4B, FL) for $204mm in stock or about 1.55x tangible book. Berkshire Bank ($6.5B, MA) will acquire installment loan equipment financing company Firestone Financial (MA) for $53mm in cash (25%) and stock (75%) or about 1.3x tangible book. 2) Wells Bank of Platte City ($122mm, MO) will acquire the 80% remaining it does not already own of Bank CBO ($62mm, MO) for $5mm in cash.
It boggles the mind to think about all of the risks facing banks and non-depository banks. The broad list of risks doesn’t change much from one year to the next, but the severity of the risks do. Managing those risks, and managing counterparty risk, is a growth industry. The OCC took a stab at telling banks what it thought were the primary risks facing banks last year. While of course there are always going to be emerging technologies that capture our fancy and media attention (right now it’s probably mobile banking), these are really only the superficial toys that reflect the deeper and more significant trends in the financial services industry’s reliance on technology. The emerging technologies of importance are therefore those that will enable the flexibility, adaptability, integration, standardization and efficiency that the transformation described above will demand.
Pacific Coast Banker’s Bank reminds us that a recent study by Harvard’s Kennedy School on the State and Fate of Community Banking found strength in community banks. Community banks’ share of the US bank lending market has decreased by 50% in the last 20 years, but community banks still maintain an essential role as lenders and supporters of agriculture and small businesses. They provide 77% of agricultural loans and 51% of small business loans. After the 2008 financial meltdown, big financial institutions focused on consumer, auto, mortgage, credit cards and mostly disdained small businesses. Community banks looked in their back yards, relied on personal relationships, gathered soft information on their neighborhood borrowers and kept their doors open.
The authors of the Harvard study note a lower default rate for local banks. In 2013, for instance, the default on 1-4 family residential loans was 3.47% in banks with < $1B in assets whereas it was 10.42% for banks $1B+. The data shows community banks retain a comparative advantage when lending to small businesses, probably due to a more localized and deeper knowledge base. Nevertheless, the market share is slowly eroding. In 2000, community banks were responsible for 57% of small business loans vs. 51% today. It’s also not easy to cultivate a bank’s garden when costs of regulation are rising.
Consider Dodd Frank pushed 33% of community banks to hire new staff in order to meet more demanding regulations. According to experts at George Mason University, 25% of community banks planned to hire new compliance personnel. Compliance costs have hurt results. In fact, for 33% of community banks, hiring 2 additional employees to meet compliance demands would take earnings negative. Small businesses have had to fight following the financial crisis as well. These businesses are responsible for 50% of all new jobs created in the US, yet small business lending has declined since the crisis ended. Higher lending standards and particularly cash flow requirements restrict banks’ ability to lend to some of these businesses and the data shows the impact. New restrictions on credit card issuers have also made it more difficult for business owners to tap into credit card financing. Given that less credit is available, small businesses have stepped outside the traditional financial channels and are now tinkering with online lenders at higher interest rates (and unpredictable fees).
A while back Zelman & Associates published its 2015 first quarter banking survey indicating that the loosening of credit standards had driven development activity. Last year, acquisition, development and construction (AD&C) loan balances across the banking industry increased 14 percent, the highest level since 2006, but the share of loans in AD&C remains at lower levels. Strong AD&C loan growth is leading banks’ balance sheets and smaller banks are increasing their AD&C lending activity at a faster rate as more local and regional banks expand their presence in the AD&C category. The multi-family capital availability has been stable over the last five quarters and non-residential capital availability is expanding with the economic cycle. To read the full report, contact Ivy at [email protected].
What is going on at the state level?
Virginia has made revisions in regards to security instruments and the maximum applicable recordation taxes. The tax for deeds of trust or mortgages is enforced at a rate of 25 cents for every $100 of the amount of the obligations secured. For transactions with an open, credit line or revolving deed of trust, the amount of the obligation is the maximum amount that may be remaining. For deeds of trust, mortgages, or other instruments that modify the terms of an existing deed of trust or mortgage, where the tax has already been paid, the recordation tax is calculated on the amount of the obligation in addition the original obligation. These changes are effective on July 1st.
The California News Wire reported that DocMagic has done 100 million eSignatures.
The Indiana Attorney General, Greg Zoeller, said financially strained Northwest Indiana families need protection from mortgage companies trying to foreclose on them. The Attorney General is lobbying against legislation that would terminate a previous law that created the Mortgage Foreclosure Trial Court Assistance program, a homeowner protection program that arose due to the mortgage crisis. Today, foreclosures take longer in Indiana than most states, as it takes about 601 days to complete a foreclosure and is ranked the sixth best state to default on a mortgage. Zoeller said bank lobbyists are trying to convince legislators the state program is no longer necessary due to the regulatory oversight by the CFPB and insists that state procedure is better than federal because a judge sits over it with the power of the court to enforce the agreement. Click here to read more about the article.
Oklahoma has updated title insurance policies, effective November 1st, 2015. The revised regulation allows title insurance companies to execute and record certain records if a mortgagee fails to execute and deliver a release of mortgage to the mortgagor within 60 days of the receipt of payments of the mortgage by the mortgagee. The written approval of the title insurance company will appear on the affidavit if executed by an agent and the affidavit should include the names of the mortgagor and the mortgagee, date of the mortgage, legal description of the property and the book and page or clerk’s document number of the real property records where the mortgage or modification is recorded. The affidavit will act as a release of mortgage described within it and the county clerk will index the affidavit against the real property.
The New York Department of Financial Services (NYDFS) has approved new title insurance industry rates for refinancing that could equal up to 65 percent of savings for consumers, depending on the age of the mortgage. Most of the savings occur if a mortgage is refinanced after 10 years since loan origination but the savings for shorter term loans can reach up to 15 percent if the loan is refinanced with the same lender and 30 percent if refinanced with a different lender. The NYDFS also proposed new regulations for title insurers, limiting certain types of expenses for title insurers and the amounts that can be charged for non-title services. These expenses cannot be incurred by the consumer, which may be the reason for the new savings. New York accounts for about 9 percent of national title premiums, but the majority is from purchase and commercial transactions. To read more about KBW’s article, click here.
Amid all this change the bond market is behaving itself, and in spite of a little intra-day volatility isn’t jumping around like a scalded cat. Using the 10-yr. T-note as a proxy, it began yesterday at a yield of 2.14% and ended at 2.13%. The European Central Bank maintained the size of Greece’s Emergency Liquidity Assistance (ELA) facility at 80.2 billion euro. This was supposedly not because the ECB is trying to apply more pressure but rather because Greek banks have enough liquidity, a 3 billion euro buffer to be exact. The Greek central bank will disclose official numbers today. The $35 billion 5-year note auction was well-received by investors, although the bid-to-cover was lower than average.
“But that was yesterday, and yesterday’s gone. (So sang Chad & Jeremy.) For thrills today we had Initial Jobless Claims for the week of 5/23 (at 282k, up 7k – consistently below 300k). Later are April’s Pending Home Sales and then another Treasury auction. Soon after this number we find the 10-yr still at 2.12% and agency MBS prices a tad better.
On average, an American man under age 75 will have sex two to three times a week.
Whereas a Japanese man the same age will have sex only one or two times a year.
This is very upsetting news to many of my friends…as they had no idea they were Japanese.
(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.)