Oct. 19: MI, retail, Ops jobs, sub-servicer option; bank M&A; USDA rural & disaster updates; Freddie’s single security proposal

The management teams at residential lenders across the nation have begun forecasting for 2017. Of course no one wants to tell their boss that they expect a 20% decline in volume, as some are estimating volume to be next year versus this year, so in some areas, and for some companies, grabbing residential market share will be the name of the game.


BBVA Compass is growing and looking for a Director of Mortgage Operations in Birmingham, Alabama. The Director will be responsible for the daily duties related to mortgage operations, will lead an outstanding team and staff in Birmingham and Tempe, Arizona, and will be a key partner to the Sales, Product and Engineering teams within the Company. The Director will be a key role in the continued development and execution of the Mortgage strategic and transformation efforts that are underway at the Company to significantly grow the Mortgage business. The Candidate must implement and execute all Mortgage Operations policies and procedures while remaining current on changes inside the legal, regulatory, and technology environments within the mortgage function, and be a member of the Mortgage executive team. Interested parties can send confidential resumes to Vice President Paul Booker.


For lenders looking for a new sub-servicer, RoundPoint Mortgage Servicing Corporation spread the word that, “Size does matter. RoundPoint is a top 20 servicer, so clients should feel very comfortable facing off with us as a counterparty. We are not so large, however, that we are unable to meet the custom needs of our clients.  If you are looking for an alternative, if you want to avoid risk concentration with a single, mega sub-servicer, if you want a sub-servicer that gives you the attention you deserve, then contact Allen Price, Head of Business Development, at 704.426.8846. We make the entire process much simpler than you might imagine.”


Assurance Financial is selectively seeking seasoned mortgage loan originators and producing branch managers to help expand its footprint. “The company, again voted one of the Best Places to Work, is looking for great people in good markets in Arizona, Colorado, New Mexico, Texas, Oklahoma, Arkansas, Louisiana, Mississippi, Tennessee, Alabama, Ohio, Virginia, West Virginia, North Carolina, South Carolina, Georgia, and Florida. Assurance has the right processes, commitment and technology to consistently close loans on time. For more information, contact Paul Peters, CMB at 225-239-7948 or visit lendtheway.com/careers.


In MI job news, Radian is currently looking for a Regional Director, New Business Development in the Northeast. This position is responsible for pursuing and closing key sales opportunities within the northeast territory. Target prospects are tier 2-4 mortgage bankers, banks, credit unions and lenders. This individual will need to network and maintain contacts with sales reps from Account Management, Correspondent Lenders, Wholesale Lenders, and other relevant contact sources; coordinate with account managers/operational personnel at Radian to execute on customer service and other client needs at all levels of customer’s company to get business to targeted “win” amount. Candidate should be highly experienced in mortgage lending; significant hands-on sales experience working with complex customers in MI space. If you are interested in this position, please send a resume to Kim Martinez.


Speaking of Radian, New American Funding and Alterra Home Loans, two national mortgage banks, announced that Radian has been named as the preferred private mortgage insurance provider for Your Path, a new loan program that makes affordable homeownership opportunities available to the changing demographics of U.S. homebuyers by incorporating criteria not used in traditional underwriting. Teresa Bryce Bazemore, President, Radian Guaranty, said, “We continually strive to better understand and remove the barriers that prevent many potential homeowners from obtaining a mortgage. The Your Path program will help address some of those issues and serve as an important support to our ongoing efforts to make sustainable homeownership a reality for qualified borrowers who have limited down payment savings.”


Banc of California, owner of Banc Home Loans, was in the press yesterday, and not for the right reason. A Seeking Alpha contributor wrote a post on the stock claiming ties with fraudsters. The contributor, “Aurelius,” says that most of the senior officers at BANC as well as the company’s board members have extensive relationships with a man known as Jason Galanis. According to the post, Jason Galanis is known as a fraudster. In fact, SA said that he has a “long history of gaining control of lenders via front men and looting the assets.” But at this point no one knows that there has been any wrong doing on the part of BANC.


On its behalf the Banc of California, Inc. (NYSE: BANC) announced it is aware of allegations posted in a financial blog. “The Company’s Board of Directors has been aware of matters relating to Jason Galanis including certain claims he had made suggesting an affiliation with members of the Company, its Board, and/or its Executive team. The Board, acting through its Disinterested Directors, immediately initiated a thorough independent investigation…Mr. Galanis’ claims to be affiliated with COR Capital were fraudulent.” The impact of all of this on Banc Home Loans, and its broker clients, remains to be seen.


While we’re talking about banks, with or without a “k”, research by the Fed finds compliance costs amount to 8.7% of non-interest expenses at banks with assets <$100mm vs. only 2.9% for banks with assets $1B to $10B.


In the last week or two several mergers and acquisitions were announced. In Pennsylvania Dollar Bank, FSB ($7.4B) will acquire Progressive-Home FSLA ($51mm). In Missouri Enterprise Bank & Trust ($3.7B) will acquire Eagle Bank and Trust Co. of Missouri ($928mm) for about $130.6mm in cash (20%) and stock (80%). In New England Salem Five Cents Savings Bank ($3.9B, MA) will acquire Georgetown Bank ($300mm, MA) for about $49mm in cash or roughly 1.48x tangible book. In the home of the Packers Stratford State Bank ($110mm) will combine with Heritage Bank ($105mm) in a merger of equals (MOE) transaction. And it isn’t confined to banks buying banks: Berkshire Bank ($8.0B, MA) will acquire wealth management company Ronald N. Lazzaro PC for about $10.2mm.


“Makes you wanna build a 10-percent down, white picket fence house on this dirt.” So sang Florida Georgia Line. A big chunk of lenders follow developments with the USDA rural development program. For those that don’t, here’s a good place to see recent news.


Lenders involved in rural housing noticed that Fiscal Year (FY) 2017 funding for Rural Development’s Single Family Housing Guaranteed Loan Program is now available. The funding is authorized by the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, and Zika Response and Preparedness Act (P.L. 114-223, H.R. 5325).


Requests that received Form RD 3555-18E, “Conditional Commitment for Single Family Housing Loan Guarantee” (aka Conditional Commitment), contingent upon the availability of an appropriation, will be obligated in the Agency’s financial system over the next 2-3 business days. An updated Conditional Commitment will be electronically generated by the Agency to remove the “contingent upon” language. Lender receipt of the updated Conditional Commitment will signal the request has been successfully obligated by the Agency. Closing transactions are not eligible for submission to USDA until a loan is successfully obligated.


Lenders are adjusting. USDA announced its temporary lapse in funding for the Single Family Housing Guaranteed Loan Program effective with the start of the new fiscal year October 1, 2016. During this time, Rural Development will issue Conditional Commitments “subject to the availability of commitment authority” for purchase and refinance transactions. Please note that this will NOT affect Plaza’s ability to fund/purchase USDA Guaranteed Rural Housing program loans. Click here for a link to the notice from the USDA.


Plaza is reminding its clients that for USDA Guaranteed Rural Housing Conditional Commitments issued on or after October 1, 2016, both the upfront guarantee fee and the annual fee (collectively the “fee schedule”) for purchase and refinance loans will decrease. The upfront guarantee fee is being reduced from 2.75% to 1%, and the annual fee is being reduced from .5% to .35%. Refer to USDA’s latest announcement for more information.


NewLeaf Wholesale provided its brokers with the following information: USDA-Guaranteed purchase and refinance loans obligated on October 1, 2016 through September 30, 2017 are subject to the following fee schedule: Upfront guarantee fee: 1.00% and Annual fee: 0.35%. A loan is considered obligated when the USDA approves a complete loan application package and issues Form RD 3555-18 “Conditional Commitment for Single Family Housing Loan Guarantee” to the USDA-Approved Lender. Loan guarantee requests submitted to the USDA on or before September 30, 2016, are subject to the Fiscal Year 2015/2016 fee structure ONLY if a Conditional Commitment has been issued before the state USDA field office close of business on September 30, 2016. The Broker must notify the Borrower when Form RD 3555-18 “Conditional Commitment for Single Family Housing Loan Guarantee” is not received prior to September 30, 2016, since the Borrower’s loan may be subject to the new fee schedule and require re-disclosure. The Broker may originate loans with the new fee structure ONLY if the loan is not submitted to USDA for conditional commitment prior to October 1, 2016.


Disaster news continues to come from residential lenders.


FCMKC posted Wholesale Product and Pricing Bulletin 2016-15 FUNDING RESUMED regarding loans in areas impacted by hurricane Matthew (Florida, Georgia & South Carolina).


PennyMac posted its Hurricane Mathew disaster policy implementation.


AmeriHomes’ previous announcement delaying loan funding due to the anticipated landfall of Hurricane Matthew in the states of Florida, Georgia, North and South Carolina; purchasing has resumed subject to any disaster re-inspection requirements that may apply for those states.


Counties located in Florida, Georgia, South and North Carolina declared disaster areas as a result of Hurricane Matthew will require re-inspection. Please click here for a copy of Plaza’s Natural Disaster Policy detailing re-inspection procedures by loan type.


In response to Hurricane Matthew in North Carolina and the Federal Disaster Declaration, M&T Bank will enforce the Disaster Re-Inspection Policy for all properties located in affected Parishes for the counties of Counties of Beaufort, Bladen, Columbus, Cumberland, Edgecombe, Hoke, Lenoir, Nash, Pitt, and Robeson.


On October 11th, U.S. Housing and Urban Development Secretary Julián Castro announced HUD will speed federal disaster assistance to the States of North Carolina, Florida, and Georgia and provide support to homeowners and low-income renters forced from their homes due to Hurricane Matthew.  This week, President Obama issued a disaster declaration for the following counties: North Carolina:  Beaufort, Bladen, Columbus, Cumberland, Edgecombe, Hoke, Lenoir, Nash, Pitt, and Robeson. Florida: Brevard, Duval, Flagler, Indian River, Nassau, St. Johns, St. Lucie and Volusia. Georgia: Bryan, Camden, Chatham, Glynn, Liberty, and McIntosh. The President’s declaration allows HUD to offer foreclosure relief and other assistance to certain families living in this county. HUD is Assisting the affected states and local governments in re-allocating existing federal resources toward disaster relief, Granting immediate foreclosure relief, Making mortgage insurance available, Making insurance available for both mortgages and home rehabilitation and Offering Section 108 loan guarantee assistance.


Good capital markets staff, although focused on the tiny details of making a basis point here or there, are also interested in the big picture. One item being discussed is a single security – why have different securities for both Fannie and Freddie products, given their similarities – especially if borrowers can benefit from the added liquidity and reduced complexity? Freddie Mac published a proposal to outline the security conversion mechanism it expects to offer to holders of its PC once the single security (UMBS) goes live in 2018. It also poses several questions on which it is soliciting feedback from market participants, beginning on page 8.


Keeping on with capital markets, we had a little rally in prices Tuesday after core consumer price index growth for September fell short of expectations. It likely that the Fed will raise rates two months from now – but that is two months from now. We also had some spillover gains in bunds and gilts: Parliament would likely get a final vote on Brexit, thus lowering the fears for a hard-Brexit. One big global economic village… But the 10-year closed at 1.75%.


This morning the MBA reported its survey results for last week’s apps: -.6%, purchases +3.0% but refi -1.0%. We’ll also have the housing duo of Housing Starts and Building Permits. Later we have the October Fed Beige Book – the status of the economies of the various Fed districts. In the early going the 10-year is at 1.75% with agency MBS prices close to unchanged versus Tuesday night.



There are some clever marketing people out there. Throw in a T-Rex, a car, and an Irish accent, well… a sweet commercial.






(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