Plenty of people I know agree with the this Forbes article titled, “We Have Learned Nothing From The Mortgage Market Meltdown.” Builders are reducing labor costs by using premanufactured products that also require low maintenance. And what’s not to like about taking advantage of cheaper labor hundreds or thousands of miles away in an environmentally controlled environment? Know the difference between “modular” and “manufactured” and “mobile.”

Legal News

Sacramento based mortgage company, Catalyst Mortgage has recently filed a lawsuit in state court against Bills.com, LLC, Freedom Financial Network, LLC and others for trademark infringement, anti-phishing violations, and unfair competition. In the lawsuit, Catalyst alleges that the defendants have engaged in a series of deceptive online marketing tactics designed to infringe on Catalyst's trademark and goodwill. The lawsuit seeks damages in an undisclosed amount and an injunction prohibiting the defendants' misuse of the Catalyst name.

Some wonder what the fate was of long-time wholesaler First California Mortgage. It turns out that a law firm (San Francisco’s St. James Law, P.C.) sent a letter out in mid-February (signed by a legal specialist in bankruptcy) to creditors. “We are insolvency counsel for First California Mortgage Company and write to you in that capacity. First Cal has terminated all business operations and laid off all its employees. First Cal is in the process of winding up its affairs and liquidating its very limited remaining assets. To the extent that there are proceeds, they will be distributed in accordance with the priorities that would govern a bankruptcy case…We therefore respectfully suggest that you close your files on this matter at this time…”

Capital Markets

Mortgage Industry Advisory Corporation (“MIAC”) is pleased to offer, as exclusive agent, a $23 million pool of reperforming residential first lien whole loans. The Seller prefers to sell the loans on an all-or-none basis but will consider carves and all loans are offered on a servicing released basis. Loan characteristics are: Interest Rate Range: 1.5% to 13.28%, 76.72% Modified Loans, Geographic Concentration: CA, NJ, IL, FL, and NY, Average Total UPB: $196,937.40, WAC: 4.353% Aggregate LTV: 75%, WA FICO: 586, WA Months Performing: 7.57. For additional information, please contact Steve Harris.

Remember the acronym PIGS from 2010? Portugal, Italy, Greece, and Spain. Their fixed-income yields shot higher over the weekend due to renewed political uncertainty. Back to the future! Uncertainty about formation of a government has triggered an Italian debt sell-off, while bank shares in Spain, Portugal and France also have come under pressure.

Italy will soon be voting on what will essentially be its membership in the European Union. Although things have calmed down this morning, an Italian exit of the EU creates uncertainty in financial markets. Traders cope with that by buying bonds (among other things) from other countries, like the U.S., as a safe-haven, a flight to quality. Much of the panic money found its way into the US bond market yesterday. Not so much today.

And thus rates slid down yesterday, with the 10-year closing -16bps as investors flocked toward Treasuries amid political turmoil in Italy. Over the weekend, Italy's President Sergio Mattarella objected to the appointment of euroskeptic Paolo Savona to the finance minister post. President Mattarella then called on former IMF official Carlo Cottarelli to form a caretaker government, but there are indications Mr. Cottarelli's government will not be supported by any of the major parties, meaning there is an increased likelihood of another election in July or August. The worries surrounding Italy overshadowed news from Spain, where Prime Minister Mariano Rajoy will face a confidence vote before the weekend. These worries surrounding two of Europe's most indebted economies produced the sharpest spike in the price of longer-dated Treasuries since June 2016.

In the U.S., Fed member Bullard argued for a slower pace of rate hikes. The fed funds futures market has seen a moderation in rate hike expectations, with the implied probability of a June hike falling to 75% from 90% on Friday and 95% one week ago. But housing & jobs drive our economy, and the S&P Case-Shiller Home Price Index increased 6.8% in, above expectations after an identical reading in February. The Conference Board's Consumer Confidence Index increased to 128.0 in May, showing consumers' assessment of current conditions is at a 17-year high.

Recall that retail sales increased 0.3 percent in April and March’s figures were revised upward; a moderate rebound after a weak first quarter. Clothing stores increased a robust 1.4 percent for the month, but department stores only managed a 0.2 percent gain. Furniture stores, which are an indication of housing demand, increased 0.8 percent. On the weak side, food services & drinking places, which are an indication of disposable income, declined 0.3 percent in April. All things considered, the increase in spending is not that dramatic considering this year’s tax cuts and current labor market conditions.

This morning we learned that last week’s apps dropped nearly 3%, the 6th straight week of declines, and refis are now down to 35% of the total. The May ADP employment report was +178k, much less than forecast. We’ve also had the second look at Q1 GDP (+2.2%, in line with expectations). And advanced indicators for April were released: wholesale (flat) and retail (+.5%) inventories. The latest Fed Beige Book will be released at 2PM ET. With lots of news, rates are higher versus Tuesday’s close: the 10-year is yielding 2.84% and agency MBS prices are worse .125.

Lender Products of Note

MCT is offering a session on Wells Fargo’s Bid Tape AOT Execution. One exciting announcement that came out of the National Secondary conference last week was support for bid tape assignment-of-trade executions within MCT's Bid Auction Manager digital loan trading platform. After beta testing bid tape AOT with select Wells Fargo sellers starting in early 2018, MCT is rolling out support across their award-winning best execution and loan pipeline management software, MCTlive! Wells Fargo is expected to progressively approve interested sellers for bid tape AOT over the course of 2018, in a move that could shake up best execution loan sales in the secondary market. Phil Rasori, COO of MCT, will be briefing clients on bid tape AOT in a webinar to be held Friday, June 1, 2018 at 11AM PT. Contact Ian Miller for more information or to sign up.

Floify, the leading end-to-end mortgage point-of-sale solution, has recently announced its official partnership with mortgage giant, Fannie Mae. This exciting news comes on the heels of the launch of Floify’s groundbreaking 1003 loan application, creating an impressive vision for the future of integrated mortgage services. Their interview-style 1003 already provides direct integration with a library of credit reporting agencies for instant credit pulls. They will soon add automation support for Floify’s existing Day 1 Certainty-approved asset verification provider, AccountChek™ by FormFree. This new partnership will allow Floify to communicate directly with Fannie Mae’s Desktop Underwriter® (DU®) to produce fast pre-qualification decisions that help convert your prospects into borrowers. To experience the awesome efficiency of Floify’s integrated 1003 and point-of-sale solutions and get your business on the leading edge of mortgage tech, request a live demo now!

Henry Ford once said, “If I had asked people what they wanted, they would have said faster horses.” The adage still stands true – and faster horses still won’t cut it. These are unprecedented times. The game has changed. We have a constant flow of technological and marketing advancements, and consumer expectations continue to push the boundaries. Total Expert is a leader in digital transformation for the industry and has observed three key digital transformation trends that every lender should have on their radar: the rise of the personal brand within the enterprise, creating customers for life, and the rapid pace of innovation. Lenders leveraging technology to support personal branding within the enterprise and to help their loan officers make customers for life will continue to lead the industry. Read about the Top Three Digital Transformation Trends in Financial Services to learn more about these key digital transformation trends you should have on your radar.

As the conventional and government loan markets continue to face reductions in origination volume and margin compression, lenders need to be evaluating new strategies. At the recent MBA National Secondary Conference, Deephaven had the opportunity to talk with hundreds of attendees about how our Non-QM products can change the trajectory of their business from both a revenue and margin standpoint. The Non-QM movement is underway and the earlier your company invests in product expansion, the more first mover advantage you and your originators will realize. The Non-QM securitization market has already doubled in size from the same period last year and is projected to continue to grow at a robust pace for years into the future. To learn more about the Non-QM industry and how it can benefit your company, please contact Deephaven Mortgage today: Correspondent and Wholesale.

Employment

Galton Funding, a fast-growing non-agency correspondent conduit is expanding, and with the recent opening of its operations center in Bloomington, MN, Galton is ready to grow its Business Development team. "With the addition of a strong seller support team in MN, the depth of our product offering, and an established securitization program, Galton Funding is well positioned to grow our platform and capitalize on the increasing interest in non-agency programs" says Doug Potolsky, Head of Galton Funding. Galton Funding’s program offerings include 1st and 2nd liens across QM, non-QM and investor products. Interested Correspondent Business Development candidates should contact Galton Careers.

As we finally find some warm weather and bask in the glow of a few days off, those guys over at Wintrust Mortgage are saying, “To heck with summer, let’s write some new business!!” Wintrust Mortgage is a bank owned, 50-state lender that is hungry for more growth with the right LOs, teams, or company acquisitions. Now that its acquisition of Veteran’s First is complete, Wintrust Mortgageis continuing to expand across the nation. “We don’t want to grow for growth or egos sake. We want to make what we have (great products and pricing, robust marketing, licensing exemption, deep balance sheet, 50-state lending, terrific and transparent leadership and a desire to WIN) available to right minded folks around the country,” says Bob Shield, Wintrust Mortgage’s EVP of National Production. “We know it is getting tough for some of the smaller lenders but also know they have some wickedly smart leaders and great producers. We can provide a great home and sincerely believe we are the place to be.” Contact Bob (847.939.9361) to learn more. Wintrust is an Equal Opportunity Employer. All qualified applicants will receive consideration for employment without regard to race, color, religion, sex, national origin, disability or protected veteran status. Equal Housing Lender.

Todd Duncan’s High Trust Company is looking for a few passionate, ambitious, smart, and personable individuals to join the team in an Entry-Level Sales Account Manager position for the opportunity to equip mortgage professionals for success and help expand the High Trust brand. This position provides direct client service as part of a relationship management team. They will serve as the first point of contact for the client and provide insight regarding High Trust events and products. They will be responsible to meet or exceed monthly, quarterly, and annual sales goals as determined by sales budgets and forecasts. Financial service industry experience is a plus. Click here to apply today! (And don’t forget that the Sales Mastery Event will be in San Diego this year, October 10-13.)

Michael Bourque, EVP and CFO of Ocwen Financial Corporation resigned, effective June 22, to move to another financial services company.