“The best part about Halloween is that the cobwebs in my house look like decorations.” For perhaps a morning, the focus for lenders has shifted away from cash flow and recruiting to who will win the yearly Halloween costume contest. The usual favorite (IT - Minions) or the long-shot shipping department (Ninja Turtles)? Perhaps accounting (The Pricing is Right!) or underwriting (Game of Thrones)? Compliance and QC departments have been gutted, but their Baywatch entries turned heads in the past. Or perhaps the dark horse: Capital Markets as One Direction. So much intrigue!
Lender Products and Services
Advantage Credit, Inc., a leading provider of credit reporting and verification services to the mortgage industry is pleased to announce its merger with Clear Choice Credit based in San Francisco. Advantage Credit and Clear Choice each have successful track records serving the credit reporting industry. Clients of both companies will benefit from enhanced innovation and a stronger, more comprehensive solution for all their credit reporting needs. Gordon Chin will join Advantage Credit in the role of Division Manager. Advantage Credit will begin management of Clear Choice customers and employees by December 1, 2018. For more information please email Don Unger or Gordon Chin.
In today’s mortgage environment, cost to originate is higher than ever while margins continue to compress. As a credit union, small bank or independent mortgage company how do you stay competitive? Ethos Lending recently launched its next-generation fulfillment platform that leverages their proven proprietary technology and world class customer service to help lenders maximize profitability and increase app to fund velocity by up to 50%. To learn more about their customizable solution, visit EthosLending.com or contact Jeff Krischer at 415-780-7446
Capital Markets
I got into capital markets in the mid-1980s, and things haven’t changed that much. Rates go up, they go down, driven by bond prices, which are in turn driven by supply and demand factors. They never go in go in one direction for a long time. What should lenders and LOs know about what’s going on now with rates and the economy?
Short term rate hikes by the Federal Reserve don’t directly impact 30-year mortgage rates. But the same factors influence both. A Wall Street Journal survey of economists finds everyone expects 1 more rate hike this year, while 42% expect 3 hikes next year and 21% project 4 hikes. As of this latest survey, the economist group projects federal funds will reach 3.08% on average by the end of 2019.
Fed Chair Powell said there are more rate hikes coming since rates are "a long way" from neutral and are still considered accommodative. Fed Chair Powell said the country could be at a "unique" time in its history given "a remarkably positive outlook" and that he expects the unemployment rate will remain below 4% and inflation will stay near 2% through the end of 2020. Meanwhile, Fed Richmond President Barkin said in a recent speech that, "growth is solid, unemployment is low and inflation is at target".
Goldman Sachs economists say there is not much sign of a recession in the next 3Ys and only calculate a 36% chance of a recession during that time. This is below historical averages because of strong growth and lessening financial concerns. S&P is projecting a 12% chance of a recession over the next 12 months. While double the expectation of May 2017, it remains well below the 30% threshold that dictates the "more likely" chances of a recession by S&P economists.
On the demand side (since prices are set by both supply and demand), overseas investors are buying fewer U.S. securities. For example, the WSJ reports that foreigners increased their Treasury holdings by $78 billion in the first eight months of 2018, just over half of what they bought during the same period last year. And the U.S. government is increasing the size of regular bond auctions to fill a growing U.S. budget gap. The U.S. Department of Treasury, however, expects to issue $425 billion of marketable debt in Q4, down $15 billion from previous expectations. Borrowing for Q1 2019 is expected to reach $356 billion. Foreign buyers now hold 41% of outstanding Treasury debt, their lowest share in 15 years, per the U.S. Treasury. China and Japan still both own more than $1 trillion of U.S. debt. Lenders know that Treasury yields serve as reference rate for mortgages, business loans, and other borrowing. Stocks and bonds don’t work inversely, but rising yields tend to hurt stocks by raising companies’ and investors’ borrowing costs.
Two days ago it was announced that the US Treasury expects to further increase its borrowing by issuing $425 billion in net marketable debt through the end of the year to finance the widening federal budget deficit. Given these figures, government borrowing will amount to $1.34 trillion this year, more than double the 2017 figure.
Recent economic data was a tale of divergence between the lethargic housing sector and the overall improving economy. Both new and existing home sales fell short of expectations in July as rising prices and a tight inventory may be leading to buyer fatigue. Existing home sales declined 0.7 percent while new home sales fell 1.7 percent in July following declines in June. Tight inventories continue to be a concern as existing homes lasted an average of 27 days on the market. The median home price of an existing single-family home eased from June’s record high of $276,500 to $272,300. On the other side of things, durable goods orders increased 0.2 percent in July, excluding the volatile transportation component. The strength was broad-based across many categories and unfilled orders remain high. The end of the week brought a speech from Fed Chair Jerome Powell where he reiterated the Fed’s current view that the economy has strengthened and that gradual rate increases remain likely in the near term.
Looking at bonds yesterday, the U.S. 10-year closed at 3.11% on no real market-moving news. The Conference Board's Consumer Confidence Index for October increased to its highest reading since September 2000 as strong employment growth continues aid consumer attitudes on current conditions and the outlook. Fears around the trade war and rising rates are still underpinning, and will continue to underpin investor thought, though attention now turns to major tech results including from Apple and Friday’s jobs report.
Jobs and housing drive the economy. Today’s calendar kicked off with mortgage applications from the MBA for the week ending October 26 (echoing what lock desks knew, apps were -2.5% with refis accounting for 39%). October ADP employment has also been released (227k, topping forecasts). The Q3 Employment Cost Index is next, which coincides with the release by the Treasury of the details of next week’s Quarterly Refunding and potential details relating to the TIPS calendar. Chicago PMI for October is due for release at 9:45am. In the very early going rates are higher versus last night’s close (10-year yielding 3.14%) and agency MBS prices are worse a solid .125.
Jobs, Personnel Moves, and Promotions
For a job in the financial services sector, due to continued growth, Inheritance Funding Company, Inc. is looking to hire an additional Funding Officer for its San Francisco Financial District home office. Inheritance Funding Company, Inc., and I am on the board of directors, has provided heirs waiting for their inheritance distribution with capital advances for nearly 25 years. "With nearly $200M advanced to heirs in all 50 states, IFC is the oldest and largest purveyor of inheritance advances in the country. With continued growth in this lucrative sector, IFC is looking to hire the right talent to catch up with increased demand. Inheritance or probate experience is neither expected nor required. The right candidate will have a blend of sales expertise, analytical reasoning, and strong client communication skills. Competitive base salary and uncapped incentive pay for strong performers." Contact Eric Holdsworth, VP of Marketing.
Compeer Financial is looking for dynamic, rural-focused Mortgage Lending Officers. “Compeer Financial exists to enrich agriculture and rural America. One of the ways we accomplish this is through our unique mortgage solutions for rural locations and small communities which often fall outside traditional guidelines. We are seeking MLO positions in Western Wisconsin and Northern Illinois to build strong client relationships, provide innovative, and workable solutions for clients looking to follow their dreams of owning a home in a small town or retiring to a hobby farm. Mortgage Lending Officers establish new networks, identify prospects, and develop relationships with clients and industry professionals as well as working closely with the lending team to create innovative credit packages to meet the client needs.” Visit www.compeer.com/careers to learn more about the MLO roles and other opportunities.
“For Loan Officers or Branch Managers looking for a change, MortgageRight sets itself apart from other companies by offering lower rates, better pricing and higher compensation. MortgageRight is making a name for itself across the nation by operating with thinner margins than other industry players due to several key strategic factors put into place by ownership to help their producers win in a market like this one. Very simply, they can offer lower rates and/or a higher comp and they can back their claims up 100%. But don’t take their word for it – They’ll put any candidate in touch with recent hires and existing LOs to discuss their strengths along with everything else they have to offer. For a pricing engine walk through, contact Mike Russo at (888) 425-5456 or visit them at www.branchright.com.”
Home Point Financial has recently hired Rob Saunders, Managing Director – Regional Manager. In this role, he will support broker and non-delegated clients, while leading Home Point’s Third Party Originations regional sales team responsible for Arizona, Nevada, Utah, Hawaii and Southern California. “Are you ready to join a team that’s 100% focused and committed to the TPO channel? Contact Paul Wyner to learn more about Home Point today: Home Point Financial is pointing you home.”
“If you believe your company should be providing you with stronger local support and a higher level of customer service for your clients, Firstrust Bank is interested in speaking with you. We are looking for individual loan officers or retail teams in the PA/NJ markets. In addition, we will be opening a Bank Branch in South Jersey market in January and we are looking for Loan Officers to work out of this new location. Firstrust Bank offers a diverse product menu as well as a competitive compensation package. If you or your team is interested in making a move please forward your information to Mike Scheier, SVP of Residential Lending. Firstrust Bank is a third-generation family bank, the largest family owned commercial bank in the region with an unbroken commitment to the Philadelphia market for over 85 years.”
Congratulations to Gavin Ekstrom and his management team on their move to Cross Country Mortgage, an Ohio-based lender with over 200 offices and licensed in all 50 states. Bill Beresford, Kim Martin, Jasmine Brown, and Paula Ott round up the dynamic leadership group based in the Greenwood Village, CO operational hub that includes local processing, underwriting, closing & funding. With a platform focused on growth, automation, and technology, Gavin and his crew are focused on dominating and expanding their footprint in CO, UT, AZ, and NV. If you’re looking to align with a visionary leader, in house operations, a company built around culture, and direct servicing, contact Gavin Ekstrom (720-231-6999).
Congratulations to Eric Kulbe and his team on their move to Synergy One Lending, a Mutual of Omaha Bank company. Kulbe has been a top producing loan originator, branch manager, national performance coach and Regional Manager for over 15 years. Kulbe joined Synergy as VP, Market Production Leader and is responsible for helping Aaron Nemec, EVP, National Head of Production, drive Synergy’s sales, recruiting, market expansion, and business development across the country, among other responsibilities. For more on why Kulbe joined Synergy, please click here. Synergy is one of the fastest growing mortgage lenders in the country. If you're looking for opportunities to learn more about the power behind Synergy’s bank-banked value proposition, please contact Eric Kulbe (303-717-0293) or Aaron Nemec (208-794-7786).
Tired of fighting the good fight alone? If you’re a business manager with a bust-their-tail team, who could use a re-direction on strategy and a few more resources to flourish, then you should consider aligning your business with a lender that has been certified as a Great Place to Work. While many mortgage companies are cutting staff and facing reduced volumes, Nations Lending Corporation (NMLS #32416) continues to show growth. The company is looking to grow immediately in the Denver, Philadelphia, Las Vegas, Phoenix, Seattle, and Chicago regions – just to name a few. Ideal candidates for this Retail Branch Sales Manager will have at least 2 years’ experience as an LO, and ready to roll as a top player in this strategic initiative with Nations Lending. If interested, contact Division Sales Manager, Jordan Gerard (337 501-0155). For more information and opportunity on how to join our growing organization, please visit the company's website.
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