Depository banks are in the business to lend, and are now concerned about commercial lending. What do Cleveland, Memphis, and Chicago have in common? They're overbuilt. Cleveland alone has added 21 million (yes, million) square feet of retail space since 2000 just as e-commerce began to make retail space less valuable. Speaking of banking, lender Social Finance (SoFi) applied with the FDIC on June 6 to obtain a de novo bank charter. The application is open to comment through July 6.

Capital Markets

Although we've seen some volatility this morning, it was all quiet on the Western Front yesterday, and in fact for nearly a week, in the bond markets. The only news was the Producer Price Index which barely budged rates, and the 30-year bond auction didn't move the market either. There was a bit of intra-day volatility, and MBS prices did move a shade higher but not enough to register on rate sheets for borrowers. Once again volume in treasuries as well as MBS was below recent averages and the 10-year closed Tuesday yielding 2.21%.

For news, today we've seen the MBA's weekly report on mortgage applications (+3% with refis +9%), May Consumer Price Index (CPI: -.1% and +1.9% year over year, core +.1%), and Retail Sales (poor at -.3%). Later the Federal Open Market Committee doles out its release of the Statement and Summary of Economic Projections, followed one-half hour later with Chair Yellen's post-meeting press conference. We begin the day with rates lower versus yesterday: the 10-year's yield is down to 2.16% at and agency MBS prices are better by a solid .250.

HUD, FHA and VA Changes

The MBA Urges VA to Evaluate 'Allowable Fees' Policy.  In a June 12 letter to the U.S. Department of Veterans Affairs, the Mortgage Bankers Association called on the VA to review its allowable fees policy for veterans, which have remained unchanged for 63 years.

Per HUD requirements, lenders must select an FHA-approved 203(k) Consultant from the FHA 203(k) Consultant Roster in FHAC. The HUD Consultant must be selected from an approved list that has also been reviewed by Sun West prior to ordering any Consultant services or making any agreements with the Consultant or the borrower.

Mountain West Financial is making enhancements to its VA Jumbo product. Loan amounts are being increased as follows: $1,000,000.00 with a 620 FICO score. $1,000,001 - $1,500,000 with a 700 FICO score.

FHA 203B or 203K loans with the $100 Down Program are now permitted through M&T Bank. Reference the M&T FHA UES for specific criteria and FHA Handbook 4000.1 for more information of HUD REO requirements. Correspondent Lenders will need to register the loan in MEME at 96.5% and email nationalcorrespondent@mtb.com with the correct loan amount and LTV. 

Tech and Processing News

Remember when the industry saw companies that specialized in the secondary markets - like investment banks - try to enter the primary markets and truly help borrowers? It didn't work so well, as I recall.

But Reuters reports that Morgan Stanley is developing a new digital mortgage application tool in a bid to get more of its existing clients to turn to it for home loans, its wealth management technology head Naureen Hassan said. "Morgan Stanley has invested heavily into growing its residential mortgage and customized lending business in recent years. But only 2 percent of current clients have home loans with the bank, per Morgan's chief digital officer for wealth management. Hassan said the new tool will allow clients to get rate estimates, upload documents and apply entirely online. She did not say when the bank planned to launch the platform. Morgan Stanley will roll out a pilot version of Zelle later this month, with plans to expand the service more broadly this fall. Zelle was developed by an industry consortium and will be used by several big U.S. banks, including JPMorgan, Bank of America Corp (BAC.N), Wells Fargo & Co (WFC.N), which plan to launch it to customers this month.

According to the 2016 STRATMOR Technology Insight Survey, that large lenders are more likely to use proprietary systems but many are looking to move on to commercial-off-the shelf systems. STRATMOR's 2017 Technology Insight Survey (TIS) captures lender perspectives regarding the functionality, vendor support and implementation experience and success of commercial-off-the-shelf (COTS), proprietary Loan Origination Systems (LOS) and other origination systems. Your Loan Origination System (LOS) is the single most important piece of technology running in your mortgage company. It is the backbone of your process. By completing this survey, you are letting your peers and LOS vendors know how your LOS is or is not working for you. This is your opportunity to provide feedback on a topic vital to all lenders, especially those considering updating or changing their existing systems.  To take the survey, click here: http://www.stratmorprograms.com/2017TechSurvey

People like lists, and the top 25 "tech cities" were determined by analyzing six metrics that the Cushman & Wakefield researchers deemed the key ingredients in creating a "tech stew." They are: institutions of higher learning, capital, tech workers, knowledge workers, educated workers and growth entrepreneurship. San Jose and San Francisco rank first and second among top U.S. tech cities in a new report. But the top 25 list published as part of the Tech Cities 1.0 report also includes some more unexpected markets, such as Madison, Wis.; Columbus, Ohio; and Kansas City (#22).

MB Financial Bank is no longer requiring IRS transcripts for salary, W-2 borrowers for most Conforming, FHA, and VA loans.  IRS transcripts will still be required for self-employed borrowers, rental income and when commission income is more than 25% of qualifying income.

As of June 5th, Mortgage Solutions is requiring that disclosures be processed and sent by Mortgage Solutions Financial for any wholesale loan submission.  Resources to support the new processes are available.

Wells Fargo Funding has seen an increase in compliance/convenience fraud as technology makes it easier to alter documents and lift signatures from one document to another. Ensure employees understand the severity of convenience fraud and educate borrowers on the importance of signing and dating all forms accurately. Also, regarding assets and income, make sure to document and verify any large income increases/ recent job changes. Obtain third-party validation when practical/possible. Document and source any large deposits. Confirm relationship between borrower and gift donor and ensure source of funds has been vetted. In addition, there has been an increase in undisclosed foreclosures, which could affect a borrower's ability to qualify. Borrowers who have a foreclosure within the past seven years, which is no longer reflected on the credit report, are not disclosing the foreclosure in the declarations within the loan application.

The California MBA is offering up the Western States Loan Servicing & Technology Conference August 6-8 in San Diego. "This year's tech-focused sessions will cover a wide variety of mortgage-related technology topics, including the following: Predictive Analytics and Big Data, Consumer Portals and Apps, Tech for the Ages: How are Baby Boomers, GenX, and Millennials Using Technology? Cyber Security/Privacy and Information Security. Obtain all the latest information on the event, agenda, sponsor opportunities, and more at www.LoanServicingTech.com.

Jobs, Products, and Companies Expanding

"Assurance Financial, a full-service residential lender, continues to grow and is hiring experienced MLOs for our branch in beautiful Charlotte, NC. What makes Assurance Financial different from other mortgage companies? We close loans on time. Assurance Financial's business model is different. We believe in supporting our LOs first, last, and always. Our operation is built around the branch, and the branch is built around our MLOs. Their success is our success. Also seeking LOs in CO, AZ, NM, LA, TX, MS, AL, TN, OH, FL, GA, AR, NC, and SC. Find out more from Paul Peters, CMB at 225-239-7948, or visit LendTheWay.com/careers."

Pacific Union Financial, LLC continues to grow its footprint in the Western region. LaNell Silverstein, has joined the company as the new Regional Wholesale Sales Manager for the Southern California and Arizona areas.  LaNell brings years of experience managing sales at companies such as Finance of America and Sierra Pacific. "I am very excited to join Pacific Union's Wholesale and Non-Delegated Correspondent Division. From leadership to the operations and sales team, Pacific Union Financial strives for excellence with a goal to provide the best experience for their brokers, Non-Delegated partners and borrowers. With my experience in Southern California and Arizona, my goal is to attract like-minded sales professionals and continue to aggressively grow Pacific Union in these markets," LaNell said. If you are an experienced Wholesale or Non-Delegated Account Executive in the Southern California or Arizona region and interested in joining a company that is financially strong with competitive products and pricing, please contact Greg Armstrong, West Division Manager or Susan Trejo, Corporate Recruiter.

E Mortgage Management, (EMM) has engaged in the next logical phase of business expansion by announcing the launch of its new non-delegated correspondent business channel. "The non-delegated correspondent lending channel will focus on serving lenders who have the resources to fund their own loans but elect on having those loans underwritten by the purchasing investor before the loan closes," stated Alan Michaels, President of EMM Wholesale Lending. EMM's Non-Delegated Correspondent business channel delivers a unique and instant, competitive advantage to Local Banks, Emerging Bankers and Credit Unions, looking to serve more clients with a full range of mortgage products and services. "The correspondent channel will help leverage our strength in wholesale pricing and operations while assisting our clients in growing revenue and loan volume without incurring substantial risk," continued Michaels. To become an approved Correspondent for EMM, lenders can click here.

Cardinal Financial Wholesale is pleased to announce the hiring of Tony Caico as VP of Talent and Business Development. Focused on aggressive growth, Cardinal will utilize Caico's broad experience in TPO and executive recruiting to attract and develop the industry's best sales talent. "I am honored and thrilled to be selected for this role with Cardinal Financial. With our revolutionary LOS, Octane, we will modernize and transform the wholesale industry and I'm ecstatic to be part of that movement," Caico said. "Tony's appointment reinforces our commitment and desire to develop a dominant Wholesale channel with a world-class sales team. Our 'We can do that!' culture and LOS automation will empower our AEs and brokers to thrive in an environment where their needs are always considered," said Amy Mahar, SVP-Director of TPO. Cardinal Financial is actively recruiting like-minded, forward-thinking Account Executives (AEs) who are leaders in their market. Is this you? Visit Cardinal Financial Wholesale to learn more or contact Tony Caico at (704) 504-7680.

"A leading provider of automated underwriting, pricing, and compliance solutions for financial institutions is seeking a Business Development Director to join our dynamic management team in Dallas. The ideal candidate should have a proven track record of developing long term relationships and selling to C-level executives within banks, credit unions, wholesalers and investors to drive company growth. This candidate will create and execute a cohesive national sales strategy and lead our seasoned financial sales team. Our work environment is engaging, and promotes creativity and collaboration among a team of passionate individuals. Together we strive to deliver innovative mortgage industry solutions with high customer value. Come make a difference with us. Please email your resume to: BusDev@LoanScorecard.com."