Boss: "Working hard here, Jimmy?" Jimmy: "Yep, ever since I heard you coming down the stairs!" Mortgage banks are working hard, but banks and other financial institutions have the inside track when it comes to offering other products – more a few paragraphs down. While we’re talking about working, here’s a column from the Sunday New York Times’ Adam Bryant on how to hire the right person from his interviews with CEOs.

Changing business models for financial institutions

There is no law barring financial institutions from branching out into offering other services, and in fact many use this tool as a way to expand and recruit. SoFi, for example, notes that nearly 30% of its clients take advantage of other product the finance company offers. Lenders such as California's Opes Advisors gives loan originators the potential for training in financial planning consulting.

I mention this because this week it was announced that PNC Bank ($366B, PA) will acquire the US equipment finance business of Canadian company ECN Capital for about $1.3B in cash. The move gives PNC $1.1B in loans and leases. Indiana's MainSource Bank ($4.1B will acquire independent investment advisory firm First Service Capital Management Inc. (KY). B. Riley Financial will acquire investment banking firm FBR for about $160mm in stock. Synchrony Bank ($72B, UT) will acquire health card portfolio Citi Health Card from Citibank for an undisclosed sum. The move gives Synchrony 110,000 consumer accounts and connections to more than 14,500 providers.

And for various reasons depository banks continue to merge. In Indiana First Merchants Bank ($7.2B) will acquire the remaining portion of IAB Financial Bank ($1.1B) for about $251mm in stock, after purchasing 12% prior. West Town Bank & Trust ($280mm, IL) will acquire Sound Banking Co. ($185mm, NC) for about $24.6mm in cash (35%) and stock (65%) or roughly 1.4x tangible book. The mother's milk of banking is lending, of course, and earning the spread between what they pay for deposits versus what they earn by lending.

And through it all lenders continue to want to help their clients in a compliant, cost-effective manner while keeping an eye on what is happening in Washington DC. Word went out this week about a "Call to Action" from the MBA and others to tell your Representative to support and assist H.R. 916, a bipartisan bill that prohibits unfair housing taxes. In other words, not to use the g-fee to support other government operations.

"Answer the Call to Action. It literally takes 2 minutes to support your clients, your neighbors, and your industry. Do you remember when G-Fees increased to pay for 2 week extension of unemployment benefits? Do you remember when Congress tried to raise G-Fees to pay for the Gulf Coast Cleanup? Do you remember when Congress tried to use G-Fees to pay for highways? When G-Fees go up, consumers pay more and housing affordability is already an issue in this country. The bottom line is simple. Artificially raising the price of homeownership to pay for non-housing items is bad policy and possibly unconstitutional. H.R. 916 is a great example of bipartisan 'make sense' legislation which will prohibit taxing homeowners to pay for non-housing related items. (READ THE BILL HERE)."

We don't need to make loans more expensive for consumers, especially with some of the drop-offs in business many are already seeing. Freddie Mac has a somewhat gloomy outlook for origination this year, forecasting a drop of 25% from 2016's level of $2 trillion in origination. Their team sees the 30-year mortgage rate averaging 4.4% and total home sales falling from 6 million to 5.75 million. House price growth is expected to moderate to 4.7% from 6%. Freddie Mac is baking in some possibility of expansionary fiscal policy coming out of Washington, especially with respect to tax reform, where an increase in the standard deduction will reduce the incentive to itemize and reduce the subsidy from the mortgage interest deduction.

Interest rate news

Hah! There is none, except for, "There's more buyers than sellers." The only scrap of information may have come from Treasury Secretary Mnuchin who said that most of the administration's fiscal policies would have a larger growth impact starting in 2018. And that sure isn't this year. But remember that lender volumes are declining, and the laws of supply and demand suggest higher prices and lower rates. By the time the day ended the risk-free 10-year's price had improved .250 and the yield was 2.39%, and the 5-year and MBS prices rallied .125-.250 depending on coupon and security.

There is some good news, and that is that the Fed does not appear to be in any rush to shrink the balance sheet, i.e., divest itself of its trillions of dollars in Treasury securities and agency MBS.

There was no early morning news today, but at 10AM ET we have Michigan Sentiment (the final number for February) and New Home Sales for January. Out of the gate this morning the 10-year is at 2.36% and MBS prices are better by nearly .125.

Events & Training 

Fannie Mae is offering three additional Day 1 Certainty eLearning courses: Implementing Day 1 Certainty focuses on the benefits, process, technical information, and quality control considerations for the DU validation service, Property Inspection Waiver (PIW), and certainty on appraised value. DU Validation Service Overview of Income, Employment, and Assets uses detailed examples to cover how income, employment, and assets are evaluated by the DU validation service. (DU and/or Fannie Mae Connect user credentials are required to access this course.) And DU Validation Service Quality Control Overview reviews Fannie Mae's requirements for lender QC in connection with the DU validation service, including process efficiencies.

MGIC is offering a wide range of webinars throughout the month of March. Trainings include topics such as the fundamentals of the Mortgage Process, Millennials: Obstacles, Opinions and opportunities, and Analyzing Self-Employed borrowers business and personal tax returns.

Are you looking for something more than the typical mortgage conference to attend this year? I recommend checking out Todd Duncan's Sales Mastery Event. I attended Sales Mastery last year and can tell you first hand that it is head and shoulders above the typical conference experience. This year is the 25th anniversary of this industry changing conference and will be in San Diego California October 3-6. I'll be there, how about you?

Jobs and Announcements

In job news, SecurityNational Mortgage Company (SNMC) is among the TOP 50 mortgage lenders in the country and is looking for producing Branch Managers that want to take the next step as an Area Manager in Wisconsin, Minnesota, Illinois and Nebraska. Security National is on solid ground and has been in the financial business for over 50 years and is backed by a public traded parent company, Security National Financial Corporation, (SNFCA-NASDAQ). The company is approved with FNMA, FHLMC, and offers many non-agency products, superior customer service, in-house processing and underwriting, and a full service marketing and advertising department. The company has won a variety awards including the Best of State, Top Places to Work, Scottsman Guide 'Top Mortgage Lender', CEO of the Year, Sales and Marketing Team of the Year (SAMY Award), and more. If you are interested in making a transition to a solid, growing company contact Justin Pater.

"The non-QM market is hot and picking up steam!  While the rest of the market is watching their pipelines shrink, Angel Oak Mortgage Solutions broke a volume record in December and is continuing its aggressive growth in 2017. Management is looking to more than double their sales force this year to take advantage of the fastest growing segment of the mortgage industry. With an industry-leading reputation for delivering an extraordinary mortgage experience, they are also looking for underwriters and other operations positions to support this growth in their Atlanta headquarters. If you're an experienced Wholesale Account Executive or have ever considered becoming one, don't sit around while others take advantage of this growing market. Join the nation's top Non-QM lender by emailing careers@angeloakms.com to start the conversation or watch this clip from their Top Mortgage Employer's interview for more information.

New America Financial is proud to announce the company's approval as a seller/servicer with the Federal Home Loan Mortgage Corporation (Freddie Mac). This recent approval allows New America Financial to extend its offerings to include Freddie Mac Home Loans in addition to the wide range of exclusive mortgage products already offered. President Michael Rappaport stated, "New America Financial is one of only a recent selected few mortgage lenders in the region to obtain Freddie Mac Seller/Servicer approval and it allows us to extend the range of mortgage products we offer and provide even greater opportunities to open the doors of homeownership to our borrowers. I am proud of the work done by our CFO, Bill Napier and our Executive Leadership Team, who worked diligently with Freddie Mac to achieve this approval." New America Financial currently has pending approvals with Fannie Mae as a seller/servicer and Ginnie Mae as an approved issuer. A fast growing 5-star rated mortgage lender, New America Financial currently lends in 10 states and the District of Columbia.

Congrats to Cheri McCarthy who National MI has brought onboard as a Regional Team Leader in New England. "Cheri comes to National MI with a wealth of experience in the mortgage insurance industry, and brings her strong relationship-building skills to the Northeast team. She'll partner with Account Representative Annmarie Kiley, and will cover the North Shore of Boston, ME, NH, and CT.  To contact your sales advisor in your region, please go to NationlMIAdvisor."

National MI also announced some industry moves by a couple of its employees. Kansas and Western Missouri account manager Robin Logan has been named to the board of directors of the Mortgage Bankers Association of Greater Kansas City (MBAKC). Logan is serving as the association's MI liaison. She has over 24 years of experience in the mortgage industry in wholesale correspondent lending for independent mortgage lenders as well as for banks. And Illinois account manager Jason Wroble has been named to the Illinois Mortgage Bankers Association's board of directors (IMBA). He has served in several other positions at the IMBA, including: member of the IMBA Secondary Committee and co-chair of the IMBA's Young Professionals Network. Previously, Wroble served as 1st vice president and director of the Illinois Association of Mortgage Professionals.

At the other end of the curve, S.A. Ibrahim, Radian's CEO, had some comments on the retirement of Radian Guaranty's president Teresa Bryce Bazemore. "Earlier this week, Teresa informed me that she plans to retire from Radian at the end of April. Having spent the last 10 years leading Radian MI to the top of its industry, Teresa has decided that now is the right time for her to consider new opportunities and challenges. For so many of us, Teresa has been an incredibly important part of the Radian community, both personally and professionally, and we cannot thank her enough for all she's accomplished during her time here. 

"I've had the privilege of knowing Teresa for more than 15 years. She is one of the first people I recruited to join the Radian team after I came aboard in 2005 - one of the best decisions I ever made! Teresa joined Radian in 2006 as executive vice president, general counsel and corporate secretary and soon took over as our chief risk officer. In this role, she helped transform Radian's credit risk profile and then in 2008 was appointed president of our MI business. Over the past nine years as president, Teresa helped double our market share, attract new customers while exploring new markets and technologies, and form lasting relationships that have helped position Radian as a market leader...She will be greatly missed." Teresa, let me know if you want to help out writing a free daily commentary on the biz...