How about this note I received from the owner of a non-bank lender in the Northeast. “Rob, in your conversations with CEOs, is anyone talking about cutting LO comp levels? It seems that some of my LOs expect corporate to absorb all the margin compression. Some have even argued for pricing that would lead to a loss for corporate. I am not in this business to run a non-profit or suffer a loss just so the LO can make money. Is ‘sharing the pain’ a conversation topic?” Yes, it is. But it’s tough to recruit when doing that. No one wants to be the first. And LOs argue that they “share the pain” due to not getting the deal, and inflexible comp plans caused by poorly-written regulations.

Company News

It isn’t the first and won’t be the last. FGMC (First Guaranty) closed its wholesale channel. (This is about 2 months after FGMC stopped wholesale construction lending.) Sent out were the usual deadlines for brokers to submit new apps (3/9), locked (3/16), refis to close (4/25), and purchases to close (5/1). “FGMC remains committed to the TPO space through its growing correspondent and non-delegated business units.”

Similar to the credit union percentage of the biz, the broker channel accounts for about 12% of the origination pie, and perhaps with that in mind that First Guaranty pulled out. “Behind the scenes” reasons ran the gamut. They included changes of ownership (PIMCO), inability to change its brand & product focus, unrealistic volume goals set by the parent, the decline in margins, shifting department reporting, unresponsive management, and lack of competitive technology.

At the other ends of the scale, TruHome Solutions, a mortgage Credit Union Service Organization (CUSO) headquartered in the Kansas City area, announced four new credit union partnerships: Las Colinas Federal Credit Union (Irving, Texas), University Credit Union (Los Angeles, California), Princeton Federal Credit Union (Princeton, New Jersey), and 121 Financial Credit Union (Jacksonville, Florida). “In all, TruHome’s new partners serve more than 100,000 members and have combined assets of nearly $1.4 billion…Owned 100% by credit unions, TruHome offers a full suite of flexible, private-label mortgage origination, secondary market, and servicing solutions to credit unions nationwide. TruHome uses a consultative approach, leveraging extensive industry expertise to identify the best strategies for each credit union’s mortgage program.”

Royal Bank of Scotland Group has reached a $500 million settlement with New York state to resolve claims over its sale of risky residential mortgage-backed securities that contributed to the 2008 global financial crisis. New York Attorney General Eric Schneiderman on Tuesday said the accord includes a $100 million cash payment to the state, plus $400 million of consumer relief for homeowners and communities. Schneiderman said RBS admitted to having sold investors residential mortgage-backed securities that did not meet underwriting guidelines, contrary to its representations, and did not comply with applicable laws and regulations.

Capital Markets

U.S. Treasuries finished Tuesday flat, as potentially positive news on denuclearization of the Korean peninsula dominated headlines for both the news cycle and markets. South Korea's envoy to North Korea produced an agreement for a summit to be held in April and a hotline to be reestablished.

Turning to economic releases, January factory orders for manufactured goods declined for the first time in six months on the heels of an upward revision in December. Excluding transportation, orders were up, demonstrating understandable softness after what has been an extended pickup in new order activity. Durable goods orders dropped 3.6% in addition to a 10.0% decline in transportation equipment orders.

The big news after the market close was the resignation of National Economic Council Director Gary Cohn due to a tariff tiff. Cohn was instrumental in shepherding the tax legislation through Congress, so the most important economic deliverable (taxes) of the Trump administration has occurred already. Deregulation is the second most important piece of the pro-growth Trump economic platform, but this is more an ongoing incremental process rather than a discrete action and isn’t likely to be disrupted by Cohn’s absence. And the markets never placed high odds on the third piece of the Trump economic platform (infrastructure spending) and thus Cohn’s departure won’t shift expectations. Trump is apparently considering a slew of people to replace Cohn including Andy Puzder, Larry Kudlow, Kevin Hassett, and Peter Navarro.

We have had weekly mortgage applications from the MBA for the week ending March 2 (roughly flat). We’ve already also had some Fed speak with Atlanta's Bostic, a voter, sharing his economic outlook in Ft. Lauderdale. This comes before New York's Dudley participates in a conversation and presentation with economists on current economic conditions and recovery efforts following last year's hurricanes. The February ADP report was released. Expected to add 220k jobs to private payrolls, it was stronger than expected at +235k. We’ve also had January trade (trade deficit widening to $56.5 billion) and Q4 (final) productivity (no change – weak) and unit labor costs (+2.5%, strong). The Fed will release the latest Beige Book at 2PM telling us what is going on around the nation. Today commences with rates not much changed versus last night’s close: the 10-year is yielding 2.86% and agency MBS prices are better a couple ticks (32nds).

Jobs, Business Opportunities, Promotions, and Products

"We at City National Bank believe that establishing and cultivating complex financial relationships will always require genuine high-touch service which produces results that exceed our discerning clients' expectations.  Financial expertise, trust and authenticity are the basic qualities we hold in the highest regard and consistently apply to the client experience. If you believe you qualify for the City National brand of mortgage banking, we look forward to hearing from you. With the sales team now under the direction of Josh Copeland (formerly of AIG Investments and Bank of America), we are searching for both Private Mortgage Bankers and Private Mortgage Banker Leads in New York City, Orange County/San Diego, the Bay Area and the greater Los Angeles area. Both roles call for entrepreneurial mortgage bankers who specialize in sourcing and cultivating banking relationships with high-net-worth clients, while providing City National's extraordinary client service." To learn more, visit CNBCareers or contact Bridget Purviance, Talent Acquisition, at 213-673-9155.

Angel Oak Mortgage Solutions is off to a hot start in 2018. And they’re continuing to add to its dynamic roster by adding Wholesale Account Executives in markets across the country, specifically in San Francisco, Sacramento, Seattle and New Orleans. To continue to deliver an extraordinary customer experience while realizing record monthly volumes, it is also hiring underwriters and other operations positions in Atlanta and Dallas. As more companies realize the benefits of offering non-QM products, it only makes sense to work with the market leader. If you are interested in learning more, contact John Wise (818.391.4131).

Floify, the enterprise-grade mortgage automation solution that supports more than 300,000+ registered users, has just elevated the bar when it comes to advancing workflows for big mortgage lenders. Floify’s white-labelable solution – which features an embeddable, and customizable 1003; a secure point-of-sale portal for borrowers; automated loan status updates via email and SMS; and, mobile apps for iOS and Android – has even more incredible improvements in the works. Enhancements to the platform’s Disclosure Desk continue to revolutionize the way lenders manage and track disclosures by centralizing the process across an enterprise’s origination teams. Using Floify, countless businesses have reported a reduction in their loan production costs and a significant improvement to the entire mortgage experience for their borrowers. To see how Floify can help you streamline your enterprise’s mortgage workflow and get the inside scoop on their upcoming features, request a live demo of Floify.

PennyMac has launched its wholesale Broker Direct division, providing the people, process and technology to help brokers succeed. The firm is interested in hiring wholesale Account Executives in the greater Los Angeles and Ventura County areas. This is a great opportunity to join a market leader on the ground floor of its exciting new division. For more information, please reach out to Matt Sjolund at (805) 225-7352. NMLS ID# 35953

Reverse Mortgage Funding LLC is offering a free, in-person “Reverse Mortgage Jump Start” accelerated learning course, one in Redondo Beach on Wednesday, March 21 , and another in San Diego on Thursday, March 22 . Each half-day session will be from 10:30 a.m. to 3:00 p.m., with lunch included. Find out how you can easily add this missing piece to your product mix, with a team of industry-leading professionals on your side. If you’re originating mortgage refinancing, home purchase loans, and/or lines of credit and not offering reverse mortgages, you’re missing out on a huge market opportunity — homeowners and homebuyers age 62+. This is a great way to learn the ropes and how you can get started. Admission is free, but seating is limited so reserve your place today!

So, as the world shifts to a purchase market, those lenders that have positioned themselves well are ready to win, while those that relied on refinances as their main business scramble to find ways to survive. One such well-positioned lender, Wintrust Mortgage, is looking for terrific like-minded individuals at every level (LO, Branch and Area managers) to expand in the markets they serve while branching out in other markets to take advantage of their 50 state lending, licensing exception, full product menu, robust marketing department and tools AND their culture of doing the right thing for the customer and their employees. Wintrust is also looking for acquisitions of well-run companies. If you are an owner producing more than $100mm, Wintrust would like to have a confidential conversation with you.  Send your information to me or reach out to Bob Shield, Wintrust’s EVP and National Sales Manager, at 847.939.9361.

David Mills has joined the Credit Union and Community Bank Division of Finance of America Mortgage as Regional sales Director. Congratulations! In this role, David will be charged with supporting credit unions and community banks in Illinois, Indiana, Kentucky, Missouri, Ohio, Tennessee and West Virginia in their development of a customized mortgage lending solution to serve the needs of their members and clients.

And congrats to Lee Wardlow who BOK Financial Mortgage, a division of BOK Financial, hired to lead its mortgage servicing business. Based in Dallas, Wardlow will serve as director of loan servicing for BOK Financial Mortgage, operating as Bank of Texas. He will lead all mortgage servicing functions for BOK Financial Mortgage including servicing, non-performing servicing, servicing administration, cash and investor accounting for the servicing portfolio of $23.1 billion/144,000 customers.