I didn’t know that America has a “most hated” type of home loan until Bloomberg “informed” me that reverse mortgages are… hated. Hated? Couldn’t the author have focused on the positives? Did you know that 87% of properties across the country are in an area eligible for 1 or more home ownership programs? Apparently.

Lender Products and Services

For a limited time only, NewRez Wholesale is offering free appraisals for Smart Series loan products (up to $650) and for FHA loan products (up to $550) through the month of March. This offer is available for new submissions only and loans must be locked by March 31st. Contact your AE today to learn more about how you can get an appraisal fee credit at your borrower’s loan closing. Some exclusions and restrictions apply. www.newrezwholesale.com. NewRez is a national mortgage lender that offers agency and non-agency lending solutions to brokers and community banks.

Caliber Home Loans, Inc. is celebrating the one-year anniversary of launching its suite of mobile apps. Since launching the three apps in the App Store and Google Play, the relationships customers, agents, builders, and business partners have with Caliber has changed. With real-time information on everything from accounts to loans in-process, working with Caliber has never been easier. The Caliber Home Loans app has been downloaded over 110,000 times by customers and received almost half a billion dollars in mortgage payments! The CaliberH2O app has widely been adopted by Caliber Loan Consultants, Account Executives, and its Wholesale Business Partners and even has a five-star rating among Android users. Agents and builders have rated the Caliber MyPipeline app as five stars in both the App Store and Google Play. Caliber is celebrating its one-year APPiversary today on social media, and invites you to say ‘Congrats Caliber’ with a LIKE.

“Are you a retail loan originator, retail branch manager, direct lender or banker? Tired of losing clients and the up and downs at your retail shop? Have you considered making the move from retail to independent? BeAMortgageBroker.com can help. We are your single, no-cost source for the information, support and tools you need to become an independent mortgage broker. We can help you take the next steps toward opening your own mortgage broker shop or help match you with an independent mortgage broker in your area. Call us for a free, confidential consultation and continued support throughout the process at 800.229.6342 or learn more at BeAMortgageBroker.com.”

Capital Markets

Rates could very well sit around these levels all year. (Margins may do the same, as well as volume – is your company ready for the last six months of 2018 for all of 2019?) Regardless, there are still questions from LOs about long-term locks or float-down options (reminding me that this biz gives borrowers a free “put” – who else does that?). Sure, some of these products may just to provide conversation fodder with builders or real estate agents, require an up-front commitment fee, or have extra margin initially priced in. Most locks past 90 days include a float-down option. Once you start trying to hedge products past the typical settlement period of MBS, things become complicated. A good primer can be found at MCM’s site that is worth a review – the mechanics haven’t changed.

The creation of the UMBS (and its rare that capital markets folks have something new to deal with) has sparked some chatter. First, Julian Gutierrez, Director of Fixed Income with Stifel, shot me a note saying, “What to call UMBS? ‘Uni’ & ‘Puni.’ I received tremendous feedback on the email I sent out from customers and market participants. Rumor has it that the chairman of SIFMA has the suggestion in the in-box. The Uni/Puni train got rolling last week, I think it makes sense and we should have fun with it.”

And RiskSpan has been publishing a series of prepayment reports for the FHFA. Bernadette Kogler, CEO of RiskSpan, writes, “FHFA publishes these reports on a quarterly basis and they can be found on the FHFA website. We are happy to answer any questions.”

With nearly all indications for the Fed being on hold for much of 2019, we’ll probably see rates in a narrow range but still see them go up and down. Yesterday they moved a little higher, with the 10-year closing at 2.63%, despite a weaker-than-expected New Home Sales. Why? I don’t know, and it could just as easily reverse this today. Jobless Claims showed that employers are reluctant to cut staff due to tight labor market conditions, and import/export prices showed no inflation pressure.

The British Parliament rejected a second Brexit referendum, but voted in favor of extending Article 50 until June 30 at the latest. The UK House of Commons voted 412-202 to postpone Brexit. The delay will be short if lawmakers approve a Brexit agreement by Wednesday but will be longer if Parliament remains undecided. The delay still needs to be approved by all 27 member states of the European Union. Japan's government might slightly downgrade its economic assessment in the March report. But overall kind of a snoozer of a day.

This morning we’ve already had the NY Fed Manufacturing Index for March (+3.7, lower than expected). Coming up are February industrial production and capacity utilization, preliminary University of Michigan Consumer Sentiment readings, and January JOLTS job openings. Friday begins with rates and agency MBS prices little changed from Thursday night’s close (the 10-year is yielding 2.61%).

Employment and Business Opportunities

A seller/servicer of MSRs is looking to partner with an investor looking to purchase $10B+ of Ginnie Mae and Agency MSRs on a subservicing retained basis. Ideal partner will have an appetite for ongoing flow/bulk purchases of MSRs in excess of $10B+/yr. Seller is specifically looking for a partner who is interested in Ginnie Mae MSRs. Interested parties should email Anjelica Nixtfor forwarding a note of interest.

Symmetry Lending, the “HELOC specialist that’s committed to service, speed, and simplicity, is growing and adding to the team! As we celebrate the launch of additional geographies, Symmetry is seeking Area Managers in several locations: California, Nevada, Maryland/DC/Virginia, Connecticut/Massachusetts, and Florida. Symmetry is currently active in 21 states, with many more scheduled for launch this year! With Symmetry’s commitment to Service, Speed, and Simplicity, this is a unique opportunity to join the team early, capture your own territory, and deliver a special experience to your wholesale broker/banker relationships. Contact us at careers@symmetrylending.com.”

If you are assessing whether you are getting the support you need to thrive, now is the time to check out the American Pacific Mortgage Spring Sales Summit. This highly anticipated event is crafted specifically for Mortgage Originators and Branch Managers so they can interact and collaborate with leadership, top producers and industry thought leaders. Come join us as our guest and discover first-hand how APM operates and commits to supporting our Originators with the tools, strategies, and resources to deliver exceptional customer experiences to grow your production. The Summit is happening in 5 key cities. Watch this short video to get a taste of what to expect and see what you are missing! For qualified candidates that want to take a serious look, contact Dustin Block (303-378-3166) for a complimentary VIP guest pass.  

AHP Servicing is a socially responsible loan servicing company located in Chicago. It has an innovative and crowdfunded business model - using funds raised from many individual investors to purchase past due mortgages. Staff works with homeowners to find a way to modify or settle the debt, keeping borrowers in their homes and investors earn a preferred 10% annual return. AHP Servicing is excited to be adding a Chief Operating Officer. The COO will oversee corporate administration, technology, servicing, and more. The COO will lead a team of experts in their respective fields and ensure that their business systems, processes, and team are designed to scale. AHP Servicing provides great benefits, a collaborative environment, and the chance to know that the work you do makes a difference. If you’re an expert in mortgage servicing with a high degree of regulatory knowledge, let’s talk.  Please submit your resume to Kim Rociola.

Congratulations to Aaron Duca on his move to Synergy One Lending, a Mutual of Omaha Bank company. Duca has been a top producing loan originator, branch manager, area manager and District Manager for over 15 years. Duca 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. 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-backed value proposition, please contact Aaron Duca at (469-964-0481), Aaron Nemec at (208-794-7786) or visit https://joinsynergy1.com.

Mergers and Acquisitions

I received this cable from STRATMOR Partner Garth Graham. “As you know, there is a lot of M&A activity going on, in fact STRATMOR has been involved in more deals in the last three months than we did the entire year prior. Most of these deals are asset deals, leaving behind the corporate entity that is then available as a ‘shell’ for other entities who may be wanting to enter the space or obtain the agency tickets. These shells are marketable, especially if the selling entity has been well run, originating low risk product and thus has a low tail risk associated with their legacy production. In fact, STRATMOR has such a ‘shell’ available now, which has Fannie, Freddie, Ginnie approvals and multiple state licenses.” Interested buyers should Garth Graham directly.

Certainly the "seller's market" for lenders has diminished as the difficult financial environment continues. But buyers still encounter some degree of seller resistance. Owners are "serial entrepreneurs" who are reluctant to forego their independence. After running their own show for a long time, will they be happy reporting to a boss? Culture is a huge determinant, and any LO comp differences must be ironed out. Retaining the seller's current management team is often mentioned as an issue despite the potential cost savings to the buyer from eliminating duplicate positions. The companies don't need two HR departments, two IT departments, two compliance groups...

Recall that when President Trump signed legislation modifying regulations imposed after the credit crisis, banks with assets greater than $10 billion immediately surged onto the radar screen as acquisition targets. That's due in large part to the fact that the new law raises the asset threshold for systemically important financial institutions to $250 billion from $50 billion. As such, banks with assets of $25 billion on up to about $200 billion can now buy smaller banks without having to deal with onerous regulatory scrutiny and limitations as to how they deploy capital. Banks $10 billion or larger in assets will likely see a significant surge in selling in the next few years, as larger banks ramp back up their M&A activity. In the last three weeks it was announced that…

BancorpSouth Bank ($18B, MS) will acquire Summit Bank ($472mm, FL) for $100.3mm in cash (20%) and stock (80%) and it will also acquire Texas Star Bank ($378mm, TX) for $86.7mm in cash (20%) and stock (80%) for an aggregate transaction price to tangible book of 1.89x. UMB Bank ($23B, MO) will acquire the corporate trust business of Bankers Trust Co ($4.6B, IA). In Wisconsin Horicon Bank ($756mm) will acquire Markesan State Bank ($127mm). In Oklahoma High Plains Bank ($95mm) will acquire State Guaranty Bank ($50mm). In Pennsylvania Somerset Trust Co ($1.2B) will acquire First Bank of Lilly ($21mm) for $3.4mm or 1.0x tangible book. Arkansas’ Stone Bank ($372mm) will acquire De Witt Bank and Trust Co ($94mm). In Illinois Wintrust Financial (31B) will acquire Oak Bank ($196mm) for $46mm in cash and stock. In Florida Fairwinds Credit Union ($2.3B) will acquire Friends Bank ($95mm). Up in Massachusetts Abington Bank ($314mm) will merge with Pilgrim Bank ($266mm).

Citizens Financial Group ($161B, RI) will acquire M&A advisory firm Bowstring Advisors (GA). Exchange Bank ($2.6B, CA) will acquire the CA trust and wealth management business of American Trust and Savings Bank (IA) for about $375k and get $85mm in assets under administration. Texas First Bank ($1.1B) will acquire Preferred Bank ($283mm. River Road Financial (LA) was formed to facilitate the acquisition of a commercial bank and is doing just that with the proposed acquisition of Mississippi River Bank ($112mm, LA). German American Bank ($3.9B, IN) will acquire Citizens First Bank ($476mm, KY) for $68.2mm in cash (23%) and stock (77%).