Who can you trust? Digital Journal reports new malware targets Google Chrome users with a pop up that indicates a new font needs to be installed for websites to load properly. Those who click on it download the malware. We can’t even trust the game Monopoly to be…immune from change. Monopoly, apparently thinking that “this will really liven things up & bolster sales,” has swapped out three of its game pieces (thimble, boot, wheelbarrow) for three new ones: a rubber duck, a T. rex and a penguin. But really, how often do you need to buy a new Monopoly game?
Zillow chatter
Yesterday the commentary mentioned receiving a note from one industry vet regarding Zillow, the CFPB, CIDs (Civil Investigative Demand), and a UDAAP charge for providing "substantial assistance" in allowing real estate agents/loan officers to knowingly violate RESPA. The opinion note continued:
"To the best of my understanding Zillow breaks down the % of value lender receives compared to agents by using a five-step calculation approach and assigns a weighting mechanism to it. So, if Zillow says a 50/50 allocation their internal calculations for the Lender's appearance on their Premier Agent website is the fair market value they have internal worksheets which might show that more than 10% of the overall calculation can be assigned to this metric. So, if one LO is paying $100 dollars for the website advertising on a 50/50 split, the internal Zillow numbers say that ALL of the LO's combined shouldn't pay more than $10. Zillow's co-marketing worksheet is something every lender across the US needs to ask for and analyze to ensure the mathematical calculations for fair market valuation.
"It is rumored that the Zillow Long Form program (designed for Lenders) is not a target by the CFPB. My compliance person thinks that if the CFPB does go after this type of advertising it could create some significant market disruptions for lending, so I do not see the CFPB coming down on this particular product. Zillow, however, is a licensed real estate brokerage so keep that in mind too. The industry should keep in mind the differences between the two programs (Long Form and the Premier Lender/Premier Agent), and do their own research.
"Zillow isn't the only one with issues though as Commissions Inc., Boomtown, Realtor.com, and others are also problematic and the regulators know it. Realtor.com, for example, only receives money from one party (typically the Lender) in a co-lead share arrangement and then sends the leads to the realtor directly and the realtor is responsible for sending those leads to the LO. As the industry saw in the Prospect case this is out of compliance in the CFPB's eyes from a RESPA perspective as those parties would both need to get leads separately and independently of each other which is why many lenders have pulled out of Realtor.com advertising over the last month. Regulators, including the CFPB, are concerned with real estate lead sharing/advertising portals in the market place in general, and we can all bet that state mortgage regulators have been communicating with each other as well as the CFPB."
(More notes on the subject this Saturday.)
Capital Markets
"Rob, has anything changed regarding the basic rating agency model, where the well-known agencies (Moody's, S&P, Fitch) are paid by the issuer to rate their MBS, and if the issuer doesn't like the rating moves on to another rating agency?" No, it hasn't changed. Don't forget the Moody's settlement - $864 million essentially for not following their own published ratings standards. What has been changing is the loss provisions & credit enhancements. Issuers now are holding back less than they were a couple years ago, with the percentages returning to levels closer to where they were ten years ago, to get deals done. Most agree that credit enhancement levels are still higher than they were pre-crisis, but we're still just a trickle of PL MBS issuance with so many other barriers still in the way.
Issuers and investors are looking to the Rating Agencies to develop and maintain credit standards across all assets sectors that can be relied upon. A tremendous amount of progress has been made developing those standards and confidence has been restored as a result. As security issuance volume increases, however, there is a growing concern that the Rating Agencies will resort back their post financial crisis ways by focusing on their revenue models and not on their credit models. The return of the Private Label Security market is critical for the non-agency mortgage market to deliver attractive mortgage products and rates to borrowers and provide continuous liquidity outlets for originators, the Rating Agencies play a vital role with this effort.
Turning to rates, yes, everyone (and their brother) thinks rates are heading higher this year. But even if short term rates head higher, we could still see long term rates not move as much, leading to a flatter yield curve. The "flat yield curve" is a yield curve in which there is little difference between short-term and long-term rates for bonds of the same credit quality. This type of yield curve is often seen during transitions between normal and inverted curves. For us novices, an easy way to think of it is if the Fed raises rates and 30-year mortgage rates don't budge.
When inflation is less of a concern, causing the spread (difference) between short term rates (less than a year maturity) and long term rates (10 years and beyond) to narrow. A flattening can also occur in anticipation of slower economic growth. And sometimes, the curve flattens when short-term rates rise on the expectation that the Federal Reserve will raise interest rates - and that is what is happening now.
And financial markets rarely march steadily in one direction anyway. Yesterday, for example, on a very light-volume day, U.S. Treasury and agency MBS prices traded higher, helped by declines in oil (less inflation) and equity markets helped to support buying of fixed-income assets. Chicago Fed President Charles Evans said that three Fed rate hikes in 2017 are "entirely possible" although the final number could be higher or lower depending on the economic outlook. Is this news to anyone? For numbers the 10-year improved .250 in price and ended yielding 2.47%; 5-year Treasuries and MBS prices improved about .125.
For news today, there is little of consequence although we will see the Q4 current account and the Philadelphia Fed Nonmanufacturing Index. And let's not forget the usual bevvy of Fed speakers. We commence Tuesday with rates slightly higher: the 10-year is yielding 2.49% and agency MBS prices are worse about .125 (depending on coupon) versus last night.
Free webinars
This year is off to an interesting start. And with the activity going on in Washington, higher interest rates and low listing inventor loan officers are asking ... Will 2017 be a good year for lending? and What initiatives should I take to ensure growth in my business? Join Dave Savage, CEO of Mortgage Coach, and Market Expert Dan Rawitch this Wednesday March 22, at 10am pacific to hear their perspective on interest rates and market opportunity for Spring home buying season. Dan and Dave will offer ideas on the best way to deliver market updates to Realtors to increase referrals and close more loans. Sign up here.
Video marketing has fundamentally changed the way top lenders are deepening relationships with prospects and clients while differentiating themselves from their competitors. Join Total Expert and BombBomb for a free webinar on Tuesday, March 21 at 2pm ET called "Capitalize on Video Marketing." We will cover how lenders are using video marketing to improve lead conversion, build relationships and increase referrals. Participants of this free, 60-minute webinar will walk away with the knowledge of how to lay the groundwork for an enterprise-level video marketing strategy and tactical examples to add video into their day-to-day communications. Seats are limited for this live webinar, so register today.
There are only 2 days left to register! 2017 is the year of mortgage tech integration. Is your LO team ready? Join me on Thursday, March 23rd at 1-2pm ET for my webinar The Future of Mortgage Technology. Loan officers are placing increasing demands on the technologies they rely on to grow their businesses. At the same time, they are experiencing "tool fatigue" as inboxes fill with pitches for products that promise end-to-end nirvana. But most LO's will tell you they don't need new tools, they just want the great platforms they already use to talk to each other. Moderated by tech industry veteran and Floify CMO, Holly Hamann, I'll share insights on how the fusion of mortgage tech will impact LO's, which processes will be affected first, and what new skill sets you'll need on your teams. Register here!
We all know that the best prospective borrowers to work with are ones that were referred to you from past clients. National Mortgage Professional Magazine is presenting a webinar entitled Driving Referrals to Your Relationship Business on Thursday, March 23 at 2:00 p.m. EDT / 11 a.m. PDT. In this complimentary webinar, Dan Hodges, Founder and Chief Strategist of Reach 150 will show you how to make yourself more "refer-able" to your sphere, how to drive a higher volume of referrals from your sphere and the best tips to CLOSE the referrals that you get. Click here to sign up for this complimentary webinar.
Jobs and Announcements
Genworth Mortgage Insurance is currently seeking applicants for a Field Sales Manager position in its Chicago territory. Candidates should have exceptional customer interaction skills and a proven track record of sales execution and leadership. Key responsibilities include developing growth strategies to achieve New Insurance Written (NIW) goals, regular use of Genworth's sales analytics and reporting tools, and mentoring Account Executives to help drive new business and sales efficiency. The successful candidate will have 4+ years' sales experience with a proven track record of exceeding goals, and a demonstrated ability to build and maintain strong customer relationships. Experience with Salesforce.com or similar sales system preferred. Position requires flexible hours and travel overnight on a regular basis. Interested candidates should send their resume to Quincy Amekuedi or click here to see the full job description and apply online.
Freedom Mortgage, named the #1FHA/VA Lender by Inside Mortgage Finance (3Q2016), is actively recruiting experienced top-producing Wholesale Account Executives nationwide, with a specific focus in the Mid Atlantic markets of PA, NJ, DE, MD, DC, VA and the Northeast (NY, CT, MA, RI, NH). Contact Vice President & Sales Manager John Turner who has been successfully heading the region for over 20 years, to speak with you about joining the Freedom Mortgage team. To learn more, contact John (610-334-1668). If you happen to be attending the New Jersey MBA (NJMBA) in Atlantic City, stop by booth 600 and meet John in person. If you are interested in markets outside the Northwest, including OH, NV, and Northern CA, please contact Keith Bilodeau, SVP, Freedom Mortgage Wholesale Lending Division.
On the Ops side, Orange Coast Title Company has an opportunity for a national operations executive in its Pittsburgh location. "As the National Operations Manager for Orange Coast Title (one of the largest independently owned title insurance companies), you will be responsible for all aspects of operational fulfillment for our title and settlement site including profit and loss, cost containment, productivity standards, compliance, fraud controls, underwriter/state audits, in addition to growth trajectory with volume forecasts and capacity planning. You will oversee all staff, accounting and human resources activities while developing and implementing policies, procedures and workflows to achieve high levels of productivity and efficiency. The ideal candidate will have a broad knowledge of the loan origination and servicing space and experience in building/maintaining client relationships in the title and settlement industry, be self-motivated for this fast-paced, competitive environment, and technology savvy. Travel required. Position reports to division's SVP/General Manager in Southern California. Resumes should be sent to Melissa Cadena."
A quick congratulation to Cindy Pike who started as western U.S. Underwriting Manager for Home Depot (iMortgage in Arizona). She is a 39-year vet with North American Mortgage, Countrywide, MetLife, and Caliber.
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