The move down in rates has sparked optimism about volume (and perhaps margins) out there. But mergers and acquisitions (M&A), and the details thereof, for many reasons, continue. For example, HomeStreet, Inc., the parent company of HomeStreet Bank announced an executed definitive agreement for Homebridge Financial Services to acquire the assets of up to 50 stand-alone, satellite, and fulfillment offices related to the Bank’s home loan center based single family mortgage origination business, and to make offers of employment to HomeStreet’s related personnel. (More details below, along with other M&A deals.)
Lender Services and Products
Looking for a game-changing product to help you elevate your business and stand out from the crowd? On April 1st, (no fooling) Freedom Mortgage Wholesale introduced Freedom Flex – a new 95% Cash-Out solution. This unique “hybrid” program follows conventional product selection/loan processing requirements with FHA credit guidelines. Freedom Flex features a fixed rate 95% LTV/CLTV Cash-Out with a credit score of 640 or above for 1-4-unit owner-occupied primary residences only. Other winning features include a 50% DTI, no mortgage insurance requirements and no reserves for 1-2 units. Not available in Texas or New York. To learn more, contact Freedom Mortgage to connect with the Regional Vice President serving your territory.
Looking for non-QM solutions? Check out Plaza Home Mortgage’s new Solutions Non-QM program and new Bank Statement Income Calculation Service, where you can send a quick request from the Plaza website and they'll review and calculate the monthly income for you before you submit your loan. Flexible income documentation—including 12 and 24-month full doc or 12 and 24-month personal or business bank statements—full doc DTIs up to 50%, interest-only options, new lower reserve requirements, expanded eligibility for all doc types, loan amounts from $100,000 to $2.5 million and easier to use guidelines matrices. For more information, contact hereforyou@plazahomemortgage.com
Grow your broker business now! Impac Mortgage has the Non-QM product line, pricing, training and marketing tools you need to expand your business. How are we winning for our brokers? Product & Pricing: Our new Premier Series offers enhanced pricing on all of our Non-QM products and more buying power. Instead of 2 years’ tax returns, qualify more borrowers on our 12-month Bank Statement Program and our Investor Program that uses 1-1 DCR on subject property only. Check out our pricing tool, iPrice, to instantly calculate Non-QM rates on our various loan products. As your lending partner, we’re also your Marketing & Training partner too. We offer an arsenal of resources at your fingertips to help increase your business. Finally, we’re in immediate need for experienced Inside National Wholesale Account Executives to join Impac, a pioneer in the industry. Contact National Inside Sales Manager, Jim Mitchell, for more information.
loanDepot Wholesale is proud to announce the expansion of our proprietary Jumbo Advantage Program and the addition of a new non-QM program – Credit Advantage. Jumbo Advantage expansions include 95% LTV to $1,500,000 on fixed rate loans, cash-out to $500,000, 1-4 units on investment properties, and 7/1 and 10/1 ARMS now qualify at the note rate. The Credit Advantage program is a non-QM program with loans amounts starting at $150,000 up to $3,000,000. The program also goes to 90% LTV with expanded DTIs, allows for 4 years seasoning on foreclosures, non-warrantable condos eligible, and has 30- or 40-year interest only terms to 85% LTV. Both programs are proprietary and as such do not require any 2nd underwrites or investor approval. Our Jumbo Product Suite allows you to qualify more Borrowers and close your Jumbo loans faster. Contact your Account Executive today with questions! Rates, terms, and availability of programs are subject to change without notice.
TCF Bank®’s Relationship Lending Unit is excited to announce “new broker compensation on our Stand Alone HELOC. Effective April 5, we will pay 1% percent of the line amount, but no less than $750 or more than $1,500 per Stand Alone HELOC transaction.
With over $16 trillion in untapped equity, we understand how important it is for our valued partners to stay connected with past customers,” said Mark Zierott, SVP, National Sales Director at TCF. “Whether it’s a need for debt consolidation, home improvement, college education, or a down payment on a second home, customers can access their equity for what matters most.” Please contact your existing business development manager for more details. If you are currently not an approved partner, please email us at RLUCorporate@tcfbank.com. You can also visit tcfbank.com/brokerloans for more details.
Caliber Home Loans, Inc. is showing its business partners how committed they are to the wholesale channel in a much bigger way! Beginning March 28, if Caliber is currently servicing the loan and your borrower is ready to refi or purchase a home, Caliber wants a chance to look at it first before you consider taking it elsewhere. On Caliber-to-Caliber loans that meet the parameters, Caliber will not only waive the appraisal fee with a credit back at closing and net escrow to the new loan, they will also waive the EPO fee (Applies to all loan products except Non-Agency Portfolio). It’s a win-win for brokers and their borrowers. There is no faster or better way to get it done. As EVP John Gibson says, “At Caliber we try to keep your borrower connected with you.” To learn more ways Caliber shows its commitment to wholesale, contact your Caliber Account Executive or reach out to newclientinquiry@caliberhomeloans.com to be connected to an AE in your local market.
M&A
Homebridge has agreed to a purchase price of the net book value of the acquired assets (subject to adjustments) plus a premium, as well as the assumption of certain home loan center and fulfillment office lease obligations. In the event Homebridge realizes a certain level of loan originations for the twelve months following the closing of the Transaction, HomeStreet will be entitled to an additional payment of $1 million at that time. The Transaction remains subject to certain employee and branch office state licensing requirements and other customary closing conditions, and is expected to be substantially completed in the second quarter of 2019.
But that’s not all! HomeStreet also announced that it has sold a significant portion of its single family mortgage servicing rights, namely single family mortgage loans held by or pooled in securities guaranteed by Fannie Mae and Freddie Mac with aggregate unpaid principal balances of approximately $9.9 billion, to New Residential Mortgage LLC, and the sale of mortgage servicing rights related to single family mortgage loans pooled in Ginnie Mae mortgage backed securities with aggregate unpaid principal balances of approximately $4.4 billion to PennyMac Loan Services, LLC. Together, these sales represent approximately 71.0% of HomeStreet’s total mortgage servicing rights portfolio as of December 31, 2018.
While we’re on banks and M&A, S&P Global Market Intelligence that finds the number of bank M&A deals closed over the prior 4 years are: 279 (2015), 241(2016), 256 (2017) and 259 (2018). That is a median of 258 per year or about 21 per month nationwide.
Why wouldn’t a bank want to buy another bank? A survey by Crowe showed that reasons included preferring to grow organically, too few or no viable acquisition targets in desired markets, management believes they will sell their bank, lack the capital or currency to acquire, concerned about the impact of an acquisition on bank culture, believe an acquisition would negatively impact bank profitability, and prices are too high.
Steve Brown from PCBB indicates that, “For bankers looking to acquire, the #1 attribute when the Fed was raising rates was to find a target bank with a cheap and deep deposit base. At the end of last year, about 71% said deposits were the most important factor, followed by branch locations in attractive markets at 53%. Now that rates have stopped climbing, the needle seems to be quickly shifting back towards concerns about credit and exposures around lending activities.”
Certainly the announced M&A during the last 2-3 weeks has continued unabated. In Connecticut Liberty Bank ($5.1B) will acquire The Simsbury Bank & Trust Co ($480mm) for $71mm in cash (100%) or about 2.0x tangible book. In Michigan ChoiceOne Bank ($667mm) will combine with Lakestone Bank and Trust ($616mm) in a merger of equals, where Choice will own 50.1% and County will own 49.9% of the combined company. In Iowa Midstates Bank ($401mm) will acquire Kingsley State Bank ($191mm), Security State Bank ($140mm) will acquire Peoples Savings Bank ($77mm), and Marion County State Bank ($310mm) will acquire Iowa State Savings Bank ($168mm).
In Missouri BTC Bank ($500mm) will acquire The Bank of Fairport ($18mm). In Joisey First Bank ($1.7B) will acquire Grand Bank ($198mm) for $19.4mm in stock (100%) or about 0.88x tangible book. In Mississippi Bank of Commerce ($477mm) will acquire Peoples Bank & Trust Co ($72mm). Out in California Mechanics Bank ($6B) will acquire Rabobank NA ($13.5B) for $2.1B. Mechanics (owned by Ford Financial Fund II) will acquire 100 branches and the retail, business banking, commercial real estate, mortgage and wealth management businesses (but not $4.8B in food and agribusiness assets).
Capital Markets
U.S. Treasuries ended last week on a mostly flat note, rate-wise. There was the usual China/U.S. trade blather. As I mentioned Friday, the March Employment Situation report showed strong headline payrolls growth but average hourly earnings increased just 0.1% which is unlikely to prompt the Fed to reconsider its patient stance. Internationally, British Prime Minister Theresa May officially requested an Article 50 extension until June 30, meaning the U.K. will prepare to hold elections to the EU parliament in late May if a Brexit deal is not secured by May 23. Finally, we saw consumer credit increase in February, with credit growth rooted in nonrevolving debt, like car loans and student loans, while revolving credit (credit cards) expanded at a slower pace.
This week’s economic calendar includes updates on jobs, wholesale and retail inflation, the budget, import prices and Michigan sentiment with the minutes from the March FOMC meeting and an ECB monetary policy decision due on Wednesday. Additionally, there will also be many global policy makers in Washington D.C. at the end of the week for the spring meetings of the IMF and World Bank which will start Friday and run through the weekend. Today gets off to a relatively slow start later this morning with February factory orders and the March Employment Trends Index. The only other event markets will pay any attention to is the Fed holding an open meeting to discuss proposed rules implementing sections of the Economic Growth, Regulatory Relief, and Consumer Protection Act. We begin today with agency MBS prices roughly unchanged and the 10-year yielding 2.49%.
Jobs
In Florida and the Southeast, a company is recruiting for a highly motivated, take-charge person who can aggressively recruit and lead a team. A large privately held mortgage company is looking for a Wholesale Regional Sales Director to manage a team covering 7 states in the Southeast, including Florida. “The ideal candidate will be required to have a focus on expanding our customer base and achieve sales quotas set by the company. Previous experience managing a sales team in this, or portions of this region is required.” If you are interested please send a confidential email to Anjelica Nixt for forwarding.
John Burns has joined ClearEdge Lending (Aliso Viejo, CA & Atlanta, GA) as VP of Sales to lead the company in its next phase of growth into the Southeast region. John brings 25 years of experience in the wholesale and correspondent mortgage lending channels including sales management and operations management with a long history of creating growth and profitability. “We are excited to enter the Southeast marketplace and provide brokers an excellent way to expand into Non-QM lending.” Alongside John, Don Brenneman will support the branch as Sr. Underwriter. With 31 years mortgage experience, Don looks forward to help shape ClearEdge’s advantage in the Non-QM space in the Southeast. Those interested in a growth-oriented career with ClearEdge Lending should email John Burns for outside sales positions in GA, FL, NC, SC, TN.
Embrace Home Loans is proving why well-supported, empowered loan officers and customer satisfaction go hand-in-hand. Embrace kicked off 2019 with National Mortgage News naming them one of the “Best Mortgage Companies to Work For.” Now, SocialSurvey has announced that Embrace is the #1 large mortgage company for Customer Satisfaction — for the second year in a row. In customer reviews, Embrace loan officers averaged nearly 4.9 out of a possible 5 stars. Nine of those loan officers made the Top 250 Originators list — and one was in the Top 10. As consumers increasingly research mortgage lenders and specific loan officers online, the top reviews Embrace receives are a testament to the company’s superior customer service and the level of support their sales team receives. Request a confidential conversation and learn more about Embrace’s unique culture.
“There’s a big shake-up going on in the mortgage industry. Wholesale brokers are picking up momentum, gaining market share, and simply dominating the mortgage space. Find out what it takes to make the switch from retail to independent at BeAMortgageBroker.com. 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.”
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