HMDA data tells us that California accounted for 21% of residential loan volume in 2017, and 23% in ’16. It’s a big market. Thus, the industry is following a ruling that Wells Fargo must pay $97 million to California home mortgage consultants and private mortgage bankers due to the state’s labor laws. A federal judge ruled that the money they were entitled to work breaks) should be based not just on their hourly pay but also on their commissions. Wells Fargo’s SVP of Consumer Lending Communications Tom Goyda wrote to me. “All of the parties in the lawsuit agree that Wells Fargo provided rest periods for its HMCs and PMBs, as required by state law. What’s in question is if they were appropriately compensated for those rest periods. Overall, we believe Wells Fargo’s compensation structure for its Home Mortgage Consultants complies with California’s wage and hour laws, including pay for all break periods, and allows our HMCs to earn competitive, performance-based compensation. We plan to appeal on the basis that the court’s decision reflects both a misunderstanding of our HMC compensation plan and a misapplication of the relevant state law.” Commissioned California LOs are riveted!

Lender Products, Surveys, and Classes

Here’s a quiz. How many homes are owned by seniors in the US? Answer: approximately 43.8 million, per the U.S. Census Bureau. How many Reverse Mortgage Loans were funded in 2017? Answer: only 0.06 million. Ready to get involved? Baseline Reverse, the reverse mortgage industry’s source for loan performance analytics, loan pricing, and MSR valuation, is excited to announce the rollout of its HECM Hedge Advisory Service. Baseline’s team of risk managers and reverse mortgage traders can price new originations, execute hedges and loan sales, and report daily loan level P&L, on your behalf while optimizing execution and minimizing risk. For those who want to manage these processes in-house, Baseline’s web-based software is available for license as well. For more information, contact Dan Ribler. Reverse mortgage secondary-in-a-box has arrived!

It's your last few days to enter to win $250! If you a mortgage lender who has recently participated in a mortgage technology/software launch in your business, then HousingWire and the mortgage industry want to hear from you! Complete the quick 3 min survey around mortgage software implementation for your chance to win a $250 VISA Gift Card and help shape the future of our industry. Click Here to Start!

Registration is closing Sunday for the first annual Recruiting and Leadership Mastery Program in Las Vegas. On Friday, May 18th and Saturday, May 19th a major innovation for branch managers will become reality. For the first time ever, a program for the mortgage industry has been created to specifically focus on showing managers and leaders step-by-step how to build and lead a high producing sales team. Ron Vaimberg, the President and Head Coach of nmpU, and one of the nation’s leading leadership trainers and coaches, will be presenting his complete system for leadership and recruiting success. There has never been a program like this…and this will be the ONLY one held in 2018. Don’t miss out! For complete details click here. Don't delay - registration closes on Sunday, May 13th!

Disaster Updates

The United States is a big place. The last time I checked we have 50 states, six time zones, an elevation range of 20,600 feet, and 326 million people. Many events can befall us, and FEMA spends its days and nights…watching. Large investors have a standard protocol when it comes to loans in process, recently funded, or serviced in areas that FEMA notes. In retail, servicing, and correspondent channels, Chase, Wells, Bank of America, and SunTrust, have them, for example.

Wells Fargo and Bank of Hawaii have implemented disaster relief policies for those affected by Kilauea.

Calhoun, Cullman, and Etowah Counties in Alabama have been declared by FEMA as Major Disaster Areas for the Incident Period Date of March 19, 2018 to March 20, 2018. The Major Disaster Declaration Date was April 26, 2018. SunWest loans submitted with an appraisal dated on or before the incident period end date or for those submitted without an appraisal, Sun West will require an interior and exterior inspection prior-to-funding or purchase of any loans with subject properties that are determined to be at risk.

Due to the severe storms and flooding in Indiana from February 14th- March 4th, As of May 5th, FEMA has declared 9 Indiana counties: Carroll, Clark, Elkhart, Floyd, Harrison, Jefferson, Lake, Marshall, St. Joseph as designated disaster areas.

Mortgage Solutions Financial posted an announcement regarding Alabama's FEMA Disaster Counties.

Mortgage Solutions Financial has posted an announcement regarding California's FEMA Disaster Counties.

Going back a ways, AmeriHome posted that on 1/10/2018, with Amendment 14 to DR-4337, FEMA announced individual assistance for 1 additional Florida county, Hamilton, in the area affected by Hurricane Irma 9/4/2017-10/18/2017.

Last year, in response to Southern California wildfires, flooding, mudflows, and debris flows, “Sellers must follow our Disaster Policy for all properties located in ZIP codes that Wells Fargo Fundinghas determined were impacted. Because the path of damage was narrow, Wells Fargo Funding’s identified list of impacted ZIP codes is a reduced subset of Federal Emergency Management Agency (FEMA)declared counties and includes: A recent addition (effective January 15), ZIP codes previously communicated with Newsflash C17-060, dated December 18, 2017 (effective December 5, 2017).”

And continuing in the way back machine, PennyMac Correspondent Group posted two new announcements: 18-07: Updates to SRP Grids and LLPAs and 18-08: Disaster Policy Implementation- Southern California Thomas Fire and Mudslides.

Capital Markets

Looking into the future for short-term rates, the implied market odds of the next Fed hike are overwhelming for the June 13th meeting and well above 50% for a subsequent rate hike in September.  If there is a fourth hike this year, it will likely come in December though the market is only pricing in less than a 50% percent likelihood at this time.

The markets, and much of the economic data, has been focused on the consumer. The final updated to Q4 2017 GDP provided an upward revision that estimated the economy grew 2.9 percent versus 2.56 percent from the previous estimate. Personal consumption and income have been growing. (Recall that the consumer contributed 2.8 points to economic growth as 2017 wound down. However, personal consumption slowed in the first quarter as those gains were achieved by a reduction in personal savings more than income growth. For February, personal income grew 0.4 percent as strong job growth and low unemployment are leading some employers to offer more to hire or retain employees.)

Surveys of consumer sentiment have been positive for several months although in March the Conference Board’s consumer confidence index was slightly lower than its February high and the University of Michigan consumer sentiment survey hitting a new cycle high in March. In the UofM data, it is noteworthy that much of the increase came from the bottom third of the income distribution while attitudes of the top third cooled during the month as their focus turned to trade.

Retail sales have been doing very well in 2018. The gains have been driven by auto sales, health and person care and non-store retailers’ sales although consumption has been weak in the first quarter. Industrial production also has been strong, due in part to heavy utility demand in the Northeast and South as below average temperatures prevailed earlier this year.

US economic indicators continue to support a narrative of moderate economic growth as we move through 2018. GDP growth eased to 2.3 percent in the first quarter from 2.9 percent in the fourth quarter as consumer spending growth slowed to 1.1 percent. However, Q4 consumer spending was driven by strong car sales due to the gulf hurricanes in the fall and was expected to be weaker in the first quarter.

Looking at the bond market, as a proxy for most interest rates, the 10-year dipped back below 3% yesterday, and U.S. stocks rallied to a seven-week high while the dollar fell the most since March 21 (lifting commodities) after a weak inflation reading signaled the Federal Reserve won’t need to step up the pace of interest-rate increases. A gauge of small-cap stocks set a record and emerging-market shares rallied on the more-favorable outlook for global borrowing costs. Speaking of the globe, the pound weakened after the Bank of England held interest rates and it has been revealed that President Trump's meeting with North Korea's Supreme Leader Kim Jong-un will take place on June 12 in Singapore. The meeting will be held three days after the conclusion of the G7 Summit in Quebec. Wives invited?

Looking back to yesterday’s economic releases, the Treasury Budget for April showed a surplus of $214.3 billion versus a surplus of $182.4 billion for the same period a year ago. That is the largest April surplus on record and it was driven by the impact of large individual tax deposits. The Treasury Budget data is not seasonally adjusted, so the April surplus cannot be compared to the $208.7 billion deficit for March.

April import/export prices kick off today's data calendar at 8:30am ET. Why do we care? They make a difference if they move rates. Nobody knows - maybe Alan Greenspan, or John Maynard Keyes. Expectations are for import prices increasing 0.7%, 0.2% ex-fuels, while exports are seen increasing 0.6% MoM. They were up .3% and .6%, respectively. Finally, the University of Michigan Sentiment Index, at 10AM ET, is seen ticking higher. Today begins with rates not doing much: agency MBS prices are unchanged and the U.S. 10-year T-note is yielding 2.95%.

Employment, Business Opportunities

Hamilton Group Funding continues its double-digit growth trend, with Q1 achieving the largest quarterly lending volume in the company’s 15-year history. The firm is seeking a dynamic Regional Lending Manager to report directly to its new President/CEO, Pat Sheehy. Location is flexible for an exemplary candidate. “HGF is an equal opportunity employer and is proud to be named one of South Florida’s Top Workplaces for the second year in a row. We have an entrepreneurial and family-oriented culture and offer residential mortgages in 11 states through 25 offices.” Inquiries can be made in confidence to HR VP Amanda Smith.

Waterstone Mortgage Corporation, a national bank-owned mortgage lender headquartered in Pewaukee, WI, is looking to acquire small to mid-sized traditional retail, purchase-focused mortgage companies nationwide. “Today’s tighter margins and complex regulatory environment motivate many small mortgage companies to seek ways to expand their business, including strategic acquisitions to create additional synergies. Waterstone Mortgage has the strength and stability that mortgage executives seek when considering a sale of their retail business. The lender is a wholly-owned subsidiary of WaterStone Bank SSB (NASDAQ:WSBF), which has assets of more than $1.8 billion. As a Fannie Mae, Freddie Mac, and Ginnie Mae-approved lender, the company offers a broad range of products including FHA, VA, USDA, and conventional loans, one-time close construction financing, bank portfolio lending products, jumbo products, and condo financing. It produced $2.5+ billion in origination volume in 2017, 90% of which comes from purchase mortgage loans.” For more information, visit info.waterstonemortgage.com/acquisitions.

BankSouth Mortgage is pleased to announce plans for branch expansions and new locations throughout the Southeast including Georgia (Duluth, Columbus, Savannah and Athens), and a new office in Seneca, SC. This ongoing expansion and organic growth is part of management’s strategy to increase market coverage and build on BankSouth’s excellent mortgage reputation. BankSouth Mortgage is a wholly owned subsidiary of BankSouth, a community bank that has served their customers for more than 70 years. BankSouth Mortgage reiterates their commitment to quality service without compromise by delivering more access to a trusted advisor and their products and services. BankSouth Mortgage recently launched the “ReadyLoan” app in preparation for the launch of the “ReadyLoan” program, which provides the consumer transparency in the process and delivers application to approval in just 9 days. BSM is focused on providing their mortgage originators with a combination of technology, marketing, products and operational support designed to grow their personal loan production. If you are looking for a new home to grow your loan production, please email joinus@banksouth.com to learn more!

Lakeview keeps on growing! “We are pleased to announce the addition of three mortgage veterans joining our Correspondent and Wholesale sales teams. Lakeview Correspondent welcomes two new Business Development Directors, Scott Bailey and Tom Dawson, both formally with Ditech. Scott will cover the Southeast region and Tom will cover the new North Texas region. Lakeview Wholesale welcomes Becky Vaughan, who will serve as Account Executive in the Denver market.  Becky brings over 30 years of industry experience, most recently as a regional sales manager heading sales production teams in the Denver and Texas markets. Backed by the strength of the Bayview family of companies, the Lakeview sales team continues to grow and has open positions with large territories for experienced Wholesale Account Executives in the Western States.” Interested parties should contact Kiely Hall-LaValley.