Princess Bride 30-years old? Time flies. My 94-year old father remembers his childhood phone number in San Francisco: WAlnut 4694. Telephones moved to all numbers in the 1940s and 1950s - will addresses also change? Is it possible to change every address in the world? Jeremy Potter sent out a note about What3Words turned the entire world into 3m x 3m squares and assigned each a unique word address so common words can be utilized to pinpoint very specific locations. I live & work at "lays.coherent.snips." Check out any address at: https://map.what3words.com/ - it shows up at the bottom.
Bank and Lender M&A news
Things aren't going gangbusters out there with approvals for new banks or additional bank locations. In fact, from the end of 2014 through the end of 2016, the number of bank branches declined by over 15% (from 94,725 to 80,227). For example, Bank of America has closed 1,597 branches since 2009 or about 26% of its footprint. The bank now has 4,542 branches and has refocused its approach on major metro areas. To date, only 173 US bank deals have occurred vs. 178 compared to this time last year. If this trend continues, 2017 could be the year for the fewest bank mergers since the Great Recession.
Bank mergers certainly play a part, but as noted above things have slowed. In the last couple weeks, it has been pretty slim pickins for depository bank M&A. It was announced that in Texas American National Bank of Texas ($2.7B) will acquire First State Bank ($174mm), and Citizens National Bank ($1.8B) will acquire Union State Bank ($471mm). Three bank holding company Brookline Bancorp ($6.6B, MA) will acquire First Commons Bank (MA) for about $56mm or about 1.49x tangible book.
Why have things slowed in bank deals? Reasons may include regulatory constraints and the current high cost of acquisition. What about M&A on the non-depository lender side of things? STRATMOR's Jeff Babcock weighed in with, "We at STRATMOR expected more 2017 YTD M&A transactions within the midsize Independent mortgage banker sector. Our expectations for a higher activity level were based on several market conditions. There remains today a robust collection of highly motivated quality buyers, many of which are well positioned to offer an attractive value proposition to prospective sellers. At the same time, originators are clearly experiencing a challenging 2017 with average production volume down 15% or more and Net Income margins declining to a fraction of 2016 profit levels. Recent peer group data confirms that many Independents reported a loss for the first half of 2017. Yet the potential sellers are just not materializing.
"What's behind this reluctance of sellers to put themselves in play? While there are numerous individual reasons, we have observed the following general trends and attitudes. Midsize mortgage companies are typically owned and managed by classic entrepreneurs who are optimistic by nature and have great confidence in their ability to overcome difficult market conditions. 2017 results have not yet become so negative that these guys are ready to forgo their treasured independence and become an employee of a larger lender. Our greatest challenge has been generating sufficient seller confidence that the company can bring its origination sales force across in an acquisition. This issue is best overcome with a compelling value proposition from the buyer that provides the seller's originators with tangible benefits and competitive tools which would generally not be affordable by a smaller mortgage bank. Finally, there is a widespread perception that earn outs --- which often represent a substantive portion of the seller's premium value ---are not achievable in the real world.
Events and Training
Simplifile President Paul Clifford writes: "Simplifile continues to see tremendous interest from lenders in improving collaboration with settlement partners, specifically around post-closing. Now that the GSEs no longer require lenders to retain wet-signed copies of e-recorded closing and post-closing documentation, there's an even greater urgency for lenders to create an electronic feedback loop with their settlement partners to ensure e-recorded documents make their way back to the loan file, using solutions like Simplifile's Post Closing service. As a demo presenter at the upcoming SourceMedia Digital Mortgage Conference in San Francisco, we'll be demonstrating both our Post Closing and Collaboration services live during Demo Session #2 on Thursday, Sept. 28 at 2:02 pm (talk about specific!). For those not going to Digital Mortgage, we'll also be on hand at MBA Annual in Denver, and you can sign up for a demo."
Join the California MBA's MQAC on September 28th for a webinar discussing the latest developments on Per Diem Interest compliance.
Its already October next week. Join the California MBA on October 3rd at 11 am (PST) for a FREE webinar: "Learn to Win More Opportunity and Close More Loans," presented by the California MBA's Mortgage Technology & Marketing Committee (MTAM). Covered will be how to convert attention into interest, present with power, and elevate your skills.
Wells Fargo Funding, in cooperation with Fannie Mae, is hosting an in-market, first-time homebuyer/affordable product events in Philadelphia, PA (Oct. 11). The event runs from 11:00-3:30 p.m. Eastern (including lunch) - and is focused on helping lenders gain market share in the affordable/first-time homebuyer space, including details about homebuyer demographics, Fannie Mae's HomeReady and in-depth insight into the Philadelphia market. LOs, sales/production/affordable lending managers, underwriters, and marketing teams should consider attending. Approved and prospective Wells Fargo Funding clients are welcome. If interested, contact a member of your regional sales team or send an email to CorrespondentDiverseSegments@wellsfargo.com.
National MI offers plenty of webinars in October. Freddie Mac's Loan Closing Advisor on Oct 3 from 10-11AM. The Home Mortgage Disclosure Act v 2018 (HMDA) on 10/17 from 12-1PM. On October 18 is The New Uniform Residential Loan Application, and on 10/19 is Leveraging Technology to Access New Markets: PDT.
Friday is the last day for early bird pricing for NEXT, the mortgage technology conference for women. Created for women executives and decision makers, NEXT provides high-power informative talks, effective networking and an integrated expo. Confirmed speakers include Guild Mortgage CEO Mary Ann McGarry, CoreLogic's Principal Economist Molly Boesel, Fannie Mae Director of Technology Innovation Tracy Stephan, Factom Co-Founder and author of "Blockchain for Dummies" Tiana Laurence, JMAC Lending CEO Christina Pham, MBA's Marcia Davies, HousingWire's Sarah Wheeler and yours truly. Register here. NEXT takes place at the Dallas InterContinental, January 18-19, 2018.
To assist lenders in their use of the Loan Review System (LRS), FHA posted a Quick Reference Sheet on the LRS Information Page. The LRS Quick Reference Sheet summarizes the most important information provided in the LRS User Manual, previously covered in FHA's series of LRS webinars for lenders. Highlights include: Review Levels, Timeframes, Response Wrap-Up and Any Response Is Better Than No Response. The Quick Reference Sheet provides helpful reminders about system access, indemnifications, and information to include whenever contacting the FHA Resource Center with questions about LRS.
Capital markets
Tuesday U.S. Treasuries & MBS had some small losses across the curve and stocks bounced back from Monday's selling as Fed Chair Yellen gave a speech that was open for interpretation as to whether it was hawkish or dovish. She spoke about how uncertainties strengthen the case for gradual rate hikes, but that it would be imprudent to leave rates on hold until inflation reaches 2.0%, and any adjustment higher in the term premium from the balance sheet roll-off is likely to be something gradual that will take place over many years.
Separately, the Senate GOP confirmed it will not vote on the Graham-Cassidy health care bill and will table the health care reform effort until after tax reform. Releases from yesterday included August New Home Sales, which declined or were flat in all regions. Consumer Confidence was down. But the S&P Case-Shiller Home Price Index rose 5.8% YoY in July, as expected.
Today, we have the weekly MBA Mortgage Index (-.5%), August Durable Orders (+1.7%, strong), August Pending Home Sales, Weekly Crude Inventories, a speech by St. Louis Fed President Bullard (non-FOMC voter) on the economy and monetary policy, and President Trump is expected to lay out the "Big Six" blueprint for tax reform. We start the day with rates higher than last night: the 10-year is yielding 2.29% and agency MBS prices are worse .250.
Products, Announcements
Congrats to Sean Browning who American Financial Network, Inc. has named as the mortgage lender's EVP of Production focused on leading, supporting, and recruiting top talent to augment its already strong retail and wholesale production. With the addition of Browning, AFN plans to fortify its successful branch network and expand in areas where the company does not yet have a strong presence. Established in 2001 by Jack Sherman, American Financial Network, Inc. (AFN) is a licensed mortgage lender (NMLS #237341) that is based in Brea, California, is licensed in 44 states, and remains on an impressive growth trajectory. AFN is an approved Fannie Mae and Freddie Mac seller/servicer, and an approved issuer for Ginnie Mae. A direct lender with in-house underwriting, AFN offers a full line of mortgage products including: Conventional, FHA, VA, USDA, Jumbo, 203(k) rehab loans and more. For additional information or for employment opportunities please send a confidential email directly to Sean.
NOVA Home Loans, a Top 50 U.S Mortgage Lender and one of the Southwest's largest privately-owned mortgage companies, is hiring. NOVA Home Loans has been an innovative company for over 35 years and has built a family corporate culture that is nurtured even as it grows its market share throughout the Southwest. We are currently seeking a Senior Compliance Analyst to grow and strengthen our already dynamic Compliance team. The successful candidate will be responsible for acting as a point-person analyzing/advising on scenarios for compliance with mortgage-related federal/state consumer financial laws; for risk mitigation; and for adherence to policies/procedures of the corporation; as well as providing leadership and making non-routine decisions using sound judgement and follow-through to solve compliance/risk issues. Qualified candidates possessing a Bachelor's degree and/or at least 5 years of related work experience demonstrating progressively more responsibility & scope of authority, at least 2 of which must be mid- to senior-level Compliance-related, are encouraged to apply.
Snapdocs announced a new initiative to help lenders accelerate digital closing adoption. The SF-based software company, which most major national settlement companies use as their everyday mobile closing platform across 50k+ monthly closings, officially released a new hybrid eSign & wet sign workflow. Snapdocs works with lenders to outline a hybrid closing policy that can deployed across their settlement partners already operating on Snapdocs. The result is a digital closing experience at scale - with minimal process changes. To learn more about this new digital closing playbook, download their free whitepaper or email Snapdocs directly to arrange a complimentary digital consultation.
Equity National Title, an innovative and customer-focused national title agency entering its 28th year of business, is expanding its National Sales Team. The successful candidate(s) will join a leading provider of title/settlement services in the country. "We are a leader in applying digital technologies to closing all types of mortgage loans and are unique in being able to support Purchase Money lenders (centralized or distributed) nationwide. We are looking for candidates who have successfully sold mortgage-related services or title services to C-level and mid-level mortgage lender managers for ten or more years. They will attract new lenders to our industry-leading services as well as expand some of our existing relationships. Additionally, he/she will have strong producing relationships and be comfortable in a culture that puts employees and customers first. Confidential resumes should be sent to David Boyum, EVP National Sales.
Franklin American Mortgage Company Retail Lending announced the addition of Mackenzie Curtis as National Builder Sales Manager. Ms. Curtis has nearly 20 years of experience in mortgage banking, and in her previous role as a Regional Builder Sales Manager helped establish a company presence in the Nashville builder community.
Senator Bob Corker (R-TN) announced his intent to retire at the end of 2018. Among other things Corker is a leading voice on financial services issues. The takeaway? Political/legislative reform of the GSEs is even more unlikely, as he was known to be able to "reach across the aisle."
Equifax CEO Richard Smith "retired," effective immediately, with the board putting in Mark Feilders into that role.
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