One of my early jobs was digging fence post holes and picking up dropped nails for a builder in 100 degree heat. No one wants to do that anymore? In builder-land, chronic labor shortages are changing the way many firms recruit and compensate workers, according to a new AGC report.

Lender News

Student lender Earnest was purchased by Navient Corp., one of the largest U.S. companies that collects payments on student debt. Navient, which spun off from student lender SLM Corp. (Sallie Mae) in 2014, effectively jumped into the lending business on Wednesday by paying $155 million in cash for Earnest. Navient plans to maintain the Earnest brand as a separate unit, which will be led by its co-founders, Louis Beryl and Ben Hutchinson. Navient services more than $300 billion in education loans for more than 12 million borrowers. San Francisco's Earnest, founded in 2013, has extended nearly $2 billion in student loans.

Bank News - M&A

It is believed that large banks' mortgage channels lost about 50 bps from all production channels combined for the first half of 2017, including some sizeable losses in Retail. The losses were primarily due to a reduction in volume which caused their cost per loan to increase substantially.  Also, the group tends to focus on Jumbo and high balance loans which have low revenue and high costs.

FDIC data finds that from Q2 2016 to Q2 2017 total employees for financial institutions (read: bank) with assets of less than $1 billion declined from 146,727 to 139,456, or about 5%.

News broke that Wells Fargo plans to refund certain mortgage customers who paid a fee to lock in rates from Sept. 16, 2013, through Feb. 28, 2017. How much are we talking about? About $98 million in rate lock extension fees were assessed to about 110,000 borrowers during the period. After 2013, apparently, some borrowers were charged fees in cases where the bank was primarily responsible for delays that made the extensions necessary.

In the last week or so it was announced that in South Carolina First Reliance Bank ($437mm) will acquire Independence National Bank ($90mm) for about $11mm in cash (100%) or roughly 1.7x tangible book. In Tennessee Centennial Bank ($370mm) will acquire Merchants and Planters Bank ($87mm). And in Maryland Old Line Bank ($1.8B) will acquire Bay Bank ($646mm) for $128.6mm in stock (100%) or about 1.92x tangible book.

Noting that in many communities persistently depressed home prices are hindering recovery, the OCC issued guidance for OCC-regulated banks seeking to develop programs to offer home loans with loan-to-value ratios of over 100 percent, known as "higher-LTV" loans. These programs may be eligible for Community Reinvestment Act credit. "The OCC recognizes that supporting long-term community revitalization may necessitate responsible, innovative lending strategies," the agency said. "The OCC believes that in some circumstances, a bank also can design a program to offer higher-LTV loans in communities targeted for revitalization in a manner consistent with safe and sound lending practices and current regulations and guidelines."

Such programs would apply to purchase loans or purchase plus rehabilitation of owner-occupied properties in communities "officially targeted" for revitalization by federal, state, municipal or other government-designated entities. Eligible loans would be permanent first-lien mortgages with LTV ratios exceeding 100 percent, without mortgage insurance or other acceptable collateral and with an original loan balance of $200,000 or less. The guidance also provides information about the required policies and procedures under such a program and about the process and timing for notifying the OCC about starting or modifying a program.

The Federal Reserve, Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency proposed holding off on implementing stricter capital rules for smaller banks while the agencies review ways to simplify requirements for less complex institutions. Banks with less than $250 billion in assets and less than $10 billion in foreign exposure would be permitted to continue complying with simpler temporary capital rules beyond the beginning of 2018. Large banks would still face stricter capital requirements, beginning on Jan. 1, 2018.

Barclays becomes one of the first large global banks to allow Siri to make payments using a mobile phone. Customers can now say "Siri Pay Mary $20 with Barclays". Fingerprints have 40 unique characteristics vs. 266 for iris scanning. Therefore, many security experts prefer iris scanning over fingerprints for authentication.

Capital Markets

There wasn't much movement in the bond market on Wednesday, though selling did accelerate after the September ADP report included an upward revision to the August figure while the ISM Services Index rose to a 12-year high. Hurricanes Irma and Maria caused tremendous damage in September, yet they apparently didn't slow the pace of activity in the non-manufacturing sector. (And, typically, the long-term economic impact of a disaster is surprisingly negligible with the initial hit being made up by the following boom.) The key takeaway from the report is that it gives the Fed some data-based ammunition to raise the fed funds rate in December with the Prices Index increasing to its highest level since February 2012.

Today, we've seen September Challenger Job Cuts (32,346), Weekly Initial Claims (-12k to 260k), and August Trade Balance (narrowed to $42.4 billion). We also have August Factory Orders, Weekly Natural Gas Inventories, and some Fed Speakers of all shapes & sizes around the nation. We start Thursday with rates the same as Wednesday: the 10-year is yielding 2.32% and Fannie/Freddie/Ginnie 30-year paper is unchanged.

Trainings and Events

If you live near Knoxville or Johnson City (Tri-Cities), Tennessee, come on by for the educational lunch next week and say hello! In fact, the TNMBA's state chapters have many events coming up worth checking out.

MBA/MW's Mid-Atlantic Lender Conference, "the premier event for the Residential Real Estate Finance Industry in the Mid-Atlantic Area," will be held Thursday, October 12, from 8:30 am - 9:00 pm at 12025 Lee Jackson Memorial Highway, Fairfax, VA. It is a full day conference, trade show, charity happy hour, and an after party (why aren't there ever pre- parties?) hosted by MBA/MW's Future Industry Leaders.

Register now for Plaza's October 10th free webinar: Focus on Assets: Acceptable Documentation and Eligible Sources.

Register now for Plaza's October 9th Preventing Mortgage Fraud webinar.

SunWest is offering a variety of trainings throughout the month of October:

October 11th...Processing a Reverse Mortgage.

October 13th...FHA Guideline Training

October 19th...FHA 203k Rehabilitation and HomeStyle Renovation Training.

October 23rd...VA loan program and guidelines.

October 27th ...Ability to Repay (ATR) and Qualified Mortgage (QM).

FAMC has posted its October training calendar.

The TMBA 67th Annual Seminar & Marketplace on November 6 & 7, 2017 at the Marriott Legacy Town Center in Plano has been extended registration until October 6th.

Join American Banker for the Small Business Banking Conference November 29th- December 1st in Austin Texas. Venue and registration information are available now.

Opportunities, Promotions, and Products

Floify, the mortgage automation solution for top-producing LOs, has just taken its powerful mobile app a gigantic step further. Having already been downloaded thousands of times on Apple's App Store and Google Play, Floify's updated mobile app comes packed with new and exciting features. Now, LOs and borrowers can send and receive push notifications, view loan milestones and activity, and upload and view loan documents - all from the convenience of their mobile device! Additionally, Floify's mobile app can be white labeled so LOs can brand Floify to match their business's identity and create a seamless presentation for their borrowers. With Floify, LOs have reported being able to reduce workload by up to 5 hours/loan and dramatically improve the lender-borrower experience. To see how Floify can help you streamline your mortgage workflow, request a live demo. Already know how well Floify will work for you? Get started with a free trial, plus 25% OFF your first 4 months.

CALCAP Lending, LLC an originator exclusively serving investors and brokers in the high demand Business Purpose lending marketplace is pleased to announce the recent hiring of industry veteran Josh Levine as Chief Production Officer. CALCAP Lending's CEO, Len Israel, stated "Josh's presence and leadership will contribute to our accelerated expansion in the high-demand private money marketplace." CALCAP is a sponsor at the upcoming NAMB Conference (10/14-16) in Las Vegas and is inviting attendees to visit to discuss CALCAP'S competitive rental purchase (75% to $3 million), fix-and-flip loan (financing 100% of rehab), foreign national (no FICO or income verification), and construction lending (80% of total cost) programs. CALCAP is recruiting Business Development Managers and Lead Specialists in Orange and LA counties and welcomes the opportunity to meet with experienced private money mortgage professionals who are looking to further develop their careers. To learn more, you are invited to email us at careers@calcapfinancial.com, contact our HR Manager, Josie Fowler), or give us a call at 623-337-4504.

Construction lending continues to heat up. Efficiency and borrower experience are the keys to success in this niche, and technology will give you an advantage. Built, the leading construction loan administration and draw management platform, continues to gain momentum as construction lending opportunities expand. The company just announced their live integration with Ellie Mae's Encompass® all-in-one mortgage management solution. Lenders using Encompass can access Built's platform to simplify their loan management process with digital draws and online collaboration from inside their loan origination system. Built was also named a Preferred Vendor Partner of The Mortgage Collaborative (TMC) providing access, with special member advantages, to their construction loan administration platform to more than 112 lender members of TMC. To learn more about Built, visit www.getbuilt.com.

"Interested in joining a stable and secure lender with a 30+ year history of success? Embrace Home Loans is looking for self-sourced, purchase focused Branch Managers, Sales Managers, and Loan Officers. Embrace has been recognized for the fifth straight year by Inc. as one of the Fastest Growing Companies in America, making it an excellent career option. For 10 straight years Embrace has achieved a 98% Customer Service Rating and has been recognized by Fortune no less than seven times as one of the Top 25 Mid-size Companies to Work for in America. Licensed in 46 states plus DC, Embrace ranks as one of the top private mortgage lenders in America. If you're interested in working with a supportive, dynamic, and productive company, contact Patrick Mullen, Director of Recruiting, or visit Embrace. Embrace your future - join our team today!"

The MBA is looking for an Assistant Regulatory Counsel. This attorney will help develop and implement MBA's policy and advocacy approach to the legal/regulatory aspects of loan origination issues.  They will also help manage certain other legal/policy issues handled by the association. The portfolio will include research, analysis, and active engagement with Association members and other parties. Under the Managing Regulatory Counsel, this person will act as point-of-contact for the legal/regulatory aspects of loan origination issues and advocate MBA positions with policymakers and representatives from a wide variety of real estate, financial services and other organizations. Juris Doctorate degree with three years of related experience in the mortgage industry or similar background required.  All qualified applicants will receive consideration for employment without regard to race, sex, color, religion, sexual orientation, gender identity, national origin, protected veteran status, or on the basis of disability. If interested, please apply online here. 

Here they grow again! American Pacific Mortgage is excited to announce a new branch office in Utah. The team of 8 originators, including Dave Barton, Scott Asbell and Larry Fry, joins APM under the dba Mountain West Mortgage. The team has more than 200 years of combined experience, and we are excited to help them grow using APM's unparalleled technology stack and expanded ability to originate loans throughout the Western states! Want to learn why over 375 originators have joined APM this year? Please come to our Sales Symposium in San Diego on October 26th & 27th.  APM has the vision, culture, and opportunities you need to thrive in the mortgage industry. We have an amazing line-up of Keynote speakers including the crazy Economist, Elliot Eisenberg, author and motivational speaker, Darren Hardy, and the inspiring Chris Gardner, author of The Pursuit of Happyness. Just reach out to Peter Schwartz (916-770-0053) or Dustin Block (303-378-3166), or click HERE to register.  

A market leader in technology-driven solutions for the mortgage industry, Informative Research is adding Renae Sherman to their growing family as Vice President of Business Development and Innovation. Coming from a long tenure at Experian with over 20 years of experience, Sherman will drive the development and execution strategy of the company's technology solutions, helping to progress Informative Research's vision to digitize the mortgage loan process for their clients.  Utilizing her extensive market knowledge, Sherman will play a vital role in building on IR's 70-year record of renowned technological growth and innovation.  "Informative Research is leading the mortgage industry into a new world, a world that simplifies the process and gets rid of common setbacks that a lot of lenders experience daily. With IR, I'm determined to help evolve our technology so our clients can close more loans securely and effectively," explained Sherman.