“Rob, is any lender making money out there?” Well, what’s the old “joke?” “How do you get $5 million in the mortgage biz? Start with $10 million!” Not so funny when it’s real. Few companies are prospering, and what I hear more is, “We hope to outlast our competition by cutting costs and since we have deeper pockets.” Does that mean whichever company can lose more will outlast the others? Any lender making money deserves a big “congratulations” because it is very rough out there, whether it is margins, higher rates & volatility, seasonal factors, production staff not wanting to make moves until after year-end, whatever. And it is a lot easier to be a manager when your company is expanding than when you’re contracting.

Lender Products and Services

Faster, easier, and smoother - Flagstar Bank is launching Loantrac 2.0 for its delegated correspondent customers soon with key updates for an improved and customized experience. The redesigned system features a more streamlined process for submitting and delivering loans. The process for uploading and viewing multiple documents has been completely overhauled as well. Other enhancements include a new dashboard that offers a customizable aggregate view of the customers’ active pipeline, intuitive navigation throughout the site, and an updated sellers guide. If you’re planning on attending the MBA Annual later this month and would like to learn more, click here to contact Brian and schedule a demo or a private meeting.

“Calling all title agents: Are you struggling to maintain margins with the drop in mortgage volume? Is it difficult to find qualified title back-office personnel? Want to ‘variablize’ your costs to align with unpredictable title volumes? String Real Estate Information Services can help you – immediately. For over 15 years, String has fanatically focused on title agent profitability. By offloading title back-office work to String, clients save an average of 65%. Even in today’s miserable margins market, every single String client is profitable. Title searches, commitment prep, policy production, tax certificates, municipal lien searches, payoffs & liens – String can expertly complete all of these and more. Our clients include hundreds of title firms across the country, big and small. Want to learn more? Please email Karen Schluckebier or meet us at upcoming industry conferences. Use these links to set up a meeting: ALTA Annual/Los Angeles, MBA Annual/Wash DC.”

Fulton Mortgage Company, a division of Fulton Bank, N.A., has chosen Built Technologies to enhance the bank’s construction lending capabilities. By partnering with Built, Fulton Mortgage Company will automate its draw processing and construction loan services. “Built is a great partner for us as we work to capitalize on the capabilities of today’s ever-evolving digital environment,” said Jeff Scheuren, President and COO of Fulton Mortgage Company. “By teaming with Built to digitize our construction lending process, we are improving the overall experience for borrowers, builders, and inspectors across Pennsylvania, New Jersey, Maryland, Delaware, and Virginia.” As an ABA-endorsed provider, Built’s cloud-based software complements the core systems operated by financial institutions. “We are excited to partner with Fulton Mortgage Company to enhance their construction loan management process,” said Chase Gilbert, CEO of Built Technologies. “As the implementation of technology continues to increase across the banking industry, now is the time for financial institutions to benefit from the power of this in construction lending.”

You’d think folks would get it by now, but Pavaso CEO Mark McElroy says many people still think an eClosing is simply replacing a wet signature with a digital one. “A digital signature is merely one component of the entire eClosing process,” he says. “A true eClosing includes electronically executing some or all closing documents and encompasses the pre-closing, closing and post-closing stages.” At the very least, McElroy adds, lenders that want to offer eClosings should find a partner that has experience leveraging their full potential. “The closing is much than the consummation of the deal—it may very well be the number one differentiator for your business,” he says. “Borrowers today want fast, convenient and digital closings, and only the right eClosing partner is going to get you there.” To learn more, visit www.pavaso.com, shoot McElroy an email or give him a call at (866) 288-7051.

Another set of eyes looking at your applicant’s credit report could mean a more successful rescore for your borrower. Credit Plus’ Lending Hand experts provide an in-depth, low cost review of each credit file that loan officers can share with their applicants. Often, our experts come up with ideas that our customers haven’t considered, even those with years of industry experience. Frustrated and don’t think your applicant has any other options? Turn your difficult files over to Credit Plus for a higher probability of a successful rescore. Speak with us at the Annual MBA Convention. Email info@creditplus.com to schedule a meeting or click here to learn more.

Capital Markets

Yes, despite several short-term rate increases by the Fed, the U.S. economy is resilient. The second estimate for US GDP was slightly stronger in the second quarter at 4.2 percent versus the advanced estimate of 4.1 percent. Pre-tax corporate profits increased by $72.4 billion to a record high $2.2 trillion and after-tax profits increased by $47.3 billion as the effective tax rate increased nearly one percentage point. Business spending was also higher than originally reported, increasing at a 6.2 percent rate versus 5.4 percent. Consumer spending, while still strong, was revised down to 3.8 percent growth. Other measures of consumer strength were mixed last week as the Conference Board’s measure of consumer confidence was up while the University of Michigan’s measure declined on growing inflation concerns. PCE inflation increased 2.3 percent over the last year; the fastest pace in the previous six years. Despite those inflation concerns, wages and salaries were up 0.4 percent in July and 2.9 percent over the previous twelve months as the tight labor market conditions are slowly influencing income data.

Ten months away from reaching its longest expansion on record, the US economy has a "muted" risk of a near-term recession and a "below-average" chance of entering one in the next three years, said Goldman Sachs economist Daan Struyven. He cautions, however, that if current conditions overheat, it could force the recovery to advance from its middle stages to late cycle.

Rates continued to rise yesterday, with the U.S. 10-year closing at 3.20% after it was as high as 3.25% during the day’s trading. Internationally, Japan's 10-yr yield (0.16%) climbed to a level not seen since early 2016, India's 10-yr yield (8.16%) approached its September high (8.23%), and European yields also moved higher with Germany's 10-yr yield briefly touching a five-month high. What does all this mean for originators? Well, it isn’t great news, but those holding servicing portfolios are kicking their chops, as ever rise in rates means a longer duration of their portfolio - meaning more time before a borrower potentially refinances to a lower rate and thus making the collection of those monthly payments even more valuable.

Turning to today, we receive the ever-important employment data, this time for September – and it was strong. We had Nonfarm Payrolls (expected to decline to 184k from the prior reading of 201k but came in at 134k with a strong back-month revision to 270k). the Unemployment Rate (expected to decline 0.1% to 3.8%, it was 3.7%), and Hourly Earnings (+.3%). The trade deficit widened to $53.2 billion. Later, as if anyone cares, August Consumer Credit is due out at 15:00 ET. We start the day with the 10-year yielding 3.22% and agency MBS prices worse .125 versus last night’s close.

Jobs

Bay Equity Home Loans is growing and seeking top level originators and managers. Looking to add to Bay’s significant presence in Colorado, it is hiring for a Branch Manager position to cover the following Northern Colorado cities: Fort Collins, Greeley, Loveland and Longmont. This producing branch manager role would allow a candidate to plug into Bay Equity’s leading technology platform and would leverage the tools and best practices fueling the sales growth of its originators. Additionally, a lot of the growth in Colorado for Bay has been due to its industry leading Colorado operations team and the support getting loans closed efficiently and on time. Compensation based on experience with possible bonus structure. NO Tiered Production and FULL Compensation on CHFA Loans! This is a full-time position with enormous growth potential in an expanding company. Apply Now!

A well-known regional lender along the Eastern Seaboard is searching for an Advertising Consultant to help grow its DTC (direct to consumer) channel. The ideal candidate will have experience with improving results in a DTC environment, and can work from home with flexible hours. If interested, please contact me to forward your note along.  

Promotions, Layoffs, Company Moves

Royal Pacific Funding is pleased to announce the promotion of Michael Turturro to the position of Vice President, Sales. Michael has been an integral part of the phenomenal growth of Royal Pacific Funding since he joined the company in mid-2016. He has achieved the Top Producer award for both 2016 and 2017 and is on a path to do the same in 2018. Michael Clary, COO had this to say about the promotion, “This promotion marks a stepping stone for Mr. Turturro and his plans to grow a dynamic team of top producing Account Executives. I’m watching the current growth trajectory of his team and looking forward to what the future holds. Congratulations to Michael on a very well-deserved promotion.”

Yesterday Ocwen announced the completion of its acquisition of PHH, a mortgage platform with established servicing and origination recapture capabilities, for approximately $360 million in cash or $11 per diluted common share. Glen Messina became the President and CEO of Ocwen and a member of Ocwen’s Board of Directors. OCN can resume acquiring MSRs post-deal closing, and analysts are now modeling a stabilization of portfolio run-off by year-end 2019. To the extent the company can resume servicing portfolio growth, this could meaningfully improve the longer term outlook for the company and improve investor sentiment. The deal creates a strong non-bank mortgage servicer with approximately 1.7 million loans with an unpaid principal balance of over $296 billion. In 2017, the combined company originated more than $3 billion of residential mortgage loans including reverse mortgages.

Home Point Financial has a new Chief Business Officer: Phil Shoemaker. He will report directly to Home Point President and CEO Willie, aka Willie, Newman, and be responsible for Third Party Originations, Customer Retention and Technology.

Customer relationship and market automation company Top of Mind Networks announced the transition of Mark Green to Chief Strategy Officer and appointment of Bill Hayes as CEO.

“Green founded Top of Mind in 2003 and led the company as its CEO before shifting to a primary focus on business development and product innovation. Hayes brings a rich background of entrepreneurial, operational and technological leadership.”

And out in California private equity firm-owned Western Bancorp exited wholesale & correspondent lending. “We regret to inform you that Western Bancorp has made the decision to exit the Wholesale and Correspondent business due to current market conditions. (Effective 10/4), Western Bancorp will no longer be accepting new loan submissions or locks. For more information you may contact your Account Executive…” In this industry things change fast… Remember – it was only a year ago when Western Bancorp tied the knot with private equity firm Eli Global with plans to go national?