I hope that you didn’t lay off your compliance department earlier this year, because there’s a lot going on. For example, from out of California comes the CCPA, effective in less than four weeks on 1/1/20. Susan Milazzo, the CEO of the California MBA, summed it up. “In very general terms, the key difference with the California Consumer Privacy Act (CCPA), as compared to other privacy laws, is that previously companies had to agree not to sell or transfer data if a consumer requested as well as companies have a responsibility to maintain data security for consumer information. The CCPA gives consumers the right to ask businesses, that fit certain criteria, to provide them all of the personal information that business has on them and/or ask the business to delete that information. While the regulations implementing the CCPA are not yet finalized, there are provisions for the AG to take action against businesses for non-compliance.” You’re ready and willing to delete all your client’s information from your database, right?

Lender Services and Products

How do you create plans for your business? Chances are you use a combination of reports, forecasting, media information and intuition. Now you face two challenges: communicating your plan to the entire company and keeping your plan updated throughout the year. New tools from Richey May Technology Solutions, RM Plan for Budgeting & Forecasting and RM Analyze for Business Intelligence, help you plan and communicate with ease and accuracy. Learn more and contact us for a demo.

How are you preparing for 2020? What tools do you have that can help set you apart from your peers? While agency guidelines and investor overlays are constantly changing, your responsiveness can remain rock solid.  With TheRuleTool™ you have instant access to guidelines and overlays offered in clear, transparent language. It's as simple as picking your agency, entering your keyword into the search bar, then scrolling through the results. You can even quickly ask a guideline or scenario question of TheRuleTool™ Credit Policy Team. Visit theruletool.com to start your free 30-day trial of TheRuleTool™. Being amazing isn’t complicated – it just takes the right tool.

Lender Toolkit and Velma.com are excited to announce a partnership focused on the new Ellie Mae Encompass solution, Connector by Velma. Lender Toolkit, leading Encompass Experts and Tool providers, are now deploying new Connector implementations. “We are very excited about how the Connector can help us improve margins for our Encompass clients by automating processes, ensuring compliance, and improving pull through across the digital mortgage journey” says Brett Brumley, Lender Toolkit Managing Partner. “With Velma’s pre-built strategies and workflows, we can have our clients up and running in days as well as implement custom configurations to best meet their needs. There’s plenty of value right out of the box, but I particularly like the ECOA/Reg B solution.”

For loan originators looking to get more done in less time outside the office, Momentifi CEO, Gibran Nicholas, is hosting a free webinar on Wednesday, December 11 at 2pm ET: How to Use Mobile CRM Technology to Save Time & Close More Loans in 2020. Topics include: how to calculate the Lifetime Value of your clients based on the latest mortgage industry stats; how to use mobile videos to close more loans from your database of clients and referral partners; how to use mobile technology to stay organized on-the-go, collaborate with your team and build more relationships outside the office. Gibran will also be sharing some new insights from recent homebuyer surveys that you can use to stand out from your competition and convert more leads in 2020. CLICK HERE to register for the free webinar.

Capital Markets

Why should lenders or originators keep an eye and ear on trade news, or whatever happens overseas? Because in recent years the world’s economic focus has shifted away from being based mostly on what happens in the United States and toward what happens elsewhere. Tariffs and Brexit have dominated the news for much of 2019. Speaking of which, the latest poll from the U.K. suggested that Conservatives remain on track to receive the most votes on December 12, but their lead has continued shrinking. And this week we learned that Eurozone's November Manufacturing PMI rose to 46.9 from 46.6 (expected 46.6). So? The outcome of the UK’s general election on December 12 will have a major influence over how things play out with Brexit, and both the economies of the Eurozone and the rest of the world. UK Prime Minister Johnson managed to secure a deal with the EU in October and was set to deliver an exit for the UK at the end of October but did not have a parliamentary majority, preventing him from pushing through a deal with the short time frame he was faced with. This led to a call for a snap election in which Johnson hopes to get a majority that will push through his Brexit deal. The outcome of the snap election will certainly be felt across Europe, whether the UK leaves the EU or has to request another delay. This comes as recessionary warning signs across the Eurozone flash red, mainly from a buildup in debt, which now stands at an all-time high of over €45 trillion. A recession, should one occur, could set off a vicious circle of widening fiscal deficits, falling bond prices, weaker bank balance sheets, further retrenchment in GDP, etc.

How does this affect people financing homes in the U.S.? Banks in some countries hold large amounts of sovereign debt. The debt of the Italian government exceeds 130 percent of GDP, and this ratio has not receded at all in recent years. Belgium, France and Spain are also large economies in which the government debt-to-GDP ratio is in the vicinity of 100 percent. A significant sell-off in the sovereign debt market of one of these aforementioned large economies could be problematic. A decline in the prices of government bonds (e.g., a rise in yields on government bonds) would have two adverse effects. First, the associated rise in government borrowing costs would lead to higher fiscal deficits, everything else equal, which could lead to further selling of government bonds by investors. Second, a decline in bond prices would weaken banks that hold meaningful amounts of government debt by depressing the value of the bank’s assets. Significant weakness in the banking system probably would lead to slower economic growth, which would lead to even wider fiscal deficits. The year-over-year rate of real GDP growth in the Eurozone has dropped to only 1.2 percent in Q2-2019 from 3.0 percent at the end of 2017. It would not take much of a financial or economic shock to cause the Eurozone to slip into recession in coming quarters.

Fortunately, as measured by the debt-to-GDP ratio, the Eurozone has de-levered modestly over the past few years. The household debt-to-GDP ratio has edged down recently, and the ability of the household sector to service its debt has improved due to the decline in its debt-service ratio. So keep your eyes on that December 12 election and other developments around the Eurozone as it could have far-reaching recessionary impacts.

Will the most recent tariffs actually affect the American consumer? The higher prices that importers will pay means either higher prices for consumers or squeezed margins for businesses. Earlier tariffs, by design, impacted categories further up the production pipeline, like steel and aluminum. The latest round impacts finished goods like toys, clothing and consumer electronics, with the more direct consumer exposure giving this round of tariffs the ability to really harm consumer confidence. Either importers could push back on costs from suppliers (suppliers may have little room to budge on their margins and/or contract prices have they been set), or tariff costs could be passed on to consumers. In previous rounds aimed more at intermediate goods, tariffs on inputs were only a part of a finished goods’ final costs.

What speculation is new on the trade front? It’s moving markets as much as actual news these days, and Treasuries pulled back again on Thursday as investors speculated the Trump administration won’t move forward with a tariff hike on Chinese goods scheduled for December 15. The spike in trade tensions earlier in the week is now viewed by many investors as negotiating bluster, with President Trump yesterday saying China trade negotiations are “moving along well.” Though gains were slowed by a news report that the U.S. and China remained at odds over the value of farm purchases. Treasury yields climbed after data showed jobless claims fell to a seven-month low, signaling resilience in the labor market ahead of today’s jobs report. One thing is certain: expect trade to dominate the narrative for the next week and a half as we approach that December 15 deadline.

Yesterday we learned that the U.S. Treasury will sell $38 billion in 3-yr notes on Monday, followed by a $24 billion 10-yr note reopening on Tuesday, and a $16 billion 30-yr bond reopening on Wednesday. The trade deficit for October narrowed, and a decline in both exports and imports for the second straight month is not a hallmark of a global economy running strong. Initial jobless claims reminded us that the labor market remains tight, and Factory Orders increased 0.3% in October, as expected. The 10-year yield quickly rose 5bp, touching a high of 1.822% midmorning before spending the rest of the session grinding lower before trading sideways into the close.

Although the Fed appears to be on hold until April, traders always look forward to unemployment data, and both the labor market and consumers should be enough to continue to sustain the expansion. A high number would corroborate Federal Reserve Chairman Powell’s view that rates can stay on hold following three cuts. But it could also reduce the urgency for a deal with China, given that escalating levies have so far failed to significantly dent employment.

Turns out that Nonfarm Payrolls for November were +266 (expected +180-200k, with a revision higher in October), the Unemployment Rate was 3.5% (expected 3.6%), and Hourly Earnings were +.2% (expected +.3-.6%). Later this morning brings the consumer sentiment index and wholesale inventories. We begin the day with Agency MBS prices worse a solid .125 and the 10-year yielding 1.86 percent after closing yesterday at 1.80 percent after the solid jobs report.

Employment and Transitions

A Mid-Atlantic Mortgage Company is looking for an experienced Underwriting Manager. Responsibilities include overseeing the department to ensure all mortgage transactions are underwritten based on the guidelines in a timely manner and meeting commitment dates and closing dates. Collaborate with management team to create, revise and implement policies and procedures. Hire, develop and manage their team. Must have knowledge of Encompass, at least 10 years’ experience in underwriting (3 years’ experience as an underwriting manager) and knowledge of all products and guidelines. Confidential notes of interest should be sent to Chrisman LLC’s Anjelica Nixt for forwarding.

American Financial Network, Inc. (AFN; NMLS 237341) is recognized as a top U.S. mortgage lender by HousingWire Magazine, Inc. 5000, Scotsman Guide and others. AFN recently acquired its New York state license, making it a true nationwide lender. AFN has deployed a single-source Command Center that fulfills virtually all of its tech needs and simplifies processes. Advanced remote and mobile access to loan app technology and real-time views of pipelines puts vital data in the hands of AFN’s Mortgage Loan Originators (MLOs). Add highly skilled ops support to cutting-edge technology and AFN offers a proven formula for success. With an ambition of app-to-funding within 10 days, some AFN teams have achieved a record 7 days. AFN is expanding its reach, adding quality branches to a growing, successful company. Seasoned retail professionals, John D’Onofrio, Matt Larson, and Matthew Schultz, are recruiting ambitious Branch Managers and MLOs. Visit joinAFN.com to learn more.

Fannie Mae & Freddie Mac announced the appointment of Anthony Renzi as the new CEO of Common Securitization Solutions, LLC (CSS). Recall that David Applegate announced earlier this year that he would be stepping down as CSS CEO by year-end.