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Cinco De Mayo, Bank M&A Heating Up, Jumbo Loan Trends, What % of Underwriters Work From Home?

Friday, May 5, 2017 - Article by: bcahoone - Global Home Finance Inc - Message

By rchrisman@robchrisman.comMost people don't know that in 1912, Hellmann's mayonnaise was manufactured in England. In fact, the Titanic was carrying 12,000 jars of the condiment scheduled for delivery in Vera Cruz, Mexico, which was to have been the next port of call for the great ship after its stop in New York. This would have been the largest single shipment of mayonnaise ever delivered to Mexico. But as we know, the great ship did not make it to New York. The ship hit an iceberg and sank, and the cargo was lost forever. The people of Mexico, who were crazy about mayonnaise, and were eagerly awaiting its delivery, were disconsolate at the loss. Their anguish was so great that they declared a National Day of Mourning, which they still observe to this day. The National Day of Mourning occurs each year on May 5th and is known, of course, as Sinko de Mayo.Today on "Jobs Friday," don't think California has some pull? It is home to 1 in 8 Americans and its economy is the 6th largest in the world. It has 58 counties; there are a total of 3,143 counties and county-equivalents in the United States. I mention this not to give you some trivia for Cinco de Mayo, but to show how narrowly confined the much-discussed coal jobs are: 50 percent of the U.S. coal mining jobs are in a mere 25 counties in the United States, and the number of coal mining jobs roughly equals that of florists in the U.S. (Nothing against either profession!) Products Did you just get a mysterious cube in mail? I did. The Money Source Inc. sent me this intriguing package to announce SIME (pronounced Sim-mee) which stands for Servicing Intelligence Managed Easily. Get a sneak peek at In 2015, 28% of underwriters worked remotely according to the STRATMOR Compensation Connection Survey. STRATMOR believes the percent of Underwriters working remotely increased in 2016. Did you change where your Underwriters work in 2016 and how does that compare with your peers? Participate in our 2017 STRATMOR Compensation Connection to find out. This year we're digging deeper into benefits to look closer at PTO, Healthcare, 401K, and Educational Assistance offerings by lenders. The deadline has been extended to May 15, so don't miss out on your chance to find out how your compensation, compensation plans and benefits compare to industry standards and peers. To participate, visit our site. For questions regarding this program, please contact us at Nationwide mortgage lender Cardinal Financial Company, LP, launched its wholesale division and proprietary technology. "Cardinal Financial's end-to-end digital solution significantly streamlines the wholesale loan process by improving the loan manufacturing process from point of sale to close. The company's vision to lead and disrupt the mortgage industry by modernizing the way home loans are obtained is furthered by this significant initiative." Upcoming events "2017 is an inflexion point for the mortgage industry, with many unknowns swirling around. To help you make sense of all these unknowns, String's 2017-Opportunies Webinar is pleased to host one of the most insightful housing market insiders: Doug Duncan, Fannnie Mae's Chief Economist, will share his insights on the current state of the housing market with a special focus on the current stage of the business cycle and discussion about whether public policy will extend the expansion, continuing housing affordability challenges in light of limited new construction and homes available for sale, and Fed policy and mortgage market conditions. Join Garth Graham of STRATMOR Group and Todd Ballenger of Vantage Production for the webinar Borrower Satisfaction Insights on Tuesday, May 9 at 1 p.m. ET. Find out why measuring borrower satisfaction is one of the most critical ways to understand the impact of the loan process on your business. Click here to register now. On June 13th at the Jacksonville Community Center, FHA is offering a free Appraisal Training.On June 14th FHA's free Underwriting Training is available at the Jacksonville Community Center. Bank newsApparently, we've entered in to bank merger & acquisition season, if there is such a thing. Things are heating up, which is interesting as the number of announced mergers this year has declined slightly. S&P Global Market Intelligence reports the number of banking sector deals for Q1 2017 was 58 compared to 61 (Q1 2016) and 65 (Q1 2015) for the same quarter in the prior 2 years. And are there green shoots in banking? Bank Director Magazine reports the FDIC has approved 5 de novo bank applications since 2009 or about 1 per year vs. an average of 154 per year for the 8 years prior to the crisis. Just in the last week a whole new slew of bank M&A announcements came out from around the nation. In California, Central Valley Community Bank ($1.4B) will acquire Folsom Lake Bank ($200mm) for about $33.6mm in stock (100%) or about 1.71x tangible book, Bank of the Sierra ($2.0B) will acquire Ojai Community Bank ($257mm) for about $35.7mm in stock (100%), and Seacoast Commerce Bank ($572mm, CA) will acquire Capital Bank ($306mm, CA) for about $53.6mm in cash (20%) and stock (80%) or about 1.96x tangible book. In Kansas First Commerce Bank ($65mm) will acquire The State Bank of Blue Rapids ($46mm), and Mid-America Financial Corp (KS) will merge Morgan Federal Bank ($113mm, CO) into Golden Belt Bank ($138mm, KS). Towne Bank ($8.0B, VA) will acquire Paragon Commercial Bank ($1.5B, NC) for about $323.7mm in stock (100%) or roughly 2.37x tangible book. South State Bank ($9.0B, SC) will acquire Park Sterling Bank ($3.3B, NC) for about $690.8mm in stock (100%) or roughly 2.43x tangible book.) National Bank of Commerce ($2.0B, AL) will acquire Patriot Bank ($155mm, FL) for cash and stock. First Tennessee Bank ($30.0B, TN) said it will acquire Capital Bank ($10.0B, NC) for $2.2B in cash (20%) and stock (80%) or about 2.0x tangible book. First Bank ($4.4B, NC) will acquire Asheville Savings Bank ($795mm, NC) for about $175mm in cash (10%) and stock (90%). Things aren't always peachy, of course. BB&T said it will close 100 branches of its total footprint of 2,193 or about 5% this year. Bank failures still happen but at a much, much slower pace than in the last few years. There have been only four this year, but recently the FDIC closed First NBC Bank ($4.7B, LA) and sold it to Whitney Bank ($25B, MS). Whitney picks up 29 branches, deposits excluding CDs, IRAs and brokered (for a $35mm premium), and $1B in assets. This is the largest bank failure since 2015 (which was Doral). Jumbo news The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.23% from 4.20%, for 80% LTV ratio loans. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) increased to 4.18% from 4.15%, for 80% LTV loans. The average contract interest rate for 30-year fixed-rate mortgages backed by FHA increased to 4.06% from 4.03%, for 80% LTV loans. The average contract interest rate for 15-year fixed-rate mortgages increased to 3.51% from 3.46%, for 80% LTV loans. The average contract interest rate for 5/1 adjustable-rate mortgages increased to 3.29% from 3.22%, for 80% LTV loans. MWF posted a new email address for Jumbo scenarios. Any questions or scenarios regarding any MWF Jumbo product should be addressed to: Mountain West Financial has updated and changed various underwriting guidelines. Effective May 1, 2017 a one-on-one homebuyer counseling session in addition to the homebuyer education class is required on its CALHFA program. Changes have also been made to its JUMBO II product which include information on Ineligible Transactions, Second Home and Investment Properties and Gift of Equity. MB Financial Bank's Jumbo Enhancements include 90% LTV Purchase to $1.5 Million, and Non-Owner Occupied to 60% LTV. NewLeaf announced the new NewLeaf Prime Jumbo and NewLeaf Prime 90% High LTV Products - QM products that must meet all ATR requirements. These products are available immediately. Effective immediately, loans with properties in the state of California, home to plenty of jumbo loans, are eligible for purchase by Fifth Third Mortgage Company. Capital markets What are bond traders talking about these days? In no order, the NBA playoffs, overall business spending accelerating in March, the Stanley Cup, the sharp decline in oil prices, rising unit labor costs, Wednesday's FOMC statement, a flat yield curve, and the House of Representatives passing a partial repeal of the Affordable Care Act. (The bill still needs to get through the Senate, which could be a more difficult undertaking but that would pave the way for making corporate tax cuts easier to do. And corporate tax cuts could spur the economy, which in turn typically leads to higher rates.) Yes, that's a lot to talk about, but it all conspired to weigh on bond prices and drive rates higher: as a proxy for other rates, the 10-year T-note worsened .375 to yield 2.36% while the 5-year and MBS prices worsened .125-.250 depending on coupon and security type. Do the markets care about unemployment when there is a 90% chance of the Fed increasing short-term rates at its meeting next month? Yes. Say what you want about the validity of the numbers, the April employment numbers came out: nonfarm payrolls (+211k, but March was revised downward), the unemployment rate (4.4% - strong), and average hourly earnings (+.3%). After the employment numbers we find rates roughly unchanged versus Thursday's close: the 10-year is yielding 2.35% and agency MBS prices have barely budged.

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