Senior officials of the National Association of Federally-Insured Credit Union and Ginnie Mae met this week to discuss housing finance challenges and credit union participation in Ginnie Mae programs—in anticipation of housing reform.

The meeting between Dan Berger, president and CEO of NAFCU, and Michael Bright, acting president of Ginnie Mae, also covered the Association's key principles for reform, such as the following:

• The government sponsored enterprises should be self-funded, without any dedicated government appropriations.
• Credit risk transfer transactions should be expanded and the Common Securitization Platform and Single Security retained.
• FHFA or its successor should continue to provide strong oversight of the GSEs and the new system, whatever it may look like.
• The transition to a new system should be as seamless as possible.

NAFCU seeks to ensure that lawmakers and agency officials include credit unions' principles in the Trump Administration housing reform.

Bright joined Ginnie Mae July 2017 as executive vice president and COO; he is awaiting Senate confirmation to serve as president. Bright has also served as a senior financial policy advisor to Sen. Bob Corker, R-Tenn., and helped draft a GSE reform bill introduced by Corker and Sen. Mark Warner, D-Va., in 2013.

Treasury Department Counselor Craig Phillips recently said the administration is working on housing finance reform and plans to build on recommendations that it released in June. NAFCU has called on the administration to work with Congress to develop a comprehensive solution to reforming the housing finance system.

From a legislative perspective, House Financial Services Committee Chairman Jeb Hensarling, R-Texas, and Rep. John Delaney, D-Md., in September released a housing finance reform discussion draft that would transform Ginnie Mae's role in the housing finance market, as well as preserve a NAFCU-sought government guarantee to the secondary mortgage market and create more lending opportunities for small lenders.

In addition, following the Federal Housing Finance Agency’s release of housing finance reform objectives to leaders of the Senate Banking Committee earlier this year, Senate Banking members Corker and Warner released draft legislation. The proposal outlines new roles for Ginnie Mae and the FHFA, while establishing conditions for transition from a GSE model, to one with multiple guarantors and guaranteed access for small lenders.

Fidelity National Financial Inc. has reported total revenue of around $2.1 billion in the third quarter compared with $2.0 billion in the third quarter of 2017. And, over all, the third quarter average title fee per file was $2,623, an 11% increase compared to the third quarter of 2017. Fidelity National provides title insurance and transaction services to the real estate and mortgage industries.

In addition, the company announced the following financial performance results:

• Third quarter net earnings of $236 million and adjusted net earnings of $218 million versus net earnings from continuing operations of $156 million and adjusted net earnings from continuing operations of $174 million for the third quarter of 2017.
• Third quarter diluted EPS of $0.85 and adjusted diluted EPS of $0.78 versus diluted EPS from continuing operations of $0.57 and adjusted diluted EPS from continuing operations of $0.63 in the third quarter of 2017.

Title Insurance 

• Total revenue of around $1.9 billion versus approximately $1.9 billion in total revenue in the third quarter of 2017.
• Pre-tax earnings of $309 million and adjusted pre-tax earnings of $297 million compared to pre-tax earnings of $262 million and adjusted pre-tax earnings of $287 million in the third quarter of 2017.
• Pre-tax title margin of 16.2% and adjusted pre-tax title margin of 15.6% versus pre-tax title margin of 14.0% and adjusted pre-tax title margin of 15.3% in the third quarter of 2017.
• Third quarter purchase orders opened increased 0.3% and purchase orders closed decreased 1%, compared to the third quarter of 2017.
• Total commercial revenue of $271 million, an 8% increase over total commercial revenue in the third quarter of 2017. It was driven by a 16% increase in total commercial fee per file and a 7% decrease in closed orders; third quarter total commercial open orders increased 1% compared to the prior year.
• Overall third quarter average fee per file of $2,623, an 11% increase versus the third quarter of 2017.

"The third quarter was a solid performance for our title business, as we generated adjusted pre-tax title earnings of $297 million and a 15.6% adjusted pre-tax title margin, increases of $10 million and 30 basis points, respectively, over the third quarter of 2017," said William P. Foley, chairman of Fidelity National. "The commercial and residential purchase markets continued to be the main drivers of our performance in the third quarter, as total commercial revenue grew by 8% versus the third quarter of 2017, continuing a very strong year for our commercial business. While residential purchase open orders per day increased by 0.3% and residential purchase closed orders per day declined by 1%, this was offset by an 11% increase in the fee per file that provided 3% growth in direct title premiums over the prior year.  As we enter the seasonally slower fourth quarter, we will remain focused on our operating metrics and staffing levels in order to maximize our profitability.”

Stewart Information Acquisition

"We continue to work through the regulatory process for the Stewart Information Services acquisition that we announced on March 19," said Foley.  "We are currently engaged in the Second Request related to the FTC's HSR regulatory review of the transaction. Responses to nearly all the FTC's requests for information and documentation have been submitted. The Form A filings with the states of Texas and New York are being reviewed by those states. We still anticipate a first or second quarter of 2019 closing for the transaction and continue to believe the Stewart acquisition will create meaningful long-term value for our shareholders."

Wages increased for most workers, and that's good news for the mortgage industry.

Wages for U.S. workers grew 3.5 percent over the last year, increasing the average wage level by $0.95 to $27.81 an hour, according to the Workforce Vitality Report from the ADP Research Institute.

The growth, accelerating to 3.5 percent annual as of September 2018, was driven by strong wage gains for workers in the professional and business services industry, representing almost 17 percent of the workforce, (3.5 percent wage growth, $35.23 average hourly wage) and trade, representing 22 percent of the workforce, (3.9 percent wage growth, $24.57 average hourly wage).

The West (4.3 percent, $29.88) and large businesses (4.8 percent, $28.84) also contributed.  Employees in the resources and mining industry saw their wages decrease (-0.2 percent, $34.91) and businesses with less than 50 employees experienced the slowest wage growth (2.0 percent, $25.56).

"Full employment is upon us," said Ahu Yildirmaz, co-head of the ADP Research Institute.  "This is evident in the gradual slowdown we've seen in overall job switching for the past year, coupled with an acceleration in wage growth for switchers.  As the labor market tightened, employers focused on providing the pay and benefits that would attract and retain skilled talent, making job holders less apt to switch."

Among industries, information continued to lead the way for both wage level and wage growth. In addition to the top overall wage growth number of 6.2 percent, those who successfully switched positions to the information industry had wage growth of 9.8 percent.  Employment in the information industry improved to 2.1 percent.

Job switchers in professional and business services and construction also realized high wage growth of 9.4 and 7.5 percent, respectively. In trade, the largest sector, job holders experienced stronger growth in wages than the workers who switched to the industry, 5.2 percent versus 3.8 percent.

Table 1: Wage and Employment Growth by Industry – September 2018

Workers in the West outpaced other regions with 4.3 percent wage growth and 2.6 percent employment growth. Job switchers also fared best in the West experiencing a wage growth of 8.7 percent. Workers in the South had the lowest wage growth at 2.8 percent and Midwest had the worst employment growth at 1.1 percent. By firm size, workers at large firms had the highest wage growth rate at 4.8 percent, with employment growth at 2.4 percent.

Table 2: Wage and Employment Growth by Region and Firm Size – September 2018

Also, the research revealed that more than 20.9 percent of U.S. employees successfully switched firms in the last year. This highlights an overall slowdown in job switching.  On the other hand, we have seen wage growth for job switchers gradually accelerating during this same time period, currently at 5.6 percent. Given that the U.S. labor market is at full employment, and there is a shortage of skilled labor, this is not surprising as employers look to attract and retain top talent with premium wages.

With investment money pouring into single-family rentals, some experts have warned that the market’s boom could be unsustainable over the long-term. So reports GlobeSt.com.