Thursday, March 31, 2016

servicers-need-to-simplify-mods-when-collateral-changes-hands

National Mortgage News – Servicers Need to Simplify Mods When Collateral Changes Hands

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Servicing

Servicers Need to Simplify Mods When Collateral Changes Hands

By Bonnie Sinnock
March 31, 2016

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Widows, divorcees and others who inherit or otherwise receive mortgaged property often have a hard time getting loans modified because there are too many hurdles to proving they own the property.

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fha-urged-to-update-assumption-rules-discuss-handbook-changes

News from Our Industry Newsletters

March 25, 2016

VA Jumbo Securitization Rises in 2015 Despite 4th Quarter Decline

Ginnie Mae securitization of jumbo mortgage loans with a VA guaranty rose significantly in 2015 despite a volume drop-off in the fourth…… from Inside FHA/VA Lending

March 24, 2016

The Shifting Sands of Subservicing: Growth for Cenlar, Nationstar Poised to Move Up, Ocwen Takes a Tumble

Firms that specialize in subservicing increased their contracts by 2.7 percent in the fourth quarter and by 21.3 percent from a year ago,…… from Inside Mortgage Finance

March 18, 2016

FOMC Holds Off on Rate Increase, Signals Two Hikes; Observers Expect Moves in June, December

The Federal Reserves Open Market Committee decided this week, as expected, to delay its next rate increase, citing concerns about global…… from Inside MBS & ABS

March 11, 2016

Ocwen Under Pressure as Restructuring Continues

Ocwen Financial recently reported a large loss in the fourth quarter of 2015 along with investigations by a number of regulators, leading to a…… from Inside Nonconforming Markets

fha-urged-to-update-assumption-rules-discuss-handbook-changes

http://www.cnbc.com/2016/03/30/tired-of-rising-rent-maybe-you-should-consider-becoming-a-landlord.html

Since the housing collapse forced millions of Americans from their homes, professional investors have plowed more than $25 billion into the purchase of more than 150,000 houses. And they’re still buying.

It’s not hard to see why. With more than 7 million homeowners evicted by lenders since the mortgage bubble burst, most of those families are now renters.

And the next generation of homebuyers are more likely to rent than their parents did when they first left the nest. Thanks to tighter credit, and the reality check of the housing bust, milllenials have become the “Meh Generation” of potential homebuyers, taking a much more cautious approach to the homeownership aspirations of their parents and grandparents.

As a result, rental housing is in demand. As CNBC has reported, single-family rental homes made up about 9 percent of the U.S. housing stock before the housing bust. Now they are about 13 percent and still rising, according to Moody’s. Some 13 million of the 22 million new households that will form between 2010 and 2030 will likely be renters, instead of buyers, according to the Urban Institute.

Since 2006, the number of single-family rental homes has increased 35 percent, to 15.1 million from 11.2 million, according to John Burns Real Estate Consulting. And more of that new rental housing, roughly 3.9 million units, came from former owner-occupied homes, compared to 2.9 million newly built apartments.

So as homeownership has fallen and continues to drop, more people need to rent. That’s created a land rush of investment in rental properties.

But the big gains have already been made by investors who snapped up houses at distressed prices at the bottom of the market. That means today’s would-be landlords need to cast a wider net.

One way to find potentially profitably rental properties is to look at neighborhoods where rents are rising faster than the median home price — a sign that demand for renting is still stronger than buying.

That’s still the case in some in 45 percent of the housing markets analyzed by RealtyTrac, a real estate research firm.

“There are still plenty of solid opportunities available for real estate investors willing to cast a wider geographic net,” said Daren Blomquist, a RealtyTrac analyst.

But even in locations showing rising rents, there’s no guarantee you’ll come out ahead as an investor. As the rental real estate market has become more competitive, it may be harder to make the numbers add up in your favor. The only way to know is to do the math.

http://www.cnbc.com/2016/03/30/tired-of-rising-rent-maybe-you-should-consider-becoming-a-landlord.html

3-ways-to-tame-your-student-loan-debt-and-buy-a-home

DTI fixes

There are 3 ways to overcome a DTI difficulty: Reduce debt, increase income or decrease the target mortgage payment.

Reduce debt. Some lenders will remove an installment or closed-end loan, such as a car payment, from DTI if the loan will be paid off within 10 or fewer payments. Dacey says if a buyer pays off enough of a loan to reduce the balance to 10 or fewer payments, the DTI can benefit.

Reducing or paying off credit card debt can help, too, although the 10-month rule doesn’t apply because a credit card is revolving or open-ended debt.

Another DTI improvement strategy is to pay off the student loans with a private loan, perhaps from a family member, at a lower interest rate or with a longer repayment term. The private loan must be disclosed to the lender.

RATE SEARCH: Shop today for the right personal loan for you.

Moving debt around

Buyers who are married and don’t live in a community property state might be able to reconfigure the income and liabilities to overcome a DTI hurdle.

“Let’s say the husband stays home with the kids and (the couple) has a joint auto loan that is truly the dad’s truck. I’ve seen people refinance out of their existing auto loan and put it into the (name of the) spouse who doesn’t have the income,” Dacey says.

The income-earning spouse then applies for a mortgage without the debt-burdened spouse.

Increase income. The general rule of thumb is that income must be documented for 2 years to be included in DTI. But Krichmar says a buyer’s college history can make up almost all of that 2-year time frame, and a new job in the same field isn’t necessarily a negative, especially if it comes with a higher salary.

“That income could be used to qualify as soon as you have 30 days of pay stubs,” he says.

Different rules apply to commissions, bonuses, self-employment income and hobby businesses.

Decrease mortgage payment. It may seem counterintuitive, but buying a house instead of a condominium can improve a buyer’s DTI because homeowners association dues are included in a condo payment but not a house payment.

“Somebody might qualify to buy a $150,000 house but not a $150,000 condo because the association fees might be a little bit too high,” Dacey says.

Buying a home in an area with lower property taxes or paying an upfront fee to decrease the mortgage interest rate also could help. The upfront fee is known as discount points or a buy-down.

It’s tough out there

If none of those solutions works for you, you’re not alone.

Only 33% of 2015 homebuyers were first-time purchasers, according to a survey released by the National Association of Realtors. That was the lowest proportion since 1987, excluding 2014, when the proportion was also 33%.

What’s more, 22% of millennial buyers said saving for a down payment was difficult and 54% of that group cited — you guessed it — student loans as a factor.

Real estate brokers are concerned about this issue, says Wendy English, sales manager at Century 21 Commonwealth in Medfield, Massachusetts.

“Setting aside for the down payment and closing costs is difficult because their money is going toward living expenses and paying student loan debt,” English says. “They might want to buy, but they have that burden of the student loans.”

12,563 rubber duckies

One way to understand the impact is to try the make-your-own-infographic function at the website of the Young Invincibles, an advocacy organization in Washington, D.C.

Plug in, say, $25,000 of student loan debt and you’ll discover that’s equivalent to about 60% of the average down payment to buy a home. It’s also equal to about 2.4 years of average rent payments, 676 toaster ovens or 12,563 rubber duckies.

Some of those examples might seem silly, but they do illustrate that student loans are a significant factor for many young adults in their prime first-time homebuying years.

RATE SEARCH: Get prequalified for a mortgage today.

3-ways-to-tame-your-student-loan-debt-and-buy-a-home

Wednesday, March 30, 2016

realtytrac-ranks-best-markets-for-buying-single-family-rentals-in-2016

IRVINE, CA–(Marketwired – March 31, 2016) – RealtyTrac^® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its Q1 2016 Single Family Rental Market Report, which ranks the best markets for buying residential rental properties in 2016.

The report analyzed single family rental returns in 448 U.S. counties each with a population of at least 100,000 and sufficient rental and home price data. Rental data was from the U.S. Department of Housing and Urban Development, and home price data was from publicly recorded sales deed data collected and licensed by RealtyTrac markets (see full methodology below).

The report ranked all 448 counties based on the potential annual gross rental yield (monthly rent, annualized, divided by median home price) and also identified the best counties for future growth in the single family rental market and the best millennial magnet single family rental markets.

View interactive map displaying SFR returns in all 448 counties analyzed.

“Rapidly rising home prices and tepid wage growth have dampened single family rental investment returns and growth potential in many markets, but there are still plenty of solid opportunities available for real estate investors willing to cast a wider geographic net,” said Daren Blomquist, senior vice president at RealtyTrac. “Rents are rising faster than median home prices in 45 percent of the markets analyzed — indicating continued strong demand for rentals in those markets — while annual wage growth is outpacing rent growth in 43 percent of the markets — indicating room for rising rental returns in those markets.”

Counties with highest single family rental returns

The average annual gross rental yield among the 448 counties was 9.4 percent, down from an average of 9.5 percent in the first quarter of 2015.

Counties with the highest annual gross rental yields were Baltimore City, Maryland (28.5 percent); Clayton County, Georgia, in the Atlanta metro area (25.8 percent); Wayne County, Michigan in the Detroit metro area (24.2 percent); Bay County, Michigan, in the Bay City metro area (21.2 percent); and Macon County, Georgia (20.6 percent).

“The strong South Florida rental market continues to give solid returns to the investors,” said Mike Pappas, president and CEO of the Keyes Company, covering the South Florida market, where Miami-Dade County’s potential single family rental return was 8.4 percent with rents rising 4 percent annually and home prices rising 11 percent annually. “Our limited land with growing population give the investors an additional equity kick in rising prices.”

Counties with lowest single family rental returns

Counties with the lowest annual gross rental yields were Arlington County, Virginia in the Washington, D.C., metro area (3.3 percent); California Bay area counties of San Francisco (3.4 percent), San Mateo (3.6 percent), Marin (3.9 percent), Santa Cruz (4.0 percent) and Santa Clara (4.0 percent); Williamson County in the Nashville metro area (4.0 percent); and Kings County (Brooklyn), New York (4.0 percent).

“I would expect to see a modest slowdown in rental rate growth given the distinct ties that there are between rental rate growth and income growth,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market, where King County’s potential rental returns for 2016 ranked 394 out of the 448 counties analyzed. “If incomes do not keep on growing, rental rates cannot either.

“I am also finding that some softness is starting to enter the single family rental market in Seattle for other reasons,” continued Gardner, who noted that the RealtyTrac analysis shows King County rents grew 6 percent annually, home prices grew 10 percent annually while average wages grew less than 1 percent annually. “The first is that home prices are increasing to such a degree — specifically in King County — that investors will not be able to get sufficient yield on rents given high prices that they have to pay for houses.

“Secondly, many single family rental households are families who had lost their previous home to foreclosure and are now becoming so-called ‘boomerang buyers’ who are now starting to be able to qualify for a mortgage again and are likely heading back into home ownership. This will reduce demand for single family rentals, and millennials will not take their place as they prefer urban multi-family units. Because of these confluence of factors, landlords are going to be cautious with any potential acquisition.”

Best single family rental growth markets

The report identified and ranked 17 counties as the best markets for future growth in single family rental returns. In all 17 counties average weekly wages grew at least 5.0 percent annually and annual wage growth outpaced annual rental rate growth

The top five counties are Genesee County, Michigan in the Flint metro area (15.3 percent annual gross rental yield and 5.0 percent annual wage growth); Camden County, New Jersey in the Philadelphia metro area (12.9 percent annual gross rental yield and 5.5 percent annual wage growth); Woodbury County, Iowa in the Sioux City metro area (11.4 percent annual gross rental yield and 11.3 percent annual wage growth); De Kalb County, Illinois in the Chicago metro area (11.3 percent annual gross rental yield and 8.9 percent annual wage growth); and Warren County, New Jersey in the Allentown, Pennsylvania metro area (10.8 percent annual gross rental yield and 6.0 percent annual wage growth).

“With increasing jobs and immigrant growth, housing demand continues to grow across Ohio,” said Michael Mahon, president at HER Realtors. As available housing inventory and new construction inventory remain low, rental pricing shall continue to rise throughout much of 2016.”

View interactive table showing all 17 best SFR growth markets.

Best millennial magnet single family rental markets

The report also identified and ranked 15 counties as the best markets for renting single family homes to millennials. In all 15 counties, the millennial share of the population increased at least a 10 percent between 2008 and 2013 and annual wage growth outpaced annual rental rate growth.

Top five counties are Milwaukee County, Wisconsin (15.7 percent annual gross rental yield and millennial population share increase of 16.4 percent); Richmond City, Virginia (13.7 percent annual gross rental yield and millennial population share increase of 27.6 percent); Bell County, Texas in the Killeen-Temple metro area (11.9 percent annual gross rental yield and millennial population share increase of 20.6 percent); Jackson County, Missouri in the Kansas City metro area (11.1 percent annual gross rental yield and millennial population share increase of 13.5 percent), and Okaloosa County, Florida in the Crestview-Fort Walton Beach-Destin metro area (10.5 percent annual gross rental yield and millennial population share increase of 22.2 percent).

View interactive table showing all 15 best millennial SFR markets.

Zip codes with best and worst single family rental returns

The report analyzed single family rental returns in 6,551 zip codes nationwide with a population of at least 2,500 and sufficient rental and home price data.

The top five zip codes with the highest potential single family rental returns for 2016 were 48505 in the Flint, Michigan metro area (150.2 percent); 21223 in the Baltimore, Maryland metro area (102.0 percent); 35208 in the Birmingham, Alabama metro area (89.7 percent); 21205 in the Baltimore, Maryland metro area (87.8 percent); and 48205 in the Detroit, Michigan metro area (87.1 percent).

The top five zip codes with the lowest potential single family rental returns for 2016 were 34102 in The Naples, Florida metro area (0.5 percent); 33480 in the Miami, Florida metro area (0.6 percent); followed by three zip codes in the Los Angeles metro area: 90210 (0.9 percent), 90069 (1.0 percent), and 90402 (1.1 percent).

View interactive map displaying best and worst zip-level SFR returns by state.

Methodology

For this report, RealtyTrac looked at all U.S. counties with a population of 100,000 or more and with sufficient home price and rental rate data. Rental returns were calculated using annual gross rental yields: the 2016 50^thpercentile rent estimates for three-bedroom homes in each county from the U.S. Department of Housing and Urban Development (HUD), annualized, and divided by the median sales price of residential properties in each county.

RealtyTrac also incorporated weekly wage data from the Bureau of Labor Statistics and demographic data from the U.S. Census into the report.

The millennial generation was defined as someone who was born between the years 1979 to 1993.

Report License

The RealtyTrac U.S. Single Family Rental Market Report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.

Data Licensing and Custom Report Order

Investors, businesses and government institutions can contact RealtyTrac to license bulk foreclosure and neighborhood data or purchase customized reports. For more information please contact our Data Licensing Department at 800.462.5193 or datasales@realtytrac.com.

About RealtyTrac

RealtyTrac is a leading provider of comprehensive U.S. housing and property data, including nationwide parcel-level records for more than 130 million U.S. properties. Detailed data attributes include property characteristics, tax assessor data, sales and mortgage deed records, distressed data, including default, foreclosure and auctions status, and Automated Valuation Models (AVMs). Sourced from RealtyTrac subsidiary Homefacts.com, the company’s proprietary national neighborhood-level database includes more than 50 key local and neighborhood level dynamics for residential properties, providing unrivaled pre-diligence capabilities and a parcel risk database for portfolio analysis. RealtyTrac’s data is widely viewed as the industry standard and, as such, is relied upon by real estate professionals and service providers, marketers and financial institutions, as well as the Federal Reserve, U.S. Treasury Department, HUD, state housing and banking departments, investment funds and tens of millions of consumers.

realtytrac-ranks-best-markets-for-buying-single-family-rentals-in-2016

ex-lehman-cfo-dishes-on-downfalls

First, Erin Callan Montella went quietly, but now she’s come back swinging.

Callan Montella spoke Wednesday on CNBC’s “Closing Bell,” and said her decision to publish an autobiography was motivated by a need to explain herself in the wake of her own personal failures and after Lehman Brothers’ collapse.

“I wanted to take accountability for my own actions,” she told CNBC. “Nobody wanted me to fail. There was no incentive to have me fail.”

“Full Circle,” the self-published book from Callan Montella, ex-chief financial officer of Lehman, represents one of the more candid assessments of the bank’s struggle and failure in the 2008 global financial crisis. But the book also delves deeply into her own failings and broken relationships, while showcasing the pain felt by the executive once viewed as the most important woman on Wall Street.

On “Closing Bell,” Callan Montella stopped short of saying her career was ended by gender issues on Wall Street.

Callan Montella (who assumed the second surname after marrying her husband, Anthony Montella) talks about the day she was fired from the bank as it tried to beat back waves of liquidity pressures and press leaks that would undo not just her Wall Street career, but Lehman itself.

“I know I started to cry,” Callan Montella wrote, adding, “I’d given Lehman every ounce of myself for 13 years: all of my focus, energy and passion.”

ex-lehman-cfo-dishes-on-downfalls

bankers-battle-fhfa-plan-to-let-gses-buy-tax-credits

National Mortgage News – Bankers Battle FHFA Plan to Let GSEs Buy Tax Credits

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Secondary

Bankers Battle FHFA Plan to Let GSEs Buy Tax Credits

By Brian Collins
March 30, 2016

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Bankers are fighting back against a plan that would allow Fannie Mae and Freddie Mac to invest in low-income housing tax credits, arguing they are critical for meeting Community Reinvestment Act requirements.

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house-flipping-deja-vu-all-over-again

Over the past year in Miami, where condominium construction is fast and furious yet again, flipping activity has increased most, from 4.7 percent of all sales to 6.4 percent. Other Florida markets are also seeing the practice gain popularity again, according to Trulia. Both Florida and Las Vegas held the highest foreclosure rates in the nation during the housing crash and are still mopping up the mess with higher-than-average distressed sales. The market with the smallest share of flips: Detroit.

While large-scale investors scooped up foreclosures and turned them into rentals, smaller investor-flippers had to sit out the housing crash years. Homes were losing value, and lenders all but locked up the mortgage market. In the past four years, as home prices began gaining value again, flipping became profitable, although not nearly as profitable as it once was. Companies cropped up to help streamline the process, like Texas-based 1-800-CashOffer, also known as WeBuyHouses, which connects investors with sellers across the country.

“Miami and Las Vegas are extremely hot and are very big markets for us. There are still a lot of houses that need repair. Home flippers make their money by buying a house and fixing it up,” said Jeremy Brandt, CEO of We Buy Houses. “Everyone has their own strategy, and out of 10 homes in a month, the WBH investor might keep one or two for their rental portfolio, flip six to other investors, then fix up and resell the rest on the MLS (multiple list serve) in order to turn their cash over so they can buy more properties.”

Last fall, Brandt said he was getting between 5,000 and 10,000 contacts a month from home sellers looking to unload their properties quickly. He admits, with tight inventory of homes for sale nationwide, finding and securing the right, profitable property is harder than ever.

On the flip side, “Selling a house isn’t a problem,” he added.

Brandt’s company spends millions on marketing, building a strong national brand so that they can find sellers more easily. While Las Vegas is hot, he said investors are making the most money in Los Angeles — that is if they have deep pockets. Investors there are flipping multimillion-dollar properties, so the rewards are therefore greater.

house-flipping-deja-vu-all-over-again

news-release-fannie-mae-improves-options-for-energy

March 30, 2016

Fannie Mae Improves Options for Energy Efficiency Financing

HomeStyle Energy Mortgage Makes Refinancing Loans, Financing New Improvements Easier

Andrew Wilson
202-752-5168

WASHINGTON, DC – Fannie Mae (FNMA/OTC) has introduced HomeStyle® Energy mortgage, an enhanced option for borrowers who want to finance energy and water efficiency improvements to their home. Borrowers with an existing, higher-interest energy improvement loan, can more easily roll that loan into a new mortgage or into a refinance of an existing mortgage. In addition, borrowers will have options to finance new energy upgrades when purchasing or refinancing a home. HomeStyle Energy mortgage can be used on 1-4 unit properties, including condominium units, and is available for all approved Fannie Mae lenders.

“The National Association of Home Builders has found that energy efficient features are highly desired by homeowners, and we are committed to helping lenders serve these customers,” said Carlos Perez, Senior Vice President and Chief Credit Officer for Single-Family, Fannie Mae. “HomeStyle Energy mortgage will be particularly helpful to borrowers who want to pay off debt for existing energy improvements. It will also benefit homeowners who want to make their home more comfortable and efficient.”

Borrowers who are purchasing a home and want to improve the energy efficiency of the property can now receive up to 15% of the as-completed appraised value of the home to use for the upgrades. An energy report is required, and the lender must place these funds into an escrow account. Borrowers can finance up to $3,500 in weatherization or water-efficiency upgrades without having to obtain an energy report.

HomeStyle Energy mortgages can simplify the financing of energy-efficient improvements. This financing is likely more affordable than a subordinate lien, home equity line of credit, or unsecured loan, or loan from an HVAC vendor. In addition, most PACE loans are not eligible for Fannie Mae–backed mortgages, but can be paid off with this option.

Fannie Mae’s guide announcement on HomeStyle Energy mortgage is available here and a fact sheet for lenders and other resources are available here.

Fannie Mae is also the market leader in green solutions for the multifamily industry, and currently offers several options to reward green properties and to give multifamily borrowers the flexibility to finance energy efficient improvements. For more information on Fannie Mae’s Multifamily Green Initiative, please visit www.fanniemaegreeninitiative.com.

Fannie Mae enables people to buy, refinance, or rent homes.

Visit us at: http://www.fanniemae.com/progress

news-release-fannie-mae-improves-options-for-energy

zillow-forecast-expect-slightly-slower-growth-in-february-for-the-case-shiller-indexes

The Case-Shiller house price indexes for January were released yesterday. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close.

From Zillow: February Case-Shiller Forecast: More of the Same, But Slightly Slower

The January Case-Shiller indices grew at the exact same annual pace as December. Looking ahead, expect all three February Case-Shiller indices to show similar but slightly slower slower growth, with the 10-City Composite Index expected to register sub-5 percent annual growth for the first time in months, according to Zillow’s February Case-Shiller forecast.

The February Case-Shiller National Index is expected to gain another 0.3 percent in February from January, down from 0.5 percent growth in January from December. We expect the 10-City Index to grow 4.5 percent year-over-year, and the 20-City Index to grow 5.3 percent over the same period. The National Index also looks set to rise 5.3 percent year-over-year.

All SPCS forecasts are shown in the table below. These forecasts are based on today’s January Case-Shiller data release and the February 2016 Zillow Home Value Index (ZHVI). The February Case-Shiller Composite Home Price Indices will not be officially released until Tuesday, April 26.

The year-over-year change for the 10-city and 20-city indexes, and the Case-Shiller National index, will probably be slightly lower in the February report than in the January report.

zillow-forecast-expect-slightly-slower-growth-in-february-for-the-case-shiller-indexes

guaranteed-rate-hit-with-25m-judgment-for-data-stolen-by-poached-lo

National Mortgage News – Guaranteed Rate Hit with $25M Judgment for Data Stolen By Poached LO

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Origination

Guaranteed Rate Hit with $25M Judgment for Data Stolen By Poached LO

By Brad Finkelstein
March 28, 2016

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A California jury found Benjamin Anderson breached his employment contract and fiduciary duty to Mount Olympus, as well as committed fraud.

A jury awarded Mount Olympus Mortgage Co. more than $25 million in a lawsuit alleging “corporate espionage” by former employee Benjamin Anderson and his new employer, Guaranteed Rate.

Anderson and another former Mount Olympus originator who now works for Guaranteed Rate, Brian Decker, were accused of stealing loan files, borrower information and other proprietary data from the Irvine, Calif.-based lender.

“The purpose of the scheme was to divert hundreds of MOMCo loan customers to Guaranteed. The Individual Defendants misappropriated MOMCo’s confidential and proprietary information and directed MOMCo customers to Guaranteed,” the lawsuit, filed in an Orange County, Calif., superior court, reads.

The complaint alleges the pair acted with the encouragement of Chicago-based Guaranteed Rate.

“Guaranteed and Anderson conspired and devised a scheme to defraud MOMCo and secretly misappropriate MOMCo’s proprietary and confidential information,” the lawsuit reads. “Anderson was the perfect infiltrator: Anderson would continue to masquerade in his role as Mortgage Banker for MOMCo, while simultaneously, unlawfully downloading gigabytes of proprietary and confidential borrower information as well as offer confidential information from MOMCo’s servers, and diverting such information to Guaranteed.”

Anderson and Decker are among nine former Mount Olympus employees accused of participating in the scheme, which allegedly involved more than five gigabytes of Mount Olympus data. The claims against Decker was severed from the original lawsuit against Anderson and Guaranteed Rate and will be tried separately, said Chad Hummel, an attorney for Mount Olympus, in an interview. Claims against the remaining seven former Mount Olympus employees were previously settled confidentially out of court, Hummel added.

California law required the state’s Attorney General as well as consumers be notified regarding a data breach involving over 500 individuals. Hummel said that over 900 files were involved in this case; a letter dated July 30, 2014 notifying customers of the data breach is posted on the Attorney General’s website.

Guaranteed Rate officials declined an interview request. In a written statement, the company denied the lawsuit’s allegations.

“Guaranteed Rate would never encourage Ben Anderson, or any loan officer, to bring over loans in process or download any data,” the statement reads.

“Needless to say, Guaranteed Rate strongly disagrees with the jury’s conclusion, and we are reviewing all available options for an appeal in the case,” it adds.

According to Hummel and court documents, the situation at Mount Olympus came to a head on June 5, 2014. There was a meeting between company management and Anderson, who ranked No. 6 among top originators in 2013 with production of $201 million and 21st in 2012 with production of $180 million, over a decline in his loan origination volume.

After the meeting, Anderson’s desk was empty and his computer hard drive had data missing. At that point the company terminated Anderson’s employment, Hummel said. Mount Olympus was able to recover the missing information and found archived emails showing Anderson had been corresponding with Guaranteed Rate for three months, Hummel said, adding what was “discovered at that point just the tip of the iceberg of the data theft.”

The complaint said Anderson received a new employee package from Guaranteed Rate in April 2014. The jury found that Anderson breached his employment contract and fiduciary duty to Mount Olympus, as well as committed fraud.

The jury also found that Anderson along with Guaranteed Rate violated portions of section 502 of the California Penal Code involving the copying of mortgage loan computer files. Even though the claims against Decker were separated from this case, the jury also found Decker to be accountable.

In its verdict on March 17, the jury awarded Mount Olympus $5.6 million from lost profits and $4.6 million in lost business value jointly coming from Anderson and Guaranteed Rate. The jury also determined Anderson had to disgorge nearly $2 million he earned from commissions on the loans involved in this case, Hummel said. The jury also found Guaranteed Rate earned $657,000 unjustly.

On March 22, the jury awarded Mount Olympus $12.5 million in punitive damages from Guaranteed Rate and $500,000 from Anderson.

Mount Olympus can elect to take either the jury award on lost profits or unjust enrichment, but not both, Hummel said. In the case of Guaranteed Rate, Mount Olympus is taking the lost profits award of $5.6 million, the lost business value of $4.6 million and the punitive damages of $12.5 million, for a total of $22.7 million. Against Anderson, the lender is taking the $1.9 million in unjust enrichment award instead of the $5.6 million in lost profits (for which the jury held both him and Guaranteed Rate jointly liable for), the $4.6M lost business value award that both Anderson and Guaranteed Rate are jointly liable for, as well as the $500,000 punitive damage award — for a combined judgment of $25.1 million.

In addition, the judge presiding over the case may assess attorney’s fees and other damages under California Business and Professions Code Section 17200, which deals with unfair competition.

Anderson and Decker filed a countersuit against Mount Olympus, as did Guaranteed Rate. Guaranteed Rate dropped its suit during the trial. Anderson made wage and defamation claims. The wage claims were dismissed by the judge, Hummel said. The jury decided against Anderson on the defamation claims.

Both Anderson and Decker appear on the 2016 Top Producers list. Anderson did $182 million volume for 2015 and ranked No. 16. Decker ranked No. 32 with volume of $139 million.

Mount Olympus did not have a problem with Anderson leaving for a larger competitor, Hummel said. “Everybody is free to recruit legitimately; everybody is free to move legitimately. But the data relating to customers that is in a mortgage bank’s database is generally the property of the mortgage bank and it is illegal for an employee to take that data without the employer’s and in particular, the customer’s knowledge or consent,” he continued.

Mount Olympus, besides its Irvine office, had an office in Temecula, Calif., which closed on June 5, 2014 because of the situation with Anderson and Decker. The company now does business as Tru Mortgage and it opened a second office located in Beverly Hills, Calif., this past August.

“Now more than ever, the mortgage industry depends on legitimate and fair practices, and maintaining the integrity of private consumer financial data is a responsibility entrusted to every mortgage bank that we cannot and should not take lightly,” said Mount Olympus’ chairman Claude Arnall in a press release.

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