Mar. 29: What is important to a rating agency? Saturday Spotlight: SWBC Mortgage; Print out your SS earnings history
First, a public service announcement. DOGE has plans to rewrite the entire code for the Social Security Administration. What could go wrong? Those “in the know” are advising people, obviously regardless of party affiliation, to logon to www.ssa.gov and print out a hardcopy of their SSA earnings history, as it may become the “Prima Facie” evidence of your eligibility for SS benefits, as well as one’s SSA Notice of (Retirement) Award, if applicable, and the latest seven Cost of Living Adjustment letters. Tracking your dollars makes sense. Dollars and cents make up the currency of the United States. A proposal has been made to eliminate the poor penny, since they cost three cents to make, and no one wants to lose two cents on each one. But if you think eliminating the penny is an easy financial decision, it isn’t so clear cut. While pennies are wasteful and cost more to make than they’re worth (three cents a penny), it’s actually way worse for nickels at 11 cents per five-cent piece. The elimination of the penny might cause demand for nickels to spike, which would end up being even more expensive. But the nickel problem isn’t anywhere near as well known to the general public, or politicians, as the penny problem. It is doubtful that we’ll move straight to dimes being the minimum.
Saturday Spotlight: SWBC Mortgage
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“The Happiest Way Home”
In 3-5 sentences, describe your company (when was it founded and why, what it does, where, recent growth and plans for near-term future growth).
Founded in 1988, SWBC Mortgage is more than just a company. We’re a team of real, approachable people who genuinely care about the success of our employees. We retain the majority of servicing on our loans, giving our loan originators exclusive access to data that helps predict when clients are ready to buy or sell again. With cutting-edge tools and a focus on relationships, we make sure our team spends time where it matters most. Our leadership is hands-on, accessible, and invested in creating a collaborative environment where people can thrive.
As we continue to grow and expand our footprint, our focus remains on building stronger communities, enhancing our technology, and empowering our team for long-term success.
Tell us about what type of volunteer work employees are encouraged to engage in, or charities your company supports, and why.
Beyond mortgages, we are committed to giving back. SWBC Mortgage is a division of SWBC, and each year, through our SWBCares program, our employees contribute thousands of volunteer hours and donate hundreds of thousands of dollars to charities. Since 2013, the SWBC Foundation has donated more than $13.3 million to a variety of philanthropic efforts, including the MBA Opens Doors Foundation.
Aligned with SWBC’s priority programs (children and family services, education, health & wellness, quality of life, and safety net services) SWBC Mortgage has provided over $1.4 million in grant funds to assist first-time homebuyers. We also proudly support veteran services and homelessness prevention efforts both nationwide and locally.
What does your company do to help elevate your employees’ growth? Describe any mentoring programs, outside classes or training, in-house training. How does the company help people develop?
When you join SWBC Mortgage, you become part of a team that values leadership, mentorship, and professional development. We provide ongoing training, cutting-edge tools, and dedicated support to help you thrive in your career.
We develop programs like the SWBC Move Up Program™, which promotes home affordability in underserved communities. Whether through flexible and unique programs, sales coaching, marketing resources, or industry-leading training, we empower our loan officers to serve the neighborhoods where they live and lend. We also host weekly sales calls where our top performers, leadership team, and industry experts and realtors share their stories and best practices.
By working together, we can share ideas more freely, support each other more effectively, and celebrate our successes as a cohesive team.
Tell us how your company maintains its culture in a work-from-home environment, or how you plan on bringing employees back into the office, if applicable.
SWBC Mortgage supports flexible work arrangements that empower our team to succeed. While we have production employees all over the country, many of whom work remotely, we remain committed to maintaining strong connections and a dynamic company culture. We do so by fostering an environment where collaboration and camaraderie thrive. We believe that being in person, even occasionally, plays a crucial role in this. In 2024, we hosted sales rallies in San Antonio and Nashville to discuss staying in touch with current trends and best practices, ensuring we remain ahead of the competition in local markets.
Fun fact about your company.
SWBC Mortgage, a division of SWBC founded in San Antonio, Texas, by sports enthusiasts Charlie Amato and Gary Dudley, is the official mortgage provider of the Dallas Cowboys! SWBC has been a partner of the Dallas Cowboys, welcoming All-Pro linebacker Micah Parsons as the spokesperson and brand ambassador. In 1993, Amato and Dudley became minority owners of the San Antonio Spurs.
(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)
A look at a deal
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During the 2008 financial crisis there was plenty of blame to go around, not the least of which was directed at the rating agencies. After all, they were expected to accurately assess the risk of the securities backed by mortgages that they reviewed as well as a company’s ability to service mortgages. That didn’t happen, and it didn’t help that their compensation came from the companies issuing the securities. The rating agencies are still with us, and I thought it would be useful to take a look at the way an agency, in this case Fitch Ratings, issues information about a servicer and what it views as important. (Editor’s note: I have no financial interest in Fitch or NAF.)
“Fitch Affirms New American Funding U.S. RMBS Servicer Rating; Outlook Revised to Positive Fitch Ratings has affirmed New American Funding's (NAF) U.S. RMBS Primary Prime Servicer Rating at 'RPS3+'. The Rating Outlook has been revised to Positive from Stable.”
“Key Rating Drivers: NAF's 'RPS3+' rating and Positive Outlook reflect its tenured management team and staff, improved loan administration stability, strong default servicing performance, comprehensive enterprise-wide risk and compliance management framework, and a culture of continuous improvement.
“NAF, a family-owned limited liability company under Delaware law, is an independent mortgage lender based in Orange County, CA. Founded in 2003 as a loan processing and underwriting call center, it is a Fannie Mae, Freddie Mac and Ginnie Mae direct lender, seller and servicer. The company operates builder and real estate-based lending divisions and has its loan servicing headquarters in Austin, TX, with a presence in Chennai, India, focusing on loan origination processing.
“Management reports that 70% of new loan are sourced through its retail channel, with about 30% from its call center operation. NAF saw a 22% increase in loan origination volume for the year ending June 30, 2024. The company also engages in construction loan servicing and opportunistic sub-servicing arrangements with third parties to diversify revenue.
“NAF has nine years of experience servicing residential mortgage loans and employs 290 staff dedicated to this division. Group managers average 22 years of loan servicing experience and more than five years of company tenure, while functional managers average 12 in the industry and three years with the company. In 2023-24, NAF's voluntary turnover rate was 9.53%, and involuntary turnover was 6.37%, which Fitch views as highly competitive.
“Employee training combines classroom, web-based and on-the-job delivery instruction. Since Fitch's last review, the company increased new hire training up to 170 hours from 145 hours and averages 68 hours of annual education training for tenured employees. The Learning Management System, a third-party software application, houses training materials, maintains employee training completion records and serves as a platform for delivery of training content.
“NAF's loan servicing performance metrics overall are competitive with industry peers and reflect improvements since Fitch's last review. Call center performance metrics in customer service and collections continue to improve since Fitch's last review and are highly competitive with industry averages. Call center training has a very competitive attrition rate of 2%, reflecting effective applicant screening and training.
“Escrow administration is well-controlled, and oversight of third-party tax and insurance vendors is robust, as reflected in competitive lender placed insurance and real estate tax performance metrics. Since Fitch's last review, NAF deployed automated clearing house (ACH) functionality for payoff and escrow overage payments to borrowers. The company also introduced escrow shortage coupon logic with their new lockbox vendor and implemented escrow analysis e-statement delivery for borrower convenience.
“Loss mitigation efforts are effective overall with multiple levels of loan workout application quality review and controls. Processing times for incoming loss mitigation applicants are competitive with industry averages and recidivism rates in the 30+, 60+ and 90+ day delinquency categories reflect solid underwriting and quality review practices. The company has assisted borrowers with the collection and application of more than $21 million of funds received from various states through the U.S. Treasury Department's Homeowner Assistance Fund during the annual period ending June 30, 2024.
“Bankruptcy and foreclosure case volume has increased since Fitch's last review. NAF is deploying four new bankruptcy module enhancements including a new proof of claim workstation in 2023. Bankruptcy and foreclosure case referral, tracking and performance monitoring are efficiently managed via third-party vendor servicing systems. The REO portfolio is small, but the process is well-controlled with effective property disposition results.
“NAF has a comprehensive compliance management framework that includes quality control, audit, compliance, as well as litigation management and vendor oversight. A review of the audit schedule and findings, as well as quality control reports, indicates the process is sufficiently robust. Fitch reviewed audit reports performed over a recent 12-month period and found them satisfactory with improvements noted in the internal audit findings since Fitch's last review.
“The company's most recent USAP report indicates full compliance with the specified requirements. The company reported receiving only 50 CFPB-referred complaints during the annual period ending June 30, 2024, with no statutory delays, which is considered de minimis.
“NAF's technology environment is effectively designed to disseminate portfolio information to clients, investors, trustees, and information recipients, as defined in servicing agreements. The company uses the MSP Mortgage Servicing System (MSP) offered by Intercontinental Exchange (ICE) to anchor its core loan servicing platform, supplemented by ancillary software applications. Since Fitch's last review, NAF transitioned to the Genesys Cloud Call Monitoring software for enhanced call monitoring, including a variety of live monitoring options to listen, join and coach on calls.
“The business continuity and disaster recovery plan include a calling tree, hierarchy of critical tasks and recovery point and recovery time objectives. The company's recovery point objective has improved to one hour. A third-party vendor conducts network intrusion testing throughout the year. Disaster recovery protocols were re-structured since Fitch's last review and are now based on a third-party vendor's cloud environment service. Cybersecurity insurance is maintained in compliance with GSE and GNMA requirements.
“Fitch does not publicly rate NAF's credit and financial strength. However, Fitch's financial institutions group reviewed NAF's financial statements to provide an internal assessment, as a company's financial condition is a component of Fitch's servicer rating analysis.
“As of June 30, 2024, NAF's loan servicing portfolio consisted of 264,888 loans representing an unpaid principal balance of $69.6 billion. The servicing portfolio by investor distribution consists of Fannie Mae, Freddie Mac, Ginnie Mae, NAF-owned and third-party servicing loans. Management indicated that a business strategy consisting of non-QM originated loans as well as third party subservicing and opportunistic acquisitions forms a part of their future business plan.
“Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within some of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating. For more information on Fitch's residential servicer rating program, please see Fitch's "Criteria for Rating U.S. Residential and Small Balance Commercial Mortgage Service," dated December 2022 and available at www.fitchratings.com.”
"I believe half my advertising dollars are wasted; I just don't know which half." (Thank you to James Duncan of Caelum Advisers for a reminder of that quote.) It is a tale that reminds us that fame and market share are fleeting, especially given the innovations that John Wanamaker introduced to the retail world.
In 1861, John Wanamaker opened his first store in partnership with his brother-in-law Nathan Brown. The store, called "Oak Hall", was located at 6th and Market Streets in Philadelphia, adjacent to the site of the residence and offices of George Washington during his presidency. Oak Hall grew substantially based on Wanamaker's then-revolutionary principle: "One price and goods returnable".
Wanamaker was an innovator, creative in his work, a merchandising genius, and proponent of the power of advertising, though modest and with an enduring reputation for honesty. Although he did not invent the fixed price system, he is credited for the creation of the price tag and popularized it as the industry standard. He also started the "money-back guarantee" that is now standard business practice.
He provided his employees with free medical care, education, recreational facilities, pensions, and profit-sharing plans before such benefits were considered standard. Wanamaker was the first retailer to place a half-page newspaper ad (1874) and the first full-page ad (1879). He initially wrote his own ad copy but later hired the world's first full-time copywriter.
A family trust owned the Wanamaker's store chain, run by a trustee system set up by Rodman Wanamaker's will. In 1978, the business was sold to Carter Hawley Hale, Inc. The 15-store chain was sold to Woodward & Lothrop in 1986, and the downtown store was renamed as Lord & Taylor. Woodies declared bankruptcy in 1994, and with it went the Wanamaker stores, which were sold to May Department Stores Company on June 21, 1995. In August 2006, the flagship Philadelphia store was converted from Lord & Taylor to a Macy's.
Notable Chapter 11’s include Lord & Taylor, Pier 1 Imports, Fry’s, Brookstone, Toys R Us, Bebe, Radio Shack, The Limited, CompUSA, Blockbuster Video, Woolworth, and Kmart (kind of).
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you're interested, visit my periodic blog at the STRATMOR Group web site. This month’s piece is titled, “Mergers and Acquisitions Aren’t Going Away, and In Fact…” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).
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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2025 Chrisman LLC. All rights reserved. Occasionally paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman. The views and opinions in this newsletter are mine alone unless otherwise specifically stated herein.)