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Apache is functioning normally

Data Mining, Digital Lending, Real Estate Database, Servicing Products; Conventional Conforming Program Shifts

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Data Mining, Digital Lending, Real Estate Database, Servicing Products; Conventional Conforming Program Shifts

By:
Rob Chrisman

49 Min, 7 Secs ago

As if lenders and vendors don’t have enough other stuff to worry about, the budgetary standoff in the U.S. doesn’t look like it will abate soon, raising the likelihood of the first government shutdown since 2019. Current funding for federal operations will end on October 1 unless a deal is reached or the proverbial can kicked down the road. Thousands of federal workers might be furloughed without pay. Sure it will be temporary, and its wider impact will likely be limited, but still even talking about it is lousy. According to Morgan Stanley, the last 20 government shutdowns that occurred since 1976 “appear to have had limited impact on the economy.” As for bond prices, a shutdown may cause some “temporary instability”, but this is not a given. There is talk of a short-term Continuing Resolution (CR) providing funding until later this year, but federal agencies, including HUD and Treasury, will cease to function normally. The National Flood Insurance Program (NFIP) authorities also expire on October 1st. The Mortgage Bankers Association created a guide outlining how HUD (including FHA and Ginnie Mae), VA, and USDA would be directly affected by the furlough of government employees and the curtailment of agency operations. (Today’s podcast can be found here and this week’s is sponsored by Built. Built is powering smarter and faster money movement for the entire construction and real estate ecosystem, all while reducing risk. Hear an interview with Servbank’s Bryan Crofford on how companies can best invest in employees, promoting longevity and success.)

Lender and Broker Software, Programs, and Services

Life can change on a dime, and sometimes even the most prepared borrowers end up facing financial hardships they never would have imagined. Forward-thinking credit unions are preparing today, so they can be there for their members when they need help the most. It’s why Mission Federal Credit Union implemented the MSP® loan servicing system, to not only improve their own efficiencies, but better serve their members who are facing financial difficulty. Are you ready to join Mission Federal Credit Union by enhancing your technology to be there for homeowners in life’s most challenging moments? Learn more about MSP today.

One thing that you can always count on in the mortgage space, is that regulatory requirements are always changing. This is why it’s critical for Banks or Mortgage Servicers to stay vigilant with comprehensive Compliance Testing and Monitoring to mitigate exposure and minimize risk. At the MBA Annual in Philadelphia, PA, Servbank’s Shayna Arrington will be helping us all do exactly that. Watch her moderate the panel, “Today’s Top Regulatory Issues” on Tuesday, October 17 at 1:30 PM, on 200 Level, Exhibit Hall E. Want to dive deeper into how Servbank can partner with you? Servbank will have a meeting space at the W Philadelphia on 10/16 and 10/17. Schedule some time to meet with them here: [email protected] or learn more at www.servbank.com.

One-Time Close (OTC) Volume Soars to record highs at AFR Wholesale® (AFR)! While housing inventory is still at an all-time low, OTC loans have witnessed an unprecedented surge in volume! In August, AFR closed more One-Time Close loans in one month than at any other time in their long history of offering the product. Homebuyers are increasingly drawn to the convenience and cost-saving benefits of OTC loans, as they streamline the construction process, reduce paperwork, and offer more favorable terms. This surge in OTC loans at AFR is not just a testament to its effectiveness but also an indicator of the outstanding clients and partners of AFR. Breaking news: As a thank you to their clients, AFR has also brought back FHA OTC on site-built homes!! This long-awaited product is back for partners of AFR to utilize now. Partner Today or contact AFR, email or call 1-800-375-6071.

One of the biggest questions for LOs in a down market is “How do I find more agent partners?” The answer is MMI. To find the right agent partners, you need the right data. MMI has assembled the industry’s most comprehensive real estate and mortgage transaction database which is leveraged by thousands of mortgage professionals daily. Using MMI’s database, LOs can easily search & filter, find an agent and at the click of a button, push the info to a CRM like Bonzo. Sign up for a demo today to see why a majority of the top 25 lenders rely on MMI.

Free eBook: Market-Proof: How to Build a Flexible Lending Business Resilient in Upcycles & Downturns. The exaggerated upcycles and downturns of the past few years underscore just how crucial it is for lenders to build resilience and flexibility into their businesses. To overcome today’s challenges, lenders need to hone their lending process at each step. In this new eBook, Maxwell provides 12 tips from industry veterans to help you optimize your mortgage process from loan application to the secondary market. You’ll get insight from exclusive interviews with industry veterans on how to increase efficiency, access economic scale, and become resilient to market volatility like never before. Click here to download Maxwell’s new eBook “Market-Proof: How to Build a Flexible Lending Business Resilient in Upcycles & Downturns.”

The transformation from paper to digital processes offers substantial benefits, including cost reduction and improved borrower experiences. Most lenders are in a hybrid phase, blending paper and digital processes. To navigate this ongoing change and ongoing innovations in the digital lending space, lenders should consider embracing five best practices: create a successful strategy, prioritize borrower experience, ensure compliance, harness technology, and stay adaptable in the evolving digital landscape. Tackle the future of lending by staying informed and proactive. For deeper insights into this digital lending revolution and actionable steps, read the full article.

“Heading to Vegas? The Total Expert team is in full force at the Digital Mortgage conference in Las Vegas! There are three ways to interact with us. The first is to stop by booth #501 to get your Customer Intelligence ROI report and learn how you could increase funded loan volume by 20 percent. You can watch a LIVE demo of Total Expert on Tuesday 9/26. Lastly, catch our Founder & CEO Joe Welu for a panel discussion: The Customer Data Goldmine Goes Way Beyond Credit Triggers on Wednesday 9/27.Schedule time to meet with the Total Expert team in Vegas.”

Freddie Mac, Fannie Mae, Conventional Conforming News

The Federal Housing Finance Agency (FHFA) released its second quarter 2023 Foreclosure Prevention and Refinance Report. The report shows that Fannie Mae and Freddie Mac (the Enterprises) completed 47,370 foreclosure prevention actions during the quarter, raising the total number of homeowners who have been helped to 6,818,471 since the start of conservatorships in September 2008. View the News Release

FHFA-OIG released two reports: Within the Federal Housing Finance Agency (FHFA), the Division of Federal Home Loan Bank Regulation (DBR) is responsible for supervising the Federal Home Loan Bank (FHLBank) System to ensure the safe and sound operation of the FHLBanks. In response to market disruptions, DBR adapted the scope of its Federal Home Loan Bank Supervisory Activities in 2023.

Regulated entities have not been immune to the trends affecting the labor market over the past few years. Some of the regulated entities experienced higher attrition in 2021 and 2022, consistent with trends in the broader labor market, but one Enterprise reported that its turnover rate started declining in 2022. Read the full report, People Risk at FHFA’s Regulated Entities.

Freddie Mac will update Loan Product Advisor® (LPASM) in October to support multiple recent Single-Family Seller/Servicer Guide announcements, plus more enhancements, described in Freddie Mac October LPA Releases.

Freddie Mac Loan Selling Advisor September Updates includes the following information: Uniform Loan Delivery Dataset (ULDD) Phase 4a Updates and Phase 5 Specification, Auto Evaluate on Import Loan, New Loan Delivery Rules Supporting the Duty to Serve Credit Fee Cap, Initial Principal and Interest Payment Amount Conditionality update, Auto Re-evaluate: Improvements to Modify and Evaluate, and Enhancements to Mandatory Cash Contracting.

Leverage Fannie Mae’s new edition of Beyond the Guide to help your organization build a best-in-class quality control (QC) program. Specific examples and scenarios provided can help teams understand and apply Selling Guide concepts in a way that is most impactful to their organization. A robust QC program helps strengthen loan quality ensuring a safe, sound, and resilient mortgage industry.

Fannie Mae Appraiser Update September 2023 edition focuses on dual themes of delivering high quality appraisals and understanding recent policy changes. Topics include updates to the Appraiser Independence Requirements (AIR), new options for 1004D completion, our stance on 3D printed homes, and more.

Fannie Mae posted the September Appraiser Quality Monitoring (AQM) list. Read the AQM FAQs.

Chris Whalen writes, “Our short take on the future of the GSEs (Government Sponsored Enterprises) looks a lot like the character played by Bruce Willis in the 1995 Terry Gilliam film, ‘Twelve Monkeys.’ Imagine if the GSEs were released from conservatorship, but then were immediately designated as a ‘systemically important financial institution’ (SIFI) by the FSOC. How do you think that would work for private investors? What would happen to the guarantee fees?”

Pennymac Conventional LLPAs updates effective for Best Efforts Commitments: Pennymac Announcement 23-58 replacement of ‘Purchase Special’ LLPA Grid with new ‘Area Median Income Adjustments’ LLPA Grid. Pennymac Announcement 23-59 introduces new ‘Investment Property’ LLPA to the ‘LLPAs by Product Feature for All Eligible Loans’ LLPA Grid. Pennymac Announcement 23-60 updates values for the ‘2nd Home Additional’ LLPA on the ‘LLPAs by Product Feature for All Eligible Loans’ LLPA Grid.

Pennymac is aligning with the FHFA based updated project review and eligibility requirements announced in Fannie Mae SEL 2023-06 and Freddie Mac Bulletin 2023-15, with the exception of any reference to co-op projects. View Announcement 23-61: GSE Updated Condo Project Review Requirements

Citizens Correspondent National Bulletin 2023-16 provides updates on the following topics: Conventional Conforming Products, Review requirements for condominium eligibility – DU and LPA, Gifts and Gifts of Equity – DU, 3D printed homes, Trust Income – DU, USDA-RD Product, Fiscal Year 2024 Conditional Commitment Notice, All Products, Disaster Tax Filing Relief.

PHH Mortgage Corporation updated Conforming Product listings for both Delegated and Non-Delegated loans.

Pennymac announcement 23-62: Fannie Mae SEL 2023-06 Condo Project Manager Updates

Citi Correspondent Lending Bulletin 2023-08 provides Credit policy updates regarding Non-Agency Depreciating Markets list updated, Condo & Co-Op Critical Repairs, Shared Equity and Shared Appreciation, LPA Asset, and Income Modeler (AIM), Continuity of Obligation: Limited Cash-Out, Hazard Insurance Update: Effective Date, and Taxpayer First Act.

On September 6, 2023, Fannie Mae and Freddie Mac announced Selling Guide policy changes addressing multiple topics in Fannie Mae SEL-2023-08 and Freddie Mac Bulletin 2023-18.

AmeriHome Mortgage accepts all revisions, view Product Announcement 20230910-CL for details.

Capital Markets

Ahead of today’s $48 billion 2-year Treasury auction, headlines to open the week revolved around increases in oil prices that’s evidence of inflation’s stickiness, Chinese developer Evergrande calling off talks with creditors as it appears headed for bankruptcy, and reaction to hawkish Fed remarks which is forcing yet another reprice from markets. There is growing sentiment that central banks across the globe aren’t done hiking rates, and Treasury yields trended higher to open the week as a result. With the calendar turning to fall, the economy is facing a few headwinds such as the run up in oil prices, student loan payment resumption, an expanding auto workers strike, and a partial shutdown of the U.S. government.

Every lender knows that mortgage rates remain above 7 percent, and housing data released over the last week highlighted another decline in builder sentiment. Housing starts fell 11.3 percent to a 1.25-million-unit pace in August. Existing home sales were down 0.7 percent in August as low inventory, high prices, and high mortgage rates continue to weigh on sales. Hoping for lower interest rates? A recession would likely mean lower interest rates, but workers with stable jobs (most individuals) would want to take advantage of low interest rates, causing home prices to rise faster. Initial jobless claims fell to 201k for the week ending September 16, which was the lowest weekly reading since January. The JOLTS report indicated that the demand for new workers is moderating somewhat however, significant layoffs are not on the horizon.

Today’s calendar includes the Philadelphia Fed non-manufacturing surveys for September, Redbook same store sales, July house price indexes from S&P Case-Shiller and FHFA, September consumer confidence, August new home sales, Richmond Fed manufacturing for September, Dallas Fed Texas services for September, the aforementioned Treasury auction of $48 billion 2-year notes, and remarks from Fed Governor Bowman. We begin Tuesday with Agency MBS prices a few ticks (32nds) better and the 10-year yielding 4.50 after closing yesterday at 4.54 percent. The 2-year is up at 5.12.

Employment

“At Fairway Independent Mortgage Corporation, customer service is a way of life. #FairwayNation mortgage loan officers are dedicated to finding great rates and loan options for our customers while offering some of the fastest turn times in the industry. Our goal is to act as a trusted mortgage advisor, providing highly personalized service and helping you through every step of the loan process, from application to closing and beyond.”

Logan Finance Corporation, a national Non-QM mortgage lender, is excited to welcome Aaron Samples to Logan’s Executive Leadership Team as Chief Revenue Officer. To learn more about why Aaron joined one of the fastest Non-QM lenders in the nation, contact Randy Viars.

The FHA has a job opening for a Senior Underwriter: Job Announcement Number 23-HUD-2915-P. Job duties include assisting the Branch Chief in monitoring the status of goal accomplishment. Advise the Chief of potential problems in attainment of goals and objectives. Research required underwriting procedures and techniques. Serve as an expert-level resource within his/her Office on matters relating to Underwriting and other Direct Endorsement issues.

Don’t forget that private mortgage insurance companies are hiring: MGIC, National MI, Arch MI, Radian, Essent, and Enact (in no particular order). And while’s we’re at it, Fannie Mae and Freddie Mac. And my cat Myrtle’s friend the CFPB.

Dovenmuehle Mortgage, Inc. announced that Robert Howerton has joined the organization as Chief Information Officer where he will be maintaining and expanding Dovenmuehle’s current information technology (IT) infrastructure.

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

Apache is functioning normally

Marketing, CRM, Fair Lending, HELOC, Non-QM Products; Webinars and Training Next Week; Why do People Move?

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Marketing, CRM, Fair Lending, HELOC, Non-QM Products; Webinars and Training Next Week; Why do People Move?

By:
Rob Chrisman

7 Hours, 28 Min ago

Sometimes I send this Commentary out from some pretty nice places, sometimes not. Today comes from the tarmac at the Newark Airport, in Row 22, sitting next to some hairy guy who’s snoring and apparently went with the “Garlic Lover’s Pizza” last night. You can decide which category today fits in. “What do you call a small pepper in the autumn? A little chili.” Tomorrow is the fall equinox. Autumn? Autumnal? Different ways of saying similar things? Do you know the difference between a loan, a mortgage, a lien, a note, and a deed of trust? There are differences, just like there are differences in the reasons why people move. Unlike the convicted felon that I spent some time with yesterday, wanting a newer, better, or larger house or apartment has been the most common specific reason cited for moves over the past two years. That’s followed by establishing one’s own household, evidenced by a change in marital status becoming a more common reason for moving in 2022 than in 2021. The percentage of movers reporting housing unit upgrades declined, suggesting a reversal of a boom in housing demand that happened in 2020, early in the COVID-19 pandemic. A quarter of movers reported family-related reasons for their move, the second most often-cited general reason for moving in 2022 and in several recent years. (Today’s podcast can be found here and this week’s is sponsored by the Trade-In Mortgage powered by Calque. Homeowners can buy before they sell, make non-contingent offers, and tap their home equity to fund the down payment on their next home. Lenders can help their clients negotiate a lower purchase price, reduce their interest payments, and eliminate PMI. Hear an interview with Mayer Brown LLP’s Lauren B. Pryor on M&A activity in the mortgage space and what makes for a successful transaction in the current environment.)

Lender and Broker Software, Programs, and Services

“Cheers to 20 Years! We are proud to announce the 20 Year Anniversary for Carrington Mortgage! It’s been an incredible two decades filled with trust, growth, and a commitment to serving our partners. As we celebrate this remarkable achievement, we want to express our heartfelt gratitude for your continued support. We look forward to many more years of serving our partners. We remain committed to being the industry’s leader in Non-QM solution lending. Our team of experts is ready to help you and your borrowers with a new home purchase or a refinance, all done in a timely and professional manner. Our program and product suite includes Non-QM, FHA, VA, USDA & GSE. Our Non-QM program offers you and your borrowers features and flexibility you may not find anywhere else. We’re here to help. Please contact us for more information about our products and services.”

In challenging down economic times, Loan Vision is your solution to maximizing profitability and reducing costs in your business. With Loan Vision, companies see improvements of 25% to 35% decrease in days to close the books, 20% reduction in accounting headcount, complete LOS to G/L automation, and improved reporting and visibility that allow for better business decisions. Don’t accept a competitive disadvantage or get caught flat footed in a recovering market. To improve your cash position, gain a competitive edge, and prepare your business for sustained growth, contact Carl Wooloff to schedule a call today.

From what people are saying, The Loan Store has consistently been among the “pricing leaders” and “process leaders” with agency loans, and they’ve also really been making a nice name for themselves with their Quick-Pay HELOCs. TLS is funding HELOCs 100% within 3-5 days (and paying 175 bps in comp), and that’s a great tool for LOs looking to expand their business. Plus, word on the street is that TLS will be expanding HELOCs to Texas soon, so that’s something else for Lone Star State LO’s to get excited about. Regardless of where you’ve set up shop, price out a HELOC in the TLS/Figure HELOC portal. Or, if you haven’t signed up with TLS yet, do that here.

Recent Trends in Fair Lending Compliance! When the DOJ announced its Combatting Redlining Initiative in October 2021, it was the department’s “most aggressive and coordinated” enforcement effort against financial institutions. The initiative has cost financial institutions $40 million in the first half of 2023 alone. The DOJ and regulators have not let up on enforcement actions against financial institutions (banks, credit unions, mortgage companies, and other lenders) violating fair lending compliance laws. In fact, regulatory agencies have expanded the scope of fair lending enforcement. A recent article from the experts at Ncontracts highlights the significance of recent fair lending enforcement trends and what it means for your fair lending program. Read the full article.

Earlier this month, Apple announced the 15th version of its amazing, do-everything iPhone. It’s hard to imagine, but what if Steve Jobs never invented the iPhone? What if we all carried one device to make calls, and a completely different device to send a text? This is exactly what many lenders do today with their CRM software. They have one CRM for their retail loan officers, a different CRM for their direct-to-consumer team, and another CRM for their wholesale account executives. Wouldn’t it be nice to manage all of your business channels in just one CRM? That’s what OptifiNow Flex is: a retail, wholesale, correspondent, reverse, home equity and private money CRM that can be personalized to fit your business needs. Reach out to us to learn more and see why OptifiNow is the iPhone of mortgage CRM!

Attention Mortgage Lenders! Discover the secrets to thriving in this competitive market with our FREE white paper, tailored specifically for you. Written by Seroka Brand Development, the mortgage industry’s leading marketing and public relations company, this exclusive guide reveals top marketing and PR strategies for 2023. As the industry faces its current set of challenges, effective yet cost-conscious marketing is more crucial than ever for companies like yours, competing for every opportunity. Learn six impactful ways to reach your target market and secure success through the rest of 2023 and beyond. Don’t miss out on this invaluable resource: download your FREE white paper now.

Training, Webinars, and Events Next Week

A good place to start is here, and click on “events” for conferences in the future. Next week is the last week of September already?! Wasn’t it just Labor Day? Let’s see what’s up.

According to data from Gartner, two in three companies say customer experience is the primary area where they will compete for business. Lenders, how is your business utilizing customer feedback to drive revenue growth in today’s challenging market? Need help? Join STRATMOR Group’s customer experience experts as well as peer lenders for STRATMOR’s Customer Experience Workshop on September 25, 26 and 27. This highly interactive, virtual workshop is designed to give lenders specific, actionable ideas: you’ll learn how to optimize your loan processes to maximize repeat and referral business and achieve your growth goals in challenging market conditions. Register today!

Tuesday the 26th is the next Mortgages with Millennials with Kristin Messerli and Robbie Chrisman, and sponsored by National MI. Tune in every Tuesday at 10AM PT to the weekly video show designed to empower mortgage professionals to tap into the millennial market. This show demystifies the psychology of first-time homebuyers and offers strategies to win more market share with a key segment of the market. Sign up for a weekly reminder with the link to join and a sneak peek into the next episode.

On September 26, 2-3PM ET, FHA’s free, virtual webinar will assist FHA-approved lenders (and their auditors) with their upcoming Annual Recertification and provide information on how to successfully submit an acceptable recertification package via the Lender Electronic Assessment Portal (LEAP). For detailed information, closely review the LEAP User Manual.

Free, on-site, FHA Underwriting Training in Philadelphia, PA., September 26, 9:00 AM to 11:30 AM (Eastern) will provide an overview of FHA underwriting procedures and addresses several industry-related frequently asked questions (FAQs) as outlined in FHA’s Single Family Housing Policy Handbook 4000.1. This training will also take an in-depth look at a variety of topics including credit, income, and asset (CIA) documentation; automated underwriting systems (AUS); closing; and more.

Free, on-site, FHA Appraisal Training in Philadelphia, PA., September 26, 1:00 PM – 3:30 PM (Eastern) will provide an overview of the appraisal requirements outlined in FHA’s Single Family Housing Policy Handbook 4000.1. The training topics will include property inspection requirements, appraisal validity period, manufactured homes, water and septic, attic and crawl spaces inspection, and the FHA Appraiser Roster.

If you are looking for the housing policy and fintech event of the year to watch from the comfort of your office, Housing Finance Strategies’ #HousingDC23 is it. The agenda is published, and Complimentary Registration is now available. Sign up to view the premium content offered virtually and accessible to you starting September 26th.

If your credit union’s due diligence for quality control relies only on last-minute adjustments during post-closing processes, chances are you’re spending too much time putting out fires rather than adequately serving members’ needs. Market changes demand a more comprehensive and proactive approach to due diligence, and the experts at ACES Quality Management have the wherewithal to help you make that adjustment. Tune into this Inside Track webinar on September 27th at 1 pm CST to learn the why’s and how’s of improving your QC processes.

Looking for more in-depth commentary on weekly mortgage news? Register here for “Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT is a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Listen to a unique mix of age perspective, expertise, and charisma to the screen, ensuring that the information is not only educational but also entertaining.

California MBA upcoming Mortgage Quality and Compliance Committee webinar, Navigating the Future of Work: Adapting Return to Office Policies, on Thursday September 28th at 11 A.M. PST. Expert panelists will provide valuable insight on the ever-changing work dynamics, the challenges of managing remote and in-house teams, and MLO enhanced requirements in CA (and other states).

AzAMP Annual EXPO, Luncheon, and 8-Hour NMLS CE Class, September 27–28, at the We-Ko-Pa Resort and Casino. Begin your experience on Wednesday, Sept. 27 with Part 1 of NMLS CE class. Full day of events begins on Thursday, September 28 including NMLS CE class Part 2, Luncheon with Keynote Speakers Allen Beydoun, UWM Executive Vice President and Robbie and Rob Chrisman, The Chrisman Commentary Daily Mortgage News, followed by the AzAMP Expo.

Watch on demand, at your leisure: Millennials and Gen Z’ers represent the largest group of first-time homebuyers. In less than 10 years, 3.1 million will have entered the market. Of these buyers, roughly 75 percent of them report checking social media daily. Making social media a necessary strategy for loan officers. Join Homebot’s VP of Marketing, Ashley Remstad and Mortgage Advisor Sosi Avila as they discuss key strategies and tactics for using social media to your advantage. Register for the webinar here.

The NCEO 2023 Fall Forum in Houston is September 26-28. Featuring top industry experts and thought leaders, the forum will update you on the latest trends and best practices in employee ownership. Network with other employee owners and industry professionals from across the country, sharing ideas, challenges, and successes.

Friday the 29th is The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT in “The Rundown”.

Capital Markets

Remember when all the “smartest guys in the room” were telling us that an inverted yield curve was a nearly sure sign of a recession? I haven’t heard that one lately. Even with the Fed just signaling lower interest rate volatility going forward, in theory translating into tightening MBS spreads and lower rates, mortgage rates still jumped by over .125 percent yesterday thanks to falling bond prices and “non-trivial stack decompression.” Much of the decrease in bond prices over the past couple of days stems from the markets still trying to fight the Fed. The yield curve remains highly inverted and will only unwind once the hard landing scenario becomes less probable.

On the data front, Existing home sales decreased 0.7 percent month-over-month in August to a seasonally adjusted annual rate of 4.04 million as sales were down 15 percent from the same period a year ago due to a well-known confluence of factors: higher mortgage rates, higher prices, limited supply, a lack of mobility, and homeowners who are reluctant to give up a low-rate mortgage. Keep in mind that an economic recession could also bring about an increase in inventory, as those who lose jobs may be forced to sell their homes and those uncertain about their jobs will not have the confidence to buy a home. While the overall U.S. economy remains resilient, there are growing signs starting to show U.S. households tightening budgets or starting to reduce discretionary spending.

Today’s economic calendar includes flash PMIs for much of Europe where modest increases are expected versus the prior readings. Domestically, S&P Global PMIs will be released later this morning, though the bigger headline is the resumption of Fed speakers following Wednesday’s FOMC events. Markets will receive remarks from Governor Cook, Boston President Collins, Minneapolis President Kashkari, and San Francisco President Daly. We begin the day with Agency MBS prices unchanged, the 10-year unchanged from Thursday at 4.48 percent, and the 2-year at 5.13.

Employment

“What distinguishes a company in the mortgage lending game? For Evergreen Home LoansTM, it’s an unwavering dedication to customer experience. As Evergreen’s CMO, Haavard Sterri, puts it, “At Evergreen Home Loans, customer satisfaction isn’t just a metric; it’s our mission. We go above and beyond to ensure our clients not only receive exceptional financial solutions but also feel valued every step of the way.” Take the Security Plus program, a gem that offers clients pre-approved, underwritten loans before house hunting begins. But why should job seekers pay attention? A firm that champions customer needs typically scores high on employee satisfaction. At Evergreen, you’re not a replaceable part; you’re integral to a collective mission of transforming the homebuying process. In a crowded field, Evergreen shines by marrying excellent customer service with fulfilling career opportunities. If you’re on the job hunt and value innovation, teamwork, and a relentless focus on the customer, Evergreen beckons. To view all open Evergreen careers visit our careers page.”

In the Northwest and California, Banner Bank is searching for Mortgage Loan Officers looking to create lasting Realtor and builder relationships at a bank focused on the market today. Banner has opportunities for lenders looking for local decision making with FHA, VA, USDA, state bond and true Portfolio lending opportunities along with servicing retained Fannie and Freddie loans to assist in client retention. Additional highlighted products cover CRA lending with private label no payment down payment assistance to help assist all borrowers with the right opportunity. Banner is the right fit for an established team, or the individual looking to grow their business and take the next step in their career. Please send resumes to Aaron Miller.

As a mortgage sales professional have you ever thought, “What if I could focus on only the things that actually grow my business, flipping the hourglass and spending 80 percent of my time on what I do best: building relationships?” Or “What if I could surround myself with sales support that is truly team inspired, results driven marketing and customer obsessed headache-free process?” Welcome to radius financial group! They started radius with one main focus: to offer a better value proposition than any other bank or mortgage company in the country for you, your borrowers and your referral partners. radius can help you grow your business, have a better quality of life, and make more money. For confidential inquires please contact Carla Herrera.

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

Apache is functioning normally

Shares of government mortgage financiers Fannie Mae and Freddie Mac stumbled badly today after a Barron’s report pointed to an impending Treasury bailout.

Barron’s Jonathon Laing said legislation included in the recently passed housing bill would allow a taxpayer-funded recapitalization of the slumping pair, spelling trouble for both shareholders and current management.

Laing believes that by some calculations each of the companies is roughly “$50 billion in the hole,” if their balance sheets were marked to fair value and you factor out stuff like deferred tax assets.

He noted that Freddie Mac took only a $51 million loss on repurchased mortgage loans in the first quarter, down from $736 in the fourth quarter, as the GSE chose instead to bring bad loans current and worry about them in the future.

Fannie Mae also postponed the buyback of soured loans, avoiding more than $1 billion in second-quarter charge-offs.

Apparently raising capital seems to be out of the question, considering just $300 million of Fannie’s $7.2 billion capital raise from the second quarter is still intact.

Brother Freddie was unable to, or chose not to raise $5.5 billion in capital, with CEO Richard Syron citing reasons such as shareholder dilution for failing to complete such a sale.

Of course, the OFHEO said both were adequately capitalized as recently as June, though the GSE regulator recently lowered the capital surplus requirement for the two mortgage giants.

Here’s how a bailout may go down:

Treasury would install new management and directors at both, curb the GSEs’ sometimes reckless investment and guarantee operations, and liquidate in an orderly fashion the GSEs’ troubled $1.6 billion in on-balance-sheet investments. Then the companies could be resold to the public without their explicit government debt guarantees, or folded into government agencies like Ginnie Mae or the FHA.

Shares of Fannie Mae fell $1.76, or 22.25%, to $6.15, while Freddie slid $1.46, or 24.96%, to $4.39.

(photo: teofilo)

Source: thetruthaboutmortgage.com

Apache is functioning normally

Apache is functioning normally

Additionally, the mortgage application measure and the pending home sales index are increasingly diverging, reflecting the higher cash share of sales, the ESR group noted. 

While the additional downside risk from rate movements to date is minimal, the prospects of a recovery in existing sales in the near future is unlikely given strong mortgage rate “lock-in” effects and stressed affordability.

Going forward, the ESR Group expects new home sales to pull back slightly due to the higher mortgage rate environment and recent decline in homebuilder confidence.

Homebuilder confidence fell six points from July to a reading of 50 in August. It’s the first decline in 2023 reflecting the difficulties of 7% mortgage rates and reduced housing affordability. 

The recent rise in mortgage rates will also now test the resiliency of the new home sales market, which showed remarkable strength over the first half of the year.

The lack of existing homes for sale has helped support demand for new homes, including an increasing share of first-time buyers. 

To what extent homebuilders will continue to offer generous mortgage rate buydowns to drive sales is a big question that needs to be answered, according to the ESR group.

“When mortgage rates originally jumped to 7% in late 2022, a pullback in homebuilder activity ensued as buying activity slowed. It is uncertain whether this same rate threshold will result in a similar effect this time around or whether buyers and homebuilders have increased their willingness to purchase and subsidize at current rates,” Fannie Mae noted. 

Fannie Mae expects Q4 new home sales to average around 691,000 units on an annualized basis, down slightly from the most recent pace of 714,000 in July.

Purchase mortgage origination volume is expected to be $1.3 trillion in 2023 and $1.4 trillion in the following year. Refi volume is forecast to be at around $10 billion in 2023 and $14 billion in 2024.

Fannie Mae’s projection of a mild economic downturn in Q1 2024 remains unchanged. 

While the GSE’s initial April 2022 forecast of a mild recession was in the second half of 2023, housing production held up and household savings supported consumer spending longer than Fannie Mae had expected. 

“Our current prediction for a mild downturn in the first half of 2024 is predicated on the belief that consumers will begin pausing their spending, in part due to the exhaustion of those funds and having to realign to a more sustainable relationship between spending and incomes,” said Doug Duncan, SVP and chief economist at Fannie Mae.

Source: housingwire.com

Apache is functioning normally

Apache is functioning normally

HELOC, Manufactured, Technology, Marketing, and Digital Tools; Central Banks and Inflation

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HELOC, Manufactured, Technology, Marketing, and Digital Tools; Central Banks and Inflation

By:
Rob Chrisman

7 Hours, 56 Min ago

If you want something sobering, almost mesmerizing, here’s a short drone video of the flood damage in Libya (at the 15 second mark you can see how it tore through the city). Fortunately not so sobering are some stats out of the United States. The U.S. homeownership rate in 2022 was even higher than before the COVID-19 pandemic at 65.8 percent compared to 64.6 percent in 2019. That rebound was driven largely by those aged 44 and younger. And who says Millennials aren’t buying homes? Homeownership continued to climb from the foreclosure crisis (2004) and Great Recession (2008), when rates dipped as low as 63.4 percent in 2016. Homeownership rates recovered approximately half of the 5.6 percent decrease from 2004 to 2016. In Hawai’i the homeownership rate is 59 percent, I bring up the Aloha State because American Savings Bank, First Hawaiian Bank, and Central Pacific Bank joined Hawaiʻi Community Lending, a Hawaiʻi-based nonprofit community development financial institution, in pledging to provide mortgage forbearances to Maui families impacted by the recent wildfires. (Today’s podcast can be found here and this week’s is sponsored by the Trade-In Mortgage powered by Calque. Homeowners can buy before they sell, make non-contingent offers, and tap their home equity to fund the down payment on their next home. Lenders can help their clients negotiate a lower purchase price, reduce their interest payments, and eliminate PMI. Today’s podcast features Greg Korn and Ben Petit in an interview from the New England Mortgage Bankers Conference.)

Lender and Broker Software, Products, and Services

In an era defined by technological advancements, Dark Matter Technologies LLC emerges as a transformative force in the mortgage origination landscape, marking its evolution from Black Knight Origination Technologies. Under the Perseus Operating Group of Constellation Software Inc., Dark Matter Technologies remains steadfast in its commitment to pioneering innovation. CEO Rich Gagliano aptly sums up the company’s vision: “Dark Matter Technologies is on a mission to revolutionize the mortgage origination business by supporting, growing, and aggressively innovating new and existing products.” With over 1,300 dedicated mortgage technology experts and a portfolio that includes Empower, AIVA, Exchange, and more, Dark Matter Technologies is poised to lead the industry into a new era of unparalleled transformation. Learn more about Dark Matter Technologies and their mission, here.

There is approximately $9T in agency or government MSR outstanding. Billions of dollars are being transacted daily and this volume requires disciplined loan accounting processes to record loans accurately, produce investor reporting, and power business decisions. SBO from SitusAMC is a comprehensive loan accounting and master servicing platform that reconciles daily and monthly servicer cash collections down to the penny, aiding in the discovery of potentially misplaced funds and enhancing the financial integrity of the entire process. Servicers using SBO produce accurate and timely details providing confidence that their investor reporting obligations are being met. Schedule a demo of SBO with SitusAMC’s client-focused experts.

“Did you hear Capacity’s big announcement at TMC Fall? We’ve acquired Denim Social! Together, we’re building a support automation platform that helps you automate support, connect more authentically with your borrowers, and close more loans, faster. Read the press release to learn more! We also gave away a personalized AI Assessment worth $10,000 to help mortgage lenders identify opportunities for improving their business with AI. Plus, our new GSE Search feature pulls accurate, up to date GSE regulations within seconds using generative AI. Want to join the AI in mortgage revolution? Meet the Capacity team today.”

A new era in loan origination has arrived. Mortgage Machine Services, an industry leader in digital origination technology to residential mortgage lenders, announced the launch of its namesake platform Mortgage Machine™, an out-of-the-box, all-in-one LOS designed to accelerate lenders’ operational velocity and support an end-to-end digital origination process. Developed by digital mortgage pioneer and industry veteran Jeff Bode, Mortgage Machine utilizes intelligent automation, configurable business workflows and a cloud-based infrastructure to optimize the entire loan lifecycle and create a seamless lending experience. Key platform features include AI-powered task automation, a scalable cloud-based infrastructure, flexible APIs, pre-configured workflows for retail and TPO channels, integrated document management and POS functionality. Mortgage Machine also offers all-in-one eClosing capabilities, including an eClose room, eNotes, eVault and RON, and utilizes MISMO SMART Doc® data and security standards. Visit here to get started on your digital transformation journey.

Blend Labs continues to be the mortgage industry’s leading technology platform. Core to the platform is Blend’s unique integration with Desktop Underwriter® (DU®) and LPA. These integrations help streamline your approval process for borrowers, with all the conditions lined up for your fulfillment team. Add in intelligent and automated follow-ups and you’ll get to the closing table faster and more efficiently. Putting this information at the loan officer’s fingertips creates a streamlined process and eliminates manual work which equals lower costs, higher pull-through, and increased revenue. See more ways that Blend is committing to innovation and continues to lead the way.

Looking for timely advice on how to capture more loan volume and improve your bottom line in a down market? Now is the time to explore ways to tap into new markets. Expanding your mortgage footprint through new products and channels or by reaching new geographies insulates your business against economic and interest rate volatility by diversifying your sources of volume and revenue. By setting the groundwork to connect with new borrower markets now, you’ll open new revenue possibilities for when the market inevitably recovers, positioning your business to hit the ground running and beat out the competition. Download this informative eBook from mortgage solutions provider Maxwell for actionable advice, including how to create your expansion plan and choose the offerings best suited to the markets you want to pursue. Click here to download Growing Your Mortgage Footprint: How to Launch New Loan Products, Channels & Geographic Expansions.

Broker and Correspondent Products

Build your book with AFR Wholesale® (AFR)! Now, get the chance to listen from and ask questions directly to AFR and Freddie Mac to turn those prospects to active pipeline at the next Why Wait webinar series covering Manufactured Home Financing on Wednesday, September 20th at 1 PM EST. Register here today! Have you and your borrowers looked into Manufactured Housing as an option? With unbeatable affordability, customization options that are very tailored, quick installation and trusted quality, manufactured homes are worth exploring. Especially with a top lending partner in AFR who has been an industry leader for over 25 years. This is a live webinar, and a recording will not be provided so make sure to join and get great insight and have the opportunity to ask questions and listen to scenarios! Visit AFR Wholesale, email [email protected], or dial 1-800-375-6071. AFR Wholesale® – Don’t wait. Register today!

“With Cash-Outs on the decline during this high interest rate environment, it is important to present your borrowers with different cash-out options. That is why Vista Point is announcing a brand new HELOC product coming soon, in addition to our existing Closed-End Second. Our HELOC product is being designed as a complement to our Closed-End Second to provide a full suite of Equity Solutions. Our HELOC will provide a specific solution for borrowers that want the optionality of an interest-only payment, or the ability to draw up and buy down their line during the 5-year draw period with no Appraisals up to $250k. Just like on our Closed-End Second offering, with HELOC loan amounts up to $550K and combined lien amounts up to $2.5M, your borrowers can get the cash they need without sacrificing their advantageous 1st mortgage rate. HELOC will be available for full doc and bank statements on OO and 2nd homes. For more information, reach out to us, or meet us at the Philly MBA to discuss.”

Capital Markets

We learned last week that prices in August rose by the largest monthly percentage in 15 months. However, that month-over-month inflation was widely expected due to a surge in gasoline prices. Underlying oil prices are also pointing towards further increases in September. Meanwhile, core prices were up 0.3 percent and core goods prices declined by 0.1 percent. Over the last three months core prices have increased at an annualized pace of 2.4 percent, the lowest three-month pace since March 2021. Retail sales rose faster than analysts’ expectations in August, also due to higher gas prices. Many analysts expect consumer spending to slow as excess savings built up over the pandemic have materially declined and credit is increasingly costly and difficult to obtain. Additionally, the resumption of student loan payments is expected to cut into discretionary spending. It will take more than expectations of slower spending before the Federal Reserve feels inflation is firmly under control.

What could move mortgage rates this week? The U.S. Federal Reserve, Bank of England, Bank of Japan, and the central banks of Norway, Sweden, and Switzerland are all announcing rate decisions after a spate of recent inflation data shows that price increases are alive and well. The Fed’s Federal Open Market Committee (FOMC), the action arm of “the Fed,” is not expected to raise rates. It’s unlikely that the commentary around the commitment to keep fighting inflation and higher rates for longer will change either, but it could tilt a little more to the hawkish side after a stronger-than-anticipated inflation report for August.

The week could also see some extra drama on the political front as the countdown continues toward a potential government shutdown on October 1 in addition to the battle between the United Auto Workers (UAW) union and Detroit automakers. The auto worker strike could complicate Fed Chair Powell’s bid for a soft landing. Union leaders are asking for a 36 percent wage increase over four years, to match the similar recent pay increase for top executives. The union also wants pay to rise automatically with inflation in the future, as it did before the financial crisis.

This week brings the aforementioned FOMC meeting that begins tomorrow and concludes on Wednesday with the Statement, updated SEP (where fed funds projections will be closely scrutinized), and Chair Powell’s press conference. The treasury will also be in the headlines with more coupon auctions scheduled: $13 billion reopened 20-year bonds tomorrow and $15 billion reopened 10-year TIPS on Thursday. The only scheduled, probably non-market moving, news out today is the NAHB Housing Market Index for September. We begin the week with Agency MBS prices roughly unchanged from Friday, the 10-year yielding 4.34 after closing last week at 4.33 percent, and the 2-year is at 5.00 percent.

Employment

Are you more energized, more encouraged, and more motivated to succeed today than yesterday? Zig Ziglar famously stated, “People often say that motivation doesn’t last. Well, neither does bathing; that’s why we recommend it daily.” “As an industry leader, Thrive knows that motivation, discipline, and belief in your ability to succeed is critical,” stated Randell Gillespie, National Sales Leader for Thrive Mortgage. “There is no better time than now to find ways to continually motivate your team, which is why we put so much focus on daily opportunities like these at Thrive. Through our weekly High-Performance Coaching Calls, our very own nationally-recognized Marketing Master, James Duncan, leads these motivating and educational experiences for results. The biggest names in the mortgage industry and thought-leadership have been part of our Thrive Nation broadcasts. We want everyone to be better today than yesterday. Start a conversation with us and find out how.

“The fall season is here, and now more than ever is the time to build rapport with your referral partners and clients to maintain a steady stream of business. At Guaranteed Rate Affinity, not only do we have the greatest number of products, but we have the tech platform for our loan officers to do business from anywhere. With PowerVP, you can do anything from creating loan applications to sending pre-approval letters all from your mobile phone. Anything you could do from your desk, you can now do on the go with PowerVP. Gone are the days of being chained to your desk and missing out on important moments. Primarily, it gives you a work-life balance you never thought possible. Luckily, we’re hiring the best of the best loan officers to leverage our tech platform to grow their business. Ready to learn more? Contact Tim McGraw to get started.”

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

Apache is functioning normally

Cybersecurity, Warehouse, Accounting, Marketing Tools; New Broker Products; CFPB Co-Marketing Case

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Cybersecurity, Warehouse, Accounting, Marketing Tools; New Broker Products; CFPB Co-Marketing Case

By:
Rob Chrisman

Fri, Sep 15 2023, 8:34 AM

“Happy” 15-year anniversary of Lehman Brothers going belly up. “I was struggling to understand how lightning works and then it struck me.” One of the conversation topics here at the NAMMBA event in Orlando is how Florida has its share of estimated lightning strikes every year. (As does the rest of the nation: here’s a link to an interesting real-time map.) Another topic is Florida’s Senate Bill 264 which prohibits the direct or indirect ownership of specific categories of real estate by “foreign principals” from a foreign “country of concern,” defined as the People’s Republic of China, the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, the Venezuelan regime of Nicolás Maduro, or the Syrian Arab Republic… The Statute prohibits the acquisition of (1) any interest in agricultural land by a foreign principal, (2) any interest in real property located near a military installation or critical infrastructure by a foreign principal, and (3) any real estate interest by a foreign principal of the People’s Republic of China, subject to very limited exceptions. There are challenges, of course. (Today’s podcast can be found here and this week’s is sponsored by SimpleNexus, an nCino Company, and award-winning developer of mortgage technology for modern lenders. Hear an interview with Simple Nexus’ Lori Brewer on areas in the mortgage space that technology and innovation will impact most.)

Lender and Broker Software, Products, and Services

“Our latest blog, ‘FEMA, Floods, Fires, and Funding, Oh no!’, highlights the early impact of this year’s hurricane season, blustered by Idalia’s trail of destruction and fanned by the Maui fires. This year packs a bigger punch as FEMA, the primary lifeline for relief, faces serious funding concerns that have led to restrictions on access to assistance. Where does this leave homeowners and servicers who face more disasters before yearend? Servicers, it’s time to evaluate your workflow automation, ensuring distressed borrowers have immediate access to relief and that your operations are streamlined accordingly. CLARIFIRE® delivers the speed, accuracy, and results that servicers need to succeed in the face of the volumes and complexities of all the parties involved. Arm your servicing team when disaster strikes with CLARIFIRE, delivering better results, better software, and BRIGHTER AUTOMATION®.

It used to be that our postal mailboxes were stuffed with all kinds of marketing materials. It still happens today of course, but mostly in our online mailboxes instead. But one thing has stayed the same: marketing still needs a special spark to stand out in a crowd, and that’s why utilizing a far less crowded medium might now be the “old-is-new-again” way to reach your prospects. Not to mention, it’s also one of the best ways for mortgage professionals to make a lasting impression on homebuyers during the holidays! Connect with the ICE team to learn how easy it can be to start with Surefire℠ CRM and Mortgage Marketing Engine.

More than ever, mortgage brokers and correspondents need a lending partnership that empowers them to exceed client expectations with elite service, speed, and simplicity. Rocket Pro TPO’s technology team delivered Pathfinder, the most powerful technology ever for brokers, created in partnership with Google. Combining multimillion-dollar AI and machine learning tech, it’s a first-of-its-kind centralized platform, right at your fingertips, 24/7/365. Also, their partners outpace the competition by leveraging Rocket Connect portal technology which connects brokers to the right team right away, including operations leaders for any question or escalation need. Their industry-leading Pricing Calculator quickly produces loan options to share with clients using Clear Quote, an easy-to-download PDF. To learn more, watch EVP, Mike Fawaz discuss more details. Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO.

In challenging down economic times, Loan Vision is your solution to maximizing profitability and reducing costs in your business. With Loan Vision, companies see improvements of 25 to 35 percent decrease in days to close the books, 20 percent reduction in accounting headcount, complete LOS to G/L automation, and improved reporting and visibility that allow for better business decisions. Don’t accept a competitive disadvantage or get caught flat footed in a recovering market. To improve your cash position, gain a competitive edge, and prepare your business for sustained growth, contact Carl Wooloff to schedule a call today.

“Mortgage Industry Veterans Announce Fund It, New Startup Venture to Automate Warehouse Lending. Fund It is redefining how the mortgage industry manages its warehouse banking processes. Most IMBs still handle their warehouse funding manually. The Fund It platform, built with AI-powered algorithms, provides an automated warehouse lending solution. View capital needs projections in the next 30 to 60 days, eliminate human data errors, and access robust reporting tools that drive data-driven decisions. It also seamlessly integrates with many popular mortgage tools that IMBs currently use. Fund It’s platform tracks fundings, collateral administrations, and loan purchases. It also pinpoints cost leakages. These features help IMBs save time and increase profit on every warehouse-funded mortgage loan. FundIT optimizes every element of an IMB’s warehouse lending process. Use Fund It to enjoy higher profits by automating a traditionally manual-heavy process. Visit our website to learn more how to manage your company’s warehouse funding operations.”

Click links, ask questions later. The most common attack vector for a cyberattack is the human element. It’s what phishing emails, phone calls and text messages all have in common. Yet while it’s the weakest link, the human element could be your organization’s greatest prevention layer if trained correctly. In an industry that incentivizes people based on sales goals, every mortgage lead has bottom line potential. And in the current market, it’s only human to go after leads without stopping to consider their legitimacy. But recent data shows just how risky clicking without thinking can be. According to ISACA, in 2022 social engineering (tricking humans) was the #1 attack vector, and even the best teams are vulnerable. Learn how to do a better job at testing and training your team to identify legitimate leads. Talk to Richey May’s cybersecurity experts for help assessing and defining your cybersecurity training needs.

The CFPB and Co-marketing

Ken Perry with the Knowledge COOP writes, “The Freedom mortgage case should capture the attention of every mortgage broker, lender, and real estate agent. This is the biggest statement the CFPB has made about their feelings on co-marketing in a long time! The fact that they targeted a mortgage company providing free open house flyers, and free access to a subscription they pay for is huge because these arrangements exist in so many mortgage companies, including wholesale lenders, and rarely does the referring entity have to pay for these things. This is truly a case of, ‘if everybody is doing it then is it even wrong?’ Well, it looks like the CFPB has answered that question. Now we wait and see if $1.75 million was enough of a deterrent to force people to look at their business practices and make some immediate changes. These settlements usually come in groups. I can’t help but wonder if we will see more soon…”

Capital Markets

Much like the Consumer Price Index on Wednesday, the Producer Price Index report for August came in above expectations yesterday (0.7 percent versus consensus 0.4 percent). Other data on the day also included better than expected August Retail Sales (0.6 percent month-over-month, largely due to gasoline stations), and a smaller than expected increase in weekly jobless claims. Low jobless claims reflect a fairly tight labor market, which helps to explain why consumer spending continues to hold up in the face of inflation pressures and rising rates.

On the central bank front, the European Central Bank raised interest rates for the 10th consecutive time, to 4 percent, as President Lagarde signaled a shift that could mean the peak has been reached, though she insisted that she can’t yet say if that’s the case. As far as our Fed, there is zero likelihood the central bank is going to signal they’re done hiking rates at the conclusion of the FOMC meeting next week.

Despite all the major events over the past couple days that have influenced bonds, including the beginning of an auto worker’s strike last night, today’s calendar also has some market moving potential. We’ve already received Empire manufacturing, import prices (-3.0 percent, ex-gas flat), and export prices (-5.5 percent from the prior year). Later this morning brings August industrial production and capacity utilization, and preliminary September Michigan sentiment that includes inflation expectations. We begin the day with Agency MBS prices worse .125 from Thursday evening, and the 10-year yielding 4.32 after closing yesterday at 4.29 percent; the 2-year is up to 5.03.

Employment

Crescent Mortgage Company, a subsidiary of United Bank, named “Most Trusted Bank in America” for 2023 by Newsweek, is celebrating its 30th anniversary and rapidly expanding its retail division in the southeast. We welcome ambitious Loan Originators seeking growth and unparalleled support. Seasoned veteran David Rapson, CMB serves as SVP – Retail Lending, guiding us to new heights. President and CEO Fowler Williams, CMB emphasizes our unique commitment to allowing originators to do what they do best, originate loans, we will handle the rest! Backed by advanced technology and curated product offerings including agency, 1X close construction or renovation, low down payment options, non-QM, as well as unique portfolio offerings, Crescent has built a platform for Loan Officer success, a platform for you. Join our journey. Experienced Loan Originators or Branch Managers, explore possibilities by contacting David Rapson to elevate your success. The future is bright at Crescent Mortgage.

Supreme Lending is pleased to announce Rachel Saylor Brown as its newest Producing Tampa Bay Area Manager. Leveraging 10 years of remarkable industry experience, Brown will steer Supreme’s Florida expansion strategy, together with her husband Chris Brown, and a best-in-class team: Kaitlin Schiro, Nancy Myrick and Anna Livingston, all seasoned mortgage professionals. Rachel and her team are known for providing exceptional client experiences through transparent communication, meaningful relationships, and industry-leading technology. Supreme Lending is thrilled to welcome her to the team!

“Revolutionize Your Leadership: Meet Your Visionary Executive! Are you on the hunt for a C-suite dynamo to steer your organization to new heights? Look no further! I am a strategic powerhouse primed to tackle the role of President, CEO, COO/CSO. With a proven track record in strategy, team building, P&L mastery, and agile execution, I’m all about results, not magic. My extensive network includes GSE’s, investors, regulators, vendors, PE sources, and compliance experts. My experience spans Mortgage, Insurance, Tech and more. I don’t just lead; I innovate. I seamlessly integrate tech into strategy diversifying revenue streams while boosting traditional sales. Fintech? Consider it a bonus. Comfortable with boards and stakeholders, I’m a goal-driven, creative problem solver and an adept communicator. West Coast-based, but I’m open to relocation or remote work. Ready to transform your organization? Email Chrisman LLC’s Anjelica Nixt today for more details and a game-changing connection.

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

The question many in capital markets have been asking since the GSEs were put into conservatorship is this: Without Fannie, Freddie, or the Fed, who will buy the agency MBS? Today we are seeing this play out with a shortage of MBS buyers to the tune of about $2 billion in demand per day.

Supply and demand — when demand is low, MBS prices will drop at sale and the corresponding yields will rise.

Late last year, Laurie Goodman, the famed MBS expert and a leader at the Urban Institute in Washington, penned an article in Barrons to explain why rates were so high. She gives a very thorough explanation as to why the 30/10 spread is so high, stating, “Before and during the Great Financial Crisis, the Fannie Mae and Freddie Mac portfolios essentially served as shock absorbers, buying mortgage-backed securities, or MBS, when spreads were wide, selling when they narrowed.

“In 2009-2010, the combined portfolios were over $1.5 trillion. In the wake of the Great Financial Crisis, Fannie and Freddie have been mandated to reduce their portfolio size. The two portfolios together are now under $200 billion. Meanwhile, the Federal Reserve was a fairly consistent buyer of MBS after the financial crisis, as part of its quantitative easing strategy. But as of June 2022, the Fed began to allow its portfolio to run off.”

Today, as Laurie points out, the GSEs are restricted in what they can buy. Per the 4th amendment to the PSPA (preferred stock purchase agreement), essentially the governing document for the two companies in conservatorship, it is stated clearly. Historically, the GSEs could make up for the short in demand if needed.

For example, if the current short was absorbed by GSE purchases, the spread between 30-year mortgages and and the 10-year treasury would likely collapse to it’s more normalized level, likely bringing mortgage rates down about 100bps +/-.

But the PSPA 4th amendment states the following: “Limit Future Increases to the Retained Mortgage Portfolio: The PSPA cap on the GSEs’ retained mortgage portfolios will be lowered from the current cap of $250 billion to $225 billion by the end of 2022, aligning with the FHFA conservatorship cap the GSEs are required to comply with today, while providing the GSEs with flexibility to manage through the current economic environment. As of November 2020, Fannie Mae’s mortgage portfolio was $163 billion, and Freddie Mac’s mortgage portfolio was $193 billion.”

So why haven’t we seen spreads wider more often since conservatorship in 2008 until now? It’s simple really, the Federal Reserve engaged in three rounds of quantitative easing post-2008 during the Great Recession and then another massive round in the spring of 2020 due to COVID-19 recession fears. They created the short in supply that pushes prices up and yields down.

The problem now is that we have the greatest quandary in the markets. We are missing the two largest buyers of MBS on this planet. And to top it off, the FDIC is auctioning off the MBS and Treasury portfolios of the failed SVB, Signature, and First Republic Bank, which only increases supply into the market.

In a recent article in International Banking, Viral V. Acharya, C.V. Starr professor of economics, department of finance, New York University Stern School of Business (NYU-Stern), and Satish Mansukhani, managing director, investment strategy at Rithm Capital, state, “The Fed is thus caught between a rock and a hard place, with the demand- and supply-side effects of its tightening working in opposite directions. Which way will the pendulum swing? It is hard to know, but this may precisely be why interest-rate volatility has remained high.”

This is not a small market. Agency MBS is the dominant feature of the mortgage market with an approximate $9 trillion in outstanding volume. The hole being created here is enormous.

So what are the options?

First is to just leave this alone and let the markets function without interference. This would likely be the goal of fiscal conservatives who have argued that this excessive involvement by the Fed and the GSEs over decades has resulted in the market dysfunction we see today. Industry vet James Johnson penned a great piece for Rob Chrisman’s daily report in which he describes the current supply/demand conundrum and calls the period we are in as the “great reset,” a very appropriate reflection on the scenario today.

But there are other options to consider, and the reason to consider other options is because this excessive mortgage spread is hurting the people that this current administration is the most concerned with protecting.

High rates make affordability a significant barrier to homeownership. And with no end in sight, we as a nation are likely to only widen the opportunity gap between wealthier Americans and those with less means. First-time homebuyers and people of color who often have less inherited wealth and lower wages are the ones impacted the most in a time like this.

More importantly, this scenario is the unfortunate outcome of putting too much stimulus into the economy during COVID-19 combined with supply chain shortages that resulted in hyper inflation, leading us to todays scenario.

So option No. 2 is this: let the GSEs use their roughly $119bb available in remaining capacity within the limits of the PSPA to begin some purchase activity. And if there was a modification to the PSPA to allow a slightly higher balance, the GSEs could do what they have done all during the Great Recession and the COVID-19 pandemic and act as a “shock absorber” as Laurie Goodman describes. They could become tools to help stabilize a scenario, much of which was the result of the same set of agencies that produced the environment we are in today.

The unfortunate reality is that the FHFA would likely come under fire for using the permissible balance sheet to at least help temporarily. And those attacks would be something the administration would like to avoid in a heated election period. But this is an option and one that could help — particularly those who need the help the most and are now victims of hyper inflation that they did not participate in creating.

America is a great nation that has risen to beat back the Great Depression, two world wars, a variety of other conflicts, the oil patch crisis, and more leading up to the Great Recession and the COVID-19 crisis. But for the American dream, now threatened by this supply/demand imbalance, actions by federal agencies that played a partial role in the current scenario are also the ones that can help to balance out this dysfunction. And the ones who would be most impacted to the better would be those that need the help from our nation the most as they have been literally priced out of the housing market altogether.

And yes, there are other challenges, beginning with this terrible dearth in housing supply. But to use other variables as an excuse to not help here is a difficult argument to justify.

The bottom line is this, we have lost the biggest buyers of MBS in the world and this could keep rates artificially higher than would be the case in a more balanced supply versus demand environment. This is a project for the Biden administration to lead, which should include the NEC, Treasury, the Fed, HUD, and FHFA.

David Stevens has held various positions in real estate finance, including serving as senior vice president of single family at Freddie Mac, executive vice president at Wells Fargo Home Mortgage, assistant secretary of Housing and FHA Commissioner, and CEO of the Mortgage Bankers Association.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author of this story:
Dave Stevens at [email protected]

To contact the editor responsible for this story:
Sarah Wheeler at [email protected]

Source: housingwire.com

Apache is functioning normally

Cliffco Mortgage Bankers is among the rare independent mortgage banks doing more business than last year. And it’s looking to expand.

The New York-based independent bank exceeded its 2022 production volume of $400 million in August, but the end goal is far more ambitious: The company is aiming to produce between $3 billion to $5 billion in origination volume annually.

To get there, Cliffco, which has been in business since 1987, is going after the non-qualified mortgage (non-QM) market and investing in tech to get in front of buyers and non-agent referral partners.

Non-QM ripe for the taking

Faced with a lack of inventory across the country, lenders have been exploring ways to create new buyers. Target buyers for Cliffco include non-traditional buyers seeking investor loans. They are coming into the space in a very big way, Ace Watanasuparp​, a partner at Cliffco, said in an interview.

“On the non-QM side, only 3% of the market has been penetrated. Lenders in specific regions are all cannibalizing on each other’s volume. But we’re heading into different segments of the ocean. We’re going to be capturing market share, we’re going to teach people how to catch the type of product that they’re normally not used to fishing for so they can diversify their product offering and in return, they’ll give us some loyalty and list us as one of their preferred lenders,” Watanasuparp​ said.

About 30% of Cliffco’s production volume consists of non-QMs and executives expect that share to grow to 40% in 2024. 

Roughly 20% of Cliffco’s production comes from the wholesale channel and 80% of origination volume comes from its retail channel – through which it offers GSE, government loans and non-QM products. 

Currently licensed in 18 states, Cliffco plans to expand its footprint to 40 states by 2024. The lender has about 80 loan officers and aims to hire up to 100 in states.

Capturing leads with tech

Another priority for the lender is procuring leads through its proprietary technology.

“The market is retracting but it’s the best time to build,” Watanasuparp said.

Cliffco’s proprietary CRM platform enables loan officers to break away from being heavily dependent on real estate agents for referrals.

“In the past, we’ve always been dependent upon the real estate brokerage community, referring us to deals as loan officers,” Watanasuparp said. ”But in today’s marketplace with technology, we actually have the ability to get in front of the customer first, incubate the leads, and then give it back to the Realtors. So that’s something that we’re approaching the market a little bit differently.” 

The next step for Cliffco is creating an automated workflow system for its loan officers through the CRM, which will enable them to keep in touch with customers real-time.

“The database and the CRM tool is key for us to be able to monitor the different life cycles of the customer. How many times have they refi’d? Are they a warm lead, hot lead, cold lead? Things of that nature will all be very, very helpful, as we look to monitor the behaviors of our consumers and what the next trends are,” Watanasuparp said.

In a market where retail IMBs are averaging a net loss of more than $500 on each loan originated, Cliffco plans to bring that cost down by utilizing AI and automation.

“We are scaling and expanding through technology, making it more seamless, making it more efficient as we start to utilize AI underwriting,” Watanasuparp said. “We plan to use bots in terms of automation for our disclosures. The more we can lean on technology, the cost per file becomes that much lower. But the client gets to benefit from that.”

Source: housingwire.com

Apache is functioning normally

According to Ishbia, the FHFA years ago took action so Freddie Mac and Fannie Mae would not push back loans for “illogical reasons, small reasons left and right or after a 36-month window.” However, it doesn’t seem to be working, Ishbia said. 

“They are making billions, and lenders are barely scraping by, but they continue to make them buy back loans for small reasons here, little things that happened on a loan that maybe are not impacting the borrower’s success in that loan,” Ishbia said.  

At the end of August, HousingWire reported on a new report by mergers-and-acquisitions consulting firm Sterling Point Advisors showing that loan-repurchase rates have been on the rise in recent quarters when many IMBs are struggling to stay in business.  

In 2020, Fannie Mae reported $1.1 billion in repurchases on $1.4 trillion of single-family loan-acquisition volume (loans originated by lenders and purchased by Fannie Mae), or an eight basis-point repurchase rate. In Q1 2023, the GSE had $459 million in repurchases on about $68 billion in loan-acquisition volume or a 68 basis-point repurchase rate, the report shows. 

“The industry is up in arms and is very frustrated with the amount of repurchases Fannie Mae and particularly Freddie Mac are pushing back on lenders,” Ishbia said. “A lot of trade groups, a lot of people are talking about it, and it’s impacting lenders, impacting mortgage people, and impacting consumers at the end of the day as well.”

The GSEs showed a different approach to buybacks in May during the Mortgage Bankers Association (MBA) Secondary and Capital Markets Conference and Expo in New York. Fannie Mae’s position was that the loan-repurchase increases are an economic problem, not an underwriting process issue. Meanwhile, Freddie Mac said it’s in talks with lenders to address the problem through a more customer-focused approach. 

Amid mounting concerns that loan-repurchase rates in upcoming quarters are likely to continue to trend upward, Freddie Mac told HousingWire last week that, “We’re seeing a positive trend in loan quality and materially fewer repurchase letters as a result of the progress we’ve made by working collaboratively with our industry partners in the past year. We will continue to look for opportunities to build on this progress.”

Freddie Mac also said they are “always looking for ways to improve our quality control processes, and we will continue to engage in open and productive dialogue with lenders to find ways to further improve loan quality while fostering sustainable homeownership.”

Source: housingwire.com