“I’m trying to organize a hide and seek tournament, but good players are really hard to find.” Good LOs (trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean, and reverent… do I have that right?) can be hard to find. Compensation figures in there somewhere, and in this continued era of cost-cutting remember that HUD sent out a note years ago about mortgage loan officers being W-2. (Press your “Control/Ctrl” key and “F” simultaneously. Then type in W-2. There are nine mentions.) The CFPB, in its examinations, looks at LO comp. One can always ask the CFPB questions through this site, but more weight is put on LO compensation requirements under the Truth in Lending Act (Reg. Z) which addresses total loan originator compensation. It states that total income is either wages and tips reported on a W-2 or reportable income on a 1099. See 12 CFR Part 1026 (pg. 11352). One can also see the Final rule: Loan Originator Compensation Requirements under the Truth in Lending Act (Regulation Z) (consumerfinance.gov), pgs. 262-63, 274, and 517. (Today’s podcast can be found here and sponsored by ReadyPrice, offering the industry’s most powerful universal delivery portal that gives brokers the edge they need. Shop, lock and deliver with multiple lenders, all in one place, for free! Hear an interview with ReadyPrice’s Rick Soukoulis on how to win broker business and the overall direction of the wholesale channel.)
Lender and Broker Products, Services, and Software
Create a seamless specialty servicing journey with LoanSync™! When your servicing portfolio is your bread and butter, creating a communication journey that provides all parties with the same loan information is important. This is especially critical when loans become delinquent, and timing is of the essence to obtain swift resolution. With LoanSync™, your distressed loans boarded with LoanCare® are assigned to Velocity Servicing™ as needed with no fee or borrower disruption, while simultaneously creating a fully transparent loan journey. Your organization will gain immediate traction with a customized solution and real-time scalability. Alleviate the need for loan transfers, expand your program expertise with custom client waterfalls that are consistent with monitoring requirements, and gain access to a network pipeline of pre-resolution buyouts, all while leveraging LoanCare® technology. Click to learn more or call today at 646-361-6808 to partner with Velocity Servicing™, a LoanCare® division, for your specialty servicing needs.
“While it may be hard to imagine given the temperature outside, fall is right around the corner, which means it’s time to engage your 2023 audit and tax firm. In a year when every dollar counts, you need a cost-effective provider without sacrificing quality. You need CWDL. Our audit and tax teams are comprised of professionals with deep mortgage experience, so we understand your business and get right to work. Not only does that mean an efficient, smooth process from start to finish, but it also means your key stakeholders will have full confidence in the final product. And as a nimble firm without layers of management, our partners are actively involved in all aspects of your engagement, and you’ll be assigned the same management team every year. Don’t wait to make a transformative change for your business. Reach out to Kasey English or 619.302.0010 or learn more here.”
Sales and Productivity Tools
What if your Point-of-Sale wasn’t a “system” at all? What if it was a thoughtfully designed borrower experience that seamlessly integrated into Encompass® by ICE Mortgage Technology™? No new systems to learn, no frustrating borrower experiences, no expensive price tags. LiteSpeed by LenderLogix is the POS your loan officers have been asking for.
Own Up is the nation’s only mortgage concierge marketplace enabling mortgage companies, banks, credit unions and brokers to access exclusive, high intent and highly qualified borrowers. A recipient of numerous accolades, including Fintech Breakthrough’s “Best Digital Mortgage Platform,” Own Up is currently onboarding select lenders to further its national expansion. Own Up seamlessly integrates into all major lender CRMs, lead management systems and pricing engines. Lenders interested in acquiring qualified leads with industry-leading conversion should reach out to [email protected] to learn more.
STRATMOR on Sales Costs and Compensation
According to data from the PGR: MBA and STRATMOR Peer Group Roundtables program, the average fully loaded cost to originate a loan through the Retail channel for all peer groups was $13,131 in 2022. Where does the money go? Fulfillment (processing, underwriting, closing and other direct costs to manufacture the loan) costs the average lender about 22%. Sales account for 55% of the expense. Given that it is unlikely that the percentage will change materially, in STRATMOR Group’s July Insights Report, Senior Partner Garth Graham analyzes where we’ve been and where we are with sales compensation, and he offers ideas on how lenders might tame the beast of sales costs. Don’t miss Graham’s article, “Sales Compensation: Do You Get What You Pay For?” in the new STRATMOR Insights Report.
Non-Agency News
Non-Agency loans, which include non-QM, DSCR, jumbo, ITIN programs, have never quite garnered more than 5-10 percent of overall industry volume, but nonetheless are valuable tools for LOs trying to hold onto every valuable client. Let’s take a look at who’s doing what.
With a Champions Funding ITIN loan for business purposes, investors can easily access credit, regardless of immigration status, using an Individual Taxpayer Identification Number (ITIN) in place of a SSN, creditworthy borrowers can reach their goals. Reach even more potential borrowers, check out the Champion Funding ITIN for Real Estate Investors.
Champions Funding announced the new Non-Delegated Correspondent Lending Channel is now available for ITIN Loan Products (Consumer and Business Purpose). Access to new tools, marketing resources, and opportunities to utilize the operational services of Champions. Visit the updated website for all Correspondent Resources, including guidelines and the Seller’s guide.
Expand your lending options with the Plaza Home Mortgage® Jumbo Elite loan program, a new addition to its overall suite of Jumbo loan programs, open doors to more possibilities for your borrowers. Jumbo Elite Program highlights include loan amounts to $2.5 million, FICOs from 680, High Balance Loan amounts eligible, Asset Depletion allowed. LTV to 85%, 20, 25 & 30 Year Fixed, Purchase, Rate/Term, Cash-out, primary, second home or investment property SFR, Condo, Co-op, PUD, 2-4 units. Additional details can be found in the Jumbo Elite Program Guidelines and Jumbo Elite Price Adjustments documents.
Loan Stream Mortgage 40-year term loan is fully amortized for its fixed term loan program, two options available. 40 Year Fully Amortized Loan (480 months) or 40 Year Interest Only (first 10 years IO followed by 30-year fixed). Available programs: Full Doc, Alternative Doc (Bank Statement, 1099, Asset Utilization, VOE), DSCR. Purchase, Refi and Cash out available.
Angel Oak Mortgage Solutions’ DSCR loan product is designed exclusively for real estate investors seeking to enhance their property’s cash flow.
Traditional lenders may be hesitant to provide financing for cannabis-related borrowers due to the industry’s legal and regulatory issues. Non-QM is the way to secure financing for those borrowers with irregular income streams &/or other factors that make it difficult. LoanWyse
offers Multiple Doc Options: Full Doc (12 or 24 Months), 1 Year W2, 12 or 24 Bank Statements, 1099 Only and Asset Utilization, qualify for a Mortgage with Cannabis-Related Income.
Carrington Wholesale not only offers flexible bank statement income documentation options for self-employed borrowers but can also use Profit and Loss (P&L) statements*. Self-employed borrowers may submit P&L statements covering 12 or 24 months. Must be self-employed for at least 2 years. Multiple businesses are permitted. FICO scores 620+.
Carrington Correspondent offers the highest LTV in the industry on DSCR loans. How high? Up to 85%. With that kind of leverage, investors will be enjoying their positive cash flow and appreciation in no time.
40-year fixed-rate (Full Doc and Bank Statement) Non-QM loans may give your clients more financial flexibility with the rising cost of homes and today’s higher interest rates. Carrington Wholesale offers four Non-QM Programs with 40-Year Loan Option. The Carrington Prime Advantage FICO 660+, The Carrington Flexible Advantage Plus FICO 620+, The Carrington Flexible Advantage FICO 550+ and The Carrington Investor Advantage (DSCR) FICO 620+.
A&D Mortgage has just announced a significant improvement in pricing on its Non-QM second mortgages, offering a 1-point pricing improvement on these loans, helping its customers secure the funding they need at a more affordable rate. With this new pricing structure, A&D Mortgage is confident that its Non-QM second mortgages will stand out in the market and provide a competitive advantage for borrowers.
Capital Markets
We love long walks on the beach, sunset views, and all things secondary marketing. Know where you can find all three? In Dana Point during the California MBA’s Western Secondary event. If you’re attending, don’t miss what’s sure to be a highly acclaimed session featuring Optimal Blue thought leader Jim Glennon on Aug. 22. This session, titled “Capital Markets in the New World,” will offer commentary on key drivers in the capital markets space given the changing market conditions, with a focus on how the current landscape differs from the last three years. After this informative session, you can tie this insight back to your business goals by scheduling a personalized meeting with Optimal Blue’s team of experts.
Are you wondering how the Fed decision will affect rates and the mortgage market? Register for Agile’s webinar, MBS Pooling Overview, Market Dynamics, & Best Practices, on August 9th at 11AM PT to find out. In this webinar, Phil Kukafka of Towne Mortgage, Ryan Ferderer of Multi-Bank Securities, and Andrew Rhodes of MCT will give an overview of MBS pooling and discuss the current market. Panelists will also share strategies for efficiently pooling and selling mortgage-backed securities as well as the process for MBS pooling using Agile’s technology. Register now for more information on key market dynamics with traders on the front lines of the MBS market.
Bonds and rates? As expected in the U.S., the Federal Open Market Committee (unanimously) raised its benchmark rate by 25 basis points to a new range of 5.25 percent to 5.50 percent yesterday. This hike marks the 11th rate hike since the Fed began hiking in March 2022 and brings the fed funds rate level to the highest it has been in 22 years. Many think that the Fed is likely to skip a rate hike at its next decision in September, meaning the following decision on November 1st will probably be the next time the committee seriously considers raising rates again in its fight to return inflation to the proclaimed 2.0 percent target, which we are still a long way from. By November, the pace of core inflation slowing will be clearer, but policymakers do not see inflation returning to target until 2025.
The Fed thinks policy is finally restrictive but will need to remain restrictive for some time until macroeconomic growth slows on the whole. Chair Powell, in his post-decision press conference, repeated that the full effects of tightening have yet to be felt, but also revealed that the FOMC is no longer forecasting a recession, which explains why policymakers believe inflation won’t hit their 2 percent target until 2025. The only surprise was when Powell said the Fed could decide to cut rates without taking their foot off the brakes (e.g., through the discount rate, reserve requirements, and open market operations). Pricing in Fed Funds futures is now implying a nearly 40 percent probability that the Fed will hike rates by an additional 25 basis points in November, up from roughly 25 percent a week ago.
We also learned yesterday that new home sales fell 2.5 percent month-over-month in June to 697k, below expectations of 727k, but up 23.8 percent on a year-over-year basis. The median sales price fell 4 percent on a YOY basis to $415,400. New home sales activity, which is measured on signed contracts, was hurt overall by rising mortgage rates, and the pace of overall housing market activity remains quite slow. Housing affordability challenges continue, though mortgage rates should trend down once the FOMC clearly signals that they have reached the peak fed funds rate range for this cycle.
Today bought the latest monetary policy decision from the ECB (a 25-basis points hike), which took the main refinancing operation rate to 4.25 percent. ECB President Lagarde’s had a press conference, similar to Powell’s yesterday. Returning to U.S. news, we’ve had the first look at Q2 GDP (2.4 percent: soft landing?), as well as durable goods orders (+4.7 percent), and weekly jobless claims (221k, still falling, 1.690 million continuing claims). Expectations were for GDP to increase 2.5 percent versus 2.0 percent previously with the core PCE deflator increasing 3.9 percent compared with 4.9 percent in Q1.
Later this morning brings the Pending Home Sales Index for June, Kansas City Fed manufacturing for July, a Treasury auction of $35 billion in 7-year notes, and Freddie Mac’s latest Primary Mortgage Markets Survey. We begin the day with Agency MBS prices worse a few ticks (32nds) from Wednesday afternoon, the 10-year yielding 3.89 after closing yesterday at 3.85 percent, and the 2-year 4.87 after this plethora of news.
LO Employment
More than a business; it’s a movement. Join the team of Kind Ambassadors shaking up the retail mortgage market and expanding across the nation! Kind Lending is actively seeking Retail Branch Managers and Mortgage Loan Officers to join the movement. If you or your team are looking to serve your clients with white glove customer service and a full suite of competitive loan products (and putting the “fun” in funding while doing it), join the #KindMovement alongside CEO/Founder Glenn Stearns and the team of seasoned industry veterans, poised to grow your impact in the field. Contact Orlando Gutierrez, SVP of National Retail Sales today.
“PrimeLending proudly presents 1Day AdvantEDGE, our revolutionary 24-hour mortgage credit approval process, providing a significant edge in today’s competitive market. Customers simply complete an online application and submit the required documents, and our automated underwriting system, D1CEdge, takes care of the rest. Within 24 hours, customers receive a credit approval letter and enjoy a $250 lender credit at closing! This is just one example of how PrimeLending responds to market demands and helps our LOs succeed. Are you equipped to dominate your market? Discover how PrimeLending leverages technology to give LOs a real advantage. Contact Nic Hartke today to learn more. With 1Day AdvantEDGE, we empower you to excel and achieve success in your local market. Join PrimeLending and experience the future of mortgage lending.”