Wholesale Lending

Apache is functioning normally

Apache is functioning normally

Wachovia said today that it will discontinue wholesale loan origination beginning this Friday, leaving very few players in the broker-originated space.

It’s unclear how many jobs will be lost as a result of the shift in operations, but that will likely be disclosed when the company announces second quarter results tomorrow.

It is assumed that loans already locked and in progress will continue to be processed until a certain funding cut-off date.

Tim Wilson, Head of Loan Origination for Wachovia Mortgage, explained that the bank and mortgage lender was repositioning itself to work with clients who have existing relationships and live in areas where the bank’s franchises are located.

The Charlotte-based bank’s third-party origination unit Vertice is apparently not affected by the changes, and will continue to offer broker-originated loans.

Wachovia has been hard-hit by the ongoing mortgage crisis, especially after acquiring option arm specialist Golden West for a staggering $25 billion in 2006.

The company has since stopped originating option arms with the negative amortization feature, and has waived prepayment penalties tied to the so-called toxic loans.

In early June, Wachovia said it would contact all portfolio loan applicants whose loans were submitted by mortgage broker clients in what it referred to as “enhanced customer service”.

The bank is expected to report a second quarter loss in the range of $2.6 billion to $2.8 billion, according to Reuters estimates.

That includes a $4.2 billion increase in loan-loss reserves, with $3.3 billion going towards those nasty pick-a-pays.

Shares of Wachovia slipped 71 cents, or 5.37%, to $12.52 in after hours trading.

Source: thetruthaboutmortgage.com

Apache is functioning normally

Apache is functioning normally

GMAC’s Residential Capital announced today that it will close all 200 GMAC Mortgage retail locations and cease lending at its wholesale lending subsidiary Homecomings Financial.

As a result of the closures, roughly 5,000 employees will lose their jobs, including 3,000 as soon as this month and another 2,000 by the end of the year.

The loss represents about 60 percent of the remaining workforce at ResCap, which was rocked by layoffs last October when about a quarter of the staff was sent packing.

Homecomings sent a memo to mortgage brokers, notifying them that all loans must be submitted no later than 5pm eastern on Thursday, and all loans must fund by October 24.

GMAC’s ResCap unit expects a related charge in the range of $90 to $120 million, much of which will be reflected in the third quarter.

However, ResCap will continue to originate loans both domestically and internationally, so long as there is a secondary market to dump off the loans.

The plan is to originate home loans via its direct (probably Ditech) and correspondent channels and expand its servicing platform to “preserve homeownership.”

Last year, ResCap lost a whopping $4.35 billion, driving once-profitable GMAC to a $2.33 billion loss.

It had been one of the top ten largest home loan lenders until the mortgage crisis took flight in mid-2007.

Check out the latest list of layoffs, mergers, and mortgage lender closures.

Source: thetruthaboutmortgage.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

Downey Savings was shut down late Friday by the FDIC on a busy day where two other banks were also seized.

US Bank has agreed to take on the company’s banking operations, including its 170 branches in California and five in Arizona.

The news doesn’t come as much of a surprise, given Downey’s dismal share price and the admission of a consent order demanding it raise capital by year-end or face conservatorship.

It’s unclear to what extent the Newport Beach, CA-based bank and mortgage lender was still lending, given it dropped its wholesale lending unit back in mid-October.

That channel had historically provided roughly 80 percent of all single-family loan origination volume.

As of the end of the third quarter, Downey had total deposits of $9.7 billion and $12.8 in total assets, many of which were non-performing.

PFF Bank and Trust Acquired by US Bank

It was a busy afternoon for US Bank, who also agreed to acquire Pomona, CA-based PFF Bank and Trust, along with its $3.7 billion in assets, $2.4 billion in deposits, and 37 branches.

The combined failures will cost the FDIC roughly $2.1 billion, further diminishing its already vulnerable Deposit Insurance Fund (DIF).

A third bank, The Community Bank, located in Loganville, Georgia, was also seized.

A total of 22 banks have failed so far this far, including five in the state of California alone.

I suspect a number of other banks will fail within the next month as well, given the precarious trading prices of a number of banks out there at the moment.

Check out the latest list of closed lenders, mortgage layoffs and mergers.

Source: thetruthaboutmortgage.com

Apache is functioning normally

Mat Ishbia, chairman and chief executive officer at United Wholesale Mortgage (UWM), provided more than half of the mortgage company’s outstanding shares as a guarantee to secure loans ahead of the acquisition of the Phoenix Suns, according to a Bloomberg report.

According to the report, Ishbia pledged stock he controls to back two loans that were finalized days before his purchase of the Suns was approved. The deal, which values the Suns at $4 billion, first became public in December. The executive received the NBA blessing in February.

In total, 805 million shares, currently worth $4.6 billion, secured two loans with JP Morgan Chase & Co. Ishbia holds his UWM stake via SFS Holding Corp., which owns 94% of UWM’s outstanding stock and pledged the shares, per the firm’s 2023 proxy statements.

“The number of shares of Class A common stock beneficially owned by SFS Corp. also includes a total 805,281,450 shares of Class A common stock which are pledged as security for two separate loan facilities,” the proxy statement states.

The risk of tying up the shares to the loans is that if the value of the stock falls, the bank can usually request additional collateral or for the loan to be repaid. And if the borrower fails to comply, the bank can seize and sell the shares.

The Bloomberg Billionaires Index shows Ishbia’s fortune dropped by $3.4 billion after the pledged shares were removed from his net worth calculation. 

UWM and JP Morgan Chase declined to comment on the topic.  

The seller of the Suns Legacy Holdings, which owns the Phoenix Suns and Mercury, was Robert Sarver. The executive acquired both teams in 2004. Earlier in 2022, Sarver was fined $10 million and suspended for one year following an NBA investigation regarding workplace conduct.

Ishbia and his brother Justin bought 50% ownership of the franchises, including Sarver’s interest. They also acquired a portion of the interest of minority partners, who were granted additional sale rights. Mat serves as governor and Justin as alternate governor.

Source: housingwire.com

Apache is functioning normally

DSCR, Non-Del, CRM, Pricing Engine, Real Estate Agent Products; STRATMOR Customer Service Workshop; NAR President Resigns

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DSCR, Non-Del, CRM, Pricing Engine, Real Estate Agent Products; STRATMOR Customer Service Workshop; NAR President Resigns

By:
Rob Chrisman

3 Hours, 5 Min ago

“What did the happy real estate agent put on her sign? I have lots to be thankful for.” (Feel free to use that gem at your next presentation at Sotheby’s.) In response to yesterday’s opening paragraph comments about housing supply, from Maryland Ken Sonner sent an article about how New Zealand managed to shift its zoning to help alleviate the supply issues and lower rents. People like lists for some reason, and here is the “The 15 most in-demand ZIP codes for U.S. homebuyers, and #1 is in Ohio.” But heading back to inventory, affordable housing, and such, the topic is certainly percolating up to Capitol Hill. A bipartisan duo in the U.S. Senate introduced a bill that would address a shortage of affordable housing in rural communities by easing the process for non-profits to acquire properties with USDA rural housing loans. It would also decouple the related rental assistance so that the assistance doesn’t end when the mortgages mature. (Today’s podcast can be found here and this week’s is sponsored by Black Knight. Black Knight is an award-winning software, data and analytics company that drives innovation in the mortgage and real-estate industries, and the capital and secondary markets. Listen to an interview with Servbank’s Anthony Forsberg on default and loss mitigation.)

Lender and Broker Software and Services

Don’t discount the value of prioritizing your customers. Many servicers are adding customer-focused technology to give homeowners self-service options and more. Just take it from AimLoan, an internet-direct mortgage lender that recently implemented MSP®, Black Knight’s loan servicing system, along with several other customer-focused solutions. After recently moving its servicing portfolio in-house, AimLoan needed proven technology to enhance the customer experience of today and prepare for growth of tomorrow. Ready to join AimLoan by enhancing the way you serve your own customers? Learn more about MSP today.

Get valuable face time with real estate agents: host your own For Sale to Sold workshop. MGIC’s ready-made workshop kit makes it easy for loan officers to guide agents to a deeper understanding of the mortgage process. The benefits of hosting your own workshop? You’ll position yourself as an expert, build stronger relationships and earn more referrals. Request your For Sale to Sold workshop materials to get started.

Loan servicers are invited to attend a free webinar on the MERS® Annual Report and third-party review process next Thursday, September 7th, at 3pm ET. Hear from the experts at Falcon Capital Advisors, an experienced and trusted third-party review firm, about the Annual Report process and how your organization can ensure it remains compliant with MERS® System requirements. Click here to register.

You don’t have to accept lower profitability when loan volume is down. Instead, find efficiencies in your mortgage process that add up to cost savings and bolster your bottom line. Loan officers using Maxwell Point of Sale achieve more with less work, closing 20% more loans and moving loans to clear to close 35% faster. Maxwell POS syncs with your LOS bi-directionally, keeping real-time data in one place for easy management and seamless updates and preapprovals. Managers have visibility into the team’s entire pipeline, allowing them to identify opportunities for quick adjustments and better results. If you’re ready to maximize your mortgage operations and take advantage of every basis point, schedule a call with the Maxwell team.

In today’s low-volume, purchase-focused market, every mortgage lender’s goal is to optimize their profits and overall efficiency. The catalyst? The right product and pricing engine. In a recent article with HousingWire, industry expert Parvesh Sahi of Polly emphasizes three critical components to thrive in this ultra-competitive market environment: 1.) Speed to market, 2.) Margin management, and 3.) Loan officer experience and education. According to Sahi, creating the connective tissue between these three primary components is an enormous opportunity. Are you taking it? Learn more, here: Why the right PPE matters.

“It’s no surprise that many mortgage lenders use more than one channel to maximize loan origination opportunities. Maybe you’re a traditional retail shop with a growing consumer direct team, or you decide to shift resources to wholesale while your retail group rides out a rough patch. What is surprising is how many lenders use two or even three different CRM systems to meet their multi-channel needs, each one increasing the inefficiency and cost of their sales and marketing. Download our free guide, “How to Find the Ideal CRM” and learn how to streamline your tech stack and improve sales and marketing performance across all your channels.”

Broker and Correspondent Products

“Brokers: Are you attending NAMB National? Meet NexBank’s team at booth #12 and learn why we are a trusted investor and warehouse bank partner to brokers and correspondents nationwide. NexBank is continuously ranked as a top lender by Inside Mortgage Finance, and we continue to grow in the wholesale and correspondent space. Our wholesale and non-delegated channels offer a suite of Portfolio, Conventional, FHA and VA products. Our competitive portfolio products include Full Doc and Reduced Doc (Non-QM), available for loan amounts from $200,000 to $2 million, with ARM and Fixed Rate options, along with Interest Only. Ask about our unique 6-month ARM! Plus, portfolio loans have no LLPAs for FICO or second homes and allow cash-out to 80 on primary with no dollar cap on cash-out amount, where applicable by law. Contact us. Restrictions apply. Subject to change. For mortgage professionals. Not intended for general public. Member FDIC. Equal Housing Lender. NMLS 672886.”

Long-term Rental or Vacation Rental? Visio Lending is the nation’s leader in Non-QM Investor DSCR loans for buy and hold SFR rentals with nearly a decade of experience and over $2.5 billion in originations. No-DTI, 30-year terms, rate buy downs, free 45-day rate locks; I/O and Sub-1 DSCR options available. Through our top-notch Broker Program, brokers are able to earn up to 2 points YSP, and 5 points total. Visio Brokers can count on a designated Account Executive and in-house processing.

STRATMOR Customer Experience Workshop

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!

Capital Markets

With a light day of data to open the week, investors continued to mull over Fed Chair Powell’s Jackson Hole Speech, which had a rather hawkish tone as he vowed to hike rates further, if necessary. Investors in Fed Funds futures got the message, ramping up bets that the Federal Open Market Committee will hike rates by an additional 25 basis points at the November meeting. The U.S. Treasury sold $45 billion in 2-year notes yesterday morning and $46 billion in 5-year notes in the afternoon, with both offerings meeting good demand ahead of today’s $36 billion 7-year note auction. We have a heavy week of data coming up with home prices and consumer confidence today, GDP tomorrow, the PCE Price Index on Thursday, and the jobs report on Friday.

Keeping things in perspective, two weeks ago, markets were buoyed by an upwards surprise in retail sales. However, last week’s durable goods report showed orders fell 5.2 percent in a sign that business investment is slowing. Despite potentially lower jobs gains, initial unemployment claims have remained fairly consistent throughout the year and were at a three-week low last week. Given the record over-supply of available jobs over the last year, the softening in the labor market may presently be manifesting itself in less job openings rather than increasing layoffs. There were about 14 percent fewer job openings as of August 18 than on January 1. Existing home sales fell for the second consecutive month in July as higher mortgage rates reduced demand as well as supply. Lower supply has put upwards price pressure on the limited existing homes availability. This allowed builders, armed with price and rate incentives, to insulate themselves from the housing slowdown. New home sales were up 4.4 percent in July. While recent inflation data is encouraging, hawkish talk from Fed officials has the markets split on whether another rate hike will be necessary before the end of the year.

Today’s calendar gets under way later this morning with Redbook same store sales and will be followed by home prices from S&P /Case-Shiller and the FHFA for June, July job openings from JOLTS, consumer confidence for August, Dallas Fed Texas services for August, the aforementioned Treasury auction of 7-year notes, and remarks from Fed Vice Chair of Supervision Barr. We begin Tuesday with Agency MBS prices roughly unchanged from Monday and last Friday and the 10-year yielding 4.20 after closing yesterday at 4.21 percent. The risk-free 2-year T-Bill is at, or above, 5.0 percent for the sixth straight day.

Employment, transitions, and NAR President resignation

“Citizens Wholesale Lending: If you’re an Account Executive looking for a solid Wholesale Lender, look no further than Citizens! Citizens Wholesale has been supporting the Broker and Non-Del community for the past 28 years with a commitment to delivering a best-in-class experience. As the mortgage landscape continues to evolve, Citizens remains a strong pillar for the Wholesale industry. We are currently hiring Account Executives in GA, NC, and SC to join one of the strongest bank-owned wholesale lenders in the country. If you’re interested in an opportunity to thrive and be a part of a winning team, learn more at our jobs page today!”

Allen Friedman, an industry veteran and long-time friend of this Commentary, has returned to his home of over 10 years, iServe Residential Lending. Allen joins iServe as Executive Vice President and will help to further develop and expand the company’s strategic growth and development initiatives. Co-CEO Ken Michael states “We are thrilled to have Allen back in this leadership role. He helped to create our culture and shares in our desire to ensure that iServe is a company that both MLOs and Branch Managers can join to build something extraordinary. With a can-do culture, our goal is to empower each MLO and Branch Manager with a voice in the company alongside the decision makers. Allen strengthens that platform.” iServe was established in 2007 as a multi-state residential mortgage banker and invites NMLS licensed Originators to apply. For a confidential conversation about joining iServe, contact Allen Friedman through his email or at 415-298-2500.

It’s hurricane season, and sure enough we have Hurricane Idalia forming and expected to hit Florida on Wednesday. The National Association of Realtors has its own storm: the (now ex) President, Utah’s Kenny Parcell, resigned after the New York Times reported on allegations of sexual harassment and a culture of fear at NAR.

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

Source: mortgagenewsdaily.com

Apache is functioning normally

MortgageIT, a subsidiary of Deutsche Bank, announced today it will wind down its wholesale lending business in the coming months.

The company will cease accepting new loan applications as of today, and all loans previously submitted must be locked by December 24, with the last day to fund January 30.

There was no reason cited on the memo, though it’s pretty obvious why any wholesale lending company would shut down at this point.

The number of layoffs resulting from the closure are unknown, though it’s likely the company employed far fewer than the 2,500-figure listed on their website.

Back in October 2007, it was rumored that the company laid off more than 500 workers at its 40 operations centers nationwide as market conditions deteriorated.

MortgageIT was founded back in 1988 and later acquired by German banking giant Deutsche Bank in 2007 (yes, bad timing).

Based in New York City, it served all 50 states via retail and wholesale channels, providing residential mortgage loans.

It’s unclear what the company’s retail presence looks like at the moment, though their website says they still provide permanent and construction-to-perm loans in “select luxury resorts across the Caribbean and Latin America.”

This is the latest wholesale lending casualty, preceded three weeks earlier by HSBC, which shut both its wholesale and correspondent home lending businesses.

Check out the latest list of closed lenders, layoffs, and mergers.

Source: thetruthaboutmortgage.com

Apache is functioning normally

Pricing, Internal Audit, CRM, Home Insurance, Lead Generation Tools; Comp Survey; MBA’s Cost Per Loan Stats

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Pricing, Internal Audit, CRM, Home Insurance, Lead Generation Tools; Comp Survey; MBA’s Cost Per Loan Stats

By:
Rob Chrisman

Fri, Aug 18 2023, 10:49 AM

As numbers approaching a thousand head to Orange County, CA, for the California MBA’s Western Secondary, keeping an eye on the remnants of a hurricane, it is not an easy lending environment with mortgage rates at 20-year highs, firmly in the 7’s. Thomas Edison believed, “Vision without execution is hallucination.” Many owners of lenders and vendors had very good vision and execution some years ago when creating their companies. But thinking that 2020 and 2021 would continue indefinitely would have been classified as a hallucination, and obviously things have become much more difficult with many wondering where things go from here. I don’t have a crystal ball, but a certain percentage of those owners who deferred being serious about exploring a sale, waiting, until after the cycle was obviously on the downside, they’ve perhaps undermined an opportunity for negotiating more favorable deal terms. It can be argued that the smarter entrepreneurs engaged in company sale negotiations while industry mindset is mostly driven by prosperity. (Today’s podcast can be found here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades.)

Lender and Broker Software and Services

“No time for social media marketing? Introducing… Social Media Marketing for Busy Loan Officers. Tired of stressing over what to post on Facebook or LinkedIn? Want to grow your audience on Instagram without spending hours each week crafting the perfect post? With Be Loangendary, we do all of it for you. Here’s how: 1) Our team of mortgage copywriters and designers craft your social posts every week. 2) Once they’re perfect, we schedule and post to your social accounts. 3) You sit back, relax, and watch the “likes” start rolling in. With Be Loangendary, you get engaging mortgage content without breaking a sweat. That’s social media done for you. Want to get started? Enjoy a 14-day free trial on us!”

“Salesforce is committed to partnering with mortgage lenders to drive their technology transformation with modern solutions that are already in practice and serving many of the top mortgage lenders in the country. As part of its efforts to drive the industry forward through the adoption of a modern tech stack, Salesforce identified UMortgage to establish the precedent of utilizing its mortgage and lending software to its fullest potential to facilitate better client experiences. Using customized task management systems and automations within Salesforce, UMortgage has been able to achieve 300% year-over-year growth and near-perfect 95 net promoter score (NPS), an indicator of a best-in-class client experience. Check out the following link to learn more about the innovative technological systems that are helping UMortgage Loan Originators maximize their lead generation & conversion. With an investment in intuitive solutions, UMortgage is driving the mortgage industry towards a better future that enables brokers to thrive.”

We’re hearing that lenders are ramping up their tech stacks and (most importantly) focusing on the quality of the data powering that technology. If you’re considering taking your company’s tech stack to the next level, look for a property data provider that delivers the most comprehensive data through the best channels to meet your unique business needs. That’s why we’re highlighting First American Data & Analytics and its repository of more than 8+ billion recorded documents. First American is more than just a data provider. It offers end-to-end solutions for the mortgage lifecycle. From detecting fraud and risk to providing valuation solutions, First American powers lenders to make informed, data-driven decisions. If you’re ready to have access to the most accurate, complete, and current data, reach out to the team and get a data sample now.

“Lenders, the home insurance market is facing unprecedented volatility. We want to hear if it’s affecting your business and the closing process. Take our five-minute survey to share your thoughts. As a thank you, you can select to be entered to win a $100 Amazon gift card, compliments of Matic Insurance. Click here to begin the survey. Matic is a home insurance marketplace built for the mortgage industry. Learn how mortgage enterprises can implement a new revenue stream that helps borrowers navigate the insurance buying process. Book a demo today.

Wholesale lending is undergoing a transformation that will leave those who cling to outdated processes behind. Using bargain CRMs as electronic phone books or even worse, spreadsheets to track brokers, is a clear sign that your sales process is holding you back. Modern CRM technology like OptifiNow provides a comprehensive, out-of-the-box solution that helps wholesale lenders create a sales and marketing process that drives broker engagement and significantly increases loan volume. Download our guide to finding the right CRM for wholesale lenders to learn how to transform your wholesale business and stay ahead of the competition!

What’s an internal audit anyway and do you need one? An internal audit acts as a third line of defense for your mortgage operation. It provides comprehensive assurance based on the highest level of independence and objectivity to evaluate the effectiveness of management’s internal controls. This function should advise your mortgage operation on plans to achieve the company’s strategic, operational, financial and compliance goals. An effective internal audit should go far beyond just checking a compliance box; it should be an integral part of protecting your company. If you want to ensure you’re adhering to regulatory requirements and demonstrating good faith business practices, a Richey May internal audit is a good fit. If you’re looking to be Fannie Mae approved in the future or want to maintain your approved status, it’s required. If you’re unsure whether you need an internal audit, ask one of Richey May’s experts today or learn more here.

Pricing Products and Programs

“Lender Price introduces Composable Pricing UI, an innovative user interface that empowers lenders to effortlessly customize their pricing engine using No Code or Low Code options. With a variety of skinning options and increased flexibility, Lender Price users can now easily create a personalized pricing experience with an abundance of options to choose from. Surpassing the limitations of single UI platforms seen with competitors, the era of rigid, one-size-fits-all PPE’s is over. With a flexible pricing engine like Lender Price, users now have the ability to tailor their interface based on their individual needs and preferences. Composable UI represents a paradigm shift in digital lending technology UX, liberating both individuals and organizations from the constraints of single UI platforms,” said Dawar Alimi, Lender Price CEO. “With an abundance of options and unparalleled flexibility, users can personalize and take charge of their pricing experience.” Email us or request a demo today.”

In this market, hustle is everything. You can’t afford to waste a single deal or a single minute. That’s why ReadyPrice has launched its innovative new Shop, Lock & Deliver loan exchange platform, designed to help independent mortgage brokers like you save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders and all on a single platform, at no cost to brokers. It’s the industry’s most powerful universal delivery portal, and it’s already helping brokers around the country thrive and compete in even the toughest market environments. Multiple lenders. One platform. Zero b.s. Check ReadyPrice out today.

STRATMOR Comp Information and Survey

Yesterday I published, “What do underwriters and processors and LOs make? STRATMOR has the information, spelled out in a recent Perspectives piece.” Several wrote to say that there is a wide disparity in pay based on experience, at every level, and that averages may not be telling the whole story. Point well taken, although the drop in volume/units has not been matched by the drop in personnel. Stay tuned…

Information is critical in making payroll decisions. STRATMOR Group’s Compensation Connection® Study provides valuable insight into compensation components, incentive plan structures, role specifics and more, aggregated by company type, annual volume, and region. Prior three-year trending is also included on most metrics. Get the compensation data you need: sign up for the Fall 2023 Compensation Connection® Study today!

Lenders can Relive the 2nd Quarter of 2023

Spoiler alert: Losses continue but at a slower pace. The MBA has crunched the numbers of those surveyed and calculated that independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported a pre-tax net loss of $534 on each loan they originated in the second quarter of 2023, an improvement from the reported loss of $1,972 per loan in the first quarter of 2023.

Marina Walsh, CMB, MBA’s Vice President of Industry Analysis and overall good person, summed up the Quarterly Mortgage Bankers Performance Report. “After 11 consecutive quarters of increases, origination costs declined by over $2,000 per loan. Volume picked up during the spring homebuying season and additional personnel were shed. However, the substantial cost savings per loan was not enough to put the average net production income in the black… Production losses were less severe than the previous two quarters and net servicing financial income was strong. Additionally, most mortgage companies in our survey managed to squeeze out an overall profit during one of the toughest times for the mortgage industry.”

Once again, servicing income helped big time. Think about that as companies sell it off. When the MBA looked at both production and servicing, 58 percent of companies were profitable last quarter, an improvement from 32 percent in the first quarter of 2023 and 25 percent in the fourth quarter of 2022. Still, the average pre-tax production loss was 18 basis points (bps) in the second quarter of 2023, compared to an average net production loss of 68 bps in the first quarter of 2023, and down from a loss of 5 basis points one year ago. The average quarterly pre-tax production profit, from the third quarter of 2008 to the most recent quarter, is 47 basis points.

“Total production revenue (fee income, net secondary marketing income and warehouse spread) decreased to 328 bps in the second quarter, down from 358 bps in the first quarter. On a per-loan basis, production revenues decreased to $10,510 per loan in the second quarter, down from $11,199 per loan in the first quarter.

“The purchase share of total originations, by dollar volume, increased to a study high of 89 percent in the second quarter. For the mortgage industry as a whole, MBA estimates the purchase share was at 80 percent in the second quarter, with the average loan balance for first mortgages increasing to $343,386 in the second quarter, up from $329,159 in the first quarter.

It ain’t cheap to do a loan. “Total loan production expenses (commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations) decreased to $11,044 per loan in the second quarter, down from a study-high $13,171 per loan in the first quarter of 2023. From the third quarter of 2008 to last quarter, loan production expenses have averaged $7,236 per loan.

“Servicing net financial income for the second quarter (without annualizing) was $94 per loan, up from $54 per loan in the first quarter. Servicing operating income, which excludes MSR amortization, gains/loss in the valuation of servicing rights net of hedging gains/losses, and gains/losses on the bulk sale of MSRs, was $105 per loan in the second quarter, up from $102 per loan in the first quarter.”

For all the stats, there are five Mortgage Bankers Performance Report publications per year: four quarterly reports and one annual report. Contact Falen Taylor (202-557-2771). The reports can also be purchased on the MBA’s website.

Capital Markets

At this point it can be argued that the Fed doesn’t want to see higher long-term rates. But bond yields continue to rise across the board, impacting mortgage rates of course, continuing an upswing that began nearly three months ago at the beginning of the summer. In fact, the yield on the benchmark 10-year Treasury (US10Y) closed at 4.25% on Wednesday, the highest level since 2008. The upward march this week follows the release of the latest Federal Open Market Committee minutes, which stressed that additional interest rate hikes might be needed.

“With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy… Participants generally noted a high degree of uncertainty regarding the cumulative effects on the economy of past monetary policy tightening... and emphasized the importance of communicating as clearly as possible about the Committee’s data-dependent approach to policy and its firm commitment to bring inflation down to its 2% objective.”

Stronger-than-expected economic data continues to pour in, helping stock market prices, especially if you think the Fed to end its hiking cycle soon. Others say 10-year yields above 4 percent still present a good buying opportunity, in contrast to the potential rewards from pricey stocks and multiples that might not be as appealing. But it seems that bond investors have shifted to a “higher-for-longer” narrative coming out of the Fed, causing nominal rates and real rates to keep moving higher. Not good for housing affordability.

Strong economic data continued yesterday with initial jobless claims -11k and Philly Fed beating expectations by 22 points. That helped to lift benchmark 10-year U.S. Treasury yields above 4.30 percent as MBS once again sold off across the coupon stack. The recent surge in U.S. mortgage rates to anywhere between 10-month and two-decade highs, depending on who you ask, has pushed housing affordability to the lowest level in nearly four decades. Yesterday also brought another troubling sign for the Chinese economy as Beijing authorities are said to have told state-owned banks to step up intervention in the currency market in a push to prevent a surge in yuan volatility.

With no major data releases or Fedspeak today, the market will be left to its own devices. We begin the day with Agency MBS prices better from Thursday afternoon by .250, the 10-year yielding 4.22 after closing yesterday at 4.31 percent, and the 2-year at 4.91: yield curve inversion is alive and well without a recession.

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Source: mortgagenewsdaily.com

Apache is functioning normally

Ditech Home Loans Back in Business

  • A big mortgage player in the 1990s
  • That closed down in 2010
  • Has returned to the mortgage game in 2014
  • Will this be a fruitful return or business as usual?

Soon you might be seeing advertisements from a brand new mortgage lender. Or rather, one that used to be a huge player, which subsequently disappeared and then rose from the ashes.

I’m referring to Ditech Mortgage Corp., known affectionately as “ditech.” Yep, they’re back, just in time to take part in the weakest origination year since 2000.

For the record, their name was formed by combining “Direct” and “Technology,” and it’s lowercase because they are smaller than their uppercase Customers. That should have you smiling right about now.

Now a little history – the company was established back in 1995, based out of Costa Mesa, California where it ran somewhat successfully until it was eventually shuttered in 2010 as the housing market crumbled.

Back in the 90s, you may recall the wacky commercials that featured the famous tagline uttered by a dismayed loan officer: “Lost another loan to ditech!”

Since then, a lot has changed, namely the ownership of the company. They were purchased by GMAC Mortgage in 1998, and then acquired by Cerberus Capital Management, before later being purchased by Walter Investment Management Company in 2013.

Then in August 2015, Green Tree Servicing and Ditech Mortgage Corp. merged to form Ditech Financial LLC, a Walter company.

Update: There is somehow more to the story. In February 2018, Walter Investment Management Corp. completed a financial restructuring plan and emerged from Chapter 11 bankruptcy under the name Ditech Holding Corporation.

The even have a new stock symbol, DHCP, if you’re interested in more than just mortgage loans.

This is actually the parent companys name, after it changed its name yet again, with Ditech Financial LLC and Reverse Mortgage Solutions, Inc. operating beneath it.

I don’t know about you, but I can’t handle another name change.

Return of the ditech

In May 2014, the company announced that it was back in the mortgage game. It just couldn’t stay away, no matter how hard it tried. It’s a familiar story, really.

However, now they’re headquartered in Fort Washington, Pennsylvania (where sister company Green Tree Originations is also located), with aspirations to take over the mortgage world once more.

Their business approach is three-pronged:

  • Direct-to-consumer lending via their website and 1-800-number
  • Retail lending via roughly 200 loan specialists nationwide
  • Correspondent lending with 600+ partners

In other words, you’ll be able to get a loan with them directly over the phone or on their website, in person with a loan specialist, or via other lenders that resell their loan products through the correspondent channel.

As far as home loan offerings, you’ll be able to get an adjustable-rate mortgage, a fixed-rate loan, an FHA loan, a VA loan, or even a jumbo loan. The only loan type absent is the less popular USDA loan.

In the fixed mortgage department, you can get either a 30-year fixed or a 15-year fixed. Nothing too fancy or out of the ordinary there as we’re dealing with fixed rates.

However, they do claim to offer 8-year fixed mortgages if traditional isn’t your thing, along with other terms in between, similar to the YOURgage. This can come in handy while refinancing if you don’t want to extend your loan term and can handle larger monthly payments.

Their ARMs come in three flavors, including a 5/1 ARM, a 7/1, and 10/1, all of which are hybrids, meaning they’re fixed for a period of time before becoming annually adjustable.

They also offer FHA loans, HARP loans, and jumbo mortgages with loan amounts of up to $3 million (up to $1.2 million for first-time home buyers).

And ditech has a reverse mortgage business via subsidiary Reverse Mortgage Solutions, Inc. if you’re 62 and older and not into making a mortgage payment every month.

The advertised mortgage rates on their website tend to require credit scores of 720+ and low LTV ratios like 70% max. Additionally, max DTI tends to be 43%, which corresponds with the Qualified Mortgage (QM) rule.

They seem to be a .125% or .25% higher than what I’ve seen recently with other big mortgage lenders, such as Bank of America or Wells Fargo.

What Makes ditech Mortgage Different?

  • They are an established brand most people have heard of
  • Can originate loans with few overlays thanks to strong backing
  • And they have a correspondent lending division
  • Along with a wholesale platform

Aside from their lowercase name, they’ve got a few unique qualities. For one, they are an established brand with a lot of support behind them, so they can originate loans with few agency overlays.

That means you’ll be able to take advantage of more aggressive and flexible mortgage underwriting guidelines that other banks and home loan lenders might not be willing to offer.

They also offer the Fannie Mae MyCommunityMortgage, the FHA’s $100 down payment loan program, expanded lender-paid mortgage insurance, and the “Freddie Only” program, which allows them to accept LP (Loan Prospector) findings from Freddie Mac.

As far as the 125% loans go, it might be a while before they reintroduce those again…

If you happen to be a correspondent lender, you’ll have the ability to price, lock and deliver individual loans via the ditech website.

They also have a wholesale lending department, so mortgage brokers can work with ditech if they so choose.

All in all, it looks like what will set them apart is their size/backing/familiar name.  Most people will remember them and that should be enough to give them an edge, or at least a foot back in the door.

I’d like to see a little bit more technology from them given it’s in their name, but they’ve made no mention of being able to submit documents online and/or track the status of a loan online. That would be a nice touch, especially with all the fintech players emerging in this space.

They just look a bit generic with no real unique qualities – if anything, it feels like a throwback to 10 years ago, instead of a new vision. Perhaps they should give their loan programs interesting names like Quicken’s Rocket Mortgage.

Lastly, just to get this straight, three major lenders (and many smaller ones) went down during the recent housing crisis, including Countrywide, IndyMac, and GMAC.

Today, they’ve morphed into Bank of America/PennyMac, OneWest Bank, and ditech, respectively.  It’ll be interesting to see what they become this time around as the mortgage market continues to reinvent itself.

Update: Ditech now offers mortgages with just 3% down via the new Fannie Mae 97 program. Additionally, they recently launched a wholesale lending channel and are now accepting applications from mortgage brokers.

Ditech Might Be for Sale

  • The company announced in late June 2018
  • That it was exploring strategic alternatives
  • Which among other things
  • Includes a potential sale of the company

In just a few short years since the company relaunched, ditech says it is now exploring strategic alternatives with the help of Houlihan Lokey as their financial advisor.

Unfortunately, the move comes at a time when the mortgage industry is beginning to show some cracks.

Thanks to rising mortgage rates, many shops have either closed or sold out to other competitors. And the way things are going, loan origination volume is only expected to drop further.

So it’s unclear if the company is just trying to throw in the towel early before things get any worse, or if there’s another reason behind the initiative.

Either way, this could spell the real end for ditech, though the brand name certainly has staying power and value.

It’s possible a suitor could retain the name and build it out to match the likes of today’s mortgage disruptors, but that remains to be seen.

Source: thetruthaboutmortgage.com