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Apr. 20: Note from a real estate agent; Better’s results; credit costs; vendor bytes; Saturday Spotlight: Next Wave Mortgage

There are plenty of jokes about 4-20 (like tomorrow being “surprise drug test day”), but to be accurate there are serious things as well: In 1889 Adolph Hitler was born in Austria, and the Columbine High School massacre occurred in 1999, for example. Accuracy and correctly representing things is critical in lending and other things as well. In the Great State of Texas, a proposed class-action suit has been filed against movie theater chain Cinemark, alleging that Cinemark’s 24-ounce cups are only actually capable of holding 22 ounces of liquid. Concessions are where theaters have the highest margin, as seen by the $8.80 price paid by the plaintiff for the supposedly 24 ounces of liquid. (And who can resist that butter-soaked popcorn?) It’s actually cheaper to get the 20-ounce soda on a per-ounce basis given the purported number of ounces in the so-called 24-ounce cup. While we’re on money matters, Clever found that 94 percent of home sellers say buyers should pay their own agents. However, 49 percent of home sellers actually overestimate the commission fees they’ll pay, and 49 percent didn’t know that the home seller pays the buyer’s agent’s commission fee. 77 percent of those surveyed say the commission rate charged by an agent will play a role in their hiring decision and 60 percent of those who plan to sell without an agent say they’re doing so because real estate commissions are too expensive. And 67 percent of respondents feel that real estate agents value profits over their clients’ best interests.

Saturday Spotlight: Next Wave Mortgage



“Providing all the resources the market has to offer.”


Can you share the inspiration behind starting Next Wave Mortgage and what core principles guide your company?


Phil Ganz and Ryan Skerritt started Next Wave Mortgage in September 2023. Our guiding principle is hard work, “All Gas, No Brakes”. We are fully dedicated to your business aspirations by knocking down the barriers preventing you from reaching your full potential.

What distinguishes your mortgage service model from others in the industry?


Instead of just focusing on the number of loans closed, our main focus is to support our loan officers so they can be successful in their job. We do this by offering the transparency of a broker model, the support of the retail model, a more comprehensive range of products (You think of it, we get it), and prioritizing customer satisfaction. The compliance department has reviewed the marketplace and informed us that we are, on average, ½ point lower on rate than the retail model, providing 8.5 percent more customer opportunities with higher price points. Data collected by the Consumer Financial Protection Bureau (CFPB) under the Home Disclosure Act (HMDA) shows consumers can save more than $9,000 in interest and fees on a 30-year, fixed-rate mortgage when they secure the loan using the broker model.

How does Next Wave Mortgage plan to grow and innovate in the coming years?


We love what we do at Next Wave and are here to SERVE YOU. One Team – One Mission – One Family


Looking ahead to the remainder of 2024 and beyond, Next Wave Mortgage has ambitious growth plans through growing the loans officer’s business vertically, with a two-pronged approach.


The first is Direct (loan officer) to consumer: We have over 126 online domains targeted at specific states, cities, and areas, for example, Make Florida Your Home, which helps to generate local leads. We collaborate with partners to become the leading mortgage provider in their areas.

The Second is Agent Elite: Next Wave will pinpoint prospective real estate agent collaborators within the loan officer’s region and coordinate individual meetings for them. Additionally, it will supply effective strategies for subsequent follow-ups.  The goal is 60 realtor appointments per year for each loan officer.


We want to be very clear in stating our company is a mortgage company built on technology prepared for the future of lending. With 95 percent of consumers starting their homebuying search online, we need to connect if your company is not providing you with a state-of-the-art digital footprint.

How does Next Wave Mortgage contribute to the community and what qualities do you look for in potential team members?


Next Wave loves charity and believes in LLIO—Local Loan Officers Initiatives; we support loan officers’ local Grassroots campaigns in their communities.

If someone is interested in learning more about Next Wave Mortgage or joining your team, how can they reach out? 


Next Wave Mortgage is looking for eager (hungry), modest (humble), and hardworking (hustle) individuals. If you wish to learn more, please send me (Phil Ganz) a text at 617-529-9317. We can schedule a time to chat or zoom.

(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)


View from the real estate trenches


From Marin County, just north of San Francisco and south of Napa, real estate agent Bob Ravasio observes, “High interest rates? Not a problem. Low inventory? Who cares? That appears to be the case in Marin County real estate, as prices climbed yet again in March despite conditions that would seem to fight against that.

“As we have been saying repeatedly in our commentary, no matter what happens with home sales, life goes on for people. They get married, they have children. Children get older and need schools. And then they need houses in good school districts. And they start looking in Marin County.

“So, despite mortgage rates that are climbing again, and another higher-than-expected report on inflation, home prices went up again in March in Marin County. Inventory, which is finally increasing (currently 514 homes available in Marin, 31 percent in contract) was still tight last month. But new listings are down 4.3 percent versus 2023.

“With demand strong, and inventory low, the result is that pricing will go up. And in March it did: The median sales price was up 18 percent, and the average sale price was up 11 percent. Those are big changes for one month, especially when everyone is concerned about interest rates. To highlight the issue with inventory, this price increase comes even though the total number of sales for the month was actually down, by a lot: -14.6 percent. Inventory was tight.

“Is it changing in April? As always that is hard to predict. As noted, inventory is rising, which it usually does at this time of year. This is also typically one of the strongest months for demand, as families looking for school districts are out in force looking for homes. We did just run some new stats for April to try and get a handle on this, and so far, there have been 73 closings this month, according to BAREIS MLS. And 37 of those had multiple offers! But the average sale price to list price ratio for all of these is 101 percent, meaning the average sale is 1 percent over the list price for these 73 closings. So, lots of competition out there for sure, but sales are staying relatively close to list price.” Thank you, Bob!

STRATMOR’s Consumer Direct Workshop


The Fed has indicated that it plans to cut rates later in the year, but even though the timing remains unclear, to remain competitive, Consumer Direct lenders will have to stay on their toes and prepare for the effect it will have on mortgage rates. The time to develop a strategy for attracting, nurturing, converting, and closing purchase business to hold or grow your market share is now. STRATMOR Group will host its semiannual virtual Consumer Direct Workshop on May 7, 8 and 9. STRATMOR experts and peer lenders will discuss how to better understand the needs of purchase borrowers, craft marketing messages that will appeal to them, tweak your processes for purchases and train LOs to close this business. Register up to three executives from your organization today.

A note about Better


“Rob, what are you hearing about Better? It seems like they were all over the press, but now have all but vanished. What gives?” I only know what I read in the press, and a few weeks ago Better released its first fiscal year results as a public company. Better, more heavily focused on online direct to consumer than most other lenders, funded $3 billion in 2023.

Lower margins often come with the DTC channel, and sure enough, Better reported a net loss of $534M for the year. The company raised about $565M from its IPO (initial public offering) in August. The company’s stock price has a 52-week high of nearly $63 per share and is now trading at 45 cents a share. That’s a blow by anyone’s measure.

It was a good tale, focused on Better’s previous ability to scale. “Through Better’s history, we have proven our ability to scale to over $100 billion of origination volume, reaching almost 2 percent in refinance market share at our peak in 2021. In 2023, with 91 percent of volume comprised of purchase loans, we have also demonstrated our digital purchase product resonates with consumers, creating an opportunity for us to further lean into purchase as we pivot to our new operating model.”

Home equity, which many companies have shifted to for obvious reasons, accounts for only about 2 percent of Better’s volume: “Purchase loans comprised 91 percent of Funded Loan Volume in 2023, refinance comprised 7 percent, and HELOC the remainder.”

What’s ahead for the company? “A critical driver of our planned growth in 2024 is a fundamental change in our commercial operating model, which we tested in the fourth quarter of 2023 and implemented across the company in the first quarter. We have pivoted to hiring experienced Loan Officers on commission-based compensation plans, a significant deviation from our prior model. We are pleased to see early conversion improvements from this operating model pivot and the seasoned sales talent we are hiring, as well as greater alignment between our production volume and costs.

“’Further, the experienced Loan Officers are providing our customers with an increased level of service, which enables us to improve revenue per loan while remaining market competitive,’ said Vishal Garg, CEO and Founder of Better.”

Credit costs are still garnering attention


Last Saturday I published information on the current state of the credit industry, and received this note, “I read with interest your post about the recent FICO changes, and specifically the mention that the costs are only $3.50 for a FICO soft pull. I think the market dynamics are such that the cost per loan is WAY higher than that low price tag.”

Rob Zimmer, Director of External Affairs, CHLA, has had some thoughts from his research from CHLA, passed along the Community Home Lenders of America’s White Paper based on its lenders’ feedback concerning the credit-scoring industry, and particularly the dramatic rise in prices in the last 18 months. “In this addendum memo, based on 2024 transactions that have occurred after the publication date of the White Paper, we are updating the current market costs of pulling credit for home mortgages.

“As written in the White Paper, to say that the cost of a credit pull is only $3.50 is misleading because it’s applied 3 times (or 6 times for joint applicants) in the current tri-merge model, and pulled multiple times in the process (because a credit pull is only valid for 120 days, and home searches and mortgage application processes can last for months.)

“Thus, without considering the sunk costs of credit pulls for mortgage applications that did not close, the credit costs incurred to close a loan for a family has risen from roughly $50 in 2022 to $100+ in late 2023 to $150-$250 today. When lenders add in those sunk costs, which have risen from $150-$200 in 2022 to $250-$300 in late 2023 to $360-$475+ today, the total credit costs per closed loan have now risen from $200-$250 in 2022, to $350-$400 in 2023, and to $510-$725+ today.

“Soft pulls were once a way to provide savings to the consumer, but FICO raised those prices 6x as well, making them equally as expensive as ‘hard’ pulls.

“FICO prices went from around $2.00 for a tri-merge in late 2022 to $10.50 for a tri-merge today (that’s the 500 percent increase, and the Big Three Credit Bureaus tacked on increases as well.) The scale of these price hikes is unusual in American industry and can only occur when a producer has monopoly or near-monopoly status: FICO’s mortgage revenue was up 147 percent last year and the stock has more than tripled since the fall of 2022. (By way of comparison, the S&P 500 is up just under 20 percent during the same time period.)

Vendor morsels


Soup to nuts, primary markets to servicing, third party providers have a lot going on. Let’s take a random look at some recent product offerings.

HomeLight Buy Before You Sell offers a forward commitment opportunity through a unique zero-coupon discount trade offer. This scalable investment option is adaptable to your strategy, starting with a monthly volume of $30 million. Backed by proven success, with a maximum dwell time of 120 days and a median dwell time of just 65 days, it provides a reliable investment avenue. With operations in 23 states, particularly focusing on Colorado, Arizona, and Florida, it offers geographic diversification. Additionally, HomeLight retains servicing rights, ensuring a stable and controlled servicing process. To learn more, contact John Boyles.

With a shared commitment to redefine efficiency in mortgage product research and pricing, Take3Tech has entered into a strategic partnership with Polly, the leading provider of innovative mortgage capital markets technology and operator of the industry’s first cloud-native, commercially scalable product and pricing engine (PPE). Through this highly requested integration, LOs that price loans with Polly can now access agency and investor guidelines in a single click. Take3Tech’s TheRuleTool™ is a powerful software that provides LOs with agency and investor overlay information during the process of originating, processing, and underwriting a home loan. The tool leverages AI to deliver a more efficient way to manage the high volume of inquiries.

Floify, the mortgage industry’s leading point-of-sale (POS), announced the launch of Lender Edition, a newly badged version of the popular mortgage point-of-sale that introduces a flexible per-loan pricing option for mortgage lenders. Floify’s Lender Edition is the counterpart to Broker Edition, a one-stop lending platform configured for the needs of mortgage brokers that was introduced in December 2023. Lender Edition is specifically designed to address the challenges faced by mortgage lenders, such as supporting best-in-class borrower experience, while maintaining efficient production and controlling costs. In the coming months, Floify will introduce new integrations with popular borrower verification report providers and an eClosing vendor, as well as enhanced functionality with existing integration partners.

A driver is stuck in a traffic jam on the highway outside Washington DC.
Nothing is moving.  Suddenly, a man knocks on the car window.
The driver rolls down the window and asks, “What’s going on?”
“Terrorists have kidnapped the members of Congress and they’re asking for a $100 million ransom! Otherwise, they are going to douse them all in gasoline and set them on fire. We are going from car to car collecting donations.”
“How much is everyone giving, on average?” the driver asks.
“Roughly a gallon.”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is titled, “Relying on the Fed: How Did This Happen?” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).


(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2024 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)

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