LenderNews by Rob Chrisman
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Feb. 22: Correspondent & LO jobs; upcoming training; economy continues to move rates higher

February 22, 2018

Jobs & housing drive the economy, and yesterday we learned that Existing Home Sales fell 3.2% in January, according to NAR. Lawrence Yun, NAR’s Chief Economist said: “The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S. last month.” Buyer traffic is strong, but sales have lagged last January’s pace. “It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.” Industry observers ask, “Baby Boomers are going to move… where?” Mark W. observed, “The MBA tells us that refis are still 44% of all new loan apps. That is fascinating to me since it should be closer to 25-30%. Why so high? Equity stripping? Those VA shops are going to get hammered! Why refi to 4.625%? I can think of cash-out, eliminating MI, or going to a 15-year term from a 30-year term.”
“As one of the largest outsource providers in the United States, Digital Risk, LLC, is looking for experienced professionals in Mortgage Solution Architecture & Business Development (Due Diligence). The ideal candidates will have established relationships in the financial sector, the requisite experience for the specified role and a proven track record of success. If interested in one of these roles, email us for more details or view our postings here.”
A fast-growing, national Top 20 Correspondent Lender (offering delegated best effort and mandatory products that are 100% retained) seeks a strong Account Manager for its Northern California and Pacific Northwest region. Candidate must live in the sales territory and have existing correspondent relationships. Confidential inquiries should be addressed to me for forwarding on to the principals.
Stearns Retail is excited to welcome Jim Linnane as Divisional VP for the company’s retail lending activities throughout the Central U.S. Prior to joining Stearns, Jim was Director of National Sales for Guaranteed Rate. A seasoned leader who served as a Divisional Manager at Wells Fargo for more than a decade, Jim’s achievements include attaining top performance rankings for purchase business market share, renovation lending production volume and overall profitability. His experience also encompasses the creation and leadership of ten joint ventures with real estate and builder partners. Tony Taveekanjana, EVP, National Head of Retail Lending at Stearns, Lending, LLC, said “We are thrilled to have Jim join the Stearns family. He has an incredibly successful track record and understands the business at a very deep level. He is known for is genuine interest in people and being a true servant leader. He will add immediate value and accelerate our massive growth plans.”
Caliber Home Loans, Inc. produced over $43 billion overall in 2017, and has no intention of slowing down this year. We currently have over 1,200 Loan Consultants across the country, who contribute to our success as an organization. Each of our producers are knowledgeable of their market and equipped with a wide range of financing options, technology, and in-house support. Got what it takes to be a local player for a national powerhouse? Contact Jeremy DeRosa about joining our team!”
“If you’re reading this, you are most likely in the top group of mortgage originators in the nation and know how to see beyond the noise and hype and get to the deal. So do we. Assurance Financial is quietly growing into a nationwide leader in lending. Yes, our compensation structure is excellent, and yes, our back-office support is second to none – 16 years of working, changing, and perfecting it. And yes, we have a full-service marketing team at your disposal with a budget and commitment to helping you do what you do best. And yes, we have an unwavering mission to close loans on time, every time! We have immediate openings for proven, successful producing Branch Managers and MLOs in Wilmington, Charlotte, Denver, Austin, and many other branch locations throughout the country, as well as an Eastern Regional Production Manager for our expanding East Coast operationsFor immediate consideration and more information, contact Paul Peters, CMB, Assurance Financial, Recruiting Manager (225-239-7948).
Implementing a custom digital mortgage solution for your organization has never been more streamlined or simple. Maxwell, recognized by HousingWire as one of the most Innovative Companies in Real Estate, is leading this charge. Their custom to you white-label platform, allows you to provide a digital mortgage experience on your own website, all under the guise of your brand — helping you deliver the borrower experience consumers expect. Beyond branding, Maxwell’s digital POS was designed by leaders from Google and the Stanford Institute of Design. With a focus on design-thinking, embedded in behavioral theory, driven by powerful algorithms, the Maxwell experience is second-to-none. To learn more about how teams using Maxwell are closing loans 45% faster than the national average, request a demo at www.himaxwell.com. 
Yesterday the commentary noted, “At the other end of the news spectrum, Movement Mortgage had some layoffs recently regarding a portion of its staff. (The story explains the jobs impacted which focused on upfront underwriting for prequals but now requiring a property before the loan is underwritten.)” I received a note from Adam O’Daniel, AVP, Communications Director, Movement Mortgage, which clarified things. “We did not change our underwriting and still underwrite every file at the very beginning, whether it has a property or not, because this is the best way to identify issues early and save the real estate agent and borrower hassles later. The change is that once we perform Upfront Underwriting, we now wait until the property is identified before processing the loan. This is an improvement for both the customer’s experience and the operations staff. Performing underwriting on every file at the beginning is a Movement hallmark and it is not changing.”
Upcoming events & training
Register for the String February 22nd webinar, “Zillow Consumer Insights for Mortgage Lenders” with Mary Kaye O’Brien, Director of Customer Insights at Zillow Group. This presentation will provide you insights from the Zillow Group Consumer Housing Trends Report. It’s the most comprehensive research ever completed about home buyers, sellers, owners and renters, as well as their financing.
Register for the String February 27th webinar, “Cybersecurity and You” with special guest, former Special Agent Scott E. Augenbaum of the FBI’s Computer Intrusion/Counterintelligence Squad. With our inevitable move towards interconnectedness, cyber criminals have adapted to this digital realm along with the rest of us. Cybersecurity Ventures predicts cybercrime will continue rising and cost businesses globally more than $6 trillion annually by 2021.
2018 will be the most challenging year for the mortgage industry since 2008, with a significant decrease in volume. String is hosting an exclusive webinar on March 5th featuring industry guru, Joe Garrett, “Top 10 Mistakes Made By Underperforming Lenders & How to Avoid Them”. You will walk away with specific steps you can take to improve margins, shorten cycle times and reduce risk.
Freddie Mac’s redesigned Learning Center offers instant access to training topics. Loan Advisor Suite® − Find resources for each of the tools in our online risk reduction toolbox − for every step of the loan manufacturing process. Originate & Underwrite − Access resources on underwriting, Freddie Mac mortgage products, quality control and fraud prevention, and collateral representation and warranty relief. Sell & Deliver− Maximize your use of Loan Selling AdvisorSM − our tool for integrating secondary marketing functions − with resources on topics like cash pricing and contracting, the Uniform Loan Delivery Dataset (ULDD), and more. Servicing− Make servicing Freddie Mac loans easier with resources on investor reporting and remitting, foreclosure and bankruptcy, and loss mitigation. New Users − Are you a new Freddie Mac customer? Helpful resources will get you started. Plus, targeted training will orient you to underwriting, selling, and servicing.
Capital markets
Yup, the current rate of economic growth could exceed initial estimates. Several economists are betting the Federal Reserve will raise interest rates four times this year, with up to three more hikes next year based on the recent federal government spending package. Will higher rates negatively impact the economy? UBS economist Seth Carpenter, a former Fed and Treasury official, says while he doesn’t forecast a recession, "we believe the risk is material and rising."
Think back to last week, a busy week for economic releases and one standout was stronger than expected consumer prices for January. CPI jumped 0.5 percent in January and 2.1 percent year-over year while core CPI increased by 0.3 percent, reaffirming the headline number.  Inflation was also observed on the producer side with PPI registering a 0.4 percent increase at both the headline and core levels. On a year-over-year basis, PPI increased by 2.5 percent with goods, services, and construction all showing strength. All this feeds into the current narrative for monetary policy tightening and higher rates in the coming months. 
Yields on three- and six-month Treasurys shot up to the highest levels since 2008 as the government sold $179 billion in debt to replenish its cash stockpile. The Treasury Department is scheduled to sell $258 billion in debt this week. Last week’s rise of the 10-year Treasury yield to a four-year high of 2.91%, combined with a stock market rally, has been widely taken as a sign that the recent economic recovery is robust and sustainable, which could influence Federal Reserve thinking on setting interest rates and managing inflation.
As most of you know, the headline news was the release of the FOMC minutes yesterday from the January 30/31 meeting. The minutes showed the Fed has a positive view on the economy, namely regarding the impacts of tax reform as the expectation is for local businesses to increase capital investment this year, but members remain concerned about inflation. The inflation discussion centered on there being more potential for inflation with the core figures remaining at or below the Fed’s 2 percent target, especially as labor markets continue to tighten.
There was nothing in the minutes to suggest that the FOMC was deviating away from the expected three fed funds rate hikes this year, but the minutes look backward and do not account for the new Federal budget agreement, February’s increase in financial market volatility, or January’s employment data – which demonstrated a notable increase in wages. Investors still expect a rate hike at the upcoming March 20/21 FOMC meeting, with Fed Funds futures pricing in an implied probability of about 78 percent. The March meeting will also see the FOMC issue a new "dot plot" and a new set of economic projections, and the first opportunity for the new chairman, Jay Powell, to preside over a meeting.
The other major news yesterday was that existing home sales for January decreased by 3.2 percent, to a 5.38 million-unit annual rate, following a decrease in December. The housing market remains very tight, as supply ticked up to 3.4 months, while the median sales price of an existing home was up by 5.8 percent in January YoY. Further increases in mortgage rates this year could be a downside risk factor for housing markets. First-time buyers are vulnerable to a decline in housing affordability as prices increase and mortgage rates go up.
This morning we’ve had initial jobless and continuing jobless claims (-7k to 222k, 1.875 million). Leading economic indicators for January are out at 10AM ET, as is Freddie Mac’s Primary Mortgage Market Survey for the week ending February 22. We also receive the Kansas City Fed’s Manufacturing and Composite Indexes for February, before some Fedspeak and more supply: The Treasury concluding the latest round of monthly auctions at 1pm ET with $28 billion of 7-year notes. We start Thursday with the 10-year yielding 2.92% and agency MBS prices are better by .250 versus last night’s close.
The other morning it had been snowing all night. So, the morning goes like this:
8:00   I made a snowman.
8:10   A feminist passed by and asked me why I didn’t make a snow woman.
8:15   So, I made a snow woman.
8:17   The nanny of the neighbors complained about the snow woman’s voluptuous chest.
8:20   The gay couple living nearby grumbled that it could have been two snowmen instead.
8:25   The vegans at No. 12 complained about the carrot nose, as veggies are food and not to decorate snow figures with.
8:28   I am being called a racist because the snow couple is white.
8:31   The Muslim gent across the road wants the snow woman to wear a headscarf.
8:40   Someone calls the cops who show up to see what’s going on.
8:42   I am told that the broomstick of the snowman needs to be removed because it could be used as a deadly weapon.
8:45  Local TV news crew shows up. I am asked if I know the difference between snowmen and snow-women? I joke, "Snowballs" and am called a sexist.
8:52   My phone is seized and thoroughly checked while I am being blindfolded and flown to the police station in a helicopter.
9:00   I’m on the news as a suspected terrorist bent on stirring up trouble during this difficult weather.
9:10   I am asked if I have any accomplices.
9:29   A little known jihadist group has claimed it was their plot.
Moral: There is no moral to this story. It’s just the America we live in today! Or the life of a daily mortgage commentary writer.
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, “Servicing: All It’s Cracked Up to Be?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)