At the MBA’s annual conference some would say that a year like we had in 2020, and the first half of 2021, is surprising, but not as surprising as, say, Christopher Walken dancing. (Yes, he was a dancer early in his career.) Sure all the predictions from early in 2020 were dead wrong, and of course we all heard the term “unprecedented” until we were nauseous. In San Diego, besides attendees happy to see one another, the talk seems centered around the possibility of CRA for non-bank lenders, margins and volumes, changes due to the change in the presidential administration, jumbo underwriting moving to DU & LP, and where 2022 will take our industry. Let’s hope that predictions of the labor, especially lower-skilled, returning to the workforce come true. Last year we had the “Great Resignation.” But it appears that ‘Boomerang employees’ who quit during the pandemic are starting to ask for their old jobs back. (Subscription required.)

Saturday Spotlight: BeSmartee, delivering a complete digital mortgage experience

In 3-5 sentences, describe your company (when was it founded and why, what it does, where, recent growth and plans for near-term future growth). 

BeSmartee was founded in 2006 by mortgage industry veterans at the onset of the housing crisis. As one of the original mortgage point-of-sale platforms, the founders recognized that the mortgage process could be improved by utilizing source-data and automation in order to streamline the consumer experience, increase data integrity for lenders and lead to a day where a consumer could enter fulfillment in minutes.

 

Our mission is to make mortgages easy, fast, and transparent for both consumers and lenders. We plan to expand our technology offerings beyond the front-end to continue to help consumers and lenders go deeper into the mortgage origination process, faster.

  

Tell us about what type of volunteer work employees are encouraged to engage in, or charities your company supports, and why. 

We always encourage our team members to volunteer with organizations that they are passionate about. More recently, some of our team members have organized volunteer efforts with the Boys & Girls Club of Santa Ana, and Girls, Inc. of Orange County.

 

What does your company do to help elevate your employees’ growth? Describe any mentoring programs, outside classes or training, in-house training. How does the company help people develop? 

BeSmartee is big on education. Leadership always encourages their teams to enroll in courses that will help further their career. We have quarterly mortgage-specific training and we’ve recently launched a new product training program led by our new Director of Engineering!

 

Additionally, BeSmartee has partnered with Orange County-based coding bootcamp, LearningFuze, to launch a scholarship and mentorship program for women in tech. This collaboration allows our developers to mentor, encourage and support women pursuing careers in coding.

  

Tell us how your company maintains its culture in the office, or in a work-from-home environment if applicable. 

Our team has an ownership mindset, which is central to creating an efficient work-from-home environment. We also host fun, virtual company events. 🙂

 

Things you are most proud of that don’t have to do with sales. 

We are proud to have cultivated a resilient, engaged and team-first culture. Our people have helped us build a forever company, one where we have the responsibility to be:

 

1. Fearless in the opportunities and challenges we pursue.

2. Selfless with our knowledge, contacts, and time to help others.

3. Committed to our company, clients, team, and ourselves.

4. Excellent in how we approach our art and craft.

 

Fun fact about BeSmartee. 

The BeSmartee vision was born before Instagram and the automation boom.

Advice for those entering our biz

I asked people of color and women in the industry about their early careers & advice for new entrants, and appreciate the time they spent responding. I will happily circulate more responses if you care to write, and have more already to publish. “What do you think the best advice you can give those starting out in the mortgage industry?” or “What is the boldest move you made that helped advance your career?” or “What do you wish someone would have told you about being successful in this industry?”

Anne Elliott, author of Mortgage Risk: A Blueprint for Smarter Origination, remembered, “I started in mortgage banking as an administrative assistant and worked up to Senior Vice President. In between I learned to distinguish between loans likely to perform and unlikely to perform, and also about working well with others.

“First, educate yourself. My transition from clerical to management was aided by my employer’s tuition reimbursement program and resultant enrollment in every UCLA Extension class pertinent to origination including classes in lending principles, real estate law, appraisal and (the most boring) mortgages, trust deeds and security agreements. Second, educate yourself outside your immediate area of expertise. Exposure to second liens, super-jumbo loans, and hard money lending in jobs early in my career came in handy long-term.

“A beginner understands how, an expert understands why. If you want to advance, tackle the whys. Find a mentor and later on be a mentor. Expertise is not always learned from manuals and training classes. Mentoring can also result in long-term friendships.

Network externally and internally. A rapport with an Agency rep resulted in my appointment to an advisory panel. Some work friends turned into close friends and another to my husband of thirty-five years. If you don’t like your job or the work environment, find something else to do. I took a five-figure salary cut leaving a small company where the owner was too frequently a mean drunk after lunch. If you’re a good employee, under normal circumstances you can find a better job.” Thank you, Anne!

LIBOR news

Some institutions have made firm decisions on the replacement index, while others are considering multiple replacement rates. Fannie Mae and Fannie Mae have launched LIBOR transition websites that provide key resources for lenders and investors as the Enterprises transition away from LIBOR.

HUD issued an advance notice of proposed rulemaking (ANPR) on its process for transitioning away from the use of LIBOR for Federal Housing Administration (FHA)-insured adjustable rate mortgages (ARMs). HUD intends to use input from this process to issue a proposed rule that would remove LIBOR as an acceptable index, specify a new index for newly insured loans, and recommend a replacement index for existing loans. Comments will be due to HUD on December 6, 2021. Following review of the public input, HUD plans to issue a proposed rule containing the details of this transition.

You might not care too much, given that MLOs and lenders are not doing a lot of ARM volume these days. But there are large numbers of loans in servicing portfolios, and there are still trillions of dollars of various securities tied to the London Interbank Offered Rate, many that are either composed of adjustable-rate residential mortgages, or that are somehow related. Many of those surveyed have the LIBOR transition deadline on the top of their priority list, since decisions are being made. This is good news since financial institutions will begin new transactions involving a new benchmark lending rate as of January 1, 2022. Some LIBOR rates will continue to be published through the middle of 2023, allowing about two-thirds of outstanding bilateral loan contracts to naturally mature and the rest will need to convert to another rate index.

So the LIBOR index is likely to be discontinued or deemed non-representative at or near the end of 2021. The real estate finance industry continues to move forward with plans to sunset the use of LIBOR in new originations and transition existing LIBOR-indexed products to new indices. Many lenders with whom I have spoken have already moved to indices based on U.S. Treasury rates and are waiting on the “index dust to settle.

Buckley reported that on October 8, the CFPB issued its semi-annual report to Congress covering the Bureau’s work from October 1, 2020 to March 31, 2021. The report, which is required by Dodd-Frank, addresses, among other things, the effects of the Covid-19 pandemic on consumer credit, significant rules and orders adopted by the Bureau, consumer complaints, and various supervisory and enforcement actions taken by the Bureau. But the report notes the issuance of several significant notices of proposed rulemaking related to remittance transfers, debt collection practices, and the transition from LIBOR.

A recent LIBOR transition survey from Crowe LLP focused on community financial institutions where half of the participants said that their banks had chosen a replacement rate for LIBOR. Regarding loans specifically, about half of the surveyed banks said that they were considering the use of multiple replacement rates. Of those considered, 88% are leaning towards choosing the Secured Overnight Financing Rate (SOFR), while Prime was popular with a significant proportion, especially among institutions with assets less than $10B (78%). The American Interbank Offered Rate (Ameribor) caught the attention of 35% of banks, while 23% were considering the Bloomberg Short-Term Bank Yield Index (BSBY).

Unfortunately the debate on a universal LIBOR replacement is hindering the transition efforts. The demise of LIBOR was first announced in 2017. “We do expect a relatively smooth transition, but it is a substantive change that is happening across the financial industry, commercial real estate and beyond,” says Andrew Foster, AVP of commercial real estate at the Mortgage Bankers Association. Like turning an aircraft carrier.

Vendor news

Third-party providers to residential lenders do a lot more than make up company names with letters capitalized in the middle of them. Let’s take a random look at who’s doing what.

Yesterday news broke that SimpleNexus will acquire Lori Brewer’s LBA Ware. The combined company will be known as SimpleNexus and SimpleNexus’ corporate headquarters will remain in Utah. Senior management will consist of Cathleen Schreiner Gates, CEO, Matt Hansen, Founder & Chief Technology Officer, Kevin McKenzie, CFO and COO, Ben Miller, Co-Founder, Lori Brewer, EVP & General Manager, John Aslanian, Chief Revenue Officer, Shane Westra, Chief Product Officer, and Andria Lightfoot, Chief Customer Officer.

Are you attending the MBA Annual in San Diego? If so, stop by the Insellerate booth #720. Insellerate will be revealing its Annual MBA Contact Study and Vendor Lead Analysis Report findings to gain industry insights you can’t get anywhere else. Find out how for every 1,000 prospects Insellerate lenders fund 24 more loans than the competition.

Redwood Trust, Inc. announced an investment in Canopy Financial Technology Partners (“Canopy”) a consumer finance due diligence and third-party review firm that leverages emerging technology to deliver services and solutions for the Residential and Business Purpose mortgage lending markets. The investment was completed through Redwood’s RWT Horizons venture investment arm, which targets early and mid-stage companies transforming financial and real-estate technology.

First American Docutech has integrated its Solex eSignature solution with MortgageHippo’s digital mortgage platform. Now, lenders can enable their borrowers to eSign mortgage disclosures via a single sign-on experience by using MortgageHippo, a consumer-centric no-code/low-code digital lending platform, and First American Docutech. Read the press release for details.

OptifiNow, a provider of custom CRM platforms for mortgage lenders, announced the successful deployment of a CRM solution for Sprout Mortgage’s wholesale and correspondent business channels. The deployment of the heavily customized OptifiNow instance met an extremely compressed schedule, allowing Sprout Mortgage to minimize disruption to its sales and marketing process during a period of rapid growth.

Over the coming months, you’ll notice that LendingHome will start to look different. LendingHome is becoming Kiavi, its new brand name and look that is custom built for the future matching its technology. “Kiavi” comes from the phonetic representation of the Italian word ‘chiave’ which means key. This is a reference to the company’s focus on helping real estate investors unlock the value of America’s aged homes. What will not change is the people, processes, or products customers depend on.

An upcoming Snapdocs solution, Closing Quality Control, eliminates common closing package errors. Using its artificial intelligence, connection to settlement, and LOS integration, Closing Quality Control will eliminate these errors. Snapdocs Closing Quality Control Solution will provide every borrower a closing that’s “done right the first time.”

Reggora, an appraisal software company, improving residential real estate valuation, announced that Envoy Mortgage has adopted its appraisal management system to help process all loans requiring an appraisal. Envoy will leverage Reggora technology to deliver a fast and efficient appraisal, supporting their customers through the home buying journey.

SOLD.com reached milestone growth including a 300% increase in demand for services YTD, a testament to the rising need for alternative modes of home selling and comes on the heels of a recent capital raise that has allowed it to make investments in its technology, human capital, brand, and marketing expansion. an increased commitment to educating home sellers. And SOLD.com is rebranding, key updates include its proprietary matchmaking algorithm that identifies the methods available for the seller to consider and points them to the best options and provides a personal concierge service that assists sellers through every stage of the journey. Also, more educational resources for sellers to learn about both traditional and emerging methods for home selling.

Sundae, the residential real estate marketplace, is transforming the way property investors buy distressed properties. With the launch of its new digital platform, property investors can view available properties, submit offers, and streamline transactions in Sundae’s marketplace. Sundae’s platform, found at https://marketplace.sundae.com/ is the first and only that provides access to exclusive and vetted properties sourced directly from homeowners looking to sell to a cash buyer.

Incenter Appraisal Management rolled out RemoteVal™ technology, dramatically streamlining one of the biggest bottlenecks in mortgage lending: appraisals. Using RemoteVal™, the appraiser takes control of the homeowner’s smartphone camera, and then snaps geographically verified, time-stamped images and closeups while directing the individual from room to room. In addition to photos, the appraiser can remotely capture gross living area measurements. RemoteVal™ has a built-in digital measuring tape, which incorporates 3D environment scanning technologies. These technologies prevent “selective editing,” and transcription errors, helping to ensure the integrity of the data appraisers will use for their final reports. For more information, visit incenteram.com.

The Washington Post’s Style Invitational also asked readers to take any word from the dictionary, alter it by adding, subtracting, or changing one letter, and supply a new definition. The winners included:

Karmageddon (n): It’s like, when everybody is sending off all these really bad vibes, right? And then, like, the Earth explodes and it’s like, a serious bummer.

Glibido (v): All talk and no action.

Arachnoleptic fit (n.): The frantic dance performed just after you’ve accidentally walked through a spider web.

Caterpallor (n.): The color you turn after finding half a grub in the fruit you’re eating.

And the pick of the literature:

Ignoranus (n): A person who’s both stupid and an a$$hole.

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, “Grow Your Business But Don’t Step Over a Dollar to Save a Dime.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

qoɹ

(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 2021 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.)

 

Source: Rob Chrisman

Life is full of decisions. One space or two after a period in a sentence? Move to a state with no state income tax, or stay put? Wells Fargo is no longer the largest bank in the U.S. based on workforce, and I imagine trimming overhead was a conscious decision on Wells’ part. If you’re in the wholesale or correspondent channel, is there enough profit margin left to beef up your compliance department or to set aside money for potential liabilities and buybacks in the future? Or do you decide to make other moves? There are cryptocurrency decisions, which UWM made yesterday. “Due to the current combination of incremental costs and regulatory uncertainty in the crypto space we’ve concluded we aren’t going to extend beyond a pilot at this time,” said CEO Mat Ishbia. (More policy changes below.) Due to certain decisions, Fiscal Year (FY) 2022 funding for Rural Development’s Single-Family Housing Guaranteed Loan Program is available. The funding is authorized by H.R. 5305 the “Extending Government Funding and Delivering Emergency Assistance Act” of FY 2022. (Today’s audio version of the commentary is available here. This week’s is sponsored Candor Technology, helping underwriters and company improve underwriting effectiveness.)

Employment 

 

Evergreen Home Loans™ celebrates its Core Conviction of Growth with recent noteworthy associate changes. John Endres, who joined the company in 2019 as a branch manager and senior loan officer for the Seattle office, was promoted to area manager. Endres will manage loan production for the Seattle market, as well as support recruitment and retention of loan officer talent in Idaho. In addition, the company named Crystal Adair as its new vice president of loan fulfillment to oversee several key departments and workflows in processing, underwriting, funding, and post-closing, as well as the management of technology initiatives that support company goals for automation and efficiency. Evergreen is excited to see both Endres and Adair grow in their new roles and help expand opportunities for loan officers to increase their business. If personal and professional growth are important to you, check out the Evergreen Careers page.

Assurance Financial is continuing to grow production, add retail branch origination offices, and expand its production reach into the midwestern U.S., particularly the Colorado, Arizona, Kansas, Missouri, and New Mexico markets. “We are searching for an established Regional Production Manager to help create and develop mortgage origination branches in the new midwestern territory… Someone who is an outstanding talent and proven retail sales leader with a demonstrated track record of hiring and managing multiple production offices across several states. We are a profitable and well-capitalized full-service mortgage banker offering an entrepreneurial, customer-focused sales support environment, FNMA/FHLMC/GNMA direct status, and well-positioned to compete for more growth with state-of-the- art operations/support technology. This new Regional Production Manager position will report to the CEO. If you are interested in joining a dynamic group of mortgage bankers and building a first class production team, please contact Paul Peters, CMB or visit AssuranceMortgageLO.com to learn more.”

Services 

What is Enterprise Hedge Optimization? Remember illiquidity in the capital markets initially caused by COVID 19 during Q1 & Q2 2021? Rising inflation, market volatility and recent rise in interest rates is bringing back bad memories for some. Mortgage Capital Management’s (MCM) client-partners, however, avoided “aggregator risk” by acquiring and/or leveraging Agency Securitization resources and servicing capabilities. Since many IMBs lack the portfolio to counteract the changes of mortgage servicing rights, MCM has refined its core offerings, technology, and service to include servicing hedging and valuation. Whether you plan to hold servicing for the long haul or sell servicing rights in the not-too-distant future, we can set our hedge parameters around your desires and coverage needs. Heading to the MBA Convention next week? Compare before you buy! Contact [email protected] or call 858.483.4404, Ext. 220.

The Myth of the single ecosystem. A number of LOS vendors are trying to convince the marketplace they have one system for the entire loan manufacturing process. The crux of the issue is, if these systems were acquired, they were not developed organically with a single development methodology model in mind. As a result, while billing may be easier, the idea that these disparate solutions will all seamlessly interchange with no issues is something that lenders need to consider when looking at all in vs. best of breed. It may not be much different but there is more at stake for each of the individual companies to perform. Having an open SQL database with strong APIs and good integration partners may yield the same or better results. Contact SVP John McCrea or visit MortgageFlex at booth 503 next week in San Diego to learn more.

“Do you need to sell loans your company no longer needs or desires to hold? NASB Whole Loan Trading works with mortgage lenders and sellers of all sizes across the country to facilitate whole loan trades, whether it’s a reaction to historic volume from 2020 or adjusting to the new Government Sponsored Enterprise (GSE) purchase caps, we can help. NASB Whole Loan Trading has a dedicated loan purchasing team which provides a quick turnaround along with competitive pricing. Regardless of if it’s “scratch and dent” seasoned or non-seasoned loans in your portfolio, we buy both scenarios. NASB purchases* in bulk or even potentially individual loans. We buy residential property loans (1-4 units), mortgage loans in 1^st lien position (excluding HELOCs), and loans underwritten to Agency standards but are non-salable. Contact NASB Whole Loan Trading Today! *Purchase approval subject to NASB’s purchase loan due diligence review. NMLS ID: 400039, EHL, & Member FDIC.”

Western Alliance Bank’s Specialized Mortgage Services Group continues to be solution-oriented in changing markets in providing various financing vehicles. Warehouse Lending finances a wide spectrum of loan types including Agency, FHA/VA/USDA, Jumbo and Non-QM, funds until 2:30pm PST and works with borrowers to customize terms to meet investor and execution needs. MSR financing provides lines of credit that leverage Fannie Mae, Freddie Mac and Ginnie Mae collateral. Lines can be annual revolvers or longer-term interest only draw periods followed by term finance. Flexible structures provide solutions to accommodate originators’ MSR retention strategy. Additionally, the Specialized Mortgage Services Group provides Note Financing, Treasury Management Services, Working Capital Lines and Commercial Real Estate solutions across the country. Member FDIC.

How to win the 2022 “purchase war”: Purchase loans will be 75% of the market next year (vs. 47% this year), and there are only 4.79 million purchase loans to go around. To win, you must convert more pre-approved buyers. ComeHome.com by HouseCanary, a national real estate brokerage, makes your firm, and your salesforce, the most modern home search and homebuyer engagement player in the game. Here’s How! Going to MBA – stop by #429. [email protected]

Every lender knows they should be collecting upfront fees because it gives the borrower an incentive to close the deal. But unfortunately, most lenders have a pretty terrible process. Some have loan officers complete a form with the borrower’s credit card number (until the regulators find out). Others still have borrowers write checks that are manually deposited (come on, people… it’s 2021). Eliminate all that headache with Fee Chaser by LenderLogix. Fee Chaser lives in your LOS, and when it’s time to collect a fee, the borrower gets a text message where they can securely pay on their device. Once complete, receipts are automatically uploaded to the LOS. Up and running in weeks, immediate ROI, no PCI headaches. So head over to LenderLogix and put your fee collection on autopilot today.

Looking for an exceptional VA/FHA purchase or refi experience with a winning price? As the #1 VA and FHA Lender*, the Freedom Mortgage Wholesale Division  is proud to offer 2 business day Underwriting on ALL VA and FHA transactions, and a (.250) LLPA Incentive for all VA Purchases. Plus, offer more buying power for eligible VA borrowers** with no maximum loan amount and no down payment! Additionally, the previous 3.50 LLPA for VA Cash-Out transactions was reduced to 2.00 (a 1.50 improvement!) To learn more, check out our rate sheet or email [email protected] to have an Account Executive contact you. *Inside Mortgage Finance, Jan-Jun 2021. **For eligible veterans, service members, and survivors with full entitlement who are borrowing over $144,000 on a purchase or cash-out refinance, there is no down payment requirement. Maximum loan amount for such loans is subject to credit approval. For IRRRLs, VA will continue to guaranty 25% of the loan amount without regard to the Veteran’s available entitlement and/or county loan limits.

Attending MBA Annual next week? Maxwell will be showcasing its suite of mortgage solutions and the team would love to meet you. Maxwell provides local lenders solutions that address the entire mortgage process, including point of sale, loan fulfillment, diligence, and now capital markets. The company employs a team of experienced veterans that understand industry challenges and partner with forward-looking lenders to innovate solutions. Lenders can utilize these solutions alone, or as a powerful mortgage optimization platform. Maxwell will be demoing its solutions at MBA Annual October 17-20. Stop by booth #715 (directly across from the Mortgage Bankers Association booth) to meet the Maxwell team in person, or click here to learn more about Maxwell’s solutions.

“With the non-QM market making a significant comeback this year, now is the time to leverage LoanScorecard’s decisioning technology. LoanScorecard’s automated underwriting system allows lenders to take the inconsistencies out of the underwriting process and make loan decisions quickly and confidently. Our powerful automated underwriting engine enables you to efficiently underwrite loan programs to your specific guidelines while mitigating fair lending risk and ensuring accuracy. Visit us at Booth 624 next week at MBA Annual and learn more!”

Stack ranking a mortgage company based upon the number of MLOs and the volume they produced that left that company, and all the MLO’s and their volume who joined that company against all other mortgage companies for any period of time, would be valuable in determining who’s growing and who’s shrinking. Ingenius is a data analytics company for mortgage and real estate that blends sixteen different sources of data in a patent pending process that filters, blends and sequences the data, making it very granular and very accurate. In addition, Ingenius integrates into mortgage CRM’s such as Total Expert’s Experience platform allowing you to act off those analytics and automate your recruiting marketing. Reach out to Ingenious CEO Jeff Walton to schedule a meeting at the MBA annual in San Diego.

Processing, policy, and underwriting changes

PennyMac updated the Delete Option for portal users, view Announcement 21-74 for details.

Effective October 1, the 90-day Best Effort Lock Term was no longer be eligible with Caliber Home Loans Correspondent.

Flagstar Bank Conventional Underwriting Guidelines were updated with changes to Property Assessed Clean Energy Loans (PACE) and requirements for borrowers with less than 25% ownership in a business, effective immediately.

Upcoming changes to Early Payment Default and suspense fees are covered in the Fifth Third Correspondent Lending Communiqué, edition 10-8-21.

Citi Correspondent Lending Bulletin 2021-12 includes various updates including notifications that the loan limit ceiling for Best Efforts transactions is being removed from CRA premium eligibility criteria. Clarifies updated EAD classifications eligible for NPR transactions. Credit policy updates on the following: student loan payments applicable to Agency & Non-Agency transactions, Non-Agency large deposits, use of Credit Card Reward Points for Source of Funds, Agency Delayed Financing Policy, Prohibited Practices on Rate/Term Refinances, and Electronic Closings.

Capital markets

How elite investors buy homes & loans: As home demand shifts with plateauing list prices and short supply, Wall Street’s top buyers of homes rely on HouseCanary Solutions for real-time decision making. With the power of our newest solution, Acquisition Explorer, you can filter MLS listings tailored to exactly your Buy Box preferences. Learn more about Acquisition Explorer here.

The Federal Reserve is looking to avoid a taper tantrum, which was the reactionary panic that happened in 2013 causing a spike in U.S. Treasury yields, and thus mortgage rates. By tapering slowly and predictably this time, the Fed believes rates won’t get out of hand. The announcement the other day that the Fed may start scaling back its $120 billon of asset purchases a month, part of the central bank’s pandemic response, by $10 billion in Treasuries and $5 billion in MBS as early as next month, amounts to only a slight initial reduction.

Using back of the napkin calculations, the Fed is buying 40 percent to 60 percent of Agency MBS that are being produced every day. These are really simplified numbers, but if we produce $2.5 trillion of Agency MBS a year, 250 working days, that equates to roughly $10 billion a day. If the Fed is buying $5 billion a day, that is roughly half. Considering the Fed purchases an average of $5 billion Agency MBS a day, or roughly $100 billion a month, $5 billion only amounts to a 5 percent reduction in purchases.

Looking at some economic releases from yesterday, the September Producer Price Index report showed the highest year-over-year increase (8.6 percent) in producer prices since the start of the series in 2010, though the increase was not as large as the market had feared. There was little response in Treasury yields and MBS prices, meaning that market participants are viewing this as peak inflation. First-time U.S. unemployment claims dropped to the lowest level since March 2020, but September was the slowest month of job growth this year. The Primary Mortgage Market Survey from Freddie Mac saw fixed rates rise, with the 30-year rate at its highest since the week ending April 8 and the 15-year rate highest since late June. Finally, Black Knight reported another significant drop (-10 percent) in the number of active forbearance plans this week, as the first wave of final expirations continues. The 143k overall reduction since last Tuesday follows last week’s 177k drop.

Today’s calendar is already under way with Retail Sales (+.7 percent, +.8 percent ex-auto, stronger than expected), import & export prices (+.4 and +.1 percent, respectively) and Empire manufacturing (-14.5 to +19.8, lower than expected). Later this morning brings August business inventories and the University of Michigan consumer sentiment After releasing a new purchase schedule yesterday containing the same mix of coupons and agencies as the prior schedule(s) targeting 30-year 2 percent and 2.5 percent and 15-year 1.5 percent and 2 percent with two operations per day which alternative between UMBS30 and GNII 2 percent and 2.5 percent ($5.8 billion) and 15-year and 30-year conventionals ($4.9 billion), today’s schedule targets up to $4.9 billion of conventionals. We begin the day with Agency MBS prices worse/down .125 and the 10-year yielding 1.55 after closing yesterday at 1.52 percent.

Part 5 of 5 of “The Best of Capital Markets Exec Marcus Lam.”

We do not check the refrigerator multiple times to find new food, we check to see if our standards have dropped enough to eat what is available.

I’m pretty sure one of the indicators of wealth is if your couches touch the wall or not.

Turning your head towards someone requires an oddly specific speed. Too fast or too slow and it’s just weird.

You know you’re old when you clean your house to the music you used to party to.

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, “Grow Your Business But Don’t Step Over a Dollar to Save a Dime.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

qoɹ

(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 2021 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.)

 

Source: Rob Chrisman

Labor strikes are back in the news, but this time of year is breast cancer awareness month. Did you know that 1 in 8 women get breast cancer, and it can attack men as well? What could be more important than a life? They aren’t pleasant, but having mammography can save one. In a lighter vein, besides Freedom Mortgage’s Pitbull concert at the National MBA, for many this time of year highlights one of the many differences between women and men: if it’s drizzling, do you turn on the windshield wipers and leave them on, or do you occasionally twist the knob and swipe as needed? If you’re a sports fan, there is no better time of year: Football, baseball, hockey, basketball, they’re all on TV in some form. And with them comes trivia questions. Some in our biz are downright ancient, and stump your friends by asking them about the oldest baseball or football players in the Hall of Fame. (A few of the footballers lost four Super Bowls!) There’s plenty of competition, some friendly some not, in residential lending. The wholesale channel, always focused on the benefits of scale, has devolved into a break-even game, hitting publicly-held wholesaler stock prices but helping brokers compete against retail shops. Correspondent investors have never had much margin to play with. And retail lenders, if they haven’t already, will be dragged into lower margins. We’ve seen it all before. Today’s audio version of the commentary is available here. This week’s is sponsored Candor Technology, helping underwriters and company improve underwriting effectiveness.)

AE jobs 

“Impac is revolutionizing the Non-QM space. Our suite of Non-QM products and improved guidelines, including lower FICOs across the board (down to 600), DTIs up to 55%, and unlimited cash-out are changing the game. To help qualify even more borrowers, we’ve also introduced a 40 Year Fixed / 10 Year I/O term option to all of our Non-QM products.  We’ll even qualify I/O borrowers using the I/O payment with our innovative Investor program. It’s full steam ahead at Impac and we’re looking for Wholesale Account Executives to join our team! We’re offering competitive comp, generous territories, great benefits, and more. For immediate and confidential consideration, email your resume to Lisa Livingston.”

 

Broker and lender tools & software

What common snack food dates back to 4700 BC? Zea mays everta, a.k.a. popcorn. Fossil evidence from Peru proves its long existence. Still, it wasn’t until Charles Cretors debuted his popcorn wagon during the Midway of Chicago’s Columbian Exposition in 1893 that the treat gained widespread POPularity. Speaking of mainstream embrace, SimpleNexus continues an impressive year of innovation with the debut Nexus Pay next week at MBA Annual21. The in-app payment solution allows borrowers to pay mortgage-related charges (appraisal fees, credit checks, first month’s payment) using the same mobile hub they have used to submit a loan application and eSign documents. If you’re attending MBA Annual21, join SimpleNexus for a welcome reception at the San Diego Wine and Culinary Center on Sunday, October 17, from 7:30 to 10:00 pm PT. SimpleNexus will also present a live demonstration of Nexus Pay on Tuesday, October 19, from 12:30-1:15 pm PT on the Innovation Stage in Exhibit Hall A.

“Goodbye, guesswork. Hello, real answers. Welcome Richey May’s RM Analyze, business intelligence designed and implemented by and for mortgage experts. With year-end report season looming, you don’t have time to waste on systems that struggle to provide key insights and set up reports. Our platform not only consolidates data from every department and every piece of software you use, but it also provides just the right reporting from the C-suite to the front line, privacy protection included. With RM Analyze, you have everything you need to build visually engaging reports on key indicators right at your fingertips. Need peer analysis? Check out our new Peer View Ops functionality. Contact us today for a walk-through and custom RM Analyze implementation plan.”

The mortgage market is changing quickly, keeping up is getting more challenging as refi volume slows, purchase demand grows, and the number of non-agency products is expanding continuously! Now more than ever, originators need to be prepared with access to the right products and tools for easy navigation. No matter what channel you participate in, it’s all about volume and maximizing profitability. A key to success is streamlining pricing and decisioning for both agency and non-agency. LoanNEX is your solution! LoanNEX is a next generation PPE specializing in serving the unique needs of the non-agency market. LoanNEX is excited to announce that their pricing and decisioning engine is now available as an integrated solution within Lenders’ portals. Linking LoanNEX to your portal gives wholesale and correspondent clients access to LoanNEX on a fully integrated basis. Learn more about LoanNEX, or schedule a time to meet with us at MBA Annual!

ActiveComply: BOSS Magazine names ActiveComply one of their Highly Recommended FinTech Companies in 2021! Boss Magazine showcases how Nationwide Mortgage Bankers is leading the charge in innovating the mortgage process with partners like ActiveComply: “The ActiveComply social media monitoring tool keeps an eye on all of NMB’s social media sites and their sales and loan officers’ social media sites and provides feedback to ensure compliance.” Read in full here. ActiveComply’s cloud-based solution helps lenders meet monitoring and archival responsibilities through automated compliance system technology: discover company and LO accounts related to your brand, examine profiles for NMLS IDs, Equal Housing information, and specific disclosures (image scanning included). Visit activecomply.com today to learn more. ActiveComply will be attending MBA’s Annual Convention in sunny San Diego October 17^th-20^th. Want to schedule a time to meet to get a peek at your company’s social media compliance? Click here to request a time slot!

“1 UW Touch on 70% of loans!”  Candor: 1) 30 days integration, 2) 3 months to ROI, 3) 1 click workflow from your LOS, 4) 100% initial underwrite, 5) Issue Conditions, including AUS and Reps/Warrants, 6) 100% complete list of Borrower Documents on first click, 7) 38% of Conditions automatically cleared, 8) OCR Documents, 9) Calculate W2 & Self-Employed income, 10) Fully underwrite a loan, 11) Guarantee underwrite with a defect policy, and 12) Make you ready for every possible market cycle. Unbelievable? ~1.3M autonomous underwrites later, Candor clients are pulling ahead of the pack. Check the ROI here. Contact us for a demo.

Declines in margins are attributable to two primary factors: Reduction of lending volumes due to rising mortgage interest rates and weakness in the relative pricing of agency mortgage-backed securities. As the threat of margin compression looms large, many mortgage lenders are seeking new ways to prepare and maintain profits. Join MCT and Verity Global Solutions on October 28th at 11am PT for a Halloween-themed industry webinar titled “Don’t Let Margin Compression Scare You.” In the webinar, MCT and Verity Global Solutions will review which stages of the mortgage origination life cycle are best to outsource and if it makes sense for you. It’s time to embrace the new normal of remote working as waves of mortgage lenders are adopting the concept of a global team with powerful results. Register today for their webinar on October 28^th at 11am PT.

TPO loan products

“At Planet Home Lending, we offer our Correspondent partners access to competitive products without added staff or overhead expense. Just one of the many benefits of doing business with Planet. There’s still time to meet with us at MBA Annual to get competitive products and pricing, flexible delivery, and superior service. Contact Senior Vice President, Correspondent Sales Jim Loving at (414) 270-0027 to book your appointment.”

Northpointe Bank Correspondent Lending announced it is increasing its conforming loan limits, up to $625,000 for 1-unit properties for most of the country; and up to $937,500 for properties in Alaska and Hawaii. The maximum conforming loan limit for 2-unit, 3-unit, and 4-unit properties have been increased to $800,250, $967,250, and $1,202,000, respectively. The higher loan limits are available immediately for both best effort and mandatory lock commitments. Northpointe Bank offers more programs giving your borrower more options to finance their home. Contact [email protected] for details. Warehouse financing is also available through Northpointe Bank’s warehouse program. Please contact Dave Christel for more information.

Newrez Correspondent has launched a newly formed sales team dedicated solely to Bank & Credit Unions. With industry-leading products, competitive pricing, and a dedicated special sales and operations team, we’re looking forward to supporting more communities and helping more families achieve their homeownership dreams. Have questions? Contact us at [email protected].

FHFA, conforming conventional changes continue

MBA President and CEO Bob Broeksmit, CMB, addressed the Federal Housing Finance Agency’s (FHFA, overseer of Freddie and Fannie) announcement of the 2022 multifamily lending purchase caps for the GSEs ($78 billion each for Fannie Mae and Freddie Mac). “The MBA and FHFA share a common goal of increasing the supply of affordable rental housing, and we commend FHFA for its continued commitment to providing stable liquidity to the marketplace and its focus on helping renters in underserved markets. The $78 billion caps for each GSE (an increase of $8 billion from 2021) and the 50% mission-driven requirements support affordable multifamily housing and help ensure a level playing field across the various capital sources.”

Condos and co-ops are an affordable homeownership option in many markets and a lifestyle choice for many buyers. In a new Fannie Mae Perspectives blog, Jodi Horne, Director of Single-Family Collateral Risk Management, discusses the measures Fannie Mae is taking to address issues of significant deferred maintenance that may impact the safety, soundness, structural integrity, or habitability of a condo or co-op unit or the overall project and its amenities.

Freddie Mac co-ops are now eligible with Wells Fargo Funding’s expanded conventional Conforming Prior Approval cooperative (co-op) guidelines using Loan Product Advisor (LPA).

With the addition of LPA, content in the Wells Fargo Funding Seller Guide has been updated to clarify content including removing guidelines where Sellers will now follow Fannie Mae or Freddie Mac.

PRMG is aligning with Fannie Mae’s recent DU update enabling positive rent payment history to the risk assessment and an update to credit score eligibility. Regarding the DU credit score change, DU currently uses credit scores to ensure compliance with the 620 minimum representative credit score requirement. Note that the score determined by DU is for DU eligibility only, and does not apply to pricing or any other scenarios where a credit score requirement may apply. Login to the PRMG website and review Product Update 21-48 for additional information.

First Community Mortgage Correspondent announced the removal of adjustments from Second Home and Investment properties: 3 Points, above Standard Agency, Loan Level Price Adjustment (LLPA). Maximum 75% LTV/CLTV.

Capital markets

This morning we had the weekly jobless claims, but going back to last Friday, September’s nonfarm payrolls report may have initially disappointed markets due to a lower-than-expected headline number, however a closer look reveals some silver linings. The prior two months were revised upwards by a combined 169k jobs and September’s headline was dragged down by a decline of 123k government jobs which were primarily related to state and local education as not all schools are fully opened. Elsewhere in the report, the household survey showed employment increased 526k in September following August’s 509k gain. One potential cause for the disconnect between the household survey and the establishment data is that the establishment data can miss newly created businesses early in the recovery cycle and is often revised later. Regardless, employers are still having trouble filling open positions, especially in the high contact leisure and hospitality sector. Additionally, global supply shortages as well as capacity constraints at US ports have kept some manufacturing facilities idle despite robust product demand that would normally drive up hiring in those sectors.

Jobs, inflation, and tapering are driving investor sentiment, and therefore bonds and interest rates. We received more clues about each yesterday. Inflation remains hot due to supply-chain disruptions and labor shortages, which have sharply driven up costs for producers that have been partially passed on to customers. CPI rose 5.4 percent in September from a year earlier, matching the largest annual gain since 2008, though the return to its peak from July was expected. The FOMC Minutes from last month showed that Fed officials see inflation lasting longer, while still being transitory. The Minutes from the September meeting laid out support for a tapering process that will likely be concluded in 8-months. The taper is expected to begin in mid-November and see a $15 billion ($10 billion in Treasury securities and $5 billion in Agency MBS) monthly reduction of purchases, concluding near the middle of 2022. Several Fed officials did voice support for a faster reduction of purchases.

Today’s economic calendar is under way with September producer prices (+.5 versus expectations of +.6 percent, core +.2 percent, much lower than expected) and weekly jobless claims (-36k to 293k, good news, and continuing claims at 2.593 million). Later this morning brings Freddie Mac’s Primary Mortgage Market Survey and no less than five Fed presidents speaking. The Desk will conduct the last two operations on the current schedule targeting up to $5.4 billion 30-year 2 percent and 2.5 percent before releasing a new two-week schedule in addition to the MBS purchase estimate for the mid-October to mid-November period in the afternoon. We begin the day with Agency MBS prices better/up slightly and the 10-year yielding 1.54 after closing yesterday at 1.55 percent after the inflation and jobs numbers.

Part 4 of 5 of “The Best of Capital Markets Exec Marcus Lam.”

The Amazon van is the ice cream truck for adults. Heck, at this point Jeff Bezos should consider having the vans play a catchy tune as they drive through the neighborhood so adults come out to get their own packages.

One of the weirder things about being an adult is having a favorite stovetop burner, yet nobody talks about it.

Nothing else will make you type slower other than your last password attempt.

The worst thing a mechanic can say to you is, “Come out here and let me show you something.”

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, “Grow Your Business But Don’t Step Over a Dollar to Save a Dime.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

qoɹ

(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 2021 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.)

Source: Rob Chrisman

Those heading to the conference in San Diego should pack stylish, yet sensible, shoes given the amount of walking. (Today’s audio version of the commentary is available here and includes an interview between Robbie and myself about the MBA Annual starting this weekend about navigating the conference and Pitbull. This week’s is sponsored Candor Technology, helping underwriters and company improve underwriting effectiveness.) Speaking of attire, “I am currently brainstorming Halloween costume ideas after receiving an invitation to a party, and am thinking of going as a Southwest Airlines flight so I don’t have to show up.” But yesterday afternoon, my cat showed up and I could see that Myrtle was nervous: impatient, wouldn’t look me in the eye, and her bent-over ear was twitching. As soon as I opened my email, I understood the reason: another attempt from her, addressed to the CFO of Chrisman LLC (we don’t have a CFO), supposedly from me (name misspelled), saying, “We have the opportunity to pick up a $30 million a year branch, but it must be kept absolutely quiet. This is not to be discussed with any other senior management. Please wire the $1 million signing bonus to… And remember, don’t discuss this with anyone else…” The whole thing smelled like rotten salmon. But more clever swindles are out there, and borrowers, lenders, and title companies lose big bucks. Individuals do also, although here are a couple of funny videos from Jack Vale (one two, thank you to Carol K.) on how to deal with telemarketing scams. But your borrower losing hundreds of thousands, or a company losing millions, is no laughing matter, so sign up with an anti-phishing company to train your employees on cybersecurity safety. Countries, without Russia, are working together.

Careers

Union Home Mortgage Corp. is actively seeking experienced Account Executives nationwide. Union Home Mortgage supports both NDC and Wholesale Business Partners. “You’ll receive world-class on-boarding and ongoing support as you build your business. From high-level coaching to fireside chats with leadership, you’re set up for success from the very beginning. We need to see our production team focused on adding customers. Each Account Executive is assigned a Partner Advocate to be solely responsible for their active pipeline. That relationship gives the AE the time needed on a regular basis to remain razor focused on growing their customer base. Explore our new TPO website.” If you’re interested in advancing your career as an AE with Union Home Mortgage TPO, contact Jim Wickham, VP – Third Party Origination at (248) 318.8553.

“Deephaven experiencing unprecedented growth. Significant investments in Q1 & Q2 2021 are paying off in higher loan volumes. These include a more comprehensive range of programs and products, greater underwriting and operational capacity, the addition of senior sales representatives, and new technologies that provide a better and more efficient customer experience. We are seeing strong growth with our Bank Statement Program, our Total Asset Calculation Asset Utilization Program and DSCR Program with cash-out levels to $500,000. Industry-wise, the Non-Agency market is exceeding growth expectations as more self-employed workers, entrepreneurs, and business owners look to purchase or refinance homes, as refinance volumes in the conforming market decrease and as property investors take advantage of the hot real estate and rental markets. Since January, our employee count has more than tripled and we are still actively looking for underwriters and account executives! If you’re interested, please email [email protected].”

REX Homes initiated a second round of layoffs in the past two months, has now shut down operations in Chicago and all of New York. “We’re done with downsizing.”

Guaranteed Rate hired Arlyn J. Kalinski as Compliance Director, Limited English Proficiency (“LEP”) Program, to help G-Rate engage a broad range of homebuying communities through its newly established Language Access Program (LAP). She will “oversee all aspects of compliance and execution for Guaranteed Rate’s groundbreaking initiative designed to guide prospective homebuyers through the entire mortgage process in their preferred language, starting with Spanish.” [Editor’s note: there are over 6,000 languages in the world, led by Mandarin and Spanish; and we are reminded that the United States does not have an official language.]

Products and services

If you lift a kangaroo’s tail off the ground, it can’t hop! That’s because ‘roos use their tails for balance. Lenders also need to find the right balance, especially when it comes to staffing, but most don’t have a three-and-a-half-foot tail to lean on. Instead, they’ll want to join LBA Ware CEO Lori Brewer, Success Mortgage Partners CEO Owen Lee and iEmergent CEO Laird Nossuli at MBA Annual for a session on how to manage costs and make smart staffing decisions with operational data and key performance indicators (KPIs). “Balancing Your Talent Pool” takes place Tuesday, October 19, from 1:30-2:30 pm. And to learn how to support smarter decision-making and improve profitability with LBA Ware’s LimeGear, schedule time to meet with LBA Ware at MBA Annual or if you can’t make it to this year’s conference, schedule a virtual demo here.

I was shocked to see that reduction in cycle time yields 2x more profit than improving underwriting efficiency. Check out Candor’s ROI calculator and see for yourself (not click bait).

“Fed up with appraisers or AMCs? Give Triserv a try. Our client-specific, dedicated teams on both coasts get to know the lenders they work with in all 50 states. Our high-touch, personalized order follow-up means you will always know what’s going on with your appraisal. We treat our appraisers like the valued partners that they are, paying them quickly so they prioritize our customers’ orders. You too can be like our client who said, ‘Triserv excels at customer service. Their responsiveness, their customer service, their ability to resolve issues and overcome challenges in a timely manner… That’s where they stand out. Wow! These guys are amazing.’”

Happy 246^th birthday to the U.S. Navy, which was first authorized by the Continental Congress on this day in 1775. As many of us head to MBA Annual next week, it’s worth noting that Naval Base San Diego is the principal homeport of the Pacific Fleet. Scuttlebutt has the IDS team also gearing up for MBA Annual. More than just an award-winning doc prep provider, IDS also offers a full suite of eClose options through its eClose platform, Solitude Solution. For lenders still looking for the leverage to implement eClose technology, HousingWire recently ran an op-ed piece from IDS outlining ways lenders can use closing technology as a bargaining chip. Want to hear more about IDS’ doc prep services and eClose technology? Visit them at booth #815 or make an appointment to chat with a team member at MBA Annual.

New look, same great resources. Last week, Stearns Wholesale launched its brand-new website packed full of enhanced features and customized solutions to meet all of your wholesale needs. With a new, cleaner look, easier navigation, and improved broker tools, Stearns has refined their online user experience to keep their clients informed and educated in the world of wholesale. Click here to take a tour and explore a new era of wholesale lending, uncomplicated. Whether you’re browsing for in-depth product information or state-of-the-art tech offerings, it is now simpler and faster for users to explore the world of Stearns. If you’d like to partner with Stearns or learn more, click here to be contacted.

The season 2 finale of Ted Lasso aired last week and (no spoilers!) fans have some very strong feelings. LOs at Alpha Mortgage have strong feelings about Sales Boomerang, too. Regarding the #1 automated borrower intelligence and retention platform, Max Masters says, “Within 48 hours of going live with Sales Boomerang, my LOs were texting me about picking up loans thanks to Sales Boomerang alerts. Now my LOs are driving me crazy and texting me every day because Sales Boomerang has made it incredibly easy to share success.” Sales Boomerang monitors your database and notifies you when your borrowers are eligible for a loan. Notifications include refi opportunities, home listings, credit improvement and more! Lenders like Alpha Mortgage that use Sales Boomerang see an average 20-40% lift to loan volume and 65% borrower retention rate. Looking for something new to rave about? Schedule a demo with Sales Boomerang today.

Looking for technology that elevates, simplifies, and streamlines your mortgage process? Look no further. Path, the cloud-based, data-driven, fully configurable LOS from Calyx, is designed to truly simplify the loan process and provide the flexibility, visibility, and controls lenders need to monitor and run their business their way. Schedule a meeting to meet with us next week at MBA Annual or stop by Booth 620 to discover how Path can help you grow your business!

When your borrowers need assistance, who do they turn to? How does your team enable borrowers to get the information they want, when they need it? Mortgage companies such as  AmeriSave, APM, and PRMG turn to Capacity to ensure borrowers find the information they need and receive a more personalized experience. By connecting to your knowledge base and disparate information, Capacity provides 24/7 level-0 support for borrowers. Capacity correctly and instantly answers more than 90% of all prospective and current borrower questions without any human intervention. Bottom line, Capacity allows you to take care of borrowers with superior customer experience and 24/7 automated support. Deploy within 30 days. Request a demo.

Conforming conventional: investors follow Agency changes, or not

Are warehouse banks concerned about Agency loans originated at higher loan amounts than Agency guidelines? Some will say they’re happy to have the business, and rely on the existing reps and warrants of the investor or lender. Others will remind you of how it isn’t official until F&F say so. I haven’t heard of warehouse banks saying anything, and some lenders, investors, and MI companies seem happy to do it. Unless something goes awry. And what’s to stop lenders and investors moving this marketing move up to August next year, or July?

Brokers should know that the Wholesale team at loanDepot has temporarily increased the conforming loan amounts, ahead of the anticipated move higher by F&F: 1-unit $625,000 ($937,507 in AK and HI), 2-units $800,280 ($1,200,420 in AK and HI), and 3 & 4 units $967,290 and $1,202,130, respectively ($1,450,935 and $1,803,195 in AK and HI). Expanded loan limits are available for pricing in the mello® Broker portal, all new Conventional Conforming locks are eligible for new loan limits, and there are no changes to existing High Balance loan limits. Approve/Ineligible (DU) and Accept Ineligible (LPA) are acceptable given the only risk finding is due to the loan amount in excess of 2021 limits.

Fannie Mae HomeStyle Renovation product allows borrowers to combine the purchase or refinance of a primary residence or second home with the costs to renovate the property. Expenses such as architectural services, engineering and permit fees can be included, and the loan is fully disbursed at closing with renovation funds placed in an interest-bearing escrow account.

For Sellers without Fannie Mae Seller/Servicer Master Agreements, the DO^® portal allows non-approved mortgage brokers and lenders to access the automated underwriting system, DU^®, under the sponsorship of and subject to AmeriHome requirements. See AmeriHome 20211006-CL Operations Announcement for details.

Correspondent lenders should follow Fannie Mae Fannie Mae’s Recent DU Release Notes Enhancements guidelines as announced in with the exception of Positive Rent Payment History.

Added to DU Risk Assessment. At this time, Caliber will not be offering the rental payment feature. Login to the Caliber Correspondent Lending Portal.

Recent reviews of conventional Conforming Loans for self-employed borrowers indicate an elevated occurrence of missing required documents. To help avoid risks and inefficiencies related to suspense, including the possibility of nonpurchase/repurchase, or indemnification.

Wells Fargo Funding Correspondent Seller guidance RAB21-03 includes key topics on documentation for self-employed borrowers for conventional Conforming Loans.

Capital markets

The Fed has indicated it may soon begin to taper its purchases of MBS. With the primary buyer of MBS pulling back from the marketplace, it is high time for a better MBS market to emerge, and Agile made its public debut last month. From lenders to dealers, Agile is the new way to quote MBS. Join presenters Curtis Richins and Phil Rasori tomorrow at 1PM ET for a webinar introducing Agile to the marketplace, the company’s mission, and a demonstration of its To-Be-Announced (TBA) request for quote (RFQ) platform and MBS pool bidding functionalities that allow everyone to participate on an electronic platform that expedites the exchange of TBA MBS.

To be or not to be? That is the question surrounding the transitory nature of inflation. We have seen some signs of inflation easing in sectors like shipping containers after supply issues drove rates higher earlier this year, though the recent surge in energy prices has fueled volatility and intensified the debate on whether inflation pressures will actually be transitory. Today brings the release of the Fed minutes, which will be parsed for any color on tapering and/or inflation views.

 

As many of you know, the Fed is “targeting” 2 percent inflation. That is meant to be over a longer period of time, as inflation has been flaccid for the last couple of years before ticking to troubling highs over this summer and into the fall. The Fed’s intention to maintain an average of 2 percent means that the committee is happy with it running hot for a while with the goal that it recedes back towards a lower level. Inflation targeting is meant to be highly “flexible,” which means in practice that policy is discretionary and the 2 percent figure is more of a suggestion than a hard ceiling.

Putting a bow on yesterday, job openings decreased to 10.4 million in August, per JOLTS, from a revised 11.1 million in July. The backward-looking report showed that trade, transportation, and leisure / hospitality are the big leaders in job openings. Treasuries ended the day mixed after the day’s $58 billion 3-year note auction saw weak demand, but the $38 billion 10-year note reopening saw a much stronger reception.

MBA mortgage applications kicked off today’s calendar, with another dip expected due to rising mortgage rates. However, mortgage applications increased 0.2 percent from one week earlier for the week ending October 8. We’ve also had that all-important inflation reading in the form of September CPI (+.4 percent, +5.4 for the year, ex-food & energy +.2 percent, as expected, and keep in mind that the Fed’s preferred inflation reading is the PCE Index). The Bureau of Fiscal Service will release the September (fiscal year-end) budget deficit in the afternoon before the minutes from the September 21/22 FOMC meeting are released. We begin the day with Agency MBS prices roughly unchanged and the 10-year yielding 1.57 after closing yesterday at 1.58 percent.

Part 3 of 5 of “The Best of Capital Markets Exec Marcus Lam.”

It’s either Arkansas or Kansas that is pronouncing their state correctly.

It always seems like when you hear about someone’s uncle, they are either the coolest dude ever or a convicted criminal. There is usually no in-between.

Life on earth is what happens when you don’t store things in a “cool, dry place away from light.” We are cosmic mold.

The real problem with the “but why?” stage that children go through is that it is almost always a viable question.

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, “Grow Your Business But Don’t Step Over a Dollar to Save a Dime.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

qoɹ

(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 2021 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.)

Source: Rob Chrisman

People ask me for advice all the time. For example, I tell guys, “Don’t ask your wife when dinner will be ready while she’s mowing the lawn.” With the move in rates, LOs are looking for advice, hoping for free extensions. Everyone knows that LOs are out there adding value and wealth to and for their clients, but since the Paleozoic era lender’s management has dealt with “Lose the deal or give the client an extension” question, especially troubling if the loan hasn’t moved past the app stage. “Free anything” is not likely if a particular originator or broker shop constantly asks for extensions or concessions. It’s rough out there, and one broker in Michigan sent, “Rob, it’s brutal here, so thanks for the info on supply chain hassles and mortgage rates yesterday. ‘You’re not going to hire workers if you can’t get the parts’ sums it up.” On the backend, capital markets personnel are always looking to increase efficient, accurate information, and MCT is offering up a new way to quote MBS. Join presenters Curtis Richins and Phil Rasori on October 14 at 10 a.m. PT for a webinar introducing Agile to the marketplace. Speaking of efficiency, today’s audio version of the commentary is available here and this week’s is sponsored Candor Technology, helping underwriters and company improve underwriting effectiveness.

Employment

Headquartered in San Diego, Synergy One Lending is proud to welcome six new branches over the past 30 days! Industry leaders Mary Tillery, Jon Trussell, and Matt Houston have joined in the Pacific Northwest, top-producers Philip Artt and Jessica Hernandez opened locations in Texas, and the amazing Lakewood team continues the momentum in Colorado! Travis Newton, whose markets have added $500MM in production in 2021 alone, credits S1L’s A+ onboarding experience as one of many reasons so many elite originators are being drawn to the company. For more information on how Synergy One delivers Speed, Ease, and Expertise to the home-buying experience, reach out to Aaron Nemec or Ben Green or visit Synergy One Lending.

The Mortgage Link is a well-capitalized, full-service lender with the tools in place to expand.  We are looking to bring on producing Mortgage Loan Originators and Branch Managers as we seek to broaden our reach across all markets in the US.  We have the balance sheet to scale, the margin flexibility to enable your growth, and the transparency of a true partner. Our MLOs’ reputations within the industry speak for themselves and are proof that the company they work for provides them the tools needed in this highly competitive landscape.  We’d like to speak with you about the opportunities we provide and how we can assist you in growing your business moving forward.  If you’re interested in working for, or partnering with, a company designed to help you stand out and develop innovative programs to succeed, contact Jon Lowe to discuss.

Finance of America Mortgage Offers All-New ADU Refinance Option, Increases Conforming Loan Limits! Finance of America Mortgage now offers an ADU refinance solution to homeowners who have an accessory dwelling unit, or ADU, on their property who may have taken out high-interest financing to create their ADU space. Homeowners can use their ADU to generate a new stream of income by renting their unit out to anyone or to provide an affordable living space for aging parents or adult children. Finance of America Mortgage is also offering conventional pricing on loans up to $625,000 for single-unit properties ahead of FHFA’s expected loan limit announcement in November. This change helps boost Loan Advisors’ lending power to refinance and purchase borrowers, especially those in competitive markets with rapid home-price growth. Learn how you can join and take advantage of Finance of America Mortgage’s latest lending options by contacting Tim Cotten.

American Pacific Mortgage’s Fall Symposium will be November 3–4, 2021, at the Arizona Grand Resort. This year’s conference theme is NEXT. Attendees will have the opportunity to explore what’s NEXT with their business, strategy, influence, and growth, while experiencing all that APM has to offer. Speakers include Barry Habib, Dr. Amy Cuddy, economist Elliot Eisenberg, and APM’s leadership team. Attendees will also have the opportunity to join four breakout sessions led by AJ Vaden of Brand Builders Group, Josh Pitts from Shred Media, Megan Anderson with MBS Highway, and Geoff Zimpfer of Mortgage Marketing Institute. This event will help APM loan officers sharpen their edge, shift with the market, elevate their connections, and influence and disrupt the competition. To learn more about this event, click here. And if you’d like to be a guest at APM’s Fall Symposium, email Dustin Block.

Not strictly mortgage-related, but investment company Robinhood is searching for an experienced capital markets exec.

Speaking of capital markets, Lenderworks® has appointed 16-year industry vet Mario Gomez as EVP, Director of Capital Markets, and will be overseeing and growing the firm’s capital market consulting and support services for mortgage lender clients.

Broker and lender products & services

Sports writers have been chiming in with their national champion and Heisman trophy predictions since the start of the college football season, and by this point the stats are starting to show whose predictions might come true and who shanked it. In that spirit, here are some fun mortgage stats: in a recent 7-day period, lenders using Sales Boomerang’s borrower intelligence and retention automation platform received 32,173 notifications with a total potential volume of over $9 billion. Of those, the heaviest-hitting notification was the mortgage inquiry, alerting lenders when a customer or prospect has shopped with a competitor in the last 24 hours. With over 22,000 mortgage inquiry notifications for a total potential volume of nearly $6.2 billion, Sales Boomerang lenders were able to intercept their borrowers before they scored a loan with another lender. Schedule a demo with Sales Boomerang today and start seeing Heisman-worthy stats.

Lenders are experiencing significant origination volume and the impact of recent increased market volatility. It’s more important than ever to look at your business holistically and make informed decisions for maintaining a strong list of secondary delivery options, honing the accuracy and transparency of your company’s pricing and margins, and more. In a recent HousingWire interview, Black Knight Managing Director Rob Kessel examines ways lenders can manage margin compression and a tight housing market by better pricing loans. This includes a look at the importance of accurately pricing MSR assets on a loan-level basis with third-party, broker-managed assumptions. Don’t miss this brief, informative interview in learning more about fine-tuning MSR valuation. Watch the interview here.

Most mortgage lenders outsource critical operations to technology companies to reduce costs, mitigate risk, or find specialized skillsets not staffed in-house. But recent changes in consumer behavior and expectations are incenting lenders to turn to technology companies for a much bigger ask: the latest and greatest borrower-engagement tactics for a competitive purchase market. Better yet, lenders are turning to tech companies because they need to differentiate themselves from their competition in the experience provided to consumers. But how do you find the right partner? Download Total Expert’s guide for three ways to identify the right technology partner to help you innovate and create customers for life.

What’s the solution to falling mortgage volumes? Increased efficiency is a start. The promise of digital lending is that lenders can do more with less, but that’s only true with the right software. LoanComplete™ from Fiserv has demonstrated a 32% increase in productivity for lenders who use it. That’s huge! LoanComplete automates mortgage loan processing and servicing tasks, giving mortgage originators and servicers greater control and helping streamline critical loan processes to improve profitability and business operations. A life-of-loan solution, LoanComplete complements your existing loan origination system workflow, servicing and compliance systems, helping you process and service more loans, at less cost and risk. This is the answer to the market that’s coming. Learn more about all of the benefits by downloading Fiserv’s new white paper, “Achieving Success in the New Mortgage Ecosystem” today. And then email [email protected] to schedule a meeting at the MBA Annual in San Diego.

Have you heard? Credit Plus and UniversalCIS have merged to become a paramount technology and credit provider. The two firms entered into the transaction with strong, individual legacies that are now joined together by a singular vision: To truly revolutionize the mortgage process. The organization isn’t solely focused on its size. Rather, its mission is to be the best, and it now has the resources and backing to make a significant impact on the future of the industry, and play a key role in digital mortgage transformation. One thing Credit Plus| UniversalCIS is especially good at is Portfolio Monitoring. You can get 50% more leads because you can monitor all three credit bureaus and be alerted when someone is shopping for a mortgage. Learn more. Stop by booth #700 at the MBA in San Diego or email [email protected] to schedule a meeting.

Are you painfully aware of what you need to automate, but just not sure where to start? Say hello to RM Automate, powered by Zoral. Exclusive to Richey May, our expertise in mortgage banking sets a new standard in intelligent automation. An end-to-end solution from lead generation to post-closing, our platform streamlines and optimizes your entire operation by automating manual, repetitive work so your team can focus on more high-value tasks. Reduce errors and cycle times and boost capacity without adding staff. Schedule a demo today! 

Conforming conventional: investors follow Agency changes, or not

As of October 8^th, Fairway Wholesale Lending is accepting locks with Conventional loan limits up to $625,000 (previously $548,250) for 1-unit property in all contingent 48 states and counties. For Alaska & Hawaii the conforming loan limit will increase to $935,000 (previously $822,375).

Finance of America Mortgage LLC announced an interim increase in estimated 2022 conforming loan amounts to $625,000 for conventional single-family loans and is allowing higher limits for high-cost areas and homes with additional units. The change, effective yesterday across all of FAM’s lending channels, comes ahead of the usual late November announcement on conforming loan limits from the Federal Housing Finance Agency. It increases the maximum loan limit in certain markets by more than $75,000 for one-unit homes and nearly $150,000 for four-unit homes.

Starting with new locks as of Friday, October 1, Flagstar Bank improved LLPAs on Agency Investment Property listed in Announcement 21135.

Wells Fargo Funding updated additional sections in the Wells Fargo Funding Seller Guide including removing guidelines where Sellers will now follow Fannie Mae or Freddie Mac.

843.04: Eligible Transactions (Super Conforming – Prior Approval), 843.05: LTV/TLTV/CLTV (Super Conforming – Prior Approval), 900: Conforming Conventional LTV/TLTV/CLTV Matrices.

For complete requirements, refer to Seller Guide Section 820.15(b): Specific Property Types – Cooperatives.

New changes to Loan Level Price Adjustments (LLPAs) for Non-Owner and Second Home transactions are listed in Mountain West Financial Wholesale Bulletin 21W-068.

Mountain West Financial Wholesale Bulletin 21W-069 provides a summary of changes from Fannie Mae’s release of updates to DU^® Version 11.0.

First Community Bank Wholesale posted highlights of FNMA’s DU September updates in FCM Wholesale Announcement 2021-26.

Stay up to date with loanDepot Wholesale information, view What’s New This Week in LoanDepot’s WNTW Newsletter.

PennyMac updated the Conventional Second Home LLPAs for Best Effort commitments taken on or after Wednesday, September 22, 2021, details in PennyMac Announcement 21-72.

Citi Correspondent Lending implemented changes to the Best Efforts LLPAs for cash-out, second homes and investment properties, found on page 3 of Best-Efforts rate sheet effective with new locks as of September 20^th. In addition, the following adjuster was implemented on September 3, 2021: Conforming Fixed 20 and 30 Yr., FICO ≥700 and LTV ≤75: 0.100.

Beginning with Conventional rate sheets issued on and after Monday, September 27, 2021, Sellers are no longer required to use the Non-Owner Occupied (NOO) designated pricing bucket for non-High Bal Investment properties. Log in to AmeriHome SellerWeb and view Announcement Number: 20210912-CL

Caliber Home Loans Government and Conventional Updates Announcement CL21-62. The USDA Rural Housing Loan Program will be temporarily unavailable beginning October 1, 2021.

Fannie Mae’s Selling Guide update, SEL-2021-09, modifies the permitted homeownership education and counseling providers to allow qualified third parties to administer homeownership education and counseling, no longer requiring the sole use of the Framework^® program, when it becomes effective January 2022. Other changes include the removal of constant maturity treasury indexed-ARMs and the replacement of references to the Software Subscription Agreement Master Terms and Conditions with a new Consolidated Technology Licensing Guide.

PennyMac expanded Conforming High Balance limits to include additional counties, effective for delegated and non-delegated Best-Efforts locks as of Monday October 11, 2021. Read PennyMac Announcement 21-79 for details.

Capital markets

Point, whose literature states its “a leading fintech platform that helps homeowners unlock equity w/out taking on additional debt,” and Redwood Trust jointly announced the first securitization backed entirely by Home Equity Investments (HEI), major milestone for alternative real estate financing. “Home equity contracts” is something new. It’s especially timely given that home foreclosures are spiking with the conclusion of the national moratorium. Many homeowners are also looking for alternatives to traditional mortgages and HELOCs in order to stave off losing their home. Point also recently announced commitments of more than $1 billion from leading real estate and MBS investors, including Atalaya Capital Management, Kingsbridge Wealth Management, Palisades Group, and the aforementioned Redwood Trust, to expand their offerings.

Friday, we learned that the U.S. gained just 194k jobs in September, less than half of the expected 500k. Weak, but not weak enough to derail the expected tapering announcement from the Fed at the November FOMC meeting. Speaking of the FOMC, the minutes from the September FOMC meeting will be released tomorrow, in what is the likely highlight of this week’s economic calendar.

For other news, the MBA’s latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 27 bps to 2.62 percent of servicers’ portfolio volume in the prior week, meaning a reduction to 1.3 million homeowners in forbearance plans.

 

With the bond market now open again after the Columbus/Indigenous Peoples Day holiday, we have a relatively light week for data, which is typical for the week after the jobs report. There are some highlights, including inflation news tomorrow and Thursday, and retail sales, Michigan sentiment, and business inventories on Friday. The Desk will purchase up to $5.4 billion of MBS today, release a new two-week schedule and mid-October to mid-November MBS purchase estimate Thursday. We’ve already received the NFIB Small Business Optimism Index (hitting a six-month low) and later this morning brings the Job Openings Labor Turnover Survey for August. We begin the week with Agency MBS prices unchanged from Friday’s close and the 10-year yielding 1.61 after rising 15 bps over the course of the last five trading days.

Part 2 of 5 of “The Best of Capital Markets Exec Marcus Lam.”

At some point in time it becomes cooler to brag about how much sleep you got rather than how little.

People will trust a loaf of bread off the shelf with just a twist tie, but they insist on at least two layers of tamper-resistant seals for any product they put on that bread.

Flying economy is one of the most expensive ways to feel poor.

If a cashier remembers you, you’re either a great customer or a terrible customer. Everyone else is forgotten.

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, “Grow Your Business But Don’t Step Over a Dollar to Save a Dime.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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(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 2021 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.)

 

Source: Rob Chrisman