Occasionally someone will mention, as was talk in 2008-2010, of a foreclosure “tidal wave” or upcoming default escalation. If something goes from 1 percent to 2 percent, yes, it is a 100 percent increase. But the numbers are historically good. My two cents… Originators know that residential borrowers in the last several years have solid credit, their home loans are well underwritten, and, thanks to a couple years of double-digit appreciation in most areas, have a lot of equity in their homes. Sure enough, this week the OCC released its quarterly mortgage metrics report addressing performance data for the first quarter of 2022 for loans that reporting banks own, or service for others as a fee-based business. The first-lien mortgages included in the OCC’s quarterly report comprise 22 percent of all residential mortgage debt outstanding in the U.S., or approximately 12.2 million loans totaling $2.6 trillion in principal balances. The performance of first-lien mortgages in the federal banking system improved during the first quarter of 2022: 96.9 percent of mortgages were current and performing at the end of the quarter. The percentage of seriously delinquent mortgages was 1.8 percent in the first quarter of 2022, compared to 2.3 percent in the prior quarter. However, foreclosures increased compared to the prior quarter and a year earlier as pandemic-related accommodations wound down, with servicers initiating 19,524 new foreclosures in the first quarter of 2022.

Saturday Spotlight: (Nothing this week due to the holiday. For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)

CFPB: always moving

______________________________________

The Consumer Finance Protection Bureau (CFPB for anyone who didn’t know) issued an interpretive rule on the scope of the Fair Credit Reporting Act’s preemption provisions. The rule’s narrow reading of those provisions appears intended to encourage and support state legislative efforts to enact laws targeting credit reporting issues of concern to the CFPB, such as the reporting of medical debt. Ballard Spahr weighed in. And thus the CFPB affirms states’ abilities to protect their residents with limited preemption by implementing their own fair credit reporting laws that are stricter than the federal Fair Credit Reporting Act (FCRA).

On June 29, the American University Washington College of Law held a symposium centered in part around the CFPB’s new approach for examining institutions for unfair conduct. During the CFPB’s New Approach to Discrimination: Invoking UDAAP symposium, CFPB Assistant Director for the Office of Enforcement Eric Halperin answered questions related to updates recently made to the CFPB’s Unfair, Deceptive, or Abusive Acts or Practices Examination Manual. These updates detail the agency’s view that its broad authority under UDAAP allows it to address discriminatory conduct in the offering of any financial product or service as an unfair act or practice. Buckley LLC reminds us that in March the CFPB, “Published a separate blog post by its enforcement and supervision heads explaining that they were ‘cracking down on discrimination in the financial sector,’ and that the new procedures would guide examiners to look ‘beyond discrimination directly connected to fair lending laws’ and ‘to review any policies or practices that exclude individuals from products and services, or offer products or services with different terms, in an unfairly discriminatory manner.’”

Buckley LLC’s post went on, reminding readers of the June 28 letter that trade associations sent to the CFPB urging recission of revisions to the Examination Manual. “Halperin stated that the CFPB’s Examination Manual updates provide guidance on how examiners will implement the Bureau’s statutory authority to examine whether an act or practice is unfair because it may cause or is likely to cause substantial injury to consumers that is not reasonably avoidable and not outweighed by countervailing benefits to consumers or competition. He stressed that the update does not create a new legal standard under the three prongs of the unfairness standard.

“Halperin also discussed how the Bureau’s UDAAP authority interacts with laws enacted specifically to prevent discriminatory conduct such as ECOA and the Fair Housing Act, and touched on steps institutions should consider taking to ensure compliance. Notably, when asked whether the Bureau intends to pursue disparate impact claims under the CFPA, Halperin stated that disparate impact, along with disparate treatment, are wholly distinct concepts from Dodd-Frank’s prohibition on unfair acts and practices. He added that in assessing an unfair act and practice, the key is to examine the substantial injury prong and then assess the reasonable avoidability and the countervailing benefits prongs.

“He further explained that the unfairness test does not contain an intentional standard and noted that there have been cases brought by both the FTC and the Bureau where there was injurious conduct that was not intentional or specifically known to the party engaging in this practice. According to Halperin, substantial injury alone is not sufficient to prove unfairness and using disparate impact as the mechanism of proof is not what the Bureau uses to prove an unfairness claim.”

Buckley LLC’s post went on. “Halperin reiterated that the CFPB Examination Manual is designed to provide transparency to financial institutions about the types of issues that examiners will be inquiring about in furtherance of determining whether there has been an unfair act or practice under the current framework, and does not extend or create new law. In terms of practical compliance implications, Halperin said most financial institutions should already have robust UDAAP compliance systems in place and should already be looking for potential unfair acts or practices and examining patterns and group characteristics to identify the root cause of any issues, and to avoid substantial injury to consumers.”

Secondary market news

______________________________________

Rates have moved higher for much of 2022, but recently have come back down. As the “push-pull” of inflation versus recession continues, we’ll see rate movement. Bond yields have been particularly volatile of late as markets struggle to understand the simultaneous impacts of inflation, which is being driven by the Russian invasion of Ukraine, supply-chain issues and rising inflation expectations, which collectively push yields up, and the increasing likelihood of a recession, due to recent outsized Fed rate hikes and expectations of more, a yield curve nearing inversion, and falling equities, which drive rates down. The financial press doesn’t have much else to talk about besides the odds, and magnitude, of a possible recession. If the recession is mild and brief (in terms of unemployment and financial markets), housing could actually benefit in the end since demand could be buoyed by falling mortgage rates and a housing recovery would come sooner rather than later and likely ahead of some other sectors in the economy.

Meanwhile, the capital markets for Agency (primarily Freddie and Fannie) loans continues to move ahead. The demand for this production in the secondary markets, along with the value of servicing, continues to drive the rates that borrowers see on rate sheets. Put another way, what happens in the secondary markets drives the rates that borrowers see in the primary markets. Poor adjustable-rate pricing for your borrowers can be attributed to a lack of liquidity in the secondary markets for ARMs. The same thing happens with fixed-rate securities. Let’s take a sample of what Ginnie and Fannie are doing out there, and save the very active Freddie for another day

Ginnie Mae, which handles where most FHA & VA loans go, guaranteed nearly $52 billion in mortgage-backed securities (MBS) in April 2022, supporting affordable homeownership and rental units for more than 186,500 households during the month. “April issuance added $19 billion to the overall portfolio this month, the strongest growth we have seen in quite some time,” said Ginnie Mae President Alanna McCargo. “Despite the rapidly changing housing market dynamics, we are also on pace to cross the $2.2 trillion threshold in May. Total new mortgage origination volume is expected to slow due to rising mortgage rates and home affordability challenges, yet we see a strong MBS issuance volume of more than $50 billion that continues to help ensure support for first-time homebuyers and those seeking affordable rental housing during this cycle.” Ginnie Mae is seeing continued strength in purchase market activity at insuring agencies driven by the Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) lending, and a decrease in rate term refinance activity, given the rapid increases to mortgage rates over the period. As of April 30, Ginnie Mae’s total outstanding principal balance was $2.199 trillion, an increase from $2.182 trillion in March 2022 and $2.105 trillion in April 2021.

Fannie Mae announced the winning bidder for its nineteenth Community Impact Pool (CIP) of non-performing loans. The transaction is expected to close on August 19, 2022, and includes approximately 120 loans totaling $36.2 million in unpaid principal balance (UPB). The loans are geographically focused in the New York area, and the winning bidder was The State of New York Mortgage Agency Community Restoration Fund. The CIP awarded in this most recent transaction includes 120 loans with an aggregate UPB of $36,169,476; average loan size of $301,412; weighted average note rate of 5.24%; and weighted average broker’s price opinion (BPO) loan-to-value ratio of 43.55%. The cover bid, which was the second highest bid, for the CIP was 80.59% of UPB (27.56% of BPO). Interested bidders can register for ongoing announcements, training, and other information here. Fannie Mae will also post information about specific pools available for purchase on that page.

Fannie Mae priced Connecticut Avenue Securities (CAS) Series 2022-R07, an approximately $866 million note offering that represents Fannie Mae’s seventh CAS REMIC transaction of the year. CAS is Fannie Mae’s benchmark issuance program designed to share credit risk on its single-family conventional guaranty book of business. The reference pool for CAS Series 2022-R07 consists of approximately 101,000 single-family mortgage loans with an outstanding unpaid principal balance of approximately $30.6 billion. The reference pool includes collateral with loan-to-value ratios of 60.01 percent to 80.00 percent, which were acquired between July 2021 and August 2021. The loans included in this transaction are fixed-rate, generally 30-year term, fully amortizing mortgages and were underwritten using rigorous credit standards and enhanced risk controls. With the completion of this transaction, Fannie Mae will have brought 51 CAS deals to market, issued nearly $58 billion in notes, and transferred a portion of the credit risk to private investors on over $1.9 trillion in single-family mortgage loans, measured at the time of the transaction. To promote transparency and to help credit investors evaluate the securities and the CAS program, Fannie Mae provides ongoing, robust disclosure data, as well as access to news, resources, and analytics through its credit risk transfer webpages.

Late in the year Fannie Mae announced that it has completed its first Credit Insurance Risk Transfer (CIRT 2021-1) transaction of 2021. CIRT 2021-1 covers $31.7 billion in unpaid principal balance (UPB) of generally 30-year original term, fixed-rate loans acquired from January through March 2021. The deal transferred nearly $1 billion of mortgage credit risk. Fannie Mae will retain risk for the first 60 basis points of loss on a $31.7 billion pool of single-family loans with loan-to-value ratios greater than 80 percent and less than or equal to 97 percent. If the $190 million retention layer is exhausted, 20 insurers and reinsurers will cover the next 315 basis points of loss on the pool, up to a maximum coverage of approximately $998 million. Since inception, Fannie Mae has acquired approximately $13.9 billion of insurance coverage on $506 billion of single-family loans through the CIRT program, measured at the time of issuance for both post-acquisition (bulk) and front-end transactions. Fannie Mae provides ongoing, robust disclosure data, as well as access to news, resources, and analytics through its credit risk transfer webpages.

Fannie Mae priced a $1.07 billion Multifamily DUS REMIC (FNA 2021-M4) under its Fannie Mae Guaranteed Multifamily Structures (Fannie Mae GeMS), marking the third Fannie Mae GeMS issuance of 2021. The M4 is backed by call-protected DUS 10-year fixed-rate collateral and offered investors a tight window, low premium investment opportunity. All classes of FNA 2021-M4 are guaranteed by Fannie Mae with respect to the full and timely payment of interest and principal. The structure details for the multi-tranche offering are as follows. Class A1 has $110.358 million of original face, a weighted average life of 6.52 years, a fixed 0.959 percent coupon, a spread of S+14 bps and an offered price at even par. Class A2 has $855.979 million of original face, a weighted average life of 9.87 years, a WAC 1.466 percent coupon, a spread of S+20-bps and a 100.77 offered price. The collateral has a 1.8x weighted average debt service coverage ratio and a 64 percent weighted average LTV.

Fannie Mae announced that it has executed its second and third Credit Insurance Risk Transfer (CIRT) transactions of 2022.  As part of Fannie Mae’s ongoing effort to reduce taxpayer risk by increasing the role of private capital in the mortgage market, CIRT 2022-2 and CIRT 2022-3 together transferred $1.8 billion of mortgage credit risk to private insurers and reinsurers. Since inception to date, Fannie Mae has acquired approximately $17.6 billion of insurance coverage on $612 billion of single-family loans through the CIRT program, measured at the time of issuance for both post-acquisition (bulk) and front-end transactions. The covered loan pool for CIRT 2022-2 consists of approximately 87,400 single-family mortgage loans with an outstanding unpaid principal balance of approximately $26.5 billion. The covered pool includes collateral with loan-to-value ratios of 60.01 percent to 80.00 percent, which were acquired between April 2021 and June 2021. The covered loan pool for CIRT 2022-3 consists of approximately 76,600 single-family mortgage loans with an outstanding unpaid principal balance of approximately $23.3 billion. The covered pool includes collateral with loan-to-value ratios greater than 80 percent and less than or equal to 97 percent, which were acquired between July 2021 and September 2021. As of December 31, 2021, $750 billion in outstanding UPB of loans in our single-family conventional guaranty book of business were included in a reference pool for a credit risk transfer transaction. Fannie Mae provides ongoing, robust disclosure data, as well as access to news, resources, and analytics through its credit risk transfer webpages.

Fannie Mae marketed its twenty-fifth sale of reperforming loans as part of the company’s ongoing effort to reduce the size of its retained mortgage portfolio. The sale consists of approximately 7,600 loans, having an unpaid principal balance of approximately $1.49 billion, and is available for purchase by qualified bidders. Reperforming loans are loans that have been or are currently delinquent but have reperformed for a period of time. The terms of Fannie Mae’s reperforming loan sale require the buyer to offer loss mitigation options to any borrower who may re-default within five years following the closing of the reperforming loan sale. All purchasers are required to honor any approved or in-process loss mitigation efforts at the time of sale, including forbearance arrangements and loan modifications. In addition, purchasers must offer delinquent borrowers a waterfall of loss mitigation options, including loan modifications, which may include principal forgiveness, prior to initiating foreclosure on any loan.

A little girl, dressed in her Sunday best, was running as fast as she could, trying not to be late for Bible class.
As she ran, she prayed, “Dear Lord, please don’t let me be late! Dear Lord, please don’t let me be late!”
While she was running and praying, she tripped on a curb and fell, getting her clothes dirty and tearing her dress.
She got up, brushed herself off, and started running again!
As she ran, she once again began to pray, “Dear Lord, please don’t let me be late… But please don’t shove me either!”   

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is titled, “The All-Cash Phenomenon.” 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 2022 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

This morning, at the beginning of the third quarter of 2022, I learned about this morsel: The most common national holiday around the world is independence from the British! That aside, this morning I decided to start the 2^nd half of 2022 with a healthy, low-cal breakfast: oatmeal. So I found the Quaker Oats, and began boiling. Then I gathered up the butter, pecans, chocolate chips, milk, maple syrup, banana, shredded coconut… where was I going with this? Oh yeah, food and learning. Real estate agent relationships are vital in the mortgage industry, especially for purchase-heavy shops. In hot markets, agents tend to already have established relationships with brokers or lenders, so some LOs are using food and learning. They are offering either breakfast treats with a baker, or happy hour wine tasting with a local wine expert, to local real estate agents, financial planners, contractors, divorce attorneys, whoever, with 20-30 minutes of mingling and then a 10–15-minute presentation on what a broker or loan officer does and the value a good originator can add for the agents. Hey, it’s worth a shot. (Today’s podcast is available here and this week’s is sponsored by Ignite Integration Solutions, Inc., a custom software provider that has created industry leading LOS CORE integrations in addition to a library of Encompass base tools and plug ins, and custom API development with our team of 100% on shore developers to support both Mortgage Lenders and Vendors as clients and partners.)

 

Employment

___________________________________________________

“Towne Mortgage Company continues to demonstrate strength and stability as a TPO lender and as a nationally acclaimed top-rated places to work. Our Account Executives have unlimited opportunities in all channels: Wholesale, Non-Del, and Full Delegated. Towne offers an extremely competitive compensation and benefits package to our Account Executives. We provide our Sales Teams with a full FNMA/FHLMC/GNMA agency product set, renovation (203K & FNMA HomeStyle), manual underwrites, Jumbo products with full delegation, and more! Let Towne’s years of experience in this space help you generate more business from your clients. Towne also offers flexibility based on client’s needs and can provide all in-house fulfillment from disclosures to retention of loan servicing.” Please send your confidential inquiries to Mark Zierott.

PacRes Mortgage, formerly Pacific Residential Mortgage, is excited to announce industry veteran Dave Bergstrom is joining The PAC as Senior Vice President of Sales. Dave comes to PacRes with over 33 years of mortgage industry and sales leadership experience. “The team at PacRes strives for excellence, trust, service, drive, innovation, and celebration in everything we do. I couldn’t be more excited about the opportunity to support the growth of such a wonderful organization,” says Bergstrom. “Our motto says it all, Dreams approved daily. For borrowers, business leaders, and entrepreneurs that want to turn their dreams into reality, PacRes Mortgage is the 5-Star team you’ve been looking for.” PacRes is currently licensed in 35 states and growing rapidly. “Our fast national expansion demands we find and hire top level talent – now,” says Matt Stashin, CEO and founding partner. “We’re thrilled to have someone of Dave’s deep industry experience join our team.” Want to join Dave and join The Pac? Please reach out to Dave Bergstrom, SVP at 949-795-2835.

Lender and broker software and services

___________________________________________________

After decades of suffering from “middle-child syndrome,” the mortgage servicing industry is now getting the attention it deserves. During this time, there’s no doubt your organization is looking to grow to become a preferred Servicer for investors. Brace 2.0 helps Servicers securely train and scale teams while resolving loss mitigation applications. With skills-based tasking, tasks are automatically routed to team members that have been approved by management.

With Brace 2.0’s application management dashboard, managers can easily track employee progress and performance, as well as rates and application milestones. Now, management can focus on high-level organizational goals that increase revenue and improve investor relations. Learn how Brace’s compliant Rules Engine works in tandem with digital communications and income verification to help Servicers stay ahead of RESPA timelines.

“Look for credit report options now and prepare for new market conditions. Service 1st will review your price and solution stack for credit, verifications, valuation, and flood. For 95 years S1 has best positioned and advised our clients for success, no matter the lending environment. Our turn-times are best in class, regardless of volume. 84.2% of all supplements & manual VOEs returned in less than 48 hrs. How’s TRV (4506-C) turn times? We’re partnered with IRS transcript pioneer, NCS. CUs & bankers, enhance portfolio monitoring as we enter new market conditions with custom solutions from S1. Tune up your HELOC program with S1 valuation cascades. Whether à la carte or packaged solutions, our specialty is serving your organization. Schedule your July meeting with S1 today.”

With Candor you improve your pull through ≥15% and get to borrower surety whiplash fast. Watch FBC’s COO Travis Rulle describe their “speed to decision” as a Candor client. In a market where every app counts, you owe it to yourself to explore the only platform that delivers automation well beyond income calculation and OCR. You can be live in just 30 days. Contact us for a demo.

They say knowledge is power, and knowing the status of all your loans is more important now than ever. Finding that kind of info in your LOS can be somewhat of a pain. Want to know how you can get updates on all those loans on a regular, pain free basis without ever having to log into your LOS? Click here to learn how Velma Connector can streamline your Production Report process, so you can have peace of mind. Want to get a little more hands on? Schedule a demo today!

Loan product news

___________________________________________________

Since 2014, Excelerate Capital has been a preferred lender to our business partners. Our goal is to offer more ways to say yes to your borrowers. Our AEs and operations team focus on getting your loans closed as quickly as possible, with amazing support and service to the broker throughout the entire loan process. Proud to be MPA’s Top 5 Lender in wholesale and non-QM, Excelerate Capital product offerings range from a 90% LTV DSCR, and multi-family investor loans, to flexible asset utilization options. Reach out to us and see what sets us apart. We can piece it together for you! Contact: Scott Gerrity, Regional Vice President TPO or Rachel To, Senior Vice President TPO.

Northpointe Bank Correspondent Lending offers temporary buydown programs allowing eligible borrowers to pay a reduced loan payment and interest rate within the first one or two years of the loan. With Northpointe’s temporary buydown program, the interest rate is bought down from funds collected upfront, allowing the borrower to ease into the full home loan payment over time. The buydown funds can be provided by the borrower, seller, or other interested party, such as a builder, and is eligible for purchase and rate/term refinance of primary residences and second homes. Available in all 50 states and the District of Columbia, Northpointe Bank provides tailored solutions to maximize your profitability and help grow your business.  View program details for more information or email us at [email protected].

First Community Mortgage rolled out a series of updates in its correspondent and wholesale channels. It updated its Non-Conforming Jumbo Summit/Peak guidelines effective as of June 13, 2022, for all loans including loans in the pipeline. Details are outlined in FCM Wholesale Announcement 2022-28. It updated its Non-Conforming Jumbo Direct/Traditional Guidelines creating several changes to both its Direct and Traditional matrices. Review the FCM Direct and Traditional guidelines to view all updates. It summarized changes to THDA Great Choice MRB Income/AMI Limits applicable to loan applications received on or after Wednesday, June 1^st in FCM Wholesale Announcement 2022-23. There was an update to its Non-Conforming Jumbo Direct Matrix as shown in FCM Correspondent Announcement 2022-18 to reflect new minimum loan amount increase effective for loans with new commitments on or after June 22. Existing locks for less than the new minimum loan amount will be honored. And there was an update to its Non-Conforming Jumbo Direct/Traditional Guidelines creating several changes to both its Direct and Traditional matrices. FCM Correspondent’s Direct and Traditional guidelines to view all updates.

Citi Correspondent Lending implemented FICO / LTV loan level pricing adjuster changes for Non-Agency transactions, effective with new locks on/after Friday, June 17, 2022.

Recession concerns, persistent low inventory, and rising rates have mortgage lenders imagining creative ways to protect margins. Non-QM and non-Agency products is one way, as those tend to have higher margins. Verity rolled out a “Non-QM Primer” that is worth a look.

AmeriHome announced the expansion of its Portfolio Express and Portfolio Jumbo program guidelines, including 85% LTV/CLTV to $2 million and 80% LTV/CLTV to $2.5 million for primary residences. Find out more information in AmeriHome Correspondent Announcement 20220602-CL.

PRMG revised Product Profile information on its Diamond Jumbo, FHA Standard and High Balance, all Jumbo and Non-QM Products. Details are available PRMG Product Update 22-30.

While some lenders are pulling out of offering No Ratio loans, A&D Mortgage remains confident in being able to offer a no-hassle lending experience to investors wanting a loan up to 85% LTV that requires no income or employment verification.

Starting on June 8th, A&D Mortgage Broker Partners will no longer be able to submit new loans through OpenClose. Partners will need to login into Automated Decision Manager (ADM) for all new loan submissions.

loanDepot Wholesale revised information applicable to its Conventional, VA and jumboAdvantage EXPRESS Lending Guide’s as described in the LDW May 31 Newsletter.

DSCR loans can fit a variety of borrower situations. LoanWyse offers DSCR programs that do not require DTI or employment verification, W-2s or Tax Returns.

Sellers approved for Wells Fargo Funding Non-Conforming Loans should note policy expansion on departure residence and bridge loans described in Wells Fargo Funding Newsflash C22-017nc.

In Wells Fargo Funding Newsflash C22-016nc, a correction was made regarding loan amounts on Non-Conforming Loans, as well as information on Seller Guide enhancements and financial statements clarification.

Loan Stream Mortgage is offering Select Non-QM & Select DSCR Pricing Improvements, effective immediately.

Qualify borrowers with Only a 1099 using Loan Stream’s NaNQ, a proprietary program specifically created to fulfill mortgage program options for our brokers with non-prime programs.

First time home buyers are eligible, borrowers must be 1099 only.

Capital markets: rates reacting to recession chatter

___________________________________________________

Treasury yields plunged again yesterday. Why? Recession jitters, and the benchmark risk-free U.S. Treasury 10-year’s yield now down to below 3 percent. We saw yesterday that personal consumption expenditures came in light, rising only 0.2 percent, when expectations were for a 0.5 percent increase. If you adjust for inflation, spending fell 0.4 percent. PCE core inflation, the Fed’s preferred inflation gauge, rose 0.3 percent month-over-month and fell to 4.7 percent year-over-year, which was encouraging. However, the decline in real PCE will fuel concerns about the Fed continuing to tighten into a slowing economic environment. The discouraging spending number indicates that second quarter GDP might be weaker than people are thinking. If GDP contracts in the second quarter, the U.S. economy enters a technical recession. Fed Chair Powell reiterated this week that a bigger risk than recession would be to fail to restore price stability.

Today’s early close includes some data points including manufacturing PMIs (Purchasing Managers Indices) for June. First up is S&P Global followed by ISM. May construction spending winds up this week’s economic calendar, but none of the news is going to take the eyes off the general inflation and recessionary trends. There are no Fed MBS purchase operations today. We begin Friday with Agency MBS prices better .250-.50 and the 10-year yielding 2.92 after closing yesterday at 2.97 percent.

(Thank you to Carol K. who sent along this note from mortician Caleb Wilde.)

As a mortician, I always tie together the shoelaces of the dead.

Because if there’s ever a zombie apocalypse, it will be hilarious.

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is titled, “Owning a Home: The Dream is Alive and Well.” 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 2022 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

“Looking out at the road rushing under my wheels… Looking back at the years gone by like so many summer fields.” Yes, at the end of today we’re halfway through with 2022 (already). Time passes, hair styles, relationships, people, pandemics, and companies come and go. (Today’s joke has to do with the passing of time.) History is made and remembered. Woody Williams, the last surviving WWII Medal of Honor recipient (Iwo Jima), died yesterday at 98, as did Hells Angel founder Sonny Barger. When was the last time COVID made the headlines? Yesterday the Commentary noted, “Remember names like AmeriLoan, Countrywide, PNC, WaMu, Home Savings of America, Fleet, Great Western, World Savings, Associates, Nat City?” My apologies to PNC, and the many who wrote in, saying that it is alive and well. Business cycles are alive and well: With rates escalating higher and the home price appreciation that has taken place, buyer interest has rapidly deteriorated. I’ve received emails noting a “screeching of the brakes,” a “turning off the faucet,” “tremendous drop off,” “substantial” and “significant.” According to the NAR, May existing home closings, reflected by contracts signed the prior month, pulled back 3.4% on a seasonally-adjusted sequential basis compounding the seasonally-adjusted declines from the prior three months. (Today’s podcast is available here after 10AM ET, 7AM PT today, and this week’s is sponsored by Ignite Integration Solutions, Inc., a custom software provider that has created industry leading LOS CORE integrations in addition to a library of Encompass base tools and plug ins, and custom API development with our team of 100% on shore developers to support both Mortgage Lenders and Vendors as clients and partners. Today’s features an interview with Dawar Alimi, CEO of Lender Price, on a major enhancement for both lenders and brokers using Marketplace 2.0.)

 

Employment

___________________________________________________

Nations Lending continued its East Coast expansion with the addition of Jeff Nelson as East Region Divisional Manager. Nelson will manage existing branches and teams in the 20-state region stretching from Maine to Florida. As part of Nations Lending’s leadership team in the East, Nelson will help execute the company’s strategic growth plans by focusing on recruiting and building revenue volume. “Jeff is a great fit to our sales leadership team, as he will enhance our strong teams in the East, using his decades of invaluable experience in production leadership roles,” said Corey Caster, Executive VP of National Production. “Nations’ ownership and people are so genuine,” Nelson said. “The company is committed to giving its employees whatever they need to be successful, and the people dedicate themselves to the progress of the company.” Contact Jeff Nelson or VP of Strategic Growth John Owens to learn more about opportunities at Nations!

“Acra Lending, the leader in Non-QM lending, is hiring! Specializing in various Loan Programs including Bank Statement, Investor Cash Flow, Foreign National, ITIN, and Fix & Flip/Multifamily programs, it’s never been a better time to join. We are actively hiring experienced Wholesale Account Executives, Correspondent Sales, Fix and Flip Account Executives, IT Professionals and more! At Acra Lending, you will work with experienced, dedicated, and passionate people that are motivated to leading us as the industry’s fastest growing private mortgage lender. If interested, email us or apply directly at JoinAcra.”

“As the industry contracts, Planet Home Lending can aggressively expand because our experienced, data-driven leadership set the foundation last year. This visionary approach means that today, Planet is growing, even during this period of market shifts and interest raises. Backed by reliable capital. Offering niche products that help homebuyers win deals. Operations strong enough to guarantee on-time closing for your buyer or we buy the property with cash. We’re making the investments to improve our successful marketing, increase operational efficiency, and run lean without sacrificing what’s most important — the customer experience. The result? Our branches are beating industry benchmarks by 14 percent and doing over 83 percent purchase volume with products like Cash 4 Homes and bridge loans with no DTI options. See the new video from EVP, National Production, Caleb Mittelstet. Then email Caleb Mittelstet or SVP Talent Acquisition Brian Miller. Grow your business with Planet Home Lending: Right Place, Right Size, Right Now!”

“Thrive Mortgage has been paving the way for over four years with the original Home2Home suite of products. When we launched Home2Home in early 2018, we provided clients the opportunity to submit highly competitive offers and win more contracts. Now, we have enhanced the proprietary product line with the release of Cash2Home. “Thrive is synonymous with innovation, and this is the latest example. Our clients can close faster with less expense, conditions, and hassle than other offerings,” stated Randell Gillespie, Thrive’s Head of Production. This product line is the creation of Michael Jones, CFO of Thrive, and exemplifies why the lender established the most diverse product offering in the business. “Michael is our secret weapon! Our products allow me to deliver for my clients like no competitor in my market can,” stated Patty Newby, BM and top producer. Click here for more information on our unique products and opportunities to Thrive!”

Lender and broker software and services

___________________________________________________

Superheroes may seem otherworldly, but DYK many were actually inspired by real people? Although mind-reading powers would certainly help, the average lender doesn’t need supernatural abilities to retain and convert more borrowers, just the tools and strategies to answer the call when equity-related loan opportunities strike. That’s why Sales Boomerang and Mortgage Coach built the industry’s first borrower intelligence and conversion system to help lenders identify, engage, and convert more leads with less effort. Sales Boomerang’s 5 equity-related alerts help lenders be the first to reach out to consumers with accessible equity, while Mortgage Coach’s customizable loan comparisons hasten conversions by helping homebuyers make informed financial decisions. Let this borrower intelligence and conversion pairing be your home equity hero in disguise.

Chasing down upfront fees is a pain in the neck. Loan officers “forget” to collect them or write down the wrong numbers. Operations folks transcribe credit card numbers into virtual terminals and manually update the LOS. What a waste of precious resources. Fee Chaser by LenderLogix is a hot solution for this. Right from within the LOS, you can request the fee, borrowers receive a secure payment link via text and email and complete the payment right from their device. Everyone gets a receipt and the LOS is updated automatically. Remove the manual process and automate it with Fee Chaser. Sign-up for the upcoming Fee Chaser webinar or get a sample fee request sent directly to you on their site.

TPO loan products

___________________________________________________

“In conjunction with our $30 billion commitment to advance racial equity, Chase Correspondent Lending created our Community Lending Program (CLP) to support our clients’ dedication to helping underserved customers and communities. Recently, we worked with Black Knight, Inc. to deliver CLP pricing automatically on eligible loans via their pricing engine. As a result, our mutual clients are now able to see the amount of CLP incentives in real time without ever leaving the Optimal Blue PPE. We look forward to working with our clients in using these new tools to collectively serve areas in need.”

Synergy One Lending is proud to announce our very own Bridge Loan Product! This exciting addition to an already extensive suite is another way to give your buyers the power they need to win offers in today’s competitive landscape! “With the launch of our bridge loan product, we are bringing another great option to our originators and their clients that maximizes speed and agility needed to get them in the home they want. Giving our team strategic options like this just means they will gain more market share,” says Synergy CEO Steve Majerus. Coupled with the S1L HELOC, best-in-class operations, S1 FinFit application, and in-house coaching, it’s easy to see why top producers continue to be drawn to Synergy One. To learn more about how to take your business to the next level, contact Synergy President, Aaron Nemec or SVP-Strategic Growth, Ben Green today!

California: New Down Payment Assistance option for county employees in 37 counties! Golden State Finance Authority is now offering up to 5.5% in down payment and closing cost assistance (DPA), combined with attractive First Mortgage interest rates for employees of GSFA Member Counties purchasing or refinancing a primary residence. The “Assist-to-Own” DPA is available for single-family 1–4-unit residences, condominiums, and townhomes and even some manufactured homes. The Program has flexible guidelines: Minimum FICO 640; Maximum DTI 50% and best of all there is no first-time homebuyer requirement to qualify. And if you are a Lender interested in offering “Assist-to-Own” DPA to your borrowers, join us for Lender Training or visit www.gsfahome.org for more info.

Orion Lending’s Titan Flex Non-Agency Program allows for Delayed Financing! This product will give your clients more flexibility (see what we did there?!) with loan amounts up to $3 Million and a variety of out of this world income types including Bank Statements (Personal/Business), Express Doc, P&L, Full Doc, Asset Qualifier (No Income/Employment) and Asset Utilization. Additionally, Orion’s COIN (Cashflow Only Investor Loan) offers DSCR DOWN TO ZERO (No Ratio), with no disclosures or required wait periods, cash out can be used as reserves, delayed financing OK, and state licensing not required in many states!  Just think about how many more borrowers can be served! Hey, and with Orion’s new Quick Lock feature, now you can secure the rate straight from the Quick Pricer, without uploading the loan! With every program underwritten in house, our 24-hour UW Purchase Commitment on various products… What’s not to love?! Click here to get approved today!

Fast approaching events, training, webinars

___________________________________________________

Today at 11AM PT, join Sales Boomerang’s Alex Kutsishin, Mortgage Coach’s Dave Savage, and NEO Home Loans’ Josh Mettle as they share the recipe to being successful in today’s equity-heavy market. This Mortgage Bankers Association-sponsored webinar is open to all MBA members, and non-MBA members can also join the conversation free of charge using code SALESBMRNG100. Focus on wealth-building benefits to lenders and borrowers. Bon Appetit.

Tomorrow is the next edition of The Mortgage Collaborative’s Rundown with Rich and Rob. We’ll will be covering current events in the mortgage market for 45 minutes starting at noon PT in “The Rundown with Rich and Rob.”

The private mortgage insurance companies offer a fine range of very cost-effective/free training: National MI University, Enact’s course catalog of on-demand webinars, MGIC, Essent, Radian, and Arch MI.

On-Demand Webinar: Top Issues on Mortgage Compliance and What You Need to Know. In ACES Quality Management’s QC Now web series, experts share insights and tips to help quality control professionals stay informed of industry changes. Topics covered include fair lending focus, including redlining, digital redlining, and appraisal bias, CFPB RFI on Junk Fees, CFPB Supervisory Highlights, and mortgage servicing specific 2022 compliance expectations. Watch today!

Join Nancy Obando, SVP of Mountain West Financial and learn about a fantastic option for California First-Time Homebuyers, CalHFA’s Forgivable Equity Builder Loan. This loan offers a huge bump to the down payment that will be 100% forgiven within the first 5 years of owning the home. Register for MWF’s CalHFA Equity Training, Thursday, July 7^th from 9:00 a.m. – 9:30 a.m. (PST). Program features include receipt of up to 10% of the purchase price or appraised value, Amount is fully forgiven after 5 years (Must be the primary residence for those 5 years. 20% forgiven annually), FICO scores as low as 640 (FHA, Conventional, & Manufactured Home options).

After two years of virtual meetings, NRMLA can’t wait to catch up with you, provide a venue for you to meet with vendors and to network with friends and colleagues, and to offer “best in class” educational content at its 2022 Eastern Regional Meeting in Baltimore, MD, July 11-12. This event will assist you with being innovative, informative, and intentional with 1.5 days of planned sessions. It’s also an excellent opportunity to meet with your vendors in the exhibit area to catch up on questions that you may have. Full details and registration available at NRMLAonline.org.

FHA released the third in its four-part webinar series, Dispelling Homebuying Myths: Finding the Right Home. The webinar series is available on the Single Family Housing Events and Training webpage on HUD.gov and reveals the truth about common myths associated with using an FHA-insured loan to purchase a home.

Capital markets: inflation still the focus

___________________________________________________

After record volumes and margins over the course of the last two years, 2022 has been a different story. We have seen mortgage rates rise over 200 BPS, record home prices dissuade would-be buyers, and cutbacks across companies in the mortgage industry. MCT’s Six Unique Ways to Increase Your Profitability Despite Market Headwinds whitepaper examines how MCT is helping “Bring BPS Back”. One strategy the whitepaper reviews is optimizing your investor set. In a recent MCT case study with Genesis Collins, VP of Capital Markets at Alpha Mortgage, Mr. Collins describes how MCT’s BAM Marketplace enabled him to decrease his average approval times with buyers and achieve an impressive pickup on committed loan volume while delivering via mandatory executions. Learn more about how MCT’s services could help your profitability with their new hedge advisory profitability calculator.

We had a bit of a rally yesterday over recession fears. Markets digested Chair Powell’s comments which included that the “clock is running” to bring down inflation with the Fed potentially slowing the economy more than needed to get it under control. In terms of economic releases, real GDP reportedly decreased at a 1.6 percent annual rate in the first quarter, indicating that consumer spending wasn’t as strong as previously reported. Recent increases in the Fed Funds rate won’t begin to impact the economy until later this year.

Today’s economic calendar is already under way with May personal income and spending (+.6 and deflator 6.3 percent year over year) and weekly jobless claims (+2k to 231k, little changed). Later this morning brings Chicago PMI for June and Freddie Mac’s latest Primary Mortgage Market Survey. Today’s MBS purchase operation, which will be the last of the week, sees the Desk in UMBS15 3.5 percent and 4 percent for up to $313 million. We begin the day with Agency MBS prices better by .250 and the 10-year yielding 3.02 after closing yesterday at 3.09 percent based on increased recession talk.

(Like wanting to own a home, some things are timeless.)

Ira Kaplan hadn’t returned to the old neighborhood since he went off to fight in Vietnam. During a business trip to New York he visits his old neighborhood on Kotler Avenue in the Bronx.

Everything has changed over the years. Where once there was Edelstein’s Delicatessen, there is now a McDonald’s; where Fleischman’s Dry Cleaning (One-Hour Martinizing) used to be, a Korean nail salon and spa now is; where Ginsberg’s Department Store was, there is now a Gap.

Nothing is the same, except for the narrow storefront of Klonsky’s Shoe Repair, which, dimly lit as ever, is still in business.

As Kaplan passes the shop, he recalls (such are the quirks of memory that he does not know how) that just before he was drafted to go off to Vietnam, he had left a pair of shoes with Mr. Klonsky that he never bothered to pick up. Could they, he wonders, possibly still be there?

A small bell tinkles as he enters the dark shop.

Mr. Klonsky, who seemed old 40 years ago, shuffles out from the back. He is hunched over, wearing a leather apron, one eye all but closed.

“Excuse me, Mr. Klonsky,” Kaplan says, “but I used to live in this neighborhood, and 40 years ago I left a pair of shoes with you for repair that I never picked up. Is there any chance you might still have them?”

Klonsky stares at him and, in his strong Eastern European accent, asks, “Vas dey black vingtips?”

“They were indeed,” Kaplan only now recalls.

“And you vanted a halv sole, mit leather heels?”

“Yes,” says Kaplan. “That’s exactly what I wanted.”

“And you vanted taps on the heels?”

“Yes, yes,” says Kaplan. “Amazing! Do you still have them?”

Mr. Klonsky looks up at him, his good eye asquint, and says, “Dey’ll be ready Vendsday.”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is titled, “Owning a Home: The Dream is Alive and Well.” 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 2022 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

We’re all trying to save a few pennies. We have the increase in postal rates coming soon and perhaps pick up a roll, or ten, of Forever Stamps. It’s not like they have an expiration date, unlike, apparently, lenders. Remember names like AmeriLoan, Countrywide, PNC, WaMu, Home Savings of America, Fleet, Great Western, World Savings, Associates, Nat City? “We are writing to share an update on _____’s efforts to address significant, unexpected, and unprecedented economic pressures facing the entire mortgage market. As you know, the mortgage market faces mounting macroeconomic challenges, including increasing concerns about the availability and cost of credit, the end of the refinance boom, the systemic impact of inflation and geopolitical issues, and reduced demand for purchase money mortgages. As part of our efforts to address these challenges, _____ will no longer purchase correspondent loans… We value our relationship with you and appreciate your patience and understanding as we seek a comprehensive solution to these issues. We will provide you with an update when there is definitive news to share.” In this instance it was First Guaranty Mortgage Corporation’s Correspondent group that sent it out, but it probably won’t be the last we see. Those impacted can always post their resume for free here, and anyone can view them for several months for a nominal fee. (Today’s podcast is available here and this week’s is sponsored by Ignite Integration Solutions, Inc., a custom software provider that has created industry leading LOS CORE integrations in addition to a library of Encompass base tools and plug ins, and custom API development with our team of 100% on shore developers to support both Mortgage Lenders and Vendors as clients and partners.)

 

Originator Careers

___________________________________________________

Evergreen Home Loans™ is committed to helping loan officers thrive in any market. An industry leader in innovative home buying programs and product depth, the company pioneered the groundbreaking cash offer program, CashUp® by Evergreen, to meet the demands of market challenges. Staying nimble, Evergreen recently launched two new products: StepUp by Evergreen and Lock-n-List. StepUp by Evergreen provides homebuyers a solution to step into their dream home with a strong offer before selling their current home, and Lock-n-List helps homebuyer listings stand out with a locked-in rate. Quick reaction as well as innovative resources and programs provide loan officers with opportunities to develop new agent and customer relationships and close more transactions. Loan officers seeking a forward-thinking, nimble company that will help them grow their business in any market should visit the Evergreen Careers page.

“Assurance Financial, an aggressive and growing full-service mortgage banker originating in the SW, SE, and eastern U.S., is continuing to expand across our lending footprint. We have opened three new markets and branches in 2022 so far and want to meet more great people! Our commitment to providing exemplary app-to-close service and a great technology stack has been the difference-maker during the past few months, especially to our Realtor, builder, and purchase money clients. We are looking to add dynamic entrepreneurial-minded producing branch managers in all good markets: Southeast, Southwest, and Eastern states. If you a true leader and want to go to the next level with your career; lead, run and grow your own market; close all your loans on time; and, enjoy a great life/work balance environment, contact Paul Peters, CMB or click here for more details.

When the going gets tough, the tough keep innovating. There’s no doubt today’s market has created new obstacles. Great lenders, however, find ways to push forward regardless, and Embrace Home Loans is doing just that. Right now, the company’s core value of innovation is fostering growth and excitement through its state-of-the-art eSNAPP mobile app, which is revolutionizing the way borrowers get mortgages. “eSNAPP gives our customers the power to choose when, where and how they want to interact with us, even letting them upload documents and sign disclosures while on the go,” says Steve Adamo, the company’s president, national retail production. “It also gives our loan officers greater flexibility to generate business in a more challenging market. In times like these, our core values, our teammates, and our customers mean everything to us.” Want to get in on the excitement? Embrace is hiring! For more info, contact Adamo at 401-524-5733.

“Are you enthusiastic about building your team and empowering them to be the best they can be? We know that as a leader you have many goals and expanding your team is likely a priority. Successful recruiting takes continuous effort, systems, and a calculated strategy. That’s why New American Funding has a strong National Business Development and Recruiting Team designated to support your growth. From coast to coast, we have award-winning national and regional teams determined to help you succeed. If you’re ready to partner with a company that provides strategic support to help you grow, we’d love to talk to you. Contact SVP, Business Development and National Recruiting, Brooke Anderson today! (609) 500-1520. EOE

Benjamin Franklin said, “when you’re finished changing, you’re finished.” What are you doing to keep up with 2022’s changes? If you haven’t already, we recommend taking a peek at Canopy Mortgage – A better business model that provides Mortgage Loan Officers with ultimate control, unmatched pricing and a proprietary Loan Origination System that promotes highly efficient loan processes and faster closings! Finally, you can give your clients better pricing AND you can make more on your deals. Canopy provides a sustainable mortgage business model that’s good for everyone. Interested in learning more? Reach out to Josh Neumarker at Canopy Mortgage for more information 888-696-9076.

Lender and TPO programs, products, & services

___________________________________________________

Younger Gen Y Millennials and rising Gen Z are making their mark on the homebuying landscape. Are you ready for the generational shift in homebuying? Download part three of our three-part series Understanding the Next Generation of Home Buyers, The ABCs of Gen Y and Z for tips on how to reach this emerging cohort of home buyers.

Are you planning to visit Dana Point (arguably the dolphin and whale-watching capital of the world) next month for the California MBA Western Secondary Conference? If so, the Optimal Blue team will be ready to meet with you to discuss your secondary marketing strategies, and maybe even lend you a pair of binoculars. As a proud platinum sponsor and member of the California MBA, Optimal Blue will be hosting one-on-one meetings throughout the event (July 25–27). We invite you to request a meeting with one of our experts to take advantage of this opportunity to discuss ways to automate your secondary marketing functions and boost competitive strategies.

Axos Bank continues to accelerate in Non-QM Lending! Our National Wholesale and Correspondent Lending Division is designed for top producing originators in luxury markets. With loan amounts up to $30 million, flexible portfolio underwriting, and mortgage rates starting as low as 5.500%, we are confident we can help you grow in the second half of 2022! Top programs include Pledged Assets Lending, DSCR, Cross-Collateralization, Bridge-to-Sale, Deferred Interest, and Bank Statement Qualifying options. Visit our website to learn more about Wholesale and Correspondent Portfolio Lending and Residential Warehouse Lending opportunities. Or contact J Shoop, National Sales Director, to schedule a meeting with Axos Bank.

Lenders succeeding in 2022’s challenging market share one clear advantage: Their per-loan economics are strong. Mortgage solutions provider Maxwell measurably improves margins with efficiency-boosting features. Using leading technology, Maxwell Point of Sale reduces costs by 21 BPS per loan, helping lenders combat shrinking margins and empowering them to reliably outperform the market. Worried about the implementation process? Maxwell Point of Sale is lightning fast to deploy, with time-to-impact averaging less than 4 weeks. Lenders: Now is the time to rise above the competition with proven technology that delivers profitability even during market downturns. Click here to learn more about Maxwell Point of Sale, or set up a meeting to chat with our expert team today.

The result of a company closing a division

___________________________________________________

I have received many notes about First Guaranty closing, and this one is representative of them. “Rob, I am a non-delegated Correspondent with an FHA Non-Supervised Lender Title II status and relied on FGMC to underwrite a $1.4m FHA purchase loan. We were cleared to close and closed the PSA on Friday June 17^th. Last Friday the 24^th the loan was cleared for purchase but the division shut down the same day. Since it is/was owned by PIMCO I expected a lot more from FGMC, with at least an orderly wind down. Everybody says, ‘Pay attention to your counterparty risk.’ Really, FGMC was backed by the people that run the biggest bond fund in the world so even last Thursday I still would have assumed that they could make money even when others couldn’t and that they were solid.

“FGMC shutting down cold like this is leaving me in a very difficult situation since they did the FHA underwrite for this loan. I am really in a tough position and am not sure what I am going to do to resolve this. I keep running into roadblocks if I try to sell this to a new investor and from my understanding, if I can’t get FHA insurance and I need to keep the loan on my books, then I need to refund the $24k MIP and the ongoing $1,100 monthly MI to the borrower. Thanks for letting me vent.”

Support your local sheriff

___________________________________________________

Uh, I meant organization. Vendors and lenders are grappling with the drop in revenue, margin, and volume. But organizations are as well, and we should not forget, despite the belt-tightening that is occurring, that these organizations fulfill an important role in protecting our industry.

I received this note from Susan Milazzo, the CEO of the California MBA. (Know that California accounts for 20-25 percent of the nationwide production of home loans, and has members of all types across the nation.) “Rob, one great part about being in my role for this many years is that I have a great relationship with so many of our lender members. Of course, they’re all seeing the same thing: increase cost of production, decreasing margins, ‘right sizing’ their companies, and holding on until the market stabilizes. Many share that they’re leveraging their tech stacks to create efficiencies and drive costs down as well as looking at new products to offer.

“While the market is creating these pressures on the industry, the California MBA has been on the front line on a few significant legislative issues this year! First, we all saw the legislation that would have implemented CRA requirements for all IMBs in California. That measure was dramatically amended to become a bill that requires our regulator to study the IMB loan profiles to LMI and minority borrowers and evaluate what’s been successful in other states. Our industry has very good news to share in this space! In California, IMBs accounted for 83% of home purchase loans to low-and-moderate income borrowers in 2020 (data source:  MBA).

“We are also working on SB 1323, which if enacted, would require that an equity sale be made by a licensed realtor and by publicly listing the property for sale on the California Multiple Listing Service with an initial listing price at the property’s appraised value. The bill in its current form will create unnecessary delays to the foreclosure process and could increase the cost of lending/servicing in the state in a market where interest rates are rising and supply is insufficient. The California MBA and the national MBA are working vigorously to oppose this measure and protect over 100 years of foreclosure law. This industry never has a dull moment, and we know that it is our job to provide strong representation for the real estate finance industry and continue to be a valuable resource to our members.” Thank you, Susan, and contact her about membership opportunities or sponsoring the upcoming Western Secondary next month in Orange County.

A broker’s petition to the CFPB

___________________________________________________

Bill Kidwell, founder of IMMAAG, Inc. the advocacy and compliance service for small broker shops is asking everyone who has an interest in fairness and consumer choice to go to the regulatory comment page and comment on a petition filed by IMMAAG (Docket # CFPB 2022-0027) related to inequities singled out on only the 15,000+ traditional non-self-funding broker companies and their consumers.

By way of background, the petition published on 6/1/2022 asks the CFPB to reconsider specific restrictions that affect only one segment of the market and that segment’s consumers. Bill’s petition takes issue with the fact that this segment and its customers have been treated unfairly by double counting lender paid compensation as part of the QM 3% Cap, not being able to counter-offer to applicants once an LE is issued, not being able to offer incentives except in the case of borrower paid transaction and not being able to reduce MLO compensation for the benefit of the consumer. All the while all other “creditors” are treated differently. You can read the entire letter that has been shared with both the current and previous CFPB directors at www.immaag.com and Bill is just asking that you comment on the issue before the closing date of August 2, 2022. Bill can be emailed here (303-674-1200) if you have questions about the petition or the issues.

Capital markets: inflation still the focus

___________________________________________________

Are you becoming more nervous about the economy? Others are too, apparently. A drop in U.S. consumer confidence driven by inflation concerns (what else?) pressured risk assets yesterday. Conference Board’s June measure of expectations, which reflects Americans’ six-month outlook, fell to the lowest in nearly a decade and now sits at a level that is likely to portend weaker growth in the second half of the year, raising the risk of recession by year end. But New York Fed President Williams and San Francisco Fed President Daly played down the risk of a downturn yesterday, insisting that a soft landing is possible, even with another 75-basis point rate hike on the table next month.

 

We also saw yesterday that home-price growth in the U.S. started to slow, but stayed elevated, in April, which was before the Fed really started pushing up rates. House prices rose 1.6 percent month-over-month and 18.8 percent year-over-year according to the FHFA House Price Index as the inventory of homes on the market remains low. Separately, the Case-Shiller Home Price Index rose 1.8 percent month-over-month in April and 21.2 percent year-over-year. The report appears to indicate that increasing mortgage rates had yet to offset demand enough to deter the strong price gains happening across the country.

The New York Fed released the latest agency MBS purchase schedule through July 14 yesterday afternoon, and it is targeting up to $6.8 billion during this cycle, up from $6.2 billion previously. The Desk has added the Ginnie Mae II 30-year 5 percent coupon this cycle. No other changes were made to coupons and agencies versus the prior schedule, but the total amount targeted for each specific coupon has changed compared to the last cycle as the bank’s focus moves up the coupon stack. Monthly roll off (early payoffs) is expected to fall to around $25 to $30 billion going forward. Today, the Desk will purchase up to $922 million UMBS30 4 percent through 5 percent.

Today we’ve learned that last week’s mortgage applications increased 0.7 percent from one week earlier, according to data from MBA’s Weekly Mortgage Applications Survey. The Refinance Index is 80 percent lower than the same week one year ago while purchases are 24 percent lower than the same week one year ago. Refinances sit more than 60 percent below the historical averages. We’ve also received the final look at Q1 GDP (-1.6 percent, old news), including the Core PCE Deflator. Two Fed speakers make appearances at the ECB Forum on central banking in Portugal: Cleveland Fed President Mester and Chair Powell. We begin the day with Agency MBS prices better by .125-.250 and the 10-year yielding 3.14 after closing yesterday at 3.21 percent.

After my prostate exam, the doctor left.

Then the nurse came in.

As she shut the door, she whispered the three words that no man wants to hear:

“Who was that?”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is titled, “Owning a Home: The Dream is Alive and Well.” 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 2022 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

You can rest assured that no animals were harmed in the making of this commentary! But the harm felt by stockholders during the last several months has not been trivial, and not only confined to lenders. As has been discussed in this Commentary, just because the open market can see their stock prices fall doesn’t mean those companies are faring any worse, or better, than non-public companies. And other companies in related industries have not fared much better. For example, Redfin (a full-service real estate brokerage that owns lender Bay Equity) hit a high of over $95 a share and hit a low a few weeks ago of $7.13. Put another way, if you had sunk your life savings of $1 million into Redfin stock in February of 2021 your life savings would stand at $75,000. Ouch. The speed and magnitude of the rate move in 2022 has hurt many, but to keep things in perspective remember that the highest interest rates were in October 1981, a whopping 18.45 percent. Fortunately, no one is talking about rates moving up that high, and in fact there is a growing school of thought that mortgage rates may have plateaued for the foreseeable future leaving LOs asking, “What kind of products can we offer clients to blunt the impact of these higher rates?” Capital markets and product departments to the rescue! (Today’s podcast is available here and this week’s is sponsored by Ignite Integration Solutions, Inc., a custom software provider that has created industry leading LOS CORE integrations in addition to a library of Encompass base tools and plug ins, and custom API development with our team of 100% on shore developers to support both Mortgage Lenders and Vendors as clients and partners.)

 

Careers

___________________________________________________

Churchill Mortgage, an industry leader providing conventional, FHA, VA, and USDA residential mortgages across 49 states and the District of Columbia, continues its expansion across the Pacific Northwest with the appointment of Kelly Lee as Senior Vice President of Production for the Northwest region. Lee will oversee the rapidly growing PNW division, including production across the region’s 30 branches. With more than 20 years of experience in the mortgage industry, Lee brings a wealth of knowledge to the table through an impressive track record of continual market growth and senior positions at noteworthy companies, including EVP, Divisional Manager, Vice President of Sales, and EVP. Lee is also a U.S. Army veteran. “We’re fully invested in growing our team and our regional presence as we enhance our customer service capabilities,” said Jeff Miller, Vice President of the Churchill Mortgage Northwest Region. “We’re building something different here and we’re proud of what we’ve been able to accomplish thus far. Want to join us? Learn more here.”

If you’re wanting to take your Originating career to the next level, we will get you there! In most cases when an originator hits a plateau it’s because the platform they are on doesn’t allow them to grow beyond what they’ve already achieved. One of the Top Originating teams in the nation is looking to help 1 Originator achieve their goals and successfully navigate a challenging market. Looking for a new opportunity is scary, but when that opportunity has a proven track record, a dedicated operations team that has been together for 4 rising rate cycles, fear turns into excitement! Top producers have some advantages not available to everyone. It’s time to give yourself those same advantages, start dominating your market, and take your career to the next level. If you close $20M or more per year and are looking for a breakthrough, contact Anjelica Nixt to schedule a confidential conversation.

Lender and TPO programs, products, & services

___________________________________________________

“Are you a broker looking to support self-employed borrowers? Caliber Wholesale can help with all your self-employed financing needs! With a seasoned team of underwriters and account executives that know how to structure a deal, you’ll be in great hands. When it comes to incorporating Non-QM products into your loan offerings, risk mitigation can be as simple as partnering with the right team and learning to understand the needs and trends of a new customer population. Our Smart Series, a full suite of uniquely developed Non-QM solutions, ensures that homebuyers who have unique financing needs have access to unique mortgage solutions that meet their specific needs. SmartSelf is ideal for the self-employed borrowers who require the use of bank statements and/or asset amortization to qualify. Learn more about our program or contact [email protected] to get approved with us today if you aren’t already.”

Is PA reconciliation using up too much of your team’s bandwidth? There’s a better way, as Terra Johnson, SVP Controller of Highlands Residential Mortgage, finally found out. After years of reconciling PAs the error-prone, time-consuming manual way, she discovered Richey May’s intelligent automation solution. A managed, fully supported standalone offering by Richey May in partnership with Zoral Group, Purchase Advice Automation lets you manage PAs and clear warehouse lines for thousands of loans a month, barely lifting a finger in the process. Johnson’s team uses Purchase Advice Automation for reconciliation, which in turn created efficiencies with closing the books and month-end reporting. In the first year, she saw 50% productivity gains in her department and projects a 41% annualized ROI with the implementation fee amortized over the next five years. Why wait? See it in action for yourself. Sign up for a demo today.

Pioneers, leaders, innovators. if these words come to mind when considering your ideal candidate for Mortgage Banker Magazine’s list of Powerful Women of Mortgage Banking. Click here, to submit your nomination and show your support for today’s female leaders in the mortgage profession.

As you look for ways to reduce costs and create greater efficiencies, consider leveraging Black Knight Legal & Vesting reports for your property- and ownership-verification needs. Fast and cost-effective, Black Knight’s Legal & Vesting Report provides a property’s recordable legal description and complete vesting clause, as well as chain of title, tax data and deed image. What’s more, the reports are available for every county and jurisdiction across the United States. You also get a choice of reporting and delivery options, including via API to integrate with your workflow and help streamline your origination process. For more information about a cost-effective, fast and easy way to obtain the information you need for verifying property and ownership information, contact Black Knight.

“We get to Conditional Approval 14 days faster, and our underwriters review 12 files per day.” Travis Rulle, COO, FBC Mortgage. At 1 bps per day, these Candor clients add massive margin to every loan. For a bullet proof underwrite whiplash fast they use Candor’s Loan Engineering System. “We’ve cut our cycle time in half,” Kenny Parkhurst, COO Get A Rate. The Machine as an Underwriter conducts OCR, 1100 data crosschecks, income calculation, information scrutiny, condition generation, & condition clearing. It renders decisions and backs each one with a warranty. How much profit could a faster manufacturing process Do the math. You can be a raving client in just 30 days. Schedule a demo.

“***News Alert: For all Chrisman readers who use direct mail for lead generation, effective July 10, 2022, the USPS will be raising prices by 3 cents for first class and 2 cents for standard mail.*** However, did you know you can actually lower your cost per call, even with these price increases? If you are interested in beating the price increase, drop us a line at [email protected] or check us out at www.monsterlg.com. We have technology improvements enabling you to get ahead of the market and outrun the increases! Give us 5 minutes to ask 3 simple questions and see if we can lower your overall cost per call to beat the rate increase!”

Do you know where your loan officers stand when it comes to converting pre-qualified clients in their pipeline? Time is money and if they aren’t converting those warm leads into applications, something’s gotta give. With QuickQual by LenderLogix, you can measure the entire team’s performance in the pre-qualification and/or pre-approval stage by branch or at the enterprise level. QuickQual integrates with your LOS, is custom-built to reflect your branding and configuration settings, ensures letter compliance across the organization, and provides a world-class experience for the entire team (lenders, agents & borrowers). Modernize your customer experience and give your company a competitive advantage by adopting mortgage technology with a 94% borrower utilization rate. It’s efficient for teams, insightful for managers and engaging for borrowers. Sign-up for the webinar next week to learn more, or visit its site to get a sample QuickQual sent to your phone.

The recent surge in mortgage rates has lenders asking, “how do I adjust my cost and business structure to be profitable over the next 6-18 months?” Join CWDL for a webinar featuring Jim Deitch, CEO of Teraverde, and Mark Wilson, Managing Partner of CWDL, to discuss controlling operational costs to combat the rising cost to originate, fallout rates have skyrocketed: how to make every loan count, and uncovering opportunities for profitability with your branches and originators. Attendees will leave this webinar with actionable takeaways to manage costs and seize opportunities in this market. Register here.

Wholesale news

___________________________________________________

Lender Price has released Marketplace 2.0, a major enhancement to its Marketplace platform and one of the largest communities of wholesale brokers and lenders in the mortgage industry. Created to match lenders with mortgage brokers looking to find the best rates and loan products for borrowers in a volatile market, Broker Marketplace 2.0 gives wholesale brokers the ability to instantly price all of their lenders and marketplace lenders inside a single location without logging into several different TPO portals. Best part, Marketplace 2.0 is 100% free for mortgage brokers. With the ability to run price comparisons, brokers get expanded access to some of the most competitive loan programs in the market, and get a chance to move away from using legacy technology that typically comes with a monthly fee. Lenders of all sizes use Lender Marketplace 2.0 to expand their reach inside the broker community, and increase awareness of all loan programs including Non-Conforming, Non-QM, and products that fit any borrower situation such as alternative documentation, DSCR, HELOCs, and HELOANs. Register for an upcoming webinar to see Marketplace in action.

Updates were made to remove restrictions and add eligibility (subject to VA local requirements), for properties in Lava Zones 1 and 2 in Hawaii as shown in the Loan Depot Wholesale June 6 Newsletter.

First Community Mortgage updated its Non-Conforming Jumbo Direct Matrix as shown in FCM Wholesale Announcement 2022-31, to reflect new minimum loan amount increase effective for loans with new commitments on or after June 22. Existing locks for less than the new minimum loan amount will be honored.

Effective with loans locked on and after 6-1-2022, properties located in a flood zone requiring flood insurance, the HFA second lien is to be included as an outstanding lien in the flood insurance coverage calculations. This change applies to all HFA programs where U.S Bank is the Master Servicer: GSFA Platinum, AzIDA Home Plus, Home is Possible, and the SETH Star Partner Program. View MWF Wholesale Bulletin 22W-043 for more information.

This month United Wholesale Mortgage released Boost, an exclusive, new marketplace, that will provide independent mortgage brokers with streamlined access to purchase tailored leads, stay in touch with past clients, connect with real estate agents and opt-into live call transfers. “Staying in front of past clients and building new connections are two of the most critical and challenging parts of any business,” said Mat Ishbia, President and CEO at UWM. “With Boost, we’ve built a one-stop shop with some of the most valuable business tools and resources in the industry.”

Land Home Financial Services posted the following regarding the Golden Equity product: The new minimum property value for the Golden Equity product is $970,800, effective immediately. No exceptions. If you have any questions, please contact: [email protected]

Capital markets: summer doldrums ahead in housing?

___________________________________________________

As we wrap up June, don’t forget that Monday is the July 4^th holiday and the bond markets and trading desks everywhere will be closing early on Friday!

Holidays are nice, but they don’t influence the financial markets. Last week the markets grew increasingly concerned about recession as the week went on, thanks to weak economic data, hawkish central bank rhetoric, and the threat of a Russian gas cut-off in Europe. That led to a significant rally in sovereign bonds as investors sought out safe havens and cast doubt on whether central banks could keep hiking into a downturn. Fed Chairman Powell went before Congress to reiterate what was presented in the Federal Open Market Committee statement and corresponding press conference: inflation has gotten out of control and the Fed will do what is necessary to bring it down towards 2 percent. As such, the market expects another 75-basis point rate hike following the July 27 meeting. Additionally, Powell testified that the aggressive tightening policy may result in a recession sometime over the next two years.

Meanwhile an imbalance still exists in the housing market as demand is still outpacing supply which stood at a mere 2.6 month’s supply in May, significantly below the four to six months normally associated with a balanced market. The 10.7 percent jump in May’s new home sales was likely the result of buyers rushing to avoid further price and rate increases and could have pulled forward sales from later in the summer. Home sales are expected to slow in the coming months as borrowing costs and home prices force some buyers to the sidelines.

Aggressive Fed hikes, looming recession fears, and unsettling inflation readings are causing volatility, which is not welcome for capital markets folks. While it isn’t quite the panic of other bear market periods, as some viewed the Fed taking away the punchbowl as inevitably painful, it is still hurting the mortgage industry. We learned yesterday that pending Home Sales broke a six-month skid to rise 0.7 percent in May, including the Northeast seeing the biggest gain, with home sales rising 15.4 percent. However, compared to a year ago, three out of four regions (Northeast, South, and West) posted double-digit pending sales declines, while sales dropped by 8.8 percent in the Midwest.

 

“Despite the small gain in pending sales from the prior month, the housing market is clearly undergoing a transition,” said NAR Chief Economist Lawrence Yun. “Contract signings are down significantly from a year ago because of much higher mortgage rates. Trying to balance the housing market by choking off demand via higher mortgage rates is damaging to consumers and the economy,” Yun added. “The better way to balance the market is through increased supply, which also helps the broader economy.”

Construction should help, as historically housing has led the economy out of recession. The 2008 financial crisis never experienced a rebound in home construction due to foreclosures and now we have a shortage of housing. Materials and labor constrain the supply side, but we should eventually see a wave of new construction. The scene is different for existing homes, where owners with jobs and comfortable mortgages don’t have to sell.

Today sees another busy economic calendar, and we have already received advanced indicators for May: the good trade deficit (shrinking to $104.3 billion), and retail & wholesale inventories (+1.1 and +2.0 percent, respectively). Later this morning brings Redbook same store sales, April house prices from Case-Shiller and FHFA, June consumer confidence, Richmond Fed manufacturing and services, and Dallas Fed Texas services. Treasury then auctions $40 billion 7-year notes after yesterday’s $47 billion 5-year note auction met weak demand following a $46 billion 2-year note sale that received stronger, but also relatively weak, interest. Two Fed speakers: Richmond’s Barkin followed by San Francisco’s Daly. Today’s MBS purchase schedule sees the NY Fed Desk in GNIIs for up to $484 million 4 percent and 4.5 percent before the Desk will release a new purchase schedule covering the June 29 to July 14 period which is expected to total $6.8 billion. We begin the day with Agency MBS prices worse .125 and the 10-year yielding 3.24 after closing yesterday at 3.19 percent on follow through from Europe’s higher rates.

(Thank you to Steve W. for this one.)

My son just asked me where poo comes from.

I gave him a detailed explanation.

He stood there in stunned silence.

Then he asked, “What about Tigger?”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is titled, “Owning a Home: The Dream is Alive and Well.” 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 2022 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