There are plenty of MLOs (mortgage loan originators) out there very pleased with their earnings for 2020. In a non-random sample, several CEOs with whom I spoke had retail LOs earn more than a million clams, all in a compliant manner. It is good to remember that some of the changes made as a result of the “Financial Crisis” were in the area of LO comp(ensation), especially to prevent steering and taking advantage of borrowers. Importantly, LO Comp doesn’t restrict how creditors price their loans, only how they compensate LOs (including brokers). This has many ramifications, For example, many in the industry question worse pricing for self-employed borrowers, or better pricing for W-2 borrowers. The pricing has always varied for high credit score borrowers, or loan to value, but MLOs can’t charge, or be paid more, for a complex file or high-risk borrower. Compliance folks will tell you that self-employed borrowers are not a protected class under ECOA. They can be treated with higher rates based off increased risk and a more intense underwriting process. More compliance news below!

Jobs & name changes

Assurance Financial would like to congratulate Lindsay Anders on becoming a Certified Mortgage Banker (CMB). Ms. Anders joins Paul M. Peters and Chad Hebert as the company’s third CMB. She has risen through the ranks at Assurance Financial over the past 12+ years and currently serves on its National Business Development Team, recruiting top mortgage professionals nationwide. Assurance Financial is continuing to grow production, add retail branch offices, and expand its production reach. Contact Lindsay Anders, CMB or visit AssuranceMortgageLO.com to learn more about the company’s Branch Manager and MLO opportunities nationwide.

A $5 billion/year well capitalized IMB is investing further into recruiting and has opened 4 new regions for growth and are seeking 4 experienced recruiters to lead each market development plan by sourcing productive branches and teams for both P&L and hybrid set ups. Each region has a plan that is de-novo build out to 1billion in recruiting volume acquired per region. This is an awesome opportunity for those looking to achieve that next level in their recruiting career, not to mention the high-income earning potential. Excellent comp package, career path, assistant provided, market insight tools provided. The firm as all the pieces in place for additional growth & opportunity attraction like impressive tech, awesome y-o-y sales retention, and branch growth statistics (pre-2020). The firm is even staffed for additional production growth in advance to maintain quick service levels! For confidential consideration, please e-mail resume to Chrisman LLC’s Anjelica Nixt.

Arizona’s CNN Mortgage will begin operating under a new name: LHM Financial Corporation with a new logo and website.

Lender services and products

The mortgage business has never been a cakewalk. Brokers and loan officers have always had to constantly find new ways to market and reinvent themselves in an often volatile and highly competitive environment. But with recent demographic shifts and technology disruption, even the most tried-and-tested mortgage marketing simply won’t cut it anymore. This game is zero-sum. The good news is, there is a wealth of successful mortgage professionals who are able to keep themselves at the front of the pack. For these standout brokers, flexible tactics coupled with a consistent, systematic approach to marketing their mortgage business is what allows them to prosper no matter what. Leading mortgage CRM Shape Software reached out to some of the industry’s top producers and experts to learn how to create a more resilient marketing plan for your business. Check out these 5 key predictions and whatever you do in 2021, keep moving forward!

“As the rush of mortgages and refis comes roaring back after the holidays, it’s no secret that everyone’s feeling the deluge and leaving valuable loans on the table. At Truework, we know you’re feeling overwhelmed. Here are three things you can do to stop leaving valuable loans on the table, and take advantage of the market so you can come out on top. Truework is a US-based company with an expansive and ever-growing network and a dedicated team of mortgage professionals that are committed to tackling and completing any and all VOE/VOI requests. Additionally, we are the market leader for coverage for small and mid-sized companies. Start a verification on Truework now. Furthermore, with Truework, you can reverify employment for any request within 90 days of the original, receive up-to-date statuses on all verification reports, and get fast turnaround times. And for a limited time, Rob Chrisman readers get 6 free Verifications ($240 value). Let us do the heavy lifting so you can focus on what matters. Set up time with Zackary Green now for questions and to claim this offer.”

LoanCraft continues to enhance its income calculation service for self-employed borrowers through a collaboration with Freddie Mac.  Income calculations with LoanCraft reports are now eligible for representation and warranty relief through an integration with Loan Product Advisor^® asset and income modeler (AIM). LoanCraft’s unique full-service approach utilizing OCR technology combined with its data capture and QC team is picking up pace in the market. With little to no time needed for set up or training, the service is being deployed to reduce the burden on precious underwriting resources. LoanCraft’s approach also allows it to respond quickly to the changing requirements facing lenders such as P&L and bank statement analysis. Just upload documents via its portal or through Encompass, and LoanCraft will return a completed analysis in 4 hours or less.  To learn more about the benefit of having LoanCraft on your team, email Dominic Spadafore or visit loancraft.net to get started.

There’s no doubt 2020 was a busy year that set all kinds of records. Some folks think a slowdown in 2021 is inevitable, but Triserv doesn’t agree. They’ve pored through a number of data points from various sources to bring you a succinct summary of industry predictions. Here’s a sneak peek: it looks like it’s going to be a Hot Winter, folks! Click here for a quick read as to why real estate transactions are projected to continue to boom throughout 2021. This information is brought to you by Triserv, a 50-state AMC that has client-specific, dedicated teams on both coasts offering high-touch, personalized service. To find out more, contact Triserv Appraisal Management Solutions at [email protected].

Stewart Title continues to expand its capabilities in digital mortgage fulfillment, acquiring NorthStar Title Services in Cleveland, OH. The acquisition of NorthStar Title Services is the fifth for Stewart over the past seven months. Its most recent acquisitions include United States Appraisals in June, 57 title offices in Arizona, Colorado and Nevada from ET Investments in September, Alaska’s Yukon Title Co. Inc. in September, Pro-Teck Services Ltd. in October, and NotaryCam in December. Stewart is also investing in innovative technology in the appraisal process, delivering increased valuation intelligence through the VALIDITY™ guided homeowner inspection app. This app is being used by mortgage originators, non-QM investors and Home Equity lenders who want quality valuation data and quicker service levels. To learn how Stewart’s lender solutions can help you improve your processes, email Rich Kuegler, National Director of Sales.

Get Connected with the Connexions Mobile Solutions. As the pandemic continues to escalate, Connexions promotes appraisal community safety by facilitating virtual appraisals with the CNX360 Virtual Appraisal Tool. Appraisals can be completed faster while maintaining safety protocols with CNX360 by engaging homeowners to take and upload home photos from their mobile phone while completing a simple property questionnaire and then notifying Appraisers so they can incorporate the photos into their appraisal reports. In addition, the free GetConnexions mobile app is available to all Connexions users, giving both Appraisal Coordinators and the Appraisers the ability to perform many daily tasks while they’re on the go. Through innovation, technology, and client feedback, Connexions continues to deliver mobile solutions that increase productivity by optimizing appraisal processes. When selecting appraisal management technology, make sure it addresses all of your appraisal requirements, or better yet, schedule a demo today and get connected with Connexions!

Servicer retention rates are among the lowest on record even though refinance volumes continue to climb. To stay competitive, it is crucial for servicers to provide their customers with a positive experience. Black Knight continues to make investments in its technology to help servicers better support their borrowers and improve retention. Black Knight offers a comprehensive suite of servicing solutions, including the MSP® loan servicing system, which provides robust automation and digital capabilities to enhance retention efforts and support business growth. MSP integrates with an advanced customer-facing, digital servicing solution that provides detailed information about a customer’s loan and home, while offering self-service capabilities such as making payments or requesting forbearance-plan extensions via their mobile device. To help further improve retention rates, Black Knight offers actionable analytics to identify revenue-generating and retention opportunities within your portfolio. No matter the size of your operation, MSP can help. Learn more today.

Compliance/legal tidbits

With the new Presidential Administration coming in there are plenty of questions. What will happen with the CFPB, for example. There’s always a lag when a change in presidency occurs, and residential lending isn’t “broken” so regulatory and compliance changes are not the highest priority. We can expect consumer protections to be a priority, possibly with higher settlement amounts, even if it is not clear cut. Attorney Mitch Kider believes that enforcement priorities may shift toward subjective factors: are policies and procedures good or bad for the consumer?

Remember MSAs? For any lender receiving business from them, the guidelines are much better spelled out. The FAQs provide an overview of the provisions of RESPA Section 8 and respective Regulation X sections, and address the application of certain provisions to common scenarios described in Bureau inquiries involving gifts and promotional activities, and marketing services agreements (MSAs).

The Latest Compliance Updates from First American Docutech include Document Updates: Alaska and Hawaii Notarial Requirements for RON and Revised Form HUD-92900-A, HUD Addendum to URLA. First American Docutech is also updating various VA documents to match the most recent revisions published on the VA’s website.

The Texas Department of Savings and Mortgage Lending finalized Amendments to Chapters 80 and 81 of its Administrative Code. Click the link to view the information as posted by First American Docutech Compliance News.

The Social Security Administration posted revised versions of Form SSA-89 (both in English and in Spanish) on its website. These versions were anticipated, since they form a critical part of the SSA’s new Electronic Consent Based Social Security Number Verification (“eCBSV”) system.

Training & virtual events this week and next

On Jan 21, from 1-2pm ET, learn how to execute on the best borrower retention strategy in Mortgage Lending. Lenders agree on one thing, the ultimate judge of whether a technology investment is effective or not is ROI. Your Borrower Retention strategy should be no different. In this webinar, Scott Payne, CEO of SDP Solutions will show how he leverages three key technologies to implement the most effective Borrower Retention strategy in the industry for top-performing Lenders. You’ll learn 1) how to protect your portfolio, 2) how to act on intelligence, and 3) how to track the performance of each of these technologies. Scott is joined by executives from each of those technology companies: Hector Galicia (Director PSO, ICE Mortgage Technology), Mike Eshelman, CMB (Head of Consumer Finance, Jornaya), and Alex Kutsishin (CEO, Sales Boomerang). Register now.

Rich Swerbinsky, the COO of The Mortgage Collaborative, and I will be discussing current events in the mortgage market this Friday at 3PM ET in, “The Rundown with Rob and Rich.” Register here for the 30-minute session to help wrap up the week.

loanDepot Wholesale/Correspondent Events and Training Calendar.

Insellerate and BeSmartee ask, “Are you looking to grow your lending business in 2021?” If so, don’t miss this important and timely webinar, “Leveraging Digital to Enhance the Borrower Experience in Today’s Virtual World” on January 13^th at 10PT.

Register for Carrington Correspondent’s webinar today regarding FHA Manual Underwriting: Credit Fundamentals.

During a virtual press conference on January 14 ABA Economic Advisory Committee Chair Beata Caranci, SVP, and chief economist for TD Bank Group, will present the latest consensus economic forecast from the panel made up of top economists at some of North America’s largest banks. RSVP REQUIRED: Please contact Gabrielle James-Johnson to RSVP and receive login/dial-in information.

On January 15^th, Plaza Home Mortgage is providing a short webinar, Address Your Stress and Refresh presented by Lauren McCalmont, Training Specialist.

Jumbos are back at Mountain West Financial. Register for its Webinar on Wednesday, January 20^th to hear MAXEX Director, Keith Polk, discuss the new MAXEX Jumbo Program and how it can help you and your clients.

Join the Top Michigan Real Estate/Housing Associations on Wednesday, January 20^th for an Inaugural Virtual Event designed to help enhance the communication and collaboration amongst members of associations affiliated with Michigan’s real estate industry. Attendees will gain deeper insight into their peer associations’ priorities, acquire timely information, and build relationships with their cross-industry peers.

MBAF is offering two Doug Smith Webinars on January 20^th: Selling to Realtors in Today’s Market and Building a Winning Team, presents the 8 core competencies managers need to develop in their originators if their goal is to have a high volume “winning” team.

The Non-QM market has bounced back after a brief pause earlier this year, and with operations ramping up, there has never been a better time to convene the industry. The launch of IMN’s Virtual Non-QM Forum is scheduled for January 21. This is a full-fledged virtual event.

Williston Financial Group (WFG) the parent of WFG National Title Insurance Company, offers, “Economic Outlook & Title Insurance in a Turbulent Era,” featuring WFG Executive Chairman and Founder Patrick F. Stone and Economist Dr. Bill Conerly, on Wednesday, January 21, at 10 am EST / 7 am PST. Stone and Conerly will answer submitted questions about the current state and possible future of title, lending, and real estate. It’s free, but seat reservations are required and can be made by clicking this link.

Whatever your 2021 training plans MBA Education has online offerings to assist. Tuesday, January 19^th Register for Engaging Borrowers in Today’s Digital Environment. Register for School of Loan Origination starting on Tuesday, January 19^th – February 11^th.

Capital markets

Another bland day in the bond market yesterday although Agency MBS prices improved by the end of the day resulting in some price changes. Treasuries pulled back (i.e., sank in price) for the sixth consecutive day, this time just +1 bp across the entirety of the curve, and the MBS basis closed mixed. The trading day saw a well-received 10-year auction, a decline in the December NFIB Small Business Optimism Index, and a decrease in Job Openings to 6.527 million in November.

Today’s economic calendar is already underway. Mortgage applications increased 16.7 percent from one week earlier, according to data from the MBA Applications Survey for the week ending January 8. We’ve also received December consumer prices, both as expected (+.4 and core +.1, respectively). This afternoon brings the release of the January Fed Beige Book and the December Treasury Budget from the CBO, as well as an auction of $24 billion reopened 30-year Treasury bonds. Today also sees another heavy dose of Fed speakers (St. Louis’ Bullard, Governor Brainard, Philadelphia’s Harker, and Fed Vice Chair Clarida. Today’s Desk support is the largest of the week at $7.1 billion, including over $5.5 billion in UMBS30s across two operations. We begin the day with Agency MBS prices a smidge better/up and the 10-year yielding 1.13 after closing yesterday at 1.14 percent.

A recent study has found women who carry a little extra weight live longer than men who mention it.

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, “Work Longer and Harder, or Work Smarter”.

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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 designed 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.)

 Nearly two weeks into 2021 already? I was just getting used to saying “2020.” Now I have to add a syllable every time. “One.” There’s continued talk of companies like Finance of America, loanDepot, SoFi, and Homepoint going public, and if Caliber and AmeriHome will after delaying things in October. Many experts are predicting another strong housing market in 2021. “Strong” can mean either lots of volume, or price appreciation. Or both. “They” are forecasting increased demand from buyers who delayed purchasing homes due to the pandemic, from existing homeowners who need larger spaces to accommodate parents working from home, children attending school virtually, and from condo owners who are seeking to escape multifamily buildings for single-family houses to mitigate exposure to the virus. The ability to tour homes and close on purchases virtually will make buying a home simpler in 2021. The virus? I told my wife how thankful I was to have someone I enjoyed being quarantined with. She replied, “It must be nice.”

Jobs, moves, & promotions

“Founder and CEO Lucy Kereta-Block is thrilled to announce the Certified Credit team continues to grow and attract top talent to join our CCR family. Along with her friendly, customer-centric energy, Catelynn Johnson brings a wealth of knowledge and know-how from her 7+ years at CBC/FactualData as a National Account Manager and in management to our CCR Account Servicing team. After 20+ years with CBC and in the industry, Jeff Stewart joined the Certified team eager to engage customers with his insightful and consultative approach to sales partnerships, keeping the customer’s needs and a personal touch at the heart of every exchange. Our NAMMBA Visionary Ambassador, Nicole Mattiello, continues to focus our efforts on helping to grow the industry’s talent base with a goal of connecting over 50,000 undergraduates and graduates to careers in the mortgage industry. Are you looking to join a team truly committed to supporting each other and enhancing the customer experience? Contact Nicole Mattiello.”

“Mind Your Own Business. We’re looking for people who can handle taking charge and making decisions. If you’re a driven self-starter with a plan, Primary Residential Mortgage, Inc. (PRMI) is the place for you. You’re great at what you do, and you deserve a partner that will back you up without getting in your way. You handle your business, and we’ll handle ours. Join PRMI today to run your business your way. Visit our website or contact Amy Gallow, VP of Business Development, to learn more.”

Secure Insight announced a bevy of personnel moves, hiring Todd Hollosi as Chief Technology Officer, Mark Brenner has been retained as strategic partnership director and business growth leader, and Brett Nicholas & Scott Weikel have joined the SI Board of Directors.

Waterstone Mortgage announced the promotions of Brian Wesselhoff to VP, Information Technology, and Casey Seefeldt to AVP, Capital Markets. Congratulations!

FinLocker announced today that Henry Cason would be the company’s new CEO, succeeding co-founder and CEO Peter Esparrago who will become FinLocker’s Executive Chairman and will continue to lead key strategic business relationships. The appointment follows a year of significant developments for FinLocker including successfully closing its $20M+ Series A-1 financing round and announced a commercial partnership with, and equity investment by, TransUnion.

SLK Global Solutions, a leading provider of technology-enabled platform solutions for the financial services industry, has added Ken Fries as VP of Business Development.

And Nations Lending brought on Jennifer Verrilli as SVP of Underwriting, Credit Risk and Strategic Operations.

Broker & lender products

Bad things happen when you don’t have a borrower intelligence system in place. Stop getting responses such as, “I already took a loan,” or “We already bought our house.” 92% of borrowers will go with the first or second lender when they are ready. Sales Boomerang notifies mortgage lenders when someone in their database is ready for a loan. “Look at the opportunity cost you have by not having Sales Boomerang. Last year we closed over $72M in loans that we would have lost from not having Sale Boomerang.” (Stephen Barton, Eustis Mortgage). The numbers speak for themselves: 20X Avg ROI, $240 Avg Cost Per Acquired Loan, 20-40% Avg Lift to Loan Volume. Want to see exactly how much you lost this year? Request your report today. We will show you which competitor took your deal, the loan amount, type of loan, the term and much more.

Plaza Home Mortgage has extended its waiver of the 50bp Adverse Market Refinance Fee on all Agency Express refis to February 26. Available through Plaza’s Wholesale and Mini-Correspondent channels, Agency Express gives brokers faster turn times on core Fannie Mae® and Freddie Mac loans, with closings in as little as 10-15 days. Plaza developed Agency Express specifically for qualified borrowers with W-2 or fixed income who are purchasing or refinancing detached single-family residences and planned unit development (PUD) properties. Learn more about Agency Express by contacting your Plaza Account Executive.

Michael Brenning, AmeriSave’s President of Wholesale Lending, describes Capacity as a game-changer! “Capacity allows us to meet our customers wherever they want to be met from a customer service standpoint. By providing customers with a self-service platform they can access 24/7, we can differentiate our company.” Capacity correctly and instantly answers an average of 84% of all prospective and current borrower questions without any human intervention. Top lenders like AmeriSave, APM, and PRMG turn to Capacity to effortlessly tap into key systems to provide real-time access throughout the entire loan life cycle. Capacity allows you to take care of your borrowers with superior customer experience and 24/7 automated support, all through a mobile-friendly chat interface. Deploy within 30 days. Learn more about Capacity.

PollyEx, a provider of SaaS solutions for the mortgage industry, recently launched Version 3 of PollyPPE, its revolutionary product, pricing, and eligibility engine. While PollyEx has been focused on providing the industry with the most dynamic pricing and eligibility platform, it is also committed to providing clients with competitive and fair pricing. If your current PPE provider is increasing prices without added functionality you owe it to yourself to consider PollyEx. The PollyPPE allows lenders to configure rule logic, manage margin strategies and distribute pricing with ease on one, centralized and fully modern user interface. To learn more or schedule a demo email Jacob Gerson or visit www.pollyex.com.

The industry may still be emerging from COVID, but Non-QM volumes and loan pricing are now back at pre-COVID levels, according to Verus Mortgage Capital, the largest issuer of securitizations backed by non-QM loans and the industry’s largest purchaser of these products. Verus reports that Non-QM guidelines are generally back to where they were before the pandemic and some product pricing is actually better. Demand is high, the company said, because Non-QM borrowers were ignored for much of last year and there are fewer Non-QM lenders in the market today. With agency refis expected to fade and profit margins high for these products, more mortgage bankers are looking to add them in 2021. When they do, they’ll find Verus ready to buy their production, underwriting Non-QM and Prime Jumbo Non-Delegated, and Delegated in days, not weeks like other firms. Learn more, email Jeff Schaefer, EVP – Correspondent Sales (202-534-1821).

Attend this Zoom event: Bridging the Gap in Black Homeownership on Thursday January 14^th 3PM PST/6PM EST. Join keynote speaker Kristy Fercho, EVP, Head of Home Lending Wells Fargo, Gwen Garnett, Program Director Center for Financial Advancement, and Antoine Thompson, National Executive Director NAREB. New American Funding created its New American Dream initiative in 2016 to raise awareness and increase homeownership in the Black community. “We build consumer confidence fueled by homebuying education and accessibility to relevant loan programs. Join us to learn about Bridging the Gap in Black Homeownership and how to develop, enhance and promote mortgage industry best practices to reach the Black community.” Register today!

Inauguration day is next week: What can lenders expect from a brand-new administration? As Joe Biden moves into his role as President of the United States, the country anticipates change, and the mortgage industry is no exception. From economic shifts to policy reforms, mortgage professionals can undoubtedly anticipate a new industry outlook to accompany the incoming Biden administration. Navigating a new industry landscape will require some flexibility, but with proper knowhow, it’s possible to thrive in coming years. To educate yourself on how the new president could affect interest rates, regulations, and more, click here to read leading digital mortgage platform Maxwell’s latest blog post, “What Will the Incoming Biden Administration Mean for the Mortgage Industry?”

Agency-related changes never stop

The appraisal industry is abuzz about the FHFA (the overseer of Freddie and Fannie) issuing an RFI (Request for Information, or “input”) on appraisal policies. The Federal Housing Finance Agency issued a request for input on appraisal-related policies, practices, and processes. The input received in response to the RFI will be used by FHFA to determine the necessary modifications needed to ensure Fannie Mae and Freddie Mac (the Enterprises) operate in a safe and sound manner.

“Modernizing the appraisal process has the potential to create a more streamlined and accurate collateral valuation process. But if modernization is not properly adopted, it could have negative unintended consequences… RFI will improve FHFA’s understanding of how the Enterprises can improve the appraisal process while at the same time ensuring they don’t take on unintended or inappropriate levels of risk. The comments we receive will inform how we will modernize appraisals to improve both loan quality and the origination process.”

If you like to sort things out, four areas are covered. Appraisal modernization, the Uniform Appraisal Dataset (UAD) and the design of appraisal forms, Automated Valuation Models (AVMs) and appraisal waivers, and valuation differences by borrower and neighborhood ethnic makeup. If you’d like to comment by February 26, here you go.

FHFA published the 2021 Underserved Markets Plans for Fannie Mae and Freddie Mac under the Duty to Serve (DTS) program. FHFA issued a final rule in 2016 that implemented the DTS provisions as mandated by the Housing and Economic Recovery Act of 2008.  The statute requires the Enterprises to serve three specified underserved markets-manufactured housing, affordable housing preservation, and rural housing-by increasing the liquidity of mortgage financing for very low-, low-, and moderate-income families. FHFA published the Plans on its dedicated webpage, www.fhfa.gov/DTS.

Fannie Mae issued Lender Letter LL-2021-01, Appraisal Risk Management Policy Reminders and Resources. This Lender Letter reiterates lenders’ responsibilities for appraisal review and for compliance with Appraiser Independence Requirements; provides examples of appraisal findings and defects; suggests best practices for lenders’ appraisal-related underwriting and quality control processes; and points out resources to help lenders manage appraisal risk efficiently and effectively.

On the aggregator side, Wells Fargo Funding (the correspondent side of The Coach) has removed its overlay requiring pages 1 and 2 of the borrower’s federal individual income tax returns when self-employment income is not used for qualifying for conventional Conforming Loans.

Wells Fargo Funding announced that COVID-19 temporary flexibilities have been extended until further notice. Conventional Conforming Loans effective date for the previously communicated temporary additional requirements and flexibilities below align with Agencies’ date. Until further notice, it aligns with future extensions announced by the Agencies and will no longer communicate individual extensions.

Plaza Home Mortgage^® has extended its waiver of the 50bps Adverse Market Refinance Fee on all Agency Express refi’s to February 26, 2021. Agency Express, available to its Wholesale and Mini-Correspondent channels, gives you faster turn times on core Fannie Mae^® and Freddie Mac loans. Close in as little as 10-15 days. Learn More.

loanDepot’s announcement discusses the Property Section of its Conventional Lending Guide, HomeStyle Renovation Transactions in Texas, Home Possible Transactions Secured by 2-4 Units and FHA’s COVID-19 Temporary Guidance Extension.

Flagstar issued Memo 20119 regarding updates to FHA Single Family Handbook and New Construction Requirements and Memo 20064 regarding Temporary Eligibility Requirements for Conventional Purchase and Refinance Transactions.

PRMG’s Product Update 20-69 provides information on USDA and USDA Streamlined Assist private flood insurance clarification, various updates to Conventional products, and clarification that no irrevocable trusts, enhanced life estates, corporations, LLCs, etc. are allowed on any product.

Mountain West Financial Wholesale announced maximum loan limits have been increased for GSFA Open Doors loans locked on and after January 1, 2021. Loans locked prior to January 1^st fall under the 2020 max loan limits. Additionally, maximum loan limits have been increased for CalHFA loans locked on and after January 1, 2021. A high balance loan limit fee will be required for Conventional and FHA loans with a loan amount exceeding $548,250. Loans locked prior to January 1^st fall under the 2020 max loan limits. Refer to AMP inside BOLT for complete program details.

Capital markets

Our economy moves with jobs and housing, and last week we learned that nonfarm employment fell by 140,000 in December and the unemployment rate was unchanged at 6.7 percent as the record spikes in coronavirus infections and deaths weighed on economic activity and led to lockdowns in some parts of the country. Hardest hit remains the leisure and hospitality sectors as consumers pulled back from high-contact services and activities. Total employment in December was 9.8 million below February 2020’s level. Manufacturing activity reached a two and a half year high as producers are finally catching up on deliveries that saw extended turn times due to lockdowns, operating restrictions, and hiring challenges due to COVID. Additionally, interest rates moved higher as the prices paid index nearly hit a ten-year high due to a surge in commodity prices. The data renewed talks of inflation causing some forecasters to ask if we’ll see a faster increase to the Fed’s 2 percent target than previously assumed. Despite the inflation talk mortgage rates remain near record lows albeit not as low as a week ago, expectations for an unchanged fed funds rate for the first half of the year remain unchanged.

In the bond markets… Nothing much to report from yesterday. Treasuries continued to pull back, and the MBS basis closed wider, on no major headlines though the continued rise of Treasury yields certainly has folks paying attention. The day’s $58 billion 3-year note auction was met with decent demand ahead of today’s $38 billion 10-year note reopening. Aside from that, the MBA’s latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased 7 bps to 5.46% of servicers’ portfolio volume in the prior week as of January 3, 2021. According to MBA’s estimate, 2.7 million homeowners are in forbearance plans.

Today’s economic calendar is already underway; the NFIB small business optimism index (worsening 5.5 to 95.9). Next up is Redbook same store sales for the week ending January 9, which will be followed by job openings from JOLTS. Markets also receive a heavy dose of Fed speakers: Atlanta’s Bostic, Governor Brainard, Dallas’ Kaplan, Cleveland’s Mester, and Kansas City’s George. The Desk will conduct two operations targeting up to $4.3 billion 1.5% and 2% ($1.5 billion UMBS15s and $2.9 billion UMBS30). We begin today with Agency MBS prices down/worse .250 from Monday’s close and the 10-year yielding 1.16 after closing yesterday at 1.13 percent.

Thank you to Ken L who asks, “Do they allow loud laughing in Hawai’i? Or just a low ha?”

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, “Work Longer and Harder, or Work Smarter”.

qoɹ

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed 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.)

 Of course some found humor in last week’s riot in Washington DC. (“In light of recent events, Mexico has decided that it will pay for the wall after all. And Canada wants one as well.”) For others, as heard in these messages from Republican Arnold Schwarzenegger and Colin Powell, there is nothing to laugh about. MLOs steer clear of politics with their clients, and on their job-related websites, for good reason. Not only is personal information on a company website against many rules and regulations, but there is a lot at stake. Many forecast that U.S. mortgage volumes could top $3 trillion this year as rising competition among lenders and an activist Federal Reserve combine to put further downward pressure on rates, and there are 800,000 U.S. borrowers who could save money if rates stay where they are. And who would want to give up a piece of that? (The events last week at the Capitol are still resonating for many people. Attorney Brian Levy’s “Mortgage Musings” discussed the mob, QM, and Limited English Proficiency: LEP.)

Employment

Royal Pacific Funding has excellent opportunities for Correspondent Sales Professionals who are looking to advance their career with room to grow. RPF recently announced the launch of its premier Correspondent Platform, offering sellers the purchase of both Delegated and Non-Delegated FHLMC, FNMA, FHA, and VA loans. RPF offers its sellers a wide array of products with minimal overlays, innovative technology with its seamless Correspondent Portal – RPF CONNECT, and an experienced executive team. RPF is currently looking for Regional Sales Mangers to grow its national presence. To apply please contact RPF’s VP of Human Resources, Char Mangrello. In addition to expanding its team, RPF has moved offices to a new state of the art building for its headquarters: 4000 MacArthur Blvd., West Tower, 7^Th Floor, Newport Beach, CA 92660.

“Assurance Financial is continuing to grow production, add retail branch offices and is expanding our production reach into the midwestern U. S., particularly Colorado, Arizona, Kansas, 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 that 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 are 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 dynamic production team, please contact Paul Peters, CMB.”

“The new year brings good news for Caliber Home Loans! Our very own Bryan Bergjans, National Director of Military Lending and Retail Business Development, had the #1 most popular interview of 2020 on the “Borne the Battle” podcast. This Department of Veterans Affairs (VA) podcast spotlights resources and benefits the VA offers to veterans. Bryan’s episode, “Tips and Changes to VA Home Loans,” covers revisions to VA loan products in a way that’s easy to understand. His military and mortgage careers give him a unique advantage when explaining the benefits of VA loans and advising homebuyers and industry professionals on some of the challenging guidelines. Take some time to listen to Bryan’s #1 interview. He’s one of the many reasons Caliber’s a great place to work. Visit our website today to view open opportunities. To be immediately considered for Operations or Sales positions, email Jonathan Stanley or Brian Miller, respectively.

Rapid underwriting/Ops turn times: close your loans & get paid more! Recently named among Top 5 Best Mortgage Companies to work for by National Mortgage News, Geneva Financial, Home Loans Powered By Humans®, is filling 500 Branch Manager and Loan officer positions in 43 states. With the recent addition of a National Head of Underwriting focused on industry-leading turn-times, Geneva is committed to closing your deals while paying you more! Its Geneva Gives, BE A GOOD HUMAN and Hero of The Year initiatives deemed them a recipient of this year’s AZ Business Magazine’s Excellence in Banking Award for Community Impact. Geneva is currently ranked a nationally fastest growing company in the financial sector, mortgage industry and all industries categories with no signs of slowing down and all signs point to another historic year in 2021. Explore Branch and Originator opportunities!

Products & services

“No Ratio is back at FundLoans! Available on loan amounts up to $5 million, Spectrum No Ratio unlocks true make-sense lending with the ability to fund a loan regardless of cash-flow. To help brokers kick-off Non-QM business in 2021, FundLoans’ Non-QM turn times are some of the fastest in the industry; with 48 hr. initial underwrite and condition review available all month long. Best of all, FundLoans is equipping brokers with a Non-QM Price Match option through January 31 on like-to-like Non-QM scenarios that do not exceed a competitor’s price by 150bps. To price out a loan, contact your FundLoans Account Executive or call 866-203-0912.”

ACES QC Now webinar series: “Insights into Mortgage QC Trends – First Signs of the COVID Effect” will launch Thursday, January 14, at 11:00 AM PST. The webinar will cover the highlights from the latest ACES Mortgage QC Industry Trends Report, how the “COVID Effect” Resulted in Increases in Various Defect Categories, early Payment Defaults on the Rise, the Servicing Dilemma, and an outlook for 2021.

We made it! 2021 is finally here and we are all looking forward to a return to business as usual! While the mortgage industry had an incredible year in spite of it all, the non-QM market did feel the pinch as the economy came to a screeching halt in 2020. Fortunately, non-QM loans have picked back up as key players are coming back into the market. Computershare Loan Services’ (CLS) Dave Vida, EVP of Enterprise Sales, will participate in IMN’s Non-QM Virtual Forum, Servicing Best Practices Panel, on January 21^st to discuss how COVID impacted the non-QM market and what makes servicing the non-QM product unique. Contact Dave and the team at Computershare Loan Services to learn more about new developments in servicing non-QM loans. And, for more on servicing topics impacting our industry, access CLS’ on-demand webcast series: Servicing in the Post-COVID Era.

Are you ready for VA IRRRL and FHA Streamline refinance opportunities in this market? Learn how to efficiently submit your files once for a final approval! Join Freedom Mortgage Wholesale for live webinar training sessions on VA IRRRL or FHA Streamline mortgage products and origination processes. Ideal for new or experienced government originators. Sign up for a VA IRRRL or FHA Streamline webinar on 1/12 (VA IRRRL), 1/19 (FHA Streamline) or 1/22 (VA IRRRL).

 

“You do not rise to the level of your goals. You fall to the level of your systems.  Your goal is your desired outcome. Your system is the collection of daily habits that will get you there.”  As we embark upon 2021 and leave a difficult year, we are all setting goals. At Model Match, our goal is to partner with organizations focused on growth, expansion and supercharging their headhunting and recruiting efforts. Model Match delivers an industry proven system, targeted at streamlining recruitment and attracting top tier Loan Originators. With over two decades of industry expertise, Model Match provides a unified process and strategy, all in one central, collaborative space. With one click, gain insights into production metrics to identify priority candidates and gain nationwide access to total volume, unit counts, product breakdowns, and more. With the ability to customize and scale our solutions, we’re confident we have the perfect plan to fit your recruiting needs. Connect with us today!

Compliance & legal matters

Phil Stein, Practice Group Leader, Litigation with Bilzin Sumberg Baena Price & Axelrod LLP, sent along a fine piece on how our industry is still litigating the 2007-2008 financial crisis.

Credit Suisse Group AG said Friday that it expects to book a net loss in the fourth quarter after increasing its provisions for a legal dispute surrounding residential mortgage-backed securities in the U.S. to $850 million.

HMDA season as begun! The data from HMDA (Home Mortgage Disclosure Act) tells us that there are 5-6,000 institutions funding home loans in the U.S. The program, in recent years run by the CFPB, has begun its filing period for data collected in 2020. “Submissions will be considered timely if received on or before Monday, March 1, 2021. Financial institutions can access the HMDA Platform here to begin the filing process. Users will receive a confirmation email upon submission of their HMDA data. The confirmation email will be sent to the email account of the user that has submitted the data.

The Beta Testing Platform will remain available on an ongoing basis for filers wishing to test their submissions. Use it for testing only, since no data entered on the Beta Testing Platform will be considered a HMDA submission for compliance with HMDA data reporting requirements. All user accounts created during the 2020 beta testing period and during the filing period for data collected in 2019 will be maintained for the 2020 filing period, and users can log in to the 2020 HMDA Platform using their existing credentials.

Want to tell the CFPB what you think? Send an email [email protected]. HMDA filers should know that, “…only insured depository institutions and insured credit unions are eligible for partial exemptions under 12 CFR 1003.3(d)(2) or (3) to Regulation C’s data collection, recording, and reporting requirements. Financial institutions subject to Regulation C other than insured depository institutions or insured credit unions must collect, record, and report all HMDA data enumerated in 12 CFR 1003.4.”

In other regulatory and legal news, what’s it called when you’re not in heaven or in hell? Purgatory? Or maybe a better analogy for this situation is a gal agreeing to go on a date with a guy if he can find a car to take her out in, and he’s “still working on it” on the night of the big party. Genworth Financial and China Oceanwide Holdings Group Co., Ltd. have not extended the current December 31, 2020 “end date” under the merger agreement. “Oceanwide has indicated that the factors contributing to the delay since the parties agreed to their most recent extension of the merger agreement on November 30, 2020 were: (a) the finalization of the Hony Capital financing terms; and (b) the COVID-19 pandemic and associated restrictions. The merger agreement remains in effect, however, although either party is able to terminate the merger agreement at any time. Oceanwide has shared that it will continue to work towards closing the transaction, and Genworth remains open to completing the transaction if Oceanwide completes the remaining steps…”

“In the interim, Genworth is focusing on executing its contingency plan, including a potential partial IPO of Genworth’s U.S. Mortgage Insurance (U.S. MI) business, designed to meet its near-term liabilities of approximately $1.0 billion of debt due in 2021.” Genworth, to its credit, has really shored up its finances by making several moves. “Genworth has reduced holding company debt over time and built a solid position of approximately $1.0 billion in cash and liquid assets as of December 31, 2020. Approximately $340 million of this cash balance is ring-fenced to pay for Genworth’s February 2021 senior notes at maturity. Genworth intends to manage the U.S. life insurance companies on a standalone basis with no plans to infuse capital into those companies in the future, absent an Oceanwide transaction.”

Capital markets

As arguably the most anticipated monthly economic release, the payrolls report is used by all sorts of market participants to help gauge the U.S. economy. Friday delivered a lousy jobs report for December (expected +50k, actual -140k), the first monthly decline posted since April as renewed lockdowns and restrictions from an intensifying pandemic impacted the labor market to end 2020. There were 372k job losses at restaurants and bars in the December report alone, which puts the leisure and hospitality sector down 23 percent from its pre-recession reading.

The employment report did contain some positive offsetting factors, such as a larger than expected increase in average hourly earnings, an upward revision to November figures, a decrease in those in the long-term unemployed category, and gains of 51k in construction employment, which should help address a shortage of housing market inventory.

Normally poor economic news helps rates, but the bond market looked past the report (not to mention political turmoil in Washington), with investors now betting the grim data will spur more bailout legislation, focusing specifically on reports that President-elect Biden intends to seek $3 trillion in spending. Treasuries pulled back again (the 10-year yield was +19 bps for the week) and the MBS basis closed wider versus Treasury yields after digesting late Thursday’s agency prepayments (30s near expected, 15s faster than expected) and optimistic comments from Fed Vice Chair Clarida.

This week’s economic calendar is light at the start, with today containing only the Employment Trends Index for December and a $58 billion auction of 3-year Treasury notes. The heavy hitters come Friday: retail sales, industrial production & capacity utilization, business inventories and Michigan sentiment. Prior to that are CPI, the December budget statement, and import & export prices. Of potential market moving impact will be the $120 billion mini-Refunding with auctions running today to Wednesday. Regarding the Fed, several Fed presidents are scheduled to speak this week, including Chair Powell. The latest Beige Book will be released on Wednesday. Two Fed speakers are scheduled today: Atlanta President Bostic and Dallas Fed President Kaplan. In MBS Land, the NY Fed Desk will release its two-week schedule on Thursday afternoon along with tentative MBS reinvestments which are based on prepays in the Fed portfolio plus the monthly SOMA increase. The Desk will conduct three operations today, one across each class, totaling $5.9 billion. We begin the week with agency MBS prices unchanged from Friday’s close and the 10-year also unchanged, yielding 1.11 percent.

“Clinton lied. A man might forget where he parks, or where he lives, but he never forgets oral sex, no matter how bad it is.” Barbara Bush (former US First Lady)

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, “Work Longer and Harder, or Work Smarter”.

qoɹ

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed 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.)

 

This one is making the rounds out there. “Due to travel restrictions this year, the United States had to organize coups at home.” Yes, many of us are staying close to home, and working there as well. But I don’t understand it. No matter how much I drink hot cocoa, play on my phone, refresh my email, look up things online, go to the kitchen for snacks, message my friends, scroll through the news, and play with the dog and cats, I still can’t get anything done! But lenders are getting plenty done. According to FBX | Informa Financial Intelligence, December 2020 mortgage rate-lock volume was up 123% YoY and 2% MoM across all channels, while funded volume increased 58% YoY and 7% MoM. In the Retail channel, lock volume increased 123% YoY and 2% MoM, while funded volume was up 73% YoY and 7% MoM. FBX sources a statistically significant data set directly from lenders to produce these benchmark figures.

Saturday Company Spotlight: Homespire Mortgage

Describe your company (when was it founded and why, what it does, geographic range, recent growth and plans for near-term future growth).

At Homespire Mortgage, we live for those high-five moments: when we’ve helped our homebuyers responsibly and affordably finance their dream of homeownership. That’s what drives us and we’re never complacent. We’ve built a nationally recognized mortgage company known for its unrivalled borrower experience and renowned for its efforts to transform the communities where we live and work.

Why purple? It says everything about who we are – breaking the mold, creating new and vibrant energy that cannot be ignored. Fusing innovative mortgage and marketing technology with the power of the human spirit, we’ve created a mortgage experience that borrower’s trust, Realtors® recommend and employees take pride in.

Founded in 2000 by our President, Michael Rappaport, and headquartered in Gaithersburg, Maryland, Homespire Mortgage operates 27 branches and is licensed across 39 states. Funding over $2.4 billion in 2020 and projected to exceed $4 billion in sales in 2021, Homespire Mortgage is recognized on Inc. 5000’s List of America’s Fastest-Growing Companies, and continues its steady climb year after year, adding new territories and personnel across key markets country-wide.

 

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

  

One home, one neighborhood, one community at a time. Our “Inspired to Impact” company-wide initiative creates meaningful change in the neighborhoods where we live and work. Every Homespire employee receives one full day of paid volunteer time each year, to support the organizations they’re most passionate about. We call it ‘impact hours’ and our volunteers give their time and talents to the organizations that matter most to them.

Our charitable contributions over the years have supported meaningful causes and organizations including MBA Opens Doors Foundation, Feeding America, St. Jude’s Children’s Research Hospital, Children’s National Hospital, Fisher House Foundation, Our Minds Matter, The Children’s Inn at NIH, The Chesapeake Bay Foundation, and the Maryland Food Bank.

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

Creating a seriously fun company culture goes beyond the typical perks like bonuses and happy hours. In a year where we’re distanced from our friends and colleagues, supporting one another is more important than ever. We’ll do anything to put a smile on our employees’ faces, even if it means turning them into bobble heads to show our appreciation.

 

This year, we opened the play book on virtual events and staff appreciation. From virtual game nights, virtual happy hours, and pizza parties to carrying on our holiday tradition with a week of Zoom-In-To-Win giveaways, we’re keeping our teams united and our company culture thriving.

 

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

Our winning culture at Homespire! To win in the marketplace, you first need to win in the workplace and that’s exactly what we’ve done. In the past three years alone, we’ve brought home several awesome workplace awards that say everything about who we are. Winner of the “Best Mortgage Companies to Work for” by National Mortgage News in 2019, 2020, and 2021 and “Top Workplaces in the USA” for 2021, we’ve created a culture at Homespire that’s far from corporate. We’re family and our achievements are a testament to our greatest strength of all, our people. We stand together and take care of one another working across boundaries to help our company win. That’s the Homespire way!

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

Taxes in historical perspective

With the change in power in Washington DC comes some uncertainty about economics, future stimulus plans, and taxes. Thank you to Michael Dulin who reminded me, “As for taxes, corporate income taxes were 6.1 percent and 6.6 percent of all federal government receipts in 2018 and 2019 respectively, down from 32 percent in 1952. (Source OMB). Average individual income tax rates for the 96th to 99th percentile dropped from 18.2 percent in 1981 to 14.5 percent in 1984 after the Reagan tax cuts, and from 18.1 percent in 2000 to 14.6 percent in 2003 after the George W. Bush tax cut. (Source Tax Policy Center.) Huge deficits ensued after both episodes and have been only partially reversed from increases in tax rates. Since the 1970s Republican administrations have left the economy weak (to put it charitably), and follow-on Democratic administrations have done much to restore economic health.”

Non-Government Guaranteed programs

Our industry is deluged with QM (Qualified Mortgages) but some lenders and MLOs are waiting for the day that non-QM loans to become a sizeable percentage of originations. Bryan Filkey, Chief Strategy Officer at Interfirst Mortgage, wrote, “Recent changes to Regulation Z have removed Appendix Q (which was the guideline benchmarked to the Federal Housing Administration’s (FHA) underwriting standards) and removed the debt-to-income (DTI) threshold (previously 43%).

“Prior to these changes, the government-sponsored enterprises (GSEs), Fannie and Freddie, were technically not doing ‘ability-to-repay (ATR) compliant loans.’ This is why the ‘qualified mortgage (QM) patch’ was put into effect. Essentially the ‘patch’ said all GSE loans are ATR until January 2021 or until the GSEs exit conservatorship. The changes, removing Appendix Q and the 43% DTI threshold, implemented by the Consumer Financial Protection Bureau (CFPB), now guarantee GSE loans will be QM.

“As a reminder, there are really three categories of ‘QM’ loans. These include those that are QM, Non-QM or Exempt (inappropriately labeled as Non-QM by many). Exempt loans are those loans that are for a ‘business purpose’ (like buying an investment property, for example).

“The removal of Appendix Q now means that bank statement income documentation or loans that do not meet the agency Automated Underwriting System (AUS) requirements can still be considered QM loans. This could be the catalyst for revitalizing a healthy, balanced private market and reducing the taxpayer liability of having the GSEs and Ginnie Mae guarantee 8/10 loans. ‘Non-QM’ might be drying up soon, but the outlook for private lending looks rosier than ever as yesterday’s Expanded Prime “Non-QM” becomes tomorrow’s Non-conforming Jumbo or Expanded Prime ‘QM.’” Thank you, Bryan!

As a quick aside, mortgage companies were responsible for financing 42.6 percent of non-owner occupied fix-and-flip transactions during the third quarter, according to a report from ATTOM Data Solutions. As traditional agency refinances continue to overwhelm production facilities across the nation, however, fix-and-flip transactions accounted for a smaller share of activity. In response, real estate investors have pushed up average profits to $73,766 per transaction from just $61,800 a year earlier.

IPO mania?

One can already buy stock in many lenders, private MI companies, banks, REITs, even Freddie Mac and Fannie Mae. In the last several months, several lenders have either gone public, have contemplated it, or have plans to in the future. Rocket, UWM, loanDepot, Caliber, AmeriHome, Guild, SoFi, and now HomePoint jump to mind. The management of any company that goes public must weigh what it will be like to report to stockholders and the demands by analysts for information. But owners are desirous of “taking chips off the table” and monetizing some or all of their gains.

Kimberly Browne, who was recently named president of Chrysalis Holdings, a fintech investment company, writes, “Rob, we expect the flurry of public offerings for mortgage firms that took place last year will continue. Although a few home lending companies that are backed by private equity delayed their fourth-quarter public debuts as a result of election uncertainty, we expect those transactions to close this year. In addition, we anticipate that a few other public offerings in real estate finance will take place during 2021. Among these offerings will be special purpose acquisition companies, or SPACs, like the one done by United Wholesale Mortgage. SPACs have become a favored alternative investment vehicle for seasoned investors and management teams who want to avoid the increased market volatility risk of traditional IPOs.”

And another recent addition to Chrysalis, Chairman David Olson, writes, “Rob, while there have been bouts of bond market weakness this past year, mortgages have performed well. Maintaining rates and supporting the purchase of bonds that have driving mortgage rates to all-time lows has been the Fed’s explicit mission. That low-rate strategy has generated unprecedented loan originations, which has strained the balance sheets of financial institutions. Lately, however, lenders are regaining some pricing control despite the pressure.”

Predictions about the future

It seems like great residential lenders and vendors, and companies in general, are focused on helping their customers and providing solid service, products, and pricing on a daily basis but also keeping an eye on the future. And as the uncertainty surrounding politics, and therefore the economy, has cleared up somewhat, there is still plenty of conjecture about the future.

Nothing is more natural than speculation in the face of mystery. When uncertainty abounds, pundits strive to differentiate themselves from their peers. There’s little to be gained from saying what everyone else is saying, or, God forbid, suggesting that there isn’t enough information on which to base a judgement. Conversely, there can be huge rewards in taking a flyer on an extreme prognosis and turning out to be right. Being the single winner always entails more glory than sharing the prize.

This wouldn’t be the case if pundits suffered when their predictions proved wrong. There are forecasting professions where this happens, like stock analysts who err and then are more likely to be fired. But in the media mistaken forecasts tend to be quickly forgotten, so there’s little downside to being bold and wrong. This tendency is exacerbated by the demands of cable news. Relying on what we know, and what we don’t know, doesn’t grab headlines.

An expert who makes one great prediction can live off the success for a long time. We assume that the feat is repeatable. But studies have shown, time and time again, that though an expert might foretell one extreme event, doing so consistently was next to impossible. Being spectacularly right once doesn’t guarantee being right in the future. In fact people who make bold predictions tend to overestimate how likely extreme events are, so, while they may happen to hit it right once in a while, overall they’re not great forecasters. Success breeds overconfidence. And history is littered with famous people being wrong, the most recent well-known example was banking analyst Meredith Whitney who, in late 2010, predicted that cities across the U.S. were likely to default resulting in investors losing hundreds of billions of dollars.

But nothing diminishes our appetite for dramatic predictions. We don’t like uncertainty. It may be that the characteristics that make for more reasonable forecasts (acknowledging uncertainty, an awareness of the limits of one’s knowledge, and a willingness to speak in probabilistic terms rather than seeing everything in black and white) make us uncomfortable. They aren’t what we want in an “expert.” Experts who claim to be more certain are more in demand in the media, even though they are less likely to be correct. People who predict what the stock market or interest rates are going to do are seen as more credible than those who expressed uncertainty, even when the latter is just as accurate. “Fortune favors the bold.”

A woman was in bed with her lover when she heard her husband opening the front door.

“Hurry,” she cried, “Stand in the corner!”

She rubbed baby oil all over him, then dusted him with talcum powder.

“Don’t move until I tell you,” she said. “Pretend you’re a statue.”

“What’s this?” the husband inquired as he entered the room.

“Oh it’s a statue,” she replied. “The Smiths bought one and I liked it so I got one for us, too.”

No more was said, not even when they went to bed.

Around 2 AM the husband got up, went to the kitchen and returned with a sandwich and a beer.

“Here,” he said to the statue, “have this. I stood like that for two days at the Smiths and nobody offered me a damned thing.”

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, “Work Longer and Harder, or Work Smarter”.

qoɹ

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed 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.)

 

While the industry watches the personnel changes at Arch and National MI, I received several texts and emails pleading, “I’d like to cancel my subscription to 2021. I’ve experienced the free 7-day trial and I’m not interested.” This, after photos of “Chief Running Bull” at the Vice President’s desk on Wednesday circulated, with the caption, “We spend $750 billion annually on ‘defense’ and the center of American government fell in two hours to the cast of Duck Dynasty and the guy in the Chewbacca bikini.” Tiger King/Joe Exotic appears almost normal! I received this note from Mike Prince with ActiveComply, a firm that works specifically with lenders on social media & website compliance. I never expected to see a loan officer post a photo on social media of a shirtless man with a Viking helmet standing on the Senate floor. But there it was, right next to the lender’s name, a link to its website, and a properly disclosed NMLS ID. Oh boy. Everybody has a right to express their views, of course, but not while promoting loan products on the internet next to their employer’s brand. Social media is the Wild West for lenders right now. The next few weeks will be interesting.” Thank you, Mike!

Employment & promotions

Richey May & Co. is excited to welcome out new Director of Business Development, Kimberly Schenck! Kimberly brings over 30 years of experience to the Richey May team of industry professionals dedicated to serving the Mortgage Banking industry. Kimberly will join our team connecting new and existing customers with our wide range of services, including audit, tax, cybersecurity, process automation, data analytics, internal audit, risk assessment and more! Learn more about Kimberly on our website and contact us to learn more about how Richey May can transform your mortgage business.

The Mount Adams Group at NRL Mortgage is seeking operations and sales professionals who are ready to take their career to the next level! “We offer competitive compensation, extra earning opportunities, strong benefits including paid time off, and career growth. We are looking for Processors, Underwriters, Disclosure Desk Specialists, and Loan Originators to join us! Each of these roles provides tremendous opportunities for success. Our rapid expansion with 6 new branches in Ohio, Indiana, Illinois, Michigan, Tennessee, Pennsylvania, Florida, and South Carolina is evidence of our commitment to our associates. Our exceptional growth is the result of each of our teams’ combined effort – from 48-hour underwriting turn times, a lead-driven business development team, training programs, and hands-on leadership that is focused on YOUR growth. If you are interested in building your career with a supportive team like ours, then reach out to our Area Recruiter, Alyssa White!”

According to NRMLA, there are 24M seniors with $7T in home equity in the U.S. today. Many have a desire to stay in their homes, provide in-home care for a spouse, or simply afford a decent retirement lifestyle. The demand for reverse mortgages is starting to explode, and American Advisors Group (AAG, NMLS# 9392) needs qualified reverse and traditional loan officers to help with this demand. Our national advertising campaign featuring Tom Selleck drives AAG’s brand awareness and pushes a high volume of leads to our loan officers. Our amazing fulfillment teams free up our loan officers to do what they do best: sell! Bonus? The compensation potential is incredible. If you are planning your next move in the mortgage business, email [email protected] or call/text (773) 297-2249.

Shamrock Home Loans is expanding throughout the state of Florida, Connecticut, Massachusetts, and New York, seeking Area Managers, Producing Branch Managers, and Loan Officers. With a 31-year track record of originating loans for consumers across the East Coast, Shamrock is seeking aggressive originators who want to take advantage of our Ad Agency quality Videography and Creative Design teams to grow in their local markets. Agency direct, no overlays, accommodating sales culture and an aggressive marketing approach to building relationships with Realtors and Borrowers, and leading-edge technology to make the loan process easy. Email for more information [email protected], or check out our newest TV Ad designed specifically for Branch Managers and Loan Officers explaining our core purpose. Inquire today to learn more.

Mid America Mortgage Inc. has promoted former National Support and Training Director Jemma Pachiano to Chief Operating Officer. Serving Mid America for nearly a decade, as COO Pachiano will “lead the company in aligning its operational strategy with its long-term business goals, driving efficiency, and propelling Mid America’s rapid growth into the new year.”

Rodney Jordahl, chief financial officer at Bell Bank since 1999, has retired after guiding the company’s finances through more than two decades of growth and change. With Jordahl’s retirement, Blake Nelson has been named chief financial officer (CFO) and Carrie Bjorge SVP/controller for Bell Bank. Congratulations!

Products & services for lenders & brokers

Happy New Year – 2021 could not have come sooner! Service 1st announced its second release of Income+ this week. Standardize income calculations using verified consumer data for consistent results every single time! Client requests for multiple data display options, new data sources and deeper analysis were all scoped into this new release. Income+ is eligible for S1’s 30-day free trial period. Additionally, due to its popularity over the holiday break, S1 is extending its “More Than a Handshake” promotion until this Friday, January 8^th. More Than a Handshake rewards your company for each loan closed. Lock in 2020 pricing and service levels for our must popular, class leading solutions, such as VOEs, credit supplements and CreditXpert® product enhancements. Act today!

ActiveComply: In light of current events in Washington D.C., ActiveComply has updated its social media compliance system to look for current trending words and phrases that might pose harm to your company image. “We know that a lender’s brand name is invaluable, so let us help you navigate these turbulent days. With the transition to the Biden Administration and a new regulatory environment on the horizon, lenders are increasing compliance efforts to ensure they are not first on the chopping block. Not sure what the future holds for social media compliance? Check out our article on How to Stay Off the Front Page: to ensure your company isn’t on the front page, you have to make moves today to make sure it’s not your brand in the paper tomorrow. Sign-up for a free compliance audit today and download our free Social Media Compliance Cheat Sheet!

While competitors are focusing on the refi boom, you need to stay ahead of the curve and concentrate on your long-term purchase business strategies. Don’t wait until rates go up to foster your Realtor relationships. Start 2021 off the right way with strong Realtor relationships. It’s a great time to remind your partners how vital they are to your business and that you are all in when it comes to providing value. Does your CRM use data intelligence and multi-channel marketing technology to build you a referral machine that performs in any market? Supercharge your Realtor Relationships today. You’ve earned their trust, now remind Realtors of what you bring to the table!

Two of the industry’s most reliable and respected credit reporting agencies, Advantage Credit, Inc., and Partners Credit & Verification Solutions, have merged! Each company will continue to operate as separate divisions, independently, but will gradually begin merging operations to create a single, fully integrated CRA. Don Unger, president of Advantage Credit and Blake Matheson, CEO of Partners and its affiliates look forward to this partnership and will strive to create the most dynamic mortgage services and technology company in the industry.

In a recent conversation a regional SVP said “Efficiency will be the key to 2021. And not just because of higher loan volumes. It’s because remote working has evolved from a ‘pandemic survival tactic’ into a long-term operational strategy. We can’t run our branches like we used to and remain competitive.” Home offices, affordable video conferencing, instant messaging, and smarter process management tools not only reduce operational costs they also make people more focused, productive, and easier to recruit. This case study from a division of American Pacific Mortgage proves the point. When comparing team productivity for 2020 to 2019, the division 4x’d productivity and produced 280% more revenue when working remotely and coordinating loan processes with simpler, smarter workflows powered by TeamworkIQ.  How? TeamworkIQ freed up everyone’s time by automatically coordinating and prioritizing all the details, documents, deadlines, and action items for every loan. Here’s APM discussing the initiative.

Lender & broker Training

Are you ready for VA IRRRL and FHA Streamline refinance opportunities in this market? Learn how to efficiently submit your files once for a final approval! Join Freedom Mortgage Wholesale for live webinar training sessions on VA IRRRL or FHA Streamline mortgage products and origination processes. Ideal for new or experienced government originators. Sign up for a VA IRRRL or FHA Streamline webinar on 1/8 (VA IRRRL), 1/12 (VA IRRRL), 1/19 (FHA Streamline) or 1/22 (VA IRRRL).

loanDepot Wholesale’s training calendar for the first quarter of 2021 is live. Join us for mello® Portal Training, Digital Verifications Training, and coming soon Dual AUS training. Learn how to effectively leverage the mello® platform to move your loans to Closing faster. Sign up for a class today!

Corporate movements

Cultural Outreach Solutions has been acquired by NAMMBA (National Association of Minority Mortgage Bankers of America) to create a one-stop-shop for reaching young and diverse markets in the mortgage industry. Tony Thompson and Kristin Messerli, founders of NAMMBA and Cultural Outreach respectively, say that by formally joining forces, they are able to deliver a holistic solution to achieve next generation growth for lenders. “The two companies are confident that by joining forces they can provide an even greater benefit to the industry. Together, they offer a comprehensive solution to increase sales in the fastest growing markets and empower communities to build wealth through homeownership.”

SoFi, which has a notable mortgage division, announced plans to go public through an SPAC: a merger deal with “blank-check” firm Social Capital Hedosophia Holdings Corp. V to file an initial public offering (IPO).

Wikipedia defines a “neobank” (also known as an online bank, internet-only bank, virtual bank, or digital bank) as a type of direct bank that operates exclusively online without traditional physical branch networks. BBVA USA announced that neobank, Simple, and Digital Bank, Azlo, will be shutting down soon. Ryan Conway, SVP, Head of Business Development & Strategic Partnerships at Oxygen Banking, says that this should be a wakeup call for neobanks: “Today we heard that BBVA is shutting down Simple, the first neobank, and Azlo, their digital business bank. Both were early trailblazers in neobank-ing and have paved the way for much of the industry today. They were formidable competitors that we owe greatly for paving the way. These closures should be a wakeup call for many Neobanks. To survive in our new normal, they will have to focus on solving the customer pain points, inclusive of banking services, and taking it even further. There is a lot to be done in this area, seeing as how traditional banks have historically ill-performed in this space.”

Capital markets

After Wednesday’s drama in Washington, markets yesterday digested the Democratic sweep (more economic stimulus, general calm?). Lawmakers certified President-elect Biden’s victory in the early hours of the morning, while President Trump took a step toward easing the chaos by promising an orderly transition of power on the 20th. The mortgage market sold off once again, which provides a platform for the (brightest) capital markets wheat to separate from the chaff, and we saw a bit of position squaring ahead of today’s payrolls report. Economic data yesterday included an above-consensus ISM Non-Manufacturing Index for December while Initial Claims remained at a lofty level. The Primary Mortgage Market Survey from Freddie Mac for the week ending January 7 saw new lows in fixed rates, with the 30-year rate falling 2 bps to 2.65% and the 15-year rate hitting another consecutive low of 2.16%.

Dallas Fed President Kaplan said that he expects U.S. GDP to grow by 4.5 percent to 5.0 percent in 2021 and that yields on Treasuries will rise in response to the improved economic outlook. He added that the Fed should not intervene to prevent yields from rising, which suggests a willingness to let the Fed start tapering its purchases of Treasury and Agency MBS as the economy clears downside risk hurdles. He joins Cleveland Fed President Mester and Atlanta Fed President Bostic (the only voter of the three) in calling for a taper to bond buying. Tapering is still likely at least nine to 12 months away at the earliest, and perhaps as far away as 18 to 21 months, in Q3 of 2022.

Black Knight revealed that the number of mortgages in active forbearance fell by 92k (-3 percent), the largest weekly drop since early November. The decline was driven by the large volume of quarterly forbearance plan expirations at the end of December, many of which were reaching the 9-month mark. Despite the decline, it marks a troubling slowdown in the rate of improvement. Black Knight saw the population improve by an average rate of -1 percent month-over-month over the past 30 days. That’s down from -7.5 percent month-over-month on average from June through November.

Although the markets are focused on more stimulus plans ahead, this morning we had the December employment report. The headline Unemployment Rate came in at 6.7 percent unchanged. We also had Nonfarm Payrolls (-140k, mostly in services and the first drop since April) and Hourly Earnings +.8 percent. Later this morning brings November wholesale inventories, remarks from Fed Vice Chair Clarida, and November Consumer Credit. Today’s MBS FedTrade schedule sees a repeat of Wednesday’s slim support, with the Desk conducting just two morning operations targeting up to $4.3 billion conventional 1.5% and 2%. We begin today with Agency MBS prices down/worse a few ticks and the 10-year yielding 1.10 percent after closing yesterday at 1.07 percent; the yield curve is steepening and now there is a 1 percent difference between the 2-year and the 10-year.

As humans continue to encroach on nature, conflict between people and animals is inevitable and has escalated, as captured on film in this short, dramatic video.

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, “Work Longer and Harder, or Work Smarter”.

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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 designed 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.)