1-12-23: Correspondent, QC automation, home equity, work Visa products; no Wells… now what? Inflation data meets expectations

“Thirty years ago, we had Bob Hope, Johnny Cash, and Steve Jobs. Today we have no hope, no cash, and no jobs. We are all praying nothing happens to Kevin Bacon.” “Bringing home the bacon” is something that has become strained for tens of thousands in our biz when they lose their job. I’ve been deluged with Wells Fargo folks wanting to change their email to their home email, and while this has always given me insight (in advance, often) into companies closing, to be FTC compliant I don’t actually add emails: sign up personal emails here under the “subscribe” tab. Also, anyone displaced can post their resumes for free here where employers can view them for a nominal $75 fee for several months. Because, hey, there should still be a couple trillion in mortgages originated this year. Hear me out. Are you in debt? Join the crowd. U.S. households’ debt is now $16.5 trillion. Sensationalist headlines aside, it is up about 7 percent for the year. In the asset column, let’s look at one state, although I am sure that the numbers are compelling elsewhere. California has 2.4 million households free-and-clear of mortgage debt, the third-highest count among the states. (Today’s podcast is sponsored by SimpleNexus, an nCino company and award-winning developer of mobile-first technology for the modern mortgage lender. Today’s has an interview with Polunsky Beitel Green’s Marty Green on the Fed’s rate hike calculus and the disconnect between what the Fed is saying and what markets are predicting.)


Lender and broker software, products, & services


What factors will drive the housing market in 2023? Find out at a complementary webinar hosted by First American Data & Analytics on January 26th at 1PM ET. First American Deputy Chief Economist Odeta Kushi will share her perspective on the health of the U.S. economy, supply and demand dynamics in the housing sector, affordability challenges and more. Spots are filling up quickly for this must-attend event.  Register now.

“Need to generate more revenue and stand out from competitors in 2023? Matic, an embedded home insurance platform built for the mortgage industry, has helped top lenders and servicers in three key ways. Add a new revenue stream: unlike most tech solutions, we add revenue to your bottom line. Give borrowers an amazing experience with personalized insurance offers from 40+ names you know, like Progressive, Travelers, Lemonade and more. And automate the home insurance process, meaning faster closings and less headaches for your loan teams. Book a quick demo with our team of mortgage experts to learn more about partnerships.”

As housing prices continue to decline in cities across the U.S., you need the right data to inform your home equity lending strategy. Black Knight offers McDash® Home Equity, a robust, industry-leading database for you to monitor home equity trends. The data delivers valuable insights, including home equity lending patterns, delinquency and prepayment performance, as well as line utilization. And, since Black Knight’s McDash provides the deepest, broadest, servicer-contributed, loan-level data on the mortgage market, you can rely on it for a variety of critical applications, including benchmarking, research, planning and modeling. Download a complimentary McDash® Equity Report to see McDash data in action. Download the report here.

“Approximately 140,000 U.S. work related Visas are issued yearly. Advancial Federal Credit Union (an Equal Housing Lender) offers financing options for these borrowers in all 50 states. No US credit required. Loans up to $5,000,000 including unique collateral such as non-warrantable condos, condotels, and hobby farms. All forms of work authorization are considered including: Work Visas, Student Visas with OPT/CPT permits, Diplomatic Visas, EAD Cards, and more. TBD pre-approvals provided using only an offer or transfer letter. Don’t miss out on this unique market. The key to success is making contact early before a borrower is denied by another lender and signs a long-term lease. Call us today for an overview as well as lead sources in your metro area. Visit us, call us 888-876-2328 or email us.”

“Are you looking for more automation and quicker throughput for your Home Equity loans? Let Lenderful Solutions help! With our newest Home Equity Solution, you can give your borrowers a fantastic user experience and close in a little as 2 days. The solution gathers application data and enhances it with an automated valuation model, soft credit pull, and verification of income and employment. All documents are securely delivered along with an underwriting summary. Close loans in a couple of days, exceed expectations and drive bottom line revenue with Lenderful Solutions. Check out our strong lineup of solutions including Mortgage with PreQual Express, Reverse Mortgage, Construction, Commercial, Consumer and more by clicking here or contacting us at (313) 910-3070.”

Your 2023 Mortgage Horoscope: In recent months, market risks threw shade on past years of success. This doesn’t have to be the case in 2023. Remember the song “Man in the Mirror”? The planets are suggesting that now is the time to ask that man or woman to make a change. It’s time to put aside those redundant, manual QC processes and let AuditGenius, Indecomm’s loan QC automation and SaaS technology, do more. Put your trust in a proven and tested QC system that audits an average of 800,000 loans a year and delivers unlimited potential for your QC audits! The stars (and Indecomm) wish you to spend your free time on high-value mortgage tasks while reducing QC expenses. With AuditGenius, you will spend less time creating and answering checklists, validating data, and fighting with excel. Reach out to Linda Bomar to realize your future in Quality Control!

As the largest bank owned correspondent investor in the country, AmeriHome continues to find ways to add value to its clients and partners. This week AmeriHome announced that it has implemented a Conventional Purchase Special LLPA table as well as adoption of the Agency Credit Fee Cap for certain First Time Homebuyers. Other enhancements include the release of VA loans to Non-Delegated clients, increased VA maximum loan amounts to $1.5M, and later in Q1 AmeriHome will expand its Temporary Buydown program to include 3-2-1 and 1-1 buydowns. The AmeriHome/Freddie Mac webinar series continues on January 18 at 10 am PST: join for a conversation with Freddie Mac’s Deputy Chief Economist Leonard Kiefer and SVP Mission and Community Engagement Danny Gardner, as they discuss what the economy has in store for us and connect the dots between the economy, housing and affordability. Be part of the discussion in the live Q&A session! Register here!

Continued discussion about Wells’ exit


Although Wells Fargo hasn’t occupied the top spot in residential lending in quite some time, its exit from the correspondent channel and scaling back retail lending have ramifications throughout the industry. Independent mortgage banks prefer having 2-3 reliable outlets for the mortgages they manufacture, and so for some products (like jumbo) other investors are fielding calls from capital markets staffs.

Julian Hebron with “The Basis Point” sent, “What’s up with Wells Fargo exiting their position as America’s top mortgage servicer and third largest originator?

And Forbes put out an article. “For homeowners and would-be-homeowners, a major exit from the market like this is sure to have consequences. So what are they and how is this likely to impact the mortgage industry?

Conventional conforming developments from F&F


Freddie Mac and Fannie Mae continue to receive the lion’s share of the residential originations in the United States. Talk of moving the two Government Sponsored Enterprises has moved from being in the headlines every day to the far back burner.

For those of you playing along at home, the U.S. Supreme Court rejected investor suits over Fannie Mae, Freddie Mac.

FHFA posted 2023 Rules of Practice and Procedure; Civil Money Penalty Inflation Adjustment.

The FHFA (overseer of the GSEs, released the 2023 Scorecard for Fannie Mae, Freddie Mac, and Common Securitization Solutions.

Now accessible from the Uniform Closing Dataset (UCD) web pages new and updated resources to help navigate testing warning and critical edits in the Loan Closing Advisor® production and customer test environment (CTE). Read the Freddie Mac article for further details and to ensure that you have the newest information and UCD resources.

In 2022, Fannie Mae continued to evolve its policies to promote safe and responsible lending, furthering its commitment to serve renters and homeowners in a fair and equitable way. Check out the final In Case You Missed It 2022 to see the year in review, including Selling Guide updates, Servicing Guide updates, Lender Letters, and Desktop Underwriter® (DU®) release notes from last year.

Fannie Mae requires the Supplemental Consumer Information Form (SCIF/Form 1103) for new conventional loans with application dates on or after March 1. Translated versions of the form and updated Uniform Residential Loan Application (URLA) FAQs with information related to the SCIF are available for lenders. Review LL-2022-03 and Access SCIF resources.

And where would the private mortgage insurance companies be without conforming conventional loans? Quarterly, Milliman summarizes key trends in the PMI industry and relevant management comments discussing business trends and outlook. The Private Mortgage Insurer (PMI) market trends and highlights, 3Q 2022 report includes a summary of NIW, a summary of IIF (volume/persistency and performance), and a summary of capital markets ILN issuances.

“Trends highlighted in 2Q 2022 generally continued in 3Q 2022: IIF loan performance remains strong and persistency on in-force policies continues to increase. The PMIs continue to release previously established reserves… Most PMIs posting their fourth straight quarters with a negative loss ratio. Despite this strength, the PMIs faced many questions on recession risks and housing slowdowns; many mentioned selective pricing increases to account for this uncertainty. Two Capital Markets ILNs were issued in the quarter; pricing was historically wide.”

Capital markets: are you paying more for goods & services?


Bonds, and therefore interest rates, had a snoozer of a trading session Wednesday. Ahead of today’s latest Consumer Price Index reading, the market yesterday exhibited little trepidation as evidenced by excellent demand at a Treasury 10-year note reopening. That follows Tuesday’s even more impressive 3-year note sale. And good demand means prices go up, and rates go down.

The inflation data could heavily influence the plans for lenders/originators in 2023. A reduction in inflation will probably nudge the Fed to turn “dovish.” If so, originators will see mortgage demand to start to rise again near mid 2023. A good chunk of loans originated in Sept – Nov are already in the money from a LO’s view, although that is a very small percentage of the overall market.

Today brought inflation data with the much-anticipated December CPI report. We saw headline CPI month-over-month -.1, as expected. Core CPI (ex-food and energy) rose .3, also as expected. Year-over-year, increases were as expected at 6.5 percent and 5.7 percent, down from 7.1 percent and 6.0 percent, respectively. We’ve also received the latest weekly jobless claims (205k, expected at 215k, continuing to point to a fully-employed America). Later today brings more Treasury auctions, Freddie Mac’s Primary Mortgage Market Survey, and several Fed speakers (Philadelphia’s Harker, St. Louis’ Bullard, and Richmond’s Barkin. We begin the day with Agency MBS prices little changed from Wednesday and the 10-year yielding 3.55 after closing yesterday at 3.55 percent.

The older Baby Boomers were all home schooled! Who knew? See below, in parents’ own words! (Part 4 of 5.)

14. My mother taught me about WEATHER.

“This room of yours looks as if a tornado went through it.”

15. My mother taught me about HYPOCRISY.

“If I told you once, I’ve told you a million times, don’t exaggerate!”

16. My father taught me the CIRCLE OF LIFE.

“I brought you into this world, and I can take you out.”

17. My mother taught me about BEHAVIOR MODIFICATION.

“Stop acting like your father!”

18. My mother taught me GENETICS.

“You’re just like your father.”

19. My mother taught me about my ROOTS.

“Shut that door behind you. Do you think you were born in a barn?”


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Rob Chrisman