Apr. 14: LO jobs; broker, benchmarking, doc products; jumbo & specialty products continue to crumble; 3.74% loans in forbearance

Bill M. sent, “It’s not at all boring to stay in the house. But how come one bag of rice has 22,373 grains and the other bag 24,201?” Yes, things have changed. A pal wrote to me yesterday saying, “My sex life is like a Ferrari.” I reminded him that he doesn’t have a Ferrari. He replied, “Exactly.” We know that this is not 2008. This is not a bailout for an industry that has acted irresponsibly with far-fetched programs, questionable underwriting, or questionable securitization practices. Most companies were in much better shape heading into this coronavirus-driven downturn than they were twelve years ago. In the residential sector, lenders, big and small, continue managing capacity through paying for overtime, pricing, hiring temporary staff, adding technology, shifting staff, and outsourcing fulfillment. Big projects? For the most part they’re on hold. Some lenders, looking ahead to the summer, are nervous, however. Lenders often compare themselves to law firms on a variety of levels. It turns out that law firms are not only cutting back hours but also reducing pay.


“It’s never a bad time to pivot in your career and make a move to PrimeLending. It all starts with our remote onboarding and virtual training program that get you up to speed and ready to originate quickly and seamlessly. Once you’re here, you’ll be equipped with leading digital solutions like Total Expert, Blue Sage and eClose, just to name a few, you can employ to easily build your business and deliver a world-class experience online. If you’re ready to grow with a technology-focused powerhouse like PrimeLending, contact Nic Hartke to discuss how our digital solutions can help you ‘Discover Your Best’ in any market condition.”

Transparent leadership and communication: this is one of the top reasons Loan Officers give for why they stay at Academy Mortgage, and it’s never been more important than now in responding to the challenges the housing and mortgage lending markets are facing as a result of the COVID-19 pandemic. Academy’s leaders are providing company updates via weekly Town Halls broadcasted nationwide, daily market updates, frequent emails, dedicated websites, internal communication platforms, etc. Their intent is to quickly communicate and be as accurate and transparent as possible in sharing information as it continues to come in rapidly. Academy is also setting an example of the importance of being proactive versus reactive in this fluid environment, responding to ever-evolving conditions with agility and optimism. Contact Senior Vice President Bill Sohan if you’re interested in working for strong leaders with open-door policies to help you achieve your Potential.

Lender services and products

During this time of crisis, AFR Wholesale understands how important home financing can be. It is committed to remaining flexible and responsive to clients’ needs, and AFR is here for you with a variety of traditional and specialized lending options, including Conventional, FHA, VA, USDA, Renovation and Manufactured Housing. AFR Wholesale also helps you remain ahead of the curve with a suite of online resources and technology, including AFR Loan Center, which helps you manage your pipeline and streamline client communication from anywhere. For more information go to afrwholesale.com, email sales@afrwholesale.com (1-800-375-6071).

While the industry is experiencing unprecedented volume and dramatic rate volatility, there is a significant demand for market data and transparency. Optimal Blue has responded with the launch of Market Analytics. Leveraging rate lock data collected from one-third of all mortgages completed nationwide, Market Analytics provides a daily, comprehensive array of transaction-specific data points that support several practical use cases, including: (1) Benchmarking, valuation, & performance: Unique data can be used to build and tune portfolio models, including prepayment and valuation modeling for MBS and MSR portfolios; (2) Market Research: Users can effectively focus resources with early insight into market activity that can help identify geographies and demographics to offer products, direct marketing, or allocate capital; and (3) Proprietary Forecasting: This powerful capability can accurately predict macroeconomic housing and mortgage metrics in advance of their release. To learn more about Optimal Blue’s actionable data offerings including Market Analytics, visit www.optimalblue.com.

Good News and Info for Lenders! Focus on being Positive: In these trying times, we can all use positive news. Let’s celebrate those who have been discharged and are recovering. Focus on being Gracious: A debt of gratitude is owed to all our nurses and doctors who have been working overtime. We Thank You! Focus on Closing: For lenders who thankfully have full pipelines during these times and are struggling to manage Final Docs, we can help you. DocProbe has been the remote solution of choice for lenders since 2010. DocProbe retrieves, processes and ships Trailing Documents to your investors and custodians. On-time. Every Time. No Penalties – Guaranteed. Onboarding is easy and quick. With DocProbe you have 24/7 access to all your docs through our LOS-integrated platform. For lenders ready to start today, we are offering 3 Free Months. Visit us at www.docprobe.net or email Nick Erlanger to learn more about our Complete Remote Trailing Document Solution.”

Lenders at the forefront of digitization are winning in the time of social distancing. For digital experience laggards, the pandemic requires a swift progression into adopting remote systems and processes. When it comes to your technology, you want premium features and integrations, data insights, and built-in marketing compliance… all from a single solution. That’s a tough combination to find. But one company delivers on all fronts. Discover why leading mortgage marketers choose Total Expert to orchestrate the modern customer experience.

Events & training

Join National Mortgage Professional for How to Build a Better Webinar webinar (yes, a webinar on webinars) on Thursday, April 16 at 12 pm ET / 9 am PT. We will share the lessons we have learned from putting over 15,000 attendees onto webinars to maximize ROI when connecting the biggest brands in the mortgage industry to originators and mortgage company executives. Joining NMP are webinar masters John Neihart, VP of Sales TPO at Spring EQ, to help understand the business of webinars, and Michelle Boucher, VP of Marketing at Monster Lead Group, to help make your content fun and engaging. BONUS: All attendees will receive a copy of The 6 Parts of a Perfect Webinar. Sign up for the webinar here.

Join Blend for a digital summit geared toward mortgage executives and Blend customers on May 19Forward: Thriving in today’s mortgage climate, is focused on navigating today’s challenges in mortgage lending. Blend executives and product leaders will be sharing the latest solutions and features designed to help you increase efficiency and set you up for success no matter what the market brings. Sign up here.

You only have two more days to register for Floify’s highly anticipated “Top Tech for a Remote Mortgage Team” webinar. In this 30-minute, power-lunch presentation, Floify will explore the ways top loan originators are adapting to virtual and work-from-home scenarios, how you can quickly build a visible and reproducible workflow, the productivity solutions fellow lending pros are implementing to create process efficiencies, and how loan originators can continue to thrive in today’s challenging business environment. If you’re passionate about the mortgage industry and the role tech can play in leveling-up your lending game in these unusual economic times, then you won’t want to miss this event. Register now for Floify’s “Top Tech for a Remote Mortgage Team” webinar, Thursday, April 16th at 11:00AM PT. Hurry, space is limited!

The Mortgage 2020 Virtual Conference is tomorrow and Thursday! Reserve your seat (on the living room couch) now for this must-see event by clicking here. Attendees will get important industry updates from over 50 industry leaders and peers in this livestream 2-day event (the list of speakers is too long to print here). A portion of the event proceeds will benefit MBA’s Opens Doors Foundation. The event is brought to you by the Knowledge Coop, Firstline Compliance, Shred Media, and MBA Opens Doors.

The CMLA invites you to join a FREE 28-Day Challenge for salespeople hosted by Bruce Lund, PhD in Human Performance. Bruce’s 4-Hour Workday will help you stay focused on personal, professional, and marketing essentials during this “new normal” and beyond. Enter team code CMLA28 at signup. Community and accountability are more important than ever during these times.

Corona downturn reactions continue

On the latest KBW podcast, host Brian Gardner discusses the impact of the CARES act on small businesses and residential mortgages with Eric Hagen, who covers the mortgage REITs, and Kelly Motta from our small and mid-cap bank research group.

Want news on forbearance? Here is a website.

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans in forbearance jumped from 2.73% to 3.74% during the week of March 30 to April 5. To no one’s surprise mortgages backed by Ginnie Mae showed the largest weekly growth (1.58%) and the largest overall share in forbearance requests by investor type (5.89%), while independent mortgage bank (IMB) servicers continue to have a higher share of loans in forbearance (4.17%).

There is a lot of curiosity about Ginnie Mae’s final terms of its Pass-Through Assist Program for Issuers of mortgage-backed securities that are in need of funding for the increased amount of servicer advances due to the COVID-19 national emergency: “PTAP/C19.” Mayer Brown LLP weighed in.

CIT closed on its deal to buy Mutual of Omaha a few months ago. “MOOB” is being wound down, and loans must fund by the end of June. Ask your rep for details.

Flagstar’s correspondent clients received a note about it products. “… we believe it is prudent to focus resources on our core products. As a result, Flagstar will be temporarily suspending the following products. We will honor loans which have already been submitted to underwriting and are locked on or before Friday, April 17. Lock extensions and re-locks will not be permitted after April 17; please manage your pipeline accordingly. No new submissions to underwriting will be accepted. Non-Agency products (Jumbo Fixed, Doc. #5413, Jumbo Advantage, Doc. # 5427, Jumbo Express, Doc. #5432, Second Mortgage, Doc. #5562, and Doctor Loan, Doc. #5425), Construction/renovation products (One-Close Construction, Doc. #5717, Jumbo One-Close Construction, Doc. #5724, Fannie Mae HomeStyle Renovation, Doc. #5719, Fannie Mae HomeReady-HomeStyle, Doc. #5726, FHA 203(k) Rehabilitation Mortgage, Doc. #5814 – delegated only, and FHA Limited 203(k) Repair Program, Doc. #5815 – delegated only), and Specialty Government Products (FHA $100 HUD Repo, Doc. #5813, FHA 203(h) – Disaster Victims Mortgage, Doc. #5811).

Chase Correspondent released CB20-19, its COVID-19 Update – Agency Product Guide Revisions and Credit Requirements for some Agency product and credit revisions effective with Best Efforts loans locked and Dynamic Pricing Commitments taken on or after April 14, 2020. “Revising LTV, credit score, and reserve requirements on Agency Amortizing Fixed and ARM products. These changes do not apply to Chase Agency Fast Path, Cash-Released XChange, Fannie Mae HomeReady or Freddie Mac Home Possible. Investment Properties and Cash-Out Refinance transactions are no longer eligible for delivery. These changes do not apply to Chase Agency Fast Path or Cash-Released XChange transactions.

Caliber spread the word that for loans closed on or after April 23, 2020, all borrowers must execute its COVID-19 Attestation or similar attestation within 3 days of closing. The attestation must be signed by the borrower and must contain: Income used to qualify is unchanged and not impacted, borrower is not aware of any future changes in employment status or income that will affect the ability to repay, and language that informs the borrower that forbearance is not a substitute for the ability to repay. Such attestation must be included in the closed loan delivery file. A sample of an attestation form will be posted in AllRegs. For loans in which the first payment is collected by the originator, the loan file should include a payment history and documentation, such as servicing notes, to confirm that the borrower has not requested forbearance.

Caliber Home Loans is releasing the following overlays for all products. The effective dates are listed in the table linked here.

OCWEN Financial (OCN) has provided a Business update on COVID-19 Impact; ‘No Longer has Visibility to Reaffirm Previous Guidance’.

Due to the ongoing impact of COVID-19, Caliber Home Loans is temporarily suspending its renovation products effective with Commitment Confirmations issued on or after April 5, 2020. New submissions for renovation loans will not be accepted as of April 5, 2020. The suspension is effective for all renovation products including FHA 203(K) and FNMA Homestyle.

The Veterans Administration (aka VA) released Circular 26-20-13, guidance regarding appraisal practices during the COVID-19 pandemic.

As a result of risks resulting from COVID-19, Wells Fargo Funding will not purchase Loans where a Borrower has requested forbearance, or is currently in a forbearance plan, effective for all Loans purchased on and after April 4, 2020. Wells Fargo will conduct a review of previously purchased Loans to validate investor salability.

Capital markets

For most of us, seeing the recent volatility in the market subside has been welcome news. That was again the case yesterday, as U.S. Treasuries had a quiet start to the week, with all durations pulling back slightly as the curve steepened due to continued improving sentiment around the spread of the coronavirus. Deaths have started to slow in places like New York, though, that didn’t stop Minneapolis Fed President Kashkari saying that he expects 18 months of rolling shutdowns unless a medical breakthrough takes place. Separately, Fed Vice Chair Clarida acknowledged that the coronavirus will have a disinflationary impact, but said that the Fed has tools to avoid deflation. With three Fed speakers on the docket today, we should have some more clarity into its view.

Beleaguered by margin calls, lenders greeted the news that lower coupons, and 2.5 percent in particular, were hit with most of the “spread widening” yesterday despite the Fed maxing out at both of the day’s UMBS30 2.5 percent and 3 percent FedTrade operations in which two of the day’s operations targeted those coupons (including $5.2 billion 2.5 percent). The three morning operations saw a hit rate of less than 50 percent. GNIIs were the exception early following Friday’s GNMA announcement expanding the PTAP to assist issuers experiencing cash flows difficulties due to coronavirus. For the day, the Desk purchased $11.985 billion MBS of the maximum $14.55 billion, or 82.4 percent, and 51.1 percent of the $23.47 billion tendered. Today’s MBS purchase schedule sees the Desk purchasing up to $15.675 billion of current coupon production.

Today’s economic calendar began with March Import Prices (-2.3 percent ; ex-oil -.1) and Export Prices (-1.6 percent). Later this morning brings Redbook same store sales for the week ending April 11, and three Fed speakers (St. Louis’ Bullard, Chicago’s Evans, and Atlanta’s Bostic). We begin the day with Agency MBS prices up a few ticks and the 10-year yielding (.74 percent) after closing yesterday +2 bps to 0.75 percent.

Tomorrow is the National Home-school Tornado Drill. Lock your kids in the basement until you give the all clear. You’re welcome!

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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 2020 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.)

Rob Chrisman