April First Edition: MBA 2022 forecast; CFPB on the move; NMLS update; mortgage debt forgiveness plan

Lenders and originators follow not only trends in the industry but also predictions. The MBA came out with a revised production forecast for 2022. Interestingly, it mimicked, nearly word for word, its 2021 forecast except the numbers are different. “The good news is that many lenders will reach their goal of 70% purchases making up their volume! The bad news is that overall volume will be down by 90%.” This once again has spooked the originator herd and I received this note from a new LO in Wisconsin: “Rob, my mentor told me that I could make a living originating loans, especially refis. And now we hear this forecast. I’ve spent most of my time focusing on hobby farms. I was really starting to gain traction until rates went up two percent… do you think that I need to reevaluate my future in lending?” Yes.


Licensing trends


The NMLS turned some heads late last week with its latest press release. “At NMLS, We are doing our part to help the mortgage industry! We enhanced our systems to provide you with more oversight and confusion, resulting in additional wasted time for compliance. If you don’t have a full-time person dedicated to NMLS, support the economy, and hire one now! In addition, thank us for all the jobs we have created with your local government. Someone has to review all the stuff you enter. At NMLS, we are working hard to make a confusing website that doesn’t follow standard programming rules to make you consider getting more computer education. We even host a conference to teach you our system. Look at the jobs we have created! Dreaming up unnecessary compliance and making it complicated, just one of the ways we at NMLS contribute to the industry.” Soon after the release was announced Texas threatened to secede from the United States.

Corporate moves


In an unheralded move, the top lenders in 2021 have formed a club. “We haven’t had this much fun since Indymac and WAMU were competing for our stated-stated loans at a price of 105” said one CEO. Rocket, U.S. Bank, Rocket, UWM, Wells Fargo, Freedom, and others are all as giddy as schoolgirls at the prospect. When organizers were reminded that MetLife is no longer in the mortgage business, they replied, “That’s cool – we’re all one big happy family.” Apparently, this group of mid-sized lenders has grown weary of larger players coming and going, buybacks, and being lumped in with anyone worried about Basel III.

The club plans to do its own servicing, issue its own securities, map out its own underwriting guidelines, and even have its own secret conferences. One source, requesting anonymity, stated, “We’re going to have our conferences in Kansas – which is both in the middle of everything and in the middle of nowhere. And it is supposed to get the internet in 2022, which ties in nicely with our plans. We’re tired of those MBA shindigs in expensive places with lousy airports and odd elevators – and those fancy restaurants don’t hold a candle to Arthur Bryant’s BBQ. We’re going to create ‘Lender Town’ as a permanent conference center – we’ll really be able to let our hair down. It’ll be modeled after Disneyland, with a submarine ride to see the underwater houses. And instead of Abe Lincoln giving the Gettysburg Address, we’re going to have a statue of Andrew Cuomo giving a speech from 2001 about how the government needs to increase home ownership.”

Changing regulatory landscape


The CFPB has spread the word that it is hiring in order to staff up for its next project. “Word comes to us that a borrower who actually read the 78-page simplified disclosure package found 12 misspellings, 4 missing punctuation marks, and a very risqué double entendre,” announced spokesman T. Hood. Soon after the release was announced Texas threatened to secede from the United States.

And in a surprise move, the CFPB announced that it has ceased auditing mortgage companies and will instead turn its attention to brothels. One source said, “Look, mortgage lenders have been audited by every 3 or 4 letter government agency in existence. They’re people too! How many cavity searches can one’s operations department go through? Besides, it isn’t much of a stretch since consumers and finances are involved. If you’re an auditor with the CFPB, would you rather be in a room with some haggard middle-aged mortgage banker or…” Consumer complaints in this segment of the entertainment industry have been too numerous to count. “She promised one thing, and I got something entirely different” said one complaint. “The Good Faith was questionable, there was no recission period, and they didn’t honor their price,” said another. “The disclosure paperwork in that industry will warrant a close examination,” said one spokesman. It is rumored that the CFPB’s first audit will be Kitty’s Fun House, east of Reno, and the audit could take 24-36 months. Kitty was unavailable for comment.


The Bureau of Financial & Underwriting Accounting Standards answered critics who are, senselessly, asking for financial accountability. These critics ask, “Speaking of FICO scores, one wonders what the FICO score would be for the federal government given it is $30 trillion in debt? Better yet, what’s the federal government’s DTI? Would the federal government qualify for the QM all lenders adhere to?” Soon after the release was announced, once again Texas threatened to secede from the United States, claiming that this is worse than cash out refi’s.

In a related but unrelated matter, Maxine Waters (D – CA) has announced a plan to forgive all mortgage debt in 47 states. It was not clear, however, which 47 states are included in the plan. “This is America, and we need to show the world that borrowing money and signing legal documents carry no weight whatsoever. And as for the 3 states that aren’t included…well, let them figure it out.” Soon after the release was announced Texas threatened to, once again, secede from the United States.

It has been discovered that a little-known provision in the Dodd-Frank Act requires all FDIC insured institutions to honor mortgages and liens “written on any living animal.” Legislators aren’t certain how the provision made it into the final bill, but believe it was an intentional slight by an analyst, in response for having to put the Durbin Amendment in. Whatever the explanation, MERS and servicers aren’t laughing. “This has become a real headache,” said MERS spokesperson Christopher Riley. “At first, it was just a few cows, but when folks here got wind of it, they started bringing in whole barnyards. Right now we’ve got four cows, twenty-one chickens, seventeen hogs, three mules, and a goat.”

The problem isn’t limited to rural institutions. “We’re seeing more and more of it,” said Scott Short, President of San Francisco Federal Thrift & Loan. “Dogs, cats, hamsters, snakes…you name it. Sometimes these animals shed their skins and some eat each other. Then what do you do?” Fraud has also been a problem. “We had to sell a mortgage written on a bird,” said Mr. Short, “The first chance the pigeon had, it then flew right out the window.” This still small but growing practice has also impacted shipping departments around the nation, clogging already-backlogged operations departments by having to ship live animals to the aggregators. Bob Broeksmit, President of the MBA, recently testified before Congress, “Our members’ back offices were not designed with animal husbandry in mind. If you thought robo-signing was a nightmare, try having the CFPB audit a room full of monkeys.”


Capital markets: always confusing


Turning to the markets, the economy is going to improve slowly. The economy is also going to improve fast. Or vice-versa. It will definitely be one or the other. Or something in between. It’s just an issue of sooner or later, more or less. The opposite is probably true, too. Even so, no matter how gradual the improvement, it will be sudden. The economy will stall around the third quarter, before Halloween, then build momentum through the rest of 2022, reverse course in 2023, then pause for a cigarette break. Whatever the case, the economy is headed in the right direction, roughly east by southeast. This comes to us from a new predictive algorithm from the CFPB which is attempting to regulate economics.

The good news here is that the recovery is fully underway. The bad news is that the recovery will most likely take the rest of our lives. In fact, once we finally do turn the corner, we’ll still have to turn another corner, and then at least two more, only to bring ourselves full circle, a phenomenon MBA economists call “cyclical.” In short, the only rebound that will happen this year will take place on a basketball court. All signs point to that scenario, even though our mother always told us it’s rude to point. Evidence to that effect is considerable. Some companies looking to scale back payrolls will now offer early retirement packages only to employees who have recently died. Anyone who has lost a job since the recession began can now get a tax credit toward retaining a private investigator to try to find it for you. And the private sector is increasingly making fun and pointing at the public sector.


Economists at Fannie Mae and Freddie Mac say all of these are surefire signs of a surging economy. Until they aren’t. To be sure, the dollar is still weak, driving up gasoline prices, but reports have come in from Europe that it has started doing some cardio and eating more cruciferous vegetables. (Use a dictionary.) And though it’s already a given that the recovery may be jobless, it now appears likely it will also be shirtless and hairless as well.

There’s nothing funny today.

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, “Lenders Continue to Pivot” about how lenders and MLOs continue to shift to a purchase-centric focus. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).


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Rob Chrisman