Daily Mortgage News & Commentary

Aug. 19: Compliance, MLO jobs; TPO, underwriting, eSign, and sales tools; News From GNMA, FHA, and VA

“The officer said, ‘You drinking?’ I said, ‘You buying?’ We just laughed and laughed…. It’s Friday morning and I need bail money.” No one ever struck it rich by keeping their money in a savings account, although American Express National Bank is offering a yield of 1.5 percent on deposits. Do you work for a residential lender making money? If so, good for you! The Mortgage Bankers Association tells us, in its Quarterly Mortgage Bankers Performance Report, that only 57% of lenders were profitable in the second quarter of 2022, and/but on average independent mortgage banking (IMB) firms and mortgage subsidiaries of federally insured depositories lost $82 on each loan they originated (versus a gain of $223 per loan in 1Q22). Lenders who held onto servicing enjoyed a profit of $133 per loan, down from $242 per loan in the first quarter. We’re more than halfway through the 3rd quarter, and I am not hearing good things about July incomes. Thousands have been laid off. (Those impacted can post their resume for free here and employers can view them for the nominal fee of $75.) Lenders aren’t the only ones cutting staff. Vendors/third-party providers like ICE and Blend Labs are doing the same. (Available here, this week’s podcast is sponsored by Agile, the mortgage industry’s MBS fintech. Bringing the mortgage capital markets into a new digital era. From lenders to dealers, Agile is the new way to quote MBS.)

Employment

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Sanctuary Home Mortgage, a member of the Newrez family of companies, is seeking a dynamic Loan Officer in the Atlanta – Midtown area. If you’re interested in doubling or tripling your volume, this is the perfect job to get you to that goal. When you say yes to Sanctuary Home Mortgage, you’ll be saying yes to an incredible opportunity to partner with productive real estate agents from Atlanta Fine Homes Sotheby’s International Realty, and to building a sustainable purchase business. You won’t want to miss out on this unique opportunity. Apply now or contact Glenda Snyder (NMLS #659055), JV President at Glenda Snyder or our recruiting team at recruiting@newrez.com.

“Do you trust your leadership’s direction and feel confident in your company’s vision? We’re proud of our past and confident in our future. It boils down to our leadership. Churchill Mortgage not only has a sound leadership team, but it is also a 100% employee-owned company, which means we are a company of owners! When you join Churchill Mortgage you become an owner. Our owners are laser-focused on the success of our company & the well-being of our customers. We are an organization that focuses on putting people above profits, one reason why we’ve been voted a Top Workplace for 10 consecutive years! We provide our salesforce with intentional tools to help our clients succeed, such as Rate Secured program that allows our clients to secure a low interest rate amidst a market of uncertainty. This allows our clients to shop with peace of mind at no cost. If this type of work environment and leadership mentality interests you, learn more about us here. While other organizations are seeking safe harbor, we’re growing and would love to speak with you about opportunities in your local market.”

Optimize Compliance Solutions is hiring an Account Executive! Contact Dave Olchek. “Optimize Compliance Solutions has evolved over 10 years of client-driven innovation, our software and products have helped numerous lenders streamline and improve their educational compliance with add-on services to MortgageEducation.com. Optimize provides a broad range of solutions including cost (and revenue) cutting, time optimization, and strengthening compliance infrastructure via key products developed by compliance managers. You will be audit-ready via real time tracking that eliminates the necessity for multiple vendors and cross-certified coursework to reduce redundancies. Let us show you how we many of your IMB colleagues have benefitted.”

Broker and lender programs, services, & software

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Declining loan volume and an uncertain economic outlook have led to widespread layoffs from lenders as they batten down the hatches in 2022. While many lenders are focused on retaining their teams, those with the right tools can also help them surpass their revenue goals in this high-cost mortgage environment. Sales Boomerang and Mortgage Coach are those tools. The industry’s first automated borrower retention and conversion platform, Sales Boomerang and Mortgage Coach provide lenders with everything they need to close more loans and maximize ROI with its award-winning technology, proven borrower scripts and unlimited training. Before you consider jumping ship, grab hold of the lifelines that Sales Boomerang and Mortgage Coach offer lenders in these troubled seas.

Success in a turbulent market requires a strong commitment to executing one’s vision. Citibank, N.A. remains committed to its vision of building a best-in-class Correspondent Channel through a consistent, client centric approach. Citi’s team of industry professionals engage sellers to unlock execution opportunities and develop lender specific ways to optimize delivery. Over the past 18 months, Citi has substantially grown the Correspondent seller base, rolled out a prime Jumbo product, partnered with pricing engines providing sellers the ability to drive CRA incentives point of sale, and provided innovative capital market solutions tailored to helping sellers realize higher returns and mitigate hedge risk through the Mandatory Trade desk. This unwavering commitment culminated in July, with Citi Correspondent Lending funding at the highest level in over 9 years! Learn more about how we can support your growth by contacting our National Client Services Team at 800-967-2205 or completing the Prospective Correspondent Questionnaire.

Your borrowers can eSign your SSA-89 with S1! Create clean initial disclosure packages and eliminate all wet signatures. Service 1st is your credit and verifications leader. 37% of all manual VOE requests are completed within 12 business hours. Cascade through 35+ employment databases to expedite results. Create lean workflows and simplify invoicing via our credit integrations with virtually all marketplace LOS platforms. The market is tough – and we’re standing by you. Contact us today. Click here to schedule meeting time @ MBA Annual in Nashville, Oct 23-26.

Did you know that as many deals are happening with an origination date from 2 years ago, as deals that are happening with an origination greater than 9 years ago. Is your marketing company helping you to identify the older pockets of data that are in the money? What does this mean for you? There’s still so much untapped potential in these spaces. In this market, it is highly critical to utilize focused data, and identify where consumers are transacting at the highest rates. Want to know more about what is actually working out there? Where to put your marketing dollars in such uncertain times? Let us know, we’d be happy to schedule a call to discuss.

AmeriHome Mortgage is the largest bank-owned correspondent investor in the country! As a subsidiary of Western Alliance Bank, one of the country’s top-performing banking companies and the go-to business bank for mortgage companies, the combined entities bring a unique value proposition to mortgage originators. AmeriHome offers a full suite of Agency, Government and Portfolio Non-Agency products, both delegated and non-delegated, including Temporary Buydowns and affordable lending products to give their clients more options to qualify buyers. AmeriHome also offers Western Alliance Bank solutions to their clients, such as traditional warehouse lines, MSR financing, note finance and treasury management solutions. The synergies between AmeriHome and Western Alliance Bank can result in tangible benefits for clients, such as faster loan purchases, higher advance rates/reduced haircuts, reduced spread due to internal efficiencies, and better returns on deposits! Reach out to learn more about how a relationship could benefit your business. Western Alliance Bank, Member FDIC.

Lender Toolkit’s AI Underwriter™ allows upfront conditioning on a loan level that creates consistency and commitment in the mortgage manufacturing process. With AI Underwriter™, all users have the ability to get conditions in 90-seconds, including loan officers. Instead of waiting on the time necessary for a person to do a manual review, AI Underwriter™ delivers immediate results. In a competitive market, loan officers need every advantage. Dave Savage from Mortgage Coach says, “to gain customer commitment and loyalty, you have to show them you know them.” With AI Underwriter™ loan officers provide a loan level needs list with borrower specific details instead of a generic needs list like most other lenders. Showing the borrower conditions with their unique datapoints demonstrates the loan officer is committed to helping them achieve their homeownership needs. Want to improve your customer experience? Click here for happy customers.

Fly above your competitors in first class. Luxury Mortgage Corp.® now offers a first-class processing service for wholesale brokers. Take your seat and enjoy this NEXT LEVEL, WHITE GLOVE service of obtaining conditions and insurance, ordering employment verifications, coordinating document signatures, and so much more. Let Luxury Mortgage’s internal staff help you land at the closing table FAST without interrupted turbulence. Take your business to sustainable new heights with the Elite Team. Check-in to find out more information on reserving your seat.

Ginnie, FHA, and VA news

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Loan officers know that all FHA-insured loans are assumable. So of course in the current interest rate environment, this assumability feature of FHA-insured mortgages is receiving greater attention from real estate agents and sellers.

Where are FHA rates compared to other programs? The MBA’s application data from last week is a good gauge. MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) was 5.45%. Jumbo apps (loan balances greater than $647,200) were 5.14%. The average contract interest rate for 30-year fixed-rate mortgages backed by FHA was 5.38%. (15-year fixed-rate mortgages were 4.87%, and 5/1 adjustable-rate mortgages were 4.43%. By the way, the “bloom is off” the ARM rose as ARM share of activity decreased to 7.0% of total applications.)

In coordination with FHA, Ginnie Mae published a Request for Input (RFI) on enhancements to the Title I Manufactured Home Loan Program. The RFI follows publication earlier this year of the Biden-Harris “Housing Supply Action Plan” and the Department of Housing and Urban Development’s FY 2022-2026 Strategic Plan. Each identifies manufactured housing as an important means of increasing the affordable housing supply. Responses to the RFI ​are due September 26, 2022.

PRMG has brought improved Government Fico LLPA’s ranging up to +50 bps. For details on all the changes, refer to the “Before” and “After” highlights in PRMG’s Secondary Marketing Update – Improved Govt Fico LLPA’s.

Pennymac is excited to offer Manufactured Homes on its existing FHA and VA products, including FHA Streamline and VA IRRRL. Full details can be found on product profiles and are available to our Correspondents as outlined in Announcement 22-48: August Product Highlight.

Pennymac has aligned with VA Circular 26-22-10 which announces a Certificate of Eligibility (COE) enhancement to add the United States Space Force (USSF) as a military branch of service. Current and discharged members of the USSF or USSF Reserves, also known as Guardians, may be eligible for VA home loan benefits upon meeting length of service and character of service requirements. In addition, qualifying surviving spouses of Veterans who served in the USSF may also be eligible for the VA home loan benefit.

As an “August Special,” Mountain West® is offering a $500 credit for appraisals on FHA, VA, and USDA loans through the month of August. View MWF Bulletin 22W-071 for details.

Capital markets

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Turning to rates, yesterday was the quietest day of the week so far in the bond markets. There was a slight rally and the yield curve steepened post-FOMC minutes. Noted hawk, St. Louis Fed President Bullard, was quoted as saying that he is leaning toward a 75-basis points rate hike at the September meeting and that he isn’t certain that inflation has peaked already. Odds are currently just above 40 percent for a 75-basis point hike versus slightly less than 60 percent for 50-basis points.

 

This week’s Primary Mortgage Market Survey from Freddie Mac showed modest declines across mortgage types following the prior few weeks of volatility. For the week ending August 18, the 30-year fixed rate fell 9-basis points versus the prior week to 5.13 percent with the 15-year fixed and 5/1 hybrid ARM rates both down 4-basis points to 4.55 percent and 4.39 percent, respectively.

 

Existing home sales decreased 5.9 percent month-over-month in July to a seasonally adjusted annual rate of 4.81 million, missing expectations versus a downwardly revised 5.11 million in June. That is the sixth straight month that existing home sales have fallen. Total sales in July were down 20.2 percent from a year ago as higher mortgage rates are compounding affordability pressures that persist with still-high prices.

 

Today is set to be a quiet close to the week with only remarks from Richmond Fed President Barkin and no economic releases of note. There is no MBS purchase operation, though for the week, the Desk purchased the $1.99 billion maximum with a 19.8 percent hit rate as $10.17 billion was tendered. 77.7 percent was in UMBS30s and the remaining 22.3 percent was in GNIIs. We begin the day with Agency MBS worse a solid .500 prices and the 10-year yielding 2.95 after closing yesterday at 2.88 percent because inflation around the world continues to rampage.

What did the surgeon say to the patient who insisted on closing up their own incision? Suture self.

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is titled, “Lenders are Eying Compensation and Ops Trends.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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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 for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2022 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)