Daily Mortgage News & Commentary

Aug. 26: Servicing, MLO, Ops jobs; marketing, automation, tech mgt. tools; .5 Agency refi hit delayed – now what?

Are you busy but bored? I am. (For variety and excitement I used a big spoon instead of the usual small spoon for my Cocoa Krispies while writing this.) And I am tired of looking at the same window for nearly six months. Apparently others are too, so some clever software person created a website for you to either share your daily view, or stare at someone else’s. Yes, historians, among dozens of other disciplines, will be studying this time period for centuries, as it is all being recorded in minute detail. Is anything ever lost anymore? What has been lost is the origin of the saying, “Success has many fathers, but failure is a bastard.” There’s also, “It is amazing what you can accomplish when you don’t care who receives the credit.” I mention these because the residential lending industry, and our clients, received some good news yesterday in the form of bad news being postponed: the FHFA’s .50 hit on refinances. Lots more below!

Jobs & promotions

A Midwest-based correspondent lender is looking to hire a servicing director. This is an executive-level position within the leadership and can be 100% remote. The ideal candidate will have extensive experience with GNMA, sub-servicer management, and working across team lines to deliver the best customer experience. Here is your chance for a dynamic leader to create something from the ground up, without having to overcome antiquated legacy systems and prior bad habits. This position will be supported by in-house developers as well as experienced secondary, post-closing, and QC teams. Please direct all inquiries to reno@neighborhoodloans.com.

AnnieMac Home Mortgage is proud to announce that our very own Ryan Kube has officially been named President, a title previously held by CEO Joseph Panebianco since 2011. Formerly serving as Chief Production Officer, Kube has spearheaded the development and expansion of all production business channels including the overseeing of planning, growth, management, and execution of all sales programs and ensuring the achievement of overall sales and business targets. His hard work, commitment and expert guidance has paved the way for AnnieMac to open 60 new branch locations, become a National Renovation Lender, launch an Affinity channel with top corporate clients and develop a Strategic Financial Alliance division that includes Wholesale, Private Label and Correspondent Platforms. Congratulations! If you would like to learn more about all of AnnieMac’s impressive accomplishments under Ryan’s leadership and how they might benefit your career growth, please reach out to Paul Zinn.

First Guaranty Mortgage Corporation is breaking all-time company records and our award-winning leadership team is looking for highly motivated Processors, Underwriters & Closers who are ready to join a team of all-stars, as well as Non-QM Underwriters & Non-QM Sales Representatives to coincide with the upcoming re-release of our Maverick Solutions Non-QM product line. Our #MortgageMaverick culture includes a charitable partnership with CASA, Paid-Time off to volunteer, a virtual Speaker Series, Career Launch Conversations, and an employee-led council made up of high-potential employees. Our commitment to our culture is clear and we would love for you to be part of the 150+ people that we plan to add to our team! Key benefits of our operations positions may include unlimited PTO, aggressive compensation plans with sign-on & retention bonuses, monthly incentive programs, and 401-K match with 2-year vesting! Plus, all operations positions are eligible for remote work. Contact us today at careers@fgmc.com  or apply online to learn more!”

Gateway First Bank has a new CEO and General Counsel: Scott Gesell. (Prior serving as interim CEO since April, he was Gateway’s Chief Administrative Officer and General Counsel.)

Lender products & services

Certified Credit Reporting, Inc. Founder and CEO Lucy Kereta-Block is pleased to announce Samantha Markwood has joined our team as the Director of Account Servicing. Having been a part of CBC Companies for the last 15 years in progressive roles throughout Operations – most recently as a National Account Manager, Samantha will be developing relationships and serving Certified Credit’s customer base with the same sunny attitude, insightful solutions, and helpful spirit that has long-made her a customer favorite. At Certified Credit, Samantha will be joining some familiar faces from CBCInnovis and Factual Data including Nicole Mattiello, the Director of Customer Success & Training, Frank Abatangelo & Lynn Sansom in Sales, and Susan Seidl, who has quickly become an integral part of the Operations teams. Looking to streamline your lending process and improve efficiency while taking a step up in customer service? Contact Nicole Mattiello.

“Managing technology deployment in normal times can be challenging but doing so in this high-volume, work-from-home environment is even more difficult. Whether it’s implementing a new CRM, deploying a POS, or simply enhancing internal systems or procedures, mortgage companies can face serious obstacles and pitfalls when managing change in their organization. Agility 360, a mortgage-centric recruiting and project staffing firm now offers Change Management Resources to ensure a smooth rollout and program implementation. We provide personnel with extensive industry experience to seamlessly support critical projects and strategic initiatives. By leveraging our unique Agility Resource Network, we can rapidly deploy project and program managers, software engineers, business analyst, technical writers, and trainers to ensure everything goes according to plan. Through our comprehensive and proven client engagement process we align high-performing and vetted personnel for your specific needs. If you’d like to learn more about, please contact Raj Sharma at 469-208-6337.”

WANT BETTER CALL RESULTS? USE BETTER Direct Mail Marketing for Mortgage Lenders from Monster Lead Group.  “It’s been your consistency; it’s been unbelievably consistent. It’s really like clockwork… We’re able to grow and scale because of the predictability of the Monster campaigns.” (Steven Sless and Andrew Parker, PRMI Reverse Mortgage Division.) “Monster is a very intricate part of our success and how we keep the phones ringing.” (Ryan Sawyer, United Mortgage Corp.) “Somebody can charge me half as much as you guys do, but I can’t get beyond the level of your results. For me, service means a helluva lot and the results speak for themselves.” (John Kresevic, JFQ Lending.) “We’ve basically stopped doing all other marketing and gone 100% with Monster.” (Manny Fajardo, Premier Lending Corp.) Monster Lead Group. If you want consistent phones and predictable ROI from your direct mail like these lenders, go to www.monsterleadgroup.com/better/ right now.

Take the headache out of the appraisal management process. Connexions’ premier appraisal management platform ensures greater efficiency and compliance, while leveraging the latest technologies. It operates intuitively, utilizing data science, product integrations and best-in-class security that can be customized to match your workflows. Connexions’ platform features accounting automation for greater accuracy, robust reporting capabilities and appraisal management filters at every step, making the process effortless. And because it’s integrated with Encompass, more feature options are available than competing platforms. It’s configurable at the branch level and even lets you auto-disable vendors on exclusionary lists for greater compliance. You’ll also receive onboarding support and ongoing service from a dedicated account representative. A free mobile app is available too! Connexions has been packaging compliance, automation and reporting at the loan, branch, and global levels for residential and commercial lenders and AMCs for 20+ years. To learn more about Connexions’ AMC software, book a demo! 

Agency excitement

If Freddie Mac and Fannie Mae were truly private companies, would everyone at the Federal Housing Finance Agency (FHFA, the regulator of Fannie Mae and Freddie Mac) be out of a job? At this point no one cares, as word came through yesterday that it is delaying the implementation of its “Adverse Market Refinance Fee” by two months, to Dec. 1. The agency is also carving out an exemption from the 0.5 percent surcharge for low-income refinance loans.

The GSEs will exempt refinance loans with loan balances below $125,000 as well as HomeReady and Home Possible loans. Lenders cheered the move, which should allow virtually all loans in the pipeline to go through without being impacted by the fee and effectively stops a huge wealth transfer from any company doing Agency refis. After that, the 50 bp upfront fee is likely to raise mortgage rates on refinances by only about 10 bp. Experts believe that we can expect little impact on actual refinance volume, but it is good news for lenders and publicly-held mortgage originators such as RKT, Wells Fargo, FBC, COOP, NRZ, PMT, & PFSI.

The MBA’s CEO Bob Broeksmit released this statement following the announcement. He also sent this member communication. Although nearly every state and local and industry group solicited elected officials and everyone else somehow involved, hats off to the Mortgage Bankers Association and the Mortgage Action Alliance. “More than 23,500 MAA members sent more than 85,000 messages to Congressional offices. Your voice was heard by 100 U.S. Senators and 99% of all U.S. Representatives, which generated bipartisan, bicameral blowback from Congress and as noted in the Wall Street Journal, the White House had ‘serious concerns with this action and is reviewing it.’”

Most in the industry thought that the 50-basis point hit would impact Freddie & Fannie refi rates less than .125 percent, depending on various assumptions. Not a death knell, but still material for either the lender or borrower. Industry analysts would be remiss, however, if they didn’t point out some potential clouds on the horizon. For example, Compass Point Research & Trading’s Isaac Boltansky cautions, “This will not be the final word in the refi fee saga as the FHFA’s stated justification (an estimated $6 billion) in potential COVID-19 losses could grow depending on the economic landscape, which suggests that the fee level may prove variable if market conditions change in the coming months… the FHFA’s justification for the refi fee suggests that the fee could move higher if economic conditions warrant… If the GSEs do eventually exit conservatorship and seek private capital, this episode will serve as a reminder of the inherent pricing power of a duopoly.”

He points out that the press release stated, “FHFA has a statutory responsibility to ensure safety and soundness at the Enterprises through prudential regulation. The Enterprises’ Congressional Charters require expenses to be recovered via income, allowing the Enterprises to continue helping those most in need during the pandemic.” The eviction moratorium and forbearance mandate included in the CARES Act enjoyed broad bipartisan support, but there was a cost associated with those actions and the refi fee is now part of the corresponding recoupment discussion… We believe there is an intellectual argument to be made that Congress should cover the costs associated with the housing mandates it passed into law. We believe this could be a topic of discussion in the fall as the fee’s effective date draws nearer, especially if the fee is increased due to higher loss projections.”

The phone calls and emails that I was involved in yesterday focused on locked pipelines. So how are lenders grappling with the loans they’ve locked recently post-price hit? Lenders may not want to automatically give it back to borrowers, if indeed they had the price hit flow through to borrowers. Good companies are working on a consistent, fair message. Some will adjust their margins accordingly. PRMG, for example, sent out, “Tor the time being, we are removing the added LLPA from our rate sheets and will adjust all locks previously adjusted for with the fee that remain in our open pipeline, provided the loan is scheduled to close by November 1st, 2020. Any loans scheduled to close past November 1st may be subject to the adjustment based on the information provided by the FHFA.”

And PennyMac “will be removing the 50 bps pricing adjustment from loans previously locked that were impacted by the FHFA refinance fee, including: Bulk loans locked on or after 8/13 where the 50 basis point fee was applied; Best Effort loans locked on or after 8/13 where the 50 basis points fee was applied; Best Effort loans that were extended or relocked where the 50 basis point fee was applied as per Announcement 20-47. Further, we are rescinding Announcement 20-47 effective immediately.”

Upcoming event clarification

From Texas I received an email about the TMBA Symposium which is actually not being held in September. “TMBA is extremely excited to announce that the Symposium has been rescheduled and will go virtual. They have found a virtual platform that will be able to deliver the same top-quality content, engagement, exposure, and experience that you have come to expect from their live events. Mark your calendars for November 17-18, 2020.” I apologize for any confusion.

Capital markets

This week we learned that American Airlines is prepared to lay off 19,000 unless the government stimulus comes through. Last week we learned that U.S. economic data continues to trend towards a flattening pace of recovery following the initial bounce back as states lifted stay at home restrictions and allowed businesses to reopen. For the second week in a row, jobless claims increased and were back above one million new filers. With Congress unable to reach a deal on another round of stimulus and executive order to provide an extra $300 starting in September and being applied retroactively will have to hold over those who have been unable to return to work. The leading economic index (LEI) surpassed market expectations when it rose 1.4 percent for July and June’s numbers were also revised higher. One of the factors that led to the increase was the unexpectedly high gain in housing starts, which surged 22.6 percent for the month. While the headline was driven by a 58.4 percent increase in multifamily starts, single family starts still rose a respectable 8.2 percent. Homebuilder confidence was the highest on record in August for the 35-year history of the series. New homes need new mortgages and with purchases unaffected by the FHFA fee, mortgage rates are likely to remain very low for homebuyers through the fall.

The risk-on trade I mentioned yesterday morning continued throughout the day, with both investors counting on the Fed to stay accommodative as the economy recovers from the pandemic, and signs of easing U.S. – China tensions driving the move. Trade officials from China and the U.S. reportedly had a “constructive” conversation about the trade deal Phase One Agreement with both sides allegedly indicated there had been progress and they were committed to do what was necessary to have a successful outcome.

Yesterday we learned that new home sales surged nearly 14 percent month-over-month in July, the strongest pace of sales since December 2006 and noticeably higher than January’s pre-pandemic pace. On a year-over-year basis, new home sales were up a massive 36.3 percent. Robust sales activity in the new home market should continue for the foreseeable future given the tight supply of existing homes for sale, low mortgage rates, pent-up demand, and an emerging, coronavirus-driven shift by city dwellers to suburban settings. Consumer confidence fell to a figure well below expectations in August, the lowest reading for the index since May 2014. The report obviously reflects difficult labor market conditions that are weighing on discretionary spending activity. The FHFA Housing Price Index increased 0.9 percent in August and the S&P Case-Shiller Home Price Index rose 3.5 percent in June.

Today’s economic calendar is underway with a duo of releases. Mortgage applications decreased 6.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 21. The FHFA refinance announcement may have spooked conventional refinance applications, which fell 11 percent. Government refinance applications also fell 6 percent, though the home purchase market remains a bright spot for the overall economy at 33 percent higher than a year ago.

We’ve also had Durable Goods for July (+11.2 percent, much stronger than expected) and Durable Goods ex-transportation (+2.4 percent). A $51 billion 5-year Treasury note auction is ahead. There is just one Fed speaker scheduled, Richmond President Barkin, though beginning tomorrow is the Kansas City Fed’s 44th Annual (virtual) Economic Policy Symposium where Chair Powell is scheduled to speak. There is some talk that the Fed’s policy review will lead to a greater commitment to boosting inflation that will be announced during that speech tomorrow. Fed Chairman Powell has been doing his best to increase inflationary expectations in the face of a deflationary crisis. The Desk will purchase up to $7 billion maximum over three operations: two will be in UMBS30 2.0 percent and 2.5 percent for $2.8 billion and one GNII 2.5 percent and 3.0 percent for $1.4 billion maximum. We begin the day with Agency MBS prices worse/down nearly .125 and the 10-year yielding .72 after pulling back to 0.68 percent yesterday.

I’d tell you a coronavirus joke now, but you’ll have to wait two weeks to see if you got 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, “No One is Standing Over Anyone’s Shoulder”, focused on managing remote employees.

Rob

(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.)