Aug. 4: Comp study; profitability, BI, QC, API, non-QM, HELOC products; OpenDoor penalty; Two Harbors/RoundPoint deal

“Senility has been a smooth transition for me.” So quipped an attendee here at the Michigan Mortgage Lenders Association conference in Grand Rapids. The aging mortgage banker workforce continues to be a concern around the nation, but there are certainly lenders and vendors attempting to “bring in new blood.” The FTC’s $62 million fine of Opendoor’s advertising policies raised eyebrows. We had the news of Two Harbors Investment Corp.’s Matrix Financial Services Corporation entering into a definitive stock purchase agreement to acquire RoundPoint Mortgage Servicing Corporation from Freedom Mortgage Corporation. People are talking about the Equifax alleged miscalculating of consumer’s credit scores. (But could they have resulted in both worse and better mortgage pricing?) There is a fair amount of discussion is about the difficulty of the deals that are out there, and how various derivations of pre-qual, pre-approval, and To Be Determined (TBD) programs can help. Some lenders are here to learn about lock and shop programs that are being offered. Of course these programs have a cost, usually credited back when the loan funds, and anything set up should be with the help of your compliance department! (Today’s podcast is available here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services in the mortgage industry and in banking. Listen to an interview with Will Robinson, CEO of Encapture, on how mortgage banking professionals can use machine learning to lower overhead costs and increase team capacity.)

Comp: always good to know who’s doing what, and a transition

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About 40% of retail lenders who participated in STRATMOR’s Compensation Connection® Study offered a nonrefundable signing bonus in 2021.  Do you have the data insights you need to recruit and retain top loan officer talent? Participate in the Fall 2022 STRATMOR’s Compensation Connection® Study and get the data you need. The study provides valuable comparisons on compensation components, incentive plan structure, compensation percentiles, and more. Gain access to analysis that shows what other lenders are doing for guaranties and sign on bonuses to attract and recruit talent. Register for this study today!

Movement Mortgage announced that Sarah Middleton is now its Chief Growth Officer attracting, developing, and retaining loan officers around the nation. Movement has also brought on Kevin McGovern as director of coaching. These are both new roles within the company.

Lender and broker services, programs, & software

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Just 6 months after completing its approximately $1.2 billion acquisition of digital mortgage solutions provider SimpleNexus, global cloud banking leader nCino is making new appointments to its executive leadership team. nCino has tapped SimpleNexus Founder Matt Hansen to lead the global company’s product development and engineering arms as chief product officer, while fellow co-founder Ben Miller has been named CEO of SimpleNexus to continue the brand’s legacy of industry-transforming innovation. SimpleNexus’ former CEO Cathleen Schreiner Gates will remain with nCino in an advisory capacity. And Jaime Punishill will assume leadership of nCino’s marketing arm as chief market officer (CMO). Read the official announcement from nCino to learn more.

Are longer sales cycles, operating in the “unknown” and buyers deciding “not now” causing your team to struggle to stay in the game? XINNIX, the nation’s premier provider of mortgage sales, leadership, and operations training, is offering an open event to help you and your team. Share an hour with their friend and “Captain of Creating Mojo” Krish Dhanam for a one time only webinar, “Mastering Sales Motivation in Challenging Times,” held Wednesday, August 10 at 12 PM ET. XINNIX CEO Casey “Blade” Cunningham and XINNIX President Michael “Go-To” Norton will have a roundtable discussion with Krish, who is an author, mentor, a master motivator in sales and leadership.  You’ll be inspired and learn so much but also have the chance to ask questions about how you and your team can get and stay motivated.  Seating is limited.  Reserve your seat today!

The results of the Planet Home Lending/Homepoint Correspondent deal are in: Three out of four former, active Homepoint lenders locked a loan with Planet in June and July. That incredibly high penetration rate might be unheard of in the market, but not at Planet. Eight out of 10 lenders in our existing customer base locked with us in June and July, too. They come to Planet for consistency, reliability, and competitiveness. If you’re looking for a smooth passage through today’s market turmoil, talk to SVP, Correspondent Sales, Jim Loving today (414-270-0027). Find out why correspondent lenders are landing at Planet and what we can do to help you.

Why has Flagstar Bank led the mortgage space for 35 years? Many reasons, but let’s start with products. Flagstar is constantly expanding their offerings to give you what you need, when you need it. Like a stand-alone HELOC with a minimum 680 score and I/O options. And a Jumbo One-Close construction product which now offers ARMs and higher loan limits up to $3 million. Flagstar also just rolled out their Advantage Non-QM product which includes ARM options, LTVs up to 90%, loan limits from $100,000 to $3 million, and more flexible guidelines including a higher DTI up to 55%. Plus Bank Statements are coming soon. For 35 years, Flagstar’s commitment to all four channels of the space has been strong, and will remain strong. Count on it. To learn more or start a conversation, visit Flagstar.com/why or contact John Gibson.

Homeownership is the hallmark of the American Dream. Why should the process of acquiring a mortgage loan to achieve a vital aspect of the American Dream be a cumbersome and stressful process? Lender Toolkit developed an end-to-end mortgage automation platform that streamlines the mortgage process. Lender Toolkit’s AI Underwriter™ automatically fetches borrower and real estate data from a wide range of sources instead of relying on physical documents. Subsequently, the underwriting decision engines use algorithms to render underwriting decisions automatically. Imagine automating and applying underwriting conditions in 90 seconds or less with AI Underwriter™ vs 24-48 hours in a manual process. To learn about how you can digitize your mortgage processes in order to optimize humans and improve profits, click here.

Interest rates are up. Originations are down. The market is changing, and lenders need to follow the lead of a Stardusted musician and “turn to face the strange.” After all, a market downturn is prime time to embrace new tech. Consider web-based APIs, a proven way for lenders to support innovative ideas, with configurability to help you stay nimble amid rapidly changing market conditions. Then there’s the power of digital, which is helping lenders scale their operations, even in a slow market, by automating workflows and harnessing the power of AI for faster turn times and higher borrower satisfaction. Read our complimentary white paper, “What’s Now and What’s Next in Mortgage Origination Software” to learn more about how the Black Knight Empower loan origination system is helping lenders drive growth, cut costs and seize new opportunities in a challenging market.

NP, Inc. has some exciting news regarding its Non-QM TPO team. Bill Pearson joined NP, Inc. as the Vice President of Production in July. With his 10 years of Non-QM experience, Shea Pallante joined the TPO team as the Chief Revenue Officer. And Gary Arakelian will be joining as the Assistant Vice President for the TPO team. Alongside Shea, Gary brings years of experience in the Non-QM space. With their expertise within the Non-QM field; Bill, Shea, and Gary will be able to further strengthen NP, Inc.’s position in the Non-QM market. NP, Inc. stands to take advantage of the dislocation in the market with growth as other competitors start contracting in the space. NP, Inc. is a National lender, providing our broker and correspondent partners with unique loan products. NP Inc is committed to continue providing liquidity and a wide variety of products for our broker and Non-Delegated correspondent partners. In June 2022 NP, Inc. reached 26 years in business.

Leverage out-of-the-box, cutting-edge, proven technology that’s fully customizable and deployed in weeks with Richey May’s RM AnalyzeBusiness intelligence designed by and for mortgage industry experts, our platform consolidates data from every department and every piece of software you use. Need to know which loan officers are converting applications to funded loans? Get the answers in one click, plus intuitively drill down to all the details you need. Curious how you’re measuring up against your peers? Use our Peer View Ops functionality. With RM Analyze, you get a complete picture of your company and the tools to empower your managers to take proactive measures, find efficiencies, create change, and drive growth. Contact us today for a walk-through and custom implementation plan.”

Sometimes you need to zoom in to understand the quality of your loans or zoom out to get a better view of portfolio risk and opportunity. Using Indecomm’s leading QC technology, AuditGenius, lenders and servicers can quickly capture loan-level risks and trends to gain business intelligence. AuditGenius’ QC capabilities span the entire life of the loan, from pre-fund and post-close through servicing, including performing and non-performing loans. Use it internally to enable your team or combine it with Indecomm’s expert QC professionals. Schedule a meeting to learn more.

Multifamily origination trends and rents impact lenders

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Multifamily growth continued to beat expectations through the first half of 2022 after coming off a record-breaking year in 2021, but Freddie Mac projects the pace of growth will begin to moderate through the remainder of 2022. A contraction in multifamily origination volume to $440-450 billion is expected, down 8 percent to 10 percent from the peak seen in 2021, driven by macroeconomic headwinds, including inflation and rising treasury rates.

Every market Freddie Mac tracks is projected to experience gross income gains. The Florida and Southwest markets are generally expected to outperform the nation, while the smaller markets in the Midwest and few gateway markets are generally expected to be among the comparatively weaker performers. Overall, gross income growth in 2022 is forecasted to be around 6.8 percent and vacancy rates are expected to remain flat at 4.8 percent. Multifamily’s outlook and additional related materials are available online here.

Capital markets: Fed, Fed, Fed…

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“Interested to learn more about market trends and dynamics? The latest MCTlive! Lock Volume Indices show that month-over-month rate/term refinance lock volume is up 11 percent due to the recent bond market rally. Even as margins remain narrow, MCT’s Six Unique Ways to Increase Your Profitability Despite Market Headwinds whitepaper examines how MCT has helped clients maintain profitability in this down-market cycle. And with the Federal Reserve announcing its second consecutive 75 BPS rate hike last week, to get a better understanding of how this affects rates, read How the Federal Reserve Affects Mortgage Rates. As the leader in capital markets software and services, MCT supports more lenders with hedging and pipeline management solutions than any other single provider. To prepare for market scenarios that require robust margin management, contact MCT today. And to ensure you receive new content with meaningful macro trends and insights when published, please join our newsletter.”

Looking at why rates have improved over the last several weeks but hit a speedbump this week, we’ve received a lot of “hawkish” Fed talk, and Fed officials were out in full force again yesterday pledging to continue the aggressive fight against inflation. St. Louis Fed President Bullard, who has been one of the most hawkish Federal Open Market Committee voters, said that he expects a fed funds rate range between 3.75 percent and 4.00 percent by the end of the year, even if that risks a recession. (Fed speakers have pushed back against forward pricing in the money market curves.) Economic data came in better than expected, with both Factory Orders for June and ISM Non-Manufacturing PMI for July both beating estimates.

Today’s economic calendar is already under way with the Bank of England’s latest monetary policy decision. A 50-basis point hike to 1.75 percent was expected and another hike is expected in September. Kicking off the U.S. calendar was layoffs from Challenger for July followed by weekly jobless claims (-5k to 260k; continuing claims up to 1.416 million) and the June trade deficit ($79.6 billion, lower than expected). Later this morning brings Freddie Mac’s Primary Mortgage Market Survey and remarks from Cleveland Fed President Mester. The Desk will purchase up to $497 million GNII 4 percent through 5 percent MBS from early payoffs. We begin the day with Agency MBS prices better by .125 and the 10-year yielding 2.67 after closing yesterday at 2.75 percent on more recession thoughts.

Phil felt employees might be getting a little complacent. He thought a little shake-up was in order and decided it was time to rid the company of any slackers.

He went out into the shop and noticed a guy leaning against a wall doing nothing. There were workmen everywhere and he wanted them to know that he meant business. He asked the guy “How much money do you make in a week?”

A little surprised, the young man looked at him and said, “I make $400 a week. Why?”

Phil walked out to the street, found a nearby ATM, made a withdrawal, came back in two minutes, and handed the guy $1,600 in cash and said, “Here’s four weeks’ pay. Now GET OUT and don’t come back.”

Phil watched the guy leave and felt pretty good about himself. He looked around the room and asked, “Does anyone want to tell me what that goof-off did here?”

From across the room a voice said, “Pizza delivery guy from Domino’s.”

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, “Capital Markets: Protecting Margins and Assets.” 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.)

Rob Chrisman