Here is a dab of trivia to start the week. There are only about 2,000 heart transplants every year in the United States. So, on average, that’s only about 2-3 per state per month. Help others and be an organ donor! Speaking of helping, people looking for a new job, or forced out of an old one, can post their resumes for free at Lender News. And employers can view them! Tools like that are useful when one sees headlines like, “U.S. banks could cut 200,000 jobs over the next decade” through efficiency, attrition, and robots/technology. Speaking of which, if your child had heart problems, would you want them to be injected with a chip that monitored beats? Of course. How about being injected with a chip that had their credit card information so later in life all they had to do is wave their hand over a sensor to buy a couch, and some device would update it over the airwaves every day? The situation is definitely a two-edged sword for anyone who values their privacy. But it seems like we’re there. Today’s audio version of the commentary is available here; this week’s is sponsored by loanDepot Wholesale, providing a fast, integrated, and seamless technology-based lending experience for business partners and their customers.

Employment 

Mann Mortgage, a growing multi-state, community anchored, mortgage lending company dedicated to helping aspiring borrowers fulfill the dream of home ownership, has an immediate opening for a Construction Loan Assistant and a Construction Loan Administrator in its MannMade Construction division. The primary responsibilities, of both positions, will be to support the efforts of the Construction Loan Department to ensure smooth transactions and process flow for all construction loans. This individual, either in Kalispell, MT, or working remotely, will be responsible for timely and accurate data entries into the loan software program, interaction with BUILT, management of Mann Mortgage’s construction loan pipeline, assisting with builder and project approvals, supporting contractor and builder relationships, and will at all times possess a high level of attention to detail in daily tasks. Remote work acceptable with proven work experience. Please send cover letter & resume to James Hedvall, Chief Capital Markets Officer.

“Mr. Cooper was excited to announce changes to our credit box in May! The following went into effect for Delegated and Non-Delegated: Conventional and Conventional High Balance – Cash Out 1-unit (FICO 620); Specialty Government (600-640 FICO) Full Doc (Max DTI 50%); Standard Government FHA Streamline (FICO 640*) & VA IRRRLs (FICO 660*) [*Excluding NY & NJ].  We’re excited to provide liquidity and help more borrowers – keeping the dream of homeownership alive! Additionally, our Non-Delegated business is booming! Contact your Regional Sales Team as we are investing heavily into our Non-Del LOS (“GLAS”) to drive the client experience and fund loans quickly! Lastly, we’re excited to announce the Correspondent team is growing having recently promoted Devon Bevis to National Sales Manager and welcoming Georgann Degennaro as our new Northeast AE! We’re hiring and looking for additional seasoned Correspondent Sales professionals to join our expanding team. If you’re looking to join an impressive team and culture, we’d like to talk to you!”

Have you ever heard the saying, a chef is only as good as the ingredients he or she uses? Well, the same can be said of the customer service experience. The tools Caliber employees use are a critical part of fulfilling our customer needs. Take, for instance, Caliber’s ComeHome. Right from the start, the online tool makes a personal connection, allowing our customers to opt in to ComeHome via a loan consultant’s website or after closing via an invitation. Caliber customers will then receive updates about their home’s value and equity and may sign up for alerts on listings when they’re ready to move, branded to the loan consultant at every step. Caliber loan consultants are then armed with information to deliver exactly what their customer needs. Pretty cool! If you want to win with the team that understands the needs of its customers and employees alike, join the team at Caliber. Email Jonathan Stanley for Operations positions or James Hecht for Sales positions.

Churchill Mortgage, in 47 states, has named long-time employee Grant McFarland VP of Operations. Congratulations to Grant!

Broker and lender services and products

The year was 1987 when PowerPoint 1.0 shipped with its now legendary template presentation in which Christopher Columbus pitches his 1492 expedition to Queen Isabella. In more legendary presentation news, here are two upcoming opportunities to see how SimpleNexus can turbocharge ROI at your organization: (1) Credit unions looking to improve member satisfaction and efficiency through mortgage services should tune into a joint SimpleNexus/ACUMA webinar on May 19 at 2 pm ET. (2) And lenders looking for a best-in-class RON offering should register for SimpleNexus’ MBA hosted demo on May 27 at 2 pm ET.

As we shift to a purchase market, lenders will face new challenges. But challenges also open up opportunities to create a better customer experience and increase borrower loyalty by partnering with a skillful 3^rd party. A 2020 study revealed the top reason businesses outsource is cost reduction (70%) and flexibility (40%), but lenders are often reluctant to trust their processes and customer experience to a third party. Computershare Loan Services (CLS) delivers complete end-to-end fulfillment services that help manage overhead with highly trained processors, underwriters, and closers. “Our outsourcing solution integrates on to a client’s system, or we can bring a client onto ours,” says Elizabeth Baumeister, Head of Originations. “From a technology perspective, we can connect to just about any situation, which speaks to our global security framework. The solutions we develop are client-based, not just a one-size-fits-all solution.” Partner with CLS to take your mortgage fulfillment to the next level.

Today’s mortgage market creates an even greater need for competitive pricing. Are you prepared? Nomis Solutions has responded with the launch of Nomis Mortgage, the industry’s only source of non-anonymized, broad market data and analytics that help lenders achieve customer- and borrower-centric pricing via granular, intra-daily tracking and end-to-end competitive pricing tools. This real-time, actionable intelligence platform enables lenders to: (1) benchmark against specific competitors and price with data-based certainty; (2) quickly identify and act upon lucrative opportunities; and (3) optimize operational strategies to maximize profitability. Are you ready to level the competitive landscape? Contact Nomis Solutions to learn more.

“On average, 10-15% of an originator’s prospect list is someone interested in a (non-owner-occupied) real estate investment property. That’s especially true in today’s hot market. If you’re ready to fill your post-refi-boom pipeline with real estate investors, CIVIC Financial Services now offers Brokers and Correspondent partners the best rates and highest leverage in our history. This means you can serve more of your clients’ financing needs! Check this out: Non-Recourse Loans, No minimum FICO, No DTI, No TRID, Up to 80% LTV, Up to 80% Cash Out Refi, 100% Rehab financing, Foreign Nationals/Foreign Investors welcome and best of all: Close in 7-10 days! CIVIC is one of the leading private lenders in the nation. We are excited to extend largescale Wholesale and Correspondent partnerships. To learn more about building your real estate investor channel, please contact: Wholesale: [email protected], and Correspondent: [email protected].”

 

First-time buyers currently represent nearly a third of the homeownership market. As the market is evolving, so are borrower expectations, necessitating a fresh look at consumer engagement and the resources that are available to help meet current needs. Mortgage servicers, striving to embrace new and changing borrower profiles, can learn how to leverage the information on the Consumer Financial Protection Bureau (CFPB) website into borrower and servicer educational materials. At HomeBinder, we believe retaining client relationships is best realized by putting the homeowner in the driver’s seat. Click here to learn how you can leverage the CFPB to retain homebuyers and adopt our proven “Client For Life” methodology. HomeBinder is a home management platform offered solely through business partners serving residential homeowners, enabling them to deliver long term value to clients, remain top of mind, and generate referrals. Learn more about HomeBinder.

Check out PerfectLO’s new platform and you will see why they are the leader in the POS market. Their intuitive questionnaire is user friendly and unintimidating. It digs in and asks all the questions that are required to truly figure out your borrower. A custom checklist is created for them based off their answers and an easy-to-use upload portal is provided. The document center allows for processors to communicate with the borrower through the portal and it can also send out ongoing reminders for missing documents or unacceptable ones. PerfectLO can also handle all your different loan products from IRRL’s, Fix n Flip, non-QM loans and more. PerfectLO’s Bankers Edition includes Residential, Commercial, HELOC’s, PPP, Consumer Loans and Student Loans. They use all of your colors and logos throughout the screens. Sign up for a demo by clicking here. Onboarding is fast, simple, and free.

Customer service

First impressions are lasting, and what you do at the very beginning of the loan process often informs referrals — or lack thereof — at the end. Start things off right by providing a clear (and preferably complete) initial checklist of items your borrower will need to provide. According to data from STRATMOR Group, giving borrowers such a checklist results in a very high Net Promoter Score (NPS) of 82. Missing this crucial first step causes confusion and frustration, and NPS plummets to -27. In his May Customer Experience Tip, Mike Seminari offers three steps lenders can take to make sure that an initial checklist gets to the borrower and that a positive first impression produces repeat and referral business.

Events & training

Non-QM loans are back at JMAC Lending. JMAC is now offering DSCR loans for your experienced and first-time investors, and register today for the Venice DSCR Investor Non-QM webinar tomorrow, May 18, at 10AM PT.

At Forward, Blend’s virtual event from May 18-20, you can learn from industry leaders, Blend executives, and ecosystem partners as we discuss how we can move into the digital future of lending together.

Land Gorilla is hosting a live webinar, “Diversify Your Mortgage Offerings with USDA Construction-to-Permanent Loans”, on Wednesday, May 19th at 2pm ET.

QC Now Webinar: Insights into Mortgage QC Trends: Will History Repeat Itself. Join ACES EVP Nick Volpe and President, Phill McCall on Wednesday, May 19, as they dive into lessons learned from these 2020 findings and turn to where QC is headed in 2021.

XINNIX is hosting an exclusive executive event on Thursday, May 20 at 2 PM ET, “GRIT: Leading Through the Unimaginable.” Hosted by XINNIX Founder & CEO, Casey Cunningham, the event will feature special guest speaker, Paul J. Voss, PhD, on the powerful combination of grit, leadership and core competencies that will help their organizations thrive thru events that are unimaginable.

MIAC’s live complimentary webinar is on Thursday, May 20 at 2:00 PM EST to discuss the GSE Cash Cap: Preparing to Move from Cash to Guarantor. In this webinar, you will learn how to prepare for a guarantor relationship with Freddie Mac, differences between UMBS and cash from a funding perspective, and how MIAC is helping clients through this transition. This joint webinar will outline how MIAC and Freddie Mac are partnering to support the exchange of mortgages for securities, the optimization of liquidity and profitability, and the management of securitization risks.

Join Hogan Lovells and CAPCO’s webinar on Thursday, May 20^th for a panel discussion on the LIBOR SOFR transition and how mortgage companies can manage the process. Speakers will discuss transition planning, strategic and legal impacts, operational considerations, mortgage industry response, LIBOR interpretations and risks, tax guidance, open issues, and more.

Equilibrium Solutions will be sponsoring this Friday’s edition of The Mortgage Collaborative’s Rundown with Rich and Rob. Paul Campbell will be leading the discussion with Rich Swerbinsky, the COO of The Mortgage Collaborative, and me in covering current events in the mortgage market for 30 minutes starting at 3PM ET: “The Rundown with Rob and Rich.”

Join Reggora for a live webinar on Tuesday, May 25 at 1pm ET entitled Efficient Appraisal Ordering: Leveraging Automation for Increased Control. You’ll learn what you can automate, the benefits of customization, and how easy it is to automate with Reggora.

The New England Mortgage Expo returns June 10 & 11 to the Mohegan Sun Resort & Casino. Register to Join your peers for an exciting day of networking, product showcases, educational sessions, motivational speakers, and so much more. Use Code OCNFREE* for complimentary registration.

Register today for the MISMO Sprint Summit, taking place online June 7-10 and featuring an exciting slate of “Going Digital” sessions and speakers. MISMO is creating solutions to help address some of industry’s biggest challenges and this event is crucial for anyone who wants to be part of the industry’s digital future. Agenda is here and registration link is here. Monday’s kickoff session is a discussion with FDIC Chief Innovation Officer Sultan Meghji and MISMO President Seth Appleton about innovation in a digital world.

The Mortgage Bankers Association of Florida’s Secondary and Convention is from June 22-24 in Orlando.

Registration is now open for the Lender One Summit 2021, August 8-11 at the Omni Orlando Resort at Champions Gate. Access early bird rates when you reserve your spot by June 18^th.

Monday, August 9^th includes keynote speaker Frank Abagnale, renowned cybersecurity and fraud prevention expert, bestselling Author, and subject of “Catch Me If You Can”.

The California MBA holds the fabled Western Secondary in person from August 24-26 in Orange County, California.

For those in Texas, originating loans in Texas, or know how to spell Texas, mark down the date for the 105th Annual TMBA Convention: August 29-31 at the Omni Ft. Worth Hotel, Ft. Worth, Texas.

Capital markets

Consumers, armed with stimulus checks and a year of elevated savings, have pushed demand for finished goods far beyond what the current global supply chain is able to meet. As most anyone who has taken an economic course can tell you, when demand outpaces supply you get inflation. We saw last week that prices for consumer goods like clothes, food and other household goods were up 4.2 percent over the past year, well above what economists were predicting. April’s monthly increase (0.8 percent) was the highest monthly increase observed since 1981. We have seen for the last few months that producer prices have been rising and April’s report confirms that they have been able to pass on those higher costs to consumers. Additionally, labor challenges are adding to businesses’ price pressures from raw goods by putting upwards pressure on wages. Outside of autos, gas, building materials and food services, demand for goods moderated in April as some consumers shifted spending back to services. For now, the Fed is maintaining its stance that it expects current inflation levels to moderate and to keep its supportive monetary policy in place through the end of the year.

Unlike last week, this week’s economic calendar is light on data, but does contain some important housing-related indicators, as is typical for the third week of the month. The potential market moving event of the week is likely to be the release of the minutes from the April 27/28 FOMC meeting on Wednesday. Kicking off today’s calendar was Empire State manufacturing for May (26.3). Later this morning brings the NAHB Housing Market Index for May and remarks from Atlanta Fed President Bostic, Vice Chair Clarida, and Dallas Fed President Kaplan. Today’s NY Fed Desk purchase schedule sees two operations totaling up to $5.2 billion 30-year 2 percent and 2.5 percent. Last week saw the Desk surpass $2.0 trillion of asset purchases since it restarted on March 16 of last year. We begin the day with Agency MBS prices roughly unchanged as is the 10-year yielding 1.64 percent.

Remember, if you’re an underwriter being yelled at by an LO, an AE being yelled at by a broker, a receptionist being yelled at by delivery person, people are… like garbage trucks?

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, “Summer Concerns.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

qoɹ

(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 2021 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.)

Vendors and lenders, and for that matter every business that could, “turned on a dime” last year and converted workforces to being at home. Now, however, the process is reversing itself, to some extent, and with that comes hiccups. There’s this this short humorous video about life coming out of the pandemic. (Just page down once or twice and skip the ads on the video.) (Or the same video on YouTube.) What’s going on with law firms? Sullivan & Cromwell was “strongly encouraging” but not forcing anyone to come back to the office. While the Chairman Joseph Shenker was adamant that no one at the firm should feel pressured to return to in-person work, some industry observers said that messaging could be confusing and biased. One attorney told Law.com’s Patrick Smith, “It infers that there is some sort of judgement for not returning to the office.” But what’s the right way to communicate its desire to bring people back together? There’s no one-size-fits-all answer but one thing’s for sure: firms should not try to craft the message by themselves. “If you are going to issue statements that are going to affect people’s lives, they need to be vetted by people outside the management bubble,” Johnson said. “You can’t have people who work in a boardroom just issue a statement if they don’t understand how it affects 99% of their employees.”

Saturday Spotlight Company: Stewart with title offices and Trusted Providers streamlining your loan process.

 

In 3-5 sentences, describe your company (when was it founded and why, what it does, where recent growth and plans for near-term future growth). 

Stewart was founded in Galveston, TX in 1893, but we are basically a 128-year-old ‘start-up’ in the real estate settlement industry.  We are committed to being the premier title services provider, investing in our people and in opportunities that add scale and introduce innovative technology that enables our clients and partners to succeed.  As our market continues to transform and evolve, Stewart is headed to where the puck is going.

Tell us about what type of volunteer work employees are encouraged to engage in, or charities your company supports, and why.

Stewart launched a Community Service Awards program, through which Stewart recognizes and supports employees who make a difference in their communities. Just last quarter, Stewart awarded $500 donations to 85 different charitable organizations in the name of the employee nominating them. Near our headquarters in Houston, Stewart has partnered with Child Advocates, building hundreds of bikes for foster children in the annual Build-A-Bike campaign. We encourage employees to get involved locally because it is important for us to give back and to be part of something bigger than ourselves. Hopefully, our efforts will inspire others to get involved and make a difference in their community as well.

What does your company do to help elevate your employees’ growth? Describe any mentoring programs, outside classes or training, in-house training. How does the company help people develop?

Stewart has a number of internal professional training courses and materials, all housed in our proprietary learning management system, Stewart University. Specific job functions can use tools like Escrow Academy to enhance and progress their career through additional skills.  Stewart recently launched a new Mentorship Program aimed at partnering young employees early in their career with seasoned, experience industry leaders.

Tell us how your company maintains its culture in the office, or in a work-from-home environment if applicable.

Stewart has a robust internal communications platform called Workplace by Facebook that allows employees to communicate and collaborate across the country. It allows for team building and cohesion amongst groups and especially during the pandemic has allowed teams and employees to stay in contact both professionally and personally. Stewart also utilizes Microsoft Teams for document sharing and virtual meetings, allowing all work-from-home employees to stay connected.

Things you are most proud of that don’t have to do with sales.

Top to bottom, it is the people. Our Stewart family has been extremely resilient in supporting our clients, our communities and our colleagues despite a few years full of uncertainty and upheaval. Stewart has navigated this past year well and focused on growth, successfully adding several new companies, including 1,200 new employees, who brought with them the same level of determination, dedication, and culture of ‘getting stuff done’ that Stewart is known for. Pretty cool.

(For more information on having your firm, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)

Economic trends… Remember M1, M2, and M3?

Many people around the world have been watching the money supply in the United States skyrocket. Back in the 1980s and 1990s on trading desks, the Thursday afternoon announcement of money supply rivaled the current significance of our employment data that comes out on the first Friday of the month. The MBA’s Chief Economist Dr. Michael Fratantoni weighed in with some thoughts about it. “Money supply is indeed being watched. Particularly given the combination of fiscal and monetary stimulus.  Larry Summers, former Treasury Secretary, leading Democratic economist thinker, noted that while the pandemic created a deep hole in the economy, the combination of stimulus bills has now filled that hole three times over, with more spending to come. That is inherently inflationary. And that’s before we add in the Fed’s efforts to keep both short- and longer-term rates low.

“As we are seeing, the economy cannot accelerate that quickly. Supply chain constraints, shortages of workers, jumps in inflation, etc. Milton Friedman argued that inflation is, ‘…Always and everywhere a monetary phenomenon.’ He is rolling over in his grave at those money growth charts. The near-term correlation between money growth and economic statistics has always been noisy, even more so over time, but the trend is enough to be concerning. Remember that the Federal Reserve is betting that these constraints are transitory. I am expecting that inflation will run higher than we have become used to for years, but don’t worry (much) about a return to 1980 level of inflation. It’s possible, but the Fed remembers how to stop inflationary dynamics from really taking hold…raise rates quickly and push the economy into a recession.” Thank you, Mike!

And some believe that the economic recovery is regional. Peter Muoio, Ph.D., who is senior director at SitusAMC and head of SitusAMC Insights, writes, “Rob, data from our new SitusAMC Insights Heat Maps indicates that recovery from the COVID-19 pandemic isn’t the same everywhere. Regionally, economic conditions are strongest overall in the Southeast and the Southwest. The recovery, however, is off to a slower start in the Northeast and much of the Midwest. The West is more mixed. Key factors behind these differences include strong migration flows from the Northeast and Midwest to the Sun Belt accelerated by the pandemic, high housing costs, and the mix of industries that are recovering at different rates.

“We also identified a list of the top- and bottom-five metropolitan statistical areas (MSAs at the end of 2020 using NCREIF return data), which showed the pandemic has fueled growing disparities among cities during 2020. Southern California’s Inland Empire topped the list of strongest MSAs as high housing costs in Los Angeles are pushing people east. Phoenix; Denver; Cambridge, Mass; and Atlanta rounded out the list. At the very bottom was San Francisco, which is experiencing an exodus of tech companies, followed by Houston, Miami, Chicago, and the District of Columbia.” Thank you!

Optimism continues to rise that California will see a broader reopening of the state economy this summer. As of May 11, 46.1 percent of the state’s population that is 16 and older was fully vaccinated, with another 16.2 percent partially vaccinated. The state is aiming for a full reopening on June 15 if COVID case counts remain low. This is good news for California’s labor market recovery which has lagged the U.S. recovery since last year. As of March, California has recovered just 43.7 percent of the jobs lost last spring, well below the 62.1 percent for the national average. Any many expect rising employment in the hard-hit services sector to drive a stronger state economy in the second half of 2021.

Compliance: the name of the game

Lenders everywhere are focused on helping consumers, as well as helping those consumers in a compliant way. Compliance encompasses a plethora of topics, but let’s take a glance at a couple of the topics on the minds of compliance vets.

MQMR addressed what the Consumer Financial Protection Bureau’s (CFPB) Advisory Opinions Program is and how a regulated entity submits a request for opinion. The CFPB established an Advisory Opinions Program to publicly address regulatory uncertainty in existing regulations by providing written guidance in the form of advisory opinions to regulated entities upon request. Under the Advisory Opinions Program, entities subject to the CFPB’s supervisory or enforcement authority can submit a request for an advisory opinion to [email protected] or through other means designated by the CFPB. Requests are accepted and reviewed on a rolling basis. Third parties, such as law firms, trade associations, or consumer advocacy groups, may submit requests on behalf of clients or members without identifying those entities. For a complete list of the information that must be provided with the request for advisory opinion, visit https://www.mqmresearch.com/. All advisory opinions issued by the CFPB will be posted on the CFPB’s website and published in the Federal Register.

 

Another compliance hot topic from MQMR was Fannie Mae’s recently enhanced requirements for use of a Power of Attorney (POA). Fannie Mae’s guidelines for POAs in a purchase transaction now require a written record or a recorded Internet session demonstrating a meeting with the borrower to explain the Closing Disclosure after the borrower receives it. Fannie Mae’s Lender Letter, LL-2021-03 indicates that unless a recorded Internet session is required, a Power of Attorney may only be used in a purchase transaction with a note date on or after Apr. 7, 2020, if, after the Closing Disclosure or other closing statement, as applicable, has been delivered to the borrower before closing, an employee of the lender or settlement agent explains the terms of the loan to the borrower(s) to confirm that each borrower understands them. Fannie Mae also indicated that the purpose of the Borrower Acknowledgement provision is to confirm verbally after receiving the Closing Disclosure that the borrower understands both the key features of the loan and that the attorney-in-fact has the ability to contractually bind the borrower to the transaction, including the purchase of a home, on the same basis as if they had signed themselves. Fannie Mae’s Selling Guide, chapter B8-5-05, outlines all of the requirements for use of a POA.

 

MQMR discussed industry best practices related to physical maintenance of IT servers. This is separate from maintaining IT server security, but important because proper on-going maintenance of equipment helps ensure continued operations, a repair process in the event of an outage or equipment failure that is not hampered by a disorganized server room, and a commitment to organization and order, especially in the event of an audit. One recommendation was to develop a color-coding system to organize server wires and use racks with cable management “teeth” or ties to bundle wires and prevent damage. Other best practices recommended were building a checklist during server configuration to ensure that people-based controls are executed when needed.

Jonathan Foxx, Chairman and Managing Director of Lenders Compliance Group, opined on credit unions developing Community Reinvestment Act (CRA) initiatives for the first time. Generally, state CRA laws and regulations hew closely to federal reinvestment policies and standards, but provide an extra layer of oversight. His advice was to not try and go it alone if you haven’t had substantial experience. The federal CRA was passed to address concerns with financial institutions that accepted deposits from their local communities and failed to make loans in the same communities. It may not just pertain to depository institutions, but also require regulators to examine financial institutions for compliance and consider their local lending records when they seek approval to open new offices, relocate offices, merge, or consolidate, acquire other institutions, or expand their authority. A HMDA filing is still mandated, so the HMDA and CRA filings must be consistently corroborative of each other in certain states.

 

He answered another question on issuing Regulation B’s Notice of Action Taken when potential borrowers go online to complete a prequalification. Application information is taken from the customer, including credit reports, employment verifications, and the verification of other information, but some parts of the loan underwriting process are left out due to the customer not yet having a particular home or property in mind. This is to give customers an idea of the maximum amount they can borrow with a given amount for the down payment, and the price range they can afford for a home. There are a number of compliance rules under several regulations that require certain actions and/or disclosures whenever an application form is given by a lender or, in the case of Internet banking, whenever the individual is asked to supply or transmit application information online.

And Lenders Compliance released a follow up FAQ on Limited English Language Proficiency mentions Special Purpose Credit Programs. The Equal Credit Opportunity Act states that discrimination under its statutes does not include refusal “to extend credit offered pursuant to…any special purpose credit program offered by a profit-making organization to meet social needs which meets standards prescribed in regulations by the CFPB.” By permitting the consideration of a prohibited basis in connection with a SPCP, Congress protected an array of programs specifically designed to prefer members of economically disadvantaged classes, such as government-sponsored housing credit subsidies for the aged or the poor and programs offering credit to a limited clientele such as credit union programs and educational loan programs.

(Thank you to Richard B. for this one.)

A priest dies and is waiting in line at the Pearly Gates. Ahead of him is a guy who’s dressed in sunglasses, a loud shirt, leather jacket, and jeans.

Saint Peter addresses this cool guy, “’Who are you, so that I may know whether or not to admit you to the Kingdom of Heaven?”

The guy replies, “Dude, I’m Steve, a retired airline pilot from Houston.”

Saint Peter consults his list. He smiles and says to the pilot, “Take this silken robe and golden staff and enter the Kingdom.”

The pilot goes into Heaven with his robe and staff.

Next, it’s the priest’s turn. He stands erect and booms out, “I am Father Bob, pastor of Saint Mary’s for the last 43 years.”

Saint Peter consults his list. He says to the priest, “Take this cotton robe and wooden staff and enter the Kingdom.”

“Just a minute,” exclaims the good father. “That man was a pilot and he gets a silken robe and golden staff and I get only cotton and wood. How can this be?”

“Up here we go by results,” says Saint Peter. “When you preached, people slept. When he flew, people prayed.”

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, “Summer Concerns.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

qoɹ

(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 2021 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.)

 

Let me start Friday with an apology… to Alaska. (I thought I saw an eye doctor on an Alaskan island, but it turned out to be an optical Aleutian.) Julie Moore (with Alaska USA Federal Credit Union) pointed out that, given my note yesterday about Jacksonville, FL being the largest city in the U.S., “While Jacksonville might be the largest city by geographic area in the contiguous United States, it is actually the fifth largest city in the entire United States. The first four largest cities, by geographic area in square miles are: Sitka, 4,811, Juneau, 3,254, Wrangell, 3,462, and Anchorage, 1,961. Thank you, Julie! (Editor’s note: Alaska is more than twice the size of Texas.) Something else to pay attention to is what lenders are thinking as we head into the summer, which is the topic of the current STRATMOR blog post, “Summer Concerns”. Inventory in the current housing market is a concern: it is dog eat dog. (Hint: look at the photos.) Even if you want an appraisal be prepared to wait 2-3 weeks between ordering and receipt. Today’s audio version of the commentary and is available here and is sponsored by Candor Technology, offering a dynamic underwriting engine that eliminates underwriting bottlenecks.

Employment

We’re looking for a candidate with leadership experience in collateral (appraisal, condo, title) underwriting to fill a Collateral Underwriting manager position. The ideal candidate will have experience building out a team from the ground up, be a solution-oriented thinker who looks for ways to solve problems and prevent them from happening and likes working in a collaborative team environment. This role requires good communication skills and an ability to be a systems thinker to identify and implement technology-based solutions and processes. If interested, please send your resume to Chrisman LLC’s Anjelica Nixt and specify this opportunity.

The Eric Vavere Team with NEO Home Loans is excited to announce its expansion to the St. Louis market. As part of the NEO Home Loans team of mortgage professionals, the Eric Vavere Team believes in the ethos of fostering open and honest communication, and that every team member should always be cultivating new skills and growing toward their ultimate potential. Team lead, Eric Vavere, delivers a symbiotic atmosphere providing each client with world-class service that delivers optimum results, which is essential in this highly competitive market. It’s this relationship dynamic that creates a dynamic and effective team. Join the Eric Vavere Team in St. Louis and get access to the resources, tools, and training to help you generate leads and guide your career to new heights. Are you ready to transform your career? Get in touch at [email protected]. For more information on the Eric Vavere Team, contact (949) 413-3528 or check out www.ericvavereteam.com for more information.

“Nations Lending is growing at an impressive rate, taking our business next level in 2021 with increased product services to our customers and sales partners, and strategically entering the field of joint ventures. Nations welcomes Lori Phillips, VP of Production Onboarding, and Lloyd Rutherford, VP of Product Development. “Lloyd and Lori are both very valuable hires. Lloyd’s tenacity and vision in the product space immediately improves our strategy there,” said Corey Caster, EVP of National Production. “Lori will help support our existing onboarding team in retail, and with the pace of our strategic growth, her more-than-a-decade of experience building joint ventures from the ground up – handling state licensing, government approvals, and compliance – gives us the advantage to scale safely and securely.” Nations Lending remains a landing spot for top talent in the mortgage industry. Contact our VP of Recruitment Doug Opdycke (Updike) at (623) 734-5747 to learn more about branch opportunities at Nations. #JoinTheNation”

Start your career with a top 5 lender in the nation. PennyMac is looking for qualified Underwriters across the country. With a team of more than 6,000 employees and nearly two million customers, PennyMac continues to expand its national footprint to restore trust and quality in the home loan experience from beginning to end. PennyMac is a proven, solid company to grow your career with for years to come. You’ll have the ability to focus solely on Underwriting with little to no borrower, processor, or sales contact. Overtime opportunities are also provided. If you’re seeking passion and purpose in your work, more flexibility with remote options, and greater career stability, then PennyMac is the place for you. Apply today.

Broker and lender products and services

“Lakeview and Stifel, Nicolas & Co are pleased to announce the addition of Cook County, IL and Hoosier Homes in Marion County, IN to our Local Government Homebuyer Assistance Initiative. These HFA programs support sustainable homeownership for qualified low to moderate-income homebuyers, including down payment and closing cost assistance for conventional and government loans. Lakeview’s mission is to positively impact the lives of homebuyers. Join us today. Visit The Housing Resource Hub to become a participating member.”

As the share of refinance business continues to fall, mortgage Branch Managers are seeking tools to help Loan Officers make the transition to the purchase market. New tactics are required, but leaders always start with strategy. That’s why many are turning to Usherpa’s Peak Performance Learning Management System. Instead of a collection of “tips and tricks,” Peak Performance offers branch-specific strategy sessions with customized tactics that focus on your unique needs. It’s the kind of program that offers a strategic approach to helping Loan Officers perform like top producers, especially when it comes to successful sales calls to Realtors and builder business referral partners. It comes down to adding value, but you can’t do that if you don’t have a systematic method for doing what top performers do. Differentiate your team in a crowded market. Talk to Usherpa today to learn how to help your LOs in this challenging market.

When your borrowers need assistance, who do they turn to? How does your team enable borrowers to get the information they want, when they need it? Mortgage companies such as  AmeriSave, APM, and PRMG turn to Capacity to ensure borrowers find the information they need and receive a more personalized experience. By connecting to your knowledge base and disparate information, Capacity provides 24/7 level-0 support for borrowers. Capacity correctly and instantly answers more than 84% of all prospective and current borrower questions without any human intervention. Bottom line, Capacity allows you to take care of borrowers with superior customer experience and 24/7 automated support. Deploy within 30 days. Request a demo.

First Guaranty Mortgage Corporation® (FGMC) is your go-to partner for Second Homes and Investment Properties with the new enhancements to Maverick Solutions™, its proprietary Non-QM/Non-Agency product line! Our Visionary Investment product now has a Debt Service Coverage Ratio of 1, meaning your borrowers can use rental income to qualify for the subject property! We also offer the Trailblazer Jumbo product that allows for loan amounts up to $3 Million and has new low reserve requirements on all property types. If you are interested in structuring a Non-QM/Non-Agency deal or have questions regarding these updates, email FGMC’s Structure Desk at [email protected]. For more information about Maverick Solutions, contact Paul Jones, SVP of NQM Business Development, to get started today.

Company sponsored events

Down payment assistance and increasing Black homeownership: Zoom event on Thursday May 20, 2021 10AM PST/1PM EST. New American Funding & Freddie Mac have teamed up to discuss how homebuyers can overcome down payment obstacles. Freddie Mac will share its recent research including exciting new housing and homeownership data. Guest Speakers:  Lindsey Johnson, President of U.S. Mortgage Insurers (USMI), Sam Noel, Lending Engagement Manager, Freddie Mac, and Stockton Williams, Executive Director of National Council of State Housing Agencies. Join us to learn about Down Payment Assistance & Increasing Black Homeownership and how to develop, enhance and promote mortgage industry best practices to reach the Black community. Register today!

Homepoint’s pricing and turn times are as strong as ever, and a growing number of mortgage brokers continue to pinpoint Homepoint as a favorite partner to work with. On top of that, Homepoint’s popular Elevate LIVE event series is giving brokers the insight they need to boost their business. Brokers are invited to register for the next event on Monday, May 24 with Sr. Managing Director of Wholesale Production Will Pendleton and BombBomb’s Chief Evangelist Ethan Beute to discuss how brokers can build customer and referral relationships with the power of personal video. To register for the live online event, click here.

Company news

KBW released more Q1 analysis on earnings of major public players in the mortgage industry. As lenders shift gears from the “drinking from the firehose” days of 2020 and through the first quarter of 2021, it is always good to know what others are doing, right?

Rocket reported a slight beat as the company now expects gain-on-sale revenue in the second quarter of $2.2 to $2.6 billion. Investors have noted increased caution on the outlook for the industry as volumes normalize, likely putting pressure on gain-on-sale margins into next year. The reported gain-on-sale margin was 3.74 percent in the first quarter, down from 4.41 percent in the fourth quarter of 2020. The gain-on-sale margin in the Direct to Consumer (DTC) channel fell to 5.36 percent from 5.89 percent, and the gain-on-sale margin in the Partner Network fell to 1.93 percent from 2.57 percent. Management noted that gain-on-sale margins in April have fallen meaningfully. A modest increase in book value relative to GAAP income reflected the special dividend paid to shareholders on March 9. KBW said it appears that the company still has significant excess capital after paying out that dividend, and maintains strong enough earnings that there could be further special dividends or buybacks next year.

 

PennyMac saw earnings miss in the first quarter and management guidance that ROE would fall to pre-Covid levels (roughly 20 percent) for the remainder of 2021 from 43 percent in the first quarter. Ginnie Mae Early Buyout (EBO) Activity Remained a Very Strong Contributor to EPS. During the quarter, the company generated $238 million of gain-on-sale income from EBO loans up from $199 million last quarter. This equated to 32 percent of total gain-on-sale income. The company repurchased 4.7 million shares for $288 million during the first quarter, and another 270K shares for $16 million so far in the second quarter. Since the beginning of 2020, the company has repurchased 18 percent of shares outstanding. Buybacks should remain a meaningful part of the total returns as growth slows and the valuation of the shares remains compelling. Share buybacks should be accretive to EPS but not book value as the shares trade modestly above book value. A lower price target from investors going forward is being driven primarily by increased caution about the mortgage market which is facing meaningful headwinds as refinance volumes slow and industry capacity remains elevated.

 

Two Harbors noted a lower balance of interest earning assets in the first quarter, as the aggregate portfolio declined -16 percent quarter-over-quarter. KBW believes the company is well positioned to deploy capital as the Fed reduces its presence in the MBS market and expects capital deployment to increase as mortgage spreads revert to normalized levels over time. Management highlighted that increased MSR valuations were offset by lower MBS prices. Book value performance also included a one-time convertible debt repurchase premium. Given the tightness of spreads, management expects to maintain a low level of mortgage spread risk, which should result in low book value volatility. TWO has outstanding litigation with its former external manager (Pine River) that could result in a book value reduction due to a termination fee. The company expects capital deployment to increase as the Fed eventually begins to reduce its presence in the mortgage market. TWO remains focused on MSRs, which allow the company to flex the amount of mortgage spread risk it takes on. MSRs totaled 15.4 percent of total portfolio, up from 9.8 percent in the fourth quarter of last year. Management expects bulk sales to increase as normalizing GOS margins should force originators to sell in order to raise liquidity.

Capital markets

Despite hotter-than-expected April producer prices, and a larger than expected drop in weekly jobless claims, U.S. Treasuries ended Thursday rallying for the first time in four days and the MBS basis closed wider. Who can predict how “the market” will react to news? The latest Primary Mortgage Market Survey from Freddie Mac saw 30-year and 15-year fixed mortgage rates dip 2 bps and 4 bps to 2.94 percent and 2.26 percent, respectively. The Fed’s Waller spoke on the day, saying that the Fed doesn’t want to “move too quickly chasing inflationary ghosts” and that the central bank would become very concerned if 4.0 percent inflation was seen “month in and out.” The FOMC expects inflation around 2.25 percent or 2.5 percent for the next two years. Speaking of the Fed, it released a new MBS purchase schedule which covers the May 14 to May 27 period and sees coupons unchanged versus the prior schedule with all 30-year purchases in 2 percent and 2.5 percent and 1.5 percent and 2 percent in UMBS15s.

Today’s economic calendar is heavy and includes some important figures. We’ve seen both April Retail Sales (flat!) and Import Prices (+1.2 percent, stronger than expected, +10.6 percent for the year). Later this morning brings industrial production and capacity utilization, March business inventories, and preliminary May Michigan sentiment. Today’s lone Fed speaker sees Dallas’ Kaplan participating in a moderated Q&A session. That new Fed purchase schedule kicks off today with the Desk in for up to $4.5 billion starting with $3.3 billion UMBS30 2 percent and 2.5 percent followed by $1.2 billion UMBS15 1.5 percent and 2 percent. We begin the day with Agency MBS prices up nearly .125 and the 10-year yielding 1.64 after closing yesterday at 1.67 percent.

Corny anyone?

The fattest knight at King Arthur’s round table was Sir Cumference. He acquired his size from too much pi.

She was only a whiskey maker, but he loved her still.

A rubber band pistol was confiscated from algebra class, because it was a weapon of math disruption.

No matter how much you push the envelope, it will still be stationery.

A dog gave birth to puppies near the road and was cited for littering.

A grenade thrown into a kitchen in France would result in Linoleum Blownapart.

Two silkworms had a race. They ended up in a tie.

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, “Summer Concerns.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

qoɹ

(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 2021 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.)

People around the nation are “voting with their feet.” Illinois: Seven straight years of population declines. California: Losing population during a year for the first time in history. Do you ever think about the fact that one city, Shanghai, China, has more people living in it than every state besides California and Texas? (Area-wise, what is the largest city in the United States? That title goes to Jacksonville at 875 square miles, elevation 16 feet.) Did you know that over 80 percent of people who move stay in the same state? One wonders, if higher income people are leaving a particular state, does that create a bigger burden on those who remain, which encourages more departures? Provo-Orem, Utah, Coeur d’Alene, Idaho, and Reno, Nevada, are the top three high-end markets to watch, according to the luxury segment of the inaugural Wall Street Journal/realtor.com Emerging Housing Markets Index. Today’s audio version of the commentary and is available here and is sponsored by Candor Technology and includes an interview with includes a compliance segment with General Counsel Michael Dunn on common pitfalls of lenders when it comes to compliance and how to stay on top of shifting regulations. Candor Technology offers a dynamic underwriting engine that eliminates underwriting bottlenecks.

Employment & an award

“Offering the latest technology is no longer a luxury, it’s a necessity. And Sierra Pacific Mortgage delivers! If you want to work for a company that is developing and deploying the latest technology in order to drive a WOW experience, then consider being part of our winning mortgage team. We’re looking for candidates that embrace technology to create efficiencies while believing that a human approach strengthens our partnerships and commitment to unparalleled service. We welcome confidential conversations with anyone wanting to learn more about our successful Sales Team. If you are interested in joining us, email [email protected]. Find out more about Sierra Pacific’s culture here.”

NOVA Home Loans is excited to welcome two new mortgage professionals to help lead its support staff: Benjamin Schifferer will come in as VP of Underwriting, and Brooke Schlachter will join as the Director of Processing! Benjamin Schifferer has led multiple underwriting teams at many top lenders in his career. He specializes in collaborative efforts, implementing Loan Origination Software, and creating new policies and procedures. He is a married father of three who enjoys coaching youth sports, biking, and skiing. Brooke Schlachter entered the mortgage industry as a Retail Loan Officer over 20 years ago, and has since managed sales, processing, and operations teams in both the wholesale and retail worlds. She values empathy and urgency in her work, and she enjoys the outdoors with her family and two dogs in her spare time. If you’re interested in becoming part of the NOVA family, visit joinnovahomeloans.com!

AmeriHome Mortgage, the 3^rd largest correspondent and 14^th largest mortgage lender in the country, is hiring for several positions! AmeriHome’s Correspondent Lending Division is actively looking for an AVP, Pre Purchase Review Manager in Dallas, TX, an AVP, Pre Purchase Review Manager in Columbia, MO, a Loan Review Specialist (C3), an Operations Account Executive, and a QC Compliance Analyst as well as many more positions in Southern California, Texas, and remote! Why commit to a career at AmeriHome? AmeriHome promotes a thriving culture of teamwork and symbiotic growth, where one’s victory is a victory for all.  One employee says, “My team members, managers and coworkers contribute to my success at AmeriHome. I am extremely grateful to have been working with such an amazing group of people who help each other grow.” Follow AmeriHome Correspondent on LinkedIn to keep up on any updates, resources, job openings, and more! Visit its careers page to view all open positions, and submit resumes to [email protected] to schedule an interview.

Did you know Caliber is ranked No. 2 when it comes to the number of loan originations made to Latinos? That’s not by accident. On HousingWire’s “Honest Conversations” podcast, Chief Human Resources Officer Sean Harding explains how diversity and inclusion begins within Caliber’s walls. Last year, 50% of all entry-level hires at Caliber were minorities. An incredible 60% of Caliber’s workforce is female, with roughly 50% of leadership positions held by women. Caliber is breaking the glass ceiling and setting the standard. If you want to be a part of a company where diversity inclusion begins with employees and ends with our customers, then Caliber is the place for you. Join our diverse Sales or Operations teams, email James Hecht or Jonathan Stanley respectively.

Congratulations are due! The Mortgage Bankers Association (MBA) has presented its annual Burton C. Wood Legislative Service Award to John Fleming, Counsel of the Law Offices of John Fleming, and General Counsel of the Texas Mortgage Bankers Association. The award is given annually to an MBA member employee in recognition of his or her sustained superior service to the association and the real estate finance industry.

Lender products

As the refi market shrinks and rates creep-up, you need to find new and better lending opportunities. Savvy mortgage professionals are always on the cutting edge looking to expand and enhance their pipelines. ClearEdge Lending is innovating the Non-QM experience by breaking down barriers and speeding up processes. Announcing Flex Connect from ClearEdge Lending. Flex Connect takes the best features from an Agency origination process and applies them to Non-QM loans, allowing you to reduce documentation and close quickly. ClearEdge Lending is the only Non-QM lender to offer this new program. We have been originating and securitizing Non-QM loans as a true end-investor since 2015. When you want innovation, speed-to-close and streamlined documentation you will find it at ClearEdge Lending. If you want to know more about FLEX and our many other innovative programs, please reach out to our Western Regional VP of Sales, Matt Shaw and our Eastern Regional VP, John Burns.

Does Loan Originator production data alone make you any better at recruiting sales talent? Don’t get us wrong, there’s a tremendous amount of value in contact and production data, but what happens next? Without a plan of action behind the data, you just end up with names and numbers on a spreadsheet. That might impress your boss, but it doesn’t get you any closer to a hire. Model Match is an expert in strategic growth and recruiting based on 20 years of successful headhunting and recruiting in the mortgage industry. We know what it takes to attract and retain talent and our proprietary software delivers absolute value. Stop wasting time and money trying to manipulate CRM’s and drip marketing software to recruit. Work smarter, not harder with our Market Insights Pipeline Builder and create a long-term recruiting business plan. Connect with Model Match for a demo and let us show you how we can supercharge your talent acquisition process.

Managing your own appraisal panel? It’s great to have the control, but managing your own panel comes with its own set of challenges (queue images of spreadsheets and overflowing inboxes). In this upcoming webinar, the Reggora team will talk about how to introduce automation to your appraisal ordering workflow. If you’ve been looking for ways to create new efficiency without hindering appraisal quality, this is worth tuning into. Learn more and register here!

How long does it take you to commit loans to Fannie Mae? 15 minutes? 20 minutes? More? In a recent case study, Jeffrey Cassetta of Ruoff Mortgage discusses how he’s committing loans to Fannie Mae in less than 3 minutes. Mr. Cassetta states, “I load it up, push a button and within minutes they’re all committed. 54 loans, 12 different commitments, less than 3 minutes.” Wondering how he does it? Read the case study to learn how this technology has forever changed how he sells loans to Fannie Mae. Here’s a stat for you: 141,000 commitments were made to government sponsored entities (GSEs) in 2020 through MCT’s Rapid Commit technology. Its application programming interface with GSEs combines pricing and commitment with intelligent best execution capabilities. Mutual clients are discovering a five times faster loan sale process while reducing data errors. Contact MCT or join MCT’s newsletter for more information.

The average mortgage takes 46 days to close, requires 30 touch points, and costs the lender nearly $2,500 to produce. In 2021 and beyond, that’s just not going to cut it. If lenders want to compete in coming years, they need to modernize their processes. But to invest in technology confidently, it’s vital to first understand the digital mortgage trends that matter to today’s borrowers. That way, lenders won’t buy costly technology that fails to impact the bottom line. Luckily, digital mortgage platform Maxwell just put together a list of 5 major forces that are shaping the lending experience. Arm yourself for success! Click here to read Maxwell’s new blog post, “Top 5 Trends Impacting Digital Mortgage Technology Today.”

“Founded in 2017, on the principal of transparent lending, Global Mortgage offers a secure cross-border financing solution to United States citizens seeking to finance property in Mexico. Our company is backed by billions in capital and is a regulated and audited financial institution in Mexico. Our staff has a combined 200+ years of international lending experience on both sides of the border and always has our clients’ best interest at hand. Every mortgage written by our company, no matter the loan program, is fully amortized, has a fixed rate, no pre-payment penalty, no balloon payment, and no hidden fees. Approved markets: Los Cabos, Puerto Vallarta, Punta Mita, Mazatlan, La Paz, Loreto, Puerto Penasco, Todos Santos, Rosarito, Ensenada, San Miguel de Allende, Monterrey (some markets are currently subject to approval on a per file basis). Learn more here, write to [email protected], or call +1 (866) 509-4657 or +52 (624) 980-0500.”

Company news

Enact will be postponing its planned IPO this morning. Enact’s parent, Genworth, just put out a press release with this update, which can be found on its website here.

There’s a new kid on the block in the consulting world: Gate House Strategies. Gate House will “focus on FHA/Ginnie Mae/HUD and Fannie Mae/Freddie Mac policy and programmatic compliance and litigation support including origination, servicing, claims, and property disposition; strategic growth opportunities; technology; public housing; and disaster recovery.” That includes providing extensive and unrivaled expertise in the operations of government-backed mortgage programs, including FHA (forward and HECMs; Multi Family and Healthcare), GNMA, and the GSEs, and with federal and state disaster recovery processes, public housing authorities, and community development programs, including the appropriations process, grantmaking, compliance and political intelligence.” The company is led by Former HUD Deputy Secretary and FHA Commissioner Brian Montgomery, Assistant Secretary for Public & Indian Housing Hunter Kurtz, Acting Assistant Secretary for Policy Development & Research Mike Marshall, Deputy Assistant Secretary and FHA Chief Risk Officer Keith Becker, and Senior Advisor to the FHA Commissioner Dror Oppenheimer. (If you have questions, contact Mike Marshall, Partner.)

Quicken Loans, America’s largest mortgage lender and a part of Rocket Companies (NYSE: RKT), will officially change its name to Rocket Mortgage on July 31. This change will bring alignment to the overall “Rocket” brand, while also making it clear to homebuyers that technology, a core tenet of Rocket Companies, is injected throughout the entire homebuying lifecycle – from home search to mortgage closing. Recall that Quicken Loans became the largest lender in the country, closing more loans than any other retail mortgage lender, in the fourth quarter of 2017. The only difference current clients will experience is documents, letters and other communications that previously were labeled “Quicken Loans” will instead come from “Rocket Mortgage.” QuickenLoans.com will remain operational after the legal name change. In its current state, it will direct clients to apply for a home loan with Rocket Mortgage. The site will then transition to accomplish other important objectives for Rocket Companies.

Capital markets

Register now for MIAC’s live webinar on Thursday, May 20 at 2:00 PM EST to discuss the GSE Cash Cap: Preparing to Move from Cash to Guarantor. In this webinar, you will learn how to prepare for a guarantor relationship with Freddie Mac, differences between UMBS and cash from a funding perspective, and how MIAC is helping clients through this transition. This joint webinar will outline how MIAC and Freddie Mac are partnering to support the exchange of mortgages for securities, the optimization of liquidity and profitability, and the management of securitization risks. Join the discussion with MIAC’s experts: Brad Eskridge, Managing Director, MIAC Secondary Solutions Group, and Paul Raebel, Managing Director, MIAC Mortgage Delivery Services; with special guest speaker Sophie Prasada-Rao, Customer Education Services and Single-Family Delivery at Freddie Mac! Hosted by MIAC Analytics. Webinar registration is complimentary – reserve your spot today!’

Looking at potentially interest-rate moving news in the bond markets, we saw yesterday that inflation at the consumer level rose 0.8 percent month-over-month from March, reflecting gains in almost every major category, and 4.2 percent on a year-over-year basis, the most since 2009. The core measure, which excludes the volatile food and energy components, rose 0.9 percent month-over-month and 3.0 percent year-over-year, the most since 1982.

To be clear, the year-over-year CPI numbers are manipulated by COVID shutdowns at a moment when investors are fixated on widespread signs of price pressures even as the Fed insists any spike will be transitory. Regardless, all those figures came in higher than street expectations. More data like this could force the Fed to increase interest rates earlier than expected. Predictably, bond yields jumped. The fixation on the inflation data was even more evident in the fact that the market took little solace from solid demand at the $41 billion 10-year note auction on the day. With Treasury yields soaring higher, the MBS basis ended the day tighter.

Today’s economic calendar is underway with the Producer Price Index (+.6 percent, double the forecast, and core +.7 percent) and weekly jobless claims (473k, down from 566k, good news), and continuing claims came in at 16.8 million. Later this morning brings Freddie Mac’s Primary Mortgage Market Survey for the week ending May 13 and several Treasury auctions. Three Fed speakers: Richmond’s Barkin, Fed Governor Waller, and St. Louis’ Bullard, all speaking on (surprise!) the economic outlook and monetary policy. The Desk of the NY Fed will conduct the last two purchase operations on the current schedule, totaling up to $5.5 billion 30-year 2 percent and 2.5 percent. In the afternoon, the Desk will release a new two-week purchase schedule in addition to the mid-May to mid-June purchase estimate. We begin the day with Agency MBS prices roughly unchanged and the 10-year yielding 1.69 after pulling back yesterday to 1.70 percent.

Life…

I run like the winded.

I hate when a couple argues in public, and I missed the beginning and don’t know whose side I’m on.

When someone asks what I did over the weekend, I squint and ask, “Why, what did you hear?”

I don’t remember much from last night, but the fact that I needed sunglasses to open the fridge this morning tells me it was awesome.

When I ask for directions, please don’t use words like “east.”

It’s the start of a brand-new day, and I’m off like a herd of turtles.

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, “Hiring: New Tactics for a New Day.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

qoɹ

(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 2021 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.)

Is Better.com worth $7.7 billion, as indicated by the SPAC deal announced yesterday? I guess things are worth the price at which a willing buyer and seller transact. For comparison, the book value of Rocket is $34 billion, UWM $10.9 billion, Guild Mortgage $876 million. I mention Guild because of its acquisition news from yesterday, noted below. And I mention Rocket because of the UWM earnings call yesterday where CEO Mat Ishbia listed off the wholesaler’s accomplishments in the first quarter. UWM Holdings’ stock price, however, is trading near its all time low, its dividend yield is approaching 6 percent, and it is the defendant in a well-publicized lawsuit filed by brokers. Every lender, public or private, is watching economic trends in their areas: record low inventory, builders’ inability to keep up with demand, low mortgage rates, an influx of new buyers, strict lending standards, and muted foreclosure activity should prevent the housing industry from a future crash. Today’s audio version of the commentary and is available here and is sponsored by Candor Technology and includes an interview with its CEO Tom Showalter on how he moved from his career at the NSA to one applying machine learning to the underwriting process. Candor Technology offers a dynamic underwriting engine that eliminates underwriting bottlenecks.

Employment

“In 2020, Union Home Mortgage TPO channel secured more than $1.5 billion in funding. To continue its year-over-year growth, Union Home Mortgage Corp. is actively seeking experienced Account Executives nationwide, with a focus on AZ, NM, and TX markets. With an emphasis on expansion and responsible lending, Union Home Mortgage President and CEO, Bill Cosgrove, “is committed to be ALL IN to grow Union Home Mortgage’s broker and non-delegated space on a national level.” Union Home Mortgage supports both NDC and Wholesale Business Partners. You’ll receive world-class on-boarding and ongoing support as you build your business. From high-level coaching to fireside chats with leadership, you’re set up for success from the very beginning. Explore our new TPO website. If you’re interested in advancing your career as an Account Executive with Union Home Mortgage TPO, contact Jim Wickham, VP – Third Party Origination (248.318.8553).”

Christopher M. George, founder, president, and CEO of CMG Financial, knows the best way to succeed in an industry is to influence it. Throughout his career, he has worked with and led trade organizations like the MBA, the California MBA, and more. While leading CMG Financial for the past 28 years, he has concurrently advocated on behalf of the consumer and the lender for responsible lending practices and a competitive mortgage market. Under the guidance of Mr. George, each of CMG Financial’s lending channels, Retail, Wholesale, and Correspondent, was ranked as a top-producing lender by Scotsman Guide last year. Growing beyond the core channels, Mr. George led the development of a new joint venture partnership division and launched CMG Securities LLC, an owned affiliate broker/dealer. Outside of his tireless work, he gives back through the CMG Foundation. To work with leadership who advocates on your behalf apply here.

The market has lost its mind and getting a purchase offer accepted has never been more difficult! If you know what I mean, check out this funny, 60-second video. Which is why our exclusive program is a “must-have” right now! You’ll be able to make offers with no loan contingency: https://youtu.be/wDMIgyBSXB4. With no middle management, Gold Star Mortgage is positioned to help you with deeper margins too: No Middle Management. Contact Gold Star today for a confidential discussion!

Company-sponsored training & events

We’ve all seen the headlines: M&A interest and IPO activity are heating up in the mortgage industry. Whether 2020’s record-breaking profits have you looking to buy, sell or take your company public (or if you’d just like to brush up on your mortgage M&A knowledge), you won’t want to miss this fireside chat with the one and only Rob Chrisman and LBA Ware CEO & Founder Lori Brewer, happening tomorrow, May 13th from 1-2 PM ET. Topics include deal-making 101, Rob’s take on recent M&A deals, due diligence musts, and more. Register for the free webinar here.

When contestants give crazy answers on Family Feud, host Steve Harvey relies on what the “survey says” to set the record straight. But surveys don’t always reflect reality. Almost all lenders poll borrowers after closing, at which time roughly 70% say they had a great experience and would use the same lender again. Then a few years go by, and only 18% of borrowers actually return to their original lender. Join Kristin Messerli of Experience.com (formerly Social Survey), Alex Kutsishin of Sales Boomerang, and Malcolm Hollensteiner of Sandy Spring Bank on May 19 at 2 pm ET for “Survey Says: Happy Borrowers Come Back. Or Do They?” to learn why post-close survey results don’t always translate to repeat business and reveal the secret to higher customer satisfaction and borrower retention.

Leading Non-QM lender, Angel Oak Mortgage Solutions is excited to host a one-of-a-kind, unique webinar featuring their Top Producers! The panelists on “Learn From the Top to Get to the Top” have closed almost $2 billion in non-QM since 2019. The best way to learn HOW to succeed in anything is to hear from the pros, the people who are top of their game and know every aspect of their business. Originators will have access to the leaders in the industry to understand how to increase their volume with non-QM. Moderated by industry pioneer, Tom Hutchens, this webinar is a must for anyone looking to excel using non-QM in 2021.Register today!

Lender & broker services and products

Haven’t heard of QuickQual by LenderLogix? See why this LOS integration is completely changing the game for loan officers. Within minutes you can text borrowers a link to an interactive pre-approval right from your LOS, making boring PDFs that require manual changes and tireless back and forth between you and the borrower a thing of the past. One loan officer saw an 85% conversion rate for every QuickQual issued, processing 465 applications in 2020 (by himself). His success story explains how this product can help loan officers reclaim precious time in their day, increase applications and conversion rates, and increase efficiency without losing personalization. Spend less time doing clerical work and more time closing deals with QuickQual.

Some things are worth repeating and the launch of Jumbo Portfolio lending from the Correspondent Lending Channel at Citibank, N.A. falls squarely into that category! Initial feedback from our Jumbo launch has been amazing, especially when looking at the pricing incentives being offered for purchase transactions on properties residing outside of Citi’s brick and mortar footprint. With housing prices being driven to all-time highs, originators need a well-positioned Jumbo product in order to compete and one supported by a brand they can trust. We also made significant enhancements to our Agency Jumbo pricing to complement our Jumbo Launch. Citi Correspondent’s competitively priced Jumbo with loan amounts up to $3 million is the perfect tool to enhance your originators’ product set, and just the latest example of Citi’s commitment to correspondent lending. Learn more by contacting our National Client Services Team (800-967-2205) or completing our new seller Questionnaire and sending it to us.

Raise your hand if you’re happy with appraisal turn times these days. Anyone? Bueller?!? Appraisal turn times are slow right now, and there are some obvious reasons (hello, insane market demand!) and some not-so-obvious reasons. If you’ve ever wondered whether there are any repercussions for tardy appraisers, or if anything can be done about these delays, then click here to read Appraisal Turn Times: Can We Speed Them Up? This is brought to you by Triserv, a 50-state AMC that has client-specific, dedicated teams on both coasts offering high-touch, personalized service. To find out more, contact Triserv Appraisal Management Solutions.

“Up to 50% faster turn times & best in class customer service. At Service 1st (S1), we create significant value via loan manufacturing efficiencies. The results (verifications and tradeline updates delivered 2x’s faster than industry benchmarks) without the hefty price tag. Add our automated Income+ calculation reports to gain even more underwriting efficiencies. S1 is integrated with multiple loan origination platforms you probably already use for VOE, credit reporting, 4506-C, and SSA-89processing. Instantly cascade through S1 solutions within your current fintech environment. No signup fees or minimums. Get started today with a no obligation price proposal. Schedule with one of our lead experts for performance metrics, newsletter registration and referral statements from existing clients.”

Ever wonder why you don’t see ads from Google when you’re online? Or why Facebook ads don’t follow you around the internet? It’s because they advertise using direct mail! But not spray-and-pray direct mail. Google’s direct mail is intelligent, data-driven, mature, and profitable… Exactly like Monster Lead Group’s solution. That’s why Howard Korey from The Federal Savings Bank said, “Monster’s direct mail is still our best lead generator by far. It’s our bread and butter.” Schedule time to talk to the team at Monster if you need to generate more leads and are committed to growing or learn how they can help.

Lenders: Make 2021 the year you ride the inevitable digital wave to generate more leads and close more mortgages! Today’s borrowers research the home-buying process and compare lenders online. If you don’t use digital strategies to connect with those leads, your competition will. Don’t be left behind with an outdated funnel that can’t flex with market changes. Instead, prepare for this year’s purchase-heavy conditions by modernizing your mortgage lead generation practices. Want a free step-by-step guide? Click here to read digital mortgage platform Maxwell’s latest blog post, “5 Powerful Ways to Generate Mortgage Leads in 2021.”

M&A

There are a variety of reasons why one bank or lender would buy another, or why they’d merge. Cultural capability, geographic fit, operations economies of scale, channel pairing, increased financial net worth or leverage, the list goes on and on.

The latest example was announced yesterday with Guild Holdings Company (NYSE: GHLD) and Residential Mortgage Services Holdings, Inc. signing a definitive merger agreement under which Guild will acquire RMS. “Guild expects the transaction to be accretive to 2021 earnings per share and to close in the third quarter of 2021, subject to regulatory approvals and other customary closing conditions.”

The addition of RMS will “extend Guild’s presence into new geographies and create growth opportunities as Guild continues to build market share across the United States. With RMS’ strength in the retail, purchase market, Guild will leverage its core competencies to drive near and long-term growth. Based on 2020 loan originations, the combined company would have been the seventh largest non-bank retail lender in the country.”

RMS is no wallflower, with 70 offices across 14 New England and Mid-Atlantic states and generating $8.5 billion of loan originations last year with an average, over the last 11 years, of 70 purchase biz. Following the transaction, the RMS management team will continue to manage the business.

For its part, Guild knows a thing or two about not M&A as well as going public. This transaction will be the Company’s seventh successful acquisition since 2008. “Under the terms of the merger agreement, the purchase price is estimated to be $196.7 million based on March 31, 2021 tangible book value, representing 3.25x estimated 2021 earnings. The final purchase price will be determined by the June 1, 2021 tangible book value, subject to certain transaction related adjustments. RMS will also receive a three-year earnout. The initial consideration will be predominantly cash with key members of the RMS management team receiving a meaningful portion of their consideration in stock.

Wells Fargo Securities, LLC served as lead financial advisor, STRATMOR Group served as financial advisor, and Mayer Brown LLP served as legal counsel to Guild. Houlihan Lokey served as financial advisor, Winston & Strawn LLP served as legal counsel, and Buckley LLP served as regulatory counsel to RMS.

I received this note from the M&A team at STRATMOR led by Garth Graham. “With the announcement that Guld Mortgage will acquire the stock of Residential Mortgage Services, there are some interesting insights from behind the curtain. The initial conversations started pre-COVID, but circumstances, and market conditions, imposed management distractions for both parties. The mighty refinance boom, beginning in March of 2020, pushed origination capacity to the limits.  Then Guild Mortgage executed their successful IPO in August, so M&A action was limited during the mandated quiet period.

“From STRATMOR’s vantage point, it was the compelling strategic fit which sustained the discussions in spite of those significant distractions. With the additional RMS production concentration in the Northeast, Guild will complete its destiny to achieve a true nationwide mortgage origination footprint. The RMS shareholders will own an equity stake in one of the mortgage industry’s premier public lenders. The cultural compatibility and origination model match were evident from the early discussions. STRATMOR has been privileged to represent Guild Mortgage on two previous acquisitions which established Guild’s origination presence in the Pacific Northwest.”

Capital markets

Economic releases over the past week have continued to point to the momentum building since earlier in the year with the exception of the official jobs report from the Bureau of Labor Statistics. The report was a significant diversion from the ADP employment report which was released a couple days before. While both reports showed a surge in leisure and hospitality jobs, the ADP report also showed strength in manufacturing, business and professional jobs, construction, and education whereas the BLS report showed losses in those categories. It’s also noteworthy that on a non-seasonally adjusted basis, the BLS report showed a gain of 1.1 million jobs. Meanwhile, initial claims for unemployment insurance continued to decline and hit 498,000, the first sub 500K reading since the beginning of the pandemic. But total continuing claims were at 16,157,024 for the week ending April 17. While the economy continues to expand from the pandemic lows headwinds such as labor shortages, global supply constraints, and rising prices remain. Treasury Secretary Yellen, who was dovish during her tenure as Fed Chair, commented last week that the Fed may need to raise rates to prevent the economy from overheating although she noted it was not meant to be interpreted as a recommendation to do so.

Remember when the talk driving movements in the bond market was all about Brexit and the U.S. – China trade war? I can’t quite say I miss those days, but all anybody wants to talk about now is that i-word: “inflation.” Much like those previous two topics I mentioned, overly stimulative central bank policies should keep inflation on the tips of market participants’ tongues for the rest of this year, if not longer. On the bright side, it is a sign that the economy is poised to overheat rather than become anemic. We saw yesterday that small business optimism rose in April, though companies are having trouble finding qualified workers and the highest percentage of business owners since 1981 reported increasing prices. Yesterday’s Treasury market response was muted, while the MBS basis widened.

 

Today’s economic calendar is already underway and we have seen that mortgage applications increased 2.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending May 7. In consumer inflation news, also out were April CPI (+.8 percent) and core CPI (ex-food & energy +.9 percent). This afternoon brings a $41 billion 10-year note auction and the April Treasury Budget. Three Fed speakers are currently scheduled: Vice Chair Clarida, Atlanta’s Bostic, and Philadelphia’s Harker. Today’s NY Fed Desk purchase schedule is the largest of the week at $8.2 billion over three operations, including two in UMBS30 2 percent and 2.5 percent. We begin the day with Agency MBS prices worse .125 as the 10-year is yielding 1.64 percent versus closing yesterday at 1.62 percent after the strong inflationary news.

I was standing nude, looking in the bedroom mirror. I was not happy with what I saw and said to my wife, “I feel horrible; I look old, fat, and ugly. I really need you to pay me a compliment.”

She replied, “Your eyesight’s darn near perfect.”

And then the fight started.

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, “Hiring: New Tactics for a New Day.” 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 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 2021 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.)