Get up, stand up, stand up for your rights. Residential lending and the court system are inextricably linked. (See Lehman Brothers story below.) But we’re not alone. Intellectual property and copyrights are big things. For example, just ask The Verve. Remember the band’s hit “Bittersweet Symphony” in 1997? Mick Jagger and Keith Richards said, “Not so fast” and sued for songwriting credit and 100 percent of the royalties for the song, claiming that “Bittersweet Symphony” was built around a sample of an orchestral version of The Rolling Stones’ “The Last Time.” For over 20 years, Verve lead singer Richard Ashcroft didn’t receive a dime from the success of “Bittersweet Symphony,” but that changed a couple years ago year when Jagger and Richards granted back the rights. Perhaps a) Ashcroft learned his lesson and the Stones proved a point, and/or b) Mick and Keith have a combined net worth of approximately $1 billion already, so what the heck? (Although The Saturday Spotlight took today off for the holiday, for more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)

Thoughts on housing prices

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This week the Commentary had, “Fairway Independent’s Jennifer S. sent over this tweet from Congress. ‘The median annual pay during the Great Depression was 22 percent of the cost of an average home. Today it’s 14 percent. That means that pay relative to home cost made it easier to buy a home during the Great Depression than right now.’ Originators have their work cut out for them in becoming subject matter experts for their clients in this rate and affordability environment!”

The note prompted Banner Bank’s Aaron M. to scribe, “My initial thought (after reading this) was just how out of whack the price of housing is to income. But then I remembered a young homebuyer who once told me she’d never have a used toilet’ in her home so she demanded buying a new home. I’m sure I obliged, and put her into a 44% DTI with a smile and sent them down the road. The reality is she could have paid much less for a smaller, less glossy version of her dream at the ripe old age of 20-21 years old.

“I just wonder is it the price of housing out of whack or are our 3,000 + square foot bidet filled, marble finished homes out of whack because we just demand too much as a consumer and have confused need with want so the price for ‘standard’ equipment has just gone up. I visited Costco last weekend (admittedly buying things I didn’t need) and couldn’t get the video you posted a few weeks back out of my head.

“We want what we want, and I’m just as guilty of living large, but I’m inclined to think we have created our own hell over time by successive generations slowly demanding more and more until we’re here and the price point of not just housing but all goods and services is going to break America.” Thank you, Aaron!

Remember Lehman Brothers?

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If you weren’t in the biz in 2008, never mind reading this although it does give you an idea as to the perseverance of attorneys and accountants. I sold plenty of loans to Lehman Brothers and its subsidiaries, and why not? It offered great prices and underwriting tailored to meet the needs of lenders and borrowers around the nation. The company’s implosion was inextricably linked with the global financial crisis and whose subsequent bankruptcy is often rated as the starting line of the Great Recession, still in fact technically exists.

And Lehman Brothers is moving forward. Just ask any lender who it has gone after in the courts. It’s been in court since the implosion, and is staffed mostly by lawyers and accountants who have been in charge of selling off the company’s assets and paying out to creditors and doing a fine job of it. In 2012, only about 6 percent of outstanding Lehman Bros debt was paid, and overall the initial estimate for the percent of assets that unsecured creditors would eventually recover was a little over 21 percent. But as of this April, they’ve actually gotten back 46.5 percent of assets.

(This is not an ad, but if you’re a lender and want information on defending against repurchases or buybacks from a previous era, one place to start might be James Brody at Johnson | Thomas.)

Recession basics

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At some point those predicting a recession will be right, just as predicting an economic expansion will eventually be correct. Economies function in cycles, regardless of administration or foreign policy. And the “old” definition of a recession being two quarters of negative GDP, while simple and easy to understand, is stale and not accurate. And an inverted yield curve does not always predict a recession. Let’s take a look.

We saw this week that inflation remains too strong for the Fed’s liking and the committee discussed the negative GDP print in Q1 specifically. Participants commented that after its rapid growth in the last quarter of 2021, net exports and inventory investment’s large negative contributions to growth caused real GDP to decline in the first quarter of this year. These volatile components present few indications about subsequent growth and the Fed thinks that there is significant underlying momentum in the domestic economy due to advances in household spending and business fixed investment combined with the further tightening of labor market conditions. Fiscal policy is intended to act as a natural drag on the economy while the supply chain issues get worked out, and a few members noted that there were signs that the pandemic-related strains on labor supply were easing.

The National Bureau of Economic Research (NBER) has the responsibility of determining when a recession begins and when it ends. More specifically, it is the Business Cycle Dating Committee within the NBER that decides. Forget “a recession occurs any time you have two consecutive quarters of negative Gross Domestic Product (GDP) growth.” According to the NBER, “A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators like real GDP, industrial production, and wholesale-retail sales. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough.”

So the NBER looks at multiple factors when determining whether or not we are in a recession. But because “a recession is a broad contraction of the economy, not confined to one sector, the committee emphasizes economy-wide measures of economic activity. The committee believes that domestic production and employment are the primary conceptual measures of economic activity… the two most reliable comprehensive estimates of aggregate domestic production are normally the quarterly estimate of real Gross Domestic Product and the quarterly estimate of real Gross Domestic Income, both produced by the Bureau of Economic Analysis.”

And looking at employment, NBER’s Business Cycle Dating Committee views the payroll employment measure, which is based on a large survey of employers, as the most reliable comprehensive estimate of employment.

Recall that the NBER officially declared an end to the economic expansion in February of 2020 as the U.S. fell into a recession amid the coronavirus pandemic. According to the NBER, the recession was the shortest on record ending only two months later in April 2020.

Loan officers should know that there is no single way to predict how and when a recession will occur since economists assess several metrics to determine whether a recession is imminent or is already taking place. NBER aside, according to many economists there are some generally accepted predictors that when they occur together may point to a possible recession. Leading economic indicators (the ISM Purchasing Managers Index, the Conference Board Leading Economic Index, and the OECD Composite Leading Indicator) are watched, as is the Treasury yield curve. Officially published data series from various government agencies that represent key sectors of the economy, such as housing stats and capital goods new orders data published by the U.S. Census, are also monitored. Changes in these data may slightly lead or move simultaneously with the onset of recession, in part because they are used to calculate the components of GDP, which will ultimately be used to define when a recession begins. Last are lagging indicators that can be used to confirm an economy’s shift into recession after it has begun, such as a rise in unemployment rates.

Container homes: perfectly acceptable, but an acquired taste?

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Sure many parts of the nation are turning to accessory dwelling units (ADUs) to help with the crunch. What about the role of container homes in helping solve some of the issues facing a housing shortage? A few folks have written to me about them, and more specifically if Freddie Mac and Fannie Mae will buy them. Yup, each Agency addresses them, but of course the question is whether lenders have collateral overlays!

In Freddie Macs Guide Section 5605.5(e). “Non-conformity to the neighborhood and non-traditional or unique property types. When the subject property does not conform to its neighborhood in terms of type, design, age, materials, or techniques used in its construction, the appraisal must evaluate the effect the nonconformance has on the property’s value and marketability.

“Mortgages secured by non-traditional types of properties are eligible for delivery to Freddie Mac. Examples of non-traditional or unique property types include, but are not limited to, “barndominiums” (barn conversions or barn-style buildings), “shouses” (living-space and work/storage combinations), berm homes, log homes, and geodesic dome dwellings. The appraiser must demonstrate that the dwelling type or style is marketable and must ensure the property has an acceptable quality and condition rating. Additional analysis may be required to determine whether the design or style represents a mixed-use configuration. (See Section 5601.5 for mixed-use requirements.)

“The appraiser may use traditional homes as comparable sales for non-traditional or unique properties as long as the appraiser determines and adjusts for any differences between the subject property and the comparable sales and can justify and support the use of the comparable sales in the appraisal report.

Fannie Mae also addresses “Unique Housing Types.” “In the appraisal and appraisal report review processes, special consideration must be given to properties that represent unique housing for the subject neighborhood. Mortgages secured by unique or nontraditional types of housing, including, but not limited to, earth houses, geodesic domes, and log houses, are eligible for delivery to Fannie Mae provided the appraiser has adequate information to develop a reliable opinion of market value. It is not necessary for one or more of the comparable sales to be of the same design and appeal as the property that is being appraised, although appraisal accuracy is enhanced by using comparable sales that are the most similar to the subject property. On a case-by-case basis, both the appraiser and the underwriter must independently determine whether there is sufficient information available to develop a reliable opinion of market value. This will depend on the extent of the differences between the special or unique property and the more traditional types of houses in the neighborhood and the number of such properties that have already been sold in the neighborhood.

“When appraising unique properties, if the appraiser cannot locate recent comparable sales of the same design and appeal, but is able to determine sound adjustments for the differences between the comparables that are available and the subject property and demonstrate the marketability of the property based on older comparable sales, comparable sales in competing neighborhoods, the existence of similar properties in the market area, and any other reliable market data, the property is acceptable as security for a mortgage deliverable to Fannie Mae.

“If the appraiser is not able to find any evidence of market acceptance, and the characteristics of the property are so significantly different that he or she cannot establish a reliable opinion of market value, the property is not acceptable as security for a mortgage deliverable to Fannie Mae.

“Fannie Mae does not specify minimum size or living area requirements for properties with the exception of manufactured housing (see B4-1.4-01, Factory-Built Housing: Manufactured Housing). There should be comparables of similar size to the subject property to support the general acceptability of a particular property type.

“For additional information, see B4-1.3-05, Improvements Section of the Appraisal Report.”

(Thank you to Mickey S. for this one.)

This old lady handed her bank card to the teller and said, “I would like to withdraw $10”. The teller told her “for withdrawals less than $100, please use the ATM.

The old lady wanted to know why.

The teller returned her bank card and irritably told her, “These are the rules, please leave if there is no further matter. There is a line of customers behind you.”

The old lady remained silent for a few seconds, handed her card back to the teller, and said, “Please help me withdraw all the money I have.”

The teller was astonished when she checked the account balance. She nodded her head, leaned down and respectfully told her, “You have $300,000 in your account but the bank doesn’t have that much cash currently. Could you make an appointment and come back again tomorrow?”

The old lady then asked how much she could withdraw immediately. The teller told her any amount up to $3,000.

“Well please let me have $3,000 now.”

The teller kindly handed over $3,000, very friendly and with a smile to her.

The old lady put $10 in her purse and asked the teller to deposit $2,990 back into her account.

The moral of this story is….

Don’t be difficult with old people, they spent a lifetime learning skills like this.

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, “A Primer on the Federal Reserve and Mortgage Rates.” 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 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.)

What guy hasn’t wanted to usher a gal through to a club like Ray Liotta did, masterfully filmed without cutting away? Unfortunately, breaking the spell of the video, I received this note. “Rob, what have you heard regarding a miscalculation of credit scores by Equifax in late March and early April on a sizeable portion of their pulls?” I have indeed heard rumors, and indeed heard rumors that it potentially impacted thousands of borrowers across the United States, possibly influencing the loan programs and pricing that those borrowers received. Something to do with a coding issue introduced during a technology change to Equifax’s legacy online model platform (OMS) possibly resulting in the potential miscalculation of certain credit attributes. Given the seriousness of these rumors, and the potential legal implications of an error of this magnitude, you should definitely reach out and ask Equifax, or ask your credit reporting agency for more information. But hey, it’s Friday before a 3-day weekend. Who wants to work? Yes, after Monday you’ll be able to wear white shoes and be fashionable. So spend 5 minutes taking one of my favorite quizzes focused on figuring out where you’re from based on the words you use for certain common things. (What do you call the little bug that rolls up into a ball when you touch it?) It’s uncanny! (Today’s podcast is available here and this week’s is sponsored by Matchbox LLC, igniting ideas for the mortgage industry. Expertise in assisting clients through transition periods with Technology, Capital Markets, and Education.)

Careers & promotions

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“Take your originations to the next level. The past few months have been challenging for all of us, but at Ross Mortgage Company our LOs are still productive because we are one of the few remaining independent mortgage lenders based in the northeast that is expanding nationwide. We have worked tirelessly to develop a variety of programs to supply our originators with the resources required to grow their business. Exclusive partnerships with world renowned hospitals and large national unions not to mention a robust internal lead generation platform that keeps originators ahead of the competition. We look forward to starting a productive conversation with you on how we can accelerate your origination career. Contact VP Kevin Coleman for more information!”

“If you’re wanting to take your originating career to the next level, we will get you there! In most cases when an originator hits a plateau it’s because the platform they are on doesn’t allow them to grow beyond what they’ve already achieved. One of the Top Originating teams in the nation is looking to help 1 Originator achieve their goals and reach the next level of their career. Looking for a new opportunity is scary, but when that opportunity has a proven track record, a dedicated operations team that closed over $190M last year, fear turns into excitement! Top producers have some advantages not available to everyone. It’s time to give yourself those same advantages, start dominating your market, and take your career to the next level. If you close $25M or more per year and are looking for a breakthrough, contact Anjelica Nixt or click here to schedule a confidential conversation.”

Get ready for a big expansion between CMG Financial & RE/MAX Gold Nation. RE/MAX Gold Nation, named the Number One Franchise Real Estate Organization in the World by 2021 REAL TRENDS 500, and CMG Financial, named a Top Overall Lender by U.S. News & World, have combined forces to form HomeGuide Mortgage. Combining the powers of two major hitters in the home buying field will bring a cutting-edge home financing experience in today’s market.

“We conducted an arduous search for the mortgage partner who would best serve the agents & their clients in Northern California and Nevada,” said James O’Bryon, CEO of RE/MAX Gold Nation. “Chris George and CMG best demonstrate the commitment and entrepreneurial spirit to accomplish this objective. HomeGuide shall be the premier lender in the galaxy of real estate essential service providers.” Interested in joining one of CMG partner companies? Reach out to Chris Harris.

As the market pivots to purchase, Planet Home Lending is already there with the products that win real estate bidding wars and move customers from the pipeline to the closing table. Our Cash 4 Homes program guarantees to close your buyer’s home loan on time or we buy the house for cash. Planet’s bridge loan lets buyers contract to buy as soon as they list so they avoid being stuck between homes when they move up. Those niche products are just one reason Planet Home Lending is rapidly moving up the ranks on the way to becoming a Top 10 lender. Find out more when you watch the new video from EVP, National Production, Caleb Mittlestet. Then, send a note to Caleb Mittelstet or SVP Talent Acquisition Brian Miller. Grow your business with Planet Home Lending — Right Place, Right Size, Right Now!

Inlanta Mortgage, with 39 branch offices in 27 states, announced that Paul Buege has been promoted to CEO. Mr. Buege has been serving as Inlanta’s president and COO and will retain those responsibilities in addition to his new role.

Lender & broker software, services, and programs

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Tired of hearing “no” or “appraisers won’t do them” when you try to order a Desktop Appraisal? Incenter Appraisal Management says “Yes.” For all the excitement around GSE approval for Desktop Appraisals for purchase, adoption has been a struggle. A major hurdle has been the required floor plan. If an appraiser doesn’t visit the home, who creates and verifies the floor plan? RemoteVal Desktop connects appraisers directly to a homeowner or agent’s smartphone, which means they are gathering verified information, photographs, and measurements in real time. As an appraiser does the live inspection through the app, RemoteVal’s embedded 3D video scan feature creates a detailed floor plan they can submit with their report. For most appraisals, RemoteVal turns a 2-to-4-week process into a 3-to-4-day process. For an industry struggling to keep up with demand, RemoteVal is an incredible solution both now and for the future. To see RemoteVal in action, visit here.

“Orion Lending is proud to announce the release of our newest Non-Agency product, Titan Flex! Titan Flex offers Alternative Income Documentation types including: 12 months bank statements (Personal or Business), 1 year income verification, and CPA P & L up to 90% LTV. In addition, Titan Flex offers solutions for those borrowers that wish to leverage their assets to qualify, we have both Asset Depletion and Asset Only choices! With FICO’s as low as 660 and loan amounts up to $3MIL, just think about how many more borrowers can be served! Orion offers industry leading STAR Portal technology now paired with TRUV (Auto-Initiated Verification of Employment and Income Program) for the best possible broker experience! Oh, and Titan Flex is underwritten entirely in house with a 24-hour UW Commitment on Purchase loans! What’s not to love? New brokers are approved within hours, sign up today!”

 

“Unleash the power of PowerTPO Lending! PowerTPO is backed by a multi-channel fintech leader, most recently named to Fast Company’s list of World’s Most Innovative Companies for 2022. We serve Mortgage Brokers, Independent Mortgage Bankers, Credit Unions and Community Banks and offer Conforming and Government products along with fulfillment services from Processing, Underwriting, Closing and Funding. PowerTPO’s leadership team has over 150 years of combined TPO experience and innovation led by industry veterans Brett Arsta, Michael George, and Marla Guillaume – bringing not only an understanding of the value of true partnership, but also an understanding of the future of lending. Brett Arsta, Executive Managing Director states, “our process is simple; we focus on relationships to provide the best experience possible. People, process, and partners equals power.” Are you ready to harness the power? To learn more or become a partner today visit https://www.powertpo.com.”

Maxwell launches Private Label Origination, an end-to-end solution with a full suite of modern software and nationwide infrastructure to build, manage, and grow mortgage operations. Acting as a one-platform, one-partner solution, Maxwell Private Label Origination combines Maxwell’s existing set of products, from digital mortgage software and fulfillment solutions to secondary market capital, to enable local lenders to scale operations and expand their footprint in the mortgage market. This solution comes at a crucial point: With volume declining, lenders are rapidly turning to other loan offerings to boost profitability. Private Label Origination simplifies the process of adding a new channel or product, such as a wholesale channel or HELOC and non-QM products. Maxwell handles all operational logistics and resources for the lender, eliminating the usual complexities, resources, and headaches. To learn how Maxwell Private Label Origination powers profitable and scalable mortgages, freeing lenders up to focus on sales and growth, click here or schedule a call now.

Wholesalers & Correspondents shifting procedures & guidelines

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Mountain West Financial Wholesale posted in MWF Wholesale Bulletin 22W-040, an advisory that when completing the 4506-C for W2 tax-transcripts, the form must be completed as follows: Enter “W2” on line 6, “Transcript Requested” and Check box #7.

Citi Correspondent Lending updated its credit policy on Measuring Gross Living Area for Appraisals. Review the complete policy in Citi Correspondent Lending Bulletin 2022-06.

HOL Credit Bureau change is in effect for new applications submitted to First Community Mortgage Correspondent as of Tuesday, May 3, 2022. More information on HOL Credit Qualification is available in FCM Announcement 2022-14.

As of Friday, May 13, Pennymac updated the Non-Delegated Best Effort loan creation and loan access processes in P3. Applicable to Non-Delegated Clients only, view PennyMac Announcement 22-32 for details.

With rates on the rise, it’s important to offer options to your borrowers. Doing so can help you win the deal, and your clients will also get the loan that’s right for their situation. And these days, an adjustable-rate mortgage could be a smart choice. Check out UWM In The Spotlight for more resources on ARMs, including marketing.

Citi Correspondent Lending Bulletin 2022-07 contains information regarding Automated Income Assessment and Agency Updates Construction-to-Permanent Financing. Effective May 15, 2022, for New Registrations. Additionally, clarifications on Agency Documentation Chapter, U.N. Income Requirements, Sales Contracts, Credit Reports for Borrowers Living in U.S. Territories.

The Wells Fargo Funding Best Effort Rate Sheet (rate sheet) format was updated as of May 23 to comply with the Americans with Disabilities Act (ADA) for users of screen reading technology. As noted in Wells Fargo Funding Newsflash C22-017, its ADA-compliant rate sheet contains an updated sample rate sheet with corrections highlighted on the Non-Conforming Adjusters tab.

Enhanced technology is afoot to improve performance behind wellsfargofunding.com, scheduled to go live June 10, 2022. Changes to image upload process will result in changes for users, shown in Wells Fargo Funding Newsflash C22-017.

Wells Fargo Funding provided guidance for risk management to its Correspondent Sellers. The purpose of this summary is to remind Summarized in Wells Fargo Funding Risk Advisory Bulletin 22-03, the purpose is to remind Sellers of specific elements of the LO Compensation Rule.

The master servicer for the CalHFA (CA) and Home in Five (AZ) programs, is increasing lock extension fees, effective for loans locked on and after May 20. View Mountain West Financial Bulletin 22W-042 for details.

Have a Property with Solar? Get .50 Better in Fee & 90% CLTV to $2 Million with Finance of America Mortgage TPO and its new Two-X Easy Green Jumbo. “DU documentation, higher loan amounts & LTV’s, better price.”

Capital markets

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Per Freddie Mac’s survey U.S. mortgage rates recently posted their biggest weekly drop in more than two years. Fixed mortgage rates declined another 15 bps and 12 bps for 30- and 15-years to 5.10 percent and 4.31 percent, respectively, offering homebuyers a slight reprieve from this year’s massive surge in borrowing costs. While it was the biggest decline since April 2020, rates are still well above the 3.11 percent level at the end of last year and the 5/1 hybrid ARM rate rose 12 bps to 4.20 percent, the highest in 12 years.

But yesterday a rally in equities on Thursday (due to solid outlooks from retailers) helped push Treasury and MBS prices lower despite the day’s $42 billion 7-year note sale meeting stellar demand at auction. Economic data released yesterday showed a downward revision to Q1 GDP to show real GDP decreasing at an annual rate of 1.5 percent, while Pending Home Sales missed April expectations, making for another disappointing housing report. The GDP report saw an upward revision to consumer spending that exceeded the third and fourth quarters, demonstrating that the U.S. consumer drove activity in the first quarter despite rising interest rates and higher costs for most goods and services, primarily food and energy.

Pending Home Sales fell 3.9 percent in April for a sixth straight month while the March decrease was revised down amid affordability challenges for home buyers. That aforementioned decrease in mortgage rates can’t hurt.

The New York Fed Desk released a new Agency MBS purchase schedule covering the May 27 to June 13 period which totaled $18.1 billion, the sixth consecutive schedule that will not see any net additions to its balance sheet. The schedule contains the same coupons as the prior schedule for 30-year operations targeting 3.5 percent through 4.5 percent, with 4 percent added to 15-year operations which now include 3 percent through 4 percent, though are mostly concentrated in 3.5 percent. The total amount the Desk is targeting for each specific coupon has changed as the bank’s focus moves up the coupon stack. Today’s schedule sees the Desk conducting one operation which will target up to $1.1 billion UMBS30 3.5 percent through 4.5 percent. The monthly reinvestment is estimated to fall to around $25 to $30 billion by mid-summer.

Today’s early-close economic calendar is under way with April personal income and spending (+.4 and +.9 percent, respectively), the PCE Price Index (+.2 percent, slowing dramatically, and +6.3 for the year; core +.3 percent, +4.9 percent for the year), and the advanced goods trade deficit ($105 billion). Later this morning brings the final May Michigan sentiment, a 1:00pm ET futures settlement and SIFMA recommending a 2:00pm ET close ahead of the long Memorial Day weekend. We begin Friday with Agency MBS prices roughly unchanged and the 10-year yielding 2.74 after closing yesterday at 2.76 percent.

My Dad (U.S. Navy, 1942-1962) was quick to remind me that Memorial Day doesn’t honor servicemen and servicewomen, or veterans. It is a federal holiday in the United States for remembering the people who died while serving in this country’s armed forces. The number totals about 1.1 million, almost half of which were in the Civil War. First recognized in 1868, it was set on the last Monday in May starting in 1971. Give those who gave the ultimate sacrifice for our nation more than a passing thought, not only Monday but throughout the year!

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, “A Primer on the Federal Reserve and Mortgage Rates.” 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 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.)

Yesterday I visited Sacramento to speak to an audience of real estate agents and originators in a joint MGIC/Golden 1 Credit Union event. The mood was good, and much of the discussion was about rent (give or take a little, 50 percent the U.S. is paying 50 percent of their income in rent) and products offered by depositories and portfolio lenders. Attendees also remarked how fast 2022 is moving. We’re fast approaching Memorial Day, marking the unofficial start of summer. Radio stations start playing summer-themed songs (“I thought I knew what love was, what did I know? Those days are gone forever, I should just let them go…”) Time does indeed fly, and it is important to keep things in perspective. Fairway Independent’s Jennifer S. sent over this tweet from Congress. “The median annual pay during the Great Depression was 22 percent of the cost of an average home. Today it’s 14 percent. That means that pay relative to home cost made it easier to buy a home during the Great Depression than right now.” Originators have their work cut out for them in becoming subject matter experts for their clients in this rate and affordability environment! (Today’s podcast is available here and this week’s is sponsored by Matchbox LLC, igniting ideas for the mortgage industry. Expertise in assisting clients through transition periods with Technology, Capital Markets, and Education.)

Careers

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Synergy One Lending continues its expansion with the addition of five branches since April 1! From Portland, OR to Peoria, AZ, and the Lone Star state back home to San Diego, top-producers continue to be drawn to S1L’s Modern Mortgage Experience™. “We are thrilled to join forces with these high integrity, purchase-focused leaders, and can’t wait to support their teams’ growth through our commitment to innovation and transparency,” says Synergy One’s President, Aaron Nemec. Combine this incredible talent withS1 FinFit and theS1L HELOC and you’ll be ready to take your business next level in today’s ultra-competitive market. Ready to learn more? Contact Aaron Nemec or Ben Green today!

National Mortgage Professional Magazine is hosting a recognition event to applaud the Most Loved employers in the mortgage industry. Click here to nominate your company today for a chance to be recognized as one of 2022’s Most Loved Mortgage Employers.

Celebrating 18^th years of serving its customers, iServe Lending truly provides loan officers and branches with a comprehensive strategic partnership. “Our loan officers are our customers,” says Michael Wilson, COO. “iServe’s user friendly team environment and can-do attitude produce a culture which results in a much higher degree of success for loan originators. With support such as, dedicated Marketing Department and direct access to your personal Operations Team, you can be confident that iServe will put you on the path for long term success. For a confidential conversation and to learn why our average loan officer tenure is over 6 years, and branch managers over 8 years, contact Shay Curran, national recruiter at 760.338.5851.  “Let’s Build something extraordinary together.”

PacRes Mortgage, formerly known as Pacific Residential Mortgage, is excited to announce its “soon to be launched” Wholesale and Correspondent Division. Joining new Director of Wholesale and Correspondent Lending, Erik Anderson, are industry veterans Greg Woolsey, Terri Buckman, Greg Freeman, and many others who have reconnected to form a powerful and extremely experienced group of wholesale mortgage industry professionals. “To find myself working with and guiding this mortgage industry dream team once again is truly my dream come true. I’m excited to experience the positive growth we will have on our newly formed PacRes TPO Division,” said co-owner Robert Boliard. If you want to join the dynamic and growing PacRes team, and be a part of a brand that has all the resources of a large corporation without the corporate bureaucracy, contact Erik Anderson, Director of Wholesale and Correspondent Lending 425-417-1610. 

Lender & broker software, services, and programs

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Technology advancements happening at the speed of light are the standard nowadays, so you need a subservicer who understands how crucial it is to have dynamic, intuitive platforms that provide important data at a moment’s notice. TMS quickly recognized the need for technology that could go beyond the standard fare in mortgage servicing. That’s why TMS created its revolutionary servicing platform SIME (Servicing Intelligence Made Easy). It’s a fully transparent, 100% accessible, on-demand view of your portfolio where you can run 90+ standard and customizable reports, listen to recorded customer calls, get escrow analysis, and much more. SIME also powers TMS’ Happinest app, and customer websites, which lets customers manage all their mortgage affairs, leading to an 82% self-service rate. That award-winning technology combined with their outstanding people is the winning combination behind the best-in-class experience that TMS provides for its customers and clients. Ready for exceptional power at your fingertips? Partner with TMS.

Why let the market cycle dictate your profits? With Candor as your AI Underwriter, you reduce cycle time which lowers your cost to produce. The added elasticity means you can seamlessly scale up or down with no change to staff. Candor can autonomously determine borrower eligibility, documents required, conditions required, and loan defects that require resolution. Plus, Candor clears conditions and repairs defects, or provides precise instructions for your team to DIY. No guesswork, no speculation, no rework, and no bias. In addition to ingesting AUS, OCR, income calculations, data validation & verification and cross checks, Candor conducts a hands off underwrite, saves every detail to a permanent database, and backs up decisions with a warranty. Our clients rave. Implementation is a fast 30 days. It’s worth 30 minutes to learn more.

 

During a volatile climate, one must stay vigilant to counter market headwinds. MCT pairs expert advice with its full arsenal of industry-disrupting software to help you Bring BPS Back. View our webinar from May 25, Improving Profitability to Counter Market Headwinds. The webinar demonstrates how MCT leverages unique software and services like BAM Marketplace, bid tape AOT, and Trade Auction Manager to help clients squeeze every basis point from their best execution loan sale strategy. Topics include leveraging bid tape Assignment of Trade (AOT), strategies and tools to optimize your investor set, how to find new buyers with BAM Marketplace, and more. MCT continues to be a leader in the industry for bringing the future of digitization in the secondary market to your fingertips, increasing profitability and efficiency. Also, be sure to utilize MCT’s new hedge advisory profitability calculator aimed to calculate your potential profitability and efficiency gains.

Due diligence is a critical element of every mortgage transaction. This is why many originators are outsourcing to third-party providers the responsibility of conducting the risk and data analysis. If you’re interested in partnering with a provider, there are critical factors to consider, such as experience, product diversification, accuracy, and responsiveness. To learn more, read Selene Diligence’s latest article “Five things to look for when partnering with a third-party review provider”. Selene Diligence reviews in detail all loan attributes, documentation, and third-party data sources to identify and mitigate risk and is fully affirmed as a third-party review (TPR) firm by all major RMBS rating agencies.

Introducing eClosing from Maxwell: a better closing experience for borrowers and LOs. Mortgage solutions provider Maxwell has partnered with Snapdocs, an industry-leading digital closing platform, to bring lenders a best-in-class eClose experience. Maxwell Point of Sale and its eClose solution streamline the closing process so you can exceed borrower expectations, reduce delays and errors, and handle more closing volume. Supporting a variety of closing options including wet sign and hybrid closings, Maxwell eClose empowers LOs with automatic preparation of all lender and title documents and frees lending teams from communicating deadlines, sending reminders, and coaching borrowers to prepare for closing. Plus, borrowers can stay in the point of sale from start to finish, with the ability to preview and sign documents before closing day. Want to simplify your closing process for LOs and borrowers alike? Click here to learn more or request a demo today.

Loan production revenue is down, and lenders are approaching that reality with mixed reactions. Some are saying “no big deal” as they look to grab more market share, and others are having serious discussions about cutting costs and scaling down their teams. The most successful lenders will handle this market shift by seeking efficient ways to set themselves apart from their competition. For some, that may mean investing in technology that not only enhances their value in the market but helps to trim down their expenses too. Those lenders should check out the technology LenderLogix offers. Two of their most noteworthy products include QuickQual, the adjustable pre-approval that has proven to increase pre-approval to application conversion rates, and Fee Chaser, an automated upfront fee collection solution that eliminates the need for manual management and helps lenders realize 10% more revenue. Check out LenderLogix’s site for more information and schedule a demo with their team today!

STRATMOR on appraisals

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Appraisals were a very hot topic in the industry in 2021 due to the pain the high costs and long turn times caused. With the recent volume drop, lenders are turning their attention to new fires, but they can’t unsee the glaring inefficiencies and lack of control around appraisal operations. This leads STRATMOR Group’s Customer Experience Director Mike Seminari to ask, “Will the next big digital innovation in mortgage be appraisal management tools? In the just-released STRATMOR Group Insights Report, Seminari shares data from the recent STRATMOR study on appraisal operations commissioned by Reggora. Results revealed, among other details, that lenders prioritized turn times as the most important factor in the appraisal process (38 percent) with “Quality” following at a close second (35 percent). Efficiency gain opportunities derived from an effective appraisal operations process are important as lenders focus on both improving margins and the customer experience. Don’t miss Seminari’s article, “The Next Big Mortgage Technology Change: Appraisals” in the May Insights Report.

FHFA in the news

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Warning: acronyms ahead! Yesterday, our industry received some good news with the confirmation of Sandra Thompson as Director of the Federal Housing Finance Agency (FHFA), which oversees FNMA and FHLMC. Bob Broeksmit, CMB, President and CEO of the Mortgage Bankers Association (MBA), sent, “MBA applauds the confirmation of Sandra Thompson to continue leading the Federal Housing Finance Agency. Since being appointed Acting Director in June 2021, she has repeatedly demonstrated leadership, expertise, and a strong commitment to sound risk management principles while safely expanding access to mortgage credit and creating equitable and sustainable housing solutions for homeowners and renters.”

Addressing its book of business, Rocket recently sent out a piece addressing trends it is seeing. “Through a push from FHFA to ensure that the GSEs responsibly promote equitable access to affordable housing that reaches low- and moderate-income families, minority communities and other underserved populations, products and guidelines that specifically target FTHBs continue to be developed and promoted. This has caused a substantial increase in the high LTV/low down payment group among GSE origination volume (in addition to responding to rising home prices).

“This high LTV/low down payment group is exactly where the FTHB market resides. As of December, FTHBs accounted for 42.5% of the GSE purchase market and significantly more in the high LTV space; 56% of 90.01 – 95 LTVs and 96.7% of 95.01 – 97 LTVs. Recent developments by mortgage insurance providers to improve pricing execution for borrower paid mortgage insurance (BPMI) in select down payment and credit score combinations means that this trend will continue. The portion of the GSE market with private mortgage insurance will continue to rise.”

And the FHFA announced a new form requirement for lenders selling to Fannie Mae and Freddie Mac. Read the post from First American Docutech Compliance News: Supplemental Consumer Information Form.

Capital markets

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More signals over the past few days point to recession fears overtaking inflation concerns, but if growth is slowing that takes some pressure off of the Fed. A downside miss in April’s Durable Goods, decent demand at a Treasury 5-year note sale, and Fed minutes revealing officials largely endorsed the need for 50 basis point hikes over the next couple of meetings were the headlines yesterday. Wednesday saw Treasuries rally to the lowest yield levels since mid-April at one point. The past few days presented a return to the “risk off” mentality where investors sell stocks to buy bonds, driving the price up and yield down. Mortgage rates are beginning to come down too: good news for borrowers.

Market turbulence found a soft patch after the latest Fed minutes, which even though it helps shape opinions about policy action and the path of inflation, proved to be a snoozer, welcome news for a jittery bond market. Minutes from its latest policy meeting showed an agreement over 50 basis points rate hikes toward a neutral policy stance at the next couple meetings, saying it would give the central bank flexibility afterward, and revealed no signals that officials would turn more hawkish in their fight to tame inflation amongst unanimity that prices are too high and the labor market too tight. Policymakers also agreed that a restrictive policy stance may become appropriate depending on the economic outlook.

There was broad support for reducing the balance sheet and numerous participants voiced support for sales of Agency mortgage-backed securities. “After balance sheet runoff was well under, it would be appropriate for the Committee to consider sales of agency MBS to enable suitable progress toward a longer-run SOMA portfolio composed primarily of Treasury securities. Any program of sales and agency MBS would be announced well in advance.” Nothing new. But traders are “dialing back” expectations for rate hikes after poor U.S. economic data recently. 134 basis points of increases over the next three meetings are currently priced into the market, down from 141 earlier this week.

Today’s calendar is already under way with the second look at Q1 GDP (-1.5 percent versus originally coming out at -1.4 percent) as well as weekly jobless claims (210k, down from 218k last week). Markets were hoping for some relief in the month-over-month numbers to indicate that inflation is on the decline. April pending home sales are seen falling later this morning. Treasury auctions $42 billion 7-year notes and Fed Vice Chair Brainard speaks before the House Financial Services Committee to close the day. The Desk will conduct the last two operations on the current MBS purchase schedule before releasing a new schedule covering the May 27 to June 13 period which is expected to total $18.0 billion. We begin the day with Agency MBS prices roughly unchanged and the 10-year yielding 2.74 after closing yesterday at 2.75 percent.

A woman went to the doctor’s office where she was seen by one of the younger doctors.

After about four minutes in the examination room, she burst out screaming as she ran down the hall. An older doctor stopped her and asked what the problem was, and she told him her story. After listening, he had her sit down and relax in another room. The older doctor marched down the hallway back to where the young doctor was writing on his clipboard.

“What’s the matter with you?” the older doctor demanded. “Mrs. Terry is 71 years old, has four grown children and seven grandchildren, and you told her she was pregnant?”

The younger doctor continued writing and without looking up said, “Does she still have the hiccups?”

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, “A Primer on the Federal Reserve and Mortgage Rates.” 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 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.)

 

All the stories that could be told, and so many that have yet to happen. And now 19 that never will be. It is very hard to go about one’s day, whether one has children or not, or a teacher in their family as I do, or not, given what happened in Uvalde, Texas, yesterday. Or to imagine what being in that classroom was like. And just like after every other mass shooting in the United States, fingers are pointed, lines are drawn, and rhetoric that we’ve all heard before is repeated until it happens again. Ban guns? Better background checks? Create fortresses out of elementary schools? Improve mental health care? We’ll go around and around on the reason(s) and the cure(s). Far be it from a daily commentary on residential lending to adequately address the evil that we witnessed yesterday. But we all do what we can. (Today’s podcast is available here and this week’s is sponsored by Matchbox LLC, igniting ideas for the mortgage industry. Expertise in assisting clients through transition periods with Technology, Capital Markets, and Education. Today’s features an interview with Mark Walser, President of Incenter Appraisal Management, on desktop appraisals.)

Careers & retail and wholesale lenders wanted

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A group of wholesale mortgage veterans is looking for a DBA opportunity to team up with an established mortgage banker. The group’s footprint covers the Mid-West & Western states, with a track record of steady sustainable purchase business. Customer service to the broker base is the most important component looked for, followed by a full spectrum of NONQM, Conventional & Ginnie products. The group is looking to base the opportunity on results delivered, not promises or coming off a historically exceptional year. The mortgage banker should be financially stable, with the ability to digest the entire book of business. If you are interested in starting this confidential conversation, please email [email protected].

A very large, financially stable, purchase-focused independent mortgage banker is searching for a retail lender to acquire, preferably in the Midwest or Florida. The ideal lender will have funded between $1-4 billion in 2021. Principals (only) should send me a confidential note of interest for forwarding.

Wyndham Capital Mortgage has added two industry veterans to lead its new retail division: Susan Hamel, as Director of Retail Sales in Charlotte, NC, and James Hennessey as Retail Market Leader in Tampa, FL. “Wyndham’s successes over the past 21 years have uniquely positioned it to drive the growth of this new retail team,” shares Hamel. “With unparalleled culture, collaboration, and technology, Wyndham is an easy choice for originators who want to up their game.” For more information on opportunities to help grow your business in 2022, please contact Aquil Flythe.

“Acra Lending continues to expand its footprint as the industry’s leading private mortgage lender, and we are seeking talented mortgage professionals to join the growing team! Now is the time to join a company that provides competitive mortgage lending programs and a seamless customer experience. Acra Lending, a leader in Non-QM lending, is currently hiring for Fix & Flip Account Executives, MLOs, Wholesale Account Executives, Correspondent Sales, and more. Apply at JoinAcra or email us to learn more about the opportunities we offer.”

Lender & broker software, services, and programs

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Since 2006, Mortgage Professionals Providing Hope (MPPH) has provided thousands of families and children worldwide with avenues out of poverty, such as safe housing and quality education. To honor this commendable work, the June installment of Sales Boomerang’s monthly Worthwhile Webinar series will support MPPH’s humanitarian relief programs. For a $10 donation, join Sales Boomerang’s Alex Kutsishin, Mortgage Champion’s Dale Vermillion, SDP Solutions’ Scott Payne, and Mortgage Coach’s Dave Savage on June 8 at 2PM ET to learn more. All proceeds from the event will go to MPPH, with Sales Boomerang, SDP Solutions and Vermillion Consulting, Inc. each matching up to $1,000 in ticket sales. Register and join this growing coalition for positive change!

Is PA reconciliation using up too much of your team’s bandwidth? There’s a better way, as Terra Johnson, SVP Controller of Highlands Residential Mortgage, finally found out. After years of reconciling PAs the error-prone, time-consuming manual way, she discovered Richey May’s intelligent automation solution. A managed, fully supported standalone offering by Richey May in partnership with Zoral Group, Purchase Advice Automation lets you manage PAs and clear warehouse lines for thousands of loans a month, barely lifting a finger in the process. Johnson’s team uses Purchase Advice Automation for reconciliation, which in turn created efficiencies with closing the books and month-end reporting. In the first year, she saw 50 percent productivity gains in her department and projects a 41 percent annualized ROI with the implementation fee amortized over the next five years. Why wait? See it in action for yourself. Sign up for a demo today.

Your customers are asking you to provide options for several variables. You know there are many Sprout non-QM loan solutions available, but you don’t know all the details without spending time researching them. Don’t fret: iQualifi by Sprout Mortgage is your go-to tool for program for pricing answers! Receive instant pricing information, with EASY info inputs, FAST loan program identification and SIMPLE pricing tables. Mortgage professionals are invited to try iQualifi today, for lightning-fast results. Message [email protected].

You’ve seen us in the news. Now see us in person for a 30-minute meeting that could boost your bottom line all year long. Planet Home will be at three upcoming events taking meetings to serve your business needs. Join Regional Sales Manager Stan Tucker (804-317-9018) at the Indiana MBA 2022 State Convention, June 5-7, at the Grand Wayne Convention Center in Fort Wayne, IN. Meet with VP, National Renovation Lending Jim Bopp (518-348-6426) or Regional Sales Manager Danny Hughes (203-981-5743) at the New York MBA Annual Convention, June 7-9, at the Saratoga Casino Hotel. Or sit down with Regional Sales Manager Jim Shaler (813-784-6237) at the Florida MBA Annual Convention, June 21-23, at the Hyatt Regency Grand Cypress in Orlando, FL. Where will we be seeing you?

First quarter profit picture: grim due to rising costs

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Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported making only $223 per loan in the first quarter of 2022. Why? “The primary driver was cost, with total loan production expenses ballooning to a new study-high of $10,637 per loan, up more than $1,000 per loan from fourth-quarter 2021 and more than $2,500 per loan from one year ago.” The $223 is down from a reported gain of $1,099 per loan in the fourth quarter of 2021, according to the Mortgage Bankers Association’s (MBA) newly released Quarterly Mortgage Bankers Performance Report.

Of particular interest to capital markets folks was the average pull-through rate (loan closings to applications) decreased to 73 percent in the first quarter, down from 78 percent in the fourth quarter. “Net secondary marketing income decreased to 270 bps in the first quarter, down from 275 bps in the fourth quarter. On a per-loan basis, net secondary marketing income increased to $8,429 per loan in the first quarter from $8,326 per loan in the fourth quarter.” (If you have questions about the stats, contact Marina Walsh, CMB, MBA’s VP of Industry Analysis.)

Lenders react to Agency changes

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Fairway Wholesale Lending announced the release of the new down payment assistance program, Freddie Mac BorrowSmart^SM, which can be used in conjunction with the Freddie Mac Home Possible^® and Freddie Mac HomeOne^® first mortgage products. Refer to the Freddie Mac BorrowSmart^SM Guidelines accessible after logging into Fairway DRIVER for full program details.

PRMG is now allowing an exemption for non-owner occupied (investment) transactions with QM Point and Fee fails on the Agency Fannie Mae and Agency Freddie Mac products. Details are available in PRMG’s 5-11-2022 Important Announcement: Business Purpose and Occupancy Affidavit (Conventional).

AmeriHome posted a summary of recent Freddie Mac Guide Bulletins with changes to several topics including but not limited to asset and income modeler (AIM) and automated collateral evaluation (ACE) eligibility updates. All of the changes announced in AmeriHome Announcement 20220501-CL are effective immediately unless otherwise noted.

Pennymac updated values Conventional LLPAs effective for all Best Effort commitments taken on or after Monday, May 16, on Second Home LLPA Grid​.

 

PRMG Product Update 22-21 includes information providing guidance on condo approvals when requiring PERS approvals on All Agency Products. Assets for Income validation allowed (which determines borrower’s income based on direct deposits) – available with AccountChek currently for Agency Freddie Mac/Home Possible/Refi Possible/Agency. Additionally, PRMG added product codes for SOFR ARMs on Agency Texas Home Equity.

FAMC/Citizens Correspondent posted information on Conventional Conforming DU regarding Cryptocurrency related to asset/liabilities, income updated requirements on refinance transactions LPA, effective for all loans locked on and after June 1. See

FAMC/Citizens Correspondent National Bulletin 2022-08 for additional information and all lock, delivery, and purchase by dates, if required.

Similar to Freddie Mac selling guide changes, Fannie Mae announced updates to address virtual currency such as cryptocurrency for qualification requirements. Flagstar Bank’s Conventional Underwriting Guidelines will be updated with the changes shown in memo 22050 and are effective immediately unless otherwise noted.

Starting with new locks as of Monday, May 23, Flagstar Bank will be updating the existing loan level price adjustments on the products noted in Flagstar Bank memo 22051.

loanDepot Wholesale updated it Conventional Lending Guide regarding income and verification, Standard ARM 3–4-unit eligibility on jumbo Advantage EXPRESS, plus updates and clarification on Advantage EXPRESS FLEX.

Pricing news from Wells Fargo Funding, effective May 19, conventional conforming adjusters are changing by 50 basis points for second homes and investment properties less than or equal to 80% CLTV. Adjuster tables are shown in Wells Fargo Funding Newsflash C22-019.

Conventional Loans for Lower-Income, Credit-Worthy Clients are available at A&D Mortgage.

HomeReady^® and Home Possible, conventional loan programs by Fannie Mae and Freddie Mac respectively, are designed to serve credit-worthy, low-income buyers looking to purchase a new home. With either loan program, qualified borrowers have the opportunity to buy a home with little or no money out of pocket by using gifts from friends or family toward the down payment.

Capital markets

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What’s a cross hedge? How is duration calculated? These are just a few common questions the industry experts from Optimal Blue, a division of Black Knight, receive from capital markets clients. As a follow up to Optimal Blue’s recent webinar , white paper and blog post on durations and successful hedging, we invite you to join our next session on Wednesday, June 1. This webinar will focus on frequently asked questions from capital markets participants, which range from the topics of hedging and durations to the current state of the market. Save your seat today for this timely and informative webinar.

Rising interest rates and recent regulatory actions have created a significant demand for transparency throughout the loan sale and settlement cycle. Mortgage tech disruptor Polly satisfies that demand with the industry’s only cloud-native, purpose-built Loan Trading Exchange. Leading mortgage lenders leverage Polly’s unified exchange to: (1) execute faster by automating manual tasks and data entry, eliminating redundant and cumbersome spreadsheets; (2) improve execution with unrivaled loan- and pool-level best execution analysis tools; and (3) streamline workflows with seamless GSE and LOS API integrations, including Freddie Mac Cash-Released XChange®. Join Polly on LinkedIn to learn more about the powerful, no-code configuration that could help your organization realize a substantial increase on monthly gain-on-sale execution when used in conjunction with the PPE.

Turning to interest rates, a jittery market was witness to a “risk-off” trade yesterday as investors seem to lack confidence in the Fed, and the macro economy shows more signs of abrupt slowing. Goldman said the equities selloff will only bottom when the Fed signals the end of tightening and that may not happen until a recession is apparent. A disappointing report on new U.S. home sales did not help matters.

New Home Sales fell 16.6 percent during April to a seasonally-adjusted annual rate of 591k (a level typically seen in the 1970s and 1980s), well below consensus estimates. The fourth straight monthly decline and the second consecutive double-digit drop puts sales down 27 percent compared to a year ago. Sales for the prior three months were also revised lower, inviting concerns about the strength of the economy in an environment underscored by inflation and affordability pressures. Following an increase of over 200 basis points in mortgage rates since the end of last year, the housing market has certainly turned, and inventory of new homes rose to nine months at the current sales pace, which is the most since May 2010 and suggests an imminent slowdown in the rapid pace of house price appreciation. Previous reports on existing home sales, mortgage applications, and homebuilder confidence have all turned lower, but the new home sales figure is the sharpest indicator yet of a dour housing market. Prices remain firm, however, with the median price of a new home rising 19.6 percent over the past year to $450,600.

Today’s calendar is under way with MBA mortgage applications, which decreased 1.2 percent. Mortgage rates during the reporting period were narrowly changed despite the 15 basis points drop in the 10-year yield amid a volatile trade. We’ve also received April durable goods orders (+.4 percent, ex-transportation +.3 percent, both lower than expected). Later today brings a Treasury auction of $48bn 5-year notes and newly sworn-in Vice Chair Brainard delivering remarks ahead of the release of the all-important minutes from the May 3/4 FOMC meeting. Yesterday, FOMC voter Esther George noted the central bank will probably hike to 2 percent by August and then be guided by inflation. MBS investors will be keen to hear more on the Fed’s thinking with regard to future MBS sales. Speaking of MBS investors, the NY Desk today will purchase up to $1.73 billion in 30-year 3.5 percent through 4.5 percent MBS. We begin the day with Agency MBS prices are better by .125 and the 10-year yielding 2.71 after closing yesterday at 2.76 percent.

It isn’t much of a day for laughs. Please give more than a passing thought to the innocent children in Texas who won’t be going to school ever again. And to the parents who were asked to provide DNA samples in order to identify their children because the carnage was so terrible.

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, “A Primer on the Federal Reserve and Mortgage Rates.” 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 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.)

The last pay phone was removed from New York City yesterday. (Heck, growing up I financed my baseball card purchases by looking for loose change in those and newspaper vending machines.) Communication is certainly always changing, and successful loan officers and managers are adept at knowing the best way to communicate with others. Communication aside, loan officers have a lot on their plates. On a micro level, every loan is a hard deal, and LOs are focused on providing the best program for their client at a competitive rate. (Today MortgagePros411’s Audrey B. and Kevin C. – both LOs – and I have, for lack of a better term, a freewheeling conversation today at 2PM ET about what is happening in the mortgage biz and what loan officers are seeing.) Senior management is working on making sure their origination staff has software to help LOs do their job, or products that LOs were too busy in the last couple years to attend training on and are now saying, “Huh? We have that product? I didn’t know that!” On a more macro level, the Federal Reserve has already done a good job of “talking up” rates, and, believe it or not, there is a little chatter out there about the Fed not having to do more! Certainly investors are eying the Fed, and the current STRATMOR blog is titled, “A Primer on the Federal Reserve and Mortgage Rates.” (Today’s podcast is available here and this week’s is sponsored by Matchbox LLC, igniting ideas for the mortgage industry. Expertise in assisting clients through transition periods with Technology, Capital Markets, and Education. Today’s features an interview with Frank Fiore, President of Matchbox LLC, on the vendor landscape in mortgage banking, team building, and the company’s technological and secondary marketing products.)

Job options run the gamut

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A mid-size, purchase-oriented Independent Mortgage Bank (with a solid servicing portfolio, licensed in more than 25 states, and with more than $3.5 billion in fundings in 2021) has an immediate need for an experienced and proactive Chief Compliance Officer. The Candidate will grow and lead the compliance team, assesses the firm’s compliance, regulatory and reputational risk, monitor for compliance with new or amended laws, rules and regulations, with an emphasis on fair lending. CAMS, CRCM designation preferred. This is a remote, work from home position. Interested candidates can submit their resume to Chrisman LLC’s Anjelica Nixt.

PRMG focuses on further expanding its reach in the mid-West. “We are strategically growing the mid-West region and beyond by hiring one of the industry’s top talents for recruiting and management. As PRMG has grown this has created an opportunity to raise the bar of management and place a professional in this region who will hold themselves and those who will report to them to the highest of standards. The PRMG standard. ‘Cleansing a region and retaining those who close 90% of the current production is what appropriate management dictates in markets such as this,’ said Chris Sorensen, SVP, Director of National Retail. Let’s face it, the best growth is that which comes from those who join an organization not due to a signing bonus and inflated promises, but due to a desire to build a legacy worth having. Eileen Andersen, VP of Strategic Growth, is helping to attract top talent seeking a holistic platform that is ‘Built by Originators for Originators^TM.’ Reach out directly to Eileen Andersen and have a confidential conversation.

“Are you equipped to compete in a purchase marketplace? At PrimeLending, our LOs deploy powerful digital marketing tools that help leverage their customer database to strengthen their brand and attract more homebuyers. Thanks in large part to the more than 170 data-driven automated journeys deploying 3.5 million emails over the last 18 months via Total Expert, our recapture rate of past customers is well above industry average. Is it any wonder #TeamPrimeLending excels in a purchase-first market? We’re looking for top performers to grow with us. Contact Nic Hartke today for more information.”

A multi-billion-dollar originator headquartered in southern California is looking for a strategic, forward-thinking CFO to join its executive team. This multi-state lender is currently consumer direct, with a growing retail division. Ideal candidates should be experienced with profitably navigating through market changes, and strong remote candidates will be considered. Please send resumes to Mark Wilson.

“AmeriHome Mortgage, a top mortgage lender in the industry, is looking to add to its already phenomenal team of Retail Loan Officers! With Remote Retail Loan Officer positions opening up nationally, we have plenty of opportunities for you to thrive. Having a diverse suite of products ranging from FHA to Portfolio products and competitive Jumbo non-QM options, we offer so much for any Retail Loan Officer with an entrepreneurial spirit to succeed! We have been voted Top Workplaces in 2021, 2020, and are still looking to continue our growth in 2022. See our Careers page to learn more about working with us at AmeriHome and to see why your future is with US.”

Want to be a Capital Markets Consultant with Accenture? Here’s your chance.

Lender & broker software, services, and programs

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In a hot purchase market, lenders who can move fast stand head and shoulders above the rest. If the paper chase is slowing you down, it’s time to give your tech stack a boost. From application to closing, SimpleNexus has everything lenders need to succeed in a purchase market. Need proof? Both Marc Hernandez of Alterra Home Loans and Rapid Mortgage’s Kyle Shea swear by SimpleNexus and its ability to improve operational efficiency, reduce manufacturing costs and increase loan officer productivity. Curious what SimpleNexus can do for your organization? Schedule a custom demo to discuss how SimpleNexus can be a driving force for your purchase pipeline.

What’s the formula for becoming a Top 10 Subservicer? It starts with a commitment to Grow Happiness through experience and then delivering on that commitment with rock-solid stats like a 91% first call resolution rate, 83% NPS score, and less than one minute call wait times. While other subservicers lack the service part of their formula, TMS has made it their mission to put the service back in subservice. Add in their 99% customer satisfaction rate and you have one of the Top 10 Subservicers in the nation. From their inception, TMS aimed to speak a different language and do business differently, by obsessing about delivering a great customer experience, developing innovative technology, and creating genuine and transparent partnerships with their clients. Caring for customers and clients isn’t a complicated formula, it just takes a mission driven commitment and persistent execution from a dedicated team like TMS. Ready to experience the winning formula? Partner with TMS.

Finance of America TPO is committed to helping brokers and NDC’s take advantage of as many opportunities as possible. FAM TPO’s recent launch of its Loyalty Alerts Program is designed to help our partners connect with their borrowers throughout every phase of their lives and make sure FAM TPO’s broker and NDC partners are always there when they are needed. These opportunities are delivered straight to their inboxes to let them know about any purchase triggers, MLS triggers, and refinance predictors. Not only does FAM TPO provide alerts when opportunities arise, but they also have the products to meet all their borrower’s needs, from those with regular W2 jobs to those more non-traditional borrowers otherwise placed out of the market. In addition to conventional and government loans, FAM TPO gives its brokers access to Non-QM, Jumbo, Commercial, Renovation, Reverse, and more! To become an approved partner, reach out today!

“While ‘Military May’ might be ending, Caliber Wholesale’s commitment to those who have served doesn’t end when the calendar page turns. Whether you’re a broker with a passion for VA lending, or simply find value in supporting your military customers to the best of your ability, we’re here to help. Caliber Wholesale’s military lending team has decades of experience in navigating VA lending and offers dedicated resources to help brokers with general questions and getting required Certificates of Eligibility. We leverage our expertise by offering brokers education on VA lending through webinars, in-person, and virtual training. We also share content through our website on hot need-to-know topics such as VA lending myths. Ready to provide year-round support to those who serve? Learn more about our program or contact [email protected] to get approved with us today if you aren’t already.”

Is your team’s bottom line taking a hit by operational expenses? With Fee Chaser by LenderLogix, you can lower internal costs and even realize additional revenue by automating your upfront fee collection process. Say goodbye to manually processing payments, uploading receipts to your LOS, handling rejected transactions… catch our drift? Fee Chaser lets lenders collect upfront fees quickly and easily by sending borrowers a secure payment link via text message and email. The borrower completes the payment on their device and the LOS gets updated with the receipt automatically. Whether you’re collecting appraisal fees, credit report fees, or condo doc fees, this automated process can handle it all. Interested in seeing how it works? Book a demo with the LenderLogix team and let them chase the fees for you!

A glance at webinars & training through June

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The new rate landscape is changing the needs and behaviors of borrowers: ARM Loans make up 20% of all locked loans nationwide, Home Equity booked volume grew over 40% YoY in Q1 2022*. On June 1 join Curinos thought leaders for data and insight into the current home equity and ARM market, as well as the solutions that are needed to transform your business playbook in our upcoming webinar: How to Transform Your Home Loan Product Solutions. Explore recent origination and performance trends in 2022 and how they compare with prior years. You will gain insight into how to transform the anecdotal into the actionable, home price affordability, and how to address today’s challenges. *According to our benchmark.

ServiceLink’s 2022 State of Homebuying Report offers a snapshot into buyers’ desires, what’s driving their decisions, generational tendencies, and an outlook on the housing and auction market. Join industry experts from ServiceLink, NAMMBA, Money and Bankrate as they discuss insights from this report to reveal how lenders can implement the findings to better serve the most influential demographic in today’s housing market. Register today for this insightful 30-minute discussion on June 23!

Arch MI is hosting a webinar tomorrow on Using Social Media to Attract Real Estate Agents and Consumers. Join Best-Selling Author and Emmy Award Winning Producer, Ginger Bell as she shows you how to uncover what consumers and agents are searching for and how to quickly create social media content and videos that will capture their attention and educate them about the home buying process.

Friday the 27^th is the next edition of The Mortgage Collaborative’s Rundown with Rich and Rob covering current events in the mortgage market for 30 minutes starting at noon PT in “The Rundown with Rich and Rob”. (If you’re interested in sponsoring shows, contact Tom Galluci.)

This June, Enact (formerly Genworth Mortgage Insurance) will host multiple live courses to help grow your business and positively impact homebuyers. Browse Enact’s course catalog of on-demand webinars, just have your company or individual NMLS ID handy when registering.

Lenders One summer events are open for registration. Lenders One’s 20-year mission is to help independent mortgage bankers, banks and credit unions improve their profitability. One of the key benefits of membership is access to unique members-only events and meetings. Registration is now open for the L1 Executive Roundtable in Boston, MA, June 7-8, and the L1 Basecamp at the Whitewater Center, with Rob Chrisman as the Keynote Speaker, in Charlotte, NC, July 12. If you are a current member, reserve your seats today! If you are interested in how Lenders One membership can benefit your business, contact [email protected] to learn more.

Next week is the 2022 National Settlement Services Summit (NS3). This year, we are fortunate enough to host Chris Mygatt, SVP and Core 4 Engagement Leader from Coldwell Banker Realty, NBA Legend and Business Innovator Rick Barry and the entertaining economist from Graphs and Laughs, LLC Elliot Eisenberg. Attendees will hear from the Secret Service on how to stay cybersafe. State regulators will review the latest in legislation and oversight across the country. National compliance experts will share their insights on what’s happening at the federal level and much more. Join us June 1-3 at the Omni Resort at Champions Gate in Orlando, Florida.

Rates are up, and as lenders’ pipelines start to dwindle, the reality of the need to compete and win in the home purchase market is a requirement for survival. As a part of our Pivot to Purchase series, we are inviting you to join us on June 6th, 2022, for our “Mastering the Purchase Market: How to effectively grow a purchase pipeline”. Join Brian C. Coester, the CEO of Real Estate Connection, Chris Heller the Chief Real Estate Officer of OJO and our moderator Vince Parlove, Director of Wholesale Development for United Wholesale Mortgage and learn how to compete and win in today’s market. The team will cover how to effectively compete, scale, and master the purchase marketplace.

This June 2-3, join IMN for The 3^rd Annual Non-QM Forum in Dana Point, CA. The Non-QM market has bounced back in the last year and is forecast to grow substantially in 2022, there has never been a better time to convene the industry and capitalize on Non-QM opportunities. There is an expected audience of 500+, consisting of a ‘who’s who’ in the industry. Register now and use code “ROB20” to save 20 percent on your ticket.

The Indiana MBA State Convention is June 6th and 7^th in Fort Wayne. Receive state legislative updates, learn about the state of the economy from the MBA’s Joel Kan, and the regulatory landscape from Jack Konyk!

MISMO’s Spring Summit will be held in Charleston. S.C., June 6^th -9^th. Register to attend MISMO’s Spring Summit, in-person or via livestream.

Join NYMBA in Saratoga for the New York MBA Annual Convention and Inaugural golf outing, June 7-9.

ACUMA’s Workshops are back! There is still room to register for a seat at the association’s Western Workshop, scheduled for June 14-15 at the Nines Hotel in Portland, Oregon. Topics include 2022’s Top 5 Mortgage Compliance Considerations, Mining the HMDA Disaster, Developing Effective Credit Union Advocacy Efforts and more.

The MBA of Hawai’i is hosting its Annual State Conference in Honolulu June 21–June 23. If you come, please say hello!

Join the top dealmakers and private lending experts in the red-hot market of Dallas, TX for high level networking, deal flow exchange, raising investment capital and gathering of critical industry data on June 21-22^nd at the National Lending Expo (NLE).

In Florida, the MBAF is offering the 18th Annual Eastern Secondary Market Conference and 68th Annual Convention June 21-23!

Capital markets

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After President Joe Biden signaled he’d reconsider China tariffs imposed under the previous administration, a selloff ensued, and rates were hit, to open the last full week of May. Internationally, European Central Bank Chief Christine Lagarde said higher interest rates are coming in July with markets due for a rally in her opinion.

The economic calendar includes new home sales, which are expected to come in at the slowest pace since last October due to declining affordability and low inventory. New home sales help introduce supply into the Agency mortgage bond market, much needed with the refinance percentage falling to its lowest share of new issuance since 2019. Already out is the Philly Fed (+22.8) number; ahead are Redbook same store sales, Richmond Fed manufacturing and services revenue indices for May, a Treasury auction of $47 billion 2-year notes, and remarks from Fed Chair Powell. The NY Desk will target conventional MBS over two operations totaling up to $1.5 billion. We begin Tuesday with Agency MBS prices better .125-.250 and the 10-year yielding 2.81 after closing yesterday at 2.86 percent.

People who wonder if the glass is half empty or half full miss the point. The glass is refillable.

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, “A Primer on the Federal Reserve and Mortgage Rates.” 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.)