W.C. Fields said, “Money will not buy happiness, but it will let you be unhappy in nice places.” Unfortunately, many people have much less of it, and here’s a quiz to start the week. What are -68 percent, -66 percent, -60 percent, -40 percent, -13 percent, and -2 percent? They are all the stock performance since their initial public offering, or SPAC merger, of well-known companies in the residential mortgage business. And the numbers aren’t even the decline from their price highs, which would look much worse. In order of a hit taken: Home Point, loanDepot, Finance of America, United Wholesale, Rocket, and Guild. (Thank you to California’s Jeff B. for sending.) Every deal was different, but many analysts are questioning the franchise value of pure TPO (broker and correspondent) companies, given current profit margins. Remember that owners often sold only a portion of the company. It pays to diversify! As industry analyst Joe G. points out, “There’s probably a point in the cycle when it makes sense to buy mortgage company stocks, but that would be after a gut-wrenching period when they trade at huge discounts to book and maybe 2-3x projected earnings.” Today’s audio version of the commentary is available here and this week’s is sponsored by Sponsored by MCT and its new Learning Center. Mortgage bankers of every size can reach new heights by leveraging technology and a team of experts from MCT. Improve your business operations and understanding of the mortgage industry with the leading fully-integrated provider of capital markets services and technology.
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Congratulations to Mann Mortgage being named one of Outside magazine’s 50 Best Places to Work in 2021… for the second year in a row! Mann was recognized for its benefits, work-life balance, job satisfaction, and trust in leadership. “We are spoiled in unique ways,” said one employee. “From getting our birthday off to $100 meal reimbursement on our work anniversary, we feel supported in and out of work.” Mann Mortgage employs nearly 500 people across the U.S. In addition to traditional benefits, it offers a variety of non-traditional benefits that add to an award-winning culture. Mann Mortgage is ranked #1 Top Workplace in Montana by Lee Enterprises, a Top Workplace by The Oregonian, a Scotsman Guide Top Mortgage Lender, and a Top Mortgage Workplace by MPA. Mann Mortgage is actively seeking new branch locations. If you’re ready to work for a top ranked workplace, contact Cassidy O’Sullivan.
“Acra Lending continues to grow as we head into 2022! As one of the industry’s leading private mortgage lenders, we have the widest Non-QM program offerings, like our 3, 12 & 24-Month Bank Statement, Investor Cash Flow, Business Purpose, ITIN, and Foreign National programs. In addition, we have recently launched Fix & Flip and Multi-Family programs. Our investment in technology and training provides the foundation for our team to achieve success, and as we continue to expand after a record breaking 2021, we are continuing that momentum as we head into a new year. With our continued growth we are looking to bring in additional talent from Account Executives, MLO’s, Correspondent BDO’s, Fix & Flip/Multi-Family Loan Officers, Transaction Managers, Underwriters and more. Come build your career with a company that is committed to helping you achieve success and growth. Visit Join Acra to apply today.”
“We’re seeking a dynamic and eager Joint Venture President ready to make a career move! Summit Home Mortgage, part of the Newrez Family of Companies, is actively seeking a Joint Venture President in Kalamazoo, MI. Our product set consists of a dynamic Non-QM product suite, Fixed Rate Loans, Adjustable-Rate Loans, First-Time Home Buyer Loans, FHA Mortgages, Loans for Veterans, and long-term locks for Construction Financing. Ideal candidates will have at least five years of leadership and lending origination experience and an active federal or state NMLS license. Ready to make a move? Apply now or contact Randy VandenHouten, Senior Vice President of Joint Venture & Retail Lending, or our recruiting team at [email protected] today!”
It’s almost time to decide on a “new year, new me” path for your career. Why sell just a few loan solutions when you can start offering over 30 unique and exceptional products? You can sell to real estate investors, self-employed professionals, jumbo loan seekers, foreign nationals, retirees and more, with one of the fastest growing and most successful private lenders in the nation, Sprout Mortgage. Sprout delivers lending for primary & second homes, investment properties, non-warrantable condos, and multi-unit properties. Loan Officers, you’ve got nothing to lose, and only professional growth and earning potential to gain! Want to hear more? Reach out to the friendliest recruiter on the block, Cheri Brousseau, at 888-505-7568. NMLS ID# 1844521. For complete licensing information, visit Sprout. Sprout Mortgage is an equal opportunity employer.
“Now is the time! PRMG is aggressively hiring experienced Correspondent & Wholesale Account Executives throughout the Western, Northwest, Midwest, and Southeast United States, including Northern and Southern California. PRMG, a team-focused organization, has invested resources in its operations teams to ensure they provide the best possible service levels to their customers and business partners. Efficiency and success starts with like-minded team members who understand the AE is key to our success! For decades Mutual appreciation between operations and sales has led PRMG to exceeded annual goals year after year! We don’t grow without TPO! Today, along with numerous accolades under their belt including being recently ranked amongst the Top Workplaces 2021 and the Top Mortgage Employers to work for in America 2021, PRMG employs nearly 3,000 people across the country and is licensed in 48 states with over 250 branches located throughout the nation. Contact [email protected] for a complete job description or confidential inquiries.”
Broker and lender services & products
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A Utah home is drawing attention this holiday season for being decorated like a life-sized gingerbread house. Adorned with twinkle lights and giant candy canes and gumdrops, the home looks like something out of Hansel and Gretel’s dreams. Speaking of dreams, FormFree is helping renters with limited credit retain their homeownership dreams faster and easier than ever before. FormFree’s electronic asset, income, and employment verification solution AccountChek automatically submits available 12-month rent payment history reports to Fannie Mae’s Desktop Underwriter® (DU®) validation service on behalf of every lender. Not to mention, with dozens of powerful integrations, FormFree provides a secure, streamlined origination process for lenders that improves borrower experience. Contact Christy Moss today to see how FormFree can help you serve borrowers with a limited credit history.
It’s the most wonderful time of the year! Registration has opened for the highly anticipated 2022 SimpleNexus User Group (SNUG) conference, to be held at the luxurious Cliff Lodge at Snowbird Ski Resort from February 28 – March 3. SNUG 2022 is bringing together industry thought leaders, digital mortgage trailblazers and SimpleNexus’ decorated team of mortgage technology experts to help mortgage lenders attain their 2022 business #goals. To top it all off, the conference will close with a day of networking on Snowbird’s glacially carved ski slopes or at the foot of a roaring lodge fire, warm beverage in hand. Check out the preliminary agenda and grab your tickets now.
Earlier this month, British strongman John Evans donned a Santa suit and set out to achieve his 99th Guinness World Record by balancing an 8-foot brick chimney on his head. Evans, at nearly 75 years old, somehow managed to make this incredible feat of strength look easy. Speaking of incredible feats made easy, Phil Denfeld of First Heritage Mortgage attributes faster sales cycles during the largest refinance boom in mortgage history to Sales Boomerang: “The fact that we have Sales Boomerang mining our database and getting alerts to our loan officers, gave them focus and direction. Sales Boomerang made the refinance cycle easier for us.” Overall, lenders using Sales Boomerang see an average 20-40% lift to loan volume and 65% borrower retention rate. Are you looking for a simple tool that can deliver record-breaking refi volume? Contact Sales Boomerang today.
Freddie & Fannie’s changes continue
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Fannie Mae Selling Guide update (SEL-2021-11) modifies the definition of principal residence to include military service members on active duty, clarifies required documentation when a borrower has filed an extension with the IRS, expands allowable comparable sales for new (or recently converted) projects, establishes standard requirements for measuring and calculating gross living area.
Appraisers will be required to use the American National Standards Institute® standard, Square Footage – Method for Calculating: ANSI® Z765-2021, for measuring, calculating, and reporting square footage of subject properties for appraisals with effective dates of April 1, 2022, or later on loans sold to Fannie Mae. For additional information View the Fannie Mae video and
Fannie Mae automated the Form 629 submission process to request servicing and subservicing transfers with the new Quick Exchange application, eliminating manual email submissions.
Visit the Servicing Transfer Approval page and Review SVC-2021-07 for details.
HomeReady-HomeStyle now allows up to 75% LTV with a minimum 660 FICO on primary 3 to 4-unit purchase and rate/term refinance transactions.
CAMP shared cryptocurrency facts with its members: Freddie Mac says cryptocurrency can’t be used for mortgage qualification. In order to address uncertainty regarding the treatment of cryptocurrency in mortgage underwriting, the Freddie Mac bulletin specifically addresses requirements related to cryptocurrency’s use in the mortgage qualification process. These requirements include, among other things, that income paid to the borrower in cryptocurrency cannot be utilized to qualify for a mortgage and that “[c]ryptocurrency may not be included in the calculation of assets as a basis for repayment of [the] obligation.” Unless otherwise noted, the changes issues in the bulletin are effective immediately.
In Single-Family Seller/Servicer Guide Bulletin 2021-36 Freddie Mac announced: 2022 Conforming Loan Limits, an Extension of Guarantee Fee Obligation, Affordable Lending
Guide updates for previously announced Freddie Mac Refi Possible eligibility enhancements, updates related to community land trust mortgages, revised requirements for Affordable Seconds® funded by certain nonprofit entities, Credit Underwriting requirements related to the use of cryptocurrency in the mortgage qualification process, additional specificity regarding the inclusion of prepaid real estate taxes in the proceeds of a no cash-out refinance mortgage, additional specificity related to the documentation of source of funds used to pay off or pay down debts, document custody, updated requirements related to document custodian eligibility and oversight, and additional Guide updates.
Fannie Mae’s Lender Letter 2021-16 discusses increase in loan limits, most of the country will be $647,200 — an 18.05% increase over the 2021 limit — and is effective for whole loans delivered to Fannie Mae and loans in MBS pools with issue dates on or after Jan. 1, 2022. Additional Fannie Mae informational resources are also available. View the Loan Limit Look-Up Table and Visit the Loan Limits page.
Fannie Mae’s December Servicing Guide update consolidates into the Selling Guide certain policies regarding insurance applicable to both lenders and servicers, updates various borrower-facing servicing forms and documents, retires Form 2002, clarifies subservicer eligibility to perform general servicing duties and responsibilities for HomeStyle® Renovation mortgage loans not associated with property renovation, and adds a link to the Mortgage Insurance Claims Portal.
Effective December 4th, the updates to RefiNow™ announced in Fannie Mae LL-2021-10 on October 20 are active in Desktop Underwriter® (DU®). Read the Dec. 8 Selling Notice for some considerations when working with borrowers to ensure they understand what refinancing opportunities exist, and the potential benefits and costs associated with each. Servicers with borrowers whose LIBOR or COFI ARMs will be adjusting or converting may also find this information useful.
Capital markets
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The main headline last week was the announcement from the FOMC outlining changes to monetary policy as well as it’s updated forecasts. By doubling the pace at which it will taper Treasury and MBS purchases, the committee will complete the wind-down by March. This will leave it ready to begin raising the Fed Funds rate earlier than previously expected should economic conditions warrant. Given that the Federal Open Market Committee believes the inflation threshold has been met, the pace of rate increases will depend on the progress of the labor market in the new year. As higher inflation eats into consumers’ budgets, spending on discretionary items is likely to subside.
Residential construction continues to face its share of material and labor shortages which are prolonging the delivery of new homes. The number of single-family homes under construction in November, 757k units, was the highest since March 2007. There is also a rising backlog as evidenced by the number of homes permitted but not yet started (152k). Even with a modest rise in interest rates next year, housing is still expected to do well and purchase originations are forecast to be higher than in 2021.
The year-end holiday season is in full swing this week with market liquidity expected to wane over the course of the week. We have an early close on Thursday with a full close on Friday ahead of Christmas Day on Saturday. There is a fairly active data calendar ahead of Christmas with the Treasury also auctioning $20 billion reopened 20-year bonds tomorrow and $17 billion reopened 5-year TIPS on Wednesday. Today we only have Leading Economic Indicators for November, due out later this morning. Today is also Class D 48-hours in regard to MBS. The New York Fed Desk will purchase up to $4.4 billion 30-year 2.0 percent and 2.5 percent. We begin a slow trading week with Agency MBS prices up nearly .125 and the 10-year yielding 1.38 after closing last week at 1.40 percent on more worries that the pandemic will continue to keep portions of the economy shut down.
An old man calls his son and says, “Listen, your mother and I are getting divorced. Forty-five years of misery is enough.”
“Dad, what are you talking about?” the son screams.
“We can’t stand the sight of each other any longer,” he says. “I’m sick of her face, and I’m sick of talking about this, so call your sister and tell her,” and he hangs up.
Now, the son is worried. He calls his sister. She shouts, “Like hell they’re getting divorced!”
She calls their father immediately. “You’re not getting divorced! Don’t do another thing. The two of us are flying home tomorrow to talk about this. Until then, don’t call a lawyer, don’t file a paper. DO YOU HEAR ME?” She hangs up the phone.
The old man turns to his wife and says, “Okay, they’re both coming for Christmas and paying their own airfares.”
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, “The Personal Touch” about MLO compensation and motivation. 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 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.)