Dec. 9: Study on renting & health; notes on the jobs report, insurance and customer service; Saturday Spotlight: Automated Mortgage Systems, Inc.

Controlled experiments should always be listened to, and this one will help lenders. A landmark study out of the University of Adelaide and University of Essex has found that living in a private rental property accelerates the biological ageing process by more than two weeks every year. “The negative health impacts of renting were shown to be greater than those of experiencing unemployment or being a former smoker.” We all have our vices. Smoking… The average cost of a pack of cigarettes in the United States is $8.00, with average prices ranging from $6.11 (Missouri) to $11.96 (New York). A pack day is a $240 a month habit. Of course, spending $5 a day at Starbucks is a $150 a month habit, or a bottle of Fiji water a day is probably $120 a month. I’ve heard of LOs addressing these and more when talking to borrowers about monthly cash flow.

Saturday Spotlight: Automated Mortgage Systems, Inc. _________________________________________________

“Elevating loan servicing through technology.”

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

Automated Mortgage Systems, Inc. is a venture-funded mortgage servicing technology company. Our co-founders are industry veterans with established track records of building and deploying enterprise platforms.

Our initial product, MESH Auditor, is a centralized compliance rules engine for loan servicers incorporating all CFPB, Agency and State regulatory requirements for daily review.


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


Since our team lives in multiple states and countries, each of us is involved in local charitable organizations. For example, our CEO runs a local homeless food distribution and shelter support organization in coordination with 5 churches and 2 synagogues that provides daily meals to over 100 individuals and families. Our CTO is very active with the government of Costa Rica in developing technology for monitoring ocean water temperatures related to global warming. In general, we foster an environment of support for all of our employees to give their time and talents to local charitable organizations.  


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


We are all seasoned professionals and yet the flexibility and growth necessary to make new products work for new customers is a continual learning opportunity. Our executives use their strong professional relationships to set a tone for the entire organization by modeling commitment and loyalty to each other.


Tell us how your company maintains its culture in a work-from-home environment, or how you plan on bringing employees back into the office, if applicable.   


We conduct our daily business via GoogleMeet, Zoom, email and chat. Additionally, we meet in-person twice annually for multi-day work sessions and events. We believe that our virtual interactions are enhanced by our bi-annual meetings where we can greet each other and interact in-person, but we have no requirements to force people into an office setting.


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

We are a product-led firm and we’re proud of that.  We build exceptional technology and let the product do the selling.


Fun fact about your company?

Everyone seems to be moving to new geographic locations. We currently have employees in 5 states and 2 countries outside of the USA. And we have people moving to new locations including the states of Washington and New Mexico.


Is there anything else you’d like to share along these lines?   

Too often, technology organizations embellish product characteristics and over-promise functional benefits. That’s not our style. We’re building a company based on the values of quality execution and exceptional customer service.

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

Jobs data


The U.S. economy is based on jobs and housing, and, although many economists and analysts have their preferred economic statistics for indicating expansion or contraction, the “first Friday of every month” jobs data from the Department of Labor reigns supreme. What are some experts thinking about yesterday’s data, and its implication on mortgage rates?

Mark Palim, Deputy Chief Economist at Fannie Mae, sent, “This morning’s jobs report from the Bureau of Labor Statistics confirmed that job creation remains healthy, with total nonfarm payroll employment increasing by 199,000 in November, though this month’s pace was inflated somewhat by workers returning from a strike; in particular, around 30,000 auto workers and 16,000 motion picture industry workers… Wages grew at a 4.0 percent year-over-year pace, a slight deceleration from the prior month’s pace, though on a month-over-month basis the growth rate ticked up slightly.


“The household survey also provided good news, with the unemployment rate ticking down two-tenths to 3.7 percent in November, as household employment surged by 747,000. However, as we’ve often noted with prior reports, the employment figure in the household survey is a more volatile measure than the payroll survey. The labor force participation rate ticked up one-tenth to 62.8 percent as additional workers rejoined the labor market. The number of employees working part time but who would prefer full-time jobs fell by nearly 300,000 last month, another indication of strong labor demand. Finally, we note that residential construction employment, including specialty trade contractors, was essentially flat this month, growing by just 1,000, a pace much slower than in previous months.

“Overall, this report provides further evidence that the labor market remains healthy. The recent rapid decline in rates, in particular the mortgage rate is down nearly 80 basis points since the end of October, along with continued job growth are beneficial for homebuyers. But if labor markets remain this strong, we believe the pace of mortgage rate declines will likely not continue in the near term or may partially reverse.”

NAR Chief Economist Lawrence Yun observed, “Jobs are still being added to the economy… Compared to the peak employment prior to the pandemic in early 2020, there are 4.7 million more Americans working now. Mortgage rate movements may determine entry timing, but jobs are the source of long-term housing demand, which keeps growing. Wage growth decelerated to 3.96%, which is the slowest since three summers ago. This is partly due to more Americans coming off the bench to enter the labor force. The COVID stimulus money is mostly gone. Despite the lower wage gains, living standards slightly increased as the consumer price inflation was 3.2%. The higher wage gains of 6% during last summer were wiped away by 9% inflation. So, softer wages will help move the overall inflation rate lower. This also means the Federal Reserve must consider a rate cut or two—or three—in 2024.”

MBA SVP and Chief Economist Mike Fratantoni weighed in on employment conditions in November. “The trends, in combination with the drop in the unemployment rate to 3.7% from 3.9% in October, paint a picture of a job market that is still strong, even though the number of job openings has declined, and at least some sectors are seeing an increase in layoffs.

“Construction employment was flat for the month. We expect that homebuilders will continue to be the key source of housing supply next year, so we might see further employment growth in the sector, even if the economy slows as we anticipate.

“Interest rates jumped in response to this report, as job market strength may be enough to keep the Fed cautious with respect to any comments regarding the path for rates at their December meeting. Inflation is declining, but further declines are likely dependent upon some slowing in the job market. We continue to forecast that the Fed will begin to cut rates in the spring of 2024, as job market trends are likely to weaken from here.”

A scientific look at LO incentives


“Nonbank mortgage originators, which operate through the originate‐to‐distribute (OTD) model, account for more than half of all the mortgage origination in the United States. However, less is known about which factors drive the quality of mortgage originations through nonbanks. I show that an exogenous shock that reduced collateral risk for funding intermediaries of nonbank mortgage originators led to a greater issuance of riskier mortgages that culminated in 10–30% higher ex post defaults. These results show how the quality of mortgage origination in the OTD model of nonbanks is affected by the collateral risk borne by their funding intermediaries. Overall, the results highlight funding intermediaries’ monitoring incentives as one of the factors that drive the quality of mortgage originations through nonbanks.” (No, I don’t know how to access the full article.)

The insurance market is in turmoil


The insurance business has turned into a mess as the cost of home or auto insurance has skyrocketed, if you can get a policy. Carriers are scaling back or entirely eliminating entire states from coverage, and every LO encourages a potential client to consult with an insurance broker to check costs for homes. LOs can add value by helping with insurance questions.

Scot Cunningham writes, “Just when you thought that closing loans couldn’t get more difficult, we now have an insurance problem here in the State of California. A recent class I attended had this to say about the subject. This is good information for everyone in our business, as well as anyone who owns property. To begin with, don’t let insurance payments lapse! You might not get it back and/or the price may go up substantially.


“1) Start the insurance process in your transactions early for either commercial or residential!

2) Get your Bank’s insurance requirement immediately so you know what policy you are shopping.

3) Ask the seller “have they ever had an insurance claim on this property before or aware of any previously?”

4) Ask the buyer “have they ever submitted for insurance claims before on any property?”

5) Historical claims can kill you. Good for everyone to remember!

6) Shop Insurance rates…the market is in turmoil and rates can differ substantially and insurance rating systems vary.

6) The California Fair Plan can take up to 6 months, they are backed up. Prices have gone up.

7)  Inspect the property and the surroundings for fire and hazards. Insurance companies are using satellite images and drones along with hired inspectors. Roof, trees, oil drums, old cars, rubbish, anything that can be grounds for denial or rate increases. Inspections by the property owners should be done yearly because the insurance companies are inspecting their portfolios yearly… just like the banks.” Thank you, Scot!

What customers want


Steve Brown with PCBB writes, “According to a recent Salesforce study, customers want two things from their financial institutions: help preparing for economic uncertainty and a personalized experience.

“Help Navigating Economic Uncertainty! Substantially higher interest rates that the Fed says likely won’t come down for the foreseeable future, global conflicts, and lingering supply-chain issues have all served to boost prices for both consumers and businesses in the U.S. Whether the US economy goes into recession or achieves the hoped-for soft landing, it’s clear the economy is slowing. Consumer spending can’t continue at previous levels, if only because higher interest rates make payments on all kinds of debt unsustainable for many people.

That contraction affects every customer a community financial institution (CFI) has, but especially its business customers. CFIs can help them manage economic uncertainty through a variety of supports.

“Review the business’ current expenses to see if they can trim down their outflow of cash. For instance, you can use data from other customers in their industry or from businesses of a similar size to help determine if they are overpaying for a certain service or product. You might also identify if there’s a recurring expense, such as an annual subscription, that the business seldom uses. Perhaps the vendor offers ad hoc or monthly billing that could save the business money.

“Adopt faster payment options, like the FedNow® Service and Automated Clearing House payments, to eliminate processing time for incoming payments. This will help businesses manage cashflow better and enable them to send outgoing payments sooner than if they were using more traditional methods.

“Help them consider different payment models for their customers. For instance, if the business invests a lot of time or funds into preparing a customer’s order, such as with custom goods or services, asking their customers for deposits up front can help minimize cancelations and increase the ability to pay staff or vendors.

“Discuss alternative revenue methods, such as a loan or line of credit. This can help a business customer with necessary expenses or even cover the cost of implementing new offerings to their customers, like a new product line or an ecommerce website to reach a bigger market. There may also be grants available from local governments or the business’ industry.

“The second major category is creating a personalized experience. With a better idea of what your business customers want, it’s time to turn your attention to the experience clients want to have as they receive these products and services.

“A seamless digital onboarding and financial management interface is part of the experience customers want, but it isn’t everything to them. According to Verint’s VXI banking report, 53% of banking customers handle financial transactions through digital channels, compared to the 23% of customers who go to a branch to make transactions.

“Even so, banking customers still appreciate the ability to do business in person. Convenient branch locations are the fifth most important consideration for people who are choosing a new bank, and it is the top factor for those who are opening an account at a second financial institution. In-person interactions are valuable tools as CFIs give expert guidance, resolve snafus, and communicate that they care about their customers.

“What other experiences can a CFI offer its customers? Luxury retailers, which sell an experience as much or more than they sell a product, are a guide to some of the possibilities. Financial transactions can involve much larger sums than the purchase of a handbag or piece of jewelry, so it’s reasonable that CFI clients expect (and receive) first-class service at their financial institution. Elements of that service might include one-on-one appointments, personalized communications, and expert guidance.”

PCBB wrapped up with, “CFI customers want support as they navigate uncertain economic times. They also want a personalized experience from their financial providers. Looking to luxury retailers can help CFIs set the tone for the appropriate level of service, help customers understand what they want, and encourage community members to do business with their institutions.”

Here’s something useful for team building quizzes or a family party around the tree.

Name the carols described in each riddle

1. Oh, member of the round table with missing areas = Oh Holy Night

2. Boulder of the tinkling metal spheres = Jingle Bell Rock

3. Vehicular homicide was committed on Dad’s mom by a precipitous darling = Grandma Got Run Over by a Reindeer

4. Wanted in December: top forward incisors = All I Want for Christmas Is My Two Front Teeth

5. The apartment of two psychiatrists = The Nutcracker Suite

6. The lad is a diminutive percussionist = Little Drummer Boy

7. Sir Lancelot with laryngitis = Silent Night

8. Decorate the entryways = Deck the Halls

9. Cup-shaped instruments fashioned of a whitish metallic element = Silver Bells

10. Oh small Israel urban center = Oh Little Town of Bethlehem

11. Far off in a hay bin = Away in a Manger

12. We are Kong, Lear, and Nat Cole = We Three Kings

13. Duodecimal enumeration of the passage of the yuletide season = The Twelve Days of Christmas

14. Leave and broadcast from an elevation = Go Tell It on the Mountain

15. Our fervent hope is that you thoroughly enjoy your yuletide season = We Wish You a Merry Christmas

16. Listen, the winged heavenly messengers are proclaiming tunefully = Hark the Herald Angels Sing

17. As the guardians of the woolly animals protected their charges in the dark hours = Shepherds Watched Their Flocks by Night

18. I beheld a trio of nautical vessels moving in this direction = I Saw Three Ships

19. Jubilation to the entire terrestrial globe = Joy to the World

20. Do you perceive the same vibrations which stimulate my auditory sense organ? = Do You Hear What I Hear?

21. A joyful song of reverence relative to hollow metallic vessels which vibrate and bring forth a ringing sound when struck = Carol of the Bells

22. Parent was observed osculating a red-coated unshaven teamster = I Saw Mommy Kissing Santa Claus

23. May the Deity bestow an absence of fatigue to mild male humans = God Rest Ye Merry Gentlemen

24. Rose-colored uncouth dolf is aware of the nature of precipitation, darling = Rudolph the Red-Nosed Reindeer

Visit 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. STRATMOR’s current blog is titled, “How Treasury Auctions Influence Mortgage Rates”. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).


(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 Copyright 2023 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)


Rob Chrisman