Daily Mortgage News & Commentary

Feb. 28: AE, MLO, Bus. Dev. jobs; TPO, processing, CD, internal audit tools; Russian mortgage rates; Ukraine driving our bond market

I could tell that my cat Myrtle was miffed, and this time it didn’t have anything to do with the CFPB. (Nor me heading to Salt Lake City today for the SimpleNexus User Group Conference.) She was upset because she had missed out, once again, on the coveted Chrisman LLC Employee of the Month award which includes a parking spot near the front door of the massive office complex we occupy in the downtown of a large city. On top of that, she had recently fallen for an email scam that began, “My beloved, I trust that you are well, but I have become hard times and am in need of many funds…” Okay, Myrtle didn’t fall prey to the phishing, but our industry is where the money is, and subject to constant attempted scams, like wire fraud. Do you think title insurance is a scam? You’re not alone. One thing that isn’t a scam is property values continuing higher, although it is area dependent. Economist Elliot Eisenberg, Ph.D., observed, “Over the past year, house prices have risen a whopping 18.8 percent, due largely to Covid-19 and the WFH phenomenon… over the past 12 months the largest house price gains have been in warm weather cities like Phoenix, Tampa, Miami, Dallas, San Diego, and Las Vegas which all saw Y-o-Y gains exceeding 25 percent. Conversely, Washington, Minneapolis, Chicago, Cleveland, Boston, New York, and Detroit all saw gains below 15 percent.” (Today’s audio version of the commentary is available here and this week’s is sponsored by CWDL, providing industry-specific audit, accounting, and tax solutions that help you better understand the present so you can plan for the future. See what’s possible with CWDL. Today’s includes an interview with Mark Wilson, Managing Partner of CWDL, on lender philosophies in a rapidly changing market.)

Employment & transitions

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Director of Mortgage Product Development: “Tomo is a purchase-focused Mortgage Lender founded by an all-star team of former Zillow, Microsoft, USAA, and Amazon executives. We’re currently looking for a Director of Mortgage Product Development who’ll be responsible for defining, building, and bringing to market Tomo’s mortgage product portfolio. At Tomo, we thrive on collaboration and this role will work cross-functionally with leaders across the organization. If you’re an enthusiastic and nimble strategic thinker interested in affecting the growth and direction of a fast-growing company poised to transform the mortgage industry, we encourage you to apply!”

2022 is the Year of Non-QM. ACC Mortgage will break another record in February, even with the market volatility. It is time to work with the oldest, most stable, and trusted Non-QM lender. While other lenders are trying to figure out Non-QM, we have it down to a science: 90 percent Bank Statements, 90 percent P&L Only, 85 percent ITIN, 80 percent DSCR and now the 75 percent Last Chance Program for those tough deals. Go to www.NonQMPricer.com to see programs and pricing or call 877-349-0501 to connect with an experienced AE. If you are a driven conventional AE and you want to make the switch to Non-QM, we offer the best culture, training, and support. E-mail your resume to recruiting@accmortgage.com.

For the past several years, Thrive Mortgage has selected a theme as the catalyst for what that year would hold. Often, those themes have been undeniably prophetic. Thrive kicked off 2020 with “Buckle Up”, a designation which was particularly noteworthy for many reasons. In 2021, “Beyond” was an equally prescient theme as the company celebrated its 20th anniversary while also looking forward to the next 20 years. For 2022, Thrive is celebrating the next iteration of the company with “Making Waves”. “For as far as we’ve come, we’ve only scratched the surface,” stated Selene Kellam, COO of Thrive. “We have proven time and again that we will not be satisfied with the achievements and accolades of yesterday. We strive to build a community which is continually innovating and improving.” Have an interest in being a part of the next wave of innovation? Begin that conversation today! Visit us here or message us at Info@ThriveMortgage.com.

A long-time industry veteran, Deborah Gadberry, was appointed as the new Director of Third-Party Origination Sales for First Federal Bank. She is also the President Elect for Tennessee Mortgage Bankers Association. Congratulations!

Lender and broker products, services

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Is it currently difficult for you as a mortgage origination business to find underwriters, loan processors and servicing agents. By enabling NXTsoft OmniConnect lifecycle API connectivity, lenders can fill the gaps that were previously manual human processes, thereby reducing the need for pre-COVID staffing levels and dramatically decrease turnaround time. NXTsoft has over 25 years’ experience connecting financial services systems cost-effectively and efficiently.

Need training in Encompass® designed for your business needs by experts? Your industry training partner, KensieMae University, has trained more than 5,000 students from 150 lenders. We offer self-paced online courses or live virtual trainings created by experienced instructors for Encompass admins and users. To show their full mastery of Encompass, administrators can pursue the self-paced KMU Administrator Certification in Encompass. KMU also offers custom live trainings delivered remotely to mortgage lenders of all sizes. KMU provides tailor-made content for your company’s workflow, so your Encompass users and new hires are efficient and productive. Each training block is custom-made for the needs of your company’s loan originators, processors, underwriters, or closers. KensieMae is a leader in fintech with 10,000+ product installations and 800+ clients, as well as honors in Inc.’s 5,000 Fastest-Growing Private Companies. They provide professional services, operational consulting, custom development, and software products for the mortgage industry.”

Connexions is excited to announce its integration with ProxyPics, a provider of residential and commercial property inspection services. Now, our lender clients have the ability to give their appraisers the option to choose ProxyPics to complete the final 1004D inspection process, uploading both the photos and the report directly into Connexions for the lender to complete the approval process. For clients using the Encompass LOS, ordering ProxyPics services is now easier than ever, with photos and reports automatically uploaded to the Encompass eFolder. Learn more about how Connexions integrations can help your business by scheduling a demo at GetConnexions.com/demo.”

Two reasons you need risk… and an internal audit. Risk has a place in every mortgage company. Without it, you can’t grow. But exactly how much risk can you tolerate? An internal audit from Richey May can help answer that question in two important ways: 1) Know your risk appetite. Every mortgage company has a unique risk appetite. An internal audit can help you understand what yours is and how to balance risk against it. It enables you to mitigate risk to a level that lets leadership feel comfortable and still achieve business objectives. 2) Protect your licenses and agency approvals. Mortgage lenders need internal audits because agencies and regulators require them. Waiting until you get hit with a finding is a bad risk. To stay compliant, you need to adhere to regulatory requirements. Manage risk and grow your business. Learn more here. Talk to a Richey May expert today.

How about some interesting stats? Amazon orders per second show the company handles an average of 67 orders per second. That translates to about 4,000 sales per minute and 240,000 product sales per hour. Here is another impressive stat: Silk Title Co. is now producing Balanced CDs in 5 minutes. Want to learn more? Email marc@silktitleco.com or stop by Booth 13 at the ICE Experience 22 in Las Vegas March 14-16.

Cloud-based LoanMAPS, a fully integrated digital processing and underwriting system, will eliminate your need for a POS, a LOS, a CRM, report writer, and income calculator. Do you know your costs of your full-time employee? Does your Fintech truly improve streamline the work process and reduce your cost to produce? LoanMAPS does. With LoanMaps you can have confidence you will start the loan with an agency compliant AUS underwrite, and our workflow will have entry level mortgage bankers closing in no time! LoanMAPS is not about replacing people, it is about using technology to its fullest potential so that your employees can reach theirs”: Take3Tech! In conjunction with our partner DocMagic, users can finish closing documents in 15 minutes. See more about how you can reduce your cost to close with the LoanMAPS Closing Module!

“Surprising to learn that a conflict between nations half a world away could slow the rise of mortgage rates. We’re hoping that conflict ends quickly but the slow rise in rates continues. Unite Mortgage continues to rise in the TPO space and is excited to meet/reconnect with so many friends at industry trade shows across the country. Look for us at the FAMP, Broward Gold Coast Show on March 9th. We’ve got a lot to say about Unite’s many Non-QM options. Just ask us at the show or visit our web site. Our ‘12 Day Purchase Pledge’ also continues to speak volumes for brokers as well. More reasons why over 700 mortgage brokers have joined Unite in the past few months. Now is a great time for you to learn more about Unite Mortgage. Simply email Unite Mortgage President James Hooper and visit us at www.unitemortgage.com. And always follow us on all our social channels. ‘Let’s Unite!’”

Today SimpleNexus kicks off its fourth annual user group conference, SNUG, at Utah’s Snowbird ski resort, where attendees will get an intimate showing of the innovative technology and ideas guiding today’s lenders to new heights. Adding to the excitement, SimpleNexus will reveal winners of the 2022 Nexus Awards throughout the event. Two of those award winners deserve mentioning right here and now. Mortgage 1 is the recipient of the Trailblazer Award in recognition of its crucial partnership as a beta tester during the rollout of the Nexus Closing eClose solution, and Global Payments Integrated has been honored with the Partner Award in recognition of its collaboration and integration efforts behind Nexus Pay, a feature that allows lenders to send payment requests to borrowers and get paid faster through the SimpleNexus app. Keep your eyes peeled on LinkedIn throughout the week for additional Nexus Award winners.

Capital markets: Ukraine & the Fed

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You don’t need to add infrastructure or spend thousands on multiple investor contracts to win the tightening purchase market. Get daily liquidity for flow loan trading or take advantage of MAXEX’s bulk services all with a single contract. MAXEX is the first digital mortgage exchange to enable buying and selling of residential mortgage loans through a single counterparty. MAXEX’s bulk services provide clients with a turnkey process to tap into portfolio trades where you can act as buyer, seller or both depending on market conditions, with MAXEX acting as the counterparty to all transactions. Contact a MAXEX expert today to find out how you can stay competitive in a rising rate environment.

If you want a mortgage in Russia, you’ll be using a depository bank. And the rate? 15.3 percent… and refinancing is temporarily abolished. Market-influencing news over the last week was dominated by the Russian invasion of Ukraine and the fallout from sanctions as well as uncertainty around the potential outcomes of the conflict. While the initial market reaction was the expected flight to safety, all Treasury yields finished the week higher and all signs still point to the Federal Reserve moving to tighten monetary policy at its upcoming meeting despite uncertainty posed to the global economy by Russia’s invasion. Traders have pulled back bets on the Federal Reserve aggressively hiking interest rates next month with odds now at 75 percent for a 25-basis point hike (what is expected to be the first of five this year) and 25 percent for 50-basis points. Additionally, the Fed is about to wrap up its purchases of MBS in March, so that removes much of the downward pressure on mortgage rates.

Fed Governor Waller commented on the Fed’s balance sheet to close last week saying, “I do not see the need to consider asset sales anytime soon” because of large caps and sizable amounts of securities maturing over the next couple of years, which buoyed the MBS market. Before Fed speakers enter the blackout period next week ahead of the March 15-16 Federal Open Market Committee meeting, Chair Powell will deliver the Semiannual Monetary Policy Report to Congress and answer questions before the House Financial Services Committee tomorrow and then the Senate Banking Committee on Wednesday.

Last week, the Desk of the NY Fed purchased $2.3 billion per day on average compared with originator supply of around $4.5 billion. Today, the Desk will be in to buy a maximum of $4.6 billion which includes Thursday’s postponed operation in UMBS30 2.0 percent and 2.5 percent. Prior to that, the Desk will be in UMBS30 3.0 percent and 3.5 percent as well as GNII 2.5 percent through 3.5 percent. These will be the last operations on the current schedule with a new one released this afternoon that is estimated at around $25 billion across two weeks.

 

The Fed’s favored price-pressure gauge, the PCE deflator, remained high in January, rising 5.2 percent year-over-year and December’s growth was revised higher. Despite rising prices, consumer spending rose 1.5 percent for the month and expectations for a shift from goods to services spending are high given declining Omicron cases. Manufacturers still face supply challenges which are keeping inventories low and increasing unfilled orders. Homebuilders continue to face the same supply issues as the number of homes sold where construction has not started reached its highest level at 106,000 homes in January. At some point, one might expect the combination of rising rates and rising home prices to weigh on the housing market, but for the moment demand remains strong.

NAR’s Pending Home Sales Index for January unexpectedly dropped 5.7 percent when it was expected to increase 1.0 percent. This was the third consecutive decline with January’s level the lowest since April 2021 and the second lowest since May 2020. Affordability and inventory at an all-time low mean that buyers are still having a difficult time finding a home. Between rising mortgage rates, home costs, and inventory it would not be surprising to see a retreat in housing demand. The economic sanctions enacted against Russia have increased concerns over commodity prices, but that is more in regard to the price of oil, as Russia accounts for ten percent of global supply.

This week sees several key releases including January construction spending, February ISM manufacturing, ADP employment, the Fed’s Beige Book, and the all-important February payrolls on Friday. Today’s economic calendar is modest and already under way with advance economic indicators for January (trade deficit of $107.6 billion, retail inventories +1.9 percent). Later this morning brings Chicago PMI for February and the Dallas Fed manufacturing index for February. The last day of February starts with Agency MBS prices up/better by .250-.375 and the 10-year yielding 1.91 after closing last week at 1.99 percent as the world watches to see if sanctions on Russia are having an impact.

A friend asked what parenting toddlers is like.

So I hid her keys, hid her wallet, hid her TV remote, hid her phone, spilled some milk on the floor, pulled her hair, then headbutted her in the face… And then told her I loved her more than the stars.

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, “What’s Next” about how lenders and MLOs are shifting to a purchase-centric focus. 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.)