Jan. 15: Baltimore AG’s mortgage fraud indictment; Fannie’s deals; vendor news; thoughts on the Fed; Saturday Spotlight: New American Funding

There are all kinds of stuff happening out there! Netflix is raisings its prices. There are fewer wings in a Dominos bucket. A Baltimore attorney general was indicted on charges of lying on a mortgage application. LinkedIn, the professional social networking site, was slapped with an antitrust lawsuit Thursday in California. The suit accuses LinkedIn and Facebook of agreeing not to compete in the professional social networking market, allowing LinkedIn to inflate subscription prices. The court action was filed by Bathaee Dunne LLP on behalf of LinkedIn Premium subscribers. Goldman Sachs has shelved a Tuesday target for a full return to the office and has told staffers they can work remotely until Feb. 1. The Omicron variant has triggered the postponement for the bank, the offices of which reportedly were reaching full occupancy as recently as last month. Don’t think Asia’s goal is world financial domination? Think again. The foreign financial assets held by the ten richest economies in East and Southeast Asia today are valued at almost $28 trillion, triple the figure in 2005. Asian financial institutions that few in the West have even heard of now have significant influence over a wide range of asset classes throughout the world. That certainly puts our Federal Reserve’s few billion a day of purchases in perspective. Meanwhile, MLOs and lenders and vendors are just trying to help people finance their homes around the nation.

Saturday Spotlight: New American Funding 

_______________________________________________

 

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)

Headquartered in Orange County, California, New American Funding is dedicated to helping families and individuals improve their quality of living through homeownership. Rick and Patty Arvielo founded New American Funding in 2003. Since then, New American Funding has grown into a top-20 mortgage lender, one with more than 4,500 employees and a servicing portfolio of more than 219,000 loans for $57.7 billion. Going forward, New American Funding will transform the mortgage industry by providing world-class service to our clients while maintaining its commitment to its award-winning company culture.

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

New American Funding’s employees engage in countless community activities. From working with Habitat for Humanity, Big Brothers Big Sisters, St. Jude Children’s Research Hospital, Volunteers of America, Toys for Tots, and many more, the company’s employees are generous with their time. The company’s employees also engage in numerous homeownership events throughout the year that are designed to create sustainable homeownership.

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? 


New American Funding Co-Founder and President Patty Arvielo is an advocate for mentorship and has instilled that spirit in her company. The company’s career-development program, “If You Want to Grow, We Want to Know,” encourages employees to openly share their goals with leaders to further their growth.

Arvielo also hosts a quarterly mentorship program called “Thrive and Lead,” which includes New American Funding employees and external mortgage professionals who are mentored for three months. The company also offers the “360 Mentorship Program,” which matches an internal leader with an employee who is pursuing career advancement. The company’s training and compliance education platform, Specialized Training Empowering People, prepares individuals for a successful career in mortgage banking.

Diversity, equity, and inclusion are at the very core of New American Funding. Through the company’s Diversity and Inclusion initiative, New American Funding embraces and values our differences and recognizes that they make the company stronger.

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

The company works hard to replicate its on-site experience, which features a fun, family-style environment, to its employees working remotely. Departments engage in virtual contests, team-building exercises, and group activities, like a white elephant gift exchange, holiday bingo and trivia, and more, to ensure that everyone feels connected throughout the year. The company also shifted its mortgage and operations training programs and mentorship to virtual. This expanded the company’s inclusive work environment and created opportunities for trainees to work safely from home.

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

New American Funding is a community. That spirit is embodied through NAF360, the company’s culture initiative in support of the goal of having happy employees who enjoy their jobs. NAF360 was designed to ensure employees feel balanced and valued in their work life and know they are being treated with 360 degrees of respect, which has led to New American Funding consistently being recognized as a top nationwide employer.

Fun fact about New American Funding


Thanks to a specific focus on lending to underserved communities, New American Funding is an industry leader in lending to minority borrowers. In fact, 36% of New American Funding’s purchase mortgage originations were for minority borrowers in 2020, compared to 25.5% for all other lenders combined, per 2020 HMDA data. NMLS #6606

(For more information on having the charitable, employee improvement-centric side of your firm featured, contact Chrisman LLC’s Anjelica Nixt.)

Fed thoughts

_______________________________________________

Loan officers who were lagging the production curve last year, and hoping for lower rates this year to boost their business, are being reminded that “hope” is not a strategy and they’d better focus on training & referrals. A grizzled Fed-watcher had some thoughts on the pickle in which the Federal Reserve finds itself. “The Federal Reserve is far behind the curve with its policy and deserves any criticism directed its way. The Fed Presidents never believed that inflation would develop like this and that inflation would soon go away. We are a year into it and no signs of it going away. The supply chain issues should improve later this year, but inflation is caused by a lot more then supply chain issues. The Fed doled out record-breaking stimulus, then the Government gave people trillions of dollars.

“I believe that the bigger issue is excess demand. Wage growth will continue for a while as workers gain more power. If the Fed was really worried about inflation, it would stop buying bonds and adding to its balance sheet today, not in March. The Fed would target real rates (inflation versus Fed Funds) at something less than a negative 600 basis points. But the FOMC needs to spend six months telegraphing all off this to the markets, in hopes that we don’t have another “tantrum.” We are light years away from any sort of ‘normal’ policy.

“Fed Chair Powell says the Fed is not going to ‘lose the battle’ with inflation. I don’t believe that. The Fed is going to talk tough now, but its plan is to talk down inflationary expectations and then wait for price pressures to ebb. How do you fight inflation when you are still adding to your balance sheet, have short term rates below 1%, and have real rates about 600 basis points negative? I doubt if the Fed is going to deliver any real pain to stock investors, and instead will protect asset bubbles because having them deflate will be too painful. I want to see what happens when it comes time for the Fed to actually shrink its Balance Sheet. I think it will come in the form of runoff, and not the sale of securities.”

Vendor wizardry

_______________________________________________

In addition to creating new names and capitalizing letters in the middle of them, third party vendors are continually out there trying to make the loan process faster, cheaper, and more compliant. Let’s play some catch up and take a random sample of recent vendor news.

Rate Reset’s, The Button™, powered by Experian’s PowerCurve® decisioning platform, is an instant prequalification solution that empowers credit unions to compete against consumer lending fintechs. Seattle Credit Union is the first lender to integrate Temenos as its loan origination system and use The Button™ to deliver real-time credit decisions to members using Experian’s data, analytics, and scores to enable credit unions to offer members the ability to prequalify themselves for financial solutions without impacting their credit score.

DocMagic, Inc. announced the rollout of eDecision™, a robust solution that significantly expands the level of analysis applied to e-eligibility determination for eClosings. The result is a clear-cut, highly accurate decision that tells users precisely how far they can take a digital closing based on the unique attributes of the loan transaction, all the way down to county-level eRecording acceptance.

According to the Ellie Mae Origination Insight Report, it took an average of 46 days to close on a home loan as of August 2021. Moreover, a refinance took anywhere from 30-45 days from start to finish The loan originator company behind the world’s first smart loan technology, backed by Richard Branson and ex-NFL quarterback Joe Montana, LoanSnap closed the fastest home loan to date, in a mere 24 hours using its AI Technology to analyze a person’s finances in order to determine the best possible mortgage rate in the least amount of time possible. Its customer-centric approach optimizes for the fastest outcome for borrowers and homebuyers in the United States.

Planet Home Lending continues to give back not only to the communities it serves but through partnerships that advance diversity in the industry. The ongoing partnership with Planet Home Lending allows NAMMBA to continue its efforts to increase the participation and engagement of women and minorities in the mortgage industry while improving employee diversity.

“Planet Home Lending has been committed to improving diversity within the company and seeing the same happen throughout the industry, so it’s no surprise it has continually supported NAMMBA,” said NAMMBA Founder/CEO Tony Thompson, CMB. “Collaborations, like the one between NAMMBA and Planet, are key to encouraging more women and minorities to join our industry.”

Equifax®  announced additional service enhancements powered by The Work Number®, the industry-leading, centralized commercial repository of income and employment information in the United States. Lenders can now request “All Employers Within 60 Months” to pull the prior five years’ of employment and income data available on The Work Number database. In addition, lenders can now choose “Mortgage Select All” for verification of employment or income, which provides a complete view of all data available in The Work Number for an applicant at a single, fulfillment-based price point.

Covius is integrating Boston-based fintech Stavvy into its loss mitigation and loan modification solutions. Covius will use the Stavvy platform to offer RON and eSigning capabilities for all loss mitigation products, regardless of recording requirements. The integrated service can discern RON eligibility early in the loss mitigation process. When a RON-eligible loan modification package is generated, Covius will systematically tag the signature lines for eSign and RON recognition and start the scheduling process with the borrower(s). The Covius notary panel will lead the digital notarization process using Stavvy’s technology to notarize the documents in the borrower’s home or office.

OptifiNow, a provider of custom CRM solutions for the mortgage lending industry, announced a successful deployment with NextUs Lending, a wholesale non-QM lender. “OptifiNow’s unique features designed for wholesale lenders enabled NextUs to utilize features that quickly launched their marketing and sales management processes… OptifiNow features an automated account classification process that utilizes an LOS integration for data-based decisioning on critical factors, including loan submissions and user activity. The system synchronizes loan details and operational milestones to keep pipelines flowing and make sure bottlenecks and inefficiencies are quickly identified and addressed.”

Secondary markets driving primary market rates

_______________________________________________

The demand for assets in the secondary market, whether residential mortgages are being securitized and sold to insurance companies and pension funds, or put into portfolios in banks and credit unions, drive the interest rates that lenders offer borrowers. Between Fannie Mae and Freddie Mac, Freddie is the predominant issuer, but let’s see what Fannie Mae has been up to lately.

Fannie Mae recently topped $100 billion of Multifamily Green Mortgage-Backed Securities (MBS) issued, a milestone demonstrating how Fannie Mae is transforming housing finance by building liquidity to support the greening of U.S. housing and the reduction of housing’s carbon footprint. The company’s work in Green financing promotes cost-effective properties for owners and lowers costs for tenants, supporting Fannie’s mission to keep rental housing affordable. Securities backed by the multifamily green loans have attracted investors, including environmental, social, and governance (ESG)-minded participants who previously did not purchase agency commercial MBS.

Fannie Mae got 2022 off to a bang and priced Connecticut Avenue Securities (CAS) Series 2022-R01, an approximately $1.5 billion note offering that represents Fannie Mae’s first CAS REMIC transaction of the year. CAS is Fannie Mae’s benchmark issuance program designed to share credit risk on its single-family conventional guaranty book of business. The reference pool for CAS Series 2022-R01 consists of approximately 180,000 single-family mortgage loans with an outstanding unpaid principal balance of nearly $54 billion. The reference pool includes collateral with loan-to-value ratios of 60.01 percent to 80.00 percent, fixed-rate, generally 30-year term, fully amortizing mortgages. With the completion of this transaction, Fannie Mae will have brought 45 CAS deals to market, issued over $51 billion in notes, and transferred a portion of the credit risk to private investors on just under $1.7 trillion in single-family mortgage loans, measured at the time of the transaction.

 

(Warning: Rated R. No complaints for lack of taste, please.)

An old man, Mr. Wallace, was living in a nursing home.

One day he appeared to be very sad and depressed.

Nurse Tracy asked him if there was anything wrong.
“Yes, Nurse Tracy,” replied Mr. Wallace. “My Private Part died today, and I am very sad.”

Knowing her patients were a little forgetful and sometimes a little crazy, she replied, “Oh, I’m so sorry, Mr. Wallace. Please accept my condolences.”

The following day, Mr. Wallace was walking down the hall with his Private Part hanging out of his pajamas.

He met Nurse Tracy.
“Mr. Wallace,” she said, “You shouldn’t be walking down the hall like that. Please put your Private Part back inside your pajamas.”

“But Nurse Tracy I can’t,” replied Mr. Wallace. “I told you yesterday that my Private Part died.”

“Yes,” said Nurse Tracy, “You did tell me that, but why is it hanging out of your pajamas?”

“Well,” he replied, “Today is the viewing.”

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, “Opening the Door to Consumer Direct” about the pros and cons of the CD channel. 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.)

 

Rob Chrisman