Jan. 29: LO jobs, business opportunity; LOS, broker products; capital mkts.: the Fed, coronavirus, and trade

My cat Myrtle never paid much attention to Brexit, up until recently a hopeless parliamentary quagmire. (“Brexistential fear”: An irrational fear that Brexit will lead to the end of the world as we know it.) Brexit no longer moves bond markets, nor Myrtle, and it now looks as if Britain will withdraw quite uneventfully from the European Union by this Friday’s deadline. What a difference a few months, and a strong Conservative majority in Parliament, make. Even though the final Brexit plan is set for imminent approval by European Union officials, in the coming months, British and European representatives still have to hash out a trade deal, which may prove just as difficult to negotiate, if not more so, as Brexit itself. But for now, hardly a ripple in the bond markets – but there are plenty of other things moving rates. A deep dive in the capital markets section below.

Employment & acquisition opportunity

Cardinal Financial is excited to announce the addition of Jonathan Hallstead and Mark Malmberg to the Cardinal Financial team! Together, they bring over 30 years of mortgage lending experience, and both will serve as Vice President – Market Leaders. Jonathan and Mark are industry veterans receiving numerous awards, including Top 1% Originators by Mortgage Executive Magazine and Top 300 Originators by Mortgage News. “Cardinal Financial is an innovative lender that treats originators like entrepreneurial partners, providing superior tools, technology, pricing, and training to provide competitive market advantage. That premium experience is why I choose to join alongside some of the best talent in the industry,” Jonathan said. “You rarely get a chance to work with professionals such as Jonathan and Mark. We are thrilled to welcome such dynamic leaders to our management team,” John F. Cady, SVP of Retail said. To find out how Cardinal Financial can help you grow your business, contact John Cady at (951)-453-6442.

2020 has started strong for many lenders, enabling lenders to expand their licensing footprint and fuel a more aggressive expansion strategy. “Lenders are trying to recruit and expand while attempting to retain their producers even during peak recruiting season”, said Jenni Connor, National Business Development for Pacific Residential Mortgage (PacRes), headquartered in Lake Oswego, who has recently grown its corporate licensing footprint to include North Carolina, Florida, New Mexico, Texas, Louisiana , Mississippi and Massachusetts to Only name a few. “Our retail branching expansion efforts have been very well received. We are applying an operating philosophy across the United States that has made us a top lender in the Pacific Northwest. We are a lender for top producers and those LOs who aim to become a top producer. Our weekly coaching curriculum help Loan Officers make more money and expand their market share without having to worry about poor closing processes or overlays”. For Regional Production Leaders, Branch Managers and Loan Officers, email Jenni Connor, National Business Development (828.238.8963), or e-mail: JoinPacRes@pacresmortgage.com.

Guaranteed Rate is seeking acquisition opportunities with mortgage companies looking to maximize profitability. Guaranteed Rate, the 3rd largest retail lender in the country, experienced record growth in 2019 creating a great opportunity to partner with likeminded leaders looking to take advantage of our expertise and economies of scale. If you are an owner or CEO of a mortgage company that is looking for better pricing, increased profitability, lower risk and much less stress and hassle, we urge you to e-mail Mark Filler to learn more about integrating your business into our platform.”

Lender products & services

Attracting and retaining top originator talent is an increasing challenge in this market. Technology can play a big role; however, not all providers are created equal. The right platform enables your LOs to be more productive and efficient, delivering trust in your organization to invest in their future. Maxwell stands out from all other digital mortgage providers. They allow entire teams of LOs to incorporate technology as a natural extension of their work, allowing them to accomplish more every day, delight their referral partners, and attract new business. Maxwell was developed with input from thousands of LOs which in combination with their intuitive design leads to high adoption rates across lending businesses. Request a demo to learn more about Maxwell today!

Looking for a LOS that can help streamline your mortgage process? Look no further. Path, the cloud-based, data-driven, fully configurable LOS from Calyx, is designed to truly simplify the loan process and provide the flexibility, visibility and controls lenders need to monitor and run their business their way. Now available in various versions, Path can be designed to fit your organization’s specific needs. Contact Michele Warren to schedule a meeting at the upcoming MBA Independent Mortgage Bankers Conference and stop by Booth 18 for a brief demo.

If you’re searching for the government loan trifecta of price, speed, and customer service, the new Platinum product from REMN Wholesale is one of the surest bets around. Platinum from REMN Wholesale means that brokers no longer need to choose between a lender they can count on and one that offers competitive pricing. Platinum ties together REMN’s industry-leading 24-hour turn times and reputation for customer service into a product that brokers around the country need to compete as 2020 gains momentum. It’s available nationwide to all brokers and bankers, on FHAUSDA and VA loans with a 680 FICO or higher. When price, reliability, and speed matter, brokers can depend on REMN. Brokers interested in finding out more about REMN’s Platinum program for government loans can email their account executive directly, or connect with a REMN regional manager online through its website.

After massive expansion in 2019, QLMS is celebrating the people who helped them achieve their best year ever. QLMS partners had the opportunity to win all-expense-paid trips to Super Bowl LIV in Miami. NFL Hall of Fame running back Barry Sanders announced the two lucky winners: an LO from Mountain State Financial Group and a processor from Alpen Mortgage. They will be enjoying the warm Miami weather, with their AEs, at a once-in-a-lifetime Super Bowl experience courtesy of QLMS! You can partner with QLMS to grow your business and have access to killer perks like this.

Capital markets

With markets pricing in no chance of a rate cut at the FOMC meeting this week, what should originators care about? In the air will be any adjustments to the Fed’s efforts to relieve funding pressures in repo markets. The additional liquidity provided to markets via the Fed’s monthly Treasury bill purchases (which began in October and are scheduled to continue through April) and its term and overnight repo operations led to a quiet year-end in funding markets. But the Fed has indicated it is not ready to step away from markets just yet and will continue its term and overnight repo operations at their current levels through the end of the month. In February, the Fed plans to reduce the size of its term repo operations only modestly (to $30 billion from $35 billion). It is expected that the Fed will announce a standing repo facility at some point.

Asset purchases also look set to continue at the current pace of $60 billion per month, although there could be some discussion about shifting the composition of the purchases toward short-dated Treasury notes and bonds. The Fed has noted that its bill purchases thus far have had “little discernible effect on market functioning.” But if its purchases were to eventually sop up too much of the T-bill market, market liquidity could be adversely affected. Unlike its quantitative easing (QE) program of a few years ago when the rationale for QE at that time was to pull down long-term interest rates to stimulate a depressed economy, the Fed’s current need is to increase bank reserves rather stimulate the economy further, hence the focus on purchases of short-dated Treasury securities.

A tweak to IOER (interest rate on excess reserves) could come as soon as this week’s meeting. The effective fed funds rate currently stands at 1.54 percent, with a historically large deviation from the midpoint of the target range of 8.5 bps. In prior periods where the effective rate was well off the midpoint, the FOMC adjusted IOER to steer the fed funds rate back toward the center of the target range. Although raising IOER may seem at odds with the Fed’s efforts to increase liquidity in the financial system, the move could be seen as a signal of the Fed beginning to return to “normal.” Markets appear to have largely priced in a 5-bps increase in the IOER rate, a technical adjustment meant to align the fed funds rate with the current policy range.


Tuesday’s bond market? U.S. Treasuries, and with them MBS, pulled back +3 bps to +4 bps across the curve yesterday, giving back half of Monday’s gains and global yields rose as signs the coronavirus may not be quite as bad as SARS queued a rebound in risk sentiment. There were a whole host of economic releases on the day, headlined by the Conference Board’s Consumer Confidence Index exceeding expectations in January as the survey group remained optimistic about the overall situation, responding positively about business conditions and job availability.


Total durable goods orders rose well beyond expectations in December, though excluding transportation, the reading for orders slipped when it was expected to increase. Shipments of nondefense capital goods orders, excluding aircraft, which factor into GDP computations, declined following a decline in November. The S&P Case-Shiller 20 city Home Price Index increased beyond expectations in November. And a $32 billion 7-year note offering was met with lukewarm demand.


Hopefully by next week, or soon, we are talking about no new confirmed cases of the coronavirus across the globe. There have been reports of a vaccine being developed in three months. There are also signs the coronavirus may not be quite as bad as SARS, which is welcome news as well. A prolonged outbreak in the Hubei province in China could prevent workers from going to work or even cause temporary factory closures, weighing on Chinese production. Though U.S. consumer spending is likely not to be materially affected by the Wuhan coronavirus, could containment efforts have a pronounced effect on U.S. industrial output?

China’s has a very integral part in the global supply chain today, meaning a decline in its output has the potential to disrupt U.S. production. The 2003 SARS outbreak corresponded to the start of the U.S.-Iraq war, making it is difficult to single-out its effect on U.S. output. But U.S. industrial production did stall over the period. The pace of industrial production growth slowed at the onset of the war and turned negative in June 2003 due to bottlenecks in the supply chain. Fortunately, the decline in output was temporary and not enough to drag the U.S. economy into recession.

Today, the U.S. imports more than three times as much as it did from China in 2003. Although most of these imports are consumer goods, China is also an important supplier for some American industries like the U.S. computer and electrical equipment industry and the machinery industry, leaving them exposed to supply chain disruptions.


A prolonged pandemic could potentially have adverse effects on U.S. factory output if China slows or halts production, particularly for these two industries. China is a large source of U.S. imports today, but the U.S. economy is less reliant on manufacturing, particularly in terms of employment, than it was in 2003. Even if the sector were to fall under pressure, it would be unlikely to cause a U.S. recession.

A possibly better example would be the 2011 Japanese earthquake and ensuing Fukushima nuclear disaster. The disaster, which caused rolling blackouts in Japan, affected production capabilities at factories. At the time, motor vehicles and parts were the largest category of U.S. imports from Japan. In the aftermath of the disaster, growth in U.S. motor vehicles and parts production slowed 11 percent in the month after the earthquake, remaining subdued for three months before returning to their previous production level. Overall U.S. industrial production fell, but the disturbance was only temporary. And that is how it is likely to be when it comes to this coronavirus. Any hit to U.S. production from the coronavirus is likely to be temporary.

As for today, the highlights should be the latest FOMC statement followed by Chair Powell’s press conference this afternoon. The Fed is expected to hold rates steady, along with the outlook for growth and inflation, with the four new rotating Fed presidents in their first meeting of the year. The Fed has recently held a series of events as part of its policy-framework review in which it was discovered that people generally like their price rises to be small. Officials appear to have reacted to this by moving toward running inflation higher to make up for the extended era of low-price rises, perhaps showing that they may be listening but not agreeing.


Ahead of the Fed, however, MBA mortgage applications for the week ending January 24 saw applications jump 7.2 percent from one week earlier, with this week’s results including an adjustment for the MLK holiday. A bump was likely, with mortgage rates dropping 9 bps during the reporting period to 3.61 percent, according to Mortgage News Daily, and lowest since early October. We’ve also received December advance goods trade balance (widening to $68.33 billion), December advance Wholesale and Retail Inventories (neither barely budging). Later this morning will be December Pending Home Sales and, in the afternoon, the Desk will release a new MBS FedTrade schedule covering the January 30 to February 13 period, expected to total around $2.9 billion. Before the markets receive Fed-related news, we begin the day with Agency MBS prices better a solid .125 and the 10-year yielding 1.63 percent after closing yesterday at 1.64 percent.

“The reason the golf pro tells you to keep your head down is so you can’t see him laughing.”

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job 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