July 14: IT, MLO jobs; excess servicing, non-QM, anti-fraud, home equity tools; correspondent news; primer on yield curve inversion
Real estate agents love it when loan officers give them referrals. That’s not always easy. Is giving a real estate agent a book on becoming a productive and well-respected real estate agent a RESPA violation? How about an all-expense paid trip? Attorney Brian Levy points out in his latest Mortgage Musings (chock full of Rolling Stone song references) how it matters whether the “thing of value” is offered in return for referrals or is just ordinary business promotional activity. LOs know that working with real estate agents is a numbers game. (How many loan officers contact the listing agent when a property goes on the market to ask for a referral?) Did you know that on any given day there are about 61,000 people in airplanes above the United States? (I think that number is light.) I mention this because Heathrow Airport in London is taking the unconventional step of capping the daily number of passengers at 100,000 per day for the rest of the summer. Heathrow was handling 110,000 to 125,000 departing passengers a day but the airport’s seen a dip in the ability to correctly manage resources and function. Since June, airlines flying out of Heathrow have cancelled 559 flights within seven days of departure, up 299 percent from the same period of 2019. Reminds me of the days in 2020 when lenders would ratchet their pricing higher to slow their business. Ah, those were the days! (Today’s podcast is available here and I went on to talk to Robbie about the current focus of capital markets’ staff. This week’s podcast is sponsored by SimpleNexus, an nCino company and award-winning developer of mobile-first technology for the modern mortgage lender.)
“Acra Lending continues to expand its footprint as the industry’s leading private mortgage lender, and we are seeking talented mortgage professionals to join the growing team! Now is the time to join a company that provides competitive mortgage lending programs and a seamless customer experience. Acra Lending, the leader in Non-QM lending, is currently hiring for Fix & Flip Account Executives, Wholesale Account Executives, Correspondent Sales, IT Professionals, and more. Apply at JoinAcra or email us to learn more about the opportunities we offer.”
Are you getting what you need to reach your highest potential? Embrace Home Loans gives its originators a leg up on the competition by providing the best marketing and technology tools in the industry, along with a supportive culture where team members are never left on their own. For example, Embrace’s cutting-edge mobile app eSnapp lets an originator’s borrower clients apply for loans, upload documents, sign disclosures and even pay for their appraisals from anywhere, at any time. “Our originators love being able to easily communicate with their customers and referral partners all from one app,” says Steve Adamo, the company’s president, national retail production. Embrace also supports the community by offering employees 100 hours of annual paid time off for time spent volunteering, plus the company matches employee donations up to $2,500 per year. Are you looking for that kind of support and encouragement? Call Steve Adamo at 401-524-5733.
Exciting things are happening in the Pacific Northwest for PrimeLending. The company is thrilled to announce some recent promotions: Matt Eckard has been promoted to Area Manager over Oregon and Washington, while Michael Heeb has been promoted to Area Manager over Alaska, Idaho, and Montana. Also promoted from the Pacific Northwest is Amy Wirshing, named Branch Manager over Eagle Idaho and five additional Idaho branches. All three sales leaders have proven track records of production excellence and growing high-performance teams. But more than just delivering bottom line results, Matt, Michael, and Amy have demonstrated expertise as mortgage professionals, passion for serving others and a commitment to building thriving local businesses. If you’re looking for a place to grow your career in an environment that prioritizes professional development and recognizes achievement, contact Nic Hartke for more information.
Our sympathies go out to the family of United Wholesale Mortgage CFO Tim Forrester who died at 55 of cancer. Tim oversaw all financial aspects of UWM, and I got to know him during the MBA/STRATMOR Peer Group meetings. Too young.
Lender and broker products, software, and services
“Working to Provide the Best Homeowner Experience! Cenlar is more than just a mortgage servicer. We strive to be our clients’ trusted partner each and every day and we care for our clients’ homeowners. A home is most likely someone’s largest asset. It’s more than just a house. It’s a place where people make memories. That’s why we are continuously evolving to provide the best homeowner experience: not a single moment in time but one that can last a lifetime. Whether that’s the regular cycle of onboarding, escrow, monthly payments and year-end or challenges facing homeowners like the pandemic and natural disasters, we are responsive, anticipatory, and always caring. Our longevity and sheer breadth of expertise enables our talented team of mortgage servicing professionals to deliver the best homeowner experience. Let’s discuss how Cenlar can meet the mortgage servicing needs of your organization. Call 1-888-SUBSERV (782-7378) or visit us here. We want to be your trusted partner, each and every day.”
Unless they have incredible luck with the lottery, thousands of Americans will lack the savings to support themselves post-retirement. Fortunately, some older homeowners can access tappable equity for extra funds, but lenders must provide copious financial counseling to ensure borrowers understand reverse mortgage requirements. On July 20 at 2 pm ET, Sales Boomerang and Mortgage Coach will join Blackfin Group’s Wendy Peel and Suha Zehl to discuss responsible uses of home equity for retirees and digital financial education tactics for every generation. All proceeds from this charity webinar will benefit United Help Ukraine’s humanitarian efforts. Sales Boomerang, BlackFin, and Alex Kutsishin will each match up to $1,000 of ticket sales. Sign up today with a $10 donation to make a difference for your borrowers and humanitarian efforts.
Home equity lending in Encompass® by ICE Mortgage Technology: The ROI makes it a “no brainer.” In the latest episode of the ICE Mortgage Technology™ Open House Podcast, Margie Ambrosio, SVP Information Systems Manager at George Mason Mortgage, shares what makes home equity lending a “no-brainer” for lenders. Listen in to hear strategies to quickly react to rising demand for home equity lending, originate, process, and close home equity products in 2 weeks or less, have confidence that every loan is compliant – now and in the future, and achieve exceptional efficiencies and ease-of-use with a single system of record. Listen to the episode now.
Did you hear the news? First American Data & Analytics recently announced their new fraud and risk monitoring solution specifically designed for HELOCs, FraudGuard Home Equity. This streamlined version of their industry leading FraudGuard solution, consolidates the tools a home equity lender normally would run separately. Allowing lenders to close quickly on home equity opportunities without sacrificing speed, agility or adding significant cost to these transactions. FraudGuard Home Equity integrates with leading loan origination systems, covers 100% of residential properties in the U.S., and has targeted risk alerts specific to the home equity transaction that help lenders efficiently identify potential misrepresentation. Learn how to save time, and money, on your home equity opportunities now.
“IMPAC is working hard to help brokers succeed through continued market uncertainty. We will pay up to $500 towards a borrower’s appraisal cost for loans that close within 30 days of the submission date. Eligible for loans submitted on or before July 31, 2022. This can be combined with our 21 and Done™ program which saves borrowers up to an additional $500 on each loan. Brokers continue to lean on our competitive programs, seasoned in-house underwriting team with 24-hour turn times, and 26 years of experience in the industry with a focus on alternative credit. NQM is in our DNA™. Learn how we can help by contacting an Impac AE or becoming an approved broker. NMLS #128231.”
Correspondent shifts and news
Often correspondent investor changes move in lockstep with wholesaler changes. Sometimes not. The risk profile of the businesses are different, the pricing different, and who bears the legal responsibility when something goes wrong with the borrower or collateral can vary. Let’s see what a random sample of correspondent investors have been up to outside of the usual reactions to Agency news.
Wells Fargo Funding Newsflash C22-028: Covers information regarding the new final documentation delivery address for all Loans was effective July 5, 2022. Conventional Conforming Loans Form SSA-89 Vendor name change will be in effect August 2, 2022. Freddie Mac ACE+ PDR is ineligible on conventional Conforming Loans.
Wells Fargo Funding Newsflash C22-023 was provided to share recent observations, serve as a reminder of Wells Fargo Funding’s QM-related policies, and share some recommendations.
FAMC/Citizens Correspondent National gathered and posted information on Top Underwriting and Documentation Errors. View Bulletin 2022-12 for details.
Citi Correspondent Lending announced updated CRA premiums schedules and posted on the Citi Correspondent Lending Portal. Also, Optimal Blue announced the release of Citibank’s location-based premiums, which align with CRA LMI census tract premiums. Citi advised its Correspondents who utilize Optimal Blue’s services and wish to leverage these incentives MUST contact their OB client services team to ensure your OB instance is properly configured.
First Community Mortgage Correspondent is offering a Lock and Shop (non-delegated only) interest rate with a float-down option on TBD prospects pre-approved on or after Monday, June 27, 2022, non-delegated only. View FCM Correspondent Announcement 2022-21 for details. A
Resources are available in the Correspondent Knowledge Center including Lock Agreement and Float Down Terms and Agreements.
AmeriHome Mortgage summarized previously published changes made during June, recent Agency and regulatory news, and additional changes made with AmeriHome’s General Announcement 20220608-CL.
Looking for any silver lining of higher mortgage rates? Increased mortgage servicing rights (MSR) values are helping companies maintain and expand cash reserves. MCT teamed up with CWDL on a whitepaper explaining how excess in servicing is created and delving into the cash and tax consequences of retaining the excess MSR. The whitepaper also discusses “down in coupon” trades and tax treatment of “safe harbor” and excess servicing rights. Looking for more MSR content? Read MCT’s case study explaining how MCT’s MSR team helped Doorway Home Loans successfully facilitate a $1 billion MSR portfolio sale to add 15 bps, or $1.5 million, of additional profitability. To ensure you receive new content when published, please join our newsletter.
Today the yield on the 2-year was 3.21 percent while the 10-year is yielding 2.96 percent. Although an inverted yield curve does not cause a recession, there is a correlation between it and the possibility of an economic downturn. Why? An inverted yield curve describes the unusual drop of yields on longer-term debt below yields on short-term debt of the same credit quality. Usually, the yield curve slopes upward, reflecting the fact that holders of longer-term debt have taken on more risk. An inverted yield curve is unusual: it reflects bond investors’ expectations for a decline in longer-term interest rates, typically associated with recessions.
We saw the yield curve flatten yesterday, which indicates growth concerns, after the release of another hotter than expected inflation report. The June CPI report showed a 1.3 percent month-over-month increase, which lifted the year-over-year rate to 9.1 percent, a level not seen since late 1981. Core CPI was also hotter than expected on a month-over-month basis, prompting renewed speculation about a more aggressive rate hike path from the Fed. The fed funds futures market is pricing in a 75 percent implied likelihood of a 100-basis point rate hike while Atlanta Fed President Bostic said that everything is in play when asked about the potential for a 100-basis point increase. Remember, the more aggressively the Fed hikes rates, the more growth concerns come into play.
Separately, the Fed’s June Beige Book described overall economic expansion since May as modest with several Districts reporting signs of a slowdown and growing fears of a recession in a few other Districts. Recession clouds loom, with five of 12 districts noting increased recession risks, up from three in the last reporting period. The Beige Book showed that consumer spending moderated while auto sales remained weak due to low inventories. Hospitality and tourism saw healthy activity while manufacturing was mixed. Employment rose at a modest to moderate pace and wages continued growing in most Districts. Substantial price increases were reported across the board.
Today’s economic calendar contains another dose of inflation updates, this time on the wholesale side, with the June Producer Price Index (+1.1 percent, ex-food & energy +.4 percent, +11.3 percent for the year). We’ve also received weekly jobless claims (244k up from 234k). Later this morning brings Freddie Mac’s Primary Mortgage Market Survey and Treasury announcing the auction sizes for next week’s reopened 20-year bonds and new 10-year TIPS auctions. One Fed speaker is currently scheduled: Board Governor Waller. The NY Fed Desk will purchase up to $529 million GNIIs 4 percent through 5 percent MBS, the last on the current schedule, before releasing a new purchase schedule as well as reinvestment estimate in the afternoon. We begin the day with Agency MBS prices worse a solid .250 and the 10-year yielding 2.96 after closing yesterday at 2.90 percent after the strong producer price inflation numbers.
Inflation is everywhere!
A gorilla walks into a bar and, to the amazement of the bartender, orders a martini. When the bartender gives the gorilla the martini, he is further surprised to see that the ape is holding a $20 bill.
The bartender takes the $20 bill, then he decides to see just how smart the gorilla is, so he hands the gorilla $1 change. The gorilla quietly sips the martini until the bartender breaks the silence.
“We don’t get too many apes in here,” he says.
The gorilla replies, “At $19 a drink, I’m not surprised.”
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 titled, “Owning a Home: The Dream is Alive and Well.” 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 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.)