July 19: CFO, compliance, cap mkts, LO jobs; POS, AI, REO, 2nd lien, verification products; housing stats disappoint

Think mortgage math is complicated? Many in the nation are focused on air conditioning. Why is it measured in tons? It harkens back to the days of using ice, and a “ton” measures how much heat, removed by the system, would be needed to melt 2,000 pounds, or one ton, of ice in a 24-hour period. The result is then expressed in BTUs per hour. It takes 288,000 BTUs to melt a ton of ice in 24 hours, or 12,000 BTUs per hour. 1 BTU/hr. = 0.00029307107 kWh. And the average residential electricity rate in the U.S. is about 23 cents per kilowatt-hour (kWh). When you see your utility bill in the mail, don’t think about me. Maybe the math in a company acquisition is more straightforward. I mention this since ICE and Black Knight have agreed to sell Optimal Blue to Constellation Software in an effort to get regulatory approval for their merger. Constellation Software is already buying Empower and will purchase OB for $700 million paid for in $200 MM cash and a $500MM promissory note. Meanwhile, plenty of branch-level acquisitions are occurring that don’t make the headlines and will continue. (Today’s podcast can be found here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. To experience how Richey May can help you transform your mortgage business, visit richeymay.com. Hear an interview with Seth Sprague and James Brody on the wave of loan-repurchase requests from Fannie Mae and Freddie Mac that represents another threat to lenders’ balance sheets.)

 

Employment

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While most people are struggling in this market, there are still some lenders growing and adding to their leadership team! A national IMB located in the Dallas/Fort Worth Metroplex is looking to add a Chief Financial Officer, a Head of Capital Markets, and a Chief Compliance Officer with Ginnie Mae/Agency securitization experience to its team. Must have direct experience working in a securitization heavy environment. NonQM is a plus. If you are interested, please email Chrisman LLC’s Anjelica Nixt to forward your confidential note/resume.

“Job boards and careers pages can produce applicants, but are they quality candidates? Our team at Pezian Search Group are Talent Experts within the Mortgage, Banking, Credit Union, Title & Escrow and Financial Services spaces from the C-Suite to the Call Center, Front Office, Bank Office, Operations, Sales, Marketing, and everything in between. That means that we understand the industry and take the time to properly discuss important items with candidates such as backgrounds, skill sets, experience, growth objects and more. This ensures that there is a long-term fit and that we are providing our nationwide network of Clients quality candidates every time. We’ve set ourselves apart from our competition, career pages and the traditional job boards, all while offering a full satisfaction guarantee. To learn more, email our team, follow us on LinkedIn, and review the opportunities that we currently have available throughout the country.”

“Micah Parsons, linebacker for the Dallas Cowboys and the 2021 NFL Defensive Rookie of the Year, recently signed a two-year partnership with SWBC to join us as a spokesperson and brand ambassador. He is a natural fit for SWBC, as his commitment to excellence and drive to make a difference within the community align with our goal of inspiring hope where we live and lend. Micah is an exceptionally talented individual, and we’re excited to work with him to help hopeful buyers tackle their homeownership goals. SWBC Mortgage has big goals and is looking for those who can help us reach them. We combine innovation with personal interaction, empowering our loan officers to serve the communities where they live and lend. Contact us to learn more about how our unique setup helps maintain LO compensation and pricing. Contact James Clark, Director of Strategic Growth or visit us here.

Lender and broker software, services, and products

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With first mortgage rates rising and inventory dropping to record lows, many lenders are looking to turn up the volume on their HELOC business. Many of these lenders have begun aggressively advertising these solutions, many even announcing “HELOC Promos” on billboards, marques, and in digital advertising. In other words, the HELOC market is starting to heat up, and your competitors are beginning to make a big grab for this business. Don’t let them get to your borrowers before you do! With Symmetry, you can offer your borrowers one of the best, most competitively priced HELOC options on the market. Let Symmetry help you present this solution to your borrowers before they go somewhere else. Contact your Area Manager today!

Verus Mortgage Capital recently launched a Closed End Second Lien Mortgage program to help lenders capitalize on the more than $18 trillion of tappable home equity in the U.S. Verus’ new program is the perfect solution for borrowers who don’t want to refinance their home but want to take advantage of the equity they’ve amassed. In this competitive environment, non-QM can be a new revenue channel for originators, one that enables you to meet the needs of borrowers who need more flexibility, people with nontraditional income, those who are investing in properties, foreign nationals or borrowers seeking an interest-only payment option. Interested in serving more applicants with non-QM? Meet with Verus at the Western Secondary Market Conference Aug. 21-23 to learn more. Contact Jeff Schaefer, EVP – National Sales at 202-534-1821.

The Work Number® can help streamline processes and provide greater value to income and employment verification processes. Wider data coverage can help streamline lending processes, and the standard Mortgage VOE and Mortgage VOI solutions from The Work Number are now available with the option for a receipt. The Work Number is the largest commercial repository for consolidated income and employment data with access to 618 million INSTANTLY returned records, updated each pay cycle, provided directly by employers and payroll providers. Lenders and brokers have a choice: access The Work Number directly from Equifax OR through our pre-built integrations with over 60 Point of Sale (POS) and Loan Origination Systems (LOS). Gathering all of the necessary information about potential borrowers through your LOS or POS is quick and efficient and can eliminate the need to swivel back and forth between systems, juggling multiple logins.

BSI Financial Services extends Sagent partnership for seven years! Sagent is thrilled to announce the recent expansion of its partnership with BSI Financial Services (BSI) for another 7 years. As BSI looks to grow its servicing operation to 1M loans, Sagent will continue to power BSI with its configurable, cloud-based platforms including LoanServ, TEMPO, Datascape+, and LoanBoard. BSI’s great reputation and growth is because they’ve mastered things like automating complex tasks, solving customer issues fast, and adapting in real-time to regulator and investor needs. Sagent takes this crucial role in helping BSI very seriously, and they are excited to continue building with the BSI team! Read Sagent/BSI partnership details here.

“According to ATTOM, foreclosure filings were up 7% in May and 14% from a year ago. Managing an REO portfolio requires a strategic and systematic approach to ensure effective management and maximize returns. The team at Consolidated Analytics delivers one of the most comprehensive asset management solutions to streamline your REO process and satisfy the most stringent investor and client requirements combining a seasoned team, advanced tech and management platforms, and access to a nationwide network of REO professionals. Our team delivers from post-foreclosure through marketing and final disposition with proven strategies to streamline the asset management process, meet SLAs, accelerate turn times, and maximize returns. Contact sales@ca-usa.com to help make more informed decisions and achieve portfolio management goals.”

There are so many things we’d rather put off in life: stumbling to the gym at 5 a.m., eating our broccoli, preparing tax returns. But avoiding pain in the present doesn’t set us up well for the future. It’s the same for lenders looking to make a strong rebound when today’s cold originations market starts heating up again. Black Knight held discovery sessions with dozens of banks, credit unions and independent mortgage bankers who all agreed: the time to invest in your mortgage technology is now. Click here to read why competitive lenders will likely be the ones who seize this market moment and prepare themselves now to be ready for the future, even though it might be uncomfortable in the short term. Then contact Black Knight when you’re ready to see how you can be prepared for whatever the market throws at you next.

Podcast Alert! Tune into HousingWire’s Housing News podcast featuring Wolters Kluwer’s VP of Banking Compliance Solutions Simon Moir and HousingWire’s Clayton Collins. With more than 20 years of experience in the banking and financial services industry, Simon shares valuable insights on the relationship between AI and regulatory powers, and the changing dynamics in the fintech world and investor strategies. Don’t miss this key conversation exploring the future of technology, regulations, and finance. Tune in now for valuable industry perspectives.

When Premium Mortgage Corporation set out to replace its Point-of-Sale system, Premium chose LiteSpeed by LenderLogix. Amazing borrower experience. Immediate ROI. Seamless integration into Encompass® by ICE Mortgage Technology™. The best part, the results speak for themselves: Check out its experience here.

Capital markets: more talk of a “soft landing” in the U.S. & world

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The secondary markets are incredibly complicated, especially what happens “behind the scenes.”

Don’t forget that MISMO, the real estate finance industry’s standards organization, announced that the Private Label Residential Mortgage-Backed Securities (PL RMBS) Specification has reached “Candidate Recommendation” status, which means that it has been thoroughly reviewed by a wide range of organizations and industry participants and is available for use across the industry and should lead to a more efficient process for private label residential mortgage-backed securities. The MISMO PL RMBS Specification provides a standard and defined set of data that can be used by the rating agencies to help determine the ratings applied to securitizations. The tools are designed for parties that support the submission of the current ASF and supplemental mapping specifications to the rating agencies. They will provide lenders, rating agencies, third-party reviewers, and technology solution providers with the necessary information to update their systems with the revised data from the MISMO PL RMBS or flat file layout.

And while you’re not forgetting, last month Ginnie Mae announced, in All Participants Memorandum (APM 23-09), that it is extending the use of electronic signatures in conjunction with Remote Online Notarization (RON) to include power of attorney (POA) mortgage documents. All Ginnie Mae Issuers can now use RON to execute POA documents when necessary to obtain Single-Family government insured or guaranteed loans on “paper” mortgages.

By extending digital capabilities to include POA mortgage documents, Ginnie Mae is modernizing its Mortgage-Backed Securities (MBS) program with flexibility that benefits our Issuers and borrowers. Issuers must continue to follow all insuring or guarantying agency guidance regarding POA eligibility and requirements, including the circumstances under which a borrower is permitted to use an attorney-in-fact to obtain Single-Family government insured or guaranteed loans. By using RON for POA, Issuers are subject to the electronic signature and notarization requirements outlined in chapter 24 of the MBS Guide. Please refer to APM 23-09 for more information regarding the requirements.

In bond market activity, which changes every day, bets are growing that central banks are winning their battle against inflation without driving economies into deep recessions. Goldman Sachs lowered its probability of a U.S. recession over the next 12 months to 20 percent from 25 percent yesterday, and ECB Governing Council member Knot suggested that additional rate hikes after next week are uncertain. Investors also received a weaker than expected Retail Sales report for June (actual 0.2 percent, expected 0.5 percent), with gasoline a big driver of the decline. Figures are not adjusted for inflation, and on a year-over-year basis, sales rose 1.5 percent. We’ve also received better-than-expected Q2 earnings from big banks such as JP Morgan, Citigroup, and Wells Fargo. Manufacturing took a step back in June, though Treasuries and MBS prices showed no significant response to that below-consensus June Industrial Production report (actual -0.5 percent, expected flat).

“Risk-on” sentiment has taken hold over the last couple of weeks, meaning investors are favoring stocks following softer-than-anticipated consumer and producer price data in June that has optimism abounding over inflation continuing to soften and the economy avoiding a recession. CPI dropped precipitously to a 3.0 percent annualized rate in June from 4.1 percent in May. Producer price increases are also slowing with core PPI up 2.6 percent from one year ago. Core CPI remains at a still robust annualized pace of 4.8 percent, albeit down from 5.3 percent in the previous reading. Yes, inflation is still above the target of 2 percent, but bets are that the 25-basis point rate hike on July 26 that lifts interest rates to a 22-year high will be the last as the Fed reaches a terminal target rate of 5.50 percent. Then begins the waiting game, as the tight U.S. labor market is key for long-run inflation considerations.

Today’s economic calendar kicked off with mortgage applications from MBA. Including an adjustment for Independence Day, Mortgage applications increased 1.1 percent from one week earlier, which was not entirely unexpected following last week’s Treasury rally after both CPI and PPI came in softer than expected. During the reporting period, the 10-year yield fell more than 20 basis points, with the 30-year mortgage rate tumbling even more (25 basis points, to 6.89 percent, according to Mortgage News Daily).

We’ve also received housing starts (-8.0 percent at 1.434 million) and building permits for June (-3.7 percent to 1.44 million). Expectations were for 1.455 million starts and 1.525 million permits versus 1.631 million and 1.496 million previously. Later today brings a Treasury auction of $12 billion reopened 20-year bonds. We begin the day with Agency MBS prices about .125-.250 better than Tuesday evening, the 10-year yielding 3.73 after closing yesterday at 3.79 percent, and the 2-year at 4.70.

Men socialize by insulting each other, but they really don’t mean it.

Women socialize by complimenting each other, but they really don’t mean it either.

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. STRATMOR’s current blog is titled, “Interest Rates are Like the Weather? Or Like Signs of the Zodiac?” 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 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