July 24: Readers weigh in on handling of adverse market fee change; vendor bits; Saturday Spotlight: Interfirst Mortgage

As mortgage rates currently continue to “behave themselves,” lenders continue to focus on helping customers, improving efficiency, and monitoring the technology offerings by vendors with an eye on price. Meanwhile they keep an eye on demographics: what difference do great service and products make if there are no houses to lend on? But at some price, people will sell their dwelling and move. Sure, they have to live somewhere, but given the lure of the right number of doubloons, they will sell. For example, the San Francisco Bay Area is seeing an increase in inventory. Of course, those selling their houses are going somewhere, and it appears that living in Montana might be their goal. (I don’t know about you, but I’m getting tired of being part of a major historical event.) Let’s see what’s going on out there.

Saturday Spotlight: Interfirst Mortgage Company, creating a superb lending experience for customers who work with us.


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).

Interfirst Mortgage Company was founded in 2001, offering brokers and investors competitive rates and a best-in-class online experience, including our broker-centric portal. Our focus is on giving our clients the edge they deserve, from a mortgage lender that can help you sell more. We will continue to bring innovation to the industry and expand our reputation for quality, top rates, service, and speed: for example: we recently launched our industry-first “ONE” product for non-owner-occupied properties that will create an easier process for buyers and investors.


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


Our company recently partnered with A Safe Haven Foundation in its Annual Walk/Run to end homelessness. Employees were encouraged to walk/run together (virtually or in-person) and donate to our team’s fundraising page. Additionally, we are working to partner with a non-profit organization that aligns with our values and gives employees more opportunities to volunteer and give-back.


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?

We invest in you and have an extensive seven-week onboarding program that includes paid training, paid state certificates, and paid testing and multistate licensing completely covered by us.

Tell us how Interfirst maintains its culture in a work-from-home environment, or how you plan on bringing employees back into the office, if applicable.

We have 100s of employees working in our Chicago and Charlotte office locations. To ensure our employees are safe, we follow our state’s Covid-19 regulations and work diligently to keep a clean workspace. We maintain our culture in a work-from-home environment by utilizing Slack and Zoom as our main form of communication and keep meetings fun and lite to avoid work-from-home fatigue.


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

Our people. We are versatile and nimble and growing our teams in order to reach our goals of building a brand and launching innovative products that provide solutions to our clients.


Fun fact about Interfirst Mortgage Company.

Our team members come from all different backgrounds which makes for a very fun and engaging workplace. We work hard and play hard.  We are truly like a family and enjoy one another’s company. Whether in person, or on Zoom, laughter resonates throughout our meetings. We have sharks and fish on our walls, cardboard cutouts of people looking out office windows, and employee camaraderie second to none.

(For more information on having your firm, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)

Vendor bits

Lenders can take the Systems Survey of STRATMOR Group’s 2021 Technology Insight® Study providing insight into the CRM, Point of Sale, Origination, eClosing, RON and collaboration tools in use in the mortgage industry today. The 10-minute Systems Survey allows participants to receive data on all these systems and more for FREE just for participating. Who wouldn’t want to know that three POS hold more than 50% percent of the market or what STRATMOR’s exclusive Lender Loyalty Score® analysis shows about their Loan Origination Systems?

HomeLight, the real estate technology platform transforming the home buying and selling process for the top real estate agents and their clients, has opened a regional hub in Tampa for HomeLight Closing Services™, its title and escrow division. HomeLight continues to expand HomeLight Closing Services™, along with flagship financial offerings, HomeLight Cash Offer™ and HomeLight Trade-In™, to new markets across the country. HomeLight Closing Services™ has quickly grown to serve thousands of transactions across the country, with offices in California, Texas, and now Florida.

Tavant announced the availability of its new Touchless LendingTM platform. This AI-powered lending-as-a-service platform maximizes the use of data-driven processes to provide an end-to-end loan manufacturing experience. Touchless Lending’s first product line is mortgage-centric and designed to address key pain points within the mortgage industry. By reducing lengthy origination cycles and removing unnecessary touchpoints, Touchless Lending enables lenders to originate more mortgage loans faster, while also reducing costs. “On average, mortgages are taking 51 days to close, which is unacceptably slow in our on-demand world. Underwriters and processors do not have the tools they need to get the job done efficiently and effectively. Touchless Lending focuses on these overlooked middle and back-office associates, now enabling them to make a clear-to-close decision in as little as five days, handle five times as many mortgages at once and reduce processing and underwriting costs by over 75% per mortgage.”

The adverse market fee

As mentioned in this Commentary, the removal by FHFA under acting Director Sandra Thompson could very well be a sign of how the change in leadership at the FHFA has increased its willingness to listen to the MBA and other industry sources. Rough calculations from various analysts show that Fannie Mae and Freddie Mac purchased over $1 trillion in refinances above $125,000 since December 1, .5 yielding more than $5 billion in adverse market refinance fees.

Earlier this week the Commentary noted “Experienced mortgage loan originators (MLOs) know that a rate lock is a rate lock. The removal of the adverse market fee of .5 for conventional conforming refis above $125,000 has caused conversations about pricing, borrower, and profit strategy. One veteran MLO wrote to me and stated, ‘If the price had worsened, we wouldn’t be going back to borrowers for that difference. It’s not a one-way street. My borrowers don’t know what the FHFA is, but know their locked rate. My company is not repricing its entire locked refinance pipeline. If asked, and I doubt if I will be, I will explain to my borrowers that a lock is a lock. And none of them want to start the process over again with a new lender for .125 in rate when rates are already great on a refi.’ A veteran capital markets gal joked to me, ‘Any MLO that encourages repricing should lose their license. Let’s start there.’ But then continued, ‘A deal is a deal. Any price change needs to follow normal process and we will not be removing the fee from existing pipeline.’ And a retail CEO wrote to me, affirming, ‘We’re going to use the .5 to offset what was a poor 2nd quarter, margin-wise, for us.’

A capital markets vet subsequently wrote, “I’ve had that conversation a few times over the last few days. I tell LOs the majority of my pipeline, underwriting through docs back, has already been committed to agency contracts, with the price we receive already set. My argument also rests on the fact I had an entire pipeline of locks back when FHFA rolled out the adverse fee that I took a loss on and didn’t go whining to the branches about clawing anything back.”

Brian S. writes, “Your opening paragraph reminds me of an experience I had in the early 90’s. I was the head of Mortgage Operations for American Savings Bank (later bought by WAMU). A customer was angrily complaining up the chain of command about not being able to reprice down 1/2% on the rate. I can’t recall why, but the movement had been huge for a one-day change. The guy’s name and number ultimately made it to my desk.

“I called the customer and he answered, “This is Mike, Trading Desk.” I didn’t introduce myself. I merely said, “Given how you answered the call, you understand why I can’t give you the lower price.” There was silence for a few moments, and then, “Yeah, your right. But I figured it was worth the ask”. I thanked him for his business and said goodbye.”

But originators across the nation were swift with their thoughts.

From Texas came, “I’m surprised at your reader’s conclusions quoted in your commentary. Why would we rather the company keep the ‘refund’ and not the customer? It seems to be against everyone’s best interest except the company itself. The overall opinion is definitely not as one-sided as today’s newsletter made it seem. The company I work for is going through our entire pipeline & cutting rates where applicable. Our unofficial motto is ‘people over profit.’ I personally would not want to work for a company who did anything different.”

From Colorado. “Those other LO and CEO comments are disgusting. Our bank indeed offered a solution to the .50 bps. Lower the rate OR issue the equivalent for a credit for rate to eat costs, for all deals in the company pipeline, mindful of rate & term refi max allowable funds back etc. That makes me proud to be where I am now.”

Lindell S. sent, “The comments from lenders (regarding why they won’t pass along the savings they will experience as a result of the elimination of the agency refinance fee) are extremely weak, based on the opinion of this retired mortgage banker after spending 45 years in the business. Another example of why CFPB exists.”

From Southern California came, “The FHFA decided end the adverse market fee. Great. I didn’t like the fee from the beginning. But in the beginning, if the FHFA needed to pad their accounts with extra money in case of additional costs or challenges from the pandemic, ok. They write the rules, so they can do it. Lenders ultimately had time to adjust for the fee, after some initial pushback.

“Now that FHFA is cancelling the fee as of a certain date of loan delivery, the lender should reprice the loan to the borrower if possible. Keeping the adverse market fee when the lender is not being charged the fee is wrong. These lenders are screwing the borrowers so they can earn bigger profits. If the lender is delivering the loan during the time when the adverse market fee is being charged, then charge it. But, if the lender is able to deliver the loan into another pool and not be charged, the lender should not keep the windfall profit.

“This is another reason why borrowers do not trust mortgage lenders, because some of them give all of us a bad name, just greedy people. If they didn’t hedge well enough and lost money, or their poor procedures lead to market losses, then accept your mistake and adjust future loans. Can’t you earn an honest profit? Don’t screw your clients.”

And there was, “The removal of the adverse marketing fee saved my borrowers an average of $2,000. Cash to close became cash back in some cases. My borrowers were surprised and grateful. I like positive surprises that benefit my borrowers.”

From Kansas came, “It’s easy for those higher ups to say, ‘a deal’s a deal’ or that an LO’s license should be revoked. Those are some strong words. I have a feeling if the company they work for had their names were attached to it, they might be worded a little bit or a lot different. I bet a lot more locks drop if borrowers knew that’s what was being said at the company they are locked with in the background. They don’t sound like the folks that actually talks to the borrower. They also probably don’t see any meaningful impact to their income if they lose a few deals to this madness (I lost $2 million in locks in one day over it). They aren’t the ones developing relationships with these borrowers looking to you for help and guidance and trusting you’ll advocate for them.

“Now, I’m very lucky that the bank lender where I work allows me to confidently know we’re doing what’s best for borrowers and I’ve gotten a few deals saved with some renegotiations. Did I encourage those? Absolutely not. But, when questioned about it, I was able to write some long emails explaining what’s going on and what I can do. Some work, some don’t. But upper-level executives that are only looking at this as a nice little windfall to make up for a bad quarter are 100% detached from what LOs, at least most, I’m hoping, are trying to do. And that’s helping folks.”

Ohio. “I disagree with your reader’s comments. Unless there is a need for, say, cash out to fulfill an obligation, the typical borrower has no urgency to close on a refinance. As easy as it was for them to get financial documents to me (mostly electronic), they can cancel my lock an apply elsewhere. Normally, had bond and MBS pricing been steady for the past few weeks, the adverse fee would be a non-event. Now that we have seen rallies, my clients do notice it.

Most of my pipeline are purchases-so they are not as likely to try to reprice or apply elsewhere. They may breach their purchase contact and not close on time. I do have one rate/term refinance ($450,500) where, if they repriced with us that day, they would receive a .625% price enhancement, or $2,812.50. This also means that they can find a similar deal elsewhere. Their sunk cost with us is $475.00 (the appraisal fee), so losing that is not a detriment.

“Now, I’m not calling them and our rate lock policy does not address repricing. But if they call me and I reply, ‘a lock is a lock,’ it’s not going to be well received. Moreover, when they sign the closing documents, the right of recission will give them a fair amount of time to think about this and serve as a reminder to see what they have with me and what they can get elsewhere. Curse you Reg Z!”

I thought the dryer made my clothes shrink. Turns out it was the refrigerator.

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, “A Primer on What Originators Should Know about the Fed”. 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 designed 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 2021 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