July 26: LO jobs; productivity, automation, data tracking; HELOC servicing products; Freddie & Fannie news; interview on yield curve inversion

Today’s Fed meeting announcement is the last one until September 20. Mortgage rates, of course, are prone to moving around even without the Fed’s direction. Meanwhile, the second quarter earnings from lenders are of great interest to warehouse banks and investors (including Freddie Mac and Fannie Mae). Those counterparties are contractually limited as to what they can do with companies that are not making money and have seen their net worth erode over the months and quarters. There is continued talk of over-capacity as companies eye the end of summer, continued high rates, existing borrowers with low rates, and limited houses for sale. (Anyone displaced can post their resume for free here where, for $75, employers can view them for several months.) There is no disagreement about it being a difficult environment for most lenders, unlike there being disagreement over housing prices. Who you gonna believe? The FHFA House Price Index rose 0.7 percent MoM: U.S. house prices rose in May, up 0.7 percent from April, and were +2.8 percent from May 2022 to May 2023. Or the WSJ telling us that home prices fell year-over-year in May for the second straight month? (Today’s podcast can be found here and sponsored by ReadyPrice, offering the industry’s most powerful universal delivery portal that gives brokers the edge they need. Shop, lock and deliver with multiple lenders, all in one place, for free! Hear an Interview with Adam Quinones, Founder of dataQollab, and Matt Graham, MBS Live, on yield curve inversion, markets betting against the Fed, and bond performance.)

 

Employment & promotions

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Evergreen Home Loans™ is committed to helping loan officers boost their careers and thrive despite what the market is doing. That’s why Evergreen focuses on positioning loan officers to empower their customers to get the home they love with a financing solution that meets their needs in any market. After seeing positive results, the company recently brought back its Buyer Booster program which initially got launched to alleviate homebuyer fear and communicate that now is a good time to buy a home. It allows homebuyers to buy between July 1 through September 29, 2023, and boost their refinancing power with a $2,500 credit good until March 31, 2025. Evergreen also has a powerful suite of exclusive products, including CashUp®, StepUp, and Fast as Cash which are all designed to address market challenges. Loan officers seeking a company that prioritizes their success should visit the Evergreen careers page.

PrimeLending is welcoming an addition to its executive leadership team: Andrew Stringer, EVP, and Senior Director of Capital Markets. Andrew returns to PrimeLending, having previously served over a decade ago as a Capital Markets Trader. Since then, he has built an impressive career, showcasing his expertise by successfully building and leading capital markets departments for bank-owned and independent mortgage companies. His diverse experiences have honed him into a skilled capital markets strategist, and PrimeLending is confident that Andrew’s passion, vision, and leadership will help propel the company to new heights. Click here to learn more about PrimeLending.

loanDepot, Inc., and its gaggle of subsidiaries, announced that Melanie Graper has been named chief human resources officer (CHRO), effective July 31 and will oversee all aspects of the company’s human capital function and drive forward critical organizational aspects of loanDepot’s Vision 2025 plan. Graper will report to President and CEO Frank Martell. Congratulations!

Lender and broker products, services, and software

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Building a recruitment marketing plan from the ground up can take months and requires the right messaging to get the desired results. Ever had a recruitment campaign fall flat, or alternatively, generate interest, but not the kind you want? Surefire, Black Knight’s CRM and Mortgage Marketing Engine, can help you sidestep the most common pain points of loan officer recruiting with its comprehensive recruitment marketing guide. Download the free eBook for proven tips on how to grow your mortgage team.

Home equity is still a strong cash flow tool. CoreLogic reported recently that the average homeowner has more than $274k in equity. With equity high and as interest rates stabilize, we may see a higher demand for second-lien products. Computershare Loan Services (CLS) has a 20-year reputation for subservicing closed-end second liens and HELOCs with tightly managed processes and air-tight compliance that result in unmatched performance. In fact, Moody’s (SQ2), S&P (STRONG), and Fitch (RPS2+) consistently affirm and upgrade CLS’ ratings for their proficiency in servicing second liens. Learn how CLS is bringing together the industry’s best talent to improve loan performance for clients’ prime and default portfolios.

You may not often think of your property data when working on achieving cost and time efficiency. But you should. Depending on how deep, comprehensive, current, and validated your data is, it can be the difference between adding manual steps to your process or increasing efficiency. It could also be the difference maker between GSE repurchase demands and ensuring your data is reducing your exposure to risk. Not all data providers are the same. First American Data & Analytics is mission critical for some of the largest players in PropTech, FinTech, and Title insurance industries, industries where if their data isn’t the most current, comprehensive, and validated, it could cost them their business. And these businesses overwhelmingly choose to partner with First American Data & Analytics. Learn more about why First American Data & Analytics is the most trusted source of property and mortgage data in the industry.

With the average mortgage application file exceeding 800 pages and seasoned loans files often exceeding 2,000 pages originators, investors, and servicers need an efficient platform to manage, organize and share loan documents. The Acuity document suite provides secure storage with permission-based sharing and audit tracking, as well as OCR technology that can identify documents automatically and extract data from them. Acuity, by SitusAMC has processed over 900 million documents with its machine learned application, delivering confidence in documents and data that power loan origination, loan purchase, and loan servicing. Organize loans into appropriate groupings, customize stacking order, and easily share with counterparties. Documents are easily added to the loan record allowing servicers, asset management professionals, or other parties to work with an imaged record that is always up to date and comprehensive. To learn more about how Acuity can power efficient doc management, email us or visit SitusAMC.com/Acuity.

Automation and productivity tools

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Are you tired of having to adjust head count every time the market changes? The Mortgage Automation Suite, brought to you by Richey May and Zoral, can help. With scalable automated solutions that improve accuracy while reducing repurchases and costs, your business will be well-equipped for any market cycle. Leveraging this powerful automation will allow your team to close loans more easily, helping to retain your best staff. Plus, it adds the extra layer of stability needed during difficult times; something we could all use a bit more of these days! Find out how the Mortgage Automation Suite from Richey May & Zoral can help you today. Email info@richeymay.com.

Grow your wholesale pipeline quickly using OptifiNow’s Guide to Account Executive Productivity! Overcome the common account management challenges that wholesale lenders face using this sales process that helps your AEs follow up consistently and engage with the right broker at the right time. This proven sales method is ideal for both inside and outside sales teams, enabling wholesale lenders to generate more volume per AE. Now is the time to crank up the volume of sales and cool down the competition! Download the guide today and watch your volume take off!

Freddie Mac and Fannie Mae: rarely sit still

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F&F account for roughly 70 percent of current volume, so lenders and investors pay attention to the changes that they make in terms of policies, procedures, and pricing. Who’s doing what?

Freddie Mac’s latest Single-Family Seller/Servicer Guide (Guide) Bulletin 2023-15 includes Condos & Co-ops and Affordable Seconds updates. Items such as a New “Project Certified” status to be introduced for Condo Project Advisor® Project Assessment Request (PAR) tool. Updated project review requirements for Condominium Projects and Cooperative Projects in need of Critical Repairs. New requirements for using the ANSI Standard for measuring finished and unfinished areas of 1-unit properties. An expansion to permit certain Community Development Financial Institutions and Credit Unions to fund Affordable Seconds. Access the Updated Condominium Unit Mortgage FAQs.

 

Fannie Mae Announcement SEL-2023-06: the July Selling Guide Update includes revised policies and review requirements for condo and co-op project eligibility for properties in need of critical repairs and/or that have special assessments. Adjusts eligibility requirements for limited cash-out refinance transactions, requiring at least one borrower to be the current owner of the subject property; and incorporates eligibility requirements for the sale of loans aged six months or less.

While homes in condo and co-op projects are a great choice for many consumers, Fannie Mae is mindful of the unique considerations of those ownership types and the challenges of aging infrastructure. As the market evolves and new issues emerge, policies are evaluated and innovative solutions to support the condo and co-op market are developed. In a new Perspectives blog, Jodi Horne, Fannie Mae’s Director of Single-Family Collateral Risk Management explains how Fannie Mae’s condo and co-op policies are designed not only to protect lenders and Fannie Mae from a risk management perspective, but also to protect borrowers from physically unsafe or financially unstable projects.

Fannie Mae July Servicing Guide update adjusts the requirements for partial release of security and makes miscellaneous changes.

Fannie Mae updated the release notes for the Desktop Underwriter® (DU®) Version 11.1 update scheduled for the weekend of Aug. 19. The release now includes property and appraisal updates, a DU validation service change, and a new Duty to Serve message. Answers to frequently asked selling questions on the Fannie Mae Top Trending Selling FAQs page. FAQs are grouped by theme CPM, project standards, income assessment, value acceptance (appraisal waiver), and more.

Effective September 11, Freddie Mac is adding and updating LPA messages to align with a policy change for single-wide manufactured homes, as announced in Single-Family Seller/Servicer Guide (Guide) Bulletin 2023-13.

Fannie Mae reminds Servicers of available disaster recovery resources to aid borrowers affected by recent severe weather. Free, multi-language disaster recovery counseling services are available to homeowners by calling 855-HERE2HELP (855-437-3243) or visiting our website.

Strengthen your fraud detection and actively combat mortgage fraud. Leverage your quality control (QC) program to reinforce your fraud controls and prevent fraud before it starts. Fannie Mae July Quality Insider identifies patterns related to fraud and offers strategies to adapt fraud controls, helping mitigate risk in the current market.

Fannie Mae is providing a new benefit for brokers and correspondent lenders. Beginning August 19, loan casefiles submitted through Desktop Originator® (DO®) in Preliminary Findings can take full advantage of the Desktop Underwriter® (DU®) validation service benefits. With this update, casefiles will benefit from employment, income, and asset validation, as well as including a borrower’s positive rent payment history and cash flow in the credit assessment.

Freddie Mac announced the launch of its CreditSmart® Essentials free financial education curriculum in Spanish. Specifically, the company is expanding its content, design, and platform to better meet the needs of Spanish-speaking consumers. Doing so will help bolster educational efforts around the important building, maintaining, and using credit. The Spanish-language version of CreditSmart Essentials offers educational tools to prepare future borrowers to rent or purchase a home. It also provides tools for housing industry professionals to share the expanded resources with consumers.

The private mortgage insurance business, of course, owes its existence to conventional conforming mortgages. National MI’s Bulletin UW 2023-02 announced guideline changes to the TrueGuide® which includes updates and clarifications on Citizenship and Residency, Co-signers, Shared Appreciation, Shared Equity, and allowable payoffs with a rate and term (limited cash-out) refinance.

Capital markets: FOMC… one and done or more to come?

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Finally, it’s Fed decision day. In anticipation of today’s expected 25 basis points rate hike, some final “(rates) higher for longer” sentiment took hold yesterday and bonds retreated yesterday to levels not seen in nearly two weeks. With the rate hike by the FOMC a near-certainty, attention will be on the hawkishness of both the Statement and Fed Chair Powell during his press conference. Concerns about a “hard landing” here in the U.S. continue to fade, as the resilient domestic economy has given the Fed license to raise fed funds again after today’s meeting, and there’s nearly a 30 percent chance that the FOMC hikes rates by an additional 25 basis points at the November meeting.

Are you more confident about things than you were last month? We learned yesterday that the Conference Board’s Consumer Confidence Index jumped in July from an upwardly revised reading in June. The index sits more than 20 percent higher than the same period a year ago, as the uptick in consumer confidence has been driven both by a pickup in views about current conditions, inflation coming down, and the labor market remaining tight. And on the housing front, the FHFA Housing Price Index was up 0.7 percent in May (and 2.8 percent year-over-year as lack of inventory continues to keep home prices aloft) after increasing 0.7 percent in April, while the S&P Case-Shiller Home Price Index fell 1.7 percent in May after falling 1.7 percent in April.

This afternoon brings the latest FOMC decision, but kicking off today’s calendar were mortgage applications from MBA, which decreased 1.8 percent from one week earlier. Due out later this morning are new home sales for June. The latest FOMC decision on policy rates will be released at 2PM ET. Another 25-basis points hike would bring the target fed funds range from 5.25 percent to 5.50 percent, though the tone of the Statement as well as Chair Powell’s press conference both will be closely scrutinized for if there are more hikes to come. With not much news, we begin the day with Agency MBS prices unchanged from Tuesday night, the 10-year yielding 3.89 after closing yesterday at 3.91 percent, and the 2-year up at 4.86 percent.

Six cows were smoking joints and playing poker. That’s right. The steaks were pretty high.

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