Daily Mortgage News & Commentary

July 8: CD, MLO, AE jobs; warehouse, non-QM correspondent, compliance, CRM, processing products; FOMC & Fed Funds primer

Dang, is there any good news out there? Japanese ex-Prime Minister Abe was tragically assassinated. Rates stink, especially compare to 2020 and 2021, but are you really rooting for a recession to drive them back down? In Florida we have the rise of giant snails spewing parasites that invade the human brain. What happened to the days when my only worry was if the tide was going to reach my chair while enjoying an adult beverage? We have flooding in parts of the nation, wildfires in the West. The press seems consumed with house price appreciation slowing down, and is putting out sensationalist headlines predicting a crash. Everyone has an opinion. The demand is still strong: I can think of five people I know who are “waiting for the right time” to buy a house. Does “crash” mean instead of going up 20 percent a year we “only” go up 5 percent a year? I think we can all agree that double digit appreciation is unhealthy, even if you’ve recently bought a place. Can a client, or should a client, use a 401K to buy a house? Houwzer, a “next-generation real estate brokerage,” just published a blog on the topic here. Everyone, and their brother, knows that LOs are out there adding value and wealth, and being able to advise clients is what good LOs do, right? (Today’s podcast is available here and this week’s is sponsored by Real Estate Connection (REC), a boutique real estate brokerage that acts as a centralized and organized, fully-managed real estate fulfillment service, connecting buyers with local qualified Real Estate Agents and walking them through the entire home purchase and selling process with the lender partner.)

Jobs & promotions

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Keller Mortgage has been a leader in purchase originations in every mortgage cycle and is focused on expanding its nationwide sales team, hiring Loan Officers in both the Direct and Local channels! Keller Mortgage is uniquely positioned for long term growth. Keller offers prospective LOs a best-in-class tech stack which leverages Blend, Salesforce, and Encompass to offer an elevated Client experience, and help build deep and lasting relationships with Agents and Clients. Recent product expansions to include manufactured housing and new Jumbo and non-QM Investors increase their market competitiveness and help serve more homebuyers. Additionally, Keller offers a unique opportunity to propel your business forward and access a captive audience of 180K+ agents. Reach out to the Keller Mortgage leadership team to discuss how it can help your business growth plans. Contact Cassidy O’Sullivan at 805-428-0082.

Ships don’t sink because of the water around them; ships sink because water gets in them. Don’t let what’s happening around you get inside you and weigh you down. ACC Mortgage continues to hire talent! Non-QM is a strong product. Because Non-QM companies sunk does not mean Non-QM is in trouble. ACC Mortgage is the oldest Non-QM lender since 1999. The lender that survived 2007-08. The only Non-QM lender to lend throughout COVID. ACC just celebrated its best 6 months ever. Don’t let the news fool you: Non-QM and ACC Mortgage  are here to stay. If your company is struggling with Non-QM, or you are looking to make a job switch, call us at 877-353-2233 or email us.”

At Evergreen Home Loans, former COO Tamra Rieger has been promoted to President while the company’s founder, and former President, Don Burton assumes the sole title of CEO. Industry watchers know that Tamra spearheaded the deployment of CashUp™ by Evergreen and was COO for Evergreen since 2019 and EVP Loan Fulfillment since 2013.

Lender and broker products, software, and services

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Listing alert for the futurists out there: a unique property resembling The Jetsons house is on the market in Oklahoma. Though tech advancements won’t allow you to replace your Roomba with Rosey the Robot just yet, there’s no denying that a digital revolution is shaping our culture. Consumer demand for streamlined tech is changing how the mortgage industry operates, with more than two-thirds of borrowers using some kind of tech during the homebuying process. SimpleNexus stays ahead of the curve, enriching its comprehensive homeownership platform with cutting-edge technology that keeps pace with borrowers’ desire for digital convenience. For more on global tech trends shaping the future of the mortgage industry, download the free white paper.

“Don’t let the market shifts drive your business strategy. Indecomm’s GeniusWorks addresses risks, costs, and process bottlenecks in the mortgage back office, from setup through underwriting, while driving better borrower experiences. GeniusWorks combines Indecomm’s Genius automation solutions with our genius mortgage talent to streamline mortgage operations, reducing costs by 30 percent and automating 70 percent of mortgage processes. It’s the genius behind better borrower experiences and more efficient operations. Learn more by registering for our upcoming GeniusWorks webinar. Only looking for automated mortgage underwriting and decisioning? Check out DecisionGenius!”

It’s a tale as old as time: lenders put tremendous effort into their mortgage marketing strategy, only for their time and money go to waste. This was the story for Premier Nationwide Lending until it partnered with Sales Boomerang to empower mortgage advisors with automated borrower intelligence and retention alerts that help them present the best opportunities to the right buyers at the ideal time. American Banker’s Mike Sisk will join Sales Boomerang’s Alex Kutsishin, Mortgage Coach’s Dave Savage, and representatives from Premier Nationwide Lending to tell the tale of how Sales Boomerang delivered the lender an additional $217.2 million in funded loans in 2021. Tune in June 12 at 2 pm ET for the full story: it has a happy ending!

Stop wasting money on expensive CRM software that doesn’t deliver results. OptifiNow’s CRM platform provides better value for mortgage companies because it is customized to each client’s specifications and includes ongoing CRM management services from OptifiNow. System configuration, custom development and day-to-day maintenance are part of OptifiNow’s White Glove Service and a big reason why lenders receive a higher ROI from their CRM platform. Leverage OptifiNow’s proven experience with mortgage lenders to create a sales and marketing machine that is custom-tailored to fit any lender’s need. Click here to learn more.

The market has shifted. Loans are down. Refi’s are tumbling. Labor costs are rising. Saving a little cash sounds pretty good right now, doesn’t it? What if we told you Velma Connector can help you save, with our ECOA-Adverse Action solution! Our clients have reported an over 400 percent ROI, all thanks to Connector’s easy-to-use, automated workflows. Connector’s easy-to-use, automated workflows. Connector can help you reduce your labor costs and eliminate costly non-compliance fines. Let us help you save time, money and headaches, click here to learn how!

“***News Alert – For all Chrisman readers who use direct mail for lead generation – Effective July 10, 2022, the USPS will be raising prices by 3 cents for first class and 2 cents for standard mail.*** Did you know, however, that you can actually lower your cost per call, even with these price increases? If you are interested in beating the price increase, drop us a line at sales@monsterlg.com or check us out at www.monsterlg.com. We have technology improvements enabling you to get ahead of the market and outrun the increases! Give us 5 minutes to ask 3 simple questions and see if we can lower your overall cost per call to beat the rate increase!”

Access the recording and resources from ActiveComply’s most recent seminar to learn more about using social media to increase purchase business while staying compliant. Jam-packed with data-backed and actionable insights, production superstar Barry Habib and fair lending guru Mitch Kider discuss how to get the most out of marketing on social media during these interesting market conditions. Love it or hate it, social media is a critically important tool that lenders and servicers use to attract new customers, promote brand awareness, and stay on the cutting edge of contemporary marketing strategies. But how does one safely navigate the conundrum that is federal and state mortgage advertising regulations while staying up to date with social media marketing trends? Explore ActiveComply’s wealth of compliance resources, learn more about our no-headache compliance solutions for IMBs, banks, credit unions, and other lenders, or request a free demo for your company today to find out!

NexBank delivers record mortgage loan volume for four consecutive months! NexBank posted record mortgage loan volume in March, April, May, and June of 2022 driven by purchase volume growth and the bank’s unique product offerings. NexBank would like to extend a congratulations to its team for achieving such a great milestone and their dedication and commitment to serving its clients. NexBank is part of a financial services company with assets of $11.7 billion. It has been nationally recognized as a top performing bank and was recently ranked as a Top Correspondent Lender and Top Non-QM Lender by Scotsman Guide. NexBank Mortgage Banking provides Wholesale, Non-Delegated, and Delegated Correspondent Lending, as well as traditional warehouse lines of credit. It is focused on a personalized high touch approach and is consistently launching new, innovative ways to serve its clients. Member FDIC. Equal Housing Lender. Contact us to learn more.

Capital markets: an FOMC primer

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This commentary often discusses “the Fed,” and loan officers often talk about the Fed with clients in terms of “Oh, the Fed is going to raise rates, so lock in now!” Does Fed Funds drive the economy, or does the economy drive Fed Funds? It is good to have a basic knowledge of what it is, keeping in mind that the Federal Reserve System is the central bank of the United States. Most countries around the world have their own central banks. Ours performs five general functions to promote the effective operation of the U.S. economy and, more generally, the public interest. We primarily care about, and what garner the most publicity, are when the Fed, “conducts the nation’s monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy,” and “promotes the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the U.S. and abroad.”

So what is “monetary policy? Think of it as actions undertaken by the Fed to influence the availability and cost of money and credit to help promote national economic goals by using three tools: open market operations, the discount rate, and reserve requirements. The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal Open Market Committee (FOMC) is responsible for open market operations.

Everyone, rightly or wrongly, focuses on the overnight federal funds rate (fed funds). The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions. But the Federal Reserve, using those three tools, influences the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and thus alters the federal funds rate.

And as the Fed points out, “Changes in the federal funds rate trigger a chain of events that affect other short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services. And the “dot plot” was created to look at the odds and timing of future rate moves.

The Board of Governors meets regularly, typically every other Monday. But it is the Federal Open Market Committee (FOMC) that has everyone’s attention. The FOMC consists of twelve members: the seven members of the Board of Governors of the Federal Reserve System, the president of the Federal Reserve Bank of New York, and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis.

The FOMC holds eight regularly scheduled meetings per year, and the next one is later this month. At these meetings, “the Committee reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth.”

Shifting our collective gaze to the bond market, and therefore interest rates, ahead of today’s payrolls report we saw a large drop in mortgage rates, per Freddie Mac, led by a 40-basis point slide in the average 30-year fixed rate to 5.30 percent. The 15-year rate dropped 38-basis points to 4.45 percent while the 5/1 hybrid ARM rate slid 31-basis points to 4.19 percent. There is some optimism out there that the Fed can assuage inflation without a recession. Fed Governor Waller and St. Louis Fed President Bullard yesterday backed another 75-basis point hike this month to curb inflation, and Waller dismissed downturn fears.

Keep in mind that they are two of the Fed’s most hawkish policymakers, so those two saying that fears of a recession are overblown should be taken with a grain of salt. Bullard acknowledged that rate cuts could take place once inflation moderates. Current expectations are for another 75-basis points at the end of July meeting, 50-basis points in September, and 25-basis points in November and December.

The big event this week was always going to be today’s payrolls report. The Street was looking for 270k jobs and for unemployment to remain at 3.6 percent, which would mean that U.S. employers added the fewest jobs in over a year, but economists say that slowdown isn’t concerning. The unemployment rate is at historically low levels and another month of solid wage growth suggests that employers are still eager to find qualified workers and retain the ones they already have. Job openings are hovering near record highs, while layoffs are well below pre-pandemic levels.

The report showed that in June, the U.S. economy had an increase of in nonfarm payrolls 370k but a 74k downward revision to earlier months, the unemployment rate was 3.6 percent, and hourly earnings were +.3 percent, not accelerating. The labor market, and airport parking lots and restaurants in town, isn’t showing signs of an imminent recession, remaining tight, though some cracks are beginning to show in the foundation. It should be stated, though, that the rate hikes from earlier this year won’t begin to impact the economy until late this year. Fortunately, the job market probably won’t fall off a cliff this year.

Not that anyone cares, but later today brings the ISM (Institute of Supply Managers) Services Report, May wholesale inventories and sales, May consumer credit, and remarks from New York Fed President Williams. There is still a lot of tightening to go from the Fed, and since the Fed Funds rate tends to impact the economy with a roughly nine-month lag, the economy has not yet begun to feel the impact of the rate hikes we have already seen. After the employment data we have Agency MBS prices worse .375 and the risk-free U.S. 10-year yielding 3.08 after closing yesterday at 3.01 percent.

Okay, many award acceptance speeches are boring and lengthy. Not only is this one short, but it is interesting and humorous and at 1:50 must-see for any fan of Jack Nicholson. (The same person who supposedly said, “My mother never saw the irony in calling me a son-of-a-b—-.”)

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).

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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 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.)