Daily Mortgage News & Commentary

June 16: MLO, AE jobs; servicing, sales, TPO, VOI products; Fannie & Agency shifts continue: 3 instead of 7 percent NOO cap?

Satisfaction = Reality/Expectations. You can do the math yourself on that one, and speaking of math and numbers, even though there are hundreds of thousands of people in residential lending, it doesn’t take long for word to spread through our biz when Fannie or Freddie further restricts execution options. In this case, non-QM and “private label” investors were no doubt pleased to hear that lenders received calls from Fannie reps that it is dropping the NOO/Investor limit to monthly deliveries of 3 percent, effective 7/1. Any lender that is over the 3% in any month, will be subject to significant penalties. Rumor is Freddie will follow, which is contrary to its recent letter. (More reactions to recent Agency changes below.) Larger lenders and correspondent investors who have access to the securitization market find themselves with more advantages, as do depository lenders who can cherry-pick 2nd home and non-owner loans with low LTV and DTI ratios, and borrowers with high credit scores. Meanwhile, originators are searching for options: Today’s audio version of the commentary is available here. This week’s is sponsored by Symmetry Lending, rolling out more HELOC solutions and providing MLOs with a product that perfectly complements their 1st mortgage, following Agency guidelines with minimal overlays.

Employment and transitions

Evergreen Home Loans™ is excited to announce the launch of its #ShowYourHome™ Sweepstakes. Building off the success of the #ShowYourKeys™ campaign, the #ShowYourHome sweepstakes invites consumers to enter to win by submitting a photo that showcases what makes their home special. Over the next 12 months, one winner will be randomly selected every month for a cash prize of $5,000. Evergreen is dedicated to developing marketing campaigns to help loan officers build new relationships, strengthen their existing ones, and generate leads. The company also provides loan officers with social media content that encourages local engagement and new customer acquisition. If you’re interested in working with a company that creates dynamic marketing campaigns to help grow your business, check out the Careers page.

Verus Mortgage Capital, a full-service correspondent investor offering residential non-QM and investor rental programs, announced it has added non-QM veteran, Jeff Newcome, to its team as vice president – correspondent sales. With 25+ years’ experience, Newcome most recently served as regional vice president of wholesale sales-east for a large, national lender. Prior to that, he was a vice president of client development for seven years with another non-QM investor. Newcome has a proven track record of developing effective sales and marketing strategies for non-agency products while cultivating strong partnerships to successfully grow production volume. “With volume at all-time highs and market demand climbing, we knew we needed to add another veteran salesperson to complement our existing team─ and we think Jeff is a perfect fit,” said Jeff Schaefer, EVP – Correspondent Sales at Verus. “We’re excited he’s joining us and look forward to his contributions.”

Axos Bank is looking for Wholesale Account Executives to join our team! Click here to apply to work at a bank that has the most aggressive super jumbo Non-QM lending! Why would you want to work anywhere else? Axos does all the things that no one else can do! Most ‘Non-QM’ lenders cap at $3 million but not us, we go all the way up to $30 million (larger loan amounts considered)! No limit on cash out, cross-collateralization, bridge loans, and pledged assets. Cryptocurrency now considered! Email LendingPartners@axosbank.com to learn more! Our Warehouse Lending Program can help you maximize your revenue opportunities with our residential lines of $20MM to $175MM. Have a commercial real estate lending needs? Axos Commercial Lending offers financing solutions for small balance commercial real estate, commercial real estate specialty bridge and constructions lending.”

Finally, there’s a better business model that provides LO’s with ultimate control, unmatched pricing & a proprietary LOS that promotes faster closings! See how top producing loan officers are leveraging digital storefronts to expand market reach and increase volume. Canopy Mortgage is hiring top producing Loan Officers and Branch Managers. Build your business the way you want, Join Canopy to stand out in the following markets: CA, CO, FL, GA, HI, IL, NC, SC, TN, TX, and WA. Reach out to Josh Neumarker at Canopy Mortgage for more information (801-330-5016).

Sprout Mortgage announced the appointment of Michael Johnston to the newly created position of Head of Distributed Retail, and will be expanding Sprout’s consumer and retail sales channel, reporting to Sprout President Shea Pallante.

Broker and lender services & products

Faster applications = happier borrowers = loyal customers. VOE+VOIs are an unnecessary pain in the you know what when it comes to processing faster applications. Improve the borrower experience with faster VOE/VOI on Truework- verify income for any U.S. employee on Truework. Truework is now a fully integrated partner with Encompass© meaning Encompass users can now submit VOE/VOI for any applicant through Truework without leaving the Encompass environment. Verifying income and employment is easier than ever. When loan processing teams use Truework they unlock bulk pricing discounts and automated billing. Start income verifications with Truework today and close loans faster!

In 2020 Monster Lead Group generated over $16 billion in loans for its clients. It’s not rocket science, but it is big data & analytics. And with its proprietary data algorithms, Monster can qualify borrowers and pair them with your specific criteria. Just want low loan govy borrowers or jumbo refis? Monster can do that. But there’s more to it than that. John Kresevic, JFQ’s president, even said, “Somebody can charge me half as much as you guys do, but I can’t get beyond the level of your results.” So, schedule a call with the team at Monster to learn how they can deliver exclusive leads to your LOs. Or read about Monster’s offering yourself.

Stearns Wholesale continues to expand its jumbo offerings with a variety of options, investors, and rates! Stearns’ new Preferred Jumbo Program launched this week with criteria allowing for 80% LTV up to $1.5 million. This jumbo is 30-year fixed only and covers single family, condo, and PUD, as well as purchase, rate/term, and cash out. Preferred Jumbo also allows first time homebuyers and does not require AUS. “With 6 Jumbo options at Stearns, we have flexibility to help our brokers find the best program for their borrower. If you’d like to partner with Stearns or learn more, click here to be contacted.”

The Work Number® database now includes more small and medium businesses than ever before. That means the size of an applicant’s employer won’t be as much of an obstacle when you are digitally verifying income and employment. Credit Plus is an authorized reseller of The Work Number, the largest commercial collection of payroll records contributed directly from employers and payroll providers. With The Work Number, you can easily access payroll data from more than 1 million employers, quickly validate or confirm income/employment for more confident lending decisions, and instantly see the most up-to-date information, with records updated every pay cycle. Best of all, if there’s no hit, there’s typically no charge. Want more information? Reach out to Credit Plus.

How’s your TPO business? Have you ever surprised a broker when canceling or suspending a loan with incomplete actions? Do your brokers know the specific underwriting conditions not cleared for each loan? Are your brokers properly engaged and the origination facilitated through approvals and closing? So many questions and challenges!! Interested how Connector by Velma® can extend Encompass to help you run your TPO business efficiently?  More info here.

The first roller coaster in America opened at Coney Island 137 years ago today, marking an instant success. For Assurance Financial, implementing Sales Boomerang’s alerts was also an instant success. According to Chief Digital Officer Katherine Campbell, “In the first 4 months, we took in $180M in applications … My top performing LO attributes 25% of her business to Sales Boomerang alerts.” Lenders using Sales Boomerang, the #1 mortgage borrower intelligence and retention platform, see an average 20-40% lift to loan volume and 65% borrower retention for around $299 per acquired loan, a 20x ROI. Extreme ups and downs are fun on a roller coaster, but not when you’re talking about your pipeline. Contact Sales Boomerang today to start getting a steady stream of alerts like Assurance Financial.

Mortgage subservicing was long overdue for a shot of modernity. For too long, subservicers relied on out-of-date technology and slow reporting, making lenders wait weeks for portfolio performance reports. Particularly in the pandemic era, you need up-to-date, relevant data, available at a moment’s notice. That’s why TMS developed SIME, short for Servicing Intelligence Made Easy, their proprietary digital portal. Through customizable dashboards, SIME gives lenders 24/7 real-time access to 90+ standard and customizable performance reports, loan-level detail and raw data, customer call recordings, and records of all customer interactions. SIME also powers TMS’s Happinest app, which lets customers manage all their own mortgage affairs, leading to an 82% self-service rate. SIME’s transparency and ease of use empowers lenders to grow their businesses to their fullest potential. Partner with TMS.

Investors and MI companies & Agency news

Non-QM investors, without the high gfee hit in their pricing, took note yesterday of Fannie reportedly making phone calls and dropping the NOO/Investor limit to monthly deliveries to 3 percent, effective 7/1. It has an immediate impact. Lenders who try to “dump” NOO loans in June are rumored to be potentially cut off, as are lenders who go over in July. So any lender that is over the 3% in any month may be subject to significant penalties. Of course smaller lenders will turn to the aggregators, and save the 3 percent tolerance for loans rejected by those investors. Larger lenders and correspondent investors will be securitizing their own NOO and 2nd home originations, and depository lenders will cherry-pick 2nd home and non-owner loans with low LTVs, low DTI ratios, and high credit scores.

The Agencies recently introduced refinance programs for low-income borrowers (Fannie Mae’s RefiNowTM and Freddie Mac’s Refi PossibleSM). Effective June 5, 2021, these loans became eligible for Arch MI mortgage insurance when all Fannie Mae or Freddie Mac underwriting requirements for their programs are met. The loan being refinanced is insured by Arch MI.

All remaining COVID-19-related temporary underwriting requirements apply. No other Arch MI published underwriting requirements apply. For more information, read Arch’s latest Customer Announcement, CA 2021-03.

Titlegenius, by Radian, is a direct-to-consumer service that provides a simple, transparent, and secure way to order title insurance and closing services online. The first in a series of “genius”-branded services Radian is bringing to market to reimagine the way customers interact with the real estate services market. Read the press release for more information.

PennyMac posted information on the release of Fannie Mae RefiNow Option in Announcement 21-42

First Community Mortgage posted adjustments that will apply to all Second Home and Investment properties in Correspondent Announcement 2021-10 and Wholesale Announcement

2021-13.

FCM posted revised Qualified Mortgage (QM) in Wholesale Announcement 2021-11 and Correspondent Announcement 2021-9.

Flagstar is updating and preparing its system requirements to offer Fannie Mae RefiNow, read Memo 21072 for details.

Caliber Home Loans will be aligning with the Revised QM Rule PSPA requirements announced by Fannie Mae Lender and Freddie Mac Bulletin to be eligible for purchase by Caliber. There will be no exceptions to the deadline dates. And Caliber no longer requires the COVID-19 Borrower Attestation.

Capital markets

I’ve published something like 5,000 of these commentaries, so it’s often difficult to not sound like a broken record. That being said, I’ll repeat what I said yesterday. Why didn’t rates move on the day? No reason in particular. U.S. Treasuries ended Tuesday on a flat note despite a whole host of economic data for buyers and sellers in the bond market to digest. We saw a hotter than expected PPI report for May, but weaker than expected May Retail Sales, suggesting Americans are starting to shift more of their spending to services as the economy reopens.

True, inflationary pressures have been building as we emerge from the pandemic, which have been fueled in part by extensive fiscal and monetary support. Speaking of which, the FOMC Statement will be released this afternoon. The debate is whether it’s time to consider slowing the pace of emergency asset purchases because of the economic rebound so far. There are growing expectations that the minutes will indeed show indications of an impending reduction of scheduled asset purchases. Remember, as recently as the March FOMC meeting, the dot plot showed only four of 18 members looking for a hike next year.

Yup, while experts argue about inflation being here or not, rates aren’t doing much. U.S. economic data continues to support the ongoing narrative of elevated demand bumping up against limited supply; the result of which is inflation. Consumers have pent up demand for the goods and services they did without in 2020 and are supported by fiscal and monetary policies that are likely to remain in place through the remainder of the year. The Federal Reserve is not expected to announce any major changes to the fed funds rate following their meeting this week although the markets are looking for guidance on when the committed may begin scaling back special programs and asset purchases as the first phase of tightening. Consumer inflation was up 5.0 percent over the last twelve months with energy, used cars, and transportation costs driving the headline higher. Meanwhile unemployment claims continued to trend lower reaching a post-pandemic low of 376,000. In total, 15,349,465 people were receiving some sort of unemployment insurance for the week ending May 22.

Ahead of the Fed, today’s economic calendar is already underway. Mortgage applications increased 4.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending June 11. The previous week’s results included an adjustment for the Memorial Day holiday, and were thus potentially distorted. We’ve also received May import/export prices (+1.1, +2.2 percent) and housing starts / building permits (1.572 million on an annual rate, weak at +3.6 percent, and 1.68 million). On the demand side, the Desk will conduct two operations targeting up to $4.9 billion 30-year 2 percent and 2.5 percent across GNIIs and UMBS30s. We begin the day with Agency MBS prices nearly unchanged and the 10-year yielding 1.49 after closing yesterday at 1.50 percent.

Last night I went into a shop here in St. Croix, thinking about having my ear pierced.

I walked up to the counter and said, “I’d like to get my ear pierced to celebrate spending time here. How much will that cost?”

The shopkeeper replied, “It’ll be $20, plus the cost of the earring you get. If that works for you, you can go pick out the earring while I set up to pierce your ear.”

I wandered off to look through the options when another guy walked in. He was dressed in shabby clothes, had a peg leg, a parrot on his shoulder, multiple piercings, and a sword slung at his waist. He walked up to the counter and growls, “Yar, I think it be time to get another set of holes in me ears. How much be it for both?”

The proprietor responded, “That’ll be $2.”

The pirate walked away to go find just the right pair of earrings to match up with his existing jewelry.

Hearing this, I came back up to the counter and said, “Hey, what’s the deal? You’re charging me $20 for one ear, but that other guy gets both ears for just $2?”

The shopkeeper replied, “Well, that’s because he’s a buccaneer…”

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, “The Secondary Market’s Presence in the Primary Markets”. 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 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.)