June 20: LO jobs; U/W, LOS, appraisal mgt., broker, automation products; Freddie & Fannie news; housing starts skyrocket!

I am fortunate to travel around some (no, I am not on the missing Titanic tourist submarine, nor personally shepherding the new Credit Trigger Bill in MA), and am in the Bay Area to give a speech on the eve of the Summer Solstice, and am reminded of the passage of time and how my skill sets have become outdated. I can refold a map correctly, unknot curly telephone wire to get all the curls facing the right way, and can cover a textbook with a brown paper bag. I know how to write in cursive. But I don’t know why cars don’t need to warm up anymore, or why my cell phone doesn’t work in the guest bedroom. I barely understand how electricity actually works, aside from my Mom telling me not to poke my fork in the electrical wall outlet. But others have a better grasp of it, and it’s a great time to be one of the 1.032 million electricians in America, the most ever, and LOs pay attention to changes in demographics and job markets. Electricians’ pay has skyrocketed, averaging $37.51 per hour for an annual wage of around $78,000, a 7.8 percent year-over-year increase. A boom in the housing market plus the passage of the Inflation Reduction Act in 2022 (which steers $369 billion to beefing up energy infrastructure) is driving the golden age of electricians. (Today’s podcast can be found here and this week’s is sponsored by MCT and its Hedge Advisory division. Download their recently released whitepaper, Mortgage Pipeline Hedging 101, for more information on hedging in today’s market. Today’s includes an interview with MCT’s Andrew Rhodes on secondary market happenings in the current rate environment and the importance of loan sale automation.)

Employment

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Nations Lending Continues Growth with Highest Ever Rank on Scotsman Guide! Nations Lending has once again been recognized by Scotsman Guide as one of the Top Mortgage Lenders in America. The company secured the 42nd position on the 2023 list, which was based on its impressive volume of nearly $3 billion. This marks the eighth consecutive year that Nations has been included in the ranking. Over the last few months, the company has introduced a slew of new products and improvements that have seen immediate success. This includes the RIO, a Nations investor-product-focused on generational wealth for investors with simplified qualifications, a temporary buydown solution for the Jumbo product line, giving Nations an advantage in promoting payment solutions in the early years of the loan, enhancements to its agency product line-up with lowered FICO scores to 500 for FHA/VA loans, and focusing on a borrowers Positive Rent Payment History for borrowers that are past tenants. Any IMB interested in joining Nations can reach out to John Owens.

Who onboarded over $1B producing LO’s in May-June? Who won a Regional HW Tech100 Award? Who made the Scotsman Top Lenders list …again? Who made 2023 National Mortgage News Best Mortgage Companies to work for? Who was the 4th fastest growing company Inc Regionals Rocky Mountain Region? Who developed a highly efficient proprietary LOS that allows LOs to do more volume with less effort? Who has a business model that is sustainably good and profitable in any market? …heard enough yet? Join us and we’ll revolutionize the mortgage industry together. Reach out to Josh Neumarker at Canopy Mortgage for more information 888-696-9076.

“Are you frustrated as a retail loan officer or mortgage banker with the lack of flexibility to provide custom loan options? Take control: follow the lead of an estimated 24,000 MLOs like you who have joined the wholesale channel in the last year. Whether you open your own independent mortgage brokerage or join a team as a loan officer, you’ll have the ability to provide your clients with the personalized solutions they need. Contact our team at BeAMortgageBroker.com today and you’ll be well on your way to a more fulfilling tomorrow.”

Broker and lender services, products, and software

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National Homeownership Month means new opportunities for your business. June is National Homeownership Month and ICE Mortgage Technology® is sharing resources all month long to help mortgage professionals put more people into homes. Did you know, according to their 2023 Borrower Insights Survey, fewer than one in 10 borrowers wanted a fully digital experience? By leveraging mortgage automation, you can streamline the previously manual steps that slowed your team down, and ensure they have time to deliver the high touch experience your borrowers are looking for. Click here to learn how ICE Mortgage Technology can partner with you to streamline the various steps in the mortgage process.

It’s industry belief that transferring your loans to a new subservicer is slow, risky, and just too scary to even try. As a result, most originators have FOMO (Fear of Moving On), but Servbank clients found there was no need to fear the move because Servbank has the loan transfer process down to a science. They handle dozens of client transfers per year, with a fully assisted, stress-tested transfer process that is entirely transparent. Once aboard, all loans get the same compassionate, compliant servicing that has turned Servbank into one of the nation’s Top 10 Subservicers. But the proof isn’t in the claims, it’s in the numbers. In April 2023, Servbank efficiently transferred 175,000 loans timely, with imperceptible disruption to the customers or their existing clients. So, if you have a FOMO from your current servicer, let Servbank share all the details with you on how they can make transferring your loans a seamless and worry-free process that will enhance your brand and improve your bottom line. Ready to learn more? Visit here.

AFR Wholesale® (AFR) is incredibly honored and blessed to be providing homeownership for over 25 years. As a leading manufactured home lender amongst wholesalers and to be a leading FHA 203k lender for sponsored originations and an innovator in construction and renovation lending, AFR is steadfast in providing more homeownership opportunities to more families. AFR wants to teach the masses how to leverage programs such HomeOne®, Home Possible®, Home Ready®, and a full suite of other lending products to help diversify your lending toolkit. You still have time to join! We invite you on June 21st at 2 PM EST. to join AFR and special guests from Fannie Mae to learn about HomeReady® and how to leverage this program. Register Today! This is a live webinar and will not be recorded, so sign up today and don’t miss it! Contact AFR by going to afrwholesale.com, email sales@afrwholesale.com (1-800-375-6071).”

One of the ways Xactus is serving to innovate and innovating to serve is with its powerful residential and commercial appraisal valuation management technology, Appraisal FirewallX. It shortens appraisal times and lets you manage your own appraisal process. Appraisal FirewallX also improves efficiency because it is integrated with numerous LOS systems such as Encompass by ICE Mortgage Technology. Cambridge Savings Bank has been using Appraisal FirewallX since it launched Encompass in 2017 and it has enabled the Cambridge team to maintain partnerships with its approved appraisers and move away from a very inefficient manual process to a highly automated one. It considers Appraisal FirewallX’s customer service to be top notch too. In fact, it’s one of Cambridge’s top vendor relationships. See how this innovative technology solution can improve your appraisal process and how Xactus is advancing the modern mortgage. Email us for a demo.”

Integrated LOS and POS systems are essential to creating the quick, easy, and fully digital mortgage application process that today’s borrowers expect. Learn how MeridianLink® Mortgage LOS is leading the charge toward better borrower experiences in its recent ebook on the importance of integrated systems in creating an automated online application process from start to finish.

Cover your staff’s time off with Maxwell’s on-demand underwriting. As a mortgage professional, you know the value of an uninterrupted workflow. Maxwell Fulfillment services empowers you to seamlessly maintain your operations while your team enjoys time off this summer (and beyond). With direct integrations to your LOS, our experienced onshore team of underwriters provides a seamless, fast, and cost-effective experience. To learn more about Maxwell’s on-demand underwriting or other fulfillment services, click here or schedule a call today. 

Freddie Mac & Fannie Mae: the GSEs keep truckin’

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The two Agencies, under the guidance of the FHFA, continue making the changes that the industry keeps following, given 60-70 percent of production follows their processing and underwriting guidelines. This includes the increasing issue of climate change.

The Federal Housing Finance Agency (FHFA) issued its 2022 Report to Congress. The statutorily required report provides information about FHFA’s 2022 examinations of Fannie Mae, Freddie Mac (the Enterprises), Common Securitization Solutions (CSS), the 11 Federal Home Loan Banks (FHLBanks), and the FHLBanks’ Office of Finance.

Of note, the FHFA increased its efforts to address the climate-related risks faced by Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The agency’s latest annual report to Congress outlined the progress made by FHFA’s eight climate-focused working groups.

Fannie Mae’s Appraiser Update June 2023 edition focuses on certain appraisal quality issues and share examples of ways they identify and mitigate the resulting risks. Also, several recent appraisal-related policy changes and the Uniform Appraisal Dataset (UAD) and Forms Redesign project are discussed.

Fannie Mae implemented 2023 area median incomes (AMIs) in Desktop Underwriter® (DU®), Loan Delivery, and the Area Median Income Lookup Tool. There was a 7.73 percent average increase for 2023, meaning more borrowers may meet AMI requirements. AMI is also used to determine eligibility for certain loan-level price adjustment (LLPA) waivers. Lenders may use this information to determine income eligibility for HomeReady® and other loans with AMI requirements.

PennyMac Announcement 23-44: Freddie Mac Bulletin 2023-11 Credit Underwriting Updates.

Fifth Third Correspondent Lending Communiqué edition 2023-5-6.16.23 provides information on Agency and FHA Products Temporary Buydowns, Investment Property QM Points and Fees, Long Term Lock Updates.

With SEL-2023-04, Fannie Mae announced multiple Selling Guide changes, including updated requirements related to shared equity and shared appreciation, subordinate financing, and alternatives for tax filing documentation. View AmeriHome Mortgage Announcement 20230511-CL for details.

Pennymac is aligning with Freddie Mac’s selling guide updates on property appraisals and condominium projects. Updates are listed in Announcement 23-41: Freddie Mac Bulletin 2023-9 Property Appraisals and Condominium Project Updates and are effective immediately.

PennyMac posted Announcement 23-43: Updates to Conventional LLPAs. Pennymac updated Conventional LLPAs effective for all Best Efforts Commitments taken on or after Tuesday, June 13, 2023. The “Purchase Special” will improve by 0.10 for loan balances <= $175,000.

Citizens Correspondent National Bulletin 2023-13 includes information on Conventional Conforming Product and All Product Updates. See the bulletin for additional information and all lock, delivery, and purchase by dates, if required.

Of course, the private mortgage insurance companies, like Arch, Enact, Essent Guaranty, MGIC, National Mortgage Insurance, and Radian, are very interested in anything that the Agencies are up to or impact their business. Seth Appleton, President of U.S. Mortgage Insurers (USMI), released a statement on the U.S. Senate Reintroduction of The Middle-Class Mortgage Insurance Premium Act of 2023 sponsored by Senators Maggie Hassan (D-NH) and Thom Tillis (R-NC).

Capital markets:

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Okay class, let’s review. Our Federal Reserve (the “Central Bank”) doesn’t want to be seen as weak on fighting inflation. We learned last week that consumer prices rose 0.1 percent in May, in line with many analysts’ expectations. Year over year numbers are always rolling, dropping off the one 13 months ago. Sure enough, over the last year, prices were up 4.0 percent versus 4.9 percent in April. This marks the lowest annual inflation reading in over two years. Are we having a “soft landing?”

Shelter costs continue to buoy the headline number, however rental prices have moderated significantly from last year’s large increases. Consumer expectations for future inflation also fell to their lowest since March 2021. Meanwhile, the Federal Open Market Committee kept the Fed Funds Rate steady at a range of 5.00 – 5.25 percent following its June meeting. While this was in line with expectations, the dot plot released following the meeting indicates the committee still feels more tightening is appropriate this year. Officials continue to reinforce their expectations for rates to remain elevated for longer than some analysts’ forecasts. Employment and housing remain significant headwinds to inflation subsiding to levels where the Fed would consider declaring an end to the current tighter policy cycle.

After yesterday’s holiday, markets resumed today with Philadelphia Fed non-manufacturing figure for June (-16.6), as well as May housing starts and building permits (+21.7 and +5.2 percent, respectively, an enormous jump). Two Fed speakers are currently scheduled, St. Louis President Bullard and New York President Williams. The bond market, and therefore interest rates, begins the trading week little changed from last Friday: the 10-year is yielding 3.75 after closing last week at 3.77 percent, the 2-year at 4.71, and Agency MBS prices unchanged.

How ‘bout a little numbers trivia for a Tuesday?

What is the smallest number that contains the letter “a” when spelled out?

Answer: one thousand. Considering “a” is one of the most common letters in the alphabet, it’s surprising how rare it is in our numerical names.

The smallest number where “c” makes an appearance? One octillion! (27 0’s)

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, “Compensation: Ever Changing.” 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