June 29: MLO jobs; margin improvement, non-QM, sec. mktg. tools; FGMC fallout; California MBA weighs in; broker petition

We’re all trying to save a few pennies. We have the increase in postal rates coming soon and perhaps pick up a roll, or ten, of Forever Stamps. It’s not like they have an expiration date, unlike, apparently, lenders. Remember names like AmeriLoan, Countrywide, PNC, WaMu, Home Savings of America, Fleet, Great Western, World Savings, Associates, Nat City? “We are writing to share an update on _____’s efforts to address significant, unexpected, and unprecedented economic pressures facing the entire mortgage market. As you know, the mortgage market faces mounting macroeconomic challenges, including increasing concerns about the availability and cost of credit, the end of the refinance boom, the systemic impact of inflation and geopolitical issues, and reduced demand for purchase money mortgages. As part of our efforts to address these challenges, _____ will no longer purchase correspondent loans… We value our relationship with you and appreciate your patience and understanding as we seek a comprehensive solution to these issues. We will provide you with an update when there is definitive news to share.” In this instance it was First Guaranty Mortgage Corporation’s Correspondent group that sent it out, but it probably won’t be the last we see. Those impacted can always post their resume for free here, and anyone can view them for several months for a nominal fee. (Today’s podcast is available here and this week’s is sponsored by Ignite Integration Solutions, Inc., a custom software provider that has created industry leading LOS CORE integrations in addition to a library of Encompass base tools and plug ins, and custom API development with our team of 100% on shore developers to support both Mortgage Lenders and Vendors as clients and partners.)


Originator Careers


Evergreen Home Loans™ is committed to helping loan officers thrive in any market. An industry leader in innovative home buying programs and product depth, the company pioneered the groundbreaking cash offer program, CashUp® by Evergreen, to meet the demands of market challenges. Staying nimble, Evergreen recently launched two new products: StepUp by Evergreen and Lock-n-List. StepUp by Evergreen provides homebuyers a solution to step into their dream home with a strong offer before selling their current home, and Lock-n-List helps homebuyer listings stand out with a locked-in rate. Quick reaction as well as innovative resources and programs provide loan officers with opportunities to develop new agent and customer relationships and close more transactions. Loan officers seeking a forward-thinking, nimble company that will help them grow their business in any market should visit the Evergreen Careers page.

Assurance Financial, an aggressive and growing full-service mortgage banker originating in the SW, SE, and eastern U.S., is continuing to expand across our lending footprint. We have opened three new markets and branches in 2022 so far and want to meet more great people! Our commitment to providing exemplary app-to-close service and a great technology stack has been the difference-maker during the past few months, especially to our Realtor, builder, and purchase money clients. We are looking to add dynamic entrepreneurial-minded producing branch managers in all good markets: Southeast, Southwest, and Eastern states. If you a true leader and want to go to the next level with your career; lead, run and grow your own market; close all your loans on time; and, enjoy a great life/work balance environment, contact Paul Peters, CMB or click here for more details.

When the going gets tough, the tough keep innovating. There’s no doubt today’s market has created new obstacles. Great lenders, however, find ways to push forward regardless, and Embrace Home Loans is doing just that. Right now, the company’s core value of innovation is fostering growth and excitement through its state-of-the-art eSNAPP mobile app, which is revolutionizing the way borrowers get mortgages. “eSNAPP gives our customers the power to choose when, where and how they want to interact with us, even letting them upload documents and sign disclosures while on the go,” says Steve Adamo, the company’s president, national retail production. “It also gives our loan officers greater flexibility to generate business in a more challenging market. In times like these, our core values, our teammates, and our customers mean everything to us.” Want to get in on the excitement? Embrace is hiring! For more info, contact Adamo at 401-524-5733.

Are you enthusiastic about building your team and empowering them to be the best they can be? We know that as a leader you have many goals and expanding your team is likely a priority. Successful recruiting takes continuous effort, systems, and a calculated strategy. That’s why New American Funding has a strong National Business Development and Recruiting Team designated to support your growth. From coast to coast, we have award-winning national and regional teams determined to help you succeed. If you’re ready to partner with a company that provides strategic support to help you grow, we’d love to talk to you. Contact Jordyn Dexter today! 800-450-2010 x7651. EOE

Benjamin Franklin said, “when you’re finished changing, you’re finished.” What are you doing to keep up with 2022’s changes? If you haven’t already, we recommend taking a peek at Canopy Mortgage – A better business model that provides Mortgage Loan Officers with ultimate control, unmatched pricing and a proprietary Loan Origination System that promotes highly efficient loan processes and faster closings! Finally, you can give your clients better pricing AND you can make more on your deals. Canopy provides a sustainable mortgage business model that’s good for everyone. Interested in learning more? Reach out to Josh Neumarker at Canopy Mortgage for more information 888-696-9076.

Lender and TPO programs, products, & services


Younger Gen Y Millennials and rising Gen Z are making their mark on the homebuying landscape. Are you ready for the generational shift in homebuying? Download part three of our three-part series Understanding the Next Generation of Home Buyers, The ABCs of Gen Y and Z for tips on how to reach this emerging cohort of home buyers.

Are you planning to visit Dana Point (arguably the dolphin and whale-watching capital of the world) next month for the California MBA Western Secondary Conference? If so, the Optimal Blue team will be ready to meet with you to discuss your secondary marketing strategies, and maybe even lend you a pair of binoculars. As a proud platinum sponsor and member of the California MBA, Optimal Blue will be hosting one-on-one meetings throughout the event (July 25–27). We invite you to request a meeting with one of our experts to take advantage of this opportunity to discuss ways to automate your secondary marketing functions and boost competitive strategies.

Axos Bank continues to accelerate in Non-QM Lending! Our National Wholesale and Correspondent Lending Division is designed for top producing originators in luxury markets. With loan amounts up to $30 million, flexible portfolio underwriting, and mortgage rates starting as low as 5.500%, we are confident we can help you grow in the second half of 2022! Top programs include Pledged Assets Lending, DSCR, Cross-Collateralization, Bridge-to-Sale, Deferred Interest, and Bank Statement Qualifying options. Visit our website to learn more about Wholesale and Correspondent Portfolio Lending and Residential Warehouse Lending opportunities. Or contact J Shoop, National Sales Director, to schedule a meeting with Axos Bank.

Lenders succeeding in 2022’s challenging market share one clear advantage: Their per-loan economics are strong. Mortgage solutions provider Maxwell measurably improves margins with efficiency-boosting features. Using leading technology, Maxwell Point of Sale reduces costs by 21 BPS per loan, helping lenders combat shrinking margins and empowering them to reliably outperform the market. Worried about the implementation process? Maxwell Point of Sale is lightning fast to deploy, with time-to-impact averaging less than 4 weeks. Lenders: Now is the time to rise above the competition with proven technology that delivers profitability even during market downturns. Click here to learn more about Maxwell Point of Sale, or set up a meeting to chat with our expert team today.

The result of a company closing a division


I have received many notes about First Guaranty closing, and this one is representative of them. “Rob, I am a non-delegated Correspondent with an FHA Non-Supervised Lender Title II status and relied on FGMC to underwrite a $1.4m FHA purchase loan. We were cleared to close and closed the PSA on Friday June 17th. Last Friday the 24th the loan was cleared for purchase but the division shut down the same day. Since it is/was owned by PIMCO I expected a lot more from FGMC, with at least an orderly wind down. Everybody says, ‘Pay attention to your counterparty risk.’ Really, FGMC was backed by the people that run the biggest bond fund in the world so even last Thursday I still would have assumed that they could make money even when others couldn’t and that they were solid.

“FGMC shutting down cold like this is leaving me in a very difficult situation since they did the FHA underwrite for this loan. I am really in a tough position and am not sure what I am going to do to resolve this. I keep running into roadblocks if I try to sell this to a new investor and from my understanding, if I can’t get FHA insurance and I need to keep the loan on my books, then I need to refund the $24k MIP and the ongoing $1,100 monthly MI to the borrower. Thanks for letting me vent.”

Support your local sheriff


Uh, I meant organization. Vendors and lenders are grappling with the drop in revenue, margin, and volume. But organizations are as well, and we should not forget, despite the belt-tightening that is occurring, that these organizations fulfill an important role in protecting our industry.

I received this note from Susan Milazzo, the CEO of the California MBA. (Know that California accounts for 20-25 percent of the nationwide production of home loans, and has members of all types across the nation.) “Rob, one great part about being in my role for this many years is that I have a great relationship with so many of our lender members. Of course, they’re all seeing the same thing: increase cost of production, decreasing margins, ‘right sizing’ their companies, and holding on until the market stabilizes. Many share that they’re leveraging their tech stacks to create efficiencies and drive costs down as well as looking at new products to offer.

“While the market is creating these pressures on the industry, the California MBA has been on the front line on a few significant legislative issues this year! First, we all saw the legislation that would have implemented CRA requirements for all IMBs in California. That measure was dramatically amended to become a bill that requires our regulator to study the IMB loan profiles to LMI and minority borrowers and evaluate what’s been successful in other states. Our industry has very good news to share in this space! In California, IMBs accounted for 83% of home purchase loans to low-and-moderate income borrowers in 2020 (data source:  MBA).

“We are also working on SB 1323, which if enacted, would require that an equity sale be made by a licensed realtor and by publicly listing the property for sale on the California Multiple Listing Service with an initial listing price at the property’s appraised value. The bill in its current form will create unnecessary delays to the foreclosure process and could increase the cost of lending/servicing in the state in a market where interest rates are rising and supply is insufficient. The California MBA and the national MBA are working vigorously to oppose this measure and protect over 100 years of foreclosure law. This industry never has a dull moment, and we know that it is our job to provide strong representation for the real estate finance industry and continue to be a valuable resource to our members.” Thank you, Susan, and contact her about membership opportunities or sponsoring the upcoming Western Secondary next month in Orange County.

A broker’s petition to the CFPB


Bill Kidwell, founder of IMMAAG, Inc. the advocacy and compliance service for small broker shops is asking everyone who has an interest in fairness and consumer choice to go to the regulatory comment page and comment on a petition filed by IMMAAG (Docket # CFPB 2022-0027) related to inequities singled out on only the 15,000+ traditional non-self-funding broker companies and their consumers.

By way of background, the petition published on 6/1/2022 asks the CFPB to reconsider specific restrictions that affect only one segment of the market and that segment’s consumers. Bill’s petition takes issue with the fact that this segment and its customers have been treated unfairly by double counting lender paid compensation as part of the QM 3% Cap, not being able to counter-offer to applicants once an LE is issued, not being able to offer incentives except in the case of borrower paid transaction and not being able to reduce MLO compensation for the benefit of the consumer. All the while all other “creditors” are treated differently. You can read the entire letter that has been shared with both the current and previous CFPB directors at www.immaag.com and Bill is just asking that you comment on the issue before the closing date of August 2, 2022. Bill can be emailed here (303-674-1200) if you have questions about the petition or the issues.

Capital markets: inflation still the focus


Are you becoming more nervous about the economy? Others are too, apparently. A drop in U.S. consumer confidence driven by inflation concerns (what else?) pressured risk assets yesterday. Conference Board’s June measure of expectations, which reflects Americans’ six-month outlook, fell to the lowest in nearly a decade and now sits at a level that is likely to portend weaker growth in the second half of the year, raising the risk of recession by year end. But New York Fed President Williams and San Francisco Fed President Daly played down the risk of a downturn yesterday, insisting that a soft landing is possible, even with another 75-basis point rate hike on the table next month.


We also saw yesterday that home-price growth in the U.S. started to slow, but stayed elevated, in April, which was before the Fed really started pushing up rates. House prices rose 1.6 percent month-over-month and 18.8 percent year-over-year according to the FHFA House Price Index as the inventory of homes on the market remains low. Separately, the Case-Shiller Home Price Index rose 1.8 percent month-over-month in April and 21.2 percent year-over-year. The report appears to indicate that increasing mortgage rates had yet to offset demand enough to deter the strong price gains happening across the country.

The New York Fed released the latest agency MBS purchase schedule through July 14 yesterday afternoon, and it is targeting up to $6.8 billion during this cycle, up from $6.2 billion previously. The Desk has added the Ginnie Mae II 30-year 5 percent coupon this cycle. No other changes were made to coupons and agencies versus the prior schedule, but the total amount targeted for each specific coupon has changed compared to the last cycle as the bank’s focus moves up the coupon stack. Monthly roll off (early payoffs) is expected to fall to around $25 to $30 billion going forward. Today, the Desk will purchase up to $922 million UMBS30 4 percent through 5 percent.

Today we’ve learned that last week’s mortgage applications increased 0.7 percent from one week earlier, according to data from MBA’s Weekly Mortgage Applications Survey. The Refinance Index is 80 percent lower than the same week one year ago while purchases are 24 percent lower than the same week one year ago. Refinances sit more than 60 percent below the historical averages. We’ve also received the final look at Q1 GDP (-1.6 percent, old news), including the Core PCE Deflator. Two Fed speakers make appearances at the ECB Forum on central banking in Portugal: Cleveland Fed President Mester and Chair Powell. We begin the day with Agency MBS prices better by .125-.250 and the 10-year yielding 3.14 after closing yesterday at 3.21 percent.

After my prostate exam, the doctor left.

Then the nurse came in.

As she shut the door, she whispered the three words that no man wants to hear:

“Who was that?”

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).


(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.)

Rob Chrisman