I have a 30-year-old shirt from Tuttle & Co. with this printed on it: “Don’t confuse brains with a bull market.” Aside from some occasional unexpected jolts, rates have been coming down since 1981, for forty years. (Click on “max” near the top if you’re looking at the graph.) Is your business interest rate independent? Are you girding your loins? How is your overhead? If lenders are selling into the same MBS market, executing at the prices everyone else is, will the victors be the lowest cost producers? One component of that is closing costs, and ClosingCorp released its first national refinance closing cost report that showed the national average closing costs for a single-family residential property refinance last year were $3,398 including taxes, and $2,287 excluding taxes. (Think lender’s title policy, appraisal, settlement, recording fees, and various state and local taxes.) The prudent use of technology is also helpful, and today’s audio version of the commentary is sponsored by Black Knight and features an interview with Bob Brandt, SVP of Origination Technologies Division, focusing on the changing mortgage technology landscape, and how mid-market lender are using high-performance technology, data, and analytics.
New Year: Fresh Start! Are you an experienced Wholesale Account Executive wanting to make a change? Looking for a company with an entrepreneurial mortgage culture of collaboration, team-based success, and the security of working for a bank? Then it’s time to call FLCBank’s Bob Eisendrath, Strategic National Account Manager (414.350.3986). FLCBank is agency approved and has a suite of bank jumbo products along with IO options on both conventional and jumbo loan balances. In addition, you have access to offering warehouse lines to your non-delegated clients. “Come join our bank and have fun again with a team environment where everyone is passionate about delivering an exceptional customer experience with every loan. Open territories are GA, TN, AL, NC/SC, VA, MA, IL, OH, MI, AZ, TX, CO. We offer competitive compensation, an energized culture, and an experienced operations & support staff. FLCBank is an Equal Opportunity/Affirmative Action Employer.”
“Women’s History Month is a time to reflect on the accomplishments of the women at Caliber Home Loans and beyond. Women have been trailblazers in the mortgage industry contributing to our success here at Caliber and around the country. At Caliber, women serve in the highest ranks of the company like Chief Information Officer, Chief Risk Officer and Head of Servicing and Operations. One of our proudest accomplishments is employing a diverse mix of women to mirror the communities we serve. We’ve also established the DREAM employee resource group. This helps our women team members network and help further their professional development. We’ll continue to lead by example by supporting women-led foundations. Most importantly, we’ll remain committed to fostering the careers of the dynamic women who work at our company. Join a company that empowers women at every level. To be immediately considered for Operations or Sales positions, email Jonathan Stanley or Brian Miller, respectively.”
Top 10 employer, rapid turn times, and unmatched no-cost marketing platform! Cancel your third-party marketing tools. Geneva Financial has integrated reviews, listing sites, lead dialers and more into its marketing platform at no cost to branches or loan officers. The lender has just been named a “Top 10 Large Mortgage Company to Work For” by National Mortgage News. Geneva was also recently named the #1 Mortgage Lender by consumers in Arizona, home of their Corporate Office, on the annual Ranking Arizona Consumer Poll of best businesses. Geneva Financial is filling Branch Manager and Loan Officer positions in 44 states. With the recent addition of a National Operations Manager focused on industry-leading turn-times, Geneva is committed to closing your deals while paying you more! Explore Branch and Originator opportunities at www.GenevaFi.com/opportunity.
Spring has sprung and ClearEdge Lending continues to flourish. With mortgage brokers seeking new avenues of business, ClearEdge Lending is well positioned to help cultivate their portfolios and make their profits blossom. Non-QM products are critical in today’s lending environment and ClearEdge Lending is a leader in this space. Non-QM loans close quickly at ClearEdge, with loan set-up, conditional reviews, even final underwriting all taking as few as 1 to 2 days. ClearEdge has thrived in 2021, seeing an average funding increase of 33% MoM since Jan 1. And ClearEdge is quickly growing in the Northeast, expanding its presence in the states of Pennsylvania and New Jersey, and Texas lined up for April. ClearEdge is also increasing its staff, planning to add almost 100 new employees by the end of 2021. Join a winning team, become an approved broker partner, or apply for an open position at ClearEdgeLending.com.
Lender services and products
“COVID change fatigue, we all have it. What’s next? As we sit at a crossroads in our industry, with continued rumblings of foreclosure tsunamis and surges in delinquency, are we confident that we’ve fully leveraged the opportunities from 2020? Clarifire’s recent blog explores lessons learned and rising best practices that have come out of pandemic disruption. It also delves into how the interrupted servicing landscape has created a new paradigm in the mortgage servicing business, bolstered by remote processing, 24/7 no-touch services, eMortgage capabilities, and advanced web services. CLARIFIRE® is here to help your organization transcend the chaos from pandemic disruption with today’s modern automated workflow application. Partner with the best, and we’ll show you how you can future-proof your organization with CLARIFIRE®, truly BRIGHTER AUTOMATION®.”
Analyzing income is easier this year with cash flow worksheets that give you an accurate picture of your self-employed borrowers’ income. MGIC’s editable worksheets help you analyze cash flow, liquidity, rental income, and comparative income. And best of all, they’re auto-calculating! Cash flow worksheets for tax year 2020 are now available: download them today.
Sprout Mortgage, the leading nationwide force in non-QM residential lending, announced a further effort to make its Premier Jumbo Full Doc program the simplest prime jumbo program in the mortgage industry. Available for jumbo residential applications loans begun anytime in March and ongoing, Sprout’s new Automated Underwriting System Express (AUS Express) feature will provide a streamlined employment and income documentation approach for its Premier Jumbo Full Doc Program. AUS Express eliminates tedious and unnecessary Appendix “Q” documentation. This means that for Desktop Underwriter (DU) recommendations marked “Approved/Ineligible” because of a loan amount exceeding agency limits, the new Sprout AUS Express can approve the financing with employment and income documentation that follows established guidelines from Fannie Mae, along with Sprout’s LTV, reserve, and appraisal requirements. Sprout’s loan programs are accessible through many widely used mortgage product and pricing engines. For more information, visit www.sproutmortgage.com or call 844-664-6100.
Introducing the Freedom Mortgage Wholesale Division’s Big Spring Purchase Tee Off! Offer a hole in one experience with every new Conventional and FHA purchase! Enjoy 48-hour Priority Purchase Underwriting and a (.250) LLPA incentive for all Conventional and FHA purchases. To learn more, check out our rate sheet or email Freedom Wholesale to have an Account Executive contact you.
The UWM/Rocket/Fairway saga continues, especially interesting as two publicly held companies, both in plain view of the SEC, are stating two entirely different things which some would view as being able to impact stock prices. UWM has claimed that over 10,000 brokers have opted to go with UWM, and avoid Fairway Independent and Rocket, while Rocket says that this is blatantly false. And I have received several emails from brokers saying that they will never sign an agreement where they, and therefore the consumer, could be fined thousands of dollars and that contains this clause in 2.03: “The transfer or sale by Broker of a Mortgage Loan locked in by UWM during the lock-in period to another entity, shall constitute a violation of the Agreement, and the Broker shall be liable, and promptly indemnify UWM, for any loss sustained as a result thereof by UWM.”
Steve Jacobson, Fairway’s CEO, and former President of the Wisconsin Mortgage Brokers Association, wrote, “We continue to be thankful for the extra attention and business generated for Fairway’s wholesale channel in the last several weeks. We have never been more grateful for the added interest in Fairway Wholesale, and will do our utmost to continue to help our broker clients.”
Recall that Rocket Pro TPO EVP Austin Niemiec issued a statement addressing UWM’s press release, which says more than 10,000 broker shops agreed to its addendum. Niemiec says that UWM’s claim is “false and misleading” and also states that since UWM’s announcement of the addendum, Rocket is on pace to have the 10 best days in the company’s history.
PRMG Resource Center Update 21-06 discusses Disaster Notices, PRMG Appraisal Guidelines, updated Condo-PUD Project Review Manual, and the addition of its Principal Reduction Policy.
Plaza Home Mortgage shared a link to a recent Forbes article on Reverse mortgages. “[T]he HECM program allows eligible homeowners to benefit from unusually large house price appreciation without bearing the risks associated with low or no appreciation. Unusually low interest rates increase the benefits.”
Mortgage Solutions Financial has suspended Conventional Investment Property or Second Home lock requests for 60 days.
This loanDepot Weekly Announcement discusses various topics simplifications and enhancements to EAD Visa Category Matrix, Louisiana Disaster Announcement, Fannie Mae and Freddie Mac COVID-19 Guidance extension, Fannie Mae’s Power of Attorney and DU Risk Factor updates.
First Community Mortgage’s conforming loan 2nd Home and Investment Property loan level price adjusters have increased by 200 basis points (BPS). FCM also posted information regarding tax transcript requirements for all self-employed borrowers and all other income types in its Correspondent Announcement 2021-4 and Wholesale Announcement 2021-6. And it amended its previous VVOE guidelines in Correspondent Announcement 2021-5 and Wholesale Announcement 2021-7.
Plaza Home Mortgage reduced its minimum FICO requirements to 600 for FHA and VA programs and 620 for USDA. Also, its FHA 203(k) program has a new reduced minimum FICO of 620.
United Wholesale Mortgage (UWM) added its new product, Prime Jumbo, to rate sheets. Prime Jumbo combines the best of two previously offered jumbo products, its High Balance Nationwide, and Jumbo Bank Buster.
American Financial Resources, Inc. has enhanced its One-Time Close Construction-to-Permanent (OTC) program by increasing the maximum amount of initial disbursement for land acquisition or payoff to $150,000, doubling the prior initial disbursement limit. AFR’s OTC program is an all-in-one financing option that allows eligible borrowers to combine the construction financing, lot purchase or land payoff, and permanent mortgage loan into a single closing. OTC loans are available for manufactured homes, modular homes, and site-built homes.
Consumers and housing drive the U.S. economy, and last week investors ignored February’s drop in retail sales given January’s strong upward revision. They ignored the disastrous weather, and setbacks in manufacturing, but instead focused on the impending stimulus checks hitting consumers’ bank accounts. They’re more than double those that helped propel January’s retail sales, and investors have pushed bond prices down (and thus rates higher) in the belief that U.S. consumers will keep spending at a robust rate over the coming months. R-e-o-p-e-n-i-n-g!?
Manufacturing? It experienced a setback in February with output declining, but blame it on the weather and a global shortage of semiconductors. Demand for manufactured goods remains strong as evidenced in the Philadelphia Fed Business Outlook Survey which was at a 50-year high in March. As manufacturing deals with continuing capacity challenges, input prices are rising and more manufacturers are passing on costs.
Inflation will remain at the forefront of economists’ minds this spring as we head into a period where the 12-month lookbacks will be artificially high due to last year’s price drops, as well as real underlying inflation pressure that will make interpreting those numbers a challenge. The message from the Fed is that the upcoming bumps in inflation data will be temporary due to the calculation methodologies, but not all market participants are aligned given the recent trajectory of rates.
Speaking of which, the big news to close last week was the Fed Reserve announcing it will let the Supplemental Liquidity Ratio exemption expire on March 31st. The rule allowed large banks with greater than $250 billion in assets to expand balance sheets by exceeding leverage limits exempting treasury securities and deposits and was meant to bring stability to the market during the crisis last year. This was a catalyst for the record MBS holdings banks have had, and in addition to forcing equity raises it will certainly cause reallocation across their entire balance sheet to compensate including shedding MBS and treasuries. This could also result in lower buybacks and could require banks to raise more capital. Though part of what has been driving rates higher has been banks getting ahead of this expected change, it still triggered an aggressive selloff in rates and widening of the bid/ask spread.
Turning our attention to this week, the calendar is busy with many month-end releases, month-end supply, and increased Fed appearances now that the FOMC meeting is in the rearview mirror. Markets will receive some higher tiered housing-related data in addition to Markit PMI March flashes, personal income and spending, and Michigan sentiment.
Today’s economic calendar began with the Chicago Fed National Activity Index for February (falling to -1.09 from +.75). Later this morning brings existing home sales for February and several Fed speakers. Today’s MBS purchase schedule is tied for the smallest on the current schedule and sees the Desk purchasing up to $4.2 billion 1.5 percent and 2 percent across UMBS15s and UMBS30s. We begin the day with Agency MBS prices better/up .250 and the 10-year yielding 1.69 after closing last week at 1.73 percent.
(Thank you to Stephen S. for this one.)
Tommy took Michelle out for a romantic dinner where the conversation turned to the subject of marriage. Tommy had been saving for an engagement ring, but he was in graduate school and in dire need of a new computer.
Michelle was understanding, telling Tommy they had the rest of their lives to get engaged, so he should use his savings to buy a new computer instead.
During dessert, Tommy suddenly reached into his pocket and pulled out an engagement ring. Michelle was stunned, but after she collected herself, she looked up and prompted, “Well, don’t you have something to ask me?”
Tommy then got down on bended knee.
“Honey,” he said, “will you buy me a new computer?”
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