May 12: TPO products; CRM, pre-qual, retention, QC, marketing tools; upcoming events & webinars; markets focused on inflation again

If I had a dollar for every time someone called me a boring nerd, I’d have a mean daily income of $5.64 with a standard deviation of $1.25. Turning “boring” into “interesting” is something to be proud of. How about a hand-held miniature chainsaw or a shopping cart with a magnifying glass attached for reading labels? For loan originators, new and old, who think creativity has vanished from residential lending, maybe they should focus on the basics. This eBook has been recommended to me: “The Ultimate Borrower Communications Strategy for Mortgage Lenders.” I recently received this note from a successful loan officer. “Rob, my commissions in 2020 and 2021 were over $500k each year. In 2022 they dropped about 50 percent to about $250k. 2023 promises to be even lower, and I’ll be lucky to make $200k. Are you seeing this everywhere?” Yes, I am. But keep things in perspective. In the U.S., and certainly in the world, $200k puts you into top percentile, well above the middle class. Speaking of “the middle class,” according to Fed research, is saving less and high-cost credit card debt may be playing a major role. (Today’s podcast can be found here and this week’s is sponsored by SimpleNexus, an nCino company and the homeownership platform that unites the people, systems, and stages of the mortgage process into one seamless, end-to-end solution. Today has an interview with Tavant’s Hassan Rashid on how digital lending is transforming the mortgage industry and how AI is making lending decisions faster and more accurately.)

Employment

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Get the options you and your borrowers need. When it comes to buying a home, one size does not fit all. Each buyer has unique needs that can only be met by shopping multiple lenders. As a wholesale loan officer, you’ll have more choices than a bank or retail lender can offer, and when your clients can shop more, they’ll save more, leading to more referrals that lead to more business. To learn more about all that wholesale lending has to offer, contact our team at BeAMortgageBroker.com.

Lender and broker software and services

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Need to reach more consumers? Don’t skimp on a digital home loan experience. Virginia Credit Union transformed its mortgage process with Blend’s Mortgage Suite and LO Toolkit, cut turn times, increased pull-through rates, and improved customer experience. Dive into their case study.

TENA Companies, Inc. is the leading provider of Mortgage Quality Control Services & Software since 1982. Our in-house team of auditors leverages their expertise to deliver the highest quality audit and QC services, ensuring your firm stays compliant with all relevant regulations, policies, and procedures. TENA’s Servicing Division specializes in reviewing Mortgage Servicing activities such as payment processing, loss mitigation, claim submissions, foreclosure and more. TENA’s Origination Division covers Pre-Funding and Post-Closing reviews, improving overall loan quality by verifying the accuracy of documentation and confirming loans meet all regulatory requirements. TENA’s Quality Control services are tailored to fit the needs of each individual firm; ensuring your firm’s QC program stays compliant, remains effective, and minimizes risk. Contact TENA today to learn more about our Mortgage Quality Control services and how we can help your business!”

“IRRRLS, streamlines, and cashout… In Q1 2023, 0.4 percent of refi’s were rate & term. However, that trend is about to change dramatically with the seasoning of late 2022 data. Are you ready to help tens of thousands of homeowners improve their financial situation? The Fed signaled a pause in hikes, and Wednesdays positive CPI report has helped mortgage rates. The refinance market is picking up steam. Monster Lead Group has industry leading data which creates market smashing results. Additionally, we provide a full suite of included tools to help consumer direct shops capture and close as many as possible. Our clients originated billions, even through the downturn. Find out how you can get ahead of the trends and take advantage of what the market is about to do.

“Are you identifying cross sales opportunities within your portfolio? With Portfolio MonitoringX from Xactus, you can identify cross-sell, retention and risk opportunities from within your existing customer portfolio. Choose between tri-bureau monitoring, single bureau, or real-time mortgage updates. Our lenders typically see a 1 percent hit rate of new mortgage inquiries against client databases each month. It’s an effective way to protect your book of business, and is yet another example of how Xactus is advancing the modern mortgage by innovating to serve and serving to innovate. To learn more about Portfolio MonitoringX and our complimentary lookback which will show you the volume of leads you would have received over the past 30 days, email us.”

If Amazon were in the mortgage business, would their customers have to wait around for a loan officer to reissue a pre-qual letter on a Saturday before making an offer? Obviously not. Instead, it would look something like this… the borrower would be in the house running payment scenarios on their iPhone, and when they settled on an offer, they’d AirDrop a customized pre-qual letter to the Realtor on the spot. The good news is that with QuickQual by LenderLogix, loan officers can give their borrowers that experience today.

Attention Wholesale Lenders! Is your CRM draining resources but delivering little value? There are many CRM options out there, but few are specifically designed to meet the unique needs of wholesale lenders. If you’re struggling with a CRM that fails to meet expectations or is more expensive than it’s worth, OptifiNow’s new white paper, “The Right Tool for the Job,” examines how to select, implement, and maintain a CRM that gives you the control over sales and marketing that are critical to a wholesale lender’s success. Learn about the importance of database structure, LOS integrations, and specialized tools that can vastly improve the performance of your AEs. Download this complimentary white paper today and then schedule to speak with OptifiNow to see what the ideal wholesale lender CRM looks like.

TPO, wholesale, correspondent loan products

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Foundation Mortgage Corporation, one of the fastest growing NonQM Lenders, has secured financing and secondary market execution to open up a non-Delegated channel. We anticipate having the channel up June 1, 2023.  Elliot Salzman, EVP, Chief Credit Officer stated “Foundation already has a huge Wholesale following based on our commonsense underwriting and the ability to adapt to any situation and willing to make exceptions when warranted. This is just the next iteration in our plans to becoming a full service NonQM lender.” For Inquiries, please contact Dean Ayres, Senior Vice President of Sales.

Meet NexBank at the MBA Secondary Conference and IMN Non-QM Forum! NexBank is part of a financial services company with $15 billion in assets. Our Mortgage Banking division supports all channels: Wholesale, Non-delegated & Delegated Correspondent with Portfolio, Conventional, FHA, and VA products. Plus, we offer Delegated & Emerging Banker Warehouse Lending and Escrow Deposit Management. Our products and services, fast turnarounds, and competitive rates have awarded us recognition as a top mortgage lender by Inside Mortgage Finance, ranking as a Top 25 Lender for Warehouse, Correspondent, Third-Party Originations, and Non-Agency Jumbo. Committed to our clients’ success, we offer unique products, and our portfolio lending suite with Full Doc and Non-QM (Reduced Doc) is highly competitive. Ask about our 6-month ARM with competitive rates! Our goal is to provide valuable tools and resources for our partners. Contact us today to learn more. Member FDIC, Equal Housing Lender, NMLS 672886.

“Have you heard the news? Award-winning PHH Mortgage is having a breakout 2023! We’ve been recognized once again by Fannie, Freddie, and HUD for outstanding servicing. No other servicer in the U.S. is more highly decorated over the past two years than PHH. Just 6 months after boarding a $15B subserviced portfolio, we helped Sierra Pacific Mortgage reduce complaints by 75 percent and lower their servicing oversight costs by 60 percent. PHH expects its deep experience in special servicing & loss mitigation to reduce loss severity by as much as $2 million annually. Beyond subservicing, PHH delivers for the entire mortgage lifecycle: non-delegated, best efforts, mandatory, bulk MSR, reverse and all co-issue options, including Fannie SMP, Freddie CRX, and Ginnie PIIT. Ready to become the next success story? Join the PHH Mortgage family: email us or call us at (415) 828-1222. And for careers click here.

Events, webinars, and training fast approaching

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The MBA’s National Secondary promises to be well-attended, MBA sources tell me, but it is not the only game in town. Let’s see who’s doing what.

Today at 3PM ET is the next edition of The Mortgage Collaborative’s Rundown with Tom Gallucci, me, and today with co-host Chris Bennett from Vice Capital. We’ll will be covering current events in the mortgage market for 30 minutes starting at noon PT in “The Rundown”!

The private mortgage insurance companies certainly offer a fine set of classes: National MI University, the Enact’s course catalog of on-demand webinars, MGIC, Essent, Radian, and ARCH MI.

At 1PM ET on Tuesday the 16th attend a complimentary webinar on HUD’s Mortgagee Letter 2023-03. Servicing compliance expert Donna Schmidt, CEO of DLS Servicing, will share advice and practical solutions for addressing HUD’s latest requirements, which companies are finding a challenge to understand and tackle. The 45-minute event will end with an invaluable Q&A session. Register now to secure your spot. Seats are limited.

On Tuesday the 16th at 11AM PT join Homebot’s VP of Marketing, Ashley Remstad during her chat with Nicole Rueth, Colorado’s #1 Top Producing Loan Officer as they discuss key strategies and tactics every loan officer should be taking in order to thrive in a shifting housing market. Register for the webinar here.

FHA is offering a Free, In-Person Underwriting Training in Boston, May 16th | 9:00 AM – 11:30 AM (Eastern). This training will cover a variety of topics including credit, income, and asset (CIA) documentation, automated underwriting systems (AUS) closing, and more.

FHA is offering a Free, In-Person Appraisals Training in Boston, May 16th | 1:00 PM – 3:30 PM (Eastern). The training topics will include property inspection requirements, appraisal validity period, manufactured homes, well and septic, attic and crawl spaces inspection, and the FHA Appraiser Roster.

FHA is offering a Free, In-Person training on FHA Condominium Approval and Processing Training in San Juan, PR on May 16th | 8:30 AM – 3:30 PM (Atlantic).

Join PRMG University to learn about PRMG’s non-QM Expanded Access product which is available to all channels and provides options for bank statements, express documentation, assets for qualifying, reduced derogatory seasoning and much more, Thursday, May 18th 10:00 AM – 11:00 AM PDT.

In Maryland, join MMBBA for two panels: Friday, May 19th from 1-4 PM at the Checkerspot Brewing Company in Baltimore. Get several different industry professionals’ perspectives on transaction pitfalls, ways to avoid them, and ways to deal with them from the perspective of two great panels. This will be followed by a chance to network (a drink ticket and appetizers are included) and brewery tours.

Where will you be May 21-24? The MBAG Live conference this year: sign up for the May event. The event is at the Ponte Vedra Inn and Club, Ponte Vedra Beach, FL. The hotel deadline for the event block ends April 30th.

Join PRMG University on Wednesday, May 24 at 1:00 PM-2:00 PM PDT to learn about using Symmetry HELOCs option for wholesale and non-delegated correspondent channels.

Capital markets: digesting economic & inflation news

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Inflation at the consumer level came in as expected on Wednesday although producer prices came in slightly cooler than expected yesterday (0.2 percent month-over-month versus 0.3 percent expectations). Inflation at the wholesale level increased 2.3 percent on a year-over-year basis, and excluding food and energy, prices rose 3.4 percent year-over-year. Along with a rising weekly jobless claims report that came in at 264k for the week versus 247k expectations, it would seem the Fed can take some consolation that its tightening of monetary policy is having, or at least moving toward, a desired effect. Keep in mind that NY Fed President Williams said this week that it will take a couple of years for inflation to get back to the Fed’s 2 percent target.

Given last week’s rate hike, the federal funds rate is finally above the inflation rate. And yes, inflation is gradually slowing, but is still too high. Most economists think interest rates at current levels are high enough to hold economic growth below trend. Higher shelter, gasoline, and vehicle prices accounted for most of April’s increase in prices, though core service prices slowed, a sign that inflation will likely slow further in the near term. Comerica forecasts CPI inflation to continue to gradually slow to around 3 percent by year-end 2023 as 2022’s big increases in gasoline and housing prices fall out of the year-over-year comparison. But that is still above the Fed’s target.

Many believe that the U.S. rate hike cycle is over as the Federal Open Market Committee is not expected to enact any further rate hikes. Pricing is currently implying nearly a 99 percent chance that the Fed hits the pause button on June 14th. If inflation expectations have become entrenched and keep inflation high, or if the labor market stays very tight, the Fed could keep rates at their current level into 2024. However, rate cuts are currently priced in as early as the September FOMC meeting. The timing of the Fed’s first rate cut depends both on how quickly inflation slows, and how quickly the job market continues to soften. Leading indicators of the job market like layoff announcements and job openings have weakened considerably this year.

As a reminder, the Fed does not set mortgage rates, nor do Treasury prices, as mortgage lending rates are set in the TBA (To be Announced) MBS market. Mortgage lenders’ rates have historically loosely mirrored Treasuries, though recently the 30-year mortgage rate has not followed rallies lower as seen in Treasuries. The 30-year conventional rate over the 10-year yield sits around 300 basis points, well above its recent five-year average of roughly 215-220 basis points. That’s two standard deviations above the five-year average as the spread has been steadily widening since the end of 2021 due to a hesitancy among lenders to drop rates.

Today’s economic calendar is under way with import and export prices for April (+.2 percent on exports, import prices were -4.8 percent year over year). Expectations were for increases of 0.3 percent and 0.2 percent month-over-month, respectively, after declines of 0.6 percent and 0.3 percent in March. Later today brings preliminary May Michigan sentiment. Several Fed speakers are also scheduled to speak later in the day, including San Francisco President Daly, Governor Jefferson, and St. Louis President Bullard. We begin the day with Agency MBS prices roughly unchanged, the 10-year yielding 3.41 after closing yesterday at 3.40 percent, and the 2-year at 3.92.

NEWS FROM THE YEAR: 2059 (part 5 of 5)

A couple finally achieved sexual harmony. They had simultaneous headaches.

Average height of NBA players is now nine feet seven inches.

New federal law requires that all nail clippers, screwdrivers, fly swatters and rolled-up newspapers must be registered by January 2060.

IRS sets lowest tax rate at 75 percent.

Floruba voters are still having trouble with voting machines.

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, “Doing Business with the Agencies: The Golden Ticket?” 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