May 18: LO jobs; broker, CRM, texting, VA IRRRL products; premium pricing blues; forbearance & Agency news

“All of our dogs think we quit our jobs to spend more time with them while all of our cats think we got fired for being the loser they always knew we were.” And when you combine dogs and Zoom meetings, here is what you get. I’m just glad that I didn’t waste my money six months ago buying a Day Planner for 2020. We’re in an environment where the brightest economists foresee a 0% Fed Funds rate into 2022, and the MBA expects a $2.4 trillion residential origination market in 2020. Homebuilders are beginning to offer incentives to entice buyers. D.R. Horton, for one, noted in its first quarter earnings that it hasn’t had to resort to price cutting. As Brent Nyitray points out, “For the most part, many builders went into the crisis without a ton of inventory, so we shouldn’t see big price drops.” In general, good news for our biz.


Recently named among Top 5 Best Mortgage Companies to work for by National Mortgage News, Geneva Financial, Home Loans Powered By Humans®, is filling 500 Branch Manager and Loan officer positions in 43 states. Geneva strives to humanize every aspect of its business from the inside-out. With a culture-forward mindset, management focuses on loan originators and support staff to ensure an unbeatable experience for their customers. Geneva Gives, BE A GOOD HUMAN, and Hero of The Year initiatives earned Geneva this year’s AZ Business Magazine’s Excellence in Banking Award for Community Impact. In 2019 Geneva was ranked as a nationally fastest growing company in the financial sector, mortgage industry and all industries categories, consistently hit record-breaking months, doubling volume in most. Geneva Financial is excited for another historic year, with no plans on slowing down.

1st Nations Reverse Mortgage, a division of Midwest Loan Solutions, has hired Ken Krajewski as head of reverse mortgage lending for its wholesale and retail channels.

Lender services, training, and products

Blend Forward is tomorrow at 9AM PST. Don’t miss the action as executives from top lenders share their strategies for overcoming today’s topical challenges, and Blend leadership outlines the company’s plan to continue providing lenders with digital agility now and into the future. Reserve your spot now.

Computershare Loan Services (CLS) has added another A-lister supporting its valuations business. As VP of Business Development, Meg Bennett is focused on the growth of CLS’ origination appraisal business. She joined the team as the mortgage industry was rapidly evolving to adjust to new “business as usual” procedures and a more virtual process. The CLS valuations business is poised to navigate these changes with a robust product suite, including hybrid appraisals, that meet the challenges of the virtual appraisal and inspection process. CLS’ valuations products provide a higher quality valuation the first time so lenders can make decisions with confidence, often leading to faster turn times.

Recently, COVID-19 has caused major changes in the marketplace for mortgage loans. We’ve noticed many of our clients are responding by looking at retaining servicing for the first time or on a larger scale than they have in the past. If you are considering retaining your servicing in whole or in part and have questions, Richey May is here to help.  Richey May & Co. has deep experience in the operations, subservicer oversight, accounting and risk and controls necessary for you to successfully transition to retaining your MSRs. Contact David Rice to learn more and get started.

“Are you ready for VA IRRRL and FHA Streamline refinance opportunities in this market? Learn how to efficiently submit your files once for a final approval! Join Freedom Mortgage Wholesale for one or more of our live webinar training sessions on VA IRRRL or FHA Streamline mortgage products and origination processes. Ideal for new or experienced government originators. Sign up for a VA IRRRL or FHA Streamline webinar May 18 (VA IRRRL), May 20 (FHA SL) and May 22 (VA IRRRL).”

Want to close more loans while working from home? “Text messages get five times better results than email,” said Momentifi CEO Gibran Nicholas. “Loan officers and processors are using it for sales follow-up or to request documents.” The problem is that storing SMS text messages with clients or prospects on a personal cell phone may violate CCPA and other data retention and monitoring requirements. The Momentifi Text Messaging App solves this problem by assigning each user a real local phone number with a simple, chat-like interface to communicate with clients. “It’s built-in to our Momentifi Mortgage CRM,” says Gibran. “It’s also available as a stand-alone app that integrates with your existing CRM or mobile app(s) via API. It can be rolled out quickly, ensures immediate compliance and helps your staff maintain personal privacy while working from home. We’ve created a compliance tool that helps you close more loans!” The app was recently featured by Finovate, click here to watch the short demo.

Grow your new business with rates starting at 2.5%: Conquest from UWM. Just in time for what could be the best purchase season our industry has ever seen, UWM is launching Conquest, a program designed to help brokers win new business by offering significantly better pricing to any borrower who hasn’t recently (within the last 18 months) closed a purchase or refinance through UWM. With rates starting at 2.5% on conventional purchases and rate/term refinances, it’s a great way to add new borrowers to your roster, build new relationships with real estate professionals and wow them all with UWM’s fast turn times, elite service, and groundbreaking technology. Talk to your UWM account executive or sign up today at

In today’s market, which has only been speed up by recent events, borrowers are increasingly interacting with lenders virtually and digitally. Insellerate and BeSmartee will be hosting a webinar on how to Optimize CRM & POS platform usage in this changing environment. Learn best practices on how to build the right strategy and system optimization to increase front end conversion and borrower satisfaction throughout the entire journey. The webinar is this Wednesday at 10am PST you can  Register Here.

“No bang for the buck with higher rates”

We’ve all watched mortgage rates drop and refinance applications skyrocket over the last couple months. In fact, the 30-year primary mortgage rate established a new all-time low of 3.29 percent in early March and continues to be low by historical standards. Driven by rate locks in late February and early March that became closed refinance loans resulting in a wave of payoffs and fast prepayment speeds, MBS prepayment speeds in April sped up 26 percent (6.3 CPR) from the month prior. That comes on the heels of a 42 percent (7.1 CPR) increase in speeds from February to March. So what does that mean for originators and why care?

The industry has seen investors and wholesale mortgage bankers enforce or change early pay off penalties. First and foremost, it all has an impact on interest rates. When loans are prepaying (refinancing) more quickly than expected, it means investors are paid off more quickly on their investment than they expected. And servicing, that they probably paid a about a point (4×1 multiple) for, vanished. In general, investors want to hold onto their investment, as each month a borrower makes mortgage payments, they collect the principal and interest, minus servicing. The last thing an investor wants to do is pay 105 for something that pays off three months later and for which they receive 100 for, losing 5 points. Without getting into the complexities of duration calculations, when rates drop and prepayment speeds increase, it means the “rate stack” for higher rates compress, and LOs don’t see much improvement in premium pricing.

Investor, lender, & warehouse changes not ceasing

Of course the forbearance situation is ongoing, but it has not spiked as aggressively as some feared. Black Knight estimates that 7% of GSE-backed mortgages were in forbearance as of May 12. This isn’t good, but is better than expected. And as Isaac Boltansky with Compass Point Research and Trading points out, “The FHFA embraced a number of policy changes that alleviate market pressure stemming from this issue… it will limit servicer advancing requirements to the first four months, allowed the GSEs to buy ‘orphaned loans’ with an accompanying LLPA increase, and blessed a payment deferral option allowing certain borrowers to repay at the end of the loan (e.g., sale, refinance, maturity).”

First Horizon’s warehouse clients know that, effective June 14, 2020, “we will implement ‘Quarter-end Load Balancing,’ which means we will honor our commitments to support your business every day, but we will eliminate uncommitted bulge support at quarter-end. On July 1, 2020, your uncommitted bulge support will automatically resume and will be available under the normal terms of your warehouse agreement. On September 14 and quarterly thereafter, we plan to again implement Quarter-end Load Balancing, resuming support for your bulge requests on the first business day of the following quarter. ‘Will there be times when I can’t use my First Horizon Warehouse Line to close loans?’ Possibly, if your line is ‘full.’ During the last 16 days of each calendar quarter, you will have access to your committed line only. If you enter that period with some amount drawn on your uncommitted bulge line, you will need to get the bulge amount repaid before you can access your committed line. First Horizon typically offers bulge capacity of 150% of your committed line, so typically your committed line will be 40% of your maximum combined warehouse capacity.”

Wells Fargo Funding (correspondent) told clients, “Wells Fargo Funding will not charge an Agency loan-level price adjuster (LLPA) or administration fee on Loans when a borrower goes into forbearance after we purchase the Loan. This change also applies to Loans affected while the fee policy was briefly in place.” Starting today it is worsening adjusters for conventional Conforming Loans including Investment properties, LTVs >80% and FICOs <700. Pricing will be updated accordingly, and changes will appear on page 2 of the Best Effort Rate Sheet. Sellers must also refer to the Best Effort rate sheet for adjusters that apply to Loans delivered against Mandatory Commitments.

From Chase came CB20-28 Chase Correspondent COVID-19 Update – Loans in Early Forbearance Revision. “This bulletin rescinds the Forbearance LLPA, Forbearance Administration Fee and Cash-out Refinance Repurchase requirements announced in CB20-24. As a reminder, loans that are currently in forbearance or enter into forbearance prior to purchase are not eligible for purchase by Chase.”

With a nod toward delegated and non-delegated best efforts execution, yesterday AmeriHome’s rate sheets showed new Conventional and Government loan-level price adjustments (LLPAs). (Recall that AmeriHome temporarily suspended Fannie Mae and Freddie Mac Cash-Out Refinance transactions for loans submitted for Non-Delegated Underwriting.)

Plaza Home Mortgage has compiled a single document, its Temporary Credit Policy, consolidating all of its COVID-19 related policies.

Caliber is aligning with Fannie Mae and Freddie Mac  on the following updates: Unemployment benefits income, Furloughed borrowers, Extension of the effective date for: Power of attorney, Condo project review flexibilities, Representations and warranties insurance relief for employment validation for Desktop Underwriter (DU) casefiles. Click on the links for complete Agency requirements for these topics.

FCM Wholesale issued Announcement 2020-20 which outlines the suspension of Conventional Cash-Out Refinances for all Second Homes and Investment properties.

Capital markets

Effective Friday, May 15th, Flagstar once again began accepting Assignments of Trades (AOTs) in conjunction with bulk loan trades. Read Memo 20058 for details.

Sometimes, Treasury yields move in the opposite direction of what one would expect. Friday saw heightened trade rhetoric between the U.S. and China as well as a horrendous April Retail Sales report, both of which should have caused a rally on the day. Treasuries, and MBS along with them, were able to pull back by the closing bell, and the 10-year yield closed the day +2 bps to 0.64 percent, down -4 bps for the week.

We received some meaningful economic releases to close last week. Most of us know that total retail sales set a record for the worst decline in its history, with double-digit losses across most categories. The broad-based weakness was expected but is nonetheless a representation of the rapid shock to this nation’s psyche. Industrial production posted the largest monthly drop in the 101-year history of the index, and the capacity utilization rate fell to a record-low in a series that dates back to 1967. Not to sound like a broken record, but it is due to the shutdown measures designed to contain the spread of the coronavirus. Any good news? The University of Michigan’s Index of Consumer Sentiment actually rose for May, beating expectations of another decline as attitudes about current conditions improved. Unfortunately, sentiment surrounding the outlook continued to deteriorate, largely due to concerns about financial prospects.

It is a light week this week for economic releases. With just the NAHB Housing Market Index for May slated for release today, things are also light tomorrow, with only April Housing Starts and Building Permits. Wednesday sees the usual Weekly MBA Mortgage Index, before the busiest day of the week on Thursday brings weekly claims, the May Philadelphia Fed Survey, and April Existing Home Sales. There is no data of note Friday. With regards to MBS and in addition to Class C 48-hours today, the Desk will purchase a daily average of $4.5 billion versus $5 billion last week, with Class D 48-hours on Thursday. The NY Fed will conduct two FedTrade purchase operations today totaling up to $1.575 billion GNII 2.5 percent through 3.5 percent followed by up to $2.970 billion UMBS30 2 percent through 3 percent. We begin the week with Agency MBS prices down/worse a few ticks and the 10-year yielding .66 percent.

Thank you to Mike S. who sent, “Today I worked from home, ran 10 miles, homeschooled my kids, cleaned the house, made a delicious dinner and got my kids to bed early. It’s amazing what you can accomplish when you lie.”

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Rob Chrisman