Daily Mortgage News & Commentary

May 20: Senior cap. mkts., MLO jobs; employment history, insurance, POS, MSR financing products; Q&A on flood insurance laws

Huh? We should all worry about monkeypox now? While we’re talking about health, my doctor asked if anyone in my family suffers from mental illness. I replied, “No, we all seem to enjoy it.” (Bah dah bam.) Many enjoyed learning about news and trends during the MBA’s Secondary Conference this week in Manhattan, and are looking forward to the MBA’s national conference in October in Nashville. Looking through my notes of the hot topics facing the industry that I heard either on stage or in the hallways, they include the Community Reinvestment Act (CRA) requirements for non-banks, profit margins and revenue falling, staffing, liquidity, Lock-N-Shop programs (be sure to run any program like this through your compliance department!), and whether to hold or sell mortgage servicing rights (MSRs). I spoke to several IMB owners who were happy they’d left cash in their companies during the last couple years. Meanwhile, banks and credit unions are grappling with historically low loan-to-deposit ratios, so have cash to deploy into assets. Sell them some loans! (Today’s podcast is available here and this week’s is sponsored by Candor. With Candor’s Machine as an underwriter, lenders modernize their manufacturing infrastructure making them immune to margin, capacity, and staffing challenges forever. Candor’s AI solution can be deployed in 30 days, delivering fast and flawless loan production.)

Careers & new hires

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To attract talent in a COVID world, Archwell is helping companies beef up clumsy recruitment processes with efficient technology over “buzzwords and slick marketing campaigns,” said Erik Anderson, Archwell chief executive officer and president, in a recent interview with Mortgage Professional America (MPA). “We recognize that to solve the challenge of the present and adapt to all the challenges the future will bring we need to be able to get talent on demand from anywhere,” Anderson added. At Archwell, we’ve got your back. Read more about Anderson’s vision and mission here, as he discusses how Harrison National Employment (HNE) is meeting these recruitment challenges by creating a unique culture aimed at obtaining and retaining talent.

If you’re located in Arizona, Colorado, Utah, Nevada, or New Mexico and want to propel your Mortgage Advisor or Management career with one of the fastest growing national mortgage brands in America then join the PAC at PacRes Mortgage, formerly Pacific Residential Mortgage. Join Brad Allen, one of our newest Regional Sales Managers. Here’s what Brad had to say about why he joined The Pac. “I have been in the mortgage business for over 30 years. I am now so privileged to work for a great company with fantastic leadership that is set up to continue winning, and I want to share that with you,” said Brad. “PacRes understands the urgency of our business and it radiates throughout the entire organization.” Don’t just take our word for it, call or email Brad yourself to find out if you’ve got what it takes to join The Pac! Brad Allen (480-239-3670).

Benjamin Franklin said, “when you’re finished changing, you’re finished.” It’s 2022 and yes, everything is changing. What are you doing to keep up with change? Take a peek to see what why we’re different. Canopy Mortgage is 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. Reach out to Josh Neumarker at Canopy Mortgage for more information 888-696-9076.

Here’s an incredible opportunity to lead the mortgage pipeline hedging team at Citizens. The Home Mortgage, Capital Markets director is seeking an experienced hedging manager to lead a team of traders in managing it’s estimated 2022 $25b pipeline and deliveries of FNMA, Freddie and GNMA MBS and cash deliveries. Experience with non-agency, a plus, as we consider targeted alternative executions to our balance sheet investments. QRM risk management a significant plus and preference. Must have strong leadership skills, risk mitigation expertise and an ability to communicate complex concepts and market impacts to Finance and Executive leadership. Join a seasoned team with career growth opportunities and inquire today at Home Mortgage Hedging Director at Citizens (citizensbank.com).

Open Mortgage, a multi-channel mortgage lender, has selected Brenda Hedeen, CPA, as the new Chief Financial Officer (CFO) to spearhead the firm’s finance and accounting operations. And Anthony Nolte, Open Mortgage’s CFO and legal counsel since 2019, has been appointed to the newly-created position of Chief Legal Officer.

Lender & broker software, services, and programs

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When you’re conducting business digitally, you need new, smart strategies to help you develop strong connections and win repeat business. In an age of limited time and competing demands, powerful title technology can help you provide the speed and accuracy your customers want. And used well, this technology can help you build strong, lasting customer relationships. In Radian’s insight report, Technology is Transforming Title, But is That Always a Good thing?, learn more about how streamlined digital processes can help enhance your customer communication and improve the customer experience.

A Mortgage Boutique (AMB) after its recent acquisition by First Community Mortgage, continues adding to its growing salesforce and is excited to welcome Thomas Townley, Jr., as its newest account executive. Thomas, who comes to AMB with an extensive mortgage sales background is based in Texas and serves our wholesale, non-delegated correspondent, and delegated correspondent customers. Offering a wide variety of products from agency and government to Jumbo, ITIN, and Non-QM, a Mortgage Boutique based in Murfreesboro, TN is eligible to originate in 46 states. Please reach out to Thomas Townley to learn how a Mortgage Boutique can help you grow your business!

Deliver smarter, simpler customer journeys. Now you have quicker, smarter access to borrower intent through targeted consumer insights and alerts right in the Total Expert platform. With the Customer Intelligence add-on, you get an all-in-one solution allowing you to engage, convert, and grow your mortgage business. Ready to see the smarter way to deliver the perfect customer journey? Schedule your demo today!

Western Alliance Bank’s Specialized Mortgage Services Group continues to be solution-oriented in changing markets by providing multiple financing vehicles and Treasury Management Products and Services. The Warehouse Lending team finances a wide spectrum of loan types including Agency, Jumbo and Non-QM and works with borrowers to customize terms to meet investor and execution needs. Additional synergies exist for loans being sold to Western Alliance Bank’s wholly-owned subsidiary, AmeriHome Mortgage. MSR financing provides lines of credit that leverage Fannie Mae, Freddie Mac, and Ginnie Mae collateral. Lines can be annual or bi-annual revolvers or revolvers followed by term finance. Flexible structures provide solutions to accommodate originators’ MSR retention strategy. Additionally, the Specialized Mortgage Services Group provides Note Financing, Working Capital Lines and Commercial Real Estate solutions nationally. Western Alliance Bank, Member FDIC.

Turn more leads into borrowers with the loan application that boasts a 90% completion rate. In a challenging market, lenders must maximize every borrower lead. Maxwell Point of Sale delivers a game-changing digital experience to help you attract, convert, and retain borrowers like never before. Including mobile-first functionality, pre-filled application fields, and bite-sized sections that ensure fewer mistakes, Maxwell’s loan application is easy, painless, and convenient for borrowers to complete. Plus, new HELOC and Home Equity Loan templates meet borrowers’ needs in today’s tough market. Ready to close more loans than your competitors? Schedule a call with our team to learn more about Maxwell Point of Sale and start turning more leads into borrowers.

Lenders: are you looking to generate revenue while interest rates rise? Get your borrowers insured instantly and earn passive revenue (RESPA-compliant!) along the way through Matic’s embedded insurance solutions. Learn how easy it is to get started.

The Work Number® can provide comprehensive employment history amidst changing labor markets and seamlessly satisfy GSEs’ verification requirements. According to the Bureau of Labor Statistics, 77 million new hires have less than one year of tenure with their current employer, increasing the need for lenders to utilize both current and prior employment records for underwriting. This shift in borrower employment trends could mean incremental work for mortgage lenders. The Work Number® database houses over 548 million employment records and can deliver the insights needed to stay competitive, mitigate risk, and increase efficiency. The new Mortgage VOE and Mortgage VOI solutions provide up to a 36-month view of current and prior income and employment data. This comprehensive view enables lenders to quickly verify income that may not be included in the last two calendar/tax years, helping to quickly identify income trends. This data may suggest income or earnings potential that indicates better continuity and ability to pay, increasing a lender’s confidence to say “yes” to more consumers. Learn more here.

The latest disaster updates: CA, RI, NM…

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Disasters, whether natural or manmade, coast to coast and beyond, can happen with no notice whatsoever or with plenty of warning. Lenders, investors, servicers, and insurance companies take their cue from FEMA’s declared disasters.

Five federal regulatory agencies jointly issued revised questions and answers (Q&As) regarding federal flood insurance law and the agencies’ implementing regulations replacing those originally published by the agencies in 2009 and 2011 and consolidate Q&As proposed by the agencies in 2020 and 2021. Reflecting significant changes to the flood insurance requirements made by federal law in recent years, the Q&As cover a broad range of technical flood insurance topics, including the escrow of flood insurance premiums, the detached structure exemption to the flood insurance purchase requirement, force placement procedures, and private flood insurance. More information is available in the FDIC Press Release – Interagency Q&As Regarding Flood Insurance.

Mortgage Solutions Financial issued Announcement 06-22C, about New Mexico wildfires and straight-line winds.

On 5/4/2022, FEMA declared federal disaster aid with individual assistance has been made available to five New Mexico counties affected by wildfires and straight-line winds. See AmeriHome’s Disaster Announcement 20220502-CL for inspection requirements.

On May 5, 2022, FEMA declared disaster areas in New Mexico for wildfires and straight-line winds in the following counties: Colfax, Lincoln, Mora, San Miguel, and Valencia.

 

Mountain West Financial Wholesale is requiring evidence that the subject property sustained no storm related damage (flood, fire, etc.) in these specific counties. MWF production Coordinators and Underwriting Managers have been provided a list of current loans that are located in these specific counties. Review MWF Wholesale Bulletin 22W-039 for details including a map of effected areas.

Colfax, Lincoln, Mora, San Miguel, and Valencia counties in New Mexico have been declared by FEMA as Major Disaster Areas, Incident Period Date beginning 04/05/2022 and continuing.

Loans submitted to Sun West Mortgage with an appraisal dated on or before the incident period end date or for those submitted without an appraisal will require an interior and exterior inspection. Partners are advised to refer to Sun West Forward Mortgage Seller Guide (Section 404.07) and Reverse Mortgage Seller Guide (Section 3.23). Access under the HELP section in sunsoft for more details.

Capital markets

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Federal Reserve Chair Powell’s recent message is that the central bank is resolved to fight inflation even if that means pushing rates into restrictive territory. Kansas City Fed President George echoed that sentiment yesterday, saying the U.S. stock market rout was no surprise in light of the central bank’s repeated caution that it will continue raising interest rates to cool inflation. What does that mean for mortgage rates? Well, this week’s Primary Mortgage Market Survey from Freddie Mac saw fixed mortgage rates decline from their highest levels since 2009, though the hybrid ARM rate rose slightly.

For actual economic news, yesterday we learned that existing home sales fell 2.4 percent month-over-month to a 5.61-million-unit annual pace in April. The monthly drop in total sales from 5.75 million in March, the third straight month of decline to the slowest pace since the spring of 2020, represents a 5.9 percent year-over-year decline. The median sales price of $391,200 was 15 percent higher than a year ago and has seen the share of sales to first time home buyers decrease. The supply of available homes for sale remains extremely tight due to the recent slowdown in residential construction activity, even as higher mortgage rates contribute to a slowdown in buyer demand. Signs of economic weakness have also added to the overall uncertainty for potential homebuyers.

And the MBA’s Builder Application Survey data for April 2022 showed mortgage applications for new home purchases decreased 10.6 percent compared to a year ago. Compared to March 2022, applications decreased by 14 percent. “New home purchase activity declined on a monthly and annual basis in April, as the spike in mortgage rates cooled demand, and homebuilders continued to grapple with rising costs, supply-chain issues, and extended completion timelines,” said Joel Kan, MBA’s AVP of Economic and Industry Forecasting. “With the supply of existing homes on the market still at extremely low levels, the new home market is an important source of housing supply. The pace of construction has slowed, however, in recent months. MBA’s estimate of new home sales declined for the fifth consecutive month to 701,000 units, the slowest sales pace since May 2020.”

Lastly, according to Black Knight, the national delinquency rate fell another 4 basis points in April to 2.80 percent, a new record low for the second consecutive month. The figure puts overall delinquencies down 40 percent from this time last year, even with April historically being one of the worst months for mortgage performance. Prepayment activity succumbed to the sharp rise in rates, as prepays fell 19.1 percent from March and 61.8 percent from a year ago.

Today’s MBS schedule sees the Desk back in 30-year 3.5 percent through 4.5 percent for up to $1.7 billion. With nothing of note on today’s economic calendar, we begin the day with Agency MBS prices worse .125-.250 from Thursday’s close and the 10-year yielding 2.87 after closing yesterday at 2.86 percent.

(Thank you to Sue W. who sent this tale of real-life drama.)

A senior citizen is driving on the highway.

His wife calls him on his cell phone and in a worried voice warns, ”Herman, be careful! I just heard on the radio that there is a madman driving the wrong way on Route 280!”

Herman replies, ”I know! But there isn’t just one, there are hundreds!”

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, “A Primer on the Federal Reserve and Mortgage Rates.” 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 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.)