Daily Mortgage News & Commentary

May 6: LO jobs; QC, warehouse, pricing products; Agency & investor changes don’t stop; fortunately rates quiet

May 6th, of course, is the anniversary of the first tequila hangover. Alcohol consumption has increased as people continue to adapt to the working from home “Groundhog Day.” Yes, adapting. How about this doctor who adapted by handing out clear masks for free to help her hearing-impaired patients? There is training for adapting to remote leadership. Most of us are thankful that we’re able to be at home AND work. “Rob, have you heard rumors that for the next part of the quarantine we can rotate to a different family, or do we have to stay with the same one? (Asking for a friend.)” I don’t know the answer to that one. I do know, however, as we’re in the middle of another week of lockdown, I’ve been thinking about Osama Bin Laden. He was stuck in his house with three wives and children for five years. I’m beginning to wonder if he called in those Navy Seals himself. Speaking of that era, George W. Bush has an important short video out on the current health care crisis and the word “blame” is not used once.

Jobs & promotions

Interfirst’s exclusive LO[+R] position, remote Mortgage Loan Originator, puts our resources on your kitchen table. Apply today https://bit.ly/Interfirst-LOR. What’s your next career move? Online home refi and purchase applications are forecast to accelerate, and WFH is the new normal, indefinitely. It’s time to re-envision and re-define your day and grow your business on your terms.  We are expanding to meet growing demand across the U.S., and providing our sales professionals with the resources and financial stability that they deserve. All of our LO[+R] are paid an aggressive salary with the opportunity for significant bonuses. Our low-rate no-lender fee combination makes us highly competitive with anything advertised online. We provide inside purchase and refi leads to you, so goodbye cold calling, hello qualified leads all day long. Our leadership team has 100+ years of mortgage and sales/marketing experience with a 2020 goal of growing our Retail production, on top of the $35B we have originated. Make Interfirst your first move.”

In keeping with its vision to Inspire Hope for all during this challenging time, Academy Mortgage is hosting a LIVE event on Friday, May 8, at 2 p.m. MDT featuring Daniel Harkavy, the CEO and founder of Building Champions, an executive coaching company. In this 45-minute session, Harkavy will provide viewers with insights and guidance on how to turn this season of crisis, change, and loss into opportunity. Academy has extended an invitation to all of the company’s past clients, and the event is open to the public as well. You can livestream the event here. Academy held a similar event for the company’s thousands of referral partners nationwide in late April. Harkavy has also been a frequent guest on Academy’s weekly Town Halls to impart practical advice to employees and their families on strengthening relationships and gaining greater footing in times of uncertainty. Contact SVP Bill Sohan if you’re interested in joining a company that puts Purpose and People first.

Carrington Mortgage Services, LLC (CMS) Wholesale and Correspondent mortgage business has promoted Kevin DeLory to SVP, Wholesale & Correspondent. (CMS offers FICO scores down to 500.)

Out of Tennessee comes news that First Community Mortgage has named Dan Smith as its new President. Smith has been consulting with FCM for the past 8 months.

Lender services and products

Mortgage Confidential is the #1 resource for Mortgage Professionals to find opportunities and maximize their value (844-MTG-CONF). Lenders, check out our new Lender Access Page to see the sales, ops and executive talent looking for a great opportunity. Mortgage Pros, check us out here to get started and see what your true market value is! We are working with many top Executives and sales/ops professionals across the country to help them find the perfect opportunity to advance their career. You control the process. You control the Lenders you want to engage. 100% confidential, guaranteed.”

At TMS, employees’ number one goal is to provide best-in-class customer service to not only their customers, but their client’s customers too. TMS Subservicing President, Rick Smith, sat down with Housing Wire to discuss how they prioritize helping clients grow their business with their award-winning technology, SIME – Servicing Intelligence Made Easy. SIME allows 100% transparency into a lender’s portfolio with real-time reporting and interactions with their customers. Learn more about how SIME provides best-in-class customer service. 

 

Looking for a cost-effective solution to display live rates to your consumers in a digital mortgage landscape? Mortech’s product and pricing engine APIs can help push your live rates to websites, point-of-sale solutions, smart applications and more. With a streamlined onboarding process, most lenders see this integration implemented in days, not weeks. One Mortech client stated, “At Loan Pronto, we are obsessed with marketing and lead generation. Mortech is the engine that fuels our website which creates 1200-1500 unique, inbound leads per month. Their team worked closely with our web developer to implement our pricing engine which has worked seamlessly for the last two and a half years with zero downtime. Great team. Great product,” says Roger Moore, President, Loan Pronto. Reach out to Mortech via email for more information.

PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE: HTH), understands that with historically low rates, you want confidence in knowing your increased production volume can be funded with your current warehouse provider. We understand the need for additional funding capacity in high volume months and provide our customers with rapid temporary line increase and bulges at large month ends!  We are committed to building strong relationships with our customers and providing the service you need most.  If you are interested in learning more about PlainsCapital Bank National Warehouse Lending please contact Deric Barnett.”

ON-DEMAND WEBINAR: Building Your Lending Operations on a Foundation of QualityHow Mountain America Credit Union Achieves Optimal Loan Quality Through QC Automation. Learn about the current regulatory climate and how credit unions can best navigate through these unpredictable conditions; how data-driven audit technology can make a lasting impact on overall loan quality; and the success story from a leading credit union on how they revamped their qc operations to improve quality and increase member confidence. WATCH THE RECORDING

COVID-driven adjustments

With the uncertainty of extensions versus loosening of the Shelter-in-place orders, one thing is certain, work will not go back to normal. Many organizations will keep some portion of “work from home” going forward and this will impact productivity. Leadership development is one area businesses will need invest in so leaders can respond to critical events, keep employees engaged and increase skills, and they will need to do this virtually. Enact Leadership is offering its Emerging Leader Experience course to be completely virtual but with a unique design, facilitated and social content, to create connection in this digital environment. It includes a state-of-the-art digital platform experience, 3 virtual sessions and ongoing conversations with Master Facilitators, Practical tools, activities, and a personalized action plan, at 60-90 minutes per week. (Enact is offering two open enrollment sessions: May 18 – August 14, and September 9 – December 11. (Code: ENACT100.)

Thank you to Kris van Beever sent over, “How T-Mobile shifted 12,000 call center employees to work from home in less than two weeks” and this blog post that is relevant for anyone running call centers amid Covid-19 lock-downs.

Fannie Mae released Originations Lender Letter (LL-2020-03) to extend the temporary COVID policies to June 30, and added topics on unemployment benefits as qualifying income, furloughed borrowers, suspension of representation and warranty relief for employment validation through the Desktop Underwriter validation service, sale of loans aged six months or less, and more.

For conventional products, FAMC sent out Bulletin #2020-14 in April. “Franklin American Mortgage Company is aligned with current GSE guidance pertaining to loans in forbearance. If a loan is in forbearance or if a borrower initiates an inquiry regarding forbearance prior to the FAMC purchase date, the loan would not be eligible for purchase. In response to further agency policy recently issued, our forbearance guidance is being further updated for loans locked May 4, 2020 and beyond. The following agency loan-level price adjuster (LLPA) will be applicable for any loan that goes into forbearance after the FAMC purchase date and prior to settlement with the agencies: 500 basis points (5.000%) for loans to first-time homebuyers, 700 basis points (7.000%) for all other transactions. Note: The forbearance LLPA is in addition to all other applicable LLPA’s and not subject to any cap. Further, please be advised that any Conventional Cash-Out transaction that enters into forbearance following the FAMC purchase date and prior to agency settlement will be subject to repurchase. Please refer to Fannie Mae Lender Letter 2020-06 and Freddie Mac Bulletin 2020-12 for further information.

FAMC/Citizens Bank has developed an interim guidance document that summarizes its changes to policy. The COVID-19 Interim Guidance Document provides a summary of the recent policy modifications and denotes the reference bulletin associated with each change. Please visit the FAMC online manual to view the document located in the Underwriting & Credit Policy section.

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

PRMG’s Product Update 20-34 includes clarification applicable to conventional loan application date in conjunction with the “current status” of the borrower’s existing mortgage. LPA approved loans, Agency Fixed, Agency LP Fixed and ARMS, Home Possible, updated requirements in alignment with Freddie Mac for properties that are eligible for property waivers.

Effective with loans purchased on or after May 1, 2020, Caliber aligns with Fannie Mae Lender Letter 2020-06 and Freddie Mac Bulletin 2020-12 guidance specific to selling loans in forbearance due to COVID-19. Any conventional purchase or rate and term refinance loan that enters forbearance prior to the loan being sold, will be assessed the standard agency Loan Level Price Adjustment (LLPA). This only applies to loans with Note dates on or before May 31, 2020. Caliber will assess this requirement as Agency updates are provided. Correspondent will maintain all Representations and Warranties, as outlined in the Guide, regardless of the payment of the LLPA. In addition, Correspondents will be billed a $1,000 administrative fee for any loan that enters forbearance within 60 days of the Caliber purchase date, regardless of whether such loan has been sold to the agency.

IRS offices responsible for providing tax return transcripts are now open. As a result, Wells Fargo Funding is removing the temporary tax return waiver and alternative documentation requirements, reinstating its published tax return transcript requirements for all Loans, with a temporary allowance for Sellers to provide tax return transcripts up to 45 days post purchase to accommodate expected IRS processing delays. During this temporary allowance, Loans that require tax return transcripts under its published policy will be purchased without tax return transcripts. Additionally, Wells will be adding post-funding conditions requiring the transcripts within 45 days.

Capital markets

Jobs drive the economy, and unemployment continues to draw headlines as 3.8 million more people file for unemployment during the week ending April 25. This brings the six-week total to roughly 30 million which is significantly higher than previous recessions. In response, consumers have sharply curbed spending with services experiencing a 10.2 percent annualized rate of decline in the first quarter. While March was a record-breaking bad month in terms of consumption, it is very likely that April was worse. One bright spot is that though consumption rapidly declined, income declines were mild which caused the personal savings rate to spike to 13.1 percent; a 39-year high. Economists hope that this increased savings will give consumers the means and motivation to spend once stay-at-home orders are lifted. Some states are partially lifting business restrictions this month, but it is too soon to know if it will mark the beginning of recovery for the economy. Households will decide if they are comfortable heading out and resuming “normal” activities as well as whether there is a second wave of the virus as a result.

Looking at the bond market yesterday, U.S. Treasuries and Agency MBS pulled back slightly to finish Tuesday, including the 10-year yield yielding 0.66 percent after hitting its highest intraday level since mid-April, due largely to optimism surrounding the reopening of countries’ economies and ISM figures that beat expectations. The ISM Non-Manufacturing Index for April was the lowest reading for the index since March 2009, and, like the ISM Manufacturing Index, it was not as “good” as the headline number suggests given that there was a spike in the Supplier Deliveries Index, largely indicative of supply problems due to the COVID-19 impact. The Trade Balance report for March showed a widening in the deficit, the result of exports declining more than imports, but the large declines in both reflect weak trade activity in the wake of COVID-19 shutdown issues that only got worse in April.

Domestically, the administration is considering disbanding the coronavirus task force, possibly as soon as Memorial Day, touting the group as having accomplished its goal. There was disparity among Fed officials, too. Vice Chair Clarida said a recovery could begin in the second half of the year, while St. Louis’ Bullard said keeping shutdowns too long will cause long-run problems. Chicago’s Evans was more cautious, calling the lifting of restrictions “a bold decision with pretty high risks.”

Overseas, there was turmoil as Germany’s Constitutional Court ruled that the European Central Bank’s Public Sector Purchase Program could be used to directly finance government operations, which is against the law. The ECB was given three months to demonstrate that the program does not violate rules or lose the Bundesbank’s participation in asset purchases.

Today’s U.S. economic calendar is already underway with a duo of releases. Mortgage applications increased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 1, 2020. Separately, April ADP employment (-20.2 million! Grim, but expected). Later this morning brings the Quarterly Refunding Announcement, where the Treasury will detail how they plan on funding $3 trillion over the coming quarter. That unprecedented sum is more than five times what the government borrowed in a single quarter during the 2008 crisis as it finances massive stimulus efforts to revive the economy. After purchasing the maximum for the third straight operation yesterday, the NY Fed will conduct two FedTrade purchase operations today totaling purchasing up to $6.16 billion of current coupon Agency MBS. We begin today with agency MBS prices worse a few ticks and the 10-year yielding .68 percent.

Rube Goldberg would be proud of this Covid-19 version. (Pink toilet paper?) (Just press “not now.”)

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, “Loan Officers: Now More Important Than Ever”. If you have the inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed 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 2020 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.)