Nov. 30: U/W Mgr. job; mkt. research, automation, fee collection, non-Agency tools; conforming loan limit & other F&F changes

In the secondary markets, lenders are trying to wring out every penny from loan sales. For example, in today’s podcast (available here) is an interview with Senior Director of MCT’s Investor Services team, Jennifer Kennelly, on MCT’s Bid Auction Manager (BAM) Marketplace, the nation’s first open mortgage loan exchange. In the primary markets, it’s rough, and I received this note from a senior executive. “In our branches, this is worse than the meltdown. In 2008-2010 we may have had problems finding lenders to loan money, but there were some, and we still had business. And rates were okay. Today we barely have any business and rates are so high borrowers become angry at us when we quote them!” And the cost of doing business is continuing to escalate. “NCRA understands that the end users of the tri-merge mortgage credit report (the mortgage lenders) have been grouped into three pricing tiers by Fair Isaac (FICO) with a wholesale price increase of less than 10% for the top tier of approximately 46 lenders, about 200% for approximately six lenders in the middle tier, and more than 400% for all other mortgage lenders in the nation. This is a paradigm shift in the pricing structure for credit scores and is being dictated to the mortgage credit reporting industry from all three national credit bureaus and/or FICO.” (Today’s podcast is available here and this week’s is sponsored by Candor Technology: Home of the One Touch Underwrite, supporting lenders from Point of Sale to Post Close QC, to reduce repurchase risk, increase underwriter productivity by 400 percent, and decrease turn-times by 10.)

Employment & transitions

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A Nationally recognized Mortgage Lender is in search of a National Underwriting Manager with 10+ years of relevant experience who can manage a team of specialized underwriting functions to support profitable growth and consistent execution. The perfect candidate is someone who will help grow a positive culture through leadership in the organization’s underwriting department. If interested, please send your resume to Chrisman LLC’s Anjelica Nixt.

City National Bank announced that Vanessa Montañez, D.E.L, was named the bank’s first community lending national sales manager where she will create and manage a team that is responsible for building strategies and programs to expand mortgage lending and serve historically underserved borrowers through community outreach and financial education, and focus on strengthening partnerships by building relationships with nonprofits and community organizations by working closely with the bank’s Community Reinvestment Act team.

Lender and broker products, software, and services

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Are you ready to join tons of other satisfied brokers and start working with Towne Mortgage Company? Our 40 years of experience working with Brokers, Mortgage Bankers, Credit Unions, Community Banks, and Agricultural Banks means you can expect flexible solutions and reliable service. Work directly with your Underwriter, contact the Business Support Hotline for updates and technical help. As an approved FNMA/FHLMC/GNMA seller/servicer offering full Agency and Renovation product sets you are guaranteed program options and expertise at Towne Mortgage Company. “I stopped using other lenders, the only time I go elsewhere is when the scores don’t meet Towne’s Matrix. Simple submission process, awesome Account Executive support, excellent business support team and 1st rate closing team.” (Michael R.) Let our years of experience work for you! Get started with Towne Mortgage Company today, call (888) 653-9037or visit us.

We’re less than a week away from knowing which four college football teams will vie for the national title. While only one team can win the national championship on January 9, there’s room for more than one mortgage champion in 2023. In a tight market, Sales Boomerang + Mortgage Coach is the game-changing platform lenders need on their team. On Thursday, December 8, at 2 PM ET, join Alex Kutsishin and Dave Savage along with Watermark Home Loans’ Regan Hagestad as they share how Sales Boomerang + Mortgage Coach empower Watermark’s mortgage advisors to engage leads within just five seconds of them indicating homebuying intent. Get your ticket today.

Lending Compliance Q&A for Lenders! Lenders are focused on bringing in and closing loans, but that’s not where their responsibility to a financial institution ends. Lenders also have an important role to play with compliance. In this article, Ncontracts discusses five frequently asked compliance questions and how they impact lenders. Read it here!

Today more than ever, mortgage bankers need partners they can rely on that can provide them with the solutions they need to compete and succeed: Lakeview Correspondent is that partner. The Bayview Non-Agency Product SuiteBank Statement, DSCR, and Prime Jumbo ARM’s programs provide lenders with the products they need to compete and succeed now and into 2023.  Reach out to one of our Regional Business Development professionals today to find out more and set your team up for success!

Why invest in a pay-by-text (SMS) option for borrowers when collecting upfront fees? Here are four reasons: SMS fee requests save operational time by automating an otherwise manual process. SMS requests also accelerate payment completion and allow for the next-day transfer of funds. Because these requests accelerate payment completion, more borrowers have “skin in the game,” increasing the likelihood that they’ll close their loan with you. Finally, and most importantly, this type of innovative solution provides borrowers with the high-touch, user-friendly digital experience they expect. How are you innovating in 2023? Are you interested in learning more about automating your upfront fee collection? Head over to LenderLogix’s website if so. Its solution for this is pretty slick.

The right intelligent automation solution can lower your costs to originate, a very real benefit when volumes are down. It can help your operation run more efficiently, more cost-effectively and more flexibly. The Mortgage Automation Suite, brought to you by Richey May Automate and Zoral Group, provides the solution and support you need to be more flexible in response to market cycles. Along with cost efficiencies and stability, it can also improve accuracy and reduce repurchases. Learn more about how the Mortgage Automation Suite can help your business during difficult cycles.

How much longer will homebuyers hold off? With both sales and prices down 8 and 3 straight months respectively, existing homes (which are 89% of sales) are affordable at a $384,500 median price. But when 7% rates still keep homebuyers in wait-and-see mode, real-time analytics is your buyer education and engagement… And ComeHome by HouseCanary is your local market research tool for customers. Reach out for more information.

Conforming conventional shifts

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In 2008 both Freddie Mac and Fannie Mae were put under government conservatorship, and under the supervision of the Federal Housing Finance Agency (FHFA). Since that time each has individually put out policy, procedure, and pricing decisions and changes, but have also followed the guidance of the FHFA. For example, yesterday the FHFA announced conforming loan limits for 2023.

Via Public Affairs Detail | Federal Housing Finance Agency (fhfa.gov), the conforming loan limits (CLLs) for mortgages to be acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2023. In most of the United States, the 2023 CLL value for one-unit properties will be $726,200, an increase of $79,000 from $647,200 in 2022.​

“The Housing and Economic Recovery Act (HERA) requires that the baseline CLL for the Enterprises be adjusted each year to reflect the change in the average U.S. home price. Earlier today, FHFA published its third quarter 2022 FHFA House Price Index® (FHFA HPI®) report, which includes statistics for the increase in the average U.S. home value over the last four quarters. According to the nominal, seasonally adjusted, expanded-data FHFA HPI, house prices increased 12.21 percent, on average, between the third quarters of 2021 and 2022. Therefore, the baseline CLL in 2023 will increase by the same percentage.​

“For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit, the applicable loan limit will be higher than the baseline loan limit. HERA establishes the high-cost area limit in those areas as a multiple of the area median home value, while setting the ceiling at 150 percent of the baseline limit. Median home values generally increased in high-cost areas in 2022, which increased their CLL. The new ceiling loan limit for one-unit properties will be $1,089,300, which is 150 percent of $726,200.

“Special statutory provisions establish different loan limits for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $1,089,300 for one-unit properties.

“Due to rising home values, the CLLs will be higher in all but two U.S. counties or county equivalents.​ Effective immediately, Pennymac TPO is aligning with the conforming loan limit increases for standard and high-balance loans, as announced by Fannie Mae and Freddie Mac. In most areas, the 1-unit standard balance limit is increasing from $647,200 to $726,200, and the 1-unit high balance limit is increasing from $970,800 to $1,089,300. Loan amounts vary by area and unit, with complete details located here. Pennymac TPO will accept DU or LPA Approve/Ineligible decisions when the “ineligible” result is solely due to the loan amount being in excess of the 2022 limits but is within the 2023 limits.”

Fannie Mae shared its Loan Defect Taxonomy to assist when calibrating your QC results to Fannie Mae review results. The updated defect taxonomy offers a consistent baseline for identifying and classifying your defects using the same categories as Fannie Mae. Access the Loan Defect Taxonomy and Visit the Loan Quality page.

Fannie Mae has posted the November Appraiser Quality Monitoring (AQM) list. For more information read the AQM FAQs.

Wells Fargo Funding issued pricing news in C22-047. Effective November 28, 2022, Loan Score and LTV adjusters will worsen on conventional Conforming loans.

Capital markets

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With home prices declining, new listings down 20.8%, and listing removals up 56.2% YoY, home valuation accuracy is more important than ever when buying homes and loans, or determining whether LTV overlays are necessary in some markets. HouseCanary is your national brokerage to monitor fast and buy intelligently. Filter and review active listings as they hit, and run 3yr home value forecasts using market volatility, local income, and other factors. Test drive HouseCanary to see how. Reach out for more information.

Ahead of today’s risk events and Fed speak, rates inched higher yesterday. Also moving higher are FHFA’s conforming loan limits for Fannie and Freddie in 2023 for one-unit properties, set to be $726,200, an increase of $79,000 from $647,200 in 2022. We will receive more clarity on the Fed’s path today as Fed Chairman Powell will speak about the economy and monetary policy.

 

Today’s economic calendar kicked off with mortgage applications from MBA, which decreased 0.8 percent from one week earlier. We’ve also received other key data including ADP employment (+127k, the slowest rate in several months and much less than the +200k forecast), and the second look at Q3 GDP (+2.9 from +2.6 percent), and the trade balance is widening. Later this morning brings Chicago PMI, JOLTS job openings, pending home sales, and in addition to Chair Powell, we will receive remarks from Fed Governor Bowman, Governor Cook, and the latest Beige Book ahead of the December 14 FOMC decision. Tomorrow brings the October Personal Income/Outlays report, followed by the November Employment Situation report on Friday. We begin the day with Agency MBS prices better by .125 and the 10-year yielding 3.72 after closing yesterday at 3.75 percent.

Some LOs or processors probably feel this way when putting together a loan. 500 hours?

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. Supply and Demand are Still Driving Mortgage Pricing” is the current blog. 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.)

Rob Chrisman