Oct. 15: Observations on servicing and the bond market, and on the wholesale channel; Saturday Spotlight: Built

Hey, hats off to President Biden for making his marijuana announcement at 4:20PM! Genius. Oh… you mean, this was made up on the internet? False information on the web? Imagine that! But now this video is making the rounds, an undercover look at how mortgage fraud is perpetuated. And it doesn’t take long to find stories about inflation. Jokes about aging LOs sticking around too long aside, this year retirees on Social Security will receive the biggest cost of living adjustment in benefits since 1981: an 8.7 percent increase. That will increase the average benefit by $140 per month. The point of the cost-of-living adjustment is to keep pace with inflation, and to keep pace with the value of the dollar. As of September, prices paid by consumers were up 8.2 percent year over year. Overall, it’s about another $9.1 billion across the whole program.

Saturday Spotlight: Built, unlocking deal and draw management


In 3-5 sentences, describe your company (when was it founded and why, what it does, where, recent growth and plans for near-term future growth).

Founded in 2014, Built’s mission is to transform construction lending and spending by accelerating the flow of capital throughout the construction ecosystem. Construction loans are notoriously risky. Construction payments are time-consuming and tedious. Built is specifically designed to manage risk, while maximizing productivity and customer experience for lenders, borrowers, contractors, inspectors, and more. As the company continues to grow and the industry continues to evolve, Built is providing solutions to borrowers and lenders in the construction industry.

Tell us about what type of volunteer work employees are encouraged to engage in, or charities your company supports, and why.

Chase, CEO, and co-founder of Built, committed the Built team early on to participate in Habitat for Humanity on an ongoing basis. Last year, Built constructed a portion of the Sherwood Commons, an energy-efficient community of townhomes in the Nashville area in partnership with Habitat for Humanity. Built employees regularly participate in local area organization events, including a group of Built employees who marched in the 2022 Nashville Pride Parade.


What does your company do to help elevate your employees’ growth? Describe any mentoring programs, outside classes or training, or in-house training. How does the company help people develop?

Built offers hybrid and remote work, flexible working hours, and uncapped paid time off. This helps employees ensure work-life balance and makes the company an appealing place to work for working parents, people with disabilities, and talent located far from traditional tech hubs.

Built has a Diversity & Inclusion Committee dedicated to dismantling discriminatory barriers, facilitating meaningful conversations and education, and celebrating the company’s diversity. Special D&I focus areas include Strategic Initiatives, Education, Hiring, Community, and a D&I Book Club. Employee Resource Groups (ERGs) include Pride, Womxn at Built, Black at Built, and Grief in Common among other support networks at the company.

Built can only stay on the cutting-edge if its employees are always learning. The company offers learning grants to support employee growth, in addition to formal and informal mentorship. Learning grants include certifications, college courses, books or reading materials, webinars, conferences, training, etc. Individuals can apply for learning grants to support professional development on a quarterly basis.

Tell us how your company maintains its culture in a work-from-home environment, or how you plan on bringing employees back into the office, if applicable.

Built has a hybrid working model that is collaboration-forward. Built’s company culture is founded on eleven “guiding principles” that dictate how they work—and how they hire. While the majority of the Built team is located in and around the Nashville area, its focus is on recruiting top talent, wherever that talent may be. By taking a collaboration-forward approach, Built finds opportunities for all team members to connect and collaborate no matter where they are located physically.

Things you are most proud of that don’t have to do with sales.

Built has grown to support more than 220 North American lenders, spanning in excess of 200,000 commercial, homebuilder, land development, and consumer residential projects. In the past fiscal year, Built managed more than $200 billion in total construction value. To support this growth, Built doubled its talent pool and brought on senior executives across every piece of its business, attracting many of these candidates from well-known global companies. The team attracted $125M in Series D funding in late 2021 from both existing and new investors, including several customers. This led to a valuation of $1.5B and unicorn status. This type of success is rarely seen among companies developing a niche product and located outside of a major technology or financial hub.

As Built continues to grow at a rapid clip, so has its headcount. Last year, Built doubled its talent pool to 330 employees and brought on senior executives across every piece of its business, attracting many of these candidates from well-known global companies. In June 2022, Built brought on one new employee every day of the month. And, with the recent acquisition of Nativ, their headcount now exceeds 445.


Fun fact about Built.


Much of Built’s leadership consists of individuals who have spent years in the industries that Built is now trying to serve. Their innate understanding of how these businesses are run, what solutions are pertinent to the problems they are trying to solve, and how best to engage with these industries. Now, more than 220 lenders use the Built platform and in 2021 there were over 130,000 loans and over 200,000 inspections were performed.

(Contact Chrisman LLC’s Anjelica Nixt for more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured.)

Thoughts on the broker world


From Rocket/Quicken, Austin Niemiec posted his observations on how the competitive landscape in wholesale has changed and how the broker model and its independence has been impacted.

“Melinda Wilner, Chief Operating Officer at UWM responded to a journalist that questioned whether UWM’s philosophies and actions were reducing lender choice for America’s brokers.

Wilner replied, ‘I would say that’s wildly untrue, it’s competition that makes it more interesting. By the nature of wholesale, there has to be competition and there has to be other lenders… That’s what makes wholesale the best fit for the borrower.’

Mark Twain famously said, ‘Action speaks louder than words, but not nearly as often.’ Let’s ignore Melinda’s high-minded words for a moment and focus on UWM’s actions over the past few years. After reviewing the facts, it’s clear that UWM represents a massive threat to America’s mortgage brokers and to their future independence.

“Brokers shouldn’t be forced into choices that result in them, and their clients, having limited access to the best products and the best price available in the market. A broker’s lifeblood is choice and optionality… It’s what makes them a broker.

“In the past few years, Ishbia and UWM have reduced broker optionality by contractually forcing their brokers to choose between Rocket Mortgage and UWM, removing those broker’s 2nd largest option (RKT PRO TPO). Ishbia did so by forcing brokers to sign a contract that mandates them to pay $50,000 or more if they dare to broker even one of their loans with Rocket. Enforcing that same “ultimatum” contract to eliminate a UWM broker from brokering to Fairway Independent Mortgage, which has taken away brokers 10th largest option. Engaging in a price war that had as its goal not to aid brokers, but to eliminate UWM’s competitors. According to brokers who listened to a recent public sales broadcast, Ishbia said something to the effect that, every time a wholesale lender CEO emails me asking me when my Game On pricing will stop, I just add 30 more days.

“Since these moves, loanDepot, brokers’ 4th largest lending partner, exited wholesale, Finance of America, brokers’ 6th largest lending partner, exited wholesale, and AmeriSave, brokers’ 9th largest lending partner, exited wholesale. Ishbia has now, via contractual bullying and a price war designed to eliminate his competitors, eliminated the ability for UWM brokers to do business with 5 of the top 10 wholesale lenders in America.

“Now what? Many brokers are seeing a dramatic price increase from Ishbia and are feeling the pain of not having as many lenders to turn to. But in one of Ishbia’s recent earnings calls, he said, ‘And we continue to capture more market share, and not only position ourselves to win but dominate the future. We feel great about the decision we made. As I said before, we control the margins, we decided to lower margins strategically to grow the broker channel and help us continue to grow our market share.’

“If Mat Ishbia and UWM were truly committed to the real kind of competition that benefits brokers and their clients, he wouldn’t use his lawyers to take away brokers’ options, and he wouldn’t celebrate the demise of other wholesale lenders…. which only further reduces broker choice.

“Brokers are now asking themselves if eliminating UWM’s competition to gain further control of brokers is exactly what Ishbia is trying to do… and if his ultimate goal is to turn America’s independent mortgage brokers into his personal net branch loan officer network.

America’s brokers must not give up their independence to the whims of one man. A broker’s lifeblood is choice and optionality. The stakes are too high. The long-term viability of their companies and their livelihoods is on the line.”

Thoughts on the servicing market and bond market


This week the BOKF’s Chris Maloney put out an insightful piece.

“The CPI report came in a little hotter than expected at 8.2% year-over-year and yields promptly sold off, especially on the short end. Bottom line, the Federal Reserve still has more work to do, and the futures market is now pricing in a terminal rate of just above 4.75%. The mortgage rate is at 6.94% as I write this, about 100 basis points higher compared to the same time last month. The universe of American homeowners is almost guaranteed to remain without any incentive to refinance at least over the near term.

“So, we will… look at which servicers are currently flexing their muscles and keeping discount speeds fastest by looking at loan level data in Ginnie Mae space. When rates are rising and a recession is sitting at the dinner table, getting cash back into your pocket faster is preferable. At this time the Ginnie Mae 15-year 1.5% through 4.5% coupons and the Ginnie Mae 30-year 2.0% through 5.5% are all trading at a discount…

“Starting off with the Ginnie Mae II 30-year universe aggregated into rate incentive buckets, we find much of it deeply out of the money, with almost $1.2 trillion of unpaid balance sitting between 200 and 350 basis points out of the money. Of the servicers who exhibit fast speeds when out of the money Freedom is a standout as she sits in the top five for all seven incentive buckets. Mr. Cooper is right behind, with a top five showing in six of the seven incentive buckets and Money Source in four of the seven. Driving in the slow lane are AmeriHome, Planet, Home Point and United Shore.

“Servicers can make all the difference in determining your pools’ speeds. Whether it is a single or a multi-issuer pool, it behooves any investor to look under the hood at the servicer make up. In a world in which almost the entire universe of mortgage bonds is deeply out of the money, every little bit counts.”

For something other than the usual joke or trivia or interesting video…

Coffee filters have many uses. Who knew! And you can buy 1,000 at the Dollar Tree for almost nothing, even the large ones.
1. Cover bowls or dishes when cooking in the microwave. Coffee filters make excellent covers.

2. Clean windows, mirrors, and chrome… Coffee filters are lint-free, so they’ll leave windows sparkling.

3. Protect China by separating your good dishes with a coffee filter between each dish.

4. Filter broken cork from wine. If you break the cork when opening a wine bottle, filter the wine through a coffee filter.

5. Protect a cast-iron skillet. Place a coffee filter in the skillet to absorb moisture and prevent rust.

6. Apply shoe polish. Ball up a lint-free coffee filter.

7. Recycle frying oil. After frying, strain oil through a sieve lined with a coffee filter.

8. Weigh chopped foods. Place chopped ingredients in a coffee filter on a kitchen scale.

9. Hold tacos. Coffee filters make convenient wrappers for messy foods.

10. Stop the soil from leaking out of a plant pot. Line a plant pot with a coffee filter to prevent the soil from going through the drainage holes.

11. Prevent a Popsicle from dripping. Poke one or two holes as needed in a coffee filter.

12. Do you think we used expensive strips to wax eyebrows? Use strips of coffee filters.
13. Put a few in a plate and put your fried bacon, French fries, chicken fingers, etc. on the plate. It soaks out all the grease.

14. Keep in the bathroom. They make great “razor nick fixers.”

15. As a sewing backing. Use a filter as an easy-to-tear backing for embroidering or appliqueing soft fabrics.

16. Put baking soda into a coffee filter and insert into shoes or a closet to absorb or prevent odors.

17. Use them to strain soup stock and to tie fresh herbs in to put in soups and stews.

18. Use a coffee filter to prevent spilling when you add fluids to your car.

19. Use them as a spoon rest while cooking and clean up small counter spills.

20. Can use to hold dry ingredients when baking or when cutting a piece of fruit or veggies. Saves on having extra bowls to wash.

21. Use them to wrap Christmas ornaments for storage.

22. Use them to remove fingernail polish when out of cotton balls.

23. Use them to sprout seeds. Simply dampen the coffee filter, place seeds inside, fold it and place it into a plastic baggie until they sprout.

24. Use coffee filters as blotting paper for pressed flowers. Place the flowers between two coffee filters and put the coffee filters in phone book.

25. Use as a disposable “snack bowl” for popcorn, chips, etc.

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. Secondary Marketing: What They Do All Day” is the current blog. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).


(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