Oct. 25: LO jobs; tech stack analysis, LO efficiency, fair lending products; LOs see that NAR is lawyering up; STRATMOR on retaining customers

Here in the Milwaukee area (yes, the autumn colors are stellar), I attended a Newrez joint venture event and one of the conversation topics (besides lenders either saying “no mas” and exiting or being purchased, more below, or NAR’s legal events, more below) is the changing landscape of down payments and down payment assistance programs. STRATMOR’s current blog is titled, “Mind the Down Payment”. Despite high mortgage rates and low buyer demand, home prices are still at record highs in many parts of the country leading to higher down payments. LendingTree analyzed data from more than 580,000 users of our platform who lived in one of the nation’s 50 largest metropolitan areas. A down payment on a home across the nation’s 50 largest metros averages $84,499. While down payments vary significantly by location, no metro in this year’s study has an average of less than $47,900. California is home to the three metros where down payments are highest, Buffalo, N.Y., Oklahoma City, and Virginia Beach, VA, have the lowest. (Today’s podcast can be found here, sponsored by Visio Lending and its top notch broker program. Visio is the nation’s premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Listen to interview with Visio Lending’s Jeff Ball on trends in DSCR Loans.)

Employment for originators

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Peoples Mortgage is a trusted name in the world of home financing. With a commitment to excellence that spans over 25 years, we have been helping individuals achieve their dream of homeownership. Our mission is to provide personalized mortgage solutions that empower our clients to make informed decisions about their financial future. We understand that every homebuyer is unique, which is why we offer a wide range of mortgage products tailored to meet diverse needs. Whether you have first-time homebuyers, seasoned homeowners looking to refinance, reverse mortgages or construction loans, we have the loans that will meet your team’s needs. As we continue to expand our presence in the mortgage industry, we invite you to grow with us. If you’re passionate about helping people achieve their homeownership goals, consider becoming part of the Peoples family. It’s All About the People is not just a phrase but our living motto! Please contact Shawn Morris with any questions.”

“If you’re a branch manager who needs more tools, support, and an added edge in this market, look no further. At Nations Lending, we have solutions to help you. With a top-notch Operations department that focuses on the loan officer experience with features like Direct Submit, offering seamless loan file submission directly to Underwriting, ACE (Accelerated Competitive Edge) Approvals, our comprehensive preapproval program saving you time, and our easy-to-use Hybrid eClose, allowing our producers to stand out in this market. If you’re interested in excelling with a company that is credited with multiple awards, including being a three-time Inc. 5000 winner, eight-time winner of Scotsman Guide’s Top Mortgage Lenders, and three-time winner of Top Workplaces for Millennials by Fortune Magazine. Become part of our nation and mission to make “home loans. made human.™,” visit Nations Lending, or call John Owens at 801-541-7456 to learn more.”

“What opportunities are you seeking to sharpen your skills and prepare for 2024? Are you also taking time to invest in those around you? In November and December, Thrive Mortgage is focusing on our business partners and our sales teams to be even better. Thrive is excited to be leveraging the expertise of industry veteran Phil Treadwell, Speaker and Coach, to do live trainings for our business partners and sales teams in markets throughout the U.S. These are unique times, and utilizing specific tactics and strategies that will grow your business now is where we excel. Providing solutions to the current challenges is a critical commitment to our industry, our partners, and our team. For more information about these in-market presentations, or for more information about other unique offerings such as our LLC (Lower-cost Lender Collaborative) for companies looking to partner with us, give us a call or reach out today.”

Attention Loan Officers: Take your career to the next level with best-in-class Operations, Underwriting, Support and more. Find out how at the next virtual Fairway Day on Wednesday, October 25 at 3pm ET. Join Steve Jacobson, Founder & CEO and David “Laz” Lazowski, President, Retail Sales East and others from the Executive Team and the Street. Here is the registration link and participation is 100 percent anonymous.

Independent mortgage banks, and brokers are taking a hard look at staying in the business, selling at a price that seems to drop every month, or exiting entirely. For example, Georgia’s Homestar told originators and counterparties that its last day for loan locks is 10/31/23. Banks and credit unions are re-evaluating their role in residential lending and scaling back or winding them down entirely, the latest example rumored to be F&M Bank in Tennessee. Anyone displaced can post their resume for free here for potential employers to view. But companies are hiring!

Lender and broker software, products, and services

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They say money doesn’t grow on trees. But that hasn’t deterred the 48,000 people who have hammered coins into the Ingleton Coin Tree over the centuries in the hopes of receiving good fortune and wealth in return. Mortgage lenders searching for prosperity can save themselves a transatlantic flight and register instead for the latest installment in TrustEngine’s Path to Profitability webinar series. Ben Miller, EVP of nCino’s U.S. Mortgage Suite, will join Churchill Mortgage’s Matt Clarke and TrustEngine’s Dave Savage to share consultative selling and technology strategies used by today’s 9-figure producers to create modern, tailored experiences that resonate with clients. It’s free and it’s happening today at 2 pm ET. Save your spot here.

Non-QM market share is growing. Don’t leave this product type in your blind spot. If you aren’t incorporating non-QM data into your product and pricing strategies, you could be compromising profitability. Optimal Blue’s Market Data License product now includes fields for non-QM products, including historical data. Market Data License provides “do-it-yourself” access to raw lock data derived from the Optimal Blue® PPE that facilitates advanced price and volume benchmarking against the market. As the industry leader in product and pricing technology, Optimal Blue is the only provider capable of supplying this depth of daily, loan-level data. Contact Sales@OptimalBlue.com to start better informing your strategies with non-QM data today.

Is your focus to do more with less? A business intelligence solution should highlight where there are opportunities to incorporate efficiencies and reduce costs. The most forward-thinking industry leaders are turning to Richey May’s RM Analyze to learn what they need to know now more than ever: how to operate even leaner. It’s half the cost of a full-time employee, and you gain access to a strong bench of talent with a rich background in the mortgage industry and access to hundreds of reports, including real-time peer benchmarking data, in no time. With these insights you can make meaningful decisions for your business and do more than just survive. Learn how to operate leaner.

“Huge announcement! After much demand and hundreds of requests from clients, MQMR has officially launched its enhanced ‘Fair Lending 2.0’ suite of solutions to ensure mortgage lenders and servicers like you aren’t paying hefty fines to the CFPB. The 2.0 solution includes data analysis, regression testing, policies and procedures, training, IT system controls, and support for your LAR submission. Sign up for the whole program, or just some of them! Whatever you decide for your fair lending program, remember that results happen over time, not overnight. Doing nothing will cost you a pretty penny. Be intentional, stay consistent, and start now. Contact MQMR today, and in the interim, download our Fair Lending white paper to learn more!

Calling all Production Managers! Since the beginning of time, you’ve wondered “How can I get all my originators working more like my top producers?” You’ve been looking for the holy grail: habit duplicationUsherpa has been researching habits of highly successful Loan Officers for 28 years, helping literally thousands of LOs increase production using habit duplication… through every conceivable market condition! How? Using data analytics and AI (and lengthy history in the industry), Usherpa identified the most powerful habits of successful producers. Leveraging those trends coupled with Usherpa’s technology and commitment to customized training, you can ensure your team is primed to operate like the big hitters. Make your life a little bit easier and give your LOs the tools to duplicate top producers’ habits, learn how here. While you’re at it download the Usherpa eGuide “3 Habits of Top Producing Loan Officers (You Can Duplicate).”

Do you know what’s in your tech stack? If not, it’s time for an audit. In today’s challenging market, a tech stack audit can be one of the most effective methods of lowering operating costs without sacrificing effective tools. The key is to evaluate current tech investments with an eye towards optimizing productivity and ROI versus looking to simply slash costs. But how do you go about performing this kind of audit for your own company? To help lenders increase their tech stack efficiency and maximize cost savings, MMI has developed a free white paper, “Stacking the Deck: How to perform a successful audit of your company’s current tech stack,” which even includes a tech stack audit spreadsheet template to guide you through performing an audit on your own.

Staying connected with borrowers

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According to data from STRATMOR’s MortgageCX program, less than one in every five borrowers returns to their original lender for their next loan. The data indicates that borrowers return more at first (24 percent in the first two years) but then just 15 percent are returning by year five. The severity of the drop over time indicates that once two to three years have passed, the lender and loan officer are out-of-sight, out-of-mind. What can lenders do to ensure a greater frequency of repeat borrowers over the long term? In his latest Customer Experience Tip, STRATMOR CX Director Mike Seminari suggests three ways lenders and loan officers alike can create connections with servicing borrowers and increase retention. Check out, “Always Be One Thought Away for Your Borrowers.”

New loan opportunities don’t just fall out of the sky these days. But they are hiding in your database. VanDyk Mortgage used Total Expert Customer Intelligence to uncover almost $11M in new loans from existing contacts. Shannon Schmidt, chief marketing officer at VanDyk Mortgage, recently said, “Customers expect personalization: they expect you to know a little bit about them and where they are in their life journey. When you can match that up with data and meet them where they are with the right message, it helps them feel like you know who they are and reinforces your relationship with them.” Read more from VanDyk Mortgage.

The changing corporate scene

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Tongues are wagging about real estate company Redfin’s share price rising after the company said funds managed by Apollo Capital Management and its affiliates agreed to commit up to $250 million in financing. The financing will be structured as a first lien term loan facility, the company said. Would you want to own a real estate company when there just aren’t a lot of properties out there?

The National Association of Realtors has lawyered up

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Today’s Mortgage Matters at 11AM PT, 2PM ET sponsored by L1, will focus on the NAR lawsuit with the aid of Matt VanFossen, Chief Executive Officer of Mortgage Automation Technologies, a financial technology provider specializing in consumer mortgage technology, and the CEO of the Absolute Home Mortgage Corporation, a mid-size Independent Mortgage Banker located in Fairfield, NJ. Register here!

Ed Groshans with Compass Point Research & Trading LLC did a fine job of spelling out the latest potential case that not only real estate agents are following, but lenders as well. The Department of Justice (DOJ) is considering filing an antitrust suit against the National Association of Realtors (NAR) centered on NAR’s Participation Rule and the Clear Cooperation Policy, which governs broker commission agreements.

“At present, DOJ has appealed a court decision requiring it to adhere to a settlement reached with NAR and approved by a court. It is unclear if DOJ will initiate a new antitrust lawsuit while the prior case is still pending. Should the NAR prevail on appeal, it could negatively influence a separate DOJ antitrust lawsuit.

“Whether it is another DOJ lawsuit or a civil lawsuit, it is clear that decoupling broker commissions is a likely outcome, especially in light of NAR’s recent policy change permitting listing brokers to not compensate buyer brokers. Last week, it was reported that the Real Estate Board of New York will prohibit listing brokers from paying buyer brokers beginning January 1, 2024. The end result of decoupling broker commissions is likely higher upfront costs for homebuyers. It is also expected to reduce the number of licensed real estate agents in the U.S. If first-time homebuyers are affected and there are less real estate agents, then it could result in fewer annual home sales.

“NAR settlement with DOJ may yet stand. In 2020, NAR and DOJ reached a settlement on NAR’s Participation Rule and the Clear Cooperation Policy. In 2021, DOJ notified NAR that it was withdrawing from the settlement. NAR sued the DOJ and in 2023, the district court agreed with NAR, nullified the DOJ’s revised Civil Investigative Demand (CID), and required DOJ to abide by the 2020 settlement. DOJ appealed the decision, and the case is currently in process. The appeal has been fully briefed and oral arguments have been scheduled for Friday, December 1.

“In 2022, NAR changed its Multiple Listing Policy Handbook in accordance with the 2020 settlement. It was reported that NAR changed its policy again in 2023 to permit listing brokers to offer buyer brokers $0.

“Buyers may have to pay broker commissions. At present, the listing broker usually splits the commission 50/50 with the buyer broker. The NAR policy change and pending lawsuits could result in buyer brokers having to be compensated directly from the homebuyer. At present, rolling the buyer broker fee into a mortgage. Which does not appear to be permissible, would have implications for loan-to-value calculations.

“NAR faces multiple commission-related lawsuits. The NAR’s June 2023 Legal Update lists several private suits that are currently in process including the Moehrl and Burnett lawsuits… our expectation is the decision will be appealed regardless of which party wins or loses. For Moehrl and Burnett we would not expect an appellate court ruling until 2025.” Thank you, Ed!

From NAR’s perspective, it is “standing up for business practices and rules that protect consumers’ interests, drive efficiency and transparency, and provide an equitable experience for consumers and brokerages competing in local MLS broker marketplaces.”

Capital markets: rates tread water as applications continue down

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The federal deficit nearly doubled in fiscal 2023, reaching $2.02 trillion. The increase is cited as one of the drivers of rising Treasury yields and worsening MBS prices, with the 10-year yield surpassing 5 percent Monday for the first time since 2007.

The federal deficit is just part of the interest rate equation. Even with investor interest currently focused on corporate earnings from Wall Street, there has also been a shift from “how high should rates go?” to “how long will rates be kept that high?” as those in the mortgage industry hope that “higher for longer” isn’t as long as previously forecast. Fed funds futures are pricing in one more rate hike thrown in for good measure (the Federal Open Market Committee is expected leave the target range for the federal funds rate unchanged at the conclusion of its next meeting on November 1, but will continue to indicate that some additional policy tightening may be appropriate), before about three rate cuts by the end of 2024, but events in the Middle East can upset any predictions.

Even before U.S. Treasuries recouped some ground after earlier surpassing 5 percent for the first time in 16 years, some of the market’s most prominent “bond bears” said that the recent rout in Treasuries had gone too far. For what it’s worth, some market watchers have said that 10-year yields pushing up toward 6 percent isn’t out of the question. Regardless, this renewed bout of volatility in the bond market is unwelcome for anyone hedging a mortgage pipeline.

Today’s economic calendar kicked off with mortgage applications decreasing 1.0 percent from one week earlier, according to data from MBA… Unsurprising given the recent rise in rates. Later today brings new home sales for September, Treasury auctions of $26 billion 2-year FRNs and $52 billion 5-year notes, and remarks from Fed Chair Powell. We begin the day with Agency MBS prices roughly unchanged from Tuesday’s close and the 10-year yielding 4.85 after closing yesterday at 4.84 percent. The 2-year is at 5.08.

Halloween was approaching and in a dark and hazy room, peering into a crystal ball, the Mystic delivered grave news:

“There’s no easy way to tell you this, so I’ll just be blunt. Prepare yourself to be a widow. Your husband will die a violent and horrible death this year.”

Visibly shaken, Heather stared at the woman’s lined face, then at the single flickering candle, then down at her hands.

She took a few deep breaths to compose herself… And to stop her mind racing. She simply had to know.

She met the Fortune Teller’s gaze, steadied her voice, and asked,

“And will I be acquitted?”

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. STRATMOR’s current blog is titled, “Mind the Down Payment.” 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 2023 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