Daily Mortgage News & Commentary

Oct. 25: MLO jobs; decisioning, retention, sales, processing tools; report on discrimination; perspective on Fed tapering

Given my emails and hallway chatter in San Diego last week, what’s on people’s minds? The state of the housing market is one, and Ivy Zelman, CEO of Zelman & Associates and author of “Gimme Shelter,” co-hosts The Mortgage Collaborative’s Rundown with Rich Swerbinsky, the COO of The Mortgage Collaborative, and me as we discuss current events in the housing market for 45 minutes on Friday at 3PM ET in “The Rundown with Rich and Rob.” Several readers have asked me about AEI’s Housing Center recent report which critiques The Markup/Associated Press’s recent analysis on racial disparities in mortgage decline rates. “Our research finds that contrary to The Markup/Associated Press’s report, HMDA data on purchase loans do not show evidence of systemic discrimination by the mortgage lending industry when accounting for risk-adjusted loans… We are, however mindful that many past and continuing housing and other policy actions to address racial discrimination have had unintended consequences that have done substantial harm to low-income households generally, and minority households in particular… we found that loans to protected class borrowers have higher risk-adjusted default rates than for Whites, this indicates lenders are extending more lenient underwriting to protected class borrowers than would otherwise be justified based on risk characteristics.” Today’s audio version of the commentary is available here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology, and other services in the mortgage industry and in banking.

Employment

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As part of our integration with Newrez, Caliber Home Loans is proud to offer three new non-QM products: SmartEdge, SmartSelf and SmartVest. This Smart Series expansion provides us with more opportunities to better serve our customers through non-traditional elements. SmartEdge presents competitive financing for those who are unable to secure traditional lending due to a recent credit event. SmartSelf is a useful option for self-employed borrowers interested in using bank statements to qualify for a mortgage. SmartVest is for experienced real estate investors seeking a business investment property with complex finances. Interested in joining an industry-leading company where you can provide your clients with a wide range of options to suit their specific needs? Reach out to James Hecht.

Mortgage technology company Xpanse has announced the appointment of industry veteran Phil Huff as its CEO. Congratulations.

Lender & broker services and products

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“A suite of precision, tech-forward, customized mortgage lending solutions. It’s what you need. And it’s what Flagstar Bank delivers. Flagstar’s mortgage solutions live under one roof and one philosophy: clients first. Flagstar’s highly personal warehouse-lending approach has made it one of the largest warehouse lender’s in the country. Flagstar can fund your MSR purchases to maximize MSR value over time, regardless of portfolio size, and can ease the burden of servicing advances in your portfolio and manage your liquidity with servicing advance financing. And in terms of subservicing, Flagstar’s nearly 1.2 million borrowers representing over $255 billion in home loans are testament to its award-winning capabilities which are geared to minimize risk and maximize returns. Flagstar is built for best-in-class service that always keeps our client’s integrity and needs top of mind. Contact Jeff Neufeld or Joe Lathrop today to discuss what Flagstar can do for your business.”

Have you tapped into your refi opportunities? The other day, one of Usherpa‘s top enterprise clients wondered if their closed loan database still had any untapped refinancing opportunities. They wanted Usherpa to apply specific criteria to the database and launch an email campaign followed by a direct mail piece. 2,283 past clients met the criteria! The marketing team knew they were onto something when Usherpa reported an amazing 39.23% open rate. A week later, the direct mail piece went out. The mortgage company was pretty sure they would get the 1-2 loans needed to pay for the campaign, but they were shocked when just over a month from the initial email launch, their LOs had 261 new loan applications in the pipeline. Find out what Usherpa’s SmartCRM can do for your company. Schedule your personalized demo today.

If the last two years have taught us anything, it’s to prepare for the unexpected. The pundits continue to debate a potential default wave, but all seem to agree that a wave is coming. An inevitable increase in foreclosures and REO activity is on the horizon, and Computershare Loan Services (CLS) has the REO expertise to help servicers weather the storm. CLS efficiently manages portfolios with strategies that utilize clean data and local agents to get results. In fact, CLS consistently exceeds its net proceeds goal with a 90.6% sell rate of vacant and occupied, traditional, and auction properties. Contact Ron Rooney, and find out what CLS’ REO team can do for your portfolio.

Looking for an exceptional VA/FHA purchase or refi experience with a winning price? As the #1 VA and FHA Lender*, the Freedom Mortgage Wholesale Division is proud to offer two business day underwriting on all VA and FHA transactions, and a (.250) LLPA Incentive for all VA Purchases. Additionally, offer more buying power for eligible VA borrowers** with no maximum loan amount, no down payment! To learn more, email Freedom to have an Account Executive contact you. *Inside Mortgage Finance, Jan-Jun 2021. **For eligible veterans, service members, and survivors with full entitlement who are borrowing over $144,000 on a purchase or cash-out refinance, there is no down payment requirement. Maximum loan amount for such loans is subject to credit approval. For IRRRLs, VA will continue to guaranty 25% of the loan amount without regard to the Veteran’s available entitlement and/or county loan limits.

The Loan Store has ARIVE’d! See why brokers across the country are raving about one of the newest lenders on the ARIVE platform. Along with its 5-Star average Google and Yelp service reviews, TLS continues to offer consistently aggressive pricing across all products. Be sure to add The Loan Store as an eligible lender in Loansifter and price them against the competition today. TLS maintains the highest level of customer support by giving all broker partners direct access to their own support team, underwriters, and management. TLS prioritizes purchases and are closing all loan types in less than 30 days on average! To request an application with TLS visit www.theloanstore.com or email Brandon Stein.

In a strange-but-true story popularized by fictional White House Chief of Staff Leo McGarry on “The West Wing,” “Andrew Jackson, in the main foyer of his White House, had a big block of cheese…. The block of cheese was huge — over two tons. And it was there for any and all who might be hungry.” Before leaving office, Jackson had a party and shared his cheese with roughly 10,000 visitors. In a recent case study, Success Mortgage Partners’ Brett Miller equated Sales Boomerang alerts to “hot, fresh donuts” ready to share with any and all who might be hungry for leads. On Oct. 27 at 1 pm ET, join Miller along with Sales Boomerang’s Alex Kutsishin and Mortgage Champions’ Dale Vermillion as they flip on the ‘HOT’ sign, share some donuts, and reveal the secret to keeping customers coming back. Register here.

FundingShield, the market leader in wire & title fraud risk management and closing agent compliance, released its Wire & Title Fraud Analytics Report for Q3 2021 showing 47% of loans reviewed by FundingShield had at least one risk finding, and of those loans an average of 2.1 risk findings existed per transaction. Ike Suri, CEO & Chairman shared E-closings and other closing automation technologies continue to gain traction and simultaneously with new technology new fraud schemes and vulnerabilities have emerged. In our recent dialogues with the FBI they identified the lending, title, and settlement space to be a hotbed for potential first party and third party (cyber) crime due to the amount of data, funds and unsupervised access to recordable instruments that exists.” Recent CFPB concerns on third-party vendor IT risks are driving a rapid rise in clients, contact Sales@fundingshield.com to learn about the automation tools to lower cost & prevent wire/title fraud.

The StorySeller events kick off in OH, PA NJ, and NY next week, and then on to CA and WA two weeks later. “We created this event series to help loan officers and their Realtor partners convert more leads and overcome objections about today’s housing market,” says Gibran Nicholas, CEO of Momentifi and host of the events. “Realtors who attend get free CE credit, so invite your strategic partners to join you at a live event in your market. This is a great way for loan officers to connect with current and new strategic partners before year-end.” Attendees will receive templates to create your 2022 business plan and illustrate the cost of waiting for buyers and sellers. Don’t miss your chance to reconnect with Realtors and set yourself up for success as we move from a primarily refi market to a primarily purchase market. Click here for more information or to reserve your spot.

Decisioning tools

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One UW touch on 70% of loans. 1,100 data cross checks on every click. 7.92 autonomous underwrites per minute. >$1,000 more profit per loan. 0 defects. 0 put backs. Decisions rep & warranted. Happy clients. It’s hard to think of a reason to not contact Candor for more information.

Decision Management: The next frontier of mortgage automation. While there is a high level of industry awareness and interest in automating decision management, mortgage lenders are also very cautious about a “black box” type of approach when it comes to rendering highly sensitive underwriting decisions. Simply put, lenders are reluctant to trust an algorithm to deliver a critical life-stage decision and impact customer experience. When lenders automate with DecisionGenius™, they see all the information they need to make an underwriting decision in one place, comparing application data to sourced data to investor guidelines. DecisionGenius™ combines all types of income (including self-employed!), credit, assets, and collateral, and an appraisal review, for cohesive, comprehensive decision-making. Indecomm’s automation approach resonates with lenders seeking to automate their decision management and improve their customer experience holistically, not just at the point of sale. Schedule a demo today.

Underwriting Growing Pains? Instead of hiring more underwriters, enable the ones you have to do more underwriting. Lender Toolkit’s AI Underwriter adds up to 90% of the loan conditions automatically by integrating directly with your service providers. Using direct integrations with your appraisal, credit, flood, and fraud providers along with DU, LP, and FHA instead of relying on OCR technology means real-time data and decisions. After four years in production, AI Underwriter has thousands of intelligent decision points that automate applying conditions to the loan. Skilled underwriters are hard to find and hard to retain. To recruit and keep the best underwriters, provide them a system that maximizes their value to your organization. Read Mortgage One’s case study here. Contact Lender Toolkit today to learn how you can double your production with your current underwriting staff. Schedule a demo today!

Capital markets

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Redwood Trust and its Q3 results? Redwood recently announced a business update and have scheduled Q3 results for release on October 27.

Some were expecting mortgage rates to keep their summertime levels and stay low into 2022. Indeed 30-year and 15-year rates are low by historical standards, but they aren’t as low as they were over the summer. The U.S. economy is picking up steam. The price of restaurant meals, cars, hotel stays, and nearly everything has moved up. Prices are increasing, impacting both consumer and producer price indices produced by the government.

Economic data over the last week pointed towards slower, but still moderate, growth in GDP throughout the second half of the year. Leading economic indicators increased 0.2 percent in the weakest month since February. Supply chain constraints lead to declines in manufacturing, mining and utility groups during September. Meanwhile existing home sales hit their highest annual rate since January at 6.29 million units as supply dwindled to a very tight 2.4 months’ worth. New construction of single-family homes eased 1.6 percent to a 1.55 million annual pace and permits declined to a 1.04 million annual pace. Both purchase and refinance mortgage applications were down during the week ending October 15 as the average rate for a 30-year fixed increased to 3.23 percent.

As we head closer to next week’s Federal Open Market Committee meeting, expectations remain for the beginning of the tapering of asset purchases (or the slow removal of financial supports) that were implemented to combat the economic effects of last year’s lockdowns. U.S. Federal Reserve Chair Jerome Powell reiterated on Friday that “it’s time to taper,” but he did also acknowledge a note of concern over persistently high inflation. Despite his position that it won’t be around past next year, he said supply chain bottlenecks could complicate matters since they may “last longer than previously expected, likely well into next year.” With elevated inflation less temporary than expected, rate hike odds later next year continue to ratchet higher.

On the data front this week, releases include updates on regional Fed surveys, home prices, consumer confidence, new home sales, durable goods, the first look at Q3 GDP, pending home sales, and inflation in the form of PCE. Today’s calendar is on the lighter side, with only the Chicago Fed National Activity Index for September (dropping to -.13) and the Dallas Fed Manufacturing Business Index for October due out later this morning.

The days of announcing this are perhaps numbered, but for now the Fed Desk will purchase up to $4.9 billion of conventional 30-year 2 percent and 2.5 percent and 15-year 1.5 percent and 2 percent. For those wondering about what percentage of Agency MBS the Fed is purchasing, last week the Desk purchased an average of $5.4 billion per day compared with $6.5 billion in originator supply. The $27.2 billion purchased was 33.4 percent of $81.4 billion that was submitted. 64 percent of purchases was UMBS30s, 10 percent was UMBS15, and 26 percent was GNIIs. Since the restart of asset purchases in March 2020, the Desk has purchased over $2.6 trillion MBS. The Desk will release a new schedule released on Thursday afternoon covering the October 29 to November 12 period and expected to total the same as the current schedule. We begin the week with Agency MBS prices worse nearly .125 from Friday and the 10-year unchanged from Friday night, yielding 1.66 percent.

A man was at a bar one night and saw a beautiful redhead sitting in the booth opposite him. After about 5 minutes, he got up the guts to go talk to her. Just as he sat down, she sneezed and her glass eye flew out from her socket.

On reflex, the guy shot out his arm and caught her eye and gave it back to her. They started talking and the redhead invited the man to go to a movie with her, then go back to her place for a nightcap. In the morning, she cooked him a big breakfast of bacon and eggs and the man said, “Why are you being incredibly nice to me? Is this the way you treat all men who start talking to you?”

The redhead replied, “No, you just happened to catch my eye!”

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, “Grow Your Business But Don’t Step Over a Dollar to Save a Dime.” 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 2021 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.)