Oct. 9: New employee industry advice; September lock stats; Agency deals; vendor news; Saturday Spotlight: LBA Ware

I received this note from Glenn Freezman: “Rob, I can’t believe it’s that time of year again when I have to rake all the leaves from my lawn to my neighbors side.” As we move into autumn, everyone, and their brother, knows that loan originators are out there adding value and creating wealth for clients. But winter is coming, and for some it is already here, especially wholesalers who have cut their margins to break even. According to Curinos, September 2021 mortgage rate-lock volume was down 18% YoY and -11% MoM across all channels, while funded volume decreased 4% YoY and was flat MoM. (Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures; more data here.) And it is expected that Black Knight’s September 2021 Originations Market Monitor Report will also show a drop when released publicly on Monday, as the MBA’s weekly September numbers showed +.3, +4.9, -1.1, and -6.9 percent for the weeks. Meanwhile, LOs are helping one client at a time with good products, price, and service.

Saturday Spotlight: LBA Ware, helping mortgage lenders leverage their data to be successful.

 

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).

 

Since 2008, LBA Ware has been on a mission to help mortgage companies reach new heights with software that integrates data, incentivizes performance, and inspires results. Many lenders know us best for CompenSafe™, an incentive compensation management platform that automates the way mortgage companies manage commissions and bonuses. Even if you don’t use CompenSafe, you may have seen our Mortgage Loan Compensation Reports, which draw on CompenSafe data to shed light on compensation trends in the mortgage industry each quarter. More recently, we’ve been making waves with LimeGear, a turnkey business intelligence (BI) platform that is changing the way lenders use their data to be successful.

 

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

 
A core belief at LBA Ware is to never stop learning, remain curious and strive for greatness.

By partnering with Book ‘Em, a local organization that delivers books to school-aged children in need, we’re empowering future generations to develop a sense of wonder and envision a world of possibility through the magic of books. With every new client, we make a $100 donation to Book ‘Em, which allows them to purchase 45 new books.

 

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

All new employees attend LBA Ware University, a series of structured meetings with each department across our organization, so they can get to know their colleagues and understand how the different business functions work together. In addition, each employee receives an annual learning and development budget and the latitude to use it for whatever development opportunities they find most appealing. We also work to develop and recruit young talent through our sponsorship of Macon’s Young Entrepreneurs Academy (YEA!) and our involvement with two local colleges, Mercer University and Georgia College & State University.

 

Tell us how your company maintains its culture in the office, or in a work-from-home environment, if applicable.

At LBA Ware, Converse All-Stars (a.k.a. Chucks) are an integral part of our company culture. Chucks represent trust, collaboration, optimism, creativity, the future, and fun. As LBA Ware grew from one laptop in a living room to a group of highly skilled awesomeness, so too has our Chuck Check circles… Which we love to document. Every new employee gets a pair on their first day in their alma mater’s colors. You can see us rocking our Chucks on Friday’s, when we have ‘Chuck Checks,’ walking around exhibit halls during industry events, or at one of our annual and ongoing events such as our LBA Ware Summit annual retreat, quarterly family outings, pizza lunches, holiday events and group volunteering.

 

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

In 2021, LBA Ware made the Inc. 5000 list of America’s fastest-growing companies for the third consecutive year and became the first company based out of Macon, Georgia, to graduate from Georgia’s technology incubator, the Advanced Technology Development Center (ATDC). We love being a part of our local tech community!

 

Fun fact about LBA Ware

Many people don’t realize that the name “LBA Ware” is an homage to our founder. “LBA” stands for Lori Brewer and associates.

Advice for the industry

I asked people of color and women in the industry about their early careers & advice for new entrants, and appreciate the time they spent responding. I will happily circulate more responses if you care to write, and have more already to publish. “What do you think the best advice you can give those starting out in the mortgage industry?” or “What is the boldest move you made that helped advance your career?” or “What do you wish someone would have told you about being successful in this industry?”

From Arizona, Brenda Hedeen, MBA, CPA, and Chief Financial Officer of On Q Financial, sent a good note to keep things in perspective. “I hate the victim mindset, and this whole thing about ‘empowering Women’ in the work world and all of the victim mindsets floating around. I suppose my position should be encouraging in of itself… It’s just a different angle than many women focused on ‘empowerment.’

“My advice is to every person, no matter age, gender, or race, is to learn about self-fulfilling prophecy. If you think you’re being oppressed, and you obsess about it, you’ll feel oppressed. If you focus on what you want, and doing what it takes to get there, you’ll figure out how to get around any perceived roadblocks. Along the way, if you find yourself in a bad situation, don’t blink twice, find a new opportunity that aligns with your goals.

“With that being said, ALL genders, ALL races, ALL ages come across a time in life where they feel undervalued or feel lack of opportunity before them, because leaders aren’t perfect. Leaders have a lot to focus on and a non-stop barrage of demands, asks, and resource constraints. I’d bet that most often, the failure to demonstrate value and appreciation is not intentional.

“If someone feels they are underpaid, ask what must be done to add value that garners a raise. Or professionally present what you have done to support asking for a raise. If the Company doesn’t see your value, move on to another Company that does. At a previous Company I waited around for my CEO to give me a raise without recognizing that he probably wasn’t consumed with wondering if I’m paid enough. In the end, all I had to do was ask.

“If someone feels they aren’t being heard. Try a different approach. If still not being heard, take your great ideas to someone who will listen. I took my own advice soon enough, that I was able to leave without hard feelings, I’ve moved on to a better opportunity for myself, and now I can look back with nothing but appreciation for my prior employer and what it DID do for me in my career instead of dwelling on what they didn’t do. Sometimes vision just doesn’t align, and that’s ok. At the end of the day, an employee is hired to achieve the Vision & Mission of the Founder of the Company, not the other way around. That’s me on my soapbox.

“Oh, and for the record, anytime I’ve felt a little shut out, was because I let it happen. In order to be engaged in conversation, one must be a leader of engaging conversation. Asking questions is a great place to start.”

Vendor morsels

3rd party suppliers to residential lenders do a lot more than make up words for company names, dropping vowels, and capitalizing letters in the middle of those names. Let’s take a random sample of who’s doing what.

Bayview has selected Tavant as its Broker Experience Partner and Digital Transformation Agent. Bayview’s new FinXperience platform features a seamless, end-to-end digital lending experience that reduces processing time and the overall cost of loan origination. Partnering with Tavant is enabling Bayview to rapidly expand its wholesale business over the next two years through Lakeview, its wholesale mortgage provider and subsidiary.

Provider of comprehensive mortgage software solutions, Calyx announced its Path® loan origination software (LOS) is now integrated with NxtSoft, a provider of API, cybersecurity and data software solutions. NxtSoft has been an integral part of the fintech and security industry for more than 25 years. “Our integration with NxtSoft’s will make it easier and less expensive for Path users at financial institutions to onboard closed loans into their servicing systems,” said Michele Parson, Senior Marketing Manager at Path. “This will take time, cost and the potential for errors out of this loan boarding process and make Path an even more attractive solution for banks and credit unions.”

First American Title Insurance Company expanded remote online notarization (RON) availability for residential real estate transactions via the company’s Direct and Agency division operations. As state laws governing the use of RON have evolved in response to both the pandemic and consumer preferences, First American has accelerated the use of RON with the company’s preferred RON platform, Notarize, and currently offers title insurance on RON-executed real estate transactions in 32 states, with additional states to follow.

Agency deals

Fannie & Freddie’s activities in the secondary markets help determine the rates borrowers see in the primary market. What are some typical deals involving Freddie Mac?

Freddie Mac priced recently priced a new $777 million offering of Structured Pass-Through K Certificates (K-1521 Certificates), which are multifamily mortgage-backed securities. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement. Class A-1 had $194.5 million of principal, a weighted average life of 10.74 years, a spread of S+35 bps, a 1.72 percent coupon, a 1.72 percent yield, and a $99.9963 price. Class A-2 had $583.4 million of principal, a weighted average life of 14.71 years, a spread of S+45 bps, a 2.18 percent coupon, a 1.95 percent yield, and a $102.9956 price.

On August 2, Freddie Mac Multifamily announced that it will soon go to market with the issuance of $170 million in Social Bonds supporting four apartment communities in the Las Vegas area with 1,139 total units. More than 500 of the units across the four communities are affordable at 80% area median income. These Social Bonds will be issued as four floating-rate, 7-year, SOFR-based Multifamily PCs. The transaction helps Freddie with two parts of its mission: one, supporting affordable housing; and two, promoting diversity, equity, and inclusion in the multifamily industry.

On August 5, settled on August 12, Freddie Mac priced a new $1.1 billion offering of Structured Pass-Through K Certificates (K-130 Certificates), which are backed by underlying collateral consisting of fixed-rate multifamily mortgages with predominantly 10-year terms.

Freddie Mac priced a new $741 million offering of Structured Pass-Through K Certificates (K-744 Certificates), which are backed by underlying collateral consisting of fixed-rate multifamily mortgages with predominantly 7-year terms and are expected to settle on or about August 19. Pricing for the deal is as follows. Class A-1 ($38.5 million) has a weighted average life of 4.46 years, a spread of S+3 bps, a 0.863 percent coupon, a 0.8523 percent yield, and a $99.9958 price. Class A-2 ($579.9 million) has a weighted average life of 6.81 years, a spread of S+13 bps, a 1.712 percent coupon, a 1.2386 percent yield, and a $102.9976 price. Class A-M ($122.9 million) has a weighted average life of 6.93 years, a spread of S+21 bps, a 1.34 percent coupon, a 1.33 percent yield, and a $99.9979 price.

Freddie Mac priced a new $859 million offering of Structured Pass-Through K Certificates (K-F118 Certificates), which includes a class of floating rate bonds indexed to the Secured Overnight Financing Rate (SOFR). The K-F118 Certificates are backed by floating-rate multifamily mortgages with 7-year terms, which are SOFR-based. The one offered class, Class AS, has a weighted average life of 6.75 year and a coupon of the 30-day SOFR average + 20 bps. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds.

On July 23, Freddie Mac settled the $382 million SB88 offering, a multifamily mortgage-backed securitization backed by small balance loans underwritten by Freddie Mac and issued by a third-party trust. Freddie Mac Small Balance Loans generally range from $1 million to $7.5 million and are backed by properties with five or more units. This is the seventh SB Certificate transaction in 2021. The Optigo® Small Balance Loan (SBL) origination initiative was first announced in October 2014, and expands the company’s continuing effort to better serve less populated markets and provide additional liquidity to smaller apartment properties.

On July 23, Freddie Mac priced a new offering of credit risk transfer securities backed by Tax-Exempt Loans (TELs) made by state or local housing agencies and secured by affordable rental housing. The ML-11 Certificates are designated as “sustainability bonds” within Freddie Mac’s Sustainability Bonds Framework. The proceeds will finance multifamily properties that (a) finance affordable housing to low-to-moderate-income families, (b) may have features, or are located in areas that further economic opportunity for residents and (c) may include certain environmental impact features. This is the company’s eleventh ML Certificate offering and fifth ML-Deal with the sustainability bonds moniker. The company expects to guarantee approximately $357 million in fixed- rate ML Certificates (ML-11 Certificates) that are supported by a pool of fixed-rate TELs. The ML-11 Certificates settled on July 29, 2021.

The Washington Post’s Style Invitational asked readers to take any word from the dictionary, alter it by adding, subtracting, or changing one letter, and supply a new definition.

The winners include:

-Bozone (n.): The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, unfortunately, shows little sign of breaking down in the near future.

-Cashtration (n.): The act of buying a house, which renders the subject financially impotent for an indefinite period.

-Sarchasm (n): The gulf between the author of sarcastic wit and the person who doesn’t get it.

-Inoculatte (v): To take coffee intravenously when you are running late.

-Osteopornosis (n): A degenerate disease. (This one got extra credit.)

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.)

Rob Chrisman