Sep. 2: Marketing, income, onboarding, HECM tools; jumbo, non-QM, misc. product updates; do-it-yourself appraisals
I don’t know whether my Nolan Ryan rookie card, fortuitously spared from my bike spokes decades ago, is worth $500 or the 10 cents I spent for the pack (with gum!). Values (and worth) can be tricky things. Look at the value of rentals with the 4-month prohibition on evictions declared yesterday. We were reminded of this one decade ago: investors in mortgages don’t want to buy a pool of loans filled with mortgages on properties where values were “pushed,” and want accurate assessments. I bring this up because investors will certainly be interested in Xome (Mr. Cooper) and Manor Financial (a digital home records technology startup) announcing the availability of Inspex (not the UK’s Inspex) “a consumer-facing mobile application, that gives homeowners a seamless tool to appraise their property and lenders a simple, contactless option for their borrowers to reduce wait times on appraisals and other valuation products by as much as 50 percent.” And while we’re on “worth,” did you know that the ex-Mrs. Bezos is now the richest woman in the world? (In this instance, one picture is indeed worth a thousand words.) Maybe she’d like to buy a stagecoach since Wells Fargo is shuttering all but one of its corporate museums.
Broker & lender services and products
“Overwhelmed with the flood of mortgages, and losing time on manual verifications? Truework has your back. Our dedicated team of highly trained mortgage industry professionals at Truework is committed to tackling and completing your VOE/VOI request (whether manual or automated) so you can close your loans faster than ever. Truework is a US-based company and has partnered with major lenders across the country to conduct 100,000+ verifications and counting. And for a limited time, Rob Chrisman readers get 5 free Verifications ($200 value). Let us do the heavy lifting so you can focus on what matters. Interested? Email Zack Green at Truework.”
All-star panel alert! Tomorrow, 9/3, don’t miss Sagent’s National Mortgage News webinar, a deep dive on powering one-stop-shop homeownership with Sagent’s Tim Von Kaenel, Ellie Mae’s Parvesh Sahi, HouseCanary’s Michael Rodriguez, and The Basis Point’s Julian Hebron. The agenda includes why the next 5 years of housing fintech will move even faster, playbooks for customer retention and maturing forbearances, and how lenders choose partners as origination/servicing technologies converge. Register for this complimentary event now!
Overstated Credit Scores can cause expensive mistakes. Understated Credit Scores leave low-risk, high-margin borrowers on the sidelines. The actionable Mortgage Risk & Fairness Score is the most “predictive & prescriptive” alternative assessment of future credit risk, behavior, and crisis-cycle resiliency. This incremental intelligence tool is delivered top-of-funnel in a simple report that increases visibility, speed, capacity, volume, and margins, while decreasing risk. It can also be pulled by servicing for more informed accommodation; run across servicing port’s for monitoring, mining, and recapture; and appended in bulk for loan and MSR trade due diligence. Bottom line: ‘The Score’ is an easy and inexpensive way to leverage state-of-the-art AI and ML algorithms, and years of experience to supercharge risk management, streamline sales and op’s, and promote financial inclusion to boot. It’s plug-n-play, validated (top 10 bank) and vetted (CFPB, OCC, Fed).
Want better call results? USE BETTER Direct Mail Marketing for Mortgage Lenders from Monster Lead Group. “It’s been your consistency; it’s been unbelievably consistent. It’s really like clockwork… We’re able to grow and scale because of the predictability of the Monster campaigns.” (Steven Sless and Andrew Parker, PRMI Reverse Mortgage Division.) “Monster is a very intricate part of our success and how we keep the phones ringing.” (Ryan Sawyer, United Mortgage Corp.) “Somebody can charge me half as much as you guys do, but I can’t get beyond the level of your results. For me, service means a helluva lot and the results speak for themselves.” (John Kresevic, JFQ Lending.) “We’ve basically stopped doing all other marketing and gone 100% with Monster.” (Manny Fajardo, Premier Lending Corp.) Monster Lead Group. If you want consistent phones and predictable ROI from your direct mail like these lenders, go to www.monsterleadgroup.com/better/ now.
Rock-bottom refi rates have LOs enjoying a bountiful haul in 2020, but many lending executives write in that they’re already thinking several steps ahead. Their biggest concern: how to sustain momentum once rates rise and refis dwindle. Lenders preparing for an extended refi drought are investigating lending programs that are not rate sensitive. Perhaps most notable, and relevant, is the HUD-insured Home Equity Conversion Mortgage (HECM), a flexible program designed for homeowners age 62+. Recently, the HECM has been enhanced with borrower protections, making it an attractive lending tool. Sign up for this MBA Webinar featuring HECM experts from ReverseVision (free to MBA members) on Thursday, September 10 at 2 pm ET to learn how you can serve your borrowers where they are in life by incorporating HECMs into your lending portfolio.
Many mortgage companies are experiencing unprecedented volume and looking to fill new positions in the coming months. It’s the perfect time to explore options to streamline the onboarding process with AI. Top lenders like AmeriSave, APM, and PRMG are using Capacity to automate employee onboarding. Capacity’s conversational AI-platform learns your policies, procedures, and training materials, and becomes a self-service resource where new employees can ask questions and get immediate answers. Interested in learning how Capacity partners with mortgage clients to reduce costs and drive efficiency? Request a demo.
As you know, there is a lot of M&A activity going on. Most of these deals are asset deals, leaving behind the corporate entity that is then available as a ‘shell’ for other entities who may be wanting to obtain the agency tickets. These shells are marketable, especially if the selling entity has been well-run, originating low risk product and thus has a low tail risk associated with their legacy production. In fact, a well-capitalized de novo mortgage conduit is looking right now for this type of shell. The ideal shell would have all three-agency tickets to be approved sellers and/or servicers to Fannie, Freddie, and Ginnie and a majority of state licenses. We are open to looking at shells, however, that have a minimum of one active agency ticket. If you are interested, email Chrisman LLC’s Anjelica Nixt to forward your note. All inquiries will remain confidential.
Lenders are reporting a positive influence on turn times and underwriter productivity using the LoanCraft income report. More and more lenders have recognized the value of putting income in the same category as appraisal, credit, and title reports. The LoanCraft service can be immediately implemented with no set up fees or monthly minimums and requires little training. Just upload PDFs through the secure portal or select LoanCraft in Encompass and they do the rest, usually in less than 4hrs. You’ll receive an easy to use report that includes an at a glance format showing income supported by the uploaded documents and a summary of the additional possible income sources with the documents required to support inclusion.
HomeBinder: new post-close product to increase sales and retention. Are you only offering a home warranty post close? Mortgage loan officers can now offer an additional post close product to differentiate themselves in the marketplace. HomeBinder provides a centralized home management platform for homeowners. Used by over 400K homeowners, HomeBinder allows loan officers to brand each binder with every closed loan. Lenders can now stay part of the journey, helping homeowners prepare for every life event in their new home. Learn more at HomeBinder.com or call today: 1-800-377-6915.
Changes in underwriting guidelines and products
Flagstar has relaunched its Jumbo Fixed 30-Year, Doc. #5413 and Jumbo Express 30-Year, Doc. #5432 fixed-rate products.
Angel Oak Mortgage Solutions now offers a 1099 Bank Statement Option. Clients who are 1099 earners now have an option to get to the closing table. And it has reinstated its 12 month bank statement programs.
US Bank Home Mortgage issued Seller Guide Update SEL-2020-075 August 28 Forbearance Reporting. In SEL-2020-074, multiple topics are covered including FHA Condominium Project Guidelines, Disaster Area Declarations, Clarifications on Requirements and Guidance Related to COVID-19 for Self Employed Borrowers, and Agency Extension of Temporary Flexibilities Related to COVID-19.
The Conventional Agency, Government and Non-Delegated Overlay Matrices for AmeriHome Mortgage have been updated to support the removal of several overlays as well as other changes and clarifications. In addition, recently announced temporary policy changes for loans submitted under the Non-Delegated Underwriting Option have been included in the Non-Delegated Overlay Matrix. These updated matrices are available at SellerWeb > Resources > Program Guides. AmeriHome has also updated its product guide on TheTexas (a)(6) with the following changes: Updated the title of certain required documents and identified which documents are uniform instruments, Added the condominium and PUD riders, where applicable, Removed any optional documents. The Guide has also been updated to reflect the removal of ARMs as an eligible product.
loanDepot Wholesale/Correspondent announcement includes the following information: Fannie Mae and Freddie Mac Temporary Guideline Relief and Appraisal Flexibilities, loanDepot FHA Lending Guide: Property Insurance – Flood Insurance, loanDepot VA Lending Guide: IRS Form 4506-T and Tax Transcripts, Disaster Announcement – California, Louisiana, Texas.
FAMC is expanding to permit the purchase of single-close with modification transactions to increase opportunities for lenders that manage their own construction lending programs. The following requirements must be met: Delegated Lenders only – FAMC does not underwrite these transactions. Although USDA-RD offers loan guaranty at the closing of the construction loan, FAMC will only purchase 1 x close transactions after the construction of the property is fully completed and the construction loan has been modified. New construction properties only. Rehabilitation 1 x close transactions are not permitted. Escrow holdbacks are not permitted at the time of purchase. Lenders are expected to follow all requirements outlined in USDA-RD Technical Handbook 1-3555.
Keeping an eye on trends over time, last week we learned that consumer confidence waned in July and was below market expectations in August after the expiration of the supplemental unemployment benefit of $600 per week. Most of the job losses due to Covid-19 have been in lower paying industries and it is likely that workers from those industries benefited the most from the extra income each week. Despite the pullback in confidence, record unemployment, and the expiration of additional benefits the third quarter is expected to see a significant bounce in personal consumption expenditures which make up the largest component of GDP. While there are still many unknowns surrounding additional stimulus and the virus trajectory as we head into fall, the elevated personal savings rate observed over the last few months may buoy spending. Fed Chairman Jerome Powell outlined a change in strategy to target average inflation around 2 percent rather than a firm target, meaning the Fed will allow the labor market to run “hot” longer before raising interest rates. This comes after the last decade which saw sustained low inflation despite a low rate environment and sets the stage for the continuation of dovish monetary policies.
Looking at the markets yesterday, September started with another S&P record-high and more stimulus drama out of Washington. MBS & Treasuries started the day selling off following a stronger than expected ISM PMI for August, which posted the highest reading for the index since January 2019. The report reflected an encouraging rebound in manufacturing activity following the sharp contraction seen in April and May. But “dovish” comments from Fed Governor Brainard rallied Treasuries & MBS. Governor Brainard said Fed policy should shift towards accommodation, and she lent her support to Flexible Average Inflation Targeting. That comes in the wake of Fed Chair Powell’s big move last week, where the intent in stating the new inflation targets was to avoid the mistake of choking a labor market recovery due to fears that inflation could take off.
Senate Republicans are reportedly aiming to pass a $500 billion stimulus bill next week, in an effort to prod Democrats back to the negotiating table. The proposed second coronavirus bailout is a narrower version of Republican’s own $1 trillion plan, but still likely to trigger some opposition from GOP members who oppose any additional relief. Obviously, the biggest relief for the economy and the American people would be a proven vaccine.
With its purchases yesterday, the Fed surpassed $1 trillion of mortgage bonds purchased since the restart of Quantitative Easing on March 16. The Fed has purchased at a record pace to blunt the impact of the recession on homeowners and there appears no end in sight to its mortgage-buying spree. The central bank now owns almost a third of bonds backed by American home loans. The buying has been good for lower mortgage rates, with the average 30-year rate falling to 2.91 percent as of last week from 3.30 percent in early February. Today, the Desk of the New York Fed will be back to conducting three FedTrade operations targeting up to $5.2 billion MBS, starting with $987 million UMBS15 1.5 percent (for the first time) and 2 percent, followed by $2.9 billion UMBS30 2 percent and 2.5 percent as well as $1.4 billion GNII 2.5 percent.
Today’s economic calendar is already underway. We’ve seen that mortgage applications decreased 2.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 28. The labor market for August received a prelude to Friday’s payrolls report when ADP employment was released (+428k, less than half of what was expected). Later this morning brings July factory orders and a heavy slate of Fed speakers (Williams, Mester, Kashkari, and Daly) before the afternoon release of the latest Beige Book ahead of the September 15/16 FOMC meeting. We begin the day with Agency MBS prices unchanged from Tuesday evening and the 10-year unchanged yielding 0.67 percent.
A very successful businessman had a meeting with his new son-in-law.
“I welcome you into the family!” said the man. “To show you how much we care for you, I am making you a 50-50 partner in my business. All you have to do is go to the factory every day and learn the operation.”
The son-in-law interrupted. “I hate factories. I can’t stand the noise.”
“I see,” replied the father-in-law. “Well, then you’ll work in the office and take charge of some of the operations.”
“I hate office work,” said the son-in-law. “I can’t stand being stuck behind a desk.”
“Wait a minute,” said the father-in-law. “I just made you half owner of a money-making industry, but you don’t like factories, and won’t work in an office. What am I going to do with you?”
“Easy,” said the son-in-law. “Buy me out.”
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, “No One is Standing Over Anyone’s Shoulder”, focused on managing remote employees.
(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed 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 2020 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.)