Aug. 24: State law changes; letters about comp, ransomware, and borrower disposable income

Comp? Cyberattacks? Changes in underwriting philosophy? A look through my email inbox indicates they’re on folks’ minds this week. And let’s throw in some state-law changes. Just because Congress is on recess doesn’t mean states are idling.

Compensation

It’s a rare thing when someone doesn’t know what they “should be” earning. Few companies work in a vacuum, although sometimes the knowledge flow isn’t always efficient. While capital markets staff scrap to pick up a few basis points here and there, compensation levels at most lenders continues to be viewed as hefty. “Hey, without MLOs, those folks in capital markets wouldn’t have anything to sell!” So lenders have gradually cut mid-level managers and increased productivity levels for originators, e.g., raised minimum production numbers.

According to STRATMOR’s Spring 2019 Compensation Connection Study, 67 percent of Regional Sales Manager Personal Production Incentives were based on the same tiers as Loan Officers in 2018. You can get basic salary compensation information from a host of HR-based providers, but what you won’t get from them is why the compensation for mortgage-specific roles is different than other industries. STRATMOR’s Compensation Connection Study provides compensation information for all roles, including those that are unique to the mortgage industry, from sales to post closing and for both Independent and Bank-owned lenders. And, because there is more to compensation than salary, Compensation Connection provides details on incentives and benefits paid (like bonuses, educational allowances and time off) giving you the information you need about the market to build a compensation plan to attract and keep the right people. Don’t miss this opportunity to have the most mortgage-specific compensation information available. Sign up for the 2019 Compensation Connection Study today!

Bart B. writes, “Regarding LO compensation, let’s be real, too many loan officers and mortgage companies want to earn as much money as possible with the least amount of work. Given the opportunity to charge a client more points & fees or direct a borrower to a rate or loan program to earn a greater commission, they will charge the borrower a lot more often than you think. Too many LOs took advantage 30 years ago and too many will take advantage today.

“I worked in Secondary Marketing for 23 years at banks and mortgage companies. I experienced first-hand how many LOs would lock a rate with the highest rebate and/or charge the most points possible, so they could get rich at the expense of the borrower. Each borrower trusts the LO to either get them a fair or the best deal. In addition, the realtors don’t compare different lenders rates, fees and loan programs. They refer borrowers to the LO because they’ll get the loan closed at all costs. And, too many realtors want something from the lender for referring the borrower to them, such as free advertising, tickets to a pro game or free boat rides. Based on my experience, 5% of realtors try to help their clients get the best mortgage loan.

“The reason I started my mortgage consulting/coaching business several years ago was because I saw too many LOs direct borrowers into FHA or sub-prime loans to earn greater commissions. Too many other borrowers didn’t know how to compare rates, fees and programs, so they asked the realtor or friend for a lender based on trust and experience. Too often I can beat the realtors recommended lender at .25-.50% in rate.

“Why do so many borrowers search for a lender on their own, before and after meeting with a real estate agent? Because, they don’t trust the realtor to recommend a competitive lender. The LO comp rules are not great. They need to be improved. But they need to be in place to protect the borrowers. I put in place an LO comp plan some years back. It removes all of the issues mentioned above provides incentive for the LO to provide the best solution for the borrower.

“Moreover, I am greatly annoyed by the ads I see touting 15-year mortgages as a ‘benefit’ to borrowers. The slightly lower interest rate on a 15-year mortgage is way too insignificant to offset the increase in payment due to the lower amortization period. On a $200,000 loan, for example, the payment at 3.75% for a 15-year mortgage is $1,454.44 compared to $954.83 at 4.0% on a 30-year mortgage. That is a sufficiently large enough increase to make the mortgage unaffordable for many borrowers.

Risk

IT experts will tell you being hacked is a question of “when” and not “if.” I received this reminder from Michael Steer, the President of MQMR, SQC, and HQVM. “We encourage our clients to remember the importance of cybersecurity, and the consequences of ignoring it. Lenders still aren’t doing enough and should be performing IT risk assessments and audits on an ongoing basis to see where their weaknesses are, something MQMR covers as either part of our internal audit program we set up for clients or a standalone IT audit. During a recent session at TMC’s conference, we touched on ransomware and leveraging phishing services, such as KnowBe4 (a service that MQMR personally uses to educate our employees), to bring awareness to users across an organization about clicking on malicious links/emails. I’m a raving fan of the informative blog Knowbe4 puts out every week. Here’s a link for people to sign up (free!) to learn more about cybersecurity threats.

“On that same topic of ransomware, here’s another article about ransomware attacks, this time in the great state of Texas. Given the amount of information that mortgage companies and mortgage vendors have, it’s extremely important that we, as an industry, continue to share best practices and bring awareness to everyone. We’re only as strong as our weakest link. No cybersecurity program is bulletproof but educating frontline users, putting in controls to mitigate risk, and constantly assessing/testing the infosec program is important. Here are two FAQs we published within the last year that highlight some simple but effective best practices: “IT Security Controls” and “Office Security Best Practices.” Thank you, Mike!

Banks’ use of external data storage and third-party technology makes them especially attractive to hackers, warned Korbinian Ibel, director general of microprudential supervision at the European Central Bank, who called for “a common understanding at board level of the needs and risks of IT”. His warning comes after a malware attack on the ECB’s own Banks’ Integrated Reporting Dictionary website caused its closure last week.

Thank you to Rob H. for passing along an article from the Wall Street Journal: “The Startups Safeguarding Real Estate Against Schemers and Scammers.” The story mentions that wire-transfer fraud cost 11,300 victims nearly $150 million last year, according to the FBI.

Evaluating borrower risk

Regarding the current, and future direction, of underwriting, an industry vet from the East wrote, “Historically as incomes have risen, the debt to income (DTI) ratio has been modified higher because the disposable income becomes greater as an individual’s monthly income rises. Unfortunately when the CFPB took over, its staff continually refused to listen to ‘bots on the street.’ The CFPB wizards never accounted for variations in disposable income. When a constructive individual looks at the disposable income of an individual earning $60,000 it is noted that they have a radical difference from the disposable income of an individual earning $400,000 a year. There was an educational ignorance at the CFPB in that staff continually refused to listen to input from industry and only adhered to the input from the consumer groups. Unfortunately, ‘safety and soundness’, though noble in its concept, has had a negative impact on the lower economic groups it was designed to protect holding them back financially and preventing economic disparity while preventing this sector of America from prospering with the upper reaches of our society.”

State law changes

The state of Nebraska enacted provisions relating to its Online Notary Public Act. Provisions include remote presentation and the requirements needed to register as an online notary public and educational requirement mentioned above, a notary public must take a course of instruction and pass an examination approved by the Secretary of State. The fee for registering or renewing a registration as an online notary public will be an addition to the fee required in section 33-102 of the Act.

The amendment requires a notary public to register with the Secretary of State which includes information regarding the technology the notary public intends to use to perform an online notarial act, a certification by the notary that he or she will comply with the standards developed by the Secretary of State under section 7 of the act; and an email address for the notary. Additionally, the amendment allows the online notary public to perform acknowledgments, jurats, verifications or proofs, and oaths or affirmations as online notarial acts.

The Ohio Mortgage Bankers Association posted the following information: Both houses of Congress have passed H.R. 299; The Blue Water Navy Vietnam Veterans Act of 2019. Included in the bill is removal the maximum loan amount and down payment requirements for veterans with full entitlement and raises the VA funding fee for a period of 2 years.

Effective with closings on or after January 1, 2020, the funding fee for both active duty veterans and reservist first-time users with $0 down payment will be 2.30%, and 3.60% for subsequent uses. The funding fee will be 1.65% with a down payment of 5%, and 1.40% for loans with a down payment of 10%. Funding fees will reduce January 1, 2022.

The guaranty for loans at $144,000 and less remains unchanged. Loans greater than $144,000, to veterans with full entitlement, will be guaranteed at 25% of the loan amount, with no maximum loan amount. However, veterans that have used entitlement that has not been restored are limited to guaranty of 25% of the Freddie Mac conforming loan limit, less the amount of the previously used entitlement.

The state of Minnesota modified provisions relating to residential mortgage originators licensing requirements that include licensing exemptions effective on August 1, 2019.

The amendment exempts a manufactured home dealer or a manufactured home salesperson from the residential mortgage originator licensing requirements where the manufactured home dealer or a manufactured home salesperson: performs only clerical or support duties in connection with assisting a consumer in filling out a residential mortgage loan application but does not in any way offer or negotiate loan terms, or hold themselves out as a housing counselor; does not receive any direct or indirect compensation or gain from any individual or company for assisting consumers with a residential mortgage loan application, in excess of the customary salary or commission from the employer in connection with the sales transaction; and discloses to the borrower in writing.

In a recent legislative update from Black, Mann & Graham, L.L.P, the firm summarized bills from the 2019 Legislative Session that are effective immediately. Previous to this legislative update, it issued Legislative Update I, summarizing Senate Bill 2330 granting certain individuals temporary authority to act as residential mortgage loan originators in Texas, and Legislative Update II, summarizing Senate Bill 614 and House Bill 1442 that continue in existence the Finance Commission of Texas, the Department of Banking, the Savings and Mortgage Lending Department, and the Office of Consumer Credit Commissioner. Legislative Updates I and II are found on the Resources page of the firm’s website.

The Washington Department of Financial Institutions, Division of Consumer Services has issued a notice to licensees that it will temporarily waive certain fees and parts of fees under its Consumer Law Act.

For the period of July 1, 2019 through June 30, 2020, hourly fees charged on consumer loan company examination will be temporarily waived. Still required are the payment of travel expenses in connection with examinations. Also temporarily waived for the calendar year are Annual Assessments on the following categories of loans: 1) residential mortgage loans in portfolio on December 1, 2018; 2) residential mortgage loans brokered in 2019; and 3) residential mortgage loans purchased in 2019. Residential mortgage loans made during the 2019 calendar year will still be assessed. Mortgage Loan Originator Renewal Fees for the 2020 calendar years have been temporarily reduced from $155 to $75.

Connecticut has enacted provisions requiring real estate closings to be conducted by licensed attorneys. Under the new provision, no person shall conduct a real estate closing in Connecticut unless the person is a licensed attorney who has not been disqualified from the practice of law due to resignation, disbarment, or being placed on inactive status or suspension.

For purposes of this provision, “Real Estate Closing” means a closing for a mortgage loan transaction or any transaction where consideration is paid in exchange for ownership of real property. Not included in this definition are home equity lines of credit or any other loan transaction that does not involve the issuance of a lender’s or mortgagee’s policy of title insurance. These provisions are effective as of October 1, 2019.

I saw my wife, slightly drunk, yelling at the TV.

“’Don’t go in there! Don’t go in the church, you moron!”

She was watching our wedding video again.

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, “Mortgage Rates: Thinking the Unthinkable.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Aug. 23: Sales, LO jobs; CRA, DPA, pricing, recruiting products; vendor chatter

Japan’s government bonds could soon join Germany’s in having negative yields on all maturities. Japanese debt has gone negative out to 15 years, and buyers are turning to 30- and 40-year bonds to get positive yields. Falling bond yields and minimal interest rates are prompting European banks to consider the unprecedented step of offering home loans at negative interest, which would effectively pay customers for taking them while charging more on savings deposits. Denmark’s Jyske Bank is offering -0.5% 10-year loans, and others might follow. Fortunately the economy in the United States is stronger, and doing much better, than the economies in other countries. In this country, you know that if Reuters is writing about increased MSAs and joint ventures, and calling them “cozy,” that business model is back, and another periodical confusing non-QM with “liar loans” seems like sensationalism.

Jobs, business opportunities, promotions

A mid-sized, multi-channel independent mortgage banker licensed in 42 states is interested in speaking to mortgage bankers or brokers that are interested in selling their platform or merging into a company with a strong culture. The company has been in business for over 35 years and is a Fannie Mae, Freddie Mac and Ginnie Mae approved seller servicer as well as approved by all major private investors. Please submit inquiries to Anjelica Nixt for forwarding.

Award-winning Denver startup, Homebot, a financial dashboard to help homeowners build wealth with their home, is hiring! On the heels of winning the Grand Prize 2018

Realogy FWD Innovation Summit, the 2019 HousingWire Tech 100 Company, and recently named one of Denver’s Top 15 Denver Startups for Web and Innovation, Homebot is poised for phenomenal growth in the coming year. There are a number of open positions that the company is seeking to fill in Denver and one remote opportunity for a Business Development Manager in Texas. Check out its open positions at homebot.breezy.hr. Homebot is seeking experienced candidates in lending and real estate. Please share these opportunities with your networks and help us find the best candidates to bring on to their rock star team!

GO Mortgage, a DBA of GSF Mortgage Corporation, is pleased to announce Courtney Hill as its new Builder Relations Manager in the Construction Lending Division. Courtney will be working with our builder partners and manufactured dealers to ensure they experience an efficient and smooth loan process. Courtney will also be responsible for creating and distributing product information to partners and loan officers. She joins GO Mortgage with extensive onsite construction management and mortgage experience. The GO Mortgage Construction Lending Division continues to expand with eligible builders, correspondents and retail originators across the country by offering the Singe Close product. If you are an originator with construction experience, please contact our VP of Retail, Frank Papaleo for information on the opportunity.

Mountain America CU is looking for a Mortgage Loan Officer with 3 to 5 years’ experience working in a financial institution to join the Post Falls, ID team! If you have a deep focus on Member Service and a drive for finding solutions to help members get into their first, last, or dream home, you may be a great fit. Mountain America has extensive mortgage offerings from portfolio, conventional, government, jumbo, construction and reverse loans to fit member’s needs. We are an established business with over 2000 employees, competitive pay, benefits, and many other employee perks.

Mid America Mortgage, Inc. announced the promotion Michael Cooksey to Executive Managing Director of Production where he will be overseeing and ensuring the success of Mid America’s current network of retail branches nationwide, as well as recruiting and on-boarding new branches.

Lender products & services

Today, the average age of Loan Originators is between 46 and 47, which is about four years older than the US workforce overall. More importantly, opportunities for Loan Officers are expected to grow at about 11 percent between now and 2026 – more than 50 percent faster than the growth for all occupations. So it should come as no surprise that Fannie Mae’s Q2 2019 Mortgage Lender Sentiment Survey shows that, after improving consumer-facing technology and streamlining business processes, improving talent management and leadership is the top concern for mortgage lenders. It’s time for mortgage lenders to get serious about recruiting and training the next generation of Loan Originators and Loan Advisors. Cloudvirga’s Chief Product Officer Tim Von Kaenel outlines three strategies for attracting, recruiting, and retaining top-performing Loan Officers as millennials move into mortgage.

The recent drop in mortgage rates has rendered 8.2 million mortgages refi-eligible, and a further 1/8 percent decline in rates would thrust the number of refi-eligible borrowers to 9.7 million. That’s a lot of customers you could be wowing with automated asset, income and employment verification. FormFree’s Passport is the O.G. provider in this space, but FormFree has done something decidedly new-school with its recent decision to offer closed loan pricing, where lenders only pay for a full report on loans that fund. See a live demo of Passport at Freddie Mac Connect, where FormFree is holding down booth #15 as the event’s platinum sponsor.

Support for/against HUD Mortgagee Letter 2019-06 (7th in series on DPA). “At CBC Mortgage Agency, we watched reaction to HUD’s new rules with interest, and dismay. Eight states came out in favor of the proposed policy, choosing to stifle consumer choice rather than face competition. The losers? Americans needing help moving up the housing ladder. We joined NCSHA in an effort to collaborate with state HFAs to establish markets for DPA paper through efforts like the CRA Note Exchange. But some states prefer regulatory monopolies. They’ve even sued organizations seeking to provide DPA in their domains. The Chenoa Fund offers one set of guidelines and funding processes nationwide. Multiple internal pricing surveys show our pricing to consumers is better by one-eighth percent, and our process is simpler for lenders. Several states have improved pricing to compete with the Chenoa Fund program. Bravo. That’s vivid evidence that marketplace competition is benefiting consumers.”

Calling all mortgage leaders. Does your CRM stink? Most Customer Relationship Management systems make some fatal errors. Here’s one high-level mistake baked into the term CRM. The C stands for customer, obviously. But what defines a customer? The borrower, right? Wrong. It’s the borrower, AND it’s the Loan Officer. LOs are your internal customer and if your system misinterprets their needs, they won’t engage. If your system is complicated it will confuse them, and if you confuse you lose. Another error baked into CRM’s is the term Management. Today customers (external and often internal!) refuse to be managed. Today’s customers make their own decisions, and they hate being sold to. The answer? Redefine customer as Relationship. Engage, don’t manage. Simplify, don’t complicate. Then you’ll have a Relationship Engagement Platform. And it won’t suck. Dan Harrington, CEO Usherpa, Mortgage CRM since 1995.

Vendor & coop tidbits

The Mortgage Collaborative announced the addition of Kate deKay (CEO, Eustis Mortgage) and Allison Johnston (COO, Success Mortgage Partners) to its board of directors. Johnston and deKay were voted in at TMC’s most recent summer conference in Nashville. The conference featured record attendance at the highest “LTV” (lender to vendor) ratio of any mortgage industry conference this year. (Next year’s will be held at The Roosevelt New Orleans, February 16-18, 2020.) “TMC’s conferences provide lender members a unique opportunity to participate in compelling and interactive sessions led by their peers focused on growth initiatives, business best practices and experiences with third party providers.” (Click here for more info and early bird registration or give COO Rich Swerbinsky a shout.)

Vendors don’t only cater to lenders. On the real estate buying and selling side of things, Homebot, a customer engagement platform that delivers financial scenarios to help homeowners build wealth, has announced major enhancements to the homebuying side of its platform. The latest release inserts lenders into the market search process by integrating prompts for buyers to obtain a prequal or preapproval, lock a rate, and inquire about down payment with a single click. And, to instill a sense of urgency, future buyers can see how their buying power has changed over time as well as which markets best match their lifestyle, price point, and buying timeline. Read the Homebot for Buyers blog. To sign up for Homebot, visit homebot.ai or, see what your own home is worth by clicking here.

Guild Mortgage announced an alliance with Homebot to enable Guild’s loan officers to provide regular, customized home finance and wealth building intelligence to homeowners. “Guild’s loan officers can now offer customers relevant data, economic insights and market intelligence and stay connected with homeowners in a meaningful, personalized way long after the mortgage transaction has closed.” Refinancing opportunities, purchasing power for buying a new home or trading up to a new home, cash flow and short-term rental opportunities. Guild Mortgage will provide the company’s more than 1,100 loan officers nationwide access to Homebot’s “Lender Base” service at no cost to them.

Blend announced the release of a new product for lenders: self-serve pre-approvals. “As more consumers begin their mortgage process online, Blend has built a more seamless way for them to start their home buying process with automated, self-serve pre-approvals. For lenders with consumer direct channels, the new feature helps them prove their value to prospective borrowers without the intervention of a loan officer. On the flip side, these pre-approval letters enable borrowers to understand quickly exactly how much they can borrow, helping them compete in a tightening real-estate market.”

Total Expert’s Marketing Operating System is now powering Motto Franchising, LLC’s MottoSpark, a marketing and sales customer relationship management platform available to Motto Mortgage franchises across the country. Motto Mortgage’s 100+ franchise locations (in more than 30 states) will use Total Expert to drive sales and marketing efforts for mortgage loan officers. Motto Mortgage loan officers will use Total Expert to combine their client knowledge with publicly available data to build automated, hyper-personalized marketing campaigns. 3.) Motto Franchising is part of the RE/MAX Holdings, Inc. family of brands.

Capital markets

Recall that headline U.S. GDP growth declined from 3.1 percent to a 2.1 percent annualized pace in the second quarter according to the “advance” estimate released by the Bureau of Economic Analysis. Still nowhere near negative for two quarters, the technical definition of a recession. The number was buoyed by a 4.3 percent increase in personal consumption as net exports and business investment were weak due to ongoing trade uncertainties. Non-defense federal spending swelled 15.9 percent and a deal was just announced to increase caps on discretionary budget amounts and suspend the debt ceiling for two years. At least we’ll avoid potential shutdown drama for a while. Elsewhere, residential spending continued its decline; now down for six consecutive quarters. Existing home sales were down 1.7 percent in June as low inventories in affordable areas continue to weigh on the market. Even with mortgage rates hovering around 3.75 percent for 30-year fixed aren’t enough to significantly move the needle on sales. Additionally, the trade war has seen the dollar value of foreign purchases decline 36 percent over the last year.

U.S. Treasuries sold off again yesterday, including the 10-year closing +3 bps to 1.61 percent (though it still sits 19 bps below the 2-year in this inverted yield curve environment) on the back of mostly better than expected PMI readings from large economies in Asia and Europe. Additionally, the ECB minutes were deemed less dovish than hoped. Eurozone’s August flash Manufacturing PMI and flash Services PMI both beat expectations, as did Germany’s. Domestic news wasn’t as cheery, with U.S. flash Manufacturing PMI for August posting the first contractionary reading in ten years. And Freddie Mac revealed mortgage rates have now hit a year-to-date low. Time to push those refinances! Finally, markets were thrown a curveball when three Federal Reserve policy makers said they don’t think the U.S. economy needs lower interest rates, pushing back against a White House scrambling for ways to stave off a recession many see coming. Whether this growing sense of caution presages a smaller cut, or none at all, is a question that won’t be answered until next month.

Markets now turn their attention to Fed Chair Powell, who will speak in Jackson Hole this morning. Officials from the Federal Reserve and other central banks have gathered for the annual symposium on monetary policy, with this year’s theme being “Challenges for Monetary Policy.” (Guess my invitation was lost in the mail.) On the other side of the Atlantic, we have holders of the fiscal levers gathering at the G-7 in France. Both conferences are seemingly looking to the other to solve the world’s problems. Today includes just two domestic releases of note to close the week, with revised building permits for July, and July New Home Sales both due out later this morning. Friday starts with agency MBS prices better by a few ticks and the 10-year yielding 1.61 percent.

(Thank you to Doug B. for these grammar bar jokes, part 5 of 5.)

A simile walks into a bar, as parched as a desert.

A gerund and an infinitive walk into a bar, drinking to forget.

A hyphenated word and a non-hyphenated word walk into a bar and the bartender nearly chokes on the irony.

An allusion walks into a bar, despite the fact that alcohol is its Achilles heel.

The subjunctive would have walked into a bar, had it only known.

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, “Mortgage Rates: Thinking the Unthinkable.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Aug. 22: Ops, LO jobs; POS, broker, marketing products; trends in customer service, digital survey

Thank you to everyone who wrote yesterday correcting me that Hawai’i’s 1959 statehood is 60 years old and not 50. I know it’s not the case, but sometimes it seems like admitting Hawai’i was the last thing Congress agreed on. In these days of gridlock, most members of Congress exhibit a sort of learned helplessness, waiting for someone else to come up with an idea so that they can come out against it. Maybe those in Congress should view their constituents as their customers. In lending, when are we going to reach the point where lenders will bid on giving a customer a mortgage after viewing all the credit and property information on some kind of secure portal? Like, “Here I am, and the property I want to buy. Lenders, give me a rate and price!” Dealing with customers, and assuring their satisfaction, is critical to lenders’ success. Old Republic’s Eric Lapin has a recent write-up regarding the digital age and how to interact with customers. Lots more on customers below.

Employment & board moves

A well-capitalized national correspondent lender is seeking a VP of Operations for its Southeast headquarters. The position will manage loan setup, audit, underwriting and final docs.  Must have FNMA, FHLMC, FHA, VA, USDA, and regulatory & compliance experience. This company is growing, so it’s a good opportunity for a strong operations executive to drive growth in a fast-paced environment. Send confidential resumes through Anjelica Nixt.

With more than 15 states pending, Pacific Residential Mortgage (PacRes), headquartered in Lake Oswego, Oregon, is now approved in Montana and Illinois as PacRes expands outside of its historic footprint of the West Coast. PacRes will continue its expansion across the United States in the coming months. After 15+ years in the business, PacRes has emerged as a market share leader, and a financially strong and stable retail mortgage banking platform for loan officers and branch managers. The company structure is based on no underwriting overlays, and a streamlined management structure to ensure the most competitive pricing on a market by market basis. New opportunities to run production for target markets and to add the next billion in production are available. For Regional Production Leaders, Branch Managers and Loan Officers, contact Jenni Connor (828-238-8963). Or check out PacRes’ Ad for consumers, and to learn more about how PacRes Approves Dreams Daily, by going to https://pacresmortgage.com/recruitment.

Fannie Mae has a new board member: Sheila Bair. Ms. Bair is obviously an underachiever, only serving as the Chair of the FDIC, Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury, SVP for Government Relations of the New York Stock Exchange, and Commissioner of the Commodity Futures Trading Commission.

Lender products and services

Today’s borrowers, referral partners, and top performing loan originators all want an organized, transparent, and highly efficient digital mortgage process as the backbone of their transactions. Floify’s mortgage automation and point-of-sale platform is giving loan stakeholders just that – and much more.  With a modern, embeddable loan application, secure loan document management portal, automated notifications and prompts, unique partner management features, and loads of best-of-breed integrations, Floify makes the perfect digital centerpiece for all front-end mortgage operations. The platform’s incredible level of customizability and white labeling functionality gives lenders the power to shape the borrower’s experience to meet brand expectations. If you’re looking for a modern mortgage platform proven to shave days off the closing cycle, improve referral generating relationships, and provide borrowers with a streamlined single-access experience, request a demo of Floify today!

PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE: HTH), is excited to announce its all-in-one BTW Services! “A partnership with PlainsCapital Bank includes a unique opportunity to take advantage of three great platforms within one company to help further reduce costs and streamline services: broker-dealer/Treasury Management/warehouse lending, HilltopSecurities‘ TBA/Specified Pool desk which helps qualified mortgage lenders hedge their origination pipelines by buying and selling TBAs and specified pools, and PlainsCapital Bank Treasury Management group which helps mortgage lenders meet the challenges of managing their cash positions with clearing accounts and escrow management for FNMA, FHLMC and GNMA. For over 25 years, PlainsCapital Bank National Warehouse Lending has provided lines of credit to mortgage lenders across the country and offers multiple incentive pricing options to reduce costs for our customers. To learn more about PlainsCapital Bank National Warehouse Lending, please contact Deric Barnett, EVP National Warehouse Lending, or for HilltopSecurities’ Broker Dealer, please contact George M. Meillarec, Managing Director.

Would you like to do a better job leveraging social media platforms like LinkedIn, Facebook, Twitter and Instagram to drive qualified leads while building awareness of your company and what you offer? Social media is effective for any of these goals and an important component of your overall marketing and public relations strategy. Seroka Brand Development will develop your strategy and content to ensure your social presence plays the role it should in driving real business results. These platforms are constantly changing and adding functionality. Seroka will help you stay on top of them and prioritize the platforms most important to your business. Reach out to Seroka and get ready to #TurnUpYourBrand!

You offer more than a rate. As the financial expert your clients trust, you offer a solution! With all the different products, benefits, and advice you can offer, it’s important to go beyond what your clients are looking for – but find out WHY they want it. Whatever your client’s goal is, YOURgage from QLMS will help them reach it faster and easier, because YOURgage lets your client choose any loan term from eight to 30 years. So whether your client is saving for that dream vacation, a child going to school, or retirement, let them choose the home loans they need that provides them the cash flow and peace of mind they’re looking for. Call your AE now to run through scenarios where your clients can benefit from a YOURgage, or for new brokers, connect with QLMS here to learn about products to help your clients.

Correspondent exit

“It saddens me to announce the closure of the ResX Partners correspondent lending platform effective today, August 21st, due to the pending acquisition of United Bank by Peoples United Bank, Bridgeport, CT. It has been an honor to launch and grow this business for United Bank and to work with a truly professional team. Good luck to all of my great correspondent clients!”

The customer is king!

Whether you’re a vendor or a lender or an investor or whatever, where would your business be without customers? Gripe all you want about taking real estate agent cookies for their open house. Consumer expectations are changing with respect to timelines and the overall customer experience. If there is something I hear repeatedly at conferences, it is that the race to acquire customers is paramount. Customer acquisition technology is fundamental. And the smarter companies wonder where it is going in the coming years.

Everyone knows that the best data is your own data, and with rates dropping quickly, Compass Analytics announces a new product that can help you to determine which of your customers is now a great lead for a refinance, purchase, or home equity. Whether existing or new customers, CompassCapture can automate the selection and pricing of leads. Arm your Loan Officers with monthly payment savings, life of loan savings, cash out potential amounts and more, to close the deal. A CompassCapture client recently priced every loan in a client’s retained portfolio to derive dozens of options, even applying their branch-level pricing to find the best scenarios for their best leads. By delivering actionable, customized loan pricing scenarios to originators on a daily basis, CompassCapture can help you to boost servicing retention and increase lead pull-through. Contact info@compass-analytics.com for more information!

“Digital is no longer a competitive advantage — it’s the new reality,” says STRATMOR Group’s Senior Partner Garth Graham. “Borrowers expect a digital experience and lenders who are not offering their customers options for executing disclosures, uploading docs and other origination steps are falling behind their peers.” STRATMOR has just completed the Digital Innovations portion of its 2019 Technology Insight Study and this new article “Digital Fuels Innovation for a Better Customer Experience” has insight on the top perceived benefits of Digital Mortgage and the top five live digital capabilities as reported by lenders. Of note: lenders offering dynamic online applications for borrowers has jumped from 29 percent in 2017 to 74 percent in 2019.

National Mortgage Professional is having a free webinar on customers today at 11AM PT, 2PM ET. “How the modern customer journey has changed. What businesses can do to obtain new customers with qualified leads. Which tools can help your business streamline the loan process?”

J.D. Power released its 2019 U.S. Primary Mortgage Servicer Satisfaction Study. There is a “trust gap” created by the involuntary nature of the mortgage servicing relationship, where customers do not select them but are acquired when the servicers purchase loans in the secondary market. Digital tools are not keeping pace and that transferred customers require special care, because their satisfaction scores are lower and they have a significantly higher incidence of problems with payment and escrow accounts. The study also provides the ranking of mortgage servicers.

Last year, in keeping with the spirit of the football season, Ally Home (Ally Bank’s direct-to-consumer mortgage business) kicked off the availability of The Mortgage Playbook using football to outline the plays consumers need to know to understand the mortgage application process and find the mortgage that’s right for them. The Mortgage Playbook was authored by four of Ally Home’s loan experts as a useful guide for anyone – not just Ally customers. Download your free copy of The Mortgage Playbook.

National MI has an economic newsletter, the National MI Market Snapshot, for its lender customers. The Market Snapshot incorporates data and analysis from John Burns Real Estate Consulting as well as data from the National Association of Realtors, the Federal Reserve Bank of New York Consumer Credit Panel and the American Enterprise Institute (AEI). “The National MIMarket Snapshot delivers critical financial and housing information that lenders of the housing market’s most respected consulting firms, we believe our customers will find the newsletter highly useful,” states NMI’s Claudia Merkle.

A while back reports said that Amazon was looking for bank partners to target younger customers with a checking account-like service. Sure enough. Amazon hopes to cross-sell their Prime membership to bank customers to grow that business. Lenders are eyeing Amazon’s potential entry into residential lending. Why would they want to do that if Amazon is known for speed and convenience? What if all it wanted to do is break even on mortgages and instead use the data to cross sell borrowers on more profitable products? Bain research finds Amazon could be the 3rd largest U.S. bank if it wanted to do so, capturing 70 million customers over a 5-year period. (On a smaller scale, the City of Los Angeles tried to launch its own public bank to provide small business loans, finance affordable housing and support marijuana businesses. The measure failed. Meanwhile, some legislators in the state of Washington have also tried to introduce bills to form a state bank.)

Capital markets

U.S. Treasuries ended Thursday in a slight sell off, including the 10-year closing +2 bps to 1.58 percent amid another day of curve-flattening (the 2s10s spread is now compressed to just one basis point) that saw a slight improvement in overall risk tolerance. It may be that markets are becoming numb to bad news, as releases from around the world continued to be less than cheery. The world’s first 30-year bond featuring zero income struggled to find buyers, prompting Germany to admit the sale may have been “too large.” Germany sold 824 million Euros of 30-year debt at an average yield of -0.11 percent. Bids did not exceed the offered amount of 2 billion euros. The auction came as Germany’s Finance Minister said that his country is currently practicing expansive budget policy. In Italy, President Mattarella will confer with party leaders to see if a new coalition can be formed after the resignation of Prime Minister Giuseppe Conte on Tuesday.

But the big news was the release of the much-anticipated July FOMC minutes, which now has Wall Street unsure whether the Fed will sharply cut rates. Minutes from the July 30/31 central bank meeting revealed that, while prepared to cut again if conditions worsen, it didn’t view a July cut as part of an extended cycle. Fed officials viewed the July rate cut as a ‘recalibration’ of policy, or mid-cycle adjustment, in response to the evolution of the economic outlook over recent months,” the minutes said. Several officials favored holding rates steady because they judged “that the real economy continued to be in a good place,” while two officials, favored a more aggressive half-point rate cut at the July meeting, which they said would better address “stubbornly low” inflation rates. Trade tensions and trade uncertainties in conjunction with recent weakness in global economic growth remain downsides, despite a strong domestic labor market.

The fed funds futures market is still almost certain that another rate cut will be announced on September 18, but the implied likelihood of that move has ticked down. Should the economy weaken further, which would pave the way for several future rate cuts, it was revealed that White House officials have contingency plans, including for a potential payroll tax cut and a possible reversal of tariffs. That the White House is discussing ways to stimulate an economy that Mr. Trump called “very strong” underscores concern about slowing growth.

The market’s attention now turns to Fed Chair Powell tomorrow in Jackson Hole, as he should provide further clarity on those minutes. But today’s calendar is already underway, with initial claims for the week ending August 17 (209k, a four-week low). Later this morning brings the preliminary Markit PMI for August, July leading indicators, and the KC Fed Manufacturing Index for August. Additionally, Minneapolis Fed President Kashkari will participate in a panel discussion. We begin the day with agency MBS prices worse a few ticks and the 10-year yielding 1.62%.

(Thank you to Doug B. for these grammar bar jokes, part 4 of 5.)

A misplaced modifier walks into a bar owned by a man with a glass eye named Ralph.

The past, present, and future walked into a bar. It was tense.

A verb walks into a bar, sees a beautiful noun, and suggests they conjugate. The noun declines.

An Oxford comma walks into a bar, where it spends the evening watching the television, getting drunk, and smoking cigars.

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, “Mortgage Rates: Thinking the Unthinkable.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Aug. 21: LO jobs; customer retention, broker, reverse products; info on yield curve & mortgage rates

Congratulations to Hawaii which became a state sixty years ago today. We’ve had plenty of economic cycles, small and large, in fifty years, although in general rates have been coming down since 1981. And we’ve had a flat or inverted U.S. yield curve for several months. Inverted yield curves don’t cause a recession: Two consecutive quarters of negative growth is the technical definition of a recession. Nine major economies have entered a recession or are on the verge of one, adding to fears the U.S. could see a downturn. The nine economies are Argentina, Brazil, Germany, Italy, Mexico, Russia, Singapore, South Korea and the UK. Bank of America CEO Brian Moynihan says recession risks in the US are low despite warning signals from bond markets, which he contends are mostly driven by circumstances outside the country. “We have nothing to fear about a recession right now except for the fear of recession.” Lots more in the capital markets section below.

Employment

Caliber Home Loans, Inc. is having an awesome 2019, and we have the numbers to prove it! As of July 1st, we reported being 13% ahead of our sales plan, and we ended the same month with record-breaking monthly volume that exceeded $6 billion overall. But Caliber is more than loan volume – we’re a great place to build a career too. There are numerous reasons to be a producer here, but we’ve summed them up to the top 5: technology, support, products, servicing, and financial strength. Individually, these can help you stand out in a competitive marketplace, but combined they can make you unstoppable. Click here to read the top 5 reasons we’re attracting top producers from around the country and understand all the ways a career at Caliber can help YOU reach new levels of success.

Your Home Financial, powered by NewRez, is looking for an ambitious purchase-oriented Loan Officer to work as a Preferred Lender inside one of the busiest and fastest-growing real estate companies in the greater Cleveland area, Russell Real Estate Services. As the newest Joint Venture partner of national mortgage lender NewRez, Russell Real Estate Services provides an outstanding platform for LOs to expand their purchase pipeline. “For a skilled loan officer looking to grow their business, our joint venture model provides a tremendous and opportunity,” said Vince Daino VP of Recruiting and Business Development for NewRez, “With our platform and a partner like Russell, the sky is the limit.” Contact Vince Daino, VP of Recruiting and Business Development to learn more about this role and other open positions available within NewRez.

Thrive Mortgage is excited to announce the addition of two powerhouse teams in Texas. Ethan Tan and Amanda Van Nguyen have joined Thrive in the Houston, TX market, and Harold Huguley is bringing extensive VA experience to the San Antonio area. As long-time industry veterans, and in Harold’s case Air Force Veteran, Thrive is increasing its presence in the Lone Star State. “We were looking for a community of professionals coupled with a laser focus on the consumer. For a company that uses its technology to enhance that client experience,” stated Tan. Huguley added, “I have a specialized niche in serving my VA clients. The versatility of Thrive’s operations, care for the client, and ability to support my veterans was the key to my decision to be a part of this amazing company.” To speak with members of Thrive’s recruiting teams, please visit join.thrivemortgage.com.

Lender products & services

One warehouse lending organization gets noticed in the marketplace for doing things the right way. ResX Warehouse Lending is a division of Connecticut-based United Bank, a respected commercial lender with a long track record of building long-term relationships with its clients. They’re not new to the warehouse lending business, but if you haven’t heard the name yet, it’s only because they’re not promoting themselves with every new trend or fad to hit the market.  These are serious experts looking to build relationships with clients like you who are focused on sustainable growth…one relationship at a time. ResX Warehouse’s clients rave about the lender’s proactive approach. And that expertise is provided by seasoned, top-level professionals. Customers also love their commitment to delivering more effective and efficient processes. Combined with United Bank’s full-service array of products and resources, ResX is the ideal platform for the correspondent focused on real growth. Learn More.

Did you miss the Encompass Investor Connect™ webinar, hosted by TMS and Ellie Mae last week? Well it’s now available to stream from the TMS website! Learn how Investor Connect automates and reduces time of loan purchase, minimizes conditions, and ensures data security of your loans. Watch the webinar now to find out all of the benefits of partnering with TMS and Encompass Investor Connect.

American Advisors Group (AAG, NMLS #9392), whose combination of vision, energy and execution has made it the nation’s top reverse mortgage lender, is now utilizing that same vigor to rapidly grow its wholesale division. The company has invested vast resources in overhauling its marketing materials, adding more product-specific, compliance-reviewed content that its wholesale partners can further customize and curate for their specific needs seven days a week, 24 hours a day. In addition, AAG’s immense service commitment and the sales momentum it continues to create for its partners has its servicing turnaround times at a record pace. As a high-integrity, home equity solutions leader, AAG is easy to align with; their culture supports and advances the goals of its employees, partners and the communities it serves. Contact AAG today to learn more.

“You know us for our rates and programs, you love us for our service, now get to know our Renovation programs. loanDepot Wholesale makes Renovation lending easy. Our Renovation Lending Suite includes programs designed to accommodate both large and small home improvement and repair projects. Giving you more options for your real estate partners and clients to meet their homeownership needs. Flexible solutions that include FHA 203k Limited and Standard as well as FNMA HomeStyle®. loanDepot Wholesale – proud sponsor of improving homes across America. Contact us today to learn more. (Rates, terms, and availability of programs are subject to change without notice: www.nmlsconsumeraccess.org.)”

Home Point Financial’s Customer For Life approach is getting some press. Its video made waves on National Mortgage Broker Day, but Home Point is also being featured in National Mortgage Professional Magazine and MPA Magazine. Looks like Home Point is putting its money where its mouth is after research discovered brokers are currently only recapturing 14% of their business from past customers.

For over 30 years Stearns Wholesale Lending  has brought innovative products to market with a personal touch. Unique products like the FLEX Non-QM product series with our Flex 24, Flex 36, and Flex 48 brokers can now offer a variety of options with Bank Statement qualification, 1-year income documentation and Expanded Ratios up to 55%. And CalHFA with up to 103% CLTV financing on purchases, high balance options available, and NEW increased income limits as of June 2019 all help more borrowers obtain homeownership. Innovative products paired with a sales-orientated culture allows Stearns to meet the needs of our brokers. Relationships matter! Hear Regional VP Brian Herbert explain our secret sauce, the support, backing, and structure of a large company but with a small company feel. If you’re looking to join a company that with a BOLD Future reach out today.

IR Data Solutions, a provider of big data analytics and business intelligence to improve consumer targeting and retention strategies, announced the addition of David Eisenberg as its new VP of Data and Analytics, Sales. Eisenberg will be responsible for identifying business opportunities as well as developing and executing business growth objectives, sales strategies, and marketing campaigns to increase client base and product awareness. Before IR Data Solutions, Eisenberg was a Senior Account Executive for Experian and Vice President of Regional Sales for Citi Bank. “David is a solid asset to this growing team. His experience in executing strategic initiatives is vital to the company’s plan to expand our services and branch out to other markets,” stated Patrick Buckner, President of IR Data Solutions. “His skill of utilizing insights to identify the customers’ real needs will be instrumental in how we develop our solutions.” Click here to connect with David.

Capital markets

The headline grabber recently has been that the spread ten- and two-year risk-free Treasury securities became negative or that yield curve became inverted. This is significant because a negative spread between these two yields has historically been a predicter of a recession in many cases, but not the cause of a recession. The last time this happened was in 2007. U.S. economic data, however, remains upbeat with retail sales beating expectations and rising 0.7% in July as a 2.8% jump in non-store (online) retailers boosted the overall gain. Additionally, consumers will be spared new tariffs in September as the Trump administration announced a delay to their enactment. Manufacturing continues its downward trend but the current contraction is not yet a at level that should pull the rest of the economy into recession. Global recession fears were stoked by economic contraction in Germany, Europe’s largest economy. This spurred talk of stimulus from European central banks. The Fed will continue to monitor economic data and has said its goal remains sustaining the current expansion. With that, the expectation remains for a rate cut following the September FOMC meeting.

Yes, the trade war with China has dominated financial headlines and market movements. China devalued its currency in retaliation to the latest round of tariffs from the Trump Administration. Additionally, German industrial production for June came in weak and the expectation is for that weakness to continue. This resulted in a flight to quality as equities sold off and the yield on the US 10-year Treasury fell to a low of 1.62 percent recently as the yield curve become more steeply inverted. The market’s implied probability of a rate cut by the Federal Reserve is near 100% for September, however some analysts aren’t sure the Fed will make a back-to-back move. Much attention will be paid to commentary from Federal Reserve officials following the annual symposium at Jackson Hole this week. While there will be plenty of debate as to whether the Fed will or should cut rates again in September the broad consensus is that they will cut again before the end of the year.

Economists expect Federal Reserve Chairman Jerome Powell to suggest the central bank is receptive to further interest-rate decreases when he speaks Friday at an annual gathering in Jackson Hole, Wyo. Powell is scheduled to speak on challenges confronting monetary policy.

Looking at stocks and bonds yesterday, equities were pressured and markets traded defensively ahead of today’s Fed minutes. U.S. Treasuries reclaimed their losses from Monday, including the 10-year closing Tuesday -4 bps to 1.56 percent on the back of reports that the Trump administration is considering a temporary cut to the payroll tax in order to prevent consumption from decreasing. While the White House was quick to quash that report, President Trump did reiterate his call for aggressive rate cuts. In other news, the FDIC approved a loosening of the Volcker Rule to simplify regulations that govern proprietary trading, though the change still needs to be approved by the SEC and the Federal Reserve. Separately, the People’s Bank of China fixed the yuan at a modestly lower level and lowered China’s prime rate. And finally, Germany is now selling zero-coupon 30-year bunds.

The minutes from the July 30/31 FOMC meeting will be the most anticipated event on today’s calendar, though they don’t come until the afternoon ET. Market participants will be looking for more clarity on the FOMC’s thoughts regarding “mid-cycle” adjustments either from the minutes or on Friday when Fed Chair Powell speaks at Jackson Hole. The calendar has kicked off, though, as mortgage applications decreased 0.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 16. Refinances failed to see another jump as the 30-year rate didn’t fall quite as much as Treasury rates. Later this morning brings existing home sales for July, the latest 10-year forecast from the CBO, and the EIA Weekly Petroleum Status Report for the week ending August 16. We begin the day with agency MBS prices worse .125 and the 10-year yielding 1.58 percent.

(Thank you to Doug B. for these grammar bar jokes, part 3 of 5.)

At the end of the day, a cliché walks into a bar, fresh as a daisy, cute as a button, and sharp as a tack.

Bill E. sent: A young-looking palindrome walked into a bar. Once the bouncer checked his ID, he discovered he was on the level.

A run-on sentence walks into a bar it starts flirting. With a cute little sentence fragment.

Falling slowly, slowly falling, the chiasmus collapses to the bar floor.

A figure of speech literally walks into a bar and ends up getting figuratively hammered.

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, “Mortgage Rates: Thinking the Unthinkable.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Aug. 20: LO jobs; vendor contract, DPA products; webinars this week; credit news; Better.com is worth what?

Why is a 43% DTI, a line many view as “drawn in the sand,” so critical to the ability of a borrower to repay a loan? What about reserves or utility bill payment? If the borrower is already paying $2,000 a month in rent and their mortgage payment would be $1,800, shouldn’t that count for something? More thinking about credit, and its reporting, below.

Employment

“Caliber Home Loans, Inc. is having an awesome 2019, and we have the numbers to prove it! As of July 1st, we reported being 13% ahead of our sales plan, and we ended the same month with record-breaking monthly volume that exceeded $6 billion overall. But Caliber is more than loan volume – we’re a great place to build a career too. There are numerous reasons to be a producer here, but we’ve summed them up to the top 5: technology, support, products, servicing, and a retail focus. Individually, these can help you stand out in a competitive marketplace, but combined they can make you unstoppable. Click here to read the top 5 reasons we’re attracting top producers from around the country and understand all the ways a career at Caliber can help YOU reach new levels of success.

Stop Losing Money in 2019! With the mortgage industry becoming increasingly difficult to survive let alone thrive, companies are in search of new marketing strategies to compete in this new era of credit. The Decision Science team at BBM has created an advanced suite of propensity data models that help professional origination marketers identify homeowners who are actively in the market for FHA, VA, Jumbo and Non-Agency loan options. Our average loan amount for active FHA/VA and Non-Agency applications exceed $350K and gross top line revenue of nearly $15,000. If you’re marketing is not reaching these levels of performance than let BBM show you how a targeted marketing strategy focused on propensity modeling and targeted revenue opportunity can change the trajectory of your company. For more information about BBM Marketing Services and about becoming an approved origination partner; please contact Bill Senteno and visit www.bbm.company.”

Lender products & services

For lenders evaluating digital mortgage platforms who believe in empowering their loan officers with powerful technology to grow their referral business, delight their borrowers, and let their expertise shine throughout the experience, there is no better platform than Maxwell. Maxwell’s platform with powerful personalization features and integrations designed to make the loan officer the hero is having a big impact for lenders across the country, closing over $2.5B in volume every month. To learn more about Maxwell, request your personalized demo by visiting www.himaxwell.com.

As fast as technology and consumer demands change, the core principle of putting your customers’ needs first will always be a priority. CMOs are tasked with building new strategies, partnerships and technologies to future-proof their business and stay ahead of consumer expectations. Read this whitepaper from Total Expert, The Changing Role of the Financial Services CMO, for a five-part overview to become a more modern marketing leader and create customers for life.

Background on Lawsuit against HUD over Mortgagee Letter 2019-06: Part 6 in Series on DPA. As explained in the original press release, CBC Mortgage Agency sued HUD on grounds that the agency failed to follow rulemaking processes required by federal law. HUD also failed to follow an executive order and its own policy, which requires federal agencies consult with tribes before making policy or rule changes which affect Native Americans. Additionally, HUD didn’t notify Congress before issuing its new rules, nor weigh the social costs of its discriminatory new policy. Regardless of one’s position on the merits of down payment assistance, it’s clear that HUD erred in issuing Mortgagee Letter 2019-06. Secretary Ben Carson admitted before the House Committee on Financial Services that HUD should collect data before moving forward with new policy. (See video at 2:21:30). We welcome rescission of ML 2019-06, and seek a constructive dialogue on DPA.

Do you have a vendor contract up for review in the coming months? Given the critical and comprehensive nature of these documents, contract reviews can feel like a bit of a crap shoot because it can be difficult to account for all the variables that make for a successful vendor relationship. If one or two crucial components are overlooked, lenders could be rolling snake eyes instead of sevens in regard to their vendor relationships. Learn more about the 14 most critical vendor contract provisions in MQMR’s free white paper, “Rolling Sevens: The Top 14 Provisions Every Lender Should Examine When Reviewing Vendor Contracts.”

Webinars this week

ATTENTION EXECUTIVES: XINNIX will host a live Leadership Lessons webinar, The Engagement Dilemma: An Executive Wake Up Call on Wednesday, August 21 at 2:00 PM. Studies show that more than three quarters of today’s employees are not engaged in their workplace. They’re non-productive, apathetic toward their work, team, manager, and organization, and they don’t feel that they have a strong incentive to give their best effort in their job. Here’s the good news: the majority of employees are actually ready to fully engage. They’re just waiting for the opportunity to do so. In this webinar, XINNIX CEO and Founder Casey Cunningham will speak to top executives from four of the nation’s leading mortgage companies about the strategies and best practices they have put into place to engage their workforce and how this culture shift has transformed the way they do business. Register today!

How effective is your leadership style? Your team’s productivity quickly answers this question. Everything rises and falls on the impact of your leadership. Whether your team is winning or failing, there’s a good chance you’re the reason. If you want to strengthen your leadership skills, register for Todd Duncan’s FREE Webinar, The Purpose Driven Leader: 4 Decisions to Radically Impact Your Leadership Effectiveness. Join Todd on Thursday, August 22nd to learn how trust impacts every phase of the business cycle, how to positively impact your employees, empower your team through delegation, and exceed your goals by driving hyper-productivity across your organization. The best leadership decision you can make is to commit in helping your team win! Equip yourself to lead them effectively, now! Register to learn how to become a Purpose Driven Leader today!

What happens after you’ve been found? How easy is it for a customer to connect with your business? Customers demand convenience and businesses that don’t adapt will be left behind.

Join National Mortgage Professional Magazine for 7 Steps to Winning New Customers and Securing Repeat Business on Thursday, August 22 at 2 pm EDT / 11 am PDT. In this webinar, they will cover how the modern customer journey has changed, what businesses can do to obtain new customers with qualified leads, and which tools can help your business streamline the loan process. You can register for the webinar here.

MMG Members’ are invited to a Free Live Training with Michael Magnabousco on Tuesday, August 20th.

Register for MBA Compliance Essentials Update on State-Level Litigation and Emerging Trends Webinar on Wednesday, August 21, 2-3PM ET. Join the discussion with a panel of legal experts on recent major state-level litigation, including the latest developments and trends, and what you should be on the lookout for in the coming year.

Join the MCPAOA on August 21, at 10am PT for a discussion on Limited English Proficiency (LEP): the Challenges and Opportunities in the Mortgage Industry.  The guest speaker will be Joshua Weinberg, EVP Compliance for First Choice Loan Services Inc and President of Firstline Compliance LLC.

Credit

Last week the FHFA, as overseer of Freddie and Fannie, set out criteria on credit scoring models. The Federal Housing Finance Agency issued a final rule on validation and approval of third-party credit score models that Fannie Mae and Freddie Mac use in deciding whether to purchase residential mortgage loans. Each GSE must publish its description of its validation and approval process for evaluating applications from credit score model developers, consistent with the FHFA’s framework. VantageScore LLC is eligible to apply for consideration by the GSEs.

As law firm Morrison Foerster points out, “The FHFA’s framework is a four-phase process for the validation and approval of credit score models, and it specifies the criteria to be used and the timeframes for each phase. In the first and second phases, a GSE must publicly solicit submissions from credit score model developers and evaluate those submissions using established criteria. In the third phase, the GSE would evaluate a credit score model for accuracy, reliability, and integrity. In phase four, the GSE would evaluate the credit score model’s potential impact on the GSE’s own business and on the mortgage finance industry as a whole. The GSE must submit its proposal to approve or disapprove each submission to the FHFA for a final decision.”

A while back Michael Lewis, the author of Moneyball and The Big Short, launched a new podcast and discussed similar issues with the credit bureaus in the second episode. His main point being that it is the consumer’s problem when a fraudster rips off a bank or credit bureau information. Why should it be the consumer’s problem that a bank accepted a fraudulent application? This is even before you get to whether credit scores are inherently discriminatory. Shifting this responsibility to a consumer finance regulatory, the CFPB, however has its own risks. And costs.

Jeremy Potter points out, “It is true that access to credit means access to equal opportunity in this country. We have a collective interest in making better risk decisions in how we allocate credit. Failure to build wealth early in one’s career/life or inability to build wealth by an entire segment of society will have lasting impact on the long-term economic health of the country. I wonder if the private market won’t innovate faster and solve this, but if not, it will definitely be an area the government will look to get more involved. For better or worse.”

After the data breach Equifax was rumored to have hired lobbyists at Akin Gump to push legislation that would lessen its exposure in class actions alleging it violated federal fair credit reporting laws. The legislation in question, which is sure to draw closer scrutiny now, was before a House committee the same day last week that the company disclosed the breach. It’s a safe bet the bill will get a bit more scrutiny now.

It is a common assumption that too many accounts will hurt your credit score, and consequently you must close excess accounts. Actually a full 15% of your score is based on the average of the accounts. The more accounts that you have that are older in age, the better the average age of the accounts will be, which will positively affect your scores. And 30% of a borrower’s score is based on the utilization rate. If your client has more accounts not being used, many LOs will advise keeping them active will help the score because the overall utilization rate will have a lower average. In fact LOs I have spoken to tell clients to never close accounts as that will hurt a credit score. Borrowers should not open 30 accounts, however: whatever accounts they have now (3-4 is the magic number) keep them open. There is no reason to close them.

Company news, good and bad

Would you want to own a piece of the lender Better.com? It raised $160 million, using a $600 million valuation. A new lender worth $600 million?

And here’s a new acronym for you to learn, as if the mortgage business doesn’t have enough already: DLT. Distributed ledger technology is the key to blockchain, and this Forbes article explores its use in mortgage lending. And don’t forget Ohio’s Safechain, “Leveraging advanced software technologies including blockchain, SafeChain increases the speed and security of property transactions.”

“It is with great sadness that I must inform everyone that effective immediately Appraiser Connections is shutting down. All orders in the system will be complete, just no new orders. Retail loan officers will be given new user IDs for the new AMC that will be taking over and for Wholesale LOs, just make sure you select a different AMC. Thank you all very much for your years of support and business. Kathleen and I will miss you all very much.”

Capital markets

U.S. Treasuries pulled back to open the week, including the 10-year closing +6 bps to 1.60 percent, amid a risk-on trade in the stock market and the continued sentiment that Treasuries are overbought. The 10-year sits 7 bps above the 2-year Treasury. There was more of the same recent news: President Trump repeated that U.S. is not ready to make a trade deal with China, which released details for lowering a corporate borrowing rate, but talks are continuing. He also tweeted that the Fed should cut rates by 100 bps over a short period and perhaps start quantitative easing again. A leaked internal report by UK government discussed various disruptions in event of no-deal Brexit on October 31. German Finance Minister Olaf Scholz suggested Germany could spend EUR 50 billion if there are economic issues. And Argentina Finance Minister Nicolas Dujovne steps down and presidential candidate Alberto Fernandez suggests country cannot repay IMF loan. Finally, markets received disappointing Trade Balance data out of Japan and disappointing Eurozone CPI figures.

Today’s economic calendar just began with the Philadelphia Fed Nonmanufacturing Business Outlook Survey for August. The only other release today is Redbook same-store sales for the week ending August 17. Oh, and after the close, Fed Governor Quarles will speak. We begin the day with Agency MBS prices better by .125 and the 10-year yielding 1.57%.

(Thank you to Doug B. for these grammar bar jokes, part 2 of 4.)

A question mark walks into a bar?

A non sequitur walks into a bar. In a strong wind, even turkeys can fly.

Papyrus and Comic Sans walk into a bar. The bartender says, “Get out — we don’t serve your type.”

A mixed metaphor walks into a bar, seeing the handwriting on the wall but hoping to nip it in the bud.

A comma splice walks into a bar, it has a drink and then leaves.

Three intransitive verbs walk into a bar. They sit. They converse. They depart.

A synonym strolls into a tavern.

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, “Mortgage Rates: Thinking the Unthinkable.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Aug. 19: Sales, AE, LO jobs; trailing doc & U/W products; vendor trends & news

Builders can’t complain too much about material prices anymore. Building materials prices rose only 0.7% in July, and are down overall year-over-year. Despite tariffs, softwood lumber prices are down 20% over the past year and other products like gypsum, tar, and asphalt (roofing) have also dropped. Rising home costs are less due to “sticks and bricks” and more to labor, land, and regulatory costs & regulations. Regulatory costs & regulations? MLOs know about those, and for lenders who put out videos, and everyone else, they should know it is illegal to improperly use the screeching, belting tones of the emergency alert/broadcast system. The FCC lodged hundreds of thousands of dollars in fines against a number of broadcasters for the use of a sound effect. For example, Animal Planet’s Lone Star Law paid a $68,000 penalty after that show accidentally captured a real wireless alert when filming Texas game wardens during Hurricane Harvey.

Employment

PCF Wholesale is proud to announce its EZ-DSCR, a DSCR loan that is truly built for investors. We make it EZ to Qualify with interest only payment, no reserves needed, 75% LTV for cash out, 80% LTV for purchase and more. This product is underwritten 100% in-house removing the QC delay you’ll find at other lenders. Brokers can inquire about this product by emailing us. We are hiring AEs across the nation to sell our full suite of Non-QM products and agency loans. Please visit us at PCFwholesale.com: ‘Built for Brokers.’”

ACES Risk Management is seeking a result’s driven sales engineer to lead the technical sales process and support our field organization. The sales engineer will lead the effort to collaborate with our clients and prospect to demonstrate ARMCO’s award-winning product suite to the mortgage, banking, credit union and FinTech marketplace. You will be part of a dynamic and collaborative ARMCO sales team and will be supported by our corporate experts, industry veterans and experienced senior management team. To learn more about this position, click here.”

Are you a Texas-based Account Executive looking to make a change with a local presence? Plaza Home Mortgage has an exciting opening for a seasoned Wholesale and Non-Delegated Account Executive that covers the Texas, Louisiana, Arkansas and Oklahoma markets, who will take over a number of open and active accounts, as well as bring in your book of business. Enjoy selling one of the largest product menus in the country, with the traditional conventional and government programs, plus Plaza’s five Renovation Programs,

distinctive One-Time Close Construction-to-Permanent Loan Program and our new Freddie CHOICERenovation offering. Non-QM products? Look no further, because Plaza offers eight Non-QM products, from well-priced Jumbos to programs using Bank Statements for income. You will also have access to our convenient Dallas sales and operations center. Plaza is nationally recognized for its service excellence, and has the products and technology to help you achieve the success you’ve always wanted. Contact Nick Pantell at 208-871-0850.

Lender products & services

Trailing docs made easy, start to finish. Just the thought of your trailing docs retrieval process gives you a headache. Tedious and time-consuming, documents fall through the cracks or get lost. Deadlines are missed. Fines rack up. As a lender, these are not issues you want to deal with as you focus on moving loans and keeping your operations running smoothly. It doesn’t have to be this way. At DocProbe, we retrieve, audit, manage corrections, and ship complete and correct Trailing Documents to your investors on time, every time. Guaranteed. Our proprietary fulfillment process, driven by a hybrid model combining the latest technology and your personal account rep ensures efficient, accelerated results. No errors. No missed deadlines. No penalties. Just great results and satisfied leadership. DocProbe’s per loan fee structure and simple onboarding process makes it easy to start today. Email Nick Erlanger or call 866-486-0554.”

Simplify your underwriting process with Loan Product Advisor® asset and income modeler (AIM). Through the expertise of third-party service providers, AIM automates the manual processes of assessing borrower assets and income. AIM reduces the burden of traditional documentation, speeds up the loan origination process and helps you close loans faster. Freddie Mac is working hard to bring you solutions that create efficiencies for your business and improve the borrower experience – giving you a competitive edge. These capabilities are available now. Gain greater efficiency in your underwriting processes with AIM: get The Freddie EdgeSM.

Vendor tidbits

There are thousands of vendors out there, vying for business, partnering, assuring clients that they can “talk to each other,” and hoping their product(s) can truly reduce cost and increase efficiency. Let’s take a random look at who’s doing what.

FundingShield announced a strategic partnership with Tavant to integrate into Tavant VELOX’s FinConnect enterprise bus. Tavant is a provider of AI-powered digital lending technologies. Tavant VELOX’s FinConnect is an enterprise service business for the financial services industry, and an intelligent lending data and services network that integrates with more than 120 ecosystem partners. FundingShield is an award-winning FinTech firm providing cloud-based, plug n’ play tools that prevent wire fraud, validate third party settlement agents, verify settlement documentation while providing recourse at the transaction level. FundingShield maintains the largest database of live, vetted and verified bank account information of settlement parties that clients can access via multiple API driven integrations working with lenders, asset managers, warehouse banks and investors. (For more information on FundingShield contact its sales team.)

Essent Guaranty, Inc. is ready to support the mortgage insurance (MI) needs for California Housing Finance Agency (CalHFA) approved lenders. Starting September 5, you can quote and order Essent MI for all your CalHFA first-mortgage loans. “We’re proud to be a CalHFA MI provider,” says Renee Pfender, vice president of product and business development at Essent, “and we’re really looking forward to helping homebuyers realize the dream of homeownership in a challenging market. CalHFA lenders will be able to take advantage of competitive rates through our new risk-based pricing engine, EssentEDGE®, as well as zero guideline overlays and quick underwriting turn times.” CalHFA has been supporting the needs of renters and homebuyers by providing progressive financing and programs to low- and moderate-income Californians for more than 40 years. (Contact your Essent account manager to learn more.)

South Carolina-based Resource Financial Services partnered with NestReady, a technology firm that has developed platforms to bring all parties in the home buying process together. Resource Financial expects NestReady to streamline its mortgage services offering and to provide an integrated experience for its customers, as the NestReady platform offers a transparent environment for potential homebuyers as they search for their home. Resource Financial Services is looking to capture more of the millennial market by enhancing the digital user experience, providing a single platform that streamlines all the difficult parts of the home buying process. NestReady also offers access to nationwide multiple listing services (MLS) coverage in the United States, putting Resource Financial at the center of the home buying process and joining lender’s originators and real estate professionals in a collaborative process.

Calyx’s Zip™ point-of-sale solution (POS) is now integrated with AccountChek® by FormFree®. AccountChek is an automated asset verification platform that accelerates credit decisioning. The platform uses augmented intelligence and more than 1,000 proprietary algorithms to generate digital verification of assets. With this integration, brokers and financial institutions that use Zip will be able to take advantage of the various benefits of Day1 Certainty, including greater speed and a simplified verification process. FormFree’s AccountChek has been integrated within Freddie Mac Loan Product Advisor® asset and income modeler (AIM), which is their cutting-edge, automated asset and income assessment solution that speeds up and simplifies the loan origination process. Zip allows borrowers to conveniently and easily begin the loan application process online or via any mobile device. And Zip™ has been enhanced to provide larger organizations with greater control and transparency over individual user profiles. With this update, banks, credit unions, and non-bank lenders can designate a Chief Administrator, who has complete control to oversee, manage and standardize all the company’s individual user accounts with ease.

Turns out the technology provider behind Freddie Mac’s new tool, Freddie Automated Servicing TransferSM (FASTSM), is LoanLogics. It will also provide technology enhancements to expand the capabilities of FAST in support of Freddie Mac’s Co-Issue XChangeSM. The FAST tool leverages LoanLogics IDEA™ (Intelligent Data Extraction and Automation) technology, which uses machine learning and other capabilities to transform digital images and scanned documents into verified and validated information for loan boarding. IDEA can be configured to support any servicer’s defined naming conventions, stacking orders and required document sets. It includes data extraction for required information found only in documents and leverages machine learning for the accurate versioning and indexing of all documents.

Integra is now offering DocMagic’s document preparation solution to its client base via an integration with INTEGRA’s new LOS, EPIC. The partnership gives lenders the ability to leverage DocMagic’s end-to-end document production, preparation, delivery and automated compliance service as a fully embedded integration within EPIC. This includes the ability for borrowers to conveniently and compliantly eSign all documents required to meet state and TRID-based disclosures, eliminating paper and optimizing the document process from initial disclosures through closing.

A while back Blend announced the launch of digital deposit accounts for its bank and Credit Union customers. “This key offering will better help Blend’s customers serve today’s digitally savvy consumers while also enabling these institutions to remain competitive in an increasingly crowded field. The new product eliminates paperwork and any potential need for consumers to visit a branch to open an account (particularly key for credit unions, as becoming a member at most CUs has traditionally required an in-person visit). The digital offering also allows these institutions to offer an account opening experience on mobile.

Capital markets

The trade war with China has dominated financial headlines and market movement as China devalued its currency in retaliation to the latest round of tariffs from the Trump Administration. Additionally, German industrial production for June came in weak and the expectation is for that weakness to continue. This resulted in a flight to quality as equities sold off and the yield on the US 10-year Treasury fell to a low of 1.62 percent by mid-week as the yield curve become more steeply inverted. The market’s implied probability of a rate cut by the Federal Reserve is near 100% for September, however some analysts aren’t sure the Fed will make a back-to-back move. Much attention will be paid to commentary from Federal Reserve officials following their annual symposium at Jackson Hole towards the end of the month. While there will be plenty of debate as to whether the Fed will or should cut rates again in September the broad consensus is that they will cut again before the end of the year.

U.S. Treasuries saw shorter-dated maturities outperform longer-dated maturities on Friday, steepening the curve slightly as the short end was hurt by weaker than expected domestic data and the long end was pulled by the sentiment that the market is overbought on a short-term basis; the 10-year closed +1 bp to 1.54 percent. Markets received a mixed total housing starts and building permits report, as well as the lowest University of Michigan Consumer Sentiment report (preliminary August) since January, which showed consumers are worried about the economic outlook and the implications of both recent and potential upcoming Fed rate cuts that could hurt discretionary spending activity. Despite the blackout period ahead of this Friday’s summit in Jackson Hole, Minneapolis Fed President Kashkari said in an interview Friday that it’s much better to be “early and aggressive” in responding to slowdown than late, and Cleveland Fed President Mester said she sees economic risks to the downside despite not endorsing a July rate cut. Global growth concerns abounded, as Fitch downgraded Argentina to “CCC” from “B,” and it was reported Germany is preparing for stimulus spending in the event of a recession.

Today’s calendar is absent of data with just T-bills and FedTrade operations scheduled. Tomorrow also includes no data of note, before the much-anticipated release of the minutes from the FOMC’s July 30-31 meeting on Wednesday. There will be more Fed related happenings to close the week, as the KC Fed’s economic symposium “Challenges for Monetary Policy” gets under way Friday in Jackson Hole. Markets also receive New Home Sales for July on Friday. We begin today with agency MBS prices down slightly from Friday and the 10-year yielding 1.60 percent.

(Thank you to Doug B. for these grammar bar jokes, part 1 of 4.)

A dangling participle walks into a bar. Enjoying a cocktail and chatting with the bartender, the evening passes pleasantly.

A bar was walked into by the passive voice.

An oxymoron walked into a bar, and the silence was deafening.

Two quotation marks walk into a “bar.”

A malapropism walks into a bar, looking for all intensive purposes like a wolf in cheap clothing, muttering epitaphs and casting dispersions on his magnificent other, who takes him for granite.

Hyperbole totally rips into this insane bar and absolutely destroys everything.

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, “Mortgage Rates: Thinking the Unthinkable.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Aug. 17: Letters on the importance of hiring through referrals, and ransomware & cybersecurity

Today’s commentary focuses on two unrelated items that lenders, investors, and vendors spend, or should spend, a lot of energy on: hiring practices, and cybersecurity. How you find personnel can be as important as who you hire. And remember that “punched in the gut” feeling you had in school when you opened your locker and someone had stolen all your books? The stakes are a lot higher now. Shrugging and saying, “IT will take care of it,” while you have your passwords on a yellow sticky note on your computer isn’t the correct response.

Cybersecurity

Lenders are rightfully concerned about cybersecurity & ransomware, and how employees are the biggest single weakness. Companies, either through their own IT departments or consultants, often send phishing emails to employees with benign links to click on that result in employees being warned, training in classes, or even termination. And many employees or borrowers have mistakenly wired out hundreds of thousands of dollars to “title companies” for a funding, only to find that the instructions were false and the money vanished. And data privacy for individuals… is it a thing of the past? And how are lenders handling data storage? The first page of a 1003 in the wrong hands can ruin a person’s life.

On a larger, more public scale, Capital One’s news prompted Mitch Tanenbaum with CyberCecurity LLC to weigh in. “The Capital One breach is yet another reminder that putting your systems in the cloud does not absolve you of any liability or much responsibility. Capital One has already said that the breach is going to cost them in the neighborhood of $100-$150 million; I suspect it will be more in the end.

“One thing that could, possibly, help them is that they likely have a LARGE, comprehensive cyber risk insurance policy. Our experience is that many (most?) mortgage companies do not have one. In many cases the policy is an add on to a PL or E&O policy and if it is, the coverage is likely very limited and would not help in this case.

“One issue that mortgage company execs need to address, seriously, is data retention. I am not sure what the penalties in Canada are for violating PIPEDA, their national privacy law, but I think Canadian lawyers will be able to make a good case for Capital One violating this principle of PIPEDA: “Principle 5 of the Personal Information Protection and Electronic Documents Act (PIPEDA) states that “personal information that is no longer required to fulfil the identified purposes should be destroyed, erased, or made anonymous.” (see here).

“Mortgage companies and loan officers are committed packrats. They often say that they might need that loan information from 12 years ago. Let’s assume that is true, which I argue is not true, it doesn’t have to be spinning on the Internet. It could be in the basement on the hard disk (backed up offline) of a computer that is powered off except for that one hour a year that it needs to be on to retrieve that one document from twelve years ago. I remember when we used to review paper loan files and get rid of the forms we no longer needed. That doesn’t happen anymore. Software could automatically do this after two years (or whatever), so it is actually pretty inexpensive to do that after the initial software is written. But we have to get past the obsession of, ‘What if I need that 8 years from now?’ My answer to that is, ‘Is possibly needing that in 8 years’ worth $150 million to you?’ Just asking.

“More importantly, with Capital One it is not clear that the hacker exploited any vulnerability in the design of Amazon’s systems. In fact, Amazon is saying that she didn’t. Amazon, like every cloud provider, has a shared responsibility model. In Amazon’s case, it has created hundreds of documents describing what customers are responsible for doing (just check Google). Many other smaller cloud vendors have not done anywhere near as good a job of documenting this, which means that mortgage companies have to figure out more of the controls themselves. And yes, sometimes those controls require an extra step (for example, if you are licensed in New York, you ARE using multi-factor authentication to access this data as REQUIRED by DFS-500, right)?

“This is, in part, where your annual risk assessment comes in. I don’t mean the one that compliance does that checks whether your vendors are licensed and have liability insurance. I mean a real, typically third party, CYBER risk assessment. It is critical and actually required by many state laws. That is a starting point for figuring out the risk. If you are using Amazon’s AWS or Microsoft’s Azure, you have to do the hard work. If you do not have an AWS or Azure security expert on staff, you need to periodically bring one in to review your architecture and your implementation. This is not optional – unless you want to wind up like Capital One.

“What parent of multiple kids hasn’t heard, ‘It’s her fault!’ ‘No it’s not, it’s his fault!’? Who is responsible for Capital One’s massive breach earlier this week involving data stored on Amazon Web Services’ infrastructure? It was purloined by a 33-year-old former employee of the web services company. So, Amazon’s got some exposure in all of this, right? Not likely due to contract law. But where did it go wrong?

“We have seen a number of businesses that had to pay the ransom because of the amount of time they would be down recovering from their backups. Baltimore, for example, took weeks to recover and is, in some areas, still recovering. You need to have a recovery time objective and then test to see if you can actually meet that objective. That does not mean recovering one system. That means recovering your entire IT infrastructure from brand new bare metal hardware if that is required.

“You need to plan for this in advance. This is part of the disaster recovery and business continuity consulting that we do for mortgage companies. Even if you do it yourself, you need to create the policies, procedures and practices to implement this and then you need to test regularly. Putting stuff ‘in the cloud’ doesn’t solve this problem. Here is a recent blog post on one cloud provider who was down for two weeks, impacting every one of their customers, as a result of a ransomware attack.

“It is a huge problem and one that is only going to get worse as we move more stuff to the cloud. Do you remember the good old days when all we worried about was someone breaking into the office and stealing loan files? Those days are gone forever. Now we have to worry about 15-year-olds in Romania having access to your data. You have two choices: pay now or pay later. There is no option to pay never. Reputation is critical to every mortgage company. What will happen to yours if you are front page news due to a breach?” Thank you, Mitch!

Hiring through referrals

Lenders and vendors everywhere tell me that hiring the right people, and then onboarding/training them, is more important than ever. Few small companies offer formal training programs, and opt to find and hire experienced personnel – usually at the expense of others in the business. How do they find them in the first place?

Adam Consiglio, Managing Member of Consiglio-Mattei Executive Search Group LLC, writes, “It’s no secret: Employee referral programs can greatly help your organization find and hire top talent. After all, where best to find potential new employees than by tapping into current workers, who share your firm’s values and who are already helping you run a successful business? ‘Employee referral programs can be an effective way to hire talented people, and they can also be invaluable in the current talent acquisition environment, in which open jobs outnumber qualified candidates,’ according to SHRM. Securing talent through a strong employee referral program, however, doesn’t just help you hire strong new employees. It can also be a powerful tool to help you promote your employer brand.

“’These types of initiatives are extremely powerful tools that can help you promote your employer brand and attract strong talent into the recruiting process,’ says Kathryn Budd, director of human resources for MRI Network. ‘When applied consistently, employee referral programs can also be a great retention tool that translates into huge costs savings on recruitment and investment in employees over time.’”

Adam’s note goes to discuss what an effective employee program entails and how can you start one at your company? “1. Give employees the tools they need to refer: This can mean putting together a positive culture around employee referrals and being able to track these efficiently in an HR portal so that you can effectively review the entire referral workflow. 2. Set expectations and guidelines: Additionally, SHRM recommends that you should ‘make sure employees understand the referral program’s guidelines and expectations, including who is eligible to participate in the program and receive rewards for referrals.’ Also be sure to include EEOC language to make it clear that the referral program is not discriminatory in any way.

3. Provide incentives: To help boost employee support in referring all-star talent, you should ideally put into place monetary inducements (if someone gets hired and stays for a set period of time). Make sure these incentives are paid in a predictable, timely and public manner and. To facilitate this, HR staff should set up automated payments in their HR information system. Other guidelines to follow include holding leaders accountable and being transparent throughout the process with employees, providing feedback, and, importantly, marketing the program far and wide. This last guideline means investing in the marketing and communication plans to boost how many employees at your organization actually participate. This is extremely important when trying to promote your employer brand.

“But, how is the term defined? According to SHRM, employer branding ‘is an important part of the employee value proposition and is essentially what the organization communicates as its identity to both potential and current employees.’ Moreover, it includes many things about the company, including the ‘organization’s mission, values, culture and personality,’ according to SHRM. ‘A positive employer brand communicates that the organization is a good employer and a great place to work.’ Notably, the article also states that an employer brand greatly affects the ‘recruitment of new employees, retention and engagement of current employees, and the overall perception of the organization in the market.’

“So, what are the specific ways referral programs can help? First, a strong referral program, as noted above, includes clear expectations, guidelines and a powerful marketing plan of action. As a result of this communications push, employees will know in-depth how to speak with former co-workers and friends who they want to refer. This strong professionalism instantly makes your company look like a worthy organization and one that many will want to join because of this, leading to increased interest.

“Second, your company should be investing heavily in communications and online content in order to promote your employer brand on your website, social media platforms, public relations and through other promotional materials. As a result, people will covet the chance to be referred and interviewed because they’ll know even more about the company.

“’An employee referral program is a win-win situation for you and your organization,’ says Budd. ‘You’ll create both a powerful commitment to hiring the best people as well as an employer brand that truly shines.’ This will also signal to your firm’s clients and other external stakeholders that your organization has robust systems for attracting the talent that will drive performance, further establishing confidence in your products and services, and ultimately a more successful business.” Good summary Adam!

Today my daughter and I will be driving south through Ohio and into Kentucky. I told her that we’d better be careful about some of the Kentucky & Ohio laws.

In Lexington it is illegal to transport an ice cream cone in your pocket.

By law, anyone who has been drinking is “sober” until he or she “cannot hold onto the ground.”

It is illegal to have sex on a parked motorcycle in London, Kentucky. It’s all good as long as the bike is moving.

Any person who displays, handles or uses any kind of reptile in connection with any religious service or gathering shall be fined not less than fifty dollars ($50) nor more than one hundred dollars ($100).

In Canton, if you lose your pet tiger you must notify the authorities within one hour.

You cannot eat a doughnut and walk backwards on a city street in Marion.

Women are prohibited from wearing patent leather shoes in public.

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, “Mortgage Rates: Thinking the Unthinkable.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Aug. 16: LO jobs; DPA, non-QM products; spec pool primer; deficits, debt, the yield curve, & mortgage rates

Some international rates have gone through 0 percent and are now negative. The low rates and high volumes have caused lenders to focus less on long-term planning and more on closing loans. Who can blame them? How would U.S. mortgage rates near 0 percent impact the future refi market for lenders? Here’s a piece worth a skim on why mortgage rates probably won’t hit 0%: “Mortgage Rates: Thinking the Unthinkable.” The yield on the 10-year Treasury note has fallen below the two-year yield for the first time since the financial crisis, causing a sell-off in the stock market. The 30-year yield is at an all-time low. An inverted yield curve has preceded every recession since 1950 by seven to 24 months. But former Federal Reserve Chair Janet Yellen says the latest inversion of the yield curve might be a less reliable indicator of an impending recession. “…There are a number of factors other than market expectations about the future path of interest rates that are pushing down long-term yields.” Lots more discussion in the capital markets section below.

Jobs

This summer, 170 team members traveled to the all-inclusive Paradisus Resort in Cabo San Lucas for Gateway First Bank’s 2019 Presidents Club Trip. The group included mortgage originators and mortgage center managers who qualified based on production levels. In Cabo, attendees participated in activities such as fishing, riding ATVs, golfing and even a sandcastle competition. Gateway CEO Stephen Curry gave a state of the company presentation, recapping the year, discussing key growth initiatives and new products launching soon. Another day, attendees collected donations and stuffed 100 backpacks with supplies for Casa Hogar, a nonprofit helping children in need. Jayson Stirrup from Casa Hogar spoke, shared a video about the nonprofit’s mission and introduced attendees to some of the children they support. Gateway is one of the ten largest banks in Oklahoma and offers a full suite of banking services. If you want to bring your bright future to Gateway, contact Kimber Wilkins or visit www.GatewayFirst.com.

Lender products & services

Southeast lender Mortgage Investors Group is spending less time getting the books done and more time analyzing and leveraging its financial data since their move to Loan Vision. With a reduction of over 20% in the time taken to close the month, Eric Nielsen, Accounting and Finance Director said “Now, the statements are finalized earlier, and we have the time to really dig in and provide in-depth, analytical, decision-making information to the executives.” Read more about these changes in the case study here, then contact Carl Wooloff to schedule a live demo.

Stop Losing Money in 2019! With the mortgage industry becoming increasingly difficult to survive let alone thrive, companies are in search of new marketing strategies to compete in this new era of credit. The Decision Science team at BBM has created an advanced suite of propensity data models that help professional origination marketers identify homeowners who are actively in the market for FHA, VA, Jumbo and Non-Agency loan options. Our average loan amount for active FHA/VA and Non-Agency applications exceed $350K and gross top line revenue of nearly $15,000. If you’re marketing is not reaching these levels of performance than let BBM show you how a targeted marketing strategy focused on propensity modeling and targeted revenue opportunity can change the trajectory of your company. For more information about BBM Marketing Services and about becoming an approved origination partner; please contact Bill Senteno and visit www.bbm.company.

Part 5 in a series on DPA: Earlier this year, HUD issued Mortgagee Letter 2019-06 that restricted the use of DPA by governmental entities like states, cities, or tribal governments. The letter purported to make several changes to existing law, and the upshot was trouble. As the NCSHA rightly pointed out, the HUD decree caused several state HFAs to suspend their programs. Issued without notice and comment, HUD’s letter also stranded many would-be borrowers right in the middle of the home buying process. Convinced the letter had been issued in violation of proper procedure, CBC Mortgage Agency sued in federal court, securing a preliminary injunction while the case is heard. On August 13, 2019, Mortgagee Letter 2019-12 was issued, rescinding HUD’s prior letter. CBC Mortgage Agency welcomes this latest HUD notice and hopes this signals the beginning of a constructive dialogue on the merits of responsible DPA.

Ever wished you could frequently compare your operational, production, compensation and secondary market performance against lenders of a similar type, channel and annual volume? At The Mortgage Collaborative (TMC), where lender wishes come true, members can compare their performance against that of their peers each month using TMC Benchmark Powered by LBA Ware. Offered as a free benefit to lender members, the online platform provides participating lenders with monthly competitive analysis insights that aren’t quite like anything else in the market. Read the case study to learn more about TMC’s Benchmark 2.0.

Capital markets

One way investors will look to protect their mortgage-backed security portfolios as rates drop is by buying specified pools, e.g., bonds created using borrower characteristics such as credit scores, loan size or geographic distribution, designed to provide more certainty on when the underlying mortgages will be paid off. Specified pools are in contrast to buying “to-be-announced” or TBA mortgages, where investors know only a few characteristics like the coupon rate until such a time as the actual bonds are delivered by the seller.

Mortgage traders must accurately predict the speed at which the underlying home loans will be paid off in order to assign proper value, as prepayments hurt investors that paid more than 100 cents on the dollar for mortgage bonds by returning their principal back sooner than expected and at par, cutting into returns.

Bondholders that already own specified pools comprised of loans with low loan balances have benefited from the rate rally, as those pools are designed to protect from early prepayments. The prices that investors are willing to pay (“pay-ups”) for 30-year 4 percent and 4.5 percent low loan balance specified pools, which historically have seen relatively slow prepayments, have risen meaningfully higher, coupled with robust REIT and bank demand. And here the specified pools designed to protect against higher prepayment speeds can have yet another advantage, as they typically have longer duration than similar coupon TBA.

The recent widening in the federal budget deficit and persistently low yields on U.S. Treasury securities have led some observers to ask whether the United States can run large budget deficits indefinitely with minimal consequences? At the crux of the debate is why yields on Treasury securities have remained low in the face of bigger deficits and whether that is for cyclical or structural reasons. Remember, budget deficits do not influence interest rates in isolation, as upward pressure on interest rates from budget deficits can, for periods of time, be outweighed by growth/inflation dynamics, dovish monetary policy, robust demand for the asset class and light issuance volumes from other countries.

In regard to the cyclical side, a dovish turn by the Fed and falling growth/inflation expectations have dragged on yields, overwhelming the upward pressure from more government debt issuance. Other major foreign economies have seen net sovereign bond issuance fall recently due to both fiscal consolidation and to quantitative easing programs by foreign central banks. Analysis that attempts to control for these factors suggests that deficits still exert upward pressure on yields, all else equal.

On the structural side, the U.S. enjoys many built-in advantages that make financing large deficits easier, such as the U.S. dollar being the world’s reserve currency, the U.S. economy is the largest in the world and Treasury bills, notes and bonds are the gold standard for liquid, safe assets. Perpetually low interest rates are probably not enough to solve all of the United States’ fiscal challenges. If interest rates were to hold at roughly today’s levels, the federal government’s debt-to-GDP ratio would likely keep rising. Finally, if interest rates ever did jump meaningfully, policymakers would need to roll over a very large and growing stock of debt at higher rates, creating even more debt, squeezing even harder on revenue resources and potentially exerting a drag on private capital formation. In our view, it is not that deficits no longer matter, but rather that just because favorable circumstances for large-scale debt issuance exist today does not mean that one can assume they will exist forever.

The U.S. economy has been expanding for the last decade, but many questions centering around sustainability have arisen recently, namely surrounding the rising level of U.S. debt. The combined debt of the household, business, government and financial sectors in the United States totaled $4.3 trillion in 1980, but now is nearly $70 trillion. Each sector, with the exception of the financial sector, has more debt today than it did in 2009, including the outstanding debt of the federal government over $10 trillion higher today than it was ten years ago.

While the large increase in debt is a potential cause for concern, remember the size of the U.S. economy was less than $3 trillion in 1980 (nominal GDP today exceeds $21 trillion). The correct way to think about outstanding debt in an economy is to measure it as a percent of GDP, good news considering that the overall debt-to-GDP ratio of the U.S. economy has receded to less than 330 percent at present from 370 percent ten years ago.

But the ratio today is more than twice as high as it was four decades ago., including the debt-to-GDP ratio of the federal government ballooning to nearly 87 percent today from 27 percent in 1980, bas every sector has experienced an increase in its respective ratio over this period. Although debt in the U.S. economy today is higher, in both absolute terms and relative to GDP than it was a few decades ago. The question for investors is, “How sustainable is the build-up of debt that has occurred in the American economy over the past few decades?”

The financial markets had plenty of news which resulted in volatile day-to-day movements. Last week began with the Chinese Yuan passing the symbolic 7.00 per dollar rate for the first time in over ten years as retaliation for new tariffs imposed on Chinese consumer goods. Investors moved out of equities an into fixed assets, however most of the lost ground was regained by week’s end. The new round of tariffs is primarily on consumer goods which had been spared thus far such as electronics, toys and clothing and is expected to be felt by consumers at the register. If enacted, the 10 percent tariff is expected to add 0.1 percentage point to the official year-over-year consumer inflation rate in the Consumer Price Index. The trade escalation could put more pressure on the Fed to provide more accommodation potentially as soon as their September meeting.

And everyone is blathering on about how the treasury curve inverted for the first time since 2007. An inverted curve happens when yields on the short end of the curve are higher than the longer dated treasury securities. An inverted treasury curve hints at a looming recession. But many argue that, in hindsight, the Fed raised rates too much in 2018 thinking that the tax cut would do better for the economy than it actually did. Typically, an upward sloping yield curve rewards investors for the longer-term risk of buying treasury securities. In the inverse, however, investors are willing to take less yield over the long term while buying the bonds for a safe haven of positive yield. The yield on the 30yr treasury hit an all-time record low while the price on the securities rallied. The Fed cut rates in early July and are tasked with the tough decision of further cutting rates as the textbook would suggest a recession is coming. But many doubt it.

In terms of the bond market yesterday, U.S. Treasuries pulled back a bit more on Thursday, including the 10-year closing -5 bps to 1.53 percent as the curve steepened amid the release of a mostly better than expected slate of U.S. economic data. That included an Empire Manufacturing Survey for August, Q2 productivity, and Philadelphia Fed Index for August that all exceeded expectations, though it wasn’t enough to keep the 30-year from hitting an all-time low of 1.98 percent, though international news wasn’t as cheery. One European Central Bank policymaker was quoted as saying the ECB will unveil new stimulus measures, including “substantial and sufficient” bond purchases at its September 12 meeting, Chinese officials vowed to retaliate for the latest round of tariffs on Chinese imports into the U.S. (as China’s July housing prices missed expectations) and Labor’s Jeremy Corbyn is reportedly trying to rally other parties to support a no-confidence motion against British Prime Minister Boris Johnson. Interestingly enough, all that actually had little effect on mortgage rates.

Today’s light calendar has July housing starts and building permits and both the latest Michigan consumer sentiment reading, and the release of the Q2 Quarterly Services by the Census Bureau. Before these numbers we begin the day with agency MBS prices worse .125 and the 10-year yielding 1.54%.

A handful of witticisms:

I thought growing older would take longer.

Respect your elder.; They graduated from school without the internet. (I was taught to respect my elders, but there are fewer every year.)

I’ve decided I’m not old. I’m 25 plus shipping and handling.

Why do I have to press “1” for English? Did the United States move?

Patience: What you have when there are too many witnesses.

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, “Mortgage Rates: Thinking the Unthinkable.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Aug. 15: Trader, LO, Ops jobs; digital, reno products; originator survey; condo loans to become easier

Plenty of economists watch builder activity and mood swings as early indicators of future economic health. Builder confidence in the single-family 55+ housing market continued in positive territory in the second quarter of 2018, according to the HMI. We’ve been hearing about skilled labor shortages, lack of buildable land, raw material price volatility, and permit & regulatory costs for years, but aging Baby Boomers are downsizing, many into condominiums. The 55+ multifamily condo HMI is the second-highest reading since the inception of the index in 2008. I bring this up because of the FHA condo announcement yesterday, spelled out below and good news for many.

Jobs

Two of America’s most storied mortgage companies, American Mortgage Service Co. and Eustis Mortgage, have agreed to join forces to form the nation’s premier mortgage banker. Together the two companies have a combined 110 years of mortgage lending and operations and possess similar characteristics in how they approach the mortgage business for their clients and their general appreciation for the employee family. The new company will launch towards the end of the year, and will combine the state-of-the-art technology platform that Eustis Mortgage has adopted, along with American Mortgage Services long history of operational excellence. Opportunities for interested mortgage professionals looking to expand their business should contact the following individuals who are in charge of growth: Rich Phillips at American Mortgage Service or Stephen Barton at Eustis Mortgage.

Top 50 Mortgage Lender, On Q Financial, is continuing its expansion across the country with the addition of Regional Vice President, Paul Sinnett in Missouri and Area Manager, Pamela Robichaud in Delaware. Together, Robichaud and Sinnett have over 50 years of experience in the industry leading multiple teams, recruiting, and creating the dream of home ownership for families across the nation. “Their energy, diligence, and dedication have already made an impact to On Q and our plans to grow our brand and bring the dream of home ownership to countless families,” Shane Miller, Senior Vice President, added. If you’re a passionate and driven individual that thrives in a fast-paced environment and you’re interested in joining the team at On Q, please contact Nick Suwanvichit or visit On Q Financial Careers.

U.S. Bank Home Mortgage is growing in the Texas, Central Coastal, CA and Central Valley, CA communities! “We’re hiring Managers and Loan Originators with Builder/CRA/Traditional experience. We’re seeking stellar talent to build a dynamic growing team to help navigate important milestones and strengthen futures together in the communities we live and work. At U.S. Bank, you’ll get the incentives, tools, resources and personal support you need to pursue your professional dreams and cultivate meaningful relationships with the people and communities you support. We offer a comprehensive benefits package, including a pension plan and matching 401k plan!” Please contact Christina Saucedo, U.S. Bank Recruiter, at 651 325-0984 or Region Manager, Phil Deol at 949 538-4066.

Actions speak louder than words. At Citizens Bank, we not only speak to our commitment to building a diverse and inclusive workforce, we put it into action by supporting community events focused on celebrating our differences. Each year we sponsor Pride festivals in our Boston and Providence communities, with Citizens colleagues volunteering at all events. We also set up internal Business Resource Groups (BRGs) made up of our colleagues, dedicated to women, LGBTQ, multicultural colleagues and veterans. These BRGs help us weave a more effective diversity and inclusion mind set into everything we do. Join us as we strengthen our culture of inclusion. If that is the kind of company you want to build your future with, apply here. For questions, please email Home Mortgage Recruiting.

Recently, we learned that Rushmore has agreed to purchase the Correspondent channel from First Bank. Now, comes news that the new Rushmore Correspondent Lending Services is looking to expand its Capital Markets capabilities and looking for a trader in the Nashville TN location. The Trader will be responsible for bidding bulk tapes, hedging, and delivering loans to FNMA, FHLMC, and GNMA. Nashville is a pretty nice place to live, and Rushmore has big plans for growing Correspondent. Please send resumes to Patrick Reese.

Take Three Technologies (Take3™) announced its hiring of Ruth Lee as the organization’s EVP to lead the startup’s efforts to expand adoption of its proprietary software, TheRuleTool™. This SaaS solution provides originators with on-demand access to guidelines using a simple online and mobile-friendly interface, improving efficiency and reducing operational drag early in the process for mortgage banking operations and executives.

Lender products & services

OpenClose® has added industry technology veteran Allen Pollack as the company’s new VP of Innovation. The move supports OC’s commitment to innovate, empowering lenders and financial institutions to become more efficient and align with the demand of today’s consumer needs. Pollack was previously at Fiserv, where he was responsible for FinTech initiatives within retail banking that leveraged digital mortgage and conversational AI products to transform lending for the operational efficiencies and consumer experiences. Pollack was also a co-founder of NYLX, serving as CTO and later continued as CTO of LoanLogics. OpenClose recently launched a single-source digital mortgage point-of-sale (POS) solution that integrates tightly with its end-to-end multi-channel LOS, which Pollack will continue to enhance. Visit its website for more information.

If you’re thinking about a Renovation Loan, it makes sense to partner with a trusted expert like AFR Wholesale! AFR’s Renovation Portal not only provides AFR’s lending partners with the ability to view loan activity throughout the loan origination cycle, its partners can also view progress on the project even after the loan has closed. It’s easy to see why AFR has been a leader in renovation for more than 20 years, and is the go-to renovation resource for so many brokers & correspondents. AFR would also like to remind everyone of the Simple FHA Refinance: similar to the FHA Streamline with the added ability for eligible borrowers to include closing costs in the new loan. In addition to unique products and services, AFR also provides its business partners with industry-leading technology, professional expertise and continuous educational opportunities. For more information on becoming an AFR partner, email sales@afrwholesale.com, call 1-800-375-6071, or visit www.afrwholesale.com.

Originator news

In the 2018 STRATMOR Originator Census Study, STRATMOR found the top 20 percent of originators closed just over eight loans a month on average. Those same top 20 percent tended to have an average tenure of just over five years. Knowledge is power when it comes to building and maintaining a great sales team. What do you know about your team? Is it time to start recruiting because you have a higher than average age group that may be retiring soon? How many of your originators are reaching the average tenure time this year? Get the answers to these questions and more by participating in the STRATMOR Originator Census fall survey for Retail and Consumer Direct channels. Participants receive a customized summary report comparing their company data to industry averages. Register today as this Originator Census survey closes August 31!

FHA, VA news; Condo-mania

The U.S. Department of Housing and Urban Development (HUD) released updated guidance on FHA-insured condominium financing. The new rules should benefit potential borrowers by allowing more buyers to obtain low down-payment mortgages on affordable housing options. The Federal Housing Administration (FHA) announced the publication of its Condominium (condo) Project Approval Final Rule and new condominium sections of FHA’s Single Family Housing Policy Handbook 4000.1 (SF Handbook in PDF format).

The new rules will extend FHA certifications on condo developments from two years to three years, reducing the compliance burden on condo boards. They will allow for single-unit mortgage approvals (aka spot approvals) which will enable FHA insurance of individual condo units, even if the property does not have FHA approval (including units with HECM loans), and secure additional flexibility in the ratio of investors to owner-occupants allowed for FHA financing in a condo building.

The full guidance will go into effect on October 15, 60 days from publication. The full rule for single-family condo financing is scheduled to be published in the Federal Register on Aug. 15, 2019, and is available online. Recall that the Condominium Project Approval and Processing Guide was originally introduced in Mortgagee Letter 2011-22.

FHA will issue a Mortgagee Letter next week that will outline the process for case number assignments for applications utilizing the Single-Unit Approval process. And in September, FHA will host an industry stakeholder briefing call to assist mortgagees and other interested parties in FHA transactions to better understand the FHA’s condominium project approval requirements. An industry stakeholder training webinar will also be held toward the end of September. The details for both will be communicated later.

Various groups expressed approval. For example, Scott Olson, Executive Director of the Community Home Lenders Association (CHLA) issued a strong statement of support for HUD publication of the final rule today making changes to rules governing FHA insurance of condominium loans: “The Community Home Lenders Association (CHLA) strongly commends FHA for issuing this final FHA rule which responsibly provides for more flexibility to originate single family condo loans.” NAR President John Smaby, enthused, “We are thrilled that (HUD) Secretary (Ben) Carson has taken this much-needed step to put the American dream within reach for thousands of additional families.”

In SEL-2019-034, GNMA issued updates to seasoning requirements.

AmeriHome Mortgage will be accepting the FHA announced changes, effective with new case number assignments on and after 9/1/2019, the maximum LTV/CLTV for Cash-out Refinance Mortgages will be reduced from 85 to 80 percent.

In accordance with the GNMA announcement of additional restrictions for high LTV VA cash-out refinance loans; all loanDepot Wholesale VA cash-out loans greater than 90% LTV must fund by September 30, 2019. NDC VA cash-out loans greater than 90% LTV must be delivered to loanDepot Wholesale by September 23 and purchased by September 30, 2019.

Quorum Federal Credit Union now offers a new source of cash to purchase properties, renovate homes or pay for college. Individuals can borrow up to 80% of an investment property’s appraised value. Eligible properties include non-owner occupied 1-4 family homes, condominiums, planned unit developments and townhouses. Under the terms, borrowers can make interest-only payments for the first five years, followed by a 10-year repayment period. There are no pre-payment penalties. Individuals will become a member of the Credit Union as part of the application process. To learn more about Quorum’s Interest-Only Investment Property HELOC, visit info.quorumfcu.org/heloc-for-investments or send an email to mortgagesales@quorumfcu.org.

Ditech Correspondent issued an announcement regarding the Ginnie Mae Seasoning Requirements for VA Refinance Loans.

PRMG posted the following information regarding FHA Streamline Products and VA IRRRLs: In Cook County, Illinois, Kane County, Illinois, Peoria County, Illinois and Will County, Illinois Streamline Refinances are not exempt under Illinois law from the requirement to enter applicant income information. The actual income must be provided/estimated by the applicant(s) and listed on the application (1003) and entered in the Illinois Anti-Predatory Lending Database (ILAPLD). It is not acceptable to enter a nominal amount such as $1.00. However, the income will not be considered in the underwriting of the loan.

Waterstone Mortgage introduced its Non-Traditional Credit Program, which allows homebuyers with no credit history to qualify for a home loan based on other payment history indicators. The new program is available with Waterstone Mortgage’s conventional, FHA, USDA, or VA loan options, and is designed to help credit invisible homebuyers achieve their goal of homeownership.

Capital markets

What a ride it’s been for markets lately, and what a mirage Tuesday’s hope around U.S. / China trade talks was. U.S. stocks suffered one of the biggest sell-offs of the year on Wednesday, with the S&P 500 sinking almost 3 percent, the Dow dropping 800 points, and the yield curve inverting for the first time since 2007, including the 10-year closing -10 bps to 1.58 percent amid ominous signs of a looming recession. Additionally, the 30-year treasury bond hit an all-time low yield of 2.018 percent. There wasn’t much of any good news out there, between President Trump again lashing out at Fed Chair Powell in an attempt to deflect criticism that his trade war with China is harming the U.S. economic outlook, disappointing July growth figures from China, a QoQ contraction in Germany’s Q2 GDP, and reports the unrest in Hong Kong is slowing the financial center’s economy. Domestically, import/export prices didn’t show any inflation, confusing markets perspective on the Fed’s perception of inflation trends as that contradicts the Consumer Price Index for July. MBS volume soared, led by short expiries, with swaption volume besting YTD-highs as well as the February 2018 highs.

Today contains the busiest economic release schedule of the week. With all eyes on trade & tariffs, do the numbers matter? We’ve had July retail sales (+.7%), Empire State Manufacturing for August (“4.8”), initial jobless claims for the week ending August 10 (+9k to 220k), Philadelphia Fed Manufacturing for August (down to “16.8”), and Q2 productivity and unit labor costs (+2.3% and +2.4%, respectively). Later this morning brings July industrial production and capacity utilization, June business inventories, and the NAHB Housing Market Index for August. In terms of central banks, both Norway and Mexico will be out with their latest monetary policy decisions. We begin the day with agency MBS prices worse a few ticks (32nds) from Wednesday afternoon and the 10-year yielding 1.58%.

This morning I find myself in Thompsonville, MI. How do people here tease each other about living here?

“Down South” to you means Ohio.

You were unaware that there is a legal drinking age.

You know what a Yooper is. And a troll.

You think owning a Honda is Un-American.

You install security lights on your house and garage and leave both unlocked.

A brat is something you eat.

You know that UP is a place, not a direction.

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, “Residential Lending, Banks, and Market Share.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Aug. 14: Management, Ops, LO, AE jobs; broker, non-QM products; policy & procedure trends

Data compiled by the American Bar Association shows that average lawyer pay has nearly doubled since 1997! Mortgage loan originators enjoy comparing themselves to attorneys, despite the formal educational differences, the time involved with case work stretching out years, and the initial expense of law school most attorneys attend after college. And then there’s the bar exam with its “not a sure thing” passing rate. How about an exam for homebuyers before a sale can be approved? Spain has one. Also known as the Housing Credit Law, “it should greatly diversify what is on offer for homebuyers while providing better protections.” How about an exam for borrowers, the first question being, “Do you know that you must pay back a loan?” Okay, I’ll stop being snippy.

Jobs & hires

11 Mortgage is looking for champion AEs in TX, FL, GA, WA, AZ, and Northern CA. A Fannie Mae and Freddie Mac Seller/Servicer and Ginnie Mae issuer, approved in 46 states, 11 MORTGAGE is a price leader and offers a full line of products which include VA, Co-Ops, Non-QM, CalHFA, USDA, Jumbo, to name a few. 11 MORTGAGE is taking mortgage broker’s & banker’s experience to a whole new level! What makes us different? No overlays. None! 4hours CTC to Docs, guaranteed! 11 minutes funding turn time, no joke! No AMC used, ever! Every approval is called out, and our underwriters will go over each condition on every loan. Our pricing ranking in Loansifter is generating daily leads in untapped territories. 11 MORTGAGE is committed to ensure that all AEs become successful, and our records show that 80% of our AEs are funding > $5mm. If you are ready to work for a company who will not jam a bunch of AEs in your backyard, contact Thomas Michel, EVP of Wholesale, today!”

A fast-growing, up-and-coming Texas Correspondent Lender seeks an experienced Underwriting Manager. Position is a once-in-a-lifetime opportunity to grow your career and collaborate with sales and operations leaders. Ideal candidate is designated FHA & VA, with minimum 5 years’ experience as an underwriter. Underwriting Manager is responsible for credit policy excellence and operations efficiency. If you are a leader with the skills to build a team of elite underwriters, email your confidential resume to Anjelica Nixt.

“Would you like to join a well-capitalized, independent mortgage company with a National presence? We are looking for an experienced and highly motivated Consumer Direct Sales Manager who can bring a team of at least 10-15+ MLOs to be a part of an incredible strategic growth opportunity. We offer highly competitive rates and a diverse product offering that includes Conventional, USDA, VA, FHA, Non-QM, and 2nd Lien products. We are offering a strong compensation model (with over-rides) coupled with access to market leading technology platforms including Encompass, Velocify, Dial-IQ, Automated Email Marketing and a Digital Mortgage Application powered by Blend. Hybrid MLO lead delivery model includes a mix of portfolio leads, aggregator, rate table and organic lead sources. We are also offering a strong foundation and growth opportunity for the right team through our additional portfolio partnerships. Pipeline buyout or portfolio bridge may be considered. Don’t miss out!” Interested candidates please contact Anjelica Nixt and specify this role.

There is a lender that is emerging as a national player in Retail Mortgage banking. Presently, Pacific Residential Mortgage (PacRes), headquartered in Lake Oswego, Oregon is a dominant Pacific Northwest company. With soon to be announced branches in Arizona, Texas and Montana, more will be added across another 15 states. PacRes is a 15+ year old company, with retail offerings for both P&L and corporate branches, producing and non-producing branch managers seeking to expand aggressively. As a GSE approved servicer, PacRes underwrites to DU guidelines, and is one of the most stable and well capitalized Mortgage Lenders in the United States. New opportunities to run production for target markets and to add the next billion in production are available. For Regional Production Leaders, Branch Managers and Loan Officers, e-mail: JoinPacRes@pacresmortgage.com. Or check out PacRes’ Ad for consumers and to learn more about how PacRes Approves Dreams Daily, by going to https://pacresmortgage.com/recruitment.

For the 2nd year in a row Caliber Home Loans, Inc. has been recognized by Victory Media as a Military Friendly® Employer 2020. This designation measures a company’s commitment to serving the military and veteran community thru charitable work, hiring and career advancement. Caliber has also received recognition for its VA loan production. Caliber ended 2018 as the #2 non-bank purchase lender in the country (IMF) for VA loan volume. As a leading VA loan lender, we’re committed to assisting our active military and veterans in every way possible – from assistance with home financing to our community outreach initiatives. We’re looking for a few good loan officers and operations staff to join the ranks of our sales organization! Contact Jeremy DeRosa or visit our website to learn more.

AXIS Appraisal Management Solutions, a leading national provider of collateral and appraisal services, announced the addition of Jeff Briggs to the AXIS Team as Midwest Regional Sales Manager. Jeff brings 25 years of mortgage lending and appraisal experience to his new role at AXIS, and stated, “AXIS is a company that aligned with my belief in high quality and ethics when we worked together as lender and vendor. I couldn’t be more excited to be part of their team.”

Lender products and services

As more and more mortgage lenders turn to technology to enhance their business, digital mortgage platforms are generating quite a buzz. But deploying new technology is daunting, and many lenders worry about how to see a positive impact as quickly as possible in their organization and increase their ROI. A strategic plan for implementation and adoption is critical for success. A new eBook from Maxwell, The Digital Mortgage Implementation & Adoption Guide,” provides a thorough and unbiased guide of tips and best practices to maximize your success when launching digital mortgage technology. A great read for anyone looking to better incorporate technology into their workflow today. No form required and an exclusive to Rob Chrisman readers today. Get your copy here!

Informative Research expanded its credit services and integrated with both SimpleNexus and Floify in the past month. SimpleNexus users now have access to Informative Research’s TriMerge Credit Report and their popular SoftQual report. SoftQual is an effective pre-qualifying solution that enables lenders to collect all the information they need to match applicants to the right loan options via a “soft” inquiry. This means that SoftQual inquiries are not recorded in applicants’ credit histories so it cannot be seen by competing mortgage firms that might try to undercut the original lender’s loan offer. For the Floify integration, users can now order a dual or TriMerge Credit Report viatheir existing Informative Research account once they convert a loan application into a live loan; or on-demand directly from their Floify account. To learn more about these integrations, feel free to contact an Informative Research team member here.

“Vacation Rental or Long-term Rental? Visio Lending is the nation’s leader in Non-QM loans for buy and hold SFR rentals. 30-year terms, buy ups and buy downs on rates and pre-pays, I/O available. No personal DTI or tax documentation. Through our top-notch Broker Program, brokers are able to earn up to 3 points per closed loan, Visio always pays the broker the first 1%. Additionally, Visio Broker can count on a designated Account Executive and in-house processing.”

One warehouse lending organization gets noticed in the marketplace for doing things the right way. ResX Warehouse Lending is a division of Connecticut-based United Bank, a respected commercial lender with a long track record of building long-term relationships with its clients. They’re not new to the warehouse lending business, but if you haven’t heard the name yet, it’s only because they’re not promoting themselves with every new trend or fad to hit the market.  These are serious experts looking to build relationships with clients like you who are focused on sustainable growth…one relationship at a time. ResX Warehouse’s clients rave about the lender’s proactive approach. And that expertise is provided by seasoned, top-level professionals. Customers also love their commitment to delivering more effective and efficient processes. Combined with United Bank’s full-service array of products and resources, ResX is the ideal platform for the correspondent focused on real growth. Learn More.

Simplify your underwriting process with Loan Product Advisor® asset and income modeler (AIM). Through the expertise of third-party service providers, AIM automates the manual processes of assessing borrower assets and income. AIM reduces the burden of traditional documentation, speeds up the loan origination process and helps you close loans faster. Freddie Mac is working hard to bring you solutions that create efficiencies for your business and improve the borrower experience – giving you a competitive edge. These capabilities are available now. Gain greater efficiency in your underwriting processes with AIM – get The Freddie EdgeSM.

Stearns Lending continues to invest in the mortgage broker channel through innovative technology that reduces clicks and improves the overall client experience. Our latest enhancements include the ability for our clients to resend disclosures to the borrower directly out of SNAP 2.0 and a more streamlined way to track Change of Circumstance requests. Not to be outdone, our Non-Delegated Correspondent channel has developed an end to end solution where our Sellers can initiate disclosures, generate a CD and track the closing package being sent to the borrower. If you’re interested in partnering with a lender that combines the power of people and technology please reach out to Wholesaleleadership@stearns.com.

Policy and procedure updates from around the biz

In the secondary markets, investors prefer lenders to have solid guidelines that they follow. Of course lenders are always seeking ways to streamline loan processing without sacrificing quality. Let’s take a random walk on some of the changes being made out there.

Wells Fargo Funding added additional enhancement to eligibility messages and price adjuster description on Best Effort Non-Conforming Loans, effective August 26.

AmeriHome Mortgage partners should note that loans submitted through the Non-Delegated Underwriting Program, a new Loan Submission Form will replace the existing Non-Delegated Contact Information Form available until 8/19/2019. Use of the new form will be required beginning 8/19/2019. And AmeriHome’s Purchase Advice and Wire Details (Purchase Advice) changed last month. The pre-wire Purchase Advice will be provided the morning of, rather than evening before, the scheduled wire and will no longer be titled “preliminary.”

U.S. Bank Correspondent/HFA posted Seller Guide 2019-035 which includes information on Maximum TLTV/LTV on FHA loans with Community Seconds, Certification of Revocable Trust, Fannie Mae’s eligibility matrix and more.

The Fifth Third Correspondent Underwriting Manual has been updated with Private Flood Insurance eligibility guidelines. Private flood insurance policies must comply with the flood rule:

Private flood insurance policies that include the Compliance Aid Policy Provision (“This policy meets the definition of private flood insurance contained in 42 U.S.C. 4012a(b)(7) and the corresponding regulation.”) are eligible. Private flood insurance policies without the Compliance Aid Provision must meet the rule’s mandatory review requirements. Private flood insurance policies that the Correspondent accepted under the flood rule’s discretionary review provision are ineligible. Loans in special flood hazard area with a private flood insurance policy that do not meet these requirements are ineligible.

FCM posted Bulletin 2019-33 – Wholesale Guideline Updates. Information contained in the bulletin include Well & Septic Systems, Net Tangible Benefit Test, VA Laon Seasoning, Contributions by Interested Parties and more.

Mortgage Solutions Financial posted Announcement 21-19C regarding the UDM Procedure and Guideline Updates.

Capital markets

U.S. Treasuries continued their recent volatile manner in the second session of the week, retreating on Tuesday, including the 10-year closing +4 bps to 1.68 percent after the release of a hotter-than-expected core CPI for July, though the print shouldn’t be enough to quell calls for a September rate cut. The real headline news came later in the morning after it was reported that the office of the U.S. Trade Representative recommended that tariffs on cell phones, laptops, video game consoles, certain toys, computer monitors, and certain apparel items from China, $80 billion in total, should be delayed until mid-December. And Hong Kong continued to make headlines, where riot police confronted protesters at the city’s airport.

Today’s light calendar is underway with mortgage applications increasing 21.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 9. Refis were up 37 percent from the previous week to its highest level since July 2016, and was 196 percent higher than the same week one year ago. Purchase apps were up slightly. Borrowers are not sitting idly by. Fannie Mae 30-year prepayment speeds rose 29 percent in July, and at current rates a majority of borrowers have an incentive to refinance. The 30-year fixed mortgage rate decreased eight basis points during this past week’s survey period to 3.93 percent, the lowest level since November 2016, now more than 80 basis points less than the beginning of this year.

The only other releases due out this morning are July import/export prices (both +.2%). We begin the day with agency MBS prices better .125-.250 and the 10-year yielding 1.61%.

This morning I head to upstate Michigan for the MMLA conference. Michigan humor? There’s plenty.

If you consider it a sport to gather your food by drilling through 18 inches of ice and sitting there all day hoping that the food will swim by, you might live in Michigan.

If you’re proud that your region makes the national news 96 nights each year because Pellston is the coldest spot in the nation, you might live in Michigan.

You know several people who have hit a deer more than once.

If your local Dairy Queen is closed from November through March, you might live in Michigan.

If your town has an equal number of bars and churches, you might live in Michigan.

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, “Residential Lending, Banks, and Market Share.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2019 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)