President’s Day: Vendor mania

Did you hear about the population in Ireland? It’s Dublin! In the United States over a quarter of the nation’s population lived in just three states in 2019: California, Texas and Florida. And half of the nation’s population is concentrated in the 10 largest states:  California, Texas, Florida, New York, Pennsylvania, Illinois, Ohio, Georgia, North Carolina and Michigan. Coincidentally, this is the same top 10 as in Census 2010. Drops in natural increase and net international migration have resulted in a gradual slowdown of the nation’s population growth this past decade, according to U.S. Census Bureau population estimates. Growth of the U.S. population has slowed every year since 2015. Since April 2010, the population increased at an average annual growth of 0.66 percent, compared to an average of .97 percent in the decade prior.

Population change at the national level does not necessarily reflect what is happening in states and regions. Growth is not evenly distributed across the United States, and factors contributing to population growth or decline vary across geographies. Population gains in the South, now the most populous region of the U.S., were mostly due to natural increase and domestic migration (the movement of people from one area to another within the nation). During the same period, the population declined in the Northeast due to net domestic migration, which offset gains from net international migration and natural increase.

Vendor news from around the biz

I imagine that it would be impossible to find a lender that does not use an outside vendor for some function. Whether it is a title company, insurance company, LOS, hedging system, subservicer, there is a vendor out there that performs some function. And it is very hard to keep track of who is doing what, and if the particular function performed by one vendor “talks to” a function performed by someone else. Lenders hope that the use of some of these services helps them alleviate some of the “accordion type” adding/subtracting of staff during prosperous or lean times.

Let’s take a random walk through who is doing what, acquiring, or partnering with each other or lenders out there. And some of this may have been repeated from previous commentaries but it is good to have a sense, over time, of who is doing what.

The big news last week was First American’s announced acquisition of Docutech. First American Financial Corporation (NYSE: FAF) is known for its title insurance, settlement services and risk solutions for real estate transactions, and Docutech is known as being a provider of document, eClose and fulfillment technology for the mortgage industry. Docutech is “a respected industry leader that leverages technology to help financial institutions quickly and accurately provide regulatory-compliant loan documents for mortgage and home equity lending. The company’s innovative solutions are widely used by lenders across the U.S. and have contributed to the industry’s evolution toward a digital real estate closing experience. Docutech’s management team, including President and CEO Amy Brandt, will continue to lead the company’s operations. (BofA Securities acted as financial advisor to First American and Raymond James acted as financial advisor to Docutech.)

Docutech, a provider of document, eSign, eClose and print fulfillment technology, announced that Quicken Loans has gone live with Docutech’s ConformX™ dynamic document engine. This integration will allow Quicken Loans to more simply generate mortgage documents, helping enhance the lending process. Read the article for details.

The integration between Docutech’s ConformX and Solex Platforms and MortgageFlex System’s MortgageFlexONE LOS Platform? Once live, the integration will enable lenders utilizing MortgageFlexONE to generate loan documents through Docutech’s ConformX™ dynamic document engine and enable relevant documents for eDelivery, eSign, and eClose through Docutech’s Solex™ platform.

If you like QC you should check out the quarterly ACES Risk Management report: ARMCO Mortgage QC Trends Report. Even comments made a couple years ago ring true. “Critical defects in 2018 reflect the market’s rising interest rates and continued escalation of property values,” said Nick Volpe, chief strategy officer for ARMCO. “Fewer highly qualified borrowers transact mortgages when rates increase, which fills the market with more marginal borrowers who tend to require more documentation. It makes sense that defects related to loan package documentation more than doubled from 2017 to 2018.”

In response to an appraisal industry reliant on legacy technology and manual workflows, Reggora has built a modern appraisal technology platform that brings mortgage lenders and appraisal vendors onto a single core platform. Reggora recently announced that it has raised $10 million in Series A funding, led by Spark Capital. Spark also led the company’s $3 million seed round in January 2019. Existing investors, including Boston Seed Capital, also participated in the round. With the funding, Reggora will focus on adding to its engineering, sales, and operations teams, expanding its nationwide presence, and continuing to innovate in the real estate valuation space. In the past several months, Reggora’s co-founders were recognized as two of Boston’s top entrepreneurs and profiled in Forbes’ 30 Under 30 annual edition.

Calyx Software announced new enhancements to Zip Point-of-Sale Platform. New features make this software more interactive for borrowers and adaptable for home equity products. Enhancements include the ability for borrowers to upload documents and an interactive Borrower Dashboard to provide more visibility into the loan process. The new version also includes borrower questions to support HELOC origination, as well as refinance and home equity options for second homes and investor properties. The update also gives borrowers access to their loan officer’s contact information by clicking the Help icon in the Zip Interview Portal.

Calyx announced the launch of Calyx Wholesaler MarketPlace with seven of the nation’s premier wholesale lenders. Calyx Wholesaler MarketPlace enables mortgage brokers to connect with wholesale lenders via a single portal. Seven industry-leading lenders are currently in production. This week, Caliber Home Loans joined Quicken Loans, Freedom Mortgage, Stearns Lending, Plaza Home Mortgage, Sierra Pacific Mortgage, and Cardinal Financial Company in accepting loan submissions through this wholesale network. Additional lenders are in the process of integration with launches coming soon. Calyx Wholesaler MarketPlace is integrated with Calyx Point®, the dominant LOS of choice among mortgage brokers. It is also a key feature of NAMB All-In, the cloud-based platform made available for free to National Association of Mortgage Brokers (NAMB) members.

MAXEX has completed a strategic integration with Ellie Mae Encompass Investor Connect™. MAXEX connects bank and non-bank mortgage lenders to market-leading investors, including Wall Street dealers, money center banks, and the largest U.S. real estate investment trusts (REITs). To date, more than 120 lenders and investors have embraced MAXEX’s one counterparty, one contract, one digital exchange model to achieve faster, more efficient liquidity. This new integration further increases speed and efficiency by enabling seamless document transfer within Encompass. Now, Originators can deliver data and documents directly to MAXEX without ever leaving Encompass. MAXEX and Ellie Mae will host an open webinar on March 11, 2020 at 11 a.m. Pacific Time to demonstrate this new functionality.

Sign up with Ellie Mae to receive resources, get the latest updates, educational resources, and expert guidance on the new URLA. Join its “I Love URLA” community and stay on track for a seamless transition.

Mortgage document preparation vendor International Document Services, Inc. (IDS), announced that it has redesigned the audit worksheet feature in its flagship document preparation platform idsDoc. Now, the audit worksheet dynamically displays vital loan information, including a record of audits and tests conducted, in a single, easy-to-read document, providing investors and auditors with a full understanding of the loan file.

Seaside National Bank based in Orlando, Fla., and BSI Financial Services will be providing loan servicing and QA automation through its Asset360 technology. This advanced analytics and reporting technology will provide daily quality assurance reporting on 100 percent of the loans in Seaside’s portfolio. BSI ASSET360 reviews each loan using more than 600 business rules developed in collaboration with clients, investors and regulators. Loan exceptions are immediately reported to servicing teams for research and remediation. According to company officials, the technology has demonstrated cost savings and loan quality assurance improvements that have yielded significant reductions in error rates in loan boarding and in borrower and regulatory complaints.

Churchill Mortgage will work with Infosys to re-engineer its processes driving a complete digital transformation within mortgage lending. With the new partnership, the mortgage lender will enable borrowers to interact with them in the way they desire, but without compromising the values and trust Churchill is known for. Ultimately, this will position Churchill to serve more people and compete with the largest lenders and fintechs by leveraging the most modern technology available today, such as AI and robotics, propelling them into the future. Churchill is also investing heavily in its people, which will in turn provide greater opportunity for growth and innovation.

The recent partnership between LoanLogics and Virpack will increase the speed and accuracy of document recognition, data extraction, and file review while reducing the cost of creating and ensuring loan quality. By leveraging an integration between LoanLogics IDEA™ and VirPack’s virtual document management and automated workflow platform, the companies remain at the forefront of providing market leading solutions that increase the speed and accuracy of document recognition, data extraction, and file review; and reduce the cost of creating and ensuring loan quality. The potential results are higher profit margins for lenders on the front end of the loan.

Download the Free EBOOK from Notarize… the official guide on remote online notarization.

OpenClose announced that it is has scheduled a May release for the official rollout of its anticipated digital mortgage point-of-sale (POS) solution, ConsumerAssist™ Digital POS. This new integrated solution is a unique offering that combines a proven and mature 100 percent browser-based end-to-end LOS and PPE with new state-of-the-art dynamic digital mortgage POS technology. Lenders can now automate and organize numerous tasks that would normally be performed in the back-office via the LOS and push them closer to borrowers earlier in the origination process. As a result, workflow efficiencies increase, the lending process is sped up, costs are reduced, and new business is captured at a higher rate and lower cost.

Lender Price has completed an integration of its Product Pricing & Eligibility (PPE) Engine with LendingTree providing mortgage lenders the ability to synchronize their loan pricing in real-time with one of the nation’s leading online marketplace for financial services. Lender Price’s PPE technology is designed to process large amounts of pricing data and produce instantaneous responses. The PPE generates accurate loan eligibility and pricing decisions in an extremely rapid manner, allowing users to “shape” loan scenarios in a continuous manner and view the resulting changes immediately on screen. By combining Lender Price’s advanced technology with LendingTree’s established online marketplace, borrowers and lenders benefit from a partnership that delivers fast and accurate mortgage quotes.

Lender Price announced the addition of American Financial Resources Inc. (AFR) loan products to its pricing engine library. The Lender Price Product Pricing and Eligibility (PPE) engine generates extremely rapid and accurate decisions of loan eligibility and pricing for a wide array of use cases. The Marketplace version of the Lender Price PPE is targeted at mortgage brokers and provides a convenient method for comparing pricing between multiple wholesale lenders. Lender Price partnered with the National Association of Mortgage Brokers (NAMB) to provide the Marketplace PPE to all NAMB members at no cost. By combining Lender Price technology and the more than 6,000 members of NAMB, wholesale lenders such as AFR gain access to a highly coveted group of mortgage professionals. The partnership with AFR expands the number of participating Marketplace PPE lenders to 19, creating more opportunities for both lenders and mortgage brokers.

SLK Global Solutions has achieved a new benchmark of success with its latest offering, LoanAccel™, an origination support solution that helps underwriters provide conditional approvals within hours. LoanAccel works with the lender’s current loan origination system (LOS), expediting he underwriter’s conditional approval process by making sure a decision-ready loan file is submitted to underwriting in less than 48 hours. The LoanAccel team supports requirement gathering for the lender and the lender’s automated underwriting system, making sure that a lender’s most critical resource, the underwriter, can approve loans in fewer than two touches on average, regardless of loan application types. In addition, LoanAccel enables loan processors to only work on conditionally approved files, freeing them from many tedious administrative activities and improving the employee experience.

Capital markets

Bond markets are closed. Come back tomorrow.

A man was driving along the California coast when he saw a police car in his rearview mirror, signaling for him to pull over. He promptly pulled off the road. When the officer reached his window, he politely asked, “Is there a problem, Officer?”

“No problem at all. I just observed your safe driving and am pleased to award you $5,000 as part of our Safe Driver Award campaign. Congratulations! Now what do you think you’re going to do with the money?”

The driver thought for a minute and said, “Well, I guess I’ll finally go get my driver’s license.”

The lady sitting in the passenger seat said to the policeman, “Oh, don’t pay attention to him- he’s a smarty pants when he’s drunk and stoned.”

The guy from the back seat said, “You guys with your big mouths! I told you we wouldn’t make it very far in a stolen car!”

At that moment, there was a knock from the trunk and a muffled voice said, “Are we over the border yet?”

Visit 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, “How Epidemics Impact Lending” If you have the 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.


(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 Copyright 2020 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.)


Feb. 15: Letters on warehouse lending, non-bank lenders; Fannie’s results & capital markets activities

It is important to keep things in perspective. A loan officer will grouse about a price of a non-QM loan being .250 worse than a competitor’s. But Australia’s bush fires burned an estimated 72,000 square miles, the size of South Dakota, killing at least 34 people and an estimated one billion animals. (The photos of the animals were horrific.) The death toll of the coronavirus hit 1,400 with over 60,000 cases around the globe.

That noted, I receive plenty of emails, and received this letter of admonition this week. “Rob, you should stick to mortgage news. I know that others worry about politics, that our justice system is subject to presidential influence, or that the environment may be changing [editor’s note: near 70 degrees in Antarctica?]. Your readers should remember that rates are great, pipelines are full, and companies are off to a great start of the year. Those are the things that matter.”

And there you have it, although so much of what happens in the world, and the people in it, touches our business. On to mortgage topics.

Regarding the question of whether or not all warehouse lenders require audited financials, I received this note from David Frase, the President of Mortgage Warehouse Lending at Simmons Bank. “Simmons Bank is a $20 billion publicly-traded financial institution who does not require audited financials from its warehouse clients. We do not buy loans from our clients nor is our pricing out of market. When our collateral is underwritten by a valid, approved takeout investor prior to funding, we believe the risk of incorrect financial statements is sufficiently mitigated. But this is not a ‘state asset’ program, either. The cash portion of any balance sheet must be supported by bank or brokerage statements at application and annual renewal. If our client decides they want to underwrite their own files, audited financials and more liquidity will be required. I have been a warehouse lender working happily in this ‘non-del’ market for 28 years and I pray some will attest that I am reputable. This rapidly growing segment of the market is not for everyone. It requires patience, a careful hand at the tiller, and really strong people to execute the strategy.”

Concerning general business conditions I was emailed this note from West Virginia. “Rob, we talk constantly about where to invest our time and money. As a small Independent Mortgage company, we cannot afford to make financial mistakes. My personal opinion is that we have to invest in technology and support staff (part-time, full-time, task specific), not more loan officers. Sure, we have to grow, but over the last 20 years, I literally grew my competition after I created a Top 10 Unit Team for Wells Fargo in the early 2000s. Everyone becomes a rocket scientist with success; so, interestingly, I’ve been waiting for the opportunity of a changing landscape to evolve and adapt, because I’m confident the old way of doing things and business plans are not going to succeed and neither will my competition (my old policies and procedures won’t work as well.

“And they can’t copy what I am doing, because I’m not sharing it. Stealth mode to everyone except my Clients. 1:1 marketing). Maybe my (Ego) thinking is wrong, but maybe not. That is the fun of our industry – to try and see. An important point I want to make also, is that we just need our ‘share’ of the market. My standard and quality of life has improved by not carrying a large team. The tricky part of our industry is that it is a volume-based business so, at a certain point, more is needed, but we are finding technology the great equalizer.


“I think you will enjoy the email I just sent out this morning to my Realtors: Did you realize that isn’t owned by NAR? Whaaat!? The real estate listing website is operated by News Corporation, a subsidiary of Move, Inc. I had for years just assumed the National Association of Realtors (NAR) owned it. The site launched as the Realtor Information Network in 1995, serving as a closed network for members of the NAR. It relaunched in 1996 as a public website displaying property listings. Since then, claims to have become the largest website in the United States for real estate listings, and in 2016 was valued at $2.5 billion by Morgan Stanley. So, NAR and Realtors do not own their own website. (Dramatic Pause) Why would NAR abdicate control of their most important assets – listings and its Realtor base? NAR is literally paying someone for the information they provided to them for free. It’s the same trick banks did with ATM machines, you have the privilege to be a bank teller in order to get your own money out, while being charge $3.00 for said privilege.


“What does this have to do with Zillow getting their New York real estate brokerage? Well, it is another example of the erosion of Realtors position in the marketplace. For years Realtors stressed the importance of how to pronounce the word, Realtor, when they should have been protecting their domain (online and offline) and Brand name in iBuyers have been assaulting the real estate market without a comprehensive (now defensive) plan in place by NAR. Zillow says that they will have a licensed brokerage in every state by the end of the year to do “nontraditional” real estate. Well, that is Internet speak for “disintermediation”, which means the reduction in the use of intermediaries between producers and consumers, for example, an owner selling their home directly to a buyer without a Realtor.


“What is your Board of Realtors doing about it? What are you doing about it? Why is an Independent Mortgage Advisor sharing this information with you? Because we are all holding hands down this aisle and only a few of us are going to make it to the end. We need to adapt to the new realities and threats in our marketplace.”

Fannie Mae Activity in the capital markets & transferring risk

It is important for LOs to know that without investor interest in the product that the product the LO manufactures, the process would cease. So it is good to know that the Agencies (Fannie, in this case) is up to since they are the end buyer of the lion’s share of mortgage originations. And since F&F can now retain their earnings, knowing if they’re making money is important as well.

On February 13, Fannie Mae reported its fourth quarter and full-year 2019 financial results reflecting solid financial performance through strong business fundamentals and stable single-family and multifamily guaranty books. Fannie Mae reported 2019 net income of $14.2 billion and Q4 2019 net income of $4.4 billion. Fannie Mae’s net worth increased to $14.6 billion as of December 31, 2019, as the company continues to retain quarterly earnings and restore its capital base. Based on the current agreement with the U.S. Department of the Treasury and the Federal Housing Finance Agency (FHFA), the company may retain quarterly earnings until its net worth reaches $25 billion. Fannie Mae provided more than $650 billion in liquidity to the mortgage market in 2019 through the financing of more than 3 million home purchases, refinances, and rental units. Fannie Mae was the largest issuer of single-family mortgage-related securities in the secondary market during 2019 with an estimated market share of single-family mortgage-related securities issuances of 37 percent. Fannie Mae provided $70 billion in multifamily financing in 2019, which enabled the financing of 726,000 units of multifamily housing. More than 90 percent of the multifamily units the company financed in 2019 were affordable to families earning at or below 120 percent of the area median income, providing support for both affordable and workforce housing.


Fannie Mae also continued its ongoing capital management and risk reduction efforts in 2019. Fannie Mae made changes to its Single-Family credit risk transfer structures in 2019, increasing the company’s capital relief and reducing the company’s risk. Fannie Mae also began obtaining credit protection on single-family reference pools containing seasoned loans, increasing the percentage of the company’s book covered by credit risk transfer, reducing the company’s capital requirements, and further reducing risk. Fannie Mae also enhanced its risk transfer capabilities through the company’s first Multifamily Connecticut Avenue Securities transaction in the fourth quarter of 2019, while remaining committed to lender risk-sharing through its Delegated Underwriting and Servicing program. These and other multifamily credit enhancements through 2019 have reduced the company’s conservatorship capital requirement for credit risk on multifamily loans acquired in 2018 by more than 70 percent. Fannie Mae’s retained mortgage portfolio decreased to $153.6 billion as of December 31, 2019 from $179.2 billion as of December 31, 2018, due primarily to a decrease in the company’s loss mitigation portfolio driven by sales of reperforming loans.

Fannie Mae’s Green mortgage-backed securities (MBS) issuances, which can be backed by green certified properties or properties targeting a significant reduction in energy or water consumption, increased 13 percent to $22.8 billion in 2019, totaling $75 billion since the program’s inception in 2010.

Fannie Mae also broadened the sources of liquidity available to the market in 2019 with its Multifamily Credit Risk Transfer (MCRT) program, which mitigates credit risk by transferring a portion of its risk to reinsurers and investors and increasing the role of private capital in the multifamily market. Multifamily Affordable Housing volume rose over 20 percent to $7.2 billion, which Fannie Mae would say represents a commitment to the preservation of affordable housing for families across the country.

Fannie Mae priced Connecticut Avenue Securities (CAS) Series 2020-R01, a $1.03 billion note offering that represents Fannie Mae’s first CAS REMIC transaction of 2020. CAS is Fannie Mae’s benchmark issuance program designed to share credit risk on its single-family conventional guaranty book of business. The reference pool for CAS Series 2020-R01 consists of approximately 105,000 single-family mortgage loans with an outstanding unpaid principal balance of approximately $29 billion.


CAS REMIC notes are issued by a bankruptcy-remote trust. The amount of periodic principal and ultimate principal paid by Fannie Mae is determined by the performance of a large and diverse reference pool. Fannie Mae will retain a portion of the 1M-1 ($303.1 million offered amount, 1-month LIBOR plus 80 bps, expected BBB-sf Fitch/BBB+ (sf) KBRA ratings), 1M-2 ($523.5 million offered amount, 1-month LIBOR plus 205 bps, expected Bsf Fitch/BB (sf) KBRA ratings), and 1B-1 ($206.6 million offered amount, 1-month LIBOR plus325 bps, class will not be rated) tranches in order to align its interests with investors throughout the life of the deal. Fannie Mae will retain the full 1B-2H first loss tranche.


With the completion of this transaction, Fannie Mae will have brought 39 CAS deals to market, issued $45 billion in notes, and transferred a portion of the credit risk to private investors on close to $1.5 trillion in single-family mortgage loans, measured at the time of the transaction. Fannie Mae’s single-family credit risk transfer programs have now transferred a portion of credit risk on over $2 trillion in underlying loans since 2013. Fannie Mae plans to return to market in mid-February with a high-LTV CAS deal. For more information on individual CAS transactions, visit our credit risk transfer website.

Fannie Mae priced its first Multifamily DUS REMIC in 2020 totaling $873 million under its Fannie Mae Guaranteed Multifamily Structures (GeMS) program on January 22, 2020. FNA 2020-M1 is the first Green Fannie Mae GeMS issuance of 2020. This is the twelfth GeMS issuance backed by Green MBS collateral, which brings total Green GeMS issuance to $9.9 billion. Collateral was composed of 28 Fannie Mae Green DUS MBS primarily in Nevada (35 percent), Florida (34 percent), and New Jersey (7 percent) with a weighted average LTV of 69 percent and a weighted average debt service coverage ratio (DSCR) of 1.47x.


The structure details for the multi-tranche offering is as follows. Class A1 has original face of $91 million, a weighted average life of 6.39 years, a fixed coupon of 2.151 percent, and a 100.50 offered price. Class A2 has original face of $608 million, a weighted average life of 9.64 years, a fixed coupon of 2.444 percent, and a 101.99 offered price. Class A3 has original face of $174 million, a weighted average life of 9.68 years, a fixed coupon of 2.404 percent, and a 101.99 offered price. The deal was able to capture the recent spread tightening in the market, with the A2 tranche pricing inside of a 50-basis-point spread over swaps.


Fannie Mae’s Multifamily Green Financing Business provides financing through several different Green product offerings, encouraging apartment building owners to make energy and water savings improvements to their properties. Green MBS helps to support the reduction of utility costs for families and individual tenants, as well as the reduction of greenhouse gases through retrofits to existing, aging multifamily housing in the United States. In addition, the Fannie Mae Green Financing Business provides financing to properties holding a third-party, Fannie Mae-approved, Green Building Certification. Fannie Mae introduced the Green MBS product to the market in 2012 and has issued $74.5 billion in Green MBS and $9.9 billion in Green GeMS since the program’s inception. Read more about it here. For additional information about this transaction, please refer to the Fannie Mae GeMS REMIC Term Sheet (FNA 2020-M1) available on the Fannie Mae GeMS Archive page.

Fannie Mae priced Connecticut Avenue Securities (CAS) Series 2020-R02, a $1.134 billion note offering that represents Fannie Mae’s second CAS REMIC transaction of 2020. CAS is Fannie Mae’s benchmark issuance program designed to share credit risk on its single-family conventional guaranty book of business. The reference pool for CAS Series 2020-R02 consists of approximately 111,000 single-family mortgage loans with an outstanding unpaid principal balance of approximately $29 billion. The reference pool includes one group of loans comprised of collateral with loan-to-value ratios of 80.01 percent to 97.00 percent, the majority of which were acquired from June through September 2019. The loans included in this transaction are fixed-rate, generally 30-year term, fully amortizing mortgages and were underwritten using rigorous credit standards and enhanced risk controls.


Pricing for the deal is as follows. Class 2M-1 has an offered amount of $276.657 million, a pricing level of 1-month LIBOR plus 75 bps and an expected BBB-(sf) / BBB (sf) rating. Class 2M-2 has an offered amount of $567.147 million, a pricing level of 1-month LIBOR plus 200 bps, and an expected B+(sf) / BB- (sf) rating. Class 2B-1, which will not be rated, has an offered amount of $290.490 million at a pricing level of 1-month LIBOR plus 300 bps. With the completion of this transaction, Fannie Mae will have brought 40 CAS deals to market, issued $46 billion in notes, and transferred a portion of the credit risk to private investors on close to $1.5 trillion in single-family mortgage loans, measured at the time of the transaction. Fannie Mae will retain a portion of the 2M-1, 2M-2, and 2B-1 tranches in order to align its interests with investors throughout the life of the deal. Fannie Mae will retain the full 2B-2H first-loss tranche.


CAS REMIC notes are issued by a bankruptcy-remote trust. The amount of periodic principal and ultimate principal paid by Fannie Mae is determined by the performance of a large and diverse reference pool. For more information on individual CAS transactions, visit Fannie’s credit risk transfer website. Subject to market conditions, Fannie plans to return to market in late-February with the inaugural CAS Seasoned B-Tranche deal, CAS 2020-SBT1. The transaction will transfer a portion of risk previously retained by Fannie Mae on certain CAS deals issued in 2015 and 2016.

A senior citizen said to his eighty-year old buddy, “So I hear you’re getting married?”


“Do I know her?”


“This woman, is she good looking?”

“Not really.”

“Is she a good cook?”

“Nah, she can’t cook too well.”

“Does she have lots of money?”

“Nope! Poor as a church mouse.”

“Well, then, is she good in bed?”

“I don’t know.”

“Why in the world do you want to marry her then?”

“Because she can still drive!”

Visit 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, “How Epidemics Impact Lending” If you have the 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.


(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 Copyright 2020 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.)


Feb. 14: AE & LO jobs; servicing, 203(k) products; conventional conforming underwriting shifts

Does anyone out there care that credit-card debt rose to a record $930 billion in Q4 2019? (Total mortgage debt hit $9.56 trillion.) How about that the origination cost of over $8,000 per loan hits low balance loan borrowers more than high balance borrowers? Do you break out your “tech spend” per loan? Has it gone from hundreds to thousands of dollars? Residential lending is truly a numbers game. According to Informa Financial Intelligence January 2020 Mortgage Originations Data, rate-lock volume has increased 71% YoY and 42% MoM across all channels, while funded volume has increased 70% YoY and fallen 10% MoM. In the Retail channel, lock volume has increased 78% YoY and 48% MoM, while funded volume has increased 94% YoY and fallen 17% MoM. Average 30-year Conforming FRM funded loan note rates have fallen 101bps from January 2018, with refinance rates lower by 116bps and purchase rates lower by 97bps. Informa sources a statistically significant data set directly from lenders to produce these benchmark figures.

Jobs & transitions

National MI is excited to share a few new members to our winning sales teamKyle Sachs, joined us as a new Account Representative covering northern NJ and Westchester/Rockland counties in NY.  Kyle earned his bachelor’s degree in Marketing and has 3 years previous experience in the Title Insurance industry. He has already made such a positive impact and we are so happy to have him as an integral part of the team!! Jen GibsonAccount Representative joins Tony Scoma (Regional Team Lead) to round out this combo team in the Northern California and the Reno, Nevada markets. Jen has spent most of her career in the Mortgage Industry. Julie Waldron is the new Wisconsin Account Representative in the North Region and will be working alongside Jan Brezina. Julie has over 25 years of mortgage industry experience, much of it as an accomplished loan originator.”

NewRez, a rapidly growing nationwide lender, is expanding its already robust Correspondent Division, and is looking for experienced Non-Delegated Account Executives in several markets across the country. At NewRez, it is our mission to exceed the expectations of our lender partners through superior service, simple processes, and effective communication. Matched with a robust line of industry-leading Non-QM, Jumbo and Agency products, the future is bright with NewRez! Interested parties should contact the SVP National Sales, John Davis.

“Great people are coming BACK to Movement Mortgage! Here at Movement, we exist to love and value people, that’s why we’ve had over 20 originators return to the South Atlantic Region in the last year doing over $200M in volume! If you’re an experienced originator who wants more for yourself, professionally and personally, we can provide you the tools and first-class coaching to help you develop habits that can lead to your future success. To learn how we can make 2020 your best year ever, contact one of our experienced mortgage recruiting consultants in the South Atlantic: Shay Crow (720-315-2195) or Elisha Manning (252-714-8240). Visit Movement South Atlantic to learn more.”

Assurance Financial, a nearly 20-year-old profitable full-service mortgage banker licensed in 45 states is pleased to announce that Paul Peters, CMB has returned to his role with the company as National Business Development manager.  Peters has over 30 years of mortgage banking experience and during his tenure with Assurance Financial, has been instrumental in expanding the company’s production office footprint across the United States.  Peters said, “I am very pleased to return to this business development role where I can help the company achieve our aggressive growth initiatives.  We have a total commitment to branch origination success, going all-out to support higher levels of branch and MLO production.  Our technology stack is second to none and as always, we expect our loans to close on time, every time, regardless of volume levels.” Producing Branch Managers and top MLO’s looking to join a proven team should visit or email


Recently named among Top 5 Best Mortgage Companies to work for by National Mortgage News, Geneva Financial, Home Loans Powered By Humans®, is filling 500 Branch Manager and Loan officer positions in 43 states. Geneva strives to humanize every aspect of their business from the inside-out. With a culture-forward mindset, they focus on loan originators and support staff to ensure an unbeatable experience for their customers. Their Geneva Gives, BE A GOOD HUMAN and Hero of The Year initiatives deemed them a recipient of this year’s AZ Business Magazine’s Excellence in Banking Award for Community Impact. In 2019 Geneva was ranked a nationally fastest growing company in the financial sector, mortgage industry and all industries categories. They consistently hit record-breaking months, doubling volume in most. Geneva Financial is excited for another historic year, with no plans on slowing down. Explore Branch and Originator opportunities here.

Mortgage Unlimited, The Home of Sustainable Lending, has been named as one of the 2020 Best Mortgage Companies to Work for by the National Mortgage News for the second year in a row! This annual survey and awards program is designed to identify, recognize, and honor the best employers in the U.S. mortgage industry. ‘It is a distinct honor to be selected number 17 on this special list of Mortgage companies,’ said Justin Tagliareni, CEO of Mortgage Unlimited. ‘It really shows our unique culture that our employees are empowered by.’ Mortgage Unlimited, L.L.C. is a family owned mortgage lender in existence for over 30 years and headquartered out of Garfield, NJ. Our company proudly recognizes our moral and ethical responsibility to protect the financial well-being of the families and communities we serve. To find out more about our culture email Justin or visit our website.”

In the private MI world, Radian added two new Directors, Lisa Mumford and Brad Conner, and the announced the retirement from the Board of David Carney.

Lender products and services

As the top lender for 203(k) sponsored originations, AFR is proud to participate in the expanded program specifications of the FHA Limited 203(k) Rehabilitation Mortgage: total renovation and repair costs can go up to $50K for properties located in Qualified Opportunity Zones (QOZs). The expansion of this program provides eligible borrowers with additional financing options in these Zones (the $35K limit still applies for properties outside a QOZ). Intended for smaller scale projects not structural in nature, the FHA Limited 203(k) Rehabilitation Loan can help a buyer or homeowner remodel a kitchen, change the flooring, or install an outdoor deck, adding to their own enjoyment of the home and adding to its value at the same time. AFR also continues to offer the FHA Standard 203(k), with a minimum renovation cost of $5K. Visit for complete guidelines. For more information on becoming an AFR partner, email (800-375-6071).

Altisource®, your one source for real estate and mortgage solutions, has released its 2020 The State of the Default Servicing Industry report. The report reveals exclusive survey results and feedback from 200 mortgage default servicing professionals. One of the key findings is that 80% of those surveyed expect FHA loan volume to increase in the next one to two years. Almost half of those servicers anticipate a volume increase of more than 50%. While that surge means greater opportunities, it also means more challenges. This report gives you a look into those and other challenges facing servicers today and reveals input on valuable services and features critical to managing the default lifecycle in order to mitigate loss and streamline efficiency.

Sourcepoint, a leading provider of products and services to the US mortgage industry, recently announced the launch of its Servicing Solutions suite, designed to deliver servicers tangible results including reduced operating expense, enhanced borrower experience and retention rates and the ability to drive digital transformation across the servicing lifecycle. Equipped with the most comprehensive set of servicing and collection licenses in the mortgage BPM industry and backed by a 3,500+ global workforce, Sourcepoint’s solution suite encompasses Loan Boarding and Administration through Lien Release and Omnichannel Contact Centers for customer service support. Schedule time to meet with Sourcepoint at the MBA Servicing Solutions Conference. Not attending the conference? Contact them directly.

Conventional conforming moves

Have you heard about the FHFA’s proposed changes to pooling practices? Do you know how they could affect pricing and liquidity in the secondary market?  After responding to the FHFA’s Request For Input (RFI) in January, MCT’s Bill Berliner has prepared a handy overview of the proposed changes, including their objectives and implications. Read the whitepaper and stay informed about regulatory developments that may impact your business.

Freddie Mac recently extended the effective date for the variable income updates announced in Bulletin 2019-20. As a result of the extension, PennyMac is extending the required implementation date to loans delivered on or after May 15, 2020 to align with Freddie Mac’s update.

Fannie Mae’s Lender Letter LL-2020-01 provides details on updated ARM instruments, retirement of LIBOR ARMs, SOFR ARMs, and the future retirement of CMT ARMs.

Fannie Mae’s Announcement SEL 2020-01 revises policies on liabilities related to rental housing payment and calculating monthly qualifying rental income; delays a previously announced policy change related to calculating monthly real estate tax payments; streamlines the section on Contractual Representations and Warranties; and clarifies use of income limits for loans with resale restrictions.

Fannie Mae’s improved Single-Family website has launched. Enhancements include a new search functionality, a redesigned technology hub and Learning Center, access to Ask Poli® from every page, and optimization for use on all devices.

Plaza issued a reminder, all conforming loans with applications dated March 1 and later requiring Mortgage Insurance must be submitted using one of the new approved forms per agency requirements. Loans delivered without the use of the updated forms will not be eligible. for purchase.

Regarding Fannie Mae’s Appraiser Independence Requirements (“AIR”), is it compliant for a mortgage lender to permit a mortgage broker to select the appraisal management company (“AMC”) from which to order an appraisal if the lender provides the broker with a list of authorized AMCs? No. This process provides the broker with an element of responsibility for selecting and/or retaining the appraiser, and is, therefore, not compliant with the Appraiser Independence Requirements (“AIR”). Fannie Mae has cited Seller/Servicers in relation to this issue. It does not matter if the lender is responsible for the relationship with the AMC, including compensation. Notably, a lender may direct a mortgage broker to one specifically authorized AMC if the lender has previously arranged for its appraisal process to be managed by that particular AMC. This process is compliant with AIR because the lender, and not the mortgage broker, is responsible for selecting and/or retaining the appraiser.

Asurity Technologies successfully integrated of FFIEC Census 2019 and National Snapshot 2018 Peer HMDA files into RiskExec, its comprehensive web-based compliance reporting and analysis platform that automates HMDA, CRA, redlining, and fair lending processes. The 2019 Census file release includes 1,308 updates, approximately 1,200 of which are Census Tract Low- and Moderate- Income (LMI) changes, that affect HMDA and CRA analysis. The HMDA Peer data also includes a new derived field that indicates whether a loan is considered Conforming.”

Capital markets

Loan officers should know that a Treasury yield-curve inversion that is developing appears to indicate headwinds for the global economy, rather than the US economy. Federal Reserve Vice Chairman Richard Clarida says the inversion is “really driven not so much by an outlook for the US economy, but globally.” Job openings in the US fell by 364,000 in December to 6.4 million, the smallest total in two years, according to the Labor Department. The figures suggest a recent surge in job growth might not be sustained.

Let’s face it, rates haven’t been doing much over the last few days, so I won’t waste your time. There are the usual news items: the spread of the coronavirus, corporate earnings, Huawei sanctions, the U.S. proposed federal budget, etc., but all in all the bond market, and therefore mortgage rates, haven’t been doing much.

In the MBS world, the NY Fed announced yesterday it plans to buy a maximum of $2 billion in agency MBS, as expected, over the February 14 through March 13 period, based on January paydowns (that exceeded $20 billion). They also released a new FedTrade schedule covering the February 14 to 28 period targeting up to $1.1 billion MBS over three operations with the first next Wednesday purchasing up to $89 billion UMBS15 2.5 percent.

Ahead of Monday’s bond market holiday today’s economic calendar is already underway with January Retail Sales (+.3%, as expected) and January Import Prices ex-oil (flat). We do have one Fed speaker today, Cleveland Fed President Mester. Later this morning brings January Industrial Production and Capacity Utilization, December Business Inventories, and the Preliminary February Michigan Consumer Sentiment Survey. We begin today with Agency MBS prices better nearly .125 and the 10-year yielding 1.59 percent after closing yesterday at 1.62.

Guys – struggling with something to jot down in that Valentine’s Day card?

Are you a banana? Because I find you a peeling.

I know this is going to sound cheesy, but I think you’re the gratest.

My feet are getting cold… because you’ve knocked my socks off.

Is your name Wi-fi? Because I’m really feeling a connection.

If I were a cat, I’d spend all 9 lives with you.

Are you a camera? Because every time I look at you, I smile.

Do you have a bandage? Because I just scraped my knee falling for you.

Visit 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, “How Epidemics Impact Lending” If you have the 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.


(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 Copyright 2020 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.)

Feb. 13: Sales, LO jobs; subservicing, broker, originator products; vendor alliances increasing

Do we really have nine more months until the actual election? While you’re answering questions, does someone in your office speak Spanish? Tagalog? Mandarin? Canine? The minority homeownership rate rose to 48.6% year over year in the fourth quarter of 2019, up slightly from the fourth quarter of 2018, according to new data from the Census Bureau’s Housing Vacancies and Homeownership survey. This year over year gain is higher than the gain in the overall U.S. homeownership rate (up 0.3 percentage points to 65.1%) and marks the highest minority homeownership rate since 2011. (White homeownership stands at nearly 74 percent.) San Francisco has its share of minorities, lots of homeless people, a permit process that is one of the most onerous in the nation, and a mayor who is pushing a measure that would reduce the permitting process from an average wait of four years to six months. Mayor London Breed’s stated goal is to “build more housing and build more housing, faster” and she has issued a petition that could lead to a November ballot measure that would force the city’s Planning Department to speed things up. Oh, good luck finding land.


“There are many tech solutions in the mortgage industry, but there is only one Mortgage Coach and we are growing. We have an opening for a National Account Director (NAD). The NAD opening is for the western part of the country and requires C-Suite level enterprise sales skills. If you, or anyone you know, might be interested, contact Dawn Sherbeyn.”


“I joined a branch at Pacific Residential in Massachusetts because I found it the most competitive option for Loan Officers and Branch Managers”, says John Phillips, licensed Loan Officer and National Business for Pacific Residential Mortgage (PacRes). “I found they perform at a high level, with aggressive underwriting and the strongest and most positive culture I encountered, and the best marketing and operational support for my referral partners and customers, period.” What made Pacific Residential standout from all the other lenders you interviewed? “My bottom line was to understand processing and underwriting philosophy, and whether they could close loans fast and with common sense. I have been shocked on how good their operations are: By far the best mortgage platform I’ve seen across the United States”. PacRes is expanding in markets across the U.S. If you are interested in learning why loan officers and Branch Managers are joining “ThePac”, contact John Phillips, National Business Development (413.221.2977).

Thrive Mortgage believes in making an immeasurable and permanent impact on organizations that exist to serve. “We are truly blessed as a company, but the biggest part of our mission is not just earning revenue. Mortgage lending is our ‘What’, investing in people is our ‘Why’,” stated Roy Jones, CEO of Thrive. At the company’s annual Summit held earlier this week management unveiled a new initiative with Thrive Forward. “Through this initiative, we are partnering with charitable organizations in more ways than just monetary donations,” added Randell Gillespie, National Sales Director. “We’re donating the time, skills, and expertise of our teams to further enable them to serve those who benefit from their mission.” The company announced that this year will be dedicated to supporting Defenders Of Freedom, an organization committed to supporting our Military Veterans in very unique ways.  For more information about partnership opportunities, please send questions to

Lender products & services

Lenders Compliance Group has started its Semi-Annual Opportunity for Monthly Mortgage Compliance. The opportunity provides a discount to its already low monthly flat fee for compliance support. For the flat monthly fee, you receive on-going compliance support via a dedicated team of Subject Matter Experts and Directors. Included also are unlimited compliance questions, most policies, and free secure storage of compliance documents. The opportunity timeframe runs until March 31st. Jonathan Foxx, LCG’s Chairman, just published a personal statement about LCG’s mission, while announcing the first of this year’s semi-annual discount offer to get on board with their Monthly Mortgage Compliance. If interested, jump to the announcement post on the website of Lenders Compliance Group and request more information.

Maxwell CEO John Paasonen just posted a great piece on its blog titled, “Will A Machine Replace You? The Future of the Loan Officer in the Digital Age.” The aptly named piece dives into the evolution and impact future technology will have on the industry we know today. I won’t spoil the outcome, but a great read for all lending professionals. Click here to start reading!


With Blend, explore how to prepare for ideal home equity conditions with a best-in-class consumer experience and the functionality your banking team craves. Enable rapid results in a dynamic market with Blend. Download the infographic to learn more.

Join us for our final VA Mortgage Marketing training session on 2/21 and learn to market new VA mortgage opportunities in 2020! The recently implemented Blue Water Navy Vietnam Veterans Act of 2019 has provided new mortgage benefits for jumbo borrowers, active duty Purple Heart recipients and more. As a leading VA lender, Freedom Mortgage Wholesale’s No Down Payment VA Jumbo program enables eligible jumbo borrowers to exceed published FHFA county loan limits without a down payment requirement! No jumbo overlays or loan limits!


Caliber Home Loans, Inc.’s non-agency suite of products can help you turn more no’s into yes’s by recognizing that not every borrower’s story fits into agency guidelines. And now producing these loans is easier than ever before with Caliber Smart Start! This powerful, web-based tool validates loan parameters against Caliber Portfolio Lending guidelines, finds Caliber Wholesale products for unique borrowers, and delivers faster processing with more accurate discovers. All in just a few clicks! Smart Start empowers you to move ahead on documentation and processing quicker and with no guesswork. Level-up your non-agency production today! Visit to start.


Imagine a world where loan fallout is nonexistent. Right now, it can be a thorn in the side of brokers, leading to their biggest expense. QLMS is working toward that reality for brokers with industry-leading prices, products, process and technology. One of the many tools it is inserting into brokers’ utility belt is the Fresh Start program. Once exclusively for Pinnacle Partners, QLMS is extending Fresh Start to everyone in its Partner Network for free through the end of February. Fresh Start consultants are helping brokers qualify more borrowers, and increasing scores to deliver better pricing. On average, a successful Fresh Start client improves their credit score by leaps and bounds! It’s exclusive programs like this that led to QLMS brokers shattering records in 2019. Expect nothing less in 2020 as QLMS doubles down on infrastructure and innovation. Click here to learn and earn.

You and your borrowers deserve industry-leading technology, backed by the best people. How do you get it? At MBA Servicing Solutions 2020, make sure you stop by the Discovery Stage at 1pm on February 24 to catch TMS’s live demo of SIME, servicing technology made easy. Or email them at to schedule a private demo today.


Secure Insight and Wire Secure are collaborating on a first-to-market wire fraud prevention tool that will go beyond closing agent escrow account validation and incorporate all parties to the closing, including the realtor, borrower, and seller.  The technology platform, built using sophisticated multi-step identity verification with former Google engineers, will also feature a true transaction-based insurance product covering lender’s risk from wire fraud by any party at the closing of each transaction for up to $1 Million. The companies expect to launch the solution utilizing Secure Insight’s 70,000 strong agent database sometime in 2d Quarter 2020.

Insellerate is partnering with brokers and has brought its new Engagement Platform to the wholesale lending channel enabling wholesale lenders to automate communications like loan status alerts, drip and nurture campaigns thru text and email to their broker partners and to their broker partners real estate agents and borrowers. This platform allows lenders to reduce customers service overhead and provide more value to their broker partners, resulting in more loans. To find out more request a demo here.

Black Knight, Inc. (NYSE:BKI) and Quicken Loans announced the companies have broadened their relationship as “Quicken Loans extended its contract for Black Knight’s MSP servicing system and is adding multiple Black Knight solutions. Additionally, Black Knight purchased the source code for Quicken Loans’ ‘Cyclops’ mortgage servicing customer relationship management (CRM) software. The Cyclops software provides a number of tools Quicken Loans uses to meet the needs of today’s mortgage consumers. This software suite will serve as the foundation for a highly advanced customer service solution that Black Knight will be offering to clients of its industry-leading MSP servicing system.”


Roostify announced an expanded relationship with Optimal Blue, the leading provider of secondary marketing automation to the mortgage industry, enabling Roostify to “further automate the digital lending experience for its clients by embedding Optimal Blue’s comprehensive pricing capabilities directly into their platform…. the enhanced integration enables its digital lending platform to deliver Optimal Blue’s robust, accurate pricing options directly to loan officers and borrowers, without ever leaving the Roostify environment.”

Recall that Notarize partnered with Ellie Mae on an integration with Encompass empowering lenders to access Notarize’s digital closing platform so every borrower can close online, from hybrid to full remote online closings.

LoanScorecard and Deephaven Mortgage have added the Smart Conditions feature to Deephaven’s IDENTI-FI Scenario Calculator to “deliver customized, loan-specific conditions instantly, based on findings from Deephaven’s IDENTI-FI AUS engine. Originators use the IDENTI-FI Scenario Calculator to view product and program eligibility scenarios, price loans and obtain detailed AUS findings from directly within the scenario calculator. Now the Smart Conditions feature will also pull loan-specific details, such as bank names for asset verification and liability repayments and dollar amounts for closing costs and reserves, and auto-populate them into the conditions that the originator sees.

Capital markets

Think about this. The yield on 10-year Greek debt fell 5 basis points Wednesday to hit a record low of 0.982%, leaving Greece able to borrow more cheaply than the U.S. Traders say the rally could strengthen if credit rating agencies increase Greece’s rating, which would let the European Central Bank buy Greek bonds.

Economic data over the last week remained positive in spite of increasing concerns about the coronavirus and the ongoing uncertainty around the 737 Max production. Nonfarm payrolls increased 225,000 in January versus market expectations for a 165,000 gain. Unemployment was at a very low 3.6 percent and wages were up 3.1 percent over the previous twelve months. New claims for unemployment fell to 202,000 for the week ending January 25. The ISM Manufacturing Index returned to positive territory for the first time in five months with a reading of 50.9. The ISM Non-manufacturing index rose from 54.9 to 55.1 as the service sector of the economy continues to expand. As expected, the trade gap widened in December following months of uncertainty surrounding international trade. However, the trade gap declined on a year-over-year basis as the petroleum deficit shrank to its lowest level on record as the US has become the world’s largest producer of oil and natural gas. The positive economic data and continued low inflation leave the Fed with no pressure to adjust monetary policy in the near term unless something major happens.

It was another lackluster day in the markets yesterday, but without other substantive news, rumors about the coronavirus spreading, or not, influencing the “risk on, risk off” trades, and nudging the U.S. 10-year’s yield higher to 1.63 percent. Chinese officials hinted at stimulus measures to lessen the impact that the coronavirus is having on demand, which overshadowed South Korea’s fifth consecutive month of rising unemployment and another tepid industrial production report from the eurozone.

In the U.S., the day’s $27 billion 10-year U.S. Treasury note auction was met with solid demand. Fed Chair Powell returned to Capitol Hill for the second and final day of his semiannual testimony before congress, notably stating that The Fed will be forced to use large-scale asset purchases “aggressively” in a downturn. He admitted that the Fed would “never” say it had accomplished the goal of making sure anyone who wants to work and can work will have a job. Is that a surprise? It is a victory for activists who have tried to ensure the maximum-employment component of the dual mandate doesn’t draw “short straw” to the price-stability part.

Today’s economic calendar began with January CPI (+.1%, core +.2% – inflation is not an issue) and initial jobless claims for the week ending February 8 (+2k to 205k). Later this morning, Treasury will announce the auction sizes for next week’s 30-year TIPS bond, and then auction $19 billion new 30-year bonds. In the afternoon, the Desk will release a new two-week FedTrade schedule in addition to the MBS reinvestment estimate covering the mid-February to mid-March period and expected to total $2 billion based on prepayments in the Fed’s portfolio in excess of the $20 billion tapering cap. There are two Fed speakers on the schedule, Dallas’ Kaplan and New York’s Williams although the Senate Banking Committee will hold a nomination hearing on Judy Shelton and Dr. Christopher Waller to the Fed Board. We begin today with Agency MBS prices better by .125 and the 10-year yielding 1.61 percent as the coronavirus shuts down events and travel around the world.

(Thanks to Andrew L. for this one!)

People cheating on their taxes disgust me. This is not the world I want to raise my 23 dependents in.

Visit 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, “Home Ownership is Still Part of the American Dream” If you have the 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.


(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 Copyright 2020 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.)

Feb. 12: AE, vendor mgt., LO jobs; sales, marketing, broker products; team sponsor wanted; American borrowing stat

Clients want LOs to be subject matter experts on products and current events. But what do lenders know about their LOs, their originator turnover rate, or what the age bracket is of the highest producing originators? More originators change jobs in the fourth quarter than any other quarter, about 36 percent. Of that 36 percent, of those who reported a reason, 78 percent reported leaving voluntarily. The first quarter is the lowest for changing jobs with about 14 percent leaving. According to STRATMOR’s Originator Census® Study, the originator turnover rate in the Retail channel was 35 percent in 2018; the 35-40 age bracket is the highest producing originator group and has a tenure of 2.6 years. And originators with less than five years’ tenure did a higher percent of purchase business compared to originators with more than five years tenure. (Don’t miss your opportunity to find out all you can about your sales force by participating in the 2020 Originator Census® Study. Participants receive a customized summary report comparing their company data to industry averages. Sign up today as registration closes February 28.)

Jobs & transitions

Celebrating a record setting 2019 and setting goals for 2020 at their recent sales conference in Scottsdale, Angel Oak Mortgage Solutions is proud to recognize Steve Arnold, Eric Morgenson, Bob Hutchens, Scott Gruebele and Chris Taylor as a member of the 2019 $100 Million Club. They each won awards among the Top Producers as they embodied Angel Oak’s strong customer-focused culture. They clearly demonstrated the theme “The Difference is You” as part of a 110+ person sales force that is continuing to add staff across the country in markets such as Minneapolis, Virginia Beach and Olympia, WA to help brokers and correspondents grow their business. To learn more, view the Careers Page or email National Business Development Manager, Andy Looker.

FormFree is seeking an experienced vendor management and compliance analyst to support the firm’s vendor management relationships, responsibilities and compliance related projects. The selected candidate will be able to work out of FormFree’s Athens, Georgia headquarters or remotely. FormFree is a market-leading fintech company providing its team members the unique opportunity to help change the credit decisioning landscape and encourage lenders nationwide to incorporate a more holistic view of each borrower’s financial DNA. View the full job listing on LinkedIn or email your resume to FormFree directly.

Laser-focused on 2020, Nations Lending Corporation is sprinting into the new year after record growth in 2019. The company pushed past $2 billion in origination volume (20% growth from 2018) for the first time, saw an 80% growth in branch development, and obtained its final licenses to lend in all 50 states. “Last year was a historic year for us,” said CEO Jeremy Sopko. “We’re growing in all the right areas: revenue, branch development, and talent. We expect 2020 to bigger and better.” To support Nations Lending’s growth strategy and vision, the company expanded and strengthened its leadership team by adding Corey Caster (EVP of National Production), and Jim Collier (EVP of Operations). Other key additions include Nino Saso (Division Sales Manager, Western region), Doug Opdycke (VP of National Sales Recruiting), Kathryn Edelen (Regional Sales Manager), and Don Riggs (Area Sales Manager). Interested in making history with us in 2020? Give Doug Opdycke a shout.

Wells Fargo is realigning its three current operating segments into five business lines. As part of that, Mike Weinbach, who most recently served as the CEO of Chase Home Lending at JPMorgan Chase, will join Wells Fargo in early May and become CEO of Consumer Lending. At the other end of the tenure spectrum, Shana Chrisman, Regional Sales Executive for the Great West Region and who has been with Wells Fargo for 26 years, announced her retirement as of April 1.

Lender products

Before going farther, I wanted to make sure that everyone had the correct link to the complimentary compliance webinar hosted by Johnston Thomas’s Mortgage Banking Practice Group and The Mortgage Collaborative at 10:30 AM PST, on March 19, titled Invaluable Tips for Maintaining Compliance in 2020 and Beyond.”

The industry continues to be impressed by SimpleNexus’ commitment to lender process improvement via its omni-device lending platform. This week from the SimpleNexus User Group (SNUG) stage at the Snowbird Ski Resort (queue winter sports FOMO), the lending platform announced three new features that enhance functionality for desktop and mobile users: 1) Encompass credit liability mapping, which populates credit reporting data into corresponding Encompass fields; 2) Optimal Blue price locking enablement via mobile app; and 3) ability to view Fannie Mae DU findings via mobile app. If you want to learn more about SimpleNexus’ features, schedule a demo with one of its friendly reps.

It’s 2020. We don’t get out encyclopedias to research something, we “Google it.” Brokers, how are you researching the loan programs from the lenders you work with? Do you pull out a file folder full of flyers? Do you search for emails from AEs? QLMS has a better way. The forward-thinking lender has “Guru,” a search engine for mortgage qualifications. Guru makes underwriting guidelines easy to find – just search like you would for anything else in your life. Once the search results show you the mortgage product you’re looking for, the tool give you all the details about the loan product and the qualification guidelines. You can even compare products against each other on one screen. Talk to your AE to learn more about how to get the most out of Guru. If you don’t work with QLMS, you can connect with them here and start working smarter not harder.

National lender Sierra Pacific Mortgage Company, Inc. has announced the much-anticipated release of its proprietary loan origination portal, ExpressLoan. ExpressLoan features an array of customized tools that provide Sierra Pacific’s Third-Party Originator (TPO) partners a more intuitive and modern technology experience that supports the incredible client experience that has become the hallmark of Sierra Pacific Wholesale. ExpressLoan’s extensive suite of tools include a more automated and organized document management solution along with integrated solutions for validating income and assets at the point of sale. In addition, the design of the user dashboard along with clarity around the pipeline and processing milestones, bring enhanced and transparent functionality to the TPO partner. As a result, the partner gains more control and sees their efficiencies improve. To learn more, email or call (916) 932-1700.

Mortgage technology and automation are driving a rapid decrease in cycle times, improved customer service ratings, and reduced expenses, all while aiding the originator at the point of sale. The perfect storm of positive change driven through technology. This same positive force drives everything that Deephaven Mortgage invests in when it comes to technology to aid the originator at the point of sale. Over the past year, Deephaven has rolled out its full suite of IDENTI-FI technology tools, including the IDENTI-FI AUS, IDENTI-FI Scenario Calculator, IDENTI-FI Bank Statement Calculator, and the IDENTI-FI Scenario Desk. All of these tools are aimed at driving technology into the hands of the originator to help them “IDENTI-FI” whether their client is eligible for Non-QM financing. Get in touch today and get started building your Non-QM business with the help of the Deephaven Team and technology. Contact (Wholesale) or (Correspondent).

“How important are first impressions to you?  Are they an indication of the overall service you can expect of a company? At Stearns we are passionate about the experience and delivering an ‘I Can Help You’ attitude from beginning to end. Through our SNAP START online process, you provide 12 pieces of information and within 24 hours are given the opportunity to Forward Lock and Register a loan. The wholesale test drive is a simple and convenient way for Stearns to show how we lead the wholesale marketplace through convenience, technology and service. If you’re interested in working with a lender who shares a passion for service, click HERE to be contacted by your local Account Executive.”

A 30-minute conversation with Planet Home Lending, LLC at the Texas Mortgage Bankers Association’s Southern Secondary Market Conference can increase your product menu and increase your margins. Reach out to Planet Home Lending today for competitive products and pricing, flexible delivery and superior service. Contact Regional Sales Manager Stuart Blend (469-939-9055).

“Looking to grow in 2020? Monster Lead Group introduces The Monster Wayan unprecedented 8-week plan to radically change the future of your mortgage business. The Monster Way is a formidable combination of a direct marketing system, a sales process and a custom playbook for growing your organization. It includes a dedicated team of Monster mortgage experts who works with you to create an 8-week direct marketing campaign that generates a consistent flow of the right leads to your inbound call team. We’ll train your MLOs how to turn more of those calls into apps using the same professional sales techniques as the highest producing originators in the country. Your reps will graduate with the secret sauce for generating record sales in any market, regardless of rates. Join our clients who originated more than $10 billion in 2019. Find out if your organization and The Monster Way are a good match: Apply. (Space is limited due to high demand.)

Your borrowers are the most valuable asset your business has; don’t let them fall into the hands of your competitors. You don’t need to fight over the same borrowers as everyone else when you’ve got a strategy in place to retain your existing customers. Keep your borrowers coming back for more by helping them stay ahead of major life events and refi opportunities with Sales Boomerang. Don’t just win their future business, earn it. Let Sales Boomerang show you how to be there for your borrowers at the right moments and build #BorrowersForLife. Schedule a demo today

And now for something completely different

“Do you think like Gary Vee? If you do, then you will want to get involved in the esports industry and this could be your easy way to become a sponsor! A professional esports team is bringing it’s 2019 World Cup Championship qualifier team, Sanguine from Latin America, to Atlanta, GA to train and compete for the 2020 season. It will be playing against teams owned by the likes of the Pittsburgh Steelers and Wiz Khalifa. The esports industry has the same demographics as FTHB! This team is open to having a mortgage company as its team housing sponsor for the year. Think about it: your company name listed on all social media, videos, events, jerseys and the documentary that they are making about bringing this team from Peru, Chile, Argentina, and Uruguay to compete against the best pro teams in the world. If you are an ‘outside the box’ mortgage company and want to get in front of this millennial market, then join Ginger Bell on Thursday for an online overview of the world of esports. Register here or contact Ginger Bell.”

Capital markets

The strong labor market continued in January with 225,000 jobs being added and unemployment remained low at 3.6 percent. In another positive sign for the job market, labor participation is increasing even with weakness in the manufacturing sector, which saw declining employment for the third time in the last four months. Wages increased 3.1 percent for the year, however there has not been a sustained period of wage growth it takes to significantly impact inflation. The manufacturing sector crept back into expansion territory following the recent trade deals, however it is too early to know what effects the coronavirus will have on supply chains. Meanwhile the service sector, which is not as impacted by trade and slowing global economic conditions, continued to expand in January. Exports increased $1.5 billion and imports increased $6.8 billion as the trade deficit widened in December. The de-escalation of the trade war is expected to boost overall trade activity this year.

Bit of a snoozer of a day for rates yesterday. The South China Morning Post reported that “hundreds of thousands of workers” returned to work this week, which alleviated some fears about the impact of prolonged closures from the coronavirus on supply chains and growth. There were also reports that the spread of the virus is slowing. New GDP figures out of Britain showed 0 percent growth in Q4 of last year, as Brexit-related uncertainty took a toll on businesses. Treasuries dipped to fresh lows after a $38 billion 3-year note auction was met with lukewarm demand. Fed Chairman Powell appeared before the House Financial Services Committee, but did not say anything unexpected during the first day of his semiannual testimony on monetary policy. He did indicate that the Fed was “closely monitoring” the coronavirus epidemic, which had a discernible impact on Treasury yields.

It was revealed yesterday that Americans increased their borrowing for the 22nd straight quarter as more households took out loans to buy homes or refinance mortgages. Separately, President Trump’s budget proposal from earlier this week assumes significantly faster U.S. economic growth than most analysts predict. His last budget predicted that the economy would grow 3.2 percent in 2019; actual growth was 2.3 percent, according to the Commerce Department.

Mortgage applications increased about 1 percent from one week earlier per the MBA. Surprisingly, refis increased 5 percent from the previous week and was 207 percent higher than the same week one year ago. The MBA’s Joel Kan sagely observed, “The refinance index climbed to its highest level since June 2013, and refinance loan sizes also increased as a result of an active jumbo lending market.”

It’s a busy day for central banks. We’ve had the latest monetary policy decisions from RBNZ and Sweden’s Riksbank. Fed Chair Powell returns to Capitol Hill for more testifying, providing airtime for politicians. We’ll have remarks from Philadelphia’s Harker and San Francisco’s Daly, and the Treasury conducts the second leg of this week’s Quarterly Refunding when it auctions $27 billon 10-year notes. The January budget statement is due with the CBO forecasting a deficit of $32 billion compared with a surplus of $9 billion in the prior fiscal year. We begin today with Agency MBS prices worse a shade and the 10-year yielding 1.62 percent after closing at 1.59 percent.

A group of friends and I run a small restaurant where we often name our specials after our employees, dishes like “Sally’s Chicken” after our maître d who gave us the recipe, and “Rod’s Ribs” after a waiter who had his personal style of barbecue.

One evening after rereading the menu, I broke with this tradition and changed the description of the special we had named after our chef.

Despite her skills and excellent reputation, somehow I didn’t think an entrée named “Salmon Ella” would go over big with our customers.

Visit 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, “Home Ownership is Still Part of the American Dream” If you have the 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.


(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 Copyright 2020 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.)


Feb. 11: MLO jobs; non-QM, marketing, digital products; shifts in non-conforming and ATR, QM Patch thinking

In 1988, there was only one city in America where the average home price was over six times the annual median income. Today there are more than twenty. Experts think that hat number will only increase as home values continue upward in the nation’s largest 100 cities. Thirty years ago, you could buy a home in 72 of the largest 100 cities in America with less than 18 months of that city’s median salary. A year or two ago that was only possible in 25 cities. In many places home sales have been slow to grow since there are so few homes for sale and not many new listings hitting the market, especially affordable ones. It’s a seller’s market for moderately priced homes, but a buyer’s market for pricier homes. Certainly in late 2019 applications for new home purchases had increased dramatically from the same period in 2018. Home builder sentiment remains solid. Is it the best of times?

Employment, acquisitions wanted, & transitions

“Are you looking for ‘the one’ this Valentine’s Day? Someone who supports your dreams, encourages your growth and gives you the opportunities you need to turn leads into customers for life? Meet Motto Mortgage. We believe our network deserves the very best which is why we empower each and every Motto Mortgage loan originator with the right tools and training to stay ahead of the competition. Still unsure? With over 100 offices open in more than 30 states, our network’s growth makes it easy to cast those first-date jitters aside. The Motto Mortgage network is recruiting for loan originators in the following states: AL, AZ, HI, IN, LA. MD, NC, NV, NM, OR, PA, SC and TN. Where have we been all your life? Here, at Motto Mortgage. Contact us (866.668.8649) to learn why we might just be a match made in heaven for your career.”

Guaranteed Rate is seeking acquisition opportunities with mortgage companies looking to maximize profitability. Guaranteed Rate, the 3rd largest retail lender in the country, experienced record growth in 2019 and creating a great opportunity to partner with like-minded leaders looking to take advantage of our expertise and economies of scale. If you are an owner or CEO of a mortgage company that is looking for better pricing, increased profitability, lower risk and much less stress and hassle, we urge you to e-mail Mark Filler to learn more about integrating your business into our platform.”

Impac Mortgage Corp., a subsidiary of Impac Mortgage Holdings, Inc., announced that Brian Robinett has joined the company as Chief Production Officer overseeing the performance of all of the company’s lending channels. Congratulations to Brian!

Lender services and products

Many lenders continue to ride the wave of amazing volume and low rates. Although times are good for many, it’s not too late or too busy to continue to improve your business for higher margins and a more efficient LO organization. Maxwell continues to stand out from the digital mortgage platform competition with their software designed for the true end user, the loan officer, and a customer success team design to speed up time-to-value, launching over 88% of clients within 4 weeks or less. Speed matters, and with home buying season around the corner, investing now will reap large benefits in the future. To learn more about Maxwell and their mortgage dedicated digital platform, click here or request a demo.

A 30-minute conversation with Planet Home Lending, LLC at the Texas Mortgage Bankers Association’s Southern Secondary Market Conference can increase your product menu and decrease your margins. Reach out to Planet Home Lending today for competitive products and pricing, flexible delivery and superior service. Contact Regional Sales Manager Stuart Blend (469-939-9055).


“A proven direct lender, Visio Lending is the nation’s leader in Non-QM loans for buy and hold investors of single-family rental and small balance commercial properties. With direct access to Wall Street, having just completed our fifth securitization, we offer the most attractive terms and the fastest, simplest and most dependable process in the country. Learn why thousands of satisfied customers and successful brokers are choosing Visio for all of their SFR rental, vacation rental and small balance commercial needs today!”

Explore cutting-edge innovation and network with mortgage and consumer banking executives at Blend’s inaugural lender conference. Beyond will be held May 27–29 in San Francisco. For more info including a complete agenda, click here.

Is your brand a top-performer? Or, is it getting shoved aside by more powerful and compelling brands? Consumers have an abundance of choice when selecting a mortgage lender. If you feel it’s time for a brand checkup, update or even a reinvention, contact Seroka Brand Development. For more than thirty years, Seroka has been assisting lenders, financial institutions and B2B companies in the mortgage and financial industry with all aspects of branding, including brand development, strategy, promotion and culture. Make it easy on yourself by working with financial and mortgage industry experts. Contact Seroka today.

“It’s time for lower Non-QM Rates. LoanStream’s new NanQ (Non-QM) pricing improvements help load your pipeline with pricing improvements up to 1.25bps, rate reductions and less overlays on our most popular Non-QM programs: DSCR, Bank Statement Loans, Foreign National, Investor and more that create differentiation for brokers and their loan officers. Check out our pricing and matrix. Get free training just for your team from our Non-QM experts: click here. Not sure where to go with your Business Purpose Commercial Loan? LoanStream can help. Just launched and catching fire is our Business Purpose lending. Check out more at”

Jumbo, non-conforming, non-QM, high balance tidbits

When someone asks an independent mortgage banker about jumbo, they will usually respond with either Chase or Wells Fargo. Or First Republic in some areas. Of course there are nuances, often dealing with appraisals. The “Big Banks” often give great pricing to potential borrowers in order to capture the family’s overall wealth relationship. Banks can also offer non-QM products centered around interest only products, or “asset dissipation” loans where someone has $10 million in the bank and wants a $1 million loan and is only on social security. And the banks are perfectly happy to sit on the lion’s share of the loans rather than pay for the cost of securitizing them.

Those “in the know” regarding compliance and capital markets often discuss just how specific QM versus non-QM underwriting is, and what “safe harbor” is, if the proposal to remove DTI and Appendix Q moves forward.  For many investors clarity equals GSE guides or Appendix Q.

The QM Patch will not become permanent given the feedback from FHFA and CFPB. And Appendix Q is detailed to the level of being paralyzing. Inefficiency and brutal for consumers especially self-employed consumers because of the documentation requirements. FHA handbook standards frozen in time from over 15 years ago.

One compliance expert wrote to me suggesting, “The industry is wondering, if ATR is ‘consider and verify’ in the 8 categories, how is QM standard different, if at all?

“Some suggest that ATR underwriting and QM being the same with a bit more regulatory language to point to standards. So QM safe harbor would basically be “use a consistent, written underwriting model” in addition from the product features and APOR pricing requirements. But complaints are ‘consider and verify’ is not objective.

It’s almost as if people have forgotten the rules outside the Patch and want the Patch-feeling even while demanding its expiration. The industry is hoping that no judge in the future will be able to find ‘a lack of good faith’ in a documented, credit standard applied to the particular loan product. The question for industry and the lawyers is whether an articulated standard from CFPB is needed or sign off on the regulations that safe harbor underwriting can’t be challenged on the underwriting method alone is a way forward.”

Of course investors in securities backed by mortgages have many options. There are different maturities, different geographic breakdowns, different guarantees, or no guarantees/insurance at all! Lately investors have turned their eye on non-Agency MBS for various reasons spelled out in this article.

That said, at $3.6 billion issued United Wholesale Mortgage was the top contributor to prime non-agency mortgage-backed securities in 2019, according to a new ranking and analysis by Inside Nonconforming Markets. That was almost 25 percent of the dollar volume of deals in 2019. Wells Fargo ranked second among originators of securitized prime non-agency mortgages, with $2.42 billion.

In the primary markets, yesterday Caliber updated its Caliber Jumbo product. “Business debts must be included in the monthly debt-to-income calculations if the debt is in the borrower’s name and is reflected on the borrower’s credit report. Monthly obligations paid with business funds must be included in the monthly debt-to-income calculations, regardless if the business pays the debt.”

Wells Fargo Funding expanded its adverse credit requirements for all Non-Conforming Loans by removing the reestablished credit requirements that were announced in Newsflash C19-053, dated December 17, 2019.

Wells Fargo Funding removed the 36% maximum front-end ratio for Non-Conforming Loans with LTVs less than or equal to 80%. However, the monthly housing expense continues to be one of the primary indicators of determining the borrower’s ability to repay a Loan and must be evaluated and documented as part of the overall risk review of the borrower’s capacity to repay. Refer to the Seller Guide as it has been updated accordingly.

Wells Fargo Funding has updated it Non-Conforming policy to allow consideration of condominium (condo), planned unit development (PUD), and cooperative (co-op) projects with mitigated environmental hazards. The following policy will be added to Wells Fargo Funding Seller Guide (Seller Guide) Section 825.12(a): Specific Property Types, under the new heading, Projects with mitigated environmental hazards: Loans where the Mortgaged Property is a condo, PUD, or co-op with environmental hazards that have been mitigated may be considered, additional review by Wells Fargo Funding is required to determine eligibility. To support this expansion, additional updates include representation, warranty, and covenant 300.02, 49 to allow projects that have been exposed to environmental hazards, when mitigated and inspected by a professional qualified to verify that the environmental hazard has been satisfactorily corrected, prior to Wells Fargo Funding purchasing the Loan.

Plaza’s Elite Jumbo program guidelines now require that all loans must be submitted to DU® and receive an Approve/Ineligible finding for loan amount only. However, the DU is not used for underwriting; all loans will continue to be manually underwritten and fully documented per the program guidelines.

PRMG updated the Resource Center with changes to its Policies, Procedures including updated Tax Transcript / Tax Return requirements. TPO Connect Disclosure Tracking (Wholesale) and updated Completing a COC CD was added to its Training/Instructional Material. The Jumbo, Niche and Second Mortgage Product Forms and Information now has updated Expanded Access Asset Depletion and Borrower Ability to Repay Certification has been added.

Capital markets

After rallying to close last week, U.S. Treasuries padded their recent advance in an otherwise-quiet Monday session. The 10-year yield closed the day down at 1.55 percent, the U.S. yield curve now flirting with another broad-based inversion again, reigniting fears that a downturn may be coming after all. Here’s some food for thought: maybe the shape of the yield curve currently says more about the state of the world than America.

China will cut tariffs on $75 billion in United States goods on February 14 (how sweet). The announcement shows that while Beijing intends to fulfill its end of the agreement, the coronavirus outbreak may complicate matters. The death toll has now exceeded 1,000, surpassing the death toll from the SARS epidemic. The pathogen’s estimated mortality rate is roughly 1 percent, though health experts say that deaths and infections are probably being undercounted because testing facilities are under severe strain.

The phase one deal requires China to make big purchases of American products, but its economy is now reeling from the fallout of the illness, which has infected tens of thousands of people in the past few weeks and caused a widespread lockdown within the country. Since travel to and within China has been restricted (and in some cases, banned), fewer goods are being imported, and its population is staying home and shopping less. Some companies, including Apple and Tesla, resumed manufacturing yesterday. Much of the country still remains closed, however, to contain the spread of the virus. And many Chinese factories announced that they will remain closed for longer than originally planned, putting additional pressure on already-strained supply chains.

The highlight of today’s calendar should be Fed Chair Powell testifying this morning before the House Financial Services Committee on the semiannual Monetary Policy Report that was released last week. His prepared testimony was just released by the Federal Reserve. Other Fed speakers during the session include Vice Chair of Supervision Quarles, St. Louis Fed President Bullard, and Minneapolis Fed President Kashkari.

Kicking off today’s data was NFIB small business activity for January (“104.3”). Later this morning brings Redbook same-store sales for the week ending February 8 and job openings from JOLTS. The day is also busy with Treasury supply, headlined by the Desk conducting a GNII FedTrade operation. The U.S. Treasury will conduct the first leg of this week’s Refunding when it auctions $38 billion 3-year notes. We begin the day with Agency MBS prices worse .125 and the 10-year yielding 1.59 percent.

It was a stifling hot day and a man fainted in the middle of a busy intersection.

Traffic quickly piled up in all directions while a woman rushed to help him.

When she knelt down to loosen his collar, a man emerged from the crowd, roughly, dismissively pushed her aside, and said, “It’s all right, don’t worry, I know first aid.”

The woman stood up and watched as he took the ill man’s pulse and prepared to administer artificial respiration.

At this point she tapped him on the shoulder and said, “When you get to the part about calling a doctor, I’m already here.”

Visit 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, “Home Ownership is Still Part of the American Dream” If you have the 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.


(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 Copyright 2020 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.)

Feb. 10: Marketing, LO jobs; recruiting, VA, compliance products; credit study & underwriting shifts

The U.S. is divided up into regions. Have you ever noticed that we say, “Out West” or “Back East” – a holdover from centuries ago. It’s never, “Back West” or “Out East.” Historically, new housing nationwide led to more local shopping, and thus higher local sales tax revenues. But due to online shopping, that relationship has lessened. Warehouse banks usually operate nationwide, and I received this short question: “Rob, do you know of any warehouse lenders out there that don’t require audited financials?” Are you kidding? Every reputable warehouse bank requires year-end audited financials (despite 2019 being “long ago”) along with monthly (or quarterly) financials (aka, “interims”) signed by an officer of the company. There are a handful of captive warehouse providers that are also investors that require the funded loan be sold to them, but watch their pricing and terms.

Jobs and transitions

First Continental Mortgage, LTD. (FCM) is seeking to fulfill the position of Marketing Manager (MM). FCM is an independently owned mortgage banker headquartered in Houston, TX for the last 27 years with operations in Texas, Colorado, and Washington. The MM will develop and implement marketing strategies for our builder mortgage partnerships. The MM will work directly with FCM management to establish, enhance, and execute marketing processes and to build overall brand awareness for the business. The MM will promote the development of relevant, timely and measurable marketing initiatives for key objectives of the company. For a full description of this opening and to submit your resume, FCM Careers.

New American Funding has taken the biggest step yet in its market expansion growth in Arizona and Texas. With the hiring of Sean Casey as the new SVP of Retail Sales for Arizona and Texas, the company has put unprecedented focus on building elite teams of Loan Originators to uniquely serve customers’ regional loan needs in these territories. Sean has spearheaded massive year-to-year growth throughout his career. In his previous position as a Retail Division Manager, Casey helped drive growth of 5596 units for $1.7 billion in loan volume for 2017 to 6087 units and $1.9 billion in loan volume for 2019. “Sean displays the exceptional leadership and strong background we targeted to help fuel our expansive growth efforts,” said Jon Reed, EVP of Retail Sales for New American Funding. “Having held many key positions across multiple channels—including managing call centers as well as distributive retail, Sean is uniquely positioned to lead and succeed in this role.”

Congratulations to Leora Ruzin, CMB, who was recently named the new Managing Editor for Mortgage Women Magazine. She takes over for Kristin Messerli, who successfully ran the magazine for three years. Leora is currently looking for new contributors, and can be contacted here for article ideas.

Nations Lending announced the addition of Doug Opdycke as VP of Sales Recruitment to lead Nations’ recruiting team at corporate headquarters in the Cleveland, Ohio area as well as supporting branch development within the company’s 83 existing locations across the U.S. Nations broke the $2 billion mark in loan volume in 2019.

Congratulations to Ginger Wilcox whom Home Point Financial announced is its new, and first, Chief Experience Officer (CXO) to work across the organization to drive innovation and accelerate the company’s already considerable growth.

Lender products & services

James Brody, Chair of Johnston Thomas’s Mortgage Banking Practice Group, along with The Mortgage Collaborative (“TMC”), are co-hosting their first annual complimentary regulatory compliance webinar at 10:30 AM PST, on March 19, titled “Invaluable Tips for Maintaining Compliance in 2020 and Beyond”. Per Mr. Brody, this webinar will provide critical insights into those compliance issues that he and his firm are handling for their mortgage banking clientele, including but not limited to, consumer privacy, licensing, LO Comp, MSAs, federal and state regulatory audits, vendor management, non-QM programs, and more. In addition, for any mortgage company that is being confronted with agency and/or RMBS indemnification claims from JPMorgan Chase, EMC, Lehman Bros. or otherwise, Mr. Brody will also be hosting a comprehensive complimentary webinar at 10:30 AM PST, on April 9, titled “Agency and RMBS Litigation Overview: How to Defend Against Agency and RMBS Claims by JPMorgan Chase, EMC and Lehman”.  According to Mr. Brody, whose firm continues to represent a large number of lenders, brokers and credit unions being pursued by these investors, both in and out of court all across the Country, this webinar will provide critical insights to help your companies obtain successful resolutions.


For those who would like to learn more about Johnston Thomas’s team of mortgage banking attorneys and how their firm can assist your company with its compliance and other industry related legal needs, Mr. Brody will be in attendance with his colleagues and is scheduled to speak at TMC’s upcoming Winter Conference in New Orleans, between February 16-18. However, if your company is not yet a member of TMC, Mr. Brody and his colleagues will also be attending the MBA’s upcoming Legal Issues and Regulatory Compliance Conference in New York, between May 3-6.


Join us and learn to market new VA mortgage opportunities in 2020! The recently implemented Blue Water Navy Vietnam Veterans Act of 2019 has provided new mortgage benefits for jumbo borrowers, active duty Purple Heart recipients and more. As a leading VA lender, Freedom Mortgage Wholesale’s No Down Payment VA Jumbo program enables eligible jumbo borrowers to exceed published FHFA county loan limits without a down payment requirement! No jumbo overlays or loan limits! Sign up for 2020 VA Mortgage Marketing training on 2/10 and 2/21.


Mr. Cooper Wholesale will be at the Texas Mortgage Roundup in San Antonio on February 11th.  Stop by booth #124 and hear about all of our great offerings and new technology coming soon. If you are unable to attend please connect with us at

A New Era in Talent Acquisition! Your pipeline is the lifeblood of your recruiting efforts. You need to stay in front of prospects, up-to-date and on-track to reach your goals. Model Match’s Talent Management Suite provides your team with the tools needed to stay hyper-focused, and your team united in one central, collaborative space. Build healthy pipelines of qualified candidates across your entire footprint with Market Insights or partner with Team Hammerhouse to experience a revolutionary partnership that drives success through strategically deployed resources, collaboration, and accountability tools. Connect with our team to see how Model Match can help you transform your recruiting efforts.

Credit and program changes: always evolving

This decade has seen a widening income gap and a homeownership gap. As loan officers everywhere know, leases are more predominant than mortgages in cities across the nation, and part of the reason is the credit rating of the potential borrower.

The House has approved a bill that would require credit reporting agencies to delete derogatory information more promptly and to boost consumers’ ability to dispute information they deem inaccurate. The bill would also give the Consumer Financial Protection Bureau greater authority to ensure the accuracy of credit scores and to outlaw some methods of calculation.

The Federal Reserve Bank of Chicago undertook a study to identify geographic patterns in the locations of subprime-scored households across Midwest zip codes. LOs know that differences in credit scores and other attributes across neighborhoods are likely to affect the overall supply and nature of lending and investment in those places, as individuals with subprime scores face higher borrowing costs and may be unable to obtain bank credit, leading to use of more costly alternative financial products that have fewer consumer protections.

Credit scores also affect access to other products and services, such as cell phone contracts, employment, and housing. Households are classified as subprime (less than 620), near prime (620 to 760), or prime (above 760) based on the highest risk score in the household. Subprime households are more highly concentrated in urban centers, and include a much higher non-white share of the population, weaker labor market outcomes, lower educational attainment, and higher housing vacancy rates. Suburban areas tend to have very few subprime households in comparison.

The distribution of zip codes by percent subprime and population density suggests that the most subprime places tend to be densely populated urban areas, while the least subprime places are a mix of urban, suburban, and rural areas. Mean household income is much lower in the most subprime neighborhoods than in the least subprime neighborhoods, roughly $42,000 versus $102,000. The unemployment rate in subprime neighborhoods is also much higher, at 10.8 percent on average, versus 6.6 percent overall, and just 4.2 percent in the least subprime neighborhoods. The share of black households in zip codes with the highest concentration of subprime-scored households is 31 percent, but only 5.7 percent in the next-highest quartile. In the most subprime quartile, only 18.7 percent of adults have a bachelor’s degree, compared to 45 percent in the first quartile.

There are also noteworthy differences in housing market characteristics, including higher vacancy rates, lower homeownership rates, and older housing stock in the most subprime zip codes. Additionally, the most subprime neighborhoods are less likely to have credit card accounts or mortgage debt, as these lines of credit are likely not even an option. This means households in the most subprime zip codes borrow smaller amounts than households in less subprime zip codes.


This study highlights an important challenge confronting policymakers and the private market: namely, the creditworthiness of households is intertwined with economic adversity at the neighborhood level. Neighborhoods with a greater share of subprime-scored households exhibit more signs of economic adversity and lower levels of credit use compared to neighborhoods where the distribution of credit scores skews higher. Private market lending volume was substantially higher in neighborhoods with higher income and greater share of white residents. Because the flow of credit and investment has major implications for the economic vitality of communities, enforcing existing policies and applying creative solutions to strengthen fair and sustainable lending to disadvantaged neighborhoods are important goals for policy. Additional policy concerns may arise if there is a self-reinforcing mechanism of hardship for households whose lower credit scores may have already played some role in neighborhood selection.

Of course borrowers want to borrow and lenders want to lend. Let’s take a random look at who is doing what, program-wise. (Lenders can always visit to check on wholesalers.) Similar to A-paper lenders and subprime lenders fighting over the middle ground in 2007, non-QM is becoming more commoditized like every other loan where price is now a significant factor in choosing where to send loans, and more mainstream where exceptions are the norm.

Athas Capital Group will finance non-warrantable condominiums up to an 80% LTV and no HOA questionnaire required.

Plaza’s Solutions Non-QM  program allows for a flat 50% expense ratio for loans qualified using business bank statements. Borrowers with expenses less than 50% may still qualify using the 3rd party expense statement, or P&L options. The borrower P&L option has been retired. Please note that businesses with high expense factors are not eligible for the Fixed Expense Factor. The housing payment history requirements have been updated to provide guidance for qualifying borrowers without a recent housing payment history.

Land Home Financial Services offers one-year income documentation on its Alpine Jumbo Product. Other highlights include 620 Minimum FICO, 80% Maximum Loan-to-Value (LTV); 75% LTV on Cash Out, Up to 50% Debt-to-Income (DTI), Up to $2,000,000 Loan Amount at 70% LTV; $1,500,000 Loan Amount at 80% LTV, Both Wage Earners and Self Employed, Owner Occupied, 2nd Home, & Investment and I/O Available.

HomeXpress has new and improved underwriting guidelines on its Bank Statement Loan Programs.

Among other programs, ACC Mortgage offers an ITIN program.

Capital markets

U.S. Treasuries ended last week’s volatile week rallying again as global growth concerns emanating from China drove markets in a risk-off mode. The Fed said the corona virus epidemic presents a new risk to the U.S. economic outlook, warning of disruptions to global markets. It’s also triggering more onerous travel restrictions and allegations of discrimination. That meant a stronger than expected January payrolls report (though perhaps not the 500k downward revision for all of 2019) was largely ignored. It would seem to me that markets are presently “numb” to news about the coronavirus, though the 10-year did end Friday -7 bps to 1.58 percent.

Unfortunately Friday’s jobs report was overshadowed, despite adding 225k jobs when the figure was expected to be 164k. Joel Kan, the MBA’s AVP of Economic and Industry Forecasting, observed, “Last month’s increase in construction employment (44,000 jobs) was a positive development for housing, as the homebuilding sector has been challenged by labor shortages and high costs. Wages firmed in January, a welcome sign for households looking to buy a home this spring.”

Capital markets folks tuned in to the large swings in dollar rolls led by the UMBS30 3 percent and 4 percent and GNII 3.5 percent rolls, which caused large swings in G2/UMBS swaps with the UMBS 3.5 percent fly as much as 12 ticks cheaper before recovering into the close. The bid to the 3 percent and 4 percent rolls was even more surprising, with FN30 speeds slowing, but less than expected, while 15s were slowed less than half of what was expected as GNIIs slowed a little more.

This week’s calendar highlights are likely to be the Quarterly Refunding, tomorrow through Thursday, as well as Fed Chair Powell’s testimony on the Monetary Policy Report before the House tomorrow and Senate on Wednesday. Other first tier economic releases include CPI on Thursday with retail sales, industrial production / capacity utilization, business inventories and Michigan sentiment on Friday. In mortgages the NY Desk is conducting a GNII FedTrade operation tomorrow when they purchase up to $429 million 3 percent and 3.5 percent, and will release a new FedTrade schedule as well as the four-week MBS reinvestment on Friday afternoon when many industry folks will have likely already headed for the exits ahead of the long weekend.

Today sees an extremely light calendar, beginning later this morning with remarks from Fed Governor Bowman. The only economic release today is the January Employment Trends Index, which comes before Philadelphia Fed President Harker closes the calendar with remarks this afternoon. We begin the day with Agency MBS prices roughly unchanged and the 10-year yielding 1.56 percent.

During a recent trip to New Mexico a cowboy asked me if I could help him round up 18 cows.

I replied, “Yes, of course. That’s 20 cows.”

Visit 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, “Home Ownership is Still Part of the American Dream” If you have the 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.


(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 Copyright 2020 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.)


Feb. 8: Letters on cybersecurity, increasing LO productivity; Fannie & Freddie weigh in on LIBOR move

The rumor that tomorrow is National Pizza Day is true. In our business there are always plenty of rumors to go around. The latest involves, giving rate engines and automation, one large private MI company buying another, like Radian purchasing Genworth. (I’m not saying those are the two, and picked two names at random.) Remember the beginning of 2019 when many lenders and vendors, big and small, were looking to be bought, merge, or acquire? The rumor mill was working overtime. But who needs rumors when there’s enough going on in real news to keep us all busy!

Wednesday’s commentary contained this note. “Let’s take any brokerage or small mortgage banker, 10 loan officers doing an average of 3 loans per month for 30 loans/month. The company has the operations staff to handle the current amount, probably more. Does it make more financial sense to go out and hire a recruiter and/or pay a signing bonus for another LO, or increase the efficiency of the existing LOs through better marketing, training, and improving the process? Let’s say all you had to do was move MLOs from 3 loans to 3.5 loans per month. I’m no math whiz, but that’s 5 more loans per month, about the same as hiring 2 new LOs. And while you’re at it, have your Ops staff take advantage of training and conferences that are out there, many at no cost. Makes all the sense in the world to me, and it’s a mystery while lenders focus so many resources on finding and training new staff rather than focus on honing your existing group. Just think of all the money you’d save on signing bonuses or guarantees!”

I received many responses suggesting that in a perfect world this would be the case, but that management doesn’t seem to recognize it. Others were more detailed.

From Texas Geoff S. sent, “I think I can tell you the answer to your first set of semi-rhetorical questions. The company quietly knows that the 10 loan officers they have are not all so ‘hot’, or even average. Human nature almost dictates that three of them are a hopeless mess, four of them are average, and the other three are going to produce no matter what happens. So ‘honing’ this bunch with training may have limited effect. The top three are already ‘self-honed,’ the middle set might be able to produce slightly more, and the last third are impervious to training efforts. So the company sets off in search of the next ‘superstar LO’ hoping they fall into the top tier of producers and praying that no one takes away their own top producers. At least I think this is what would describe the current industry behavior to continually hammer away at bonuses, etc.”

Gregg K., an originator from California, relayed, “I would say, in reference to your first insight why employers concentrate on recruiting vs increasing loan volume via marketing, customer acquisition using their current LOs is due to the fact the majority of employers have no idea how to create more volume using marketing skills. They rely 100 percent on the LOs personal marketing skills. At least that’s what I have found during my 22 years at this cray biz. Unless you have Paul Redham mindset and skill set (marketing genius) which very few are, but then the LO works for 35 basis points. Just my two cents.”

And from out West a lender’s president scribed, ““The issue with investing in growing Loan Originators is as follows. If they are unambitious and content with 3 loans per month (national average is 1.4, as you know), then they are unlikely to embrace training. We’ve thrown tons of tools, personal coaching, and even warm leads at our folks, and we typically see fewer than 20% of our LOs actually engaging with what we give them. If the LOs are ambitious, and they do engage with what we’re investing in them, then they are typically going to be similarly ambitious when it comes to taking calls from recruiters that might enhance their earnings. So long as IMBs continue to make stupid offers of signing bonuses and unprofitable commission plans, there will be a constant tug on the more ambitious LO’s to jump ship. Thus, the ROI for any decision to invest in training, tools, etc. must be discounted by the high probability that an LO will defect. Profit sharing and graduated compensation plans can play an important role, but here again, it’s tough to get the numbers to work out.”

From Washington the MBA’s David Upbin penned, “Rob, thank you for your commentary on Wednesday regarding training and development versus recruiting and hiring. MBA Education is geared to be the one-stop-shop (one RESOURCE) for training and development in our industry. All of MBA Education’s webinars are complimentary to MBA members and there are currently 30 webinars on the calendar with more being scheduled every week. A number of our 200+ self-study courses are complimentary to members and the other courses are only $49. For the small- to mid-sized lender, MBA Education has built Education Advantage which allows MBA members to invest in their staff for one low price per year and get everything MBA Education has to offer. A member company who has a total origination volume of $30M could get 1) unlimited self-study courses; 2) unlimited designation enrollments (CMB included); and 3) limited School of Loan Origination, School of Mortgage Servicing, and School of Mortgage Banking seats for one total annual price of $4,500.”


Don’t forget that ICE, the same company that owns MERS, owns LIBOR, and don’t forget that that the “L” in “LIBOR” stands for London, so the world is keeping an eye on what happens with UK institutions.

The UK Financial Conduct Authority and the Bank of England have announced a series of deadlines for Libor phaseout. The first deadline is March 2, when users and issuers of derivatives should shift to the Sterling Overnight Index Average. Britain’s financial institutions anticipate new regulatory measures to speed the phase-out of Libor, which may include a tax or capital add-ons for transactions that continue to rely on it. “My sense is that regulators would want to make Libor more expensive and therefore less attractive to use,” said Ed Moorby, a risk advisory partner at Deloitte. And the UK Financial Conduct Authority has added further pressure to move away from the London Interbank Offered Rate with the warning that markets “should not assume that any period of non-representative Libor… would last for more than a short period, that is a period of months, not years.” Derivatives markets have yet to agree on how they will handle the Libor phase-out.

In the U.S. the Alternative Reference Rates Committee (ARRC) of the Federal Reserve Board and the Federal Reserve Bank of New York released a consultation seeking comments from market participants on the spread adjustment methodology it intends to recommend as part of its fallback provision recommendations for cash products referencing the London Interbank Offered Rate (LIBOR). Weiner Brodsky Kider PC has a nice write up about it.

Fannie and Freddie, through an announcement by the FHFA, will wrap things up with LIBOR. Acceptance of adjustable-rate mortgages linked to Libor will cease by year-end at Fannie Mae and Freddie Mac, and the companies will soon take mortgages based on the Secured Overnight Financing Rate. This is the first major announcement of a consumer-loan product based on SOFR and will help lenders transition a trillion-dollar market away from Libor. Yes, the two will stop accepting ARMs linked to LIBOR by the end of 2020. The GSEs also said they will soon accept mortgages based on SOFR, the presumptive alternative to LIBOR, which is expected to disappear by the end of 2021.


Andrew Liput, CEO and Founder at Secure Insight writes, “What do closing agents know about cyber risk and cyber preparedness? Secure Insight just released results of a poll of over 3,400 agents nationwide and discovered some interesting information about the issue. With a database of over 70,000 professionals, SI keeps it’s thumb on the pulse of the mortgage closing industry and how it effects mortgage lenders and their business operations, as well as their borrower clients.

“Secure Insight polled 3,423 closing agents between January 20 and February 5, 2020 regarding their cyber security awareness and preparedness. Here are some of the results: 86% of respondents were not aware of new laws in CA and NY requiring lenders to protect consumer private data from third party misuse, 43% do not have cyber liability coverage, 36% have been a victim of email phishing schemes at the office, 22% have been involved in a closing where at least one party has been victimized by wire fraud, and 8% use their personal email and not their business email to transmit consumer information.”

The Treasury Department’s Office of Terrorist Financing and Financial Crimes has identified the financial system’s main vulnerabilities to illicit activity and has detailed steps to counteract them. Lack of obligation for companies to disclose beneficial-ownership information, misuse of digital assets and foreign jurisdictions’ shortcomings in monitoring digital-asset activity are primary weaknesses, which the department aims to rectify with legislation and other measures.

The Mortgage Bankers Association submitted a letter to the House Committee on Energy and Commerce with its principles for privacy and cybersecurity reform. Since last year, a bipartisan group of legislators on the committee have been working on a comprehensive consumer privacy bill. MBA’s letter highlights the mortgage industry’s principals for reform.

And of course states have policies and procedures. For example, in California, where nearly 25 percent of the nation’s residential loans come from, the state government created a Cybersecurity Task Force.

The New York State Department of Financial Services extended the deadline for filing the Certification of Compliance pursuant to 23 NYCRR 500 (“Cybersecurity Regulation”) from February 15th of each year to April 15th of each year.  Therefore, those impacted have need to have their next Certification of Compliance filed by April 15, 2020. The Department is currently accepting Certifications of Compliance filing for calendar year 2019. All filings should be filed electronically via the DFS Web Portal. “Each Covered Entity should use the account that it used for previous filings. The DFS Web Portal provides a secure reporting tool to facilitate compliance with the filing requirements of the Cybersecurity Regulation. For any questions regarding filing issues, please send an email to:

(Thank you to Don C. Michigan for this one.)

C – Hello! Is this Gordon’s Pizza?

G – No sir- It’s Google Pizza.

C – I must have dialed a wrong number. Sorry.

G – No sir. Google bought Gordon’s Pizza last month.

C – OK. I would like to order a pizza.

G – Do you want your usual, sir?

C – My usual – you know me?

G – According to our caller ID data sheet, the last 12 times you called you ordered an extra-large pizza with three cheeses – sausage – pepperoni – mushrooms and meat balls on a thick crust.

C – OK – that’s what I want.

G – May I suggest that this time you order a pizza with ricotta – arugula – sun-dried tomatoes and olives on a whole wheat, gluten free, thin crust?

C – What? I detest vegetables.

G – Your cholesterol is not good, sir.

C – How the hell do you know?

G – Well, we cross-referenced your home phone number with your medical records. We have the results of your blood tests for the last 7 years.

C – Okay, but I do not want your rotten vegetable pizza! I already take medication for my cholesterol.

G – Excuse me sir, but you have not taken your medication regularly. According to our database, you only purchased a box of 30 cholesterol tablets once, at CVS, 4 months ago.

C – I bought more from another drugstore.

G – That doesn’t show on your credit card statement.

C – I paid in cash.

G – But you did not withdraw enough cash according to your bank statement.

C – I have other sources of cash.

G – That doesn’t show on your last tax return unless you bought them using an undeclared income source, which is against the law.


G – I’m sorry, sir, we use such information only with the sole intention of helping you.

C – Enough already! I’m sick to death of Google – Facebook – Twitter – WhatsApp and all the others!!! I’ m going to an island without internet – cable TV – where there is no cell phone service and no one to watch me or spy on me!!

G – I understand sir – but you need to renew your passport first. It expired 6 weeks ago.

Visit 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, “Home Ownership is Still Part of the American Dream” If you have the 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.


(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 Copyright 2020 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.)


Feb. 7: AMC, underwriting, attorney jobs; marketing, VA products; FHA, VA, USDA lending changes

I can’t predict the future, don’t even know what I’m doing for lunch today, but in October this commentary suggested that with the MOU inked in October between HUD and the Department of Justice centered on alleviating some of the uncertainty regarding the False Claims Act penalties, the big banks would take a good look at re-entering the FHA biz. And why not, given the perceived profit margins and customer service opportunities? Jump on in, the water’s great! “Jump” isn’t the word, but sure enough, yesterday JPMorgan Chase confirmed that it’s contemplating reentering the FHA market as a direct originator, probably with a cautious eye about a potential administration change in November. (Chase has continued to purchase FHA loans from its correspondents.) There is a fair amount of FHA, VA, and USDA changes across the industry – more below.


A national title insurance Agency is looking to start a relationship with a real estate attorney. “The principal will explain in detail when we discuss. It’s a great opportunity for a real estate attorney to expand its business.” Interested attorneys should contact Chrisman LLC’s Anjelica Nixt to forward a note of interest.

Valuation Partners, a leading nationwide appraisal management company, is expanding its sales force. The AMC had a record year in 2019, has been in business for over 35 years, and has a best of class reputation. Valuation Partners is looking for a VP of Sales for the Northeast Region. Our ideal candidate possesses mortgage sales experience in the northeast with existing industry relationships. Responsibilities include representing the firm regarding all valuation products in the mortgage origination space. Professionalism and a commitment to a strong work ethic are a must. Experience in correspondent, mortgage insurance, and/or mortgage vendors sales experience is desirable. Compensation is a combination of base plus commission, health and dental, and 401(k). Join a team with a full suite of valuation products, a commitment to exceptional customer experience with senior leadership that understands the appraisal business. If you are interested, please send us your confidential resume.”

“Senior underwriters, if you are looking for a place where you can call home, we are looking for you! Doorway Home Loans is a privately held residential direct lender, founded in 1987 on the principles of responsible lending and exceptional service. Doorway is actively seeking an experienced Underwriter with a minimum of 5 years’ experience in underwriting and 3 years’ experience in FHA. In addition, the ideal candidate will possess one of the following: Extensive Non-QM experience or Active VA SAR designation. Experience and knowledge of Encompass is preferred but not required. Compensation will include base salary, a bonus plan and a benefit package. The right candidates will work primarily out of the corporate office located in Santa Ana, with the opportunity to work remotely on occasion. If you’re interested, please send a resume to Director of HR Denise Rodriquez.”


GO Mortgage recently hired Andrea Knorr and Travis Butler as new Business Development Managers. Knorr and Butler bring a wealth of experience in business development, strategy, and talent acquisition, having spent over 20 years in numerous roles within the financial services sector across the US. These new team members will play a critical role in strengthening and overseeing the growth of talent for the company. To learn more about joining the GO Mortgage team, contact Andrea Knorr or Travis Butler.

Lender services and products

Maxwell CEO John Paasonen just posted a great piece on their blog titled, “
Will A Machine Replace You? The Future of the Loan Officer in the Digital Age.” The aptly named piece dives into the evolution and impact future technology will have on the industry we know today. I won’t spoil the outcome, but a great read for all lending professionals. Click here to start reading!


Exciting news at IMPAC!!  We have significantly improved pricing on ALL non-QM products for both Wholesale and Correspondent channels! Additionally, we would like to welcome Brian Robinett as Chief Production Officer and Angela Ditri as Operations Director of Correspondent Lending. Brian comes to us with an extensive background running multiple platforms within the Wholesale, Correspondent and Retail space, confirming IMPAC’s commitment to growth in the Non-QM sector. Angela joins us with over 25 years of experience managing high volume and large-scale correspondent mortgage operations. Together with Michael Falce, Director of Correspondent Lending, their mission is to grow IMPAC’s Correspondent and Wholesale channels by building strong relationships and providing exceptional service. Given these new exciting changes and additions to the team, we’re speeding steadfastly into 2020 with a strong focus to support our clients in the Non-QM market.”

Join us and learn to market new VA mortgage opportunities in 2020! The recently implemented Blue Water Navy Vietnam Veterans Act of 2019 has provided new mortgage benefits for jumbo borrowers, active duty Purple Heart recipients and more. As a leading VA lender, Freedom Mortgage Wholesale’s No Down Payment VA Jumbo program enables eligible jumbo borrowers to exceed published FHFA county loan limits without a down payment requirement! No jumbo overlays or loan limits! Sign up for 2020 VA Mortgage Marketing training on 2/7, 2/10 and 2/21.

Calling all marketing pros. I’m not going to tell you something you don’t already know, but… localized, personalized, omnichannel marketing rules. Look at the data: open rates for emails to strangers are 5-10%; emails to an LO’s past customers list increases opens to 20-30%; localized emails to Realtor partners bumps open rates north of 35%. Personalized emails skyrocket: birthday emails are opened at 40% and Loan Milestone Alerts get opened at 70+%! You see the trend. The stronger the relationship is and the more it means to the recipient, the better the response. That’s why Usherpa sends content that matters, to people our LOs know. Don’t get me wrong we cover all kinds of leads too. Omnichannel marketing: email, direct mail, video, voice, text. How we can help you accomplish your goals? Let’s talk. Dan Harrington. Realtor 7 years, Loan Officer 6 years, Mortgage Marketer 25 years.

FHA, USDA, VA news around the biz

When delinquencies were way above the historical average it impacts investor’s desire to own securities backed by mortgages. The national delinquency and foreclosure rate increased by 2.14 in December. FHA delinquency and foreclosure rates increased by 44 bps, posting the highest delinquency and foreclosure rate of 2019. Conventional and VA 30-year loans’ delinquency and foreclosure rates were roughly unchanged month over the month. Oregon is the best-performing state, with delinquency and foreclosure rates at 1.86 percent. Mississippi is the worst in the nation, with 6.26 percent delinquency and foreclosure rates. The Pacific region (CA, OR, WA, HI, and AK) has the lowest overall delinquency and foreclosure rates (2.18%). You can bet your bottom dollar that investors pay attention to this.

Most large banks pulled out of the FHA market post-crisis in the wake of large fines assessed on lenders/servicers by government regulators using the False Claims Act. A reentry of JPM into the FHA market, especially if it resulted in other banks reentering, would not be good for existing mortgage originators, especially correspondent lenders, since it could reduce the size of the correspondent market. But in November we’ll have a presidential election and a change at the White House could once again change how HUD, the DOJ, or the FHA view enforcement.

FHA issued a reminder to mortgagees about its guidance for originating and/or servicing FHA-insured forward mortgages in locations in the U.S. and its territories when the President declares it a major disaster area. This declaration is made when natural disasters or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond. The following guidance applies to all areas covered by a Presidentially-Declared Major Disaster Area (PDMDA), including those areas covered under the PDMDA declared on January 16 for Puerto Rico Earthquakes (DR-4473).

FHA issued Mortgagee Letter 2020-02, Mortgagee Electronic Funds Transfer Accounts, that requires mortgagees to establish and maintain Electronic Funds Transfer (EFT) Accounts electronically. Previously, mortgagees had to submit a hard copy form to FHA to establish and maintain these accounts. EFT accounts permit FHA-approved mortgagees to receive payments from FHA when they submit FHA insurance claims. The changes and additional guidance that allow for the establishment and maintenance of EFT Accounts electronically have been implemented in Lender Electronic Assessment Portal (LEAP) and FHA Connection (FHAC) and are effective immediately. Mortgagees must use the EFT Account Setup function in LEAP to provide their bank account information for FHA Insurance benefits payments. Hard copy forms will no longer be accepted.

Don’t forget that recently a GovDelivery was issued by the Single-Family Housing Guaranteed Loan Program (SFHGLP) to announce the future revisions to technical handbook HB-1-3555 Chapter 10, Credit Analysis. The advance copy provided with the GovDelivery was stated to be available for a minimum of thirty days on USDA LINC’s Training and Resource Library for lender review and preparation pending the publication of the Procedure Notice (PN). Effective on January 28th, Lenders are authorized to suspend the following: Credit Score Validation for GUS ACCEPT files and downgrade a GUS ACCEPT file with manually entered debts. Refer to Attachment 10-A “Credit Matrix” of the advance copy of Chapter 10. All additional revisions to the revised HB-1-3555 Chapter 10 will continue to be pending publication of the PN. The SFHGLP will provide a new GovDelivery notice when the PN for HB-1-3555 Chapter 10 full publication is released.

U.S. Bank Correspondent/HFA issued Seller Guide Update SEL-2020-004 clarifying and giving additional guidance on VA Cash-Out transactions, changes to the Income Analysis Worksheet, and credit underwriting updates specific to Debt Counseling Prior to Application and Credit Reports at the time of Application. U.S. Bank reminded clients that the FHA requires connection to water and sewer systems whenever feasible and available at reasonable costs. U.S. Bank Home Mortgage defines feasible and reasonable as 2% of the Sales Price or Appraised Value. Legal and complex title requirements prohibit U.S. Bank Home Mortgage from originating or purchasing any Government loans in IL Land Trusts. And the VA funding fee payment can be split. It can be partially paid by the buyer, seller, partially financed, or partially paid in cash.

loanDepot Wholesale/Correspondent’s Weekly Announcement includes information on LDW Credit Report Fee Increase, LDW Forms, Desktop Underwriter (DU) For Government Loans Release Notes and changes to the Veterans Information Portal (VIP).

PennyMac Correspondent Group posted a new announcement  20-03: Updates to Conventional and Government LLPAs.

Non-Delegated FHA and Non-Agency Loans closed on and after January 10, 2020 must have received a Clear to Close underwriting decision prior to the loan Closing Date. FHA and Non-Agency loans with a loan Closing Date prior to receiving a Clear to Close underwriting decision will not be eligible for purchase. AmeriHome Mortgage will use the Closing Date as provided on the Closing Disclosure to determine the loan Closing Date.

Mountain West Financial Wholesale announced that Golden State Finance Authority (GSFA) has increased the maximum debt-to-ratio of income (DTI) for borrowers with FICO scores >680 to 50% applicable to both FHA and Conventional Platinum loans underwritten through LPA. Additionally, GSFA’s Subsidy Promotion for lower AMI (Area Median Income) borrowers will end on February 7, 2020. Please ensure any Platinum loans for Subsidy Promotion borrowers are locked prior to end of day, February 7th.

Mountain West Financial® Wholesale announced the introduction of the Texas Department of Housing and Community Affairs (TDHCA) My First Texas Home Program making homeownership more affordable for low-to-moderate income first-time homebuyers across the entire State of Texas. This Program offer a 30-year, fixed rate, fully amortized FHA 1st mortgage. An optional down payment and closing cost assistance up to 4% of the total loan amount. A 2nd mortgage option that has deferred payments, 0% interest and is due upon sale, transfer, refinance, no longer own-occupied or pay-off of 1st mortgage. Refer to MWF’s My First Texas Home Program Matrix and Overview for complete program details.

Plaza Home Mortgage® has expanded its VA Fixed and ARM program guidelines to allow purchases to $1,000,000 at 100% LTV. And it doesn’t stop there…the maximum loan amount for refinances with a 620 credit score has also been increased to $1,000,000 with a maximum LTV of 90%. VA IRRRL and FHA Streamline Refinance guidelines have been expanded and allow credit scores to 580.

PRMG has updated multiple Product Profiles including its Agency Products, FHA Products, Investor Solution, Chenoa FHA Edge and FHA Rate Advantage.

Capital markets

Could your crystal ball for 2020 use some clarity? Vice Capital Markets Principal Chris Bennett recently shared his thoughts on what he expects to happen in the specified pool, TBA and servicing markets, as well as trends in eNote adoption and API development – all of which will have a significant impact on lenders’ operations and bottom lines in the coming year. Using keen market insights like these alongside extensive trading experience, Chris and his team at Vice Capital Markets have helped financial institutions over the last two decades navigate the often-murky waters of managing interest rate risk to maximize profitability on over half a trillion of MBS trades and mortgage-related transactions. Make 2020 the year you crystalize your secondary execution. Reach out to Vice Capital Markets’ Chris Bennett to make the most of your secondary execution in 2020 and beyond.

Up and down, up and down. U.S. Treasuries, and MBS prices, ended Thursday rallying slightly, closing near their opening levels after spending the session in a narrow range. The cash market appeared on track to deepen its recent pullback after Treasury futures faced some overnight pressure, but futures rebounded during the European session, canceling out any movement. The number of confirmed coronavirus cases in China rose past 28,000 with the death count exceeding 550. It seems as though markets took a breath before today’s January employment report, though it was reported yesterday in the FHLMC mortgage survey that mortgage rates are now at three-year lows.

The BLS reported that nonfarm business sector labor productivity missed estimates in the fourth quarter, and that unit labor costs were above estimates. Productivity is still running below the long-term average from 1947 to 2019, though 2019’s growth in nonfarm business sector productivity was the strongest since 2010 and above the average for the last 12 years. What does it really mean for lenders? Not much.

January Nonfarm Payrolls () started today’s domestic calendar. That release included Nonfarm Private Payrolls (225k), Average Hourly Earnings (+.2%), and the Unemployment Rate (3.6%). Later this morning brings the unimportant December Wholesale Inventories and December Consumer Credit. The Federal Reserve will release the Monetary Policy Report later this morning ahead of Chair Powell’s visit to Capitol Hill next Tuesday and Wednesday. We begin today with Agency MBS prices are better nearly .125 and the 10-year yielding 1.62 percent after closing yesterday at 1.64 percent.

“I asked the waiter, ‘Is this milk fresh?’ He said, ‘Lady, three hours ago it was grass.’” (Phyllis Diller)

Visit 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, “Home Ownership is Still Part of the American Dream” If you have the 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.


(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 Copyright 2020 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.)


Feb. 6: Ops, LO jobs; non-QM, CRM products; from processing to MI shopping: vendor news

For years there has been name confusion between Fannie Mae and Fannie May. Name overlap isn’t limited to those two; MERS, familiar to mortgage bankers everywhere, is not the same as MERS (Middle East Respiratory Syndrome). And trying to find great employees isn’t limited to mortgage banking. Lawyer recruiting has come a long way from the days of Rolodexes and landlines, Jack Newsham reports. Today’s legal recruiters are constantly in touch with candidates via LinkedIn, email, and text, while ever-more sophisticated databases help them track lawyer moves and law firm statistics. Despite technology, placing associates and partners at law firms still comes down to a recruiter’s network and reputation in the industry, they say. And there’s more competition now than ever, with large and small recruiting outfits seeking to capitalize on the increasing mobility of law firm partners and associates.

Jobs & transitions

Mortgage Confidential is the #1 resource for mortgage professionals to find opportunities and maximize their value. We allow you to CONFIDENTIALLY put yourself on the market to discover opportunities you may not have known existed. Most likely, you are happy and comfortable with your current situation, but that is no reason not to discover your true worth in the marketplace. Our site allows you to complete a profile that will remain 100% confidential. Lenders and Banks will have the opportunity to view your profile without having access to your name or contact information. You control the process. You control the Lenders you want to engage. 100% CONFIDENTIAL. Guaranteed. Check us out”

Draper and Kramer Mortgage Corp. (DKMC) announced that Corinne Shanahan has joined the company as Regional Manager, spearheading the national lender’s growth and recruiting in the Minnesota and Wisconsin markets. “Corinne joins us with 33 years of industry experience and an accomplished leadership and origination background,” said DKMC CEO Paul Lueken. “We look forward to seeing her bring our successful lending platform to Minnesota and Wisconsin.” Founded in 1893, Draper and Kramer was the nation’s third FHA-approved lender. Today, it is a Scotsman Guide-ranked top 100 lender and is expanding its presence in markets across the country. The company is known for fast closings, leading-edge technology and award-winning workplace. Originators who are interested in learning about DKMC’s opportunities in Minnesota and Wisconsin should email Corinne or email Director of Recruiting Eileen Andersen for opportunities in other states.

When you work with Finance of America Mortgage, you can expect something new and improved every day. Whether it’s our Forward, Reverse, Commercial, Renovation, or our proprietary Construction to Permanent products, you can expect to have a full suite of industry-leading products to meet the needs of your customers. When coupled with our cutting-edge origination technology and sales tools, we ensure that our sales force is positioned to deliver innovative solutions with a world-class experience to their customers every day. We are constantly driving towards new innovative products and improvements to the experience we offer to meet the needs of borrowers, regardless of their situation. Want to learn about working with us and gaining access to this arsenal of different tools and products? Visit to learn more and to get your new journey started.”

AmeriHome Correspondent will be out in full force at industry conferences across the country in 2020! The team had a great time this week at the MBA IMB in NOLA, and they’re gearing up for Southern Secondary in Houston later this month! Check out the AmeriHome events page to find out when they’ll be at a conference near you. Also be sure to check out AmeriHome’s Non-QM Income Flex program as it is getting lots of traction. AmeriHome’s Non-Del channel is growing steadily and they are looking for experienced underwriters and underwriting managers in its Westlake Village, CA and Dallas, TX offices. Visit the AmeriHome careers page for more information!

Western Alliance Bank has added mortgage industry veteran Chris Romano to its Mortgage Warehouse Lending team as SVP. (The group serves non-bank mortgage companies requiring lines of credit to fund consumer real estate loans, MSRs, residential, light commercial and mixed-use notes.)

Lender services and products

OptifiNow announced the release of its Insights OnDemand business intelligence module, enhancing OptifiNow’s CRM and sales enablement platform with powerful tools designed to help mortgage lenders optimize their business performance. OptifiNow is an end-to-end sales and marketing automation platform with innovative tools that enable mortgage lenders to execute sophisticated sales and marketing strategies. The platform is known for its flexibility to manage retail, wholesale, consumer direct and reverse mortgage lending channels. OptifiNow’s intelligent API connects LOS, POS and other data sources to their platform, allowing the new Insights OnDemand to create visualizations that identify trends, spot problem areas and enables more accurate forecasting of production volume. Learn more about OptifiNow and schedule a demo today.

LoanStream’s new NanQ (Non-QM) pricing improvements are RED HOT. Load your pipeline with Pricing Improvements up to 1.25bps, rate reductions and improved guidelines on our most popular Non-QM programs: DSCR, Bank Statement Loans, Foreign National, Investor and more that create more differentiation for brokers and their loan officers. Check out our pricing and matrix here. Register for our Non-QM products overview here.”

Vendors: always up to something

Vendors do other things besides create names by combining words and capitalizing letters in the middle. Let’s take a random look.

Docutech, the leading provider of document, eSign, eClose, and digital to print fulfillment technology, announced an agreement to integrate with Origence, a leading provider of lending technology and solutions to the financial services industry. Integration of the Origence mortgage lending platform with Docutech’s ConformX and Solex platforms will allow lenders to generate dynamic loan documents and enable those documents for eDelivery, eSignature, and eClosing capabilities thereby improving the borrower experience and optimizing the lending process. “The Origence platform may reduce loan cycle time by upwards of 10 days, increase lender productivity and decrease costs per loan. Through the integration with Docutech, the streamlined workflow for generating, distributing, and signing loan documents and disclosures will help lenders continue to reduce costs per loan while expediting the mortgage process.”

LoanSnap, a new lending services technology for banks, has launched a mortgage calculator called LoanPulse for borrowers to get an accurate sense of their ability to take out loans — and at what price.

Grappling with pricing out private MI costs? Out of Kansas comes PMI Rate Pro, a new software platform that allows loan officers to identify the most affordable private mortgage insurance rates available. “PMI Rate Pro cuts the time needed to quote the cost of private mortgage insurance and directs mortgage officers to find the lowest rates for homebuyers. Additionally, the software lets loan officers access results from all six national private mortgage insurance providers within seconds.”

Strategic Compliance Partners (SCP) announced that it will combine forces with the Offit Kurman law firm to service its mortgage banker clientele effective March 1. It “will afford clients the benefits of a flat fee holistic compliance engagement complimented by integration with Offit Kurman, a full-service law firm, which represents lenders nationwide. SCP will remain in business focusing on services for brokers and its ShareDiligence vendor management platform.”

Avenu Inc., creators of the IntroLend transactional convergence platform, made to empower home buyers, agents, and lenders, announced the official launch of its platform with RE/MAX Associates Utah. The platform has been incorporated for all RE/MAX Associates team members across the state to serve home buyers better while transforming the monetization model for the agents. The company refers to the RESPA-compliant, Affiliated Business Arrangement-Third Party Origination platform, as Transactional Convergence. Moving the agents from a single-monetization event, i.e., sales commission, to developing new services they can now provide their valued client while at the same time generating new revenue flows from these services.

FormFree teamed up with LexisNexis®Risk Solutions to help lenders “intelligently pre-fill the Universal Residential Loan Application (Form 65/1003) for mortgage applicants. The combined solution, part of FormFree’s Passport™ all-in-one verification app, significantly reduces the amount of information a consumer must manually input into a digital loan application, greatly simplifying the application process, minimizing input errors and improving the likelihood of completing the loan application.” The LexisNexis Digital Mortgage Application Prefill solution works behind the scenes to verify the consumer’s device, providing an initial layer of fraud defense before the transaction begins. Once the device is authenticated, consumers who opt to authenticate their identity and use the Passport electronic verification service can view, confirm and edit loan applications that have been prefilled with their personal information, including two year address history, assets and other real estate owned, employer information from Passport, monthly income, and combined housing expense information.

A while back LBA Ware announced that CMG Financial is using CompenSafe to streamline incentive compensation for the lender’s more than 500 loan originators (LOs) and other commission- and bonus-based employees. Branch and senior managers at CMG Financial have also begun leveraging CompenSafe’s reporting capabilities to improve pipeline management and monitor expenses. “Built-in reports make it easy for managers to compare current production to historical trends, and they now know exactly how much the company is paying out in commissions and bonuses at the individual loan level.”

Capital markets

On the central bank front, what are the experts saying about the path of the Fed after its latest meeting? Through the first half of 2020, Federal Reserve monetary policy is still expected to be very predictable and Fed Chairman Powell and other Fed officials reinforced the idea that the Fed is in “pause” mode after a series of three 25 bps interest rate cuts during the year. According to Powell, the Fed will maintain the current level of the fed funds rate until their outlook “materially” changes. The last time the Fed followed a similar pattern was in the 1990s, when the pause lasted for about two and a half years, allowing for one small adjustment.

The dot plot from December (there was none for January) showed that most Fed officials expect to keep the fed funds rate unchanged through 2020, setting a moderately high bar for any future policy changes. The Fed’s dot plot for 2021 shows that the majority of Fed officials believe that their next move will be to increase the fed funds rate once in 2021. But that could be challenged by cooler U.S. economic performance, likely from financial market volatility, and the challenge of controlling inflation, which is still below the 2 percent target.

The 2021 dot plot implies that the Fed believes that economic performance will be reasonably good, and that inflation pressures will increase. However, looking at the fed funds futures market, the majority of interest rate speculators assume the opposite. The futures market shows that most speculators believe that the Fed will decrease the fed funds rate by at least 25 basis points by the end of 2020. This implies that most speculators believe downside economic risk is the dominant factor, and it flies in the face of the Fed’s expectations. We will all find out which way monetary policy goes as it unfolds. The path of the U.S. economy through 2020 will be shaped by monetary policy, hiring, and business investment.

Looking at the bond market yesterday, Treasuries, and with them MBS, once again sold off following reports of potential vaccines for coronavirus. (Due to the impact on rates, lenders have always scorned good news and relished bad news, right?) A strong ADP report which showed the addition of 291,000 private payrolls in January when the consensus was 160,000 was largely ignored. A better than expected ISM Non-Manufacturing Index also failed to move markets, though it marked the second straight month of accelerating activity in the services sector, an encouraging marker for the continued U.S. economic expansion.

The Trade Balance report for December showed a widening in the deficit, though the goods deficit with China actually decreased in 2019 as tariff measures contributed to a decrease in exports and a much larger decrease in imports. As widely expected, President Donald Trump will remain in office through the end of his term with the Republican-controlled Senate voting to acquit him of abuse of power and obstruction of Congress. Finally, the U.S. Treasury confirmed plans to issue a 20-year bond in the first half of 2020.

Today’s calendar began with January job cuts from Challenger, Gray & Christmas (nearly 68,000, high, but it’s nearly always high in January). We’ve also had initial claims for the week ending February 1 (-15k to 202k), preliminary Q4 Productivity (+1.4%), and preliminary Q4 Unit Labor Costs (+1.4%). Both the Dallas Fed’s Kaplan and the Fed’s Vice Chair Quarles will make public remarks later in the day. Early on Agency MBS prices are a smidge better and the 10-year is unchanged at 1.65 percent.

Hospital regulations require a wheelchair for patients being discharged. While working as a student nurse, however, I found one elderly gentleman already dressed and sitting on the bed with a suitcase at his feet, who insisted he didn’t need my help to leave the hospital.

After a chat about rules being rules, he reluctantly let me wheel him to the elevator.

On the way down I asked him if his wife was meeting him.

“I don’t know,” he said. “She’s still upstairs in the bathroom changing out of her hospital gown.”

Visit 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, “Home Ownership is Still Part of the American Dream” If you have the 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.


(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 Copyright 2020 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.)