June 24: COO job; loan delivery, construction products; HECM servicing sale; wide range of upcoming training & events

I start the last week of June in Park City, Utah at a STRATMOR meeting and with a correction. In discussing tax laws in Saturday’s commentary I wrote, “The new law limits the deductibility of mortgage interest payments to $10,000, thereby reducing tax incentives for ownership of higher priced homes.” Several readers astutely wrote that this was incorrect, and that mortgage interest isn’t capped at $10,000. It is the State And Local Taxes (SALT) that are limited to $10,000. The tax law limits the amount of mortgage interest to whatever interest you pay on loans up to $750,000. Thank you! While we’re geography, much of the nation’s recent population growth is still “out West.” Cities in the West that have seen the largest population increases recently are San Diego, Denver, Henderson, Nev., and Las Vegas. Interestingly enough, Columbus, Ohio was the only city from the Midwest on to crack the top 15 nationwide list compiled by U.S. Census Bureau.

Jobs

Are you interested in joining a fast-growing mortgage FinTech start-up?  Fresh off its launch announcement, OptiFunder is looking to hire a COO to join its team. OptiFunder is already on a fast growth trajectory. OptiFunder’s SAAS solution optimizes and automates the warehouse funding process for mortgage originators. The COO role will work closely with the Company’s Founder, Michael McFadden, to develop and execute the Company’s aggressive growth strategy. Other responsibilities will include leading Technology Development, Professional Services, and Sales teams. Prior experience leading and growing a FinTech company is required, preferably in the mortgage industry. If you are interested, please send your resume to Michael McFadden.

Lender products & services

Reverse Mortgage Servicing Rights (“HMSR”) Sale: Baseline Reversethe reverse mortgage industry’s leading valuation company, is pleased to offer, a $350 million pool of newer vintage HECM Reverse Mortgage Servicing Rights (HMSR). Bids are due July 5 at 5PM EST.  For more information, please contact Dan Ribler.

ResX Warehouse Lending is a division of United Bank, a respected commercial lender with an over 150-year track record of delivering for its clients. ResX isn’t new to the warehouse business. In fact, it’s been making warehouse loans longer than many of the “established” lenders out there. ResX is also not looking to waste time with inflated promises or the latest fix-and-flip pitch. Instead, the staff are real people and experts in the business who deliver extensive management experience, more effective and efficient processes, and the drive to be a complete banking resource for clients. In combination with United Bank’s full-service array of products and services, ResX is the ideal platform for the mortgage banker serious about meaningful growth. That means no wasted time, no pipeline clogs, and no worrying about whether or not it is in it for the long haul. If that sounds interesting to you, give ResX a look!

Built Technologies announced the integration of its construction finance solution with Jack Henry’s SilverLake System ®. Through the integration, users of Jack Henry’s SilverLake core banking solution will have access to Built’s construction finance platform, enabling lenders to seamlessly manage their construction portfolio online while accessing unprecedented portfolio analytics, alerts, and reporting capabilities. “We are thrilled to add Jack Henry to our growing network of integrated core providers,” said Chase Gilbert, CEO, Built Technologies. “The SilverLake System ® is an industry leading solution, and this integration will provide a complete, seamless experience from loan origination through construction.”

Leave it to TMS to make the mortgage process easier for lenders with less risk, faster purchases, and better loan delivery by partnering with EncompassTM Investor Connect. An all-in-one mortgage management solution that establishes a secure system-to-system workflow between lenders and investors, it makes transferring loans to TMS fast and super-easy. In fact, TMS cleverly summarizes it as “Transfertopia” and defines it as “A wonderous world where all borrower information seamlessly transfers from lender to investor with just the push of a button.” Great info for investors, so check it out.

Trainings and Events:

Join us for National Mortgage Professional Magazine’s complimentary webinar “Offering Home Equity Loans as Part of Your Overall Strategy,” on Thursday, June 27 at 2 pm Eastern/11 am Pacific featuring Jerry Schiano and John Neihart of Spring EQ. This webinar will show you and your company how important a Home Equity 2nd mortgage product is as part of an overall “Customer for Life” strategy. Key takeaways include: Helping you understand how this fits into your current focus, learning about what our presenters know about this segment of the industry, and learning about resources that make it easier to execute a second mortgage strategy at a high level. Register for this complimentary webinar here to learn about how to include offering Home Equity loans as part of your overall strategy.

REGISTER FOR FREE to Impac’s SoCal Ballroom event and learn how to master Non-QM from our experts in the industry. The event will be hosted at the Hotel Irvine on Wednesday, July 10th from 9:30AM – 12PM.We will reveal our new enhanced guidelines, demonstrate our innovative technologies, review our useful tools and resources, and show you how to effectively market these powerful products to your borrowers. JOIN US for this engaging and insightful event dedicated to helping you elevate your business. Free valet parking and breakfast is included with your registration. Seating is limited and going fast, so REGISTER TODAY!”

If you are looking for something to listen to when you are driving in your car or on the treadmill, then you may want to catch the next episode of Ginger Bell’s Open Mic with The Mortgage List Podcast. On Wednesday, June 26th Ginger speaks with Mat Ishbia, CEO of United Wholesale Mortgage. Mat shares the strategies he uses in his business on coaching, giving back and marketing as well as his insight on why being a mortgage broker is beneficial to both consumers and originators. Ishbia’s episode is the 6th in the new podcast series that Ginger started to provide information about vendors who serve the mortgage industry. You can find a link to all of the podcasts here and on all podcast delivery channels.

In Northern California this week Arch MI and CAMP are presenting live Analyzing Personal and Business Tax Return classes for Loan Officers, Processors and Underwriters. The complimentary 3 hour course will take place in Concord, Tuesday, June 25 at 9:30 AM and for CAMP members only $5 in San Jose, Wednesday, June 26 at 11:00 AM (includes lunch) all non-members are $15 in San Jose. For more information and to register email Wendy Barnett.

Webinar: “Under the Hood with Blend’s Lender Experience.” Technology should empower your team to do more. Join us on June 27 to learn how Blend is equipping mortgage originators with modern tools to meet the rising expectations of today’s homebuyers.

National MI has posted its July Webinar offerings.

Registration for Arch MI’s July complimentary webinars are available.

On July 10th, FHA is providing a free on-line webinar with an overview of FHA-approved servicer requirements to include: early delinquency activity; timelines; general loss mitigation; evaluation of the borrower’s financial condition; and collections best practices.

FHA is offering a free online-webinar, July 17th to explain the HUD Loss Mitigation Option Priority Waterfall, Forbearance Plans, and Special Forbearance Options.

XINNIX is offering several classes this summer: Register today for classes in July and August.

Register for FHA’s free July 24th on-line webinar and receive guidance on HUD’s FHA-HAMP Loss Mitigation Home Retention Option.

FHA will be providing guidance on FHA’s loss mitigation home disposition options: the pre-foreclosure sale program and deed-in-lieu in a free on-line webinar on July 31st.

Indecomm’s July webinar calendar includes Solving Loan Set Up Challenges With Automation on Thursday, July 18 at 1PM ET. On Wednesday, July 24 at Noon ET: Managing Operational & Organization Content: Ask Me Anything Series.

On Wednesday, July 17th and Wednesday, July 24th, MBA Education and Mortgage Banking Solutions (MBS) is presenting a two-part webinar series on the fundamentals and complexities of mortgage servicing and sub-servicing. Registrants can receive 15% off by registering for the two-part webinar series. Use promotional code GROUP15 upon checkout.

MBA will host a one-day workshop on July 18 in Washington, DC on Condominium Lending.

Register today for MBA Education’s Fundamentals of Residential Lending & the Secondary Market one-day workshop on July 15th held during the California MBA’s Western Secondary Market Conference 2019. Attendees will get a comprehensive overview of fundamental elements in the single-family secondary market, including key risk areas in any residential mortgage portfolio along with risk reduction procedures for both the lender and secondary market investor.

We have the California MBA Western Secondary Market Conference July 15-17 in San Francisco, CA. This event is always a great opportunity to learn, network and grow your business.

Mortgage Innovators Conference is the ONLY mortgage industry conference that highlights all innovators! Taking place August 11-13 in San Diego, it will feature engaging, expert speakers on a variety of topics from Day 1 Certainty to blockchain and everything in between.

Registration is open for the 2019 NAWRB Conference – Redefining Leadership scheduled for Aug 4th-7th at the Langham Huntington in Pasadena. Key discussion topics include: Artificial Intelligence (AI), Social Impact, Family Offices, Women on Boards, Media, Residential and Commercial Real Estate, Access to Capital, Investments, Government and Poverty.

Join the Michigan Mortgage Lenders Association at the state’s largest mortgage industry event of the year! I will be attending the MMLA Annual Lending Conference is from August 14-16 at Crystal Mountain Resort & Spa in Thompsville. This event is for anyone in the mortgage industry and has something for independent mortgage bankers, brokers, community banks, commercial banks, credit unions, and all companies that provides a service to the industry!

NEXT™ and Housing Finance Strategies announced the launch of a new event, #NEXTDC19, which will focus on current policy as well as housing issues that could be impacted by the 2020 election. In November at Kimpton Hotel Monaco in Washington, D.C., #NEXTDC19 is a new mortgage event to bring together Washington policymakers, FinTech luminaries and mortgage lending executives for a dedicated, ongoing conversation on housing policy’s impact on the state of FinTech and mortgage lending.

Capital markets

To refresh your memory, as expected, last week the Fed kept short-term rates unchanged and much to the market’s delight, the tone of their latest statement noted that they would be open to potentially easing rates given the current economic uncertainty and low inflationary environment. The updated “dot plot” showed that seven committee members expected the fed funds rate to be 50bps lower by the end of the year and eight expected no change. This marks the first time since the FOMC started supplying the markets with formal projections in 2012 that they have forecasted a potential rate cut. While GDP and inflation forecasts were not significantly changed in this time around, the catalyst for the rate cut is the uncertainty in that outlook as trade negotiations stall and global growth weakens. Fed president Powell spoke about the Fed’s goal of sustaining economic expansion. Markets rallied post-statement and now widely expect the Fed will cut the fed funds rate by 25bps at the July 31 meeting and another 25 bps in September.

U.S. Treasuries finally reversed course from their rally to close the week, pulling back from their best levels of the year, including the 10-year closing +7 bps to 2.07 percent. Risk tolerance improved after it was reported that President Trump called off a strike on Iranian assets due to concern about the likely loss of life. Trump may be balancing conflicting impulses: a desire to deter future military action by Iran and distaste for another U.S. conflict in the Middle East as the 2020 campaign begins. Separately, Chinese press speculated overnight that trade negotiators from China and the U.S. will meet ahead of next weekend’s G-20 summit in Osaka and European Union leaders met to nominate replacements for EU Council President Donald Tusk, EU Commission President Jean-Claude Juncker, and ECB President Mario Draghi after failing to name new nominees during last week’s meeting.

This week’s busy month- and quarter-end calendar is busy with several reports on housing, consumer confidence, durable goods, final Q1 GDP, personal income and spending and Chicago PMI. Today began with the Chicago Fed National Activity Index for May (improved to -.05). The Dallas Fed Texas Manufacturing Outlook Survey for June is the only other release scheduled for today, and is due out later this morning. Tomorrow things pick up with the April S&P Case-Shiller Home Price Index, April FHFA Housing Price Index, June Consumer Confidence, and May New Home Sales. The midweek session brings May Durable Orders, May Advance International Trade in Goods, and some inventory numbers. Thursday sees the Q1 GDP (third estimate), Jobless Claims, and May Pending Home Sales before the week closes with May Personal Income and Personal Spending, the May PCE Price Index, and Final June University of Michigan Consumer Sentiment Index. We begin today with Agency MBS prices better nearly .125 versus Friday and the 10-year yielding 2.03%.

Many companies have written, and unwritten, job descriptions for Loan Officer Assistants. But here is rare film footage of an LOA actually doing their job.

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Residential Lending, Banks, and Market Share.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

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

June 22: The economy; California housing market; hedging servicing; learn from Supreme Lending’s ransomware attack

Not worried about computer issues? Your vendor(s) will take care of everything? Guess again. Baltimore was hacked, grinding the recording of documents to a halt. A Florida city will pay $600K ransom to hacker who seized computer systems weeks ago. In Texas, Supreme Lending, known to be “on top of it” when it comes to these matters, was attacked. And knowing the folks at Supreme, it came as no surprise to me that they wanted to help the rest of the industry. I received this note from Jeff Joyce, COO. “We at Supreme Lending saw your blog recently about the ransomware attack on the City of Baltimore. Earlier this month, Supreme Lending discovered that it was a victim of a ransomware attack, which encrypted and disabled our core information technology systems for a few days. We are going to host a call in the near future to share our own recent experience to alert our industry peers to the reality of these attacks.

“If you are an owner or CIO of an independent mortgage bank and would like to join Scott Everett, Founder and President of Supreme Lending, and his team on a call to learn more about the attack and how you may be able to prevent it from happening to your mortgage company, please email Rick Hogle, Supreme Lending’s Chief Strategic Officer, and include your name, company, title, email address, and phone number. We will include you in an invitation to the call once the date and time is set.”

Thoughts on servicing

Recently the commentary suggested asking loan servicers how their Mortgage Servicing Rights values are doing with this down move in rates. (Rates going down leads to early payoffs/increased prepayments, leading to assets running off of books.) In general those producing loans view their increased volume as a hedge against servicing run off, but the comment prompted MountainView Financial’s Matt Maurer to send, “For those that hedge the MSR asset, times are good. MSR hedge gain plus recapture opportunities and healthy pipelines. Probably about a third of overall MSR owners hedge, but more do than don’t that have larger MSR portfolios. If you are a bank and don’t hedge, you’re an outlier. For those that don’t, there are a couple of guys that feel like they have a production hedge and given their recapture capabilities and market share, they can make that argument. We think that there are a couple of larger non-bank MSR owners that should be hedging to manage some of their interest rate risk. It appears that the tail is wagging the dog, and they can’t originate their way out of the MSR loss they get when rates go down. These entities are feeling some pain right now as they have a business model is rate dependent.”

For folks who love demographic stats

The Federal Reserve seems to be in the news a lot. Is there really enough interesting economic news twenty-four hours a day, seven days a week, to support all those financial news stations?

Economists from Zillow have combined U.S. Census Bureau data and their own housing listings to show how much rental prices and home values have skyrocketed in areas across the country that are experiencing a tech boom. Utilizing the Census Bureau’s Longitudinal Employer-Household Dynamics Origin-Destination Employment Statistics that show the relationship between where people work and where they live, the group found that rent around the Seattle metro area had increased 17 percent from 2011 to 2015, triggering a supply and demand challenge. And between March 2012 and 2013, Facebook employees’ home values within four blocks of the company’s headquarters jumped 21 percent compared to 17 percent in other parts of the Bay Area. California housing has become so expensive people have been moving out to adjacent metropolitan areas, such as Dallas, Phoenix and Las Vegas where housing is cheaper. But as people have moved into these more affordable areas, affordability has changed. From 2006 to 2014, Dallas went from 46 percent more affordable than Southern California to 20 percent and Vegas and Phoenix dropped 25 percent to 15 percent over the eight-year period. Lyft and Uber are both public, and Airbnb and Pinterest are also on the verge of going public, meaning home values could move higher still, possibly causing an additional exodus.

Dallas Fed President Robert Kaplan delivered remarks for the Hoover Institution Monetary Policy Conference last month after the Federal Open Market Committee left the federal funds rate unchanged at a range of 2.25 to 2.5 percent. The Fed’s 2 percent inflation target is symmetrical, meaning the Fed doesn’t want inflation to run persistently below or above the 2 percent target, as sustained deviations could increase the likelihood that inflation expectations begin to drift or become unanchored, making it more difficult for the Fed to achieve its dual-mandate objectives of maximum employment and price stability. On a 12-month basis, overall inflation and inflation for items other than food and energy declined and are running below 2 percent, causing the Fed to continue to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective as the most likely outcomes going forward. Headline personal consumption expenditures (PCE) inflation, the Federal Reserve’s preferred inflation measure, has been running below the 2 percent target for most of the last seven years. The unemployment rate has been below the Congressional Budget Office estimate of full employment for two years. GDP growth is expected to be lower than growth in 2018, but sufficient to further tighten the labor market and cause the rate of wage growth to modestly pick up over the course of 2019. Some observers have suggested that this tight of a labor market should cause greater wage pressure, translating into greater price pressure.

Kaplan thought it would make sense to step back and explore some of the potential issues raised by recent weakness in headline and core inflation measures, particularly on labor slack, inflation expectations, and structural forces with regard to how they may be impacting the Fed’s ability to meets its 2 percent inflation objective. Many economists have argued that there may be more slack in the U.S. labor market than standard measurements are capturing, attracting and retaining previously under-represented groups in the workforce. Since 2015, increases in labor force participation have disproportionately come from under-represented groups, such as prime-age female population with less than a high school education, or black males and Hispanic females. Many workers on the sidelines were drawn in as a result of improvements in skills training, childcare availability and transportation availability. Kaplan warned central bankers need to be vigilant to the possibility that there is still the potential for inflation readings to firm substantially, with a time lag, if the degree of full employment overshoot becomes more sizable and persists for an extended period of time.

Another debate relates to the Fed’s ability to manage longer-run inflation expectations, as the Fed has clearly articulated a 2 percent PCE inflation target, helping to anchor inflation expectations. Kaplan argues an extended period of inflation running below the 2 percent target has caused expectations to have drifted lower, as reflected in the University of Michigan survey for inflation expectations, which has dropped over the last six years. Some economists argue that the Fed may need to do more to help keep inflation expectations well-anchored, such as further convincing the public that it is committed to a symmetrical 2 percent inflation target.

An additional area of exploration deals with structural changes in the U.S. and global economies, as the forces of technology, technology-enabled disruption and, to some extent, globalization, limit the pricing power of businesses and mute inflation. The impact of these trends means that companies, depending on the industry, often have much less pricing power than they did historically, causing companies to invest even more in technology that replaces people and, increasingly, taking actions to achieve greater scale in order to effectively manage the investment and margin implications of these trends. The net result is that, in a range of industries, if there is wage pressure, companies are just as likely to see margin erosion versus being able to pass these costs on to the customer. This would suggest that powerful structural changes in the economy may be an important aspect of more muted price pressures, and there may be some evidence in recent productivity statistics that new technology and greater economies of scale could be helping to dampen growth in unit labor costs.

As California goes, so goes the nation?

California’s housing affordability crisis has been eating away at housing demand for some time, but trade and foreign direct investment slowed abruptly in California during the latter part of 2018, potentially signaling trouble for the rest of the nation. Single-family home sales in March were down year-over-year in every major region tracked by the California Association of Realtors, including sales in Southern California down 10.5 percent year-over-year and Northern California down 10.8 percent year-over-year. Most of California’s largest cities and coastal markets were already densely populated when the recovery began and home to some of the most restrictive development laws, making supply more inelastic.

This steep supply curve means small changes in demand result in large changes in price. The influx of new investment from tech, entertainment and overseas investors boosted the demand for housing much more than it did supply. But recently, inventories have climbed across every region of California, and homes are staying on the market longer. California home appreciation in March clocked in year-over-year at a paltry 0.2 percent, compared to 8.9 percent just a year ago.

Tax reform is also weighing on California’s housing market. The new law limits the deductibility of mortgage interest payments to $10,000, thereby reducing tax incentives for ownership of higher priced homes. The most recent measure of housing affordability from the California Association of Realtors indicates that just 28 percent of California households could afford to purchase a median priced single-family home in Q4 2018.

All these factors have exacerbated the flow of residents out of California. Lower sales and slower price appreciation suggest years of price gains and a mismatch between where people want to live and where more affordable housing options can be built have finally reached a tipping point. Years of under-building have rendered the housing stock inadequate for the number of households. And though apartment construction has been very strong since the recession, much of the growth has been limited to luxury or lifestyle units aimed at well-to-do workers in California’s largest urban areas.

California remains the stage on which many of the largest economic, political and regulatory battles first play out, meaning other tech hotspots such as Seattle, Denver and Austin, are increasingly resembling California and it will be interesting to see how home affordability plays out in those cities.

(Thanks to Stephen S. for this one.)

John, who lived in the north of England, decided to go golfing in Scotland with his buddy, Ken.

So they loaded up John’s minivan and headed north. After driving for a few hours, they got caught in a terrible blizzard. So they pulled into a nearby farm and asked the attractive lady who answered the door if they could spend the night.

“I realize it’s terrible weather out there and I have this huge house all to myself, but I’m recently widowed,” she explained, “and I’m afraid the neighbors will talk if I let you stay in my house.”

“Don’t worry,” John said. “We’ll be happy to sleep in the barn. And if the weather breaks, we’ll be gone at first light.”

The lady agreed, and the two men found their way to the barn and settled in for the night.

Come morning, the weather had cleared, and they got on their way. They enjoyed a great weekend of golf.

But about nine months later, John got an unexpected letter from an attorney. It took him a few minutes to figure it out, but he finally determined that it was from the attorney of that attractive widow he had met on the golf weekend.

He dropped in on his friend Ken and asked, “Ken, do you remember that good-looking widow from the farm we stayed at on our golf holiday in Scotland about 9 months ago?”

“Yes, I do,” said Ken.

“Did you, um, er, um, happen to get up in the middle of the night, go up to the house and pay her a visit?”

“Well, uh, yes!” Ken replied, a little embarrassed about being found out, “I have to admit that I did.”

“And did you happen to give her my name instead of telling her your name?”

Ken’s face turned beet red and he said, “Yeah, look, I’m sorry, buddy. I’m afraid I did. Why do you ask?”

“She just died in an untimely accident but left me everything in her will.”

(And you thought the ending would be different, didn’t you?…

you know you smiled…now keep that smile for the rest of the day!)

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Are You Ready for CECL?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

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

June 21: LO, UW jobs; non-agency product; Fannie/Freddie updates; VA IRRRL reminder/clarification

That mortgage prices change every day, and often during the day, is about as surprising as sheriffs finding marijuana on Willie Nelson’s tour bus. Price changes have an immediate impact, and I knew that I’d receive plenty of phone calls from “the street” when a CEO told me to increase prices when the market hadn’t moved. Correspondent and wholesale investors have ratcheted up margins in the last month or so in order to slow volume down due to capacity constraints. Freddie Mac and Fannie Mae can easily encourage, or discourage, lenders from originating certain products. Now the jungle drums are saying that Freddie Mac will tweak its pricing for some lenders in order to lessen its competitiveness, pricing that it put in place leading up to the implementation of the UMBS (Uniform Mortgage Backed Security) this month. But hey, don’t take my word for it – ask your Freddie rep. Maybe it’s just a rumor. More F&F news below.

Jobs

Bayview Loan Servicing, LLC is an industry-leading, top-rated residential mortgage loan servicer and we are hiring! We have openings in our Originations Fulfillment team.  If you are ready to take your career to the next level, we want to hear from you. We are seeking Consumer Direct processors in Horsham, PA, Charlotte, NC, and Tucson, AZ.  If you are a closer or an underwriter, we have positions available in Tucson, AZ, and will accept remote underwriters. Contact us today to learn more.”

“All loan officers want to work with amazing, collaborative Operations teams. So what makes our Citizens Bank Home Mortgage Operations team so special? We work in pod structures – with a loan officer, processor, underwriter and closer – all in one pod, from start to finish for every loan. Our regionalized Ops hubs are never far from our loan officers who get to the. Our Ops teams are led by leaders with deep industry experience. If you care about Operations as much as your sales career, apply at Citizens Bank today. If you’re looking to build your future with a company that is winning in the mortgage marketplace, apply at Citizens Bank today! For questions, please email Home Mortgage Recruiting.”

Out of New York comes news that independent mortgage lender Nationwide Mortgage Bankers, Inc. brought on Jodi Hall as President to the organization to lead and direct the day-to-day operations of all departments within the company.

Lender services and products

If you’re planning to attend the MBA Western Secondary in San Francisco, July 15-17, be sure to set up a meeting with the TMS CAREspondent Team. Learn how using Ellie Mae Compass Investor Connect with TMS can help you save time and money and how eMortgages can grow your business. Reach out to your Carespondent VP or email

carespondent@themoneysource.com to set up a time!

Join John Gibson, EVP of Wholesale Lending at Caliber Home Loans, Inc., for an in-depth look at the new Caliber Smart Start! This tool is considered a game-changer when it comes to originating non-agency loans. Smart Start allows our broker partners to grow and move their pipelines faster by validating loan parameters against Caliber Portfolio Lending program guidelines. Join Caliber on Tuesday, June 25th from 1:00-1:30 CST. Click here to register now.

VA IRRRL clarity: A good thing

Surprisingly some lenders have been doing IRRRLs that they think are exempt from the 36 month recoupment (the date of the loan note) because the term was reduced. Perhaps the VA regional loan centers have been giving different guidance? Don’t give the industry another black eye by skirting the issue. Regardless, with refi pipelines brimming the Mortgage Bankers Association issued the following clarification to its members yesterday: “It has come to our attention that there is some confusion in the industry regarding the fee recoupment requirements for VA IRRRLs. Questions have arisen as to when the 36-month fee recoupment requirement is applied to VA IRRRLs, and whether an increase in the principal balance of the loan or the monthly payment (e.g., because of a reduced term) impacts this requirement.

“In response to some of the inquiries we have received, we reached out to VA Loan Guaranty Service staff for clarification. Below, we are sharing the input that we were provided by VA Loan Guaranty Service staff. In their view, the 36-month recoupment requirement must be met for all VA IRRRLs.

“To give a little more detail, we were told that this requirement is in place regardless of whether the principal balance on the loan increases, decreases, or remains flat. With respect to monthly payments, we were told that IRRRLs must result in lower regular monthly payments so as to allow the borrower to recoup costs/fees within 36 months. If there is an increase in monthly payment, recoupment of any costs/fees cannot be satisfied.

“While an earlier VA circular (26-18-1) did provide an exemption from fee recoupment in certain situations (such as term reduction), we were told that the more recent VA circular (26-18-13) is the binding constraint in this case. We understand that VA is in the process of consolidating its IRRRL guidance, which we hope will provide further clarity for the industry shortly.”

Conventional conforming shifting sands

Don’t forget that the GSEs announced that the optional use period for the URLA will NOT begin July 1, 2019. The effective date of the form will be revised, and an updated version will be provided at a later date. Over the coming weeks, FHFA will engage with appropriate stakeholders and agencies to finalize issuance of an updated URLA form, corresponding datasets and a new implementation timeline. Word has it that the FHFA is trying to head off borrower confusion regarding the language portion of the form. After all, when someone checks “Norwegian” will they expect the lender’s docs, and the servicer’s, and the Agencies, and the bank’s if a checking account is established, documents all to be in Norwegian? I think not.

The Homeownership for DREAMers Act, legislation was passed to clarify that Deferred Action for Childhood Arrivals (DACA) recipients cannot be denied mortgage loans backed by FHA, Fannie Mae, Freddie Mac or the U.S. Department of Agriculture (USDA) solely on the basis of their DACA status. This bill was introduced by Rep. Juan Vargas (D-CA). It was passed by a bipartisan vote of 33 to 25. This bill was passed in response to a recent HUD clarification in a letter sent to Representative Pete Aguilar (D-CA) that stated that “DACA recipients remain ineligible for FHA loans.” HUD policy, currently reflected in HUD Handbook 4000.1, provides that “[n]on-U.S. citizens without lawful residency in the U.S. are not eligible for FHA-insured Mortgages.”

Plaza’s all new High Balance Access program will now allow gift funds per Fannie Mae guidelines, including the allowance of all funds for down payment or closing costs to be gift funds for 1-unit primary residences, regardless of LTV.

SunWest is offering the Fannie Mae Student Loan Cash-Out Refinance Program to its Wholesale and Correspondent Channels. This program is a cost-effective alternative to use existing home equity to payoff student loan debts, potentially reducing borrower’s monthly debt payments. Unlike Standard Cash-Out refinance, this program allows no Loan Level Pricing Adjustment (LLPA) for cash-out refinance. Program guidelines are available in AllRegs (Wholesale, Correspondent).

Freddie Mac issued the Single-Family Seller/Servicer Guide Bulletin 2019-13 about the deferred June 10, 2019, effective date of the mandatory cash contract extensions in Loan Selling Advisor®.  Additionally, Guide Bulletin 2019-12 was issued regarding updates to DIL of Foreclosure, STOS and Escrow.

Fannie Mae has created two new job aids to help lenders use Desktop Underwriter® (DU®):

the Debt-to-Income (DTI) Ratio and Total Expense Ratio < Housing Expense Ratio Error job aids.

Fannie Mae published SVC 2019-04 with updated information that simplifies and clarifies requirements for release of property requests and investor reporting requirements.

Freedom Mortgage Wholesale has faster and easier Condo approval with its Condo Advantage. Plus, FMW will pay the Condo Questionnaire fees (available for a limited time).

US Bank Correspondent/HFA updated its Seller Guide SEL-2019-018 to reflect Home Possible® and Home Ready® Financed Properties changes from FHFA. Additionally, it has issued a bulletin regarding Upcoming Changes with AllRegs Modernization.

Capital markets

As this U.S. expansion nears the longest ever, we examine the indicators that define a recession. (Certainly European and Asian economies are not doing as well as ours, contributing to the low rates here.) A U.S. recession is coming, it’s just a question of when but probably not this year, and it impacts asset allocation by investors. Dating the economic cycle is not easy as there have been 12 U.S. recessions since 1945 that have lasted, on average, 11 months. Which if you do the math, since WWII, more than 85% of the time the economy is in expansion.

If the U.S. economy is still in expansion in July as we expect it to be, this will become the longest U.S. economic expansion on record, surpassing the one that lasted 120 months ending in 2001. In the lead-up to the financial crisis in 2008-2009, there were very few economists calling for recession, let alone the worst contraction in output since the Great Depression. Some economists may have been reluctant about calling a recession, as though imbalances in the economy can be identified in advance, pinning down the precise date for when those imbalances lead to recession requires advance knowledge of what the initial spark will be. There is little upside for economists, as if the call does not go your way, you are accused of “crying wolf,” and if 85% of the time the economy is in expansion, why chance it? Well, it’s their job.

The length of this expansion alone implores a hard look at when the next recession may strike. Risks are mounting and early warning signals of a recession keep popping up with global growth slowing, the Fed teetering on restrictive monetary policy, the leading economic index (a key yardstick for the direction of the economy) losing momentum, and perhaps most ominously, an inverted yield curve , which has preceded each of the past seven recessions. It turns out the official call of “recession” is up to the National Bureau of Economic Research whose dating committee determines the start and end dates for each cycle. It considers recession to be “a significant decline in economic activity…normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.” The next recession is coming, it is just a question of when. Eventually those predicting it will be right. But they aren’t now.

U.S. Treasuries continued to rally yesterday, but intraday action stalled near the day’s opening levels despite geopolitical uncertainty rising with reports Iran shot down a U.S. drone that was conducting surveillance over the Strait of Hormuz. The 10-year broke below 2 percent before pulling back to close -3 bps to 2.00 percent. Adding to the uncertainty were reports the U.S. may impose sanctions on Turkey if the country follows through with its plan to purchase a missile defense system from Russia. Thursday also saw a slew of central bank news, with the Bank of England voting unanimously to leave its bank rate and the purchase program, as expected, though the central bank lowered its forecast for Q2 GDP growth in the U.K. Reserve Bank of Australia Governor Philip Lowe said it is not unrealistic to expect another cash rate cut. And the Bank of Japan made no changes to its policy stance, but one dissenter called for more easing.

Today finally sees the resumption of Fed speakers as the Boston Fed releases the text of remarks by President Rosengren on the causes of the Japanese financial crisis, and we have already had Bloomberg interview Fed Vice Chair Clarida in Washington. Fed Governor Brainard and Cleveland Fed President Mester also speak at a Policy Summit, and San Francisco President Daly will host a podcast. Later this morning, Markit will release flash June readings for their Composite PMI, Manufacturing PMI and Services PMI. At the same time, May existing home sales will be released with markets expecting a slight increase from April. We begin today with Agency MBS prices a shade higher versus Thursday’s close and the 10-year yielding 2.02%.

(Happy Summer Solstice! Enjoy the amount of daylight as it decreases from here on out.)

Summertime is finally here,

That old ballpark, man, is back in gear.

Out on 49,

Man I can see the lights.

School’s out and the nights roll in,

Man, just like a long-lost friend

You ain’t seen in a while,

And can’t help but smile.

And it’s two bare feet on the dashboard,

Young love and an old Ford,

Cheap shades and a tattoo,

And a Yoo-Hoo bottle on the floorboard,

Perfect song on the radio,

Sing along ’cause it’s one we know.

It’s a smile, it’s a kiss

It’s a sip of wine, it’s summertime

Sweet summertime.

Temperature says 93,

Down at the Deposit and Guarantee.

But that swimmin’ hole,

It’s nice and cold.

Bikini bottoms underneath

But the boys’ hearts still skip a beat

When them girls shimmy off

Them old cutoffs…

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Are You Ready for CECL?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

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

June 20: LO jobs; database sales, closing costs products; lender-related M&A rolls on; what is moving rates

“Enable” is such a vague, over-used tech term. The same with “repurpose.” But over the next 10 years Google is going to “repurpose” (aka, re-zone) a lot of land and plans to invest $1 billion to “enable” the development of 20,000 new homes in the San Francisco Bay Area, including more than 5,000 affordable housing units. Hope they throw in some mixed-use projects because the Bay Area doesn’t need more people driving somewhere. Speaking of growth, among the 15 cities or towns with the largest numeric population gains between 2017 and 2018, eight were in the South, six were in the West, and one was in the Midwest, per the U.S. Census Bureau. Phoenix was at the top of the list with an increase of 25,288 people, followed by San Antonio (20,824); Fort Worth (19,552); Seattle (15,354); and Charlotte (13,151).

Jobs & promotions

Award-winning First Community Mortgage just unveiled its newest technology: A robust marketing operating system, integrated with our other advanced technology to make your job easier and grow your business. “This system gives us the edge over our competition. Put powerful tools in the hands of your referral partners, bringing them immense value through co-branded marketing, single property websites, open house registration pages, and so much more! Allow the system to work for YOU. Human Mortgage by First Community Mortgage is the perfect place for loan originators to thrive. Our experienced support staff and advanced technology help streamline the mortgage process. Those interested should apply through the First Community Mortgage careers page. We have branches throughout the southeastern United States. However, we are always looking to grow with the right ‘humans,’ no matter your location. If you have the experience necessary and an interest in discussing opening a new branch, reach out to Brandon Sandefur, EVP.”

Congratulations to Austin Niemiec on being named the new Executive Vice President of Quicken Loans Mortgage Services (QLMS). He started as a mortgage banker at Quicken Loans 10 years ago and has gained the focus that only comes from working with thousands of clients. Austin has spent the last two years leading the Account Executives at QLMS through a period of rampant growth. Bob Walters, President and Chief Operating Officer of Quicken Loans, had this to say: “QLMS couldn’t be in better hands as it writes the next chapter in its story of innovation, client service and success. Austin lives by the motto ‘Always grateful, never satisfied.’ That combination of gratitude for past successes, along with a searing desire to consistently innovate and improve, is powerful and will serve QLMS well.” If you don’t work with the fastest-growing mortgage lender serving the needs of mortgage brokers, connect with QLMS here.

Ready to make your move from retail LO to independent mortgage broker? The time has never been better. At BeAMortgageBroker.com, we can match you with a mortgage broker in your area or help you take the next steps toward opening your own shop. We are your single, no-cost source for the information and tools you need to become an independent mortgage broker. Call us for a free, confidential consultation and continued support throughout the process at 800.229.6342 or learn more at BeAMortgageBroker.com.

Lender products and services

AFR offers an impressive range of value-added services to our broker partners, including: access to the secure online AFR Loan Center (which allows you to monitor and manage your loan pipeline 24/7 from virtually any device), free AFR University Training and Certification in unique programs for Manufactured Housing, Renovation Lending and One-Time Close construction, complimentary On-Demand Processing, so you can remain focused on production, automatic notifications when a house you closed with AFR is listed for sale or when AFR receives a payoff request, and integration with various broker-focused origination platforms. In addition, AFR offers an Alexa skill that allows you to check things like expiring rate locks and find out which loans have recently closed — all without lifting a finger. If those weren’t enough reasons to partner with AFR, you can find even more by visiting www.afrwholesale.com. Questions? Email sales@afrwholesale.com or call 1-800-375-6071.”

Where are the highest closing costs? According to the 2018 Annual Closing Cost Report from ClosingCorp, states with the highest closing costs, including taxes were District of Columbia ($24,613), New York ($13,581), Delaware ($13,309), Washington ($12,667) and Maryland ($11,395). And, the national average for a single-family property was $5,779, including taxes. Download the report, here or contact media@closing.com for more information.  

Webinar: See Blend’s lender toolkit Join Blend next week (6/27) to learn how Blend is equipping mortgage originators with cutting-edge tools to meet homebuyers’ rising expectations. Don’t miss out – Sign up now.

In today’s environment while deals are flowing like the Nile River it’s easy to forget that slower times are coming so making a decision that’s best for your company’s future is really hard. Think about Maslow’s Hierarchy of needs. The foundation of Maslow’s Hierarchy is all about basic needs – Food, Water, Warmth, Rest, Security and Safety. Do what the smartest lenders are doing and turn your database into a farm. On average a borrower will have 11.4 mortgage related transactions in their life, so if you have 50,000 records in your database you actually have more than 500,000 transactions at your fingertips. Lenders that are using Sales Boomerang have originated over $1B in new loans this year and 100% of these loans have come from within their own database. Fulfil the basic needs of your company FOOD (deals) and Security (consistent opportunities) and schedule a demo today.

Company moves

Don’t forget that the new BB&T and SunTrust merger name is Truist, fun for automatic spell checkers. (But wait: Truliant, a North Carolina credit union, is suing over the name. I’m sure they’ll figure it out.)

Ditech Holding Corp., which filed for bankruptcy in February, has reached two separate deals with buyers for its forward and reverse mortgage servicing and originations businesses. Publicly traded real-estate investment trust New Residential Investment Corp. (NewRez) will acquire assets of Ditech’s forward mortgage servicing and originations business Ditech Finance LLC, while Mortgage Assets Management LLC will buy the stock and assets of the company’s reverse mortgage business, Reverse Mortgage Solutions Inc.

U.S. regional bank Prosperity Bancshares Inc. is acquiring Plano, Texas-based LegacyTexas Financial Group Inc. for $2.1 billion, creating the second-biggest bank by deposits in the state. Most know LegacyTexas from its wide-ranging successful warehouse operation. The deal is expected to strengthen Houston, Texas-based Prosperity’s foothold in North Texas cities as well as in and around the Dallas-Fort Worth area. As of March 31, 2019, LegacyTexas held assets worth more than $9 billion, total loans of $8.1 billion and total deposits of $7.1 billion, while Prosperity held $22.35 billion in assets and $17.2 billion in deposits.

We also had the news that Pretium, a specialized alternative investment management firm focused on residential real estate, mortgage finance and corporate credit, and Varde Partners, a global alternative investment firm, inked an agreement for Pretium to acquire Deephaven Mortgage from Varde.

Capital markets

The value of negative-yielding bonds has reached a record $12.5 trillion, Bloomberg data shows, surpassing a 2016 peak after the European Central Bank hinted quantitative easing might resume. And in the United States the yield on our 10-year T-Note dipped below 2% for the first time since November 2016. Fed Funds don’t drive mortgage rates, but the same factors move both in a similar direction. What’s going on out there?

Jobs data has been mixed lately with May’s disappointing jobs report juxtaposed with unemployment claims and the latest JOLTS showing continued strength. (The JOLTS report showed that there are currently 7.5 million job openings and 5.6 million unemployed; the 14th consecutive month where openings exceeded unemployed. 54 percent of employers have reported not being able to find qualified applicants to fill open positions according to the latest NFIB survey a skills gap is leaving many positions unfilled.) On the other side of the Fed’s dual mandate, inflation remains in line or below the Fed’s targeted levels with both the Producer Price Index (PPI) and the Consumer Price Index (CPI) rising less than expected last month. Tariffs remain a hot topic and so far, the data suggest that Chinese suppliers have been absorbing most of the increase costs as import prices fell 0.3 percent in May. This leaves the Fed in a good position when it comes to interest rate policy after analyzing both parts of its dual mandate. Since inflation remains below target, there would be room move rates lower if they saw fit to maintain the current expansion.

Should central banks be worried as fears of deflation have gained traction with the global economy now showing signs of a synchronized deceleration? Analysts have found that the most likely scenario for the global economy is that inflation will continue to run well below historic levels in a “deflationary pressure” scenario, though in the United States, inflation should remain “stable,” not meaningfully above or below the Federal Open Market Committee (FOMC)’s 2% target, evidenced by the FOMC taking a more “patient” stance on future policy tightening at their January meeting this year.

Internationally, inflation is most likely to remain at or below the ECB’s and BoJ’s desired rates in the near term, with the probability of an inflation overshoot quite low in both regions. The risk of an inflationary scenario in the U.S. has diminished, along with the probability of a meaningful overshoot, neither of which has been lost on the Fed. The lower risk of too-high inflation was noted in the January FOMC meeting minutes and highlighted by Chairman Powell in his post-meeting press conference as a reason for the FOMC’s pivot to a more dovish policy outlook.

Yet a real fear of deflation seems a bit premature, suggesting that the FOMC can indeed afford to be “patient” with further adjustments to the fed funds rate, as the committee pledged in January. An uptick in inflationary pressure/stable prices probabilities along with declining deflationary pressure probabilities can be viewed as a strong signal of that particular price scenario for the global economy in the near term. In real time, the highest probability event is that the stable prices scenario unfolds for the global economy in 2019, allowing the world’s major central banks to dial back their tightening plans amid slower growth and little chance of an inflation overshoot in the near term. But as the risk of deflationary pressure has not risen notably enough, the Fed, ECB or BoJ will need to meaningfully reverse direction., a cause for patience in the near term.

The Fed yesterday indicated a readiness to cut interest rates for the first time in more than a decade to sustain the near-record U.S. economic expansion, citing “uncertainties” in its outlook. The official vote left the Fed Funds target unchanged at 2.25-2.50%, although St. Louis’ Bullard did vote for a 25-bps cut. The statement included the language that the Fed “will act as appropriate to sustain the expansion,” which was viewed as opening the door for a rate cut at the next meeting in July. While the statement cited a still-strong labor market and pickup in consumer spending, continued weakness in business investment and soft inflation tilted the overall tone to the dovish side. The Fed clearly now sees increased uncertainties for continued economic expansion. Separately, the central bank made clear it thinks the law is on its side if President Trump took the unprecedented step of trying to remove Jerome Powell.

Dr. Mike Fratantoni, legendary MBA SVP and Chief Economist, commented on the latest Fed statement, saying “The (Fed) recognized that the economic outlook has become more uncertain, particularly given the weakening in business activity in recent months, both in the U.S. and abroad. The economic projections produced by the FOMC in conjunction with the meeting, however, tell a somewhat different story. The median forecaster on the committee now projects rates to hold steady in 2019, with one rate cut in 2020. Looking at the range of forecasts, there are a number of members who are considering cuts as warranted both this year and next. Markets are going to have a difficult time digesting these mixed messages, as it indicates that the Fed recognizes the slowdown, but is not yet committed to cut rates this year. Thus, mortgage rates may be more volatile in the months ahead, which could both provide refinance opportunities for some homeowners, while causing potential homebuyers to pause amidst the uncertainty.”

U.S. Treasuries responded with gains across the curve, though the curve is steeper, mortgages are tighter and spec pools have improved, with 2/10s now almost 8 bps steeper and 2/30s over 10 bps steeper. The U.S. 10-year closed -3 bps to 2.03 percent as it continues to creep below 2 percent. Fed funds futures market now sees a 100% implied likelihood of a rate cut in July, with the implied probability of another cut in September standing at 80.0 percent

After all that to digest from the FOMC decision, today has seen central bank decisions from the BoJ & BoE. Both were expected to keep policy unchanged. The U.S. calendar just kicked off with weekly initial claims (-6k to 216k) and the Philadelphia Fed Business Index (.3). Later this morning, markets will receive May Leading Indicators. As the world continues to look at the Fed’s announcement yesterday, we begin today with Agency MBS prices better .125 and the 10-year yielding 2.01%.

Hey, l like optical illusions as much as the next guy (like a piece of pie that doesn’t appear to be larger than my stomach until I start eating it). For fans of optical illusions, here’s a good one with a video of how it works.

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Are You Ready for CECL?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

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

June 19: MLO jobs across the nation; credit product; primer on current prime jumbo securitization market

Good loan officers pay attention to demographics. For example, according to a new report from the United Nations, the population of the planet could rise from its current 7.7 billion to 10.9 billion by the year 2100. This is a downward adjustment from the last U.N. prediction due to a decrease in the global fertility rate. In the U.S., where are the less-populous metro areas that are gaining the most people? Cities among the 10 largest metros by numeric growth since 2010, but not among the 10 most populous, include Phoenix (third), Seattle (seventh), Austin (ninth), and Orlando (tenth), according to U.S. Census Bureau. Phoenix, has gained an estimated +665k people since 2010, primarily attributed to domestic migration, much like Austin (+452k). Seattle (+500k) and Orlando (+439k) saw more of an international influx of residents.

Jobs & promotions

Thrive Mortgage has strengthened its position as a growing national lender in the Midwest and Eastern states. Industry veterans Adam Galbraith and Loren Riddick have taken over management leadership positions in key growth states. Galbraith is well known for building successful teams throughout the Midwest and will join Thrive as the Regional Manager covering Michigan, Illinois, Indiana, Ohio, and Kentucky. Riddick, renown as a national speaker in both the Reverse and Forward marketplaces, will spearhead Thrive’s growth in the Reverse Mortgage market nationwide. When asked what prompted his move, Riddick replied, “For me, the leadership, the amazing model, and the culture of Thrive were the most attractive assets of the company. My team and I are thrilled to be a part of such exciting growth.” For more information on available positions or to speak with members of our leadership and recruiting teams, please visit join.thrivemortgage.com.

ClearEdge Lending continues to grow its Sales team in the Southeast and on the West Coast! The company recently added Monique Chevalier to their West Coast team (South Orange County) and Rust Hilsman in the Southeast (South Carolina). Both bring over 30 years’ experience and will help continue to expand the company’s Non-QM presence. ClearEdge is growing at a rapid pace and both talented leaders bring extensive experience and knowledge in the wholesale lending industry. “We are excited to have Monique and Rust join the ClearEdge team and see them deliver service beyond expectations in every aspect of our business,” notes Steve Skolnik, CEO. ClearEdge Lending is service driven and sets itself apart by focusing on simplicity and speed at point-of-sale. Those interested in a growth-oriented career with ClearEdge Lending should email John Burns for outside sales positions in GA, FL, NC, TN and Matt Shaw in CA & AZ.

Caliber Home Loans, Inc. is Scotsman Guide’s #2 lender for Top Overall Volume (2018) and home of the modern mortgage originator. On top of providing its Loan Consultants with a product portfolio for today’s housing market, Caliber equips its Loan Consultants with proprietary technology resources to support all aspects of their business! From automated marketing campaigns to streamlined VOE, VOI and VOA to mobile apps that enable business on-the-go, Caliber Loan Consultants can communicate with today’s borrowers and get their loans to closing. Caliber builds technology that puts its producers ahead of the competition, and is positioned for success in 2019 and beyond. Producers who want to join a modern mortgage lender like Caliber can email Jeremy DeRosa or visit its website.

GSF Mortgage Corporation (GSF) is proud to announce Robert Stephens has joined the Construction Lending Division as SVP of Sales and will have a focus on growing GSF’s Single Close Construction program. Robert will be responsible for driving revenue for GSF’s Construction Lending Division, through its various channels of origination. Prior to joining GSF, Robert held a role at American Financial Resources (AFR) where he specialized in one time close and renovation loans. Robert is an expert in product training, relationship building and promoting homeownership within the growing area of home construction. As GSF continues to grow its Single Close Construction program, Robert will play an integral role in GSF’s ongoing success and with its home construction programs. If you are an LO interested in learning more about GSF Mortgage Corporation’s Construction lending philosophy, products, or culture, please reach out to Managing Director of Construction Lending, Rudy Marquez.

If you’re a Branch Manager or Loan Originator and you’re generating your own business, then you get to pick your own compensation level when you originate for MortgageRight! In addition to an immediate pay raise, we also offer upfront marketing funds, a high-performance personal assistant, and a dedicated in-house production team – all designed to help you skyrocket your income even further!  If you’ve been losing loans due to pricing and getting stuck micro-managing your files with no time to go develop new referral relationships, give us a call to see how you could leverage our proven systems to help you double your income this year! MortgageRight is the home of the aggressive compensation platform for producers who are looking to 2X their income. If you’re a producer whose business is completely self-generated, call Alvaro or Mike at (800) 603-1450 or check out the opportunity post here to learn more about this unique opportunity to run your mortgage business on a true P&L.

NEXA Mortgage is the nation’s fastest growing Mortgage Broker. We are leading the way out of retail with growth across the country. If you are a LO, BM, or TL, contact NEXA now to experience why brokering is better. Loan Officers can double their production within the first 3 months. Best in industry support, compensation, underwriting (you don’t really believe brokers lose control), rates, products, leadership, marketing, technology and processing (you will love our processing). Mark your calendars now to join our weekly ‘WHY NEXA’ Zoom meeting, Thursday at 11am PST. Login on to NEXA Support; www.NEXAmortgage.com/support and our support staff will place you in the meeting. If you can’t wait to learn more, login now and ask for Michael Neill. Currently in 9 states, submitted in 14 more, and will add any requested. NEXA Mortgage, the lender in WHY Brokering is Better!”

Congrats to Michael Powell. He is Arkansas Simmons Bank’s new mortgage division president overseeing all aspects of Simmons’ mortgage process.

Lender products & services

July is going to be a big month for the industry as we head into the third quarter of the year. This month, the Informative Research team will be at a few conferences to talk about how you can decrease your upfront credit spend by at least 40%, avoid getting your leads poached by competitors, and help reduce your non-recoverable fees. So if you’ll be in the Big Easy for the Ultimate Mortgage Expo, get in touch with Informative Research’s VP of Client Success Damon Paxson so he can talk you through our full-proof spend strategy. Not going to New Orleans? Informative Research will also be at the Western Secondary Market Conference in San Francisco from July 15-17th! Reach out to meet up and discuss how you can take the pressure off your expenses with one vendor, fewer fees, and better service.

Capital markets

The news yesterday that Pretium is acquiring Deephaven Mortgage from Värde Partners reminded me that it would be a good time to look at the securitization market.

Since the financial meltdown of the subprime mortgage market from 2007 to 2008, we have seen very little private equity purchases of mortgage backed securities (MBS) and the federal government now invests in over 90% of mortgages in the U.S? As jumbo, ARM, and non-QM go into the books, and owners avoid the cost of securitization, other funded mortgage loans are pooled with other mortgages of the same rate and term (e.g. 30-year fixed at 4.25% would end up lumped together), packaged as an MBS, and sold to an investor like Fannie Mae and Freddie Mac. Or insurance companies, pension funds, banks. The investor sets guidelines for how the loans they buy should be underwritten. It’s common for a single MBS to have multiple investors, similar to how a stock has many owners.

(Let’s not confuse the selling of MBS with the selling of loan servicing. The lender or broker that closed the mortgage is often not the company where the monthly payments are sent. The holder of the servicing rights did not finance the full amount, with the financing still coming from the secondary market. The investor pays the servicer for collecting the loan payments, receiving the interest income on the loan.)

A mortgage backed security works the same way as a traditional bond, with the rate moving inversely to the price. A higher rate MBS pays more to the investor, as it is more likely to pay off early through a refinance. Conversely, a lower rate mortgage, while paying less, is more likely to be held all the way to maturity, making it a more valuable asset to a mortgage servicer. Any time a loan pays off, the servicer loses the fee income from the investor.

Mortgage rates balance between what a borrower can afford to pay for his or her loan, and what the investment community is willing to accept as a return on investment based on the perceived risk of the borrower. Post-subprime crisis, the Federal Government stepped in to fill the void in the secondary mortgage market as individual investors grew unwilling to risk their capital on mortgage backed securities with low rates. This prevented rates from rising to the point of crippling affordability, though it remains to be seen whether the government will be able to gracefully exit the mortgage market and private investment can return to fill the void.

But what about the prime jumbo securitization market? Non-lender investors still want to own the securities, although the actual securitization procedures took a little break in 2008 and 2009 until it started back up in 2010 with Redwood Trust. Since that time lots of high-quality collateral has been securitized in annual amounts ranging from $4 billion to $17.5 billion, depending on demand by investors.

And those investors, with well over a hundred known buyers of prime jumbo securities, encompass a broad group and buy pools ranging from $1 million to over $100 million. They include regional banks, insurers, and pension funds. The number of investors has led to consistent, usually predictable pricing with investors preferring simplicity (versus the complexity of 2006 and 2007’s esoteric pooling). Interestingly, issuers report that not only is the rep & warranty work paying off, which investors appreciate, but 90-100% of loans have had due diligence done on them. It is possible that over time sampling will increase to decrease review costs for established issuers, but we know where that got us ten years ago. And delinquency and foreclosure rates are very low.

And don’t forget high balance conforming production. Agency MBS cap pools at 10% of this product, so what happens to the rest? Excess high balance loans that don’t go into TBAs (generic to-be-announced securities) go into other delivery vehicles that often trades like jumbo securities. The Agency Gfees are still high, and private label securities offer better execution, especially if loans have other loan level pricing adjustments less than Agency hits. LLPAs for agency product can go to 2 points or more, and so some larger lenders are doing private securitizations and taking advantage of the execution arbitrage.

Looking at the recent interest rate market, recall that last week set the stage for activity this week. U.S. Retail Sales increased 0.5 percent in May, and when accounting for inflation, retail sales were up 1.4 percent from May 2018 – not much. Industrial production reversed April’s downturn and improved 0.4 percent in May and Capacity utilization also increased to 78.1 percent, but is still off the peak of 79.6 observed in November 2018. Inflation data remains below the Fed’s target with both consumer and producer inflation up 1.8 percent year over year in May. At the core level, consumer inflation was up 2.0 percent year over year while core producer inflation was up 2.3 percent. The recent economic uncertainty and been a blessing for mortgage rates and total mortgage applications were up 26.8 percent for the week ending June 7, led by a surge in refinance apps. There has been plenty talk lately about the Fed potentially lowering interest rates this year and markets will be looking for guidance as to that possibility following this week’s FOMC meeting. While no change in monetary policy is expected this time, perhaps the Fed will alter its language from “patience” to potential change.

Yesterday the European Central Bank’s Mario Draghi got things rolling when he said the ECB would provide further stimulus if inflation does not head towards target. An unnamed ECB source said that a rate cut would be the central bank’s preferred way of providing stimulus. It was actually the President’s tweet regarding a “very good telephone conversation with President Xi” and an “extended meeting” they would have at next week’s G-20 meetings that kicked equities higher and pulled back bonds. U.S. Treasuries ended Tuesday hanging on to their rally despite a pullback from highs that were notched during the initial 30 minutes of the session, the 10-year closed yielding 2.06%.

Today’s calendar kicked off with mortgage applications from the MBA for the week ending June 14, down -3.4 percent from last week. The prior week’s 27 percent jump in refinances only dipped -4 percent in the most recent report, meaning the mini refi boom is alive and well. There is no scheduled news until the June FOMC Rate Decision, due out this afternoon. While a rate cut is not expected, odds of a 25 bp July cut are over 80 percent, which the Fed will need to validate or expect further curve-flattening. We begin today with Agency MBS prices worse nearly .125 and the 10-year yielding 2.08%.

A husband and wife are at the breakfast table.

The wife looks up from her newspaper and asks the husband, “If I won the lottery, what would you do?”

The husband quickly replies, “I’d take half the money and leave you in a New York minute!”

The wife frowns and asks, “Really?”

Husband snaps back, “Absolutely.”

The wife answers, “Well, I won yesterday. Here’s your half (handing him $6.00), let me help you pack.”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Are You Ready for CECL?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

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

June 18: Digital, marketing, training products; in person or on your phone, upcoming teaching & events run the gamut

With the backdrop of a global bond market rally today, let’s look back at Randy Newman singing, “It’s money that matters, hear what I say. It’s money that matters, in the USA.” What does $5.6 million buy you these days? A road-gray Yankees jersey that was worn by Babe Ruth sold for $5.64 million at an auction on Saturday at Yankee Stadium, making it the most expensive piece of sports memorabilia ever sold. Out on the Left Coast, and it’s hard to believe it was 50 years ago, you can pick up the Western Whitehouse for $57.5 million: a 5.45-acre oceanfront estate in San Clemente acquired by former president Richard Nixon in 1969 and would go onto become the setting for several political and social gatherings hosting the likes of Frank Sinatra and John Wayne. (Money and opportunity are often two different things. James Cameron was homeless when writing the movie “The Terminator” and sold the right to it for $1, on the condition he could direct it.)

Lender products and services

Roughly six out of 10 first-time home buyers are millennials, and the millennial generation is expected to form 20 million new households by 2025. Millennials are changing the market faster than we even realize, and the lenders who will lead the industry in the years and decades to come will be those who can empathize with the millennial plight and tailor the mortgage process to their unique preferences. But where to start? A new eBook from Maxwell, “The Millennial Playbook”, lays out the financial benefits and tactics for lenders to win with the largest generation of new homebuyers in the market today. No form required; no strings attached. Just one click to download: download your complimentary copy here.

In today’s aggressive battle for LO talent, the lenders who come out on top reward LOs with attractive incentive compensation plans while protecting bottom-line profitability.

That strategy has paid dividends for Mann Mortgage, who after doubling in size over two years, identified compensation as a critical lever for successfully scaling company growth and evolving with market conditions. In LBA Ware’s CompenSafe, Mann Mortgage found an automated incentive compensation and sales performance management platform flexible enough to accommodate an overhaul of its entire comp structure and powerful enough to monitor and help optimize sales performance over time. To get the full story, download the free case study here.

Pricing engine and loan product eligibility provider, Mortech, announced a new integration with digital lending platform provider, Blend. The partnership integrates accurate mortgage quotes into the Blend platform, enabling lenders to deliver on consumer expectations and see higher engagement with faster loan closing time frames. The partnership is a first step to provide mortgage lenders the tools needed to deliver efficient and accurate rate data during the loan application process. Both companies are excited to onboard industry-leading lenders who will benefit from a more seamless digital borrower experience. For more information on this service please contact Mortech Sales via email or call 1-855-298-9327.

When a borrower goes into delinquency, it means there’s a disruption to the lender’s cash flow, right? Which is not good. And if the lender doesn’t have the technology to discover it for several months, they’re probably missing out on a lot of cash. That’s really not good. TMS has a blog out right now that explains just how their people and technology help borrowers avoid, as well as get out of, the delinquency state. TMS takes a proactive approach to the whole delinquency issue so a lender can work with borrowers to make sure they get on the right track, and stay on it. Which also means that the lender’s cash flow is doing what it supposed be doing: flow.

XINNIX is providing exceptional Summer Savings to help your referral business grow with two outstanding one-hour classes for one great low price. “Exceeding Realtor Expectations”

and “Powerful Presentations” are the perfect combination that will help your business thrive this summer and beyond.  For a limited time, both classes, valued at $498 are being offered together for the low price of $299. Don’t delay. Register today for classes in July and August and watch your production grow all season long. For more information about The XINNIX System of performance training, accountability, and coaching, visit our website or click to schedule a call with one of our Account Executives.

Building a brand that inspires loyalty and trust starts with an exceptional customer experience. Delivering the customer experience true to your organization requires everyone from leadership down to articulate your company’s core values. These four strategies can help financial services leaders inspire a customer-centric culture from the top down.

On the heels of upbeat quarterly reports from both the MBA and Fannie Mae, companies throughout the industry are reporting strong Q2 results. SimpleNexus tells us that its digital mortgage platform recently surpassed 20,000 active users. That roster includes superfans like Inlanta Mortgage’s top-producing LO, who has received more than 169 digital loan applications and collected more than 838 loan documents through the SimpleNexus mobile app. Find out why LOs (especially top producers) love SimpleNexus by requesting a personalized demo. Or, if you’re in Boulder today at the Fiserv Mortgage Annual Meeting, drop by SimpleNexus’ booth #10.

Trainings and Events

Things quiet down in the summer, event-wise, but there is still plenty going on!

The California MBA is putting on a free webinar presentation on June 20 at 11AM PT by its Mortgage Technology & Marketing Committee (MTAM): current challenges lenders face in business processes, systems and those driven by the market environment/conditions, best practices to build a seamless interaction model, and do practices differ based on purchase or refinance models, markets, and products? What technology stack enables the best model for lenders? And a case study of a successful connected funnel execution for a top lender.

The MBAH Annual State Conference, “Captain Mortgage” is at the Prince Waikiki on June 25-27. Don’t miss Nathan Knottingham, VP of Training and Development for The Knowledge Coop on Thursday, June 27th. The presentation “A Dive Into the Dark Web” will look behind the Dark Web veil and talk about why protecting our digital information from being stolen and passed around the Dark Web is so important. Howard Dicus, the “Chief Explainer” at Hawaii News Now will also join the conference to provide insight into current events.

On June 25th and 26th, ArchMI and CAMP are presenting live Analyzing Personal and Business Tax Return classes for Loan Officers, Processors and Underwriters. ArchMI Senior Trainer, Stephanie Clark will enhance your understanding of self-employed borrowers, identify the components of business tax returns, discuss allowable add-backs and required deductions, calculate income from various business structures and leverage Arch MI’s easy-to-use Tax Return Analysis Calculator (AMITRAC). The complimentary 3 hour course will take place in Concord, Tuesday, June 25 at 9:30 AM and for CAMP members only $5 in San Jose, Wednesday, June 26 at 11:00 AM (includes lunch) all non-members are $15 in San Jose. For more information and to register email Wendy Barnett.

Webinar: “Under the Hood with Blend’s Lender Experience.” Technology should empower your team to do more. Join us on June 27 to learn how Blend is equipping mortgage originators with modern tools to meet the rising expectations of today’s homebuyers.

We have the National Settlement Services Summit (NS3) taking place June 18-20 in Phoenix at the Arizona Biltmore, a Waldorf Astoria resort. NS3 offers professionals across the real estate transaction top level education as well as entertaining networking opportunities. Tuesday Keynote Speaker Brian Montgomery, the Acting Deputy Secretary at the U.S. Department of Housing and Urban Development and Federal Housing Commissioner, will open the event, with a session featuring state and federal regulators wrapping up the first day.

We have Indecomm’s Summer Training webinars. Its July webinar calendar includes: Solving Loan Set Up Challenges With Automation on Thursday, July 18 at 1:00 pm ET. On Wednesday, July 24 at Noon ET., Managing Operational & Organization Content: Ask Me Anything Series.

On Wednesday, July 17th and Wednesday, July 24th, MBA Education and Mortgage Banking Solutions (MBS) is presenting a two-part webinar series on the fundamentals and complexities of mortgage servicing and sub-servicing. Registrants can receive 15% off by registering for the two-part webinar series. Use promotional code GROUP15 upon checkout.

MBA will host a one-day workshop on July 18 in Washington, DC on Condominium Lending. “Condo lending is more complex than single family lending and demands specialization by mortgage lenders since not only potential borrowers and units but whole projects must be assessed. This workshop is intended to bring together the strategic leaders and managers of condo lending and project approval groups with other experts, including government agency and GSE leadership.”

Register today for MBA Education’s Fundamentals of Residential Lending & the Secondary Market one-day workshop on July 15th held during the California MBA’s Western Secondary Market Conference 2019. Attendees will get a comprehensive overview of fundamental elements in the single-family secondary market, including key risk areas in any residential mortgage portfolio along with risk reduction procedures for both the lender and secondary market investor.

Plaza Home Mortgage is proud to be a Titanium Sponsor at the California MBA Western Secondary Market Conference, July 15-17 in San Francisco, CA. This event is always a great opportunity to learn, network and grow your business.

Mortgage Innovators Conference is the ONLY mortgage industry conference that highlights all innovators! Taking place August 11-13 in San Diego, it will feature engaging, expert speakers on a variety of topics from Day 1 Certainty to blockchain and everything in between. This low-cost conference includes an awesome Top Gun themed event on the USS Midway. Sponsors engage in on-stage product demonstrations. (Check out the Sponsor Experience for details on the new “Plug & Play” Innovation Lab!)

Registration is open for the 2019 NAWRB Conference – Redefining Leadership scheduled for Aug 4th-7th at the Langham Huntington in Pasadena. Key discussion topics include: Artificial Intelligence (AI), Social Impact, Family Offices, Women on Boards, Media, Residential and Commercial Real Estate, Access to Capital, Investments, Government and Poverty.

Join the Michigan Mortgage Lenders Association at the state’s largest mortgage industry event of the year! The MMLA Annual Lending Conference is from August 14-16 at Crystal Mountain Resort & Spa in Thompsville. This event is for anyone in the mortgage industry and has something for independent mortgage bankers, brokers, community banks, commercial banks, credit unions, and all companies that provides a service to the industry!

Transitional Licensing Authority for bank MLOs who move to a state-licensed entity, effective in November, will be discussed by experts at the NE Conference of Mortgage Brokers and Professionals. The conference will be held on September 24-26 at the Hard Rock Hotel & Casino in Atlantic City. For details and registration information, click here.

Loan Vision will be holding its third annual Loan Vision User Conference in Q3 2019. From September 22 – 24, attendees will be welcomed to sunny Phoenix, AZ for user education, industry centered discussions, and various roundtables and Loan Vision Labs. The Loan Vision User conference will feature two tracks: User track and the Executive track. Customers selecting the User track will experience an in-depth exploration of Loan Vision functionality, featuring master classes and skill workshops. Executive track selectors will experience sessions with industry guest speakers and peer round table discussions on hot industry topics.

8 hour CE with PA, 4 hour NJ at the NE Conference of Mortgage Brokers and Professionals, September 22-26, 2019, at the Hard Rock Casino and Hotel, Atlantic City, NJ. The program begins on Tuesday with a panel on popular niche products including non-QM, Reverse, VA, USDA and continues with sales training events, a panel on MSAs, online & other methods for co-marketing with realtors, transitional licensing, and regulatory insights (CFPB and state regulation), followed by a great exhibit hall and reception.

The AzAMP Annual Expo, Luncheon, and 8-Hour NMLS CE Class is accepting registration now for this educational event on October 24th and 25th, 2019 at the Beautiful Marriott Desert Ridge Resort.

Capital markets

Domestic markets didn’t receive much positive news to start the week, with the May Empire State Manufacturing Index declining well into negative territory after April’s positive reading, and the NAHB Housing Market Index for May also posting a decline. U.S. Treasuries began the week with little movement, displaying a slight curve steepening action on no major news outside of the geopolitical ramifications of Hong Kong delaying a vote on the extradition bill; the 10-year closed -1 bp to 2.09 percent.

But rates fell dramatically this morning (risk off!) around the globe. Attribute it to the QE trade in Europe, the announced willingness for the European Central Bank to increase inflation, or the potential for U.S. Federal Reserve-driven rate cuts in the U.S. We did have some U.S. new this morning (May housing starts -.9% and building permits +.3%.) The only other domestic release scheduled for today is Redbook same-store sales for the week ending June 15. Today is also the day the Senate Banking Committee with meet to consider the nomination of Michelle Bowman for Fed Governor. And day one of the two-day FOMC meeting gets under way in Washington. After the European Central Bank news we begin the day with Agency MBS prices better .125-.250 and the 10-year dropping to a yield of 2.04%.

(Thank you to Stephen S. for this one!)

A man is madly in love with a princess and wants to propose, but an evil witch has cast a spell on him and now he can say only one word a year. So he waits 14 agonizing years—accumulating all his words—before approaching his beloved.

Finally, the big day arrives. When he sees her, his heart skips a beat. He gathers his nerve, drops to his knees, and intones, “My darling, I have waited many years to say this… Will you marry me?”

The princess turns around, smiles, and says, “Pardon?”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Are You Ready for CECL?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

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

June 17: AE, LO jobs; private money, commercial products; flood & disaster updates; Quicken Loans settlement

I find builder’s naming policies amusing. Let’s call a subdivision “Hidden Valley” or “Lonesome Pines” when it isn’t hidden or lonesome anymore with 500 homes in it. Let’s pave over peach orchards, an area where hawks hunt, or a field of sage brush and then name roads after them. Maybe they can charge more for a house on a street with a cute name. Builders aren’t fools, and they, appraisers, and homeowners also know that houses with garages have more value. Chicago homes with garages sell for an estimated 38% more than comparable homes without them, per a new analysis from Redfin, adding nearly $47k to the sale price of a typical Chicago home. Nationwide, homes with garages sell for $23,211 more than homes without, which equates to a 12% premium. (And isn’t it great when families have so much stuff it fills the garage and pushes the cars into the driveway!)

Employment

“There’s a big shake-up going on in the mortgage industry. Wholesale brokers are picking up momentum, gaining market share, and simply dominating the mortgage space. Find out what it takes to make the switch from retail to independent at BeAMortgageBroker.com. We can help you take the next steps toward opening your own mortgage broker shop or help match you with an independent mortgage broker in your area. Call us for a free, confidential consultation and continued support throughout the process at 800.229.6342 or learn more at BeAMortgageBroker.com.”

There’s more great news from Pinnacle Home Loans in Northern California. Nevin L. Miller, President, is pleased to announce that Leif Boyd has joined their growing and dynamic leadership team as Executive Vice President of Production. Leif, who has a remarkable legacy of building production, said of his hire, “Pinnacle Home Loans is the new mortgage disruptor in California. I am very excited to be with a Company that offers originators the sharp pricing they need, paired with the service they deserve. In Pinnacle, I see a logical path for loan originators, some of whom are even thinking of becoming a mortgage broker to solve their margin compression problems, to remain in retail with all of its benefits”. Interested branch operators and qualified loan officers are invited to reach out to Leif or Nevin directly.

Congratulations to Joe Thompson of PrimeLending who won the “40 Under 40 Award.” “He goes above and beyond – not just for PrimeLending, but for the entire Houston area community. That’s why Joe Thompson, PrimeLending SVP and Regional Manager of the South Texas region, recently earned a 2019 40 Under 40 Award from the Houston Business Journal. This prestigious award goes to 40 individuals who deliver service beyond expectations in every aspect of their business, and Joe’s leadership, support and guidance made him an easy choice for the award. Joe joined PrimeLending in 2015 as an area manager and was quickly promoted after more than tripling production. Along with production, he also focused on expanding the PrimeLending footprint, helping to add need locations in the diverse, fast-growing market with his recruiting efforts. Way to go, Joe! LOs looking for great leadership never look further than PrimeLending. Contact Bobbi Jo Wiggins to learn more.”

“If career opportunity were an algebraic formula, the formula would be ‘G + C + I = O.’ That’s ‘Growth + Culture + Innovation = Opportunity.’ Quicken Loans® Mortgage Services is

growing faster than any other lender in its space. Our culture is unmatched, as evidenced by the fact that we’ve been on FORTUNE magazine’s 100 Best Companies to Work For list for 16 consecutive years. Our ability to innovate new products, processes and services is what sets us apart. We’re looking to add passionate, smart and creative people to the following roles: Account Executive (Detroit) and Credit Underwriter (Detroit). As America’s largest mortgage lender serving the needs of brokers, regional banks and credit unions, we want to attract the best and the brightest. Is that you? Are you ready to jump-start your career? Check out our job openings.”

Lender products and services

Originators and mortgage executives, here is another industry study giving out a great prize for minutes of your time. All completed will go into a raffle for a $350 Amazon Gift Card! This quick 5-minute survey is focused around growth opportunities in additional product and services. Please complete if you are an active lending executive, manager, or LO. Hurry, this survey closes June 20! Start Here.

Does your organization specialize in private money or are you looking to expand your product offering into this increasingly popular area of lending? Triumph Capital Partners can help you achieve your goals. Triumph Capital, based in Solana Beach, California, has recently hired mortgage industry veteran Brian Seligmiller as its Director of Correspondent Lending for its growing correspondent division. Triumph understands the space and is staffed by industry professionals with almost a century of combined experience. Products include fix & flip, bridge loans, construction lending, commercial multi-family with a rent and hold product on the way. With Triumph’s non-delegated program, correspondents across the country can close in their name and maintain their relationships while adding multi-transaction customers for life and increasing their bottom line. Think Bigger, Lend Better. To learn more contact Brian at Triumph Capital Partners.

Online Commercial Loan Applications, HELOCs, Mortgages, auto, & more. You asked for it and PerfectLO built it. After revolutionizing the residential mortgage process for the past three years with a true virtual online loan interview, PerfectLO updated its software to include all banking loan products. Loan questionnaires are customizable and have a rules engine that can auto create a smart doc checklist. Borrowers can start uploading their financial docs instantly. Manager, Processor and IT access and as well as notifications. Easy to adopt and onboard and its API / web-hooks makes it simple to transfer data to your LOS and CRM. MISMO ready, FNM 3.2 files, disclosures, authorizations, etc., and private labeled. Automate the front end of your business today and Sign up for a live demo. Visit its website for more details, call 800-277-1687, or email them. Perfect Loan Software dba PerfectLO.com

Now hopefully in the rearview mirror

Quicken Loans and the government have come to a resolution over a mortgage lawsuit.

It was determined that Quicken did nothing wrong, and the company agreed to pay $25.5 million for losses involving ‘human error”, plus $7 million dollars in interest.

Fifteen cubits upward did the waters prevail

FEMA has released tens of millions of records from the National Flood Insurance Program (NFIP). The data release includes over 50 million policy transactions from the past decade and information on 2.4 million damage claims dating back to 1970, representing nearly $70 billion in payments. The biggest takeaway is flood insurance claims are piling up across the nation, even in areas far from the shore. Releasing the data is a huge step toward helping scientists, decision-makers, and the public understand how the NFIP operates, where flood damages occur, and what the costs are to the nation. It’s a significant step forward for transparency of flood risk in the United States, something that NRDC, along with other organizations, has been calling on Congress and FEMA to provide for years. It seems that the flood of requests for information has finally broken through.

The House Financial Services Committee sent along H.R.3167, The National Flood Insurance Program Reauthorization Act of 2019, which reauthorizes the NFIP for five years and also includes a number of reforms to increase affordability, improve mapping, enhance mitigation, and modernize the NFIP. This bill was introduced by Rep. Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee. It was passed unanimously by a bipartisan vote of 59 to 0. Let’s hope the full House of Representatives votes on it.

Per federal flood insurance requirements, Wells Fargo Funding has updated its private flood insurance requirements for all loans. Effective July 1, 2019, Complete private flood insurance policy and documentation to validate compliance with the Office of Comptroller of the Currency (OCC) 12 Code of Federal Regulations CFR 22.3. Its Seller Guide has also been updated to clarify that proof the premium has been paid is required for all flood insurance policies.

loanDepot Wholesale/Correspondent’s What’s New Week Beginning June 10th announcement includes information on changes to Broker Compensation, Equal Credit Opportunity Act (ECOA) Policy and Oklahoma disaster announcement update.

Mortgage Solutions Financial issued a revised Announcement 08-19W, in reference to the Nebraska Flooding, Announcement 09-19W regarding the Iowa Flooding Disaster Alert, and Announcement 12-19W regarding the Oklahoma Storms Disaster Alert.

Per FEMA’s addition of Holt county to the existing Nebraska disaster declaration for the incident period of March 9th-April 1st; AmeriHome Mortgage issued a Seller reminder to review its disaster inspection requirements.

First Community Mortgage Wholesale posted a new announcement regarding IOWA disaster declarations and published a Disaster Announcement with updated information on additions to the Oklahoma disaster list.

SunWest Mortgage Company posted information regarding Counties in Oklahoma that have been declared by FEMA as Major Disaster Areas for the Incident Period Date of May 07, 2019 with a Major Disaster Declaration declared on June 01, 2019. The Designated Disaster Area includes the counties of Muskogee, Tulsa, Wagoner. To view FEMA’s recent update, click here: FEMA

Arkansas counties of Conway, Crawford, Faulkner, Jefferson, Perry, Pulaski, Sebastian and Yell have been added to the disaster declaration list for the incident period of May 21, 2019 and continuing. SunWest issued a reminder regarding its flood policy. For loans submitted with an appraisal dated on or before the incident period end date or for those submitted without an appraisal, Sun West will require an interior and exterior inspection prior-to-funding or purchase of any loans with subject properties that are determined to be at risk. The inspection must verify that the property is sound, habitable and in the same condition as when it was appraised.

Capital markets

U.S. Treasuries ended last week on a mixed note, including the 10-year unchanged at 2.09% as market headlines were dominated on Friday by the release of more disappointing data from China. China’s May Industrial Production drastically missed expectations despite posting an increase, representing the slowest growth rate since 2002. U.S. economic data served as a reminder that the U.S. economy remains is relatively strength versus other global economies: total retail sales in May posted a positive figure as the reading was combined with an upward revision to the figures for April; and both May industrial production and April total capacity utilization beat estimates. In Europe, budgeting was the name of the game, with Italy’s Deputy Prime Minister Salvini saying that Italy’s budget for 2020 must include substantial tax cuts; and EU finance ministers progressing toward establishing a eurozone budget, though the overall budget will be determined by EU leaders later this year.

Relative to Treasury yields, mortgage prices (looking at Agency MBS prices) had a difficult week last week, with current coupon spreads versus 10-year swap rate hitting their widest levels since late 2016. Looking across a wide spectrum of securities (Fannie, Freddie, and Ginnie), coupons (pass through rates), and maturities, traders reported that “Retail flows were defensive to close the week.”

Today’s calendar got under way with the June New York Fed Empire State Manufacturing Survey (-8.6, a record decline and the lowest since October 2016). The NAHB Housing Market Index for June is next up, and precedes Treasury conducting their usual T-bill business when they auction $36 billion each of 3- and 6-month bills.

Tomorrow brings the release of May Housing Starts and Building Permits, before the June FOMC Rate Decision on Wednesday, with expectations of no rate change predicted. Thursday sees central bank decisions due from the BoJ, BOE, and Norges Bank, U.S May Leading Economic Indicators and Initial Jobless Claims. The week closes with May existing home sales. We begin today with Agency MBS prices little changed versus Friday night and the 10-year yielding 2.09%.

That Wells Fargo can’t find a CEO yet has this job making the rounds:

Job Opening!

Local bank seeking self-starter CEO to help guide it out of a minor three-year crisis.

Required qualifications:

Desire to grow our business (given the constraints put in place by the Federal Reserve).

Ability to avoid a 100-mile radius of Senator Elizabeth Warren.

Experience with verifying customer approval when opening new accounts.

Recommended but not required:

The ability to parallel park a stagecoach pulled by four horses.

Don’t apply if you’re going to miss work because your band has a gig.

Don’t apply if you’re not going to be able to work weekends because you have a gallery opening.

Don’t apply if you only want to work a few weeks before heading off to Europe.

Don’t apply if you’re the type of person to close the door and cry in your office every day.

Must be able to remember to come back to work after lunch on the first day.

Contact Warren Buffett at BuffDaddy88@gmail.com.

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Are You Ready for CECL?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

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

June 15: Notes on the LIBOR transition, Modern Monetary Theory, the Option ARM’s origins & principals

We’re a week away from the official beginning of summer: vacations, fewer conferences, home buying, arriving at work early to snag the shady parking place. (A week is a long time. Just ask Quicken, which settled its False Claims Act action this week, or the Golden State Warriors who, in the span of a week, lost a title, said goodbye to their home arena, and lost two starters and potential hall of famers for a year each due to injury! For me it was time in Vermont, New York, Kansas, Nevada, and California; today off to Boulder, CO.) What’s been on reader’s minds this week?

Historical perspective

The death of World Saving’s Herb Sandler refreshed many thoughts about the early days of the fabled Option ARM product and brought out thoughts in defense of its underlying guidelines.

From the Mortgage Bankers Association Pete Mills sent, “The original pay option ARM dates back to the mid-1980s. I bought my first house with one. In 1988 or ’89, I worked in the research and policy shop at the California Association of Realtors and we conducted a research report for the California DRE on the ARM market and the product options/features available at that time.

“Needless to say, on behalf of Realtors, we were not fans of any product with negative amortization, while World was a huge fan of their 7.5% payment-capped product. After we completed the project (with a strong lean against the pay option/neg am features) we were summoned by Herb and Marion Sandler to the World Savings HQ office on Lake Merritt in Oakland to explain/defend our findings. It was a fascinating 90 minutes. We engaged with Herb for most of the time while Marion knitted and listened.

“Herb made a compelling case for his product, we defended our research, and we thought we had done fairly well and were wrapping up when Marion interrupted, and said she had a few questions. She then proceeded to challenge almost every aspect of our report for another 45 minutes. We survived, the report survived, and the product likely would have survived had it stayed close to its original late-1980s construct: no deep teaser start rates, no scheduled neg am from the first payment, full documentation, and conservative ratios.” Thanks Pete!

Dave Stevens sent, “It is important to understand the origins of the product. The first COFI ARM was offered by world in 1982. I started there as an LO in 1983 and that was the only product we offered.

“We did not have teaser rates back then. The fully indexed rate was based on the 11th district cost of funds and we offered a 2% margin on average. Our first no income verification was offered at 70% LTV, but we would go through exaggerated reviews to ensure the income stated was reasonable including verbal VOE’s. I remember going to a restaurant and having lunch where a borrower worked to determine if her income stated seemed reasonable.

World was very focused on the property. After all, it’s the home that cannot sell that ultimately results in default even if a borrower has personal financial challenges. Every LO was provided a camera and could not submit the file without photos of the home. We spent countless days per month in a van with the heads of appraisal, underwriting, and origination touring homes that we had originated and discussing the value, the comps, other risk factors that may have been missed. The culture on risk was extraordinary.

“The loan was created to avoid basis risk for the bank. Lending long on fixed rates and borrowing short on deposit rates was the basis for the S&L crisis. Herb and Marion developed a product that had an almost perfect match in asset to liability timing which significantly reduced risk to the bank. Their performance was unmatched.

“The point here is that the monthly adjustable rate was not the enemy to consumers. As a matter of fact consumers who took this loan beginning in 1981 saw their rates steadily decline over time for decades as did rates in general. When appropriate risk factors are considered and with a healthy equity position to allow for resale should economic hardship occur, the portfolio was extremely high performing for decades and World produces consecutive 20% Roe’s for generations. It was risk layering (deeply discounted teaser rates, 100% LTV’s, and laxer collateral standards, etc.) that drove defaults on this and other products.” Thanks Dave!

Dick Lepre with RPM Mortgage in California sent over a link to his article from the Scotsman Guide, March 2006, on Option ARMs.

From the Atlantic Seaboard Ken Sonner telegraphed, “These folks that blame the No Doc loans for the financial crisis appear to be rather selective in presenting the past. I had heard that job loss and occupancy fraud were the leading causes for foreclosures. No Doc loans certainly contributed to the crisis but that was not the leading cause.

“Many folks that had obtained full doc loans lost their jobs and many of the owner-occupied specs used full doc financing to get a loan. When the borrowers lost their jobs, they quickly cut out their largest expense (mortgage payment).  When property values dropped, the speculators walked away from their loans since they no longer could turn a quick profit. This caused an immediate drop in value in many communities and regions. (The New Yorker had a great article about this happening in Florida.)

“FHA suffered during the downtown but this was not a result of No Doc loans. It continues to come back to job loss, no skin in the game (Nehemiah), property value declines, and HECM causing a serious strain on the fund.

“I heard one industry leader blame mortgage brokers for the crisis. Really? What about the big lenders and investors, Wall Street, real estate professionals and the borrowers? Blanket statements are a quick impulse to assign blame rather than stepping back to recognize that many factors contributed to the Great Recession.

It’s the economy, stupid!

Economist Elliot Eisenberg, Ph.D. sent over is recent article titled “Modern Monetary Theory Is Voodoo Economics Redux.”

“There is currently widespread frustration with the performance of the global economy. Traditional policy approaches are not delivering the economic results they have in the past. In the US, Millennials are poorer, have lower incomes, marry less often, and have fewer children than the generations before them. In Europe, the rise of previously fringe parties is unmistakable as voters express their frustrations with the status quo at the ballot box. All this has led to the rise of Modern Monetary Theory (MMT), a set of ideas that reflect a significant and unfortunate break with previous orthodoxy.

“During the late 1970s, a similar economic malaise gave rise to supply-side economics popularized by Arthur Laffer. It began with the age-old observation that taxes had important incentive effects and that, in conceivable circumstances, tax cuts could raise revenue. That said, from these two well understood underpinnings, it grew into the ludicrous idea that tax cuts would always pay for themselves. In the 1980 presidential primaries, future President George H.W. Bush called this idea ‘voodoo economics’ and in the following decades this doctrine did substantial damage to the US economy and has largely short-circuited meaningful debate about taxes.

“Now comes MMT, which, like supply-side economics, makes a good observation, that fiscal policy needs to be rethought in an era of low real interest rates, but then stretches it into a ludicrous claim that massive deficit spending on job guarantees can be financed by central banks without any burden on the economy. At a moment of deep economic and political frustration, some fringe wing of the out-of-power party is again offering the proverbial economic free-lunch as a politically attractive way out of a fiscal bind. Regrettably, MMT is flawed at many levels.

“First, it promises that by printing money the government can finance deficits at zero cost. Not true! The government in fact pays interest on money it creates as it becomes reserves held by commercial banks and the Fed pays interest on reserves. Second, contrary to MMT, governments cannot simply print money to pay bills and avoid default. Looking back at developing nations that have employed MMT demonstrates that beyond a certain point printing money leads to hyperinflation. Third, MMT conveniently assumes an economy that does not trade with other nations. Regrettably, money printing will result in a collapsing exchange rate that will in turn boost inflation, raise long-term interest rates, encourage capital flight and reduce real wages.

“And it is not only in emerging markets where MMT has played out badly. France in the early to mid-1980s and West Germany in the late 1980s employed what now would be called MMT but both nations had to reverse course. Separately, the UK and Italy both had to be bailed out by the IMF in the mid-1970s because of an excessive reliance on inflationary finance.

“Supply-side economics was an unreasonable extension of valid ideas. To that end, few support a return to the very high marginal tax rates that prevailed before the tax reform of the 1980s. Similarly, in an era of very low inflation, and of real interest rates of close to zero, we can and should carefully reconsider our traditional views of federal borrowing; they need at a minimum a careful and thoughtful rethink. That said, when something sounds too good to be true, as was the case with supply-side economics, and is the case with MMT, it’s important to make this clear to improve debate and hopefully prevent us from making another costly and unnecessary economic policy mistake.”

LIBOR

Yes, $350 trillion of financial instruments is estimated to be tied to this index. We’ve had plenty of lead time to create, evaluate, and discuss alternatives (like SOFR from the Federal Reserve Bank of New York) ahead of the end of 2021 when it “goes dark.”

Randal Quarles, vice chairman for supervision at the Federal Reserve, told the Alternative Reference Rates Committee the industry must move faster to switch to the Secured Overnight Financing Rate from Libor. “With only 2½ years of further guaranteed stability for Libor, the transition should begin happening in earnest,” he said.

But Marc Perez raises an interesting point. “My biggest concern with SOFR is that it hasn’t been stress-tested to handle another financial meltdown. I was recently at the National Secondary MBA in NY and attended the session discussing the LIBOR transition. I asked the committee the following but I never got a real answer. They simply repeated what I said and diverted the question.

“Given that Libor was more ‘committee-based’ (for example: Barclays and the LIBOR Scandals), versus SOFR which is more quantitative & stratified (underlying data set to US Treasuries & follows Fed Funds rate), what happens if we ever went back into a financial crisis environment? In that instance, LIBOR goes up and SOFR goes down, which is an issue for the banks and not the customer. Would all banks have to jointly start short selling Treasuries to guide the Yield up (like in a Bond Convexity Vortex)?

Here, 14 dog quotes that capture the special bond between a human and their pup.

“I’m suspicious of people who don’t like dogs, but I trust a dog when it doesn’t like a person.” — Bill Murray

“It’s just the most amazing thing to love a dog, isn’t it? It makes our relationships with people seem as boring as a bowl of oatmeal.” — John Grogan

“Happiness is a warm puppy.” — Charles M. Schulz

“When your children are teenagers, it’s important to have a dog so that someone in the house is happy to see you.” — Nora Ephron

“I have found that when you are deeply troubled, there are things you get from the silent devoted companionship of a dog that you can get from no other source.” — Doris Day

“I’ve seen a look in dogs’ eyes, a quickly vanishing look of amazed contempt, and I am convinced that basically, dogs think humans are nuts.” — John Steinbeck

“My dogs have taught me to be more loving, more nurturing, and happier.”— Nicollette Sheridan

“When an 85-pound mammal licks your tears away, then tries to sit on your lap, it’s hard to feel sad.” — Kristan Higgins

“I love my pets so if they are happy, I am happy … I have treated all my dogs like my kids. To me, they’re just kids I didn’t birth.” — Kristen Bell

“My fashion philosophy is, if you’re not covered in dog hair, your life is empty.” — Elayne Boosler

“Some of my best leading men have been dogs and horses.” — Elizabeth Taylor

“Reason No. 106 why dogs are smarter than humans: Once you leave the litter, you sever contact with your mothers.” — Jodi Picoult

“It’s not the size of the dog in the fight, it’s the size of the fight in the dog.” — Mark Twain

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Are You Ready for CECL?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

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

June 14: Sales & LO jobs; eClose, non-QM, broker products; VA & FHA investor shifts

“The City of Baltimore, Maryland suffered a ransomware attack on May 7, 2019. Due to the attack, the City is currently unable to record documents until further notice. In the interim they are issuing ‘Lien Certificates’. Mr. Cooper is offering the following guidance related to loans closed within the city of Baltimore: ‘Any loans with title reports that contain title exception language regarding lien certificates will be ineligible until further notice.’ If you have any questions, please contact your Regional Sales Team.” Scary stuff. What if this were to happen to an area that is growing by leaps and bounds? For example, two of the top three largest gaining MSAs from 2010 to 2018 were in the state of Texas, with both Dallas-Fort Worth-Arlington and Houston-The Woodlands-Sugar Land gaining over 1 million people during that time, according to the U.S. Census Bureau. Dallas and Houston have estimated populations of 7.5 million and 7.0 million, respectively, ranking them the fourth and fifth most populous metro areas in the U.S.

Employment

MortgageFlex Systems is expanding rapidly and looking for a new talented sales leader to join the team! “Come join a fintech leader with a modern cloud-based LOS and Digital Lending Platform. Be a part of a fast-paced environment where you’re challenged to find creative ways to engage your audience. MortgageFlex is looking for an energetic sales leader that’s based in Orange County, CA. The ideal candidate is eager and ready to learn in his/her career. The candidate has 3-5 years of experience in LOS, POS, and CRM. We are experiencing a high demand of interest and need a goal-driven innovator. His/her strengths should include multi-tasking and forming strong interpersonal relationships. If you think you’re a match please email Alexis Anderson.”

Highlands Residential Mortgage is coming off its fifth consecutive year of growth in 2018 and is on pace to make it six in 2019. Recently, Highlands was recognized as one of the Scotsman Guide Top Lenders in 2018 and ranked #1 on National Mortgage News’ list of Best Mortgage Companies To Work For 2019. Highlands is led by former originators and industry veterans guiding the company to being one of the most successful independent mortgage bankers in the country today. Continuing the company’s track record of attracting some of the best and brightest people in the business, Highlands has added Talent Acquisition leader Howie Hall to its dynamic team. If you are looking for an origination home that is loaded with experience and support, rallies around closing on time, every time and want to find your last business card, contact Howie Hall.

NOVA® Home Loans, an independent full-service mortgage banker with a dynamic platform, excellent support, diverse product offerings, and exceptional, engaged leadership, is looking for a seasoned Branch Manager to grow its Colorado Springs market. “The ideal candidate will have a minimum of five years’ experience in mortgage banking and five years management/leadership experience in the mortgage industry. Excellent leadership and recruiting skills a must. NOVA® Home Loans is consistently ranked among the Top 50 Mortgage Lenders in the United States and as one of the Best Places to Work in the Southwest. NOVA® Home Loans has branches in Arizona, California, Colorado and Nevada and can originate loans in 12 states. NOVA offers stimulating work in a fast-paced, customer-oriented, compliance-focused work-environment.  NOVA also offers a competitive benefits portfolio. If you are ready to work for a dynamic and growth-minded mortgage lender, please send your resumes to Kim Carson.”

“With June officially being National Homeownership Month, are you armed with the right product mix to help meet the needs of first-time homebuyers, current homeowners looking to refinance, and the scenarios in-between? If you’re a part of the Motto Mortgage network, the answer is a strong yes thanks to our mortgage brokerage-in-a-box model. As a Motto Mortgage broker owner, you get all the tools you need to hit the ground running including a wholesale lending portfolio that gives your loan originators and borrowers the options they need to close with confidence. With nearly 90 offices open in 30 states, our national presence continues to grow thanks to a network hard at work, turning homebuyers’ dreams into realities. Contact us (866.668.8649) to learn how Motto Mortgage can offer more for you, and your borrowers.”

Lender products and services

Prime Choice Funding Wholesale has announced another product expansion by adding Alt-QM to its product offering. “The Alt-Choice Product Suite is an amazing group of products: LTVs up to 95%, FICOs down to 500, loan amounts to $5M, Bank Statements up to 90%, P&L program, Foreign National, WVOE only program, Asset Utilization, Investor Solutions: No income, No ratios (only LTV, FICO & DSCR). PCF Wholesale is currently doing business in 34 states. Offering a wide array of loan products from Agency to Non-QM, you can count on us for any loan scenario. Through our excellent service, price & best-in-class technology, we pride ourselves on being a wholesale lender that you can count on for all your loan transactions. PCF Wholesale is ‘Built for Brokers,’ and works to ensure our lending partners look like the super stars they are. Please contact your AE for more info or contact PCF wholesale directly at marketing@pcfwholesale.com to have an AE assigned to your company.

Please join Polunsky Beitel Green at Booth 702 for a demonstration of our new eClose solution, eMortgagelaw.com, during  the National Association of Federally Insured Credit Unions in New Orleans, June 18th – 20th. The eMortgage law technology offers a one-stop eClosing solution built around a proprietary intelligence engine, which electronically digitizes lender loan documents from any loan origination or document system, allowing the lender to maintain its own documents, barcodes, internal workflows and processes without having to change to another system. Because documents from any system can be auto-tagged, categorized, sorted and bookmarked within seconds, labor intensive manual tagging and sorting is completely avoided. The eMortgage law system greatly reduces operational errors, making post-closing issues virtually a thing of the past. Drop by or schedule an appointment with Eric Gilbert or Stacey Maisano.

Caliber Home Loans, Inc.is excited to announce the newest addition to its suite of non-agency loan products. Investor Access extends real-estate investment opportunities to more borrowers by providing the ability to qualify based on property cash flows. Borrowers can apply as an individual or as an LLC, which expands their options for investing in their financial future. Investor Access borrower may qualify for loan amounts up to $1 million with a 75% LTV. Caliber also improved pricing on its self-employed borrower product, Professional Elite, by as much as 1% in rate. Visit www.CaliberHomeLoans.com for more information.

In today’s environment, technology can create friction between brokers and lenders. To better this relationship, improve integration, and provide a superior TPO and consumer experience, Flagstar Bank has partnered with three market software leaders. Flagstar’s integration with Ellie Mae Encompass creates a utility inside the platform, allowing correspondents to deliver loans with a single click. This eliminates the need to login to the Flagstar portal and offers greater efficiencies and faster shipping. Flagstar is also aligned with Arive, a new technology ecosystem for brokers. They anticipate this software package will include pricing as well as delivery and status updates in future releases. Flagstar’s integration with NAMB All-In, powered by Calyx, also benefits brokers, allowing loans to be delivered directly to Flagstar. Their partnerships with these market leaders offer their customers the confidence and innovative tools to experience greater success in today’s everchanging and complex markets.

FHA & VA lender chatter

This week I noted that FHA is extending the public feedback period on its proposed revisions to the Addendum to Uniform Residential Loan Application (Form 92900-A) posted on the Single Family Housing Drafting Table (Drafting Table) on hud.gov until 11:59 PM (Eastern) on June 30, 2019. FHA is extending the feedback period to give interested parties additional time to review and submit feedback on the proposed changes. The feedback deadlines for the Annual Lender Certifications and the Defect Taxonomy — also posted on the Drafting Table will remain the same, and end on June 8, 2019. Thank you very much to Bob Broeksmit who reminded me that defect taxonomy was also extended to June 30.

And Mountain West Financial is offering its brokers free Appraisals on FHA conforming purchases with a 640 or higher score thru the month of June. “Unlike other lender’s free appraisal offers, there’s no payment required from the borrower. It’s truly an appraisal paid for by your friends at MWF. Applicable only for Conforming FHA Loans (Program code: FF30), purchase transactions only. MWF will not pay for 1004D’s, only the initial appraisal. Loans must be submitted between June 1st and June 30th. Minimum 640 FICO or higher, new submissions only. Sale disclaimer: Available to MWF Approved Wholesale Brokers. Valid on the initial Appraisal ONLY. Free appraisal is a lender credit at closing. If appraisal is transferred to another lender, the borrower will be responsible for full payment. When ordering the FHA appraisal on this Special Program, choose ‘other’ for the billing option and input ‘MWF FHA Appraisal Promotion’ in notes.”

MBA’s Risk Management, QA and Fraud Prevention Forum (RMQA19) is the premier industry event for risk management professionals in the residential mortgage industry. Take advantage of this opportunity, September 15-17 in Chicago IL., to hear directly from the GSEs, FHA and industry experts on digital document management, loan quality and costs, underwriting, fraud prevention and more.

VA has recently released updates to several chapters of the VA Lender’s Handbook. Unless otherwise announced, PennyMac will be aligning with all updates to the VA handbook, while maintaining current overlays. Click here to view the announcement.

Ditech Financial has revised appraisal and LTV guidelines for VA Interest Rate Reduction Refinance Loans (IRRRL). Appraisals are now only required for IRRRLs that refinance a VA fixed rate mortgage into a VA Adjustable Rate Mortgage (ARM). LTV limits based on whether discount points are charged will apply only to fixed rate to ARM IRRRLS. Appraisal reports for fixed rate to ARM IRRRLs must not be ordered through WebLGY. Reports may be exterior-only or full appraisals and repairs do not have to be completed prior to closing. Contact ditech for LTV requirements applicable to fixed rate to ARM IRRRLS when discount points are charged.

Freedom Mortgage Wholesale has implemented new loan registration and disclosure instructions on VA Cash-Out Refinance Loans for Table Funding Brokers effective immediately. The new VA cash-out Refinance Disclosure is now included with Freedom Mortgage’s electronic LE disclosure packages. Brokers are cautioned to input accurate data in these new data fields. These data fields do not include any logic that will auto correct typos or other data errors. Discrepancies between data used in the new disclosure and in the system may result in delays.

U.S. Bank Home Mortgage has completed consolidation of its Correspondent and HFA websites. View Bulletin B-2019-12-A for details. (U.S. Bank Correspondent/HFA Division announced its alignment with Black Knight and its Empower technology as its future loan origination system.)

In its Resource Center, PRMG posted updated Credit Refresh Lookback Policy.

First Community Mortgage Wholesale Announcement 2019-12 covers guideline updates applicable to multiple programs.

PRMG posted Product Profile Updates 19-27 on April 25th. Click the link to view its various updates.

As a reminder NewDay launched Operation Home in December, a program that utilizes VA-guaranteed mortgages and seller-paid closing costs to put active-duty and veteran servicemembers military families into homes with as little cash out of their own pockets as possible. Last month, NewDay announced its Operation Home monthly volume is expected to soar 150 percent by the end of the year. NewDay has renewed its warehouse facility with BankUnited for $100 million bringing it a total of $400 million in warehouse commitments, that also includes Texas Capital Bank and People’s United Bank.

Capital markets

The short end of the yield curve did well yesterday but U.S. Treasuries across the curve rallied after reports that two tankers operating near the in the Gulf of Oman were attacked, which the U.S. blamed on Iran. That aided the global growth narrative, and now it seems we may be in a refi tsunami as well with that 10-year yield approach 2 percent, which is weighing on MBS sentiment. Fed rate cut odds in 2019 continued to rise, with next week’s meeting now near 30 percent and with July at 85 percent for a 25 bp cut. 30-year mortgage rates are back to September 2017 levels.

Today’s calendar begins with retail sales for May. Later this morning, markets will digest May industrial production and capacity utilization; business inventories in April; and preliminary June Michigan sentiment. We begin today with Agency MBS prices a few ticks better and the 10-year yielding 2.07%.

Part 5 of 5 of “First World Problems”)

I poured just the right amount of cereal, but there was so little left in the box that I had to pour and eat the rest of it too.

No one re-blogs or likes what I blog on Tumblr.

Chipotle over-crimped my burrito bowl.

I accidentally bought conditioner when I needed to buy more shampoo.

I gave my dog some bacon and now he won’t stop following me around the house.

My girlfriend has been with more women than I have.

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Are You Ready for CECL?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

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

June 13: Non-QM, underwriting, marketing, AOT execution products; borrower satisfaction tips; 1003 pause

At the direction of the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac (the government-sponsored enterprises, or GSEs) are communicating that the optional use period for the redesigned Uniform Residential Loan Application (URLA) form and corresponding datasets will not begin on July 1, 2019 as previously scheduled. It will begin tomorrow! Just kidding. “The effective date of the form will be revised and an updated version will be provided at a later date. Over the coming weeks, FHFA will engage with appropriate stakeholders and agencies to finalize issuance of an updated URLA form, corresponding datasets and a new implementation timeline.” Legacy issues, listening to complaints about the language portion, whatever, stand down for now. More lender/agency news below.

Employment & transitions

Are you a retail loan originator, retail branch manager, direct lender or banker? Tired of losing clients and the up and downs at your retail shop?  Have you considered making the move from retail to independent? BeAMortgageBroker.com can help. We are your single, no-cost source for the information, support and tools you need to become an independent mortgage broker. We can help you take the next steps toward opening your own mortgage broker shop or help match you with an independent mortgage broker in your area. Call us for a free, confidential consultation and continued support throughout the process at 800.229.6342 or learn more at BeAMortgageBroker.com.

After 30 years, J. Terry Ryan, President of Multi Financial Services Co., Inc. in Tallahassee, FL is retiring from his successful national mortgage loan servicing. The vast majority of loans in fifteen (15) states consisting of private investors, non-profits, and government entities have been taken over by Covey Financial, LLC out of San Antonio. For those not fitting Covey’s business model, Security National Servicing Corp out of Baton Rouge offers assistance. Servicing inquiries can still be directed to Terry (850-321-9352)! Some people just can’t get away from servicing completely!

Bob Hora has been hired by Cenlar as SVP of Default Operations, reporting to Tony Renzi, Cenlar’s President and COO. While overseeing Default Operations, including Collections, Loss Mitigation, Foreclosure, Bankruptcy, Claims and REO, “Bob’s primary mission will be to create and deliver profound value to our clients. He’ll work to reduce losses and enhance portfolio values by keeping borrowers in their homes through viable alternatives to foreclosure.”

Lender products & services

JMAC Lending has expanded alternative doc qualifications for the Venice NON-QM program with flexible options for self-employed borrowers. The NON-QM program has been popular, with one-year tax returns, 12-months bank statements, Foreign Nationals and DSCR options. New features include: ONE-YEAR CPA Prepared P&L (No Bank Statements), 12-months Bank Statements with Borrower Expense Letter, ONE-YEAR Bank Statements with Borrower’s P&L, Qualifications based on DU findings, No-cost appraisal transfers and 30-year fixed terms w/Interest-Only options. Qualifying just got easier. To learn more and get approved, please contact our sales team today: Email Sales@JMACLending.com, call 844.888.JMAC or visit JMACLending.com.

What happens to people who visit your website, but never call, email or fill out a contact form? There are many reasons why people don’t take the time to pursue the next step with your company, whether that be requesting a demo or contacting you for more information. They could be comparison shopping, conducting research on a specific topic, casually browsing or maybe they just got distracted. Retargeting is part of a broad digital strategy the experts at Seroka Brand Development will leverage for you. It’s a great way to stay top of mind with your prospects. It’s also a great way to draw them back to your website with messages that reflect their interests, encouraging them to reach out to you. If you would like to know more about retargeting and best practices, contact the experts at Seroka at info@seroka.com for a free consultation and get ready to #TurnUpYourBrand!

The mortgage industry is in flux. Fluctuating interest rates. Shrinking inventories. Changing borrower needs. Wouldn’t it be nice to have some consistency– especially from your automated underwriting system? Freddie Mac Loan Product Advisor® delivers reliable eligibility findings that foster responsible lending and give you confidence that you’re originating quality loans. Its innovative capabilities were developed in collaboration with lenders, providing automation and insights that help reduce costs and increase efficiency. What does it all mean for you? Greater opportunity for business growth and an edge on the competition– The Freddie EdgeSM. Learn more about ACE and AIM, available exclusively through Loan Product Advisor®.

Here’s a webinar titled, “Empowering LOs with a digital toolkit.” Technology should enable your team to do more. Join us on June 27 to learn how Blend is equipping mortgage originators with modern tools to meet the rising expectations of today’s homebuyers. Sign up now.

AFR Wholesale was proud to be a Gold Sponsor of yesterday’s AIME Mortgage Expert Workshop: Broker All-Stars, and remains committed to supporting the success of independent mortgage brokers. In addition to having a booth at the Workshop and sponsoring the closing Mix & Mingle, AFR’s President Laura Brandao moderated the insightful Master the Art of Recruiting panel. For over a decade, AFR has been guiding brokers through new business opportunities with continuous educational opportunities, truly world-class customer experience, and unrivaled expertise in specialized programs like One-Time Close and Manufactured Housing. Find out more about AFR by visiting www.afrwholesale.com. Looking to become a partner? Email sales@afrwholesale.com or call 1-800-375-6071.

Do you have FOMO? (That’s Fear of Missing Out) In today’s lending environment, the whole industry seems to be falling victim to it. Think about it. Are you chasing the next hottest trend? Do you envy others launching a new product or channel that you’re not in?  Following the next big thing is not the secret to success. This TMS CAREspondent blog shares how to lose the mortgage FOMO and focus on what really matters.

Do you care about borrower satisfaction?

Did you know that the top five nationally-ranked lenders in terms of borrower satisfaction — according to J.D. Power’s 2018 U.S. Primary Mortgage Origination Satisfaction Study — are all independents? Why do many independent lenders beat large banks when it comes to satisfying their borrowers? STRATMOR MortgageSAT data from the last 12 months (more than 100,000 borrower responses) shows no difference in borrowers’ perception of the loan officers based on their affiliation with a bank or independent, with both scoring 95 on a 100-point scale. What’s going on? In the new June MortgageSAT Tip, MortgageSAT Director Mike Seminari identifies three reasons why many independents beat banks in the race to delight customers and suggests three ways banks can adapt to compete.

Lenders & investors incorporate Freddie/Fannie changes

Although this may change given yesterday’s URLA news (first paragraph), FAMC Correspondent issued the following information: Delegated Lenders may begin using Freddie Mac & Fannie Mae’s updated URLA/ Form 1003 for all new loan applications taken on or after July 1, 2019, although it will not be required until February 1, 2020. FAMC is working to ensure systems are compatible with the new 1003 and ULAD format so that Non-Delegated Lenders may utilize the new 1003 for all new loan applications taken starting in November 2019.

Mr. Cooper (ex-Pacific Union Financial) has discontinued its Home Possible Advantage product line(s). As a result, these products will no longer be offered in the Optimal Blue system.

Customers utilizing this content for proprietary products have six months from 05/20/2019 to reconfigure eligibility/adjustment sourcing.

Land Home Financial Services offers down payment assistance for Conventional buyers.

Effective immediately, Mountain West Financial, Inc. (MWF) will begin accepting transactions for Deferred Action for Childhood Arrivals (DACA) and Individual Taxpayer Identification Number (ITIN) borrowers in accordance with Fannie Mae (FNMA) guidelines.

loanDepot’s Wholesale/Correspondent weekly newsletter covers the following topics: Borrower Paid Compensation (BPC) – New Jersey and Pennsylvania, Conforming and High Balance (DU) 1/0 Temporary Buydown Program, VA Appraisal Policy and Procedures and South Carolina Attorney Telephone Closing Affidavit Compliance.

As announced in Fannie Mae’s Lender Letter LL-2019-04, Fannie Mae will begin implementing a 25-basis point (0.250) loan-level price adjustment for loans secured by second homes with LTV ratios greater than 85%. This is in addition to any other price adjustments that are otherwise applicable to the particular transaction. As a result, effective for locks on and after May 13, 2019, Franklin American Mortgage Company (FAMC) will begin charging a 0.250 percentage point adjustment for loans run through DU for second homes with LTV greater than 85%. Currently, the rate sheets have a 0.250 percentage point adjustment on applicable products for “LP/Second Home” with LTV ratios of 85.01-90.00; this will be revised to “Second Home”, reflecting that the adjustment now covers any AUS type.

Capital markets

Have you been missing out on new bid tape AOT loan sale executions? Since MCT rolled out these executions in May 2018, clients have saved an average of $45,000 each on trading costs. Leading investors are offering bid tape AOT with distinct improvements over legacy AOT, including wider trade tolerances, automatic blending, immediate acceptance, and short delivery periods. If you haven’t been using these executions, you’ve been leaving money on the table. Learn more about the advantages and economics of these executions from MCT COO Phil Rasori. With the launch of MCT’s Trade Auction Manager (TAM) electronic TBA trading platform, lenders can take advantage of an end-to-end digital process for bid tape AOT. Broker-dealers confirm trade requests with TAM, investors confirm bid tape AOT pricing with BAM, and tri-party agreements are automated, leading to instant, error-free execution. Schedule a demo to experience the potential pickup and operational benefits for yourself.

U.S. economic data has started to reflect some of the uncertainty surrounding international trade as well as a general easing of the ongoing expansion. Employers added a dismal 75,000 jobs in May and prior months’ numbers saw downward revisions. Hourly earnings saw their smallest increase since last September, rising 0.2 percent in May. While the US-Mexico tariff situation seems to be a non-issue, tensions are still high in the US-China trade negotiations. This has created a potential showdown between the markets and the Fed as the markets are now expecting 75bps in rate cuts before the end of the year. With inflation running below the Fed’s target and unemployment at 3.6 percent, the Fed may view a rate cut as appropriate to sustain the current expansion and get inflation back to preferred levels. However, the Fed has consistently said it will remain data dependent and exercise patience in the timing and degree of any changes in monetary policy.

Are we entering a refinance boom? Yesterday saw mortgage applications from the MBA jump nearly 27% versus the prior holiday-adjusted week, thanks to a huge lift in refis which accounted for nearly 50% of apps. Pricewise, U.S. Treasuries ended the midweek session on a curve steepening note although the 10-year T-Note closed nearly unchanged at 2.13%. CPI and core CPI moved as expected, meaning consumer inflation pressures remain muted: another data point to aid inflated expectations for the Fed to cut the target range for the fed funds rate sooner rather than later.

Intensifying protests in Hong Kong over a bill that would allow extradition to China weighed on investor sentiment, as it seems China is trying to tighten its control over the region. Speaking of China, its retail vehicle sales in May posted a twelfth consecutive decline, while its CPI was unchanged MoM in May, and PPI met expectations. Other readings from Asia included Japan’s April Core Machinery Orders growing well above expectations, though May PPI decreased when it was expected to increase. And South Korea’s May unemployment rate fell. In Europe, the Italian government will reportedly back a French candidate to lead the ECB in order to avoid giving the job to Bundesbank President Weidmann.

Today’s U.S. domestic calendar is already underway with initial jobless claims for the week ending June 8 (+3k to 222k) and May import (-.3%, ex-petroleum -.2%) prices. This afternoon, the NY Fed will release a new two-week FedTrade schedule, which is expected to total around $1.35 billion based on paydowns in the Fed’s portfolio which exceeded the $20 billion tapering cap by $2.7 billion. MBS market participation will also be lighter with many in Washington, D.C. for the two-day 2019 Ginnie Mae Summit which has FHFA Director Calabria delivering remarks today. With the weekend in sight we begin today with Agency MBS prices better nearly .125 and the 10-year yielding 2.10 percent.

Part 4 of 5 of “First World Problems”)

I ate too much food for lunch and now I’m tired.

After you buy one iPhone, they make another one a year later.

My garbage disposal eats better than 98% of the world.

The Wi-Fi on my flight across America is not fast enough to watch YouTube videos.

I got a haircut and now everyone is saying, “Hey, did you got a haircut?”

I accidentally bent my spoon while scooping out ice cream.

The cleaning lady woke me up.

There are so many dishes in the sink I can’t fill my Brita pitcher.

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Are You Ready for CECL?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

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