July 3: Recent depository mortgage jobs; vendor news; primer on yield curve control: price vs. quantity

Yes, I know that today is a holiday for many companies, and well-deserved. But I wanted to put three topics out there, including vendor news, to play some catch up. If you think technology is racing along in mortgage-land, how about in language and communication? Remember newscasts for the hard-of-hearing? Now scientists have created a glove that automatically translates sign language! Vendors do a lot besides make up words that are caught in spell check, combine two words into one word, or capitalize letters in the middle of normal words. A random selection of what is doing what is below.

By the way, for a quick education plug, MBA’s Path to Diversity Scholarship provides industry professionals with the opportunity to advance their careers. You provide current resume, a professional recommendation and a personal statement and we send you a decision. Path to Diversity dollars can be used on instructor-guided online courses, certificates and designations, and select conferences. Individuals are eligible to receive the award up to three times during their career, but no more than once per calendar year. Click here  to see  to see all of the offerings that you can apply your scholarship dollars toward.

Bank lending jobs

A mid-sized publicly held depository bank is continuing to expand its residential mortgage reach, and is looking for branches and originators in Texas. Capacity has not been an issue for this Bank, and it has a wider variety of programs than most, and is Ginnie, Fannie, Freddie approved. Confidential resumes/notes of interest should be submitted to me for forwarding; please specify the opportunity.

Marlene Hoover has joined Banner Bank as VP Regional Manager of the bank’s Southern California Mortgage Banking team and is building a team of experienced lending professionals with opportunities in the Inland Empire and LA County. Serving the west coast for more than 130 years, Banner Bank is Money Magazine’s Best Bank in the Pacific Region of the U.S. “Banner has a top-notch portfolio of products, including single-close construction, Lot Loans, state housing programs and portfolio lending, as well as an excellent in-house loan servicing team and a market-leading compensation plan,” said Hoover on the reasons she chose Banner. If you’re a mortgage loan officer in Southern California interested in a career that ensures you have high-quality products to support your clients, marketing and sales support, workplace flexibility and highly competitive compensation, consider Banner Bank.

PrimeLending takes work/life balance very seriously and wanted to do something special to bring everyone together to learn, laugh and enjoy a gourmet Italian meal. The results? Hundreds of team members and their families shared a great evening creating yummy food and even better memories. It’s no wonder so many teammates describe our award-winning culture as a family; We work hard and play hard together. If you’re ready to join a company that cares about your quality of life, contact Nic Hartke.”

People’s United Bank has opportunities for talented mortgage loan originators to join our growing organization. Our Mortgage Loan Officers are supported by an experienced team that creates an environment for growing your business and providing your clients excellent service and products. Positions are currently available in Westchester and Rockland Counties in New York. As an Assistant Vice President, Mortgage Loan Officer, you will originate residential mortgages through our retail branch network and self-generated referral sources. We are a portfolio lender offering a wealth of portfolio products to our customers. Please visit our website at www.peoples.com/careers or you can email your resume to Elise Saltzman. Join us and show what your know-how can do.”

Northpointe Bank is recognized as a top-performing bank in the nation by the Independent Community Bankers of America. This is the seventh year in a row Northpointe Bank is ranked a top performing bank in the nation out of approximately 5,000 ICBA member banks. Northpointe attributes its consistent success to its client-first culture. “Our customers are offered more loan products, including zero down payment loans, construction and renovation lending and personalized portfolio loans,” said Michael Winks, president, lending & retail banking at Northpointe. “Also, we have leveraged proprietary technology, such as Home, our lending app that allows borrowers to submit an application, upload and e-sign documents, as well as make their loan payments all from a single secure login.”

And of course there are jobs at Citi Mortgage, Bank of America, Wells Fargo, JPMorgan Chase, U.S. Bank…

Random news from the vendor world

Some vendors are offering products that are “cutting edge.” Others not, and can be compared to the 1990s sports car where the owner has slapped on more tech each year to make it look and feel more advanced. Except it’s 2020, and while their competitors are rolling things like the Tesla Cybertruck, a given vendor is still showing off its 1990 Pontiac Grand Prix Turbo with a new backup camera and parking sensors.

The Mortgage Bankers Association, American Land Title Association, and the National Association of Realtors have jointly prepared sample language for governors to issue executive orders in states where remote online notarizations are not currently allowed. Here are some thoughts from Evolve Mortgage Services CEO Paul Anselmo about the model executive order. “The pandemic certainly emphasized the need for standardization amongst all verticals in the mortgage process. The efforts made by every lender, settlement provider, and Realtor to assure a safe, transparent process for the consumer were challenging when every state had different rules around Remote Online Notarization. It is important that the process is one that assures each transaction was performed with the integrity, consistency, and security necessary to assure the asset is sellable and enforceable.

“When lenders move forward in their support of RON, the only way transactions can scale is to have that standardization in every state. Without standardization, it is impossible to adopt and embrace 50 different ways to conduct business and maintain any resemblance of control. Every vendor should be operating using the proper security protocols as outlined by the MISMO RON Standards even if a state has adopted more formal rules and regulations around RON or offers a remote ink-signed notarization alternative.”

C Squared Social announced the formation of a partnership and integration with OptifiNow. The collaboration of these two companies pairs the targeted digital lead generation expertise of C Squared Social with the enterprise solutions designed to deliver sales support and management at every point in the customer life cycle from OptifiNow.

The COVID-19 pandemic has resulted in unparalleled demands on lenders. To help the lending industry, Factual Data partnered with Innovis Data Solutions and announced it would offer free Innovis® Credit Reports through July. These reports show forbearance, deferment, or natural disaster comment code reporting right on the tradeline throughout the origination process. The reports can also help lenders monitor other loan payment activity such as auto loans. Since the May announcement, nearly 300 lenders have signed up and hundreds of thousands of reports have been accessed. In response to this obvious need, Factual Data® has decided to extend its offer at No Cost through the end of the year.

Docutechs’ Blog: Insights, recently added a new post to its technology series. Digitize Your Fulfillment Process with Docutech’s Fulfillment API.

CoreLogic has fully integrated its Verification of Employment and Income solutions with Encompass by Ellie Mae. Through the integration, mortgage lenders can now receive both automated and manual borrower employment and income verifications directly from Encompass. CoreLogic VOE/I is the only solution on Encompass that ensures every borrower can be verified every time, while remaining compliant with the updated guidelines from Fannie Mae.

 

Radian announced the launch of Radian.com, its redesigned corporate website that serves as the online experience for the full family of Radian companies. “The launch of radian.com allows our customers to tap into Radian’s extensive and unparalleled array of products and services from one point of entry,” said Eric Ray, senior executive vice president, chief digital officer, and co-head of Real Estate. “With its modern design that reflects our company and culture, the new website offers improved functionality, interactive tools, accessibility and readability on all devices for our customers to connect with us easily and efficiently.”

With the launch of its new brand, Indecomm reveals a new visual identity and website. As the mortgage lending industry evolves, Indecomm continually provides innovative solutions to meet the changing needs of its clients. This is specifically represented with the company’s new alignment of product focus on automation, outsourcing, and compliance solutions.

SimpleNexus has released “multi-loan,” a platform enhancement that merges management of multiple loans with the same applicant into one user-friendly interface. The new functionality improves the loan experience for LOs and borrowers, enabling both parties to start, submit and access multiple loan applications via web browser or mobile app experience. This enhancement makes it easy for borrowers to navigate between multiple loans and applications, sign individual loan eConsent and disclosures forms, upload documents and complete tasks associated with each loan file.

AppraisalWorks announced the launch of its flagship appraisal management technology platform, AppraisalWorks. Designed to streamline the real estate appraisal process, this platform gives lenders and servicers a single, web-based technology platform for managing their own appraisals. Lenders and servicers can manage all appraisals and loan types from a single interface. With both the Community and Enterprise Versions of AppraisalWorks, lenders gain access to a nationwide, pre-screened network of licensed or certified appraisers. In addition, lenders have the option to onboard in-house appraisers and appraisal management companies.

FirstClose has added a new feature to its flagship FirstClose ONE platform. Automated ordering is designed to allow lenders to fully automate current underwriting guidelines and streamline loan fulfillment. lenders can configure their account with key loan characteristics such as loan amount, loan to value and FICO. Once this information is configured, the system will automatically select the correct products or services to order for each loan. This level of automation saves the lender processing time, eliminates key-strokes, and dramatically increases efficiencies.

COVID-19 continues to threaten the mortgage industry with long-lasting economic repercussions. In response to the current environment, Altisource hosted the Mortgage Industry Pandemic Summit on May 6, with 6 sessions and 28 speakers, to discuss the major challenges facing the industry as well as possible solutions. Key ideas, best practices, guiding principles and expert advice as and the results and analysis of over 20 poll questions conducted during the sessions have been summarized in this downloadable 24-page whitepaper.

Capital markets

The markets are closed today in observance of the Fourth of July holiday tomorrow, so view any rate sheets out there with caution. Let’s take a gander at “yield curve control,” something we may be hearing about as our economy continues to suffer from the impact of COVID. Remember that the FOMC released the Minutes from its June meeting indicating that the Fed stands ready to react further with accommodative policies for “many years,” but a distaste from the committee for implementing any sort of yield curve caps or targets. FOMC officials questioned its benefits and instead focused their attention on communicating a more explicit form of forward guidance.

In general, the public doesn’t think about the Federal Reserve, the “central bank” for the United States. Given the pandemic, and the initial economic chaos, the Fed jumped in and certainly has been in the news ever since. As a reminder, it performs five general functions to promote the effective operation of the U.S. economy and, more generally, the public interest. But lenders are most focused on the Federal Reserve conducting the nation’s monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy. And promoting the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the U.S. and abroad.

In addition to bringing back forward guidance and quantitative easing during the coronavirus pandemic, Fed officials are now talking about yield curve control, sometimes called interest rate caps. But just what is yield curve control, and how might it impact the rates you give to borrowers?

In normal times, the Fed helps steer the economy by raising or lowering very short-term interest rates. Under yield curve control, the Fed would target a longer-term rate and pledge to buy enough long-term bonds to keep the rate from rising above its target. This would be one way for the Fed to stimulate the economy if bringing short-term rates to zero isn’t enough. Yield curve control is different from Quantitative Easing because QE deals in quantities of bonds while yield curve control focuses on prices of bonds. Under QE, the Fed might announce that it plans to purchase $1 trillion in Treasury securities. Because bond prices are inversely related to their yields, buying bonds and pushing up their price, leads to lower longer-term rates.

Under yield curve control, the central bank commits to buy whatever amount of bonds the market wants to supply at its target price. Eventually, the target price becomes the market price in the bond market, since who would be willing to sell the bond to a private investor for less than they could get by selling to the Fed? And since securities backed by mortgages usually trade based on a fluctuating spread to various points of the yield curve, movements impact mortgage pricing as well.

One of the most widely held misconceptions about the Declaration of Independence is that it was signed on July 4, 1776. In fact, independence was formally declared on July 2, 1776, a date that John Adams believed would be “the most memorable ‘epocha’ in the history of America.” On July 4, 1776, Congress approved the final text of the Declaration. It wasn’t signed until August 2, 1776.

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

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)

 

July 2: Fulfillment, AE, LO jobs; anti-fraud, DPA, HMDA products; non-QM news in primary & secondary markets

Lenders continue to count the piles of doubloons they booked during another record-breaking month; will July be another? M&A deals are still simmering out there, but when profits are “en fuego” and July is looking strong with full pipelines, it can be tough for a fortunate owner to sell. Think of all of those unfortunate folks who bought fancy/expensive dresses or suits in February or early March: They probably won’t need them in 2020 due to the pandemic crisis. Now all one needs is a Zoom blouse or shirt. Speaking of a crisis, TBD Marketing put together a Crisis Flowchart that is easily downloadable. I hope none of you will ever need it, but we know that someone will from a PR perspective. When the health crisis began 3 ½ months ago, since no one was on vacation, the daily “out of office” replies that I received after sending out my commentary plummeted. They’ve ramped back up again, which means that some are taking some much-deserved time off, and hopefully wearing masks & washing hands. Seen outside a bar: “When this is all over, we’re throwing the biggest St. Pats Easter de Mayo Bash of July End of Summer Halloween party ever!”

Employment & new hires

Caliber Home Loans and our employees show our patriotism in numerous ways, one of which is through active support of our Military Veteran Employee Resource Group (MVRG). ERG members have raised funds and volunteered countless hours with several military support organizations such as Wreaths Across America and Patriot PAWS, as well as assembled hundreds of Caliber Cares Packages for active-duty service members. Caliber and the MVRG recognize the contributions and sacrifice of military and veteran communities annually through military t-shirt sales, support of the USO, and participation in the Carry the Load campaign. We celebrate and honor National Military Appreciation Month each May though these efforts and with a special place in our hearts at Caliber. If you have an interest in one of our posted job opportunities, please contact Jonathan Stanley for consideration. If you are interested in a sales opportunity at Caliber, please contact Brian Miller for immediate consideration. Visit the Caliber Careers website for opportunities across the organization!”

Amazing opportunity with unlimited career potential for the right accounting/finance leader who would report directly to the CFO: A nationally recognized IMB is searching for a Controller to join its legendary team. A company where culture is number one, they consistently prove strong annualized YOY growth with first-to-market innovations, implementing leading technologies, and growth in expanding markets. Teamwork, leadership, and advocacy of the company’s vision are essential to the role. Experience with AMB and Encompass are ideal. Interested candidates should reach out to Chrisman LLC’s Anjelica Nixt to submit a resume and begin the interview process.

“We’d like you to meet RON. No, RON isn’t a new Evergreen Home Loans associate. RON is short for Remote Online Notarization and we’re well acquainted. In fact, Evergreen closed 15 loans in April with RON. Combine that with almost 86% of customers previewing their closing documents before signing, plus 65% of eligible customers eSigning, and we said hello to a record month in April. Next up? Introducing our customers to eNote. Customers in select markets can eSign the Note before meeting with a notary (including RON). And some customers have already closed with eNote and RON! That’s just another way we’re streamlining and improving the closing process. If you’re interested in working for a company that welcomes innovation and creates happy customers, check out our careers page or contact Chuck Iverson. We’d love to meet you.”

Angel Oak Home Loans is excited to announce its expansion in the Western U.S., specifically California, Arizona, Nevada, and Washington. “We are hiring a Regional Sales Manager to be based out of California or Arizona. As well, positions are available for a West Regional Operations Manager and experienced Loan Officers. This is a great time to join Angel Oak Home Loans as we have had stellar mid-year growth and originations. Continued growth for the remainder of 2020 is projected along with plans for expansion. If you are interested in career opportunities with a growing team at Angel Oak Home Loans, please contact Lee Williams, Mac Cregger, or Drew Church.”

Home Point Financial was a start-up in 2015. In just five years, we have grown to be the second largest wholesale lender and the #13 largest correspondent lender. We’ve experienced 400% year-over-year growth in wholesale and expect to fund over $55 billion in 2020. How did we grow so fast? Because we are committed to being true partners to mortgage brokers and correspondent lenders. To meet our continued demand, we’re hiring 75 underwriters at every experience level and 105 fulfillment positions. Visit our website, check us out on social media and learn what being a part of the Home Point family is all about. For immediate consideration please send your resume directly to John Eite.”

The Community Home Lenders Association (CHLA) announced that Craig Thomas would be joining CHLA as its Communications Director after a 30-year stint at Freddie Mac in a number of external relations and public policy roles (most recently as part of its Congressional relations team and as supervisor of Freddie’s state relations function).

Lender & broker services and products

“In case you missed it, Richey May’s 2019 HMDA Market Share Dashboards are out! We’ve organized the raw data into easy-to-use dashboards to help mortgage leaders and industry service providers find insights. See the dashboards on our new website! If you have any questions or would like to discuss the data please reach out to us.”

“Overlays” & shuttered programs are reactive; exclude solid, underserved borrowers; overweight the past & credit scores; and weren’t a magic bullet in the GFC. Overstated (and understated) scores, forbearances & defaults will increase with such a volatile socio-economic backdrop, regardless. Get “proactive” with the actionable Mortgage Risk & Fairness Score, a predictive, data-driven “intelligence” tool to understand borrowers, holistically. Then, use that deep insight to originate, underwrite, fulfill, buy, sell, and monitor more inclusively & efficiently. It’s plug-n-play and enables quick deployment of advanced risk & behavioral/attitudinal analytics (propensity, segmentation, ability, and “willingness” to pay) that are validated (top 10 bank) & vetted (CFPB, OCC, Fed). “The Score” doesn’t require change to existing tech or processes. But, used up-front, and as an adjunct to underwriting, secondary, and servicing, it will increase volume, inclusion, confidence, margins, efficiency, and capacity, while decreasing risk. Click for info.

Chenoa Fund demonstrates how responsibly run national DPA programs benefit the consumer. Innovative financial solutions, such as our CRA Note Exchange, have allowed us to offer the Rate Advantage program, which offers rates competitive with standard FHA loans, even with DPA included. Also, by running mortgage banking in-house vs. outsourcing operations through large bankers, we have brought costs down to consumers, while helping lenders avoid losses on DPA. Additionally, through careful monitoring of our loan defaults, we added overlays to mitigate risk without eliminating offerings to underserved populations. Independent financial/operational audits are conducted throughout the year to assure partners our compliance with all industry requirements. We constantly strive to improve our offerings, pricing, and service. These measures allow us to serve significantly more minority homebuyers than any other DPA program (54% of borrowers are minorities). We sincerely thank each of our amazing correspondent lenders, making our program available where most needed.”

FundingShield’s services have processed $110Bn+ YTD 2020 in transaction value, an increase of 700%+ compared to YTD 2019 due to client growth in addition to a surge in product interest due to WFH (Work-from-home). The industry continues to seek cost reductions, efficiencies in automation (utilizing cognitive AI/ML) to free up critical middle & back office resources while eliminating wire & title fraud and losses. Lenders are now able to very quickly get comfortable with new closing agents that can execute with the realities on the ground using RON, digital and e-closings where FundingShield’s transaction level vetting, verification and validation facilitates lenders to adapt, adopt and in result be protected. Ike Suri, Chairman & CEO shared, “The industry is embracing cloud-based, single-click, secure and malleable technology to improve customer experience, eliminate the risk of the growing epidemic in wire, title & synthetic fraud while driving higher asset quality to investors who demand further validation through the origination process.” Contact Sales@Fundingshield.com.

News about the non-QM sector

Last week the CFPB put out a proposed extension and new definition of non-QM, much of which goes along with industry thinking. Given that it would appear that non-QM loans will account for somewhere between 1 to 5 percent of overall production, and the huge majority come from three states (CA, FL, and NY), plenty of lenders either don’t care about the product or aren’t even licensed in those states. And a large percentage of non-QM loans flow directly into the portfolios of credit unions and banks who often price it very competitively and like owning the asset. But it is still a good idea to see who is doing what, and what the trends look like.

First, a look at existing securities. S&P Global reports, in its Assessing the Credit Effects of COVID-19 on U.S. RMBS, that the non-QM sector was “expected to show relatively increased credit pressure given the greater presence of lower FICO borrowers and the higher proportion of self-employed borrowers. As expected, the reported delinquency levels rose the most (on an absolute basis) for non-QM compared to other sectors, such as credit risk transfer (CRT) and prime jumbo.”

“The nonqualified mortgage (non-QM) RMBS sector may be particularly sensitive to the economic freeze that has gripped the country because it is characterized by (1) lower relative FICO scores, (2) the use of alternative income documentation, (3) self-employed borrowers, and (4) concentration within three states (California, New York, and Florida). Examining non-QM pool concentrations by metropolitan statistical area (MSA), we found that roughly two-thirds of non-QM loans are to borrowers in the top-15 MSAs (of which there are 399 in the U.S.), and 12 of these are located in either California, Florida, or New York.”

S&P continued. “Self-employed borrowers may face business cash flow strains arising from mandatory lockdowns. We find that loans to borrowers in California make up 50% of the closing principal balance in the S&P Global Ratings-rated non-QM RMBS universe, with 28% underwritten to self-employed borrowers. California has the largest share of self-employed borrowers at 56%. The state’s non-QM loans, however, exhibit FICO scores and loan-to-value (LTV) ratios that are stronger than the respective national averages. Florida’s non-QM loans stand out as having the lowest average FICO score and the highest average LTV ratio. New York and Florida both have greater exposure to debt service coverage ratio (DSCR) loans (i.e., investor property loans underwritten to rental cash flows) than California. New York has the highest FICO and lowest LTV ratio among these three states.

“At this early stage in the economic downturn, we have seen DSCR loans exhibit about the same credit performance as self-employed borrowers, except in New York where they have performed worse. The higher degree of COVID-19 exposure in New York may be having an impact on the residential rental market to a greater extent. DSCR borrowers, however, tend to have substantial equity in their properties and might therefore be disinclined to default strategically. In addition, they tend to also have cash flow diversification via multiple rental cash flow streams, which could also be a factor supporting DSCR loan performance.”

Sprout Mortgage has announced enhancements to its recently unveiled suite of non-QM programs that are designed to provide additional home finance options to creditworthy borrowers. The new enhancements include: A new Max 85% LTV on most loan programs. Reduced rates across the entire program offering. Increased maximum Loan Amounts at lower Loan-to-Value levels on the Select program series. Sprout’s loan programs are accessible through many widely used mortgage product and pricing engines including Optimal Blue, Loan Sifter, EPPS LoanNex and Mortech. Full details are available to mortgage professionals through the Sprout Client Portal, while Sprout’s easy-to-use iQualifi app provides scenario eligibility and pricing.

Luxury Mortgage has announced that it has resumed funding on its entire suite of Simple Access non-QM products (full doc, alt doc, and investor/DSCR) through all origination channels: retail, wholesale, and correspondent. Luxury Mortgage was the 2nd largest contributor into Starwood’s recent non-QM securitization, which was the largest post pandemic issue. Luxury Mortgage also noted that, in anticipation of the relaunch, it has maintained the entire TPO workforce through the pandemic. If you are interested, click here to inquire about becoming an approved broker or correspondent seller with Luxury Mortgage.

Angel Oak Mortgage Solutions informed its clients that lender paid compensation is back, and highlighted its Bank Statement Program with lower rates and expanded LTVs: 85% down to a 720 score, personal bank statements are now available, 100% of deposits on our Personal Bank Statement loan (call AE for details).

LoanStream posted an article titled, “Lenders Broaden Non-QM Offerings, Loosen Credit as the Market Stabilizes.” And LoanStream posted various updates including FNMA & HomeReady Product Guideline Updates, Matrices for Government and Non-QM,  and Communications Related to COVID-19.

Mortgage Solutions of Colorado is offering products such as hobby farms on 20 acres, homes on 100 acres, or other unique specialized products for Ag land loans, farms, and ranches. “In addition, as many borrowers struggle with impacted credit from the pandemic, we also still offer our unchanged FHA and VA products with the same Agency driven guidelines. See what is available that you may be missing with the Ag and Rural Residential products that we offer, as well as our still popular government guideline driven FHA and VA products. (Questions can be directed to Richard Eampietro.)

Redwood’s Select QM and Choice QM Program Eligibility Guides have been updated; effective dates are specific to each change.

PRMG announced the release of the Choice Non-Agency Product Suite offering two non-QM first trust deed products with loan amounts ranging from $100,000 to $2,000,000 or $3,000,000 (depending on the product). The Choice Conforming and Jumbo product is more like a traditional jumbo product and the Choice Plus Conforming and Jumbo is a near-miss jumbo. They both allow for non-warrantable condos and LTVs to 95%. The near-miss option also allows reduced seasoning and credit scores down to 600. PRMG offers live webinar training on this new product suite option.

Today National Mortgage Professional Magazine and ACC Mortgage offer up, “DealDesk Focus On: The resurgence of Non-QM and Jumbo” providing a brief overview of the post-corona products and how brokers can use Non-QM to increase business, save loans and help their referral partners.

Capital markets

Liquidity continues to be the name of the game! Chris Bennett from Vice Capital sent, “GNMA 2.0s have struggled from a liquidity standpoint without any support from the Fed like UMBS 2.0s or GNMA 2.5s have, but there is real end-buyer interest there. We recently put out a larger pool of GNMA 2.0s and got bids that ranged from 24/32 below Tradeweb screens to 10/32 above them – in the end they traded well into the 104s. Seems a little crazy to think you can offer 2.25% on a 30yr FHA loan and get 4 points in cash plus keep the servicing for free, but if you’re an issuer that’s where things have evolved to. Wild times.”

It was a bit of a volatile session for MBS and U.S. Treasuries yesterday, though the latter ended the day only pulling back a couple bps across the yield curve, moved by an opening rally in stocks, no positive coronavirus news as more states were forced to delay re-openings, and reminders of a worsening relationship with China (this time over sanctions for the Communist Party’s abuse of Muslim minorities in Xinjiang). The FOMC released the Minutes from its June meeting, which indicated that the Fed stands ready to react further with accommodative policies for “many years,” but a distaste from the committee for implementing any sort of yield curve caps or targets. FOMC officials questioned its benefits and instead focused their attention on communicating a more explicit form of forward guidance.

Data from the day showed construction spending declined 2.1 percent month-over-month in May when it was expected to increase 1.1 percent. That comes on the heels of a downwardly revised 3.5 percent decline in April and shows total construction spending has decelerated to only be up just 0.3 percent from a year ago. The ISM Manufacturing Index for June rose to 52.6 percent, indicating expansion in the sector, which comes as a welcome surprise as it was still expected to contract for the fifth straight month. The figure also represents the largest month-over-month increase since August 1980 and reflects a clear bounce back from the super depressed conditions seen in April and May… but how sustainable is the bounce back?

Today’s early close calendar has already had a whole slew of releases. June Nonfarm Payrolls (+4.8 million, better than expected), Unemployment Rate (13.3 percent down to 11.1 percent!), Hourly Earnings fell, May Trade deficit ($54.6 billion), weekly Initial Claims for the week ending June 27 (-55k), and Continuing Claims for the week ending June 20 (+59k). There are only two other scheduled releases (ISM New York business conditions and May Factory Orders) before the early 1PM ET bond market close. After the payroll data we begin the day with Agency MBS prices worse/down nearly .125 and the 10-year yielding .70 after closing yesterday at 0.68 percent.

Police in Anaconda, MT arrested two kids yesterday. One was drinking battery acid, the other was eating fireworks. They charged one – and let the other off.

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, “Knowing a Borrower’s Mind”, focused on operations changes. If you have the inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)

July 1: COO, Ops, AE, LO jobs coast to coast; broker, marketing products; mortgage rates: “steady as she goes”

Thank God for the Rolling Stones: They’re older than we are! Halfway through 2020 already? Welcome to Q3! Social D. sang, “Life goes by so fast; you only want to do what you think is right. Close your eyes and then it’s past; story of my life.” Yes, we’re aging. The U.S. Census Bureau announced the nation’s 65-and-older population grew by 34 percent (13.8 million people) during the past decade, driven by the aging of Baby Boomers born between 1946 and 1964. The growth of this population contributed to an increase in the national median age from 37 years in 2010 to 38 in 2019. Since the first Baby Boomers reached 65 years old in 2011, no other age group has seen such a fast increase in the past 10 years. In fact, the under-18 population was smaller in 2019 than it was in 2010, in part due to lower fertility in the U.S. (For pure numbers, millennials, born between 1981 and 1996, number about 72 million. Boomers are 73 million, a stat not lost on reverse mortgage lenders.)

Employment & transitions

ServiceLink is pleased to announce David Lee as its new VP, Sales, ServiceLink Auction. Lee, who brings more than 16 years of industry experience to ServiceLink, will be responsible for leveraging his deep industry knowledge and auction expertise to continue to strengthen ServiceLink’s reputation for providing superior client service. He is excited to continue his career at ServiceLink, citing its wide breadth of integrated default services that work together with auction to improve efficiencies and deliver better results for its clients. Prior to joining ServiceLink, he served as VP, Client Management at Auction.com. Before that, he held Senior Vice President roles in Business Development and Account Management at Jordan Capital Finance and Matt Martin Real Estate Management following a distinguished career in the United States military.

AAFMAA Mortgage Services is looking for experienced mortgage professionals in sales and operations roles. “We have Loan Officer, Branch Manager and Closing/Post-Closing opportunities in Virginia Beach and Northern VA, as well as the Raleigh, Fayetteville, and Wilmington NC areas. Great opportunity to be part of a mortgage team, with centralized support and marketing leads to help you grow! Email Tiana Fallavollita for details! Plus, with a wide range of low-rate and low-cost mortgage products, you can help Veterans and military members build, buy, or refinance a home. Join us and be part of a not-for-profit, member-owned association founded in 1879.”

Agility 360, a mortgage-centric recruiting and project staffing firm, continues to see unprecedented need for qualified originations and servicing staff. With the pressure of historically low rates, re-bounding demand for purchases, and increasing delinquencies, finding qualified mortgage personnel can be difficult, but finding great talent can seem almost impossible. This is when Agility’s nationwide candidate database and our proprietary methodology can deliver results and find that unique fit between employer and employee. Whether you need immediate direct hires or temporary contract personnel, Agility always finds “the right person for the job”. Leveraging over a decade of industry experience, Agility has created the most sophisticated recruiting and talent management network in the mortgage industry. If you’d like to learn how we can help, please contact Raj Sharma at 469-208-6337.”

Is your company becoming too corporate? Do you love the company you used to work for? Check out PacRes Mortgage Dreams Approved Daily and go back to being proud of where you work and having fun again. Contact Jeff Strode, EVP (503-805-0991) to find out about joining The PAC.

“With a 600 percent year over year growth, and a target of $1.3 billion in our 2nd year of business, 11 MORTGAGE is looking for high caliber team members to support this growth. If you have extensive wholesale experience, we may have an incredible opportunity for you in Underwriting, Account Managers, Closers, Set up and Disclosure Desk. We offer a lucrative bonus program with opportunities for additional earnings through overtime (including weekend O/T). All of these positions are available remote. On the sales side, we are looking for champion Account Executives with an active book of business in key states across the nation. 11 MORTGAGE offers attractive compensation, very aggressive pricing, unmatched broker/ops level of service, NO AMCs, very low AE turnover, and untapped wide-open territories. If you want to double your production and territory with an exclusive organization that provides the industry’s best customer service, contact 11 Mortgage EVP of Wholesale, Thomas Michel. Area sales managers with successful teams are also encouraged to reach out.

As we continue our Gear Up For Growth 2020 initiative, Stearns Lending is excited to welcome KJ King, Account Executive, to the Wholesale team. KJ comes to Stearns with nearly a decade of experience in the industry, which includes roles at top wholesalers. Throughout his career, he has played a key role in company growth and client success in wholesale lending. King stated, “Stearns has always been a leader in the industry, so I am honored to join the team and excited to have the opportunity to provide premium products with unmatched service to my clients”. Even with our sustained growth, Stearns is looking to add more operations and sales positions to the team. For more information or to inquire about open sales and operational roles with Stearns Wholesale Lending, click here.

St. Louis, Mo.-based, and 100 percent employee-owned, USA Mortgage ranked among 2019’s top 60 U.S. mortgage loan originators by Scotsman Guide after booking loan volume of $2.45 billion, is looking for a Chief Operating Officer (COO). Primary duties (from the big picture perspective) are to plan, develop and implement internal and external initiatives that advance goals set by the CEO and ESOP Board of Directors. Qualifications: a BA or BS in business from a four-year university (MBA preferred); detailed knowledge of mortgage loan products; and at least five years of executive supervisory experience. For an inside look at the factors powering the rise of USA Mortgage, which now employs 767 people at 106 locations in 40 states and the District of Columbia, here’s a recent story from the St. Louis Business Journal. If you think you are a fit, let’s get started. Reach out today to joinus@USA-Mortgage.com.

Lender & broker services and products

Union Home Mortgage Corp. TPO recognizes this time of uncertainty for our Partners and their families. We are committed to prioritizing our purchase transactions. In 2020, our purchase business goes from submission to funding in less than 25 days on average. In our Wholesale and Non-Delegated Correspondent production channels, we are offering the following products: FNMA, FHLMC, FHA, VA, USDA loans. We will continue to adapt to changes, keep you informed, and do our personal best to fund all loans on time as expected. We’ve made changes to our workflow and technology to create Raving Fans. Thank you for your business and partnership. We are here for you. We’re an organization dedicated to providing world-class service at competitive prices. LEARN MORE: Contact Jim Wickham, Vice President – Third Party Origination (248.318.8553).”

When Dan Gilbert founded a small mortgage brokerage called Rock Financial 35 years ago, the three-person operation had grit, hustle, and a penchant for innovation. Those qualities still permeate through the Quicken Loans we know today as the nation’s largest mortgage lender, guided by its unmatched culture. A decade ago, QLMS was created so the company could return to its roots and support brokers who look like Rock Financial did in 1985. Now, QLMS is in the midst of incredible growth. It has a partner network that is 40,000 LOs strong and has done more broker business in the first half of 2020 than in all of 2019, which was a record year. This growth is thanks to the infrastructure and processes that have been honed over the last three and a half decades. If you want this expertise on your team, click HERE to start working with QLMS tomorrow.

As wholesale brokers continue to uncover new ways to optimize their business, the team at ReadyPrice has been hard at work developing their technology focused on saving brokers’ time, clicks, and dollars. ReadyPrice is the first cloud-based software that brings together product pricing eligibility, DO/DU underwriting, and loan delivery within a single, easy-to-use platform, creating a smarter way for brokers and lenders to work together. Best of all, ReadyPrice is a lender-sponsored tool, which means there is no cost for brokers to sign up and start working more efficiently. ReadyPrice launches July 16th and is already taking pre-launch registrations. Sign-up today to experience ReadyPrice and the Modern Era of Mortgage Technology! 

Record sales and 50 percent lower cost per loan! How Steven J. Sless and his PRMI Reverse Division rocked their best months ever using direct mail: “You know, PRMI is just a powerhouse in the mortgage industry now. And Monster Lead Group has been an unbelievable partner. Monster knows what they’re doing, they know how to make the phones ring, they know how to generate business, but they also know how important it is to help us grow a brand at the same time. It’s a real marketing system. It’s not just sending mail. I think the consistency of the campaigns is what we rely on… Our cost per funded loan is about 50 percent of the industry average… So that story should be told. We’re able to grow and scale our operation because of the predictability of the Monster campaigns. That is what’s allowed us to get to this point.” Want BETTER direct mail?

Capital markets

Fannie Mae’s Trading Desk made a temporary change to the maximum extension period for mandatory commitments. “When making mandatory (non-Servicing Execution Tool) commitments in Pricing & Execution – Whole Loan (PE – Whole Loan), the maximum extension period has been temporarily moved from 30 days out to 60 days. Any commitment extended for more than 25 days will still be ineligible for the auto-extension process.”

Interest rate volatility has disappeared from the market, much to the satisfaction of capital markets folks everywhere. But this is sobering: not expecting air travel to return to pre-virus levels until perhaps 2025, Airbus will cut 15,000 jobs. One of the major headlines fueling market movement is if the federal government will engage in further stimulus. When Congress returns from recess in mid-July, it will consider additional fiscal stimulus before emergency unemployment benefits expire and the much longer August recess begins. Between now and then, we will receive some very important labor market-related economic data, which will likely play a key role in shaping the outcome. Bills discussed range from $500 billion to roughly $1 trillion in size, with the bulk of the money going towards state and local aid and stimulus to households through policies like a payroll tax cut or another round of direct household checks. Markets have yet to price in or forecast for any additional stimulus, meaning another round would bump up forecasts for GDP growth, employment growth, Treasury yields, etc., with the actual magnitude dependent on the ultimate size and design of the package.

Taking a step back for perspective, economic data last week continued to show small signs of improvement from the massive contraction that occurred earlier in the year. The Eurozone PMI hit a four-month high, as did the UK and Japan. While all these economies are still contracting, they are not contracting as much as they were over the previous three months. U.S. personal income reverse course in May, declining over 4 percent after jumping nearly 11 percent in April thanks in part to the fiscal stimulus. But in April personal spending dropped almost 13 percent only to rebound 8 percent in May as pent-up demand drove sales. Personal savings fell to a still high 23 percent in May. Durable goods orders rebounded in May as all major categories with the exception of commercial aircraft saw gains. Initial unemployment claims declined by 60,000 to 1,480,000 for the week ending June 20 and continuing claims were 19,522,000. And new home sales jumped over 16 percent in May to a 676,000-unit annual rate after a weak April, although existing home sales fell to their lowest annual pace since late 2010.

Turning to yesterday, the last day of Q2 2020 saw the U.S. Treasury yield curve steepen, with longer durations pulling back a couple bps and the 2-year yield rallying one bp on mixed news. China passed the new national security law for Hong Kong, putting an effective end to the “one country, two systems” principle, though markets paid more attention to Fed Chairman Powell and Treasury Secretary Mnuchin delivering testimony before the House Financial Services Committee where they talked about measures undertaken to support markets, though neither offered anything new. Mnuchin told the House that the economy continues to recover and expects 17 percent growth next quarter and 9 percent in Q4. Powell, in his prepared remarks, stressed the importance of containing the coronavirus amid the recent resurgence in cases, and also said he and his colleagues can see possibly lowering the threshold for the central bank’s Main Street lending facility again. Powell also said the Fed is prepping for a second virus wave. Both men walked a fine line, welcoming a recent rebound in economic activity while warning the pandemic remains a significant risk.

Talking of economic activity, U.S. consumer confidence rose in June by more than forecast as optimism increased amid business reopenings, though sentiment remained well below pre-pandemic levels. Separately, the Chicago PMI increased in June from May but was still below expectations. And the S&P Case-Shiller 20-City Home Price Index rose 4.0 percent in April, missing 4.1 percent expectations but increasing from 3.9 percent in March.

Turning to today’s economic activity, mortgage applications decreased 1.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 26. That comes despite the 10-year yield falling 6 bps during the reporting period with mortgage rates mostly lower as we may be beginning to see some refinance burnout. We’ve also had some labor market indicators, with job cuts from Challenger (172k cuts in June, down from May’s 397k) and ADP employment (2.369 million, less than expected). Later this morning brings the final June reading for Markit manufacturing PMI, ISM manufacturing PMI, and May construction spending. With regards to the Fed, Chicago Fed President Evans and San Francisco Fed President Daly will both deliver webinar remarks. The afternoon brings the minutes from the June 9/10 FOMC meeting which may give more color on any yield curve control discussions. And the Desk of the NY Fed will conduct two FedTrade purchase operations totaling up to $4.665 billion. We begin today with Agency MBS prices unchanged from Tuesday’s close and the 10-year yielding .68 after closing yesterday at 0.65 percent.

Wearing a mask can be scary. Not wearing one can be deadly.

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, “Knowing a Borrower’s Mind”, focused on operations changes. If you have the inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)

 

June 30: Ops, LO jobs; servicing, inspection, loss-mit products; CFPB’s structure to change; Ginnie adjusts pooling requirements

Some days you don’t learn much, other days you learn a lot (skip the ad). We’ve learned that COVID is driving our economy, not fundamental economic news, and at this point virologists have better forecasts than economists. Appearing with Treasury Secretary Mnuchin today before Congress, it is believed that Fed Chairman Powell will state that there won’t be an economic recovery until the threat disappears. We are reminded that low rates come with a cost. Temporary layoffs can easily become permanent reductions. I’ve learned that many lenders are having their best June ever, volume-wise, and I’ve heard some say their June income could equal up to six months of income during a “normal” period. Margins are high in an effort to continue to control volume: why shrink margins if your underwriting turn times are two weeks out? Adjusting margins with an eye on capacity continues to be the name of the game. I hope companies are saving their money for a rainy day. Because there will be.

Employment & transitions

At Home Point Financial, culture starts at the top from our CEO, Willie Newman, and permeates every part of our business. Our ‘We Care’ philosophy is the foundation of who we are, and Willie’s leadership has created a culture that fosters an environment of inclusion, community, caring and open communication. Right now, we’re hiring an additional 75 underwriters at every experience level and 105 operations positions. Our associate-first corporate culture ensures team members are given what they need to succeed: a commitment to work-life balance including remote work, a generous bonus program, opportunities for overtime, and supportive leadership.  Curious what “We Care” really means to Home Point Associates? Click here. Ready to join our team? Send your resume directly to John Eite.”

“Are you receiving the Coaching and Support you need to reach $100 Million? 150 Million? At Churchill Mortgage our goal is to make sure you have a solid foundation by maximizing your strengths, then coaching you up to become an expert in loan strategy and relationship development. For example, we routinely share best practices among our Top Producers to help lift the whole sales team to the next level. Check out these tips from our Top Producer, Michael Brown, who closed $150 Million last year.”

Waterstone Mortgage Corporation announced the resignation of Andy Peach from his position as President & Chief Executive Officer effective July 31. (In 2019, Waterstone Mortgage surpassed $2.9 billion in loan origination volume with 14,000 loans.)

Lender services and products

Join National Mortgage Professional and ACC Mortgage for a special DealDesk Webinar on The resurgence of Non-QM and Jumbo, being held on Thursday, July 2 at 1 pm ET / 10 am PT. The webinar will give a brief overview of post-corona products and how brokers can use Non-QM to increase business, save loans and help their referral partners. During this DealDesk Webinar you will learn what has changed, the most important criteria for getting approval today, concern for the future of Non-QM, and what the future holds. Join us for your chance to win a $250 Amazon Gift Certificate  We invite you to register for the webinar and submit your DealDesk scenarios right here.

 

Now available: The latest innovation from ServiceLink, EXOS Inspect, allows borrowers to complete their own home inspections for maximum comfort, safety, and convenience. No waiting for an appointment: using EXOS Inspect, borrowers spend just minutes per room conducting fast, easy, and secure video inspections for critical aspects of the lending and servicing process. The app includes geo-fencing, timestamping, and patent-pending advanced video processing to assure accurate and comprehensive data, and even has a unique privacy feature to identify and screen out potentially sensitive images. And it’s easy to implement: It is now available to ServiceLink clients with no tech lift required. You can use EXOS Inspect to improve home equity collateral review and portfolio management processes or simply to get a look inside a home in your portfolio.

First American TaxSource property tax reporting delivers full national coverage with the most current tax status and rapid results through the latest technology and data resources vetted through multiple validations from one reliable, trusted partner. Lending professionals need on-demand, real-time tax status reporting outside of the cyclical tax cycle for transactional data that shows the currency of property tax payments to make informed decisions and mitigate risk. First American property tax status reporting creates workflow efficiencies in a single-source solution, delivered via robust, seamless API integration or online self-service PDF reports. As the industry leader in data and technology, First American expertise, innovation and consultative approach provide the best in tax status reporting services. From managing defaults or selling off a package of loans, to monitoring tax liabilities, procuring tax status reports outside of annual cycles is now easy!

UHOUSI Initiative – Civil Rights leaders, Dr. Alveda King and Bishop Harry Jackson are leading a movement to address the national wealth gap, where minorities have 1/10th the net worth of whites. The UHOUSI Initiative is partnering with churches around the country to educate minorities on programs such as the Chenoa Fund, which aims to help families achieve the dream of homeownership through the provision of DPA. Homeownership leads to better family and community outcomes. You can make a difference in addressing the racial wealth gap in our nation by actively educating the minority community and increasing the pool of people you lend to. Did you know that 2/3rds of all household formations in the next decade will be minority led? Be part of a growing movement.  To learn more, contact us about sponsoring a homebuyer education event in your community, where we will provide media outreach and spotlight your company’s efforts.

HomeBinder Announces Partnership with Encompass® by Ellie Mae. With this partnership lenders will have the perfect tool to keep them connected post-close without physical contact. Drive agent referrals by co-branding HomeBinder with the real estate partners you work with. The effortless integration with Encompass® automates the entire process (including loan docs!) View our demo or call us 1-800-377-6915

Part 2 of Maxwell’s new blog series is here. The Land of Unequal Opportunity (Pt. 2): How Government Policy Segregated American Neighborhoods examines how government policy at federal, state, and local levels historically segregated neighborhoods across America and set the stage for the burgeoning racial wealth and homeownership gaps holding Black Americans back today. Read part 2 here. (Missed Part 1? Start with “A History of Redlining and Its Lasting Impact on Black Homeownership” here.)

Do you have the right loss mitigation partner for COVID-19? With agency guidance and investor updates continuing to define how servicers do business during the pandemic, having the right type of vendor partnership is crucial. Sometimes a small, focused partner makes a big difference. With your staff working from home, it is imperative to have easy access to applications that are dynamic, versatile, and able to ingest and synchronize data from throughout your organization’s ecosystem. Read our recent blog to find out what you need right now as well as review the most recent agency COVID-19 guidance. By leading your organization with rapid implementation, client-centric specialization and industry expertise, your servicing team can successfully manage historic levels of borrower interactions while reducing cost and improving efficiency. Stop worrying about how to scale and let us show you how to future-proof your organization with CLARIFIRE®.

As COVID-19 continues to profoundly impact every aspect of business, Sourcepoint understands mortgage servicers must adapt quickly to a new normal. Its experienced Omnichannel Contact Center and Collections teams, and default support staff are available to serve your borrowers and ease their concerns, not only during normal times but also during periods of uncertainty. Backed by the most comprehensive set of servicing and collection licenses and a 5,000+ global workforce with US and global centers, their teams are well equipped to help your borrowers through these difficult times – whether fielding customer service inquiries, navigating through a forbearance application and the approval process to ensure they get the assistance needed in a timely manner, or working through loss mitigation or modification strategies, they are here to help. Learn more about Sourcepoint’s default servicing capabilities.

CFPB in the news

Why should originators care that in a 5-4 decision authored by Chief Justice John Roberts, the Supreme Court has held that the Consumer Financial Protection Bureau’s (CFPB) single-director, for-cause removal structure is unconstitutional because it violates the separation of powers? The court found that the CFPB’s structure can be saved by striking out the for-cause termination provision from the rest of the Dodd-Frank Act. So the agency’s structure was ruled unconstitutional because its director held too much unchecked power, and now the President can fire the director of the CFPB.

The CFPB touches many other industries besides mortgage lending. It’s leadership may not have much direct on the lending activities of LOs. The Trump administration declined to defend the CFPB and agreed with legal challengers who argued its structure was unlawful, abandoning the legal position of the Obama administration. The case itself involved a challenge by debt-relief firm Seila Law LLC, which sought to contest a CFPB subpoena.

Isaac Boltansky Compass Point Research & Trading opined, “In the simplest terms, this means that CFPB Director Kathy Kraninger could be dismissed by the president, which we believe would occur almost immediately if a Democrat wins the White House. At the highest level, we view this decision as (1) a net negative for consumer financial firms as it adds political volatility to the federal policymaking process and should embolden certain state-level actors and (2) directionally positive for the effort to end the GSE conservatorships as there is a readthrough from this case to the FHFA’s governance structure, which could bolster Director Calabria’s sense of urgency… The Seila Law decision carries significance for mortgage finance in two specific ways: (1) the effort to revise the Qualified Mortgage (QM) rule in order to end the patch; and (2) the FHFA’s governance structure.” (The overseer of Freddie and Fannie is similar in structure to the CFPB.)

Capital markets

Ginnie Mae announced sent All Participants Memorandum 20-07 (APM 20-07) that immediately implements pooling eligibility restrictions on re-performing mortgage loans that were bought out of Ginnie Mae pools. This temporary action continues to provide for buyout transactions that are appropriate and necessary, while maintaining market confidence in Ginnie Mae securities.

The main topic of conversation over the last week is the rising number new positive coronavirus confirmations that have taken place since many social restrictions were lifted. This offset the positive news that resulted from the increase in economy activity following forced business closures amid the initial outbreak this past spring. While some increase in positive cases was expected as more tests are being done and people visit restaurants and stores at limited capacity, the percentage of those testing positive has also risen despite expectations that the summer heat and humidity would slow the spread. Many of the states that are seeing a rise in new infections are those in the South and West that experience hotter temps and higher humidity. Financial markets took a pause from their recent bullish outlook last week as the unknowns about Covid-19 present potentially large risks to the economic outlook. As states begin to pause or reverse course on which business may open and by how much and with enhanced unemployment benefits set to expire in July things may get worse again before we are on the steady path to recovery.

Normally, bad news means the yield curve will flatten, but despite the announcement of reopening delays across several states and the WHO saying the “worst is yet to come” regarding the coronavirus, the curve actually steepened and the 10-year yield ended the day unchanged. Part of that was due to exceptionally strong housing data, which saw pending home sales jump 44.3 percent in May after falling 21.8 percent in April. The May figure was expected to register around 18.0 percent, and certainly bodes well for summer homebuying season.

The week opened with a bit of Fed-related news. The Fed finally announced the launch of its primary market corporate credit facility. Additionally, Fed Chair Powell stressed the U.S. economic outlook is “extraordinarily uncertain” due to the pandemic, which he said must be contained to ensure a recovery in advance of his prepared testimony for today’s appearance before a House panel. Hiring is picking up and spending is increasing, but “a full recovery is unlikely until people are confident that it is safe to reengage” in activities.

Today’s calendar starts here shortly with Redbook same store sales for the week ending June 27. Later this morning brings S&P/Case-Shiller Home Price Indices for April, Chicago PMI for June, consumer confidence for June, and Dallas Fed Texas services. There are several Fed speakers starting with New York’s Williams, followed by Fed Governor Brainard, Fed Chair Powell, Minneapolis’ Kashkari, and Atlanta’s Bostic. The NY Fed will conduct two FedTrade purchase operations totaling up to $4.4 billion. We begin today with Agency MBS prices a shade better/higher and the 10-year yielding .62 after closing yesterday at 0.64 percent.

I never thought the comment “I wouldn’t touch him/her with a 6-foot pole” would become a national policy, but here we are!

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, “Knowing a Borrower’s Mind”, focused on operations changes. If you have the inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)

June 29: LO & Sales jobs; MSR, marketing, leads products; training & webinars from home

Does this mean we can no longer say, “Hindsight is always 2020”?! It’s too bad that the Tiger King is the most normal thing about 2020. For the people who still think it is a hoax, and pushing for your right to not wear a mask around others, well, you can read the tales of survivors. Certainly, conditions are impacting the economy. Remember Blackstone and other venture capital firms gobbling up housing inventory ten years ago? Blackstone skipped its payment on $274m hotel loan. Shale pioneer Chesapeake Energy filed for bankruptcy. And the “resi” industry is digesting the latest legal preceding involving G-Rate and non-solicitation (Cook County Case No. 2020 L 371, Guaranteed Rate as Plaintiff and Harry Richter as Defendant). The judge found that G-Rate’s non-solicitation provision was “unreasonable” because it was overly broad and needed to specify employees that were covered. Speaking of employees…

Employment & transitions

Caliber Home Loans is pleased to announce the new PRIDE Employee Resource Group: Promoting Respect, Inclusion, Diversity, and Equality. Caliber and PRIDE are committed to offering a welcoming and inclusive culture for those who identify as LGBTQ+ and advocacy efforts for a better world. PRIDE will encourage honest and sincere conversations, education, equality, and our basic human right…civility. We are currently looking for passionate employees to join the cause! Join team Caliber, a place where everyone can work safely and openly while climbing toward progress together. If you have an interest in one of our posted job opportunities, please contact Jonathan Stanley for consideration. If you are interested in a sales opportunity at Caliber, please contact Brian Miller for immediate consideration.

Movement Mortgage makes another splash in the Midwest, hiring back 17-year industry veteran Brian Sumption to lead the Columbus, Ohio market. Sumption previously worked for Movement from 2015-2018. “I came back to Movement for many reasons,” says Sumption, “but when a company’s priorities of God, Family, Community, and Business align with yours, it’s a no-brainer. I am thrilled to be back where I belong.” Sumption rejoins Movement in the middle of the company’s incredible record-breaking spree. June is projected to be the company’s first $3 billion month. Sumption is part of a one-two punch as Movement expanded its Cleveland market just last month. Sumption will report to Regional Director Chris Shelton. If you’re interested in seeing if Movement is right for you, contact Shelton directly.

“What’s been cooking at PrimeLending besides record-breaking production months? Delicious home cooked meals! This week we hosted eCuisine with the PrimeLending Team, our first in a series of virtual cooking classes designed as a fun way for our team to spend quality time with their families and say ‘thank you’ for all their incredible hard work. We take work/life balance very seriously at PrimeLending and wanted to do something special to bring everyone together to learn, laugh and enjoy a gourmet Italian meal. The results? Hundreds of team members and their families shared a great evening creating yummy food and even better memories. It’s no wonder so many teammates describe our award-winning culture as a family – we work hard and play hard together. If you’re ready to join a company that cares about your quality of life, contact Nic Hartke.”

“Wyndham Capital Mortgage sits at the intersection of being a leader in the digital home lending space while keeping top-level customer service as a priority. With Wyndham, you can fill your pipeline with high-quality digital leads that set you up to close more loans, experience close times almost twice as fast as the industry average, and gain more valuable experience while creating a work-life balance that fits you best. With the implementation of intelligent automation and technology-focused platforms, gone are the days of manual data entry, time-consuming information gathering and rigid scheduling needs. Instead, you have in front of you the tools for success. But we don’t just say that – we have the success stories to back it up. Whether it’s working from home and earning a top spot in the Scotsman Guide or working four days a week and funding hundreds of millions of dollars in loans each year, Wyndham Capital allows you to work in ways you’ve never imagined. Click here to learn more about joining the Wyndham team.”

Marlene Hoover has joined Banner Bank as Vice President Regional Manager of the bank’s Southern California Mortgage Banking team and she is building a team of experienced lending professionals with opportunities in the Inland Empire and LA County. Serving the west coast for more than 130 years, Banner Bank is Money Magazine’s Best Bank in the Pacific Region of the U.S. “Banner has a top-notch portfolio of products, including single-close construction, Lot Loans, state housing programs and portfolio lending, as well as an excellent in-house loan servicing team and a market-leading compensation plan,” said Hoover on the reasons she chose Banner. If you’re a mortgage loan officer in Southern California interested in a career that ensures you have high-quality products to support your clients, marketing and sales support, workplace flexibility and highly competitive compensation, consider Banner Bank.

FHA is hiring a Director for Program Operations and Customer Service Division in Philadelphia. Salary range is $117,188 to $152,342 per year. Apply by Thursday, 7/9/2020. And in Denver, FHA has two vacancies for a Program Assistant ranging from $47,421 to $61,643 per year. Posting closes on Monday, 7/13/2020.

Lender services and products

Mortgage servicers are struggling to right-size preparedness for when forbearance ends and moratoriums are lifted. There really is no way to predict staffing levels needed over the next 12+ months to prepare for the imminent spike in loss mitigation activity. This webinar will introduce self-service options to allow borrowers to secure post-forbearance relief in minutes, while avoiding manual credit processing and operational errors. With the expected uptick in loan modifications, short sales, mortgage releases and foreclosures, the right technology can considerably reduce operational strain, regardless of the source system or collections platform. REGISTER NOW.

Record sales and 50% lower cost per loan! How Steven J. Sless and his PRMI Reverse Division rocked their best months ever using direct mail: “You know, PRMI is just a powerhouse in the mortgage industry now. And Monster Lead Group has been an unbelievable partner. Monster knows what they’re doing, they know how to make the phones ring, they know how to generate business, but they also know how important it is to help us grow a brand at the same time. It’s a real marketing system. It’s not just sending mail. I think the consistency of the campaigns is what we rely on… Our cost per funded loan is about 50% of the industry average… So that story should be told. We’re able to grow and scale our operation because of the predictability of the Monster campaigns. That is what’s allowed us to get to this point.” Better direct mail: www.monsterleadgroup.com/better-results.

“Willingness to pay” is a key behavioral risk attribute that ‘overlays’ ignore & credit scores fumble. Houses, jobs, assets & credit reports don’t pay the mortgage, people do. And people can be wildly unpredictable, and credit scores commonly over/understated, amidst extreme socioeconomic stress. The actionable Mortgage Risk & Fairness Score is a predictive, data-driven “intelligence” tool to understand borrowers, holistically. Then use that deep insight to originate, underwrite, fulfill, buy, sell, and monitor most efficiently. It’s plug-n-play and enables quick deployment of advanced risk & behavioral analytics — propensity, segmentation, ability, and “willingness” to pay – that are validated (top 10 bank) & vetted (CFPB, OCC, Fed). “The Score” doesn’t require change to tech, or vital processes. But, used up-front, and as an adjunct to underwriting, secondary, and servicing, will increase volume, inclusion, confidence, margins, efficiency, and capacity, while decreasing risk. CLICK for Info.

 

Ready to learn how Q2 2020 market volatility has affected your MSR portfolio? With MCT’s servicing portfolio valuations, you’ll get a first look at how market volatility, forbearance, prepayment speeds and other factors have affected your MSR portfolio! MCT can also help you plan for cash advances based on the impact of market volatility on your portfolio. Contact MCT’s MSR services team today for more information.

Training & events in the next week or two

Join MCT on July 7th at 11AM PT for a webinar on the Power of Bid Tape AOT featuring Wells Fargo. In the webinar, MCT’s COO, Phil Rasori, and Wells Fargo’s SVP of Correspondent Pricing, Greg Vacura, will discuss recent enhancements to the AOT functionality. They will also review cash management benefits for lenders, managing timelines with AOT’s and aggregate stats on AOT executions and savings.

MGIC’s July webinars include a 3-part webinar series, “The Fundamentals of the Mortgage Process”. During these sessions, we’ll discuss the mortgage cycle, taking the loan application, processing the loan, and evaluating credit, capacity, capital, and collateral. MGIC offers complimentary webinars every month to help customers succeed in today’s mortgage insurance industry.

Arch MI is offering mortgage lending education through up-to-date content, expert trainers and convenient formats. And starting in July, when you complete three of Arch’s webinars, you’ll earn its Arch MI Academy Certificate of Education.

The FAMC July 2020 Wholesale “Customer Training Calendar” offers a variety of training opportunities such as: Mortgage Fraud, Getting Your Name Out, Best Practices in Loan Processing, Evaluating Borrower Assets, How to Avoid the Email Delete Barrier and Get More Replies and Selling in a Purchase Market.

Genworth Mortgage Insurance provides complimentary webinar courses to help customers manage, protect, and grow their business, delivering you-centric solutions that matter. Check out the new That MI Guy course entitled “Leverage Your CRM,” to help you close more loans; get all the details on ALL of the GSE communications from Q2 in “Quarterly Agency Updates,” and brush up on Fannie Mae and Freddie Mac’s renovation products as well as HomeReady® and Home Possible®. View the July Training Calendar here.

Join AEI’s Housing Center director Edward Pinto and director of research Tobias Peter for the monthly update of AEI’s Housing Market Indicators on Wednesday, July 1st, 11:00–11:45 AM. Please RSVP by 4:00 PM ET this Tuesday, June 30th to receive call-in information for the briefing on Wednesday, July 1st.

Statistics show that the average consumer will obtain 7-11 loans over the course of their lifetime but only 25% will go back to their original lender when they are looking for another loan. Register for Insellerate’s New Webinar on July 7th – “How To Retain A Customer For Life Through Modern Automation” hosted by Josh Friend, CEO Insellerate and Grant Moon, CEO Home Captain.

Refinitiv’s Eikon Platform Webinars can be used to stay on top of markets, help generate alpha, and enhance your ability to service your clients. CE credits will be provided for each course attended: Technical Indicators: July 8th at 14:00 EDT This session will explore some of the key technical indicators. Learn how to differentiate between convergence and divergence signals. This class will help you improve your understanding of when to use the appropriate technical indicator.

Capital markets

For those that spend their lives worrying, are the new coronavirus cases across the U.S. part of a second wave? Or did the first wave never end? With a record number of cases reported in successive days last week, I’m not sure the semantics matter so much. What really matters is that I cannot go to the bars in Florida or Texas for the foreseeable future. Fortunately, I avoid state income taxes in Nevada, and the bars are still open here! MBS and Treasuries rallied sharply in a risk-off trade to close out last week, not only because investors realized the virus is far from contained, but also due to increased tensions between the U.S. and China, along with the adverse reaction to the bank stress test results from late Thursday. The 10-year yield closed the day -4 bps, -6 bps for the week.

Aside from paranoia surrounding the virus moving markets, there were some actual economic releases on Friday. Consumer spending surged by a record 8.2 percent in May as Americans spent relief payments on newly opened stores and restaurants. Still, the number missed consensus and remains well below pre-pandemic levels. Incomes dropped 4.2 percent, less than the 6 percent decline forecast following a 10.8 percent increase in April due to stimulus checks. The important takeaway is that the personal savings rate, as a percentage of disposable income, remains very high at 23.2 percent. While the figure is down from 32.2 percent in April, a high savings rate means less spending activity, which means less economic growth. Separately, the final University of Michigan Index of Consumer Sentiment for June fell from the preliminary reading, slightly missing expectations. It was still a higher sentiment level than May, and moving forward, consumer attitudes and demand will be influenced by the progress or regression against the coronavirus.

Today’s economic calendar is very light, with May Pending Home Sales and the Dallas Fed Manufacturing Index slated for later this morning. We will also have some Fed speak, with San Francisco Fed President Daly and New York Fed President Williams delivering remarks. Things pick back up tomorrow with the April S&P Case-Shiller Home Price Index, June Chicago PMI, and June Consumer Confidence. Additionally, Chair Powell will testify before the House Financial Services Committee on the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The midweek calendar brings the usual Weekly MBA Mortgage Index, June ADP Employment Change, May Construction Spending, the June ISM Manufacturing Index, and the minutes from the June 9 / 10 FOMC meeting. Thursday is understandably busy ahead of the Independence Day holiday on Friday, and will include an early close. Releases include the June Payrolls report, May’s Trade Balance, weekly jobless claims, and May Factory Orders. With regards to MBS and in addition to tomorrow’s month-end trade, the Desk is scheduled to purchase up to $18.142 billion MBS between Monday and Thursday’s early close. Today, the NY Fed will conduct a repeat of Friday’s schedule totaling $4.665 billion when they purchase $1.768 billion GNII 2.5 percent and 3 percent followed by up to $2.897 billion UMBS30 2 percent through 3 percent. We begin the day with Agency MBS prices worse a shade and the 10-year yielding .65 after closing last week at 0.64 percent on not much news.

2020: Written by Steven King, directed by Quentin Tarantino.

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, “Knowing a Borrower’s Mind”, focused on operations changes. If you have the inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)

 

June 27: Morale & innovation in WFH environment; Fannie’s recent secondary deals; Company spotlight: Mortgage Sentinel

With the dramatic increase of COVID-19 cases in the United States and the world, and returning to captivity at home, it is never too early to start working on that bathing suit body for… 2021. Sure you’ve proved you can work from home. Productivity has gone way up, arguably because there isn’t much else to do besides work. LOs and AEs and other salespeople have been doing that for decades. But what about office culture, or encouraging innovation? How does management make it different working from home as an underwriter for Quicken Loans, United Wholesale, Freedom, Fairway Independent, Bay Equity, U.S. Bank, Caliber, or whoever? Companies are trying online plank-holding contests, daily chats from senior management, virtual co-worker happy hours, walk and talk Zoom meetings, guided meditation, and other things in an effort to build brand loyalty. And where do ideas come from, when in the past they came from chatting informally at lunch, passing by a co-worker’s desk, or on the way to the car at the end of the day? It is easy to argue that innovation is impossible to schedule for a WebEx call. But companies are trying. And executive coaching services are focused on boosting remote morale.

Saturday Company Spotlight

This week we highlight Mortgage Sentinel’s focus on the founding, growth, employee mentoring in a work from home environment, entrepreneurship and charity work, and spoke to Jim Paolino (CEO of LodeStar Software Solutions, a partner in Mortgage Sentinel).

In 3-5 sentences, describe Mortgage Sentinel (when was it founded and why, what it does, where, recent growth, and plans for near-term future growth). The company was founded in Philadelphia in 2020, and provides QA services to the mortgage industry that feature “secret shopping” techniques. This is a first of its kind service for mortgage lenders and helps originators gain insight into the interactions their team has with borrowers. We can help improve the overall sales performance while helping to ensure lenders are compliant with consumer-focused guidelines and regulations.

 

Mortgage Sentinel is a partnership between two industry leaders: LodeStar Software Solutions specializes in web-based compliance tools for the mortgage and title insurance industries, and RDAssociates, Inc. a competitive intelligence, market research and business development firm. They are experts in quality assurance and regulatory compliance research techniques.

 

Tell us about company culture and what type of volunteer work employees are encouraged to engage in, or charities your company supports, and why. Because we are a newer brand, we are still building our corporate culture, which includes the charities we will support most. But both the founding companies have a history of helping various not-for-profit organizations in Philadelphia, including Philabundance, the area’s largest hunger relief organization.

 

What things you are most proud of that don’t have to do with sales? Mortgage Sentinel is founded on the ideals of bringing equality and transparency in the mortgage industry. By the nature of its service, Mortgage Sentinel helps mortgage originators ensure that all borrowers are being treated fairly regardless of their demographic or overall circumstances. Given the biases that exist in society at large, it is imperative that all organizations take a look at how they treat their customers. Mortgage Sentinel is in a unique position to assist with this process.

 

What does Mortgage Sentinel hope to achieve in the next five years? We founded Mortgage Sentinel on the concept that we, as an industry, can do even better in playing our part to ensure fairness and equality in the greater economy. We are also disappointed when we see companies being notified of violations at the point of borrower/originator contact (e.g. loan officers, account executives) for the first time by way of violation and penalty. We feel it’s nearly impossible to truly track or monitor what a company’s borrower-focused employees are doing at all times, and that there needs to be a proactive way to catch violations, many of which may be unintentional or the result of inadequate training (or even inadequate guidance by the regulating agency), and correct them before that firm needs to be penalized. Mortgage Sentinel is our vision for providing just that.

(For more information on having your firm featured, contact Chrisman LLC’s Anjelica Nixt.)

Borrower’s rates helped by the capital markets

The Agencies (aka Freddie and Fannie) continue to help that process in both the primary and secondary markets, hoping to achieve competitive pricing in the secondary market while limiting risks borne by taxpayers. Along those lines, billions of dollars of conforming conventional loans have been bundled into CRT (Credit Risk Transfer) bond deals, nonperforming, or multifamily deals, which help reduce taxpayer exposure to the large book of mortgages guaranteed by the two housing giants and help the Agencies manage their capital.

These deals involve sharing part of the credit risk with third party investors – for a price. In the deals, the investors pay cash up front and purchase debt securities that are designed to absorb the credit losses on GSE (government sponsored enterprises) loan pools. The goal is to attract private capital into the mortgage market and shift some risk away from taxpayers since we are currently on the hook for Freddie & Fannie. Fannie Mae and Freddie Mac have still been pricing transactions to aid liquidity in the mortgage space, providing support for its borrowers and up-to-date disclosures for our investor base. And that helps rate sheet pricing for borrowers! Let’s see what Fannie has been up to lately.

First a walk down Memory Lane. Fannie Mae’s Capital Markets team provided a very well-written recap of recent MBS liquidity in the market. Daily origination volumes, which averaged $3.9 billion in the first two months of the year, doubled to $7.8 billion in the first two weeks of March. Volumes peaked to 2.36 times the yearly average a week ago (Tuesday), when the market was forced to digest $13.1 billion in mortgage supply. With the 10-year Treasury rallying to an all-time low of .36 percent last Wednesday, lenders have been challenged by capacity constraints. Limited demand for TBAs caused mortgage spreads to widen to levels not witnessed since the 2008 financial crisis, and large pickups in production over this month have caused specified pool pay-ups to fall dramatically since the March Class A settlement. Volatility has been the main hamper on MBS liquidity, with no end in sight. Bid-Ask spreads on TBA prices remain significantly wider than screens currently reflect, making it extremely difficult for the desk to execute TBA trades as pockets of liquidity have been rapidly disappear. Fannie experienced regular covers that were several ticks behind the winning levels, and liquidity became scarce enough that subsequent trades were met with even wider cover levels. Going forward, finding liquidity will continue to be challenging and Bid/Offers will likely continue to trade in a volatile range as dollar prices reflect the current state of the market’s depth.

On June 10, Fannie Mae priced FNA 2020-M29, its sixth Multifamily DUS REMIC in 2020 totaling $719.5 million under its Fannie Mae Guaranteed Multifamily Structures program. All classes of FNA 2020-M29 are guaranteed by Fannie Mae with respect to the full and timely payment of interest and principal. The structure details for the multi-tranche offering are as follows. Class A1 has an original face of $90,800,000, a weighted average life of 5.79 years, a fixed coupon of 0.946 percent, and an offered price of 100 with a S+46 spread. Class A2 has an original face of $513,729,819, a weighted average life of 9.86 years, a fixed/AFC coupon of1.492 percent, and an offered price of 102 with a S+51 spread. Class 2A3 (I think that is Elon Musk’s baby’s nickname) has an original face of $115,000,000, a weighted average life of 9.79 years, a fixed coupon of 1.449 percent, and an offered price of 102 with an S+47 spread.

Earlier in the year Fannie Mae priced its second Multifamily DUS REMIC in 2020 totaling $1.03 billion under its Fannie Mae Guaranteed Multifamily Structures (GeMS) program. In addition to the traditional 10-year fixed-rate collateral, the February M5 deal offered a floating-rate execution off of an ARM with a LIBOR-based floater and an embedded 6 percent cap on the pass-through rate. Fannie will now work to develop a SOFR-based variable-rate product. All classes of FNA 2020-M5 are guaranteed by Fannie Mae with respect to the full and timely payment of interest and principal. The $219.4 million Group 1 is comprised of 35 Fannie Mae DUS MBS based primarily in Texas (41.8 percent), Illinois (10.5 percent) and Indiana (9.6 percent) with a weighted average debt service coverage ratio of 1.47x and a weighted average LTV of 69.1 percent. Group 2 is comprised of $817.7 million in UPB across 69 Fannie Mae DUS MBS, primarily in Texas (14.6 percent), Virginia (13.5 percent) and Georgia (9.6 percent), with a weighted average DSCR of 1.50x and a weighted average LTV of 67.4 percent. For additional information, please refer to the Fannie Mae GeMS REMIC Term Sheet (FNA 2020-M5) available on the Fannie Mae GeMS Archive page.

And Fannie Mae priced its fourth Multifamily DUS REMIC in 2020 totaling $1.07 billion under its Fannie Mae Guaranteed Multifamily Structures (GeMS). Per Fannie Mae, the M14 deal captures the appeal of conservatively underwritten, Fannie Mae multifamily collateral in the face of recent volatility. Fannie Mae remains committed to transparent disclosure for investors in navigating the challenges of the current commercial real estate market. Group 1 collateral consists of $624.528 million in UPB across 43 Fannie Mae DUS MBS, primary geographic distribution in CA (34.07 percent), NC (13.86 percent), and WA (10.54 percent), with a weighted average debt service coverage ratio (DSCR) of 1.87x and a 64.5 percent LTV. Group 2 collateral consists of $448.329 million in UPB across 70 DUS MBS with primary geographic distribution in VA (12.00 percent), NY (11.39 percent), and FL (11.03 percent), with a weighted average DSCR of 1.33x and a weighted average 73.1 percent LTV. All classes of FNA 2020-M14 are guaranteed by Fannie Mae with respect to the full and timely payment of interest and principal.

Fannie Mae announced the completion of its first multi-tranche Multifamily Credit Insurance Risk Transfer (MCIRT 2020-01) transaction of 2020 covering a pool of approximately $8.7 billion of existing multifamily loans in the company’s portfolio. The covered loan pool for the transaction consists of 1,017 loans acquired by Fannie Mae from July 2019 through September 2019. These loans are secured by 1,019 properties. Each loan has an unpaid principal balance of less than $30 million. With MCIRT 2020-01, which became effective February 1, 2020, Fannie Mae will retain risk on the first 75 bps of losses on the reference pool. The C tranche will transfer risk to reinsurers covering losses between 75 bps and 150 bps. The B tranche will transfer risk to reinsurers covering losses between 150 and 275 bps. The A tranche will transfer risk to reinsurers covering losses between 275 and 400 bps. Once the pool has experienced 400 bps of losses, the credit protection will be exhausted and Fannie Mae will be responsible for any further losses. This new transaction is the eighth Multifamily CIRT transaction, and transfers approximately $283 million of risk to reinsurers and insurers as part of Fannie Mae’s ongoing efforts to increase the role of private capital in the multifamily mortgage market. Fannie now expects regular programmatic issuance in the market with one transaction in each quarter. Since 2016, in addition to the risk retained by Fannie’s DUS lender partners, Fannie Mae has transferred a portion of its credit risk on multifamily mortgages with an aggregate unpaid principal balance of more than $80.6 billion through the MCIRT program.

And Fannie Mae announced that it priced its second Multifamily Connecticut Avenue Securities (MCAS 2020-01) transaction as part of the company’s ongoing efforts to expand the types of loans covered and promote the continued growth of the credit risk transfer market. MCAS Series 2020-01 is a $425.6 million note offering that complements Fannie Mae’s Delegated Underwriting and Servicing (DUS) and Multifamily Credit Insurance Risk Transfer (MCIRT) programs. The reference pool for MCAS Series 2020-01 consists of approximately 218 multifamily mortgage loans with an outstanding unpaid principal balance of approximately $12 billion. The reference pool includes first-lien multifamily loans underwritten according to Fannie Mae’s standards and acquired by Fannie Mae from January 1, 2019, through June 30, 2019. The loans included in this transaction are a combination of fixed-rate and adjustable-rate multifamily mortgages with unpaid principal balances equal to or greater than $30 million and that have terms less than or equal to 12 years, in addition to other select eligibility requirements. Pricing for the three offered classes is as follows. Class M-7 has an offered amount of $43.2 million, expected initial credit support of 4.793 percent, and is priced at 1-month LIBOR plus 195 bps. Class M-10 has an offered amount of $339.8 million, expected initial credit support of 1.200 percent, and a pricing level of 1-month LIBOR plus 375 bps. Finally, Class C-E has an offered amount of $42.5 million, expected initial credit support of 0.750 percent, and a pricing level of 1-month LIBOR plus 750 bps.

(Thank you to Rhonda M. for this one.)

“I’m from the Gumamint and I’m gonna help you!” Here is an amusing story, as well as a reply to an over-reaching bureaucracy that seldom sees itself on the other end of its ridiculous regulations.

The State of Oregon Department of Fish and Wildlife sent a letter to a home/landowner asking for permission to access a creek on his property to document the decline in a certain species of unheard-of frogs. The property owners’ response in the second letter is worth the read.

Original Letter from Oregon Dept. of Fish & Wildlife:

Dear Landowner:

ODFW Staff will be conducting surveys for foothill yellow-legged frogs & other amphibians over the next few months. As part of this research we would like to survey the creek on your property. I am writing this letter to request your permission to access your property.

Recent research indicates that foothill yellow-legged frogs have declined significantly in recent years and are no longer found at half their historic sites. Your cooperation will be greatly appreciated and will help contribute to the conservation of this important species.

Please fill out the attached postage-paid postcard and let us know if you are willing to let us cross your property or not. If you have any concerns about this project please give us a call. We would love to talk with you about our research.

Sincerely,

Steve Niemela

Conservation Strategy Implementation Biologist

RESPONSE FROM LANDOWNER:

Dear Mr. Niemela:

Thank you for your inquiry regarding accessing our property to survey for the yellow-legged frog. We may be able to help you out with this matter.

We have divided our 2.26 acres into 75 equal survey units with a draw tag for each unit. Application fees are only $8.00 per unit after you purchase the “Frog Survey License” ($120.00 resident / $180.00 Non-Resident). You will also need to obtain a “Frog Habitat” parking permit ($10.00 per vehicle).

You will also need an “Invasive Species” stamp ($15.00 for the first vehicle and $5.00 for each additional vehicle) You will also want to register at the Check Station to have your vehicle inspected for non-native plant life prior to entering our property. There is also a Day Use fee, $5.00 per vehicle.

If you are successful in the Draw you will be notified two weeks in advance so you can make necessary plans and purchase your “Creek Habitat” stamp. ($18.00 Resident / $140.00 Non-Resident).

Survey units open between 8 am and 3 pm. but you cannot commence survey until 9 am. and must cease all survey activity by 1 pm. Survey Gear can only include a net with a 2″ diameter made of 100% organic cotton netting with no longer than an 18-ft handle, non-weighted and no deeper than 6′ from net frame to bottom of net. Handles can only be made of BPA-free plastics or wood.

After 1 pm. you can use a net with a 3″ diameter if you purchase the “Frog Net Endorsement” ($75.00 Resident / $250 Non-Resident). Any frogs captured that are released will need to be released with an approved release device back into the environment unharmed.

As of June 1, we are offering draw tags for our “Premium Survey” units and application is again only $8.00 per application. However, all fees can be waived if you can verify “Native Indian Tribal rights and status”.

You will also need to provide evidence of successful completion of “Frog Surveys and You” comprehensive course on frog identification, safe handling practices, and self-defense strategies for frog attacks. This course is offered on-line through an accredited program for a nominal fee of $750.00.

Please let us know if we can be of assistance to you. Otherwise, we decline your access to our property but appreciate your inquiry.

Sincerely,

<name removed>

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, “Knowing a Borrower’s Mind”, focused on operations changes. If you have the inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)

 

June 26: LO, Ops jobs; DPA, forbearance, broker products; FHA, USDA tweaks; Treasury/MBS spread update

There are plenty of tricks in any trade. Just-opened cellulose sponges are already damp because many are premoistened with sterile water. (Without H20, the material shrivels and hardens and looks unattractive in the store.) Watch a car commercial on TV: many have the street watered down to make the asphalt dark and the car reflect. Don’t ever, ever put anything on a hospital floor. In the old days, when there were open houses, a smudge of vanilla on a light bulb made the house smell like cookies. We’ve all heard of Freedom of the Press. What about “Freedom of the Font?” Under the category of “you can’t make this stuff up,” Goldman Sachs released a new font with which you’re not allowed to criticize Goldman Sachs! Lastly, in keeping with this non-mortgage opening paragraph, did you know that, for the highway engineering trade, expanding a highway makes the traffic worse?

Employment & hires

Bluepoint Mortgage is hiring key positions to aid in its continued success and growth. BPM is currently hiring DE, VA, and Conventional Underwriters, Quality Control Specialists, Account Managers, Disclosures, Funders, and Account ExecutivesWhen polled, Bluepoint employees named the top five reasons to work at Bluepoint as leadership, recognition, growth opportunities, inclusion, and comradery. Being the #2 wholesale lender in CA and #9 in the nation is serious business and takes dedication. That said, BPM knows how to have some fun and break up the day to keep employees engaged and motivated. Please email careers@bluepointmtg.com to inquire about open positions. For more information on Bluepoint, or to become an approved broker, please visit www.bluepointmtg.com.

People’s United Bank has opportunities for talented mortgage loan originators to join our growing organization. Our Mortgage Loan Officers are supported by an experienced team that creates an environment for growing your business and providing your clients excellent service and products. Positions are currently available in Westchester and Rockland Counties in New York. As an Assistant Vice President, Mortgage Loan Officer, you will originate residential mortgages through our retail branch network and self-generated referral sources. We are a portfolio lender offering a wealth of portfolio products to our customers. To learn more about these positions and to apply online, please visit our website at www.peoples.com/careers or you can email your resume to Elise Saltzman. Join us and show what your know-how can do.”

Wyndham Capital Mortgage knows the advantages of implementing digitally driven solutions don’t just apply to borrowers. With the launch of its partnership with Workday, Wyndham Capital is fusing its employee experience with the latest in human resources technology. Whether it is a potential employee working through the application process, or a current employee researching information or increasing their knowledge base, leveraging this technology will have impacts across the board. Wyndham Capital is currently driving the transition to the Workday platform for all employee and recruiting needs. What does this mean? That once again, Wyndham is recognizing the force technology can have to create a smarter, smoother, more efficient organization. As the leading digital home lender, Wyndham Capital is bringing next-generation benefits to today’s workplace, building an organization where employees are given the tools to streamline their days and maximize their success. Click here to learn more about joining the Wyndham team.

Northpointe Bank is recognized as a top-performing bank in the nation by the Independent Community Bankers of America. Northpointe is honored, once again, to be named a top-performing bank by the ICBA, according to FDIC return-on-asset and the institution’s focus on efficiency and personal service. This is the seventh year in a row Northpointe Bank is ranked a top performing bank in the nation out of approximately 5,000 ICBA member banks. Northpointe attributes its consistent success to its client-first culture.  “Our customers are offered more loan products, including zero down payment loans, construction and renovation lending and personalized portfolio loans,” said Michael Winks, president, lending & retail banking at Northpointe. “Also, we have leveraged proprietary technology, such as Home, our lending app that allows borrowers to submit an application, upload and e-sign documents, as well as make their loan payments all from a single secure login”, Winks added.

A mid-sized publicly held depository bank is continuing to expand its residential mortgage reach, and is looking for branches and originators in Texas. Capacity has not been an issue for this Bank, and it has a wider variety of programs than most, and is Ginnie, Fannie, Freddie approved. Confidential resumes/notes of interest should be submitted to me for forwarding; please specify the opportunity.

Total Expert, a fintech software provider for bank, mortgage, and credit union marketing and sales teams, welcomes Josh Lehr as its Director of Strategy, Consumer Direct. Josh will expand Total Expert’s mortgage technology solutions for lenders and loan officers, focusing on lead management and sales productivity offerings. Congratulations!

Lender products & services

Mortgage servicers are struggling to right-size preparedness for when forbearance ends and moratoriums are lifted.  There really is no way to predict staffing levels needed over the next 12+ months to prepare for the imminent spike in loss mitigation activity.  This webinar will introduce self-service options to allow borrowers to secure post-forbearance relief in minutes, while avoiding manual credit processing and operational errors.  With the expected uptick in loan modifications, short sales, mortgage releases and foreclosures, the right technology can considerably reduce operational strain, regardless of the source system or collections platform. Register now.

The results are in and Scotsman Guide has ranked Bluepoint Mortgage a Top Ten Mortgage Wholesaler in the Nation for the second year in a row. Tremendous year-over-year growth has hurtled Bluepoint onto the major playing field of wholesale mortgage banking, funding hundreds of loans per month with a lending footprint in 29 states and counting. Managing Partner, Mark Matta, attributed Bluepoint’s success to its long-standing commitment to lend responsibly and transparently to the Broker Community and its borrowers. Becoming one of the Nation’s Top Lenders is also credited to the people who make up Bluepoint. On the list of Scotsman Guide’s Top Account Executives are Chris Calderon ranked #2 in the entire country, Allen Samuel ranked #35, Diego Chavez ranked #115, Demanche Clemente ranked #125, Rebecca Raff ranked #131, Steven Peinado ranked #139, and Mynor Arevalo ranked #142. Become an approved Broker with Bluepoint!

Altisource, your one source for real estate and mortgage solutions, has released a white paper entitled “Navigating the Challenges of COVID-19 Now and in the Future.” On May 6, Altisource hosted the Mortgage Industry Pandemic Summit, a virtual symposium with 28 leading experts discussing the operational and economic challenges mortgage, real estate and financial companies are facing as a result of COVID-19. The company’s new 24-page white paper summarizes the summit’s key ideas, best practices, guiding principles and expert advice. It also includes the results and analysis of 20 poll questions conducted during the sessions. Read the paper now to see how other mortgage industry professionals are responding to the current pandemic. Click here to download.

 

Compass Analytics, part of Black Knight, introduced new forbearance modeling capabilities in its latest release of CompassPoint, an industry-leading platform for pipeline risk management, hedge advisory services and MSR valuation. The new forbearance model enables lenders to explicitly model the price impact of loans in forbearance, including the expected forbearance period, additional cost to service, likelihood of curing successfully, monthly payment considerations and more. This powerful new functionality, in conjunction with the Servicing Advance Calculator released in late March, arms clients with the tools they need to make optimal servicing retention decisions in a challenging market. Please visit https://compass-analytics.blackknightinc.com/compasspoint/ to learn more about CompassPoint.

Chenoa Fund demonstrates how responsibly run national DPA programs benefit the consumer. Innovative financial solutions, such as our CRA Note Exchange, have allowed us to offer the Rate Advantage program, which offers rates competitive with standard FHA loans, even with DPA included. Also, by running mortgage banking in-house vs. outsourcing operations through large bankers, we have brought costs down to consumers, while helping lenders avoid losses on DPA. Additionally, through careful monitoring of our loan defaults, we added overlays to mitigate risk without eliminating offerings to underserved populations. Independent financial/operational audits are conducted throughout the year to assure partners our compliance with all industry requirements.  We constantly strive to improve our offerings, pricing, and service.  These measures allow us to serve significantly more minority homebuyers than any other DPA program (54% of borrowers are minorities).  We sincerely thank each of our amazing correspondent lenders, making our program available where most needed.

FHA & USDA

USDA released an announcement informing lenders of foreclosure and eviction moratorium for all USDA Single Family Housing Guaranteed Loans Program (SFHGLP) loans that has been extended through August 31, 2020, in connection with the Presidentially declared COVID-19 National Emergency.

FHA issued an Extension of Foreclosure and Eviction Moratorium in connection with the Presidentially Declared COVID-19 National Emergency. ML 2020-19 announces a second extension of the foreclosure and eviction moratorium through August 31, 2020. Read the Press Release.

USDA is in the process of building a new Guaranteed Underwriting System (GUS) user interface (UI) to support the new Uniform Residential Loan Application (URLA) and Uniform Loan Application Dataset (ULAD) and to modernize GUS. To prepare lenders for the March 1, 2021 mandate and gain insight to what is occurring, the SFH Guaranteed Loan Program URLA/ULAD implementation timeline and testing timeframes are available for review.

As part of Wells Fargo Funding response to the COVID-19 national emergency, they’re implementing a temporary minimum Loan Score of 680 for all FHA, VA, and Guaranteed Rural Housing (GRH) Loans, regardless of automated underwriting system (AUS) decision. Effective for Best Effort Registrations, Locks, relocks, and renegotiations on and after April 1, 2020 and Mandatory Commitments on and after April 1, 2020

Hyperion Bank broadened service-centric offerings with major mortgage expansion with the launch of Hyperion Mortgage, LLC, a significant expansion of its existing mortgage program. Promising comprehensive lending options tailored personal service and local decision making; Hyperion Mortgage offers conventional, jumbo, FHA, VA, construction-to-permanent, home renovation, home equity (HELOC) loans, portfolio mortgages and more.

All VVOE/VVOIs must be completed by an HR representative, owner, digital vendor, or a supervisor as indicated by the payroll system and be completed within the below timeframe:

Caliber Home Loans posted an update to COVID-19 overlay regarding Wage Earner VVOE and VVOI for Conventional, FHA, VA, and USDA Purchase and Rate Term Refinance Transactions. VVOE must be completed within 6 business days of the note date and VVOI must be completed within 15 calendar days of the note date. Cash out transactions: VVOE/VVOI must be completed within 3 business days of the note date.

Effective with new commitments taken on and after 6/23/2020, for FHA Streamline Refinance transactions, AmeriHome Mortgage will require a verbal VOE or third-party verification of income source will be required for both Credit Qualifying and Non-Credit Qualifying refinances.

Mountain West Financial® has added 2%, 3% and 5% down payment and closing cost assistance (DPA) options for Texas Department of Housing and Community Affairs (TDHCA) FHA loans. For complete details, refer to the Texas Department of Housing and Community Affairs Matrix and Overview.

Capital markets

With the 10-year yield content around .70 percent, and 30-year mortgage rates around 3.00 percent, what now? Any decline in rates will likely come from reduction in the primary/secondary spread, which measures the difference from where the lender can sell a home loan into the secondary market and where the lender will offer one to a borrower. Over the last five years, the spread has averaged roughly 1 percent, but is currently well above that, 1.72 percent this week. The spread is part of a measure of how much risk lenders believe there is within mortgages, and has recently kept rates higher than they otherwise would be, due to economic damage from the coronavirus and forbearance. As the economy improves, lenders will gradually tighten the primary/secondary spread back towards that 1 percent figure, which could reduce mortgage rates by up to three-quarters of a percent. Granted, as the economy improves, mortgage rates will naturally rise.

We live in a 24-hour news cycle, but it seems the headlines this week have all been the same: the coronavirus is continuing to spread, with a record 37k new domestic cases reported on Wednesday, and it is forcing businesses to rethink their plans to reopen. MBS prices and Treasury yields were roughly unchanged yesterday, maybe because of the lack of “new” news. The concerns weighed on risk tolerance, but did not fuel much of a risk-off response. As far as economic releases went, jobless claims showed an eye-watering 47 million people have signed up for benefits since mid-March. The downward trend may not accelerate until after the benefit boost expires at the end of July, but new worries abound as the reacceleration in coronavirus case counts and a rethink of reopening efforts may cause another wave of layoffs. With parts of the economy potentially needing to shut down again to control the pandemic, it is looking increasingly likely that rather than a “V” or “U” shaped recovery, it may be a series of W’s. New orders for durable goods increased by 15.8 percent in May after dropping by 18.1 percent in April, with all major categories except commercial aircraft experiencing a bounce back. Let’s not get ahead of ourselves: new order levels year to date are 13.6 percent lower than the same period a year ago on a not seasonally adjusted basis.

May personal income and spending (-4.2 percent, +8.2 percent, respectively, both lower than expected) kicked off today’s week-end calendar. Additionally, we have had Core PCE prices (+.5 percent). Later this morning brings final June Michigan sentiment. The NY Fed will conduct two FedTrade MBS purchase operations totaling up to $4.665 billion starting with up to $1.768 billion GNII 2.5 percent and 3 percent followed by up to $2.897 billion UMBS30 2 percent through 3 percent. We begin today with Agency MBS prices little changed (like all week!) and the 10-year yielding .66 after closing yesterday at 0.67 percent.

2020 is going to be synonymous for “crazy” for the rest of time.

“Hey, stay away from that guy in accounting over there. He’s 2020.”

“That borrower went 2020 when I scolded her about buying a car two days before closing.”

“Your Honor, I gained control of the car after avoiding the pedestrian, but then things went 2020.”

“As soon as I let the cow into the pen, the steer went 2020.”

“That loan officer is driving me 2020!”

“I’d have to be 2020 to approve that loan!”

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, “Knowing a Borrower’s Mind”, focused on operations changes. If you have the inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)

 

June 25: Management, Ops, LO jobs; marketing, processing, default products; primer on high bal pricing

Some things are uncertain, like whether colleges, driven by ticket & TV income, bring back their football players when the rest of the student body “remains virtual” this autumn. (Harvard law school is online for the fall semester, for example, leading to a tuition lawsuit, of course.) Or if your company is giving you July 3 off (the bond markets are closed). Other things are certain, like the mortgage-level data from the 5,500 institutions reporting HMDA data for 2019. Or states putting anyone who visits certain states into quarantine. I receive emails all the time from brokers and LOs who are certain their high balance pricing is the worst in the industry. Why? An explanation is below in the Agency section.

Employment

Caliber Home Loans is taking positive action, building diversity, raising our voices, and looking ahead. Our reputation as a great company to work for is illustrated by Caliber’s sponsorship of Employee Resource Groups (ERGs) which provide career networking for professional and personal development. These principles begin at the top with Sanjiv Das, CEO, and are echoed throughout our leadership and by Caliber team members. Currently, we have ERGs representing Military Veterans, Women in Business, and the LGBTQ community. Join Caliber, where diversity is celebrated, and mutual respect is core to our culture. If you have an interest in one of our posted job opportunities, please contact Jonathan Stanley for consideration. If you are interested in a sales opportunity at Caliber, please contact Brian Miller for immediate consideration.”

 

Synergy One Lending (“Synergy One”) is pleased to announce the Management-led asset purchase (“MBO”) of the company’s distributed retail channel and the Synergy One brand from Mutual of Omaha Mortgage. The terms of the acquisition were not announced. The MBO was led by industry veterans Steve Majerus, CEO, and Aaron Nemec, President. Synergy One has quadrupled its loan production in three years, breaking into the top 100 retail mortgage lenders in 2019 ranked #53 in Scotsman’s Guide. “Aaron and I are sincerely grateful for the opportunity to lead Synergy One into the future. Our confidence in our team and our collective ability to execute couldn’t be higher,” said Majerus. Synergy One is based in San Diego, CA, is currently licensed in 29 states and has Operational HUBS in Roseville, CA, Boise, ID, Denver, CO and Dallas, TX. If you’re looking for high growth opportunities contact Aaron Nemec.

 

A profitable, well-capitalized, regional full-service independent retail mortgage banker is looking for an established Regional Production Manager to help create and develop mortgage origination branch opportunities in the midwestern part of the country, Colorado, Arizona, Kansas, and New Mexico markets. “We are searching for an outstanding talent and proven retail sales leader with a demonstrated track record of hiring and managing multiple production offices across several states. We offer an entrepreneurial sales support environment, FNMA/FHLMC/GNMA direct seller/servicer/issuer status and are well-positioned to compete for more growth with state-of-the-art operations/support technology and a company -wide commitment to providing exemplary customer service. The Regional Production Manager will report to the CEO. If interested in the next step, please send a confidential resume and qualifications to Chrisman LLC’s Anjelica Nixt.”

 

“We’re hiring! Home Point Financial just announced 400% year over year growth, and we continue to grow at record pace. As a result of our growth (not just the current environment) we’re hiring an additional 69 senior underwriters as well as 105 operations positions. At Home Point, we offer an incredible bonus program, opportunities for overtime, and 100% remote work to fit your lifestyle during today’s challenging times. However, it’s our culture that makes us shine. Our ‘We Care’ commitment is a verb not a noun, which is evident through our initiatives. This, coupled with a supportive leadership team and multiple career development opportunities, makes Home Point a premier place to call home. We are the second-largest wholesale mortgage lender (per IMF), have an amazing partnership between sales and operations, and have welcomed 445 team members to our family since March. Join us! To apply please visit the careers section of our website or send your resume to John Eite.”

ACC Mortgage is hiring additional remote Non-QM underwriters and experienced AE’s to handle the increased volume and return of a healthy Non-QM market. ACC not only has the most complete Non-QM offering, we provide accounts, leads, and the support for the account executives to be successful. We have a leading comp plan with support, leadership, and stability.  If interested in joining our family, please send your resume to the president, Robert Senko, for consideration.”

Guaranteed Rate Affinity, a mortgage origination joint venture between Guaranteed Rate and Realogy, has hired industry veteran Joe Daly as National Renovation Sales Leader to advance the company’s renovation lending programs. Congratulations!

Lender services and products

Overstated & Understated Credit Scores are byproducts of socio-economic volatility. Heck, not all 700s are safe (or 600s risky) in the best of times! What’s your plan to understand borrowers holistically? Then, originate, fulfill, buy, and sell most efficiently across all channels using that deep insight. The actionable Mortgage Risk & Fairness Score is predictive, data-driven “intelligence” to pro-actively manage COVID-19, credit quality, financial inclusion, and capacity risk. It enables lenders to easily deploy advanced risk & behavioral analytics (propensity, segmentation, ability, and “willingness” to pay) that are validated (top 10 bank) & vetted (CFPB, OCC, Fed). Backward-looking Scores+DTI+LTV+ATR data & calcs struggle with this. “The Score” doesn’t replace existing acquisition or underwriting processes. But, at the tip of the spear, and as an ‘intelligence’ adjunct to underwriting, it will increase volume, inclusiveness, confidence, margins, efficiency, and capacity, and decrease risk. Click for info.

 

As COVID-19 continues to profoundly impact every aspect of business, Sourcepoint understands mortgage servicers must adapt quickly to a new normal. Its experienced Omnichannel Contact Center and Collections teams, and default support staff are available to serve your borrowers and ease their concerns, not only during normal times but also during periods of uncertainty. Backed by the most comprehensive set of servicing and collection licenses and a 5,000+ global workforce with US and global centers, Sourcepoint’s teams are well equipped to help your borrowers through these difficult times, whether fielding customer service inquiries, navigating through a forbearance application and the approval process to ensure they get the assistance needed in a timely manner, or working through loss mitigation or modification strategies, Sourcepoint is here to help. Learn more about Sourcepoint’s default servicing capabilities.

“Mortgage lenders today are all trying to find the right resources to maximize the opportunity of today’s rate environment. At Sutherland, we partner with our clients to create operational flexibility, scale, and process expertise. Being an experienced Business Process Transformation company with a global reach enables us to reduce costs while aligning the right mortgage specific resources that are experienced in Processing, Underwriting, Closing and Quality Control support. Whether you are looking to close more loans or increase your quality assurance scale, Sutherland is here to achieve your goals. To schedule a discovery call on our capabilities, email Neil Armstrong, AMP.”

Maxwell is back with another blog series: The Land of Unequal Opportunity takes an honest look at the housing & mortgage industry’s troubled past and the role we’ve played in perpetuating racial inequality. Our history might be uncomfortable to confront, but building a better future starts with accountability for our past mistakes. Thus, Part 1 tackles the problematic history (and enduring legacy) of redlining that continues to suppress Black homeownership rates and widen the racial wealth gap today. Read “The Land of Unequal Opportunity, Part 1: A History of Redlining and Its Lasting Impact on Black Homeownership” here.

 

The Agencies Never Sleep

Where the Agencies go, the industry will follow. Just think what would happen if we didn’t have them?

At some level, pricing matters. “Rob, my high balance conforming pricing stinks. Why?” Recall that around Thanksgiving Freddie and Fannie come out with the conventional conforming loan amounts for the following year, including loan amounts for high-cost areas. Conforming loan limits impact high-balance loans and jumbo loans. LOs know that the various programs come with different lending rules, potentially higher interest costs, down payments, and lending fees. Rates, vary, of course, and high-balance loans typically come with tighter requirements than regular conforming loans. Interest rates for jumbo loans can higher than for conventional loans because a borrower is asking for more money, so the loan carries more risk for a lender. But remember that jumbo loans do not have a 50+ gfee, which is why jumbo rates can be lower than conforming rates.

A big piece of the pricing pie is composed of the propensity to prepay the loan. And that hurts high-balance conforming loans, and has since SIFMA, the organization that creates delivery requirements for securities, set up the percentage of loans in high-cost areas that are allowed in mortgage-backed security pools. SIFMA laid out the definition of loans to borrowers in high-cost areas as “defined in 12 U.S.C. 1717(b)(2) (i.e. areas where 115% of the median home price exceeds the conforming loan limit) where the balance of the loan exceeds the conforming loan limit (“Superconforming Loans”) should be limited to no more than 10% of the total principal balance of a pool at the time of issuance to be eligible for good delivery in TBA (the loan details making up the pool “to be announced” when the security is created) trades.”

The TBA market is the most liquid, and consequently the most important secondary market, for mortgage loans. Investors don’t like a lot of variance in the loans making up a pool, so homogeneity is important. In an effort to “minimize liquidity disruption in this important market,” SIFMA limits the inclusion of higher-balance loans to 10 percent of the total balance of a pool eligible for TBA delivery. (SIFMA said “minimize,” not “eliminate.”) Borrowers in high-cost areas can still have access to Freddie Mac and Fannie Mae’s programs, so are not penalized by living in those areas and needing financing. But at a price.

Investors are concerned that prepayment behavior on high balance conforming mortgages is quite different than “regular” conforming conventional loans. Basically, if an investor buys a $1 million pool, and one loan for $100,000 pays off, oh well. If a $600,000 loan pays off, that is a problem. So SIFMA limits the higher-balance inclusion to 10 percent of a given pool, helping investor modeling and expectations, and thus helping the liquidity of the market. A portion of loans, instead of being underwritten to jumbo criteria, flow through DU and LP and into GSE hands and out of the private mortgage market. And lenders are very cognizant of that 10% cap, and price high-balance conforming loans accordingly: originating conforming conventional loans that can’t fit into securities for good delivery will sit on a warehouse line until they fit into a pool. And investors and lenders will price to avoid that.

To help limited English proficiency (LEP) borrowers who are experiencing mortgage-related difficulties due to the coronavirus national emergency, FHFA in coordination with Fannie Mae and Freddie Mac added new translations to the Mortgage Translations website. Site visitors can now choose English, Spanish, traditional Chinese, Vietnamese, Korean, or Tagalog when accessing scripts that servicers use when discussing COVID-19 forbearance with borrowers. The revised Mortgage Assistance Application (MAAp) is also available in the same six languages. For additional information about the assistance and protections provided by the Federal government during the pandemic, visit CFPB.gov/housing.

Yesterday Fannie Mae updated LL-2020-02, Impact of COVID-19 on Servicing, to modify the financial eligibility and reporting requirements for non-depository sellers/servicers. “The temporary policy change relates to the calculation of the liquidity requirement for sellers/servicers who service mortgage loans that are in a forbearance due to COVID-19 hardships. Fannie Mae Form 1002, Mortgage Bankers Financial Reporting Form, is being updated to capture COVID-19 forbearance activity. This Lender Letter update also extends the suspension of foreclosure-related activities through June 30.”

Fannie Mae’s Here to Help campaign offers servicers the resources and information needed to assist homeowners facing a hardship related to COVID-19.

Fannie Mae posted updated In Case You Missed It (ICYMI) which includes an overview of Selling Guide updates, Servicing Guide updates, new and updated Lender Letters, and Desktop Underwriter®/Desktop Originator® release notes.

As of June 17th, Fannie Mae has updated nine of the AAA matrices. Review each jurisdiction-specific AAA matrix revision history for additional details.

Capital markets

Markets have increasingly moved more due to news headlines surrounding COVID-19 than actual economic releases. It was a similar story yesterday, as coronavirus concerns weighed amid more record increases in certain hot spots, and Treasuries and MBS rallied across the curve as a result. Florida and California both set daily records for new cases. New York, New Jersey, and Connecticut now require visitors from virus hot spots to quarantine for 14 days. And the WHO warned cases in Latin America haven’t yet peaked even after rising 25 percent to 50 percent within the past week in some countries.

Separately, the U.S. is weighing new tariffs on $3.1 billion of exports from France, Germany, Spain, and the U.K., which could proliferate into a trade fight later this summer. As far as economic releases went, the FHFA Housing Price Index for April increased 0.2 percent. Chicago Fed President Evans warned that recurring outbreaks will probably hurt U.S. growth and keep unemployment levels elevated for some time, saying that spikes of infections “might be made worse by the faster-than-expected reopenings.” Fed speak rolls on today, with Dallas Fed President Kaplan, Atlanta Fed President Bostic, and Cleveland Fed President Mester all set to take the stage. Also with regards to the Fed, bank stress test results will be released in the afternoon. The central bank has purchased a massive $765 billion of mortgage bonds since March 16, and while the Federal Reserve is unlikely to slow its latest bout of quantitative easing, the 10-year Treasury yield isn’t forecast to drop any further, which does not bode well for lower mortgage rates.

Today’s economic calendar is just about done and dusted. Initial Claims for week ending June 20 (1,480,000, -60k) and Continuing Claims for week ending June 13 (19.5 million), Durable Goods Orders for May (+15.8 percent, strong) and orders, excluding transportation (+4.0 percent). Q1 GDP – Third Estimate (still -5.0 percent). Advanced Retail Inventories (-6.1 percent), and Advanced Wholesale Inventories (-1.2 percent). For those who like Treasury news, there are results from a $41 billion 7-year Treasury note auction this afternoon. The NY Fed will conduct two FedTrade purchase operations totaling up to $4.35 billion starting with $1.373 billion UMBS15 2 percent and 2.5 percent followed by $2.977 billion UMBS30 2 percent through 3 percent. We begin the day with Agency MBS prices nearly unchanged again and the 10-years yielding .66 after closing yesterday at 0.69 percent after the jobless claims and durable goods data.

You think you’ve had bad days? Keep an eye on the driver of the scooter near the top center of the screen – like an LO trying various programs for their borrower.

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, “Knowing a Borrower’s Mind”, focused on operations changes. If you have the inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)

June 24: Ops, AE jobs; marketing, broker, tax products; VA, construction webinars; tech partnerships

Companies worldwide are grappling with continued travel bans, and how to bring back employees in waves, if at all. Others are re-designing office layouts, thinking about renting more space, and looking at the cost of footprint changes. Some employees can’t wait to return to office life, others are doing fine without commuting, and still others will spend part of the workweek at home and in the office, all the while helping clients & borrowers. Most “experts” expect less office space to be required. It’s crazy! Traditional economic models and measurements are in disarray as well, as any economist worth their salt will tell you. For starters, many of the government’s statistics are driven by surveys, and distressed people and businesses often aren’t wild about answering surveys. Federal Reserve Chairman Jerome Powell said the economy faces potentially significant long-term damage from higher unemployment and a wave of small business failures due to the coronavirus pandemic despite recent signs of an economic rebound. “Until the public is confident that the disease is contained, a full recovery is unlikely,” Mr. Powell told the Senate Banking Committee. Low rates ahead.

Employment, transitions, & retirements

A well-capitalized lender in Los Angeles is aggressively looking to bring on exceptional talent and is seeking an experienced VP of Operations to assist in continued growth by hiring, building, and managing a robust operations team of experienced Processors and Underwriters. The lender is operating on Encompass and originating all products including Conventional, FHA/VA, Jumbo and Non-QM. Excellent compensation and bonus structure and full benefit package. Please forward resumes to Chrisman LLC’s Anjelica Nixt.

“Looking for a company offering continuous growth, a full-scale marketing strategy, continued training, career improvement courses? At Carrington Mortgage we offer a complete suite of products including FHA, VA, FNMA, FHLMC and a robust menu of loan programs which has further fueled our growth. We are currently recruiting for an experienced AE with FHA and VA experience for the Chicago, IL, or if you are located in or around Plano, TX, join our Inside Sales team and make Chicago your calling territory. If you feel your sales skills and experience would be a fit with Carrington, please email John Cervantes.”

Would you like to be a Radian Account Manager in the Pacific Northwest? Here you go. Radian is looking

Interfirst Mortgage Company, a private equity-backed mortgage originator, announced that Lou Friedmann has been named Chief Marketing Officer where he will lead all of Interfirst’s strategic marketing and communications as the Company relaunches under a new business model that includes an integrated retail and wholesale residential mortgage origination offering.

It is the end of an era at MBS Securities as Gail Schaumann announced her retirement (set for the end of the month) and turning the proverbial reigns over to Sara Weber. “After more than 30 years in the securities industry, it is time to have time! I will forever appreciate, and be grateful for, all the wonderful people I have come to know in the mortgage banking and securities industries.”

Lender services and products

First American TaxSource property tax reporting delivers full national coverage with the most current tax status and rapid results through the latest technology and data resources vetted through multiple validations from one reliable, trusted partner. Lending professionals need on-demand, real-time tax status reporting outside of the cyclical tax cycle for transactional data that shows the currency of property tax payments to make informed decisions and mitigate risk. First American property tax status reporting creates workflow efficiencies in a single-source solution, delivered via robust, seamless API integration or online self-service PDF reports. As the industry leader in data and technology, American expertise, innovation, and consultative approach provide the best in tax status reporting services. From managing defaults or selling off a package of loans, to monitoring tax liabilities, procuring tax status reports outside of annual cycles is now easy!

Start doing business faster with Stearns Wholesale Lending. Secure a lock in 3 steps. Log into Stearns SNAP broker portal and use PriceIt to input loan data to generate pricing. Then, select your program and rate to forward lock and enter borrower’s first name, last name, address and social and lock instantly. If you’re not ready to lock you can save the scenario and revisit at a later date. The portal continues to be enhanced with tools such as Calc My Income, Instant VOI, MI Price It, and LO Portfolio making it easier for clients to submit a loan. If you’d like to be contacted by an Account Executive, Click HERE.

Record sales and 50 percent lower cost per loan! How Steven J. Sless and his PRMI Reverse Division rocked their best months ever using direct mail: “You know, PRMI is just a powerhouse in the mortgage industry now. And Monster Lead Group has been an unbelievable partner. Monster knows what they’re doing, they know how to make the phones ring, they know how to generate business, but they also know how important it is to help us grow a brand at the same time. It’s a real marketing system. It’s not just sending mail. I think the consistency of the campaigns is what we rely on… Our cost per funded loan is about 50 percent of the industry average… So that story should be told. We’re able to grow and scale our operation because of the predictability of the Monster campaigns. That is what’s allowed us to get to this point.”

Events for training & information

Mark your calendars Calyx customers: CalyxVision 2020 is headed your way! A completely reimagined, next generations user event, Vision 2020 will deliver both hands-on software training and strategic insights in an engaging, online format accessible from your own location. Join us from August 18-20 for live interaction with our software specialists, lenders, integrated service providers, insightful keynote sessions, overviews of the newest Calyx products and more! For more information, please visit the Registration page  or contact Calyx directly at calyxvision@calyxsoftware.com.

GSF Mortgage Corporation’s SVP of Construction Sales, Robert Stephens, will be hosting a webinar for partners, builders, and single close clientele on July 9th at 12:00 pm Central. As the construction market starts to see signs of recovery, Robert will give an update on the current market and on the Single Close Construction program offered by GSF Mortgage Corporation. Register here or reach out to Robert Stephens.

Join National Mortgage Professional Magazine and Boots Across America for a very special on demand webinar to become a “Certified Military Home Specialist.” This one of a kind webinar will help you build a rapport with your military niche market and provide them with the specialized skills they deserve, whether they’re seeking a VA loan or some other form of financing. Upon successful completion, you will receive your Certified Home Military Specialist certificate. Topics to be covered include: Increases knowledge and confidence to better serve military clients, establishing credibility specifically with this market, service members Civil Relief Act guidelines and benefits to share, pay and allowance categories and which ones to use, special situations, disability and retirement benefits, and resources to use and share. You may take and complete this course at your leisure. Click here to register.

Technology partnerships march on

Lenders, don’t miss your chance to have great insight into the CRM, Point of Sale, Origination, Closing and collaboration tools: All the mortgage technology solutions available in the market today. Participate in the System Survey, the first survey of STRATMOR’s 2020 Technology Insight Study, and get the answers you need. The System Survey can be completed in less than 10 minutes and lenders who participate receive the report for the survey for FREE. Take the System Survey now and rate the systems you’re using — hurry, this survey closes July 10!

Hey, did you know that there is actually whistle blower software!? There’s a lot of tech news out there; let’s take a random walk through what has crossed my desk lately about who’s partnering up.

IDS announced it has expanded its partnership to become the exclusive integrated document preparation vendor of Mortgage Builder. The newly rebuilt integration now fully incorporates the IDS eSignature platform and custom form generation capability and includes the migration of Mortgage Builder’s client base to idsDoc, IDS’ flagship document preparation platform, which is recognized for unequalled customization and superior customer service. The integration also supports new data points to meet more recent demands and upcoming needs, including TRID documents, eClosing process fields and impending URLA updates.

Ameriprise released an announcement on its new partnership with Embrace Home Loans giving Ameriprise clients’ access to mortgage products and services to complement their existing relationship to financial advisors. Ameriprise clients will gain competitive interest rates, no application fees, and a streamlined application process with a dedicated loan consultant from pre-qualification to closing.

OptifiNow integrated its platform with the Ellie Mae Digital Lending Platform, including using Encompass Partner Connect API technology. This integration allows lenders to share data efficiently and securely between the two to drive quality and efficiency in the loan origination process. OptifiNow’s extensive integration capabilities enable lenders to create an advanced sales and marketing process that connects data with Encompass and other vital systems.

SimpleNexus and Mortgage Coach have enhanced their integration with real-time data syncing for instant analysis of lifetime loan costs. The original integration ensured that every borrower who applies for a mortgage loan via SimpleNexus immediately receives Mortgage Coach Total Cost Analysis (TCA), improving the borrower experience by updating key loan information in real time and enabling loan professionals to incorporate video narration into TCAs from within the SimpleNexus app.

LBA Ware has announced that Centier, Indiana’s largest private, family-owned bank, has implemented CompenSafe to automate incentive compensation for its residential lending department. Built for the mortgage industry, CompenSafe is an automated ICM platform that bridges the gap between lenders’ loan origination and payroll systems to eliminate manual data entry and provide actionable insight into staff performance and profitability. Since implementation, Centier has reduced man-hours spent on calculating incentive comp by 99 percent.

Amid current challenges and social distancing measures, the new integration between Wipro Gallagher Solutions (WGS), and DocMagic, Inc., offers state-of-the-art, relevant functionality for lenders, settlement providers and other stakeholders. It allows borrowers to easily eSign documents and execute completely paperless eClosings, and will enable WGS to advance digital mortgage processes via a seamless integration to DocMagic services. With this partnership, WGS is expanding the scope of its NetOxygen suite of products to better equip lenders to overcome new lending challenges and provide seamless digital experience.

Sterling Federal Bank has selected Finastra’s Fusion Phoenix as its core technology to support its efforts to expands its business from consumer banking and mortgages to one with a strong presence in the commercial banking scene. Sterling Federal Bank already uses Finastra’s Fusion Mortgagebot and Fusion LaserPro for consumer loan and mortgage origination, servicing, and documentation. Fusion Phoenix will provide exceptional integration with these platforms, saving the bank over 50 hours of redundant data entry per month. Fusion Phoenix was also favored for its ability to service various loan types in a single system so staff only need to be proficient in a single system and will have all the information they need in one place.

Not so much technology but certainly a partnering, Ally Lending is offering home improvement financing partnering with Authority Brands, LLC, a leading provider of home services that includes more than 250 franchisees of Benjamin Franklin Plumbing, Mister Sparky Electric and One Hour Heating and Air Conditioning. Customers seeking assistance with unexpected and planned plumbing, electrical, and HVAC expenses now have access to financing solutions backed by 100 years of lending experience.

Clarifire, a leader in workflow automation, announced that the Idaho Housing and Finance Association has selected CLARIFIRE as its loss mitigation platform. “Idaho Housing will rely on the flexibility and automation capabilities of CLARIFIRE to increase the efficiency of its loss mitigation services.”

Capital markets

Mortgage rates, and Treasury rates for that matter, have hit the summer doldrums for volatility. Look at the mix of news from last week. The rebound in retail sales in May was met with mixed reviews. The big headline gain that easily beat everyone’s forecasts was impressive, but the number was 6.1 percent below May 2019’s level. (For example, clothing store sales gained 188 percent for the month, but were 63.4 percent below their level from one year ago. Food services and drinking places saw a 29.1 percent monthly gain, but were down 39.4 percent year-over-year.) This is the pattern with most of the categories on the report with the notable exception of non-store retailers. Clearly there was pent up consumer demand as stay at home restrictions began to be lifted, but it’s a long way to go before the economy is back to its normal state. While the quick rebound provides hope for growth in the second half of the year, there were 21 million people unemployed in May whose extra benefits will expire next month.

Yesterday features another slow session with minimum movement of U.S. Treasuries, though fears around the U.S. – China trade deal continued unabated. New home sales increased sharply in May, rising 16.6 percent month-over-month to a seasonally adjusted annual rate of 676,000 after a sharp downward revision for April. On a year-over-year basis, new home sales were up 12.7 percent. The increase in contract signings reflect some dissipating COVID-19 shutdown pressures, and should aid expectations that sales activity will continue to improve in coming months given the tight supply of existing homes for sale, low mortgage rates, and pent-up demand.

But turning to today, the Weekly MBA Mortgage Index showed mortgage applications decreased 8.7 percent from one week earlier for the week ending June 19. Both refinance and purchase activity fell despite a record low 30-year rate for the survey (3.30 percent). Later this morning brings the release of the June FHFA Housing Price Index, while the afternoon brings $47 billion 5-year Treasury note auction results. The Desk of the NY Fed will conduct two FedTrade purchase operations totaling up to $4.721 billion, and there is some Fedspeak with both Chicago’s Evans and St. Louis’ Bullard taking the stage. We begin the day with Agency MBS prices unchanged again and the 10-year yielding .73 after closing yesterday at 0.71 percent.

Email from a reader: “Yesterday my husband thought he saw a cockroach in the kitchen. He sprayed everything down and cleaned the room thoroughly. Today I’m putting the cockroach in the bathroom.”

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, “Knowing a Borrower’s Mind”, focused on operations changes. If you have the inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)

 

June 23: QC, sales, LO jobs; outsourcing, DPA, marketing products; thoughts on the CFPB’s non-QM proposal

There are all kinds of things that I don’t, or didn’t, know. For example, the other day I learned that when dogs lap water, they’re actually scooping up water with the back of their tongue, which is curled like an elephant’s trunk. Now I’ve learned that the term “master bedroom” is being abolished and changed to “bedroom 1” or “primary bedroom” and “autism” is “neurally diverse.” Mary Poppins has a racist scene? Really? Smart builders like Lennar continue to “take advantage” of COVID and the shutdown and are training displaced restaurant and retail workers in construction. Anything to alleviate the construction labor shortage, right? Rates are great, and refinancing possibilities abound, but Black Knight tells us that mortgage delinquencies increased another 20% in May to hit their highest level since 2011. Total borrowers more than 30 days late surged to 4.3 million in May after a record jump to 3.4 million in April, and more than 8% of all US mortgages were either past due or in foreclosure, the report showed. Yup, Americans are skipping millions of loan payments due to the coronavirus.  In high-cost areas, jobless benefits aren’t enough to help debt-laden borrowers pay down their bills.

Employment

Sutherland, a leading Business Process Transformation and Outsourcing provider is pleased to announce a new addition to the executive team. Kevin Norris has joined the Sutherland Mortgage team as Director of Client Engagement, bringing over 20 years of experience in financial services, primarily in the mortgage sector. Kevin has spent the majority of his career working for large Fortune 500 companies including Morgan Stanley, Discover Financial Services, PHH Mortgage, and Realogy Corporation and has held various roles within these firms including running large operation centers, product and business development, e-commerce, process improvement, account management, and various other leadership management positions. In his new role at Sutherland, Kevin will lead the effort around maximizing the alignment of Sutherlands offerings to their growing client base enabling both cost reduction and revenue growth opportunities. “Kevin brings a great deal of knowledge and experience. As we continue to grow with our clients, Kevin will provide a critical role in taking our customer’s needs into action,” said Neil Armstrong, AMP of Sutherland.

Quality Mortgage Services is a team of QC mortgage audit professionals ready to execute mortgage QC, due diligence, and audit functions so today’s lenders and servicers have the best mortgage analysis reports possible. We are expanding our residential mortgage auditing team by adding experienced and knowledgeable quality control auditors interested in working collaboratively with peers in a remote environment allowing for more work-life balance. Ideal candidates have a minimum of 10 years’ experience in residential mortgage underwriting or auditing for quality control, be proficient with Conventional and Government underwriting guidelines, FHA Direct Endorsement – VA SAR Certifications preferred, strong understanding of compliance, and solid knowledge of the Secondary Market. If interested, please send resumes directly to Claudia Duncan or Laura Kate Davis.”

Innovation, Efficiency, and Family are the three most common attributes new hires point to regarding their decision to join Thrive Mortgage. Case in point are the additions of industry veterans Jamal Chubb and Josh Harvith to expand Thrive’s Talent Attraction & Career Team. Asked about why he joined Thrive, Chubb responded, “This career move allows me to offer growth opportunities to Originators and Ops Professionals across the country. I am excited for my future with Thrive and the future for my family.” Harvith also explained, “The culture of excellence in our company runs very deep. Our process is world-class, but it’s our people who drive our success!” Thrive Mortgage is growing in markets across the U.S. and is looking for ‘Humble, Hungry, and Smart’ professionals who want to be a part of something special. Contact Jamal, Josh, or Chris Karageorge to inquire about open positions. We can’t wait to meet you!

Academy Mortgage achieved record-breaking volume in April and May and is on pace for another record-high volume total in June. Achieving this incredible success in an extraordinary time for the housing and lending industries is the result of a strong sales team, dedicated operations team, and the hard work of Academy’s 1,900+ team members nationwide. More good news for the independent lender: Academy was recognized by Scotsman Guide as a Top Mortgage Lender for 2019, ranking in the top 25 for Top Retail Volume and Top Overall Volume. In addition, Academy had 100 Loan Officers named as Top Originators by Scotsman Guide, which is a company best. Academy Loan Officers were also included in top producer lists by Mortgage Executive Magazine and National Mortgage News. If you’re interested in joining an award-winning company to power your Potential, contact SVP Bill Sohan.

Many LOs struggle to trust their leadership & company’s stability. Churchill Mortgage not only has a world class leadership team, but it’s also an E.S.O.P! Our employees are partial owners. We’re a company of leaders, focused on the success of our company & our customers. We’ve been voted a Top Workplace for 7 consecutive years! According to LinkedIn, Churchill Mortgage loan officers have an average tenure of 4.3 years compared to the industry average of 1.7 years! Also, 13% of our Loan Officers have been with us for over 7 years. “I’ve been in the mortgage and finance business for over 40 years, & have found it’s truly a ‘people’ business where there must be a relationship of trust,” explained Churchill Mortgage president and CEO, Mike Hardwick. We’re proud of our past & confident in our future. If this type of environment and leadership mentality interests you, contact Churchill Mortgage.

Lender services and products

Join National Mortgage Professional Magazine on Thursday, June 25 at 1 PM Eastern/10 AM Pacific, for “How American Pacific Mortgage Wins the Hearts of MLOs with their Tech Stack.” American Pacific Mortgage has one of the best tech stacks in the industry and their most basic objectives are that their Loan Officers actually adopt and utilize the technologies that have been made available to them. This webinar will focus on how APM builds the case for any new technology or service, disseminates it throughout the organization, and measures the impact it has on their business. You will learn how to invest in technologies that produce the biggest return; the playbook on technology adoption in the mortgage industry; how technology impacts your bottom line; and why technology utilization and adoption can be just as important as ROI. *T-shirts will be given out to the best questions during the webinar. Click here to register.

Mortgage lenders spend a lot of time and energy optimizing their customer experience, but many lack the time and resources to put the same amount of focus into their recruiting experience. And in order to seamlessly move candidates from one stage to the next, mortgage lenders need to have the right processes in place to deliver hyper-relevant, personalized communications from first touch to onboarding. Register for this webinar with Total Expert Founder & CEO Joe Welu and Chief Customer Officer Sue Woodard and learn 5 best-kept secrets that every mortgage company can rely on to identify, attract, and retain top talent. Register now.

Monitored Marketplace: It appears HUD is considering regulating the benefits to, and geographical operating areas of, governmental entities providing DPA, like CBC Mortgage Agency. But Miki Adams, vice-president of CBC, which operates the Chenoa Fund program, says there is a better way: a monitored marketplace that tracks the pricing and performance of loans by individual governmental DPA providers, something HUD doesn’t currently do but easily could. This would allow HUD to establish performance standards for DPA loans and ensure there is a competitive market so that borrowers get the lowest costs and a variety of products. After collecting sufficient data, HUD could use the pricing and performance statistics to support rulemaking. But “HUD intends to do just the opposite: regulate without supporting data, creating onerous requirements for government DPA programs,” Adams says. “That will inevitably produce fewer options and less benefit to borrowers.” Read about the Monitored Marketplace here.

Free eBook from Maxwell: It has been increasingly difficult for lenders, particularly small to midsize lenders, to adequately staff to handle volume when business is booming without taking a hit when things go bust. Outsourcing can be a low-risk, high-reward solution for moderate-sized lenders who are growing too quickly to manage all their loan production in-house. Digital mortgage leader, Maxwell, has put together an incredibly helpful eBook, “Outsourced Fulfillment: Benefits, Myths, & Opportunities”. A great read for any moderate sized lender looking to better manage scale, growth, and opportunities for their business. No form required, free download.

CFPB & non-QM loans

The long awaited proposed (proposed only at this point) changes in the QM versus non-QM dividing line came out yesterday. The Consumer Finance Protection Bureau issued two notices of proposed rulemaking (NPRMs) to amend the ATR-QM Rule. “The first NPRM would extend the sunset date for a temporary category of qualified mortgages sometimes referred to as the temporary GSE qualified mortgage category or as the GSE Patch. The second NPRM would amend the definition of a permanent category of qualified mortgages sometimes referred to as the general qualified mortgage category.”

(If you just want to see the changes, here you go.)

Non-QM lenders and investors are especially interested in the proposal to replace the DTI limit with a price-based approach. The Bureau suggests replacing the existing 43% DTI ratio threshold in favor of a loan pricing threshold based on the difference between a loan’s annual percentage rate (APR) and the average prime offer rate (APOR) at the time the rate is set for a comparable transaction. Why? Because it preliminarily concludes that a loan’s price, as measured by comparing a loan’s annual percentage rate to the average prime offer rate for a comparable transaction, is a stronger indicator and more holistic and flexible measure of a consumer’s ability to repay than DTI alone.

So for eligibility for QM status under the general QM definition, the Bureau is proposing a price threshold for most loans as well as higher price thresholds for smaller loans, which is particularly important for manufactured housing and for minority consumers. The NPRM also proposes that lenders take into account a consumer’s income, debt, and DTI ratio or residual income and verify the consumer’s income and debts.

Comments on the changes to the general QM definition rulemaking are due 60 days after publication in the Federal register. Comments on extension of the Patch are due 30 days after publication in the Federal Register.

The announcement prompted attorney Brian Levy to write, “The CFPB just came out with its proposal to extend the patch until the first to occur of either (i) GSE exit from Conservatorship or (ii) implementation of the just proposed new QM rule that defines QM based on the price of the loan instead of 43% DTI. For my comments on this proposal, see my Musings from Leap Day 2020. “Consumer groups seem to admit that 43% DTI isn’t very predictive of affordability, but they (and conforming loan MBS securitizers) want to use pricing alone as the QM determinant for ability to repay. That makes no sense in that the price of the loan tells you nothing about the borrower’s ability to repay it.”

What is the scope of the change? Bose George with KBW scribed, “The QM Patch had allowed the GSEs to underwrite mortgages with DTIs greater than 43%, and we estimate that these loans account for roughly 15% of GSE mortgage volume. The proposed rule should ensure that a large percentage of high-DTI loans remain in the QM category, which allows the GSEs to continue guaranteeing them. We see this as positive for the mortgage industry as a whole, and especially for the mortgage insurers… We estimate that loans with DTIs over 43% accounted for up to 25% of new insurance written (NIW) for some mortgage insurers in 2019.”

President and CEO Bob Broeksmit, CMB, weighed in. “MBA appreciates the CFPB’s proposed changes to the QM Rule and extension of the GSE Patch. As proposed, the regulatory changes would seek to ensure creditworthy borrowers have access to sustainable mortgage credit without disruption to the overall mortgage market. MBA looks forward to reviewing and commenting on both rules, and we will continue to work with policymakers and all other stakeholders to ensure borrowers are both protected and have access to credit throughout the mortgage lending process.”

CoreLogic’s Pete Carroll opined, “The CFPB’s ATR/QM proposed rulemaking has significant bearing on the balance between homeowner ability to sustain their mortgage payments and broad access to affordable mortgage credit. The ATR/QM blog series from CoreLogic seeks to provide policymakers and industry stakeholders alike with evidence-based insights to consider as they deliberate on the important policy questions raised by the proposal, including market sizing, loan performance, underwriting factors, credit availability, and more.”

Capital markets

Data over the last week has showed improving economic conditions coming off record lows observed during March and April. Retails sales rebounded in May due in part to an increase in auto sales but were still 8.3 percent below January’s peak. Housing starts increased modestly in May as delayed multi-family projects resumed. Single-family starts were little changed for the month although single-family permits jumped over 14 percent. Builder confidence has also increased, signaling stronger construction numbers in the coming months. Industrial production in the US is beginning to restart after significant declines in March and April. One of the most watched numbers as of late, initial unemployment claims, declined for the eleventh straight week for the week ending June 13 although the rate of decline has weakened. The positive news over the last week has been welcomed by financial markets. But there is an underlying concern as some areas of the country are seeing an increase in new Covid-19 cases. Large month-over-month improvements are nice, but the year-over-year data show there is still a long way to go before the economy is back to where it once was.

For those who enjoy steady mortgage rates, the last couple weeks have been a welcome respite from prior months. U.S. Treasuries ended Monday on a mixed note, and by mixed note I mean with either unchanged yields for shorter durations or 1 bp off of opening levels for longer maturities. Why? Limited data and headlines, though there is always news to go around. Existing home sales declined 9.7 percent month-over-month in May, missing expectations as the reading marked the third straight month of a decline in sales. Total sales were down 26.6 percent year-over-year and are now at the lowest level since 2010. On the bright side, closed sales in May reflect most contract signings completed in March and April, so coming months should feature stronger sales activity.

Investors in mortgage-backed securities are worried about U.S. home-loan delinquencies spelled out in the first paragraph. The number of borrowers more than 30 days late ballooned to 4.3 million, up 723,000 from April, according to Black Knight. That means more than 8 percent of all mortgages are now past due or in foreclosure. Mississippi had the highest rate, followed by Louisiana, New York, New Jersey, and Florida. Separately, the Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased for the first time since the survey’s inception in March, from 8.55 percent of servicers’ portfolio volume in the prior week to 8.48 percent as of June 14, 2020. According to MBA’s estimate, 4.2 million homeowners are now in forbearance plan, down from almost 4.3 million homeowners the prior week.

Today’s economic calendar is already underway with the Philadelphia Fed nonmanufacturing indices for June, going from -41.4 to +7.3! Later this morning brings Redbook same store sales for the week ending June 20, preliminary June Markit Manufacturing and Services PMIs, the ever-important May new home sales, and finally, Richmond Fed Manufacturing and Services indices for June. The NY Fed will conduct two FedTrade purchase operations totaling up to $4.349 billion. With the Fed’s balance sheet is set to top $10 trillion this year, Boston Fed President Rosengren said yesterday that the Fed is a long way from raising rates and that rates on the short and long end need to be kept low. We begin the day with Agency MBS prices nearly unchanged and the 10-year yielding .72 after closing yesterday at 0.70 percent.

Did you hear about the crossed-eyed teacher who lost her job because she couldn’t control her pupils?

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, “Reducing Friction”, focused on operations changes. If you have the inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)