In a broad generalization, when people have money to invest they usually think about stocks, bonds, or real estate. (Yes, I know there are other assets, like precious metals, restaurants, your sister-in-law’s nail salon…) Looking at real estate, if a home builder is going to spend large sums on land, labor, and permits, they want to be able to charge a lot. Sure enough, even though there's been a slight push back to entry level, builders are still focusing on higher priced homes. "In 2009, 19 companies of the 200 companies on the BUILDER 100 reported that 50% or more of their closings came in the affordable sector. By last year, that number had fallen to just two."


Lenders Reacting to Disasters

On 7/14/2017, FEMA announced NR-51, amending DR-4317 and providing individual assistance to 8 additional Missouri counties (Christian, Crawford, Dent, Greene, Iron, Ste Genevieve, Wayne & Wright) for recovery efforts in areas affected by tornadoes and flooding from 4/28/2017 to 5/11/2017.

On 6/26/2017, FEMA announced Amendment No. 1 to DR-4318 dated 6/26/2017, providing individual assistance to 3 additional Arkansas counties: Prairie, White and Woodruff.

Wells Fargo Funding has expanded its disaster policy on Conforming, Non-Conforming, and Guaranteed Rural Housing (GRH) Loans to allow third-party inspectors to complete the property inspection. The third-party inspector must comply with all applicable state and local licensing/certification requirements. An optional new exhibit, the Third-Party Disaster Inspection Certification (Exhibit 25), has been created which the inspector may use to evidence compliance with Wells Fargo Funding requirements for properties in areas affected by disasters.

Pacific Union is monitoring the impact of severe storms and disaster declarations across several states as published by FEMA. Currently, loans secured by properties located in impacted areas are subject to standard Pacific Union protocol. Standard requirements for disaster areas apply for these properties as they relate to expectations from appraisers for existing pipeline and new applications. For loans secured by properties in affected areas, the appraiser must comment on the disaster and if there is an impact to the property and value.  In addition, all types of issued insurance policies (hazard, flood, windstorm, etc.) must have binding authority on the subject property. Upon delivery of a loan to Pacific Union Financial, the Correspondent must ensure that re-inspections have been completed and delivered to Pacific Union Financial for all impacted properties in accordance with Pacific Union's Disaster Area Policy.


Interest Rates

Last week the focus was on Fed Chair Janet Yellen at the Semiannual Monetary Policy meeting as she reviewed the mixed messages coming from key indicators within the economy; while retail sales, consumer prices, and import prices were among some of the indicators that came in below expectations in June, other areas such as industrial production came in stronger than expected. The year-over-year rate still suggests consumer spending has room to expand. Optimism lies both above and below U.S. borders in July, as the central bank of Canada decided to increase interest rates in response to an improving national economy, and Mexico's industrial production saw notable growth thanks to improving national infrastructure. Eurozone's third consecutive positive print in industrial production speaks strongly for the region's improving production environment and China's GDP data.  

High volume LOs seem more concerned about "getting the deal done" for their client rather than rates going up or down slightly. But U.S. Treasuries, and with them MBS prices, recorded gains for the third consecutive day, which is nice. But more notably, the yield curve continued flattening at an increasing pace - usually indicative of a slowing economy. At the end of the day, the 2-year vs. 10-year spread narrowed by four basis points to 91.

Why? Well, the health care bill is bogged down, and appears to be dead - which means that the Trump team may have trouble rallying support for any kind of tax or infrastructure changes. And if those things don't move, well, the economy isn't going to boom like some thought back in November when rates shot up after the election. The GOP is still months away from coalescing around a plausible tax plan as party leaders haven't yet agreed on key objectives.

For those quantitatively inclined, yesterday the price on the 10-year improved .375 and it closed yielding 2.26%. The 5-year note, as well as agency MBS prices, improved about .125.

But that was all so... yesterday. This morning we've had the MBA confirming what lock desks on average across the nation already knew: apps were +6.3% last week but 31% below last year. Refis were up 13 percent! In terms of numbers impacting interest rates this morning we've seen June's housing starts and building permits (+8.3% to 1.2 million, +7.4% respectively). Hump Day begins with rates a shade higher versus yesterday, with the 10-year yielding 2.28% and agency MBS prices are worse a smidge.


Upcoming Events

There is just one day to register for United States Appraisals Free Collateral Policy Update & Technology Guidance Webinar on Thursday the 20th at 2PM CT. "The webinar features insight from experts from both United States Appraisals and Fannie Mae on how to navigate the difficult regulatory waters and adjust to the latest advancements in technology. Topics covered included property inspection waivers, reducing submission requests, the importance of appraisal quality and the national shortage of appraisers."

Registered for summer camp? At WAMP CAMP on August 9th in Seattle, each meeting room will include a professional Coach / Facilitator. YOU and all other attendee's will choose the topics you want to discuss. Plus, there will be four all-star presentations featuring nationally renowned speakers discussing hot topics.

Get an overview of associated disciplines essential to a complete understanding of mortgage banking, including loss mitigation, predatory lending, capital markets, real estate law and regulation, and real estate mathematics. Register for MBA School of Mortgage Banking I. Or choose MBA School of Mortgage Banking II. This course covers developing new markets, production management, servicing portfolio management and valuation, secondary marketing risk management and pricing strategy. Both courses are scheduled for September 19 - 22, 2017 in Dallas TX.

August is right around the corner and MGIC is ready with both live and recorded webinars. Understanding CONDO Appraisals, evaluating income, tax returns, assets and fraud preventions.

Register for an FHA 2-day live, on-site seminar in Sacramento August 1st-2nd. Covering a wide range of topics including: Single Family Housing Handbook 4000.1, underwriting the FHA appraisal, Endorsement protocols, the new Defect Taxonomy and Loan Review System (LRS) and much more.

Or for FHA's August 3rd one-day instructor-led appraisal training course in Sacramento. This course will cover FHA appraisal requirements, including FHA appraisal protocol and updates to FHA appraisal policy. This course is ideal for seasoned FHA appraisers, appraisers new to the FHA Appraiser Roster, as well as those working toward appraiser licensing.

It isn't too early to register for MBA's Diversity and Inclusion Summit December 4th & 5th in Washington D.C. This event will bring together industry leaders for in-depth and productive discussions on this seminal topic. Early registers (by October 30th) will save...


Employment and LOS Product

In wholesale job news, Sierra Pacific Mortgage is looking for talented additions to its teams across the nation. Don't miss the opportunity to work for a company that has tons of growth, prioritizes its culture and employees and offers hands-on support from the leadership team! We're looking for talented and motivated account executives throughout the US. Contact us about our opportunities just waiting for you. If you have the vision and the drive, we'll provide the support and tools you need to take your career to a whole new level. Send your resume to careers@spmc.com to learn more. Sierra Pacific Mortgage is an approved Fannie Mae, Freddie Mac and Ginnie Mae direct seller/servicer and has been named one of the Top 50 Mortgage Companies to Work For by Mortgage Executive Magazine several years in a row.

For lenders searching for a new TPO outlet, Planet Home Lending, LLC's non-delegated / Emerging Banker channel boasts a suite of conventional and government products, a strong pricing model, a national presence, and user-friendly customer portal - contact Tim Gibbens for more information. Plus, Planet's wholesale division is expanding, nationwide, and is on-the-search for talented Account Executives hungry for a strong product lineup, competitive pricing, and a leading compensation plan. Contact Chase Gonzalez about career opportunities at 844-358-8163.

Citadel Servicing Corporation ("CSC") a leading provider of Non-Prime, Alt-A and ODF mortgage products is excited to announce expansion plans for its Correspondent Sale team. CSC is hiring two Account Executives to continue its sales initiative for this acquisition channel. CSC provides correspondent sellers with innovative industry leading Non-QM products on a flow or bulk delivery that provide a great customer experience augmented by responsive service, exceptional pricing not to mention extended LTVs and loan amounts up to $3,000,000. Interested candidates should have a background with requisite mortgage sales skills and correspondent experience. Special consideration is given to those candidates with existing contacts in this space and who desire to work at our offices in either Irvine, CA and Alpharetta, GA. If you desire to be involved with an industry leader whose culture is committed to funding and servicing the very best in Non-QM loan products, please contact Manny Rodriguez, Correspondent Sales Director, for a confidential discussion.

In retail news, Academy Mortgage is excited to announce another addition to Leif Boyd's expanding California and Nevada team! "Stephan Le joins us as a new Area Manager in Southern California with influence in Orange County and Riverside.  Stephan comes to Academy with over 20 years of professional experience in the finance/banking industry.  He has over 12 years of combined mortgage experience in both origination and management, most recently managing a top producing sales team in Southern California. Please reach out to Stephan Le or by phone at (949) 933-2337 for a confidential meeting to learn more about what it takes to join this dynamic and growing team!"

July is here and for the mortgage business that means being busy. Many Loan Officers forget that if you have a large amount of loans in your pipeline, you can't stop networking with potential referral partners. Putting your name out there as a leading professional in your industry is essential to growing your business. loanDepot has taken this to heart which is why they have invested in marketing tools and a team to support them that are designed with the Loan Officer in mind. Using tools and systems to keep your existing relationships strong and get new potential partners interested through co-branded marketing material, single property websites, lead capture apps, and user-friendly direct mail systems will make the difference when the realtor picks up the phone to call a lender. When things inevitably slow down, you will destroy your competition who didn't have time to reach out and keep the lines of communication open with their partners. If you are interested in hearing more, contact Shane Stanton.

Many lenders of today are struggling with LOS Platforms that weren't designed to integrate with the latest technologies. LendingQB offers a simpler way to add functionality without the high costs of an all-inclusive system. "Providing 200+ integrations, LendingQB's best of breed LOS platform is driven by innovation, ensuring lenders can integrate with the latest and greatest technological advances as soon as they're available - even those not yet invented. Learn how our system can help your lending operation be, and remain, at the forefront of the industry. Email Linn Cook to meet at the Western Secondary Conference this week, or learn more here."

Before going on, yesterday the commentary had a pricing update that had expired. This is no longer the case: "Mortgage Solutions Financial is offering a pricing incentive for purchase transactions with FHA, VA, and USDA financing. FICO >680; Loan amount < $250.000 (0.250). Loan amount > $250.000 (0.000). FICO 620-679; Loan amount < $250.000 (0.250) Loan amount > $250.000 (0.250). FICO <620; Loan amount < $250.000 (0.000). Loan amount > $250.000 (0.000)." My apologies for any confusion.

Colony American Finance, LLC ("CAF") announced that certain funds ("Fortress Funds") managed by affiliates of Fortress Investment Group LLC (NYSE: FIG) have purchased the equity and substantially all the assets of CAF. Simultaneously with the purchase, Fortress Funds will rebrand the CAF operating platform under the name CoreVest American Finance Lender LLC.