The U.S. Census Bureau knows a thing or two about numbers, and it tells us that over the 10 years from 6/30/07 to 6/30/17, the number of “renter” households in the USA increased by 8.4 million to 43.4 million while the number of “owner” households increased by just 0.9 million to 76.1 million. Over the latest 12 months, however, from 6/30/17 to 6/30/18, the number of “renter” households in the United States declined by 0.1 million to 43.3 million, while the number of “owner” households increased by 1.8 million to 77.9 million. Thanks in no small part to folks who read this commentary! There’s a spate of home vacancies across the United States, especially in cities in decline. A healthy rental vacancy rate is about 7 to 8 percent and a healthy homeowner vacancy rate is something like 2 percent. In “legacy cities” like Flint, Gary, Cleveland and Detroit, it’s enormous, about 17 percent in small cities and 15 percent in large ones.
Zillow/MLOA
The Zillow/Mortgage Lenders of America deal is causing some discussion out there. Zillow was downgraded by Bank of America on “greater risk” to profits from adding mortgage lending.
There were questions right off the bat.
“As an LO, will this relationship affect my referrals from real estate agents?” I believe you’re asking about whether this will impact Zillow’s co-marketing advertising product. Zillow intends to support all its lender advertising products as it does today - lender co-marketing, along with Connect and Custom Quotes. All those advertising products remain an important part of Zillow’s business, and it intends to support and grow that marketplace over the long term. “Zillow Group receives millions of loan requests from consumers each year, 23 million loan requests in 2017, and its mortgage partners are vital to continue to serve these borrowers.”
“Real estate agents try to show up on Zillow. If an agent is giving their business to another lender, will it impact Zillow’s relationship with that lender?” Real estate agents appear on Zillow by paying to advertise. Zillow’s new mortgage business won’t affect the way it distributes contacts to its network of agents, and Zillow will continue to support its advertising products for lenders.
“I know that builders have relationships with lenders that are legal, and that builders will offer incentives to buyers to use their lender (lower closing costs, granite counters). Will Zillow and its lender do the same thing?” The acquisition isn’t expected to close for several months. The folks at Zillow told me that they’ll be exploring various ways they can make Zillow Offers transactions as seamless as possible for buyers.
Underwriting Updates
In Monday’s commentary was a note regarding conventional wholesale products for BOFI Federal Bank being discontinued. I received this note from management: “Our conforming/government product line is alive and well and in fact we’ve dedicated an entirely new wholesale channel called ‘WME: Wholesale Mortgage Express’ to originate these loans nationwide – we are expanding our wholesale footprint, not reducing it. Our existing Wholesale-Correspondent Portfolio business remains focused on originating non-conforming loans for the Bank’s balance sheet, offering a full suite of aggressively priced products including FHA, VA, Agency, Prime Jumbo, and Non-QM through a highly automated and efficient fulfillment process. Our Broker partners can choose which channel better supports their business needs, but we do not allow approvals in both wholesale channels (Portfolio and WME) due to lender paid compensation restrictions. Brokers can apply online here or through Comergence directly. For more information on our new business, please call us at 844-WME-2967.” I apologize for any confusion.
Mortgage Solutions Financial now requires a minimum FICO of 640 when using gift funds for all loan programs. Effective with submissions on and after August 1, 2018 and loans funded September 1, 2018. Loans in the pipeline with gift funds and FICO < 640 must fund by August 31, 2018.
MWF Jumbo RC & R90 program updates include maximum loan amounts increases for multiple Jumbo RC programs. New maximum loan amounts for Primary & 2nd Home Purchase & Rate/Term to $2,000,000 and cash Out to $1,500,000. Refer to the updated MWF Jumbo RC Product Matrix for complete guideline information.
Capital Markets
Stock market moves don’t drive interest rates, but yesterday the U.S. 10-year closed the day up +3bps to 2.97%, taking a cue from across the Pacific as Chinese equities climbed off their lowest levels of the year. Speaking of China, and we have been doing a lot of that lately, there was a slight cooling in rhetoric from both the U.S. and China, which allowed for yesterday’s selloff. Today’s market moves will also be impacted by Asian headlines as the Bank of Japan will release a summary of opinion later today from its July 30-31 meeting, at which it tweaked elements of its stimulus policy to make it more sustainable.
Not that U.S. economic news seems to move rates much for the last few months but circling back to a few economic releases of note yesterday, the Job Openings and Labor Turnover Survey (JOLTS) showed that job openings increased to 6.662 million in June from a revised 6.659 million in May. Consumer credit increased by $10.21 billion in June, falling short of expectations on top of a revised $24.26 billion increase from May. Finally, revolving credit decreased by $0.2 billion from May to $1038.75 billion, only the third decrease in almost five years.
Today’s light calendar kicked off with the MBA weekly mortgage applications for the week ending August 3: -3%, a 19-month low (refis down 5%). The only other release today is the EIA Weekly Petroleum Status Report for the week ending August 3. We start with rates little changed (yawn) from Tuesday’s close: the 10-year is yielding 2.97% and agency MBS prices are unchanged.
Lender Products and Services
The “1003” should be called the “1030” because it's missing at least 27 very important pieces of information at a minimum. “PerfectLO is designed with underwriting intelligence and asks all the right questions. Your borrower will answer them all as the questions are easy to follow and they know the answer, however they can skip any question. We all know that a completed ‘1003’ is quite useless even when completed. The real pain in your operation begins and ends with a perfect loan interview and thorough doc checklist. PerfectLO creates a spot-on doc checklist and an easy to 2-way timestamp secure upload. Also check out its new release featuring a customizable milestone notification portal to keep your borrowers and agents updated. Sign up for a free trial and demo to see why top producers love the system. PerfectLO’s online questionnaire takes a non-intimidating, logical, and systematic approach. Easy to adopt and onboard. PerfectLO is a multi-language software solution that talks to all LOSs.”
“If your job involves a lot of keyboard hitting then you’re less likely to have a happy future,” warned Barclay’s President Tim Throsby in a recent Financial Times article, when asked about the impact automation will have on our future. This is a concerning prediction for many LOs, particularly those who are still originating loans and communicating with borrowers the old-school way. Fortunately, Floify, the leading mortgage point-of-sale, is helping LOs make the switch to a fully-automated mortgage office and remain competitive in an increasingly digital marketplace. Coupled with an impressive suite of integrations, a brilliantly redesigned 1003, and branding options galore, Floify makes it easy for LOs to get on the leading edge of mortgage tech. If you’ve been considering bringing your mortgage operation up to speed, now is the perfect time to make the transition to this powerful automation solution. Request a demo to learn more!
Informative Research (IR) announced its complete integration with LendingQB’s Loan Origination System (LOS). Now, LendingQB users have access to IR’s streamlined service and can order several products including but not limited to Credit Supplements, 4506-Ts, PreClose Monitoring (UDM), Flood Reports, and their popular SoftQual solution, “which lets you pull a soft inquiry on an applicant’s credit report before pulling a hard inquiry, so you can prequalify them without triggering competition or affecting the credit score. ‘Informative Research really took the reins when it came to integrating into our LOS,’ explained David Colwell, Vice President of LendingQB Strategy. ‘Our integrations team worked very closely with Informative Research to bring out the full potential of our OpenAPIs to offer our customers a wider variety of enhanced products. Integrations like these are living proof of the value of maintaining powerful partnerships in the digital mortgage age.’” Click here to read the full article!
“HomeScout-HBM asks, ‘What’s your plan to protect your business from the behemoths who have decided to go into the mortgage business?’ If your customers are on the HomeScout-HBM lead and conversion technology platforms, you have nothing to fear. Lenders who introduce leads and preapproved borrowers to HomeScout can protect and nurture them by monitoring their search activities, providing timely communications when they need it most; earning their trust and referral business for years to come. HomeScout provides the convenience of 100% MLS listing data, in a private search environment where buyers are protected from the pit-falls of inaccurate listings and the onslaught of unwanted solicitations from strangers who would purchase their information from public search sites. See what our proven, worry-free, lead and conversion solutions have done for thousands of loan officers by contacting them HERE and scheduling a demo or give them a call at 952-831-0623.”
Employment
Glassdoor is one of the fastest growing job sites with a database of millions of employee reviews on thousands of companies. Cornerstone Home Lending, a Texas based lender with 175 offices in 23 states ranks among the ELITE companies in the U.S. in terms of Employee Satisfaction with a Rating of 4.8 stars (0-5 scale). In addition, 95% of reviewers would recommend Cornerstone to a friend, 98% approve of CEO, Marc Laird, and 93% say that there’s a Positive Business Outlook for Cornerstone. These are remarkable ratings, especially given the current state of the lending industry! Go to Glassdoor Cornerstone Review for the details, AND you can also check out the employee ratings on other companies. For more information about careers at Cornerstone contact Tom Lott.
Yesterday the commentary had a note for ClearEdge Lending, a new direct wholesale lender of non-QM loans, who is actively recruiting account executives, operations, and credit staff to its Orange County location. I apologize for including the incorrect company link which is now correct. ClearEdge lender is entering the non-QM mortgage space with an array of industry leading, simplified and competitively priced loan products aimed at helping mortgage brokers build and scale their non-QM volumes. It has originated over $1 billion in non-QM loans since 2015 and has completed four non-QM securitizations over the past two years. For a career with ClearEdge Lending, email Matt Shaw for sales positions and Kelly Blackburn for operations and credit.
Envoy Mortgage is searching for a Head of Mortgage Underwriting. “As a top mortgage employer, our growing and changing company is looking for a talented head of underwriting in Houston, TX. This is a key leadership role in our retail-focused organization that will require exceptional skill in inspiring innovation, taking quality risks and streamlining processes among Envoy’s underwriting teams. By leading a team of dedicated and experienced industry professionals, this position will have significant influence in directives and business strategies to evolve and innovate Envoy’s underwriting operations. The candidate will have a direct impact on advancing process, cycle times, systems and technology to be the best in the business while driving a top-notch work culture of continuous improvement. We are looking for a knowledgeable, energetic candidate that can provide their experience and input to our award-winning team. If you want to lead in a retail and purchase-focused, well-capitalized and forward-thinking shop, email Human Resources.”
Looking for a career in Wholesale? Look at Angel Oak Mortgage Solutions. Employees already know Angel Oak is a great place to build a career as industry accolades are piling up. Named a “Legend of Lending” by National Mortgage Professional Magazine, a four time winner of the AJC’s Top Workplace award, a three-time winner of the ACG Fast 40, and individual awards like Account Executive MVP Award, Elite Women 2018 and MPA Hot 100, the industry is taking notice. Employees are passionate about our service-first culture and it shows in our growth. Fresh off a record Q2 for non-QM production (up 90% year-over-year), the company is looking for Account Executives across the country. To learn more, view the latest job openings on the Careers Page or email Regional Sales Manager, John Wise.
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