Bond prices and mortgage rates, like nearly every commodity, are driven by supply and demand. I mention this because early last week prices of US government bonds declined while the yield on the benchmark 10-year Treasury note increased (although it reversed itself due to turmoil in Turkey). Investors bought $34 billion of three-year Treasury notes amid relatively soft demand, with the week bringing the first sales of Treasury notes since the Treasury Department announced it is looking to increase its borrowing in the second half of 2018 to $769 billion, a 63% year-over-year increase. Just something to keep in the back of your mind if you’re hoping for lower rates, or relying on them to help your business model.

Corporate Name Changes

After 17 years, Georgetown Mortgage, LLC, has outgrown its original name, and is rebranding as Thrive Mortgage, LLC. “We are a company focused on delivering unparalleled service to borrowers and originators and cultivating an all-around atmosphere of growth and achievement,” states Michael Jones, the company’s Chief Financial Officer. “If you’re not living, you’re dying. But just living isn’t good enough. Why simply get by when you can enjoy life to the fullest and Thrive?” The name change is accompanied by several strategic hires. Brian Hurd, VP National Builder Division, is blowing the doors off construction lending. Brian Nachlas, Chief Strategy Officer, is a Social Media guru with amazing vision and an expert understanding of building an online brand. Erin Dee, Director of Business Solutions, spearheaded the implementation of a new Point of Sale platform making the company’s technology, processes, and loan production more efficient and effective. The company is on track to fund $1B in originations this year, up 14% over last year, and the future is very bright.

Riivos! Last month Alight, Inc. — parent company of Alight Mortgage Solutions, the leading provider of cloud-based applications for budgeting, forecasting, financial reporting and scenario analysis for the mortgage industry — changed its name to Riivos, Inc. “Riivos connects your organization to the data that comprises the mortgage value chain — GL, LOS, payroll, BI and other systems — allowing you to see your whole business in a way that is natural to you, enabling collaborative discovery, exploration, analysis, and tracking of opportunities that optimize financial performance and value creation. Contact Scott Walker for a demo.”

Capital Markets

The preparation for the fabled single security (both Freddie and Fannie loans in the same mortgage-backed security) continues and is set for next year. 80-90% of current originations are, in effect, backed by the U.S. taxpayer, and both agencies continue to shift risk to parties willing to absorb it through credit risk transfers and other mechanisms. Originators should cheer this on, as the eventual product is a healthier secondary market for what lenders are producing in the primary market.

Last month Freddie priced a new offering of Structured Pass-Through Certificates (K Certificates), which are multifamily mortgage-backed securities. The company expects to issue approximately $1.1 billion in K Certificates (K-078 Certificates), which are expected to settle on or about July 19, 2018. The K-078 Certificates are backed by corresponding classes issued by the FREMF 2018-K78 Mortgage Trust (K-78 Trust) and guaranteed by Freddie Mac. The K-78 Trust will also issue certificates consisting of the Class X2-A, Class X2-B, Class B, Class C, Class D, and Class R Certificates, which will not be guaranteed by Freddie Mac and will not back any class of K-078 Certificates. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.

On August 2, Freddie Mac priced a new offering of Structured Pass-Through Certificates (K Certificates) that are backed by underlying collateral consisting of supplemental multifamily mortgages. The company expects to issue approximately $251 million in K Certificates (K-J20 Certificates), which are expected to settle on or about August 10, 2018. Freddie also expects to issue approximately $465 million in K-I02 certificates, which are expected to settle on or about August 14, 2018. K-Deals are part of the company's business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.

Additionally, on the 2nd Freddie announced that it will begin issuing new 55-day “mirror” mortgage-backed securities for the current population of exchange-eligible 45-day Freddie Mac Gold Participation Certificates (PCs) and Giant PCs to facilitate the implementation of the Single Security Initiative on June 3, 2019. The company expects the initial issuance of mirror securities to take approximately 8 weeks beginning on August 7, 2018. Freddie expects to issue over 70,000 mirror securities during this 8-week period, corresponding to the population of exchange-eligible PCs and Giants, and will continue to issue mirror securities as new exchange-eligible 45-day securities are produced.

The deal helps pave the way for a combined Freddie Mac and Fannie Mae $3.5 trillion market of a To-Be-Announced Uniform Mortgage-Backed Security, intended to strengthen the U.S. mortgage market by providing more liquidity and lowering costs for borrowers.

On August 3, Freddie priced a new offering of Structured Pass-Through (K) Certificates backed by fixed-rate mortgages on multifamily properties affordable to working households earning low- to moderate-incomes. The company expects to issue approximately $599 million in K Certificates (K-W06), which are expected to settle on or about August 10, 2018. K-W06 is the sixth K-Certificate issued under the K-W series. The underlying mortgages backing K-W06 are on workforce properties, which generally have rents that are affordable to individuals earning 80 percent or less of their area median income, excluding high cost housing markets. On August 9, Freddie priced a new offering of K Certificates backed by floating-rate multifamily mortgages with seven-year terms. The approximately $1.1 billion in K Certificates (K-F49 Certificates) are expected to settle on or about August 17, 2018.

What is a mirror security? It is a step in the process, and for a primer read page 15 of this Playbook.

On August 7 Fannie began issuing new 55-day “mirror” mortgage-backed securities for the current population of exchange-eligible 45-day Freddie Mac Gold Participation Certificates (PCs) and Giant PCs. This is a milestone that supports the launch of the Single Security Initiative on June 3, 2019.

Freddie plans to issue over 70,000 mirror securities over an 8-week period, and then continue to issue mirror securities as new exchange-eligible 45-day securities are produced. Holders of 45-day TBA-eligible and non-TBA-eligible PCs and Giant PCs will have the option, beginning in May 2019, to exchange these securities for corresponding 55-day mirror securities. The cash flows of these mirror securities will be backed by the same loans as the original PC or Giant PC.

Looking at the bond markets and interest rates, on Tuesday the 10-year displayed the same action as on Monday, rising another 2bps as investors brushed aside Turkish turmoil that has dominated headlines over the last few days. The ramifications of what is happening in Turkey could still have far-reaching consequences for the global economy, as Turkish borrowers make up roughly $140 billion in debt to Italian, French, and Spanish banks. Import figures from yesterday morning did reflect some of the effects of a stronger dollar as nonfuel import prices declined month-over-month in both June and July.

It has been a slow start to the week as economic releases go, but that changed today. We have already seen the MBA weekly mortgage application figures for the week ending August 10 (echoing what lock desks already knew, -2%), July Retail Sales (+.5%, core +.6%, strong), the release of the Empire State Manufacturing Index for August (expected to decline, it was up to 25.6). We also received Q2 productivity (seen increasing 2.0%, it was +2.9%). Next up is July industrial production and capacity utilization, expected to be unchanged. To close out the day, we receive June business inventories, the EIA Weekly Petroleum Status, and the Treasury will release June TIC data. We start the Wednesday U.S. trading day with rates versus Tuesday’s close: the 10-year is yielding 2.87% and agency MBS prices are better by nearly .125.

Lender Products and Services

“What is sim·pli·fi·ca·tion? A noun. The process of making something simpler or easier to do or understand - Deephaven Mortgage has taken this strategy straight to their products over the last three months to put you at the forefront of innovation & simplicity. The most recent simplification involves two dh•mtg products, Expanded Prime and Non-Prime. Both products now offer 90% LTV’s to further strengthen your available options for lower down-payment lending options. Non-QM doesn't have to mean complex. To find out more about Deephaven's products contact (Wholesale) or (Correspondent) or visit Non-QM = Simplified = dh•mtg.”

“Are you rejecting loans you should be closing? Verus Mortgage Capital responsible non-QM programs can help you tap into the $200 billion in annual unmet demand from creditworthy borrowers. With flexible guidelines and solid underwriting, Verus helps correspondent lenders grow. Take advantage of loan products for self-employed borrowers, credit events, single-family rental units and more. Verus is an experienced investor that is committed to helping correspondents succeed in non-QM with its innovative products and partnership program. Verus has purchased over $2.6 billion in expanded, non-QM loans and completed six rated securitizations. Contact Verus today to learn more.”

“Reasons to Leverage End-to-End Fulfillment: In today’s mortgage environment, loan manufacturing takes longer, costs more and carries more risk. How can you stay competitive? This infographic highlights the most important reasons to leverage end-to-end fulfillment. Interested in learning more? Contact Gary to find out how you can achieve improved profitability through Trelix Mortgage Fulfillment Services.”

Jobs and Personnel Moves

Towne Mortgage Company is looking for experienced Account Executives with a book of business throughout the Southeast, Mid-Atlantic, Texas, Ohio, Northern Illinois, Western Pennsylvania and Iowa. This position will have access to multiple operation centers and a wide range of product offerings including FHA, 203K, Fannie Mae HomeStyle, HomePath, HomeReady, DU Refi Plus, VA, USDA, and Manufactured Programs. Towne is looking for a seasoned, high-energy, salesperson who can partner with Towne to expand their lines of business. “We are looking to fill positions in our financial institution channel working with Banks, Credit Unions and AgBanks as well as our traditional broker channel. Delivery mechanisms include both wholesale and mini-correspondent relationships. Towne offers competitive compensation packages including Medical and 401K. Sound Interesting? Email Cassi Sluka.”

“We know you hear the same pitch from every mortgage company that is trying to recruit you. Sierra Pacific Mortgage, its different. Sierra understands how to adapt when the market changes, and what it takes to not only survive, but to thrive after 30 years in the industry. Be it in technology, regulation, or product, Sierra is a leader in the industry because they aren’t afraid to try new things. Check out this video. It’ll make you smile. Sierra Pacific Mortgage is a great company, and if you are ready to work for real people, who really care about you and your success, visit the careers site today.”

“Realtors, Builders, Closing Agents and Borrowers are praising Cornerstone Home Lending’s EXPRESS CLOSING process, which reduces the industry-average time at the closing table from an hour to UNDER 15 minutes. Laura, a Closing agent in Colorado, was elated last month when she closed 3 separate Cornerstone loan transactions in less than 38 minutes total. In July 78% of Cornerstone’s closings took less than 15 minutes to complete, giving Sales agents and clients more time away from the closing table. To learn how Cornerstone’s EXPRESS CLOSING results in more customer referrals for Cornerstone Loan Officers, contact Tom Lott.”

“Want to make more money from your current production? Are you losing deals over pricing? Is your volume down? Great news for LO’s/Branch Managers: LOWER RATES + BETTER PRICING = A PAY RAISE FOR YOU! Increase your compensation AND offer lower rates to your customers by joining the Mortgage Right family. Check this testimonial out: We recently signed up a Branch Manager from Georgia who was able to improve his overall comp by 117BPS by making the move to Mortgage Right. Here’s how he split the winnings up: He gave himself a 50BPS raise and is passing the remaining 67BPS on to his clients, giving them a 1/8th better pricing than his competitors! He’s winning more deals AND he’s making more money! It only takes 10 minutes to see how much extra you could be getting paid from your current production. Give us a call at (866) 228-7703 or visit our site at”

Congrats to Laura LaRaia who has been appointed General Counsel for First Guaranty Mortgage Corporation and be located in the Plano, Texas.

Trinity Oaks Mortgage has named James Hinton, who brings 46 years of mortgage industry experience to Trinity Oaks, as EVP. Mr. Hinton will work closely with the Post-closing and Secondary Department to increase secondary marketing and secure government entities such as Fannie Mae and Freddie Mac for post-closing procedures.