I remember when I would travel to exotic places like London, England, Lima, Peru, or Biloxi, Mississippi. From Southern California, thank you to Carey A. sent along this interesting site in which you can take a drive in most of the cities in the world, listening to that city’s local radio station! Listening is an art, and the “bad lip reading” videos are flying, and pretty darned funny. With an eye on “equal time,” they are pointed at both the Republicans and the Democrats. There was no lip reading needed for the big announcement by Fed Chair Jerome Powell yesterday. Although inflation, addressed in the new policy, has not been a problem for decades, lenders should have at least a cursory knowledge of the news, discussed in depth below, as the policy will probably keep overnight rates low for a longer period of time.

Lender Products

Do you need more warehouse capacity? The answer should be yes… Who doesn't in this current market? In addition to adding new lines, look to sell to the fastest correspondent buyers like TMS. TMS’ average delivery to purchase turn time is only 7 calendar days while continuing to set new funding records. Warehouse banks dwell times are averaging 16-19 days so at 7-day purchase time you can fund twice as many loans. How does TMS always stay ahead? The majority of their time savings stems from the fact that they perform the initial collateral review instead of outsourcing the review to a custodian. Sign up here. 

For Dea Avila, Marketing Compliance Specialist for PRMI, social media monitoring is simplified. “Our team doesn’t have to search out all of the non-compliant posts. If there is a problem, we see it quickly and we address it quickly”. With ActiveComply, accounts, individual posts, and reviews, show up on one unified dashboard. ActiveComply flags posts using industry key words that trigger scrutiny from regulators, and even scans images like infographics or cover photos for NMLS IDs and Equal Housing logos. “We have been able to track postings about current events, forbearance, social justice issues and other subjects we can review for accuracy, or appropriateness with business accounts,” says Laura Zitting, Compliance Manager for PRMI. “ActiveComply gives us peace of mind while constantly delivering results”. Read the full story here.  Contact melissa@activecomply.com for a FREE Social Media Compliance Audit today. 

A new tool to help lenders drive profitable loan production: Compass Analytics, part of Black Knight, prioritizes reporting that allows customers to better understand the drivers of their profitability in challenging markets. Compass Analytics’ Originator Scorecard builds upon the industry-standard pull-through metric by calculating a “clean” pull-through rate that represents the percentage of loans that maintained their original profit estimate upon closing. Additionally, the Scorecard details how originators stack up against each other within a lender’s organization and against Compass’s anonymized database of loan originators, brokers, correspondents, and branches, helping lenders identify their most profitable originators. Its intuitive Peer Score metric helps lenders better understand their production, providing an opportunity to facilitate conversations between Senior Management, Secondary, and Production regarding overall profitability and strategies to reduce the number of manual touch points on loans. Join us today at 1:00 p.m. EST to learn how the Originator Scorecard can help you. To schedule a demo or learn more, visit Compass-Analytics.BlackKnightInc.com.

Wholesale and Correspondent Bits

PadLockIt or PadTheirPocket. Any broker knows a rate lock extension can be a very expensive proposition. Now, given unprecedented volumes in the middle of a pandemic, rate lock extensions are serious business. Some lenders are charging up to 10 basis points PER DAY to extend rate locks. That’s as much as 15 times the true cost of the dollar roll! It is in times like these that Quicken Loans Mortgage Services’ Padlock program becomes incredibly valuable. Using the Padlock program, QLMS Partners have extended 59,671 days in August alone… for free! This has saved those Partners more than $5,867,087! Click HERE for relief from lenders who are padding their pockets with outrageous extension fees.

Approved Broker Partners of Orion Lending are automatically enrolled in its LeadGen service providing Point in Time Borrower Data including the borrower contact, original and subsequent loan information, to name a few.

FAMC issued a reminder that all VA Refinance transactions (including IRRRLs) must continue to follow the mortgage seasoning requirements as outlined in the Ginnie Mae APM 19-05. Additionally, FAMC will require a copy of the Note from the loan being refinanced to be delivered in the closed loan file submission, effective immediately.

Mountain West Financial posted that Texas announced a revision to the borrowers’ debt-to-income ratio requirement. Effective with locks on and after September 1, 2020, My First Texas Home and My Choice Texas Home loans will have a maximum DTI of 50% with AUS approval.

Manual underwriting is not affected, Max DTI remains at 45%. For complete program details, see the My First Texas Home and My Choice Texas Home programs in the Affordable Housing Loan Programs (AMP) website.

PCF Wholesale is offering a Lock Special, 45 days for the price of 30 days. Contact PCF for details.

Capital Markets

After an uneventful start to the week, headlines attracting investor interest were plentiful yesterday. There was the landfall of Hurricane Laura, Fed Chair Powell’s speech, initial jobless claims and other economic indicators, and tensions in the South China Sea China. The biggest news was Fed Chair Powell unveiling a major shift in monetary policy to allow inflation and unemployment to run higher, which abandons decades of precedent and ensures that rates will stay low for years to come.

Originators should be aware that the Fed, concluding an 18-month review of how to best achieve the Fed’s dual mandate of stable prices and maximum employment, announced two key changes to the Fed’s framework. First, the Fed will seek inflation that "averages" 2 percent over time, implying that the inflation figure can overshoot 2 percent after periods of weakness. This new, outcome-based approach, entails seeing inflation first before raising rates, rather than simply forecasting it to rise. Inflation has persistently been below the Fed’s 2 percent inflation target over the past several years, and the potential disinflation that could result from the COVID-19 pandemic made this move towards average inflation targeting expected. Encouragingly, market-based inflation expectations have more or less recovered to their pre-pandemic levels, although they remain below 2 percent. The move is less monumental than meets the eye, as many experts view this as the codification of a policy the Federal Reserve had already de facto adopted.

While the official change to the inflationary framework was expected, the second change, the new Statement on Longer-Run Goals and Monetary Policy Strategy, was not expected ahead of the September FOMC meeting. The Fed unexpectedly adjusted its view of full employment to allow labor-market gains to reach more workers, which should help a deeply impaired job market. The statement change now says that monetary policy decisions will be informed by “assessments of the shortfalls of employment from its maximum level” rather than “deviations from its maximum level.” It essentially means that the Fed has now formalized a more dovish path over this cycle than previously expected, and Chair Powell even said that, “employment can run at or above real-time estimates of its maximum level without causing concern, unless accompanied by signs of unwanted increases in inflation.” This move also acknowledges that what dictates a tight labor market can be a moving target in real time.

Mortgage folks will be relieved to know that it remains to be seen just how realistic sustaining the economic conditions necessary to generate an overshoot in inflation will be and how long they will take for the Fed to achieve. One thing does seem fairly certain after these changes: the Fed seems unlikely to tighten monetary policy for quite a long time. Chairman Powell said there is no arithmetic formula that will be followed, and no formulaic time horizon has been set, though a change in forward guidance at the September meeting comes next. U.S. Treasuries ended the day pulling back in severe curve-steepening fashion (the yield curve now sits at its widest level in two-months) on the dovish Fed news, lifting yields on the 10-year and 30-year bonds to their highest levels since late June as longer maturities sold off sharply. A Fed that is willing to tolerate a bit higher inflation over a medium-to-longer run horizon is going to increase the yields on longer-dated Treasuries.

As far as economic releases went, initial claims declined but are still just over 1.0 million, remaining consistent with a continued gradual improvement in the labor market. But the level of initial claims remains well above the peak experienced in past recessions and does not include an additional 608k claims filed under the Pandemic Unemployment Assistance program. Total U.S. unemployment stands at 14.5 million. The second estimate for Q2 GDP featured an upward revision, but still showed output decreased at an annualized rate of 31.7 percent, a reminder that the COVID pandemic has triggered the biggest downturn for the U.S. economy on record. Pending Home Sales increased 5.9 percent in July, better than expected, though the June figure was revised downward. Freddie Mac’s Primary Mortgage Market Survey for the week ending August 27 saw fixed rates fall back near their survey lows. Finally, House Speaker Pelosi talked with White House Chief of Staff Meadows for the first time in three weeks regarding the stalemate on a new pandemic relief bill.

Today’s economic calendar is already underway with July Personal Income (+.4 percent), Personal Spending (+1.9 percent), PCE Prices (+1 percent), Core PCE Prices (+.3 percent), advanced trade balance (-$79.32 billion), and July Wholesale Inventories (-.1 percent). Later this morning brings Chicago PMI for August and the Final August University of Michigan Consumer Sentiment Survey as well as the second and final day of the virtual 44th annual Kansas City Fed Economic Policy Symposium. After the Desk of the NY Fed released a new MBS purchase schedule yesterday covering the August 28 to September 14 period that totals up to $57.8 billion (GNII 3 percent are no longer part of the rotation with 1.5 percent replacing 2.5 percent in UMBS15s versus the prior schedule), the Desk will purchase up to $5 billion MBS today, starting with $754 million UMBS15 2 percent and followed by $2.9 billion UMBS30 2 percent and 2.5 percent and $1.4 billion GNII 2.5 percent. We begin the day with Agency MBS prices better/up nearly .125 and the 10-year yielding .74 after closing yesterday at 0.75 percent.

Employment, Transitions, and Promotions

“Sourcepoint, a partner of choice for leading mortgage companies, is rapidly growing and seeking high performing Underwriters with 4-8 years of direct experience. You’ll be responsible for reviewing, analyzing, and underwriting both first and second mortgage loans for top mortgage brands. The position requires an associate degree, in-depth knowledge of Fannie Mae and Freddie Mac underwriting guidelines and automated underwriting engines, as well as strong customer service, communication, and problem-solving skills. Sourcepoint offers a continuous learning culture with opportunities to boost your skills, performance, and growth. If you are detail-oriented with a passion to help borrowers in their quest for home ownership, we want to talk to you. Email Katrina Gaer for more information or apply today.”

ServiceLink is pleased to announce Mike Ehms as a new VP and Sales Manager who brings 30 years industry experience, focusing on executive strategic initiatives and business development. He will be responsible for leading a team of sales executives, focusing on news business development, new client acquisition, expanding new channel opportunities, while providing superior client service. Jon Roventini also joined the sales team as a National Sales Executive. Jon brings more than 25 years of industry experience and will be responsible for leveraging his deep industry knowledge and expertise to deliver ServiceLink’s Valuation, Title and Closing services to mortgage originators.

Flagstar Bank just closed out the best quarter in its history, and is growing at a record pace. Which is why Flagstar is looking to add to its mortgage ops team in the following positions: Processors, Support Specialists, Closers, Disclosure Specialists, Underwriters, Delegated Auditors, Team Leads and Managers. Flagstar Bank is committed to the health and well-being of their employees, and offers 100% remote opportunities on all positions, both now and into the future. Plus right now, Flagstar is offering very competitive signing bonuses. Click here to learn more about all of the exciting opportunities that await you at a company that truly cares about its employees: Flagstar Bank.  

Lenox/WesLend Financial, an industry leader is announcing the opening of a Dallas, TX second headquarter office. Located in the beautiful Galleria Towers buildings, this is centrally located with easy expressway access, shopping, and restaurants in walking distance. Lenox/WesLend is hiring for in office and remote positions in both the Wholesale and Retail Divisions. With great work life balance and a family first attitude, Lenox is recruiting seasoned, Underwriters, Processors, Funders, and operations support. Lenox/Weslend is offering competitive salaries and signing bonuses. If you are interested in joining a dynamic team in either Santa Ana, CA or in Dallas, please send your resume for confidential review to: careers@lenoxhomeloans.com. Join the Lenox/WesLend family today!

All signs point to KIND. The new building sign is shining brightly at headquarters and is pointing towards the top talent in the mortgage industry. If you are looking to make a career move, join a team who only hires passionate and happy people who are ready to take their career to the next level! KIND is now hiring for over 20 positions including Closers, Funders, Underwriters, Loan Setup Specialists, and much more. If you need a refreshing change, where personal career growth matters as well as a strong work/life balance, great compensation, benefits, and caring team members, submit your confidential resume to VP of Talent Acquisition, Melissa Richardson or submit your resume online at www.kindlending.com/careers

Fannie Mae has appointed Jeffery Hayward to the position of EVP and Chief Administrative Officer and Michele Evans as EVP and Head of Multifamily. Congratulations!

Churchill Mortgage announced the appointment of Martin Ford to VP of Credit Risk and will lead the underwriting team to help manage risk, credit quality and product portfolios as well as working closely with the company’s secondary marketing team.