Worried about it being April Fool’s Day? Don’t be. We’ll take care of you. Today's podcast includes a discussion on extended locks, as well as an interview with millennial Megan Sinclair on her non-biased experience with the refinance process. Worried about rising rates? What, your company doesn’t do HELOCs or cash out refis? Here’s a story on rising rates from an industry perspective, although 3.25 percent shouldn’t kill your business. Worried about how Freddie Mac’s announcement yesterday on its new policy regarding 2nd homes and investment properties? We knew it, along with other changes, was coming nearly three months ago. Capital markets folks agree that it is not that bad: Freddie will only purchase second homes and investment property loans that were underwritten by LPA. Not DU. And nearly everyone has the Freddie variance that allows them to sell DU loans with certain overlays. It is not the end of the world. Senior management is much more concerned with the seven CFPB notices rescinding certain COVID-19 regulatory flexibility notices issued between March and June of last year. Let’s hope the recissions are not retroactive!
Lender and Broker Products and Services
Wish we could say this is an April Fool’s prank, but recently 11 Georgia residents pleaded guilty in a mortgage fraud scheme that resulted in 100 mortgage approvals, 50 of which have since gone through loss mitigation, modifications, or are delinquent. Led by two listing agents, the group of fraudsters helped unqualified buyers obtain a mortgage by altering bank statements, inflating assets, and posing as employment verifiers. It’s a shame to see, but the situation serves as a valuable reminder that direct-source data verification is the most secure method of knowing your customer’s true financial profile. FormFree’s AccountChek 3n1 uses end-to-end encryption to deliver tamper-free direct-source asset, income, and employment data in an underwriter friendly report. Contact Gregg Palmer to learn how FormFree can help you prevent fraud.
A lot of tech is all smoke and mirrors, making promises that are too good to be true. That’s why I prefer to trust the word of the folks doing the buying over the vendors doing the selling. Sales Boomerang recently shared a new case study from Assurance Financial that illuminates the true value of its borrower intelligence and retention system. Says Katherine Campbell of Assurance, “the loan opportunities Sales Boomerang surfaces are hyper-relevant. Assurance closed approximately half a billion dollars in funded loans from Sales Boomerang alerts in 2020.” With Sales Boomerang, loan opportunities are pulled out of your own pipeline, not out of a hat. Get a peek behind the curtain at how Sales Boomerang brings the hidden opportunities in your pipeline to light without the smoke and mirrors.
2021 has already been a year of uncertainty, especially in the lending space. Lenders need to prepare for all scenarios including, early signs of distressed borrowers, uncovering undisclosed liabilities (including HOA) and preparing for an uptick in new purchases, let alone finding the right partner to work with. How can lenders keep up when the lending landscape is constantly changing? Join First American Data & Analytics experts as they share how our industry-leading solutions leverage public, private and proprietary data sources to uncover early indicators of risk, research discrepancies and verify borrower and property information in a free data-driven webinar: 3 Tools Lenders Need to Navigate an Ever-Changing Environment.
“Symmetry Lending continues to bring solutions to the mortgage broker and banker community. In addition to servicing your retail origination teams, the Symmetry HELOC is now available to your TPO channel as well. As our friends at Kind Lending recently mentioned in the Chrisman Commentary, “Twice the loan, not twice the work”, referring to the Symmetry HELOC now available to approved broker partners as an alternative to jumbo financing. Symmetry is proud to announce that Rick Mangone, as Symmetry’s Wholesale Account Manager, is dedicated to delivering our signature Service, Speed, and Simplicity to our partners in the TPO channel. For more information on how to add the Symmetry HELOC to your TPO offering, click here to connect with Rick, or simply call him at 213-500-3965. And if you haven’t already, connect with us on LinkedIn, Facebook, and Twitter for our ongoing updates.”
Ah, spring! The time for new growth, recommitment to our yearly goals, and sowing the seeds of profitability, efficiency, and competitive edge in advance of the “harvest season” for the mortgage industry. When the time comes, as it does eventually for any growing lender, you’ll need to find a trusted partner as your hedge advisor to support you in all stages of growth. As MCT®’s latest blog “How to Choose a Mortgage Hedge Advisor” can attest, not all firms are created equal. To get the competitive edge, be sure to choose carefully so you can take advantage of key differentiating characteristics and services only found in a full-service hedge advisory firm. Read the full article for important questions and checklists to use as tools for vetting potential partners so you’ll be sure to ensure your company’s long-term success no matter what your goals may be.
The CFPB in Action
In an effort toward more transparency, the CFPB, like the Federal Reserve Open Market Committee, has decided to release the minutes from its senior management meetings, informally known as “cuddle huddles”. Here is an excerpt from a recently held cuddle huddle, sent to me in advance by an inside unnamed source:
“I’d like to thank everyone for getting together to touch base and closing the loop. Just to remind the team, managers are now leaders, sharing ideas is now “socializing,” meetings are now “pull ups,” although meetings with 2+ level down employees are now “skip-levels.” And I’ll give a free Zoom tutorial to the first person who uses “synergy” in a sentence. The next item on the agenda is the off-siting paradigm, and if we are ready to push it across the finish line. Compliance?”
“Our team was going to re-purpose this task, engage in some team building exercises, and then circle back with the other pods after solutioning. Legal?”
“Yes, and we need to line up our ducks and take it to the next level once we brainstorm the strategic fit. Are the other assistant associate directors in agreement?”
“Roger that. My group is prepared to kick it up a notch and see if it holds water, and then push the envelope. Government affairs?”
“Last week we held an enclave, putting our heads together and synergizing, and discussed dialing it back. Accounting?”
“Our group has been working under the radar with the end goal to be to operationalize this function and get to win-win. IT?”
“We wanted to see how this was going to bubble up, right-size it, streamline the flow, and then run it up the flagpole. We’re working on coding and trying to work a pivot table into the flow. Communications?”
“Can someone remind me what we are talking about?”
“We may need to outsource this if we want to stay lean and mean. Quinn won the prize for using synergy. Meeting adjourned. Group hug. Now let’s go make some money for the government.”
Given FHFA Director Mark Calabria’s stance on government involvement in lending, mortgage companies everywhere weren’t surprised that the FHFA announced Freddie and Fannie will stop offering home loans, effective today. "Their footprint was being reduced to the point of asking, “Why buy loans? Most people don't even remember what half the acronyms produced by the Agencies even stand for" spokesman Melva Christopherson noted. "There were too many rules. We all remember the first version of HARP suffering because it excluded homeowners whose homes were valued more than 25% below the loan amount as well as borrowers who may have missed a mortgage payment in the last year. These ineligible Americans were over-represented in the areas of the country that were hardest hit by the Great Recession. And the GSEs, in spite of prodding by the FHFA and Congress, don’t want to be on the hook for this stuff.
“Besides,” added Ms. Christopherson, "With the adverse market fee, the constriction of 2nd home and non-owner occupied lending, and further footprint reductions in the works, why bother even turning the lights on? Most borrowers out there have 30-year rates in the high 2 or low 3 percent range… Why should the government offer them the chance to improve their situation further now? And this whole conservatorship thing is confusing, has dragged on for more years than most people have been in our business, and the recap and release proposals are way too expensive. It makes no sense. We look forward to seeing the correspondent rate sheets from Private Capital Savings and Loan for lenders.”
In financial news, the Biden Administration narrowly missed out solving its debt issues after a junior aid made a numerical mistake. It turned out that President Biden arranged for a gap in his daily agenda and traveled to a convenience store in Terra Haute, Indiana to purchase a Mega Millions lottery ticket. Needless to say, the trip raised many eyebrows among conservatives across the United States. Biden made the extraordinary purchase himself, traveling commercial to a 7-11 in Indiana to buy a ticket. After buying the ticket, he was quoted as saying, "Winning will allow us to pull the proverbial rabbit from out of the hat. We are not afraid of the odds of winning the jackpot. 1 in 176 million is much better than the odds experts give us of solving the massive debt run up by the Trump Administration, and our stimulus and infrastructure packages, which are approximately 1 in 975 gazillion." Hopes were dashed, however, when an aide used the cabinet's birthday numbers using the Greek Orthodox calendar rather than the Julian calendar for the picks. "If it hadn't been for that, we'd have been flying back in first class!" Biden said wistfully.
Turning to the markets, the economy is going to improve slowly. The economy is also going to improve fast. Or vice-versa. It will definitely be one or the other. Or something in between. It's just an issue of sooner or later, more or less. The opposite is probably true, too. Even so, no matter how gradual the improvement, it will be sudden. The economy will stall around the third quarter, before Halloween, then build momentum through the rest of autumn and into 2022, reverse course in 2023, then pause for a cigarette break. Whatever the case, the economy is headed in the right direction, roughly east by southeast. This comes to us from a new predictive algorithm from the CFPB, which has now taken over the task of protecting consumers and loan officers from random interest rate predictions.
The good news here is that the recovery is fully underway. The bad news is that the recovery will most likely take the rest of our lives. In fact, once we finally do turn the corner, we'll still have to turn another corner, and then at least two more, only to bring ourselves full circle, a phenomenon MBA economists call "cyclical." In short, the only rebound that will happen this year will take place on a basketball court. All signs point to that scenario, even though our mother always told us it's rude to point. Evidence to that effect is considerable. Some companies looking to scale back payrolls will now offer early retirement packages only to employees who have recently died. Anyone who has lost a job since the pandemic began can now get a tax credit toward retaining a private investigator to try to find it for you. And the private sector is increasingly making fun and pointing at the public sector.
Economists at Fannie Mae and Freddie Mac say all of these are surefire signs of a surging economy. Until they aren't. To be sure, the dollar is still weak, driving up gasoline prices, but reports have come in from Southern California that it has started doing some cardio and eating more cruciferous vegetables. (Use a dictionary.) And though it's already a given that the recovery may be jobless, it now appears likely it will also be shirtless, maskless, and hairless as well.
On a non-April Fool’s note, the two big words driving moves in the bond market right now are “growth” and “inflation.” Those came up on Wednesday as President Biden unveiled his $2.25 trillion “American Job Plan” of sweeping economic investment achieved through increasing corporate taxes. Though it faces a tenuous path through congress, it will dominate investor sentiment along the way. Also spurring on growth talk was the ADP Employment Report for March, which showed a net gain of 517k private sector jobs. Attention now turns to whether there will be a similar strong payroll job gain in the official Bureau of Labor Statistics payroll data. We begin Maundy Thursday with Agency MBS prices +.125 and the 10-year yielding 1.70 after the Challenger layoff numbers (30k) and weekly initial jobless claims (719k, +61k!).
Interested in managing a team, but not interested in the business of running a business? A local highly-rated lender is looking for a highly a motivated originator/leader with a track record of production and a desire to grow beyond their own production to lead our team. “We are a company full of mortgage producers that consistently rank among the highest in the country. Employees from the top-down work alongside each other in order to help achieve sales and career goals. Learn how to take your career to the next level from some of the best in the business in a company that thrives on a fun and inclusive culture.” Nevada branch managers should send a confidential note of interest to Chrisman LLC’s Anjelica Nixt for forwarding.
First Option Mortgage, a national retail residential mortgage lender, is excited to announce four new locations: Tampa, FL, led by Lorena Colin, Corbin, KY, led by Tim Hill, Alexandria, VA, led by Melissa Willoby, and Orland Park, IL, led by Brian Kedzior. “We have coined a phrase at First Option, ‘I am the difference’ and that phrase applies to everyone because we all contribute to the company’s growth,” said Fobby Naghmi, national sales manager. First Option’s footprint continues to grow as the company positions itself to be a top retail originator offering several loan products, including ITIN mortgage loans. “As we continue our expansion, we are focused on maintaining our operational commitment to our current sales team,” said Alvin Shah, managing partner at First Option. “The same level of service that they have always enjoyed will not be compromised.” To explore career opportunities in your market, contact Fobby Naghmi.
Are you an extraordinary recruiter, looking to work with and become part of a growth oriented executive team? iServeLending, a dynamic, 15-year-old independent mortgage lender, currently licensed in 12 states is searching for a VP of Talent Acquisition. This is your opportunity to join a winning team that gives you a decision-making voice. The Executive Management Team has been together 14 years, and is focused on an employee-centric culture, fun environment to work, and providing "above and beyond" service to its mortgage partners. The average employee tenure is over six and half years, and they are seeking like-minded team members who want a company they can call home! The ideal candidate is a talented recruiter who can attract top mortgage sales and operational talent. This can be a remote position with an attractive salary and bonus plan. If you have successful recruiting experience, entrepreneurial, able to work independently, with a proven track record, this could be the ideal position for you. Qualified candidates should send their resume in confidence to firstname.lastname@example.org.
As Unified Reliance Wholesale launches vigorously into its seventh month of business, the organization has met its promise of creating a revolution in wholesale lending. It’s done so by building a team of exceptional talent and standing by URW’s commitment to unparalleled customer service and industry-leading turn times. The business has logged multiple record months and is growing steadily but tactfully in today’s unstable market. The team is excited to announce URW’s expansion into additional markets and is opening its doors to new talent, actively recruiting champion account executives in California, Oregon, Washington, Utah, Colorado, and Arizona. URW looks forward to a bright future with their expanding team of industry leaders! Want to be a part of something amazing? To explore opportunities, call 951.368.9225.
“Caliber Home Loans is excited to introduce our podcast called ‘The Home Connection.’ The topics covered have a strong appeal to homeowners, realtors, mortgage professionals and everyone in between. Our episodes range from the state of the mortgage industry to stories from some of our best loan consultants around the country and are enlightening and informative. Subscribe and tune in every other Monday on Apple, Google, or Spotify. Caliber Home Loans is an innovative company, and we’re hiring right now. Visit our website today to view open opportunities. To be immediately considered for Operations or Sales positions, email Jonathan Stanley or Brian Miller, respectively.”