Why do all underwriters have soft hair? Because they over-condition! (How do your underwriters feel about bitcoin? Brokers up in Canada are now accepting eCurrency.) Underwriters are charged with analyzing the 5 C’s of credit (character, capacity, capital, collateral, and conditions) and hope that none of their borrowers go bankrupt. Surprisingly, bankruptcy filings by consumers under Chapter 7 were down 22% last year, despite COVID, compared with 2019, while individual filings under Chapter 13 fell 46%. After holding above 50,000 filings a month in 2019 and in the first quarter of 2020, bankruptcy filings have remained below 40,000 a month since last March when the pandemic hit. Say what you will about it, I am sure the stimulus money helps. The credit “black box” is good for people who are able to build traditional credit but there are credit-worthy individuals who don’t have the ability to build credit the way the FICO score is built. In recent news, the MBA’s mortgage credit availability index rose by 0.6% to 125.4 in March, indicative of loosening credit. (By the way, the audio version of today’s commentary is available here and is sponsored by FBX, an Informa Financial Intelligence business, helping you know how your competitors are underwriting and pricing.)

Broker and Lender Products

When it comes to unresponsive settlement agents, corrections, and investor exceptions, it is DocProbe’s deep mortgage experience, powered by a disruptive Trailing Document platform that is the secret sauce to a smooth and seamless post-closing and secondary fulfillment. Look at what happened in the Suez Canal. You can build the biggest and best ship in the world, but if you can’t steer it straight you end up blocking $400 million an hour in global trade. For DocProbe, as a Fintech in the mortgage space, technology is at our core. Automation, machine learning, AI and document recognition are at the heart of our effectiveness and why lenders are partnering with us to manage their Final Documents. Ultimately, though, it is our people and process that are pulling together a Trailing Document operation that supports over $230 billion in originations nationwide. We think of it as the perfect balance. People. Process. Technology. Our clients know it as the perfect solution. Visit DocProbe or reach out to Nick to learn more.

Sales Boomerang is the #1 borrower intelligence and retention platform... but what exactly IS a borrower intelligence and retention platform? By collating and analyzing numerous sources of borrower intelligence, including credit history, property listings, consumer debt load, loan payment history, accumulated home equity, and major life events, Sales Boomerang tells lenders when a past customer is ready for a loan, which loan they need and whether the borrower is credit-qualified. With Sales Boomerang, customers enjoy an average three-year refi retention rate of 59.33%, which is more than triple the industry average. In this free white paper, Sales Boomerang analyzes data from 19 different lenders to illustrate the impact a borrow retention strategy can have on a lender’s pipeline.

Northpointe Bank Correspondent Lending’s Streamline Jumbo Fixed & ARM program, with loan amounts up to $3,000,000, loan-to-value up to 90%, and no mortgage insurance requirement provides tailored solutions to maximize your profitably and help grow your business. The Streamline Jumbo program includes cash-out refinances with LTVs up to 80%; closely follows automated underwriting guidelines; and is available for owner-occupied, second homes, and non-owner-occupied properties. Approved Northpointe Bank clients have access to best effort and mandatory delivery options, third-party origination, and the program is eligible in all 50 states and the District of Columbia. Additionally, Northpointe Bank offers an extended rate lock option for Agency loans, allowing for lock protection up to 360 days. View our program details or for more information, email us at correspondentsales@northpointe.com.

With both refinancing and purchasing creating an exceptional amount of volume for lenders, 2021 is shaping up to be ‘The Year of the Loan Officer,’ but only if they have the right tools to guide borrowers through those big financial decisions. Lenders using Total Expert are decreasing loan turn times by 20% and receiving 16 times more loan application submissions. Read on for three tactics to boost results and capitalize on this year’s rare confluence of high purchase, high equity, and low refinance rates.

Tight inventory and rising home prices are forcing many homebuyers to consider “fixer-uppers” and simultaneously buy and renovate. The Freddie Mac CHOICERenovation® program is a great fit for these buyers and for refinance-and-renovate customers. Plaza Home Mortgage’s National Correspondent channel offers CHOICERenovation and will accept delivery of these loans prior to completion of the renovation – giving correspondents more liquidity and flexibility. And Plaza will do this even if they deliver directly to Freddie Mac. Plaza also accepts Freddie Mac’s Home Possible® program in combination with CHOICERenovation for qualified borrowers. Contact Plaza to learn more.

Are you ready to continue your digital lending momentum into 2021? At Forward, Blend’s virtual summit taking place May 18-20, you can gather with innovators and industry leaders to learn about the technology trends shaping the future of lending. You’ll hear from expert speakers, discover Blend success stories, and even have the opportunity to become a Digital Lending Platform expert with post-conference training. Register now.

Finance of America Mortgage is always striving to provide borrowers with more tools to fully maximize their home’s equity and financing options. FAM’s HELOC gives borrowers the control and flexibility to manage the equity of their home and be prepared for the unexpected. The HELOC from FAM has no maximum combined loan amount and requires a minimum of only $10,000, making this an attractive option to a broad base of homeowners. It gives borrowers the flexibility to take additional draws and remains opens so that they have access to their equity to spend as they wish.  The HELOC program can be used for both Purchase and Refinance transactions and allows for up to a 90% CLTV with credit scores down to 680 on both Primary residences and Second homes. With a 10-year interest only draw period and 20-year amortization, it’s what your borrowers are looking for! Contact us today at FOAmortgage.com to learn more!

Non-QM and Credit Score-Driven Lending

In new investor news, Onslow Bay Financial, LLC (Onslow Bay), a wholly owned subsidiary of Annaly Capital Management (“NLY”), is a mortgage aggregator that buys closed, funded residential whole loans directly from correspondents. Annaly, with $14.0 billion of permanent capital and $101.6 billion of total assets as of Q4 ‘20, is among the world’s largest real estate investment trusts (REIT). Onslow Bay has been active in acquiring new origination, residential whole loans since 2016 and has purchased over $6.5 billion of whole loans and has completed 14 rated securitizations under the Onslow Bay shelf (“OBX”). During the market volatility caused by the Covid-19 pandemic, Onslow Bay honored all outstanding whole loan commitments and supported their origination partners by continuing to provide liquidity with the strength of Annaly’s balance sheet. Until now, all purchases were done through bulk or mini bulk aggregation. Onslow Bay Financial has announced its ability to purchase loans “best efforts”, on a flow basis. For information and how to become an approved correspondent, email Michael Wold, Managing Director, Business Development or Onslow Bay Sales.

The government can’t eliminate business cycles, although one of the U.S. Federal Reserve’s missions is to add stability to our economy. But remember when the “experts” thought that the high debt many Americans are carrying might put them at risk as the Federal Reserve increases interest rates? So said “debt-reduction specialists.” In 2017 household debt rose in the fourth quarter at the fastest pace since 2007; credit card delinquencies were increasing; and spending on general-purpose credit cards soared over 9 percent.

First, any lender looking to see what lenders are doing what in their state, check out www.mortgageelements.com: just enter the state and then look for the program.

Over a year ago, the capital markets seized up and stopped doing Non-QM loans but ACC Mortgage forged on. Non-QM options available include 90% Jumbo, 85% ITIN, 85% P&L Only, 80% DSCR and 70% Foreign National. Get NON-QM deals priced instantly.

A&D Mortgage has updated its FHA and FHA Streamline programs with the following overlays: FHA Minimum FICO 620, NJ, NY 3-4-Unit Property: Minimum FICO 640, Max DTI 55%. FHA Streamline Minimum FICO 640, VVOE Required. Review FHA Program Details. And its newly Renovated A&D Mortgage Jumbo product is available for 30-year fixed loans with the ability to run DU Approve/Ineligible due to high loan amount and cash-out over 80% LTV only. More information is available here. (A&D Mortgage is a direct seller/servicer with Freddie Mac and offers an expanded line of products including 30/25/20/15 Year Fixed, High Balance (Super Conforming), and Home Possible.

LoanStream Wholesale has improved pricing on its Nan-Q/Non-QM. Some Product Highlights are FICOs starting at 600, LTVs up to 95%, Loan Amounts to $3.5 million, DSCR & No Ratio FICOs starting at 680, 620 (no ratio), great for Business Owners and Investors. Learn more about LoanStream’s product options here.

Will you need a New "Home" to fund 2nd Home and Investment Property Loans? HomeXpress Mortgage is a leading Non-QM Wholesaler of 2nd Home & Investor loans across the U.S. offering competitive rates, first class service, and expanded product guidelines. Click here to visit its website.

Capital Markets

It is good to look at trends, rather than individual news bites, to help clients who have questions about rates. (The MBA puts out a forecast worth checking out.) Last week we learned that producer prices increased in March (and were up over 4 percent on an annual basis, the quickest annual pace in nearly 10 years). Supply constraints, elevated demand, and rising commodity prices are all contributing to the inflationary pressures throughout the economy. Services are expanding at their quickest pace in the 24 years they have been tracked separately. Supply chain problems were one reason imports declined in February as autos and parts imports fell almost 11 percent despite car sales being at a three-and-a-half year high. Many U.S. automakers are waiting on a backlog of semiconductors, which are experiencing a world-wide shortage. Surging goods demand has also created shipping delays as container ships are forced to park offshore at the nation’s busiest ports due to lack of space. While there is much encouraging data, employment still has a ways to go as 18.2 million people were receiving some form of unemployment insurance in the most recent week’s report, a sign that a full recovery is still a ways off. 

Anyone hoping for a lot of interest rate movement on Monday was sorely disappointed. Without much economic data on the day, talk revolved around Fed Chair Powell’s 60 Minutes comments (or lack thereof) and a mediocre $38 billion 10-year Treasury note auction. The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by a sizable 24 bps to 4.66 percent of servicers’ portfolio volume as of April 4. 2.3 million homeowners are in forbearance plans, per the MBA’s estimate.

Today’s economic calendar started before the open with the March NFIB Small Business Activity Index (up to “98.2”). We’ve also had March’s Consumer Price Index (+.6 percent for the headline, +.3 core, overall year over year +2.6 percent), which followed last week’s high PPI figures. Later this morning brings Redbook same store sales for the week ending April 10, a $24 billion reopened 30-year bond auction, and no fewer than eight Fed speakers. On the demand side, today sees the last three operations on the current Fed purchase schedule with the Desk purchasing up to $6.7 billion with one operation in each class: UMBS15, UMBS30 and GNII. A new two-week schedule and the mid-April to mid-May purchase estimate will be released in the afternoon. We begin National Scrabble Day with Agency MBS prices roughly unchanged from Monday and the 10-year yielding 1.68 after closing yesterday at 1.68 percent after the producer inflation number.

Employment and Transitions

Lest I forget, the current STRATMOR blog is, “Hiring: New Tactics for a New Day.”

Synergy One Lending welcomes top producers Dave Slater and Charadie Finkle! Synergy One Lending welcomes Dave Slater and Charadie Finkle, expanding its footprint into the Colorado Springs Market! “Our decision to join S1L was about leadership and trust. Not only have they built a best-in-class platform, but they have an amazing vision for what’s to come. We can truly shape our team’s future while knowing our clients will be put first each and every time.” said Charadie Finkle. Synergy One President, Aaron Nemec added, “Charadie and Dave bring a level of integrity and professionalism to S1L that we could not be more excited about! They’re the best in the market for a reason and having them join the team means the world to us!”

Synergy One Lending, based in San Diego, CA, is licensed in 38 states, with Operational HUBS in Boise, ID, Denver, CO and Dallas, TX. To learn more about S1L, reach out to Aaron Nemec or Ben Green.

Wanna be an underwriter for the FHA in sunny Santa Ana and make up to $115k clams a year? Here’s your chance.

Lenderworks® has appointed mortgage veteran Andrew Peters as President, and will be implementing a growth strategy for the company and overseeing the expansion of its footprint in the housing ecosystem.

Sprout Mortgage announced the appointment of Laura LaRaia to EVP, General Counsel, and Chief Compliance Officer, effective immediately.

Incenter Appraisal Management (IAM), an appraisal management company (AMC), announced the promotion of Mark Walser to President. Congratulations!

Out of Ohio comes news that Nations Lending has added Randy Koerner as its new Divisional Sales Manager in the Southcentral Region.