Another stimulus package is in the headlines but no one is talking about inflation being a concern with near-term oil futures prices actually below zero. Oil producers are in a tight spot. And when in a tight spot it is important to panic. Uh, I mean, not panic. It is nice to talk about exit strategies, and returning to normal. But heck, when this is over, what meeting do I attend first: Weight Watchers or AA? Lenders and vendors will have some major decisions to make when it comes to continuing to rent office space versus the costs incurred in the last six weeks moving everyone to a WFH (work from home) environment. Can everyone please just follow the government instructions so we can knock out this coronavirus and be done?! I feel like a kindergartner who keeps losing more recess time because one or two kids can’t follow directions. Lots of lenders are following directions, fortunately. Good luck following the directions of this video from “Kay” on how to make a facemask. “Go for protection, not perfection!”, start by cutting two squares 9 inches by 6 inches, and finish with some Burgundy.
Lender Services and Products
In January, I shared numbers from LBA Ware’s 2019 LO Compensation Report. It received such an enthusiastic response that I’m passing along the newly released Q1 2020 LO Compensation Report while it’s still hot off the presses. Data from LBA Ware’s CompenSafe incentive management platform shows that after unit and volume gains across Q1, March saw LOs take home an average of $18,907 in commissions, likely their highest payday in six months or more. Here’s the full report. If reading this makes you realize you don’t have your arms around LO comp, LBA Ware invites you to schedule a demo.
As a reminder, don’t’ forget to leverage your partnership with Citibank, N.A. during this period of immense volatility. Citibank has a variety of tools to help manage your risk while also ensuring you a competitive execution. For example, Assignment of Trades (AOTs) are an excellent way to manage margin call risk and avoid bid/ask spreads. Combined with Citibank’s 2-Way Pair Off feature, you will accomplish both while also maintaining your hedge! Citi will allow full transfer of assigned trade on day 1, regardless of loan allocation. Leverage this offering today via Citibank’s Bid Tape-AOT or traditional AOT. Learn more about this and other programs Citi has to offer by contacting our National Client Services Team at 800-967-2205 or for new seller consideration complete our Prospective Mortgage Correspondent Questionnaire.
As entire organizations have moved to home offices, mortgage technology has been tested like never before. Calyx Path, the cloud-based, configurable, enterprise-level LOS has made the transition seamless for its customers. With its multi-channel design, anytime accessibility, pre-configured or fully configurable options and intuitive compliance platform, Path provides the flexibility lenders need during these unprecedented times and into the future. For more information, contact Michele Warren.
Because business closures are making employment verification increasingly difficult, Fannie Mae, Freddie Mac, the VA and the FHA have all relaxed their employment verification requirements. For now, all you need to verify a borrower’s employment is a recent year-to-date paystub or bank statement data showing a recent payroll deposit. For lenders who work with FormFree, meeting the new standard is as straightforward as refreshing the Passport 3-n-1 Report before loan closing. Passport also makes it easy for lenders to meet Fannie Mae’s new, tighter window for documenting borrower income and assets. For mortgages with application dates on or after April 14, income and asset documentation must be dated no more than 60 days from the date of the mortgage note. FormFree customers can again simply refresh the Passport 3-n-1 Report (even after the loan closes) to ensure data is current. Talk to Gregg Palmer for more info.
Webinars and Training
Join Blend for a digital summit geared toward Blend customers and mortgage executives on May 19. Forward: Thriving in today's mortgage climate, is focused on navigating today's challenges in mortgage lending. Blend executives and product leaders will share the latest solutions and product features designed to help you increase efficiency and set you up for success in any market conditions. Sign up here.
You don’t want to miss this special live event hosted by XINNIX! Register now for “Elevating Relationships in a Digital Era”, a free webinar on Thursday, April 23 from 2:00 - 3:00 PM ET. In this webinar, you'll learn the 4 secrets to mastering video outreach, how to maximize your prospecting time with a highly effective weekly plan, over 20 ways to bring value to your referral sources while we are sheltering in place and so much more! “Our industry is crazy busy, and our partners have sought our advice on the best ways to adjust their sales and communications strategy to gain, maintain and enhance valuable relationships. We are eager and excited to share all that we’ve learned with you, the mortgage industry at large – at no cost!” said XINNIX Founder and CEO, Casey Cunningham. Seating is limited, register today!
The Clear to Close podcast is hosting a special LIVE episode and industry happy hour this Thursday, 04/23 at 5PM EST/2PM PST. They’ll be covering the topic ‘Leading a Remote Salesforce’ with experts from inside and outside of the industry. Bring your favorite drink and get some relevant guidance and insights about the new status quo for most mortgage leaders. Whether you’re a new fan or frequent listener, it should be a great experience. Click here to sign up today!
The market continues being very volatile and its impact on the mortgage industry is apparent with some lenders still hurting with margin calls, others without a place to sell their loans, and some that are setting records. I will be doing a special podcast and live webinar with Josh Friend CEO of Insellerateon Friday April 24th at 10am PST to discuss the current market conditions, what to expect and how lender should be looking at this and preparing for the rest of the year. We will have a Q&A session to answer questions from our mortgage community. Tune in and find out how you can be pre-pared for this market and how to navigate it. Register here to join us in discussing our current market, and if you are unable to attend please register as we will be sending it out for those who miss it.
Join Mitch Kider and Michael Kieval for a WBK Webinar, “Cybersecurity for the Mortgage Banking Industry, A Focus on Risks from Remote Work in the Coronavirus Crisis,” on April 23 at 2 pm ET.
NAMMBA is hosting a Town Hall event and virtual conference on Friday, April 24, from 1-4PM ET. The event will include a session with Dave Stevens, Mitch Kider, and me talking about the State of The Industry. The Town Hall will bring together industry stakeholders, policy makers, and CEOs.
Join the West Chapter of MMLA on Thursday, April 23 for a Virtual Luncheon. Discussions will include our new normal, overcoming new obstacles, and finding new best practices hosted by Andy Baker and Andrew Clarkson from the Mortgage Breakdown.
MBA’s inaugural delivery of School of Mortgage Banking (SOMB) Online is scheduled for April 27 – May 31, giving you the opportunity to learn the most important aspects of mortgage lending, get expert insider industry knowledge, gain practical skills and grow in your career.
Join NAMMBA on Tuesday, April 28th at 2:00 EST for a free webinar presented by Freddie Mac.
Altisource is hosting a one-day virtual summit on how Covid-19 is impacting the mortgage industry. The Mortgage Industry Pandemic Summit will take place on May 6, 2020 featuring 28 of the most influential leaders in Originations, Servicing, Vendor Management and Government discussing the operational challenges facing mortgage and real estate companies as a result of the pandemic. There is no cost to attend and registrants can select the all-access option for all sessions or choose individual sessions that interest them the most.
Here is a free webinar: “FACT vs. FICTION: eClosing and RON during and after COVID-19” on Wednesday, April 22 at 1PM EDT, where mortgage technology experts from DocMagic and OpenClose will provide an inside look into the eClosing process along with the technical and regulatory insights you need to better serve your customers today and tomorrow. Register now.
Guideline and Program Changes
Plaza Home Mortgage has made recent adjustments to its Temporary Credit Policy that has been established as a result of the response to COVID-19.
Parkside Lending is waiving its Lender Fee (up to $1095) for COVID-19 Community Heroes! Click here for full details and to obtain a list of the qualifying professions.
Wells Fargo Funding came out with temporary flexibilities for appraisals - FHA and GRH Loans. “We’re aligning our appraisal requirements for FHA and Guaranteed Rural Housing (GRH) Loans with the temporary, COVID-19-related, appraisal flexibilities announced by FHA and USDA Rural Development.”
Loan Stream is still offering Non-QM Mortgages.
With the recent GSE guidance, changes to MI eligibility follow suite. Radian announced the following changes: Investment properties are no longer eligible for MI. Cash-out refinance transactions are no longer eligible for MI. Exterior-only and desktop appraisal flexibilities announced by the GSE’s on March 23, 2020, are not eligible for loan amounts that exceed $765,600. Loan amounts > than this will still require full appraisals.
National MI has aligned with the underwriting, valuation and servicing guideline changes announced by Fannie Mae and Freddie Mac. See National MI Announcements: UW & SVC 2020-02 and UW & SVC 2020-03 for details.
Symmetry Lending has issued new Pricing Guides and Credit & Income Guides with an effective date of April 7th. Symmetry will No Longer accept income from Non-Occupant Co-Borrowers for CLTVs Greater than 89.99% or Condominiums for CLTVs greater than 89.99%. However, Symmetry Lending has made NO CHANGES to any of its Program Guidelines for HELOCs up to 89.99% CLTV.
U.S. Treasuries experienced some curve flattening yesterday, but in a very narrow range as the big news on the day was a plunge in the May contract for WTI crude oil to a negative level ahead of today's expiration. The MBA released data on total loans in forbearance as percent of servicing portfolio volume covering the period from April 6 - April 12. The total sample size rose to 5.95 percent from 3.74 percent the previous week, with depository servicers accounting for a larger percent of loans than IMB. Mortgages backed by Ginnie Mae showed the largest growth (2.37 percent) from the prior week and the largest overall share in forbearance by investor type (8.26 percent). On the bright side, weekly forbearance requests as a percent of servicing portfolio volume dropped to 1.79 percent from 2.43 percent the previous week.
When it became clear to the Federal Reserve that this coronavirus pandemic was going to have serious economic fallout, it didn’t want a repeat of 2008, instead acting swiftly and decisively. With the intent of adding stability to the economy, it announced a series of measures intended to assist households, businesses and state and local governments with financial support. These measures have been intended to provide further liquidity support to capital markets and help businesses that may be struggling to stay afloat while many parts of the economy remain on lockdown.
The Fed is making small business loans and then repurchasing a large majority of those loans to both stimulate the economy and keep room on commercial banks’ balance sheets for additional lending. The Federal Reserve will also offer support to cash-strapped municipalities by issuing short-term notes with the Treasury department offering credit protection to the Fed for the facility. The Fed also moved to support primary issuance in the investment grade corporate bond market to provide liquidity support to trading in investment grade corporate bonds. Finally, the Fed indicated it would wade into the high yield bond market with purchases of exchange-traded funds (ETFs) that have exposure to high yield corporate bonds.
The Federal Reserve has not moved towards liquidity support to the securitization markets, but has expanded the range of securities that will be eligible for financing. There has been great cooperation between the Federal Reserve and the Treasury Department with the Treasury Department providing equity that the Fed can then lever to increase the amount of financial support to households and businesses. For now, it is great news that the Treasury Department and the Federal Reserve seem to be willing continue to do “whatever it takes” to see the economy through this current rough patch. Hopefully it is a reason to believe the economy will begin to recover quickly later this year.
The 10-year yield closed the day -3 bps to 0.63 percent. For the day, the Desk purchased $10.291 billion MBS of the maximum $10.709 billion, or 96.1 percent, and 34.6 percent of the $27.86 billion tendered. Since the restart of QE on March 16, NY Fed MBS purchases are up to $524.76 billion. With only the Philly Fed out (-82.5, yikes!), and Existing Home Sales ahead, we begin the day with Agency MBS prices roughly unchanged and the 10-year yielding .55 percent.
Newfi Wholesale is looking for experienced Account Executives with an established account base in select geographic areas. In this challenging market it's important to be able to offer multiple programs and solutions for your broker partners. Newfi's new Pinnacles NonQM program offers bank statement, 1099, asset depletion and 1-year tax return qualification options with all loan decisions made in-house. We also launched four new Jumbo options and offer traditional Agency and Government programs. Our proprietary technology offers a smooth and effortless experience for our clients. Join the growing Newfi Family! Email President Steve Abreu.