My Saturday was going pretty well until I realized it was Sunday. Remember when Zillow was going to take over the mortgage business? Or Amazon was going to undercut everyone’s comp structure? Or TRID was going to spell the end of every lender? Mike D. sent, “I miss the good ‘ol days when we were all going to die from climate change.” This industry will certainly survive: people need a place to live and they need money. CEOs tell me they continue to grapple with capacity management, MBS volatility, pricing & hedging, managing liquidity, servicing issues/forbearance requests, appraisal & VOE challenges, and recruiting. Managing a remote workforce is not as much of a challenge as it might have been a couple months ago. What is on the mind of far-sighted capital markets staff and CFOs are the upcoming May pair offs, IMBs having adequate broker-dealer coverage, and convincing the remote workers to return to their cubicles later this year. Potluck in the shipping department this Friday!
Lender Services and Products
How are you responding to the impact from the COVID-19 pandemic? Read Black Knight’s white paper to gain insight into the current and forecasted impacts to the industry, recommendations you should consider to address these changes, and innovative solutions uniquely suited to meet your most challenging needs.
In times of change, constants can be reassuring. Stearns Wholesale operations remain consistent in keeping business productive for Account Executives and their clients during this time. We are fully staffed and working remotely to provide round-the-clock service and solid turn-times to our customers. Applications are still being accepted, there is currently no change to the lock policy, common-sense underwriting still applies, and temporary overlays are available real-time to brokers. Additionally, broker-facing and borrower-facing digital platforms offer secure and convenient ways to communicate and do all things mortgage from start to finish. Rest assured, we are here for the Account Executive community and focused on providing the highest level of service to our team members now and in the future. Click HERE to be contacted by the Wholesale Recruiting team.
“We really couldn’t say it better ourselves. At UNIFY CRM we built our CRM solution specifically for the mortgage business and the results speak for themselves: ‘As a company, we have sought to ﬁnd the perfect CRM to meet the individual needs of our 80+ loan officers; we tested dozens before finding Unify. After our demo with Unify, we knew this was a “must have” CRM. We have now been using Unify for almost a full year with fantastic results.’ (Marketing Director, Mortgage Financial Services.) ‘I wanted to reach out and let you know how impressed I am with the new UNIFY CRM system. Since diving head ﬁrst into the database and actually using it, I have been able to close an additional 8 reﬁnances that I would have never called and made over $42,000 in additional commissions in the last 60 days.’ (Senior Loan Officer, Summit Funding.) We want to partner with you and help grow your business: Schedule a Demo today.
Mortgages are in the news! For example, Dave Stevens, CEO Mountain Lake Consulting, put out a piece titled, “The FHFA’s Epic Failure with COVID-19.” And there’s, “Can Fannie Mae and Freddie Mac Handle the Coronavirus Mortgage Crunch?” Meanwhile, there are events to help you keep up on the news from your home.
Webinar: Managing Profitability with a Data Informed Crisis Management Playbook. As the coronavirus pandemic continues, mortgage bankers are shifting their focus from facilitating growth to protect profit margins. On Friday, May 1st at 1:00 pm EST, we invite lenders to join us for a webinar where Jim Deitch of Teraverde and Martin Kerr of Loan Vision address these strategic shifts and how to navigate them. In the dynamic 60-minute session, they will cover how mortgage banks can not only better manage profitability through crises, but also mitigate a number of other risks prevalent in today’s operating climate. You can register for the webinar here.
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. It is an unprecedented time with news and regulations changing daily. Altisource has partnered with the most trusted names in the financial industry: The Five Star Institute, MBA, Forrester and National Mortgage News to bring you an unprecedented line up of content and industry perspective. 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.
Join Anow on Tuesday, April 28th at 11:00 PST for a free webinar for a full look into its brand-new homeowner inspection tool, Anow Walkthrough. This is your chance to get a no-risk inside look and the best advice on how to use it from Anow CEO, Marty Haldane.
Join MMLA’s panel of experts on April 29th at noon for a virtual meeting to learn how forbearance and foreclosures are being handled in today's market.
MBA-NJ is providing an important webinar for Mortgage lenders on April 29th at 1:00 EDT - Appraising With COVID-19 Restrictions.
mPower is offering a Complimentary Webinar for MBA Members. Managing Stress and Anxiety in a Crisis, presented by Bronwyn Morrissey, CPC, CMB, AMP CEO, Insight Global Coaching.
Webinar is scheduled is Thursday, April 30th, 2:00–3:00 PM ET. MBA members: enter promo code "WEBINAR" at checkout to register for free.
UWM has launched Success Track Training - Virtual Training Courses for independent mortgage brokers and processors offered Tuesday through Thursday, twice a day, and include one of the following each week: Beginner Loan Originators, New to Wholesale and Beginner Processor Training. All classes are free to UWM clients and offers interactive opportunities for attendees to ask questions and collaborate with the trainers as if they were face-to-face.
Plaza's May Webinar Calendar includes trainings on topics such as Fraud, Reverse, MI and Cyber Security.
Big Name Production Trends
Quicken Home Loans reported $51.70 billion in first-quarter originations, up slightly from the fourth quarter and enough to pass Wells Fargo in total originations, per Inside Mortgage Finance. “The Coach has been #1 since 2008 due to its successful correspondent channel. But Quicken has ranked as the top retail lender since the fourth quarter of 2017 per IMF.
Wells Fargo, the largest lender and servicer in the nation, originated $48.0 billion of home mortgages in the first quarter of 2020, a decline of 20.0 percent from the fourth quarter in 2019. On the servicing front, the news was even more grim. Wells’ massive residential servicing portfolio declined in value by 29.4 percent from the prior period; valued at $8.13 billion at March 31 of this year compared to $11.52 billion at the end of 2019. As we have seen with servicing values across the board lately, the MSR damage to some degree reflects refinancing and an anticipated wave of delinquencies sparked by the coronavirus, though values have been hit worse than expected. In its 2020 first quarter earnings statement, Wells noted that to date, it has deferred payments for 1.3 million consumer and small business customers, a universe that includes residential mortgagors. Gain on Sale margins fell -13 bps quarter-over-quarter to 108 bps, though Wells books GOS income when the loan is sold (versus at the time of rate lock which is the common method for most lenders).
JPMorgan Chase reported $28.1 billion in new originations during the quarter, drop of 15.6 percent from the final quarter of 2019. JPMorgan Chase assigned a value of just 65 bps to its $505.0 billion MSR portfolio at March 31 compared to 90 bps at December 31 when the portfolio totaled $520.8 billion. Unlike Wells, JPM’s GOS margin rose +16 bps quarter-over-quarter to 114 bps. As we know, this week the bank announced it is raising borrowing standards for most new home loans as the bank moves to mitigate lending risk stemming from the coronavirus pandemic. Customers now applying for a new mortgage will need a credit score of at least 700, and will be required to make a down payment equal to 20 percent of the home’s value.
It was an uneventful end to the week last week for the Treasury and mortgage markets. The big news on the day was President Trump signing a $484 billion spending package that includes more money for small businesses but lawmakers are already discussing the next phase of coronavirus rescue legislation. Government officials worldwide have now earmarked more than $5 trillion to support their countries’ economies. The Federal Reserve says it will name names for each of its emergency lending facilities after it resisted disclosing some borrowers during the financial crisis. The $700 billion Troubled Asset Relief Program (TARP) was seen as a bailout for banks that protected investment bankers while regular workers suffered.
Treasuries rallied slightly on the spending package news and the 10-year closed the day -2 bps to 0.60 percent, down -5 bps on the week. Durable goods orders showed business spending was up slightly in March, though April figures will show the full effect shutdown measures. The final reading for the University of Michigan Index of Consumer Sentiment for March was revised up and the preliminary April reading was high as the downturn in the Expectations Index was not as severe as the downturn in the Current Economic Conditions Index. Consumers are concerned about the outlook but still maintain hope with anticipated reopenings of state economies.
Supply and demand are everything, and to close the week the NY Federal Reserve Desk again purchased the maximum in UMBS 30-year securities. For the week, the NY Fed bought $46.2 billion of the $50 billion maximum, and the NY Fed has bought $561 billion since the QE restart on March 16. This week, the Desk will purchase up to $40 billion MBS versus $50 billion this past week.
This week’s bond-market moving news gets off to a light start: Dallas Fed Texas manufacturing, and T-Note auction results for $42 billion 2-year and $43 billion 5-year notes. Tomorrow, activity picks back up with March goods trade balance, advance March Retail and Wholesale Inventories, February S&P Case-Shiller Home Price Index, April Consumer Confidence, and a Bank of Japan rate decision. We'll get a clearer picture of the pandemic's toll on economic growth when U.S. first-quarter GDP numbers are released on Wednesday. The economy is expected to not only contract for the first time in six years, but be the worst decline in 70-80 years. (The Congressional Budget Office announced that it expects Q2 real GDP to contract 12 percent.) March Pending Home Sales are also due out Wednesday as well as the Fed’s April rate decision. The expectation is for the central back to remain on hold for the foreseeable future when it comes to the policy rate, but that doesn’t mean the Fed won’t be busy.
So you know, the Federal Reserve is mandated by Congress via the Federal Reserve Act to “promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” The Fed is expected to announce a flexible-duration Treasury purchase program, lower its monthly purchase amount of agency MBS, shift down its scheduled coupon to be purchased, and ease shadow rates to offset the downside economic effects of tighter financial conditions. Thursday is quite busy, with Weekly Jobless Claims, March Personal Income/Spending, March PCE Prices, April Chicago PMI, and an ECB rate decision. Friday prints April ISM Manufacturing Index and March Construction Spending. We begin the day with agency MBS prices unchanged from Friday and the 10-year yielding .63 percent.
A Midwest-based correspondent lender is looking to hire a servicing director. This is an executive-level position within the leadership and can be 100% remote. The ideal candidate will have extensive experience with GNMA, sub-servicer management, and working across team lines to deliver the best customer experience. Here is your chance for a dynamic leader to create something from the ground up, without having to overcome antiquated legacy systems and prior bad habits. This position will be supported by in-house developers as well as experienced secondary, post-closing, and QC teams. Please direct all inquiries to Tony@neighborhoodloans.com.
Evolve Bank & Trust is rapidly expanding across the country and has an immediate opening for an experienced SVP of Mortgage Operations. You’ll oversee the operational support of 30 Home Loan Centers in 17 States with several more opening in the near future. Evolve’s Mortgage Division has a long and successful history in the industry backed by a 95-year-old bank. It has a best-in-class reputation and is well respected by the agencies and investment community. If you’re a born leader and want to be part of a growing and experienced team, please send inquiries/resume to email@example.com
“Freedom to Succeed! Freedom Mortgage is growing and looking for talented and experienced Wholesale operational professionals to help us serve the needs of borrowers, brokers and wholesale correspondents across the nation. Work from home opportunities for Loan Processors, Closers and Underwriters are available throughout the continental U.S. Prior to the COVID-19 pandemic, the vast majority of our teams already worked from home, so you will be ready to seamlessly and efficiently contribute to our goals on day 1! If you are fueled by your entrepreneurial spirit and are looking for a great work culture, please Freedom Careers to review available positions and submit your resume.”
Direct Mortgage Loans is now partnered with the Fraternal Order of Police (FOP). As the lender partner of the FOP, Direct Mortgage Loans (DML) has established a custom mortgage program to show its appreciation for our nation’s law enforcement officials, and the charitable causes they support. With more than 13 years of experience in the mortgage industry, DML’s dedication to customer service, transparency, accountability, and the community is what solidified the partnership. DML partner, Ashley Mills, shared, “During an uncertain time, we’re especially grateful for the men and women in blue. We’re excited for this new partnership and look forward to ways we can give back to a community that already gives so much.” FOP President, Patrick J. Yoes added, “We are confident that these new programs will be valuable additions and will improve members’ day to day lives.” For more information, contact program director, Chris Naylor.