Huh? Your company has 20,000 square feet of office space along 635 in Dallas, or 15 in Salt Lake City, or 405 in Orange County, that’s been empty for two months? And you’re paying how much for it every month? And your workforce is more productive than ever, closing a record amount in April? I won’t say, “Don’t worry,” but I will say you’re not alone. Staff more productive, or is it just that employees have had nothing else to do besides work? Thousands of lenders around the nation are listening to their employees, balancing thoughts on cutting back on space but enforcing corporate culture, putting the money saved on rent into pricing and marketing but questioning IT security at home, saving employees time and money by not commuting but having potlucks on Fridays, and so on. People need a connection with their co-workers, but not spending two hours a day in rush hour traffic is a plus. Thank you to George H. for sending along, Death of the office: The coronavirus pandemic has sped up a revolution in home working, leaving offices around the world empty.”
Lender Services and Products
Despite the global pandemic, there are still some companies doing well. In fact, QLMS had its best month ever in April, receiving an eye-popping 36,000 applications. That is three times more clients than it helped in April 2019, and solidifies its position as the fastest growing lender serving brokers. Not only are more in the industry realizing QLMS is the best place for their clients, but more are becoming partners; nearly 600 brokers joined the partner network in April alone. QLMS has been a refuge for brokers during this unique time. While some lenders have told their partners to put business on hold, QLMS, and its network, never saw an interruption in business. If you want to join this growing movement and become Stronger Together with a lender that has your back, click HERE and you could be sending loans to them in as few as 24 hours.
Looking to ensure compliance and maintain personal connection during COVID-19? “Text messages get five times more engagement vs. email,” said Momentifi CEO Gibran Nicholas. “We’ve also found that video emails and text messages from a real phone number have a better response than auto-texts from a short-code or generic emails with no personalization.” The interesting thing is that storing SMS text messages with clients or prospects on a personal cell phone may violate CCPA and other data retention and monitoring requirements. The Momentifi Text Messaging App solves this problem and was recently featured in a Finovate Digital Demo. It can be connected to your existing CRM or mobile app(s) via API. “Texting is a great way to get faster follow-up responses and engage clients in a more personalized way when requesting documents or information,” says Gibran. “We’ve created a compliance tool that actually helps you close more loans!" Click here to view the Finovate virtual demo.
Correspondent lending continues to navigate through the pandemic in the wake of uncertainty. While pricing improvements and reduced market volatility have eased strain on the mortgage market, loans in forbearance and historically low rates have created other unique challenges. Join MCT on Thursday, May 21st at 11AM PT for a public webinar, Challenges & Solutions for Correspondent Lending in Crisis: Part 2.This webinar is a follow-up from MCT’s highly attended webinar on April 8thand will cover agency and aggregator pricing, capacity concerns, servicer liquidity issues, and recent tightening of credit and criteria in the secondary market.
Someone has to pay for the trillions in stimulus, right? The US Treasury Department says it will increase the size of debt auctions for long maturities and will have the first auction of a 20-year bond be worth $20 billion, a bigger offering than expected. The department expects to borrow a record $2.99 trillion during the second quarter, more than any quarterly amount during the financial crisis.
The mortgage market paid attention to two big stories yesterday ahead of today’s payrolls report: a rise in expectations for a negative fed funds rate and the continued jobless claims figures. Two-year yields actually fell to a record low as traders priced in the possibility the Fed will cut rates to negative territory by early next year, and slight expectations for a rate cut in January were pulled forward to November. Separately, initial jobless filings may have fallen to 3 million last week, down from 3.8 million the previous week, but the seven-week total is now above 33 million. Even conservative estimates have the unemployment rate in double digits in April after registering at 4.4 percent before the pandemic.
Let’s take a quick look at that, since jobs and housing drive the economy. Yes, the initial claims figure continues to trend downward from a peak of 6.9 million on March 28. But claims still remain at historically elevated levels and continue to illustrate the unprecedented degree of labor market disruption being registered via reduced economic activity and falling consumer confidence due to the ongoing COVID-19 outbreak. The 33 million unemployment insurance claims represent more than 20 percent of the workforce, as measured by the level of payroll employment in the February employment report. Know that unemployment insurance eligibility rules have been relaxed recently, increasing the number of people who are able to apply. But many states reported a significant backlog of unemployment insurance applications due to a lack of processing capacity, so perhaps the number is understated, per Fannie Mae’s Doug Duncan.
In central bank news, Norway's central bank lowered its deposit rate to 0.00 percent. The Bank of England voted unanimously to leave its key interest rate unchanged, and the asset purchase program was left untouched as well. The Bank of England's forecasts had U.K. GDP down roughly 30 percent this quarter and 14 percent overall in 2020, the worst scenario since 1706. It also said the jobless rate will double, though the country will start lifting lockdown restrictions to mitigate the contraction. Banks are facing massive credit losses with consumer spending falling and investment going down with it. On the bright side, the BoE did say it sees a 15 percent bounce-back in GDP next year. Back stateside, the Fed reviewed more than 600 public companies’ earnings calls to discover that between cutting investments, equity payouts, and debt reductions, U.S. firms are more worried now than during the 2008 financial crash.
Internationally, China managed to increase exports last month, up 3.5 percent compared to the year before, even amid the pandemic. While that figure was driven mostly by exports to other Asian countries, a 14 percent drop in imports signaled how slow recovery will be. That doesn’t bode well for the trade war. It was reported that U.S. and Chinese trade negotiators may speak next week on progress in implementing the phase-one deal after President Trump threatened to scrap it.
Keep in mind, much market movement this week was muted ahead of today’s payrolls report. Today’s jobs report was expected to show a multiple in the dozens of the worst monthly decline during the 2007-2009 recession and about a dozen times the previous record decline in September 1945, when the nation demobilized with the end of World War II. April Nonfarm Payrolls (-20.5 million, about as expected), Average Hourly Earnings (+4.7 percent as lower paid employees left the workforce), and the Unemployment Rate (14.7 percent, about as expected).
Later this morning brings March Wholesale Inventories. The NY Fed will conduct two FedTrade purchase operations today totaling up to $6.16 billion in the current coupon range of 2.5 percent through 3.5 percent. Finally, the Desk will release a new MBS FedTrade purchase schedule for next week in the afternoon. We begin the day with Agency MBS prices barely changed and the 10-year yielding .64 percent after closing yesterday at 0.63 percent; though historic, the employment numbers were about as expected.
Employment and Transitions
Thrive Mortgage is expanding while also continuing to smash production records and closing speeds. Joining in the Pacific Northwest is a team led by long-time Seattle mortgage industry veteran, Carl Self. Self is a well-known mortgage expert, and recently featured in the Seattle press. Regarding his transition to Thrive, Self declared, “I am so proud to be here! It is so exciting to be at an awesome company like Thrive. I have received top-notch support during this transition from every department, with zero interruption in my ability to serve my clients.” Randell Gillespie, National Sales Director for Thrive, added, “There’s no doubt that we onboarded the best ambassador for the Thrive brand in the Seattle market. We are thrilled to have Carl join us and share his expertise and fresh ideas for building great things in the Northwest Region!” For more information on available opportunities at Thrive, please contact Chris Karageorge.
First Continental Mortgage, Ltd. (“FCM”) is seeking motivated and qualified individuals to fulfill multiple openings for Underwriter and Loan Processor. “FCM is a full service, independently owned mortgage banker headquartered in Houston, TX for 27 years. We handle primarily new home purchases through multiple home-builder partnerships operating in Texas, Washington, and Colorado. If you want to work with a dynamic team of mortgage professionals at an organization that invests in its employees and promotes within its ranks, this could be the place for you. We provide our customers with exemplary service as we help them fulfill their dreams of home ownership. Remote work positions a possibility. Competitive benefits available. For more information on our open positions and to submit your resume, please visit our careers page.”
Lakeview Wholesale, an industry-leading, top-rated residential originator and loan servicer, is hiring talented field Account Executives! If you are ready to take your career to the next level, we want to hear from you. We are seeking experienced professional Account Executives with strong relationships in several markets including Denver, Minnesota, Phoenix, Salt Lake City, Southern California, and Wisconsin. Contact Michael Cullen today and learn more.
WOW… What a month! Mann Mortgage continues to break production records and score rave review from borrowers. Mann’s SocialSurvey scores rose to 4.95 out of 5 stars and maintained a perfect score of 100 on their satisfaction rating the last 3 months. CEO, Jason Mann said “This is the best indicator or how WE are doing as a company. The ‘Mann Plan’ and the Best Backroom in the business are working well!” Mann was a quick to pivot to a mostly remote staff when states where shutting down and maintained its best-in-class productivity and fulfillment. May looks to be an even busier month and could be the largest month in Mann Mortgage’s history. If you want to see how they are doing it, branch partnering opportunities or company information, reach out to Director of Business Development, Cassidy O’Sullivan.
Jeff Strode has been named EVP at Pacific Residential Mortgage (PACRES). Jeff joined the PAC on May 1st as EVP. Established in Portland, Oregon in 2004, PACRES is currently expanding nationwide, and Jeff recently left a top 10 lender after 12 years where he last served as EVP of National Sales and Marketing to bring his unique blend of talents to PACRES: tremendous work ethic, creative & deep expertise in sales & growth, commitment to development of people through empowerment and an unwavering dedication to building and enhancing the culture of an organization. Says Jeff, "I have a great deal of respect for PACRES on how they coach up their people to help them achieve their personal goals. I couldn’t be more excited to work with such a well-respected organization. PACRES is a growing business that is large enough to make a difference, without sacrificing the personal touch of a smaller company. It's the best of both worlds."
Gateway Mortgage Group funded over $1B in loans in April. Gateway Mortgage Group, a division of Gateway First Bank, reported funding over $1 billion in residential mortgage loans for the month of April. This was a record setting month for the Oklahoma-based company’s 21-year history. With an increased number of homeowners refinancing and taking advantage of lower interest rates, the loan production for April only adds to the Gateway trend of record-breaking months. “We are excited to have been able to help over 5,170 families with their mortgage financing needs along with providing opportunities for our 1,300 employees. As we celebrate a financial milestone in our company’s history, we will continue to recognize the impact our work has on the families we touch,” says Mark Revard, Divisional EVP.
“Several years ago, we committed to deploying industry leading technology and as a result our Gateway team has been able to operate very efficiently in a work-from-home environment,” says Scott Gesell, CEO at Gateway First. “We are very fortunate to have such a dedicated team delivering personalized concierge service to our customers. We recognize the COVID-19 situation has put extra stresses on the families we serve, and our team has shown remarkable commitment and an amazing resilience while helping so many. This speaks directly to the testament that Gateway is committed to strengthening families while becoming an industry leader.” Gateway has originated more than $3.2 billion in mortgage loans year to date through April assisting over 16,700 families, putting the company on pace to potentially surpass its record-breaking year of $7.7 billion funded loans in 2019.
Congratulations to Erin Lantz who was named San Francisco’s Ethos’ first Chief Revenue Officer, coming over from Zillow.