The U.S. Bureau of Labor Statistics projects increasing customer usage of technology will reduce the number of bank tellers by 42,000 through 2026. Given their average pay is a little over $2k per month, I can see why some of the smarter ones are being wooed and hired as loan officer trainees. (And yes, the BLS mentions loan officer forecasts.) While we’re talking about banks, and possible good news for them, Goldman Sachs analysts believe Amazon won’t go so far as to open a bank, due to the extra regulatory scrutiny and credit risk. Amazon, however, will likely continue to provide supplementary financial services and it has partnered with various banks on their financial products already, and has a large pool of customers for financial products.

Lender Products and Training

Learn to grow your business with LinkedIn! Join Sierra Pacific Mortgage and experts on June 21st to learn how to engage and share insights to grow your network and become a trusted resource in this platform. You will learn how to increase connections and enhance relationships. Participants will leave workshop with a specific plan for full utilization of the power of their LinkedIn® Profile for increased referrals for mortgage loans. Register now.

National MI has several great trainings lined up for you this month: Wednesday, June 13, – Fannie Mae’s HomeReady Mortgage Overview, Thursday, June 14, – Fannie Mae’s HomeStyle Renovation Mortgages Simplified, Tuesday, and June 19, – Appraisal Review – Recent Changes and What’s Ahead. Sign up to attend any of these webinars here.

In response to Ginnie Mae’s new restriction on pooling unseasoned VA loans, APM 18-04: Eligibility of VA Refinance Loans, Mid America’s Whole Loan Trading Group has added this product to its “Scratch and Dent” program. To be eligible, the loans must have a VA guaranty and be performing. This complements Mid America’s existing program, which specializes in government insured and conventional conforming loans with minor compliance or eligibility issues. These loans will also be eligible for Mid America’s new warehouse partnership with Spectrum Mortgage Holdings that provides immediate warehouse financing for loans undergoing due diligence for purchase. For more information, please contact Michael Lima, Managing Director.

Freddie Mac OR Fannie Mae? The “OR” is a decision lenders make every day. But if you run both GSE AUSs, you have options which is why Freddie Mac is taking a stand for AND: AUS-Neutral Design. With results from both GSEs you can maximize secondary market loan fungibility and identify opportunities for borrowers to save money and get to closing faster. It’s better to see all your options before you make a decision – knowledge is power. So say goodbye to the days of OR. Demand #AND. Make your voice heard at Sponsored by Freddie Mac.

It’s no secret that with rates rising, margins shrinking and a transition towards purchase money that its getting more difficult to grow (dare I say maintain?) origination volume. But while most mortgage professionals are complaining about lack of volume -- they're not adding new marketing tools to find new sources of leads. In fact, most mortgage pros are neglecting one important aspect of their overall marketing strategy: digital marketing. Are you struggling to find out how to leverage digital marketing to generate more leads? Want to see how real-life mortgage companies are using digital marketing to generate leads? Tobe Agency is a marketing agency focusing on the mortgage industry and they're offering a free, on-demand, webinar to help mortgage pros understand the concept of inbound digital marketing and its application to the mortgage industry. You can access the audio and video versions of the webinar here.

The American Bankers Association announced its endorsement of Built Technologies, a Nashville-based fintech company focused on simplifying the administration of residential and commercial construction loans through secure, cloud-based software. Built’s construction loan administration and business intelligence software was specifically designed to complement a bank’s core system(s), reducing the cost of servicing, increasing interest income via faster draw processing, and introducing unprecedented credit and collateral risk management capabilities to banks of all sizes. “We are delighted to be chosen as the ABA endorsed provider for construction lending technology,” said Chase Gilbert, CEO, Built Technologies. “We were impressed by the ABA’s due diligence process when choosing to work with us and it’s great to know we’re completely aligned on what their members need to solve this important problem.” This endorsement is the latest step in Built’s continued focus on bringing construction lending into the digital age.


Capital Markets

Last week I discussed efforts of Freddie and Fannie to shift risk from the taxpayer to other entities that would pay for it. I received several questions about the process. For example, Freddie Maccompleted an auction of subordinate non-guaranteed certificates. The Subordinate Certificates will be issued by Freddie Mac Seasoned Loans Structured Transaction (SLST), Trust 2018-1, which will also issue guaranteed senior certificates (the “Senior Certificates”). The Senior and Subordinate Certificates will be backed by 2,617 seasoned re-performing loans (RPL) and moderately delinquent loans serviced by Nationstar Mortgage LLC, d/b/a Mr. Cooper.

The SLST program is a key part of Freddie Mac's seasoned loan offerings to reduce less liquid assets in its mortgage-related investments portfolio and shed credit and market risk via economically reasonable transactions. The servicing of the loans will be in accordance with RPL requirements, like FHFA’s requirements applicable to the sale of nonperforming loans (NPLs), which prioritize borrower retention options in the event of a default and promote neighborhood stability.

This transaction involves a two-step process. The initial step involved the auction of the right to purchase the Subordinate Certificates via a competitive bidding process subject to the terms set forth in a securitization term sheet. In the second step, the loans will be deposited into a Freddie Mac trust which will issue the Senior and Subordinate Certificates. Freddie Mac will guarantee, purchase and initially retain the Senior Certificates.

Fannie Mae is marketing its seventh sale of reperforming loans (RPLs) to reduce the size of its retained mortgage portfolio. The pool contains roughly 27k loans with a UPB of $6.17bn. Fannie Mae’s total retained mortgage portfolio dropped from $231bn to $228bn in Q1, down from $272bn at the beginning of last year.

Jobs and housing drive the U.S. economy, and therefore are watched closely to determine the direction of rates. Private employment increased by 223,000 as job gains were widespread across many industries. The unemployment rate fell to an 18-year low and was 3.8 percent (3.75% if you go out one more decimal). Additionally, the U6 unemployment rate, which considers those marginally attached to the labor force, fell to 7.6 percent. The labor participation rate fell slightly to 62.7 percent.  When looking at cumulative job gains by age, it is interesting to note that for the year, more net job gains have occurred in the 55+ age group (+720,000) than the 25-54 group (570,000).

This week's meeting of the European Central Bank might produce an indication of the ECB's stance on tapering quantitative easing, but expectations are far from certain on whether this will happen. The ECB must balance delicate and occasionally conflicting factors, knowing any announcement is likely to affect markets.

There are only four FOMC meetings a year that also have updated economic projections – March, June, September and December – and these meetings are seen traditionally as ‘live’. The market view is that if Powell communicates after every meeting, all eight FOMC meetings will be considered as ‘live’, where policy changes can occur. Yesterday the markets took note of the hawkish tone of the post-meeting statement, suggesting that relatively soon the Fed may need to deliberately slow the economy with still tighter monetary policy.

As expected, the FOMC statement called for a 25-basis point rate hike (to 1.75%-2.00%), approved 8-0. Members acknowledged that inflation is moving closer to the Fed’s stated 2% target and affirmed the committee’s intention to continue a gradual trajectory of rate increases going forward. The post-meeting press conference is to communicate transparently rather than signaling further policy changes. The “news” du jour was the accompanying dot plot showing policymakers see a high likelihood that two more rate hikes will be announced before the end of 2018. Additionally, the Fed upgraded its outlook for GDP and inflation, as household investment has picked up and business investment has continued to grow strongly. Finally, the committee voted to increase the interest rate paid on excess reserves by 20bps, to 1.95%. This is 5bps below the normal spread, saying that the correction was necessary to better manage the effective fed funds rate in the middle of the target range.

Fed interest-rate increases almost guarantee short-term Treasury rates moving higher. A bigger question for investors is whether those increases will curb growth along with inflation. That would pull down yields further out on the yield curve (like with 30-year or 15-year mortgages, to some extent), potentially signaling a slowdown.

Today, we have already had the ECB statement, leaving rates alone until the summer of 2019, but scale back asset purchases late in 2018. Back on this side of the pond, we had May retail sales and import / export prices along with weekly jobless claims. Expectations were for Retail Sales to increase 0.4% MoM in the headlines, and 0.6% ex-auto. Sales were much stronger, +.8% and +.9% ex-auto. Import and export prices came in as expected, both increasing 0.6%. Initial claims for the week ending June 9 were expected to decline 2k versus the prior week to 220k but actually dropped to 218k. Finally, April business inventories are seen increasing 0.3% versus the previously unchanged figure. We start Thursday with the 10-year at 2.94% and agency MBS prices a few ticks better, so rates are down slightly versus last night’s close.

Employment and Promotions

Academy Mortgage recently introduced its newly created Sales Leadership Team who have over a combined 75 years of production experience in the mortgage industry. The team is led by Executive Vice President Kevin Haycock, who is joined by industry veterans and Academy SVPs Bill Sohan, Patrick Welberg, and Rob Shockley. The objectives of this innovative and dynamic team are simple: To help Loan Officers and Branch Managers grow their production, customer base, and partner base, and aid them in recruiting A+ individuals. To accomplish this, the team is passionately working to streamline processes, expand product offerings, and connect with referral partners to deliver the best platforms and experience possible for our originators and their customers. To see how Academy's Sales Leadership Team can benefit your growth and production, contact Kevin Haycock or John Owens.

How many more residential loans could you close with better back office support? You work too hard to experience the same chokepoints over and over again. Assurance Financial offers you a full-scale team of experts who have spent the last 17 years with only one objective: to help you close loans on time, every time. If you even THINK you may be losing money in your current situation due to poor support, call Paul Peters, CMB at 225-239-7948. Assurance Financial is a growing private residential mortgage banker with offices throughout the South, East Coast, and Midwest US, and we may be the answer you’ve been looking for.

For those keeping score at home, EverBank has a new name, TIAA Bank. And another ever - Evergreen Home Loans, a full-service direct home loan lender offering origination, funding and home loan servicing with offices in six Western states, announced the launch of a new brand, logo and website to enhance the customer experience. Evergreen Home Loans started in West Seattle with five associates in 1987. It has grown to more than 800 associates and 65 offices throughout the Western United States. It was recently named the best workplace in the country in finance and insurance by Fortune and Great Place to Work.

And don’t forget that in August SunTrust Mortgage will be officially folded into SunTrust Bank.