With the increase in COVID cases, plenty are heading back into captivity, and it is important to keep a level head. (What is so hard to understand about “stay away from each other”?) Also increasing are the forbearance percentages. We’ve seen the MBA’s surveys on forbearance in the residential sector, but what about commercial loans? While forbearance in the B2C residential market has become widespread, it is a very different, deal-by-deal process in the commercial market. There are high levels of distress in certain sectors of the commercial market. MBA’s commercial loan performance and forbearance surveys shows that as of May 20, 20% of the balance of hotel properties loans was non-current as was 10% of retail loan balances, versus just 1.6% of multifamily and industrial. Across all property types, between April 20 and May 20, servicers took actions (modifications, redirecting reserves, forbearance, etc.) on 2 percent of commercial balances. (Contact Jamie Woodwell if your institution is interested in participating in this survey.)
Lender Services and Products
In its Regulatory Plan for FY 2020, HUD raised concerns about governmental entities benefiting financially from DPA programs. To ensure government programs are not benefiting too much, HUD is considering establishing a de minimis amount that government programs can receive above the cost of the DPA. Such a regulation could dramatically decrease the amount of DPA available from governments who could no longer fund their programs. Government programs like the Chenoa Fund, offered through CBC Mortgage Agency, provides minorities, who often lack intergenerational family wealth to help with home purchases, the ability to buy a home. CBCMA EVP Miki Adams says, “HUD’s focus should be less on the benefit to the government entity and more on the benefit to the borrower.” Adams added that HUD needs to base any changes it makes on program specific loan performance and pricing data, which HUD is currently not collecting. See our policy recommendations here.
Altisource, your one source for real estate and mortgage solutions, has released a white paper entitled “Navigating the Challenges of COVID-19 Now and in the Future.” On May 6, Altisource hosted the Mortgage Industry Pandemic Summit, a virtual symposium with 28 leading experts discussing the operational and economic challenges mortgage, real estate and financial companies are facing as a result of COVID-19. The company’s new 24-page white paper summarizes the summit’s key ideas, best practices, guiding principles and expert advice. It also includes the results and analysis of 20 poll questions conducted during the sessions. Read the paper now to see how other mortgage industry professionals are responding to the current pandemic. Click here to download.
BETTER Direct Mail Marketing for Mortgage Lenders from Monster Lead Group: “We’re able to grow and scale operations because of the predictability of Monster’s campaigns. It's a real marketing system. It's not just sending mail.” (Brad Bennett, Caliver Beach Mortgage.) “It's been your consistency; it's been unbelievably consistent. It's really like clockwork… We're able to grow and scale because of the predictability of the Monster campaigns.” (Steve Sless and Andrew Parker, PRMG Reverse Mortgage Division.) “Somebody can charge me half as much as you guys do, but I can’t get beyond the level of your results. For me, service means a hell of a lot and the results speak for themselves.” (John Kresevic, JFQ Lending.) "We've basically stopped doing all other marketing and gone 100% with Monster." (Manny Fajardo, Premier Lending Corp.) Monster Lead Group. BETTER than whoever you’re using. See how at monsterleadgroup.com/better.
Effectively manage increased forbearance requests and loan modification volumes from COVID-19 impacted borrowers. If your business is facing an influx of home loan forbearance requests, read this insightful article by George FitzGerald, Black Knight’s EVP of Servicing Technologies. Gain insight into the right technology and common practices servicers can use to help keep up with forbearance volumes and increase flexibility to support loan modifications for loans impacted by COVID-19 and any future crisis situation.
Looking to lock loans 24/7, 365 days a year? Starting today, TMS Correspondent is accepting rate sheet commitments 24 hours a day, 7 days a week through their KISS platform. As a Top 15 Correspondent Buyer, TMS strives to deliver unparalleled service levels and minimal to no overlays on all products for their clients. Join the over 475 other lenders selling loans to TMS, and placing TMS as the 5th largest Government buyer in May!
Vice Capital Markets. The company has reported a significant increase in trade volume over the past 90 days, shattering many of its internal company records. Since March, the volume of monthly trades Vice Capital has executed on behalf of its clients has more than doubled, with monthly totals reaching $13.4 billion. Coupled with this increase in trade volume, Vice Capital also reports a 13% increase in its client base. Read the full announcement here.
So Myrtle brought this one to my attention and it basically sounds like the coolest closing gift ever. Picture this... a loan officer submits an application and the borrower automatically gets a text message asking if they have any pets. They answer a few questions about names and sizes, and when the loan closes, Fido gets a welcome package from the lender with new customized pet tags. The best part is that it all runs automatically from your LOS so you don’t even have to lick an envelope. Would you spend a few bucks to deliver that kind of joy to your borrowers? Check out Operation Fido, another cool project from the crew over at LenderLogix.
As we all cross our fingers and hope the worst of the volatility is in the rear-view mirror, many are ready to look past market volatility guidance for more traditional training opportunities. MCT needs your input as MCT prepares to bring you quality information beyond the crisis. Share the topics you would like to learn about, such as profitability strategies, advanced hedging, or best execution, and submit your ideas by taking this one-minute survey. They will be putting it right into action, with new webinars, articles, and training opportunities planned for June and July. Don’t forget to subscribe to the MCT newsletter to receive updates on the topics you voted for!
Training and Webinars This Week
Are you ready for VA IRRRL and FHA Streamline refinance opportunities in this market? Learn how to efficiently submit your files once for a final approval! Join Freedom Mortgage Wholesale for one or more of our live webinar training sessions on VA IRRRL or FHA Streamline mortgage products and origination processes. Ideal for new or experienced government originators. Sign up for a VA IRRRL or FHA Streamline webinar June 15 (VA IRRRL) and June 19 (FHA SL).
Register for Freddie Mac’s Live Webinar on Monday, June 15th from 2-3:30 EST to gain a basic understanding of the forbearance relief option and a review of the new COVID-19 Payment Deferral relief option.
Join a Special Webcast on Tuesday, June 16th at 3:00 (Eastern) hosted by the FHA Office of Single-Family. This is a live, virtual interagency discussion that will focus on FHA’s, USDA’s, and VA’s responses to the COVID-19 National Emergency. Pre-registration is required no later than June 15th.
Do you want to see where technology in 2020 and the latest trends in consumer engagement meet? If so, join Insellerate on June 16th at 10:00 PST and understand how Insellerate’s platform helps lenders engage with more than 50,000 new borrowers per month. Learn about its all-new stand-alone engagement platform automates communications through: Social media, Text messages, Email, Phone calls, Ringless voicemail, and Direct mail.
Register for an MBA/MW free webinar on June 16th at 1:30 featuring: Mike Cafferky, Fannie Mae Laurinda Clemente, MERSCORP Holdings, Inc. to discuss Getting Started with eNotes, eMortgage, and eClosing.
Join CoAMP for a FREE VIRTUAL EVENT on June 17th at noon MT. The discussion focus is changes in procedures for the Real Estate & Mortgage Industry Related to COVID19.
Thursday, June 18th? Why should Mortgage Originators offer a Reverse Mortgage Program? Register for a Free Webinar presented by The Money House and FAMP Central Florida Chapter at 2PM ET. POS, LOS, RPA, AI/ML, RON…with the alphabet soup of tools and software flooding the “Digital” solutions market, how do you make the right choice of automation for your lending organization? Learn how with Indecomm’sfree webinar “Defining an Automation Strategy for Your Mortgage Business.” Blue Loans offers a live online Intro to Secondary Markets Course, ideal for individuals with no to limited exposure to the secondary markets from 2-4PM ET, cost is $375.00 per student.
The following is a correction from Friday’s blog regarding Lakeview Correspondent’s minimum government FICO score requirements. Friday’s blog contained outdated information. Effective June 15, 2020, Lakeview will accept best efforts locks and bulk bids on FHA, VA, and USDA loans with FICO scores down to 640. These minimum FICO score changes do not apply to HFA loan programs. The COVID-19 cover page of the impacted product matrices will be updated to reflect this change.
PennyMac Announcement 20-41 outlines its alignment with the Fannie Mae and Freddie Mac guidance given for borrowers using self-employment income to qualify, effective for conventional loans with applications on or after June 11, 2020. PennyMac stated it strongly recommends lenders to apply these requirements to existing loans in process. 20-39 announces updates to both Conventional and Government LLPAs effective for all Best Effort commitments taken on or after Monday, June 15, 2020.
Flagstar Bank issued Memo 20068 FHA- Endorsement of Mortgage for Borrowers Affected by COVID-19.
Although VA guidelines do not require an IRS Form 4506-T for standard and alternative documentation, AmeriHome requires a fully complete and signed 4506-T for each borrower whose income is used to qualify.
Ginnie Mae announced that issuance of its mortgage-backed securities (MBS) totaled $63.44 billion in May. This May issuance provides financing for more than 235,000 homeowners and renters, and includes $2.77 billion of loans for multifamily housing. Ginnie Mae's total outstanding principal balance of $2.152 trillion is an increase from $2.068 trillion in May 2019.
Markets next week will continue to struggle with economic concerns and fears of a second wave of the novel coronavirus. Stay at home orders and required business shutdowns began to be lifted throughout much of the county towards the end of May. In general, the US is seeing a decline in the rate of new Covid-19 infections; however some areas, like Texas, have recently reported their highest one-day total of cases since the beginning of the pandemic. This has raised concerns for a potential second wave of the virus and new lockdowns despite Treasury Secretary Steve Mnuchin expressing the needs for the county to remain open.
Even if business officially remain open through a second wave, consumers may still curb spending should they decide to remain at home even if they are not mandated to do so. The country is also better prepared with more available testing and access to personal protective equipment which could prevent many areas from having to impose new restrictions. Until a vaccine is widely available, the risk of a second wave remains, although the hope if that happens is that it will not be as severe. In the meantime, the gradual reopening of the economy is expected to lead to a rebound in economic activity.
Looking at the specifics of the bond market, and therefore interest rates, the 10-year note closed yielding 0.70 percent Friday. But for the week the 10-year’s price rallied nearly two points with the yield dropping 21 basis points. Current coupon UMBS30 2.5% and 3.0% prices were higher by 22 and 14 ticks.
For thrills and chills this week, aside from Federal Reserve officials being back on the speaking circuit (Powell’s Humphrey Hawkins testimony along with other regional Fed Presidents) we started today with June Empire State Manufacturing Index (-.2). Tomorrow we’ll see May Retail Sales, the Industrial Production & Capacity Utilization duo, and June’s NAHB Housing Market Index. Wednesday has the weekly MBA application data, May Housing Starts & Building Permits, and a $17 billion 20-yr bond auction. Thursday has weekly Initial Jobless Claims, June’s Philadelphia Fed Survey, and a $15 billion 5-year TIPS auction. The mid-point of June begins with Agency MBS prices better/up nearly .125 versus Friday’s close and the 10-year yielding .66.
Caliber Home Loans recently launched Processor Accelerated Career Education (PACE), a program designed to introduce new to industry professionals to a career in mortgage! Participants are immersed in seven weeks of hands-on training and mentorship across Caliber’s Learning and Development and Operations teams with a dedicated focus. PACE recently celebrated two successful milestones: the graduation of its first class, and the consecutive kick-off of their second 29-member class. Graduates are now engaging with customers and processing loans to support Caliber’s mission of helping customer achieve their dreams of home ownership. To learn more about this program and rewarding career opportunities, contact Mackenzie Plyer or Recruiting@caliberhomeloans.com.
Recently named among Top 5 Best Mortgage Companies to work for by National Mortgage News, Geneva Financial, Home Loans Powered By Humans, is filling 500 Branch Manager and Loan officer positions in 43 states. Geneva strives to humanize every aspect of its business from the inside-out. With a culture-forward mindset, Geneva focuses on loan originators and support staff to ensure an unbeatable experience for customers. The Geneva Gives, BE A GOOD HUMAN, and Hero of The Year initiatives deemed the company a recipient of this year’s AZ Business Magazine’s Excellence in Banking Award for Community Impact. In 2019 Geneva was ranked a nationally fastest growing company in the financial sector, mortgage industry and all industries categories. It consistently hit record-breaking months, doubling volume in most. Geneva Financial is excited for another historic year, with no plans on slowing down. Explore Branch and Originator opportunities here.