Today I head to Orlando for the Mortgage Bankers Association of Florida 2021 Secondary and Convention (approaching 250 registrants!) The live and in-person events are definitely increasing as we move through 2021. The focus on the first portions of the conference will be on recent FHFA/FNMA/FHLMC moves, risk management, private label securitization, the economy, and capital in general. Families are out there guarding their capital, much saved last year. Each year, the average American household spends $2,471 on real-estate property taxes. With such high costs, it’s no surprise that more than $14 billion in property taxes go unpaid each year, according to the National Tax Lien Association. Hawaii has the lowest average real-estate tax at $606, which is roughly nine times lower than in New Jersey, the state with the highest at $5,419. Blue States (traditionally Democrat) have 31 percent higher real-estate property taxes (averaging $2,722) than Red States (traditionally Republican), averaging $2,076. Today’s audio version of the commentary and is available here and is sponsored by Candor Technology, offering a dynamic underwriting engine that eliminates underwriting bottlenecks. It features an interview with compliance specialist Michael Dunn on the latest from the FHA, FHFA, and CFPB.

Broker and Lender Services and Products

Attention Encompass users: Teraverde launches its Encompass Mortgage Software Store. Valuable Encompass extensions, bots and solutions for immediate purchase and delivery. Yes, that quick. Encompass Tools are available at www.teraverde.com/store. All products developed by Certified Encompass Developers and/or Certified Encompass Administrators by Teraverde, an ICE Technology Pro Elite Partner. 

The pandemic expedited rapid change in our industry last year, especially in digital transformation and automation. Computershare Loan Services (CLS), a leader in mortgage services, continuously leverages its innovative tech to benefit its clients, and last year was no exception. Its Loan Application Management Platform (LAMP), a customized robotics workflow tool, was initially developed in response to 2014’s evolving regulatory climate and was put to the test during several natural disasters before 2020. Then when COVID arrived, LAMP came to the rescue again, allowing CLS to quickly implement various borrower self-serve tools and create an efficient workflow to manage the high volume of forbearance requests, ultimately helping alleviate a very stressful time for homeowners. CLS remains committed to creating exceptional borrower experiences and helping investors reach their goals. Learn more at www.computershareloanservices.com.  

Homebuyers can turn to Pinterest and Houzz for design ideas. But where can lenders look for creative ways to capture repeat and referral business in a purchase market? Here’s an inspiring example for you. Despite its lean team of just 25 LOs, University Federal Credit Union (UFCU) has grown organically to become Austin’s top residential mortgage lender. Its secret sauce? Intelligently automating marketing outreach at every stage in the customer journey with Top of Mind’s Surefire CRM. 23.8% of UFCU members who receive a Surefire-powered pre-qualification campaign convert to funded loans, yielding an additional 4,555 units and $1.45 billion in volume for the credit union to date. For more inspiration on how to retain customers for life, download the free case study.

Have you heard? Newrez offers a SMART Non-QM Loan Series for buyers searching for a loan with specific characteristics not available in Qualified Mortgage (QM) loan products. Our SMART Series includes SmartSelf – simplifies the approval process for self-employed borrowers; SmartEdge – alternative jumbo mortgage for those with a recent credit event or looking to purchase or refinance a non-warrantable condo; and SmartVest – designed for real estate investors with multiple properties. Why wait to make a Smart Move? Grow your business through Non-QM loans or a Joint Venture partnership. Email Randy VandenHouten to get started! Interested in becoming an approved Newrez Wholesale broker? Click here.

Service 1st clients receive 80+% of all credit supplements in under 24 hours – nearly 50% of VOE/VOI orders are completed in 12 business hours or less. Month after month, year after year, S1 delivers consistent ROI for our clients. Hesitant to switch? Concerned about onboarding and process disruption? There’s a reason our name is “Service 1st”. We’re here with industry leading support for you through every facet of your relationship with us. Take 5 minutes to connect at srv1st.com/request-for-info drop us a line at info@srv1st.com.  We look forward to celebrating your continued success!

Check out Freedom Mortgage’s recently enhanced VA and FHA pricing!  Enjoy 2 Business Day Priority Purchase Underwriting and a (.250) LLPA incentive for all Conventional, VA, and FHA purchases with the Freedom Mortgage Wholesale Division’s Big Spring Purchase Tee Off! Offer a hole in one experience with every new Conventional, VA, and FHA purchase! Plus, offer more buying power for your Jumbo VA borrowers with no maximum loan amount and no down payment for eligible* VA borrowers. To learn more, check out our rate sheet or email AskFreedom@FreedomWholesale.com to have an Account Executive contact you. *Subject to credit approval, requires full entitlement; for purchases and cash-out refinances only and not applicable for loan amounts<= $144,000. For IRRRLs, VA will continue to guaranty 25% of the loan amount without regard to the Veteran’s available entitlement and/or county loan limits.

Housing demand remains high and refinance numbers are expected to dwindle through the second half of 2021, according to the MBA. Do you have a strong purchase lead pipeline built to stay ahead of your competitors this summer? Mortech, a Zillow Group business, has a predictive analytics platform that leverages Zillow’s data from over 139 million homes to identify purchase opportunities in your current customer database. With an algorithm that can predict 1 in 5 homes in your database with a “very high” status that will likely list in the next 90 days, you can target these home sellers before they look elsewhere for financing. Mortech recently saw an increase in their model performance and population size, which will give you the opportunity to identify even more high intent potential borrowers. If you’re looking to source additional mortgage purchase leads from your current customer database, contact the Mortech sales team at sales@mortech.com to set up a demo.

As margins tighten, more Mortgage Bankers are optimizing their warehouse line transactions and reducing expenses using OptiFunder’s Warehouse Management System, which has facilitated over $50 billion optimized and automated fundings in 2021. Innovative companies like Golden Empire Mortgage are using OptiFunder’s AI decisioning to select the best warehouse facility for each loan in pipeline and sophisticated automation to streamline warehousing processes including funding requests, confirmations, reports, and purchase advice reconciliation.  The efficiency gains, near constant connection to their OptiFunder-connected Warehouse Lenders and resulting real-time data stream provide business insights for Originator clients and have reduced net origination costs, producing positive ROI. "We are excited to harness warehouse optimization to help manage the bottom line, and the efficiency gained from automated funding and post-closing to scale our business and make us even more competitive with changing market conditions,” states Joe Ewens, President, Golden Empire Mortgage. Join leading Bankers and demo OptiFunder today.

With millions of homeowners scheduled to exit forbearance programs this fall, the CFPB has warned mortgage servicers: “Unprepared is unacceptable.” Last year’s temporary flexibilities due to unprecedented volumes have been replaced by close oversight. Particularly for subservicers, on whom homeowners rely for excellent service and lenders rely for healthy portfolios, compliance has never been more critical. Fortunately, TMS has a rigorous Compliance Management System that, unlike many industry peers, they never relaxed, not even during the height of the pandemic. TMS has earned the status of an FNMA STAR servicer and achieved a GNMA IOPP platinum rating. Forbearances are ending, and the CFPB is watching. With all of the current and anticipated scrutiny, is your subservicer ready? Partner with TMS!

M&A

The big continue to get bigger and eliminate competition, and the smaller, well, are taking chips off of the table. The latest example is Ocwen Financial Corporation (NYSE: OCN)’s wholly-owned subsidiary, PHH Mortgage Corporation, entering into an agreement with Reverse Mortgage Solutions, Inc. and its parent, Mortgage Assets Management, LLC, to acquire substantially all of the operations, assets and employees of the RMS reverse mortgage servicing platform. MAM is a subsidiary of investment funds managed by Waterfall Asset Management, LLC (“Waterfall”). The Company will also acquire all of the outstanding equity interests in the RMS Real Estate Owned business, REO Management Solutions, LLC (“REO”). As a reminder, PHH owns Liberty Reverse Mortgage already, and Ocwen, while headquartered in Florida, has offices in the U.S. Virgin Islands and operations in India and the Philippines.

“Under the terms of the agreement, subservicing contracts for the reverse residential mortgages currently subserviced by RMS would be assigned to PHH. As of March 31, 2021, RMS serviced approximately 35,000 reverse mortgages, or approximately $7.8 billion in unpaid principal balance. As part of the transaction, PHH expects to assume the vast majority of the RMS reverse servicing and REO employees and PHH will become the subservicer under a five-year subservicing agreement for reverse mortgages owned by RMS and MAM. The aggregate purchase price is estimated to be approximately $12.4 million and will be subject to certain post-closing adjustments. The transaction is expected to close in the third quarter of 2021, subject to appropriate regulatory approvals and other customary closing conditions.”

Events and Training 

Go beyond the numbers and learn the economic risks and opportunities from a leading expert in the industry. Dr. Jessica Lautz will share her expertise on the housing and mortgage market, so you know what to expect in the second quarter and the second half of the year. October Research’s complimentary webinar on June 23.

Register for Carrington Mortgage Services Webinar, Investor Loans: No Personal Income, No Employment, No Problem! Join on June 23rd to discover the benefits of Carrington's Investor Advantage℠ and have your questions answered by its dedicated Non-QM underwriting experts.

Join the next FREE webinar from the California MBA Mortgage Innovation Committee on June 24th at 11 am (PT) to hear from experts in the non-agency market how you can leverage significant opportunities to grow your business in a changing market environment, plus how video can take super-charge your marketing efforts! Speakers include Eric Morgenson, VP, Business Development at Angel Oak Mortgage Solutions, John Lynch, Founder & CEO at PCMA, and Darius Santos, Chief Revenue Officer at Dubb. Practical takeaways include market opportunity for non-agency lending, how to differentiate yourself from the competition, and how technology and video can help strengthen your business and close more loans faster. Click here to RSVP.

MBA's first-ever Single-Family Research & Economics Showcase is right around the corner, taking place June 23-24. This two-day online event highlights the most current results and insights from MBA’s residential surveys, forecasts, and reports. Led by MBA's Chief Economist, Michael Fratantoni, Ph.D., the Showcase provides the rare opportunity to hear directly from all the experts behind the data you want and trust.

Compass Point Research & Trading is hosting a virtual conference on mortgage finance/policy conference on Wednesday the 23rd from 12pm ET to 4pm ET. Origination, affordability, servicing, and the new administration’s mortgage policy priorities. (Event is closed to the press.)

Register for FHA’s free webinar on June 28th, Home Equity Conversion Mortgage 101 Webinar.

MBA Education upcoming webinars? Yup. June 28 register for “Lending to the LGBTQ Community: Opportunities and Considerations.” June 29: Register for “Benchmarking for Performance and the Performance Ratios Every Mortgage Banker Must Know.” June 29 Register for “MISMO: Transformation Impact of Blockchain in Mortgage Industry and Realized Economic Benefits.

The Mortgage Bankers Association of Hawaii is pleased to announce that its Annual Conference will be held this year on June 30th using a virtual format. The theme for this year’s Conference is “It’s a Whole New World”! Big Mahalo to Rob Chrisman who is back as a featured speaker! MBAH is looking forward to this time next year when we can welcome everyone in person again!

Friday, July 2nd is the next edition of The Mortgage Collaborative’s Rundown with Rich and Rob. Rich Swerbinsky, the COO of The Mortgage Collaborative, and I will be covering current events in the mortgage market for 30 minutes starting at 3PM ET: “The Rundown with Rob and Rich.”

Capital Markets

Rate movement last week was dominated by the Federal Reserve meeting statement along with updated economic projections and their influence on the expectations for continued elevated inflation. While the Committee made no changes to monetary policy following its two-day meeting, the updated “Dot Plot,” which illustrates members’ opinions on the future level of the fed funds rate, showed more members view that rate rising sooner than previously expected. Additionally, the economic projections revealed a higher forecast for core PCE for the remainder of the year as well as a significant slowdown in GDP in 2022 as the bump from this year’s fiscal stimulus fades.

While the fed funds rate may not change this year, expectations are that the Fed will begin to wind down asset purchases towards the end of 2021 after providing markets with ample notice. After a brisk sell-off following the meeting statement and press conference on Wednesday, mortgage pricing bounced back on Thursday although still finished the week worse. While the Fed maintains its willingness to let inflation run a little hotter than it would like in the interest of supporting full employment, persistently high inflation will have to be addressed in the form of tighter monetary policy.

On Friday, we saw a May retail sales report that highlighted the continuing shift from goods to higher contact services now available due to increased vaccination rates. After a year of spending on home improvements, consumers seem ready to increase spending at restaurants, health & personal care retailers as well as clothing stores. While headline sales declined, the declines were primarily on motor vehicles & parts dealers and building materials & supplies stores, both of which benefited over the last year. Industrial production and specifically manufacturing continued to expand in May and would have likely seen larger increases if not for the bottlenecks in the global supply chain.

Housing starts rose 3.6 percent in May as demand for single-family homes, townhomes, condos, and apartments was strong. Although pricing increases for building materials as well as shortages have led to delays for many projects. Producers across the economic spectrum continue to face inflationary pressures for raw and finished goods with producer prices up 6.6 percent over the last year. These inflationary pressures will continue to weigh on the financial markets and their expectations for future rates. Unlike the period following in the previous recession where the markets and policy makers were waiting for inflation to materialize, inflation is here and policy makers will need to act if it does not subside as they initially projected.

This week’s economic calendar includes updates on housing-related data, durable goods, Markit PMIs with PCE and Michigan sentiment on Friday. Fedspeak picks up after last week’s Fed events and includes Chair Powell testifying on the pandemic tomorrow afternoon. Today’s calendar is light on data with just the Chicago Fed National Activity Index for May. The Desk of the NY Fed will purchase up to $4.1 billion of securities backed by conventional loans. We begin Monday with Agency MBS prices a shade better/lower and the 10-year yielding 1.43 in the very early going after closing last week at 1.45 percent.

Employment 

As a new originator/loan consultant to Caliber Home Loans, you are our number one priority. We’ve created Power Up, a custom-built onboarding experience, just for you. You will have a dedicated team, 1-on-1 support, training, and all that you need to seamlessly transition and succeed at Caliber. Watch this video as Roopa Seshadri, AVP Onboarding Program, explains how Power Up is making a difference. Join the team at Caliber. Email James Hecht for Sales positions.