Someone once said, “A loss is not a failure until you make an excuse.” You can apply that to politics or to sports. Or to business. No company wants to lose a lock, and locks desks are beginning to see some attempts at renegotiations. Whether they are prompted by borrowers or brokers is of little consequence, but it does remind us that it is a one-way street. Few lenders would think of going back to a borrower in a rising rate environment and telling them, “Uh, sorry, we need to bump your rate up a little.” Although bouncing this morning, rates have indeed come down, and there is continued talk about the Federal Reserve’s role in the general rate environment. (The current STRATMOR blog is, “A Primer on What Originators Should Know about the Fed”.) Farther upstream, lenders are doing what they can to attract and keep business, sometimes creatively. The latest example is American Express Card members who finance a home with one of the company's partners (Better Mortgage or Rocket Mortgage/Quicken Loans) can receive a statement credit of $2,000 or $6,000 depending on the type of mortgage. And once a lender has a potential borrower, they do what they can to reduce the production friction between application and funding. Speaking of which, this week’s podcast is sponsored by Richey May and features Part 2 of an interview with Nathan Lee, head of Richey May Advisory, the firm’s practice dedicated to Risk Assurance and Advisory, on automating the loan production process.

Lender Products

What’s the ROI for ECOA Adverse Action process automation? Is it really over 500%? Connector by Velma clients report labor cost savings for both sales and compliance, better engagement by sales resulting in rescued deals, faster speed to audit and, of course, eliminating risk of fines for non-compliance. Curious how Connector by Velma® can solve your ECOA - Adverse Action headaches? Learn how here. 

The #1 skill growing lenders need to compete in today’s changing market is the ability to remain nimble. And the best way to achieve that agility is to shift to a variable cost model for more product expenses. In fact, lenders that outsource volume to tech-forward outsourced fulfillment services save over 20% on fulfillment costs AND become more flexible during volume fluctuation. Maxwell is now one of the nation’s leading tech-powered onshore fulfillment providers. The Maxwell Fulfillment Platform not only helps lenders scale, but also enhances borrower experience with faster time to close, positioning your brand as the hero. To learn more about Maxwell and its Fulfillment Platform, click here or schedule a call today.

Western Alliance Bank’s Specialized Mortgage Services Group continues to be solution-oriented in changing markets in providing various financing vehicles. Warehouse Lending finances a wide spectrum of loan types including Agency, FHA/VA/USDA, Jumbo and Non-QM, funds until 2:30pm PST and works with borrowers to customize terms to meet investor and execution needs. MSR financing provides lines of credit that leverage Fannie Mae, Freddie Mac and Ginnie Mae collateral. Lines can be annual revolvers or longer-term interest only draw periods followed by term finance. Flexible structures provide solutions to accommodate originators’ MSR retention strategy. Additionally, the Specialized Mortgage Services Group provides Note Financing, Treasury Management Services, Working Capital Lines and Commercial Real Estate solutions across the country. Member FDIC.

The Correspondent Team at Citibank N.A. expresses gratitude and appreciation to our sellers for helping make the first half of 2021 exceptional. We successfully executed several key initiatives designed to help us deepen relationships and improve efficiencies for lenders highlighted by: Enhanced Agency High Balance pricing resulting in significantly improved competitive position on Mandatory bids, roll out of a CRA identification tool through EPPS that creates a competitive advantage for our sellers by bringing Citi offered CRA incentives to POS, unveiled a Jumbo portfolio product exclusive to our sellers that has garnered tremendous feedback and high demand, and completed our transition to a new Correspondent portal that improves the seller’s delivery experience and ability to manage their pipeline. We invite you to contact our National Client Services Team at 800-967-2205 or complete the Prospective Seller Questionnaire  to see how Citi Correspondent can add value to your business.

AmeriHome Mortgage, the 2nd largest correspondent and 14th largest mortgage lender in the country, is planning a return to the Non-Agency business with a phased rollout of products! In August they will be rolling out their Portfolio Series of Non-Agency programs, beginning with a Portfolio Jumbo product for their Non-Delegated clients, followed by a release to their Delegated clients. Later this year, they will introduce their Portfolio Non-QM programs, a Portfolio Scratch and Dent program, and a warehouse lending offering in conjunction with their parent company Western Alliance Bank. AmeriHome is excited to be working with Western Alliance, and AmeriHome believes that their combined products, services, and people will bring a unique and powerful offering to their combined client base. Lenders interested in discussing opportunities should visit AmeriHomeCorrespondent’s website, email, or catch them in-person at an upcoming event!

Referring a buyer to a Realtor is the holy grail in our industry. Check out this game-changing new app from Usherpa that uses SmartScore™ technology to help you do just that. UsherpAlert™ push notifications are based on data intelligence and machine learning algorithms that comb Loan Officer’s databases for opportunities and serve up past customers most likely to be in the buy zone for a new mortgage. In fact, UsherpAlert purchase notifications have a 297% higher likelihood to close. Schedule your free demo today to learn how you can double your production with Usherpa’s Smart CRM.

Agency Changes

Fannie Mae’s announcement this week turned a few doc drawing heads, some saying it was weak on details (“enhanced clarity and usability”). January 1, 2023 is a big lead time, however. “We have updated all of our uniform legal instruments – security instruments, notes, riders and addenda, and special-purpose documents – used for loans delivered to us. In collaboration with Freddie Mac, we conducted a comprehensive review of the instruments and made improvements to enhance their clarity and usability. This update includes both Fannie Mae/Freddie Mac uniform instruments and Fannie Mae-specific instruments. These new instruments can be found here. The new instruments have a Jul. 2021 footer date. Effective: Lenders may begin using these updated forms immediately but will be required to use them for loans with note dates on or after Jan. 1, 2023. The updated Jul. 2021 uniform instruments cannot be used in combination with any earlier versions. For example, a security instrument with a Jul. 2021 footer must be used with a note that also has a Jul. 2021 footer.

Fannie Mae has adjusted the terms for a Flex Modification with reduced eligibility criteria for COVID-19 impacted borrowers to provide an opportunity to reduce their interest rate, regardless of the mortgage loan’s mark-to-market loan-to-value ratio. View LL-2021-07 for details.

In LL-2021-02, Fannie Mae updated the Impact of COVID-19 on Servicing to inform servicers of the provisions regarding the suspension of foreclosure-related activities and filing motions for relief from the automatic stay in certain bankruptcy cases.

 posted new FAQs to address common lender questions about loan eligibility under the Preferred Stock Purchase Agreement and Revised General Qualified Mortgage Rule (Revised QM) effective for all loans with application dates on or after July 1, 2021.

Based on lender feedback regarding RefiNow™ messaging, Fannie Mae made changes to the Desktop Underwriter® (DU®)/Desktop Originator® (DO®) July update including changes to two existing DU messages and the addition of a new DU message. Read the updated release notes.

To address opportunities discovered during the successful industry implementation of the Uniform Residential Loan Application (URLA/Form 1003), limited critical business information needs, and a regulatory request, Fannie Mae and Freddie Mac have published updates to their automated underwriting system (AUS) data specifications and supporting resources.

PennyMac updated Conventional LLPAs adding a new ‘Second Home’ LLPA grid and removed single line item ‘Second Home’ LLPA.

Flagstar Bank implemented a new +0.125 price improvement for Agency Fixed Investment Property FICO >= 680 loans. This new LLPA is addition to any existing investment property LLPAs.

Fifth Third Bank is suspending the Fannie Mae High LTV Refinance and Freddie Mac Enhance Relief Refinanced products, effective with loans funded July 30th, 2021. Loans may be locked and delivered prior to this date but must be in fundable condition and purchased by July 30th.

Borrowers whose income held them back may now be able to refinance with New American Funding thanks to Fannie Mae’s RefiNow™. Determining whether the current mortgage is owned by either Freddie Mac or Fannie Mae can be checked on the website: Freddie Mac Loan Look-up Tool or Fannie Mae Mortgage Loan Lookup.

Capital Markets

Despite all the “experts” predicting that rates will go up, and them receiving a bit of a bounce this morning, Treasuries rallied for an eighth straight day yesterday and the MBS basis finally tightened (read: rates went down) as investors “backtracked” on the reflation trade. What does that mean? There is more concern and less optimism about peak growth than there was only a couple months ago. Much of that is due to the COVID-19 delta variant, which has severely impacted less-vaccinated countries than the U.S. Domestically, continuing jobless claims fell to a pandemic low, reflecting the fact that more than half of states are ending enhanced federal unemployment benefit programs amid debate about whether they are hampering hiring efforts. Attention now turns toward Fed Chairman Powell delivering his semiannual monetary policy testimony to Congress today.

Freddie Mac reported a decline in mortgage rates in its Primary Mortgage Market Survey yesterday. The 30-year fixed rate fell 8 bps to 2.90 percent, its lowest level since the week ending February 18’s 2.81 percent average. Likewise, the 15-year fell 6 bps to 2.20 percent and is just 4 bps above its historic low hit at the start of 2021. Mortgage News Daily reported its 30-year benchmark at 3.03 percent at the close of yesterday, down from 3.18 percent as of July 1. Separately, Black Knight reported that the overall number of active forbearance plans dropped by 189k, pushing the number of active plans below 2 million for the first time since early last April. That puts overall forbearance figures down 254k, or -12 percent from the same time last month.

This holiday-shortened week closes out with a light calendar consisting of wholesale inventories for May later this morning. The bond market, though, will start setting up for Monday and Tuesday’s $120 billion mini-Refunding. The NY Fed today will purchase a maximum of $4.1 billion MBS with Class A net out. We begin Friday with Agency MBS prices worse nearly .250 from Thursday afternoon and the 10-year yielding 1.33 after closing yesterday at 1.29 percent.


Jobs and Transitions

Midwest Loan Solutions, Inc., a subsidiary of University Bank, has announced that Jerry Walters joined the organization as the Director of Mortgage Warehouse Financing. Walters will be guiding the warehouse division’s policies, procedures, and products in addition to growing new business. Midwest Loan Solutions’ warehouse division provides mortgage warehouse facilities to Independent Mortgage Bankers, Brokers seeking conversion to a Banker, and Emerging Mortgage Banking companies. “Having been involved with Warehouse Lending for over twenty years, I’m excited to join Midwest and its wonderful team of mortgage professionals. I look forward to applying my experience and leadership to help safely grow their business and help provide capital for growth to Independent Mortgage Bankers seeking to grow.” If you’re a Broker to Banker an Emerging Mortgage Banker or a seasoned Mortgage Banker seeking growth capital, contact Jerry for additional information.

In a time when volume is shrinking and revenue is down, many lenders are downsizing or reorganizing. Not Loan Simple. Loan Simple is hiring, big time. In fact, there’s somewhat of a Gold Rush going on over at Loan Simple right now. Unlike other lenders, they’re stable, growing and they’re mining for lots of great talent, especially AEs. For anyone who’s tired of sharing territory and competing for top brokers, Loan Simple has Regional Account Executive positions available in several of the most sought-after markets. It’s a rich opportunity for growth, so what’re you waiting for?

Strong Home Mortgage is expanding our consumer direct services with two new locations in Kansas City, MO and Las Vegas, NV. Leadership is committed to providing a team driven culture with an amazing customer and employee experience. SHM is licensed in 46 states and built an organization with effective and experienced leadership, passionate team members, unparalleled customer service and an overall infrastructure. We’re seeking leaders ready for the next level as a Branch Manager in one of these new locations.  We are also looking for seasoned Mortgage Loan Officers who are focused on elevating their career with a team and platform that will support their goals and aspirations. We provide high quality leads from a consumer trusted brand affiliated partner. If you are a high-level, self-motivated loan originator with leadership qualities who is looking for a great opportunity by building a successful team, our Branch Manager position is for YOU! Please contact Joe DeStasio if interested.”

“We are looking for motivated Loan Originators that are able to effectively handle a high volume of call center leads, internet leads, call-ins, and branch repeat borrowers. We expect our Loan Originators to originate loans primarily through telephone sales presentations, operate as primary contact during the loan process including updating the borrower on loan status, review disclosures, review loan documents, provide a Five Star Customer Experience, be coachable, and open to new approaches to selling. We provide salary plus commissions, leads, leads, leads, streamlined processing that allows for quick closes and a management team that listens and is responsive. If you are ready for a fast and dynamic environment with opportunities to close many, many loans, please send over your confidential resume to Chrisman LLC’s Anjelica Nixt for forwarding.”

The Change Company announced the appointment of 20+ year vet Jon Irvine as Chief Production Officer of its mortgage banking subsidiary, Change Home Mortgage, responsible for revenue-generation strategy and execution across all origination channels, including Change Wholesale. (This comes after a record-breaking funding and submission month for Change’s proprietary non-QM Community Mortgage  product which does not require any income or employment documentation for owner-occupied mortgages up to 80% LTV.)