I am sure that there are people who read this commentary who firmly believe that the earth’s climate is not changing, and believe that historical graphs of temperatures in places like Minneapolis are falsified. And there are those that believe that any change is purely natural and has nothing to do with humans. Others believe mankind is causing climate change, violent storms, flooding, etc. That said, does anyone disagree that poorer areas in the United States are hotter than affluent areas because they have more asphalt and fewer trees? Researchers of this phenomenon have made their data publicly available and created an interactive map. Poorer neighborhoods, usually of color, tend to have more asphalt, buildings, and highways, all of which absorb the incoming solar energy and then radiate heat. The “heat island effect” has come under increasing scrutiny by researchers in the past several years, particularly the uneven distribution of it. Richer neighborhoods tend to include more green elements, like parks and tree-lined streets, which help beat the heat. Trees can provide shade from the heat, and through transpiration, vegetation also releases water, which cools the air as it turns into a vapor. Today’s podcast is available here. This week’s podcast is sponsored by Black Knight, providing innovative technology, comprehensive data, agile analytics, and features Part Five of an interview with Mike Brown focused on lender risk mitigation.

Services and Products

Let your people work from home while improving efficiency with a virtual assembly line. Henry Ford reduced car production time from 12.5 to 1.5 hours with an assembly line. The benefits were: Shorter timelines, increased efficiency, near-zero errors, plus the ability to employ both high and moderately skilled workers to get work done. The same has proven true for mortgages. 2021 has seen more mortgage operations move to a “virtual assembly line” model to produce higher volumes and shorten “lead-to-close” timelines. Case in point: A division of American Pacific Mortgage quadrupled their volume and produced 280% more revenues after implementing TeamworkIQ, a simple task-based-workflow platform that drives virtual assembly lines. Work moves forward faster. bringing the right task to the right person at the right time with the right priority. And some tasks can even be automated to achieve even greater efficiency. See the case study and request a test-drive.

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.

In celebration of National Mortgage Brokers Day on Sunday, July 18th, 2021, Orion Lending will be giving Brokers $500 Off Underwriting Fees on all loans uploaded Sunday, July 18 – Saturday, July 24, 2021! One day is not enough to celebrate our Brokers! Like what you are hearing? And as if that weren’t enough, new Brokers can get Express Approved by clicking here and start submitting loans by the end of the day! Additionally, Orion Lending offers a 15 BPS New Broker Price Special* on all products! Orion has a loan program to fit your qualified borrowers’ needs. With a broad range of new products and more on the horizon plus our 24-Hour SLA’s on select Purchases, now is the time to hyper speed your business with Orion! You’re Not Just Another Broker. We’re Not Just Another Lender.  

Loan officer efficiency and happiness are critical to your business. That’s why the brand-new Lender Dashboard from digital mortgage point-of-sale leader Maxwell focuses on driving both as a part of your tech stack. Through intelligent automation, Maxwell’s revamped Lender Dashboard makes it easier for LOs to find and manage the borrowers who need the most attention. The result? Maxwell as a platform helps your LOs close 20% more loans per month through a streamlined process and increased capacity to drive referrals. And more closed loans mean happier LOs. In fact, over 89% of LOs whose companies use Maxwell would recommend it to other LOs! To learn more about Maxwell’s new Lender Dashboard and the rest of its point-of-sale features, request a demo or learn more here

The Velma Connector is really outstanding…Not only is the compliance a win but these loans required way less resources to manage from an application/processing standpoint to a compliant cancellation. We gained efficiency and accuracy.  That is what one compliance manager had to say about the value of automating their ECOA Adverse Action process.  If you are an Encompass LOA user and have ECOA-Reg B headaches, you’ll want to learn more about Connector.

Updates From Investors and Lenders

I usually group like news together here, whether it is conventional conforming, or government, credit score underwriting shifts, and so on, from around our biz. Once in a while I throw the whole kitchen sink at you. This is one of those days where not a lot of matches, but you may glean something that helps your company or borrower!

In correspondent news, Onslow Bay Financial is gaining momentum. (If you click on the “Sellers Resource” button, and then click “Seller Portal” then “Seller Portal Log In, and finally “Don’t Have an Account Sign Up Now,” it gives users access to lots of info, without being an approved customer. (Contact Mike Wold with questions.)

In wholesale news, eXp World Holdings (Nasdaq: EXPI), the holding company for eXp Realty, announced a new joint venture with Kind Lending, a rapidly growing nationwide residential mortgage provider, to establish SUCCESS® Lending. “SUCCESS® Lending builds on the heritage of SUCCESS Enterprises, a 124-year-old company and a leader in the personal development industry. This new venture will enlist expert loan officers, currently working with top eXp agents, to provide lending solutions to consumers engaged in the homebuying journey.”

Illinois’ First State Mortgage sent out Freddie Updates, QM, HomeReady and Home Possible Income Limits.

Effective, July 16, 2021,  Wholesale's Underwriting/Commitment fee will be changing. All states with the exception of CA and HI will change to $995.00, CA and HI will remain the same at $995.00. FHA/VA Streamline Fees will remain the same at $495.00. NDC Underwriting/Commitment and FHA/VA Streamline fees will remain the same at $575.00.

Fee changes will apply to all loans created in the mello® Broker portal on or after July 16, 2021.

Fifth Third Correspondent requires Correspondent Sellers to provide applicable documentation used to approve condominium projects on delegated deliveries, refer to Underwriting Guidelines for details on required documentation. Note that the project’s legal documents are not required to be submitted with every delegated file but must be retained and available upon request. In addition to the approval documentation, sellers must provide required information about the project including Type of Review Conducted, Condo/PUD Development Name, Project Design Type, Dwelling Unit Count and Units Sold Count, Agency-specific Project Classification and Type.

On July 6 Flagstar Bank improved margins for HELOCs up to 80% combined loan-to-value (CLTV) ratio by 0.25%. View memo for details.

First Community Mortgage updated information on SOFR Adjustable-Rate Mortgage (ARM) in Correspondent Announcement 2021-7 and Wholesale Announcement 2021-9.

Plaza delivers a customized, full analysis of its most popular Reverse programs specific to your borrower’s scenario right to your inbox. The analysis details available funds, rates, fees, and other loan information. Plaza’s Reverse Mortgage staff will run a complete analysis on your submitted information and send the findings back to you via e-mail - typically within a few hours.

Capital Markets

At some point I’ll realize asking the same questions usually yields the same answers. Congress doesn’t seem to have learned that yet with Fed Chair Powell, as those in the Senate expecting groundbreaking responses yesterday to inflationary concerns didn’t quite get what they were looking for. The Fed Chair again “dovishly” defended the central bank's stance to keep providing support to the U.S. economy, which meant bonds reacted by rallying (as expected) with the biggest buyer stating they plan to remain in the market for the foreseeable future. Though interest rates are set to stay near zero likely until at least 2023, there are still a lot of unknowns, such as how much longer price pressures will remain elevated, or if there are other things that will come forward and take their place.

In terms of economic releases, initial claims decreased while industrial production growth missed expectations. Manufacturing surveys from New York and Philadelphia were mixed relative to expectations. The Primary Mortgage Market Survey from Freddie Mac for the week ending July 15 saw further declines in the 30-year rate to 2.88 percent. Finally, Black Knight reported that after last week’s nearly 200k drop, a 1k decline in the overall number of active forbearance plans was actually very much in line with the mid-month lull in activity we’ve seen month after month since the recovery began.

Today’s economic calendar is already underway with June retail sales (beating expectations at +.6 percent, +1.3 percent ex-auto). Later this morning brings May business inventories, preliminary July Michigan sentiment, and remarks from New York Fed President Williams. The Desk will purchase $4.5 billion of conventionals. We begin the day with Agency MBS prices down/worse .125 and the 10-year yielding 1.32 after closing yesterday at 1.30 percent.


Jobs and Transitions

Uncertainty, displacement, and change are the new normal in today’s mortgage lending world. But you don’t have to let the change happen to you. You can take control of the business you’ve worked so hard to build. Earn more bps and lend in all 50 states under a P&L based, revenue allocation model. If you’d like to take your sales team to a new level, or if you are a motivated branch leader seeking a stable and committed bank partner, we may have a solution for you. A nationally chartered bank with decades of commitment to residential lending throughout the country is expanding its branch partner network. Serious inquiries and confidential resumes to Chrisman LLC’s Anjelica Nixt for forwarding.

“PHH Mortgage continues to grow and is emerging as an industry leader in Correspondent Lending. In June, we completed the addition of Texas Capital Bank’s Correspondent Lending business, launched our new website and portal, and added Best Efforts Commitments to our existing Mandatory and Co-Issue delivery options. Our team is expanding as well. PHH is excited to announce the promotion of Sean Marr to VP, East Division Sales and the addition of Christian Stevens as VP, West Division Sales, and Scott Loddeke as VP, Correspondent Operations. Our regional sales team is here to answer any questions and help you become an active seller. PHH Mortgage offers great pricing, fast turn times, exceptional service and a full range of competitive products and programs, learn more today!”

Kindness you can take to the bank. Kind Lending, founded by industry veteran Glenn Stearns, is hiring. Currently, the company is seeking an experienced VP Controller to build and lead the accounting department. Must-haves: extensive experience leading a mortgage company’s accounting department in compliance with GAAP & regulatory guidelines, ability to produce timely & accurate financial statements, and KIND attitude (obviously). Kind Lending is also looking for a Financial Reporting Manager with experience in preparing accurate and informative reports in all areas of the company’s operations with information from large pools of data and channeling reports accurately & efficiently. Reach out immediately for a confidential interview with Melissa Richardson.

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, Regional VP of Sales, if you are interested in this opportunity. 

When it comes to making the switch to a new lender, Loan Simple knows how to make the transition super simple for AEs so that you’re up and running quickly. Unlike some lenders, they don’t just throw you into the deep end of the pool and expect you to sink or swim. When you hire in, they grab the floaties, wade in and train you with tools and resources that’ll set you up for success. Like a marketing toolbox so you can send your own personalized Sell Sheets, Process Guides, TBD Guides and Loan Comparison Charts to brokers. In fact, they’re a marketing machine and will mentor you, help you bring your brokers over, help you build your book of business and increase share of wallet. Before you know it, you’ll be down in the deep end doing half somersaults off the high dive. If you’re looking to move lenders, Loan Simple is a great choice, so apply now. No bathing suit required.

Congratulations to Shelly Kobb who has joined PenFed Credit Union as head of correspondent lending, non-delegated.