Well, we sailed through another perfectly good month, and many lenders had a superb July funding month. And there is great optimism about August’s numbers as well. Veterans, however, are watching locks to see how September is going to shape up. The MBA reports that applications have fallen for three straight weeks, not a recipe for success for many residential lenders. And some areas continue to have a lack of inventory for sale. Stat-wise, the nation’s housing stock increased by 6.8 million units (5.2 percent) since April 1, 2010, per the U.S. Census Bureau. North Dakota was the fastest-growing state in terms of housing units, with an increase of 18.9 percent during that time. Rounding out the top five states in percentage gain were Utah (13.2 percent), Texas (11.3 percent), Idaho (10.2 percent) and Colorado (9.5 percent). The strength obviously being congregated in the Mountain West region.

Lender Products and Services

In defense of Down Payment Assistance, rapidly increasing home prices coupled with student debt and rising rents are making it increasingly tough for minorities and millennials to save up for a down payment. Should these groups be allowed to receive DPA? Absolutely, if the assistance is provided responsibly. A recent study by the Urban Institute found that minorities have 1/10 the household net worth as white Americans, a gap that makes them less able to help their children purchase a home. Not surprisingly, recent Census data showed African-American homeownership at a decades low rate – 40.6%. “Chenoa Fund provides DPA responsibly, with careful screening and pre-purchase homebuyer counseling. We’re proud that over half of our assistance helps minorities. This is the first in a multi-part series examining issues surrounding the proper role of DPA.” Click here to learn about Chenoa Fund’s innovative programs designed to help minorities and millennials.

In a recent case study, KS StateBank discusses how its switch to MCT improved its profitability while boosting operational efficiency. Furthermore, KS StateBank describes how MCT’s culture and overall value is unparalleled in the hedge advisory industry. According to Ryan Krell, Secondary Market Supervisor, “We moved from another vendor and they just weren’t out-of-the-box what we needed. MCT has been able to provide a more custom experience for us and give us exactly what we need: accountability, communication, everything!” Cameron Mott, VP of Mortgage Lending, goes on to discuss how MCT’s culture is setting the new standard for client satisfaction. “It’s a family culture. When they bring you in, they genuinely care about you. I can’t say it enough, they are great people, who happen to be incredibly smart.” MCT pairs fast, convenient onboarding with mathematically superior execution. Contact MCT today to schedule an introductory phone call. 

Upcoming Events and Training

Are you ready to “Own Your Market with non-QM?” Join National Mortgage Professional Magazine and Larry Mize, VP of Sales with Angel Oak Mortgage Solutions as they focus on the alternative lending space. They’ll do a deep dive into non-QM products to help you offer an innovative quality solution to answer the needs of your previously forgotten borrowers. The webinar takes place today at 12:00 PM EDT / 9:00 AM PDT. Click here to register. 

Is Digital Marketing Dead? Why Direct Mail Marketing Outperforms Digital Marketing, and How to Do It Right. In this enlightening webinar on August 6, 11AM, Michelle Boucher, VP of Marketing at Monster Lead Group, will reveal why mortgage companies are investing more of their marketing spend in direct mail and how they’re consistently getting the highest ROI from that investment. What you’ll learn: The formula for a high performing direct mail campaign, how AI, predictive analytics and deep data have changed direct mail forever, and the “X factor” you can use that nearly doubles close rates. Plus, attendees will get a FREE checklist on How to Get Monster Responses from Direct Mail!

The Lenders One Summit in Seattle (8/4-8/7) provides a forum to learn from peers and experts in the field. “Our member and provider networks are the keys to driving our co-op ahead in this industry, and we’re excited to gather at Summit to provide a forum for you to grow and learn from thought leaders and peers.”

Want to learn more about eClosing? Here is your chance. Polunsky Beitel Green’s eMortgageLaw is hosting an eClosing Webinar series the first Wednesday of each month starting August 7th at 10:00 CST.  Discover how to easily implement an eClosing strategy that allows integration with any LOS and accommodates any closing document set. Please register at info@eMortgageLaw.com. Check out its website: www.eMortgageLaw.com.

The California MBA’s all-new Mortgage Innovators Conference is August 11-13 with some of the best tech-focused minds in the business. If you are a member of the California MBA, you’re eligible for the, ‘Buy One, Get One’ offer! Here is the special registration offer. Register today, and members of the California MBA are always eligible to register 3 of their rising stars (under 35 years of age) to attend the conference for free

Join the Michigan Mortgage Lenders Association at the state’s largest mortgage industry event of the year! I will be attending the MMLA Annual Lending Conference is from August 14-16 at Crystal Mountain Resort & Spa in Thompsville.

Capital Markets

The Fed lived up to rate cut expectations by lowering the fed funds rate by 25 bps, though it indicated that the reduction did not signal the start of a new easing cycle. Additionally, the FOMC announced that the interest rate on excess reserves (IOER) will be reduced by 25 bps as well, and that the balance sheet run off will end in August, two months ahead of the previous forecast. While Fed Chair Powell calmed it a lone adjustment “mid cycle,” markets still believe another rate cut will take place in September, followed by a third cut in December, not buying off on Powell's comment that the action is "not the beginning of a long series of rate cuts." That language triggered a stock market sell-off and criticism from President Donald Trump. Powell did not explain to markets what variables the Fed will be paying close attention to, however, or “look into a magic crystal ball” to discuss how many more rate reductions there might be in this rate-cutting cycle.

The yield curve saw significant flattening, with the 2-year +3 bps and the 30-year -6 bps; the 10-year inched back down towards 2 percent, closing -4 bps to 2.02 percent. Positive data out of Asia and mixed data out of Europe had little effect on U.S. Treasuries, as investors attention was focused on the signals of an impending recession stateside.

Low inflation figures and slipping inflation expectations have the Fed increasingly concerned it will have to visit the effective lower bound of its policy rate more frequently, and/or the U.S. will become trapped in a low inflation environment. Additionally, inflation expectations could become unanchored to the downside, all prospects that have led the FOMC to address the shortcomings of its current inflation framework. The Fed has been performing a comprehensive review of its strategies on implementing monetary policy for some time. Several ideas have come to the fore in recent months, notably the FOMC potentially incorporating an overarching rule that takes into account inflation targeting when faced with the zero-lower bound, and providing a safeguard should a sustained period of lower inflation give rise to financial instability. The Fed is likely to include this modification in the Statement on Longer-Run Goals and Monetary Policy Strategy document it releases at its January 2020 meeting, though the change could happen later in 2019 subtly through speeches and in minutes of upcoming meetings.

Market participants aren’t certain of timing, but agree that even a binding rule will still not change inflation expectations over the business cycle nor the way markets price inflation. Economists, strategists and portfolio managers seem to share broad consensus that even under extreme changes to the inflation framework, market reactions would be mild. A non-binding change, or soft approach to average inflation targeting is the most likely outcome, with complete replacement of the current framework with a binding rule-based approach less likely. Should the Fed fully adopt average inflation targeting across the cycle a significant drop in yields and the USD would result. Few expect inconsequential or no change.

But it is a new day for markets today, and the Bank of England is out with their latest monetary policy decision and inflation report leaving rates unchanged. The U.S. calendar is also underway with some labor market indicators: numbers from Challenger & Gray (July job cuts fell to 38,845) and jobless claims (+8k to 215k). Later this morning we have final July manufacturing PMI, the ISM manufacturing PMI for July, June construction spending. We begin the day with Agency MBS prices worse a few ticks from Wednesday’s close and the 10-year yielding 2.02%.

Employment, Businesses Opening, Personnel Moves

A leading mortgage technology company is seeking a National Account Manager with a proven track record of success in working with consumer direct lenders. The ideal candidate will have a minimum of 3+ years in selling B2B services and technology. You may work remote, so organization and accountability are musts. Frequent travel across the US to meet and present to potential clients as well as participate in trade show opportunities will be required, as well as creating and delivering effective presentations, effectively managing a pipeline, sales activity, and providing accurate forecasting. You must have a proven track record of success in a high-volume fast paced role. Previous experience in technology sales selling to financial institutions and C-Level executives. Pre-existing contacts in the mortgage and banking industry are a big plus. If interested, please send your resume and specify the role to Anjelica Nixt. 

After 26 years of Wholesale and Correspondent lending, Atlanta, GA based Crescent Mortgage Company recently announced its newly launched Retail Lending division. Crescent would also like to announce that industry veteran David Rapson, most recently Retail Sales Manager for Fidelity Bank in Atlanta, GA, has joined Crescent Mortgage Company as SVP of Retail Lending to lead this new national channel. “We are truly excited about this opportunity and our overall growth strategy for all channels of business” said Fowler Williams, CMB, President and CEO of Crescent Mortgage Company. “We feel like we have a lot of product, technology, and service offerings that are differentiators for Loan Originators as well as a culture of customer service excellence.” Crescent Mortgage Company, a wholly owned subsidiary of CresCom Bank (Myrtle Beach, SC), currently lends in 48 state footprint and is hiring Loan Originators, Producing Branch Managers, and additional support staff to facilitate this expansion of the company. If interested in joining the Crescent family please forward your resume to Drapson@crescentmortgage.net.

NMSI Inc continues to grow and is seeking experience Outside Account Executives in ALL Markets. “We are also looking for Inside Account Executives in our new Chandler Arizona operation center. If you’re looking for a to grow your career with a wholesale lender with best in class technology, a product line that includes Agency and some of the best Non-QM programs in the country accompanied by a great ops team and aggressive pricing then send your resume to James Hooper. To learn more about NMSI Inc visit www.nmsigroup.com.”

WesLend Wholesale recently announced the addition of industry veteran Keith Stubbs, EVP of Wholesale, to lead the continuing expansion of the WesLend wholesale platform in the 39 states where it lends.  With over 25 years in the industry and 10+ years in direct retail production, Keith knows what brokers need to succeed and will oversee both sales & operations.  WesLend Financial is a direct seller/servicer, allows TBD’s and originates Conforming, Govvies, USDA, Jumbo, NonQM, Reverse (HECM) and will lend on Manufactured Housing. WesLend Financial is looking nationwide to hear from talented AE’s that want to have a voice in shaping the most broker-centric wholesale lender in the industry.  Interested parties please reach out to Parrish Mesa, Director of Talent Acquisition (949-681-5254).