Originators and lenders are having a great summer from income and profitability perspectives. The thick margins are making managers look like champs, arguably covering up other issues that would normally be corrected. Rocket, the parent company of largest US mortgage provider, trimmed the amount of stock it is selling from $3.3 billion to $2 billion this morning, which is different than good companies continuing to trim waste and rewarding departments and employees who are focused on that, either financially or with fun. (I know of one successful lender in Michigan who has “Blossom the Unipig,” a mascot that is earned by various departments based on cost efficiency and therefore profitability actions.) One company that knows a thing or two about profitability is Apple Computer, much of it due to marketing. From Tennessee’s First Community Mortgage, Keith C. passes along, “There’s an advertising rule of thumb that says, ‘Good advertising makes bad products fail faster.’” Makes sense to me. On the flip side, "You can go to school and spend years trying to learn about great marketing. Or you can spend a few minutes watching Steve Jobs. And what LO or vendor can’t improve their marketing? (“It’s about value.”)
Lender and Broker Products
Which borrowers are most likely to request forbearance, go delinquent, or default in the next 6 -12 months? What’s their true “ability to pay”? What’s their “willingness to pay”, despite having solid ability to pay? Which borrowers will outperform their lower FICO scores by 50, 100 or more points going forward? What is the right bid for a portfolio of loans, or are there any arb opportunities? These are just a few of the questions that the actionable Mortgage Risk & Fairness Score answers up front. Everybody has big data. It’s how you use it that matters. MRS uses big data to deliver a predictive, prescriptive, assessment of borrower performance & resiliency. The benefits are greater visibility, informed decisions, sharper pricing, fewer overlays, financial inclusion, faster turn-times, additional due-diligence and CYA, increased volume and margins, and less risk. MRS is plug-n-play, validated (top 10 bank) and vetted (CFPB, OCC, Fed). Click for more information
“Mortgage elephant in the room: are your current customers STILL leaving to the competition? Ok, lender executive - this is for you: What’s the fastest and most predictable way to increase your sales beyond the current market? If you said, ‘borrower retention,’ you are 100% correct. Your solution: The Attention to Retention Challenge. Starting August 17th, we’re sharing our expert secrets, and handing over the playbook on how to TRIPLE your retention rate without maxing out your overhead! Plus over $9k in bonuses. People are calling us crazy, and we might just be. In this exclusive event, we are walking you through our proprietary process, and teaching you how to fish for yourself! Lender executives, we’re limited to 30 sign ups. Register here. (Current customers need not register… we got your back! Ask your CSM for details.)”
Find digital agility in a changing world. During Forward, Blend’s virtual summit taking place September 22-23, executives and project teams will explore the regulatory changes and rising consumer expectations shaping the future of lending. Learn about Blend’s latest innovations and leave with a strategy to keep you ahead of the competition. Register now.
The independent mortgage broker community faces a defining moment in time, outpacing retail with 20% market share and growing! To keep up this unprecedented momentum, join Home Point Financial today at 1PM CT for an exclusive HousingWire webinar – “Taking the Mortgage Boom to the Next Level.” You’ll learn best practices and strategies from Phil Shoemaker, President of Originations at Home Point Financial, and hear from three of today’s fastest growing wholesale brokerages about what it’s like to work in the wholesale channel today. We’ll cover how brokerages are using today’s mortgage boom to accelerate and scale growth, and how the broker community can continue its momentum. All mortgage loan originators should register now for this exciting event!
Don’t forget that Colorado’s CMLA has its annual convention today, albeit virtually. Attendees can register the day of the convention.
Much of the focus is on the impact of forbearance, now and in the future, sparked by the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, the $2.2 trillion economic stimulus bill from March. But there are other things of note, especially servicing values.
STRATMOR Principal Seth Sprague, CMB shared his Second Quarter 2020 Bank Press Release Summary for Mortgage Origination and MSR Values in STRATMOR’s Capital Markets Workshop yesterday. For Q2 across the subset of banks noted in the summary, originations are up an average of 39.7 percent and servicing values are down an average of 31.6 percent, year over year. Having a clear understanding of your strategy and ability to benchmark results is critical for managing the changing 2020 environment and planning for 2021. Contact Seth Sprague or Sr. Partner Jim Cameron at STRATMOR to discuss your servicing strategy.
Packages and MSR flow servicing deals continue to trade. The latest comes from Phoenix Capital presenting a $75mm - $100mm per month conventional flow offering. (100% FNMA A/A, 74% Fixed 30, 26% Fixed 15, average balance of $260k based on recent locks, 21% purchase originations, 100% retail originations. Contact Luke Mueller for more details.
Written bids for this portfolio are due no later than Tuesday, August 11th, 2020 by 5 PM EST
ServiceLink debuted next-generation technology solution for Real Estate Inspections. EXOS Inspect is the latest artificial intelligence (AI) and intuitive user interface enabling homeowners to complete fast, easy, and secure video inspections for critical aspects of the lending and servicing process. The new mobile app that empowers borrowers to conduct their own home inspections when a traditional appraisal inspection is not required. EXOS inspect can be used to support home equity lending and collect data for portfolio management processes including loss mitigation, loan modification and private mortgage insurance (PMI) removal.
With servicing listed as a reason, Interfirst Mortgage Company, a private equity-backed mortgage originator, relaunched operations with a new proprietary loan origination technology platform and an expanded business model, featuring both a wholesale platform and a soft launch of a new consumer-direct retail platform. The significant disruption to the origination and servicing markets in early 2020 accelerated the Company’s plan to reenter the market with its new business model to help provide a needed and timely solution.
I like a good surprise, even if it comes in the form of a Treasury Quarterly Refunding announcement. MBS coupons steepened, and Treasuries pulled back in yesterday’s midweek session, primarily from larger than expected government funding needs via the Treasury Quarterly Refunding for the August through October period. This quarter's 2-year, 3-year, 5-year, and 10-year note auctions will be increased by $6 billion, while 7-year note auctions will be increased by $9 billion and 30-year bond auctions will be upsized by $4 billion. Next week will see $112 billion auctioned between 3-year and 10-year notes and 30-year bonds versus the $109 billion anticipated. Sizes were increased across the board, including in 2-year Floating Rate Notes which will result in $132 billion in additional nominal coupon issuance for the quarter versus the previous one. Markets paid the most attention to that and largely shrugged off a disappointing ADP report ahead of tomorrow’s Nonfarm Payrolls report.
There were positive developments reported out of Washington on the new stimulus package. Republicans will reportedly agree to an eviction moratorium through year-end and have made an offer on extra jobless benefits (up from $200 to $400 a week), though Democrats are demanding more concessions for a new pandemic relief package if one is to be approved by tomorrow. The White House has put $200 billion in state and local aid on the table, but that is far less than the $1 trillion Democrats are seeking. Aid for the Postal Service and states to conduct mail-in voting is a top Democratic priority. Remember, this all comes while unemployment benefits are expiring and job losses are mounting as the recovery stalls and small businesses near the end of their rope. Expect a bill to reach the president’s desk soon, as there is a unique combination of economic necessity, political potency, and health realities. As Chicago Federal Reserve President Evans said, "Fiscal policy is fundamental to a better baseline outlook, to a stronger recovery and getting the unemployment rate down, people back to work safely, and ultimately reopening the schools safely."
As far as economic data went, markets received expansionary July Services PMI readings from Germany, France, Italy, Spain, and the U.K. As I briefly mentioned yesterday and above, we received a pitiful domestic ADP Employment Change report, which came in at one-tenth(!) of expectations. Not good. The ISM Non-Manufacturing Index increased in July, marking the third straight monthly improvement and the highest reading for the index since February 2019 despite expectations for a decline. The Employment Index fell, however, even as business activity improved some, which suggests a reluctance on the part of employers to bring on new employees given the large uncertainty over future demand.
Ahead of tomorrow’s payrolls report, today gives some additional color on the jobs market. We’ve already had Challenger layoffs for July (262k versus June’s 107k), initial claims for the week ending August 1 (1.186 million, much lower/better than expected), and continued jobless claims for the week ending July 25 (about 16 million). Later we have Freddie’s Primary Mortgage Market Survey for the week ending August 6, confirming what lock desks everywhere knew. Last week, the 30-year fixed mortgage rate averaged 2.99 percent, just 1 bp above the survey record-low. We will have some Fed speak, with both Governor Brainard and Dallas Fed President Kaplan taking the virtual stage. For the fourth consecutive day, the NY Fed will buy up to $5 billion, consisting of $753 million UMBS15 2.0 percent and 2.5 percent, followed by $2.8 billion UMBS30 2.0 percent through 3.0 percent and $1.5 billion GNII 2.5 percent and 3.0 percent. Also influencing trading will be the release of July prepayment data. We begin today with Agency MBS prices a tad better/up and the 10-year yielding .53 after closing yesterday at 0.54 percent.
Employment and Job Moves
Caliber Home Loans is recruiting top candidates in the mortgage industry for our Caliber Operations teams across all channels. We are offering enhanced sign-on bonuses and incentive plans for Underwriters, Processors and Closer/Funders. Looking to join a leader and make some phenomenal money? We have approximately 500 open Operations positions available! If you’re at the top of your game and have a passion for helping customers, we want to talk to you! Interested in one of our posted job opportunities? Please contact Jonathan Stanley for consideration. Interested in a sales opportunity at Caliber? Please contact Brian Miller for immediate consideration. Visit the Caliber Careers website for opportunities across the organization!
“Over eight years! That’s the average tenure of our underwriters, closers, and post-closing employees at PrimeLending. When you think about stability and where you want to take your career as an operations professional, PrimeLending is the powerhouse you’re searching for. And there’s never been a better time to make your move, as these unprecedented times have created unprecedented opportunities on our operations teams. We’re hiring rockstar teammates for all mortgage operations positions who are ready to enhance their career, be part of a winning team and make a real difference in the lives of our borrowers and teammates, all with the convenience of working from home. If you’re ready to make a transition, now’s the time. Contact Nic Hartke to discuss more about our career-changing opportunities, industry-best technology and award-winning culture at PrimeLending.”
“Assurance Financial is continuing to grow production, add retail branch offices and is expanding our production reach into the midwestern U. S., particularly Colorado, Arizona, Kansas, and New Mexico markets. We are searching for an established Regional Production Manager to help create and develop mortgage origination branches in the new midwestern territory, someone that is an outstanding talent and proven retail sales leader with a demonstrated track record of hiring and managing multiple production offices across several states. We are a profitable and well capitalized full-service mortgage banker offering an entrepreneurial customer-focused sales support environment, FNMA/FHLMC/GNMA direct status and are positioned to compete for more growth with state-of-the-art operations/support technology. This new Regional Production Manager position will report to the CEO. If you are interested in joining a dynamic group of mortgage bankers and building a dynamic production team, please contact Paul Peters, CMB.”
Franklin American Mortgage, a Division of Citizens Bank, is looking for an experienced Underwriting Manager to help launch a new Jumbo product suite for Wholesale and Correspondent channels in early 2021. This unique opportunity will allow the Jumbo Underwriting Manager to build their team and develop processes ahead of the launch. The ideal candidate will be a seasoned mortgage underwriting professional with recent and extensive Jumbo experience, and at least five (5) years of managerial experience. This experience should include significant exposure to underwriting loans for sale into the private whole loan and securitization market, as well as for portfolio. Strong communication skills and a high standard for exemplary customer service are required. The Jumbo Underwriting Manager can work out of either of FAMC’s Franklin, TN or Dallas, TX offices. Learn more or apply now!
AmeriHome Correspondent continues to grow its Non-Delegated business, and its Non-Delegated team! AmeriHome is excited to announce that Julie Janssen has joined its sales team as a Non-Delegated Account Executive in the North Central and North East Division! AmeriHome is still staffing up and has many other great opportunities available! Why AmeriHome? Just ask its employees. One Production Support Manager enthused, “There are so many wonderful things about working for AmeriHome. What has captivated me most is the culture. AmeriHome strives to create an environment where employees are free to express their creativity, and be a part of innovative solutions to drive the company forward. The leadership team is very accessible and help to foster a great sense of community.” Positions are available both full time and part-time in Southern California, Texas, and remote! Visit AmeriHome’s careers page to view all open positions, and submit resumes to email@example.com to schedule an interview.
A lender headquartered in the Northwest is searching for a remote Capital Markets Product Specialist to increase loan originations, develop solid relationships with its retail branches, departments, and investors to successfully provide the loan products that best serve the Lender’s execution and profitability in the capital markets. The person, who may currently be a processor or lock desk person, will assist in product roll out, marketing, education, and trainings. Must be knowledgeable with FNMA/FHLMC/GNMA as well as investor specific products. Submit confidential resumes to me for forwarding.
Planet Home Lending, LLC has hired a Maureen Morais as controller in the servicing operations division and Desiree Kirkland as vice president of national closing.
radius financial group inc. announced Michael Wilberton is joining as its new Chief Financial Officer (CFO)