“It was the third of September that day I’ll always remember… Papa was a rolling stone… Wherever he laid his hat was his home. And when he died, all he left us was a loan…” Or may it is “alone.” Regardless, the talk here in Orlando at the well-attended FAMP Annual Convention is about appraiser, and appraisal, problems industry-wide. Many appraisals are expensive, few appraisers are entering the industry, and originators everywhere are seeing delays. On the flip side there is talk of technology and Agency policies changing the appraisal situation. Stay tuned! The talk is also about wholesaler news, and the performance of the recent mortgage IPOs and their dividends. (The stock market is not the economy. Did you know that Apple, Alphabet, Facebook, and Amazon account for roughly 25 percent of the total $33.3 trillion market value of all the companies in the S&P 500?) Rocket and Guild pay no dividends. UWM’s yield is about 5.5 percent, Home Point 15 percent, loanDepot 3.9 percent, and Penny Mac 9.7 percent. Dividends, of course, always run the risk of being cut by the company, especially when their internal rate of return is not as high. If earnings are weak, or the company would rather reinvest the money into its own growth than pay investors, the dividend may be cut. Perhaps the company is saving up money for a big acquisition. (Today’s audio version of the commentary is available here and this week’s is sponsored by Floify. Loan originators, mortgage brokers, and wholesale lenders, expedite your mortgage process with Floify POS, Floify+, and Floify TPO. Visit floify.com to schedule a live demo of any one of these three powerful loan origination solutions.)

Broker and Lender Products and Services

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Agency News

There is a lot of buzz about how, in December, Fannie will be averaging credit scores if one of the borrowers has a score less than 620. But there is plenty of other F&F changes now.

Fannie Mae has increased its commitment to the low-income housing tax credit market. Fannie Mae’s Press Release announced a New Annual LIHTC Investment Cap, raised to $850 Million from $500 Million. The Federal Housing Finance Agency (FHFA) approved the increase, effective immediately. “FHFA’s increase in the cap allows us to continue to play a leadership role in supporting underserved markets and projects, including rural, supportive housing developments, and disaster impacted areas,” said Dana Brown, Vice President, Multifamily, Fannie Mae. For more information about Fannie Mae’s Low-Income Housing Tax Credit program, visit Fannie Mae’s website.

Fannie Mae is taking an important step to remove systemic barriers to homeownership for people with a strong rent payment history but a thin credit file. A groundbreaking update to Desktop Underwriter® will allow lenders to consider a history of recurring rent payments in assessing mortgage eligibility. Starting September 18, Fannie Mae will enable lenders, with the borrower’s permission, to use bank account data to identify 12 months of consistent rent payments. Visit Fannie Mae’s Research and Insights page, Perspectives Blog and listen to Hugh Frater, Chief Executive Officer as he discusses Unlocking the Door to Homeownership.

Interested in reading other articles about Fannie Mae’s dedication to correcting housing inequities and encouraging the housing system to develop new ways to serve all of society safely and fairly? The Wall Street Journal: Fannie Mae Aims to Make Home Loans More Accessible. Mortgage finance giant to help lenders factor rent payments into loan-underwriting process. Urban Institute’s Urban Wire Blog: Fannie Mae’s Decision to Incorporate Rental Payments into the Mortgage Origination Process Will Expand Access to Homeownership Over Time. USA Today: Homeownership in reach for more as Fannie Mae to include rent payments in mortgage approval process.

Freddie Mac issued Guide Bulletin 2021-29 providing updates related to Home Possible, retirement of A-minus and Affordable Merit Rate mortgages, a new requirement related to paystubs, property eligibility and manufactured home appraisal requirements for Freddie Mac CHOICEHome® mortgages, single-wide manufactured homes, and group homes.

Freddie Mac updated COVID-19 selling-related FAQs to align the guidance provided with current requirements. The revised FAQs are labeled with a “9/1/21” date for easy identification. The updated FAQs are not related to the topics included in Guide Bulletin 2019-29.

PennyMac is aligning with all the Fannie Mae updates announced in SEL 2021-07 and Freddie Mac Bulletin 2021-27 for all conforming loans. These updates include Fannie Mae’s clarification to its policy under prohibited refinances, and policy updates to address the use of credit card reward points, Freddie Mac’s revised requirements to provide additional flexibility, for cash-out refinances when none of the borrowers have been on title to the subject property for at least six months prior to the Note date. View PennyMac Announcement 21-66 for details.

FCM Wholesale September 1st Announcement - Conventional COVID-19 temporary flexibilities

FCM Correspondent September 1st Announcement - Conventional COVID-19 temporary flexibilities

FCM Wholesale Announcement -THDA DPA Program Changes: Loans locked on or after September 13, 2021, *All loans currently locked, must close with existing rate lock confirmation terms. New DPA programs below are eligible for origination and disclosure immediately but may not be locked with THDA until on or after Monday, September 13, 2021.

Borrowers whose income has held them back may now be able to refinance with New American Funding thanks to Freddie Mac’s Refi Possible program. The program requires that eligible borrowers receive a savings of at least $50 on their monthly mortgage payment and a reduction of their interest rate of at least 0.50%. Homeowners are also eligible to receive $500 credit for towards an appraisal if one is obtained.

PRMG announce the release of the new Freddie Mac Refi Possible product for all channels. Designed for borrowers who currently have a Freddie Mac owned mortgage, a refinance option that offers expanded eligibility for borrowers whose income is at or below 80% of the area median income (AMI) limit. Note this is the Freddie Mac version of the Fannie Mae RefiNow product. Learn more about this product with PRMG’s on-demand webinar, found on PRMG University's YouTube Channel.

Mountain West Financial Wholesale Bulletin 21W-059 announced the expiration of certain Freddie Mac COVID 19 temporary credit underwriting requirements and provided an overview of those remaining.

Flagstar Bank implemented the new Freddie Mac Refi Possible program, effective Wednesday, September 1.

loanDepot Wholesale updated its Conventional Lending Guide related to Verbal Verification of Employment, Auto Allowance, Alimony & Child Support Payments, and Builder Model Leaseback.

Recently, Fannie Mae announced an update to the credit score used by Desktop Underwriter®

(DU®) Version 11.0 for loans submitted or resubmitted to DU on or after September 18, 2021. For loans with more than one borrower, DU will use an average median credit score when determining if a loan meets the minimum credit score requirement of 620. Arch MI supports the change for loans using its EZ DecisioningSM program, its Underwriting Manual will reflect the updated requirement. For more information, refer to the ARCH MI Customer Announcement.

loanDepot updated its Conventional Lending Guide regarding Direct Gift Payments Toward Earnest Deposits and revised information on Departure Residence in the Jumbo Advantage Express Lending Guide.

Wells Fargo Funding updated its policy on benefit-to-borrower compliance requirements for conventional Conforming Prior Approval Loans to differentiate between court-ordered and non-court-ordered removal or buyout of a coborrower, effective September 20, 2021. Form 23 for co-ops on Non-Conforming Loans have been updated, effective August 30, 2021. Effective September 27, 2021, Wells Fargo Funding will require Form SSA-89 version 12-2020 for conventional Conforming loans. Newsflash C21-044 is available on Wells Fargo Funding home page after signing.

Capital Markets

In a free-market economy prices are driven by supply and demand. September is typically a significant month for U.S. corporate bond offerings, but banks and investors expect even more issuance this year. Some borrowers are eager to get their debt placed before rising inflation and the ongoing economic recovery send interest rates higher.

Looks like we are finally out of the holding pattern that characterized this week in the run up to the jobs report. It wasn’t all smooth sailing getting here. Our economy is driven by housing and jobs, and this week the focus is on jobs. We saw that initial jobless claims (340k) remain historically elevated and ADP said the economy created about 225k less jobs in August than expected, meaning it looks like the acceleration in job growth associated with a reopening economy seems to have petered out. Regardless, today’s payrolls date will help shape bets on the path of both the Fed's policy tightening and interest rates.

The consensus estimate for nonfarm payrolls was +740k. But here we are with the August payrolls report showing nonfarm payrolls clocking in at +235k, a big disappointment, the unemployment rate down to 5.2 percent, and hourly earnings were +.6 percent, a huge amount. There’s the usual jawboning about the labor participation rate, states whose unemployment benefits have ended, and so on. This will certainly allow the Fed to postpone any tapering talk.

Later this morning brings the final August Markit services PMI and ISM non-manufacturing PMI. The Desk will purchase up to $1.99 billion GNII 2% and 2.5% in the sole MBS purchase operation today. We begin the day with Agency MBS prices nearly unchanged from Thursday and the 10-year yielding 1.28 after closing yesterday at 1.29 percent after the employment data and ahead of the holiday weekend.

Jobs and Promotions

A Top 30 National Mortgage Lender is looking for an individual with DTC experience and a keen understanding of the loan process and CRMs. Encompass experience is a plus. This company already has the leads flowing in. There is no cold calling needed or direct mail involved, and they’re not internet leads. This opportunity is not driven by low rates. In fact, 90% of the customers are looking to buy. It’s an opportunity like you’ve never seen before. If you’re interested in learning more, please confidentially email your resume to Chrisman LLC’s Anjelica Nixt for forwarding. Questions may be sent to her as well.

PacRes Mortgage is pleased to announce former President of Finance of America Holdings and founder of Pinnacle Capital Mortgage, Robert Boliard, has joined the ownership team at PacRes. “Robert’s leadership and success in the mortgage industry is legendary,” said Matt Stashin, CEO, PacRes. “Following the founding of the industry-focused accounting firm, Boliard, Takasugi & McBride LLP, Robert launched Pinnacle Capital Mortgage, in 2008. During a time where others saw only dark clouds, Robert saw opportunity. It’s that foresight and vision that Robert brings to PacRes’ national growth strategy,” said Matt. “I promised myself, after stepping away from Finance of America, I would not accept a position until I found a company that matched my business philosophy. A locally focused but nationally powerful brand that embraces the entrepreneurial spirit that built this industry I love. I found that brand in PacRes,” said Robert Boliard. Want to join the PAC? Please contact Eric Wiley, CXO, at 971-645-7087.

Merchants Bank of Indiana, an emerging Correspondent Lender and established warehouse provider, recently announced the addition of Bob Reinagel to its Correspondent Lending team. Bob brings with him over 25 years of experience and is covering the Southeast Region of the US (AL, GA, FL, MS, TN, VA). Merchants offers both a Non-Delegated and Delegated program and prides itself on being built one relationship at a time. Bob joins Kathy Bickett - Northeast, Jeff Cothern - Central, Dan Hastings - Midsouth, David McPherson - West, and Rob Wilson - Vice President.

“Ready to join a growing technology company with an ethical and human centric environment and to surround yourself with talented people who are genuinely excited about the work they are doing? ACES Quality Management is looking for a Sr. Director of Business Development to join our dynamic and collaborative ACES FinTech sales team. You should be a high energy self-starter with a passion for sales to support our mission of bringing our market leading quality control software solution to the mortgage, banking, and credit union industries. Did I mention we were remote only? ACES Quality Management provides the industry's leading software solution for quality control and audit. Our award-winning products and consultative approach help banks, mortgage companies, servicers, lenders, and other organizations in the mortgage vertical better understand loan quality, control it, and convey it. Please apply at our Career Site.”

Ryan Grant joins NEO Home Loans as a Divisional President. Currently ranking as one of the top Loan Originators in the United States, Ryan Grant is a nationally recognized coach, speaker, and trainer in the mortgage business. Grant, along with NEO Co-Creators, Danny Horanyi, Josh Mettle, and Chris Ledlie, created NEO Home Loans because of their collective mission to change the mortgage industry for the better. Grant expresses, ‘We’ve created such a unique mortgage platform because we truly want to add long term value to the clients we serve and we’ve done that by building a system that helps the originator provide their clients with a lifetime of value on their path towards financial freedom’. Grant and the NEO team wanted to create a fully transparent business model so mortgage professionals can always be confident in their product and run a scalable business that allows for great work-life balance. For more information click here.

PRMG (Paramount Residential Mortgage Group, Inc.) is now hiring key experienced Account Executives and Regional Managers for its Correspondent Lending Division. Ranked #5 in Non-Delegated loan volume, PRMG’s Correspondent Division has the operational engine and infrastructure to grow far past such volume. The Division also offers a Delegated delivery solution which continues to grow and support Seller’s needs. PRMG employs over 3000 people across the country is and licensed in 48 states and consistently ranked in the Top 5 of the Top 50 Best Mortgage Companies to Work for in America. Interested candidates please submit all confidential inquiries or resume to Jay Boand, Director of Correspondent Lending.

Gateway First Bank announced the formal appointment of Steven Plaisance as President of Mortgage Banking on August 4, 2021, after serving as interim president since February 22, 2021, during the regulatory approval process. Plaisance will be a key part of the executive leadership team, helping define and set the course for mortgage activities. “We are thrilled to welcome Steven to the Gateway team,” said Scott Gesell, CEO of Gateway. “With his extensive experience and leadership, we’ll be able to align all things mortgage under one umbrella.” Before joining Gateway, Plaisance worked at Arvest Bank for 32 years, serving most recently as President and CEO of the mortgage banking division. Plaisance has served on various advisory boards for Fannie Mae and Freddie Mac. He’s active in leadership roles with the Mortgage Bankers Association, including the current chairman of the Mortgage Action Alliance. Learn more about opportunities at Gateway here.