Would you transfer a quarter million smackers if your boss told you to? Let’s just remind every lender, and every bank: you have the money and others want it. Here a scammer successfully “deep faked” a CEO's voice to fool an underling into transferring $243,000. Yes, rates are great (Fed Funds are 2.25%, but the 2 year T-Bill yield is about the same as the 10-year T-Note, and the 30-year Treasury bond is yielding 1.95%), and pipelines (e.g., future income) are brimming, but all it takes is one mis-sent wire to wipe out a lot of profit. And speaking of profit, the 2nd quarter was a good one for independent mortgage banks and mortgage subsidiaries of chartered banks: they reported a net gain of $1,675 on each loan originated in the second quarter.

Lender Products and Services

Spring EQ Wholesale, the industry’s premier second lien lender, offers 95% combo, 100% CLTV stand-alone and pays Lender Paid Compensation (LPC) up to $10,000. Spring EQ is excited to announce added flexibility for approved broker partners and  is now offering LPC to 2% of the loan amount, and Borrower Paid Compensation (BPC) for those partners who wish to originate at par. Spring EQ is now offering fixed rates that are below the prime rate, which is the HELOC rates index, a fiscally responsible, budget friendly way for clients with needs to tap their available equity. And Spring EQ, a specialty lending company focused on home equity solutions, last month announced a Series B funding round led by Tilden Park Capital Management, an alternative asset manager. The funds will drive growth in Spring EQ’s wholesale division to better serve brokers, add a correspondent lending channel, and expand product offerings. For more information, or to partner, please contact your Account Executive or visit Spring EQ Wholesale here.

When reviewing vendor contracts, you don’t want to feel like you’re betting on a losing hand. After all, these documents are critical to mitigating the risks lenders face in their vendor relationships. The first step to reducing your risk and ensuring a winning relationship is obvious but often overlooked – make sure all vendor contracts are fully executed AND on file. Don’t gamble with your contract reviews! Learn more about the 14 most critical vendor contract provisions. Download MQMR’s free white paper, “Rolling Sevens: The Top 14 Provisions Every Lender Should Examine When Reviewing Vendor Contracts” today.

“You know us for our rates and programs, you love us for our service, now get to know our Renovation programs. loanDepot Wholesale makes Renovation lending easy. Our Renovation Lending Suite includes programs designed to accommodate both large and small home improvement and repair projects. Giving you more options for your real estate partners and clients to meet their homeownership needs. Flexible solutions that include FHA 203k Limited and Standard as well as FNMA HomeStyle®. loanDepot Wholesale – proud sponsor of improving homes across America. Contact us today to learn more. Rates, terms, and availability of programs are subject to change without notice - www.nmlsconsumeraccess.org.”

One warehouse lending organization gets noticed in the marketplace for doing things the right way. ResX Warehouse Lending is a division of Connecticut-based United Bank, a respected commercial lender with a long track record of building long-term relationships with its clients. They’re not new to the warehouse lending business, but if you haven’t heard the name yet, it’s only because they’re not promoting themselves with every new trend or fad to hit the market. These are serious experts looking to build relationships with clients like you who are focused on sustainable growth…one relationship at a time. ResX Warehouse’s clients rave about the lender’s proactive approach. And that expertise is provided by seasoned, top-level professionals. Customers also love their commitment to delivering more effective and efficient processes. Combined with United Bank’s full-service array of products and resources, ResX is the ideal platform for the correspondent focused on real growth. Learn More. 

If other industries can boast amazing customer satisfaction, who says the servicing industry can’t too? 2019 HousingWire Insider Award winner, TMS’s Johnny Spagnola, has redefined the mortgage customer service experience post-closing, setting chart-topping records of 98% Customer Satisfaction, a level that surpasses any industry. It’s time to put the “customer service” back into “servicing.” Learn more about TMS subservicing here. 

“Vacation Rental or Long-term Rental? Visio Lending is the nation’s leader in Non-QM loans for buy and hold SFR rentals. No income verification or tax documentation. 30-year terms (no balloons), buy ups and buy downs on rates and pre-pays, I/O available. Through our top-notch Broker Program, brokers earn up to 3 points per closed loan; Visio always pays the broker the first 1%. Additionally, Visio Brokers can count on a designated Account Executive, in-house processing, and one-year broker protection.”

Last September, HousingWire reported that America’s 44 million homeowners have more home equity than ever before. This $6 Trillion of untapped equity could lead to a surge in HELOC originations, but when? New investors in the market have been preparing quietly for a HELOC surge yet the demand appears to be marginal. Lenders that offer home-equity loans need servicers with sophisticated customer access tools. According to Randy Lightbody, Chief Revenue Officer of Computershare Loan Services, “The goal for any asset owner is to optimize the draws on the HELOC. This requires multiple points of access and tools that exceed consumer expectations. SLS has experienced an average usage rate of 13 transactions per month and one ATM withdrawal per month. For the HELOC market to fully function, it requires a cheap and effective origination process, liquidity for the mortgage banker, and a servicer that provides the functionality to support the product.”

Stearns Lending Wholesale is excited to invite you to connect at the NAMB 2019 at Caesar’s Palace in Las Vegas, September 14-16. Meet the Stearns Wholesale leadership team and learn more about our “Strong History and Bold Future” and how our Account Executives create a “Personal Touch” and put our brokers first. Learn first-hand how we are poised for growth and prepared to serve the Mortgage Broker with new product offerings, new pricing specials and great technology enhancements. If you would like to set-up a time to speak with the Stearns Wholesale team while at the NAMB 2019 conference, please email us.

Vendor and Tech Tidbits

Lenders, the Loan Origination System (LOS) Survey in STRATMOR Group’s 2019 Technology Insight Study is now open. If you want insight into the functionality and resource requirements for the LOS available in the market today, participate in this survey and get the answers you need. It takes just five minutes to complete and lenders who participate receive the survey report for FREE. Complete all the surveys in the study and you’ll have the entire 2019 Technology Insight Study for the investment of your time! Take the LOS survey now and rate the LOS you’re using.

Want a new vendor name to track? A group has “recognized the potential value of a solution to streamline access and information sharing” by creating Elphi, a financial services startup for the mortgage industry. “Elphi provides a front-facing customer interface and a back-office workflow system for borrowers and lenders, respectively, to send and receive the information needed to create and monitor a mortgage throughout its life cycle in a regulatory compliant manner.”

Flagstar Bank and Detroit FinTech Bay announced the first startups to participate in the Flagstar Mortgage Tech Accelerator Program. The three companies are Brace, which focuses on servicing nonperforming loans, boost.ai, which develops A1-based chatbots for the banking sector, and Home Captain, a real estate SAAS technology company that acts as a conversion optimization system. The program focuses on startups active in developing innovative technology solutions for the mortgage industry. It is the first and only accelerator program in the United States exclusively dedicated to mortgage technology. Business plans for the start-ups will be developed at an official gathering at the Detroit hub in TechTown this September to kick off the program.

Recently MCT announced the industry's first client-wide rollout of new functionality that delivers real-time pricing and automates loan commitment for PennyMac clients. “MCTlive! Rapid Commit, which was previously limited to agency executions, speeds up the committing process, ensured data integrity and optimizes best execution for all commitments. After completing best execution analysis and determining loans to be sold to PennyMac, RapidCommit intelligently selects products and delivers commits for all loans with a single click including execution of the tri-party agreement required for AOT transactions.”

Simplifile announced that the Town of Westerly has joined its e-recording network following the passage of a law authorizing e-recording statewide in Rhode Island. Rhode Island joins 47 other U.S. states that have authorized e-recording of deeds, mortgages, and other documents to enable faster and more cost-effective land record transactions. Only Kentucky and Vermont have yet to begin e-recording.

First Allegiance announced its latest new product: Valuation Occupancy Inspection. First Allegiance has combined the best of two services: Drive-by BPO's and Occupancy Inspections. Get the latest value of a property and determine occupancy with one order request. Geared toward early stage delinquency borrowers, foreclosure, and REO situations.

Capital Markets

Consumers consumption makes up the largest portion of GDP and consumers continue to support the current economic expansion. Despite a downward revision in second quarter GDP from 2.1 to 2.0 percent, personal consumption expenditures increased from 4.3 percent to 4.7 percent; the highest quarterly level in almost five years. July's personal consumption data showed a 0.6 percent increase, suggesting the third quarter is off to a good start as well. Additionally, consumer confidence remains strong despite volatility in the financial markets, uncertainty surrounding trade and recession chatter. On the flip side, residential construction continues its decline and business fixed investment was down for the first time since the third quarter 2016. A new round of tariffs went into effect over the last weekend that will more directly expose consumers to rising prices. The ongoing trade uncertainty is expected to be a headwind to capital expenditures in the near-term. Manufacturing has been on a downward decline this year, which is likely to continue given the current global environment. Given these conditions, markets expect another 25-basis point rate cut following the upcoming FOMC meeting later this month.

It was a volatile start to a short week Tuesday, including the 10-year closing yielding 1.47 percent, the same level at the 2-year, in what was another day with reminder of global trade tensions and disappointing data points. Domestically, the ISM Manufacturing Index for August registered a contractionary figure, its lowest print since early 2016, which will engender economic slowdown concerns, as well as worries about the impact of tariff actions on business investment. Internationally, China's August Manufacturing PMI, Japan's August Manufacturing PMI, Germany's August Manufacturing PMI and the U.K.'s August Construction PMI all fell beyond expectations. Separately, ECB policymaker Muller, said he does not support a resumption of asset purchases at this time amid reports ECB policymakers are considering a tiered rate cut and reinforced guidance. And British Prime Minister Johnson lost his party's parliamentary majority, with MPs now expected to attempt to pass a bill that will block a no-deal Brexit on October 31. Finally, a 15 percent tariff on $110 billion worth of imports from China went into effect on Monday. China retaliated with a tariff hike of its own. The market had little reason to be hopeful that the U.S.-China relationship can improve in short order, considering trade negotiators from both sides have yet to even agree on the specifics of their next meeting.

Winter is coming. Although pipelines are full, the Mortgage Bankers Association reported that mortgage applications for the week ending August 30 decreased about 3 percent from one week earlier after dropping over 6% the week before. We’ve had some non-critical trade numbers ($54 billion deficit), and later this morning are the Redbook same store sales for the week ending August 31, the ISM NY Business Conditions Index for August, and a long list of Fed speakers (NY Fed President Williams, Dallas’ Kaplan, Fed Governor Bowman, St. Louis’ Bullard, Minneapolis’ Kashkari, and Chicago’s Evans). In the afternoon, the latest Beige Book will be released ahead of the September 17/18 FOMC meeting. Additionally, the Fed will conduct two FedTrade operations in which they will purchase up to $1.425 billion 7- to 20-year treasury coupon securities followed by up to $178 million UMBS15 2.5 percent. We begin the day with Agency MBS prices worse a few ticks and the 10-year yielding 1.50% based on Hong Kong’s leader withdrawing legislation that potentially allowed extraditions to China and easing political tensions in the U.K and Italy.

Jobs 

“Finance of America Mortgage (FAM), a national mortgage company headquartered in Horsham PA, has several opportunities for Underwriters in our very busy TPO Division. Remote positions are acceptable and we have many locations throughout the company for those that prefer to work in an office. Conventional, DE, SAR and Jumbo – experience in any or all will be considered! Great opportunity for career growth in this quickly growing channel. Come join the FAM! Send your confidential resume to us to start the conversation.”

WEST, a Williston Financial Group Company, has appointed Darcy Patch as VP of Marketing, Lender Services. “In this newly created role, Darcy will lead the marketing and communications strategies for WFG’s Enterprise Solutions group.” Congratulations!