Why is it that every time I call some place, I hear the recording, “Wait times to speak to a representative are longer than normal.”? Why can’t I ever figure out a “normal” time to call? I bet that the Federal Emergency Management Agency FEMA) always has operators who pick up the phone. And the Agency needs them, given the rain and floods, wildfires, hurricanes, and windstorms that have hit the United States recently. FEMA’s disaster declarations drive the policies and procedures of lenders and investors, especially in terms of collateral and credit. Lots of disaster news below. And looking ahead, thank you to Carol K. who sent this NYT article titled, “How Climate Migration Will Reshape America.” “Millions will be displaced. Where will they go?” I realize that some will say there is no climate change, or that it is all political blatherskite. But the financial markets are cognizant of a new class of dangerous debt (climate-distressed mortgage loans) that might already be threatening the financial system.

Lender Products and Services

Informative Research is proud to welcome Angela Reeves as its newest Client Success Manager. Previously, Reeves served as a National Account Manager with Factual Data for over a decade, managing credit services for multi-branch national financial institutions. “Angie’s industry connections and history of developing strong relationships with clients is the perfect fit for what we're trying to achieve at IR,” said Kelly Richards, Head of Client Support. Reeves will connect with key business stakeholders and prepare client business reviews to help them meet and exceed their business goals. Additionally, she’ll coordinate with cross-functional internal teams to continually streamline the customer experience. “Learning and sharing the knowledge I’ve gained to help others is my passion,” Reeves commented. “Within Informative Research, I’ve found that same passion, positive energy, and enthusiasm paired with a focus on innovation. I’m so excited to be on this team.” Read more here.

Monster Lead Group tells us that direct mail continues to be a critical component of originating mortgages and has released a helpful guide on the best practices of direct mail marketing in mortgage. This 12-page guide on the seven essential practices they use in every direct mail campaign explains their techniques for producing high return, high converting direct mail campaigns that led to more than 400,000 unique calls and $10 Billion in loan originations for their mortgage lenders in 2019. View the guide here.

ACES Quality Management Q1 2020 Mortgage QC Trends Report tells us that EPDs are rising, but the critical defect rate hit a three-year low. Overall critical defect rate of 1.56% matched the lowest rate in three years. Defects attributed to the credit and income categories rebounded after climbing higher in Q4 2019. Increases in the share of refinances (5%) and conventional loans (2%) contributed to the improvement in the overall defect rate. Early Payment Defaults are on the rise. “The combination of falling interest rates, employment numbers not yet impacted by COVID-19, and steady property appreciation all contributed to increases in the share of both refinances and conventional loans, which in turn drove the continued decrease in the overall critical defect rate observed in Q1 2020,” said ACES EVP Nick Volpe.

Sales Boomerang notifies mortgage lenders when someone in their database is ready for a loan. “Look at the opportunity cost you have by not having Sales Boomerang. Last year we closed over $72M in loans that we would have lost from not having Sale Boomerang.” (Stephen Barton, EVP, Eustis Mortgage) “In the first 4 months we took in $180M in applications and we have about 100 LOs. That is a significant impact to our business. My top performing LO attributes 25% of her business to Sales Boomerang alerts.” (Katherine Campbell, CMO, Assurance Financial) The numbers speak for themselves: 20x Avg. ROI, $240 Avg Cost Per Acquired Loan, 10-20% Avg Lift to Loan Volume. Want to see exactly how much you lost this year? Request your report today. We will show you which competitor took your deal, what was the loan amount, what type of loan it was, and much more.

Overstated Credit Scores cause expensive mistakes. Understated Credit Scores exclude many low-risk, high-margin borrowers who need credit the most. The Mortgage Risk & Fairness Score is the most “predictive & prescriptive” alternative assessment of credit risk, behavior, and resiliency. This incremental intelligence tool is delivered top-of-funnel in a simple report that increases visibility, speed, capacity, volume, and margins, while decreasing risk. It can also be pulled by servicing for more informed accommodation; run across servicing port’s for monitoring, mining, and recapture; and appended in bulk for loan and MSR trade due diligence. Bottom Line: ‘The Score’ is an easy and inexpensive way to leverage state-of-the-art AI and ML algorithms, and years of experience to supercharge risk management, streamline sales and op’s, and promote financial inclusion to boot. It's plug-n-play, validated (top 10 bank) and vetted (CFPB, OCC, Fed).

Virtual Events

With purchase applications up 30% and refinances up 51% year-over-year, there’s no doubt that we are in the middle of a boom market. Now, every loan officer is wondering how much longer it will last. Home Point Financial is here to help with that today at 2:00pm EST! As part of its new Home Point Elevate LIVE series for loan officers, Home Point’s Will Pendleton will be joined by Freddie Mac Deputy Chief Economist Len Kiefer and Shelby Elias, CEO of United Wholesale Lending, to discuss the most likely market scenarios and expert strategies to help loan officers plan for what’s next. To register for today’s live event at 2:00 p.m. EST, click here.

Discover how you can deliver the consumer experiences needed to acquire and retain loyal customers at Blend’s virtual summit on mastering digital agility, September 22-23. Hear actionable advice from industry leaders and gain access to innovations that will allow you to quickly launch new products and stay ahead in today’s rapidly changing landscape. Save your spot.

The California MBA’s Western Secondary Market Conference is just around the corner, being held virtually September 23 and 24. To thank you for being a loyal subscriber, I am offering you a complimentary conference registration! Use this link and enter the promo code Chrisman to get your free registration. Hear from the star of Undercover Billionaire and CEO of Kind Lending, Glenn Stearns, as well as the CEO Panel, mPower Leadership Panel, Capital Markets Update, and a discussion about the latest trends in Mergers and Acquisitions. Plus some fantastic musical entertainment, featuring a live performance from an award-winning star! Look forward to seeing you in the virtual portal next week.

If you are an originator, operations professional or leader in a company, it is not too late to register for NAMMBA's CONNECT 2020 Virtual Conference. The conference is today and tomorrow. Can't attend the entire event? Register here and get a copy of the conference sent to your inbox.

Disasters and Agencies

First, recall that several U.S. Government Agencies jointly published proposed Interagency Questions and Answers Regarding Flood Insurance that reorganize, revise, and expand the existing Interagency Questions and Answers Regarding Flood Insurance. The Agencies requested comments on these proposed Interagency Questions and Answers Regarding Flood Insurance (herein “Proposed Q&As”) prior to September 4. The addresses and methods for submitting comments to one or more of the Agencies is set out on pages 40442 and 40443 of the above hyperlinked Federal Register.

To date, the President has declared a major disaster in every state and most territories in connection with COVID-19. The following guidance applies to all areas covered by an additional Presidentially Declared Major Disaster Area (PDMDA) during the COVID-19 pandemic. FHA-insured forward mortgages secured by properties in a PDMDA are subject to a 90-day foreclosure moratorium following the disaster declaration. In PDMDAs, FHA provides mortgagees an automatic 90-day extension from the date of the foreclosure moratorium expiration date to commence or recommence a foreclosure action or evaluate the borrower under HUD’s Loss Mitigation Program.

For borrowers who are already on a COVID-19 Loss Mitigation Option, including a forbearance before the date of the PDMDA, mortgagees must continue to follow the loss mitigation guidance in ML 2020-22: FHA's COVID-19 Loss Mitigation Options. For any buildings in a PDMDA that are substantially damaged, mortgagees must follow the guidance in Single Family Housing Policy Handbook 4000.1 Section III.A.3.c.iii, Monitoring of Repairs to Substantially Damaged Homes. This requirement applies to all properties covered by an additional non-COVID-19 Presidentially Declared Major Disaster Area during the COVID-19 pandemic, including those already under a COVID-19 Loss Mitigation Option, such as forbearance.    

Fannie Mae Servicing Guide Announcement (SVC-2020-04) provides updated information on  allowable foreclosure attorney fees in Hawaii. Other miscellaneous revisions include Incorporation of disaster payment deferral with the addition of references to payment deferral throughout the Guide as applicable. Forbearance without achieving QRPC in a disaster event and Master Agreement updates.

USDA Rural Development issued a Bulletin providing guidance on servicing relief for borrowers impacted by Presidentially Declared Disaster (PDD) areas during the COVID-19 Pandemic.

Fannie Mae issued a reminder to those impacted by Hurricane Sally and the West Coast Wildfires of available mortgage assistance and disaster relief options. In addition, homeowners currently on a COVID-19-related forbearance plan who are subsequently impacted by the storm or fires should contact their mortgage servicer to discuss options.

Fannie Mae also offers help navigating the broader financial effects of a disaster to homeowners with a Fannie Mae-owned mortgage and renters living in Fannie Mae-financed properties through its Disaster Response Network, including: A needs assessment and personalized recovery plan. Help requesting financial relief from FEMA, insurance, and other sources includes web resources and ongoing guidance from experienced disaster relief advisors. Homeowners and renters can call 877-833-1746 to access Fannie Mae’s Disaster Response Network or other available resources.

Freddie Mac confirmed disaster relief options for homeowners affected by Hurricane Sally and the ongoing wildfires.

(More tomorrow on how investors and lenders have reacted.)

Capital Markets

U.S. Treasuries, and Agency MBS, ended Wednesday pulling back slightly and the UMBS30 basis closed wider following poor retail sales data in the morning and the latest Fed events in the afternoon, which were relatively upbeat. Total retail sales pointed to some slowing in retail spending activity following the expiration of enhanced $600 in unemployment benefits expired in July. Both those August retail sales and the latest industrial production figures indicate that the pace of the economic recovery slowed in August.

The September FOMC Statement indicated that short-term/overnight rates will remain at current levels until maximum employment is achieved and inflation exceeds 2 percent for some time, even if inflation is not expected to exceed 2 percent for at least three more years. The implication is obviously that rates will not be raised anytime soon. Investors were looking to Fed Chairman Powell for more details on how the central bank plans to accelerate the U.S. economic recovery, and he lobbied for more fiscal stimulus during his press conference, though that remains to be seen whether any agreement can be reached in Washington. The Fed could eventually dial up the rate of its asset purchases if inflation does not soon show signs of moving up toward 2 percent.

Following yesterday’s FOMC decision, markets this morning are digesting the latest decisions from the BoJ and BoE. The domestic calendar is also underway with a spate of releases. Initial claims for the week ending September 12 (-33k to 860k, seasonally adjusted), continued claims for the week ending September 5 (-98k but still around 29 million), housing starts and building permits for August (1.416 million, -5.1 percent, and 1.47 million), and the Philadelphia Fed Survey for September (-2.2 to +15.0, as expected). Later this morning brings Freddie Mac’s Primary Mortgage Market Survey for the week ending September 17, and the Treasury selling $12 billion of reopened 10-year TIPS. The NY Fed will conduct two MBS FedTrade operations totaling up to just $3.5 billion starting with $669 million UMBS15 2 percent followed by $2.9 billion UMBS30 2 percent and 2.5 percent. The Desk will then report on MBS purchases for the week ending September 16 later in the afternoon. We begin the day with Agency MBS prices better/up by a solid .125 and the 10-year yielding .65 after closing yesterday at 0.69 percent.


Jobs and Transitions

PHH Mortgage, a subsidiary of Ocwen, is looking to fill Loan Originator, Underwriter and Processor positions as well as management positions in Underwriting, Processing, Marketing and Learning and Development. The Company’s rapidly growing Originations business recently announced that total lending volume for July and August grew by 62% over the same period last quarter and by 16X over the same period last year. In addition to working with a team that is growing, as well as innovative, strategic, and collaborative, our compensation package includes a 401k with company match, medical, dental, vision, paid time off, tuition reimbursement and more! Apply today at our career site or email your resume to Michelle Cisneros.

AmeriHome Mortgage, the 3rd largest correspondent investor and 11th largest mortgage lender in the country, is hiring for several positions! AmeriHome’s Consumer Direct division is hosting a virtual job fair on Wednesday, September 23rd. They are hiring Loan Officers, Processors, Underwriters, Funders, and more! Email Manny Sanchez to set up an interview. AmeriHome’s Correspondent Division is also hiring for several positions, including Underwriters, Operations Account Managers, Loan Review Specialists, and Operations Managers. AmeriHome Correspondent hosts weekly virtual job fairs every Thursday. Email Mitchell Tsai to schedule an interview. AmeriHome has competitive compensation and benefits, and so much more! AmeriHome provides training, career pathing, and mentorship to help their employees further their careers. For example, their Underwriting Career Path Program has helped a significant number of employees move from loan review and client support positions into underwriting positions! AmeriHome is invested in the long-term success of their employees. Visit their careers page to view all open positions!  

Churchill Mortgage announced that Randy Starkweather has joined the company as CFO, responsible for overseeing Churchill’s financial operations and performance.