I know that plenty of folks at United Wholesale read this commentary, and the company is in the news about a merger that will take UWM public valuing it at $16 billion. Perhaps Bruce Springsteen reads this commentary, perhaps not, but he turns 71 today so Happy Birthday Boss! Out of curiosity, what does $500,000 buy, home-wise, in some of the cities and towns he has included in his songs, for the $1,700 monthly payment on a $400,000 loan (yes, I know a buyer doesn’t need to put 20 percent down!)? Let’s start with Lincoln, Nebraska, from “Nebraska”. (This place is nice too.) Let’s head out to California with a “bourgeois house in the Hollywood Hills from “57 Channels (and nothing on).” Across the nation, on the “Streets of Philadelphia”, this place is very stately, as is this one on Shunk Street. While you’re in that area, fix up your hair, head southeast, and meet me in “Atlantic City”: here’s a place on the water or if you don’t want to hassle with the yard, there’s this one. If you want to try your hand at mining, live in “Youngstown” in a nice house with great woodworking or one with a yard. A world away, he sang, “I know a pretty little place in Southern California down San Diego way” in “Rosalita”. (I saw them on this tour in 1980. That aside, I am glad that the real estate used a wide-angle lens.)

Lender Products and Services

In the next few weeks, two well-known subservicers will be opening their virtual doors to Subsequent QC, MQMR’s servicing-focused sister firm and singing, “Be our guest, be our guest, put our service to the test.” While “beef ragout, cheese souffle, pie and pudding en flambe” will not be served, SQC will be sampling favorites from the annual subservicer oversight menu, such as the review of written policies and procedures and meeting with the subservicer’s key servicing personnel, in addition to seasonal specials related to current and on-going procedures as a result of the COVID-19 pandemic. While on-site audits were postponed due to COVID, your subservicer’s compliance responsibilities were not. To learn more about subservicer audits or how you can get a seat at the table for SQC’s remaining 2020 reviews, contact info@subsequentqc.com.

Are your appraisals coming back on time? Many lenders have been frustrated at delays in valuations due to the high volume of refis the past few months. They’re also frequently annoyed at not being able to get ahold of the appraiser to find out what’s going on. If you’re sick and tired of poor communication and service, follow the lead of a lender in Virginia who says “Triserv is a breath of fresh air. My team and I immediately saw a change and a clear-cut winner - Triserv stood apart from the AMCs we used before. We get more than we could ever imagine from Triserv.” To find out more, go to www.triservllc.com/expect-more or contact us at learnmore@triservllc.com. Triserv is a 50-state AMC that has client-specific, dedicated teams on both coasts offering high-touch, personalized service. 

How would it impact your mortgage business if you could do more loans at your current capacity? The old saying, "Time is Money" couldn't be truer in the mortgage industry. Stop wasting time on phone calls from borrowers that you can’t help. Monster Lead Group are the experts at producing high return, high converting direct mail campaigns using Monster’s unique intelligent response marketing. Start answering more calls from borrowers that are ready to transact. Talk to us about launching a turnkey, “done for you” campaign and test us against your current marketing. Schedule a call right now.

Company-Sponsored Webinars and Training

Carrington Mortgage Services, LLC (CMS), a leading wholesale lender and non-delegated correspondent sponsor has brought a comprehensive suite of Non-QM products to the marketplace. Carrington’s Prime Advantage, Flexible Advantage Plus, and Flexible Advantage products were developed to support borrowers that don’t fit Agency or QM standards and have FICOs as low as 550. The Carrington Investor Advantage (DCR) gives experienced and first-time investors a powerful financing tool. Guidelines and rates are on our Wholesale and Correspondent websites. Today at 11am PDT, Carrington is hosting a free webinar with Amy Marsh, “Launch Your Non-QM Business to New Heights,” that'll show you how to originate and close more Non-QM loans. “At Carrington, we have been looking forward to the day the marketplace returned for non-agency products,” said Greg Austin, EVP, Mortgage Lending, for CMS, “and we know how important it is to ensure our product offerings are price-leading and right for both brokers and borrowers.”

You’ve got data for days, but do you have the tools or time to parse it into meaningful business insights? See for yourself how turnkey business intelligence (BI) transforms processes, productivity and profitability by witnessing a “day in the life” of AmCap Chief Analytics Officer Matt Stokes as powered by LBA Ware’s LimeGear BI platform. See how Matt utilizes LimeGear to clear roadblocks in his pipeline, manage sales force productivity and much more. Join this free webinar, hosted by The Mortgage Collaborative, at 2 pm ET tomorrow, September 24. 

Free webinar: Interested in finding out how implementing virtual closing and self-inspections solutions will help you prepare for the unexpected, deliver a great borrower experience (from the convenience of their homes) and help you close more loans… faster? Join ServiceLink’s upcoming webinar:  “Linking Technology and Today’s Borrowers: How You Can Provide the Closing Experience Your Consumers Expect,” being held Thursday, September 24 at 2 PM ET. See these technologies in action with product demos of our latest solutions. The webinar will demonstrate how you can contend with today’s remarkably high origination volume without sacrificing the customer experience. Learn how you can keep pace with your borrowers’ expectations and better prepare for volume fluctuations in this rapidly changing market by harnessing the power of user-friendly remote closing and borrower-inspection options. Register today. 

Despite the continued decline in forbearance numbers to a five-month low (Ginnie Mae’s continues to increase, however), there is still forbearance risk, leading to potential warehouse risk. Lenders, already delivering directly to Freddie and Fannie rather than correspondent investors, will continue selling directly to the Agencies if the correspondent investors out there make a wrong move in terms of forbearance policy.

Brian Levy, author of the mortgage blog Levy’s Mortgage Musings, wrote in response to Monday’s note about the Agencies using indemnification/recourse to demand repurchase of loans that are 120 days past due as a result of forbearance. “Rob, The COVID related forbearance program was mandated by federal legislation and created a moral hazard as noted in some of my previous Mortgage Musings. For the GSEs to now demand repurchase for a forbearance delinquency is an unjustified transfer of the risk of forbearance back to the originator. As an attorney who negotiated and defended numerous repurchase claims coming from meltdown era, I would be inclined to strongly resist any effort to put forbearance induced delinquency risks back on an originator as contractually unwarranted and grossly unfair. I think the whole origination industry should want to vigorously push back against any effort by the GSEs to send forbearance induced risks back downstream.” (Levy also recently posted a new Musings on the CFPB’s QM proposal to use price in lieu of DTI with some observations about mask wearing and hearing loss. Attorney Levy can be reached here.)

The Federal Housing Finance Agency (FHFA) is requesting input on its Strategic Plan: Fiscal Years 2021-2024 (the Plan), which establishes new goals that are necessary for FHFA to fulfill its statutory duties, including responsibly ending the conservatorships of Fannie Mae and Freddie Mac (the Enterprises). Input on the Plan is due by October 5.

Earlier this month PIMCO (Pacific Investment Management Co) wrote to the Federal Housing Finance Agency, warning that plans to end government control of Fannie Mae and Freddie Mac could undermine US housing finance. Per PIMCO, the move could signal a weakening of federal guarantees of the firms' securities, prompting some investors to shy away from holding them and encourage others to sell, leading to higher borrowing costs.

Fannie Mae’s DU validation service will discontinue validation of employment and income using manual verification reports. Lenders may continue to use third-party employment verification vendors to obtain income and employment information, in accordance with the requirements outlined in Section B3-3.1-02 of the Selling Guide. Lenders are encouraged to review information on underwriting and quality control best practices for identifying income and employment discrepancies.

Fannie Mae Selling Guide SEL 2020-05 update includes changes related to accessory dwelling units, the removal of references to refinanced or modified balloon loan policies, and clarifications regarding non-occupant borrowers.

Capital Markets

Mortgage rates have been unusually stable for several weeks now. Sure there’s a little up and down movement, but nothing major. This is a good thing as no lender, or lock desk, or MLO, wants volatility. The latest U.S. economic data from August continues to be broadly positive, but the rate of improvement from the summer is clearly slowing. This raises the possibility that demand will level out causing both manufacturing and non-manufacturing industries to reduce capacity and turning furloughed employees into permanent layoffs. Not a good thing for your clients.

August’s retail sales increased 0.6 percent vs. 0.9 percent in July and were up 2.6 percent over the last twelve months. Given that consumer spending is the largest component of GDP, the market widely expects at least a partial rebound from the second quarter’s historic decline.

Housing starts fell 5.1 percent in August due to a plummet of 22.74 percent in multifamily starts.  Meanwhile single family starts increased 4.1 percent to an annual rate near February’s as people look to leave crowded apartment living for more space. The Federal Reserve made no significant changes to monetary policy at its meeting last week and projected the Fed Funds rate would remain near zero until 2023. The Fed also reiterated its recent change in inflation targeting with a goal to see their broad measure of inflation rise above two percent so that it averages near two percent for a sustained period prior to raising rates.

Looking at bond markets yesterday, U.S. Treasuries rallied 1 bp across the curve and the UMBS30 basis closed mostly tighter due to a large amount of Fed support across three operations and a general rebound in risk tolerance after the equity selloff to open the week. Fed Chairman Powell and Treasury Secretary Mnuchin testified before the House Financial Services Committee. Chairman Powell told the Committee that the economy is improving but has a long way to go before fully recovering. Secretary Mnuchin said that the Treasury can't offer additional assistance without action from Congress as employment and overall activity remain well below pre-virus levels.

Existing home sales increased 2.4 percent month-over-month in August to a seasonally adjusted annual rate of 6.00 million, the third consecutive month of positive sales gains. Total sales in August were up 10.5 percent from a year ago and the strongest since 2006 as demand for existing homes is very strong and certainly a bright spot for the economy. Unlike other parts of the economy, the housing market continues to experience a V-shaped recovery. The downside to that is that supply is constrained, 18 percent lower than 2019, and will push home prices higher the longer it remains that way.

Turning to today’s economic calendar, we have seen that mortgage applications increased 6.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 18. On tap are FHFA house prices for July and preliminary September Markit manufacturing and services PMIs. Markets will have to digest remarks from six Fed speakers: Cleveland’s Mester, Chair Powell, Chicago’s Evans, Boston's Rosengren, Atlanta Bostic, and Fed Vice Chair Quarles. The Desk of the New York Fed will conduct three MBS FedTrade operations that will total up to $5.5 billion, starting with $1 billion UMBS15 1.5 percent and 2 percent followed by $2.9 billion UMBS30 2 percent and 2.5 percent and $1.7 billion GNII 2 percent and 2.5 percent. We begin the day with Agency MBS prices unchanged and the 10-year yielding .68 after closing yesterday at 0.66 percent: another snoozer of a day, rate-wise.

Jobs and Promotions

Caliber Home Loans is proud to announce that Ranjit Bhattacharjee has joined its leadership team as the EVP over Capital Markets and Treasury. In his role, Bhattacharjee is poised to take an accomplished team to the next level of growth and success. Bhattacharjee has a Ph.D. in Pure Mathematics from Boston University and a master’s in Mathematics from Technical University Aachen. He comes to Caliber from New Residential Investment Corp. where he focused on MSR Hedging, Secondary Markets, and customer data analytics and before that served in a number of senior leadership roles at CitiMortgage. Bhattacharjee has a deep and successful background in the mortgage industry. “We’re delighted to have Ranjit as a member of our team. His impressive skills will allow us to accelerate our success going forward”, remarked William Dellal, President of Caliber. Only a best-in-class mortgage lender attracts the finest talent. We’re hiring right now, so visit our website today to view open opportunities. To be immediately considered for Operations or Sales positions, email Jonathan Stanley or Brian Miller respectively.

Three times the charm! Evergreen Home Loans is proud to announce that three times this quarter it was recognized locally and nationally as a best workplace. Puget Sound Business Journal named them the #1 best workplace in Washington in the Extra-Large Company category. This is their 5thyear on the list and second time as a #1 company. Next, Evergreen was named to the Seattle Business Magazine Washington's100 Best Companies to Work For (Large Company) list.And most recently, Fortune and Great Place to Work recognized it as the #1 Best Workplace for Women. The company is humbled by the recognition and proud of associates for bringing the WOW and FUN every day. Looking for a great place to advance your career? Check out the Careers page or contact Chuck Iverson. Great Place to Work and Best Workplaces for Women are trademarks of Great Place to Work Institute Inc.

Are you tired of feeling like you are leaving money on the table when you're trying to build a sustainable work/life balance? Do you feel like you're wasting your time on inefficient processes, menial tasks, and out-of-date practices? What you need is a next-generation mortgage lender to bring your work and your day-to-day into the present, with an eye on an ever-evolving and ever-improving future. Wyndham Capital Mortgage, a leading digital home lending company and Fintech Mortgage Lender, is excited to announce the launch of the new and improved JoinWyndham.com! This will be the one-stop-shop to learn about the benefits of becoming a Fintech Mortgage Lender loan officer, with in-depth information, video testimonials, relevant statistics and more. Wyndham Capital empowers our loan officers by allowing them to focus on achieving the success they crave without sacrificing the work/life balance they want. Find out more at JoinWyndham.com

AHP Servicing announced the appointment of Tim Gillis as President of the company, bringing 25 years of lending and servicing experience to “the country’s only crowd-funded residential loan servicer.”

Sagent announced Uday Devalla is its new CTO and will “will drive Sagent’s vision to accelerate the consumer-first modernization of mortgage servicing by improving loan servicing engagement and consumer experience from the homeowner perspective.”