First off, my apologies to Ernest Hemingway whose name I mistakenly wrote as “Earnest.” Thank you to those who pointed that out. Second… Okay… I see my share of clever and funny videos. But this one is a “must watch,” superb and short, about adults returning to the office. Know any truck drivers? Do they want to work in the UK? BP is closing stations due to a shortage of drivers! In this nation, Costco has begun rationing, and is raising prices, due to shortages. Wannabe homeowners have been grappling with a shortage of housing stock for a while. As homebuilders begin to release more inventory for sale, seasonally-adjusted order trends are bouncing off recent lows. Still, overall sentiment among our contacts continued to soften in August as there is a general feeling that the homebuyer frenzy seen in late 2020 and early 2021 has eased. The Mortgage Collaborative’s Rich Swerbinsky (who has a show at 3PM ET today) suggested nothing in Biden's affordable housing proposals last week will move the needle (enough). “Eliminate/reduce capital gains taxes for non-institutional investors that own investment properties that sell them. Create incentives or remove roadblocks for builders to build homes below area median home value prices. Meanwhile, lenders everywhere continue to grapple with appraisal issues, and the audio version of today’s commentary, available here, is sponsored by Reggora, modernizing residential valuation and helping lenders streamline their appraisal process to close loans quickly and efficiently.

Broker and Lender Products and Services

Has your credit services provider recently been acquired? If so, you may be stuck with a vendor that you didn't originally select and therefore may experience some setbacks. We've put together this complimentary eBook, “Mortgage Credit Industry Consolidation: How to Turn Disruption into an Opportunity” to help you gauge your new credit vendor and guide you through the questions you should ask them to ensure your service levels are maintained, and even improved upon. Click here to download the eBook.

Birchwood Credit Services has provided credit reporting solutions to financial institutions for over thirty years. We’re passionate about what we do because we believe it matters. Our proprietary bundled pricing models guarantee all add-on fees and back-end processing costs up front so there are never any additional “surprise” fees. In addition to eliminating hidden costs, these models improve TRID compliance and lower your credit expenses.”

You update your apps on your phone; are you hesitating to update your business processes? If you don’t have the ability to update the configuration and programming of your automated processes, your system isn't working for you. Build and customize automation across the whole organization with Richey May’s RM Automate. From POS to underwriting, to loan delivery and trailing docs, our team will work with you to reimagine the entire loan origination process. Our exclusive, end-to-end platform streamlines and optimizes your entire organization by automating manual, repetitive work and freeing up your team to focus on exceptions and more high-value tasks. Contact us to schedule a demo today to see how intelligent automation is changing the game for lenders.

The words ‘million’ and ‘billion’ share all but one letter, making it hard to remember just how wide the divide is between their respective values. For some perspective, consider that one million seconds is 12 days — whereas one billion seconds is 31 years. Speaking of mind bogglingly big numbers, last week alone lenders using Sales Boomerang received 44,800 notifications with a total potential volume of over $12.5 billion. Of those, the company’s credit-qualified Loan Scenario Alerts accounted for 2,240 notifications with a potential volume of $627 million. Loan Scenario Alerts tell lenders not only that a borrower in their database is ready for a loan, but also that the borrower checks all the qualification boxes for a particular loan product. Schedule a demo today to learn more.

Check out TRIPLE STAR Conventional, VA and FHA purchase Incentives! The Freedom Mortgage Wholesale Division is offering a (.250) LLPA Purchase Incentive and 2 business day Priority Purchase Underwriting for all Conventional, VA and FHA purchases. Additionally, our NEW Premier Jumbo Fixed Rate product features a maximum 89.99% LTV/CLTV (Purchase, Rate/Term, up to $1.5 million, 1 unit, single family, includes PUD/Condo, minimum 740 credit score), no required mortgage insurance, and cash out up to $750,000 on primary and second homes.

Introducing Maxwell Capital: A better way to sell loans on the secondary market from leading digital mortgage platform Maxwell. Working as a dedicated partner, Maxwell Capital helps local lenders compete by offering scale and benefits previously reserved for large industry players. This powerful new offering pairs technology with industry expertise to decrease trading time, streamline the process, and create a more consistent experience for lenders and their borrowers. Plus, Maxwell leadership helps lending teams increase capacity and reduce fixed costs throughout the process. Lenders: Find out how real-time data analysis, faster pricing, and personalized support can transform your secondary market experience. Click here to learn more about Maxwell Capital, or request information now.

SERVICING IN THE SPOTLIGHT @ HW ANNUAL: Headed to Frisco next week? Make sure to block off 1:30-2:15pm CT on Tuesday 9/28 for a panel of servicing industry experts discussing the latest guidelines out of the CFPB, loss mit strategies, and how servicers can leverage tech to guide their borrowers out of hardship. The panel is sponsored by Sagent and will include Sagent CTO Uday Devalla, Courtney Thompson (Founder, Consigliera), Karthik Kuma (Global Head of Mortgage Practice, TCS), and Michael Keaton (Chief Servicing Officer, Shellpoint Mortgage Servicing). With servicers under the regulatory microscope and pressure mounting ahead of September 30, this is a can’t-miss session for mortgage servicers. Register here!

Conforming Conventional News

Lenders are keenly aware of Fannie’s shift to allow rent payments to be considered in qualifying for a mortgage. And why not, isn’t one’s housing payment the best indicator of future behavior? Realtors aren’t fans of the FHA program, putting additional weight on F&F (Fannie & Freddie) so Agency shifts are under plenty of scrutiny.

Originators that the official conforming, conventional loan limits (CLL) aren’t announced until around Thanksgiving. But if an investor wants to garner some publicity by putting out different limits, then so be it, and brokers and borrowers can benefit. Housing price appreciation has been obvious. As a reminder, the Housing and Economic Recovery Act (HERA) requires that the baseline CLL be adjusted each year for F&F to reflect the change in the average U.S. home price. The FHFA publishes its FHFA House Price Index® (FHFA HPI®) report, which includes estimates for the increase in the average U.S. home value over the last four quarters. According to the seasonally adjusted, expanded-data FHFA HPI, house prices increased dramatically in 2020, so lenders know that the baseline maximum CLL in 2022 will increase by the same percentage.

Citi Correspondent Lending Bulletin 2021-11 contains information on 2021 FFIEC Median Family Income updates, DU Validation Services, gift funds used as earnest money, Clarifications on ARM Initial Fixed Period, DU Property Inspection Waivers, student loan payment calculation, Home Possible cash to borrower and consumer credit blocks.

Read the Fannie Mae Release Notes for details implemented with update to Desktop Underwriter® (DU®) Version 11.0. Changes include the addition of positive rent payment history to the risk assessment and an update to credit score eligibility to support sustainable homeownership for more underserved borrowers. Additionally, Positive rent payments FAQs have been posted.

Fannie Mae’s commitment to promoting racial equity in housing includes helping all homeowners and buyers receive a fair and impartial appraisal. Read about the actions Fannie Mae is taking to raise awareness of potential appraisal bias in practical ways that lead to positive change.

Discover 3 Smart Ways to Get the Most out of eMortgages, read Freddie Mac’s Expert Roundup Article.

New and updated Loan Product Advisor® (LPASM) feedback messages are written to help make faster decisions and align with the latest Single-Family Seller/Servicer Guide (Guide) updates and tool enhancements. Read the latest changes to Freddie Mac feedback messages effective in November.

Freddie Mac’s URL for accessing Loan Closing Advisor customer test environment must now be accessed through the Freddie Mac Loan Advisor® portal CTE. The new URL is: The old Loan Closing Advisor CTE URL is no longer available.

Freddie Mac and Fannie Mae (the GSEs) have updated the joint FAQs for the Uniform Closing Dataset (UCD) with information regarding the critical edits transition, requirements for delivery to each GSE’s UCD collection solution.

PennyMac posted Announcement 21-71 regarding Fannie Mae changes to Credit Score Eligibility and Rent Payment History.

FHFA and the Treasury recently suspended certain provisions of the Freddie Mac Amended and Restated Senior Preferred Stock Purchase Agreement (PSPA). One provision is the 7 percent, acquisition limit on mortgages secured by second homes or investment properties.

Freddie Mac is retiring the requirements outlined in the Freddie Mac Single-Family Seller/Servicer Guide (Guide) sections 4201.15 and 4201.16 that place the 6 percent volume cap requirement on mortgages secured by second homes and investment properties.

Wells Fargo Funding removed its overlay requiring two months bank or brokerage statements to verify funds available for closing for conventional Conforming Loans. Sellers will now defer to Fannie Mae and Freddie Mac policy for bank and brokerage statement requirements. Review Wells Fargo Funding Announcement C21-048 for details.

Recently, Freddie Mac published Bulletin 2021-27 announcing multiple changes, including updates to QM and PSPA, and cash-out refinance. AmeriHome Mortgage impacted guidelines are listed in Announcement 20210907-CL.

Caliber Home Loans updated its Additional Investment Property and Second Home LLPAs. Effective for Commitment Confirmations issued on or after September 16, 2021.

In response to FHFA's September 14th announcement, loanDepot Wholesale has removed occupancy LLPAs on investment properties and second homes. The rate sheets and mello® 

Broker Portal have been updated to reflect these fee changes, effective on loans locked today or after. 

Conventional LLPA’s for Investment Properties and 2nd Homes has been significantly improved, applicable to new locks as of September 17 and going forward. All pricing vendor partners have been notified of this change. View the Franklin American Mortgage Company rate sheet for the new LLPA.

Starting with new locks as of Thursday, September 16, 2021, Flagstar Bank improved the listed Agency Investment and Second Home loan level price adjustments.

Investment/2nd Home LLPA and LTV Limit adjustments have been removed from all First Community Mortgage Wholesale Second Home and Investment properties. Loan Level Price Adjustment (LLPA) 2 Points, above Standard Agency. Maximum 75% LTV/CLTV.

Capital Markets

Do you need to sell loans your company no longer needs or desires to hold? We work with mortgage lenders and sellers of all sizes across the country to facilitate whole loan trades, whether it’s a reaction to historic volume from 2020 or adjusting to the new Government Sponsored Enterprise (GSE) purchase caps, we can help. NASB Whole Loan Trading has a dedicated loan purchasing team, that provides a quick turnaround along with competitive pricing. Regardless of if it’s “scratch and dent” seasoned or non-seasoned loans in your portfolio, we buy both scenarios. NASB purchases* in bulk or even potentially individual loans. We buy residential property loans (1-4 units), mortgage loans in 1st lien position (excluding HELOCs), and loans underwritten to Agency standards but are non-salable. Contact NASB Whole Loan Trading Today! *Purchase approval subject to NASB’s purchase loan due diligence review.  NMLS ID: 400039, EHL, & Member FDIC.

MIAC is offering a portfolio of approximately $63 billion of XS IO, comprised of FHLMC/FNMA/GNMA/PLS collateral and produces a strip of approximately 6.8 bps. The collateral carries a note rate of approximately 4.35% and is seasoned by 129 months. The pool is not a security but rather a private contract between the current investors and their servicers. The bid date is September 29th by EOD. For details and an offering memorandum, after completing a requisite NDA, please contact your MIAC sales representative at 212-233-1250 or Steve Harris.

Why did rates go up yesterday? First, countries around the world continue to see good news about their respective economies. Nice to see, but good economic news typically leads to higher rates. On the flip side, ever heard of Evergrande? Yes, think “big Chinese company.” Like Lehman? Will Evergrande’s default lead to a collapse of China? Banks around the world are trying to reassure markets that the Evergrande debacle is contained. Here in the U.S., the Fed’s soothing words on the strength of the economy jump-started a two-day rally that more than offset the big decline on Tuesday. Stocks have rallied nicely, and the “risk-on” sentiment translated to less interest in fixed-income securities. U.S. treasuries, and with them mortgage-backed securities, sold off on the risk-on move, trading lower in price and higher in yield. The 10-year treasury closed down -23/32nds to 1.410% yield, the highest since early July.

The only scheduled news out today is New Home Sales. It is not an “important 8:30AM ET number,” so probably won’t move the market much. We start Friday with the 10-year yielding 1.42 percent but Agency MBS prices better/up a few 32nds.



InstaMortgage Ranks as the Best Place to Work in 2021! InstaMortgage, led by CEO Shashank Shekhar who is ranked as the #4 top producing mortgage brokers in the country by Scotsman Guide, offers a unique banker/broker hybrid model that allows mortgage professionals to have the best of both worlds. We give you more products and better pricing, while offering you the control and flexibility of in-house underwriting, processing, and closing. It’s no surprise that InstaMortgage has been ranked the best mortgage company to work for by 3 leading industry publications. Want to learn more about what InstaMortgage has to offer, click here.