TGIF! Do Fridays mean as much as they did up until mid-March? Yes! Well, maybe. How about some non-mortgage stuff? There is, after all, life outside of RESPA. It’s crazy at the nursery via webcam at the Warrior Canine Puppy Live (although sometimes they let them roam outside). How about the oldest recording of a U.S. President? (It’s short.) Here’s the first film of a U.S. President: Teddy Roosevelt in San Francisco. I don’t need more politics in the daily news, or to hear jawboning about the half dozen Congressional & Administration election permutations, but I sure need water every day. Did you know it takes 90 days for a drop of water to travel the entire length of the Mississippi River. (By the way, the Mississippi River is not the longest river in the United States. The Missouri owns that title.) One mountain, Triple Divide Peak in the Rockies, is the only place in the United States where rain and snowmelt flow into three different oceans: the Atlantic, the Artic, and the Pacific! Lastly, for you fans of George Orwell, here is a “security” drone that constantly flies around the inside of your house, and Alexa can bark at intruders from your Echo for $49 per year. Hard pass, no thanks.
Lender Services and Products
In personnel news, Credit Plus is excited to announce the addition of Ashley Lockaby as a Regional Account Manager. Ashley will manage existing and potential customers helping them navigate the tumultuous waters of our industry. Her hard work and dedication are only exceeded by her enthusiasm. With more than 17 years in the mortgage industry, Ashley brings well-rounded experience to the table. Most recently she was the VP of Warehouse Lending at Northpointe bank and before that spent time in the mortgage technology space as a Director at Black Knight. In the beginning of her career, Ashley ran secondary for a national mortgage lender. “We’ve built a top performing company fueled by a team of high-achieving and customer-centric individuals who have a real desire to help mortgage lenders and we think Ashley is a perfect fit,” said Greg Holmes, Managing Partner at Credit Plus. “We’re excited she is joining Credit Plus and look forward to her contributions as she helps lenders mitigate risk and make more confident credit decisions.” Reach out to Ashley (404-481-3733) to say congrats!
Free Infographic: Your client’s FICO Score. There are 5 weighted factors that go into a FICO Score. Do you know what they are? Here are some quick tips you can share with your borrowers on what they can do to improve their score for each factor. For more helpful ways to elevate your lending game, subscribe to Data Facts’ weekly blog, or follow us on LinkedIn.
Want to supercharge your outbound marketing? Top of Mind and special guest Barry Habib will show you how to combine Surefire CRM’s Power Calls with market insights from MBS Highway to work smarter, not harder. The show starts at 1 pm ET on October 1. Register here. Stay tuned at 2 pm ET for another Top of Mind session, this one featuring Zac Scalzi of Floify. Learn to integrate your website, your POS, and your CRM to turn drive-by traffic into inbound leads that convert. Register here. See you there!
Security and Cybercrime
My daughter teaches 7th grade and got quite a chuckle out of this. Is your kid’s teacher trying to steal their identity? I don’t think so.
When the pandemic hit and companies who had outsourced work overseas scrambled to equip their foreign staffs to work from home, but it raised issues. The shut down in India and other countries has played havoc with work, lack of computers, cyber security (could someone, accustomed to turning their phone in at the door, now take a photo of their screens?), and unwanted eyes seeing personal information from U.S. borrowers. It is still an area of cybersecurity focus.
Borrowers are continually reminded to beware of cyber-fraud. Before wiring any funds, borrowers are told to call the intended recipient at a number they know is valid to confirm the instructions and to be very wary of any request to change wire instructions already received. Lender’s employees are warned to never provide nor confirm wire instructions.
In a paragraph of non-mortgage chatter, how much does the director of the FBI make? About a $185k bones. The Central Intelligence Agency (CIA) is having serious difficulty recruiting tech savvy geek types with no social conscience about spying on people because they are usually hired by Facebook or Google. But the CIA’s officers can now publicly file patents on intellectual property IP they work on and collect a piece of the profits. Officers who make new tech at CIA Labs will be able to make 15 percent of the income from a new invention with a cap of $150,000 per year, functionally doubling agency salaries.
This summer a FinCEN Advisory (FIN-2020-A005) came out on cybercrime and cyber-enabled crime exploiting the COVID-19 Pandemic alerts financial institutions to indicators of potential fraudulent schemes, malicious cyber activity and scams, and other suspicious activity.
A Cybercrime Report provides detailed insight into how fraudsters have responded to the COVID-era and modified their cyber activities to take advantage of governments and certain industries. There was evidence of specific attacks targeting government-backed loan schemes, as well as a number of e-commerce merchants. The former is reflective of the number of schemes that governments put in place globally to get credit and grants to individuals and businesses impacted by the global pandemic.
Educating employees and clients is critical. Man against machine. Global, automated bots remain a key attack vector for fraudsters. Financial services organizations experienced a surge in automated bot attacks, up 38% year over year, and continue to experience more bot attacks than any other industry. Financial services companies include mobile and online banking, online money transfer, lending, brokerage, alternative payments, and credit card issuance.
Naturally, all industries have felt the impact of COVID-19, and there are clear peaks and troughs in transaction volumes coinciding with global lockdown periods. During this period, financial services organizations saw growth in new-to-digital banking users, a changing geographical footprint from previously well-traveled consumers and a reduction in the number of devices used per customer. There have also been several attacks targeting banks offering COVID-19-related loans.
What rebound? Yelp tells us that as of August 31, 163,735 businesses in the United States that were open on March 1, 2020 have closed, up 23 percent since July 10. Of those businesses marked closed 60 percent will not reopen, or 97,966 permanently closed businesses with 65,769 temporarily closed ones. The most affected are restaurants (32,109 total closures), retail and shopping (30,374), and beauty and spas (16,585).
As you’ll see below, today’s Capital Markets section is largely about the prospect of a new stimulus bill. Speaker Pelosi and Secretary Mnuchin both raised the prospect of resuming negotiations as House Democrats yesterday drafted a $2.4 trillion proposal that they can take into possible negotiations with the White House and Senate Republicans. For the American’s across the nation who truly need further stimulus, they will be disappointed to hear the latest offer from Democrats deviates only slightly from previous offers and is unlikely to find any Republican backing. The Senate passed a stopgap funding bill, as expected. Elsewhere in Washington, day three of Fed Chair Powell on Capitol Hill saw him once again suggesting that aid to small businesses and the unemployed should be a priority. Treasuries ended the day pulling back slightly but the entire week has been a snoozer, rate-wise.
With both Fed Chair Powell and Treasury Secretary Mnuchin appearing before a House panel earlier this week, markets were looking for indications on which direction talks between the White House and Congress are heading over another aid package. A compromise (mortgage rates likely up) or lack thereof (mortgage rates likely unchanged/down) will have implications for our industry, so it is worth paying attention.
White House officials and leaders of both parties of Congress have struggled for months to agree upon another economic relief package since the passing of the $2.2 trillion CARES Act at the end of March. Any future bill before November will have to pass the Democrat-led House and the Republican-controlled Senate, which appears increasingly unlikely before the election. Negotiations between the two sides were on and off throughout the summer, with Democrats in the house proposing a $3 trillion relief bill and Republicans in the Senate countering with their own $650 billion relief bill. The sense of urgency that propelled the CARES Act into law is likely gone, as many say the country is no longer facing a historic collapse of economic activity. U.S. equity markets have all but recovered their early-pandemic losses, and the unemployment rate has fallen over six percentage points from its high of 14.7 percent in April. The result is that Democrats and Republicans disagree over both how much additional support is needed and how best to structure that support. Sticking points are support for state and local governments, the bump to weekly unemployment benefits and liability-protections from COVID-related lawsuits for businesses, schools, and health care providers. Currently, most baseline U.S. economic forecasts have refrained from including any new stimulus in its projections.
Did I mention time for compromise is running out? The legislative calendar sees the House of Representatives leave Washington on October 2, with the Senate scheduled to leave a week later on October 9. Unless there is an emergency that necessitates Representatives and Senators to be called back (stimulus talks do not qualify), neither chamber will return to action until after the election. Unfortunately, for the average American, the current position of the two parties appears too far apart for any deal. Both sides have dug in and appear willing to wait until after the election, when election results may change the balance of power. With each passing day, the prospects of an economic relief bill being passed into law before the election decline. If further stimulus is passed, it would be a boost to real GDP growth, payroll growth, inflation, Treasury yields, the budget deficit, etc. I wouldn’t hold your breath, unless you can make it until 2021, which means mortgage rates don't appear likely to increase anytime soon.
It was a relatively busy day for economic releases yesterday. Jobless claims for the week ending September 19 increased when they were expected to decline, which still would have been nearly four times pre-pandemic levels and twice as high as the peak of the last recession. It’s going to be a long road back for U.S. businesses. On a brighter note, new home sales in August exceeded a seasonally adjusted annual rate of 1.0 million for the first time since November 2006, rising 4.8 percent month-over-month to 1.011 million when the figure was expected to be 875k. That marks a 43.2 percent year-over-year increase (!), reflecting strong demand for new homes at more affordable price points. The South region, which is the largest homebuilding region and features lower average prices, saw a sales increase of 13.4 percent month-over-month. Finally, the FHFA announced the extension for buying loans in forbearance, and certain loan origination flexibilities, due to Covid-19 from September 30 to October 31.
Well, we’ve already received both economic releases that were scheduled for today. August durable goods orders were only +.4 percent (ex-transportation only +.4% as well). We’ve also seen, per Black Knight, the number of mortgage plans in active forbearance fell 95K over the last week (-2.6 percent). This marks five consecutive weeks of improvement and is 24 percent lower than the peak in late May, a decline of 1.17M plans since then. As of September 22, 3.6 million homeowners remain in COVID-19-related forbearance plans, or 6.8 percent of all active mortgages, representing $751 billion in unpaid principal. Separately, a busy week of Fed speak concludes with remarks from New York Fed President Williams. The Desk will conduct a near repeat of Wednesday’s operations when they purchase up to $5.5 billion MBS starting with $954 million 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 are better/up a few ticks and the 10-year yielding .66 after closing yesterday at 0.67 percent, shaping up to be another day of no rate volatility!
“August was a great month for Caliber Home Loans! We continue to help more families achieve their dreams of buying a home as rates remain at historic lows. Our ongoing success is driven by our remarkable team members. Caliber customers get exceptional service through all stages of home ownership. Are you looking for a place to work that is rewarding, has an awesome opportunity for upward mobility and is committed to supporting the communities where you live and work? We have open positions in Operations and Sales. If you have a passion for helping customers, we’d like to talk to you. Visit our website today to view open opportunities. To be immediately considered for Operations or Sales positions, email Jonathan Stanley or Brian Miller respectively.”
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“A top national mortgage lender, headquartered in Houston, Texas, is expanding and seeking to fill production and underwriting positions across four expansive regions. With over 20 years in the business, Envoy Mortgage is continually setting new records, investing in game-changing marketing technology and has a rock-solid operational and financial position to fuel repeated growth. We even broke our own personal production record three times this year! Shall we say it louder for those in the back? A strong balance sheet, extensive warehouse bank capacity and licensing status in 46 states, including DC, is just the beginning. Contact Envoy’s Recruiting Director, Hal Sims to learn more about these positions or register for our live webinar to see what it is like to work at Envoy!”