Last week the Mortgage Bankers Association’s survey showed that retail applications dropped almost 12% last week from the week before. Refis were down 17 percent – in one week! Lots of folks are being asked by management about projections for 2020. Have fun estimating volume, margins, and “person-power” needs. And how much of your competitor’s market share can you grab? Will credit unions and brokers continue to grow? The MBA’s Joel Kan observed, “Our 2018 volume estimate was $1.6T, with $1.2T of that purchase. We currently have $1.9T for 2019 and $1.7T for 2020. For 2019 we have just under $1.3T purchase and $670B refi.” Rates will drive refinancing, as well as corresponding “refi burnout” which involves borrowers who either aren’t in a position to refinance (credit, equity) or recently did. It will certainly be a conversation topic at the MBA’s grand event that begins Sunday.
Lender Products and Services
LoanScorecard’s advanced non-QM technology is powering the eligibility portals used by leading wholesalers and providing operational efficiencies for their correspondent channels by delivering automated underwriting findings reports for non-QM loans with the same ease and instant decisioning found in the agency AUS platforms. Whether you’re already in the space or looking to enter the non-agency market, stop by booth 843 at MBA Annual next week to learn how LoanScorecard can enhance broker and lender connectivity and confidence and increase underwriting accuracy and efficiency. You can also enter for your chance to win an Amazon Echo Dot and Firestick! Contact Raj Parekh to schedule a meeting and learn more.
Residential finance has been a tale of two extremes so far in 2019. In the first quarter, mortgage companies were dealing with significant margin compression and low volume. In the second and third quarters, low interest rates spiked an unexpected refi boom that has strained the capacity across the industry as lenders adjust their staffing levels to account for the increased production. Nick Pabarcus, executive vice president of wholesale at Stearns Wholesale Lending, noted, “In the long run, 2019 might be best remembered as the year that mortgage brokers regained their foothold in the industry. Originators are transitioning to the broker model in record numbers, attracted by the product differentiation, service levels and the price position wholesale lending offers.” Brokers have access to a wider range of products.
Are you a Title Agent headed to Austin for ALTA One 2019 or MBA Annual? If so, don’t miss the opportunity to discover how String can help you increase profits, minimize risk and take advantage of the refi boomlet. String fits seamlessly into your existing operations workflow. SCHEDULE time in Austin with the String team to discover how we can handle your cumbersome and repetitive tasks, freeing your in-house team for customer facing processes. Don’t worry. We’ll keep the initial meeting brief. In less than 20 minutes, you will discover the power of String.
FundingShield announced its integration into Ellie Mae Encompass for all of its loan level wire-fraud prevention and closing agent vetting tools. This is the first wire fraud related technology integrated into Ellie Mae (Full Press Release on Bloomberg) and the only MISMO compliant set of tools allowing Encompass users to access to the entire suite of FundingShield’s services with a single click. Further new fields have been added to Encompass that map to Fundingshield loan level results streamlining funding and closing workflows. Ellie Mae’s Parvesh Sahi, SVP of business development shared, “Through our partnership we are digitizing workflows for closing and settlement agent vetting, removing risk and increasing efficiencies. With FundingShield we are adding a new wire verification category on the Encompass Partner Network and bringing more value to more customers, faster.” FundingShield will be at MBA Annual in Austin, please contact email@example.com to set up a meeting or a WebEx demo to see how FundingShield can prevent fraud while lowering operating costs.
Conventional and Conforming News
Don’t forget that Fannie Mae extended the mandatory use date for the revised Form 1008. Lenders may use it immediately but won’t be required to use it on/after Feb. 1, 2020, as previously announced. The GSEs will notify lenders of the new effective date and any additional changes soon. View revised Form 1008, Uniform Underwriting and Transmittal Summary.
Freddie Mac Multifamily has a new mapping tool to help lenders identify investment opportunities in underserved markets throughout the country. The mapping tool, which is part of Freddie Mac’s Duty to Serve Plan, synchronizes data from multiple sources to help investors better understand opportunities for creating and preserving affordable housing in hard-to-serve markets. Key features of the mapping tool include the ability to: Identify rural, high needs and/or residential economic diversity census tracts. Identify if a property can receive Duty to Serve credit, supporting efforts to serve historically underserved markets. Identify properties around the country with major public subsidies from the National Housing Preservation Database. View income and demographic statistics on each tract level. Download a spreadsheet of data for a list of addresses or subsidized properties at once for use in other applications.
Wells Fargo Funding has removed overlays on High Balance and Super Conforming documentation requirements. The applicable Agency’s documentation requirements for Wells Fargo Prior Approval High Balance Conforming Loan Program and Prior Approval Super Conforming Mortgage Program can now be followed.
Wells Fargo Funding has removed its income requirements for public assistance manually underwritten Conforming Loans. The more restrictive of Fannie Mae or Freddie Mac guidelines will need to be followed.
Without Data Standards, the Mortgage Industry Doesn’t Go Digital. A new Fannie Mae white paper describes the importance of data standards for the industry’s future
Fannie Mae issued a Servicing Notice eliminating servicer responsibilities for paying HOA and condo association fees, effective July 1st, as well as co-op fees and assessments for all acquired properties, effective Nov. 1st.
MQMR President Michael Steer reminded lenders to conduct an independent audit review of their quality control (QC) process immediately in deference to updates to “Subpart D1, Lender QC Process” of the Fannie Mae Selling Guide. The lender must have an independent audit process to ensure that its QC process and procedures are followed by the QC staff, and that assessments and conclusions are recorded and consistently applied. The findings must be accurately recorded and consistent with the defects noted in the lender’s system of record.
Results of the QC audit must be distributed to senior management. It must include an affirmative statement that no influence from other business units or bias in the QC conclusions was apparent. Management must distribute the results to the appropriate areas within the organization and an action plan must be established for remediation or changes to policies or processes, if appropriate. The lender must provide a copy of the QC audits and the audit of the QC process to Fannie Mae upon request. For more information on Fannie Mae’s requirements for independent QC process audits, read MQMR’s free compliance newsletter, “FAQ: FNMA Update - It's All About the Independence!”
Fannie Mae will be implementing an update to Desktop Underwriter® (DU®) Version 10.3 during the weekend of December 7th. This update includes changes to homebuyer education requirements, construction-to-permanent financing for manufactured homes, updates to align with the Selling Guide, and more. Prepare for these updates now by understanding what’s changing in December.
Ellie Mae announced its Encompass Digital Lending Platform™ will now include support for the new government-sponsored enterprise (GSE) Uniform Residential Loan Application (URLA) aimed at enabling lenders to start testing and planning their transition to the new redesigned application before the mandatory use deadline. Read the full release here.
Yes, we’re stuck in a tight range with U.S. rates, even with other nations loading up on “high yielding” U.S. paper. It doesn’t seem like we’re heading lower, or heading higher. Crack economist Elliott Eisenberg noted, “…always been the U.S. that’s dragged other nations into recessions. Next time things may reverse. The U.S. share of global GDP keeps falling, reducing our influence. Trade matters more to the U.S. than before, and globally integrated capital markets mean U.S. interest rates are increasingly dependent on foreign monetary and fiscal policy.”
Not much happened in the bond market yesterday, so I won’t waste your time talking about prices or spreads going up a little or down a little. The same issues continue to influence rates: Brexit drama (the UK Parliament voted down the motion for a three-day timetable to approve legislation for the re-worked Brexit deal with the EU, meaning the Brexit deadline will likely have to be extended past Oct. 31 to avoid a no-deal Brexit), Trump tax returns and impeachment gossip, debt supply (the U.S. 2-year auction was met with solid demand), U.S. existing home sales declining in September (upward pressure on prices is likely to persist as inventory of unsold homes continues decreasing from last year's levels).
This morning, besides learning that last week’s apps plummeted, ahead of us are the FHFA Home Price Index for August (if you like news from two months ago) and a $41 billion 5-year T-note auction. The yield on the 10-year, which closed yesterday at 1.77 percent, is down to 1.74% and Agency MBS prices are better by .125.
Caliber Home Loans, Inc., the third largest non-bank residential mortgage originator, is “proud to announce Jeff Tarbell has joined our organization as Divisional Vice President. Jeff will oversee and grow Retail production in a newly created Northern CA based division and report to Brady Yeager. Jeff previously held a senior Retail leadership position for five years with a large independent mortgage bank, and prior to that was a partner in a mortgage bank and owner of a mortgage brokerage firm for 22 years. Caliber EVP James Hecht said, ‘I’m excited to have an experienced Retail Leader like Jeff join our team as we continue to increase our market share on the West coast and grow our team of outstanding Loan Consultants.’ Jeff is one of many high-profile additions to Caliber this year. We’re a purchase-focused lender that’s dedicated to creating, and keeping, happy homeowners. If you share our passion for this mission, contact us today!”
“Citizens Bank Home Mortgage is dominating in our markets and exceeding all sales goals. Now ranked at #17 in the Top 100 Mortgage Lenders and #5 of bank-owned mortgage lenders nationally (1Q2019 Inside Mortgage Finance), Citizens has been steadily climbing the list over the last two years. This year, we have already exceeded our 2018 application volume with four months left to go in 2019. And, we will exceed our 2018 funded volume by the end of September! If that sounds like a company you want to build your sales career with, apply to Citizens Bank today. For questions, please email Home Mortgage Recruiting.”
“A 20-year veteran of building successful Mortgage Organizations is looking for Top agents in all 50 states. Agents will get a competitive commission rate, full benefits, Guaranteed Close of escrow or he will pay the seller for every day it closes late, dedicated assistant and processor, media budget depending on profitability. If you are looking to increase your business 20-30% you should send your resume to Chrisman LLC’s Anjelica Nixt for forwarding!”
If you are a mortgage professional with a deep and long-standing relationship with a real estate brokerage and/or builder, the Joint Venture division of NewRez may be your next and best move. “We are proud of our proven track record in launching, managing, growing, and sustaining profitable partnerships,” says Randy VandenHouten, SVP Joint Venture & Retail Lending. “With our best-in-class JV partnership platform, we are looking for professionals who seek a mortgage partnership solution for their real estate and builder partners that provides significant revenue potential in a 100% compliant manner.” The NewRez family brings over thirty years of experience in the JV space and is growing. To learn more, contact Randy VandenHouten.
MAXEX Is Hiring Top Talent! Recognized as HousingWire’s 2019 Tech 100 winner, MAXEX has dramatically simplified the secondary mortgage market by offering lenders a turnkey solution to significantly increase liquidity and expand their loan product offerings. Lenders simply execute a single standardized contract, face a single counterparty (MAXEX) and are then seamlessly connected to the largest Wall Street dealers, banks, insurance companies and REIT’s who are actively buying billions of dollars in loans every year on our innovative exchange platform. MAXEX is seeking to add top talent in sales, operations, technology and marketing. As a high growth fintech company, MAXEX provides the opportunity to grow alongside a pioneering technology that is changing an industry. See www.maxex.com/careers for a list of positions. We will also be at the upcoming MBA conference in Austin and available for selective meetings with qualified candidates as well as prospective lenders/sellers. Email a meeting request to Tom Pearce.