Welcome to the first Friday the 13th of 2020 since March. What an eight months! Cindy E. writes, “The longer I stay at home, the more homeless I look.” I start fielding emails every year around this time about the following year’s conforming loan limits and the impact on home ownership. It was a bigger deal in the past, when the price difference between jumbo and conforming was greater, but every year the threesome of Fannie, Freddie, and the FHFA announce conforming parameters around or after Thanksgiving. Stay tuned for a few weeks, but the jungle drums are beating somewhere around $535k (versus 2020’s maximum of $510,400 and 2019’s of $484,350; units and states aside). With rates these low, with these high loan amounts, plenty of renters are considering owning a home. 80.4% of renters paid their rent payment by November 6, up from the 79.4% of renters who paid by October 6, but down from the 81.5% who paid by November 6, 2019.

Broker and Lender Products and Services

According to Inman, the real estate media company, a whopping 73% of agents are re-evaluating their current relationships or looking for new ones. Momentifi is launching its new solution at the Inman online conference this week and at the Finovate online conference later this month that helps mortgage companies and LOs protect their current relationships and find new ones. “The challenge we’ve found is that LOs are too busy to get in front of referral sources, and COVID is also making live events impossible,” says Momentifi CEO, Gibran Nicholas. “Meanwhile, agents still need CE credits. So, what if we could turn the process of earning CE credits into an online networking opportunity? Your LOs don’t need to do anything other than invite their referral partners. We teach the classes and handle everything else. The referral partners walk away with RESPA-compliant free CE and co-branded marketing with their LO.” Click here to email Gibran directly and get a sneak preview.

Synergy One Lending held its first Modern Mortgage webinar, “The Cost of Being Invisible — No Nonsense Social Media with Bill Hart” for its new digital event series on Tuesday, November 10th.  Loan officers and real estate agents in attendance listened to Coach Hart present on what real estate sales and finance professionals need to be doing right now on social media to make 2021 their highest volume year yet. Further, Coach Hart discussed how to use social media to stay top of mind with referral partners, connect with prospects through social videos, and guarantee long-term production through proactive social media strategies. In case you missed it, you can view the recorded digital session and learn more about how you can use social media to increase your volume. If you have any questions about Synergy One Lending’s new online event series, please contact Ben Green. 

Amidst today’s refi boom, successful originators are also looking ahead at what their next big opportunity is. For many, it’s developing an investment real estate channel. CIVIC Financial Services is a leading institutional private lender, funding more than $4B in private money loans. With CIVIC as your private lending partner, you can serve customers throughout their entire real estate journey: purchase, refi, fix and flip or long-term rental. 15-20% of the average mortgage originator’s prospect list is a potential investor who could use a private money loan to buy an investment property as a flip or a rental property in today's hot real estate market. To learn more about real estate investment financing check out CIVIC’s video and download the free whitepaper to help you build your business.

1981-1996 = Millennials = Home Buyers

Early forecasts pegged Millennials (ages 24-39 this year) as the “Peter Pan Generation,” never wanting to grow up and therefore, less likely to settle down and buy a house. Like many predictions about 2020, those predictions appear to have missed the mark. So far this year, Millennials have comprised 52 percent of purchases and 42 percent of all mortgage loans. In his November MortgageSAT Tip, MortgageSAT Director Mike Seminari offers three strategies that lenders can leverage to capture Millennial interest and loyalty. Don’t miss the new MortgageSAT Tip, “What is the Secret to Becoming the Mortgage Lending Choice of Millennials?”

Private Mortgage Insurance Trends

Some industry watchers view MI companies as “barometers” in terms of equating their performance to that of the industry in general. Let’s take a look!

Given the recent vaccine headlines, KBW's Bose George recently took a look at how some MI companies, title insurers, and mortgage originators/servicers are positioned for a recovery. Mortgage insurers, with exposure to residential mortgage credit, stand to benefit the most. Higher interest rates are neutral to positive for the sector as long as they are not high enough to impede the housing market. It’s also likely to be a positive for the title insurers, given a quick recovery in commercial real estate activity. While title insurers have benefited meaningfully from the refinance wave this year, one concern is that the decline in refinance volume will not be offset by a growing purchase and rebounding commercial market. Mortgage originators would likely fare the worst amongst the three groups during an economic recovery, as the rise in interest rates would slow refinance activity more quickly than expected. Finally, this scenario should be positive for mortgage REITs that have exposure to mortgage credit risk.

Essent posted solid quarterly results due to a lower loss provision and lower operating expenses. Expectations are now for a lower run-rate expense ratio, partially offset by a lower average premium yield. The delinquency rate continues to improve, down to 4.25% in October from 4.54% in September and 5.19% in June. The improvement is tracking pretty much in-line with overall GSE forbearance rates. Management estimated the mark-to-market LTV on the default population of loans is about 80%, suggesting there is a margin for a drop in home prices without materially impacting the frequency or severity of losses.

Radian posted a positive quarter due largely to a lower loss provision and higher singles cancellations. Delinquent inventory levels continued to decline through October month-end. As more clarity on credit emerges, it will be easier to predict future performance, though forward loss estimates should remain roughly unchanged. The company kept its default-to-claim rate assumption on new defaults unchanged at 8.5%, which is slightly more conservative than the industry average. Estimates are for a roughly 2.2% cumulative loss assumption over the 3-year period 2020-2022.

NMI Holdings beat earnings estimates in Q3, driven largely by lower credit losses. This was partially offset by lower net premiums earned and lower investment income. The reported October 31 delinquency rate was 3.41%, down from the previously reported 3.60% on September 30. The company applied an unchanged 7% default-to-claim rate assumption on new defaults in the quarter. Insurance in Force (IIF) grew 21% quarter-over-quarter, and New Insurance Written (NIW) came in at $18.5 billion, making NMI one of the fastest growers out there. PMIERs excess capital increased to $681 million (69% cushion) from $609 million (58%) last quarter, benefiting from issuing its fourth and fifth ILNs during the quarter at attractive spreads.

MGIC’s Q3 included lower losses incurred than Q2. Losses at these levels would remain below the attachment points of the ILNs. Those points increase over time as the insured portfolio runs off, though the collateralization is currently locked since delinquency triggers have been reached. MGIC’s delinquent inventory declined to 5.5% through October versus peak of 6.4% on June 30, and broader GSE forbearance rates are down to 3.5% in early November versus peak of 7.2% at the end of May, per the MBA. Additionally, home price appreciation has been very strong, which could reduce the severity and frequency of losses. In this scenario, delinquent borrowers would be more likely to be able to sell the house to pay off the mortgage in order to avoid foreclosure. Going forward, the company hopes a slightly lower average premium yield is offset by stronger IIF growth. Industry NIW volumes remain very strong, though runoff also remains quite elevated.

Capital Markets

To those that were mourning the lack of volatility in the bond market throughout the summer, are you happy now? Last week’s volatility was all about the U.S. election, while this week is centered around “vaccine euphoria,” increasing COVID cases, and the implications for an already sluggish economic recovery. U.S. Treasuries & MBS rallied as three of the world's top central bankers, including Fed Chair Powell, warned that the prospect of a coronavirus vaccine isn't enough to put an end to the economic challenges created by the pandemic.

We learned that Initial Jobless Claims continued to trend downward but with new curfews and restrictions on business activity in many cities and states due to rising coronavirus infections, expect an increase in jobless claims in coming weeks. The Consumer Price Index figures are far from the Fed's aim of lifting the average inflation rate. Separately, the Treasury Budget showed a $284 billion deficit in October, which is more than twice the deficit seen in October 2019 as the nation (and the world) has been forced to deal with the fallout from the pandemic. For good news, Black Knight reported that the number of mortgages in active forbearance saw another round of strong improvement, dropping by 121K (-4%) over the last week. Finally, yesterday’s Primary Mortgage Market Survey from Freddie Mac had the 30-year rate rising 6 bps to 2.84%.

Today’s economic calendar is already underway with October’s Producer Price Index (+.3%) and Core PPI (+.1%), both near expectations. The only other release on today’s calendar is the Preliminary November Michigan Consumer Sentiment Survey. Three Fed presidents are currently scheduled to speak: New York’s Williams, St. Louis’ Bullard, and Philadelphia’s Harker. Today’s MBS FedTrade purchase schedule sees the Desk conducting two operations targeting up to just $4.2 billion, starting with $975 million UMBS15 1.5% and 2%, and followed by $3.2 billion UMBS30 2% and 2.5%. We begin Friday with Agency MBS prices roughly unchanged from Thursday’s close and the 10-year yielding .88 after closing yesterday at 0.89%.

Jobs and Transitions

A strategic CFO with a track record for generating millions in annual savings is looking to join a great company. This candidate is confident they can pay for themselves 10x over through creative savings strategies, negotiations, automation, and unit costing. Additionally, the candidate is experienced in both expense branches and corporate branches in Consumer Direct and Retail environments. To start a conversation, please email Chrisman LLC’s Anjelica Nixt for details. Credentials include a master’s in financial engineering, experience at Fortune 20 companies, and CFO positions at independent mortgage banks.

MortgageCTO ("MCTO") is seeking new Account Managers to support the company's rapidly growing userbase of its industry-leading fee disclosure platform, FeeWise™. Candidates should have a solid understanding of the loan manufacturing process and preferably have experience with the Ellie Mae Encompass product suite, too. If you are technology savvy, have a thirst for knowledge and are ready for exciting work around a cutting edge product, send your resume to letsbegin@mortgagecto.com. MCTO offers competitive compensation and a flexible work environment.

“We’ve maintained an upward trajectory for several years running, with no sign of slowing down. Fundings have exceeded $1 billion 7 months running, and November is on track to make it 8. The key to our success lies in our company culture and the team we’ve built. American Financial Network, Inc. (AFN), approaching its 20th year in business, thrived through the great recession in 2007 and has grown exponentially every year since. We are a true national lender, closing loans from coast to coast and each branch that comes aboard offers its community a local expert with the power of a big organization behind them. When asked, our people say the best thing about being a part of Team AFN is the culture. Although we’ve grown and expanded, we haven’t lost the “family” feel and the collaborative mentality that makes us a cohesive team. We are always looking for people who don’t want to feel like they’re on an island (unless of course, they’re actually on an island like our Hawaii branch). If you’d like to join our winning team, contact https://joinafn.com/.”

“On Q Financial is proudly expanding employment opportunities in the mortgage industry! We currently seek a Secondary Marketing Manager and a Mortgage Trader. The ideal candidates will be energetic and analytical with a proven record of accomplishments. We are looking for out-of-the-box thinkers who can hit the ground running and bring in fresh ideas. These positions ensure effective management of complex hedging functions, pipeline governance, loan sales, buy side bidding, pooling, and trade settlements for Retail/TPO channels. Additionally, these positions are responsible for managing existing partnerships and building new relationships. At On Q Financial, we are passionate about making the dream of homeownership a reality! We are highly collaborative, extremely innovative, and like to have fun - and we move FAST! If you are someone who accelerates and propels Capital Markets to the next level, we want to meet you! Interested candidates please email your resume to Juan Rodas.”

We’ve created something EPiQ! CMG Financial and Realty One Group launched a true joint venture partnership EPiQ LENDING. This dynamic lender gives loan officers unparalleled support to maximize their growth. Clients and partners get the hands-on service of a direct lender and the unique experience of the powerful Realty One Group, UNBROKERAGE. Mortgage industry veteran Raffie Kalajian will lead as Joint Venture President and is staffing a team to demonstrate the power of EPiQ LENDING’s industry influence. Chris Harris, Senior VP, National Joint Venture Manager, CMG Financial stated, “With a combination of our proven mortgage platform and engaged partner with a network of over 15,000 agents, EPiQ LENDING is poised to be one of the best destinations for loan officers.” To discuss joining EPiQ LENDING’s team contact Raffie Kalajian (626-705-2506). To learn more about joint venture opportunities with CMG Financial contact Kevin McGarrity (856-287-2659).

Sun West Mortgage Company, [NMLS 3277] a leading full-service national mortgage lender, is excited to announce the expansion of its west coast operations. Tyler Fowler recently joined Sun West Mortgage Company as the new Producing Branch Manager for Middletown, CA. Tyler, along with his experienced team of mortgage professionals, are dedicated to guiding customers through the mortgage process with transparency and trust. With nearly 23 years of banking and lending experience, Sun West is pleased to have Fowler a part of the company’s continued growth. For more information on Sun West Mortgage Company, please contact Managing Director, Leif Boyd or SVP, Business Development, Peter Schwartz at 916-770-0053. For Sun West Mortgage Company, Inc. licensing information and disclosures, please click here.

Thrive Mortgage has the largest complement of diverse product offerings. Clearly, many lenders are experiencing amazing growth in 2020, but few have also included an emphasis on Reverse. In 2019, Thrive hired Loren Riddick to lead the company’s national initiatives regarding Reverse Lending. Since then, Thrive has seen this niche product become a rapidly growing component of their record-breaking total business in 2020.  Recently joining Riddick and Thrive Mortgage in expanding that message is industry veteran Mike Stanley. “The Reverse Lending market is poised for some amazing success in the days ahead,” stated Stanley. “Because of Thrive’s focus on expanding that message, more of our client base is learning how valuable a tool this product can be as component of a smart financial strategy.” Thrive is seeking mortgage operations and sales professionals who are “Hungry, Humble, & Smart”! To learn more about your new opportunity to Thrive, visit join.thrivemortgage.com.

First Community Mortgage has named Antonio Roundtree VP of Community Engagement, a new role responsible for increasing lending activities, promoting homebuyer and financial education programs, and community outreach efforts.

Out of Arizona comes news that Geneva Financial Home Loans (130 branches in 43 states) has a new National Head of Underwriting: Tiffany Graves. She’ll “focus on industry-leading rapid underwriting turn-times while maintaining the integrity of the company's underwriting policies and standards and protect and support the company's risk management goals.”