Many years ago I was hanging out with George Clooney and made the mistake of telling him, “Look, you’ll never amount to much as an actor. You’d be much better off sending out a free daily commentary.” He thought differently and it led to a rift between us, and we haven’t spoken since. Looking back, it was probably a mistake on my part, especially when the story came out that he gave 14 of his friends each $1 million in cash! Speaking of receiving, or earning, money, a recent STRATMOR workshop poll showed that “tiered dollars per loan” is how a large block of lenders pay incentives to their operations staff (versus achievement of individual or team objectives, or flat dollars per loan). On the legal side, no one wants to pay fines, and did you know that the U.S. Sixth Circuit Court of Appeals ruled that lenders cannot rely on borrowers to satisfy ATR rule? In a case regarding the Dodd-Frank Act’s ability-to-repay (ATR) provisions, the Court determined the defendant bank violated the Truth-in-Lending Act by erroneously relying on the verbal statements from the plaintiff and his ex-wife regarding his income and failing to verify those statements with documentation.
Company-Sponsored Training and Events
Are you ready for VA IRRRL opportunities in this market? Learn how to efficiently submit your files once for a final approval! Join Freedom Mortgage Wholesale for live webinar training sessions on VA IRRRL mortgage products and origination processes. Ideal for new or experienced government originators. Sign up for a VA IRRRL webinar on 11/20 or 11/24.
To successfully manage an incredible volume of business, you need to build an equally incredible team! XINNIX Founder & CEO, Casey Cunningham, will present a free live webinar - "Proven Ways to Build New Talent", on Wednesday, December 2 at 1 PM ET. As the expert in building new talent quickly and effectively, XINNIX will share their proven methodology behind successfully empowering and equipping the next generation of mortgage professionals. Leaders looking to grow their teams in 2021 won't want to miss this event. Prepare for all the success that potentially lies ahead for your business in the new year: reserve your seat today!
Join Josh Friend, CEO Insellerate as he goes live with Rob Chrisman, capital markets consultant, today from 11AM-11:45AM PT. Listen to key industry insights and in-depth conversations where they discuss the economy, industry trends, and provide an outlook for 2021.
Years ago, servicing, and the fluctuation in the value of servicing, was an afterthought. That has changed, and the volatility in the value of government servicing (primarily Ginnie Mae securities backed by FHA & VA loans) we saw in March and April given forbearance uncertainty once again reminded us that servicing impacts the perceived value of loans in pricing algorithms, and therefore borrowers, everywhere. And for the last several years the CFPB has been focused on servicing since it, and any transfers, is a critical touchpoint with the consumer.
Making the decision to service a portfolio of residential loans should not be hasty. Currently the top 25 servicers manage 85 percent of all servicing! And who the large servicers are has shifted: a look at the top 50 servicers shows about half non-bank and half depository bank as banks like Wells ($1.3 trillion), Citi, and US Bank have reduced holdings. Chase, for example, has been “de-risking” and focusing on the quality of its portfolio rather than quantity. And MLOs are especially interested in what Black Knight, which is estimated to have access to 70-80 percent of the servicing data, says about homeowners with mortgage rates above the current market: 18.5 million.
For an update on the scratched and dented market, RAMS’ Tad Dahlke reports that it has followed everything else in the financial markets, as the number of bidders increase and yields tighten. “Larger pools continue to garner more attention and higher pricing. With current origination volumes going strong, we continue to see a handful of pools every day. Not much chatter about year-end transactions, but we anticipate originators taking advantage of this record year and cleaning up any stale inventory. The headwind on this is the disruption in the 3rd party due diligence landscape. The largest diligence provider has substantially paired back its number of clients, which could ultimately create a backlog with other diligence providers. Our recommendation is for originators to put any 2020 mistakes behind them and let’s start 2021 with a clean slate!”
Servicing packages continue to trade, and it is instrumental for originators to know the attributes in which buyers are interested. MIAC, Phoenix Capital, InCenter, RAMS Mortgage Capital, and others help make a market for packages. But here are two quick examples…
SitusAMC, as exclusive sale advisor, announced a $1.0 billion FNMA/GNMA bulk MSR portfolio opportunity that is being made available to the national market. The portfolio is composed of government and conventional fixed rate, 1stlien product. Conventional loans have a weighted average qualifying FICO of 761 and weighted average original LTV of 79%. The weighted average interest rate is 3.40%, average loan size is $281,072 and the top states are Florida (24.7%), Texas (22.5%) and Ohio (14.5%). Government loans have a weighted average credit qualifying FICO of 702 and weighted average original LTV of 96%. The weighted average interest rate is 3.59%, average loan size is $293,044 and the top states are Texas (38.4%), Florida (27.1%) and Ohio (9.0%). Loan-level data is available upon request and written bids were due yesterday. (For any further information on other packages, contact Matt Maurer).
SitusAMC is also asking for written bids by Monday, November 23rd at 5pm ET on a $13.2 billion FHLMC/FNMA non-recourse servicing portfolio that is being made available on a select basis. Quality features of the portfolio include: 100 percent retail, fixed rate MSRs, weighted average credit qualifying FICO of 773 and weighted average original LTV of 71 percent, weighted average interest rate of 2.89 percent (2.94 percent on the 30-year fixed rate product), and no delinquencies and no forbearance loans as of marketing date. The top states in the pool are California (22.1 percent), Illinois (13.8 percent), and Massachusetts (12.7 percent), while the average loan size is $356,539. Loan-level data is available upon request. For any questions or further information, contact Matt Maurer.
Various global measures of business confidence improved in October; however some countries may begin to see a pull-back as increasing coronavirus cases have led some to impose new social restrictions. In the US, new claims for unemployment insurance continued their downward trend as they eased to 709,000 for the week ending November 7. However, new permanent layoffs have been observed as some companies are forced to restructure due to changes in consumer behavior and social mitigation. As of October 24th, 21,157,111 people were receiving some sort of unemployment assistance. The job openings rate and hiring rate did not change much from August to September. According to the Bureau of Labor Statistics, there were 2.0 unemployed persons per job opening on a seasonally adjusted basis. This is down from a peak of 4.6 in April and improving quickly compared to the previous recession. Declining unemployment typically leads to improving home purchase activity. Mortgage purchase applications are up 22.5 percent on a four-week moving average basis from one year ago despite declining six of the last seven weeks. The rate for a 30-year fixed rate mortgage declined to 2.98 percent for the week ending November 6.
U.S. Treasuries and MBS rallied in curve-flattening fashion yesterday and the UMBS30 basis closed tighter, with the moves catalyzed by a poor jobless claims report that outweighed any news of renewed stimulus talk when the Senate returns from recess in Washington. Initial jobless claims rose when the figure was expected to decline, which will contribute to expectations for a slowdown in job growth in November.
The other big news yesterday was existing home sales increasing more than expected in October, the fifth consecutive month of positive sales gains and another reminder of the remarkable strength of the housing market in 2020. Total sales in October were up nearly 27% from a year ago, and the 6.85-million-unit sales pace was the highest since November 2005, reflecting robust demand for existing homes. The scant supply (currently 2.5 months) will be a pressure point that feeds higher prices going forward. And we have already seen some higher prices start to take shape, as the median home price came in at $313k an increase of 16% from a year ago. Though higher existing home sale prices will hurt the purchase power of first-time buyers and low-income buyers, it should bolster the prospects for new home sales. Finally, fixed mortgage rates in Freddie Mac’s Primary Mortgage Market Survey for the week ending November 19 hit new survey lows of 2.72% and 2.28% in 30-year and 15-year rates, respectively.
Today sees no real economic releases of note but markets do receive plenty of remarks from Fed Speakers, including Chair Powell, Richmond’s Barkin, Atlanta’s Bostic, Dallas’ Kaplan, and Kansas City’s George. Black Knight did report before the open that after falling by 273K (9%) over the past two weeks, its forbearance volumes edged slightly upward the week of November 17. There are about 2.77 million forbearances, representing 5.2% of all active loans, down significantly from the peak of 4.76 million in late May. Today’s MBS FedTrade purchase schedule sees the Desk conducting three operations targeting up to $6.7 billion, comprised of $1.2 billion UMBS15 1.5% and 2%, $3.5 billion UMBS30 2% and 2.5% and $2 billion GNII 2% and 2.5%. We begin the day with Agency MBS prices up/better a smidge and the 10-year yielding .83 after closing yesterday at 0.85 percent.
Employment and Promotions
A Director of Product Management is needed for a leading provider of virtual document management and workflow automation in the mortgage industry. Responsibilities include creating the vision, direction, and adoption of our products. This individual will manage a business analysis team and team with members from the product solutions department. Successful candidates must be able to understand and communicate customer and prospect needs and wants to the organization. Through a collaborative and iterative agile design process, this role is expected to manage the product design process, hand off to development and QA teams, and interact with customers. We are seeking someone with a keen ability to ascertain the unspoken needs of market segments and elicit meaningful findings that will help propel the product and company forward, staying abreast of the competitive landscape and industry trends. If you're interested, please email your resume to Anjelica Nixt.
Track record of long employee tenure = Assurance Financial. Best tech stack in the mortgage marketplace = Assurance Financial. Exemplary record of servicing purchase money market MLO’s = Assurance Financial. Incredible entrepreneurial Branch Manager business model = Assurance Financial. Community service oriented in all markets with St. Jude as our philanthropy partner = Assurance Financial. Founded in 2001, licensed in 43 states, all agency approvals, not controlled by private equity, and growing in all markets. If you are an aggressive producing branch manager or senior mortgage loan officer considering another opportunity, please contact Paul Peters, CMB or Lindsay Anders to discuss an opportunity with Assurance Financial.
Sun West Mortgage Company, [NMLS 3277] a leading full-service national mortgage lender, is excited to announce Costpro Lending Team, a new division of Sun West Mortgage Company, Inc. Maxx Zamani, Bobby Afrasabi, and Carly Zamani of Costpro Lending Team recently joined Sun West Mortgage Company in Buena Park, CA. Joining the award-winning mortgage professionals will be their highly qualified team, which Bobby Afrasabi says is like family. “We’re a family business with the backing of a corporation that's been around forever. Employees are family. We took a big shift and completely changed direction, because we cared about our family needs”, says Bobby Afrasabi. Costpro Lending Team will be a great asset to the Sun West Mortgage Company and the expansion of their west coast operations. For more information on Sun West, 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, click here.
“Don't fear tomorrow! Come to a lender who can close loans faster, has all the products you need to be successful and the management team actually knows your name. Your loans aren't a line item on a pipeline report at Shamrock HomeLoans. We build our market strategy around you to achieve specific production goals. We are a company for top producers and people who want to be a top producer. If your employer doesn't invest in your growth, why not expect more? We have Ad Agency Quality Creative Design and Videography to showcase you, your branch or division to realtors and consumers. You deserve more and the only obstacle is fear… fear prevents consistent growth. Dean Harrington, founder of Shamrock Home Loans, touches upon this in his impressive weekly video-cast the Morning Huddle, discussing consistency as it relates to ‘Fear.’ Join Shamrock, an award-winning lender. Sales Teams, Loan Officers and Branch Managers, aim for something greater by contacting firstname.lastname@example.org.”
Northpointe Bank, a top performing bank in the nation*, announces its new streamlined Jumbo Fixed-Rate & ARM program. With total focus on customers, Northpointe offers more loan programs, better technology, and very competitive pricing that delivers true value for its borrowers. Programs like Northpointe’s new streamlined Jumbo with loan amounts up to $3,000,000, loan-to-value ratios up to 90% and no mortgage insurance requirement with a competitively low rate. You’d be hard pressed to find better solutions anywhere else! If you are an expert home loan professional ready to grow and thrive, learn more at northpointe.com/join, or connect with Tom Borrelli, VP, National Sales. (* For each of the past six years, Independent Community Bankers of America® has ranked Northpointe Bank as a top-performing bank in the nation out of approximately 5,000 ICBA member banks.)
“Trinity Oaks Mortgage has partnered with Sales Boomerang, the #1 Borrower Retention technology in the mortgage business, to ensure its Loan Officers don’t just get the first loan, but ALL ELEVEN mortgage transactions the average borrower has in their lifetime. In short, by utilizing the tools we provide, such as Sales Boomerang and others, our Loan Officers do less work and will consistently average two additional deals a month than they would at another lender. That’s how we help our LOs build their businesses and ensure a profitable, life-long customer database. If you’re looking for a position at a company that consistently equips their LOs with the tools needed to achieve huge success, let’s talk! Contact Todd Reynolds for more info.”
Planet Home Lending has promoted Dalila Ramos to VP of Talent Acquisition to support recruiting efforts in the company (she was already working with distributed retail and operations).