While the markets are talking about Boris Johnson’s victory in the U.K. (“get Brexit done”), here’s your trivia of the day: Every month that starts on a Sunday has a Friday the 13th. And did you know that research on humans shows that in the short term, we tend to regret actions more than inactions. But in the long term, we’re more likely to regret the things we didn’t do. For lenders… Didn’t merge? Didn’t add that branch? Didn’t hire that great underwriter? (Psychologists suspect that this is because the consequences of inaction are uncertain and take much longer to make an impact.) I’ve been telling folks for quite some time that I hope they’re happy with rates where they since they’ll probably be here for a while. Yesterday they moved higher giving pause to anyone predicting a recession in 2020 (two straight quarters of negative U.S. GDP). Yes, short term rates will probably stay around these levels for quite some time. But originators should understand what the current state of the U.S. economy, and economies around the world, is. Lots more on what is driving, or stabilizing rates, below.
Lender Services and Products
Floify just released Version 3 of its web-based, interview-style 1003 loan application! The company’s latest digital 1003 comes packed with powerful new features like multi-language subtitles, downloadable PDFs, and support for the updated URLA, with more exciting innovations to come. The latest version builds on everything lenders already love about Floify’s fully customizable 1003, which delivers a beautiful, simple, and secure mortgage application experience for borrowers on any device and creates massive efficiencies for originators via dynamic automations and best-of-breed integrations. If you are considering upgrading your mortgage operation to include a comprehensive digital lending platform, now is the perfect time to get on the leading edge of mortgage tech with Floify’s point-of-sale system and new 1003 – request a live demo to learn more!
Wondering where lending is headed in 2020? Blend asked industry leaders, including Henry Cason, Joe Welu, and Michael Ovitz, for their perspectives. Learn how customer experience is evolving, why lenders should empower consumers, and ways to navigate an increasingly margin-compressed environment. Click here to read the insights.
The clock is ticking on Home Point Financial’s self-service admin fee reductions: $200 Reduction on Standard Documentation and $100 Reduction on Streamlines! To receive this reduction, your LE must be disclosed by Wednesday, December 18 and submitted by 11:59 PM Eastern on Thursday, December 19, so there’s no time to waste. Quick, easy, and saves money? Sounds like a great way to make the holidays a little less hectic. See more here.
From Service 1st’s CEO, Curtis Knuth, “Rob, a big thank you to your readers as they’ve made Q4 a great one for us. We introduced Income+ (an income determination solution) @MBA Annual, and it’s been a great launch. Keys have been the simplicity of using third party IRS & employer validated data, no endless uploads of consumer docs, and a consistently accurate and customizable rules engine for W-2 & self-employed borrowers. For your readership that haven’t tested Income+ yet, I’ve created a 5-day, zero-fee testing program to help validate the solution’s performance. Contact us and let’s get your team further tuned for performance in 2020. Thanks Rob.”
AmeriHome Mortgage wishes all of its clients and business partners a happy holiday season! Fannie Mae and Freddie Mac loans at the new 2020 Loan Limits are eligible for purchase NOW! For pricing and implementation information email CLsales@amerihome.com. AmeriHome has also expanded its Non-Agency product offerings with the launch of its Non-QM program - Income Flex - as well as the enhancement of their Core Jumbo program. AmeriHome's Non-Delegated Program also continues to thrive with unparalleled service and Close-on-Time Commitment. Visit the AmeriHome Correspondent website for more information, and follow AmeriHome Correspondent on LinkedIn to keep up with all of the latest updates and opportunities!
Mortgage-backed securities played a pivotal role in triggering the 2008 recession. And there was a notable reduction in the amount of MBS U.S. banks held on their balance sheet immediately after the downturn. But banks have been doubling down on the MBS in recent years, with data compiled by the Federal Reserve showing that this figure breached the $2-trillion mark for the first time ever this August. Industry experts, whoever they are, do not believe that this is a cause for concern. After all, the government has taken significant steps to regulate the mortgage securities market after the downturn. For an in-depth look, check out, “How Mortgage-Backed Securities Issued In The U.S. Have Changed Since The Sub-Prime Crisis” in great detail with an interactive dashboard.
It’s all about supply and demand. Yesterday the NY Fed announced it planned to buy a maximum of $5.1 billion in agency MBS over the December 13 through January 14 period, based on November paydowns (that exceeded $20 billion). For the two-week period beginning on Friday (with no operations held from Dec 23 to Dec 31), the Desk is scheduled to buy up $2.445 billion MBS across four FedTrade operations between next Monday through Thursday.
Economists are split on why hiring has fallen to a monthly average of 167,000 this year from 223,000 in 2018, potentially resulting in the lowest annual total since 2010. 266,000 jobs were added in November and October's numbers were revised higher, according to the latest Employment Situation Summary report which was significantly more positive than the markets were expecting. This was viewed as a sign of resilience for the US economy despite slowing global economic conditions and trade uncertainty. Manufacturing hiring increased in November due mostly to the return to work at GM following a six-week strike. The hiring was welcomed by markets which saw the November ISM manufacturing survey decline for the fourth straight month earlier in the week and pointing to continued weakness in manufacturing. Fortunately, manufacturing is only roughly 12 percent of US economic output and the servicing sector continued to show expansion in November. Lately it feels as through each day we see the opposite headline from the previous day regarding whether or not a trade deal signed between the US and China. Up until yesterday the next round of tariffs was expected to go into effect on December 15.
Brexit who? Treasuries pulled back in a big way Thursday as equities moved upward amid a large risk-on trade yesterday regarding a “phase one” trade deal between the U.S. and China. President Trump tweeted five minutes after markets opened in New York that the U.S. and China were very close to a phase-one trade deal, which he signed later in the day. The deal averts December 15 tariffs on $160 billion in consumer goods, for now. That news saw the 10-year yield hit a new recent high of 1.92 percent, before closing the day +11 bps to 1.90 percent. Treasuries experienced steepening across the curve, rallying slightly in the afternoon after the completion of a hot $16 billion 30-year bond reopening, which stopped through the when-issued yield by more than 2 bps.
It’s actually more like “Brexit when?” Though the effects will take some time for markets to digest, Boris Johnson's election gamble paid off. Brexit seems to be firmly back on track with Johnson’s Conservative Party winning a solid majority in the House of Commons. Boris Johnson will also retain the office of prime minister, allowing him to continue his effort to remove the country from the European Union.
Both of those pieces of news overshadowed the ECB meeting and President Lagarde’s first press conference of her tenure, where she avoided identifying as a hawk or dove. Lagarde did offer that the euro zone’s economic slowdown is showing signs of bottoming out, suggesting further interest-rate cuts are unlikely any time soon.
Economic releases like the Producer Price Index, tame, confirmed why the Fed is choosing to remain patient before raising the fed funds rate. The inflation releases reflected disinflation that Fed Chair Powell does not want to see gain any momentum. (In Fed Chair Powell’s press conference from Wednesday analysts were interested in his response to the question of what it would take for him to characterize the labor market as “hot.” Powell said it all came down to wages, and that he wasn’t comfortable calling it hot because employers still aren’t paying workers more despite low unemployment. This is reminiscent of former Minneapolis Fed President Kocherlakota, who recently said one reason the Fed tightened rates in 2018 was an obsession with “normalizing” policy.)
Today’s calendar is already underway with the U.K. election results, November Retail Sales (+.2%, ex-auto +.1%) and Import & Export Prices (both +.2%). The only remaining release of the day and week will be October Business Inventories in a few hours. Fedspeak resumes following Wednesday’s Fed events with New York Fed President Williams speaking later this morning. We begin the day with Agency MBS prices up .125 and the 10-year yielding 1.89 percent.
Opportunities and Transitions
An Arizona-based consumer direct Mortgage Broker that funded its first loan in October 2017 just finished the year with over $2 billion in funded volume. The company is looking to bring in its first-ever Chief Marketing Officer whose goal will be to help the company hit it’s $3.5 billion funding goal in 2020. The candidate should have at least 3 years’ experience in the mortgage marketing space with proven concepts related to SEO optimization, Digital Marketing, Tradition Marketing, Website design/overhaul to drive organic lead flow, and be willing to work in an awesome culture with an extremely cohesive executive team. Interested parties should contact Chrisman LLC’s Anjelica Nixt to forward their resumes.
Guaranteed Rate (NMLS ID 2611) is seeking acquisition opportunities nationwide. “Licensed in all 50 states, Guaranteed Rate (NMLS ID 2611) is on a mission to find the right partners to expand market share across the U.S. The ideal situation is to acquire mortgage companies originating between $200M and $10B annually that are looking to maximize their profitability and revenue by implementing best-in-class pricing, lower corporate cost per loan, world-class technology, marketing, recruiting, and business development resources. Allow us to handle the logistics of the business with our proven model and technology that provides companies with the opportunity to focus on growing their business. Interested parties please e-mail Mark Filler and specify this listing.”
“Consumer Direct Lending is ‘Hot Again!’ Call us if ‘chance’ is not your game and you are not willing to bet on when your current or future lender will close its doors or lay you off. HomeLend Mortgage is small enough to grow and strong enough to stay. At HomeLend you will have the Best and Brightest of technology, POS design and lead sources. We have the Best In Class loan fulfillment! We provide a great base salary to keep you warm when its cold outside and we provide solid leads along with an outstanding monthly bonus compensation structure to keep you thriving. Stop jumping from ship to ship, it’s time to come ‘Home,’ come Home to HomeLend. We want individuals, teams and groups. Out of state OK! Parsippany NJ is our Corporate HQ. Home is where the Dream is, HomeLend makes it happen! Call Munjal Patel, President of HomeLend, (cell 908-510-2719 or work 908-315-5701).”
Guardian Mortgage is thrilled to announce that Rhett Broussard is the new Director of National Sales Development responsible for coaching loan originators and ensuring they have the tools and training needed for success. Throughout his career, Rhett’s vision of what “could be” has prevailed. Early on, he transitioned into roles focused on leadership, creating efficiencies, and growing teams. He developed a 52-week structured prospecting and relationship-building methodology by leveraging the experience, strategies, and tools of elite-level producers with the objective of transforming the type of business being written, while fostering growth. He later dedicated his time to the development of a CRM, XtremeMortgageWorX, for loan officers industry wide. Between Rhett’s expertise and the tools they offer, Guardian Mortgage is becoming the organization that fosters the successful achievements of those who are prepared to thrive with a strong mortgage career. To learn more visit us.
Congrats to Len Patton, CMB who has joined Sutherland as Senior Principal, Business Development and will focus on promoting Sutherland’s component servicing and technology offerings to the mortgage servicing marketplace. Len will bring his over 22 years of experience to the Sutherland team to highlight the efficiency, scale, and cost reduction in digital transformation. “Len is a great addition to the Sutherland team. I have worked with Len in the past and his knowledge and customer focused sales approach aligns with Sutherland’s culture,” stated Neil Armstrong, AMP Head of Global Business Development.
And Wyndham Capital Mortgage has appointed Trey Rigdon as SVP of marketing tasked with providing loan officers with digital tools and help them build brand presence.