This is about the time you stop saying “Happy New Year” to people because you’ve forgotten who you’ve said it to and who you haven’t. Lenders and vendors are not forgetting the second half of 2022 as they plan for 2023, and widespread travel and entertainment cutbacks are standard fare. It is hard to justify spending $3-5k for each person to go to a conference just to “wave the company flag” when you just went through another RIF and you’re hoping to break even in the first quarter. Zillow has not forgotten anything, especially since it has nothing to remember. Zillow doesn’t have to remember what the inside of my house looks like, since it has never set foot in my hovel. But Zillow has a staff to crunch numbers, and tells us that, given the FHFA/Freddie/Fannie conforming loan limit changes for 2023, more than 2 million U.S. homes no longer require a jumbo loan. (Remember that, since jumbo loans don’t have a g-fee, some of their rates are actually less than conforming conventional loans.) Redfin’s never set foot in my house either, but thanks to “big data” is telling us that buyers received concessions (like repair money and rate buydown funding) in a record 42 percent of home sales in the fourth quarter, up from 31 percent a year earlier. Yes, places like Phoenix and Las Vegas are back in the news. (Today’s podcast is sponsored by MCT and its Hedge Advisory: Comprehensive capital markets software and services that empower secondary marketing performance.)

Lender and Broker Software, Products, and Services

People are fickle. 1 in 4 will give up on their New Year’s resolutions after just one week, and 1 in 3 will leave a brand they love after just one bad experience. On the other hand, 7 in 10 say they’ve spent more money to do business with a company that delivers great service. According to the Harvard Business Review, consumers that rate companies a 10 out of 10 for customer experience spend 140% more and remain loyal for up to 6 years. On January 12th at 2 pm ET, join Sales Boomerang and Mortgage Coach’s Alex Kutsishin and Dave Savage and Insellerate’s Josh Friend as they share the key elements of a 10/10 borrower experience and how you can implement them in 2023. Give your customers an experience they’ll love. Register now to learn more.

“Start off the new year celebrating your independence by connecting with Optimal Blue, a division of Black Knight, at the MBA Independent Mortgage Bankers Conference, Jan. 23 – 26 in Coronado, California. We’re a proud platinum sponsor, and we invite you visit our booth to learn why we’re a leading provider of secondary marketing solutions. Our product, pricing, and eligibility engine is used to price and lock 40% of U.S. mortgages. We also offer premier hedge analytics solutions, as well as expertise in MSR valuation, loan trading and social media management. We are ready to discuss your needs as an independent mortgage banker so you can grow your revenue with distinctive, automated solutions. Contact us today to schedule a one-on-one meeting to discuss your unique business goals.”

ICE Experience 2023 Early Bird pricing ends January 13. ICE Mortgage Technology®’s customer-only user conference, ICE Experience 2023 will bring together 2,500 mortgage industry professionals to connect, learn, and plan for success in the year ahead. The agenda includes more than 45 all-new sessions, networking opportunities, a look inside ICE Mortgage Technology’s product road maps, hands-on demos, and training courses to help customers use Encompass® more efficiently. Attendees will also hear from Pro Football Hall of Famer and NFL Analyst, Steve Young, HGTV TV personality & Real Estate Broker, Egypt Sherrod, MBA President, Bob Broeksmit, the Founder and Inventor of Ring, Jamie Siminoff, and Investor and Former Chairwoman of Etsy, Caterina Fake. Register by January 13, 2023, to take advantage of Early Bird pricing, as well as hotel and airfare discounts.

It’s a new year. You want new revenue. Planet Home Lending’s Correspondent team is here to empower you for 12 months of success. We offer unparalleled service, innovative technology, and newly-expanded temporary buydowns available for Conventional, FHA, VA, and USDA loans. VP of National Renovation Lending Jim Bopp (909-225-8444), and Regional Sales Manager Danny Hughes (714-376-3214) will be at the New England Mortgage Expo at the Mohegan Sun Casino & Resort in Uncasville, CT., Jan. 12-13. Learn more about our full suite of competitively priced Conventional, Government and Niche products via Best Effort, Mandatory and AOT delivery. Strong partnerships are the cornerstone of success, so we are determined to be the easiest team of professionals to deal with in the entire industry. Reach out for a 30-minute consultation that can boost your business all year long.

“Get the accounting support you need to fit any market condition, flexibly. With skilled mortgage accounting staff getting harder to find and more expensive to hire, lenders need solutions they can afford and trust. Richey May’s Client Accounting and Advisory Services (CAAS) team provides the industry expertise you need to outsource your accounting functions at will. Think of it as outsourced bookkeeping… And a whole lot more. CAAS lets you scale up or down, transitioning fixed to variable costs in tune with the market. Need help capturing the right data for loan-level accounting? We have deep experience in this area. Plus, we not only know how to communicate with operations and accounting, but we also know the best practices used by the most successful lenders. Most of all, we have the cost-effective, flexible solutions you need now. Contact us for details and learn more here.”

Retail Lenders Going After Market Share

Anyone who’s been in this business for any length of time knows that what happens in the secondary markets directly flows through and impacts borrowers. For example, when the FHFA tells Freddie or Fannie to jump, they ask “how high?” Want to issue Ginnie Mae securities? Then you’d better pay attention to what Ginnie and HUD are doing. When correspondent investors or wholesalers make changes, their clients either mimic them or find a new outlet for that product. But things happen with retail lenders who either have portfolio products or special agreements with investors, and it is good to take a quick glance at a couple to see who’s doing what.

First, let’s jump across 5,900 miles to China to look at maximum government interference. China's central bank and the banking and insurance regulator have established a dynamic adjustment mechanism on mortgage rates for first-time home buyers in an attempt to further support the property sector. For cities where the selling prices of new homes fall month-on-month and year-on-year for three consecutive months, the floor on mortgage rates can be lowered or abolished for first-time home buyers in phases, according to a statement by the People's Bank of China (PBOC).

In the U.S., one example is Silverton Mortgage, a leading direct residential mortgage lender, is now offering a Rate Drop Protection Program for home buyers trying to purchase their dream home between now and March 31, 2023. Buyers that finance the purchase of their home with Silverton Mortgage can refinance within three years if interest rates drop, and Silverton Mortgage will waive the origination fee and contribute up to $500 towards appraisal fees.

And SoFi has a pricing special. “30-year mortgages are very popular among home buyers because they feature low monthly payments. And now you can save on your mortgage with a 0.25 percent pricing special* from SoFi available when you purchase a new home with SoFi's conventional 30-year loan. Contact SoFi for details.” When you lock in your rate, a pricing discount will be applied to the par rate of your loan. (The 0.25 percent purchase pricing special will be reflected on the lock confirmation you receive upon locking your interest rate. Rates can vary and are not guaranteed until locked. Available only on 30-year conforming purchase transactions after January 14.)

Capital Markets

The U.S. Government is rarely not in the headlines, or at least the front page. I am occasionally asked, “Will government debt be a serious problem?” especially since America's national debt topped $31 trillion for the first time in November. The press likes to throw things into the mix, such as the possibility of a recession, the lack of a House Speaker, an aging U.S. population, elevated healthcare and defense costs, and a tax system that doesn't bring in enough revenue to cover spending… the federal government has become very good at “kicking the can” down the road.

People far smarter than I am will tell you that there's no magic number or level for when a government's debt begins to hurt its economy, and the country has easily handled a much heavier debt load than was once thought possible (and even use those conditions to remain competitive on the international stage). Default isn't imminent, and even a divided Congress ultimately finds ways to raise the debt ceiling. Some go a step further and say that the record amount of red ink doesn't matter at all, and instead focus on the interest the government pays on all its debt as a percent of GDP.

Ahead of today’s latest payrolls report, we had some rate hike concerns yesterday following stronger than expected labor market data. ADP Employment (+235k) beat expectations and there was the lowest number of weekly initial claims (204k) since September. While Amazon, Salesforce, and other giants across technology and finance have garnered recent headlines by firing tens of thousands of workers, small and medium-sized U.S. businesses have been on a hiring spree, pointing to a tight labor market, which should keep the Fed on edge about inflation remaining elevated despite other signs of weakening in the broader economy. In a welcome sign for the Fed in its fight against inflation, the data also showed a sharp deceleration in wage growth in December.

We had some Fed “speak” yesterday. Kansas City Fed President George says she sees rates reaching 5.0 percent and staying there "well into 2024." St. Louis Fed President Bullard suggested 2023 might be a disinflationary year. He added that "While the policy rate is not yet in a zone that may be considered sufficiently restrictive, it is getting closer."

Today’s economic calendar kicked off with the December payrolls report. The U.S. economy added 223k jobs “not on farms” in December, higher than expected. The unemployment rate rang in at 3.5 percent (down from 3.6 percent last month) and hourly earnings were +.3 percent, +4.6 percent year over year, so cooling down a little. We’ve also received November factory orders and December ISM non-manufacturing PMI, if anyone cares. Today is also packed with Fed speakers (Governor Cook, Atlanta President Bostic, Richmond President Barkin, and Kansas City President George) who are expected to continue to push back on forward pricing in money markets in 2023. After the employment data we begin the day with Agency MBS prices are nearly unchanged from Thursday night and the 10-year yielding 3.73 after closing yesterday at 3.72 percent.

Careers and Transitions

A nationally recognized mortgage lender with the dependable financial backing of a publicly traded parent company is looking to expand its team. This mid-sized Utah-based company is consistently ranked a Top 50 mortgage company by Scotsman Guide in the United States and features a full array of mortgage products and a network of professional branches from coast to coast. The National Recruiting Director position will oversee production growth and team acquisition. To apply, please send your confidential resume to Chrisman LLC’s Anjelica Nixt for forwarding.

“Who’s one of the fairest of them all? According to FairPlay, PrimeLending is. In an exclusive analysis by FairPlay, PrimeLending, a PlainsCapital Company® was named one of the Top 10 Fairest Lenders for Black Homebuyers. In the study, FairPlay analyzed more than 23 million mortgage applications from 2021 to determine how fair lending is for protected groups, including Black borrowers. It used Federal public source data to conduct the research. We are honored to be recognized for our fair practices and will continue to be an ethical and trustworthy lender. That’s why we have a whole Multicultural Lending team dedicated to expanding our footprint in the multicultural market led by SVP Latonia Donaldson. If you want to be part of a company committed to ensuring homeownership is accessible to all borrowers, we’re hiring experienced producers. Contact Nic Hartke for more information.”

Plaza Home Mortgage, Inc. announced Jeff Leinan has been promoted to Co-President, sharing the day-to-day management of the company with the fabled Mike Fontaine, Plaza’s Co-President and COO. Both of them will report to Kevin Parra, Plaza’s Co-Founder and CEO, reported to still be somewhere on planet Earth. Leinan, who had previously been President of Plaza’s Wholesale Division, will continue to be responsible for national Wholesale sales, operations, and production. Congratulations Jeff, Plaza’s a top-notch company!