Have you ever been to a chiropractor? You know, where there’s something out of alignment, you describe it to them, and then they work their magic? Here’s a chiropractor of a different sort with a different kind of patient. Today I head to Boise where there are 43 chiropractors. Okay, I made that figure up. Here’s something that’s not made up: originator comp. Yesterday afternoon’s Commentary mentioned the shift in regional manager’s pay to more profit-based rather than strictly volume and raised the issue of paying loan originators based on profits rather than in basis points of production. The note prompted this reminder from attorney Brian Levy. “No. As much as that makes sense from a business perspective, it’s illegal to pay LOs on profits under TILA’s LO Comp Rule. There are other things a lender can do that are permissible, but the whole gist of the LO Comp Rule was to prevent LOs from being paid on individual loan profitability.” (Today’s Commentary podcast can be found here and this week’s is sponsored by Lender Toolkit and its AI-powered AI Underwriter and Prism borrower income automation tools. By providing lightning-fast underwriting decisions, your market reputation with borrowers and Realtors will soar, which means more repeat and referral business. Hear an interview with PHH’s Sabrina Dean-Bass on why a commercial/business purpose loan servicer matters.)

Lender and Broker Services, Products, and Software

“Are you trying to gain an edge in pricing and predicting cash flows? Start by better understanding the value of your servicing portfolio. Although valuing servicing is a key responsibility in secondary marketing, the process isn’t always straightforward. And if you’re still using grids to value servicing assets, you could be compromising transparency, profitability, and efficiency. Fortunately, Optimal Blue offers a better way to manage the opaque MSR asset, and we’d love to tell you more during the MBA Servicing Solutions Conference in Orlando. Steve Baselice, capital markets solutions specialist, will be on-site at the Optimal Blue booth and ready to lend his decades of expertise to your business needs. Additionally, plan to attend the Tech Showcase session, which will include an overview of Optimal Blue’s technology, presented by Mike Vough, VP of hedging and trading products. To learn more, contact us.”

“Today, Valentine's Day, we invite you to join us for a webinar filled with passion for mortgage servicing rights (MSR)! Hosted by industry leaders MQMR and MCT, our event tomorrow, February 15th will delve into the heart of servicing operational and regulatory best practices, offering tips to steer clear of common MSR management mistakes. Indulge in the sweet insights we have to offer, just like your favorite M&Ms! We'll unwrap crucial topics, including MSR compliance, risk management, and best practices, all while exploring the regulatory developments related to FHFA, GSEs, NCUA, and GAAP compliance. Dive into the bulk MSR market with our current updates and navigate the maze of trends in retained vs. released vs. co-issue portfolios. Don't miss this opportunity to understand the true value of your portfolio and stay ahead of the game. Secure your spot and let MSR excellence be the heart of your success story.

Fed up with inconsistent processing? Take the guesswork out of your business with wemlo®. Our processors are in the business of making mortgage brokers look good. That’s why our transparent communication and customer care define our loan processing services. Our processing team works in a pod set-up (one manager and two go-to processors) to ensure consistent service and results for every loan submitted. Trust us, we’re in the business of keeping customers happy – just look at our 4.6/5-star borrower rating. Book your wemlo demo today. *2023 Borrower Score:  4.6 /5.0 out of 229 responses* NMLS ID 1853218

“’Pride of ownership.’ ‘Crime-ridden area.’ ‘Desirable area.’ On January 26, Freddie Mac Loan Collateral Advisor began delivering fatal feedback messages that prevent a “Successful” status on the Uniform Collateral Data Portal Submission Summary Report for appraisal reports if they contain these terms and phrases and certain others that may be prohibited or potentially biased. Xactus Appraisal ScorecardX helps you perform a full review of your appraisal reports and avoid potential biases to ensure successful loan submission and delivery to Freddie Mac. Appraisal ScorecardX analyzes key words and phrases in your appraisal reports and helps detect potential biases. It also allows you to identify key terms that you would like included in your appraisal reports, and much more. Ready to get started? Contact your Xactus strategic account manager or email us. Stay updated on upcoming news, webinars, and other industry insights by following the Xactus LinkedIn page.

“Want to escape to old Havana, just for the night? Here's your chance at MBA Servicing! RSVP to the Covius Kickoff Reception at the Cuba Libre Restaurant & Rum Bar on Tuesday, Feb 20th. We're unwinding with hand-crafted cocktails, Cuban fare and Latin and Afro-Cuban rhythms. Join us there! Be sure to also schedule a meeting to talk with the Covius team while at the conference and stop by the Covius booth (#708) to learn more about our solutions designed to help servicers control risk and assure compliance, including default title, loss mitigation, title curative, REO & auction, doc prep, compliance solutions and more. While at the Covius booth, be sure to catch a demo of the newly redesigned and enhanced RealtyBid auction website or a demo of the Covius Technology Solutions team’s Low-Code Automation solution that interfaces easily with other industry standards and legacy systems.”

Anchor Loans Launches TPO Broker Channel for Flip, Bridge, New Construction and Rental Investment Financing: With so many banks and private lenders scaling back on fix and flip and construction lending, house flippers and builders are turning to mortgage brokers and other intermediaries to help identify reliable sources of capital. National private lending leader Anchor Loans has stepped up to launch a new Third-Party Originator (TPO) Broker Channel to serve loan brokers and other third-party originators whose clients are the real estate investors and developers building and refurbishing homes for America's buyers and renters. With 25+ years in business, $14B+ in loans funded to date and expert teams lending in 48 U.S. states, Anchor offers flexible loan programs, experience-based pricing, $100k to $10MM loan amounts, fast funding, and a speedy draw process. Mortgage brokers and loan originators can learn more here.

Conferences and Events Through February

A good place for longer term conference planning is to start is here, and click on “Conference List” for in-person events in the future.

Today, looking for more in-depth commentary on weekly mortgage news? Register here for "Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT is a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Hear from Todd Maki of Snapdocs!

Friday the 16th is this week’s episode of The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT, 3PM ET, in “The Rundown”. Listen in to Chuck Iverson from Mason McDuffie.

Gain insights on how Closed End Seconds work and get informed on the upcoming CalHFA Dream For All program. Join LoanStream Mortgage on Tuesday, February 20th, 11AM PT for an informative webinar.

The New Mexico Mortgage Lenders Association (NMMLA) and its resident Mortgage Guru, Alan Fowler, CMB, are presenting Real Estate Finance – Your Role in Providing the American Dream on 2/20, from 8:30 AM until Noon at the GAAR Event Center, 1635 University Blvd. NE in Albuquerque. Alan will pass along some of the wisdom he has gained in his 43 years as a lender and 35 years as a speaker and educator to help attendees of every experience level understand their role in providing the American Dream and why Real Estate Finance is the best industry in the world! Register at NMMLA Events – New Mexico Mortgage Lenders. Association or by calling 505-480-8514.

Register for MBA's Servicing Solutions Conference & Expo, February 20-23 in Orlando. Get valued insight from industry experts at the premier industry event created especially for servicing professionals and providers. Attend to reconnect with your peers, hear and share vital information, and get relevant results for your organization.

Are you ready to help your FHA and VA clients with VA IRRRLs and FHA Streamlines? Join Rocket Pro TPO’s panel of expert trainers, a VP of Sales and a senior sales FHA/VA pro on Tuesday, February 20, at 2:00 p.m. ET!

“Strategies to Master the Market Now with the Right Mortgage Technology,” is Wednesday, Feb. 21, at 2 pm ET. This free webinar, co-sponsored by Floify and Truv, Christy Soukhamneut, chief lending officer at UFCU; Raven Johnson, VP business systems at Legacy Mutual Mortgage; Craig Ungaro, COO AnnieMac Home Mortgage; features Jodi Hall, founder & CEO of DandaRoad, LLC; Richard Grieser, vice president of marketing at Truv; and Sofia Rossato, president & GM of Floify. Click here to register.

Do you know how to create your BRAND? Have you ever done a TIKTOK Video? Do you know how to build connections? Monitor results and strategy? How to get it right? Create different accounts for areas of focus. Discover Personal Branding with Kim Drakulich and Rebecca Richardson, join MBAC Educates Online Webinar February 22, at 11 am EST.

As part of the certified packaging process, Rural Development (RD) partners with Housing Assistance Council (HAC), NeighborWorks America (NWA), and Rural Community Assistance Corporation (RCAC) to provide the Section 502 direct loan application packaging training. In person certified loan application packaging course is now open for registration, NeighborWorks America: Monday, February 26, – Wednesday, February 28, 2024. Completion of an approved course is required for a loan application packaging certification.

Learn the checks and balances you can use to ensure your partners are complying with industry regulations on the RESPA: Ensuring Fintech Partner Compliance webinar on Feb. 27th. FNF Family of Companies’ Chuck Cain and Mortgage Connect’s Gabe Minton will be sharing the factors you need to take into consideration including: a brief overview of fintech and artificial intelligence, lessons learned from the Amazon AI and First Federal Bank settlement, strategies to ensure partners follow through on their stated compliance protocols, and much more. Learn how to identify what you need from your partners: RESPANews.com.

Join MMLA Southeast Chapter at the Federal Reserve Bank - Detroit Branch on Thursday, February 29th 11:00 a.m. - 1:30 p.m. to hear from speaker, Martin Lavelle, senior business economist who will provide insight on what's really going on with our economy and what it means for our business. An exclusive tour of the building will follow lunch. NOTE: all registrations need to be made before February 24 for security purposes. Cost: $29/member and $39/non-member include boxed lunch.

A&D Mortgage offers the upcoming webinar "Generational Bridges in Mortgage" on leap day of February 29 at 1PM. “This distinctive roundtable event will feature a dynamic discussion among members of two families (Denese Carty, Ally Carty, Rob Chrisman, and Robbie Chrisman). “The webinar aims to bridge the gap between generations within the mortgage industry, offering unique perspectives on the challenges and opportunities faced by Baby Boomers, Gen Xers, Millennials, and Gen Z.

The 2024 Central Florida FAMP Education Day is 8:30 AM to 4:30 PM; followed by the Free Annual Trade Show from 4:30 PM to 8:00 PM, on February 29th at the Altamonte Hilton.

Capital Markets

This morning Freddie Mac reported its Fourth Quarter and Full-Year 2023 financial results and filed its Annual Report on Form 10-K with the U.S. Securities and Exchange Commission. To cut to the chase, Freddie reported a net income of $2.9 billion for the fourth quarter of 2023 and $10.5 billion for all of 2023. Nice.

Anyone hedging a pipeline against interest rate risk pays attention to which security to use. After all, you don’t want to hedge a pipeline of Freddie & Fannie loans with Ginnie Mae securities. That creates basis risk. Nor do you want to hedge a pipeline of 7 percent loans with a 5 percent security, since they don’t have the same price movements. Traders have told me that the 5.5 coupon remains the hedging instrument of choice, being very liquid, although there is certainly a sizeable percentage of 6 percent coupon securities being used as these are more relevant for 7 percent loans.

The timing of the first Fed rate cut this year is at risk of slipping to the summer. January inflation data came in hotter than expected, with consumer prices rising at a 3.1 percent annualized rate. While this is a massive improvement from the 9.1 percent annualized rate inflation peaked at in June 2022, the current rate still means prices will double roughly every 20 years. And despite declining from a 3.4 percent rate in December, inflation is not a level that will give the FOMC the much-desired confidence investors seek to start imminently cutting rates. Fed messaging has been that it needs to see more evidence that core-inflation is trending towards the 2 percent target before rate cuts can occur.

The bottom line is that inflation is still alive, which was a bit of a reality check to Wall Street as that hotter-than-estimated inflation data pushed the prospect of rate cuts further into the future, triggering a fall in both stocks and bonds prices. Core goods prices remained in deflationary territory, but core services inflation came in hot at 0.7 percent, the largest gain in 16 months. There was a move higher in price growth for owners' equivalent rent, medical care services, and travel-services such as airfares and hotels. Additionally, shelter inflation is rising at a very stubborn 6 percent, a bit of a mystery since apartment rents are no longer rising.

The highlight of today’s calendar is Fedspeak, with the presidents of various Federal Reserve districts speaking, though things kicked off with mortgage applications decreasing 2.3 percent from one week earlier, according to data from the MBA’s Weekly Mortgage Applications Survey for the week ending February 9. The remainder of the economic calendar consists of Fed speak: Chicago President Goolsbee, Vice Chair for Supervision Barr, and Atlanta President Bostic are all set to deliver remarks. We begin the day with Agency MBS prices roughly unchanged from Tuesday evening, the 10-year yielding 4.30 after closing yesterday at 4.32 percent, and the 2-year at 4.60.


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“Attention Appraisers! Join our leading group of Staff Appraisers and help take the industry forward. The appraisal industry is evolving, and Class Valuation is helping lead the charge. Here is an opportunity to join a team dedicated to modernizing the industry by bringing together the best people, processes, and technology to strengthen appraiser independence. When you are part of our team, you have the support of our operational teams. You no longer have to shop for benefits or track down order payments. We provide you with the resources you need to do your job. You get to concentrate on doing what it is you do best: providing high quality appraisals! Learn more and apply here.”

Sagent appointed Eugene “Geno” Paluso as Chief Executive Officer. “Along with Sagent’s board and executive team of servicing experts, Paluso will operationalize the $14 trillion mortgage servicing industry’s first and only cloud-native software platform in 2024. Paluso replaces Dan Sogorka, who will remain with the company as an advisor. “This is the latest move in Sagent’s multi-year strategic plan to build the future of mortgage servicing. Phase one of this plan was to move Sagent platforms to the cloud, earn long-term relationships with many of America’s top mortgage servicers, and begin building a new platform with a single data and user experience across the entire core, consumer, and default servicing lifecycle. As CEO, Paluso will lead Sagent’s next phase, which is to complete, launch, and operationalize this platform for customers in 2024 and beyond.”