Nature is full of trivia. The moon moves about two inches away from the Earth each year. The Earth gets 100 tons heavier every day due to falling space dust. The climate, obviously, is part of nature. Climate, and natural disasters, impact our clients, people, insurance premiums, and the value of servicing in areas prone to hurricanes, flooding, forest fires, and earthquakes. A certain portion of those events (the number is increasing) are determined by FEMA to be natural disasters, and last year 3.4 million adults in the U.S. were at one point or another forced to evacuate their homes due to one, according to the Census Bureau. Approximately 1.4 percent of the American adult population. That’s a lot higher than historical averages, up to 800,000 on average for the years between 2008 and 2021. 12 percent were people displaced for over six months and 16 percent were adults who never returned home. The Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA) has published A Collection of Essays on Climate Risk and the Housing Market. It “was developed in response to the growing interest from industry participants on how various issues were connected to climate risk. The study features four essays from industry experts that focus on topline issues related to climate risk and its impact on the housing market.” (Today’s podcast can be found here and this week’s is sponsored by the STRATMOR Group, the data-driven mortgage advisory. At STRATMOR, insights and knowledge are applied to guide mortgage clients to make sound strategic decisions and take actions that improve their success. Todays has an interview with Partner Garth Graham on tech trends and adoption of tech solutions.)
Lender and Broker Software, Products, and Services
MSR sales have increased dramatically over the last few months as IMB's are shoring up cash reserves. IGNITE Integration Solutions, the leader in Encompass automated workflow and solutions, has helped many lenders with MSR sales by automatically extracting documents and data, while delivering files to the due diligence agent or aggregating firm. Having a technical solution dramatically increases the speed, efficiencies and transaction closing times. For more information contact Brad Ketcher, view IGNITE's suite of products, or visit booth #212 during the ICE MT Experience.
Do you have a game-changing plan to boost production? Existing-home sales continue to slip! The National Association of Realtors reported that existing-home sales have dropped for eleven straight months. The total sales number decreased 17.8% from December 2021 to December 2022. NAR Chief Economist Lawrence Yun commented, “December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates.” So, what’s your strategy to engage home sellers? Cole Information has the solution. Deepen your realtor/loan officer relationships with an offering built on decades of real estate data. Cole puts meaningful, robust and actionable property and homeowner details at your fingertips: Append CRM data or augment your web forms with neighborhood and contact information that will drive your production to the next level. Experience the power to expand and create new seller relationships that generate increased purchase business. Interested? Find the listing volume you’re missing at Cole Information!
Is your PPE ready now for all the new changes to the Fannie/Freddie LLPA’s? Does your PPE accurately reflect the cap limitations for HomeReady and HomePossible when pricing out a loan? Do you have the option in your current pricing engine to show both a Reverse mortgage and a forward mortgage option, side by side? Can you price out all the niche products you want your LOs to offer including DPAs, HELOCs, Housing Authority options and Private Money? Does your PPE vendor give you an option for a lower monthly fee when volume is down and is not tied to the number of users? If you answered “No” to any of these questions, you owe it to your company and your clients to contact LoanPASS and discover the power of what the next generation of decisioning and pricing can do! Contact Bill Mitchell or 561-254-5971.
With loans no longer falling from the sky, lenders are tasked to uncover new opportunities with their existing customer base and build stronger relationships to grow their business. Some lenders have found the sweet spot by leaning on technology to form deeper connections and become top performers in their organizations. Katherine Campbell, the chief digital officer at Assurance Financial, joined Total Expert Founder and CEO Joe Welu on the Expert Insights podcast to discuss their strategy to win in the 2023 purchase market and what other lenders can do to be successful in the year ahead. Listen to their conversation and hear Katherine’s tips to stand out from the pack.
Revvin, the leading low-code/no-code Customer Experience Engine for lenders and financial institutions, announced this week new, transparent pricing for its digital lending solutions. Lenders can now choose from among four subscription plans to get started very quickly, from the basics all the way up to solutions for the largest lenders. All plans come with pre-built integrations with third-party technology partners and access to core platform capabilities, such as the borrower and lender hubs. The lender then has the freedom to change plans as their business requires. All pricing information is now available on the company website, so if you're ready to "rev up" your lending strategy, visit here to learn more.
What if you could give your team and all your channel partners a quick and easy way to market your products and generate immediate sales? “One of the biggest challenges in today’s market is that most mortgage companies are focused on cutting back and cutting costs,” says Gibran Nicholas, CEO of Momentifi. But what if you could turn your product, service, or initiative into a profit center for your mortgage company clients? That’s why Momentifi just launched an Enterprise Content Marketing Platform for industry vendors and wholesale lenders. It’s designed for vendors and lenders who want to get more buy-in for your products and ideas in a challenging market. CLICK HERE to learn more and get your free executive briefing, Five New Ways to Drive B2B and B2B2C Sales in 2023.
The transition from mortgage broker to mortgage banker has been a popular trend among lenders in recent years. If you are in the midst of this transition, or trying to decide whether this transition would be a good fit for your operation, tune in on February 22nd. In this webinar, experts from Independent Financial and Richey May will cover what you can expect from this transition including how the warehouse lender views the banker, the economic entity principle when talking about net worth and liquidity, and the accounting implications surrounding this transition. They will also give you tips on how your CPA and warehouse lender can help advise you through this difficult process. Register here.
Fun With Credit
The sleepy world of credit, and the previously predictable cost of running and evaluating credit, has been turned upside down in the last four months. Fair Isaac setting up tiered pricing has hit credit re-sellers and borrowers. The move from tri-merge to bi-merge will take some years, but other news is happening now.
Yesterday the Consumer Finance Protection Bureau weighed in. “In 2020, we noted that the largest credit card companies started to deliberately suppress their customers’ actual payment amounts from the nationwide consumer reporting system. Actual payments are the amount a borrower repays each month, as opposed to the minimum payment or balance. Failure to report actual payment data means that millions of people’s credit reports are missing fundamental information about their credit card repayment behavior that could help many of them receive better financial offers and save on interest expenses.”
The CFPB took a poll of the largest credit card companies on if they ever furnished actual payment information. “For those that suppress it, we asked why, and if they had any plans to change their practice. Here is some of what we learned: Major market players made the change to suppress data within a short period of time. Credit card companies didn’t say when they would restart reporting actual payment information. Companies suppressed data to limit competition. By suppressing actual payment data, the largest credit card companies are making it harder for people to shop for credit and save money.”
The news prompted one veteran originator to write to me. “This sounds all well and good, but I believe that if the Agencies do this, it would result in a negative impact on the lower economic groups who pay minimum payments. It you tighten on end of the equation, the other end is diminished. My opinion is that there seems to be a concerted effort by FHFA, HUD, and CFPB to steer weaker borrowers toward FHA. I often hear that FHA has better rates. But, in fact, when the MIP is included , since it permanent, the FHA rates are more costly.”
Somewhat separately, VantageScore sent out, “Excessive and often unfair medical debt practices affect tens of millions of Americans. The continued impact from the COVID-19 pandemic only served to exacerbate medical debt’s financial burden and undermine its usefulness in predicting creditworthiness… VantageScore made the decision to eliminate that information from its most recent credit scoring models last year. Earlier this week, in a press release and fact sheet highlighting ways in which consumers are receiving necessary relief, the White House specifically cited VantageScore’s leadership in eliminating medical debt from its credit score models.”
FEMA is the official source of disaster declarations. And when FEMA publishes them, lender and investor policies and procedures are triggered.
Georgia’s declaration by FEMA as a major disaster with DR-4685 on January 10th, added Amendment 1, on February 10th, granting individual assistance to Pike county.
FEMA provided an Incident Period End Date of 1/31/2023, for California counties with Amendment No. 7 to DR-4673.
Citi Correspondent Lending announced, in CORef_DisasPol_Feb23, two policy updates addressing the following topics: changing seasoning requirements for Agency cash-out refinances and further clarifying its Disaster policy requirements. Related changes to the Correspondent Manual will be published with the February bulletin on Friday, 2/24/23. Read the complete announcement that includes effective dates and full details.
Think you have problems? Lenders and vendors aren’t the only ones who had a bad 2022. Redfin, owner of Bay Equity Home Loans, lost $320 million last year. (This is after a $57 million gain from buying back senior notes, so some would say Redfin really lost $377 million.)
Earlier this week we learned that inflation at the consumer level is still stronger than the Federal Reserve would like for a stable U.S. economy. Yesterday we learned that inflation at the wholesale level grew at the fastest rate since last June (actual 0.7 percent, expected 0.4 percent; coupled with an upward revision to the December reading to -0.2 percent from -0.5 percent) according to the Producer Price Index. This was after two months of declines in November and December. Energy costs were the big driver. Between the jobs report, CPI, retail sales, and PPI, it’s evident that growth accelerated in January. As a result, the March Fed Funds futures see an 85 percent chance for a 25 basis point hike and a 15 percent chance for a 50 basis point hike.
Ahead of the holiday and market closure Monday (no commentary), today’s calendar includes minor numbers like import & export prices for January and leading indicators for January. Two Fed speakers are currently scheduled, starting with Richmond’s Barkin who will be followed by Fed Governor Bowman. We begin the day with Agency MBS prices worse .125-.250 and the 10-year yielding 3.89 after closing yesterday at 3.84 percent. (The 2-year yield is up to 4.69.)
New Year means New Opportunities! Universal Lending Depot is excited to announce the launch of a Wholesale Mortgage Platform. We will be going LIVE on 3/1/2023 and our sales team will be led by industry leader Tyler Ermisch, Director of Sales. ULD is looking for Inside Wholesale Account Executives to join us in our Phoenix, Arizona location. We are also looking for seasoned Outside Account Executives across the US to help promote all agency products as well as Non-QM programs. If you’re looking to join a company that will be a household name in the coming years, email us for a confidential conversation to learn more about this exciting opportunity.
Frank Mancino, former RVP at Finance of America, has moved his team and +35 years in the industry to The Money Store. This move reflects his pursuit to plant solid roots in a company that can offer his team the resources and support The Money Store offers to continue to grow and succeed. These include direct underwriting to agency guides, a rockstar Operations team, great marketing and sales tools, flatline management and low rates, all to help grow their footprint in the Mid-Atlantic and Northeast. If you are interested in joining The Money Store, reach Frank Mancino to learn more.
“Looking to grow your purchase business and build agent relationships? If so, we have great news for you at Guaranteed Rate Affinity! We are in a year of opportunity for growth as we take our partnership with Coldwell Banker to another level in 2023. With instant access to over 50,000 agents nationwide along with our innovative platform, our loan officers thrive in purchase markets. If you’re looking to connect with thousands of agents in your market, this is the place for you! It’s a win-win scenario. Learn more about us today and email Tim or call (972) 236-9632 to start growing your business today!”