As attendees from the MBA’s servicing conference headed home this week, they may have learned that some airport lounges are cutting back on free guests. Some of those attendees work for depository banks, and they are in flux when it comes to servicing portfolios: Certainly reports of the majority of them shedding servicing are erroneous. Reports have Mr. Cooper, Nationstar, Chase, PNC, 5 3, all increasing their servicing portfolios. Other trends being discussed in the hallways at the conference include an increased scrutiny of regulators and auditors of the fair value of servicing, and counterparty financial strength of servicing sellers declining. Certainly, one topic is Wells Fargo’s shift in residential mortgages: Will its servicing hit the market in one big chunk? The general consensus is “probably not” and that Wells will sell its Ginnie portfolio (FHA, VA) and delinquent loans to reduce servicing costs. $400 billion of whole loans. Wells is not in any rush, and will look for fair prices, which is the best way to sell anything, right? (Today’s podcast can be found here and this week’s is sponsored by Agile, bringing the mortgage capital markets into a new digital era. From lenders to dealers, Agile is the new way to quote MBS.)

Lender and Broker Services and Products

The Empower® loan origination system (LOS) from Black Knight is the one-stop shop for lenders looking for an easier, faster, and more satisfying loan process that ultimately costs less money. Over the last year, more than 25 leading credit unions, banks and independent mortgage bankers turned to the Empower LOS to automate their mortgage process, implement exciting new innovations and capture new efficiencies and cost reductions. With a complete LOS ecosystem that seamlessly integrates with a natively embedded point-of-sale and loan officer workspace, the Optimal Blue® PPE, the Surefire℠ CRM, and more innovative solutions, Empower isn’t just any LOS. It’s an invitation to experience cutting-edge mortgage technology that will transform the way you do business. Talk with Black Knight today, and see why Empower is the proven LOS platform that positions lenders to win in a difficult lending market.

“Are you a mortgage controller, CFO, or do you run a mortgage accounting team? Ever wondered why so many people are making the switch to the mortgage industry’s leading accounting software? Well, we have just the conference for you! Join us September 24th-26th in Denver, Colorado for the 2023 Loan Vision User Conference! Spend 2+ days with over 100 Loan Vision users and find out how Loan Vision has helped maximize efficiency and minimize risk for over 200 mortgage lenders. To find more information on our conference, please visit our Conference Web Page. For any questions regarding the conference, please contact Haleigh Heilman. We can’t wait to see you there!”

“Deephaven Realtor Presentation on Non-QM Alternative Financing Options. Realtors, do you have homebuyers who need alternative financing? Are you working with originators offering an expanded line of products outside traditional agency solutions? Join us for a free webinar to learn about Non-QM lending options, how they work, and when they could be precisely what your homebuyer needs. Register today here. To view our calendar of events, please click here. If you are interested in adding a Non-QM Investor, please contact Deephaven’s Chief Sales Officer Tom Davis.”

Heading to ICE Experience ’23? What a coincidence, we'll be there too and would love to meet you! What can Velma offer you? Well, how about the best Encompass process automation you can find. Velma Connector brings value to your operations by saving costs, reducing risk, and driving productivity. Freeing up your LO's and support staff from the tedious parts of the loan manufacturing process. Plus, ICE Experience 2023 conference attendees that sign up for Connector by April 30, 2023, are eligible for a $5,000 credit towards their setup fee or recurring service charges! Click here to check out how Connector can supercharge your business! See you at booth #227!

“Since 2007, MonitorBase has been the leader in Relationship Retention Management, partnering with the largest mortgage lenders in the industry. MonitorBase continues to succeed with Retail Loan Officers, especially in down markets like we are experiencing now. Loan Officers, Brokers, and Mortgage Lenders are switching to MonitorBase and switching in record numbers. Our proprietary technology and predictive analytics produce high-quality alerts and customizable plans to fit every lender’s business model. We know you have potential loans in your contacts: Email or click to learn more today!”

Do you know how many of your website visitors click your Apply Now link? Or how many drop off before you can collect their information? Most lenders don't because the number of applications has always been the North Star and the most important metric to track. Well, not anymore. Conversions are key when leads aren't quite as plentiful. This is one reason LenderLogix created LiteSpeed, the market's newest point-of-sale system for small to midsize lenders. LiteSpeed offers a simple yet highly engaging experience for prospective homebuyers, making lead capture seamless. As a result, you can get real-time insights into how your marketing and sales efforts are performing while instantaneously seeing an increase in leads. Learn more about LiteSpeed here or check out LenderLogix's booth at ICE Experience next week for a live demonstration.

Income calculations just got a whole lot easier. Prism, the latest innovation from Lender Toolkit, streamlines the income calculation process for Encompass® users. Prism provides a simplified income automation workflow for all income types, includes built-in agency guidelines, Optical Character Recognition (OCR) for income document data extraction, and a human-in-the-loop workflow to augment OCR technology. Lender Toolkit is also hosting its Supercar Experience on Monday, February 27 just before the start of ICE Experience 23 in Las Vegas. While driver slots are full, come cheer your driver colleagues at a networking reception. For more info on the Supercar event or to secure an in-person meeting with Lender Toolkit, email us. Or stop by booth #430 to learn more about how Lender Toolkit can automate the mortgage process for your company. A big thanks to Lenders One, Reggora, Lodestar, KPMG, and Velma for sponsoring the Supercar Experience.

“Don't miss the chance to meet the Lender Price team at the ICE Experience 2023 conference next week! As a proud Gold Partner with ICE Mortgage Technology®, we invite you to visit us at Kiosk #1 or schedule a meeting to discover Lender Price, the proven, modern and most robust pricing engine in lending. Our platform drives significant improvement in operational efficiency, profit per loan and overall ROI for lenders of all sizes. Many of the largest banks and credit unions in the nation trust us. Plus, we're typically much cheaper than the competition. Lender Price enables you to price loans faster and we offer a comprehensive array of features that automate secondary and capital market tasks. Your originators can access some of the best pricing and product options available in the industry. Don't compromise on efficiency or quality - choose Lender Price for unmatched loan pricing performance. Don't just take our word for it - many lenders have already switched to Lender Price. Experience firsthand why we are the go-to platform for modern lenders! Request a demo and discover how we can help your business thrive and outperform your competitors.”

Non-QM Lenders and the State of Georgia

Logan Finance sent, “As of February 22, 2023, and until further notice, based on investor restrictions, Logan will not be funding or purchasing consumer purpose loans in the state of Georgia. Encompass has been updated to prevent a milestone to be finished under this scenario.”

Recall that, “Effective immediately, Arc Home has temporarily suspended new registrations and loan purchases in the State of Georgia for all non-agency loan products. While we regret this decision, non-agency investors have indicated that they have halted or will be halting their purchase of non-agency loans in Georgia. This suspension only impacts non-agency loan products and Arc Home continues to accept registrations and purchases of all agency and government loan products. We will continue to monitor the situation and are hopeful that this temporary suspension is short in duration. Please contact your Arc Home Account Executive with any questions.”

FHA, VA News

Lenders and investors are adopting the new FHA MIP scheme. (See Rocket news below.) There are plenty of other changes with government-backed mortgages.

In Circular 26-23-06, the U.S. Department of Veterans Affairs (VA) announced reduced funding fees for purchase, construction and cash-out refinance loans guaranteed by the VA that are closed on or after April 7, 2023. The current funding fee amounts for loans closed prior to April 7, 2023, are set forth in Exhibit A to the Circular. The funding fee amounts for loans closed on or after April 7, 2023, are set forth in Exhibit B to the Circular. The funding fee amounts for an interest rate reduction refinance loan (IRRRL) (which is the VA’s version of a streamlined refinance loan), a manufactured home loan (for homes not permanently affixed to the property), a loan assumption, and a Native American direct loan (non-IRRRL) remain the same.

FHA Mortgagee Letter (ML) 2023-04 eliminates paper-based filings and informs mortgagees of the digital claim submission options for all insurance benefit claims on FHA single family forward mortgages. Mortgagees are required to file all insurance claims through the FHA Catalyst: Claims Module, FHA Connection (FHAC), or the Electronic Data Interchange (EDI) as outlined in the ML. The provisions of this ML must be implemented no later than March 1, 2023, and will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1.

FHA Mortgagee Letter (ML) 2023-03, makes three corrections or clarifications in Mortgagee Letter 2023-02 and restates the policies in ML 2023-02, as originally published on January 30, 2023.

FHA published Mortgagee Letter (ML) 2023-02, extending the time period that the Single Family COVID-19 Recovery Options are available and expand the availability of these options to additional borrowers.

FHA published Request for Information (RFI) Regarding Rehabilitation Mortgages (Docket No. FR-6366-N-01). The RFI solicits stakeholder input regarding the barriers that limit the origination of FHA-insured mortgages under the 203(k) Rehabilitation Mortgage Insurance Program and lender participation in the Program. FHA’s effort to gain industry and public insight is being conducted to enhance the 203(k) Program; and increase its availability to borrowers seeking affordable FHA-insured mortgage financing or refinancing for the purchase and rehabilitation of homes in need of repair. Interested stakeholders are encouraged to review and provide comments on the RFI through April 15, 2023, following the methods outlined on the RFI. Additional information is available in the press release.

Rocket Pro TPO addressed the FHA MIP cut for brokers. “The Federal Housing Administration (FHA) cut mortgage insurance premiums (MIP) across the board for most borrowers. That could mean a family buying a home with a: $200,000 mortgage will save $600 per year, $300,000 mortgage will save $900 per year, $400,000 mortgage will save $1,200 per year, and a $500,000 mortgage will save $1,500 per year. We will apply this change starting February 23, 2023, for all new FHA registrations and FHA loans that are in process with our underwriting team.”

The VA published an update to its previous circulars regarding VA Forms extending the mandatory effective date of new VA form 26-1820, Report and Certification of Loan Disbursement and VA form 26-6393, Loan Analysis from 2/1/2023 to 4/1/2023. Pennymac announced it is aligning with the new 4/1/2023 effective date and there are no other changes to the requirements from the original VA circulars.

PRMG Product Update 23-07 clarifies Asset Depletion information on Agency Freddie Mac and Freddie Mac Refi Possible. Additional clarifications related to FHA Streamline, Choice DSCR, Investor Solution, VA Products and USDA are discussed in PRMG’s update.

PRMG clarified MI Certificate issuance requirement on Agency Products. Also discussed in PRMG Product Update 23-10, overridden manual income calculation documentation with D1C/AIM, and additional updates on VA Products, Chenoa FHA Product, and FL Florida Housing Products.

Did you know Orion Lending's VA Program Requires No Reserves?! Orion Lending believes every veteran deserves a place to call home. Reach out to learn more about its ultra-competitive VA offerings.

Capital Markets

Keep in mind that Federal Reserve policymakers were nearly unanimous in supporting a quarter-percentage-point interest-rate increase at their most recent meeting, with a few backing a larger increase, minutes show. But all participants indicated rates would need to rise higher, and several "observed that a policy stance that proved to be insufficiently restrictive could halt recent progress in moderating inflationary pressures," according to the minutes.

Soft landing? Hard landing? Now there is talk of expecting a "no landing" for the global economy, in which economic growth holds steady and inflation remains high. This scenario would result in tight financial conditions for longer and could weigh on government debt and risk assets. Economists surveyed by Bloomberg expect the Federal Reserve's peak interest rate to be higher than what had been projected, after recent data showed inflation had remained high. The economists expect policymakers to raise the federal funds rate to a peak of 5.25 percent and hold it there through year-end.

Looking at yesterday’s bond market, in reaction to another strong jobless claims report and a downward revision to Q4 GDP (to +2.7 percent), which was coupled with upward revisions to the price deflator and the personal consumption expenditure component, we had another rally in the bond market yesterday. Growth was driven primarily by inventory growth. Services spending rose, driven by housing and health care. Government spending was revised upward as well. It’s an off-putting mix for the Fed as growth is still running above potential and inflation is still running above target, though we are talking about data that is far in the past at this point.

Leading off today’s economic calendar was January personal income and spending (+.6 and +1.8 percent, respectively). We’ve also received the Core PCE Deflator (+.6 percent, more than expected, +5.4 percent year over year – not going in the right direction). Later this morning brings Michigan sentiment, new home sales, and remarks from Cleveland Fed President Mester, Fed Governor Jefferson, and Boston Fed President Collins. We begin the day with Agency MBS prices worse .250 and the 10-year yielding 3.93 after closing yesterday at 3.88 percent. (The 2-year is up to 4.75.)

Employment, IMB Wanted

"Is this you? With all that has transpired over the past 12 months, we know that there is strength in numbers and partnership. If you own an IMB doing between $100 million - $1.5 billion, we would love to speak to you about one topic: ‘Are we stronger together than we are apart.’ This market has created a reality that is undeniable: market compression, decreased volume, decrease revenues and the difficulty in creating profit. We firmly believe that we can reverse these realities with the right partnership, and we can actually provide it. Please call Kevin Broughton at 248-470-2100 at Success Mortgage Partners for a confidential discussion.”

Coastal States Bank is happy to announce the addition of Thomas Steibel as Relationship Manager in its Mortgage Banker Finance group. Tom spent the past 21 years growing correspondent relationships and will now use these contacts to expand the banks warehouse business. If you are looking for a new line or would like to review your current warehouse offering, please reach out to Tom. CSB is still looking to add additional associates throughout the country. If you are a seasoned warehouse lending professional looking to join a growing Bank, please send a resume.

Radian Group Inc. announced that Sumita Pandit has been appointed Senior Executive Vice President and Chief Growth Officer effective March 6, 2023. “Reporting to Radian’s Chief Executive Officer Rick Thornberry, she will join the company’s executive leadership team and lead activities associated with developing and implementing the company’s long-term strategic growth plans.”