Things are always changing. No bagpipe player I saw growing up looked, or played, like this. The MBA’s forecast for 2023 volumes changed, and here’s the latest by the MBA on 2023’s originations: $1.8 trillion. Technology is always changing. No, this Commentary is not produced by ChatGPT, nor will it ever be, unlike lesser publications. But if you’re a teacher, like my daughter with her classroom full of 7th graders, or a professor, how do you know that the paper turned in by a student wasn’t produced by AI? (Speaking of which, thank you to everyone who wrote yesterday that egg-laying chickens were killed by the “flu” not “the flue”… I should have caught that.) Economic conditions are always changing as well, and yesterday’s Federal Reserve Open Market Committee change of 25 basis points higher for its targeted overnight Fed Funds rate (what banks charge one another for overnight deposits) certainly sent a statement: “Sure some banks had some issues and mismanagement that we are well aware of, but we don’t see a crisis, and we’ll continue with our match against inflation.” [Fed Funds chart.] (Today’s podcast can be found here and this week is sponsored by Black Knight, Inc. As a premier provider of innovative, high-performance software, data and analytics for mortgage and home equity lending and servicing, Black Knight, Inc. is transforming the mortgage industry through its best in class solutions. Hear an interview with Black Knight, Inc.’s Mike Vough on the current MSR market and the evolution of duration calculations and servicing valuations.)

Lender and Broker Services, Products, and Software

“Headed to an upcoming event? Be sure to add Axos Bank’s Wholesale & Correspondent Lending team to your agenda. We’ll be at Mid-South Mortgage Expo in Nashville and TMBA 107th Annual Convention in San Antonio. We’re ready to talk loan programs and strategies to help you diversify your client base in 2023: Agency, non-QM, Super Jumbo, Cross-Collateralization, Pledged Assets, DSCR, Deferred Interest, and more. Check out the programs in advance with our Quick Pricer tool and get real-time mortgage rate quotes. Or contact J Shoop, National Sales Director. Looking for a residential warehouse lending solution? Our Warehouse team will also be at these upcoming events: TMBA 107th Annual Convention in San Antonio and MBA Secondary in New York. Email Eric Nelepovitz to lock in a meeting time.”

The challenges mortgage lenders are facing in 2023 are historic, and it’s vital to understand that decisions now will impact the long-term success and profitability of your company. The mortgage banking consulting experts at Richey May are here to help you make those all-important decisions around your go-forward strategies. We dive deep with an analysis of your operational and financial metrics, MSR cash flows, servicing retained strategies, and production reviews. Our advice is focused on helping companies succeed and return to profitability, so you can reach your goals this year and next. Contact us to begin your deep dive.

It's no secret that the real estate market is posing challenges to every member of the mortgage industry. Interest rates are higher than they've been in years, inventory is down, and many buyers are spooked. Let's talk about the bright side. Before you skeptically snort and say, "What is that?" Consider this: flexibility, adaptability and agility are key to not just making it through this valley but thriving in it. Yes, the total pie may have shrunk, and profitability margins may have decreased, but there are still ways to ensure you come out on top. If you want to offset the rising costs of getting borrowers into mortgages and protect your profitability, download our complimentary eBook “7 Ways Mortgage Professionals Can Offset Rising Costs and Maintain Profitability” today. Follow Birchwood Credit Services on LinkedIn to access even more industry-related news and informational content that will help you close more loans quickly!

Marketing and Sales Tools

Did you know that 77 percent of buyers move forward with the first mortgage lender they speak to? It’s a season where every deal matters, and a smart social media strategy could give mortgage loan officers a considerable edge. As you plan your social media program this spring, consider these three strategies to keep customer relationships thriving: Establish stronger connections through social selling. See how in our guidebook, How To Build A Social Selling Program. Stay top of mind with targeted paid social media advertising. Learn more in Getting Started with Paid Advertising. Enhance customer engagement with relevant content. Check out what’s resonating in 2023 with this report on Social Media Trends. And with the right tools, both marketing teams and mortgage loan officers can efficiently execute and scale to drive big results. See how it works in a free interactive demo.

Registration opens today for The StorySeller Virtual Summit on April 19 with nine guest speakers including master FBI negotiator Chris Voss: How to Uncover Hidden Opportunities in Life and Business, NAR chief economist Dr. Lawrence Yun: How to Overcome Objections About Today's Housing Market, and industry legends Tim Braheem and Carl White on Your Inner Story and the Habits of Top Producers. The event is hosted by best-selling author and Momentifi CEO, Gibran Nicholas. The theme of the event is How to Grow an Epic Business and Find More Meaning in Your Work. Registration is free, but you can also sign up for a VIP All-Access pass that includes Momentifi's personally branded homebuyer education tools and other member benefits. This is a great way to kick off the Spring Home Buying Season with your team and referral partners. Click here to learn more or sign up. You can also click here to inquire about group tickets.

Quality Control Tools

Q3 2022 Critical Defect Rate Rises 20.5 percent to a Reported High. ACES Quality Management released its quarterly ACES Mortgage QC Trends Report covering the third quarter (Q3) of 2022. The latest report provides an analysis of post-closing quality control data derived from ACES Quality Management & Control® software. “As layoffs have continued since Q2 2022, we’re seeing the ripple effects of interest rate volatility and changing market conditions surface in other areas of the loan manufacturing process, particularly in eligibility,” said ACES CEO Trevor Gauthier. There were several notable findings. The overall critical defect rate increased 20.5 percent ending the quarter at 2.47 percent. Income/Employment defects increased significantly. Assets and Income/Employment categories uncovered troubling defect trends related to eligibility. Appraisal defects continued trending downward. Read the full report.

Are you ready for Indecomm’s mortgage quality control 4.0? If your mortgage QC partner is still relying exclusively on manual audit skills and reporting, Indecomm offers you a new approach, one that pairs modern QC technology and automation with a meticulous QC services team. Indecomm’s mortgage QC 4.0 uses AuditGenius technology to capture more errors, increase audit productivity by 40 percent, and rapidly expand QC scope from the standard 10 percent sample size to 100 percent of loans in review. Plus, Indecomm’s digitally-enabled QC services comes with a robust, interactive, customizable QC reporting module that gives you critical insights into defect and risk trends related to your loans, portfolios, teams and operations, empowering you to take fast, informed corrective action. Want to learn how tech-enabled QC services keep you compliant? Reach out to Neil Armstrong and register for our upcoming webinar, “Rate Your Own Risk: A Proactive Approach to Fannie Mae QC Calibrations.

Natural Disaster Updates

This month Kilauea in Hawaii stopped erupting after 61 days of volcanic activity, according to the U.S. Geological Service observatory. No lava was flowing on the crater floor. There were what scientists referred to as “ooze-outs” of lava on Monday in the lava lake, and by that afternoon activity was way down. Kilauea has been erupting since 1983, and a 2018 eruption destroyed over 700 homes in the area. This bout of volcanic activity was, luckily, nowhere near as destructive.

But volcanoes are only one source of natural disasters. The U.S. is prone to tornadoes, like the one that hit Southern California this week, earthquakes, flooding, hurricanes, storms, and fires. FEMA is the official source of disaster declarations. And when FEMA publishes them, lender and investor policies and procedures are triggered.

From hurricanes to forest fires, the environmental impacts of climate change are becoming more pressing with each passing year. 90 percent of natural disasters involve some degree of flooding. Flood damage has cost Americans over $50 billion throughout the last decade. It’s more important than ever before for lenders to stay up to date with the latest FEMA flood hazard maps and changing flood determination guidelines. Luckily, there are solutions to help you save yourself and the borrower both time and headaches. View the article from Certified Credit to learn more.

CliftonLarsonAllen LLP points out that, “In late February, the Internal Revenue Service (IRS) announced that taxpayers in most of California (all but seven counties) and for parts of Alabama and Georgia would have until October 16, 2023 to file their individual and business tax returns and to make certain tax payments.”

The Colorado Mortgage Lenders Association raised an interesting issue. “While it has not yet been introduced, we are expecting a bill to address reverse mortgage products when the homeowner faces a natural disaster. We are working with the legislator who plans to run the bill to explain relevant federal guidelines/regulations and hopefully arrive at a reasonable resolution.”

AmeriHome is retracted the announcement titled 20230304-CL Disaster Announcement – New York Severe Winter Storm – 2 Counties Granted IA in its entirety.

On 2/22/2023, with Amendment No. 9 to DR-4683, FEMA declared federal disaster aid with individual assistance to Amador county in California. See AmeriHome 20230212-CL Disaster Announcement for inspection requirements.

Capital Markets

The Fed’s Federal Open Market Committee hiked rates by 25 basis points (.25 percent) at its policy meeting yesterday. But the central bank's stance appears to have softened a bit as the Statement noted that "some additional policy firming may be appropriate,” a change from the February Statement that said "ongoing increases in the target range will be appropriate." Ultimately, the Fed’s battle against inflation must go on, but the current turmoil in the banking system, which should lead to tighter credit conditions, means that the end of the current tightening cycle is likely coming into view.

During his press conference, Fed Chairman Powell emphasized his belief that the banking system remains resilient but said that it is too early to determine the extent of the recent events and how monetary policy should respond (read: the Fed doesn't yet know how much credit will tighten and how much nominal spending will slow). The more credit tightens on its own, the less the Fed will need to do to bring down inflation. Treasury prices fell after he added that policymakers do not expect to cut rates this year, though bond markets still had rallied by the day’s close on the overall dovishness of the statement.

Today’s economic calendar is underway with a Bank of England rate increase of 25 basis points. In this country: Both the Q4 current account deficit and weekly jobless claims (191k, the labor market is still unexpectedly strong; 1.694 million continuing claims). Later today brings KC Fed manufacturing for March, Freddie Mac’s latest Primary Mortgage Markets Survey, and a Treasury auction of $15 billion reopened 10-year TIPS. Before the open, the SNB, Norges Bank and BoE were out with the latest monetary policy decisions. We begin the day with the 2-year at 3.98, Agency MBS prices roughly unchanged, and the 10-year yielding 3.48 after closing yesterday at 3.50 percent.

MLO Employment

“Finding more ways to say yes at PrimeLending! In today’s hyper-competitive, fast-moving marketplace, it takes having the right product mix at the right time to win. And nobody knows more about what borrowers need right now than our LOs. That's why our Product Management Team works hand-in-hand with our production team to create innovative solutions like Buyers AdvantEDGE and Rate Redo. These cutting edge programs were suggested by the field and are helping our LOs stay at the top of their game. At PrimeLending, we understand that your success is our success and we're committed to providing our LOs with the tools and support they need to thrive. If you're feeling unsupported in your current position or want to offer your borrowers the latest and greatest products, it's time to make the move to PrimeLending. Contact Nic Hartke today to learn more about what we can offer you!”

“Want to get your buyers cleared to close in as little as one day? We can make it happen. Guaranteed Rate Affinity has changed the game with Same Day Mortgage. You can now level the playing field for your clients, giving one of the biggest advantages of cash buyers to everyone: speed. In today’s market customers want things fast, and Same Day Mortgage delivers exactly that with cutting edge technology allowing you to close more loans. Our proprietary tech gives you the edge and speed you need to do what you do best. Want to join a winning team with the best tech in the industry? Contact me, Tim McGraw, or call (972) 236-9632 to get started today.”

The New Year might be the right time for a new opportunity. Sovereign Lending Group has been in business for over 17 years and ranked by INC. Magazine 5000 as one of the fastest growing companies 10 years in a row. SLG is consistently introducing new products like Solar and establishing partnerships with some of the biggest Credit Unions to ensure you have the competitive advantage. To learn more about SLG we invite you for a discreet conversation with Ed Vaccaro, Head of Retail (925-997-1846).

Don’t forget that private mortgage insurance companies are hiring: MGIC, National MI, Arch MI, Radian, Essent, and Enact (in no particular order). And while’s we’re at it, Fannie Mae and Freddie Mac. And my cat Myrtle’s friend the CFPB.