“We base our business model on lots of things, but not on our ability to predict rates.” Remember when there used to be “a flight to quality” when there was world unrest, and investors put their money into dollar-denominated assets? Long gone. Even if one knew exactly what was going to happen in the United States, how can anyone, including the Federal Reserve, predict much of anything given the global uncertainty, violent or otherwise, and an event’s impact on mortgage rates? (Speaking of the Fed & rates, the current STRATMOR blog is titled, “Relying on the Fed: How Did This Happen?” (Found here, this week’s podcasts are sponsored by Optimal Blue. OB's smart solutions automate critical functions like pricing, hedging, trading, and social media. More originators and investors rely upon Optimal Blue's integrated solutions, data, and connections to support their unique business strategies, no matter how complex. Hear an excerpt of an interview with former CFPB Director Kathy Kraninger from last week’s Mortgage Matters show that airs every Wednesday at 11am PT/2pm ET. Register for today’s show with guest Tom Davis of Deephaven.)

Lender and Broker Products, Software, and Services

Real estate valuations continue to be complex and ever-evolving, especially today with proposed regulatory changes and unpredictable market dynamics. Creating an effective valuation strategy is vital for lenders to manage risk and streamline operations. Watch this complimentary webinar hosted by ICE to learn all about the world of automated valuation models (AVMs)*. You’ll find out when to use an AVM to address challenges in the current valuation landscape; why AVMs are considered a credible, objective option for collateral risk management; and how they can help your business – from lead generation and portfolio management to cost reduction and more. *Check with your compliance or legal department for information on complying with applicable law.

HomeLight Buy Before You Sell offers a forward commitment opportunity through a unique zero-coupon discount trade offer. This scalable investment option is adaptable to your strategy, starting with a monthly volume of $30 million. Backed by proven success, with a maximum dwell time of 120 days and a median dwell time of just 65 days, it provides a reliable investment avenue. With operations in 23 states, particularly focusing on Colorado, Arizona, and Florida, it offers geographic diversification. Additionally, HomeLight retains servicing rights, ensuring a stable and controlled servicing process. To learn more, contact John Boyles today.

FundingShield, the market leader in wire & title fraud prevention, released its Q1-2024 report showing nearly half (48 percent) of transactions had deficiencies. During Q1-2024, 44.6 percent of transactions had CPL issues, a record high 9.8 percent had CPL Validation issues and 9.2 percent had wire / bank account related risks. This underscored the importance of regulated entities to understand what type of ongoing monitoring they have for vendors and third-party service providers. “The lenders that have prepared for the market volume pick-up, including some of our new clients, have tech tools for their risk & compliance, operations, funding & accounting teams to fight back against threats. There will be more cyberattacks exploiting known and new vulnerabilities among homebuyers, lenders, and title agents where our B2B & B2B2C consumer facing solutions are being utilized,” Shared, Ike Suri CEO. Contact Sales@fundingshield.com for demos and free trials or to set up meetings at California-MBA Mortgage Innovators, Anaheim CA 5/8-5/10, MBA-Secondary NYC 5/19-5/21, or MBA-Multifamily/Commercial Servicing+Tech, New Orleans 5/21-5/22.

“Sunrise, sunset, wemlo®. In a world of uncertainty, it’s reassuring to have a few constants in life. The current market is a rollercoaster and third-party processing support like wemlo can be the stabilizer mortgage pros need to ride the wave. It’s simple: wemlo processing services are designed around dependability and stability... whether business is booming or during a downturn. Our processing pod set-up (a manager and two go-to processors) helps ensure business never skips a beat. Ready to learn more about our consistent processing services? Book your wemlo demo today. NMLS ID 1853218”

“Revolution Mortgage estimates that they can save up to $20,000 in cost on verifications with Truv over traditional verification methods. Significant reduction underscores Truv's commitment to providing cost-effective solutions for mortgage lenders. Femi Ayi, EVP of Operations at Revolution Mortgage noted, "We’ve dropped our verification cost per loan from 8 basis points to 3 basis points. That's all real cost, not factoring in time or touch savings.” Moreover, Truv is now a conditionally authorized report supplier for mortgage lenders using Fannie Mae's Desktop Underwriter (DU®) validation service. With Truv's support for D1C, lenders can lower costs by up to 80 percent, reduce the risk of fraud and buybacks by leveraging real-time data directly from the source, and accelerate growth by increasing pull-through rates and closing loans faster. Contact our team for a demo today to start saving. Get started!”

STRATMOR on Borrower Satisfaction

It’s a dog-eat-dog world out there in mortgage lending right now. The average loan officer is taking just four applications per month, rate cuts that many expected early in the year have yet to materialize, the market supply of existing homes for sale is still tight and new construction can’t move fast enough. It has never been more crucial for loan officers to do everything in their power to drive word-of-mouth referrals from their customers, to be sure they are delighted and thus motivated to spread the word. In his latest Customer Experience Tip, STRATMOR Group Customer Experience Director Mike Seminari explains that the key to delighting borrowers is to operate in the world of the unexpected. Check out “An LO's Guide to Creating Unexpected Delight for Borrowers" for more on how to deliver unexpected experiences for your customers.

Correspondent and Broker Product News

Non-agency is where responsible lending and unconventional solutions intersect. And as the country’s leading non-QM issuer, Verus Mortgage Capital stands ready to support lenders seeking to expand their loan portfolios with responsible non-QM/non-agency solutions that meet the needs of creditworthy borrowers who fall outside of conventional underwriting standards – such as the self-employed, foreign nationals, property investors, and more. Verus recently crossed $30 billion in acquisitions and completed its 57th securitization. Isn’t it time you capitalize on its extensive experience and vast expertise? After all, with today’s market dynamics, non-agency represents your best opportunity for growth. Schedule time to meet at the MBA’s Secondary and Capital Markets Conference in New York May 19-22, or learn more by contacting Jeff Schaefer, EVP, National Sales at 202-534-1821.

Open Mortgage Wholesale, (Previously Westgen Lending), offers NONQM PRIME option. Highlights include P & L only, no Bank Statements Required, 640 Minimum FICO, loan amounts up to $3.5MM, up to 90 percent LTV Purchase/R&T, Max Cash-in-Hand to $1.5MM up to 80 percent LTV.

eMortgage pioneer Jeff Bode at Click n’ Close has been developing a suite of proprietary DPA products. The latest of these combines DPA with a shared appreciation component, enabling Click n’ Close, formerly known as Mid America Mortgage, to offer borrowers a below-market rate on their first-lien mortgage. A multi-state mortgage lender serving consumers and mortgage originators through its wholesale and correspondent channels is also the nation’s leading provider of Section 184 home loans for Native Americans. Offering USDA one-time close construction loans, proprietary down payment assistance (DPA) program and reverse mortgage division. Its DPA with Shared Appreciation program offers a below-market interest rate for first-lien FHA and USDA loans and a repayable DPA second lien in exchange for up to 40 percent of the home’s appreciation during the first five years. DPA with Share Appreciation is available through Click n’ Close’s retail and wholesale divisions.

NCLC and CRL provided comments to the VA urging expansion of home retention alternatives for borrowers with VA-guaranteed loans who are facing financial difficulties. The comments explained that the VA’s current system fails to provide relief and will unnecessarily cause some active-duty service members and Veterans to lose their homes. The comments also urged the VA to avoid placing unneeded and burdensome procedural barriers on borrowers trying to access the relief. The VASP program released today largely addresses these concerns and gives borrowers access to streamlined assistance.

Imagine being able to help homeowners in your community stay in their home. There are some great resources for folks that are struggling to stay in the homes they own: Washington State, Nevada, Montana, Idaho, New York (looks like it’s spent theirs), Connecticut, New Jersey. (Thank you very much to Julie Cooper, Commerce Specialist 3 in the Multifamily Housing Unit with the Washington State Department of Commerce for the list!)

HighTechLending Wholesale introduced its new Jumbo Proprietary Reverse Product, the Platinum Reverse. Offered in three variations: Maximum LTV Fixed Rate, Adjustable Rate with a Line of Credit, and Reduced LTV with a lower Fixed Rate.

Plaza Home Mortgage’s resource, provided by the Reverse Mortgage Servicing Department, shares valuable FAQs for when a reverse loan closes. As the borrower’s loan is being boarded with the Servicer, these topics can guide your clients in the right direction. Take a look at these common questions and share with your clients.

More than ever, providing value, tools, solutions and education is essential to your borrowers. Check out this quick video to see five real-life examples of how renovation lending from Plaza Home Mortgage® saved the day. See Plaza’s full suite of renovation loan offerings.

Capital Markets

Yes, we all care about rates. Are they going to go down meaningfully anytime soon? Probably not, though Iran and Israel may have something to say about that. It’s been the selloff that has gone global of late, largely due to angst over U.S. rates, China’s sluggish economy (March industrial output and retail sales both missed projections), and tensions in the Middle East. On the rates front, Fed Chair Powell said yesterday that persistent inflation means the central bank can stand pat for “as long as needed.” Colleagues Barkin, Jefferson, and Daly all agreed, stressing that there is no urgency for cuts given “remarkable” U.S. growth, a strong labor market, and elevated inflation. Restrictive monetary policy needs more time to work as recent data has not shown the desired progress against inflation. Pricing in fed funds futures now implies less than two rate cuts for the entire year, with the first cut likely not coming until Q4.

We learned yesterday that housing starts dropped nearly 15 percent month-over-month, much more than the expected 2.4 percent decline. Single unit starts were down by double-digit percentages in every region except the West. This will not help affordability, which has hit a five-decade low. Building permits, which are a leading indicator, fell to a 1.46 million rate. Permits for single-family units were down in every region, highlighted by a 5.3 percent decline in the South, which is the country's largest housing market. In general, builders have been switching their focus from apartments to houses. They're building smaller, more affordable houses in response to affordability challenges brought on by higher mortgage rates. High mortgage rates continue to be a headwind for the builders as it is keeping buyers on the sideline, hoping for a decline in borrowing costs.

Today’s economic calendar kicked off with mortgage applications increasing 3.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending April 12. Later today brings the release of the Fed’s Beige Book ahead of the April 30/May 1 FOMC meeting and remarks from two Fed speakers, Cleveland’s Mester and Governor Bowman. We begin the day with Agency MBS prices about unchanged from Tuesday evening, the 10-year yielding 4.66 after closing yesterday at 4.66 percent, and the 2-year at 4.97.

Employment

Arc Home is excited to announce the addition of Elliott Grumer as the new Vice President of Correspondent Lending. Elliott brings over thirty years of industry experience including leadership positions in capital markets, sales strategy, and product enhancements. His expertise will be instrumental in driving strategic growth and strengthening our position in the market while focusing on improving the experience for Arc Home’s correspondent partners. Elliott will guide Arc Home’s correspondent lending division, capitalizing on the strong foundation laid by the recent launch of our Delegated Buy to Your Guide program and Sparc 2.0 client portal. His strategy will focus on sustainable growth and operational excellence, ensuring that we continue to meet the needs of our partners. Join Elliott and the Arc Home team at the upcoming MBA Secondary conference to see firsthand how our innovative strategies and leadership can benefit your business. Schedule your appointment now to discover why Arc Home should be your primary Non-QM and Non-Agency lending partner.

“We know. We know. Everyone’s talking about mortgage opportunities “springing up” and business “flourishing” this time of year. And yes, sprouts and flowers are fun, but do you know what home loan business actually comes down to these days? Real estate agent connections. In this shifting housing environment, working in close proximity to these “home-buying pros” is essential if you want to grow your pipeline. (Did we just make a spring pun? Whoops.) Want to work closer to real estate agents? The majority of Motto Mortgage offices are affiliated with established real estate brokerages. Motto Mortgage brokerages are hiring talented loan originators in: AK, AZ, CA, CO, CT, FL, GA, ID, IL, IN, KS, KY, MA, MI, MN, MO, MS, NC, ND, NJ, NM, NV, OH, OK, OR, PA, SC, TN, TX, UT, VA, WA, & WI. Click here for more information on becoming a Motto LO!”

Congratulations to Nations Lending’s top producers who were named 2024 Scotsman Guide Top Originators: Carisa Winklepleck, Dan Doyle, Lori Bowman, Nic Campbell, and Tammy Kennedy; Branch Managers Beau Cox, Lance LaGarce, and Mina Galab; and Area Sales Managers Brooke Ames, Cindy Levorah, Jason Fogle, and Steve Dieckhaus. Their inclusion on this prestigious industry list puts them in the top 5 percent of the nation’s best mortgage originators. Achieving this accomplishment based on their 2023 production totals was no small feat. The sales professionals at the Cleveland-based independent lender are supported by talented operations and marketing teams who exemplify the company’s approach, Home Loans Made Human. Nations’ originators have full autonomy to grow their business, with local control and decision-making and direct access to an Executive team who wants to grow with top producers by ensuring customized service and access to competitive loan solutions. Contact Nations Lending to join a team who prioritizes your success.