There are 3 things that tell the truth: small children, drunk people, and yoga pants. HMDA data is close behind. Warning: sobering thoughts ahead, and not only the headlines about credit scores and mortgage pricing, officials trying to devise a plan for First Republic’s future, or two 80-year old white men posturing about the country’s future. Residential lenders at the recent MBA STRATMOR Peer Group meeting in Atlanta were looking at units, and I asked the MBA’s Joel Kan about some stats on fundings per year: 13.7 million in 2020, 14.2 million in 2021, 6.4 million in 2022 (awaiting final HMDA data in June), and 5.0 million forecast for 2023. That puts 2023’s fundings at about 1/3 of 2021’s. Forget overall volume numbers, since the loan sizes have moved higher… Have you reduced your expectations and staff, both in ops and production, to match a 66 percent decline in units? Or do you expect to grab market share through superior products, pricing, and service? (Today’s podcast can be found here and is sponsored by LoanCare, a Fidelity National Financial (NYSE: FNF) division and award-winning developer of the most sophisticated mortgage servicing portfolio management tool, LoanCare Analytics, built to support MSR investors with a focus on customer engagement, liquidity, and credit risk. Listen to an interview with MGIC’s Concepcion Guerrero on the Hispanic borrowing community and lender opportunities to gain market share amongst that demographic.)

Lender and Broker Products, Services, and Software

Long before alarm clocks, "knocker-uppers" would tap on windows in the morning to wake people up in time for work. Now, Down Payment Resource is waking housing industry professionals up to the revenue-building value of down payment assistance (DPA) with its Homeownership Program Index (HPI) report. Notably, the Q1 2023 HPI report showed there are 2,362 homebuyer assistance programs, marking a streak of quarterly increases. Homebuyer assistance can offer the financial boost your customers need to afford a loan in a costly housing market. If you haven’t hopped on the DPA train yet, this is your wake-up call! Download the report for a comprehensive breakdown of homebuyer assistance trends in Q1 2023.

Today join Weiner Brodsky Kider’s managing partner, Mitch Kider, for a live webinar, at 1:00 PM ET, on current litigation risks affecting the mortgage industry and how mortgage professionals can effectively manage those risks from start to finish. Mitch will highlight recent litigation trends, the current market’s effect on litigation, and ways to successfully manage both litigation risks and costs. Sign up here!

“Brokers know that contractors have developed a skill to sharpening their literal pencils in the field to then use them to capture the best design and implementation. AFR Wholesale has been sharpening the pencil on our One-Time Close (OTC) loan. AFR is an expert, especially skilled at structuring OTC loans. But now, we have fine-tuned the craft even further and built out adjusted pricing with even more rate options for our clients. Our changes update how we assist our clients with deal structuring and allow even more flexibility. Building a solid structure, with the right amount of flexibility, options to help the projects succeed and the biggest part, having a team of experts building the loan with you is the key to bringing more families home. AFR wants to provide homeownership opportunities to more families. Join up with us today! Contact AFR by going here, email us or call 1-800-375-6071.”

When it comes to construction products, who’s got your back? No need to get too excited, but homebuilder confidence has been climbing steadily in 2023, according to the latest NAHB data. Yet managing the construction process isn’t easy, which is why many lenders continue to shy away from selling construction loans to boost volumes. Enter the construction loan experts at CFSI. Over the past 10 years, CFSI has helped lenders finance, manage and service more than $15 billion in construction loans with ease. “For a fixed monthly cost, lenders can have all their back-office needs for construction financing taken off their plate, including funding disbursements, risk mitigation and even contractor oversight,” says CFSI founder Brian Mingham. Looking for help to launch construction financing products or to take your current offerings to the next level? Give CFSI a call at 855-344-2374 or drop a note.

New American Funding is making a big splash in joint ventures. The company offers multiple partnership models to help you find the one that’s right for your business and it has the infrastructure and needed systems to run a successful independently branded mortgage business. You are the best at what you do, and so is NAF, so you can trust them with most of the day-to-day heavy lifting. When you become a partner with NAF, you’re giving your team direct access to one of the nation’s most reputable privately-owned mortgage companies. You’re pointing them to a network of professionals committed to providing an affordable path to homeownership for people of all backgrounds. And you’re closely tied in with an innovative industry leader quickly growing beyond the mortgage space into a whole-home provider. Learn more about NAF’s commitment to joint ventures today!

How to Responsibly Manage Pricing Exceptions! This month’s “Conversations About QC” features Nanci L. Weissgold and Melissa Malpass from Alston & Bird discussing the regulation of pricing exceptions and risk reduction tactics. In this video you will learn the importance of establishing and enforcing policies and procedures, effective training for policy adherence, and monitoring and sampling. Sign up to watch the complete video.

Marketing, Lead Capture, and Sales Tools

Momentifi launched its personally branded Spring/Summer 2023 Homebuyer Education Content in English and Spanish to help loan officers and mortgage companies attract clients and educate them about today's housing market. "Many homebuyers are under the mistaken assumption that home prices will collapse or that we're in a housing bubble," says Gibran Nicholas, CEO of Momentifi. "This content helps loan officers to educate homebuyers and referral partners and overcome their objections about today's market." The content package includes 150 personally branded articles that loan officers can post to social media or email to clients and referral sources. Many loan officers use the content as scripts to record short videos that they post up on their social media sites. Momentifi also offers an enterprise-level plan for banks and mortgage companies who want a company-wide content license. Click here to learn more or subscribe.

During times of market uncertainty, focusing on what you can control and going back to the basics are two pieces of advice offered by the #1 originator in America. Shant Banosian of Guaranteed Rate joined Total Expert’s Joe Welu on the Expert Insights podcast to share his journey to the top, how to maintain a growth mindset, and steps lenders can take to navigate the ever-changing market. Listen to Shant’s episode, followed by Joe’s discussion with Clayton Collins of HW Media on the evolution of the housing industry. They weigh in on what separates the top players in the industry and how lenders can help consumers cut through the headline noise to make the best financial decisions. Tune in and subscribe to Expert Insights for more conversations with financial services leaders.

STRATMOR on Home Equity

Home equity lending grew by 53% between 2021 and 2022 according to Curinos, and Black Knight estimates the growth in tappable home equity at $3.4 trillion over the last three years. But despite the opportunity it offers, many lenders have been slow to take up home equity lending. Why? In the April issue of STRATMOR Group’s Insights Report, Principal Tom Finnegan analyzes the home equity lending market and suggests strategies for lenders considering taking advantage of this opportunity in today’s unique market situation. Find out more in Finnegan’s article, “Home Equity Lending: Opportunity, Necessity or Distraction?” in STRATMOR’s April Insights Report.

The CFPB on the Move

The Consumer Financial Protection Bureau (CFPB) announced a revised version of its “Methodology for Determining Average Prime Offer Rates”, which describes the calculations used to determine average prime offer rates (APOR) for purposes of federal mortgage rules.

The methodology statement has been revised to address the upcoming unavailability of certain data the CFPB previously relied on to calculate APORs. On or after April 21, 2023, the CFPB will begin using ICE Mortgage Technology data and the CFPB’s revised methodology to calculate APORs. The CFPB will continue to post the survey data used to calculate APORs on the Federal Financial Institutions Examination Council’s website, and the CFPB will continue to identify the source of the data on that page.

Today the Consumer Financial Protection Bureau (CFPB) will visit Brooklyn, New York, where Director Rohit Chopra will host a discussion with local community organizations, advocates, leaders, and members of the public about “zombie” second mortgages — debts that consumers thought were satisfied long ago by loan modifications or bankruptcy proceedings or that were written off by lenders as uncollectable and other debt collection issues. Those who would like to participate, RSVP and save the date.

The CFPB has some “’splainin’” to do, as it become public that it suffered a data breach earlier this year when a now-former employee of the bureau sent confidential and personal information on more than 250,000 consumers to their own personal email account. The CFPB has referred the matter to the Office of the Inspector General and reported the breach to relevant congressional oversight committees.

On April 19, CFPB Office of Servicemember Affairs Assistant Director Jim Rice discussed recent CFPB efforts to “understand the veteran financial experience,” enforce the law, and coordinate efforts across the federal government and in the states.

And Director Rohit Chopra delivered prepared remarks on modern-day redlining at Seton Hall University.

Capital Markets

We saw fixed income prices go higher, and yields plunge, yesterday after the quarterly earnings release from First Republic invited renewed concerns about the health of regional banks and speculation that overall lending will be hurt. That makes it more likely that the FOMC will drop the reference to "some additional policy firming" in its statement next week and signal that the tightening cycle may be at its end. The Federal Reserve is truly in a tight spot, balancing fighting inflation with easing banking concerns.

We also learned yesterday that new single-family home sales jumped 9.6 percent in March to a seasonally adjusted annualized rate of 683k, above estimates and the strongest pace in a year. However, sales are down 3.4 percent compared to a year ago. Overall, the new home market remains resilient despite current affordability challenges. The tight supply of existing homes has prospective buyers turning toward new homes instead. The median new home price was $449,800 which was up about 3 percent compared to a year ago.

Speaking of house prices, house prices rose 0.5 percent month-over-month and 4 percent on a year-over-year basis in February, according to the FHFA House Price Index. The Case-Shiller Home Price Index reported a 0.2 percent month-over-month gain in February, and a 2.0 percent annual increase. The increase was, in part, due to a decline in mortgage rates by more than half a percentage point from the peak reached in early November as well as historically low housing inventory. Mortgage financing and the potential economic weakness are likely to remain as headwinds for housing prices for at least the next several months.

Today’s economic calendar kicked off with MBA mortgage applications, which increased 3.7 percent from one week earlier despite a rise in mortgage rates. Today brings advanced indicators for March like the trade deficit ($84.6 billion), wholesale inventories (+.1 percent), and retail inventories (much higher than expected) and durable goods orders (+3.2 percent, quite the jump, ex-transportation +.3 percent), before Treasury auctions $24 billion 2-year notes and $43 billion 5-year notes. We begin the day with Agency MBS prices are a touch improved and the 10-year yielding 3.42 after closing yesterday at 3.40 percent; the 2-year is down to 3.93.

Job Opportunities

“Mortgage Sales professionals and Wholesale Account Executives, NOW is the time to speak with Mortgage Confidential to find out if you are with the best platform for your needs and goals! There is a lot of consolidation on the horizon, and you owe it to yourself to make sure you have options if your company changes hands. The last thing you want to do is put your head in the sand and hope for the best. Take control of your own destiny. Don’t sell yourself short, let lenders and banks compete over you! Mortgage Confidential is the #1 resource in the industry for Mortgage Professionals to find top opportunities and maximize their value. Check out our site and put yourself on the market, confidentially. Email us at 100% confidential, guaranteed!”