“I accidentally rubbed ketchup in my eyes. Now I have Heinzsight.” In terms of foresight, looking ahead, there are some interesting things going on out there in Mortgage Land! How ‘bout the CapitalW Collective non-profit for women in mortgage capital markets? And Beeline's Miguel Vega has been in the press lately with, "The Dream of Owning a Piece of America is a Dominant Theme in the Latino Community” and the company launching a Spanish-language version of its home loan experience this week. Something else that continues to be “interesting” is the question, “Are brokers violating RESPA every day?” This question is asked because brokering is a referral of a customer to a lender, right? HUD identified fourteen services normally performed in the origination of a loan (Section II, subsection C of the link above), and brokers usually do five out of the fourteen services, including taking the application, to get around RESPA. Mortgage attorney Brian Levy addresses the broker/RESPA issue in “RESPA, a whole(sale) lot of trouble.” Brokers, be careful that you’re the person actually originating the loan in terms of regulations! (Found here, this week’s podcasts are sponsored by Essex Mortgage. Essex specializes in providing exceptional mortgage subservicing solutions tailored to meet your specific needs. Looking to capitalize on your excess servicing strip? Check out Essex’s servicing offerings today!)

Lender and Broker Products, Software, and Services

In today’s regulatory environment, audits seem to be nonstop: Is your team ready? Clayton's Servicing Oversight specialists can support your associates as they prepare for regulatory, GSE and investor audits, including customer contact evaluations, yearly validation of PRCI and RCSA and focuses on loss mitigation and foreclosure. Whether you need staff augmentation or help with audit responses, our experts are there for you. Clayton’s Servicing Oversight team provides audit support services across the entire mortgage servicing lifecycle. Contact Clayton’s Samantha Shanaberger to learn more about how Clayton Servicing Oversight can help your team tackle audits.

Winning Agent Business: The lender’s guide to building a strong referral network, updated for 2024! In the aftermath of the NAR ruling, agents are more incentivized than ever to show their clients value. That means they’re actively looking to partner with top-tier lenders in their market. Want to take advantage and grow your referral business? Maxwell just updated its Winning Agent Business eBook with new tips straight from agents to help you better network to create a strong funnel of referral leads. Download your free copy to learn qualities agents value in their lending partners, networking dos and don'ts, ways to become a go-to lender, and more.

In today's competitive purchase market, the lenders who stand out are providing excellent, personalized, and consistent communication. This approach is key to attracting new business, keeping your current borrowers happy and retaining clients for life. In our new blog, we’re sharing how the Surefire℠ CRM and Mortgage Marketing Engine can help you streamline and improve your borrower outreach even further, so you’re prepared to thrive in today’s competitive purchase market. And by leveraging both Surefire and Encompass®, you’re able to deliver targeted content to the right contacts at the right moment. Read the full blog to gain all the insights.

Mergers and Acquisitions

UMB Financial Corporation (Nasdaq: UMBF) and Heartland Financial, USA Inc. (Nasdaq: HTLF) announced today that they have entered into a definitive merger agreement under which UMB Financial Corporation (UMB) will acquire Heartland Financial USA, Inc. (HTLF), in an all-stock transaction valued at approximately $2.0 billion.

HTLF is headquartered in Denver and has $19.4 billion in assets, $16.2 billion in total deposits and $12.1 billion in total loans, as of March 31, 2024. The combination of companies will create an entity spanning a 13-state branch footprint, adding California, Minnesota, New Mexico, Iowa and Wisconsin to UMB’s existing eight-state footprint, which includes Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas.

Within its 11-state footprint, HTLF does business as: Minnesota Bank & Trust, Wisconsin Bank & Trust, Dubuque Bank & Trust, Illinois Bank & Trust, Bank of Blue Valley, Citywide Banks, Premier Valley Bank, Arizona Bank & Trust, New Mexico Bank & Trust and First Bank & Trust.

UMB will host a call for the investment community on Monday, April 29, at 7:30 a.m. (CT) / 8:30 a.m. (ET). Interested parties may access the call by dialing (toll-free) 833-470-1428 or (international) 404-975-4839 and requesting to join the UMB Financial call with access code 397231. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial Conference Call. A replay of the conference call may be heard through May 13, 2024, by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 182605. The call replay may also be accessed at investorrelations.umb.com.

If Borrowers Opt Out of DU and LP…?

I ran this note on Friday, and it caused a bit of a stir given the implications so I thought it was worth mentioning again. If this bill passes, what will it do to your underwriter staffing and efficiency?

California, which accounts for 20-25 percent of residential lending in the U.S. is considering AB 2930, basically giving consumers the right to “opt out” of automated underwriting tools. It could massively disrupt lending because of the ubiquitous use of DU/LP. California MBA CEO Susan Milazzo writes, “California MBA has concerns with AB 2930 (Bauer-Kahan), a bill that would require lenders to perform impact assessments related to automated decision tools (ADT), provide borrowers disclosure notices on the use of ADTs, and provide alternative manual underwriting options to consumers upon request. The bill would disrupt the availability of credit for California residents by imposing potentially conflicting regulations upon lenders who are already highly regulated by existing federal and state consumer protection laws, and are subject to regulatory oversight for identifying, monitoring, and controlling the risk of discrimination or bias. (Reach out to Susan with questions or to lend support defeating it.)

TPO and Investor News with Planet Home Details

Pennymac updated Jumbo LLPAs, effective for all Best-Efforts Commitments taken on or after Monday, April 29, 2024. View Pennymac Announcement 24-38 for more information.

In conjunction with enhanced enforcement from the GSEs, Pennymac will begin the review and remediation of inaccurate or improperly executed 4506-Cs at loan delivery. In addition to the requirements and best practices that were provided in Announcement 23-37, new requirements are listed in Pennymac Announcement 24-39.

Plaza Home Mortgage® has made updates in BREEZE: Appraisal Reconsideration new link, VVOE Fee Disclosed Upfront and New Buttons added.

Carrington Mortgage Services (CMS) added to its diverse non-QM lending offerings introducing Individual Taxpayer Identification Loans (ITIN) for its retail, wholesale, and correspondent lending customers. Although historically, borrowers seeking ITIN loans have sometimes been vulnerable to excessive interest rate loans, the ITIN loans offered by Carrington provide access to homeownership at fair interest rates for mortgages and normal terms. The product demonstrates the unique benefits of The Carrington Companies’ position as an asset manager gives homeowners, brokers, and sellers access to the company’s respectable liquidity as well as Carrington’s dedication to continually innovate as market conditions evolve.

ITIN borrowers can buy, refinance or invest in real estate with Carrington Mortgage Services.

Non-U.S. citizens who do not have a Social Security Number, but live and pay taxes in the United States and have an Individual Taxpayer Identification Number (ITIN) can now qualify for Carrington's full suite of non-QM loan products. ITIN borrowers are now eligible for all four of our non-QM loan programs: Carrington Prime Advantage, Carrington Flexible Advantage Plus, Carrington Flexible Advantage, and Carrington Investor Advantage.

In accordance with the recently announced temporary enhancements the GSEs made to the HomeReady and Home Possible programs, Citi Correspondent Lending is accepting loan submissions for these programs with VLIP credit. View the complete announcement addressing both Best Efforts and Mandatory Desk loans.

Introducing a unique opportunity from Angel Oak Mortgage Solutions, a First Lien Business Bank Statement Home Equity Line of Credit (HELOC) tailored specifically for homeowners who own their homes free and clear. Compelling benefits for these homeowners: Competitive rates and terms, Convenient access to funds for various needs, Streamlined application and approval process. If you have clients who own their homes outright and are interested in leveraging their equity with a First Lien HELOC, Angel Oak Mortgage Solutions can assist.

Planet Financial Group, LLC, parent of national mortgage lender and servicer Planet Home Lending, LLC and Planet Management Group, LLC, had quite a first quarter. In the first three months of the year, Planet earned Fannie Mae's coveted Servicer Total Achievement and Rewards (STAR™) Program recognition, brought to market a suite of proprietary home loan programs targeting the unique challenges facing today's homebuyers, was awarded Top Workplace USA for the fourth year in a row, and became the #4 Ginnie Mae correspondent lender and #8 Ginnie Mae servicer. The company saw volume grow by 255 percent for the retail retention division, which continues to hold an 89 percent recapture rate, and sub-servicing AUM increase by 33 percent, $11B of non-agency assets.

Planet's total servicing portfolio ended the quarter at $106.44 billion, up 2 percent from $104.69 billion in the fourth quarter of 2023. At quarter end, Planet was the #8 Ginnie Mae servicer, and #14 servicer overall, according to Refinitiv. Since 2019, Planet's Servicing division has posted a compound annual growth rate (CAGR) of 42 percent. Residential sub-servicing volume ended the quarter at $10.8 billion, up 33 percent from $7.2 billion at quarter end 2023. Planet manages and services a diverse range of residential and commercial asset classes, including non-QM, Debt Service Coverage Ratio loans, Residential Transition Loans, small-balance commercial properties, multifamily and Single-Family Rental. Planet moved into the Top 10 nonprime servicers and the Top 20 non-agency MBS issuers. Over the past year, Planet's market share in nonprime has more than doubled from 1.1 percent to 2.4 percent, the latest available Inside Nonconforming Markets data shows.

Planet's residential origination volume was $4.39 billion for Q1 2024, down 6 percent from the prior quarter, on par with the MBA's projection for overall origination volume. Recapture originations increased to $323 million in Q1 2024, a rise of 255 percent compared to $91 million in Q4 2023. Planet's verified recapture rate continued to outpace industry benchmarks, rising to 89 percent for loans originated by the company's retail branches and 62 percent overall.

Correspondent volume was $3.94 billion, down 11 percent from the prior quarter volume of $4.41 billion. Planet's correspondent market share rose from 4.2 percent at yearend 2022 to 6.0 percent at yearend 2023, according to the latest data available from Inside Mortgage Finance. Since 2019, the Correspondent division's CAGR was 32 percent.

The correspondent customer base held steady despite continuing M&A activity and exits in the retail market. Nearly two-thirds of Planet's correspondent partners lock loans on a monthly basis. Ending the quarter, Planet was the #5 correspondent lender overall and the #4 government correspondent lender, according to data from Refinitiv.

Capital Markets

Last week we learned that in the first quarter Gross Domestic Product growth fell short of expectations at a 1.6 percent annualized pace despite strong consumer spending. Personal consumption increased by 2.5 percent, driven by a 4 percent rise in spending on services. Personal incomes rose by 0.5 percent, while personal consumption increased by 0.8 percent, driven by healthcare and housing. The Personal Consumption Expenditure (PCE) deflator reading rose to a 3.7 percent annualized rate, but March’s personal income report suggested inflation peaked in January and didn't steadily rise throughout the quarter.

Accordingly, this news, and the news for some months now, suggests that the Fed is expected to remain patient in shifting to a less restrictive monetary policy, with markets adjusting expectations to fewer rate cuts later in the year. Separately and fortunately, home builders are still delivering completed homes despite higher rates, evidenced by new home sales being up 8.8 percent in March.

It’s a big week this week for scheduled economic news, as all eyes will be on the Federal Reserve on Wednesday and the jobs report on Friday. Investors will look for more direction on whether the economy is heating or cooling as well as the Fed’s updated thoughts on inflation. Other highlights this week include the Quarterly Refunding announcement, house prices, consumer confidence, PMIs, ADP employment, construction spending, productivity / unit labor costs, and factory orders. The week gets off to a quiet start with one data point due out later today, the non-market moving Dallas Fed Texas manufacturing for April. We begin the last week of April with Agency MBS prices better .125-.250 from Friday’s close, the 10-year yielding 4.61 after closing Friday at 4.67 percent, and the 2-year at 4.97.

Brokers Wanted

“Mortgage Brokers! 2024 is the year to grow and we want you to join our movement, the #KindMovement! Hear from subject matter experts and leaders about market trends, broker technology, and what's happening here at Kind and within the mortgage industry. Join us on Friday, May 10th at noon PST (2 CST/3 EST) and hear from our very own Kind Ambassadors, Mary Malloy, EVP of Capital Markets, Mark Russell, CTO and technology visionary, and Delfino Aguilar, Chief Production Officer of TPO. Visit our events page to register and reserve your seat or click here! We hope to see you there!”

Don’t forget that anyone can post a resume for free at www.lendernews.com. Employers can view resumes for several months for the nominal charge of $75.