English grammar… what a hassle. Is it "lay" or "lie"? - Are you sure you're using them correctly? “Than” versus “then?” One should use “than” only with a comparative adjective, like taller than, faster than, as in, Apocalypse Now is better than The Deer Hunter. “Then” is used for time, like at that moment, or after. Or “I lost $100 at blackjack, and then lost another $100 in craps.” Speaking of gambling losses, ever heard of loss aversion, a theory which behavioral economists will tell you drives many of our financial decisions? People feel the pain of losses much more than they feel the pleasure of gains. Empirical studies suggest that losing is twice as painful as winning is enjoyable. So people will go to great lengths to avoid losses, and to recover what they’ve lost. Politicians often play on this (voters have lost the good old days and want them back, and should fear their opponent because they will lose even more of their lives). Loss aversion makes people cautious: offered the choice between five hundred dollars and a fifty percent chance at a thousand dollars or nothing, most people take the sure thing. But once people have sustained loses, impulses change dramatically. Offered the choice between losing five hundred dollars and a fifty percent chance of losing a thousand dollars or nothing, most people prefer to gamble. This is why people hold falling stocks, hoping for a rebound rather than cutting their losses, and its why they double down after losing a bet. (Today’s podcast is available here and has an RC/RC interview about what to look forward to in next week’s MBA Secondary Marketing conference. This week’s is sponsored by SimpleNexus, an nCino company and award-winning developer of mobile-first technology for the modern mortgage lender.)

Lender and Broker Software and Services

Do you know the ROI of your CRM? One of our enterprise clients recently asked Usherpa, to compare the loan officer production of those who were using Usherpa versus those at the company that did not. We had data going back four years. Take a look in particular at '20 and '21. In 2020, everybody did well, regardless of what platform they used. You'll agree, it was a great year for all. But in 2021, when volume falls off, LOs using Usherpa SmartCRM sales and marketing automation closed nearly twice as many loans, as those who didn't. Pretty remarkable. Click here to see the data. Help your loan officers grow their business with these free eGuides: 3 Habits of Top Producing LOs and 3 Strategies to Inspire Your Loan Officers to Make High Value Calls.

“Looking to reduce accounting costs? Richey May’s Client Accounting and Advisory Services(CAAS) provides a comprehensive mortgage accounting service that lets you outsource your accounting functions with flexibility. Our model lets you turn fixed accounting costs into variable costs when volume drops or your needs change so you can do what makes sense for your business. It fills the gaps when internal accounting resources get stretched thin or the talent pipeline shrinks… or both. The best part? Utilizing our CAAS team puts your finances in the hands of mortgage accounting experts and lightens your administrative load, so you can focus on making key business decisions. At times like these, it helps to have ways to outsource to a team of experienced mortgage accounting professionals while reducing costs. Contact us for details and learn more here.”

With Covid beginning to ease in many parts of America, the expected surge back to the office has yet to happen. In fact, Pew Research says over 75% of employees prefer to remain working remotely- even though their offices are open and they are not concerned about Covid! If your staff is remote, you need remote solutions for more of your operations than ever. You’re already familiar with DocProbe, which allows you to offload your entire trailing docs department. Now, you can also offload your goodbye and mortgagee clause change letters! Many lenders are trimming staff; with Docprobe, you can eliminate the need for in-person employees to fold, sort, stuff and send your letters. DocProbe does it all with their easy-to-use portal. And, with one flat fee, you’ll also benefit from a fixed-price service instead of variable-cost labor! To learn more, contact Steve: (732) 333-2647. Visit Docprobe.net for more about DocProbe.

Mid America Mortgage has revised the economics in our down payment assistance (DPA) program to withstand this turbulent market. We remain a viable option for homebuyers trying to combat the dual effects of rising interest rates and declining affordability to purchase the home of their dreams. Our program is available nationwide to first-time and repeat homebuyers with no income restrictions. It combines a first lien FHA with a second lien that has ZERO payments, ZERO interest and is forgivable after 5 years. Lenders with $5M tangible net worth should contact Julas Hollie to learn more about becoming a correspondent customer. For those not quite at $5M net worth, contact Christopher Hartman at our Wholesale Division.”

Clear Capital is now offering Desktop Appraisal, a GSE-compliant 1004 Desktop/70D residential appraisal that quickly delivers a reliable opinion of value with price certainty. Additionally, the company announced Desktop Data Collection, a certified, background checked data collector-enabled property data gathering service designed to capture information, photos, and generate high-fidelity floor plans with interior walls and ANSI-aligned digital gross living area (GLA) to help appraisers complete a desktop appraisal with confidence. Lenders can purchase a package inclusive of Clear Capital’s Desktop Appraisal and Desktop Data Collection solutions, or opt for Desktop Data Collection as a standalone product. Visit clearcapital.com/rc-desktop to learn more.

Non-Agency, Non-QM Related Products

“Looking to originate, buy, sell, and securitize more loans quickly, securely, and confidently? Evolve Mortgage Services has the team, technology, and services to make it happen… All from a single platform! We built our AUS engine for Non-QM, providing an agency-like experience when originating Non-QM loans. Like DU/LP, our engine produces eligibility, conditions, and findings in a familiar format (approve eligible, ineligible, near-miss). We’ve programmed many investor guidelines to display a full array of Non-QM pricing and loan term options. Seamless integration with LOS systems enables efficient file delivery and condition clearing, a user-friendly client portal and insured results that travel with the loan – origination through securitization. Meet with Paul Anselmo, Mark Hughes, Ann Gibbons & Mike Romano during MBA Secondary to strategize on how we can help you shorten cycle time to close, fund, sell and securitize, while reducing cost and risk. Isn’t it time to Evolve?”

Luxury Mortgage Corp. ("LMC") is offering a 100 bps special for newly locked non-QM purchase loans until May 31st. LMC's elite team isn’t stopping there; they are also offering a 50 bps pricing enhancement on prime credit Jumbo purchase loans! In addition to these amazing pricing specials, LMC has also significantly expanded its Non-QM guidelines. Throughout these past few months LMC has once again demonstrated its commitment to be a valued, reliable partner to its brokers and correspondent clients. In times of turbulence, leaders step up, they don't disappear into the background. Now is the time to align with true partners who will be here for you and execute at the highest levels. Take your business to sustainable new heights with the elite team. Click Here to become an approved wholesale broker.

Adjustable-rate mortgages are the popular choice for borrowers to offset rising interest rates. In the latest MAXEX Market Report, Jumbo ARM volume made up 23% of total origination share traded through the exchange for the month of April with 10/6 ARMs representing nearly half of total ARM volume. MAXEX also expects to see investor loan origination increase across the exchange in the coming months as it introduces a DSCR program to all sellers May 20. Subscribe to the MAXEX Market Report to get the latest non-agency secondary market insights into your inbox free each month.


Bob Broeksmit, CMB, President and CEO of the Mortgage Bankers Association (MBA), had this to say about Julia Gordon being confirmed as Assistant Secretary for Housing and Federal Housing Commissioner at the U.S. Department of Housing and Urban Development (HUD). “MBA congratulates Julia Gordon on being confirmed to lead the Federal Housing Administration (FHA)… “We look forward to working with Assistant Secretary Gordon, HUD Secretary Marcia Fudge, and other stakeholders to ensure a resilient FHA program that works for lenders and borrowers and provides more affordable housing opportunities for our nation’s homeowners and renters, while protecting taxpayers."

There’s a lot of chatter out there about the FHA possibly cutting its mortgage insurance premiums. A report to Congress last fall showed its Mutual Mortgage Insurance Fund has a large capital cushion, far in excess of the statutory minimum. Stay tuned!

Richey May’s HMDA dashboard for examining originations in 2021 is ready, and a look turns up the leading FHA lenders/investors for the year. The #1 spot goes to PennyMac with $32.3 billion. Next is Freedom Mortgage with $32.0 billion, then Rocket Mortgage ($27.8), Lakeview Loan Servicing ($20.9), Caliber Home Loans ($12.9), Newrez ($12.1), AmeriHome Mortgage ($11.9), United Wholesale Mortgage ($11.6), Nationstar Mortgage ($11.1), and wrapping up the top 10 is U.S. Bank at $10.8 billion. In 2021 roughly $474 billion in FHA loans were originated by banks, credit unions, and independent mortgage lenders.

FHA released updated frequently asked questions (FAQs) regarding the Department of Treasury's Homeowner Assistance Fund (HAF). The FAQs clarify when a mortgagee may place a foreclosure action on hold when a borrower has applied for or will be utilizing HAF funds. Mortgagees are strongly encouraged to work with borrowers to explore eligible options that promote sustainable homeownership.

USDA Guaranteed Rural Housing offers 30-year fixed rate financing for borrowers purchasing a 1-unit primary residence in a rural area; 100% LTV based on appraised value alone without regard to the purchase price. For a 12-month period, beginning May 2, 2022, USDA Rural Development Single Family Housing Guaranteed Loan Program (SFHGLP) announced that for a 12-month period, non-U.S. citizens with valid Social Security Numbers (SSN) and work authorization, as evidenced by documentation such as an Employment Authorization Document, Form I-766 (EAD), are temporarily eligible to apply for assistance. Read USDA’s Bulletin, posted on April 29th, for details.

Per PennyMac Announcement 22-29, as of Friday, April 29th, minimum FICO Score requirements have been updated on FHA, VA, and Rural Housing loans for both Full Doc and Streamlines/IRRRLs to a FICO Score of 580.

Carrington Correspondent announced improved FHA loan pricing for full doc, 640 FICO and below.

FAMC/Citizens Correspondent National Bulletin 2022-07 includes information on USDA-RD Non-Permanent Resident Aliens and Conventional Conforming Attorney Title Opinion Letter. Review the bulletin for additional information and all lock, delivery, and purchase by dates, if required.

Capital Markets: Ciao Global Growth?

“Risk off” sentiment was the name of the game yesterday as investors are now fully convinced the Fed will make a serious attempt at quashing inflation which will hurt global growth prospects. The flight to safe haven assets is beginning to cause a rally in bonds with MBS lagging, as usual. Yesterday’s $22 billion 30-year bond auction was met with solid demand, capping this week's note and bond auction slate. What does it mean for mortgage rates? Well, the rear-facing Primary Mortgage Market Survey from Freddie Mac saw mortgage rates mixed though holding near the highest levels since 2009 in the case of the 30-year and 15-year fixed rates. The 30-year rate rose 3 basis points to 5.30 percent with the 15-year rate slipping 4 basis points to 4.48 percent. Meanwhile, as adjustable-rate mortgages (ARMs) became more popular, the 5/1 hybrid ARM rate rose 2 basis points to 3.98 percent.

San Francisco Fed President Daly said a 75-basis point increase in rates is "not a primary consideration,” but backed raising interest rates by a half-percentage point at each of the central bank’s next two meetings, adding she’d like to see financial conditions tighten further. She said that “There’s no reason right now that I see in the economy to pause on doing (50 basis point increases) in the next couple of meetings.” Speaking of the Fed, the Senate voted to confirm Jerome Powell for a second four-year term as Fed chair in a bipartisan 80-19 vote. Powell reiterated the likelihood of half-point hikes in June and July. The vote to confirm the Fed chair had been delayed for months as senators deliberated over other nominees President Biden had made for the central bank. Sarah Bloom Raskin withdrew her name following controversy over her appointment, while Lisa Cook and Philip Jefferson were only recently confirmed as governors.

As mentioned yesterday, producer prices for April matched headline expectations while the core reading was a bit cooler than expected. The headline year-over-year growth rate slowed to 11.0 percent from an upwardly revised 11.5 percent in March while the core reading slowed to 8.8 percent from an upwardly revised 9.6 percent in March. Month-over-month, inflation at the wholesale level rose 0.5 percent in April, decelerating from the 1.5 percent we saw in March and 1.1 percent we saw in February. Even with the deceleration in month-over-month increases and moderation in the year-over-year changes, inflation rates for producers remain at high levels and the Fed will likely stick to its schedule and hike rates another 50 basis points at the June meeting. Profit margins for producers become pressured if these increased costs are not passed along to consumers.

Today’s economic calendar is under way with April import and export prices (flat and +.6 percent versus expectations of +.5 and +1.0 percent, respectively month-over-month, compared with 2.6 percent and 4.5 percent previously). Ahead of us are the preliminary May University of Michigan sentiment and remarks from Minneapolis Fed President Kashkari and Cleveland Fed President Mester. Yesterday afternoon, the Desk released the MBS purchase estimate for the May 13 to June 13 period, which is the last estimate to not include a taper. That taper is $17.5 billion in the next period before hitting $35 billion 3-months later. The Desk also released a new schedule covering the May 13 to 26 period containing the same coupons as the prior schedule with 30-year operations targeting 3.5 percent through 4.5 percent and 15-year operations targeting 3 percent and 3.5 percent. Today’s schedule sees the Desk purchasing up to $1.7 billion 3.5 percent through 4.5 percent. We begin the day with Agency MBS prices worse a solid .125 and the 10-year yielding 2.90 after closing yesterday at 2.82 percent.


SWBC Mortgage has expanded its footprint into the Northeast, with Kelley Tyrell leading the charge as Regional Vice President. With over thirty years of lending experience, Kelley’s focus is on growing the footprint across Pennsylvania, New Jersey, and the Midwest, including Michigan and Ohio. “SWBC Mortgage has over 32 years of success, and as a privately owned company, we’ve fostered an environment built on teamwork and personal growth that’s unrivaled in the industry,” said Kelley Tyrell. “Combining a family-like culture with business advantages such as our distributed retail model, retained servicing, and depth of marketing support, make your next step your best one at SWBC Mortgage.” Kelley supports existing branches in Richmond and Chesapeake, Virginia, and Charleston, South Carolina. Kelley is actively recruiting across his entire territory Contact him at Kelley Tyrell. SWBC Mortgage is also recruiting for all branches in 42 states. Learn more about SWBC Mortgage.