I mentioned yesterday that 4 out of 3 people have trouble with math, but it doesn’t take a genius to do subtraction. 6 - .2 = 5.8, right? Wouldn’t you like to earn 5.8 percent on your money? The Federal Reserve reports that U.S. households are holding $17.9 trillion in cash and cash equivalents. If your credit union or bank is paying you (and other depositors) .2 percent on your bank account, but owns a portfolio of new Freddie or Fannie loans where borrowers are paying 6 percent, well, that is a darned nice spread. I know that I am simplifying that somewhat, but what bank wouldn’t want that? Along those lines, underwriters are keenly aware that the average monthly payment on a new car loan hit a record high of $686 in June. Household balance sheets are still in good shape after bolstering savings during the height of the pandemic, but we can expect those to ebb with inflation. (Today’s podcast is available here and is sponsored by SimpleNexus, an nCino company and award-winning developer of mobile-first technology for the modern mortgage lender.)

Lender and Broker Products, Software, and Services

Closing the racial homeownership gap is a priority for Fannie Mae and Freddie Mac, and the enterprises’ 3-year housing equity plans emphasize down payment assistance (DPA) as a key means of doing so. Award-winning DPA database provider Down Payment Resource (DPR) understands that to effectively confront racial homeownership disparities, we must first address generational wealth disparities that make it harder for qualified minority consumers to afford a down payment. Using DPR’s lender tools to connect borrowers with home financing support, mortgage professionals can grow their book of business while opening doors for historically underserved markets. DPA awareness is growing, so there’s never been a better time to jump on the DPA bandwagon! Check out some of the ways DPA plays into the enterprises’ housing equity plans.

Click n’ Close proudly announces the launch of its down payment assistance (DPA) adjustable-rate mortgage (ARM) program to provide additional housing opportunities for low to moderate-income individuals and families. This program (which includes a 3/1 or 5/1 government ARM first mortgage and a second mortgage repayable up to 30 years) represents the first mortgage financing product that delivers both down payment and closing cost assistance to eligible borrowers and is available through Click n’ Close’s correspondent and wholesale channels. This is just one of several innovations announced since the company’s rebrand from Mid America Mortgage. Recently, Click n’ Close announced the availability of eNotes via its third-party channel for eligible non-delegated correspondents to help them operate more efficiently and competitively as they make the transition from mortgage broker to banker. To learn more, contact National Sales Manager Christopher Hartman or Julas Hollie (correspondent).

“As the housing market evolves this year, we know your business needs are evolving. At wemlo℠, we appreciate how precious your time is, especially as clients need more of a shoulder to lean on than ever before. That’s why we’re here to give some of that time back by taking on your processing workload. How does third-party processing benefit you? When you pass the baton to wemlo’s highly trained processors, you’ll be able to focus more on client-facing activities while we handle the often-tedious processing work. To make sure we’re keeping up with your borrowers’ needs, wemlo proudly offers processing support in 48 states for more than a dozen loan products including Conventional, FHA, Jumbo, VA, and Non-QM. Ready to reap the benefits of third-party processing? Connect with wemlo today! NMLS ID 1853218.”

As you look for ways to reduce costs and create greater efficiencies, consider leveraging Black Knight Legal & Vesting reports for your property- and ownership-verification needs. Fast and cost-effective, Black Knight’s Legal & Vesting Report provides a property’s recordable legal description and complete vesting clause and deed image. What’s more, the reports are available for every county and jurisdiction across the United States. You also get a choice of reporting and delivery options, including via API to integrate with your workflow and help streamline your origination process. For more information about a cost-effective, fast and easy way to obtain the information you need for verifying property and ownership information, contact Black Knight.

TMS is driven by a sole mission to grow happiness for its clients and its customers. So it’s no surprise when it comes to subservicing, TMS delivers on that happiness. Backed by a 91% first-call resolution rate, 83% NPS score, and 98% customer satisfaction rate, TMS delivers with rock solid stats. But the numbers don’t represent the whole story. TMS prides itself on being a fully transparent and collaborative partner with all of their clients. But don’t just take their word for it. Doug Wilson, Co-CEO at iServe Residential Lending states “We’re very impressed with the level of knowledge and service the TMS team consistently provides. We’re grateful to have their guidance and advocacy.” It’s this leading customer experience and true partnerships with their clients that has propelled TMS to a Top 10 Subservicer. Ready for an extraordinary partnership? Partner with TMS.

Company Sponsored Webinars and Training

Don’t let your team fall into the mid-year slump. XINNIX is on the road and ready to energize your next meeting, quarterly rally, or conference! As the nation’s premier provider of online and in-person training, accountability, and coaching for two decades, XINNIX can help you transform any live event into a truly memorable and enriching experience for your team. XINNIXspeaks is a catalogue of incredible topics that can be customized for your organization’s meetings; and XINNIX’s bureau of highly engaged and knowledgeable leaders, trainers, coaches, and industry experts is always expanding! To find out what offering would be the best fit for your team, download the full catalog here, or schedule a call with a XINNIX Account Executive today to talk about how they can customize an event to meet whatever topic, theme, or goal you may need.

Higher interest rates are keeping many prospective homebuyers from entering the market. It’s time for originators to look for new opportunities to sustain their business. Divorcing homeowners is a recession-proof specialty that creates a greater demand for housing as former spouses often require two homes rather than one. FinLocker has created a guide that explores the five common mortgage-related options for settling this marital asset. Mortgage originators who download The Mortgage Lender’s Guide to Supporting Divorcing Customers will receive tips and tools to guide their divorcing customers towards a financially stable future. To help loan officers create a social selling program that generates leads, nurtures prospective homebuyers, and create customers for life, Brian Vieaux from FinLocker and Doug Wilber from Denim Social will present a webinar Make Every Loan Officer an Influencer with Social Selling tomorrow at 1 pm CST. Register here.

Webinar: QC Trends and How to Prepare for Next Generation GSE Reporting! Don’t miss this upcoming live webinar on July 21st at 11:00 AM PDT featuring ACES Quality Management’s seasoned subject matter experts. Topics covered include an analysis of the recent Mortgage QC Industry Trends Report, deep dive into mortgage quality control trend reporting and how it aligns with the current state of the industry, predictions on what to expect from GSE’s and how to align with their expectations, and new generation reporting that will ensure compliance with GSEs. Register here!

The U.S. government has 1.4 BILLION pounds of cheese stored in caves beneath Springfield, Missouri. The stash dates back to the 1970s, when a dairy shortage and inflation spurred something of a gold rush for cheese. Despite limited housing inventory and high mortgage rates, we can’t count on an underground housing stash to save the day. But with the right strategy, lenders can still succeed in this rising rate environment. To help lenders determine the right strategy, Sales Boomerang and Mortgage Coach are bringing together MBA’s Mike Fratantoni, Success Mortgage Partners’ Owen Lee, and yours truly on July 21 at 12 pm ET to share key trends, forecasts, and capital markets insights. Tune in to learn how you can become the big cheese of the 2022 housing market!

Freddie and Fannie Updates

Agency production, moving through the Government Sponsored Enterprises (GSEs), still represents the lion’s share of residential loan volume. What have F&F been up to recently?

Under the guidance of the Federal Housing Finance Agency (FHFA), Freddie Mac and Fannie Mae have been jointly assessing the impact of the Equifax incident on mortgages originated for sale to the GSEs. Guide Bulletin 2022-14 provides requirements and guidance for credit underwriting, representation and warranty relief, and data corrections for impacted mortgages. The requirements are effective immediately and apply to mortgages with credit reports containing the Equifax credit score pulled on or after March 17, 2022, and on or before April 6, 2022.

At the direction of the Federal Housing Finance Agency (FHFA), the GSEs published updates to the five translated versions (Spanish, traditional Chinese, Vietnamese, Korean and Tagalog) of the supplemental Consumer Information Form (SCIF). Updates include minor revisions to the translated forms, introduction, and effective date alignment with those made to the English language form published May 3, 2022. The respective agency translated forms are available on Freddie Mac’s multi-language and URLA web page, Fannie Mae’s multi-language and URLA web page, and FHFAs Mortgage Translation Clearinghouse.

Fannie Mae is implementing an update to the risk and eligibility assessments in Desktop Underwriter® (DU®) Version 11.0. These changes will apply to loan casefiles created on or after July 10. Read the Fannie Mae DU/DO Originator Release Notes for details.

Launched Collateral Underwriter® (CU®) Version 5.4 on June 24th. CU now has a new undervaluation risk flag along with 16 new undervaluation risk reason codes to complement the existing overvaluation risk flag and reason codes. Review Fannie Mae’s CU Version 5.4 release notes for detailed information.

Issued Lender Letter LL-2022-02 to provide requirements that apply to loans impacted by the Equifax coding issue.

Introduced Quality Control Calibrations, an expanded and formalized initiative to engage with a larger segment of lenders in the calibration of their QC results. Read Fannie Mae’s Selling Notice for more information.

Fannie’s July Selling Guide Update SEL-2022-06 adds requirements for compliance with State Address Confidentiality programs, revises the required version of title insurance forms, and clarifies how to calculate the LTV ratio for manufactured housing subdivisions. Additionally, the Guide describes updates to the list of approved mortgage insurers (MI) and approved mortgage insurance forms.

Posted a Selling Notice regarding the implementation of area median income estimates (AMIs) in Desktop Underwriter® and published on the HomeReady® page.

Currently, there are still some COVID temporary selling policies remaining in effect until further notice. Fannie Mae Selling FAQs answer common questions about them, recently updated to remove no-longer-needed content.

Fannie’s June Appraiser Quality Monitoring (AQM) list has been posted.

Freddie Mac - On June 29 announced that it will begin considering on-time rent payments as part of its loan purchase decisions to increase homeownership opportunities for first-time homebuyers. Now with a borrower’s permission, mortgage lenders and brokers will be able to submit bank account data showing 12-months of on-time rent payments through Freddie’s automated underwriting system. Bank account data will be “obtained from designated third-party service providers using the same automated process used to verify assets, income and employment” using its asset and income modeler. Eligible rent payment data includes checks, electronic transactions, or digital payments made through specific payment apps. Additional requirements for submitting rent payment data to Freddie’s underwriting system will be announced in an upcoming July Single-Family Seller/Servicer Guide Bulletin.

Advance selling and delivery proficiencies with recent updates to Freddie Mac Loan Selling Advisor®. Learn about Early Disclosure, Cash Rate Sheet Redesign, Enforcing the AMI Limit on Freddie Mac Home Possible® Loans, Critical Edits in Support of the Revised General Qualified Mortgage (QM) Rule, New Delivery Requirements for Construction Conversion and Renovation Mortgages Job Aid.

Announced updates to ACE+PDR (automated collateral evaluations plus property data report) requirements superseding those announced in Bulletin 2022-6. Sellers must comply with requirements in Bulletin 2022-13 for all mortgages originated and delivered using ACE+PDR.

Posted Selling Updates in Guide Bulletin 2022-15 regarding information related to rent payment history, COVID-19 requirements, Guide Form 1103-SCIF, manufactured homes, and mortgage insurance.

New automated processes in Loan Product Advisor, and expanded eligibility for Accessory Dwelling Units (ADUs) and Manufactured Homes top the list of updates recently made to the Freddie Mac Seller/Servicer Guide. See the highlights in Freddie Mac’s Q2 Policy Video.

Is increasing homeownership opportunities for first-time homebuyers by considering on-time rent payments as part of the company’s loan purchase decisions. In a new Press Release, Freddie announced that beginning July 10, 2022, this automated functionality will be available to mortgage lenders nationwide through Freddie Mac Loan Product Advisor® (LPA). With the borrower’s permission, lenders and brokers can submit bank account data for LPA to identify 12-months of on-time rent payments for inclusion in the tool’s assessment of purchase eligibility.

Capital Markets: Recession Talk Driving Rates Down

A strong jobs report on Friday calmed some jitters that the economy might have already tipped into recession, but at the same time, it raised expectations that the Fed could press ahead with aggressive rate hikes to tame inflation. It's a circular methodology to gauge the coming economic landscape, meaning earnings season will likely play an outsized role in shaping investing sentiment. And ask yourself what a recession means for rates.

Speaking of rates, we had a rally in the bond market to open the week as investors awaited bank earnings and key inflation data. The week after the jobs report is normally light on data, but this week we receive the Consumer Price Index tomorrow and the University of Michigan Consumer Sentiment Survey, which gives the Fed clarity on inflationary expectations, on Friday. The fact that there are no clear and confident answers on the strength of the labor market and inflation is causing much of the volatility we have seen recently. The closest we can get to a sure bet is that the war in Ukraine and supply bottlenecks from labor shortages will keep inflation high until central banks tighten policy toward economic discomfort.

Today’s economic calendar kicked off ahead of the open with the NFIB Small Business Activity Index for June (dropping to 89.5, its lowest level since 2013). Later this morning brings Redbook same store sales for the week ending July 9 and a Treasury auction of $34 billion reopened 10-year notes. One Fed speaker is currently scheduled: Richmond’s Barkin. Today’s MBS purchase schedule sees the Desk in GNIIs for up to $531 million 4 percent through 5 percent using money from early payoffs. We begin the day with Agency MBS prices better by a solid .250 and the 10-year yielding 2.92 after closing yesterday at 2.99 percent.

Jobs and Promotions

Merchants Bank of Indiana is expanding its Correspondent Sales team. “We are growing our Western Region and looking for a Sales Executive to develop Non-Delegated and Delegated lender relationships. We offer Agency and Non-Agency programs with a focus on Non-Delegated Lenders. We also offer a dedicated Financial Institution channel that provides fulfillment services to Banks and Credit Unions. Merchants is committed to our Lender partners and the Correspondent channel. With approximately $10 Billion in Assets, a strong warehouse financing platform, a diversified banking business and seasoned mortgage professionals in the C-Suite, Merchants approaches the Correspondent business from a position of strength and commitment. Contact Human Resources to learn more about the Western Regional Correspondent Sales Executive position.”

“Do you feel like you’re riding the waves of the changing mortgage market? Your local Motto Mortgage office has the “surfboard” for you. Our network’s tools and support take the pressure off your most time-consuming activities so you can hang ten with your borrowers when they need you most. When you join a Motto office, you have access to processing technology built just for brokers, a complete CRM with contact automation, ongoing educational opportunities with industry experts and network giants, timely marketing pieces for continued business growth, industry-leading compliance support, and a tight-knit community of independently-owned offices. It’s time to hit the surf and ride those wild waves. Motto Mortgage brokerages in states all over the country are hiring talented loan originators: AL, AZ, CA, FL, MA, MD, MI, NC, NV, OH, OK, PA, TN, TX, WA & WV. For more information or to take the next step, start here.”

Primis is adding to its mortgage team with the addition of Chris Blevins as managing director of Primis Mortgage’s Central Division. Primis Bank has more than $3.4 billion in assets, and Primis Mortgage was formed in June 2022 after Primis acquired SeaTrust Mortgage. (For more information on Primis Mortgage, contact CEO John Owens.)