“Knowledge is knowing a tomato is a fruit. Wisdom is not putting it in a fruit salad.” What a gift it is to be able to read. Where are you reading this commentary? (Don’t respond, it was rhetorical. Trust me, I hear all kinds of things.) If you’re sitting in the office, you might be the only one there. Being in the office on a Friday has apparently become passe. What hasn’t become passe is financial literacy, whether it is for children or homebuying adults.
Lender and Broker Software and Services
Change is inevitable, and that’s a fact. That’s also why lenders must align borrower-facing processes like closing with evolving consumer expectations for a modern financing experience. To explore how to best introduce and leverage eClosing at your organization, SimpleNexus teamed up with leading fintech research firm Celentto create The State of Digital Mortgage eClosing Adoption: From Base Camp to the Summit. The comprehensive report offers an objective analysis of how lenders are using eClose technology, and suggests best practices for optimizing digital closing processes. Download the full report for a look into the future of eClosing.
Oh, the pain of losing a borrower to another lender while waiting for the initial underwrite! With Candor LES, you get borrower surety in a flash with a full underwrite as early as POS. Schedule a demo to stay ahead of your competition!
How’s your TPO business? Have you ever surprised a broker when canceling or suspending a loan with incomplete actions? Do your brokers know the specific underwriting conditions not cleared for each loan? Are your brokers properly engaged and the origination facilitated through approvals and closing? So many questions and challenges!!! Interested in how Velma® Connector can extend your LOS to help you run your TPO business efficiently? More info here.
Leave your borrowers alone! Leverage source-driven income analysis with verification products you already order, eliminating the need to ask your applicants to upload redundant documents. With Income+, it is easier and faster to get automated results when ordering Service 1st TRVs and VOEs. Create frictionless efficiencies in your underwriting workflow using system-calculated monthly income totals with consistent results every single time, saving up to 40 FTE minutes per file. Explore the time and cost-saving benefits for yourself with a 30-day trial: watch demo. Easy onboarding, faster processing, and higher profit margins. No signup fees or minimums. Get started today with a no obligation price proposal.
Big industry news! AmCap Home Loans announced that it made Usherpa, the mortgage industry’s original enterprise CRM technology, the marketing and SmartCRM solution for its 500+ loan originators across all 140+ branches. AmCap executives compared Usherpa’s technology to that offered by the industry’s big box CRMs and found Usherpa outpaced them in customer service, long-term customer loyalty and its vast content marketing library. Data gathered by independent researchers has found that Usherpa users consistently close twice as many loans as non-users. “We looked at a range of options but found Usherpa’s boutique service levels and enterprise power to be a winning combination,” said Garrett Clayton, CEO of AmCap Home Loans. Read the full press release here.
In a market where every competitive edge matters, are your loan officers making the most of social media? If you’re not activating loan officers as digital social sellers, you’re already behind the competition. It starts with the right tools. Denim Social is a SaaS provider that powers social selling programs. Our platform empowers marketers, producers, associates, lenders, and more to communicate and engage on their channel of choice, leading to more meaningful customer relationships. In partnership with Denim Social, financial institutions compliantly and authentically distribute thought leadership, build trust, and deepen relationships at scale. If you want social media to drive meaningful business results for your loan officers, schedule a demo with Denim Social to find out how we can help.
3 WAYS TO HELP HOMEBUYERS THIS SUMMER: Will the Fed’s favorite inflation measure, Core PCE, drop in June like it did in April and May? We’ll find out two days after they hike rates next week. Meanwhile, buyers are finally gaining bargaining power as the volume of June home price drops increased 132% YoY. So stay sharp with these 3 purchase pipeline pro tips on your (1) purchase pre-approval mindset, (2) real time response to homebuyer intent, (3) ComeHome by HouseCanary playbook to end pre-approved buyer fallout. BREAKING HELOC BARRIERS: It’s easy to say HELOCs are hot with record home equity. But historically it’s been harder to get HELOCs done fast for borrowers and safely for lenders. Not anymore. ComeHome, HouseCanary’s home search and valuation platform Wall Street uses to bulk buy homes and loans, is your fast, safe HELOC solution. Evaluate leads and pre-underwrite immediately with granular mortgage and property analytics, which include industry gold-standard AVMs, and win customer trust with sharp consumer Home Value Reports.
TPO Product News
“Luxury Mortgage Corp. continues to show its commitment to being a valued, reliable partner to its wholesale brokers and correspondent clients. As the market leader, we are excited to have implemented a dramatic price reduction across all Simple Access Non-QM products. Take your business to sustainable new heights with the elite team. Contact an Account Executive today to submit a scenario!”
Excelerate Capital gives you more options to help fund even your most complex loans. Give your borrower access to their home equity with our 1st TD HELOC 5/6 ARM Bridge Loan – no prepay, par pricing/borrower paid and up to 75% LTV. *Self-Employed Stated Income OK *Wage Earner Stated Income (20% within Salary.com) *Minimum 660 FICO *Loan Amount up to $2 Million (States available: AZ, CA, FL, IL, OH, PA). Also, our Prime program remains strong with 90% LTV and loan amounts up to $3.5 million. With this program we accept full doc or 3/12/24 months bank statements. Become an approved broker and close your loans fast with us! Contact us today: 855-455-7026 or email Rachel To and Scott Gerrity. "Fast. Friendly. Flexible."
FHA, VA, Ginnie Mae
There are pros and cons of originating “government” products, and in servicing them (especially if the borrower doesn’t make their payments). The profit margins can’t be ignored, and it is rare to find a large lender that doesn’t offer VA and FHA products to borrowers. The FHA program and private mortgage insurers managed to gain share in the second quarter. Per a tally from Inside Mortgage Finance, “Fannie Mae, Freddie Mac and Ginnie Mae securitized $217.34 billion of loans with some form of primary mortgage insurance in the second quarter. That was down 8.2% from the previous period, a more benign downturn than the 26.5% nosedive in total agency business. FHA loans accounted for 27.1% of insured mortgages in the second quarter, up from 25.5% in the first three months of the year. Securitization of FHA purchase loans rose 4.1% from the previous period, significantly stronger than the 0.9% gain in insured purchase loans.”
FHA announced it published a new Mortgagee Letter, Calculating Effective Income after a Reduction or Loss of Income for Borrowers Affected by Presidentially-Declared COVID-19 National Emergency. Guidance in ML 2022-09 allows flexibility in calculating income for borrowers who experienced a gap in employment and/or a reduction or loss of income due to a COVID-19 related economic event, where the borrower’s effective income is now stable. These flexibilities will allow more borrowers who have recovered from a COVID-19 related economic event to be appropriately evaluated for FHA financing.
While new mortgage loan originations were slightly down compared to May, Ginnie Mae guaranteed more than $46 billion in mortgage-backed securities (MBS) in June. Ginnie Mae President Alanna McCargo stated “The recent launch of the Department of Housing and Urban Development’s housing supply initiative, Our Way Home, is critical to boost the nation’s affordable housing supply. The initiative builds on the Biden-Harris Administration’s housing supply Action Plan to address communities' housing supply needs in an equitable, inclusive and sustainable fashion.” For more information on monthly MBS issuance, UPB balance, REMIC monthly issuance and global market analysis visit Ginnie Mae Disclosure.
Pennymac announced the release of the FHA Full Documentation, FHA Streamline, VA Full Documentation, and VA IRRRL Manufactured Home Loan Program to its Delegated clients, Effective Monday, July 18, 2022 Read PennyMac Announcement 22-46 for additional information.
Effective immediately, Pennymac is accepting Conventional Conforming, Jumbo, FHA, and VA loans secured by properties in New York for Non-Delegated clients. Details are posted in PennyMac Announcement 22-43.
FHA updated their guide for “Calculating Effective Income after a Reduction or Loss of Income for Borrowers Affected by the Presidentially Declared COVID-19 National Emergency. While these updates are effective for case numbers assigned on or after September 5, 2022. Mountain West Financial Wholesale may begin implementing these updates immediately, view MWF Bulletin 22W-060 for additional details.
Capital Markets: Central Banks Raising Rates
The Mortgage Bankers Association is now forecasting for the U.S. economy to slow to a growth rate of 0.6 percent in 2022. This is a downward revision from last month’s forecasted growth rate of 1.6 percent. Higher interest rates resulting from the Fed’s efforts to combat inflation, as well as the persistently high rate of inflation, are causing stresses for households and businesses. The tighter financial conditions will lead to weaker growth. While a recession is not in our baseline forecast, it is a coin flip at this point, as we estimate a roughly 50 percent chance that the US could enter a recession over the next 12 months, with the most likely timing being in the first half of 2023.
“We lowered our forecast for single-family starts and home sales, leading to lower purchase originations. We now expect existing home sales will decline 8 percent in 2022. Purchase origination volume is expected to be $1.66T in 2022, essentially flat from last year, before increasing slightly to $1.70T in 2023. Mortgage refinancing continues to be well below the pace we saw last year, especially as rate-term refinances continue to decline with mortgage rates more than 2 percentage points higher than a year ago. We expect the 30-year fixed rate to stay over 5 percent for the remainder of 2022, ending the year at 5.2 percent. Refinance originations are estimated to fall 70 percent in 2022 to $706 billion.”
News from around the world impacts our economy, and vice versa. The European Central Bank hiked rates for the first time in 11 years yesterday in the shadow of the collapse of Italy's government and threat of fragmentation. The result was bond prices rallied around the globe: prices up rates down.
The ECB’s decision, which affects 19 eurozone member countries, is part of a worldwide trend of tightening monetary policy in the face of rising inflation that has been driven by supply chain issues related to the COVID pandemic and made worse by the Russian war in Ukraine. The hike follows moves last week by central bankers in Canada, who increased rates by a full-percentage point, and in the Philippines, who raised rates by a surprise 0.75 percentage point. The Bank of England anticipates a half point hike in August and our FOMC is expected to increase rates 75-basis points at its meeting next week.
Today’s economic calendar is light on data with only the preliminary July reading for S&P Global PMIs scheduled for release. Expectations are for declines in both manufacturing and services. The Desk will purchase up to $180 million 3.5 percent and 4 percent UMBS15’s from early payoffs and today is also Class D 48-hours. We begin the day with Agency MBS prices better by .250-375 and the 10-year yielding 2.81 after closing yesterday at 2.91 percent due to weak economics from around the world.
Draper and Kramer Mortgage Corp. announced that mortgage industry veteran Matt Rohl has joined the company as Senior Vice President of CRA Development and Emerging Markets. Rohl has 29 years of industry experience and is known as a long-time leader in the mortgage insurance and risk management space. In his new position, he will focus on growing the company’s business in low-to-moderate income and majority-minority areas through program expansion, community outreach and recruiting. “I’m excited to be joining a thriving nationwide lender that has such a strong reputation for culture, support and innovation,” said Rohl. Draper and Kramer Mortgage Corp. is a leading mid-sized mortgage banking company that continues to expand from coast to coast. To learn more about their career opportunities for originators, visit us here.