What in blazes?! The Choco Taco has met its demise?! Food is something we all have in common. Last week’s, “Knowledge is knowing a tomato is a fruit. Wisdom is not putting it in a fruit salad,” prompted Henry Salomon to send, “And philosophy is wondering whether ketchup is a smoothie.” Excellent philosophical question. Even though The Western Secondary here in Orange County is about capital markets, the philosophy of signing bonuses in our industry is a topic, which reminded me of the piece by STRATMOR’s Jim Cameron about paying, or not paying, them. “The key is for lenders to focus on expected volumes, do the math and stay disciplined. Importantly, the focus should always be on recruiting salespeople who fit your culture.” Some of the talk here in Orange County is about the sale of mortgage servicing rights, or MSRs. Seems like the market, while not going down in value, has grown a little tired. Multiples reached some levels above 5:1 (for “vanilla” 25 basis point servicing) are now firmly in the 4.5-5:1 multiple range. Not terrible, but one can sense either a) an eye on the possibility of rates dropping some, or b) the usual buyers from the last few years becoming satiated. (Today’s podcast is available here and this week’s is sponsored by Candor. With Candor’s Machine as an Underwriter, lenders modernize their manufacturing infrastructure making them immune to margin, capacity, and staffing challenges forever.)

Lender and Broker Software and Services

Ever feel like the “service” part of subservicing is long gone? That all you’re left with is customer complaints, poor customer service, lack of transparency into your portfolio, and a relationship with your subservicer that is anything but a true partnership? Born as an originator, TMS Subservicing knows firsthand how frustrating this subpar service can be. Which is why every part of TMS has been built to eliminate them. RANLife and its CEO, Greg Walker, faced subpar service with their subservicer. As a customer centric originations company that cares about their brand and their customer’s experience first and foremost, Greg and his team considered switching subservicers for years. In this month’s blog, take a look at what attributes Greg and his team considered when evaluating subservicers, and what drove him to make the switch to TMS. Learn how TMS puts the “service” back in subservicing on the full blog here.

The need for REO asset management and disposition is set to increase as assets stalled in the moratorium pipeline become movable. Do you have an end-to-end REO asset management and disposition solution in place to help you handle the volume? Unlike others, Covius can address REO asset management, offer auction services and bundle additional solutions to streamline processes and save expense. Whether it be through REO asset management solutions (including asset marketing, valuation, value assessment and closing and escrow), our Dual Path liquidation that opens two lanes for offers through REALTOR® partnerships and RealtyBid® auction or through our REO Straight-to-Auction program, clients rely on our expertise and hands-on approach. We have the market knowledge to adapt to the rapidly changing servicing environment, the skills to deliver maximized asset exposure and the solutions to enhance your net proceeds. Leveraging a single REO management and disposition solution can make all the difference! Contact our Covius/RealtyBid team to find out more.

Introducing Maxwell’s Spanish-language loan app, a fully bilingual mortgage experience to help lenders serve today’s borrowers. By 2030, Hispanic Americans will represent an estimated 56% of all new homeowners, and mortgage solutions provider Maxwell just unveiled its Spanish-language loan app, offering a fully translated experience from landing page to submission that seamlessly integrates to the LOS and accounts for URLA and MISMO 3.4 requirements. Unlike many point-of-sale systems, which rely on ad hoc translation or subtitles, the Spanish loan application available through Maxwell Point of Sale provides immersive bilingual functionality that retains cultural context. While borrowers complete their application in Spanish or English with the ability to easily toggle between the two, LOs can continue to work in English on the back end, and access favorite features such as QuickApply™ and FileFetch™, which deliver application submission rates upwards of 90%. Want to attract, convert, and engage native Spanish speakers? Click here to learn more about Maxwell’s new Spanish-language loan app, or schedule a call with the team now.

SiteXPro℠ for Home Equity Leads! In today’s challenging origination market, you need a fast, cost-effective way to find reliable home equity leads. SiteXPro™, offered by Black Knight, provides instant, affordable access to a powerful online lead-generation tool. Drawing from our high-quality, nationwide property data, SiteXPro helps you quickly and easily identify targeted HELOC and other mortgage leads based on current, reliable information. The solution offers a variety of search-and-filter options so you can create lead lists to your specifications. Generate lead lists by geography, property type, current mortgage amount, LTV and more. Then access the AVMs on SiteXPro to help verify if there’s sufficient equity in a property for a home equity product. Sign up for a free 30-day trial of SiteXPro* and start getting instant, affordable access to the leads you need. *Available to new customers only. 30-day trial includes access to standard package of reports/solutions and does not include access to third-party products.

Conforming Conventional News

Pennymac is aligning with the Freddie Mac updates announced in Bulletin 2022-11, with the exception of the use of CHOICERenovation loans for ADUs due to an existing overlay. View Pennymac Announcement 22-44 for additional updates.

Pennymac is aligning with the Automated Collateral Evaluation (ACE) Waiver Eligibility Updates and the new offering, ACE+ PDR (property data report) originally announced in Freddie Mac Bulletin 2022-6 and then superseded by Freddie Mac Bulletin 2022-13. View PennyMac Announcement 22-45 for effective dates and additional details.

The Fannie Mae July Servicing Guide update, SVC-2022-05, adds requirements related to state Address Confidentiality Programs and makes other miscellaneous updates.

Wells Fargo Funding conventional conforming adjusters are changing by 25 basis points for second homes and investment properties with CLTVs less than or equal to 80%, effective July 21, 2022. Some adjusters are worsening, some are improving. For more information, view Wells Fargo Funding Newsflash C22-031.

loanDepot Wholesale loanDepot Wholesales’ News You Can Use! July 12 Newsletter includes Oklahoma disaster announcement, rental income requirement updates on loanDepot Conventional Lending Guide, Freddie Mac – refinance updates, and the announcement of a New Program: jumboAdvantage EXPRESS SELECT.

Mountain West Financial Wholesale posted information on the update to DU Version 11.0 released by Fannie Mae in MWF Bulletin 22W-061. Changes to the Risk and Eligibility Assessment may result in a reduction of Cash-Out Refinances that receive an “Approve/Eligible” recommendation. These changes will be effective for loan casefiles created on or after July 10, 2022. See release notes here.

Capital Markets: Fed Increases Priced Into the Market

Housing and jobs drive our economy, but last week had some clues about the direction of things. Economic data over the last week pointed towards slowing economic activity. Friday’s Purchasing Managers Index (PMI) showed a significant drop in activity for the service sector of the economy. Respondents generally attributed the slowdown in activity to inflationary pressures and rising interest rates. Additionally, with the dollar at a 20-year high, orders for exports have declined.

Unemployment claims rose to 251,000 for the week ending July 16, however that is still below the level typically associated with a struggling labor market. Job losses have been most prevalent in the mortgage finance, real estate brokerage, technology, and retail sectors. The focus this week will be on the FOMC meeting where the expectation is for a 75bps rate hike as well as the first look at Q2 GDP. Many economists expect a slightly positive number of around 0.5 percent annualized growth despite the Atlanta Fed’s GDP forecast predicting an annualized decline of 1.6 percent.

Looking at this week, this week’s headlines will be dominated by tomorrow’s anticipated Fed rate hike to combat inflation, though we do receive several important economic releases. The Chicago Fed National Activity Index was flat in June compared to a downwardly-revised May figure. Overall, the economy is showing signs that the actions taken by the Fed are beginning to have an effect. Day one of the two-day FOMC meeting gets under way in Washington, D.C. today.

With the FOMC events looming tomorrow, today’s busy calendar began with Philadelphia Fed non-manufacturing surveys for July. Later this morning brings Redbook same store sales, May house price indices from Case-Shiller and FHFA, July consumer confidence, June new home sales, Richmond Fed manufacturing, Dallas Fed Texas services, and a Treasury auction of $46 billion 5-year notes. The Desk will purchase, using money from early payoffs, up to $492 million GNII 4 percent through 5 percent MBS. We begin the day with Agency MBS prices better by .250-.375 and the 10-year yielding 2.74 after closing yesterday at 2.82 percent.

Employment Opportunities

“If you are a loan officer with 1-5 years of experience and possess a college degree in Economics, Business Administration, Statistics, Mathematics, or any of the Natural Sciences, we at Doorway Home Loans would like to have a word with you. Please reach out to us by sending a very brief email consisting of only your name and cell number in the subject line to Danielle Boren. Doorway Home Loans has been doing good business and doing business good for over 35 years. We look forward to speaking with you!”

Total Quality Lending (TQL) announces branch expansions in California, Arizona, and Nevada. Headquartered in Irvine, California, TQL is actively hiring Mortgage Loan Originators and Branch Managers across the country. TQL has built a reputation of providing mortgage professionals a platform of transparent pricing, innovative products, unique value proposition marketing and cutting-edge technology so they can grow their business regardless of market conditions. “Total Quality Lending is an organization that was founded by loan officers on the core values of building not only a great business but a Total Quality Life. We are excited to continue our growth across the country, impacting the lives of mortgage professionals through our commitment to providing great culture and tools for personal development and growth. By committing to personal growth, we know it will further originators' ability to increase their earnings and positively impact the communities they serve” says Chris Paliska, President of Total Quality Lending. For more information, please contact Taylor Burkhart at 714-914-4468.

iServe Residential Lending is aggressively expanding its loan officer network in Alabama, Arizona, California, Florida, Nevada, and Tennessee. We don’t flee; we innovate. Celebrating 18 years of serving their customers, iServe provides their loan officers and branch managers with a comprehensive strategic partnership. We provide the tools to succeed with a dedicated Marketing Department to increase your production and direct access to your personal Operations Team, including an underwriting hotline for loan scenarios. ‘When an MLO has the support they need, they thrive,’ says Doug Wilson, Co-CEO. Get the help you need, when you need it, from the source. Doug goes on to say new recruits are amazed at the amount of access they have with C level executives, and decision makers. For a confidential conversation and to learn why our average loan officer tenure is over 6 years, and branch managers over 8 years, contact Shay Curran, National Recruiter at 760.338.5851.

PrimeLending is focused on making a difference in multicultural and affordable lending markets. That’s why the company recently established the Multicultural Lending Advisory Council with loan originator representatives from every production region. Operating as an advisory council to the executive leadership team to ensure our loan officers have a voice that is truly heard, the group provides guidance on sales initiatives, product enhancements, adoption strategies, marketing programs, talent recruiting and more. The national mortgage lender is building on the momentum of several priority initiatives, including hiring more minority loan originators and serving more minority borrowers. How is the company doing? In 2021, 36% of all sales new hires were minority and 24% of our total salesforce are minority. And through June 2022, minority borrowers made up 27% or our total business. PrimeLending is hiring loan originators who are passionate about helping all homebuyers achieve their dreams of homeownership. Contact Nic Hartke for more information on being part of the future at PrimeLending.

The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday's logic.” (Peter Drucker, the father of modern Management studies.) What logic has your LOS been using? Canopy Mortgage empowers Loan Officers with tomorrow's thinking; ultimate control with a proprietary Loan Origination System built by industry experts for top producers. Join Canopy for access unmatched pricing, highly efficient loan processes and faster closings! Think forward to a sustainable business model that is good for every party involved in the mortgage process. Reach out to Josh Neumarker at Canopy Mortgage for more information 888-696-9076.