Florida is the source of a sizeable percentage of home loans and fine lenders, as well as plenty of “Florida Man” stories. (Don’t read if easily offended.) I head to Orlando this morning, where (unlike this week’s rain and lightning) there are an average of 233 sunny days per year, in addition to the FAMP event this week. Speaking of sunny days, if they can make a car paint that can “heal” scratches by being out in the sun, wouldn’t you think someone could invent a new mortgage product? There are new things in the land of real estate agents, and thank you to Indiana’s Carol K. who, as a notary, recently completed a rather interesting assignment. “It was for a ‘Homeowner Benefit Program’ where the real estate company is buying the rights to be the real estate agents who sell the owner’s property if and when they sell. You get $500 to sign a contract with them that says if you ever decide to sell, you will use them as your agent. Something for a lender to consider. (Available here, this week’s podcast is sponsored by Agile, the mortgage industry's MBS fintech. Bringing the mortgage capital markets into a new digital era. From lenders to dealers, Agile is the new way to quote MBS. Today’s has an interview with Built Technologies' Jim Fraser on originating and managing loans to build or improve housing.

Broker and Lender Services and Software

I don't know… doesn't it seem like a good time to lower your costs? Here's an idea: turn your fixed staff overhead into variable costs by outsourcing your processing, underwriting, and closing functions to the fulfillment team at Computershare Loan Services (CLS). They are ready to help you with your entire pipeline from conventional, non-QM, and FHA loans to multiple product types, including HELOCs. CLS can fulfill one part of the originations process or all of it! They save clients an average of 30% on back-office operational expenses, so why wait? Contact the team at Computershare Loan Services to learn how they can help your business thrive.

On National Compliance Officer Day, September 26th, ActiveComply will announce the winner of its first inaugural Compliance Champion Award. This award shows the holders’ commitment to the highest standards of professionalism and their dedication to supporting compliant marketing practices in the mortgage industry. In addition to their award, the winner will be featured on ActiveComply’s website and receive a new reMarkable 2! Know a compliance professional that deserves to be crowned champion? Nominations will be accepted until September 21st. In the meanwhile, explore ActiveComply’s wealth of compliance resources, learn more about their no-headache compliance solutions for IMBs, banks, credit unions, and other lenders, or request a free demo for your company today. As an added bonus, access the recording and resources from ActiveComply’s most recent seminar to learn more about using social media to increase purchase business while staying compliant.

Candor’s Loan Engineering System (LES) seamlessly integrates inside your LOS eliminating the need to log into a different platform for access. Using expert systems technology, Candor’s LES can fully underwrite a loan in as little as 90 seconds and as early as point-of-sale, which will allow a borrower to compete with cash offers. Unlike any other solution in the mortgage space, Candor’s LES clears conditions based on unique loan data and scenarios and provides a warranty on those cleared conditions. With well over 2 million underwrites, Candor LES has proven to increase Underwriter productivity by 5X and reduce turn-times by as much as 20 days, all with ZERO repurchases! Learn more about how our innovative technology and insights can help you Survive and Thrive the next 12-18 months and beyond! Contact us for a demo and be live in 30 days!

Support automation is transforming the mortgage industry. Top leaders like Jodi Hall (NMB) and Kevin Peranio (PRMG) are using platforms like Capacity to bring AI to their teams, increasing productivity. Originators and brokers use data from many external sources to meet the regulatory requirements during the loan process. The time-consuming task of manually searching contracts, bank statements, loan applications, and guidelines is inefficient. The mortgage industry is in dire need of a platform that securely integrates with lenders’ key systems, providing loan officers with instant, actionable answers about borrower opportunities, loan statuses, guidelines, and more. Capacity reduces the time that LOs spend logging into a sea of endless systems to find information. If this sounds familiar, see how Capacity can save your team time and frustration. See how it works.

“The trick with great automation is picking out what's needed from what's possible. No matter how far technology advances, no matter how far the realm of possibility goes with bells, whistles, and widgets, it will always be more effective to implement only what's really needed, not everything that big-box brands promise is new. At Usherpa Mortgage CRM, we know the needs of the sales team must be prioritized. It doesn't have to be an either-or situation; you can have both. Carefully consider which tools will best address the needs of your sales team while not being seduced by needlessly complex systems - or getting distracted by the next shiny new technology. Lastly, look for a long track record of success from your technology. As you audit your technology stack, download this free tool from Usherpa to boost LO success: 3 Habits of Top Producing Loan Officers.”

Broker/TPO Program and Product News

HELOC analytics solution: A lender's ability to offer HELOCs is becoming a more valuable solution with the record home equity many homeowners currently have. Members of HouseCanary’s executive team recently held an in-depth webinar to discuss HELOCs, and how HouseCanary’s HELOC solution can help lenders evaluate leads and pre-underwrite immediately with granular mortgage and property analytics. View the webinar and see if HouseCanary’s HELOC Analytics Solution is right for you.

Orion Lending continues to provide innovative products to allow our Broker Partners to serve more borrowers. Orion Lending recently added 5/6 & 7/6 YR ARMs including I/O with 30 YR and 40 YR Amortization, for both the Cashflow Only INvestor Loan (COIN DSCR, Non TRID program) and Titan Flex series. Titan Flex includes Bank Statements (Personal/Business), Express Doc, P&L, Full Doc, Asset Qualifier (No Income/Employment) and Asset Utilization. Orion offers industry leading STAR Portal technology for easy submissions along with a 24-hour UW Purchase Commitment! Coupled with our new Quick Lock feature, what’s not to love? To learn more about our ARM programs, please click here. Orion has something for everyone: Today is the day! click here to get approved within 24 hours!

These days, every homebuyer comes to the table with a standard “pre-approval” letter. Want your clients’ offers to stand out? Hook them up with AFR Wholesale’s Power Approval Home Financing Program, a welcome addition to AFR’s suite of home loans. With Power Approval, borrowers get more than the standard approval…they can make a no mortgage contingency offer, even if they don’t have all the cash, thanks to a contract addendum ensuring that AFR’s program partner will purchase the home if the buyer is unable to close due to a covered mortgage issue. While the Power Approval program still requires an appraisal contingency, it goes a long way toward giving everyone the confidence of an all-cash offer. What’s more, Power Approval is available in all states except Hawaii. Act now to give your clients a leg up! For information about becoming a partner, go to afrwholesale.com, email or call 1-800-375-6071.

Wells Fargo in the News (not an official announcement)

Broadly speaking, lenders can be involved in retail, wholesale, or correspondent. And very broadly speaking (a generalization), in the past a rule of thumb said that retail LOs made 100 basis points, wholesale AEs made 10 basis points, and correspondent AE’s made 1 basis point. A correspondent channel has traditionally been viewed as a way for an institution (such as Chase, Wells, AmeriHome, PennyMac, Citi, and so on, to bring in large volume economically and add servicing value, and clients, to its portfolio. Has this changed?

For decades Wells Fargo has been an icon in correspondent lending. Wells is certainly not going to “bail and sail” as some have done on a particular channel. But Bloomberg is reporting, and this not an official Newsflash from Wells Fargo, that “people with knowledge of the decision” say that “Wells Fargo’s leadership is preparing a retreat that will probably start with the bank’s ties to outside mortgage firms that generated roughly a third of its $205 billion in new home loans last year... The strategy shift follows changes in the executive ranks and years of struggles to avoid costly regulatory probes and hits to the bank’s reputation.

“Wells Fargo & Co. plans to shrink its vast mortgage empire, which once churned out one of every three home loans in the US and for a time made the bank the most valuable in the nation.

No longer committed to ranking No. 1 in the business, Wells Fargo’s leadership is preparing a retreat that will probably start with the bank’s ties to outside mortgage firms that generated roughly a third of its $205 billion in new home loans last year, according to people with knowledge of the decision. The strategy shift follows changes in the executive ranks and years of struggles to avoid costly regulatory probes and hits to the bank’s reputation.”

The reporter goes on to say, “With many details yet to be hashed out, the focus will be on lending to people with existing relationships to the bank [retail customers versus correspondent], or in places where it’s already present. ‘Wells Fargo is committed to supporting our customers and communities through our home-lending business… Like others in the industry, we’re evaluating the size of our mortgage business to adapt to a dramatically smaller originations market. We’re also continuing to look across the company to prioritize and best position us to serve our customers broadly.’”

The story states that “the people” “asked not to be named discussing internal deliberations, which are continuing… Retrenching will almost certainly include paring, or potentially even halting, so-called correspondent mortgage lending, in which Wells Fargo provides funding for loans arranged by outsiders, the people said. The channel offers benefits but also poses risks. Some banks use correspondent loans to diversify or round out portfolios they may keep on their balance sheets. A concern inside Wells Fargo is that when it finances large amounts of loans from other firms, it’s on the hook for any reputational damage if problems later surface… But in one sign of the firm’s evolving philosophy, executives are already under orders to improve handling of applications from existing consumer-banking and wealth-management clients, rather than refer them to the same system used by non-customers.”

The piece goes on to remind us that residential lending has changed. “Banks dominated the home-loan market heading into 2008 financial crisis. After the bust, many large lenders faced tens of billions of dollars in liability from mortgage-related operations and retreated. Bank of America Corp., for example, originated more than $100 billion of new home loans in a single quarter in 2009 after scooping up scandal-ridden Countrywide Financial. By 2018, it was originating less than 10% of that. Meanwhile, a new breed of online mortgage lenders swelled to fill the void left by banks. Quicken Loans grew from the 34th-largest provider of mortgages when the housing market reached its previous peak in 2006 to eventually pass Wells Fargo in originating new home loans. Along the way, it changed its name to Rocket.”

Capital Markets

Market volatility discussion: HouseCanary’s Chief Research Officer and Head of Product recently hosted a webinar and discussed the current market volatility and specific topics such as the Fed hike and inflation and how these factors are impacting the real estate and rental markets. Other topics include how today’s conditions compare to 2008, and markets that could potentially become hot purchase or rental markets. Learn about these crucial topics and see how it could affect your industry.

Turning to the bond market and therefore interest rates, both inflation figures and expectations dropped last week, which was welcomed news and something the Fed will pay close attention to. Declining energy prices helped to drive down inflation below market expectations in July. The monthly increase of 0.1 percent was below the 0.3 percent expected gain while the annual rate fell from 9.1 percent to 8.5 percent. But the most significant expenses for most (shelter and food) were up 5.7 percent and 10.9 percent over the last year, respectively. Additionally, the decline in consumer demand is occurring at the same time many retailers have restocked inventories causing some to begin offering discounts as items sit on shelves.

For the first time in two years, producer prices declined month-over-month. Expectations for future inflation are moderating according to a Federal Reserve survey and one from the University of Michigan. The markets are still undecided about how much the Fed will move in September as each new economic release seems to move expectations from 75-basis points to 50-basis points and vice versa. Following July’s job numbers, the market heavily favored 75-basis points but has since retreated following last week’s inflation data.

This week’s economic calendar includes several housing market indices, minutes from the July 26/27 FOMC meeting, retail sales and business inventories, as well as leading indicators. Today’s economic calendar is under way with NY Fed manufacturing for August (falling 14 points, basically collapsing!). Ahead today, after the commentary comes out, are the NAHB Housing Market Index, remarks from Fed Governor Waller, and a Fed MBS purchase operation of up to $776 million 4 percent through 5 percent. We begin the week with Agency MBS prices better by .250 from Friday and the 10-year yielding 2.78 after closing last week at 2.85 percent after the collapse of the Empire State Manufacturing Index.

Jobs, Lender Wanted!

“In contrast to all the doom and gloom being reported, here’s some positive news. Celebrity Home Loans actually increased production from Q1 to Q2, and that’s before counting the influx of great producers from the Apex Home Loans team that just joined us! Are you curious about how we increased business while most of the industry is reporting terrible results? Do you want to find out why the best in the industry are joining the CHL family of brands? Start a conversation with Celebrity Home Loans today!

A well-known wholesaler has the potential to secure capital for growth and expansion, and has begun the hunt to acquire/merge some non-QM talent and/or non-QM companies into the existing, well-run, well-capitalized institution. This is a standalone company that doesn’t need capital for typical organic growth and sustainability, but is searching for an ongoing group to add. Please send Chrisman LLC’s Anjelica Nixt a confidential note (principals only) for forwarding to the CEO of the wholesaler.

“Wholesale Account Executives, in the current environment are you aligned with a growth-minded wholesale lender? If not, Citizens Wholesale Lending is the place for you and we're looking for Account Executives in Arizona, California, Colorado, Massachusetts, Minnesota, Michigan, New Jersey, Utah, and Washington to join the top bank-owned wholesale lender in the business. For over 25 years, we’ve built our success on our commitment to delivering unparalleled customer service to our valued industry partners. Citizens AE’s have access to a full suite of agency offerings as well as Portfolio programs, long-term lock options and much more! Together, our forward-thinking leadership team and innovative company culture continue to produce undeniable results: Just check out our Q2 2022 Earnings Report! We are seeking best-in-class talent and if you’re ready to join a winning team click here!