If I am not borrowing money, the impact of higher rates isn’t a big direct hit to my lifestyle or spending. But if I had a credit card from Kohl’s, paying 30 percent would sure dissuade me from buying something and putting it on “layaway.” Lowe’s? 28.99 percent. Nordstrom’s is over 31 percent! With credit card debt moving about $1 trillion for the first time ever, something has to slow down, right? Today I head to Las Vegas, forecast 103 degrees, and I have already been fielding emails about lenders are selling servicing, busy further cutting costs, or making sure they collect money that is due them (like appraisal fees, as noted in this STRATMOR piece). Some companies are looking to acquire or be acquired. Mergers and acquisitions don’t only happen with lenders. For example, yesterday, in the compliance consulting biz, Firstline Compliance announced that Mark Wilson, Managing Partner, and Dustin Pfluger, Partner and Mortgage Banking Practice Leader at mortgage banking audit, accounting, and tax specialists, CWDL, made a significant strategic investment in the company, joining Troy Garris, Co-Managing Partner of Garris Horn, LLP, and Josh Weinberg, President of Firstline Compliance, as investors in the company. (Today’s podcast can be found here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. Hear an interview with Richey May’s Seth Sprague on the servicing retain versus release decisions and the current environment.)

Lender and Broker Software, Products, and Services

Did you know that when you send homeowners to a third-party for a stand-alone HELOC, you not only lose out on this business for yourself, but you also create an opportunity for your competitors to take over your mortgage business? Here’s what happens. After this lender onboards the new HELOC client, they start cross-promoting their mortgage solutions to this individual. On many occasions, this leads to a handoff of business, with many of your current or would-be homebuyers choosing to host their next mortgage through this lender, versus booking this business through you. In other words, by sending these homeowners away for their HELOC, you are often transferring future loan business to your competition. With a Symmetry HELOC, you not only guarantee this business stays with you, but you also retain the opportunity to build a longer, more profitable relationship with your clients. Contact your your Symmetry Lending Area Manager or email to get started!

We are painfully aware of the emotional and financial stress lenders are experiencing in the current environment. Many of you have been forced to choose between saving great people or saving the company, a horrible set of choices. However, with the help of our patented machine + human mortgage loan fulfillment solution, you will never find yourself in that situation again. By harnessing the CandorPLUS™ full loan lifecycle solution and its decision-ready file output, will ensure that you can quickly and confidently scale up or down to match your volume while simultaneously improving your performance metrics: cost, speed, and quality. Click here to schedule a call to explore how CandorPLUS™ can help you change the way your business navigates market volatility going forward.

“Doing your own loan processing is like hearing nails on a chalkboard for time-poor mortgage brokers. But what if you could drop off your loans with someone you trust, just like you drop the kids off at school? We’ve got the answer: wemlo® processors. At wemlo, our highly qualified processors have hit the books and are trained to work with dozens of loan products and lenders. In fact, school is always in session for wemlo processors, thanks to our ongoing educational opportunities and rigorous training standards. That means you can have peace of mind knowing our savvy processors are here to help you make the grade with your customers: just look at our 4.7/5.0-star* rating from borrowers. Experience A+ processing support today.”

“Receive 50bps Bonus YSP on qualified new applications submitted between July 22nd and August 31st for RentalOne DSCR Loans and RentalOne Portfolio DSCR Loans. This limited time special offer is expiring at the end of this month for LendingOne TPO mortgage brokers. If you are attending Originator Connect this week in Las Vegas, be sure to stop by our booth and meet with the LendingOne TPO team. Don’t miss LendingOne’s VP of Third-Party Originations, Samuel Bjelac, as he kicks off the Private Lender Forum on the panel “The State of Private Lending” on August 17th at 1:15PM. Let’s schedule a time to meet onsite to discuss new opportunities for LendingOne TPO brokers. Call us today to learn more: 866-794-0937 or visit our website.”

“Are you tired of having to adjust head count every time the market changes? The Mortgage Automation Suite, brought to you by Richey May and Zoral, can help. With scalable automated solutions that improve accuracy while reducing repurchases and costs, your business will be well-equipped for any market cycle. Leveraging this powerful automation will allow your team to close loans more easily, helping to retain your best staff. Plus, it adds the extra layer of stability needed during difficult times; something we could all use a bit more of these days! Find out how the Mortgage Automation Suite from Richey May & Zoral can help you today. Email us.”

Disaster News

Last year, U.S. climate-related disasters totaled $171.5B. Destructive weather and climate events, including hurricanes, wildfires, tornados, and drought, are expected to increase and affect a wider geographic range. Is your lending operation ready? When disasters strike, you may need to postpone loan closings, which could impact your origination revenue and impair the ability to fund new loans. Loans that have already been funded may be difficult to sell, further limiting your liquidity. Learn how you can reduce your financial exposure, decrease costs, and better serve borrowers by preparing before, during and after a disaster. Download our complimentary ebook: Climate-Change and Weather-Related Disasters: How to Manage Mortgage Risk.

The nation’s attention is on Maui, especially the town of Lahaina, and the devastation from the fire. Nearly every part of the United States faces natural disasters, whether they be earthquakes, hurricanes, tornadoes, forest fires, drought, or volcanoes. A declaration by FEMA triggers lender and servicer policies and procedures.

In the wake of several natural disasters which recently swept across the country and in anticipation of the approaching Atlantic hurricane season, are there resources available for mortgage lenders to assist consumers affected by such events? Read the Compliance Hot Topic from Mortgage Quality Management & Research (MQMR) Fannie Mae Disaster Relief – FAQ. Check out more equally insightful FAQs. (To learn more about Mortgage Quality Management & Research, download MQMR’s white paper.)

On 8/11/2023, with Amendment No. 7 to DR-4720, FEMA provided an Incident Period End Date of 7/17/2023, for Vermont counties affected by severe storms, flooding, landslides, & mudslides from 7/7/2023 to 7/17/2023. View AmeriHome disaster announcement 20230804-CL for inspection requirements.

PHH Mortgage Correspondent posted FEMA new disaster declaration details with FEMA DR-4724-HI. Reference PHH Mortgage Correspondent Announcement Disaster Alert Hawaii for all disaster declared counties, requirements, procedures, and conditions.

Capital Markets

Wall Street traders report that they’re seeing the supply of Agency MBS running between $2-2.5 billion a day. This number goes up and down, of course, but for a rough number, multiplying that by 250 business in 2023 gives us much less than $1 trillion. Throw in some non-Agency, portfolio, ARM, and bond production… Perhaps we’ll clear $1 trillion for the year. As rates creep higher, more of the MBS pipeline is comprised of purchase loans, which are less sensitive to intraday rate moves. At these yields, it is fair to expect pipelines to show less “negative convexity,” as incremental rate changes will have less of an effect on rate locks / trigger less reprices.

In terms of bonds and interest rates, troubling economic news out of China dominated headlines yesterday with slowdowns in consumer spending, industrial output, and investments, while unemployment in the country ticked higher. The People’s Bank of China cut rates on its medium-term lending facility by 15 basis points to 2.5 percent, the steepest cut in three years, while dropping short-term policy rates by 10 basis points. The move suggests elevated concerns from Chinese officials about the slowing economy in the face of a resurging real-estate crisis. Once again, U.S. Treasury rates increased yesterday, which is somewhat perplexing as weakness in China will send a disinflationary pulse throughout the world. Commodity consumption falls and credit issues should cause a flight to safety.

Domestically, Fitch warned that even the largest U.S. banks will have their ratings reevaluated if the agency downgrades the sector to A+ from AA-. The warning comes just a week after Moody's cut the ratings of ten small to mid-sized U.S. banks, placed four banks on watch for potential downgrades, lowered the outlook for eleven lenders, and warned that big banks could face ratings action soon.

Mortgage applications from MBA kicked off today’s economic calendar, decreasing 0.8 percent from one week earlier. Activity was expected to remain subdued as mortgage rates moved higher following the increased Quarterly Refunding and inflation reports. We’ve also received July housing starts and building permits (+3.9 percent at 1.45 million on an annual basis, and +.1 percent, respectively). Later today brings July industrial production and capacity utilization, as well as the Minutes from the July 25/26 FOMC meeting. We begin the day with Agency MBS prices roughly unchanged from Tuesday afternoon, the 10-year yielding 4.22 after closing yesterday at 4.22 percent, and the 2-year at 4.94.

Employment

“You want more deals. And we want you to have them. Download this infographic to see 3 powerful borrower stats that can help you close more deals. No need to thank us. We’re in the business of helping mortgage professionals grow their businesses. And just remember... when you’re ready to stop hustling to build someone’s empire, it’s probably time to run your own. We’re Motto Mortgage, a mortgage brokerage franchisor. What does that mean, you ask? It means we’ve put a mortgage brokerage together for you. Email to chat with us. We’re nice people.”

“Leadership is more important than ever in today's dynamic landscape. Because we have the right leadership at the helm, SWBC Mortgage is able to navigate challenges with resilience, while continuing to grow in a down market. Our leadership team cares about the employees and deeply values having direct communication with the field. The success of our loan originators is priority #1, and we strive to provide an unsurpassed level of support that will help grow their business to remarkable heights! We have big goals and are looking for those who can help us reach them. We combine innovation with personal interaction, empowering our loan officers to serve the communities where they live and lend. To learn more about how our unique setup helps maintain LO compensation and pricing, contact James Clark, Director of Strategic Growth or visit us.”

We know you’re always on the go, but we have the tools to get your buyers across the finish line wherever, whenever. At Guaranteed Rate Affinity, our new technology, PowerVP, is designed to make your life easier by giving you the freedom to be anywhere and do anything. With the ability to create new loan applications, view existing loans, pull credit, send pre-approval letters, and even share multiple pricing scenarios, you’ll wonder how you ever lived without it. It’s like having your own mortgage assistant in the palm of your hand. We get it, while you’re out there building your brand and strengthening relationships, you can’t be chained to a desk. That’s why we’ve made your pipeline portable. Want to learn more? Contact Tim Mcgraw to get started.