Tony H. writes, “I just switched my 30-year home mortgage to ‘student loan.’ Follow me for more financial advice.” I have been fielding questions about the impact of student loan forgiveness on credit (probably won’t impact credit scores) but also whether the forgiven debt is taxable (not at the Federal level, but Forbes thinks it may be at the state level in some places). While the government is intervening, wouldn’t it be nice if someone put a cap on college cost escalation? The government doesn’t directly determine compensation or profit margins, but both are huge issues for lenders. (“Lenders are Eying Compensation and Ops Trends” is the current STRATMOR blog.) The government doesn’t directly determine the rate of inflation either, but the Federal Reserve can address it. During his Jackson Hole speech, Powell said that the Fed will continue raising interest rates and hold them at a higher level until it is confident inflation is under control. Of course 30-year mortgage rates are pushed more by supply and demand, and inflation, than by the Fed. Meanwhile, lenders are “gutting it out” until… when? (Available here, today’s podcast has an interview with Dawar Alimi, CEO and Co-Founder of Lender Price, on how lenders should evaluate, implement, and use new technology. This week’s podcast is sponsored by MCT’s Hedge Advisory. As the industry leader in pull-through analytics and best execution with the highest staff-to-client ratio, lenders of every size trust MCT to manage risk and optimize profitability in their mortgage loan pipeline management.)
Lender and Broker Services and Software
The FHFA has directed Fannie and Freddie to require lenders to ask borrowers for their language preference beginning in March 2023. Will you be ready? Being prepared requires more than simply issuing the document to borrowers and will divide the market between lenders that meet borrower expectations and those who won’t. If a borrower says they prefer to speak Spanish, and you respond, we only speak English, have you truly provided a good customer experience? The Urban Institute reports that between 2020-2040, all net household growth will come from households of color, primarily Hispanic. Talk’uments provides savvy mortgage lenders the ability to access and grow market share by serving Limited English Proficient (LEP) consumers, in compliance with state requirements and federal expectations. They offer digital language solutions in Spanish and Chinese, and soon Vietnamese, Korean, and Tagalog. Visit Talkuments.com or call George Baker for a technology demonstration at 301.651.6198.
Why use a vendor when what you really want is a partner? Symmetry Lending works with loan officers every step of the way to build relationships and trust – the keys to creating customers for life. Don’t lose first mortgage approvals because you’re waiting on a Jumbo loan vendor to get back to you. Partner with Symmetry – Symmetry HELOCs with an appraisal can close in as little as 10 days! Discover our Service, Speed, and Simplicity at Symmetry’s Credit & Income Guide and Pricing Guide or call your Area Manager!
Outperforming Industry Benchmarks for Customer Service. At Cenlar, we are always looking to improve the homeowner experience through our investments in people and technology. The results of our efforts are clear, with the kind of progress that is measurable. Our call center is consistently outpacing industry benchmarks. This performance reflects our philosophy to “think like a homeowner” and we have committed ourselves to anticipating homeowner needs. Through proactive communications like our chat bots and website, homeowners can get what they need, when they need it, in a manner they choose. While it is important to us that we are among the best in our industry, it’s an even greater importance that we are always improving the service we deliver to our clients and their homeowners.
Let’s discuss how Cenlar can meet the mortgage servicing needs of your organization. Call 1-888-SUBSERV (782-7378) or visit here.
In the Super Mario Bros. series, players can “power up” their game by finding red, spotted mushrooms. In capital markets, lenders can “level up” their lock desk by attending Optimal Blue’s upcoming webinar. Make plans to join industry experts Melissa Leidy, Cheri Wolfe, and John Dumonsau on Sept. 29 at noon CT for “Level Up Your Lock Desk: Compete More Effectively, Save Time and Improve Accuracy.” This session will explore the value of embracing lock desk automation to amplify the essential work of lock desk staff. Don’t miss this opportunity to hear how you can increase ROI by maximizing the power of technology. Save your seat today.
Northpointe Bank Correspondent Lending announces recent enhancements to its Investor Cash Flow program, which allows eligible borrowers, including business LLCs, to finance investment properties based on the cash flow of the subject property rather than utilizing the borrower’s income. With loan amounts up to $2,000,000 and loan-to-value ratios up to 80%, Northpointe’s Investor Cash Flow includes fixed-rate, adjustable-rate, and interest-only options. The program allows unlimited cash out for loans with LTVs up to 60% and loan amounts up to $1,500,000, has a minimum debt-service credit ratio (DSCR) of 0.75, and is eligible for non-warrantable condos and condotels. Available in all 50 states and the District of Columbia, Northpointe Bank provides tailored solutions to maximize your profitability and help grow your business. View program details for more information, or email us.
“Are you experiencing high Home Equity loan volume? Let Lenderful Solutions help! We can assist with the efficiency of your staff, while giving your borrowers a fantastic user experience. Introducing Home Equity Express from Lenderful Solutions, by far the most powerful home equity loan solution available on the market. Starting with a user-friendly interface, this solution gathers application data and supplements it with an Automated Valuation Model; soft credit pull; verification of income and employment; and delivers it to your staff along with an underwriting summary. Close loans in a couple of days, exceed borrower expectations and drive bottom line revenue using Home Equity Express. Lenderful Solutions is a company built by Loan Officers, for Loan Officers. Check us out here or contact us at (313) 910-3070.”
Are you prepared for the Affordable Housing Initiative? Xome®, the premier asset management provider, offers solutions as part of HUD’s First Look Program for homeowner, owner-occupants, HUD-approved nonprofits, and governmental entities to expand access to affordable housing in the U.S. Through Xome’s recent alliance with the National Community Stabilization Trust, eligible mission-driven buyers will have exclusive first-look access to properties available for sale on Xome.com, helping them identify potential properties for revitalization while keeping the dream of homeownership alive for thousands of American families. Learn how Xome can help you support this important initiative, maintain compliance, and keep the dream of homeownership alive.
Intelligent automation, yes. But which platform? In the loan origination world, intelligent automation can be a game changer. But how can you sort through the hype to know which platform is right for your business? Before you buy, consider this: How intuitive is it for underwriters to use? Are there friction points for underwriters in terms of usability? Can they trust the results that are being returned? And keep in mind, spot solutions for underwriting, document management or other automation use cases will only take you so far. The Mortgage Automation Suite brought to you by Richey May Automate and Zoral is a holistic, end-to-end platform tailored for the mortgage industry. It’s not only easy to implement and adopt, but it also makes your underwriters’ workday easier and more productive. Check out our series to learn more about intelligent automation designed for your business or contact us for a demo!
Wholesale lenders! What if your Account Executives knew exactly which brokers to call? What if you knew where in the country you needed more AEs? What if you had a CRM that anticipated the unique sales challenges that only wholesale lenders have? OptifiNow is the answer! OptifiNow offers the only sales and marketing CRM designed specifically for wholesale and TPO lenders. OptifiNow manages all aspects of wholesale lender marketing, from rate sheet distribution to event marketing. Powerful integrations with LOS systems enable OptifiNow to have complete visibility and control over sales operations. Make the switch from overpriced and underpowered CRMs that have zero experience with wholesale lender sales. What if you reached out to OptifiNow today? The answer is at 888-746-6743 or click here to learn more.
FHFA, Agency Changes
Don’t forget that the FHFA (Federal Housing Finance Agency) oversees not only Freddie Mac and Fannie Mae but also the Federal Home Loan Bank Board. I mention this because the FHFA announced that a comprehensive review of the Federal Home Loan Bank System. The MBA’s Bob Broeksmit quickly announced, “The MBA applauds FHFA’s announcement to examine the appropriate role of the Federal Home Loan Bank (FHLB) system. We have long supported the responsible expansion of FHLB membership eligibility to better reflect the diverse providers of single-family and multifamily housing finance throughout the country. The Banks’ membership framework has only seen piecemeal updates since its creation, and there’s a need for an FHLB system that better reflects today’s housing finance market, not one from the 1930s.”
Recall that the FHFA announced Updated Minimum Financial Eligibility Requirements for Freddie Mac and Fannie Mae Seller/Servicers. Freddie Mac plans to issue a joint Seller/Servicer Bulletin in September and will update the Single-Family Seller/Servicer Guide (Guide) in the October Selling and Servicing Bulletins to incorporate the requirements into our policy. For more information, refer to the FHFA Press Release.
Freddie Mac Loan Advisor Enhancements for Affordable Mortgage Solutions is now available. Freddie Mac streamlined the loan origination and delivery process to make it easier for you to deliver more affordable mortgage solutions. To align with Uniform Loan Delivery (ULDD) Phase 4a delivery implementation, Loan Product Advisor® (LPASM), Loan Selling Advisor® and Loan Quality Advisor ® now include new loan program identifiers for CHOICEHome®, CHOICERenovation®, CHOICEReno eXPressSM, GreenCHOICE Mortgages®, and HFA Advantage ®.
Freddie Mac is making it easier to sell mortgages secured by manufactured homes. In the Single-Family Seller/Servicer Guide (Guide) Bulletin 2022-15, we announced enhancements to our manufactured home (MH) and CHOICEHome ® mortgage solutions. Updates include:
Expanded flexibility: Allowing the sale of mortgages secured by manufactured homes on leasehold estates, provided certain requirements are met. Clarified requirements: Providing specificity around eligibility requirements for manufactured homes with our Affordable Seconds® mortgage offering. Simplified selling: Eliminating the requirement to obtain prior written approval to sell CHOICEHome mortgages.
Freddie Mac updated requirement, Guide Bulletin 2022-11, providing greater flexibility for ineligible condominium and cooperative projects and reciprocal project reviews to provide you with greater flexibility. increased the maximum single investor concentration to 49% for purchase transactions in condominium and cooperative projects if certain conditions are met.
Freddie Mac announced that partial representation and warranty relief (formerly referred to as source level representation and warranty relief) will be offered through Loan Product Advisor® (LPASM ) asset and income modeler (AIM). Partial representation and warranty relief happens when multiple income sources are submitted through LPA and one or more of the income sources receives income representation and warranty relief, but additional sources of income are required for the transaction. For more details, read Freddie Mac’s August Loan Product Advisor article.
It’s back to school time. Time to learn about new solutions and features in Freddie Mac’s Loan Selling Advisor® to help you be the top of your class with your clients. Check out what’s new and coming. Information on API: Cash Settlement Purchase Statement, Cash rate sheet changes and upcoming webinar, Desktop appraisal loan delivery critical edit reminders and
“‘That is so cool!,’ ‘Wow!’, ‘I love the whole concept!’ - that’s some of the feedback we’ve received on our platform the last couple of weeks. Blue Loans’ Secondary Manager system is a comprehensive control center for secondary managers. It includes controls for mandatory and best effort loan sales as well as portfolio production. Lock management, loan level price adjustment verification, hedging analytics, pool optimization, sale reconciliation, accounting, and more are included in the platform. We are currently looking for Beta Testers! Learn more.”
Have you left money on the table due to purchase advice errors? MCT recently became the first platform integrated with the Fannie Mae Connect Whole Loan Purchase Advice Seller API, allowing clients to pull purchase advice data to MCTlive! directly out of Fannie Mae. This API connection allows MCT Mark-to-Market and Hedge Accounting Reports to be updated with Fannie Mae purchase data instantly, instead of waiting to run reports through a LOS. Join MCT for a webinar with Fannie Mae on September 8th discussing the benefits of MCTlive! integrations with Fannie Mae technology. MCT can be contacted to start the process of automating purchase advice for whole loan buyers or sellers. Clients of MCT can also pull live note pricing and Servicing Marketplace executions through an API, allowing for delivery of multiple commitments with one click through Rapid Commit within MCTlive!, MCT’s award-winning best execution & loan pipeline management software.
Ginnie Mae’s outstanding mortgage-backed securities (MBS) portfolio grew for the 13th consecutive month in July, hitting $2.252 trillion, up from $2.229 trillion in June and $2.117 trillion one year ago. Growth in the portfolio was fueled by steady new issuance of Ginnie Mae MBS as homeowners found value in the government-backed mortgage market. New MBS issuance for July was $45.5 billion, supporting the financing of more than 155,000 single-family homes and rental units. The July issuance includes $43 billion of Ginnie Mae II MBS and $2.01 billion of Ginnie Mae I MBS, which includes approximately $1.85 billion of loans for multifamily housing. For more information on monthly MBS issuance, UPB balance, REMIC monthly issuance and global market analysis visit Ginnie Mae Disclosure.
If there’s one thing capital markets folks don’t like, it’s volatility. A turbulent August for bond markets ended with rates on the rise again as markets continue to recalibrate rate-hike expectations with central banks across the globe vowing to step up their fights against inflation. During the month, MBS prices and Treasuries faced their biggest monthly loss since April as the Federal Reserve now has a clearly stated goal to grind inflation down by slowing growth below its potential. Economic releases yesterday showed another record inflation print in Europe, and in the U.S., the ADP released a weaker-than-expected Employment Change report for August (with an updated methodology… should it matter?).
Today’s calendar is already under way with layoffs from Challenger (job cuts dropped to 20k) ahead of tomorrow’s payrolls report. We’ve also received weekly jobless claims (232k) and Q2 productivity and unit labor costs (-4.1 percent and +10.2 percent, respectively). Later this morning brings a salvo of news: final August S&P Global manufacturing PMI, ISM manufacturing PMI, July construction spending, Freddie Mac’s latest Primary Mortgage Market Survey, and remarks from Atlanta Fed President Bostic. We begin the day with Agency MBS prices worse .125 and the 10-year yielding 3.24 after closing yesterday at 3.13 percent.
Non-QM Opportunity; Transition
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 Anjelica Nixt a confidential note (principals only) for forwarding to the CEO of the wholesaler.
SimpleNexus welcomed Lisa Lee Howard as its Strategic Account Executive for Compensafe (“Automate your compensation process!”) & NexusVision (Advanced Analytics for Lending). Congratulations Lisa!