This morning I head to Dallas, Texas, where, if you ask Redfin, prices are up 5 percent for the year. Or Zillow will tell you prices are down 2 percent. Can’t we all agree on something? Certainly, we can all agree that inflation is simply too many dollars chasing too few goods. How about when too many houses are chasing too few insurance companies? No insurance company wants to be the last one standing. (Today’s “Mortgage Matters: The Weekly Roundup” at 11AM PT, 2PM ET, focuses on how LOs and brokers are dealing with the homeowners insurance nightmare.) In California, home to plenty of insurance companies dropping insuring homes, the Insurance Commissioner is an elected position. Ricardo Lara doesn’t want to lose his job, so doesn’t allow insurance companies to raise their premiums to compensate for risk. So, they drop out. “With the average premium priced over $1,400, some homeowners are opting to drop home insurance altogether. But this decision comes with some serious risks…” (Today’s podcast can be found here and this week’s is sponsored by LoanCare, a Fidelity National Financial (NYSE: FNF) division and award-winning developer of the most sophisticated mortgage servicing portfolio management tool, LoanCare Analytics, built to support MSR investors with a focus on customer engagement, liquidity, and credit risk. Hear an interview with MAXEX’s Henry Broeksmit on youth in the mortgage industry and career paths out of college.)
Lender and Broker Products, Programs, and Services
In burro racing (yes, that’s a thing), people run behind, alongside, and sometimes carry pack donkeys across rugged terrain in a bid for a unique Triple Crown title. If you feel like you are dragging your tech vendor around the innovation track, it may be time to swap your burro out for a pedigreed racehorse like SimpleNexus, an nCino company. The SimpleNexus suite of mortgage solutions provides borrowers and loan officers with the modern, single-sign convenience of managing mortgage loans from anywhere. What’s more, SimpleNexus leads the pack when it comes to continuous product enhancements, having recently released a loan officer dashboard to help originators effectively manage their pipelines, special HELOC loan support, several native integrations, and much more. If you’re eager to leave your competition in the dust, schedule a demo today.
Make no mistake, 101 courses aren’t just for college freshmen. In fact, mortgage lenders of all experience levels can benefit from Optimal Blue’s upcoming webinar, Hedging 101: The Benefits of Mandatory Delivery. This session will be back by popular demand on Thursday, Sept. 14, at 1 p.m. ET. Pipeline hedging experts Jeff McCarty and Mark Teteris, CMB, will walk attendees through the theories behind hedging practices, various hedging instruments, best execution analysis and strategies to employ during market fluctuations. Whether you’re just entertaining the idea of transitioning to mandatory delivery, or you’re already a hedging veteran, you won’t want to miss this informative and directional webinar. Save your seat today.
Fannie and Freddie News
If you like acronyms, here’s a bone for you: the FHFA is cogitating on allowing IMBs to access the FHLB. Sure, many lenders and vendors are focused on surviving the autumn and winter with stubbornly high mortgage rates and stubbornly low inventory levels, but those with a long time horizon may want to pay attention to the future of the Federal Home Loan Bank system, and a good place to start is a write up of a forum held earlier this year.
Fannie Mae maintains a dedicated Disaster Response webpage which provides valuable resources including where to locate additional guidance and direction in the Selling Guide for loans currently in the process of being originated or loans currently being serviced. Mortgage lenders and servicers play a key role in helping borrowers and homeowners deal with the financial effects of hurricanes, fires, floods, earthquakes, and other disasters. With the frequency and severity of such events affecting communities nationwide, Fannie Mae provides the tools and flexibility lenders and servicers need to provide effective assistance, including payment relief, loan modifications, and even the additional recovery support provided by HUD-approved housing counselors at Fannie Mae’s Disaster Response Network.
Two reports were released by Federal Housing Finance Agency Office of Inspector General: FHFA Did Not Effectively Implement Records Management Training Controls for Onboarding Offboarding Personnel and Audit of the Federal Housing Finance Agency’s Privacy Program Fiscal Year 2023.
Beginning August 19th, Fannie Mae began accepting temporary interest rate buydowns on mortgage loans secured by standard manufactured homes (MH) and MH Advantage®. Now, lenders can help address affordability challenges with temporary interest rate savings. Refer to the buydown policies in the Selling Guide.
Fannie Mae updated LL-2023-05, Advance Notice of Changes to Master Servicing Processes and Systems, to include the effective dates servicers are required to submit borrower payment activity on summary reporting mortgage loans in Q2 2024 and provide notice that the Servicer’s Reconciliation Facility™ (SURF™) application will be retired on Oct. 31, 2023.
Brush up on your quality control (QC) basics with Fannie Mae’s new QC Fundamentals Boot Camp webcast. This session provides a detailed overview of Part D in the Selling Guide, which covers lenders’ QC processes. A robust QC program helps strengthen loan quality. Watch the webcast and revisit the fundamentals of QC.
The Uniform Closing Dataset (UCD) Submissions and Findings Report in Fannie Mae Connect™ can help lenders identify Phase 3B critical edits ahead of the Nov. 6 transition. Lenders who have access to the report can self-serve by pulling the findings to review the compliance of their submissions. Visit the UCD Critical Edits Transition Resources page.
Freddie Mac issued a reminder to homeowners and mortgage servicers of its relief options for those affected by Hurricane Idalia. Freddie Mac’s forbearance program provides homeowners mortgage relief for up to 12 months without incurring late fees or penalties. Freddie Mac's disaster relief options are available to homeowners who have been impacted by an eligible disaster. This includes anytime the homeowner’s property experiences an insurable loss, and also covers instances where their homes or places of employment are located in Presidentially Declared Major Disaster Areas where federal Individual-Assistance programs are made available to affected individuals and households. Foreclosure and other legal proceedings are also suspended while homeowners are on a forbearance plan. More information is available on My Home by Freddie Mac where owners can read about the steps they can take to help recover from a natural disaster, including frequently asked questions related to disaster and mortgage relief.
Partnership Announced
FundingShield, a market-leading fintech providing plug-and-play solutions to manage risk, compliance, and fraud prevention, has entered a partnership with Tata Consultancy Services (TCS), a global leader in IT services, consulting, and business solutions. Together the partners hope to protect even more lenders, home buyers, and sellers from the rapid increase in wire and title fraud in recent years.
“As cybersecurity risks become more pervasive, lenders are focusing more on data integrity to ensure that data inconsistencies are resolved, and potential frauds are avoided. FundingShield’s live ecosystem of service provider source bank data is the largest in the industry with over 95 percent coverage. TCS clients can now benefit from direct access to FundingShield’s cost-saving and risk-mitigating ecosystem, allowing them to uphold superior standards in data integrity, bank account verification, and counterparty compliance.”
“TCS’s global presence, business acumen, and trusted relationships with the world’s largest financial institutions will allow FundingShield to deliver its innovative products straight to the banks who need them the most,” said Ike Suri, CEO of FundingShield. “The safest way to verify information is through automated, real-time, source-data verification, which is FundingShield’s expertise. We look forward to bringing our automations to more of the top US banks, GSEs, and to numerous other sectors where TCS has deep domain knowledge and experience.”
Capital Markets
The yield curve is a graphic depiction of U.S. Treasury yields from overnight to 30-year rates. The fact that it has been “inverted,” meaning short term rates are higher than long term rates, can be used to forecast the potential of a recession. So far that has failed.
Indeed, the yield curve “bear steepened” to open the week as investors weigh the resilience of the U.S. economy against slowdowns in China and Europe, while surging oil prices added further fodder to inflation concerns after Saudi Arabia and Russia extended temporary production cuts to the end of the year. The narrative that the U.S. economy is still expanding albeit at a slower pace floated around as markets continued to digest that there were 187k jobs added in August, though the prior two months’ of data were revised downward.
Looking back to last week, labor force participation in August was its highest since February 2020 at 62.8 percent. Additionally, the JOLTS report showed job openings declined to 8.8 million in July which was the lowest number since March 2021. As the supply and demand for labor returned to balance, wage growth cooled to 0.2 percent. Employment growth near its pre-pandemic rate and slower wage growth are welcome data points from the Fed’s perspective. Meanwhile, businesses continue to pull back on capital expenditures and the ISM manufacturing index remained in contractionary territory for the tenth consecutive month in August. Despite higher interest rates, new home construction increased in August as limited resale inventory and slowing material price inflation combined with strong builder incentives have boosted new home sales.
Despite a drop in mortgage rates, mortgage applications decreased 2.9 percent from one week earlier to the lowest level since 1996, according to data from MBA. That kicked off today’s economic calendar, alongside the July trade deficit. The deficit was expected to register $67.0 billion versus $65.5 billion in June. Later this morning brings the final August S&P Global services PMI, ISM non-manufacturing PMI for August, and remarks from Boston Fed President Collins and Dallas Fed President Logan. In between Fed speakers, the Beige Book will be released. Also of potential interest, the Bank of Canada will release its latest monetary policy decision later this morning, where rates are expected to be held steady at 5.00 percent. We begin the day with Agency MBS prices roughly unchanged from Tuesday evening, the 10-year yielding 4.25 after closing yesterday at 4.25 percent, and the 2-year at 4.95.
Employment
Evergreen Home Loans™ shines bright on Experience.com's index, proudly ranking in the Top 10 for Large Division Mortgage Companies. Out of 300+ lenders, our distinction is evident. With over 50,000 loan officers indexed, our stellar associates and teams have clinched positions in the Top 1 percent in Customer Ratings: Corey Newell, Kendra Graybeal, Ruby Grynberg and Team Scott Reynolds. Exceptional customer service is the Evergreen hallmark. "Our dedication is to provide a WOW customer experience and deliver on time, as promised. It's our brilliant team that turns this vision into reality, echoing our customer's sentiments," expressed Tamra Rieger, President of Evergreen Home Loans. Ready to be a part of our esteemed legacy? Visit: Careers at Evergreen.
“Stronghill Capital, LLC, an Austin, TX-based Wholesale and Correspondent Lender is HIRING! If you are an Account Executive with 3+ years of experience and an existing book of Correspondents and/or Brokers that you want to introduce to a dynamic company with a responsive management team that strives to provide world-class service levels, sharp price execution, and is committed to building the Non-QM ‘private money’ space, contact Matt Brammer. As we continue to expand, we are open to discussions throughout much of the United States.”
“At Homestead Funding, we understand the dynamic nature of the market, and we're dedicated to equipping our team with the tools and resources needed to excel. We push the needle forward by discovering and delivering niche products that create more opportunities for homebuyers and allow us to better serve clients. Differentiate yourself in your marketplace: Join a team whose focus is on pioneering the future of home financing. We position our Loan Originators for success by providing them with cutting-edge resources, next-level operations support, and tailored marketing solutions built to drive engagement. Contact Michele Teague today to learn how you can elevate your career with a company that champions your growth, harnesses market trends, and empowers you to succeed.
The Mortgage Bankers Association (MBA) announced that George Rogers has joined the association as Vice President of Legislative Affairs, responsible for advocating on behalf of MBA's legislative and policy priorities on Capitol Hill. Congratulations!
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