Today is 092023 and I head to Savannah, GA for the SECUREN (credit union) conference. Did you know that the last day of 2023 is 123123? In other “fun with numbers,” as a stockholder in a lender, how’d you like $5 million because your company couldn’t keep its costs down? The median sale price per square foot in Savannah is $197, up 13 percent since last year, if you believe Redfin. Want to build wealth? The median sale price per square foot for new single-family homes in the U.S. has increased a whopping 368 percent since 1980. Additionally, the median square footage for homes in the U.S. has increased 52 percent since 1980, while the median sale price has increased 609 percent. Compared to 2008, the peak financial crisis, home buyers today face an 85% higher median sale price per square foot of homes. California is the most expensive state when looking at price per square foot. Highest and lowest cities? San Jose at $845 per square foot, Cleveland at $133 per square foot. (After 5:30 AM PT today’s podcast can be found here and this week’s is sponsored by the Trade-In Mortgage powered by Calque. Homeowners can buy before they sell, make non-contingent offers, and tap their home equity to fund the down payment on their next home. Lenders can help their clients negotiate a lower purchase price, reduce their interest payments, and eliminate PMI. Hear an interview with first time homebuyer Ben Cottingham on how he made his choice of lender and how his originator best helped him throughout the process.)

Lender and Broker Software and Services

MBA Annual is the industry’s biggest event of the year, so it only makes sense to spend it with the biggest name in secondary marketing solutions. Make plans to connect with Optimal Blue while you’re in Philadelphia to learn everything we’re doing to stay in front of your future. Whether you’re looking to discuss your goals and challenges during a meeting with our experts, or simply to enjoy a beverage after a productive day at the conference… We hope to connect with you. Stop by our booth #321 at the event or request a meeting at a time that suits your schedule. If you plan to attend our happy hour reception, RSVP by Oct. 11.

How do you future-proof your organization? Outsource your processing, underwriting, closing, and post-closing functions to Computershare Loan Services (CLS). Flexibility is in their DNA with end-to-end and component models, the choice to leverage their POS & LOS or yours, and various pricing options that align with your originations strategy. When you outsource to CLS, you’ll lower your costs, alleviate the burden of recruiting, hiring, and training, and tap into a culture of control that helps you mitigate risk. CLS has hired the industry’s best talent, so make CLS an extension of your team and improve your profitability and efficiency.

“Originators in joint ventures and affiliate relationships are more common than ever these days. Oftentimes, clients and/or prospects will ask us, “Is that something you can handle at OptiFunder?” Not only can we handle it, we were built for it. OptiFunder is a great fit for lenders who have complex relationships because we help optimize and automate so much of the lending process. From a consultative approach and process review to multiple LOS and warehouse integrations, OptiFunder offers a highly configurable system with customized user views aligned to specific organizational structures and warehouse performance metrics available at the JV/affiliate and parent level. Our facilitation of transfer/sweeps between warehouse lines, customization of warehouse capacity management, and accommodation of multiple purchase processes make OptiFunder the perfect partner when it comes to warehouse management. The icing on the cake? We’re delivering a 99.6% success rate in automation performance. Learn more here.”

If you missed the news last month, CWDL and Firstline Compliance have formally joined forces to serve the wide range of accounting and compliance needs of today’s mortgage industry. Lenders can now access CWDL’s mortgage-specific audit, accounting, and tax solutions, and Firstline’s operational risk and compliance services, through one seamless partnership with a unified client service philosophy. Whether you’re looking for monthly accounting support, an outsourced compliance management system, annual audit and tax services, state licensing guidance, or more, CWDL and Firstline Compliance will help you manage and improve the financial and operational health of your business. Reach out to Kasey English or Josh Weinberg to learn more about this partnership and how our guidance can transform your business.

Cookie-cutter solutions no longer cut it. In today’s market, look for Non-QM financing from an industry leader like Flagstar Bank. Flagstar offers three competitive Non-QM products that work well for borrowers: Advantage Bank Statement, Advantage, and Advantage Plus. Advantage Bank Statement features flexible qualifying guidelines based on 12 months of bank statements, making it a great choice for self-employed borrowers. The other two, Advantage and Advantage Plus, include 12-month seasoning on derogatory events, 1-year income documentation, asset depletion, and unlimited cash-out. All three Advantage Non-QM products offer fixed rate, ARM, IO, and 40-year options. Flagstar delivers in the Non-QM space, with LTVs up to 90%, loan limits from $100,000 to $3 million, and flexible guidelines, including up to 55% DTI. For over three decades, Flagstar has provided smart lending solutions to broker partners, and, with $119 billion in assets, they have the strength and stability you can rely on. Start a conversation with your AE today or click here to learn more.

“Philadelphia here we come! Mr. Cooper’s excited to attend MBA’s Annual Convention. Buoyed by our exceptional 2Q Earnings Report, we’re deeply invigorated to engage in discussions regarding our wide array of attractive products and pricing solutions, including liquidity solutions for MSR acquisitions and subservicing ventures. Responding to the challenges posed by affordability constraints, affordable lending products are a priority, including HomeReady/Home Possible, FHA, and DPAs. We’ve introduced enhanced pricing strategies designed to support low- to moderate-income borrowers. Our successful track record is attributed to our comprehensive menu of execution options, including Single Loan Mandatory, Hybrid AOT, Bulk, and Best Efforts. Our industry-leading Co-issue program integrates with our B2B business lines, allowing our clients flexibility to align their delivery strategies with their business models. To explore opportunities, please contact your B2B Sales Team. We’re proud to announce that Mr. Cooper remains the largest non-bank servicer, with a portfolio of $882 billion+.”

Credit and Verification News and Products

FHFA announced the next phase of the public engagement process for updated credit score requirements, view the FHFA News Release.

“As mortgage professionals, we are all passionate about helping borrowers achieve their homeownership dreams. That’s why we’ve created the ultimate resource that will aid you in finding, educating, and qualifying more borrowers and help you make their dreams of homeownership come true. Introducing our new eBook, 12 Ways to Help Your Borrowers Get the Home (and Mortgage) of Their Dreams. Download your free copy today. In this eBook you will learn how you can help more borrowers qualify for a mortgage, find ways to increase your business with happy customers, and see what actions WON’T be valuable to your borrowers (and may even turn them off). Ready to evaluate a better solution for your credit reporting and verifications needs? Contact Birchwood Credit Services today and let us show you what a true credit and verifications partnership really looks like!”

“Have you heard all the buzz about Xactus360? Xactus’ proprietary verifications platform has been enhanced and expanded to offer game-changing features that streamline workflows and create greater efficiencies, such as a single login for Mortgage Credit and Pre-Qualification reports. You can also set advanced user controls and permit restrictions for rush requests, the frequency of report ordering, where a report may be ordered from, and more! Its latest product integration is Flood ReportsX. Take advantage of Xactus’ no close, no pay offer, which means you will not be charged for a Flood Zone Determination if the loan doesn’t close! Receive federally compliant Flood Zone Determinations, obtain free HMDA and seismic reports, and enjoy fast turn times! Meet Xactus at the MBA Annual for a demo of Xactus360 and see how this next gen platform revolves around you. To set up a time, email us.”

“In today's mortgage landscape, the cost of Verification of Employment (VOE) and Verification of Income (VOI) is an unavoidable reality, especially as vendors up their prices in a contracting market. The process itself is often cumbersome and time-consuming, forcing LO teams to cycle through different vendors manually to find cost-effective solutions. Floify, in partnership with Informative Research, is changing that with the introduction of our cutting-edge VOE and VOI waterfall technology. This innovation not only automates vendor selection but also keeps the workflow within the Floify platform, eliminating the need to navigate third-party interfaces or incur additional fees. The result? Significant time and cost savings that can translate to a more efficient loan origination process and improved bottom line. Don't let inflated verification costs chip away at your profitability! Contact Floify for more information.”

STRATMOR and Customer Experience

Could Customer Experience (CX) be the biggest untapped revenue opportunity in today’s market? There is broad acceptance by lenders that CX focus is important to financial success, and there is plenty of data to back up that belief. In fact, studies have shown that companies with strong customer focus are 60 percent more profitable than those without it. In his new Customer Experience Tip, STRATMOR Customer Experience Director Mike Seminari provides more data around how a comprehensive CX strategy can help lenders ignite revenue, and he offers specific steps lenders can take to start tapping into this lucrative opportunity. Check out the September Customer Experience Tip, “CX: The Mortgage Market’s Untapped Revenue Opportunity” on the STRATMOR Group website.

FHFA, Freddie, Fannie News

The Federal Housing Finance Housing (FHFA) agency recently announced it will hold stakeholder forums and listening events on the transition to credit score and model requirements for GSE lending. Compass Point reminds us that last October, FHFA announced that the VantageScore 4.0 (V4) and FICO 10T (F10) models were validated. The GSEs published a Partner Playbook that contained a proposed implementation timeline which would require new credit score calculations to be implemented in 1Q24. Numerous trade and consumer groups submitted a letter to FHFA in June and noted the proposed timeline was insufficient and requested an iterative stakeholder engagement process. As part of the public engagement process release, FHFA indicated the implementation will occur later than 1Q24 but now some expect the full transition to the new credit score models and bi-merge credit process to begin in 2-3 years.

On September 11th, the Federal Housing Finance Agency (FHFA) announced additional opportunities for public engagement to facilitate the transition to updated credit score models and credit report requirements for loans acquired by Fannie Mae and Freddie Mac. Learn more, including how you can participate in upcoming meetings, on the Fannie Mae Credit Score Models page.

Fannie Mae introduced updated project review questions in CPM to assist lenders and correspondents in determining project eligibility based on the new policy requirements for condo projects being reviewed under the full review process.

Freddie Mac and Fannie Mae (the GSEs) are updating the Uniform Loan Delivery Dataset (ULDD) to align with current GSE requirements and support the continued improvement of loan delivery standards. The GSE announcement details updates that align with the Enterprise Credit Score and Credit Reports Initiative requirements, the new Uniform Appraisal Dataset (UAD) 3.6, and the Single-Family Seller/Servicer Guide updates for Sellers and business critical needs. It also provides an overview of the Phase 4a updates. For additional information, refer to the Summary of ULDD Phase 4a Updates and Phase 5 Specification and the ULDD webpage.

Fannie Mae has issued a Fraud Alert involving misrepresented borrower profiles in multiple loans that indicate identity theft and have allowed perpetrators to abscond with large sums of money at closing. This alert addresses loans originated in suburban Atlanta, GA.

Fannie Mae’s Collateral Underwriter® (CU®), originally launched to help lenders manage appraisal and valuation risk throughout the underwriting and quality control (QC) process, is now accessible to eligible QC vendors. CU empowers reviewers to manage appraisal quality and ensure more accurate and efficient collateral risk assessments.

Freddie Mac published the company’s first Sustainability Report, which provides details about the company’s 2022 sustainability strategy, activities and performance. The report also includes the company’s Sustainability Accounting Standards Board (SASB) Index and Metrics for the years 2020-2022, as well as a Taskforce on Climate-Related Financial Disclosures (TCFD) Index.

Capital Markets

Ahead of today’s Fed rate decision, where there is almost a zero chance of a rate hike, yields on benchmark bonds rose to fresh closing highs for the year yesterday. Why? The market continues to price in the “higher rates for longer” narrative.

On the data front, the U.S. Census Bureau reported that new residential construction for single-family starts declined 4.3 percent to a seasonally adjusted annualized rate of 941k in August. Total housing starts, which includes multifamily (-26.3 percent for the month) dropped 11.3 percent overall to a 1.28-million-unit pace, the lowest since June of 2020, when builders were struggling with shutdowns, labor shortages and supply chain issues - and well below 1.43 million estimates. The pull-back in starts surprisingly contrasts a strong gain in both single-family and multifamily building permits, which increased to 1.54 million, up 7 percent month-over-month. The big headline from the report was, understandably, the continued collapse in multifamily starts to a seasonally adjusted annualized rate of 342k. Multifamily starts have dropped precipitously as of late due to high rates and extensive new supply already under construction. With mortgage rates over 7 percent, and a further decline in homebuilder confidence in September, some additional softening is to be expected. Fortunately, starts should remain relatively resilient through the rest of the year given the ongoing lack of inventory of existing homes available for sale. New construction adds desperately needed inventory that could help buyers facing affordability challenges, but permits have generally trended downward since the summer of 2022. Keep in mind that earlier in the week, the market received a weaker than expected NAHB Housing Market Index for September.

Turning to today and the Fed, besides the MBA reporting that applications rose last week by 5.4 percent, this afternoon brings the latest FOMC decision with the Statement and updated Summary of Economic Projections, followed by Fed Chair Powell’s press conference. Consensus expectations are for a “hawkish pause,” where the Fed maintains the current fed funds rate and signals one more hike in the dot plot. There are mixed expectations as to when the Fed will hike again, with predictions ranging from the end of this year to the end of next year. Even with more of the same hawkish tone, the Fed will likely take a fairly patient approach, and a simple reminder of the central bank’s willingness to implement additional rate increases will have some slowing effect on the economy, without the Fed actually having to take action. Investors will be looking for any clues as to when the Fed will start cutting rates. Prior to the Fed, MBA released its weekly mortgage applications, which increased 5.4 percent from one week earlier. In the very early going, Agency MBS are prices better by about .125 and the 10-year yielding 4.34 after closing yesterday at 4.37 percent; the 2-year is at 5.06 percent.

Transitions

“Join us in welcoming two new heavy hitters in the Correspondent Lending industry, Mary Ann Geller and Rob Jeske who recently joined LoanStream Mortgage’s Correspondent Team as Regional Sales Executives. Mary Ann Geller will be covering our Mid-Atlantic region (WV, VA, DC, MD, and DE) and has over 22 years of experience covering the same region at Wells Fargo. Rob Jeske will be covering our Northwest region (WA, OR, AK ID, MT, and WY) and has 24 years of experience covering the same region at Wells Fargo. Plus, for Correspondent, take advantage of our Non-QM September Special on Purchase, Refinance and Cash-Out, 50 BPS Price Improvement on all 740+ FICO Non-QM Programs. (Special may not be combined with Select Non-QM Programs) For loans locked 9/1/2023 through 9/30/2023. Contact your Regional Sales Executive for details.

Ryan Ogata will now lead Guaranteed Rate’s reverse mortgage division as Executive Vice President of Reverse Mortgage Lending where he will be tasked with “super-charging the lender’s reverse mortgage division.

And out at Alterra Home Loans, a Panorama Mortgage Group company, Fernando Ospina has been promoted to President. Ospina, who has worked for the firm since 2018, formerly served as Alterra’s SVP of National Production for the last year and oversee the firm’s strategic direction, operational activities, and growth initiatives, while “ensuring Alterra continues to lead the industry in providing accessible and tailored mortgage solutions to the Hispanic and underserved communities.”