Here in Louisville, at AgFirst’s Correspondent Lending Conference, much of the discussion involves going after builder business (“focusing on how fast they get paid so they can pay their subs”), rural programs (“know how to communicate with your clients, or else”), top producer success (“treat your processor like royalty, and fill out the information correctly in the first place,” “set boundaries,” “sell yourself, not rates”) and agriculture. In ag news, the amount of butter the U.S. has in cold storage is down 22 percent compared to a year ago, and the average price of Grade AA Butter is up 80 percent year over year: seasonal milk production is down, there were 11,000 fewer milk-producing cows on U.S. farms compared to a year ago, and dairy products that see seasonal surges like cream cheese and eggnog are eating into supplies of milk that would otherwise go into butter. As butter prices rise, people switch to margarine. In a housing market with high prices and mortgage rates, it is presumed that priced out millennials are largely the target market for build-to-rent single family homes. Affordability is cited as the main reason millennials have not purchased a home. Lastly, speaking of prices, the September Producer Price Index report is tomorrow and is expected to show a 0.1 percent month-to-month drop. The Consumer Price Index comes out Thursday as is expected -.2 percent month over month. Both would be nice, but not enough to dissuade the Fed from another .75 percent increase especially given the tight labor market. (Today’s podcast is available here and features an interview with TMS’s Anthony Forsberg on loss mitigation. This week’s is sponsored by SimpleNexus, the homeownership platform that unites the people, systems, and stages of the mortgage process into one seamless, end-to-end solution that spans engagement, origination, closing and business intelligence. Click here to learn more about SimpleNexus, an nCino company.)
Lender and Broker Products, Services, and Software
Redfin just enhanced its home listings nationwide with down payment assistance (DPA) information. Powered by Down Payment Resource, the new feature connects prospective homebuyers with localized, up-to-date information about the DPA programs available for each property. As DPA awareness and accessibility continues to grow, more consumers will be asking for it by name, and more real estate agents will want to work with lenders that can offer this game-changing service to their clients. Keep your referral network happy and your pipelines full by being the next to partner with Down Payment Resource.
There comes a time when every mortgage bank must decide between keeping servicing in-house or engaging a subservicer. In this decision process, one must consider several risks, from staying compliant with state and federal regulations, to maintaining data quality and accuracy, to keeping investors, auditors, and of course, keeping customers happy. If you’re considering the subservicer route, TMS Subservicing should be your first stop. TMS’s combination of great people and great tech delivers an optimal customer experience, backed by a 99% customer satisfaction rate, 84% Net promoter score, sub-60-second call wait times, and 91% first-call resolution rate. Its culture of compliance, bolstered by TMS’ three lines of defense, means its process and your loans will exceed all regulatory requirements. The innovative technology, powered by SIME (Servicing Intelligence Made Easy), ensures you’ll have transparent, real-time access to all data, and the detailed performance of your portfolio. To learn more about making the switch, read TMS’s latest blog here.
“As a 2022 NAMB Service Partner of the Year, wemlo® offers industry-leading third-party processing support for mortgage brokers and loan originators. We’re on a mission to provide quality service and, in today’s fluctuating market, that means offering processing support for a variety of lenders and more than a dozen loan products including Conventional, FHA, Jumbo, VA, and Non-QM. Available in 47 states plus Washington D.C., wemlo’s team of processing whizzes are ready to empower brokers and originators to grow their business. We know your business needs are evolving alongside the market… That’s why we offer scalable processing services. Plus, we continually train our processors in relevant loan products and adapt our processes to better serve our customers and their borrowers. Click here to see how quality processing support can recharge your business.”
“The key to reducing costs in 2023 is transforming your borrower experience and back-office operations. Maxwell offers innovative technology that centralizes your processes, promotes team productivity, and helps you close more loans with less work. Lenders using Maxwell Point of Sale slash their time-to-close by 13+ days and save an average of 21 BPS in costs per loan. Loan officers using Maxwell POS close 15% more loans per month, helping top lenders attract and retain the industry’s best talent. Beyond front-end improvements, Maxwell Processor Edge, a first-of-its-kind processing workflow technology, transforms the loan fulfillment process, accelerating document review, reducing errors, and boosting processor capacity. Set up a call with our team to learn how you can increase your lending profitability and combat margin compression with Maxwell technology.”
Did you realize if you order VOEs too early in the process it can increase your costs? Improve efficiency with Xactus’ VOE/VOIs. It offers access to millions of employment and payment records through its integrations with Experian Verify™, The Work Number®, a solution offered through Equifax Workforce Solutions and the largest collection of payroll records contributed directly by employers, and more. The workflow can cascade from one database to the next in search of a match. And if there are no hits, we can perform a manual VOE. Xactus also performs QAQC reverifications. Its proven process uses everything from manual Excel spreadsheets to OCR data extraction technology with integrated workflows. And it has the accounts and integrations needed to enjoy high success rates. Xactus even offers consolidated monthly billing! Meet with Xactus at MBA annual or email to learn more.
Conventional Conforming News
Freddie Mac and Fannie Mae are still the predominant investors of residential loans. Therefore, the changes that they make are nearly always adopted by companies in the correspondent and wholesale channels, including pricing and underwriting moves. Let’s take a random look at who’s doing what.
On Tuesday, October 4th PennyMac updated Conventional LLPAs effective for all Best Effort Commitments. Update structure and values on the ‘Loan Balance Adjustments’ LLPA Grid.
PRMG Product Update 22-54 provides clarification on temporary buydowns on Agency Fannie Mae, Agency Freddie Mac, HomeReady, Home Possible, FHA Standard and High Balance, USDA, and VA. Updated Fannie Mae Conventional Products gift fund donor requirements. Clarifies that escrows are required for LTV>85% (unless restricted by state law) on Expanded Access.
AmeriHome Mortgage issued product announcement 20221005-CL, providing a summary of changes to Conventional Agency and Non-Delegated Overlay Matrices updated to align with existing AmeriHome guidelines.
Due to the most recent House Price Index (HPI) report, which tracks the average increase in home values over the previous year and is an indicator of what the FHFA uses to update its baseline loan limit, PRMG is adjusting the standard balance limit down to $700,000 for a 1-unit property in all counties (other loan limits adjustments apply for Hawaii, Alaska and for 2-4 unit properties effective for loans locked as of 10/6/22 are subject to the new limits. See PRMG Product Update 22-57 for details.
PRMG announced the Investor Solution product has been updated to offer the Investor Solution DSCR Premier products. Some changes are listed in PRMG Product Update 22-55. Refer to the actual profiles for additional information.
Verbiage was added to the Borrower Eligibility section of the Conventional MSF Guidelines. View Mortgage Solutions Financial Announcement_Borrower_Eligibility_13-22 for details.
“Blue Loans Secondary Services is pleased to announce our new White Glove program: lock desk support, hedge management, unlimited secondary markets consultation and training for your team. This program includes our on-line Secondary Manager application to give you full visibility into your secondary markets control center. Start with our full-service program and transition to self-managed on our platform when your team is ready to take over. Our Secondary Manager platform’s Beta Test window is closing! Contact us prior to October 21 to be considered. Stop by our booth at the annual MBA conference!”
Last week’s Job Openings and Labor Turnover Summary (JOLTS) briefly gave the markets hope that tight labor market conditions are beginning to ease. The decline of 1.1 million job openings from July to August was the largest monthly decline since early in the pandemic. However, with 10.1 million job openings, there are still significantly more jobs available than workers who are unemployed.
Friday’s Employment Situation Summary confirmed hirings are slowing, however not quite as fast as the markets would like. Total employment is now roughly 500,000 above the pre-pandemic peak. A key takeaway from the report was that wage growth did not increase during September and on a year-over-year basis rose 5.0 percent versus 5.2 percent in August. Compared to more interest rate sensitive sectors of the economy, the services sector saw the most significant monthly employment gains in September. While there are signs that areas of the economy are cooling, last week’s data did nothing to change the market’s view that the Fed will remain aggressive in its monetary stance. Fed fund futures are pricing in an 81 percent likelihood of another 75-basis point rate hike at the November 2nd FOMC meeting compared to 56 percent one week ago.
Following yesterday’s Columbus Day holiday, the rest of this week is packed with market moving events including CPI and PPI, central banker appearances, the IMF, and World Bank annual meetings, the FOMC minutes from the recent meeting, as well as the mini-Refunding which kicks off with $40bn 3-year notes this afternoon. Kicking off today’s calendar was NFIB Small Business optimism for September, which increased 0.3 points to 92.1 this month, the second straight month of gains following a deterioration in the first half of this year. Two Fed speakers are currently scheduled with Philadelphia’s Harker and Cleveland’s Mester set to speak on monetary policy and the outlook. We begin the day with Agency MBS prices worse .125-.250 and the 10-year yielding 3.92 after closing Friday at 3.88 percent on the continued belief that the Fed will not stop raising rates for quite some time.
Freddie and Fannie Updates
Freddie Mac’s Single-Family Seller/Servicer Guide Bulletin 2022-20 announced a new enhancement to Condo Project Advisor. Effective October 24, 2022, Condo Project Advisor will allow you to submit Project Assessment Requests (PARs) that will provide findings telling you whether a condo project meets the requirements assessed by Condo Project Advisor and whether the tool has identified issues. If issues are found, feedback messages alert you where to focus your review.
Federal Housing Finance Agency Office of Inspector General released two items on Thursday, October 6th. A memorandum report to FHFA detailing the agency’s management and performance challenges for the coming year and the annual plan for FY 2023 describing general oversight priorities.
Freddie Mac Guide Bulletin 2022-20 announced an enhancement to Condo Project Advisor effective October 24, 2022, Condo Project Advisor® Project Assessment Request. The Bulletin includes additional Guide updates on the number of document custodians Seller/Servicers are permitted to contract with and announces the updated Document Custody Procedures Handbook.
Freddie Mac expanded community land trust (CLT) mortgage loan delivery options to provide more flexibility, deliver CLT mortgages through Guarantor or Fixed-Rate Cash execution. Follow the guidance below to develop the Guarantor contracts interface between your system and Loan Selling Advisor® and start delivering CLT mortgages through Guarantor execution. Visit the CLT mortgage web page to learn more about Freddie Mac community land trust mortgages.
Fannie Mae’s October Selling Guide updates SEL-2022-09 includes changes related to retention of asset verification reports, Social Security income documentation, use of average median credit score for manually underwritten loans, and miscellaneous updates.
Fannie Mae published the Desktop Underwriter® (DU®) Specification version 1.8.3, supporting documents, and URLA FAQ updates on Sept. 28. This specification update includes data changes to support the Supplemental Consumer Information Form (SCIF) requirement for new conventional loans sold to Fannie Mae and Freddie Mac with application dates on or after March 1, 2023, and changes to other data elements. Desktop Originator® (DO®)/DU will be updated the weekend of Oct. 15 to support these changes via direct integration and the user interface. View Fannie Mae’s Integration Impact Memo for additional information.
Effective Oct. 31, the Expense Reimbursement Dashboard (ERD) will be retired from Fannie Mae Connect™ due to low usage. Reporting capabilities are available within Property 360™. For additional reporting needs, submit a request through the Inquiry Response Tool (IRT). Access the Inquiry Response Tool, Review the Servicer Expense Reimbursement job aid, Visit the Servicer Expense Reimbursement page.
When a lead comes in, you need a lender who has your back and a reputation to set you up for success long-term. With New American Funding, the company’s dedicated, in-house processing team takes care of all the paperwork, from origination to close. From there, nearly all loans are serviced in-house. That means customers enjoy a seamless, consistent, and industry-leading customer experience… And they stay with you. This includes equipping you with a robust CRM and campaign automation to continue nurturing relationships. Discover what it’s like to work with the company that’s #1 in Customer Satisfaction Among Mortgage Servicers (J.D. Power 2022) and #18 on the Fortune 100 Best Companies to Work For® in 2022. Contact Jordyn Dexter today! 855-458-2023 EOE
Would you call yourself a leader or a follower? Leader, you say? Then a Motto Mortgage franchise is all boxed up and ready for you to run it. Motto Franchising’s Mortgage Brokerage-in-a-BoxSM allows you to direct your own team, your career trajectory, and your future without having to do all the heavy lifting that usually comes with launching a business. That’s because we provide professional marketing content, product mix, wholesale lender relationships and compliance support from day one. “Launching my office was a smooth process with plenty of support,” said Christian Bennett, owner of Motto Mortgage Champions, “opening a Motto has been a game-changer for us and running the office has been less time-intensive than I’d imagined.” It’s time for you to go from LO to head honcho. Email for all the details.