While we had news today of the British Prime Minister resigning, yesterday my doctor asked if anyone in my family suffers from mental illness. I replied, "No, we all seem to enjoy it." Suffering from a lack of liquidity is the death knell for lenders and certainly nothing to joke about. Want to know the quickest way to shut your business down? Don’t return your warehouse bank’s phone call. In the secondary markets, if no one is interested in buying the products we’re manufacturing, that isn’t good news. So headlines of stories in the Wall Street Journal like, “Recession Fears Hit Risky Mortgage Debt Amid Default Concerns” are a real problem. (Subscription needed.) Housing and lending, “upstream” and “downstream,” is our focus, and economist Elliot Eisenberg summed things up. “With 30-year mortgage rates steadily climbing and now at 7 percent, it is unsurprising the NAHB Housing Market Index fell to 38 in October, the 10th straight monthly decline, and outside of Covid, its worst level since 8/12. First-time mortgage applications are down 38.3 percent Y-o-Y and refi is down 85.9 percent Y-o-Y. Lastly, single-family starts are off 18.5 percent Y-o-Y, but less costly multifamily starts are up 17.6 percent Y-o-Y as builders focus on rentals.” (Today’s podcast is available here and features an interview with TRUE’s Bob Noble on using AI to create accurate data that powers automation and optimizes every step of the lending lifecycle. This week’s is sponsored by EarnUp, reinventing payment and data flows in real estate ecosystems, origination, mortgage, and fintech.)
Lender and Broker Products, Services, and Software
MBA Annual keynote speaker Mike Krzyzewski is a college basketball legend who coached some remarkable teams over the years. With five NCAA championships and five Olympic gold medals under his belt, Coach K always put together the right mix of players to win. In today’s market, lenders also need to put together the right team to succeed. By teaming up, Sales Boomerang + Mortgage Coach and BombBomb combine the borrower intelligence needed for hassle-free loan conversion with video messaging that ensures a lasting impact. TODAY at 2 pm ET, join SB+MC’s Alex Kutsishin and Dave Savage, BombBomb’s Stephen Pacinelli, CrossCountry Mortgage’s Sean Herrero and Fairway Independent Mortgage Corporation’s Shane Sharp and Wally Elibiary as they break down how pairing Total Cost Analysis presentations with BombBomb videos creates an incredible experience for today’s borrowers. Join the team and start winning more deals today.
Interest rates got your buyers spooked? Affordability nightmares keeping your clients up at night? Click n’ Close is preparing to launch a proprietary suite of loan programs designed to give low and moderate-income (LMI) homebuyers an advantage in today’s heightened mortgage interest rate environment. Unlike a lot of gimmicky teaser-rate buydown programs currently on the market today, we can offer your borrowers a permanent and material interest rate reduction, actually allowing them to qualify at the lower rate! What’s more, several of these programs will also feature down payment assistance (DPA) to help your borrowers increase their buying power in today’s challenging market. To learn more about these programs as they become available or any of Click n’ Close’s other innovative loan programs, contact Adam Rieke (wholesale) or Julas Hollie (correspondent).
Chase expands markets eligible for Community Lending Program! In conjunction with our $30 Billion commitment to advance racial equity, Chase Correspondent Lending created our Community Lending Program (CLP) to support our clients’ dedication to helping underserved customers and communities. We are pleased to announce that the program has expanded into more markets across the country. Visit us for the full list of available markets and program details. If you are not a current Chase Correspondent Lending client but are interested in learning more, contact our Business Development Manager, Karen Russell, who can illustrate the benefits of the program and becoming a Chase Correspondent Lending client.
Even in a rising rate environment, the wholesale business can still be a strong opportunity. But it's more important than ever before to segregate yourself from the competition, as well as maximize your earning potential with every transaction. Speed, relevance, and reliability are key ingredients to make this happen - and you get all of these with automated underwriting. AIQ ™ by ICE Mortgage Technology® drives speed by reducing underwriting turn times, relevance by creating REAL exception base processes, and reliability backed by mortgage experience over 20 years. Learn more what this means.
The right intelligent automation solution can lower your costs to originate, a very real benefit when volumes are down. It can help your operation run more efficiently, more cost-effectively and more flexibly. The Mortgage Automation Suite brought to you by Richey May Automate and Zoral Group provides the solution and support you need to be more flexible during market cycles. Along with cost efficiencies and stability, it can also improve accuracy and reduce repurchases. Learn more about how The Mortgage Automation Suite can help your business during difficult cycles.
STRATMOR on the Customer Experience
What can mortgage originators learn from baseball’s Aaron Judge’s success? Plenty, if they’re looking to win at the long game. In his October Customer Experience Tip, STRATMOR Group’s CX Director Mike Seminari shows how applying Judge’s approach of putting in the hard work, day-in and day-out, can help them to grow partner relationships, improve the customer experience, and have confidence that their production numbers will ultimately work out. Seminari suggests three steps originators can take today to win in the long game. Don’t miss, “How to Play the Long Game in Mortgage Originations,” STRATMOR’s October Customer Experience Tip.
Lender and Investor News
Fairway Wholesale Lending is now offering its Correspondent Partners Temporary 2-1 Buydowns, funded by the seller, and available on all standard Agency programs, effective October 12th. View Fairway Client Announcement 2022-10-12 for more information.
Bring your Bank Statement Loans to Unite Mortgage. Offering LOW Bank Statement Rates, up to 55 percent DTI. To find out more, visit the Unite Mortgage website.
Guaranteed Rate Inc. recently launched one of the most extensive Spanish-language mortgage programs in the U.S. housing market. Loan officers, real-estate agents and borrowers can now leverage a best-in-class Spanish experience with the company’s website, full Digital Mortgage Application, centralized bilingual processing team, Over-the-Phone Interpretation Services, and critical customer facing communications. Now, digital language and Limited English Proficiency (LEP) technology provider Talk’uments has unveiled its Spanish language integration with Guaranteed Rate Inc. which will significantly enhance the ability of Guaranteed Rate Inc.’s Language Access Program by empowering Spanish speakers to better understand the key terms and features of their loans, including related costs, Loan Estimate (LE), Closing Disclosure (CD), and other TILA disclosures.
Fannie Mae issued a reminder that Uniform Closing Dataset (UCD) Phase 3 critical edits will be implemented as fatal severity in the UCD Test Environment on the evening of Oct. 21st and as warning-to-fatal severity in production on Nov. 7th. Lenders can access transition resources to prepare for the Phase 3 edits to turn fatal on May 1, 2023: Read the release notes and Access critical edits transition resources.
The Fannie Mae October Servicing Guide update, SVC-2022-07, includes changes to the property valuation fees for borrower-initiated mortgage insurance termination; amending the requirement that a servicer cancel an active mortgage loan modification trial period plan when mortgage assistance funds fully reinstate the mortgage loan; and miscellaneous updates.
Capital Markets: Overnight Rates Above 5 Percent?
There are both fears of a recession that high rates could bring, and anticipation of the potential easing of interest rates that a recession would bring. As the Fed raises interest rates, the cost of mortgages has now reached levels not seen in the U.S. in decades, reducing demand and cooling home prices. MCT’s most recent blog, Rate and Market Elasticity, discusses how the market has adapted to rising interest rates and offers advice for weathering this market cycle. Interested to learn more about market volatility best practices? Explore MCT’s market volatility guidance for lenders page or read the Six Unique Ways to Increase Your Profitability Despite Market Headwinds whitepaper. To prepare for market scenarios that require robust margin management, contact MCT today. And to ensure you receive new content with meaningful macro trends and insights when published, please join our newsletter.
It’s time to do your homework so you can look smart at the next party you attend (i.e., MBA Annual22). Everyone is going to be talking about Optimal Blue’s big announcement: the launch of the highly anticipated CompassEdge hedging and loan trading platform. Sure to be the best thing since sliced bread, CompassEdge combines the power and capabilities of CompassPoint, Optimal Blue Secondary Services, and Resitrader to deliver one revolutionary platform. Designed with ease-of-use in mind, CompassEdge gives any credentialed user (from lock desk to C-suite) the ability to access the tools and analytics they need immediately at login. Interested in being the first to see CompassEdge in action while enjoying complimentary refreshments? Register to attend a CompassEdge Grand Reveal showing during MBA Annual22. Sessions will be held at 3 p.m. on Oct. 24 and 25, and space is limited.
The U.S. 1-year, 2-year, and 3-year risk-free Treasury security yields are all on top of each other, an unsustainable situation. Minneapolis Fed President Neel Kashkari said yesterday that the Fed may need to push the fed funds rate above 4.75 percent if core inflation keeps climbing. After a two-day bond rally to open the week, his comments, as well as a couple more blistering CPI reports for the U.K. and the eurozone, and weak demand at a $12 billion 20-year Treasury bond auction, caused selling to prevail yesterday.
Most concerning to lenders, those rising rates (and high home prices) continue to depress housing starts. Starts were down 8.1 percent month-over-month in September and 7.7 percent year-over-year while building permits were up 1.4 percent month-over-month to 1.56 million. The highest mortgage rates in two decades are clearly depressing demand and discouraging new builds.
The Federal Reserve released its Beige Book for October, noting that activity expanded modestly in the last month. Retail spending was little changed, travel and tourism grew strongly, while manufacturing activity held steady. Employment grew at a modest to moderate pace while price growth remained elevated.
Today’s economic calendar is under way with weekly jobless claims (214k) and Philadelphia Fed manufacturing for October. Later this morning brings September existing home sales, September leading indicators, Freddie Mac’s Primary Mortgage Market Survey, and a Treasury auction of $21 billion 5-year TIPS. There are also four Fed speakers currently scheduled: Philadelphia’s Harker and Fed Governors Jefferson, Cook, and Bowman. We begin the day with Agency MBS prices a few ticks better from Wednesday’s close and the 10-year yielding 4.11 after closing yesterday at 4.13 percent.
Jobs and Transitions
“A medium-sized healthy/profitable Fannie/Freddie/Ginnie approved mid-west based IMB is seeking a Director of Servicing to oversee our current $5B+ portfolio and support continued growth. Candidates must have a history in managing a Servicing division and an in depth understanding of Customer Service, Default, Investor Reporting and Escrow. The position is located in the Midwest, a competitive relocation package will be available for the right candidate. If you have the experience and would like to join the leadership team of a top performing IMB, please send your resume to Chrisman LLC’s Anjelica Nixt for forwarding.”
“Smart. Stable. Strategic. In the face of rising rates, inflation uncertainty, and ongoing inventory challenges, nearly 70 MLOs have joined Planet Home Lending in Q3 alone. And why wouldn’t they? We’re built and capitalized for markets just like this. And it shows: In the tech stack we built to help MLOs succeed, in the data-driven marketing team dedicated to retail, and in the deep product lineup with both mainstream and niche solutions for today’s borrowers. Find out why our employees voted us one of National Mortgage Professional’s Most Loved Employers for the second year in a row. There’s no better time to reach out to Eastern Regional VP Kathryn Edelen (301-502-2493), Western Regional VP Lynette Hale-Lee (818-321-1260), or VP of Talent Acquisition Peter Briggs (435-709-6287). Shouldn’t you #LandAtPlanet?”
Atlanta-based Highland Mortgage is thrilled to announce that industry veteran Mickey Schilling, CMB® is its new VP of National Sales. Mickey will oversee national growth opportunities and provide senior-level guidance from technology, scalable process, and acquisitions. A Georgia Dawg, Mickey’s southeastern roots are well-established with highly successful stints with regional banks and Independent Mortgage Banks. She is an active MBAG and NAMMBA member and never meets a stranger. While Mickey is known for her breadth of industry relationships, it’s her advocacy for originators that sets her apart. From business development to product/pricing to leveraging integrated technology, Mickey is a proven asset. Now in its third year, Fannie Mae-approved Highland Mortgage is well-positioned to expand its footprint nationwide under Mickey’s guidance. Here are Mickey’s top reasons why Highland is the right destination for you.