“Hey, just because you’re offended doesn’t mean you’re right.” Lenders, who paid out bucks, believe that they are right and within their rights in “clawing back” bonuses paid to employees, namely producers, when production didn’t pan out. (Let me know if you need it sent to you.) Is the bond market “right” pegging Treasury and mortgage-backed security prices and therefore mortgage rates? The traditional “flight to quality” during international conflict hasn’t materialized for a variety of reasons including currency valuations, traditionally riskier assets such as equities or bitcoin becoming increasingly accepted as safe-haven investments, and the Federal Reserve currently acting as a net seller while the U.S. government is set to issue even more bonds. And despite years of predictions of a recession, the first reading of U.S. GDP for Q3 blew every analyst estimate out of the water: The American economy expanded at an annualized rate of 4.9 percent to reflect the strongest quarter since Q4 2021 and driven by strong consumer spending. Sure, we’re tapping into savings, but we’re still buying! (Today’s podcast can be found here, sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. Hear an interview with Canopy Mortgage’s Jeff Reeves on how companies are driving down origination costs.)

Lender and Broker Software, Products, and Services

Fan favorites are rarely a coincidence. And that’s certainly true when it comes to Optimal Blue’s popular hedging webinar series. Hosted throughout the year, these highly attended OB sessions give originators of all experience levels the know-how they need to confidently and effectively hedge their pipelines. Make plans to attend the next webinar in the series, Hedging 201, on Nov. 8. Optimal Blue secondary marketing experts will dive into the various components that make up pipeline valuation. From data integrity to gain/loss reconciliation, this session will cover features and functionality that Optimal Blue’s hedging and loan trading services provide. This includes mitigating interest rate risk, saving hedging costs, and making every penny possible on your loan sales. Save your seat for Hedging 201 today.

“Attention Lending Operation Leaders: this is your last chance! Join us on November 2nd and transform your approach to efficiency, profitability, and borrower experience. Efficiency isn't an option, it's a necessity. Don't miss out! We will dive into specific examples that lenders can take back to their teams, today, and improve their businesses. Some of these strategies are saving 50-80% per month on the larger costs that lenders face. Others allow for greater automation, reducing the load on reduced teams, and allowing them to do even more. Efficiency and optimization aren’t the keys to winning in this market. They are the requirements to survive! This Thursday, November 2, at 1 PM EST, Join Femi Ayi, EVP of Operations at Revolution Mortgage, Kirill Klokov, CEO at TRUV, and Jason Perkins, CEO at Bonzo as they break down efficiency and optimization strategies that you can put into practice today!”

“Permissionize Revolutionizes Servicing Retention. Permissionize presents a unique servicing retention strategy that is financially viable. This technology automates retention programs by alerting the servicer when borrowers fill out a webform, enabling re-engagement with current clients before they start the application process. Permissionize “listens” 24/7 for signals when a phone number is input in a webform. Leverage your established business relationship, drive inbound traffic to your call center, no opt-in needed. This new technology changes everything we know about how to view servicing retention. John Lomanno, mortgage industry veteran, states, “We are revolutionizing the servicing industry through automation by providing a cost effective, extremely reliable way to get in front of your customer when they go online.” Contact us to witness how our trailblazing technology changes everything you thought you knew about servicing retention.”

The 8 percent mortgage rate housing market is here, and it’s time for lenders to get lean and cut out complicated fluff. Truework is saving lenders $100 on every VOI/E by connecting every major verification method into a single platform. With one-stop verification, you can verify income for 95% of applicants and replace expensive and clunky legacy systems. Now is the time to sharpen your processes and with Truework Income, lenders are accelerating applications and cutting verification costs.

In this market, hustle is everything. You can’t afford to waste a single deal… Or a single minute. That’s why ReadyPrice has launched Shop, Lock, Deliver, an innovative platform designed to help independent mortgage brokers and their lenders save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders—all on a single platform, at no cost to brokers. It’s already helping brokers around the country thrive and compete in the toughest market. Multiple lenders. One platform. Zero b.s. Come check us out today.

“Don’t get spooked by your MERS deadline! As the shadows grow longer and the nights get colder, we know that there's something even scarier than ghosts and goblins: missing your MERS annual audit deadline! With the deadline creeping up, it's crucial to ensure that everything is in order for your MERS audit. MQMR understands that the process can be a bit daunting, but rest assured, we're here to help you navigate through it smoothly. Reach out to us today and schedule your MERS audit!”

The Loan Vision team is excited to attend the MBA’s Accounting and Financial Management Conference! Stop by table 2 in the Exhibit Hall to learn how companies that run Loan Vision show a 25% reduction in OPEX/time to close, a 20% reduction in overall accounting headcount, complete LOS to G/L automation, and improved reporting and visibility that allow for better business decisions. Be sure book time with Carl Wooloff here to get an early introduction to our newest product, that focuses on allowing our customers to be more profitable with less volume; LV-PAM, a modeling tool that provides actionable intelligence with consolidated loan data. Loan Vision’s innovation continues to provide you the “insights you need in the software you trust.”

Conventional Conforming Changes

Most lenders have incorporated non-QM, jumbo, bond, renovation, reverse/HECMs, and other products into their arsenals. Still, the lion’s share goes through Freddie Mac and Fannie Mae, which are under the auspices of the FHFA. Who’s doing what out there?

Fannie Mae’s DU validation service was established to simplify mortgage lending, optimize how borrower data is shared and verified, and cut needless risk and paperwork out of the equation. Argyle’s integration with DU boosts confidence and eases workloads on both sides of the loan origination process. For borrowers, it means a lower-friction application and a better overall experience. For lenders, it means more efficient and informed verifications, faster closing times, and existing relief from representations and warranties.

Fannie Mae LL-2023-08 announced that with the guidance of the Federal Housing Finance Agency (FHFA), and in coordination with Freddie Mac, loans previously or currently in a COVID-19 forbearance may be eligible for relief from enforcement of representations and warranties using the criteria that apply to loans subject to a disaster-related forbearance in Selling Guide A2-3.2-02, Enforcement Relief for Breaches of Certain Representations and Warranties Related to Underwriting and Eligibility (the “framework”).

Pennymac Announcement 23-17 provides information Conventional & Government LLPAs updates, effective for all Best-Efforts Commitments taken on or after Tuesday, October 24th.

Fannie Mae DU risk assessment details found in its Release Notes have been updated for the Desktop Underwriter® (DU®) Version 11.1 update the weekend of Nov. 18. To support efforts to help lenders provide equitable homeownership for credit worthy borrowers, DU’s risk assessment will be updated to no longer consider number of borrowers as a factor.

Strong quality control (QC) can help your organization manage risk and improve loan quality. Visit Fannie Mae’s Beyond the Guide webpage and hear quality risk leaders discuss the importance of managing quality risk and offer insights into leveraging this guide to help achieve a best-in-class QC program.

Freddie Mac November Loan Product Advisor® (LPASM) releases includes LPA Key format update, new feedback message for condominium-financed units, revised message related to credit enhancements for Freddie Mac Refi Possible®, updates to messages pertaining to Freddie Mac HFA Advantage®, and limiting feedback message DQC0661 from returning on conventional loan submissions.

On December 3, Freddie Mac new and revised messages will be added to quickly identify reasons why LPA returned a Caution risk class for the loan submission.

Freddie Mac compiled its latest affordable and equitable housing research, products, insights and thought leadership in one convenient place. Freddie Mac’s HFA Resource Center is comprised of products and resources to reinforce your efforts in promoting and sustaining homeownership.

Effective Wednesday, October 25th, Kind Lending updated the expanded 1-4-unit conforming loan limits ahead of the official 2024 FNMA/FHLMC Loan Limits announcement.

Capital Markets

It’s hard to have lower rates when investors and the Federal Reserve keep talking about “higher for longer” and that the fight against inflation isn’t over. The U.S. economy continues to outperform expectations despite higher interest rates and tighter credit conditions. Real GDP in the third quarter was 4.9 percent; the highest reading since the fourth quarter of 2021 when it was emerging from the pandemic fueled by fiscal and monetary stimulus. A strong reading was expected given consumer spending data that was released over the summer. That spending was primarily driven by savings, however, as real disposable income fell at a 1.0 percent annualized pace.

Specific to readers of this commentary, residential investment rose at a 3.9 percent annualized pace, the first increase in ten quarters, as builders moved to speed up deliveries of homes. Additionally, new home sales in September rose 12.3 percent to a 759,000-unit annualized pace. The tighter monetary environment is expected to eventually lead to slower growth, but analysts are split as to whether or not the U.S. will experience a full recession.

This week brings November. This month-end week is highlighted by the FOMC decision and Chair Powell’s press conference on Wednesday afternoon, which is largely expected to be a non-event as the Fed weighs whether an additional rate increase is needed or if the current environment is tight enough to achieve their desired outcome. Wednesday morning’s Quarterly Refunding announcement is expected to be of significant importance, where further increases to coupons are expected. Data will be headlined by the October payrolls report on Friday, and other data of interest includes Fed surveys, pre-payrolls labor market indicators, housing data, PMIs, construction spending, productivity / unit labor costs and factory orders. Besides the Fed, the BoJ and BoE will be out with their latest decisions on Tuesday and Thursday, respectively.

Regarding MBS, roll-related activity should pick up with agency prepayments due for release next Monday. The week is off to a quiet start with today’s only data point coming later this morning with Dallas Fed manufacturing for October. With nothing else of note on the economic calendar today, we begin the week with Agency MBS prices worse about .125 and the 10-year yielding 4.89 after closing last week at 4.85 percent.

Jobs

“Kind Lending is looking for account executives to join the #KindMovement! At Kind, our family of diverse and talented Kind Ambassadors are the driving force behind our new approach to the mortgage experience. We are focused on serving the broker community and their borrowers by providing an array of products, top-notch service by experienced and friendly professionals and superior resources to support their business model. Founded by Glenn Stearns in 2020, Kind Lending is one of the fastest growing mortgage lenders in the country, building partnerships with our customers, who ultimately become family and our reason why. At the heart of it all, our people believe kindness matters and a client's positive experience is everything. Come grow with us! Contact Delfino Aguilar, SVP TPO Production, 619.726.0377.”

FHA has a vacancy for a Business Analyst, Job Announcement Number 24-HUD-42-P. Duties include analyzing relevance of program offerings as part of analyzing larger market trends. Develop data and provide reports that facilitate strategies to promote FHA Single Family programs in urban areas. Maintain awareness regarding the amount of FHA activity in various markets and trends with major lenders and those factors that are positively and negatively influencing endorsement business flow.

FHA is taking applications for a Secretarial position in Washington, District of Columbia, job announcement 23-HUD-3045-P. Job duties include advising the supervisor of important office matters, maintain and advise supervisor appointment schedule, arrange meetings, including space, time, and staff, and assemble background material for agenda items.