This morning it’s off to Missoula, Montana, for me to spend some time with the folks at MAMP. (Few states have as many different species of mammals as Montana: nearly 120 out of a total of 490 in the wild in North America.) Going through the airport there were few signs of Halloween, although across the country, lenders’ employees are asking, “Which area of our office has the best leftover Halloween candy, underwriting or accounting? Or perhaps it is near the front desk… a Kit Kat bar after lunch won’t hurt anything!” I bet the folks at NAR could use something sweet: In a case where the appeal was nearly filed before the verdict, the National Association of REALTORS (NAR), Keller Williams, and HomeServices of America were found guilty of conspiring to inflate commissions and ordered to pay damages totaling $1.78 billion, a jury in Missouri ruled Tuesday. Good loan officers and real estate agents are masters at gauging customer psychology and sentiment. But leave it up to the Federal Reserve to turn 280 character tweets into its own, 36-page, slicing and dicing of consumer financial sentiment. But it doesn’t take the Federal Reserve to figure out that 8 percent mortgage rates have ground things to a halt. (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 Kristin Messerli and Sean Herrero on appealing to a younger home buying demographic.)

Lender and Broker Software, Products, and Services

Ask anyone who’s tried to form a new habit: you can’t rise to the level of your goals if the systems aren’t there to support you. And with both the housing market and technology moving fast, it’s important for lenders and servicers to work with their technology provider to help keep pace. That’s why ICE built its “Think Customer” product development framework: to prioritize both client and borrower needs in a rapidly changing mortgage technology environment. “Think Customer” is rooted in the Agile framework and has allowed ICE’s Servicing Digital product team to adopt a dynamic development cadence that expedites innovation. Read more about the advantages of “Think Customer,” and see how ICE helps clients reach business goals and gain an edge in competitive markets.

Want to cut your tech spend by $150,000 a year?! Town Square Mortgage achieved $500 savings per loan officer with Milestones’ all-in-one homeowner engagement platform. Trent Annicharico, Chief Revenue Officer of Town Square Mortgage, expressed, “Milestones has not only delivered significant cost reductions to my business by eliminating redundancies in our tech stack, but their fully white-labeled platform has prominently showcased our team's brands, leading to a substantial increase in client retention rates." Ready to save big? Contact Milestones today.

Does the limited supply have your borrowers still searching? They can build equity with a One-Time Close (OTC) Construction Loan. AFR Wholesale® (AFR) never stops sharpening its pencil on OTC loans. If you’re a partner of AFR, ask your OTC questions today! Not yet a partner, partner today! AFR is an expert, especially skilled at structuring OTC loans. AFR has built out adjusted pricing with even more rate options for their clients. Did you see that FHA OTC for Site-Built is back? These changes update how AFR assists their clients with constructing deals and allows even more flexibility. MPA recently awarded AFR for sustainable product offerings – likely due to AFR always adapting to the market. AFR wants to provide homeownership opportunities to more families and needs you to make that happen! Partner Today! Contact AFR by going to,email or call 1-800-375-6071.

“October was a busy month for Luxury Mortgage Corp., and it's worth recapping the offerings we've rolled out for our brokers. We're introducing a Low-to-Moderate Income" ("LMI") Consumer Incentive featuring a reduced rate of 25 basis points on purchases and refinances for borrowers in LMI census tracts. Our ITIN Program is now available under Non-QM Full Doc, Bank Statement, and 1099 Only doc types. We expanded our eligible property types to include 5-10-unit properties within our DSCR products. And the innovation didn't stop there! We welcomed "The Fast Pass," a game-changer that ensures a 24-hour underwriting turnaround when you submit a completed DSCR loan application. Lastly, we announced the extension of our rate lock period to 60 days, providing even more flexibility for our brokers and their borrowers. If you find these changes exciting, stay tuned for what November has in store. To stay updated on Luxury Mortgage's latest developments in real-time, follow us on LinkedIn.”

Today, borrowers expect a more digital, convenient experience, particularly at closings, and if one lender doesn’t provide it, a competitor will. Having the right tools at your disposal is central to a successful eClosing strategy. Wolters Kluwer provides solutions for every step in the process to create a compliant, streamlined, fully digital closing process at your pace. With ClosingCenter and SmartSign Plus, lenders can boost operational efficiency by up to 50 percent while simultaneously enhancing the customer experience. Discover the transformative power of Wolters Kluwer's ClosingCenter and SmartSign Plus today and unlock your full potential! Learn more.

Non-QM lending has gained significant traction over the past few years and the wholesale lenders that offer these products are experiencing impressive growth while the rest of the industry has struggled. OptifiNow announced that several Non-QM lenders had recently implemented its CRM platform, reflecting the strength of this niche market and demand for CRM technology that caters specifically to the wholesale channel. “OptifiNow understands wholesale lending better than any other CRM vendor,” said Blake Scheifele, president of Solve Mortgage. “Their system simplifies our sales and marketing process, allowing our account executives to engage with more brokers on a daily basis.” Learn more about OptifiNow and how they’re helping lenders like Solve Mortgage grow.

Neighborhood Loans celebrates success alongside OptiFunder as the two close in on nearly a year of partnership. “With tools like OptiFunder, we’ve maximized efficiency and seen great results in minimizing net interest loss and maintaining positive cash flow,” said Michael Kennemer, CFO of Neighborhood Loans. “This allows us the opportunity to hire rapidly and increase profitability this year.” As part of the evaluation process, OptiFunder conducted a back test analysis on three months production to compare the impact of OptiFunder's optimized decisions to Neighborhood Loans historical allocations, illustrating a potential 8 percent reduction in warehouse expense. Nearly a year later, OptiFunder conducted a pre/post-test analysis for Neighborhood Loans, proving even better results than anticipated: saving an average of $112/loan and lowering the spread to SOFR by 29 percent. Schedule a demo with OptiFunder or meet with the team at MBA Accounting & Finance to learn more.

STRATMOR’s Tech Workshop

Let’s face it. The mortgage technology space is a complicated jumble of offerings from multiple providers with significant overlap as vendors move upstream, downstream and evolve into adjacent market segments. When lenders finally pull the trigger on a given solution, they are never sure they are getting a reasonable ROI if any ROI at all. Lenders, if you could use some guidance on mortgage technology, sign up today for the next STRATMOR virtual Technology Workshop, December 5-7. This popular workshop focuses on solving business problems with technology. Discussions are facilitated by STRATMOR experts and supported by data gleaned from our annual STRATMOR Technology Insight® Study. Contact us for more information and to register.

Lender and Company News

What are lenders and investors doing about home purchases falling through at the fastest rate since last year at this time, according to Redfin. About 53,000 sales contracts fell through in September, or about 16 percent. Rising mortgage rates are a big driver, but there are other issues too. Buyers are extra cautious right now. They want to make sure they’re getting a good deal given how much mortgage payments have gone up, and when they don’t feel like they’re getting a good deal, they’re backing out.

All government-backed loans processed by the Federal Housing Administration and the U.S. Department of Veterans Affairs, are assumable. Roam is a platform launched by Uber operations staffer Raunaq Singh that connects sellers who locked in those low rates with prospective buyers. (The announcement caused a few LOs to write, asking if a VA or FHA borrower has a lot of equity, where does the large down payment come from? And if a VA loan is assumed by a non-veteran, will the vet have their entitlement restored? There is a process. And of course, people aren’t moving due to payment shock.)

As alluded to in this Commentary yesterday, Universal Lending, a privately held Denver-based lender founded in 1981, will now become a division of mortgage fintech Lower. Both retail and wholesale channels will be overseen by industry veteran, TJ Kennedy. Universal Lending's wholesale channel will join Lower and operate under the PowerTPO brand.

“This strategic move allows us to take an offensive approach with the opportunities of today’s market,” said Kennedy. “We have found a partner in Lower that matches our values, commitment to taking care of our customers, and puts us in a position of strength moving forward.” Lower Co-Founder and Managing Partner, Mike Baynes said, “The addition aligns with our expansion plans, adding over 60 loan officers and establishing a strong presence in both the Colorado and Montana markets.”

The Lower Family of Companies is a nationwide brand servicing retail, direct-to-consumer, and mortgage-as-a-service industries. They are one of the fastest-growing mortgage companies in the nation, with over 1,000 employees across 65 branches and private labels in 47 states.

Out of Austin, Texas comes news that Cedar accepted a $3M seed funding round to provide software that helps real-estate developers and professionals maximize the housing potential of urban infill properties. “Cedar believes that the complexities of urban development are driving builders to construct homes ever-farther from city centers, thus contributing to the supply-demand mismatch creating a crisis of affordability today. Kyle Vansice, co-founder of Cedar added: “Not only is the US not building enough housing to support our population growth, but we’re also not building homes in the right places - urban centers where current and future generations want to live and work, and be closer to their friends, family, and cultural amenities.”

The funding round was led by Caffeinated Capital with participation from Tishman Speyer Ventures, Maria Davidson (CEO of celebrated construction startup Kojo), David Rubenstein via Shorewind Capital, Alumni Ventures, among others. Cedar’s cap table also includes global venture capital firm Antler as an early investor (pre-seed round).

“Cedar is radically collapsing the time and cost for developers to source and evaluate real-estate projects, a major inefficiency in today’s real-estate market. It often takes longer to acquire, design, and permit a housing project than it does to build it - largely due to the slow, consultant driven, and regulatory burdened process of solving the 3D puzzle that is a real-estate development project. And while 80 percent of cities are composed of housing, almost no software exists to help developers know where and what can be built in the city - a critical market gap Cedar is filling… The Cedar platform uses generative algorithms and a mix of public and proprietary data to quickly generate a broad array of building designs, accurately predicting the development yield on any parcel in a city and converting complex land-development regulations into real development scenarios that maximize a property's financial potential.

Capital Markets

It was a quiet session in the bond markets yesterday preceding today's release of the latest Federal Open Market Committee Statement, which is not expected to call for any policy changes. Markets did receive some housing data in the form of home prices. Case-Shiller reported that home prices rose 0.4 percent month-over-month and 2.6 percent year-over-year, while the FHFA House Price Index increased 0.6 percent month-over-month and 5.6 percent year-over-year.

We also learned that there was a 1.1 percent rise in the Employment Cost Index in Q3, slightly stronger than expected but showing labor cost pressures continue to slowly ease. The Employment Cost Index still running north of a 4 percent annualized pace means that labor cost growth remains too high to be consistent with the Fed's 2 percent inflation target.

Today’s busy economic calendar kicked off with mortgage applications decreasing 2.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. Ahead of Friday’s payrolls report, today look for the October ADP Employment Change, the U.S. Treasury announcing the planned sizes of its bill, note, and bond auctions for the remainder of Q4, Final October S&P Global US Manufacturing PMI, September Construction Spending, the October ISM Manufacturing Index, September job openings, and the November FOMC Rate Decision. We begin Fed decision day with Agency MBS prices roughly unchanged from Halloween and the 10-year yielding 4.90 after closing last night at 4.88 percent.


“At loanDepot, we’re passionate about making homeownership more accessible and achievable for more families with the help of our loan officers. Recognized by The Wall Street Journal as the best lender for first-time homebuyers, we’re proud to be the nation’s #3 lender to minorities overall, the #3 lender to Hispanics and the #4 lender to African Americans (per 2022 HMDA). With our extensive portfolio of affordable housing and down payment assistance programs (we’re a top FHA and VA lender) and innovative programs for originators that support outreach to traditionally underserved communities, loanDepot is finding new ways to better serve the unique needs of minority and first-time homebuyers. And our commitment to inclusive lending extends to our multicultural and multilingual team, which is made up of 42 percent minorities. If you’re aligned with our strategy of purpose-driven lending and looking to increase your first-time homebuyer business, contact Shane Stanton.”

An innovative executive with a history of 2x-10x ROI achievements is actively seeking a high-level leadership position, ideally President; open to a COO, CSO, or CEO role. This visionary leader excels in trend anticipation, pioneering solutions, and fostering exponential growth. Customer acquisition strategies encompass traditional and emerging channels, while expertise in FinTech/DevOps, process integration and strong industry relationships with vendors, regulators, capital markets, PEs, GSEs, and banks underscore comprehensive business acumen. Tenacious competitor who attracts sales and ops talent to develop and integrate with company superstars utilizing vision, transparency, P&L management, data analytics, KPIs, OKRs, resource allocation, cost containment, and adept negotiation skills. Known for inspiring growth through both proven and innovative approaches that are capital efficient. Superb communication skills excelling in both structured and ad hoc decision making. Dedication to continuous learning and collaborative leadership and building others for success. For more details, please contact Anjelica Nixt.

In the current market environment, independent retail mortgage banks with falling originations face a dilemma: risk hanging on until liquidity runs out, or selling their company to a new owner who will make any payout dependent on a difficult-to-achieve earn-out. This begs the question as to why an owner would relinquish control. But there is a third path. What if you could take some or all of your balance sheet off the table, become a full partner in a financially strong independent mortgage bank (that's also small enough where your voice will matter), and continue to run your origination platform? If you have already scaled back your operations to the absolute minimum and still can't break even, consider exploring a continuity equity partnership with a group who have refined this model over years of collaboration. Interested parties should email me to forward your confidential note along asking for more information.