My cat Myrtle has toys and games, namely the end of a shoelace, a ping pong ball, and an occasional bout with the light from a laser pointer. Humans have toys too, and here are the top ones from the year you were born. (More fun to look at the years when you’re 5 or 8.) Some of those are big bucks now, speaking of which, everyone out there is trying to save money. Here’s one way: for loan officers requiring continuing education, you only have a couple weeks to complete your 2022 CE classes. If your company is a Lenders One Member, your classes are free! (No, this isn’t a paid ad; contact Tricia Migliazzo for information.) And this may be on the test: The six criteria that make up the completed mortgage loan application are: A – Address of the subject property, L – Loan amount requested, I – Income of applicant, E – Estimated value of mortgage loan application, N – Names of borrowers, S – Social Security Number. There is your acronym: ALIENS. And only when you have ALIENS do you have a completed mortgage loan application. And if you have TILA or RESPA questions, the CFPB’s FAQ site is as good a place to start as any. (Today’s podcast is sponsored by Appraisal Logistics, a full-service AMC licensed in all 50 states. AIM-Port’s robust integrations, custom automations, and granular reporting tools are delivering gains in efficiency and cost savings to lenders across the country. Today’s features an interview with Adam Boyd, Head of Home Equity Lending at Citizens Bank, on the growing popularity of the HELOC market.)

Lender and Broker Software and Services

Santa’s sleigh can’t deliver a house but Click n’ Close can help borrowers get the home on their wish list. Click n’ Close is ringing the bells on SmartBuy, a proprietary suite of loan programs designed to give homebuyers an advantage in today’s heightened mortgage interest rate environment. Click n’ Close can offer your borrowers a permanent and material interest rate reduction, allowing them to qualify at the lower rate! The gifts don’t stop there; several of these programs will also feature down payment assistance (DPA), temporary 2/1 buydowns or permanent rate buydowns to help your borrowers increase their buying power in today’s challenging market. SmartBuy is the latest in a series of unique loan products to help consumers and third-party originators (TPOs) address the challenges of today’s 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).

Now is the perfect time for innovative business growth ideas. Capital Markets Cooperative (CMC) is an exclusive membership organization that carefully selects investors and service providers that support IMBs, credit unions, and financial institutions as they navigate the industry's inevitable shifts. CMC does the heavy lifting by choosing partners with unique products designed to help reduce your expenses and maximize your revenue on every loan. Get the advantage by tapping into the passion and dependability of CMC, a partner that can strengthen your business and benefit your bottom line.

Are you looking to close more loans, faster in 2023? Automation technology is transforming the mortgage industry. Top leaders like Jodi Hall (NMB) and Kevin Peranio (PRMG) are using platforms like Capacity to bring AI to their teams, increasing productivity. Originators and brokers use data from many external sources to meet the regulatory requirements during the loan process. The time-consuming task of manually searching contracts, bank statements, loan applications, and guidelines is inefficient. The mortgage industry is in dire need of a platform that securely integrates with lenders’ key systems, providing loan officers with instant, actionable answers about borrower opportunities, loan statuses, guidelines, and more. Capacity reduces the time that LOs spend logging into a sea of endless systems to find information. If this sounds familiar, see how Capacity can save your team time and frustration. See how it works.

On-Demand: Regulatory Update Hub! Hear from Ncontracts’ Stephanie Lyon and their internal team of compliance experts in monthly updates that help clarify the latest regulatory changes, guidance, and news as well as how they affect your institution. Sign up for regulatory updates here!

FHA, VA, and USDA Rural News

As a reminder, HUD announced the 2023 loan limits for Single Family Title II Forward and Home Equity Conversion Mortgage (HECM) insurance programs. (See also Mortgagee Letter 2022-20 and Mortgagee Letter 2022-21). For FHA case numbers assigned on or after January 1, 2023, the maximum loan limits for FHA forward mortgages will increase in 3,222 counties and remain unchanged in 12 counties. The HECM maximum claim amount will also increase from $970,800 to $1,089,300.

In USDA news, the Lender Financial and Participation Requirements Final Rule became effective on November 29, 2022. To implement this rule, the Single-Family Housing Guaranteed Loan Program (SFHGLP) announced numerous revisions to Handbook 1-3555. In addition, updates were made to the servicing guidelines described in Chapters 17, 18, and 19. These changes became effective upon the recent issuance of a Procedure Notice (PN).

The Single-Family Housing Guaranteed Loan Program (SFHGLP) announced upcoming revisions to Chapters 9 and 15 of Handbook 1-3555, expected to be implemented in January 2023. Highlights of the upcoming revisions are available for review on the Loan Origination page of the USDA LINC Training and Resource Library, under the sub-heading “New”.

The FHA announced ML 2022-19 Addressing Electronic Appraisal Delivery Solution.

And the FHA recently announced the publication of Mortgagee Letter (ML 2022-19), rescinding the mandatory use date for mortgagees to submit appraisals for both forward and reverse, single family Title II mortgage endorsements using the FHA Catalyst Electronic Appraisal Delivery (EAD) module. FHA extends the temporary partial waivers to HECM loss mitigation policies.

Recently, FHA issued an extension of the temporary partial waivers to the Home Equity Conversion Mortgage (HECM) loss mitigation policies provided in Mortgagee Letter 2015-11 and Mortgagee Letter 2016-07 through December 31, 2023.

New 2023 FHA loan limits are effective for Case Number Assignments on or after January 1, 2023. For detailed information, view Freedom Mortgage Wholesale Announcement  RCC#22-66.

Sun West updated its underwriting guidelines in accordance with VA Circular 26-22-17 to no longer request Private Road maintenance agreement on VA loans where subject property is serviced by a private street/ driveway/ a shared driveway/road. Effective for loans with application date on or after 12/5/2022.

Pennymac will update Government LLPAs effective for all Best Effort Commitments taken on or after Friday, December 09, 2022. View announcement 22-78 - Updates to Conventional & Government LLPAs for details.

For appraisers, today there’s the “Appraiser’s Guide to FHA Lending.”

Want to learn about the “New FHA Regulations on Private Flood Insurance Acceptance”? Tune in Friday, December 16, from 11:00 am - 12:00 pm EST.

Capital Markets

Is anyone else tired of talking about the Fed? The Federal Reserve will hold a two-day meeting of its policy-making committee with expectations high that the central bank will fire off an interest rate hike of 50 points. While recent readings from the labor market continue to be strong, the housing slowdown appears to be spreading into manufacturing and given economists differing opinions on how high the terminal interest rate will go. Trading on the federal funds futures contract indicates almost an even split between a 25-point or 50-point interest rate increase at the February meeting. Outside of Powell's speech, the summary of economic projections will be closely watched with the median forecast for 2023 forecast to move up by 50bp to 5.125%. What about 2024 and 2025? Bank of America, for one, thinks the dot plot will point to 100bp of cuts each in 2024 and 2025.

Turning away from conjecture to actual announcements, after the past couple of weeks saw rate declines, Friday ended with Treasury yields and MBS increasing after November PPI came in hotter than expected (actual 0.3 percent month-over-month, expected 0.2 percent). Even still, the year-over-year PPI growth rate slowed to 6.2 percent from 6.8 percent in October while Core PPI slowed to 7.4 percent year-over-year from 8.1 percent. The report has piqued concerns that this week's Consumer Price Index will not be as friendly as expected either. There was also an above-consensus preliminary reading of the University of Michigan's Consumer sentiment survey for December where sentiment improved in conjunction with rising stock prices and falling gas prices.

The U.S. economy remains surprisingly strong according to the ISM services index released last week. It rose unexpectedly as the business activity sub-component jumped. In contrast to the manufacturing index, the prices paid index remained high and the gap between the services and manufacturing prices paid indices is the largest on record as consumer spending has shifted significantly away from goods. One area of the economy that might be good news in the fight against inflation is slower unit labor cost growth. Revisions for the third quarter showed unit labor costs increased at a 2.4 percent annualized rate, the slowest since the first quarter of 2021. Should labor markets cool in 2023, slower wage growth would help reduce inflation towards the Fed’s target.

Amid recent optimism that inflation has peaked, and that Fed could start to change its tone this week with a 50-basis point hike, the heavy risk-event-week ahead begins with the mini-Refunding supply from Treasury which will auction $40 billion 3-year notes and $32 billion reopened 10-year notes today. Tomorrow, the first day of the FOMC meeting, $18 billion reopened 30-year Treasuries will be auctioned and we will receive the key Consumer Price Index report for November. Wednesday and Thursday are dominated by central bank interest rate decisions beginning with the FOMC on Wednesday with release of the Statement and updated SEP followed by Chair Powell's post-meeting press conference, and the BoE, ECB, SNB and Norges Bank on Thursday. With no economic releases of note today, we begin the week with Agency MBS prices better by .125 and the 10-year yielding 3.54 after closing last week at 3.57 percent.

Investor Wanted; MLO Jobs

Wanted: A portfolio partner to purchase loans from a leading lender. “We’re a top 10 mortgage company seeking flow business partners to acquire quality loans for their balance sheet. Our prime credit residential loans can be either purchased servicing retained or released, and coupon & underwriting guidelines are subject to negotiation. Products include conforming ARMs, jumbo ARMs, jumbo fixed, as well as HELOC and Personal Loans. Interested buyers, principals only, should reply to Chrisman LLC’s Anjelica Nixt to forward your note of interest.”

“If you’re looking to join a team of well-connected mortgage professionals, Caliber Home Loans has plenty to offer. Our teams are committed to developing innovative programs to help borrowers and sellers in the current environment. Our Lock ‘n Shop program allows borrowers to temporarily lock a rate at no charge while they search for their new home, easing the anxiety of recent rate volatility. Caliber’s Lock ‘n Sell allows sellers to temporarily lock in a rate on a property while they search for the right homebuyer. But wait there’s more: Caliber Rate Remedy eases the pain of high rates for 12 months with a lender paid buydown, and when combined with Rate Rollback, Caliber customers can then refinance without any lender fees if they refinance with us before 12/31/2024. To learn more about what we have to offer, contact James Hecht.”

“A key to staying productive and coming out ahead in these challenging market conditions is staying in front of mortgage demand. True to this belief, Ross Mortgage Company has continued to expand during recent months into the Pacific Northwest, adding teams of experienced loan officers in Washington and Idaho. We have worked to forge relationships to give our LOs access to extremely competitive rates. These rates combined with access to a robust affinity partnership network have allowed our loan officers to stay productive. If you’ve been considering a change in your origination career, starting 2023 with a move to Ross Mortgage Company is the jumpstart you need. Reach out to VP of Sales, Kevin Coleman, for a confidential conversation about how we can expand your business in the New Year.”

Citizens is honored to be named “2022 Bank of the Year – US” by The Banker, a monthly journal chronicling the banking industry. With one winning bank from each of the 120 countries judged, Citizens won based on performance, innovation, adding customer value and leadership in society. Congratulations to all Citizens colleagues who work every day to serve our customers and communities! If you want to be a part of our talented mortgage team click here to learn more.