Here’s what happened when a company relied on forecasts and rate predictions during late 2022 for its business in 2023. You’d have a come-apart! Speaking of losing one’s cool, how do you think IMBs feel about this Bloomberg story about how mortgage fees at banks are less than at non-banks? In STRATMOR Group’s December Insights Report, STRATMOR provides key takeaways that will help lenders think outside the box, evaluate new strategies, take risks and survive the downturn that is likely to continue into the first quarter of 2024. Lenders are looking at rising credit costs, asking if there alternative financing strategies versus traditional warehouse lines, is there a “best” technology underwriter, and how are lenders handling HPML loans, like sharing the cost between a branch and corporate? Today’s podcast can be found here, and this week’s is sponsored by Lender Toolkit’s AI-powered AI Underwriter and Prism borrower income automation tools. Get loans approved in under two minutes. By providing lightning-fast underwriting decisions, your market reputation with borrowers and Realtors will soar. Listen to an interview with Brent Emler (Lender Toolkit) and Katie Pastor Trinidad (Partners Mortgage) on the benefits of AI underwriting.

Lender and Broker Products, Programs, and Services

Loan Vision exclusively serves the mortgage industry by providing software built by the mortgage industry for the mortgage industry. With Loan Vision, customers see improvements of 30 percent+ decrease in days to close the books, 20 percent+ reduction in accounting headcount, complete LOS to G/L automation, and improved reporting and visibility. Interested in learning how Loan Vision can help you run a more efficient and profitable company? Contact Carl Wooloff to schedule a call today.

On the first day of Christmas my VP gave to me… a borrower portal that my borrowers hate and don’t use so I just default to email to collect everything like it’s 2003. We have to work on that lyric, but in the meantime you should check out LiteSpeed by LenderLogix, the borrower portal that gets five golden rings.

Create opportunities with ITIN borrowers in the new year. If you’re not sure how, reach out to the Champs of Non-QM. Champions Funding is steadfast in its mission to help you and your borrowers access loan products outside of traditional agency options. Don’t miss out on learning all the CDFI benefits too! Not yet partnered with the Champs? Sign up today!

Credit and Verifications in the News

Truv is now an approved third-party service provider supporting Freddie Mac Loan Product Advisor® asset and income modeler (AIM) Revolution Mortgage estimates that they can save up to $20,000 in cost on verifications with TRUV over competitors. "Let's talk about our documentation costs and those giant monopolies that are out there and laughing at customers and increasing prices because they have a particular monopoly. You want to lower your manufacturing costs” said Femi Ayi, EVP Operations. Contact TRUV today to discuss how we can help you with your income, employment, insurance, and asset verifications. Come join us!

Thinking of having borrowers pay for credit reports upfront? If you read this commentary regularly, you know you’re not alone. With another credit fee increase coming, overall loan level costs continuing to increase, and the growing need to capture servicing payments, having a streamlined process for providing payment requests to borrowers has never been greater. The Ignite Payment Engine allows lenders to request itemized fees and servicing payments from borrowers seamlessly from within Encompass. Borrowers receive a PII Secure link to pay their fees or mortgage payment within minutes and have the payment(s) confirmed back into Encompass. This fully integrated payment solution, which accepts credit card and ACH payments, updates the itemization or loan balance upon payment confirmation. The system has full refund capability and can integrate into your accounting solution to dramatically improve your payment reconciliation process. Contract Frank Fiore for a demo today to start better managing and reducing your costs to originate heading into 2024.

Cost aside, mortgage credit availability decreased in November according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) that analyzes data from ICE Mortgage Technology. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012. The Conventional MCAI decreased 3.6 percent, while the Government MCAI remained unchanged. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 5.4 percent, and the Conforming MCAI remained unchanged.

“Credit availability in November declined to its lowest level in four months, driven by reduced offerings of non-QM and jumbo loan programs,” said Joel Kan, MBA’s VP and Deputy Chief Economist. “The conforming and government indices were unchanged over the month but remained close to multi-year lows. Overall credit availability was seven percent below last year’s level, as the industry has reduced capacity in response to declining origination volume and lenders continuing to simplify their loan offerings.”

The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.). These metrics and underwriting criteria for over 95 lenders/investors are combined by MBA using data made available via ICE Mortgage Technology and a proprietary formula derived by MBA to calculate the MCAI, a summary measure which indicates the availability of mortgage credit at a point in time. Base period and values for total index is March 31, 2012=100; Conventional March 31, 2012=73.5; Government March 31, 2012=183.5.

Capital Markets

It’s a big week for housing data this week, and yesterday we learned that housing starts rose 15 percent month-over-month and 9 percent year-over-year to a seasonally adjusted annual rate of 1.56 million units, exceeding expectations. Building Permits decreased 2.5 percent month-over-month to 1.46 million. Despite the rise in housing starts, both housing starts and building permits figures were below 2022 levels. And even with higher interest rates, builders are maintaining a strong position due to the ongoing inventory shortage.

No day would be complete without news from the U.S. Federal Reserve. Atlanta Fed President Bostic told listeners at an event in Atlanta that he does not see an urgency to cut rates in 2024 and that there hasn't been an active discussion on rate cuts. The central bank’s policy judgment that short-term rates need to stay high to support tightening has partly been undone by investors’ responses.

Today’s economic calendar kicked off with mortgage applications decreasing 1.5 percent from one week earlier, according to data from the MBA. A seventh straight week of increases was expected following the plunge in yields and mortgage rates during the reporting period: the 10-year yield slid more than 30 basis points to its lowest level since July, while 30-year mortgage rates dropped 45 basis points and 27 basis points to 6.64 percent and 7.18 percent, according to Mortgage News Daily and Bankrate, respectively.

We’ve also received the Q3 current account deficit, and later this morning brings consumer confidence for December, existing home sales for November, and a Treasury auction of $13 billion reopened 20-year bonds. We begin the day with current coupon Agency MBS prices better by about .125, the 10-year yielding 3.87 after closing yesterday at 3.92 percent, and the 2-year down to 4.37.


“SWBC Mortgage congratulates our 2024 President's Club qualifiers. Amid a challenging year, your unwavering dedication and hard work have set a new standard. We applaud your resilience and ability to thrive amid adversity. This achievement reflects not only your individual excellence but also the dedication of a company committed to providing the training, technology, and encouragement needed for success. At SWBC Mortgage, the success of our loan originators is priority #1, and we strive to provide an unsurpassed level of support to help grow their business. Leadership is more important than ever in today's dynamic landscape, and with the right leadership at the helm, SWBC Mortgage navigates challenges with resilience while continuing to grow in a down market. For information on career opportunities, contact Scott Brown, EVP of Retail Sales, or visit here.”

A national IMB is looking to revamp its Operations Team and is looking to bring in a new Chief Operating Officer along with an additional Operations Manager. Prior leadership experience in the mortgage space is a must. Applicants should also possess strong management skills, excel in troubleshooting, and communication. Confidential inquiries should be directed to Chrisman LLC’s Anjelica Nixt for forwarding; please specify the opportunity.

“Spring EQ’s TPO division continues to experience rapid growth as demand for home equity solutions accelerates. To meet this demand, Spring EQ is excited to announce a new second lien program designed for Correspondent partners. Eligible delegated and non-delegated sellers will now have the opportunity to take advantage of Spring EQ’s competitive suite of products, including fixed-rate second mortgages and adjustable-rate HELOCs. Explore Spring EQ job postings and come join our growing team of fun and experienced mortgage professionals! At Spring EQ our primary focus is second mortgages. So, think of us first for all your seconds. Want to become a Spring EQ Correspondent partner? Click here to get started.”

In marketing news, Depth is “proud of the strong 2023 we had during a challenging industry cycle and two new hires: Client Services Manager Adria Riley and Senior Content Writer Laura Lang. They are a perfect fit at Depth, where we value writing acumen and industry knowledge above all. (Recall that in October Depth announced the promotions of Lindsey Neal and Leslie Colley to executive vice president.) Congratulations!