As Wells Fargo was smacked upside the head with a $3.7 billion fine by the CFPB, sports news included Mat Ishbia and the Phoenix Suns, and the Senate passed the Improving Access to the VA Home Loan Benefit Act of 2022, and the Federal Housing Finance Agency (FHFA) Office of Inspector General released a report with a really long name because that is what bureaucrats do (FHFA Could Further Combat Appraisal Bias by Ensuring That Complaints Are Filed with State Authorities and Ensuring the Enterprises Use Appraisals That Comply with Federal Law), the industry is grappling with continued higher rates. Not that lower rates would release the unicorns from their pens and spread rainbows through the industry, mind you, but they might help. The economists from Redfin (who have seen their stock plunge 94 percent in less than two years) believe that there is a decent chance rates gradually going down to 5.7% by the end of next year. Q1 will be ugly. Seems like after a year of losses in 2022 next year will be a break even or slightly better kind of year. (Today’s podcast is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology, and other services in the mortgage industry and in banking. Listen to an interview with Richey May’s Nick Ward on outsourcing, how to approach it, what the benefits and risks are, etc.)
Lender and Broker Software, Products and Services
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Global Experience, Local Relevancy. Zoral’s intelligent automation solutions are eliminating antiquated industry workflows and replacing them with technology that is years ahead of domestic capabilities. Zoral’s Processing & Underwriting solution offers the most sophisticated set of intelligent automation tools that Processors and Underwriters can use to dramatically increase productivity, improve accuracy, reduce risk, eliminate manual data entry, and stare & compare tasks. For the past 18 years, Zoral has operated one of the largest intelligent automation labs in the world. Whether you close 500 loans a month or 5000, leveraging Zoral’s intelligent automation should be your priority in reducing your overall cost to operate. Ask about a no-risk, complimentary trial. Contact Zoral to schedule a quick call to learn more.
REMN’s 5 DAY HELOC Program: Now available in 34 states (coming soon to PA, UT, and SD). Approvals in minutes, closings in as little as 5 days! Temporary buydown options: REMN offers 3-2-1, 2-1, 1-1-1, 1-1, and 1-0, buydown options to structure, structure, and structure. When the lending environment becomes more challenging, your wholesale lending partner becomes more important than ever. The bottom line is that you need the loan products and options to structure more deals; you need the ancillary drivers such as manual government underwrites, an Income Calculator Desk for Non-QM, and access to the most tenured team of Account Executives, Regional Sales Managers, and leadership in the industry. REMN Wholesale is now on the Lender Price platform, partnered and accessible on the ARIVE platform (click here), and proud to be a multi-year, Platinum sponsor of AIME, and multi-decade giant supporter of NAMB.
Does your current loan application have a 90% completion rate? In a competitive market, lenders must maximize every borrower lead. Maxwell Point of Sale delivers a game-changing digital experience to help you attract, convert, retain, and delight borrowers like never before. The Maxwell QuickApply™ feature allows borrowers to pre-fill required fields by simply inputting their zip code and last four digits of their social security number, cutting time to complete the application and leading to an over 90% application completion rate. With other built-in options, such as a Spanish-language application, a powerful eClose solution, and HELOC abilities, Maxwell is a powerful differentiator for lenders in a tough market. Ready to close more loans than your competitors? Schedule a call with our team to learn more about Maxwell Point of Sale and start turning more leads into borrowers.
Events and Training Ahead
Yes things quiet down during the holidays, but there is still events and training to register for this week and in January. Let’s take a gander.
Today the final guest on the Mortgage Influencers Podcast for this year is, none other than, Robbie Chrisman! He will be sharing how he's taken the daily Chrisman Commentary into a daily podcast! Join today, Wednesday, December 21st at 1:30 pm. Register here or watch on the Facebook group Mortgage Influencers.
This Friday at 3PM ET is the next edition of The Mortgage Collaborative’s Rundown with Rich Swerbinsky and me. We’ll will be covering current events in the mortgage market for 30 minutes starting at noon PT in “The Rundown with Rich and Rob”!
Looking into January, the private mortgage insurance companies certainly offer a fine set of classes. There’s National MI University, the Enact’s course catalog of on-demand webinars, MGIC, Essent, Radian, and ARCH MI.
Speaking of which, registration is open for National MI upcoming January 2023 webinar sessions, brought to you by National MI University. Register for State of the Market, 2023 Predictions, & Strategies with Freddie Mac with Mia J. and Nora G., January 12th at 10am PT. Join Scott Weghorst, President of Diehl Mortgage Training and Compliance, for Mortgage Industry Outlook 2023 on Wednesday, January 25th,10:00 AM - 11:00 AM PST.
And Enact (formerly Genworth Mortgage Insurance) will host multiple live courses in January to help grow your business and positively impact homebuyers. To help you get off to the right start in 2023, discussions include conventional loan options to help affordability, how to better structure loans to meet GSE guidelines, credit scores and credit reports, and more. Browse Enact’s course catalog of on-demand webinars, just have your company or individual NMLS ID handy when registering.
Meet the MBA of St. Louis 2023 Board at the January 12, 11:30 - 1:30 pm Luncheon at Syberg's. Hear presenter Charles ("Chuck") S. Gascon, senior economist in the Research division at the Federal Reserve Bank of St. Louis, discuss the future of the 2023 economy. Cost for MBA Members is $40.00, Non-MBA Members - $65.00.
Register for the upcoming MISMO Winter Summit, January 9 - 12, 2023 in Delray Beach, FL and learn what's hot in mortgage standards. Network and collaborate with your industry colleagues while learning the latest updates on mortgage industry standards. Your participation helps make the digital future possible.
Registration is open for the largest industry event designed exclusively for MBA’s Independent Mortgage Banker executives and leadership of all sizes and business models. IMB23 Conference, scheduled for January 23-26 at Hotel Del Coronado in Coronado, CA., is the place to build your relationships, learn from other IMBs, and hear customized and curated programming focused on topical issues of the moment.
On January 24th at 1PM ET we have the “Experts Roundtable: Where is Non-QM Headed in 2023?” moderated by me and featuring Max Slyusarchuk, Alex Suslov, Billy Abrams, and Derick Mildred. “It's been a whirlwind year in the world of non-QM mortgages, and there's no better time to take a step back and review everything that's happened than at our end-of-year webinar on January 24th, 2023, at 1 PM EST. We'll be joined by leading industry experts who will share their insights on what went down in 2022 and what we can expect in the coming year. From market analysis to regulatory changes to product innovation, this is one webinar you won't want to miss. So, whether you're a seasoned pro or just getting started in the non-QM space, save the date, and join us for an enlightening review of all things non-QM and learn how to grow your business in 2023.
The 5th Annual SimpleNexus User Group (SNUG) conference is on March 13-16, 2023, at the picturesque Snowbird Mountain Resort. The conference agenda includes sessions focused on helping mortgage lenders optimize their incentive comp plans, maximize the advantages with eClose, deploy a unified business intelligence strategy, increase partner referrals, and fully embrace SimpleNexus' entire platform solution. Plus, attendees can preview what's coming down the product roadmap and hear from key executives from SimpleNexus and parent company nCino during the opening keynote. Check out the full SNUG 2023 agenda and register now to lock in your early bird savings.
The MBA’s Forecast in the Context of the Overall Economy
Remember your volume in 2018? Is your staffing at that level? The MBA put out its forecast for 2023 and total originations are expected to fall to $1.9 trillion. (Recall that in 2021 they were $4.4 trillion.) The first quarter of 2023 is projected to be the slowest time period with the MBA predicting total originations to fall to $345 billion before increasing to $510 billion in Q2, where it will begin to increase throughout the year.
The MBA also expects mortgage rates to fall throughout 2023, with the 30 year mortgage rate falling to 5.2% by the end of the year. The Census Bureau expects housing starts to remain depressed around 1.4-1.5 million per year. Existing home sales are expected to remain on the low side, however they will improve throughout the year. Finally, home price appreciation should plateau and possibly turn negative at the end of 2023… but there are still millions of people in their 20s and 30s who want to own a home.
Recall that the latest Fed move had a 50-basis-point (.5 percent) hike as expected, Chair Jerome Powell struck a more hawkish tone during his ensuing comments. Earlier estimates predicted the Fed’s target rate could hit 4.6% in 2023, but that’s been adjusted higher to 5.1%. The Fed suggested unemployment will rise next year, amid tepid economic growth. With bond traders anticipating future rate hikes, the yield on the US 2-Year Treasury rose slightly.
Yesterday's economic data was limited to the Housing Starts/Building Permits report for November, which showed higher than expected starts. Building permits missed expectations, however, serving as a cautious signal about demand for new construction. There has been waning confidence among homebuilders, due to building cost inflation and high mortgage rates, that is placing affordability constraints on prospective buyers. Put another way, rising rates and higher construction costs have caused the builders to hold off until things normalize.
Thoughts on the housing starts data? Holden Lewis with NerdWallet writes, “Home builders have cut back on construction of single-family houses, but they tempered that decline in November by breaking ground on apartment and condominium projects. Starts on single-family houses plunged 32.1% year-over-year, while starts on multi-unit buildings surged by 24.5% from a year before. In about a year, these apartments and condos will be ready for occupancy, relieving the upward pressure on apartment rents and condo prices. There was a 22.4% drop in housing permits issued, signaling that home builders are preparing for a slow 2023.”
Rates ticked up yesterday as the Bank of Japan surprisingly announced that it will allow its 10-year bond yield to rise up to 0.50 percent, which sent reverberations throughout global sovereign debt markets. Most benchmark Treasury yields around the globe were up about 10-basis points yesterday. The global narrative is clearly shifting from global inflation to a global recession, which should put downward pressure on rates next year.
Mortgage applications increased 0.9 percent from one week earlier, according to data released this morning from MBA’s Weekly Mortgage Applications Survey. We’ve also received the Q3 current account. The deficit was expected to narrow to $222.0 billion from $251.1 billion previously. Later this morning brings December consumer confidence, November existing home sales, and a Treasury auction of $12 billion reopened 20-year bonds. We begin Wednesday with Agency MBS prices a few ticks better and the risk-free 10-year yielding 3.65 after closing yesterday at 3.68 percent.
Employment and IMB Wanted
A medium-size New England-based mortgage correspondent lender, with full suite of products, is working on expanding and is looking to hire an in-house, experienced recruiter. Please send your resume to Feliks Viner, VP of Capital Markets.
“Looking back at 2022, where was there room for improvement in your career? Could you have achieved more with greater support, better products and more streamlined operations? What about work/life balance? Do you have the flexibility and tools needed to be there for your personal and professional life? What about peace of mind? Are you confident that your company is strong and resilient enough to navigate another challenging year? One more question… in 2023 while the rest of the industry is content just treading water, are you eager to improve your situation and grow your business? At PrimeLending, we have the support, products, processes, resources and culture in place to help you make next year your best year yet. We’d love to talk with about your goals. Contact Nic Hartke for more information. And, we wish you and yours a happy and healthy holiday season.”
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