For me the first three weeks in August includes time in California, Washington, Nevada, Tennessee, and Michigan. Did you know that roughly 80% of new houses being built are in the South or West? Freddie and Fannie know a lot about lending on new homes, and lending to first time home buyers. Recall that a piece of their gfees goes from the borrower to the government, and their profits go to the government as well through “dividend sweeps.” What are the Agencies talking about these days in meetings with clients? Appraisal modernization, Fannie’s servicing marketplace, and data validation top the list. And fine if you want to ask them about the QM patch, but they will do what regulators and the FHFA tell them to do about it and that won’t be known for quite some time. More Fannie & Freddie (conventional conforming) news below.

Lender Services and Products

“You know us for our rates and programs, you love us for our service, now get to know our Renovation programs. loanDepot Wholesale makes Renovation lending easy. Our Renovation Lending Suite includes programs designed to accommodate both large and small home improvement and repair projects. Giving you more options for your real estate partners and clients to meet their homeownership needs. Flexible solutions that include FHA 203k Limited and Standard as well as FNMA HomeStyle®. loanDepot Wholesale – proud sponsor of improving homes across America. Contact us today to learn more. Rates, terms, and availability of programs are subject to change without notice: www.nmlsconsumeraccess.org.”

If your business isn’t texting in 2019, you’re behind the curve. 78% of U.S. consumers say that business texts are the best way to reach them, and texts are the most opened form of communication. But business texting can be inefficient and frustrating if you don’t have the right tools. Luckily for you, Jungo, the Salesforce-based, mortgage optimized CRM, launched its brand-new SMS texting app this week. This add-on for Jungo customers provides a seamless texting experience for all. Your team will be able to send loan process updates to their customers and referral partners, or automate mass messages. Plus, all texting history is contained within their CRM, so you can ensure your communication is compliant. To learn more, click here.  

The Stearns Lending Wholesale team is excited to announce the FLEX Non-QM product series. With our Flex Investor, Flex 24, Flex 36, and Flex 48 brokers can now offer a variety of options with No Ratio Programs, Bank Statement qualification, 1-year income documentation and Expanded Ratios up to 55%.  “The Non-QM launch represents a unique opportunity for Stearns to bring our best in class fulfillment experience to the Non-QM product line” says Nick Pabarcus EVP of Wholesale Lending.  Learn how your trusted advisor and Account Executive can support your business on this product line and utilize Stearns’ best in class fulfillment team to elevate your Non-QM options in the market today.  If you’re a broker looking to partner with a lender who has a 30-year track record of success please email wholesaleleadership@stearns.com.

“Chenoa Fund Builds Communities, Part 2 in a Series on DPA. Offered by CBC Mortgage Agency, the Chenoa Fund has enabled thousands of borrowers to realize the dream of homeownership. Our broader goal is to use innovation to help America resolve its affordable housing crisis. How? CBCMA created the CRA Note Exchange as an online marketplace allowing purpose-driven entities to gain liquidity for their paper and receive cash to further their missions. Already, over 4,000 loans have traded on the platform, helping groups such as Habitat for Humanity. CBCMA also has partnered with minority faith-based churches to hold seminars on homeownership, and co-founded a workforce housing opportunity zone fund to address affordable housing needs in gentrifying areas such as Baltimore. In addition, CBCMA partnered with CityVision Homes to promote neighborhood revitalization by renovating blighted properties. Revenues from these and other initiatives fund critical economic development projects for the Cedar Band of Paiutes in Southern Utah. 

NewRez is proud to announce the formation Your Home Financial, a new Joint Venture mortgage company recently added to its network of partners. NewRez and Shelter Mortgage Company, the NewRez business division focused on JV lending, have partnered in this venture with Russell Real Estate Services, a long-standing family-run business serving the greater Cleveland, OH area. Led by Paul McKelvey, the creation of Your Home Financial combines the expertise of some truly seasoned industry players in their respective lines of business. “The innovative Joint Venture model offered by NewRez and Shelter Mortgage enables us to offer our clients a complete menu of mortgage services from an established platform and the credibility to achieve success in the mortgage business,” said Jeff Russell, COO Broker/Owner. For more information on the Shelter Mortgage Joint Venture platform, please contact Randy VandenHouten or go to newrez.com.

The mortgage industry is in flux. Fluctuating interest rates. Shrinking inventories. Changing borrower needs. Wouldn’t it be nice to have some consistency– especially from your automated underwriting system? Freddie Mac Loan Product Advisor® delivers reliable eligibility findings that foster responsible lending and give you confidence that you’re originating quality loans. Its innovative capabilities were developed in collaboration with lenders, providing automation and insights that help reduce costs and increase efficiency. What does it all mean for you? Greater opportunity for business growth and an edge on the competition– The Freddie EdgeSM. Learn more about ACE and AIM, available exclusively through Loan Product Advisor®.

Second Mortgage News

From Houston comes, “Based on evolving market conditions, Cadence Bank has made the strategic decision to exit the purchase-money second lien mortgage business effective August 15, 2019. We will no longer be accepting new applications for PMT loans as of August 15, 2019. Our team will handle any loans currently in process with the utmost efficiency and professionalism that you have come to expect from Cadence Bank.”

Ditech Financial Approved Correspondent Clients note: the eligibility and underwriting guidelines for the Piggyback Closed End Second EE products have been revised.

Plaza Home Mortgage’s Closed-End Second Lien Program Guidelines have been updated for more flexibility. Highlights include new flexibility in trade line requirements, delayed purchase refinances are now eligible, gifts of equity are now allowed and land contracts, contract for deed, and lease option to buy are now eligible.

Conventional Conforming

Fannie Mae posted answers to its customers’ most frequently asked underwriting and eligibility questions on the updated top trending FAQs page. The page has been redesigned to group FAQs by theme, such as rental, employment, and retirement income.

In Fannie news, servicers using Servicing Management Default Underwriter™ (SMDU™) can now update borrower delinquency data to match what is in their systems of record when the delinquency is attributable to an acceptable reason. Acceptable reasons include a servicing transfer or a disaster event for which the borrower is compliant with a related workout. View the MI Termination User Guide within SMDU for details on updating a delinquency. Click here to review FAQ’s.

PennyMac Correspondent has been busy with announcements. Its newest postings include: Announcement 19-44, an update to its Early Payoff Policy in the Seller's Guide. Announcement 19-42covers updated information on ChoiceRenovation, HomePossible Income Limits and Real Estate taxes. Announcement 19-43 outlines the update to VA Seasoning Requirements and COE required for all VA IRRRLs.

AmeriHome accepted the Freddie Mac changes in Bulletin 2019-16 except “Properties in Disaster Areas – Age of Documentation Flexibilities,” which is under review and will be announced in the future. The other topics in the Freddie Mac Bulletin have been accepted with additional timing overlays. Home Possible – Rental Income for 1-Unit Primary Residence - Required for loans delivered to AmeriHome on and after 9/10/2019. Home Possible - Multiple Financed Residential Properties – Implementation Date Extension - Required for loans delivered to AmeriHome on and after 8/16/2019. Calculation of Monthly Housing Expense – Real Estate Taxes - Required for all applicable loans delivered to AmeriHome on and after 9/10/2019.

Stearns is offering training materials for its new “Conforming Interest Only” product. The training materials for the client base is now posted in SNAP 2.0. Follow these easy steps to access: Click on “Training Links,” click on “Origination,” and click on “Conforming Interest Only Presentation.”

The Mountain West Financial Wholesale Bulletin 19W-066 provides information on Freddie Mac HFA program regarding Non-Occupant Co-Borrowers.

Capital Markets

Last week saw the widely expected 25 basis point rate cut from the Fed; the first cut since December 2008. Given the markets’ high degree of certainty, buoyed by recent Fed speak, the focus of the announcement was the next move and whether this cut would be enough for the time being. In addition to the cut, the Fed also announce and early termination of its balance sheet run-off, which is logical as that policy tool has an opposite effect of a rate cut. In his post-meeting press conference, Fed chairman Powell tried to leave all options on the table despite the markets’ desire for hints at a future cut. Overall, his comments left the impression that the move was not necessarily one and done and its unlikely that the underlying economic conditions that prompted the move will change significantly over the near-term. Nonfarm payrolls were out a couple day later and showed the economy added 164,000 jobs in July and unemployment remained at 3.7 percent. Average hourly earnings were up 3.2 percent year-over-year; a pace not likely to significantly increase inflation and therefore cause no alarm for the Fed. Of course, the wild card remains US – China trade relations and the effects of the newly announced tariffs which sent financial markets into a tailspin. 

The rally finally abated yesterday, though the curve did display a slight flattening (the 10-year closed unchanged at 1.74%) on no real headline news. Markets took note of a couple events, including the People's Bank of China deciding not to further cheapen the yuan, St. Louis Fed President Bullard saying that the FOMC should not rush with another rate cut (though he conceded that he expects one more cut before the end of 2019), and the Reserve Bank of New Zealand announcing a 25 bps reduction of its official cash rate to 1.25 percent after the close. The Job Openings and Labor Turnover Survey showed that job openings increased to 7.348 million in June from a revised 7.268 million in May.

Today is light on the economic calendar, but mortgage applications increased 5.3 percent from one week earlier according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 2. (Refis were up nearly 12%.) Later this morning brings remarks from the historically dovish Chicago Fed President Evans and June Consumer Credit. We begin the day with Agency MBS prices better by .250 and the 10-year yielding 1.63% on continued global economic worries.

Employment and Transitions

Fresh off the heels of another record-breaking quarter, non-QM lender Angel Oak Mortgage Solutions added to its roster of Account Executives in July. Mark Tirabassi came on-board in New Jersey, Danielle Evans in Houston, Jaime Sanchez in San Diego and Alex Trujillo in Inside Sales. These AEs have gone through the first round of training and have been teaching brokers and correspondents how easy it is to work with Angel Oak. And Angel Oak is not done yet, continuing to add Account Executives in many additional markets across the country and Inside AEs in Miami. To learn more, view the latest job openings on the Careers Page or email Regional Sales Manager, John Wise. 

Volume at Caliber Home Loans, Inc. has really been heating up this summer! The top-tier lender had a hot month in July, funding $6 billion overall – making it the BEST month in company history. Such strong mid-year performance can be attributed to proprietary technology, streamlined operations and talented producers. A month prior, Caliber ended the second quarter with originations 13% above its 2019 sales plan. Caliber is a modern mortgage lender that’s breaking its own sales records and providing products for today’s borrowers. It has no plans of slowing down and is excited to carry this strong momentum to the end of the year and beyond. In fact, Caliber continues to hire in markets across the country. To learn more, visit its  website or email SVP of Recruiting, Jeremy DeRosa.

The StoneHill Group added Jamie Giorello as National Inside Sales and Marketing Executive, and Anthony Golden as National Sales Executive. Ms. Giorello will be responsible for new business development, marketing and sales support, along with existing client retention. Mr. Golden will drive national business development efforts throughout the Western United States.

The Lenders One leadership team added Justin Demola, CMB, as VP, Sales to “lead the sales group to further maximize member value by utilizing a consultative approach to offer provider solutions tailored to members’ specific needs.”

And Mortgage Quality Management and Research, LLC (MQMR) announced that Stephen Sherman has joined the firm as Chief Operating Officer responsible for overseeing MQMR’s day-to-day operations and managing the firm’s long-term growth strategy.