Japan's government bonds could soon join Germany's in having negative yields on all maturities. Japanese debt has gone negative out to 15 years, and buyers are turning to 30- and 40-year bonds to get positive yields. Falling bond yields and minimal interest rates are prompting European banks to consider the unprecedented step of offering home loans at negative interest, which would effectively pay customers for taking them while charging more on savings deposits. Denmark's Jyske Bank is offering -0.5% 10-year loans, and others might follow. Fortunately the economy in the United States is stronger, and doing much better, than the economies in other countries. In this country, you know that if Reuters is writing about increased MSAs and joint ventures, and calling them “cozy,” that business model is back, and another periodical confusing non-QM with “liar loans” seems like sensationalism.

Lender Products and Services

Today, the average age of Loan Originators is between 46 and 47, which is about four years older than the US workforce overall. More importantly, opportunities for Loan Officers are expected to grow at about 11 percent between now and 2026 – more than 50 percent faster than the growth for all occupations. So it should come as no surprise that Fannie Mae’s Q2 2019 Mortgage Lender Sentiment Survey shows that, after improving consumer-facing technology and streamlining business processes, improving talent management and leadership is the top concern for mortgage lenders. It’s time for mortgage lenders to get serious about recruiting and training the next generation of Loan Originators and Loan Advisors. Cloudvirga’s Chief Product Officer Tim Von Kaenel outlines three strategies for attracting, recruiting, and retaining top-performing Loan Officers as millennials move into mortgage.

The recent drop in mortgage rates has rendered 8.2 million mortgages refi-eligible, and a further 1/8 percent decline in rates would thrust the number of refi-eligible borrowers to 9.7 million. That’s a lot of customers you could be wowing with automated asset, income and employment verification. FormFree's Passport is the O.G. provider in this space, but FormFree has done something decidedly new-school with its recent decision to offer closed loan pricing, where lenders only pay for a full report on loans that fund. See a live demo of Passport at Freddie Mac Connect, where FormFree is holding down booth #15 as the event’s platinum sponsor.

Support for/against HUD Mortgagee Letter 2019-06 (7th in series on DPA). “At CBC Mortgage Agency, we watched reaction to HUD’s new rules with interest, and dismay. Eight states came out in favor of the proposed policy, choosing to stifle consumer choice rather than face competition. The losers? Americans needing help moving up the housing ladder. We joined NCSHA in an effort to collaborate with state HFAs to establish markets for DPA paper through efforts like the CRA Note Exchange. But some states prefer regulatory monopolies. They’ve even sued organizations seeking to provide DPA in their domains. The Chenoa Fund offers one set of guidelines and funding processes nationwide. Multiple internal pricing surveys show our pricing to consumers is better by one-eighth percent, and our process is simpler for lenders. Several states have improved pricing to compete with the Chenoa Fund program. Bravo. That’s vivid evidence that marketplace competition is benefiting consumers.”

Calling all mortgage leaders. Does your CRM stink? Most Customer Relationship Management systems make some fatal errors. Here’s one high-level mistake baked into the term CRM. The C stands for customer, obviously. But what defines a customer? The borrower, right? Wrong. It’s the borrower, AND it’s the Loan Officer. LOs are your internal customer and if your system misinterprets their needs, they won’t engage. If your system is complicated it will confuse them, and if you confuse you lose. Another error baked into CRM’s is the term Management. Today customers (external and often internal!) refuse to be managed. Today’s customers make their own decisions, and they hate being sold to. The answer? Redefine customer as Relationship. Engage, don’t manage. Simplify, don’t complicate. Then you’ll have a Relationship Engagement Platform. And it won’t suck. Dan Harrington, CEO Usherpa, Mortgage CRM since 1995.

Vendor and Co-op Tidbits

The Mortgage Collaborative announced the addition of Kate deKay (CEO, Eustis Mortgage) and Allison Johnston (COO, Success Mortgage Partners) to its board of directors. Johnston and deKay were voted in at TMC’s most recent summer conference in Nashville. The conference featured record attendance at the highest “LTV” (lender to vendor) ratio of any mortgage industry conference this year. (Next year’s will be held at The Roosevelt New Orleans, February 16-18, 2020.) “TMC’s conferences provide lender members a unique opportunity to participate in compelling and interactive sessions led by their peers focused on growth initiatives, business best practices and experiences with third party providers.” (Click here for more info and early bird registration or give COO Rich Swerbinsky a shout.)

Vendors don’t only cater to lenders. On the real estate buying and selling side of things, Homebot, a customer engagement platform that delivers financial scenarios to help homeowners build wealth, has announced major enhancements to the homebuying side of its platform. The latest release inserts lenders into the market search process by integrating prompts for buyers to obtain a prequal or preapproval, lock a rate, and inquire about down payment with a single click. And, to instill a sense of urgency, future buyers can see how their buying power has changed over time as well as which markets best match their lifestyle, price point, and buying timeline. Read the Homebot for Buyers blog. To sign up for Homebot, visit homebot.ai or, see what your own home is worth by clicking here.

Guild Mortgage announced an alliance with Homebot to enable Guild’s loan officers to provide regular, customized home finance and wealth building intelligence to homeowners. “Guild’s loan officers can now offer customers relevant data, economic insights and market intelligence and stay connected with homeowners in a meaningful, personalized way long after the mortgage transaction has closed.” Refinancing opportunities, purchasing power for buying a new home or trading up to a new home, cash flow and short-term rental opportunities. Guild Mortgage will provide the company’s more than 1,100 loan officers nationwide access to Homebot’s “Lender Base” service at no cost to them.

Blend announced the release of a new product for lenders: self-serve pre-approvals. “As more consumers begin their mortgage process online, Blend has built a more seamless way for them to start their home buying process with automated, self-serve pre-approvals. For lenders with consumer direct channels, the new feature helps them prove their value to prospective borrowers without the intervention of a loan officer. On the flip side, these pre-approval letters enable borrowers to understand quickly exactly how much they can borrow, helping them compete in a tightening real-estate market.”

Capital Markets

Recall that headline U.S. GDP growth declined from 3.1 percent to a 2.1 percent annualized pace in the second quarter according to the “advance” estimate released by the Bureau of Economic Analysis. Still nowhere near negative for two quarters, the technical definition of a recession. The number was buoyed by a 4.3 percent increase in personal consumption as net exports and business investment were weak due to ongoing trade uncertainties. Non-defense federal spending swelled 15.9 percent and a deal was just announced to increase caps on discretionary budget amounts and suspend the debt ceiling for two years. At least we’ll avoid potential shutdown drama for a while. Elsewhere, residential spending continued its decline; now down for six consecutive quarters. Existing home sales were down 1.7 percent in June as low inventories in affordable areas continue to weigh on the market. Even with mortgage rates hovering around 3.75 percent for 30-year fixed aren’t enough to significantly move the needle on sales. Additionally, the trade war has seen the dollar value of foreign purchases decline 36 percent over the last year. 

U.S. Treasuries sold off again yesterday, including the 10-year closing +3 bps to 1.61 percent (though it still sits 19 bps below the 2-year in this inverted yield curve environment) on the back of mostly better than expected PMI readings from large economies in Asia and Europe. Additionally, the ECB minutes were deemed less dovish than hoped. Eurozone's August flash Manufacturing PMI and flash Services PMI both beat expectations, as did Germany’s. Domestic news wasn’t as cheery, with U.S. flash Manufacturing PMI for August posting the first contractionary reading in ten years. And Freddie Mac revealed mortgage rates have now hit a year-to-date low. Time to push those refinances! Finally, markets were thrown a curveball when three Federal Reserve policy makers said they don’t think the U.S. economy needs lower interest rates, pushing back against a White House scrambling for ways to stave off a recession many see coming. Whether this growing sense of caution presages a smaller cut, or none at all, is a question that won’t be answered until next month.

Markets now turn their attention to Fed Chair Powell, who will speak in Jackson Hole this morning. Officials from the Federal Reserve and other central banks have gathered for the annual symposium on monetary policy, with this year's theme being "Challenges for Monetary Policy." (Guess my invitation was lost in the mail.) On the other side of the Atlantic, we have holders of the fiscal levers gathering at the G-7 in France. Both conferences are seemingly looking to the other to solve the world’s problems. Today includes just two domestic releases of note to close the week, with revised building permits for July, and July New Home Sales both due out later this morning. Friday starts with agency MBS prices better by a few ticks and the 10-year yielding 1.61 percent.

Jobs, Business Opportunities, Promotions

A mid-sized, multi-channel independent mortgage banker licensed in 42 states is interested in speaking to mortgage bankers or brokers that are interested in selling their platform or merging into a company with a strong culture. The company has been in business for over 35 years and is a Fannie Mae, Freddie Mac and Ginnie Mae approved seller servicer as well as approved by all major private investors. Please submit inquiries to Anjelica Nixt for forwarding.

Award-winning Denver startup, Homebot, a financial dashboard to help homeowners build wealth with their home, is hiring! On the heels of winning the Grand Prize 2018 Realogy FWD Innovation Summit, the 2019 HousingWire Tech 100 Company, and recently named one of Denver’s Top 15 Denver Startups for Web and Innovation, Homebot is poised for phenomenal growth in the coming year. There are a number of open positions that the company is seeking to fill in Denver and one remote opportunity for a Business Development Manager in Texas. Check out its open positions at homebot.breezy.hr. Homebot is seeking experienced candidates in lending and real estate. Please share these opportunities with your networks and help us find the best candidates to bring on to their rock star team!

GO Mortgage, a DBA of GSF Mortgage Corporation, is pleased to announce Courtney Hill as its new Builder Relations Manager in the Construction Lending Division. Courtney will be working with our builder partners and manufactured dealers to ensure they experience an efficient and smooth loan process. Courtney will also be responsible for creating and distributing product information to partners and loan officers. She joins GO Mortgage with extensive onsite construction management and mortgage experience. The GO Mortgage Construction Lending Division continues to expand with eligible builders, correspondents and retail originators across the country by offering the Singe Close product. If you are an originator with construction experience, please contact our VP of Retail, Frank Papaleo for information on the opportunity.

Mountain America CU is looking for a Mortgage Loan Officer with 3 to 5 years’ experience working in a financial institution to join the Post Falls, ID team! If you have a deep focus on Member Service and a drive for finding solutions to help members get into their first, last, or dream home, you may be a great fit. Mountain America has extensive mortgage offerings from portfolio, conventional, government, jumbo, construction and reverse loans to fit member’s needs. We are an established business with over 2000 employees, competitive pay, benefits, and many other employee perks.

Mid America Mortgage, Inc. announced the promotion Michael Cooksey to Executive Managing Director of Production where he will be overseeing and ensuring the success of Mid America’s current network of retail branches nationwide, as well as recruiting and on-boarding new branches.