Is there a place for age or sex discrimination in mortgage banking? Of course not. So the court case earlier this month involving Sacramento’s Summit Funding and Rick Ruby (LOs know him from CORE) is being followed closely by the industry. At this point Summit and “profit participant” Rick Ruby lost a $1.6 million binding arbitration case. In other legal news, even as states and local governments are passing so-called “ban-the-box” laws, the Eighth Circuit has upheld a Wells Fargo employment policy that allowed the bank to fire employees, or not consider job applicants, based on criminal records. Erin Mulvaney reports that the court ruled against 10 African-American and Latinos who alleged discriminatory employment practices. And the courts are involved in the shut down of St. Louis’ American Equity Mortgage, trying to find new revenue streams to pay off creditors.

Lender Products, Services, and Events

Todd Duncan recently launched his FREE 1-Hour Broadcast, Disrupt or Die: How to Win With Value. The response was overwhelming and exceeded capacity effecting hundreds of Originators who wanted access to the content. Todd believes Originators need to adjust their business model and disrupt the industry through value. He will launch two rebroadcast options of this game changing event TODAY ONLY for those who missed out. If you want to stay a step ahead in these challenging times don’t miss out on this event! Click here to register here for Disrupt or Die.

BBM enterprise strategy specializes in NQM and Non-Agency Direct to Consumer Marketing.  With rates on the rise it is imperative that you transition your marketing to the new frontier of credit.  NQM production is projected to grow by 3x in 2019 and BBM is prepared to help you compete in this space. If your organization is looking to expand into targeted direct to consumer marketing or enterprise level marketing strategies aimed at the NQM and Non-Agency consumer, BBM has the right solution for your firm. For more information about BBM Marketing Services and about becoming an approved origination partner please contact Bill Senteno or visit www.bbm.company.

ARMCO launched its Fraud Case Manager™, a “customizable, secure platform that increases efficiency and analyzes fraud investigation data. ACES Risk Management (ARMCO), the leading provider of technology for loan quality and compliance testing, data validation and analytics, announced the launch of Fraud Case Manager, the industry’s first technology for managing and analyzing fraud investigations. Fraud Case Manager provides lenders with a secure, fully configurable web-based alternative where they can manage all fraud investigations in one central location, and address all major risks associated with traditional fraud case management methods. For example, users can track any detail of any case in seconds rather than searching through numerous spreadsheets and technologies. They can limit usage to authorized parties rather than using open access documents like spreadsheets. Fraud Case Manager allows users to analyze data and create comprehensive reports that provides valuable insights for strategies going forward, rather than remaining unaware of trends and reacting to repeated issues as they arise.”

On Saturday, October 20 more than 1,500 independent mortgage brokers, loan originators and processors will come together at the AIME Fuse 2018 National Conference to learn from industry experts about how they can access the best technology, originate more loans each month and become a marketing expert for their own business. AIME Fuse will unite the nation’s most passionate mortgage professionals around a singular focus: to celebrate and enhance the value of independent mortgage brokers. This is the inaugural national event for the Association of Independent Mortgage Experts (AIME) and will be held at Bellagio Las Vegas. Use code FUSEEARLY18 to register for only $75 ($125 value) until August 31st. Register for AIME Fuse 2018 here.

Lenders One CEO Michael Kuentz will be hosting a CEO Symposium in Fort Worth, TX, September 26-27 for prospective members to share his vision for the future of the Lenders One mortgage cooperative. “We’ve heard from our members that the current market is one of the toughest they’ve ever faced. With so many disruptive players around us, it’s never been more important for mortgage bankers to embrace new ideas to compete in these dynamic times,” said Kuentz. Lenders One recently rolled out several new solutions at its Summer Conference in Salt Lake City including a total eClose solution with DocMagic; an MSR optimization engine with Incenter; an M&A connector; and a talent acquisition and retention offering with Hoops HR. If you are interested in joining Michael in Fort Worth, reach out to Michael Kuentz by September 5.

Congratulations to Susie Garza, PrimeLending EVP, Director of Joint Venture Strategy and Licensing for being named one of HW’s 2018 Women of Influence! Under her guidance and brilliant leadership, the PrimeLending Ventures line of business has grown exponentially. Through the Joint Venture platform, PrimeLending has partnered with some of the nation’s most prestigious home builders, providing them with the tools, resources and support to quickly and confidently develop a business that offers financing solutions to their customers. As a result, joint venture partners can create an additional and predictable revenue stream, grow their company’s brand image and maximize their customers’ lifetime value. If you’re a home builder who is interested in learning more about generating incremental revenue and strengthening your brand, contact Mike Matthews at (972) 852-8238.

Capital Markets

Optimal Blue announced the completion of integration with Freddie Mac’s Loan Selling AdvisorSM application programming interface. “By connecting the two platforms in real-time, Optimal Blue has enabled significant workflow efficiencies for its clients by fully automating the process of pricing Freddie Mac loans and securing Freddie Mac commitments…with the initial goal of bringing additional operational improvements to Freddie Mac sellers and servicers that utilize Optimal Blue’s innovative whole loan trading platform, Resitrader. Available immediately to all Resitrader clients without the burden of time-consuming system upgrades, this integration enables users to seamlessly acquire Freddie Mac pricing data and facilitates comparisons against alternative executions such as bulk bids. Additionally, this advanced integration enables the automated commitment of Freddie Mac loans by returning trade confirmations directly back to the Resitrader user, thus eliminating the need to utilize multiple systems to conduct a single transaction.”

Compass Analytics has integrated its product, pricing and eligibility engine, CompassPPE™ with Essent Guaranty's mortgage insurance platform to enable mutual clients to obtain immediate and accurate real-time rate quotes on loans exceeding 80% loan-to-value. As soon as a loan officer runs a search for loan options through CompassPPE™, the pricing engine interacts directly with Essent Guaranty’s platform to provide MI pricing with multiple options for lender-paid coverage, borrower-paid single premium, and borrower-paid monthly premium coverage.

Freddie Mac and Tradeweb announced an agreement under which approved institutions will be allowed to exchange directly with FHLMC (or via dealers using Freddie Mac Dealer Direct) legacy FHLMC MBS via Tradeweb into new UMBS (55-day delay like FNMA) as part of the Single Security initiative with the exchange offer expected to commence in May 2019. On Tradeweb, it is expected that investors will need to identify eligible FHLMC MBS to go with carry depending on settlement date.

Most of the economic indicators released over the last week continued to show moderate growth in the US economy, however housing data for July underperformed.  Overall, the labor market remains strong and household balances sheets show increased savings and manageable debt loads. New home sales declined 1.7 percent in July and the supply of new homes increased to 5.9 months’ worth; more or less the same supply as one year ago. Existing home sales waned for the fourth consecutive month, down 0.7 percent in July, as a steady increase in home prices has begun the reduce demand. However, inventory is still at a tight 4.3 months’ worth. The median home price for all housing types, which has now increased for 77 consecutive months on an annual bases, was $269,000 in July.

At the Fed’s recent central banking conference in Jackson Hole, Fed Chairman Jerome Powell reiterated intentions to continue to gradually increase the Fed funds target despite criticism that the Fed is both increasing rates too quickly and too slowly. As such the markets are pricing in a 96 percent probability of another 25-basis point increase at upcoming September FOMC meeting.

The labor market continues to tighten with job openings elevated across industries and there is now less than one unemployed person per job opening. The adjusted job opening rates for low-skill and high-skill industries are at all-time highs. However, the labor market for lower-skill jobs looks to be tightest. While the adjusted opening rate for high-skill jobs has fluctuated around its current level for most of the past two years, the low-skill opening rate has continuously trended upward. The highest industry-specific job opening rates are clustered in lower skill industries, namely the transportation, warehousing & utilities industry. The rate for this industry has more than doubled since early 2018, while openings in the retail sector are also elevated.

Higher-skill jobs are not immune from worker shortages, however. The information industry has an elevated adjusted job opening rate compared to historic norms. Irregular hours and low wages may be discouraging workers from pursuing careers in fields with some of the highest opening rates. As more workers pursue higher education and look to enter office jobs, fewer are training for low-skill jobs, contributing to a reduced pool of workers applying or qualified for jobs in fields such as manufacturing or transportation. In addition, lower workforce participation rates for workers with less education may be exacerbating labor shortages in low-skill industries. Facing difficulty finding qualified workers, employers are likely to continue to ease job requirements and provide more training. The labor scarcity may force wage and benefits growth to pick up.

Yesterday was another snoozer although the long bond showed relative strength and the yield curve flattened further. (That doesn’t directly impact 30-year mortgage pricing, however, given early payoffs – which is why we watch the 10-year.) The 5-yr yield, 10-yr yield, and 30-yr yield spent the second consecutive session near their respective 50-day moving averages. The second estimate for Q2 GDP (4.2%) included a downward revision to personal spending growth (from 4.0% to 3.8%) that was offset by a higher estimate for nonresidential investment growth, government spending, and a downward revision to imports, which are a subtraction in the calculation of GDP.

This morning we’ve had July personal income and spending/consumption (+.3%, +.4%), weekly jobless claims (+3k to 213k), and PCE Prices (). After this initial volley we find rates little changed from Wednesday’s close: the 10-year is chopping around 2.87% and agency MBS prices are up or down slightly depending on coupon and maturity.

Employment and Promotions

“We at City National Bank believe that cultivating complex financial relationships will always require genuine high-touch service, producing results that exceed our discerning clients’ expectations. Financial expertise, trust and authenticity are the basic qualities we hold in the highest regard and consistently apply to the client experience. If your approach and qualifications line up with the City National brand of mortgage banking, we look forward to hearing from you. As we continue to grow, despite a contracting mortgage market, our Residential Lending Division is searching for Private Mortgage Bankers, Private Mortgage Banker Leads and Residential Lending Consultants in Orange County/San Diego, the Bay Area and the greater Los Angeles area. The roles call for entrepreneurial mortgage bankers who specialize in sourcing and cultivating banking relationships with high-net-worth clients, while providing City National’s extraordinary client service.” To learn more, visit CNBCareers or contact Bridget Purviance, Talent Acquisition (213-673-9155).

It's time for standalone/self-generating MLOs to face reality. The ability to thrive and grow in this career has never been so uncertain. Realtor referral business is threatened by existential changes in real estate, major mortgage players are aggressively buying market share, and consumer behaviors are changing fast. Many MLOs are contemplating an array of career options that offer little promise of the financial freedom and independence this industry has traditionally offered. Lionsgate Real Estate Group (a division of American Capital Corp) is taking the lead to offer professional MLO's a better option - the position of "Hybrid Agent." As the Home of the Hybrid Agent, our platform allows MLO's to compliantly practice loans and real estate in CA and TX. Create more value for consumers, increase your ROI, become your own best referral partner, and decrease your misery index by exponents. Contact Brett Bonecutter, Executive Director, to learn more. More states are coming soon - feel free to inquire.

HomeStreet Bank, one of the largest community banks in the West, announced that Mark DeWitt (NMLS ID# 633221) has taken on a new role as VP Area Manager based in the Del Mar Home Loan Center in San Diego. Mark is a 15-year industry veteran, previously serving as an outstanding HomeStreet Bank branch manager and holding several roles as a home loan officer. Congrats!