Does anyone out there care that credit-card debt rose to a record $930 billion in Q4 2019? (Total mortgage debt hit $9.56 trillion.) How about that the origination cost of over $8,000 per loan hits low balance loan borrowers more than high balance borrowers? Do you break out your “tech spend” per loan? Has it gone from hundreds to thousands of dollars? Residential lending is truly a numbers game. According to Informa Financial Intelligence January 2020 Mortgage Originations Data, rate-lock volume has increased 71% YoY and 42% MoM across all channels, while funded volume has increased 70% YoY and fallen 10% MoM. In the Retail channel, lock volume has increased 78% YoY and 48% MoM, while funded volume has increased 94% YoY and fallen 17% MoM. Average 30-year Conforming FRM funded loan note rates have fallen 101bps from January 2018, with refinance rates lower by 116bps and purchase rates lower by 97bps. Informa sources a statistically significant data set directly from lenders to produce these benchmark figures.

Lender Products and Services

As the top lender for 203(k) sponsored originations, AFR is proud to participate in the expanded program specifications of the FHA Limited 203(k) Rehabilitation Mortgage: total renovation and repair costs can go up to $50K for properties located in Qualified Opportunity Zones (QOZs). The expansion of this program provides eligible borrowers with additional financing options in these Zones (the $35K limit still applies for properties outside a QOZ). Intended for smaller scale projects not structural in nature, the FHA Limited 203(k) Rehabilitation Loan can help a buyer or homeowner remodel a kitchen, change the flooring, or install an outdoor deck, adding to their own enjoyment of the home and adding to its value at the same time. AFR also continues to offer the FHA Standard 203(k), with a minimum renovation cost of $5K. Visit afrwholesale.com for complete guidelines. For more information on becoming an AFR partner, email sales@afrwholesale.com (800-375-6071).

Altisource®, your one source for real estate and mortgage solutions, has released its 2020 The State of the Default Servicing Industry report. The report reveals exclusive survey results and feedback from 200 mortgage default servicing professionals. One of the key findings is that 80% of those surveyed expect FHA loan volume to increase in the next one to two years. Almost half of those servicers anticipate a volume increase of more than 50%. While that surge means greater opportunities, it also means more challenges. This report gives you a look into those and other challenges facing servicers today and reveals input on valuable services and features critical to managing the default lifecycle in order to mitigate loss and streamline efficiency.

Sourcepoint, a leading provider of products and services to the US mortgage industry, recently announced the launch of its Servicing Solutions suite, designed to deliver servicers tangible results including reduced operating expense, enhanced borrower experience and retention rates and the ability to drive digital transformation across the servicing lifecycle. Equipped with the most comprehensive set of servicing and collection licenses in the mortgage BPM industry and backed by a 3,500+ global workforce, Sourcepoint’s solution suite encompasses Loan Boarding and Administration through Lien Release and Omnichannel Contact Centers for customer service support. Schedule time to meet with Sourcepoint at the MBA Servicing Solutions Conference. Not attending the conference? Contact them directly.

Conventional Conforming Moves

Have you heard about the FHFA's proposed changes to pooling practices? Do you know how they could affect pricing and liquidity in the secondary market?  After responding to the FHFA’s Request For Input (RFI) in January, MCT’s Bill Berliner has prepared a handy overview of the proposed changes, including their objectives and implications. Read the whitepaper and stay informed about regulatory developments that may impact your business.   

Freddie Mac recently extended the effective date for the variable income updates announced in Bulletin 2019-20. As a result of the extension, PennyMac is extending the required implementation date to loans delivered on or after May 15, 2020 to align with Freddie Mac’s update.

Fannie Mae’s Lender Letter LL-2020-01 provides details on updated ARM instruments, retirement of LIBOR ARMs, SOFR ARMs, and the future retirement of CMT ARMs.

Fannie Mae’s Announcement SEL 2020-01 revises policies on liabilities related to rental housing payment and calculating monthly qualifying rental income; delays a previously announced policy change related to calculating monthly real estate tax payments; streamlines the section on Contractual Representations and Warranties; and clarifies use of income limits for loans with resale restrictions.

Fannie Mae’s improved Single-Family website has launched. Enhancements include a new search functionality, a redesigned technology hub and Learning Center, access to Ask Poli® from every page, and optimization for use on all devices.

Plaza issued a reminder, all conforming loans with applications dated March 1 and later requiring Mortgage Insurance must be submitted using one of the new approved forms per agency requirements. Loans delivered without the use of the updated forms will not be eligible. for purchase.

Regarding Fannie Mae’s Appraiser Independence Requirements (“AIR”), is it compliant for a mortgage lender to permit a mortgage broker to select the appraisal management company (“AMC”) from which to order an appraisal if the lender provides the broker with a list of authorized AMCs? No. This process provides the broker with an element of responsibility for selecting and/or retaining the appraiser, and is, therefore, not compliant with the Appraiser Independence Requirements (“AIR”). Fannie Mae has cited Seller/Servicers in relation to this issue. It does not matter if the lender is responsible for the relationship with the AMC, including compensation. Notably, a lender may direct a mortgage broker to one specifically authorized AMC if the lender has previously arranged for its appraisal process to be managed by that particular AMC. This process is compliant with AIR because the lender, and not the mortgage broker, is responsible for selecting and/or retaining the appraiser.

Asurity Technologies successfully integrated of FFIEC Census 2019 and National Snapshot 2018 Peer HMDA files into RiskExec, its comprehensive web-based compliance reporting and analysis platform that automates HMDA, CRA, redlining, and fair lending processes. The 2019 Census file release includes 1,308 updates, approximately 1,200 of which are Census Tract Low- and Moderate- Income (LMI) changes, that affect HMDA and CRA analysis. The HMDA Peer data also includes a new derived field that indicates whether a loan is considered Conforming."

Capital Markets

Loan officers should know that a Treasury yield-curve inversion that is developing appears to indicate headwinds for the global economy, rather than the US economy. Federal Reserve Vice Chairman Richard Clarida says the inversion is "really driven not so much by an outlook for the US economy, but globally." Job openings in the US fell by 364,000 in December to 6.4 million, the smallest total in two years, according to the Labor Department. The figures suggest a recent surge in job growth might not be sustained.

Let’s face it, rates haven’t been doing much over the last few days, so I won’t waste your time. There are the usual news items: the spread of the coronavirus, corporate earnings, Huawei sanctions, the U.S. proposed federal budget, etc., but all in all the bond market, and therefore mortgage rates, haven’t been doing much.

In the MBS world, the NY Fed announced yesterday it plans to buy a maximum of $2 billion in agency MBS, as expected, over the February 14 through March 13 period, based on January paydowns (that exceeded $20 billion). They also released a new FedTrade schedule covering the February 14 to 28 period targeting up to $1.1 billion MBS over three operations with the first next Wednesday purchasing up to $89 billion UMBS15 2.5 percent.

Ahead of Monday’s bond market holiday today’s economic calendar is already underway with January Retail Sales (+.3%, as expected) and January Import Prices ex-oil (flat). We do have one Fed speaker today, Cleveland Fed President Mester. Later this morning brings January Industrial Production and Capacity Utilization, December Business Inventories, and the Preliminary February Michigan Consumer Sentiment Survey. We begin today with Agency MBS prices better nearly .125 and the 10-year yielding 1.59 percent after closing yesterday at 1.62.

Jobs and Transitions

“National MI is excited to share a few new members to our winning sales team. Kyle Sachs, joined us as a new Account Representative covering northern NJ and Westchester/Rockland counties in NY.  Kyle earned his bachelor’s degree in Marketing and has 3 years previous experience in the Title Insurance industry. He has already made such a positive impact and we are so happy to have him as an integral part of the team!! Jen Gibson, Account Representative joins Tony Scoma (Regional Team Lead) to round out this combo team in the Northern California and the Reno, Nevada markets. Jen has spent most of her career in the Mortgage Industry. Julie Waldron is the new Wisconsin Account Representative in the North Region and will be working alongside Jan Brezina. Julie has over 25 years of mortgage industry experience, much of it as an accomplished loan originator.”

NewRez, a rapidly growing nationwide lender, is expanding its already robust Correspondent Division, and is looking for experienced Non-Delegated Account Executives in several markets across the country. At NewRez, it is our mission to exceed the expectations of our lender partners through superior service, simple processes, and effective communication. Matched with a robust line of industry-leading Non-QM, Jumbo and Agency products, the future is bright with NewRez! Interested parties should contact the SVP National Sales, John Davis.

Assurance Financial, a nearly 20-year-old profitable full-service mortgage banker licensed in 45 states is pleased to announce that Paul Peters, CMB has returned to his role with the company as National Business Development manager.  Peters has over 30 years of mortgage banking experience and during his tenure with Assurance Financial, has been instrumental in expanding the company’s production office footprint across the United States.  Peters said, “I am very pleased to return to this business development role where I can help the company achieve our aggressive growth initiatives. We have a total commitment to branch origination success, going all-out to support higher levels of branch and MLO production.  Our technology stack is second to none and as always, we expect our loans to close on time, every time, regardless of volume levels.” Producing Branch Managers and top MLO’s looking to join a proven team should visit www.assurancemortgagelo.com or email myfinalmove@assurancemortgage.com. 

Recently named among Top 5 Best Mortgage Companies to work for by National Mortgage News, Geneva Financial, Home Loans Powered By Humans®, is filling 500 Branch Manager and Loan officer positions in 43 states. Geneva strives to humanize every aspect of their business from the inside-out. With a culture-forward mindset, they focus on loan originators and support staff to ensure an unbeatable experience for their customers. Their Geneva Gives, BE A GOOD HUMAN and Hero of The Year initiatives deemed them a recipient of this year’s AZ Business Magazine’s Excellence in Banking Award for Community Impact. In 2019 Geneva was ranked a nationally fastest growing company in the financial sector, mortgage industry and all industries categories. They consistently hit record-breaking months, doubling volume in most. Geneva Financial is excited for another historic year, with no plans on slowing down. Explore Branch and Originator opportunities here.

“Mortgage Unlimited, The Home of Sustainable Lending, has been named as one of the 2020 Best Mortgage Companies to Work for by the National Mortgage News for the second year in a row! This annual survey and awards program is designed to identify, recognize, and honor the best employers in the U.S. mortgage industry. ‘It is a distinct honor to be selected number 17 on this special list of Mortgage companies,’ said Justin Tagliareni, CEO of Mortgage Unlimited. ‘It really shows our unique culture that our employees are empowered by.’ Mortgage Unlimited, L.L.C. is a family owned mortgage lender in existence for over 30 years and headquartered out of Garfield, NJ. Our company proudly recognizes our moral and ethical responsibility to protect the financial well-being of the families and communities we serve. To find out more about our culture email Justin or visit our website.”

In the private MI world, Radian added two new Directors, Lisa Mumford and Brad Conner, and the announced the retirement from the Board of David Carney.