With the coronavirus driving worldwide markets and politics dominating the headlines, who doesn’t like “easy?” Easy: Krispy Kreme is launching donut delivery. Thank you to Ken S. who passed along this report, brought to us by our friends at the NAR (or is it just “NAR”?), on the easiest places to buy a house this year. Surprisingly, many of the “easy” places are along the coast, with the harder places inland. What isn’t easy is paying out a $3 billion fine, like Wells Fargo did last week for its fake account scandal, or shifting/closing/pausing an entire division like Quicken Loans did with its One Reverse Mortgage. Another thing that isn’t easy is keeping track of trends with 139 million housing units, and servicing the loans on many of them, in the U.S.: more below in the capital markets section. Proper loan servicing is certainly of interest to the CFPB.

Lender Events: Compliance and Servicing

ComplianceEase is excited to be bringing its annual Risk & Compliance Summit to Chicago this year. This year’s event will feature leading regulatory and technology experts from CSBS, HUD, MBA and more. Don’t miss this opportunity to learn from and network with regulatory and mortgage industry experts who will speak to compliance at both the strategic and tactical levels to prepare you for upcoming regulatory changes & enhance your day-to-day compliance operations. To register, click here. For more information, contact Blair Matuszak. 

According to STRATMOR Group data, six percent of loans in a given portfolio have errors on their billing statements, which causes the Net Promoter Score (NPS) to fall by 91 points. That’s 3,000 loans in a portfolio of 50,000. And, of all the problems borrowers identify on their billing statements, 70 percent of the problems are either an incorrect payment amount or incorrect escrow amount, resulting in -66 and -61 NPS, respectively. Understanding what your servicing customer is telling you about your operation is now more critical than ever. Join STRATMOR MortgageSAT Director Mike Seminari at the MBA's Servicing Solutions Conference as he moderates the panel discussion "Innovative Approaches to Borrower Satisfaction" at 2PM ET. today, February 24. Not at the conference? Contact Mike to talk with him about optimizing your servicing customer’s experience.

Capital Markets

The markets remained focused on the coronavirus over the last week and its potential impacts on the global economic outlook. It may still be a while before any effects show up in the data. In January, the Leading Economic Index for the US rose 0.8 percent as the stock market hit new highs and residential building permits surged. Housing starts dipped in January by 3.6 percent to a 1,567,000-unit annual rate following a strong December. Mortgage purchase applications declined for the third straight week last week and refis declined 8.0 percent following three weekly increases. Through mid-February the average rate for a 30-year fixed mortgage was 3.77 percent. Existing home sales increased 1.3 percent in January and supply was at 3.1 months' worth. On a yearly basis, existing home sales increased 9.6 percent and the average purchase price increased 6.8 percent, according to the National Association of Realtors. Finally, producer prices increased a more than expected 0.5 percent in January due to a strong increase in the final demand for services which was driven by a 10.3 percent gain in margins for apparel, jewelry, and footwear and accessories.

Housing starts may have fallen 3.6 percent in January, but the 1.57 million-unit pace easily beat consensus expectations and is the second strongest of this expansion. Homebuilding continues to gain momentum, as unseasonably mild weather helped keep things in high gear during January. If housing construction maintains its current pace, we will see some incredibly strong year-over-year numbers in 2020. However, warm weather means the data once again got an extra boost from seasonal adjustment, and that will likely hurt numbers this spring.

Single-family starts may have fallen after rising six of the past seven months, but single-family permits, which are less prone to weather distortions and are a more reliable barometer of activity, have risen for eight consecutive months. Low mortgage rates have improved buying conditions, and consumers increasingly report now is a good time to buy. That has been evidenced in the NAHB index, a measure of single-family homebuilder sentiment, which registered near a 20-year high in February. Multifamily starts posted their fourth straight gain, multifamily permits have risen three of the past four months, and apartment permits are running above starts on a six-month average basis, suggesting there are plenty of projects in the pipeline.

(It isn’t all peaches and cream. The housing industry is not immune to the coronavirus factory closures and supply chain disruptions, as many building materials are sourced from China. According to the NAHB, nearly one-third of imported residential construction to the U.S. originates from China, namely vinyl floor coverings, kitchen cabinets and wall lighting fixtures. The likely effect is some upward pressure on construction costs, which are already showing signs of picking up.)

The MBA’s Joel Kan’s, AVP of Economic and Industry Forecasting, weighed in on the January new residential construction report: “The housing market is still experiencing supply shortages in many areas, but January’s residential construction data show yet another step in the right direction. Similar to the findings in MBA’s January Builder Applications Survey released this week, homebuilders are continuing to ramp up production to meet the demand from potential buyers, and mild winter weather is helping some of the increased activity in the Midwest. The success of the spring buying season greatly depends on how much new and existing inventory is on the market.”

Looking at bonds, and thus rates, U.S. Treasuries rallied again to end last week due to continued coronavirus fears and contracting PMIs from around the globe, including here in the U.S. The rally pressured yields to fresh lows for the year, and the 10-year yield hit its lowest level since last September before closing Friday’s session -5 bps to 1.47 percent.

As mentioned above we learned that existing home sales fell 1.3 percent in January to a 5.46 million-unit pace, slightly above expectations. With mortgage rates falling and an unseasonably mild December and January weather-wise, it has some momentum. Closings typically take place 45 to 60 days after a contract is signed, which bodes well for sales in February and March.

Unfortunately, the lack of inventory is clearly limiting the sales upside and is evident in the January data, which show the number of homes available for sale falling by 10.7 over the past year. The 1.42 million units of inventory for sale is the lowest since 1999, means that homes are selling quickly and often above the asking price. Homes sold in January remained on the market for an average of 43 days, which is down from 49 days a year ago. Many homes are selling much more quickly than that, with the NAR reporting that 42 percent of homes sold in January were on the market for less than a month. The median price of a single-family home has risen 6.9 percent over the past year after bottoming at just under 4 percent in April 2019, underscoring the importance of mortgage rates staying low for affordability purposes.

Turning to this week, the month-end economic calendar is underway with the January Chicago Fed National Activity Index (-.25%; 49 out of 85 indicators down). Later today brings February Dallas Fed Texas manufacturing figures and remarks from Cleveland Fed President Mester. Tomorrow is a little busier, with the December S&P Case-Shiller Home Price Index, February FHFA Housing Price Index and February Consumer Confidence on the docket. Wednesday sees January New Home Sales and a GNII FedTrade operation before January Durable Orders, the Q4 GDP (second estimate), and January Pending Home Sales on Thursday. The week closes with a heavy calendar consisting of January Personal Income and Personal Spending, PCE Prices and Core PCE Prices, the January advance goods trade balance, January Advance Retail Inventories and Advance Wholesale Inventories, and the Final February University of Michigan Consumer Sentiment Survey. We begin today with Agency MBS prices better by .250 and the 10-year down to 1.40 percent on continued worries about the coronavirus hurting world economies.

Jobs and Transitions

“Strategic Growth Partners 360 is proud to announce the addition of Delaware based Phil Petruccelli to its team of expert recruiters. Phil is another multi decade mortgage professional recruiting nationally for SGP360 Clients. SGP360 has entered its 8th year of helping well established mortgage professionals move their entire team to platforms that dynamically impact their book of business, profitability and overall happiness! We successfully align multibranch Division, Region, Area or individual branches with our many top tier clients. Our clients have been vetted for their great leadership, capital, products, pricing, service levels, and most importantly, technology to ensure long term results. NDA’s are in place with all our clients; not only will we confidentially align your production team successfully; we will also become the “insulation” for transitioning your team. Representing both Bank and Independent platforms, offering both P&L and Corporate Retail models. Billions in production successfully transitioned since 2013!

A veteran TPO production team, both Sales and Ops support, is seeking a new opportunity with a national bank or nationwide mortgage banker. Well versed in all channels of TPO production, broker, correspondent (NDC, Delegated and Bulk), this small but effective team brings a history of managing billions of dollars of loan volume, leveraging technology, underwriting expertise, and excellent customer service.  Interested parties should reply to Chrisman LLC’s Anjelica Nixt for forwarding.

National MI is pleased to announce that Lauren McKinney Miller has been promoted to Account Manager for Tennessee. Lauren joined National MI in July of 2015. Since then, she has been heavily involved with the Knoxville MBA: Named Affiliate of the Year in 2018, graduated from the Future Leaders Program in 2019, and sat on the Board of Directors in 2019. She also currently sits on the TNMBA Board of Directors. Lauren graduated from East Tennessee State University in 2012 with a degree in Business Administration. She also recently got married and is currently expecting her first child! Please feel free to reach out to Suzette Jordan, Director, Sales Technology and Operations, or Lauren if you have any questions.

A well-branded and nationally recognized independent mortgage bank is searching for a Comptroller to join its growing team. With consistent, strong annualized YOY growth, the hiring company is looking for a strong leader to provide additional bandwidth for its future expansion plans into new markets and strategic partnerships. Critical thinking skills and the ability to work closely with teams are essential to the role. Extensive experience with AMB and Encompass are also preferred to hit the ground running from day one. The position would report to the CFO.  Interested candidates can reach out to Chrisman LLC’s Anjelica Nixt to submit a resume and begin the interview process.

“Castle and Cooke Mortgage is a branch-driven retail lender successfully built on high execution standards and no red tape. We are expanding an already robust footprint into many markets that offer high opportunity and no internal competition. We are seeking MLOs and branches to join us who are passionate about providing total consumer and partner satisfaction. We distinguish ourselves with a service-first mentality, sales-centric and accessible leadership, first-class marketing support, and a full menu of products to meet all borrower needs. After a record year in 2019, Castle and Cooke will cultivate methodical and strategic growth in 2020. Opportunities are available in Las Vegas, Phoenix, Chicago, Omaha, Florida, and Texas. Reach out to Christi Fullerton, National Recruiting Manager, if you would like to be a part of our exciting future.”

AmeriFirst Financial, Inc. has earned the number four spot on Mortgage Executive Magazines Best Mortgage Companies to Work For list. This serves as just one of many milestones the company reached in 2019 and early 2020, and the #4 ranking marks three consecutive years making the prestigious list, a true reflection of AmeriFirst’s “people first” philosophy. The nation-wide mortgage company also celebrated its 30th year in business and spent time with its people reflecting on the growth and the amazing culture created throughout those years. AmeriFirst attributes its success to its dedication to hiring premier talent and letting them shine, and cultivating a culture of excellence that inspires from the inside out. To continue to build on its legacy, AmeriFirst is looking to build teams and branches nationwide to offer more coverage to real estate partners and home buyers. Contact us to learn more.

A National Title Insurance Agency looking to start a relationship with a real estate attorney; Will explain in detail when we discuss. It’s a great opportunity for a real estate attorney to expand its business. Contact Anjelica Nixt to forward a note of interest.

The President intends to nominate Dana Wade as the Federal Housing Commissioner to lead the Federal Housing Administration (FHA) and oversee the agency’s $1.3 trillion portfolio. Previously she was Acting Federal Housing Commissioner and Assistant Secretary for Housing.

NewDay USA announced it named Michael “Mo” Oursler Chief Operating Officer. Mo’s been there eight years, and is moving over from being Chief Credit Officer where he built NewDay’s Accelerated Underwriting Program.