To listen to the audio version of today’s commentary with an interview with STRATMOR Group’s resident recovering accountant Jim Cameron on handy metrics for MLOs to be aware of, please click here. Income and revenue are certainly metrics whence people make decisions. Is the profit on a locked, but not funded, loan something a lender should count on their balance sheet? And if so, if the loan falls out, is it a real loss? If you’re interested in accounting nuances, ask your CFO about Interest Rate Lock Commitments (IRLCs), an acronym for a lender’s locked pipeline. Some institutions, like Wells Fargo, recognize gain on sale (GOS) income at the time of a loan’s closing, other companies recognize GOS income at the time of lock. (For example, check out the 98 times IRLCs are mentioned in Rocket’s S-1.) If income is booked on a locked loan, and it falls out, then what? Of course some lenders want IRLC assets on their books due to net worth minimums. Do all lenders, public or private, big or small, account for gains in a locked pipeline the same way? Perhaps not. (And you wonder what accountants talk about!)
Lender and Broker Services and Products
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While the Golden Globes were rife with gaffes and technical glitches (“Can you hear me now?”), SimpleNexus’ inaugural Nexus Awards went off without a hitch. For those of you not in the know, SimpleNexus rolled out the red carpet during its virtual SNUG event last week to honor customers and partners whose engagement with the platform is transforming the homeownership journey. CMG Financial took home the Referral Award for driving large amounts of business with 42,000 app shares in 2020. Residential Mortgage Services nabbed the Capstone Award for leveraging SimpleNexus’ reporting API, which aided in driving a 70% increase in business. Highlands Mortgage received the Trailblazer Award for performing hundreds of hybrid eClosings in its first month going live with SimpleNexus. And finally, Progressive Insurance was honored with the Partner Award for its SimpleNexus integration that folds homeowners insurance selection into the lending process. Congrats to these innovative organizations!
Yesterday was Dr. Seuss’ birthday, and while we most commonly associate him with characters like the Grinch and the Cat in the Hat, a lesser-known fact about Dr. Seuss is that he created the word ‘nerd.’ Its first documented use was in his book, “If I Ran the Zoo.” The borrower retention nerds over at Sales Boomerang have developed technology that turns your customer data into actual volume by identifying when someone in your database is ready for a loan. Lenders using Sales Boomerang see an average 20-40% lift to loan volume and 65% borrower retention rate for around $299 per acquired loan, a 20x ROI. One lead, two leads, red lead, blue lead, use Sales Boomerang to turn your old leads into new leads.
Stearns Wholesale is excited to announce two new product features and improvements for March 2021. First, the Accelerator program, aimed at closing on the borrowers’ home with fewer conditions, has reduced the minimum credit score from 700 to 620 on all Accelerator transactions up to 90% LTV. The second newest additional feature included to their Accelerator program are brand new price improvements, which went live this week! These improvements are aimed at awareness, retention, and excitement for the program overall. These new changes for Stearns and their lenders allow Stearns to build a sustainable process in homebuying that accelerates the users experience. If you want to learn more about this exciting new update or partner with Stearns, click here to be contacted.
1003/URLA Headlines
Wells Fargo Funding has updated its site to accept the new Uniform Loan Application Dataset (ULAD) to Register Best Effort Loans. Sellers submitting Loans using the new URLA are not required to include taxpayer consent documentation in the Closed Loan Package. The redesigned URLA includes language that meets Wells Fargo Funding’s taxpayer consent requirement. The March 1, 2021, mandate also applies to Non-Conforming Loans.
Sun West will require all the submissions with application date on or after March 01, 2021 to use the redesigned URLA on all its loan programs. For the loan applications prior to March 01, 2021, Sun West will accept applications with the current 1003 versions only and must be processed through DU using the old format 1003 (even if DU is run on or after March 01, 2021).
Sun West will require the borrower and lender pages on all loans. Where applicable, the additional borrower’s sheet, unmarried addendum, and continuation sheet will be required.
loanDepot Wholesale’s mello® is taking the new URLA 3.4 data files. View its URLA Guide with links to Agency Resources, a new URLA Components & Sections overview,
Effective March 1 PRMG's TPO Portal began supporting the MISMO file format 3.4 version to accommodate the newly designed URLA and updated AUS systems. PRMG will continue to allow 3.2 files to also be used but will require additional data to be completed prior to submission.
On February 16, 2021, Wells Fargo Funding will begin net funding through the intraday funding process. Balance due amounts will be net funded from the intraday funded wire amounts. View invoices and purchase advices on wellsfargofunding.com, company purchase advices and invoices are accessible anytime the website.
PennyMac Correspondent Group issued announcement 21-07: Updates to Best Efforts Rate Sheet.
First American Docutech posted an in-depth regulatory compliance article discussing finance charges with special emphasis on seller-paid costs.
The IRS extended its mandate requiring Form 4506-C to May 1, 2021. Wells Fargo Funding will accept Loans with either IRS Form 4506-T or IRS Form 4506-C through April 30, 2021.
Flagstar Bank’s 2020 Tax Year Filing requirements can be viewed in Memo 21028.
Best Efforts Commitments that have expired due to reaching the maximum cumulative extension term must be relocked subject to AmeriHome's Relock Policy. In the event of a subsequent Relock, the Extension count will be reset.
The Consumer Financial Protection Bureau (CFPB) provision allowing for a points and fees cure under the Ability-to-Repay/Qualified Mortgage Rule (ATR/QM Rule) expired on January 10, 2021. The new qualified mortgage rules issued by the CFPB in December 2020, did not extend or replace the cure provision. Loans Closed on and after January 11, 2021, with this provision are ineligible for purchase by Wells Fargo Funding.
Seller will be required to provide the newest version of the Authorization for the Social Security Administration (SSA) to Release SSN Verification, Form SSA-89 (12-2020), for Loans delivered on and after August 2, 2021 to Wells Fargo Funding. The newest version may be used prior to the required date as well.
Capital Markets
Last week’s volatility has not only quieted, but rates, as one would expect, have bounced back down from the big move on Thursday. Fed Chair Jerome Powell testified in front of the Senate Banking Committee last week and despite his assessment that the economy is a “long way from our employment and inflation goals” interest rates continued to climb throughout the week. With more fiscal stimulus on the way, the financial markets are bracing for significant increases in consumer spending that would lead to a spike in inflation. While consumer inflation has remained below the Fed’s 2 percent goal for some time, housing prices heated up measurably. The S&P CoreLogic National Home Price Index showed a 10.4 percent annual increase for December; the quickest appreciation since 2014. Manufacturing data continues to point to strength as durable goods orders increased 3.4 percent in January. Jobless claims, which come out again tomorrow, fell to 730,000 for the week ending February 20 although it remains to be seen whether the severe weather over the prior week had an effect on the data. Initial claims remain well above the height of the 2008-2009 recession underscoring just how far the economy is from a full recovery.
Looking at actual price activity, the bond market enjoyed a little breather yesterday after its recent volatility. Treasuries stabilized after the recent spike in yields, while the UMBS30 basis, which determines borrower rates, extended its recent tightening move in what was otherwise a relatively uneventful day. Fed Governor Brainard said that there are some signs of stretched asset valuations, but they are not broad-based and that conditions for tapering bond purchases will not be met for "some time."
Today’s economic calendar is already underway, with mortgage applications from the MBA increasing 0.5 percent from one week earlier, for the week ending February 26. Much of that was a rebound given the storm-impact in Texas in the prior week, because rates were certainly on the rise during the reporting period. (Over that time, the Bankrate and Mortgage New Daily 30-year rates rose 21 bps and 25 bps respectively to 3.25 percent and 3.29 percent.) We’ve also had ADP employment (117k, weak versus the 205k forecast). Later this morning brings final February Markit Services PMI, ISM non-manufacturing PMI for February, and four Fed presidents, Philadelphia’s Harker, Atlanta’s Bostic, Chicago’s Evans, and Dallas’ Kaplan before the latest Beige Book is released in the afternoon ahead of the March 16/17 FOMC meeting. We begin the day with Agency MBS prices worse/down .5 and the 10-year yielding 1.46 after closing yesterday at 1.42 percent as the chatter continues to revolve around the effectiveness of the vaccine and an economic recovery.
Employment
Did your production totals more than double in 2020? Nearly three dozen Loan Officers at Supreme Lending increased their volume totals by 50% or more from 2019 to 2020, with six Loan Officers more than doubling, tripling, or quadrupling their 2019 stats for total volume or total number of loans closed. As a company, Supreme broke all of its records with an extraordinary 107% increase in production from 2019, ending last year with $15.96 billion in volume and 59,675 families served. The Supreme Team grew in 2020 to keep up with the company’s growth, and the Dallas-based independent lender now has more than 350 branches and 2,500 team members across all 50 states. If you’re interested in taking your production or your branch’s production totals to personal-best heights in 2021, contact Ryan Baxter, Director of Recruiting, to learn more about joining Supreme. Equal opportunity employer.
At Commerce Wholesale our “Community” program was designed to fill the void and address the issues limiting prime credit borrowers’ access to lending through common sense underwriting. This exclusive mortgage product is unique in the marketplace and is a great solution for the large number of borrowers left stranded by traditional documentation guidelines and the CFPB’s Ability to Repay (ATR) rules. Commerce is also looking for seasoned Wholesale and Correspondent AE’s across the US. Contact SVP of Wholesale Lending James Hooper to learn more or visit us at www.commercemtg.com.
Today’s the day! Join Evergreen Home Loans™ for the next Evergreen Leadership Advantage webinar. They’re live at 8:30 a.m. (PST) with Dave Savage, Founder of Mortgage Coach, and Todd Bookspan, Executive Coach and Win by Noon Creator, to discuss How to Become a Modern Mortgage Originator. Learn how to deliver more value to clients; develop a personal brand that generates leads and referrals; and evolve to meet the demands of today’s consumers. Register here before 8:30 a.m. (PST) to watch the webinar on Zoom. Or catch the livestream on the Evergreen Home Loans Facebook or YouTube pages. Can’t make it? Follow Evergreen on LinkedIn or YouTube for information on accessing the recording. However you watch, you don’t want to miss this one!
“We’re so thrilled to announce that PrimeLending has once again been recognized by MortgageSAT® as a Best in Class Lender for 2020 in the categories of Best Online Tools and Best Application Process. These prestigious awards are only given to lenders who consistently received the highest ratings from borrowers they served in 2020… In other words, they come from our customers! Winning in these key categories comes as no surprise to us. Our acclaimed digital mortgage, Loanplicity®, offers a streamlined online process that seamlessly combines personal service with digital speed, security, and innovative convenience. Our goal is simple: To provide the ultimate mortgage experience to customers and business partners alike. If your borrowers aren’t enjoying an award-winning digital process, it’s time to explore your options with a company who is invested in the customer experience from application through closing. Contact Nic Hartke to discover more about our digital tools or to learn about what opportunities are available with PrimeLending.
Prosperity Bank Warehouse Lending is pleased to announce that 30-year vet Joel Dulmage is a new Sr. Warehouse Lender. The addition of Joel further strengthens Prosperity’s division for growth and expansion throughout the US. Joel can be reached via email or at 708-305-9220.
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