Welcome to the only day where the date is a command. Owners of shopping malls wish they could command everyone to go shopping in one. When was the last time you went into a shopping mall? I don’t remember either, and I’m starting to miss those rock-solid pretzels and henna tattoo & ear-piercing booths. Turn them into housing, affordable or otherwise? Why not?! The aggregate value of reappraised American malls fell an average of 60 percent in 2020, with 118 retail properties seeing $4 billion in value wiped out over the course of their reappraisals. Of the 1,100 indoor malls in the United States, analysts say only about half have a reasonable chance of survival. Certainly, the hundreds of thousands of loan officers hope their jobs do more than survive in 2021, and to listen to the audio version of today’s commentary with an interview with Bay Equity’s CEO Brett McGovern discussing the current state of the loan officer, please click here.

Lender and Broker Services and Products

Whether you process 10 loans per week or 10,000, finding the right tool for VOE + VOI is a must. Stop chasing employers down over the phone- Truework is a one-stop shop for income and employment verifications. Its employee network is massive with over 35 million instantly verifiable employees. March is here and we know mortgage activity is going to be insane this year- Truework will help you close more loans with fast and accurate verifications. Get started on Truework today. And for a limited time, Rob Chrisman readers get 6 free Verifications ($240 value) . Let us do the heavy lifting so you can focus on what matters. Set up time with Zackary Green now for questions and to claim this offer.

SCRIPT-a-PALOOZA 2021 is next week! On Tuesday 3/9 at 9AM Pacific, watch the best scripts from the best in the mortgage industry. This event will feature 13 top producing loan officers who closed over $4.5 billion last year and will include scripts like, “What do you say to get a meeting with a Realtor,” and, “What do you say when asked “What’s your rate?”.  This free event is sponsored by Mortgage Coach and Win By Noon. CLICK to sign up today.

NAN (Nationwide Appraisal Network) continues to experience unprecedented growth, with the nation’s top lenders drawn to their unique concierge appraisal experience. NAN is modernizing the way appraisal management companies provide valuation services through innovation, transparency, accountability, and world class service. With a surging demand for appraisals across the country, the need for efficiency from the AMC is greater than ever. By leveraging technology, data, and predictive analytics, NAN has built a reputation for providing extraordinary service for the thousands of industry professionals who trust them to deliver appraisals with speed and precision. To further simplify the process, NAN is now offering two new features on its website at www.nan-amc.com: (1) Instant access to local turn times for every county in the United States; and (2) a free quote service to provide detailed fee and turn time quotes. Looks like NAN is making appraisals easier, and the industry is taking notice!

Operational efficiency remains the #1 key 2021. Not surprisingly 2020’s highest producing teams were the ones who worked together the most efficiently­–whether together or working remotely. Why? Tracking milestones in CRM+POS+LOS systems worked in 2018, but effectively managing today’s higher loan volumes requires smarter, more detail-oriented systems to proactively track every doc, deadline and datapoint for the entire loan pipeline. And if potential issues arise, escalate those before they turn into costly mistakes. Origination and operations teams need smarter, more proactive, assistive systems to provide self-service visibility into detailed loan status, prioritized next actionable tasks and escalated issues. When loan teams and automated processes work together, loans move forward and close faster, error free. This case study from a division of American Pacific Mortgage proves the point. The team quadruped efficiency and produced 280% more revenue using simple, smart, automated task-based workflows and operational dashboards powered by TeamworkIQ.

Spring EQ Wholesale, the wholesale industry’s leading home equity lender, has expanded its CLTV’s to 97.5% and lowered FICO scores to 680 on the fixed rate product, and made this product available for purchase and refinance piggybacks as well as stand-alone 2nd liens. In addition, 25- and 30-year terms are now available. In many buckets, the fixed rates are lower than those being offered on an adjustable rate HELOC. “Break-up” your purchase & refinance business to avoid Jumbo and High balance pricing. Cash-out to 97.5% to avoid MI and LLPA’s. Spring EQ also offers adjustable HELOC piggybacks and stand-alone 2nds, e-sign technology, and loan officer compensation up to 2% of the loan amount. It is clear that Spring EQ is the industry’s “one-stop home equity shop.” We are currently adding new partners. For more information, please contact your AE or visit Spring EQ Wholesale here.

Jumbo, Non-QM, and Non-Agency News

Where will you be around Halloween of next year? The Consumer Finance Protection Bureau has proposed to extend the mandatory compliance date of the General QM Final Rule to October 1, 2022. (Yes, 2022.) As a reminder, the General QM final rule is part of the CFPB’s work to protect homeowners from debt traps and unaffordable, irresponsible mortgage loans. “Under the statute, QM loans are presumed to be made based on the lender’s reasonable determination of the homeowner’s ability to repay the loan. Extending the mandatory compliance date of the General QM final rule would allow lenders more time to offer QM loans based on the homeowners’ debt-to-income (DTI) ratio, and not solely based on a pricing cut-off.

As folks in our biz know, extending the compliance date of the General QM final rule would also give lenders more time to use the GSE Patch, which provides QM status to loans that are eligible for sale to Fannie or Freddie. If it goes through, the old, DTI-based General QM definition, the new, price-based General QM definition, and the GSE Patch (unless the GSEs exit conservatorship prior to October 1, 2022) would all remain available as long as the lender received the consumer’s application prior to October 1, 2022.

Verus Mortgage Capital (VMC), a full-service correspondent investor offering residential non-QM and investor rental programs, announced that in 2020 it financed nearly $2.6 billion of loans across six-rated and one unrated securitization transactions. “As the nation’s largest issuer of securitizations backed by Non-QM loans each of the three last years, Verus’ 2020-2 issuance was the first post-COVID securitization with ratings to include both Standard & Poor’s and Fitch Ratings. The company completed five rated securitizations post-COVID, totaling more than $1.65 billion in collateral. Verus also issued its first unrated securitization backed primarily by non-performing loans in 2020, which included traditional mortgage loans as well as Residential Transitional Loans.”

MAXEX launched two new lending programs to support the growth of green energy home improvements in collaboration with J.P. Morgan. MAXEX’s ESG programs for green energy home improvements are available for loan amounts ranging from $400,000 to $3,000,000. MAXEX Sustainable: Includes preferred pricing on fully amortized 30-year mortgage loans, which can be passed on to borrowers in the form of discounted interest rates. Residential solar panels and geothermal units can be amortized in the loan either at purchase or refinance.

MAXEX Sustainable Express: Includes the same benefits as MAXEX Sustainable, along with the ability to reduce manual underwriting by leveraging certain results from Fannie Mae’s Du and LP.

Acra Lending offers a complete suite of programs designed specifically for Self-Employed, Investor, and Foreign National borrowers. There’s a 12-Month Bank Statement program (borrowers qualify with 100% on personal account deposits and 50% on 12 consecutive months of business deposits) and a 3-Month Bank Statement program where borrowers qualify with most recent personal or business account’s bank statements.

CalHFA and Home in Five Programs are now accepting DACA Status Applicants, spelled out in Mountain West Financial Wholesale’s Bulletin 21W-016.

Mega Capital Funding Inc. has returned to Non-QM Lending with its line of Mega Elite Non-QM & DSCR Products. The new product line up is a balance of Alternative income documentation products including three (3) and twelve (12) month bank statement products, CPA and borrower prepared P&L, asset utilization and for investment properties Debt Service Coverage Ratio (DSCR) with 1:1 and no ratio options. “With our initial proprietary product offering we’ve set out to focus on a specific segment of Non-QM, that will allow our brokers to provide enhanced solutions and our capital partners to achieve their yield goals”, said Brian Na, CEO.

Jumbo (nonconforming) loans are thought to represent 10-15 percent of 2020’s overall production, and the servicing is shifting. A group of 30 servicers tracked by the publication handled $1.16 trillion of jumbos as of Dec. 31, down 5.9% from the end of 2019 per Inside Mortgage Finance. “The three largest servicers in the group boasted receivables of more than $100 billion each, all posting portfolio declines in the fourth quarter and for the full year. Wells Fargo was the top jumbo servicer, with $268.73 billion of product at yearend, down 14.2% from the end of 2019.”

loanDepot’s proprietary program, Jumbo Advantage, does not require any second signatures or investor approvals. Loan amounts start at $1 above Conforming loan limits. View its product matrix here.

LoanStream Wholesale posted new guideline enhancements. Improvements to its Non-QM Programs include FICOs starting at 600, LTVs up to 95%, increased loan amounts into $3.5 Million and a New 40 year I/O option. DSCR & No Ratio changes include FICOs starting at 680, 620 (No Ratio), ITIN Allowed (No Ratio), 1x30x12 Allowed (0x30x12 No Ratio), Cash-out Max 70% Property Value.

AD Mortgage offers loans above the Conventional Conforming Loan Limits. Max Cash in hand $500,000, 80% LTV, FICO 700, Cash-out allowed up to 80 % LTV. Learn more about its Prime Jumbo program.

Plaza Home Mortgage addressed how to talk about reverse mortgages by providing new guidance from the Academy for Home Equity in Financial Planning for brokers and investment advisory firms to use to help govern planners’ interactions with reverse mortgage products.

And Plaza reintroduced its Jumbo 1 program featuring LTVs to 85% and can be used for primary, second and investment properties, 1-4 units, condos, PUDs and Co-ops. Self-employed borrowers allowed on purchase and rate/term. FICOs as low as 680.

The latest guideline updates from Angel Oak Mortgage Solutions include reduced rates on Bank Statement, Investor Cash Flow, and Platinum Jumbo. Credit score to 640 on Bank Statement and Investor Cash Flow, and increased loan limits to $1.5 million on its Investor Cash Flow product.

Capital Markets

Looking back a bit, economic data over the last week was generally upbeat as the last round of fiscal stimulus has circulated though the economy. A 52 percent increase in government transfer payments led to a 10 percent jump in nominal personal income in January while wages and salaries were up 0.7 percent for the month. As a result, consumer spending increased in January, although many households chose to save as the personal savings rate climbed to 20.5 percent in January! The Conference Board’s U.S. Consumer Confidence Index increased in January but remains below levels seen last fall. Meanwhile new home sales were at a 923,000-annual rate in January, an increase of 4.3 percent from December as inventories were at a tight 4.0 months’ worth. Prices for new homes increased 5.3 percent nationwide over the last year to an average of $346,400. With mortgage rates increasing, applications for home purchases fell for the week of February 19 according to the Mortgage Bankers Association.

Good news is good news, right? Well, not necessarily if it ends up leading to higher mortgage rates. MBS and U.S. Treasury prices sank again yesterday (pushing rates higher) as inflation expectations hit the highest level since 2008. Traders and investors are pricing in a quicker and quicker economic rebound. There was also a growing sense that Fed Chairman Powell will hint at another operation twist when he speaks today. The policy tool involves selling shorter-term debt and buying longer term notes and bonds with the proceeds, and was last utilized in 2012. Chicago Fed President Evans said he does not see a need to respond to the recent rise in yields, but he acknowledged that the average maturity of bond purchases could be extended. Aiding the positive sentiment on the day was President Biden saying vaccine shots will be available for all adults by the end of May, two months earlier than planned.

In terms of economic releases, the Fed's Beige Book for February noted that economic activity in most districts expanded at a modest pace during the first six weeks of 2021. Leisure and hospitality remained weak while manufacturing activity improved. Commercial real estate worsened while home prices continued climbing in most districts. Employment levels rose at a slow pace while demand for labor varied significantly by industry.

Speaking of employment, the ADP Employment report showed that 117k jobs were added in February, below estimates of 140k for Friday's jobs report as the labor market continues its sluggish recovery across the board. The ISM Non-Manufacturing Index fell to its lowest level since May of last year, but remained in expansionary territory for the ninth straight month. Prices continue to rise, which supports the narrative of inflation. The MBS basis closed the day tighter again.

Today’s OPEC+ meeting is likely to dominate global investor sentiment, though we do receive those remarks from Fed Chair Powell on the economic outlook before a Wall Street Journal Jobs Summit. Ahead of the Fed chair, there is a busy economic calendar, which began with February layoffs from Challenger (about 35k). We’ve also had weekly jobless claims (+9k to 745k, as expected) and final Q4 productivity and unit labor costs (-4.2 percent, down to +6.0 percent). Later this morning brings January factory orders and the Freddie Mac Primary Mortgage Market Survey for the week ending March 4. Last week, the 30-year rate leapt up 16 bps from the prior week to 2.97 percent. Today’s MBS purchase schedule sees the Desk conducting three operations, one in each class, for up to $6.4 billion. We begin the day with both Agency MBS prices and the 10-year (yielding 1.47), both pretty much unchanged from Wednesday night.

Jobs and a Promotion

“Wholesale Account Executives, the housing market is still surging, so it’s more important than ever to align yourself with a lender that is solid enough to let you reach your full potential! For over 25 years, Franklin American Mortgage, a division of Citizens Bank NA, has built our success on our commitment to delivering unparalleled customer service to our valued industry partners. These values have helped us become the top bank-owned wholesale lender in the country! Now, we're looking for Account Executives in CA, CO, IL, NV, MD, MN, OR, and WA to join our winning team. With a forward-thinking leadership team and an innovative company culture, we have all the tools you need for success… Just check out our latest Earnings Report at Citizensbank.com to see our undeniable results! If you have what it takes to join our winning team, apply online at jobs.citizensbank.com today!”

“Women’s History Month is a time to reflect on the accomplishments of the women at Caliber Home Loans and beyond. Women have been trailblazers in the mortgage industry contributing to our success here at Caliber and around the country. At Caliber, women serve in the highest ranks of the company like Chief Information Officer, Chief Risk Officer, and Head of Servicing and Operations. One of our proudest accomplishments is employing a diverse mix of women to mirror the communities we serve. We’ve also established the DREAM employee resource group. This helps our women team members network and help further their professional development. We’ll continue to lead by example by supporting women-led foundations. Most importantly, we’ll remain committed to fostering the careers of the dynamic women who work at our company. Join a company that empowers women at every level. To be immediately considered for Operations or Sales positions, email Jonathan Stanley or Brian Miller respectively.”

PennyMac Mortgage Investment Trust (NYSE: PMT) appointed Doug Jones as President and Chief Mortgage Banking Officer. Congratulations!