Nearly every residential lender is selectively scaling back, or rumored to be scaling back, for a multitude of reasons. Suddenly a company cutting a LO who is barely doing one loan a month, or shuttering a continuously unprofitable branch, is turned by the rumor mill into an entire region being closed, or a company shutting down. Interesting times. Remember the source of news!

Upcoming Events

Is it true that the best dinner party in the world is the one that’s cancelled? Nah, not always. Let’s check on some upcoming events with more substance than a dinner event.

This week is a webinar titled, “Mortgage Sales & Marketing Boot Camp: 6 Secrets to Sales Management” on Friday, May 11, from 10-10:45AM PT. Register here. “If you’re a sales manager looking for ways to improve your leadership impact and overall team performance, this boot camp session is for you! Join this webinar with industry experts, Dale Vermillion (Mortgage Champions) and Josh Friend (Insellerate), as they go over 6 powerful secrets that will change the way you motivate your team to exceed their quotas. Learn what actionable KPIs to measure, coaching best practices, and how to prioritize for your LOs.

Join Plaza’s webinar on May 8th to learn about its 203(k) Standard and Limited products including how Plaza’s tools and resources can help simplify the renovation loan process.

The Greater Sacramento CAMP Chapter is pleased to bring back our annual Lender Fair and Trade Show tomorrow, Tuesday May 8th 4pm-8:00pm. The event will be held at Sacramento Association of Realtors 2003 Howe Ave, Sacramento. Registration to this event includes food, a hosted bar, and the popular Taco Bar. This an opportunity to mix and mingle with other professionals, meet many of the vendors who support us in this industry, and walk away with a new 55" flat screen TV! This event is FREE for CAMP members who pre-register above, $20 for future CAMP members, and $40 at the door. Reach out to one of our sponsors for free tickets to this event!! Thank you to sponsors: Sierra Pacific Mortgage, Evergreen Home Loans, Envoy Mortgage, Radian, and Essent. Please reach out to Leo Whitton.

Join MBA St. Louis for lunch, Thursday, May 10th from 11:30-1:30 at Orlando's, 2050 Dorsett Village Plaza, Maryland Heights. This is a great opportunity to hear an insightful discussion on the mortgage and real estate fraud issues with Special Agent Wade Beach of the F. B.I. The cost is $35 Members in Advance and $45 Members Walk-in Registration at the Door.

National MI has posted upcoming May MI University classes. Topics include: advanced self-employed borrower on May 10th, Freddie Mac’s Loan Product Advisor on May 16th, and marketing techniques for reaching Asian homebuyers on May 17th.

Register for the CMLA’s “Denver Women in Lending Seminar” on May 24th. Speaker Emily Bennett, Business Operations and Strategy Lead, will discuss how women can elevate each other in the workplace as well as within their careers.

Ginger Bell is partnering with wholesalers, vendors and AIME (Association of Independent Mortgage Experts) to host a webinar series on how to set up your own brokerage. Find dates here.

Capital Markets

Yes, the trend in short and long-term rates is higher, although there will be moves down – nothing moves in a straight line. And oil is over $70 per barrel. It is difficult, despite interest rates increasing, to find measures of the economy that aren’t doing well. The National Federation of Independent Business's Small Business Optimism Index pulled back a little in March but is at similar levels from 2004-2005. Remember that unemployment claims continue to generally drop, and declined by 9,000 to 233,000 and continuing claims were at 1.87 million. The four-week moving average for continuing claims fell to its lowest level since January 1974. In another sign of a healthy job market, remember we learned that the job openings rate was 3.9 percent in February with 6.1 million job openings.

Recently we saw the release of the producer price index, the consumer price index, and the import price index; three closely monitored inflation metrics. First out of the gate was the producer price index which increased 0.3 percent compared to expectations for a 0.1 percent gain. The sub-categories saw price increases, and this is now the third month in a row in which PPI for services increased. The consumer price index showed a 0.1 percent decline in the headline figure, however much of the decline could be attributed to a 2.8 percent drop in the gasoline index. At the core level, prices advanced 0.2 percent in March and 2.1 percent over the prior twelve months and trending higher over the last three months. The final metric, import prices, was flat for the month.

Positive US economic data continued through the end of the first quarter of 2018 and the first data of the second quarter looks good as well. The Conference Board’s Leading Economic Index increased by 0.3 in March, a signal of modest growth in the coming months. Thanks in part to a surge in auto sales, nominal retail sales beat expectations with a 0.6 percent increase in March. Excluding auto sales, retail sales increased 0.2 percent. Industrial production increased by 0.5 percent and manufacturing activity increased by 0.1 percent in March.  Nominal inventories were up 0.6 percent in February after a similar gain in January. Housing starts, which have been challenged by the weather this spring, increased to a 1,319,000 unit annual rate as multifamily construction increased 14.4 percent to a 452,000-annual rate. Currently, the odds of a short-term rate hike at the June FOMC meeting stand at greater than 95 percent.

The rates storyline of the year thus far has been one of higher yields as the yield benchmark 10-year US Treasury Note is up roughly 60bps this year and the yield on the Freddie Mac PMMS 30-year fixed is up 48bps. While economic growth expectations began to rise in earnest last fall with the anticipation for tax cuts, current growth expectations have stagnated slightly as forecasts for Q1 growth fallen from 2.9 percent in January to 1.3 percent. While expectations for first quarter growth may have declined, however, expectations remain strong for the remainder of the year. Inflation has risen above the Fed’s 2 percent target and core inflation, measured by the PCE deflator, is also approaching their target. Additionally, a tightening labor market and rising costs for raw materials are increasing input costs and adding pressure on firms to pass those increases to the market. Market expectations are currently pricing in 2-3 more Fed rate hikes this year, however should GDP growth accelerate in the coming quarters and core inflation reach 2 percent, expectations for a third would increase.

As an update, the Fed NY is now posting the Secured Overnight Financing Rate (SOFR), which will probably eventually replace LIBOR. SOFR is a “broad measure of the general cost of financing Treasury securities overnight." SOFR is currently an overnight rate, but it will not be long before a 3-month rate can be calculated and that will set the stage to replace LIBOR. Finally, the first derivatives based on SOFR are expected to launch next month on May 7. SOFR is the preferred replacement for LIBOR. Recall that the UK’s Financial Conduct Authority announced some time ago that it would no longer exercise authority over LIBOR after 2021. LIBOR is the primary reference rate for trillions of dollars of derivatives, loans and other financial instruments worldwide.

Treasuries yields flattened out, though U.S. stocks logged their biggest advance in almost four weeks after the country’s jobless rate hit an 18-year low. Markets were left to digest the impact of America’s inconclusive trade talks with China. U.S. hiring rebounded less than anticipated in April, but the unemployment rate dropped below 4 percent for the first time since 2000. Wage gains unexpectedly cooled, suggesting the job market still has slack to absorb. The drop in the participation rate drove the drop in the unemployment rate. The report’s implications for monetary policy will be eyed after the Federal Reserve kept rates on hold this week, saying inflation is near its target without suggesting any need to accelerate its hiking path. Many are saying the Fed is apt to stay on course for at least two more rate hikes this year.

Turning to this week, besides a pickup in Fed speakers including Chair Powell tomorrow afternoon, this week sees central bank decisions from the BoE and RBNZ on Thursday with U.S. economic releases including PPI and CPI, inventories, the budget statement, import prices as well as the first look at May Michigan sentiment.

Economic releases today start with the Employment Trends Index for April at 10:00am (previously 107.7). Treasury will announce the 1-month T-bill auction size at 11:00am (estimated: $45 billion, unchanged) followed by the $48 billion 3- and $42 billion 6-month bill auctions at 11:30am. March consumer credit will be released this afternoon. Monday starts with rates, including agency MBS prices, little changed versus Friday night and the 10-year yielding 2.95%.

Lender and Vendor Employment

Impac Mortgage Corp. is expanding its successful TPO channel with a focus on NQM & Govt. business and there are Management level and Account Exec opportunities available.Managers will inherit producers. Account Exec’s will be called on to expand territories. Seattle, Portland, Denver, D.C., Northern California and Arizona based professionals are needed. Inside AEs are needed in Orange County, CA. Must have a strong commitment to succeed, a desire to compete and exceptional consultative selling skills. Click on or paste the following link in your browser to apply: Impac Careers.

“Indecomm is growing again and looking for a compliance hero! Indecomm, a leading provider of outsourcing, SaaS technology, and learning solutions for the mortgage industry, is seeking a mortgage compliance manager. The key responsibility for this position is oversight and management of mortgage compliance for all federal and state laws, regulations, agency guidelines, and client requirements. This is a full-time, remote position just right for the person with strategic vision coupled with a tactical approach to mortgage compliance.” Interested? Click here to read the position details and send your resume to VP of Sales Linda Bomar.”

92% of customers surveyed say Evergreen Home Loans closed on time or earlier than promised. “Closing On Time and As Promised® is how we honor our commitments to our customers, so they can have peace of mind,” said Don Burton, president, Evergreen Home Loans. This pledge has been a mission for Evergreen for over 30 years and now the stats back up their claim (based on an independent third-party survey of Evergreen closed loan customers between July 1, 2017 and February 28, 2018). Evergreen is aggressively hiring loan officers seeking a great culture and place to work. Candidates can find a testament to the Evergreen culture on their awards and recognition page and the latest job openings on the Evergreen Home Loans Careers page.

XINNIX, the mortgage industry’s premier provider of sales and leadership performance programs, is expanding its team and looking for four National Sales Executives regionally located in California, the Midwest, New England, and Texas. Each National Sales Executive is responsible for having a strategic plan for each client, implementing that strategy and managing the client relationship. Want to join a dynamic team with award-winning culture and a passion for transforming the industry? Send your resume to Kevin Knaus, VP of National Sales.