Plenty of people are clamoring to be released from captivity, and changes in staying sequestered or opening up has become political. The lending climate certainly continues to change. Reverse mortgage origination has plummeted, for example. “You never want a serious crisis to go to waste,” said Rahm Emanuel after 2008, and officials aren’t. It was known that Freddie and Fannie weren’t wild about buying certain loan types, and look what happened to cash out refi pricing. Don’t forget that in January the FHFA, under Director Calabria, suggested minimum net worth requirements for servicers. Would anyone be surprised if increased capital standards came out of this? Fortunately heading into this health crisis, we had the lowest delinquency rates in years; now some expect us to head to the highest. But older issues are still unresolved. The CFPB is expected to make public its proposal for QM vs. non-QM this month. And LO comp is still simmering. From Colorado Bill Kidwell, President of  IMMAAG, sent over a letter sent this week to the CFPB regarding loan officer compensation. (The CFPB did release SAFE Act information.) And this virus has done what no woman had been able to do: cancel all sports, shut down all bars, and keep men at home!

Lender Services and Products

In Celebration of Cinco De Mayo week, I’ll have whatever they’re having! How is it that digital mortgage innovators like ARMCO, FormFree, IDS, LBA Ware, NotaryCam, ReverseVision, SimpleNexus, and Top of Mind succeed so often in elevating their expertise, achievements, and vision to our industry? How are they translating their customers’ delight across multi-media platforms to grow their business and strengthen their reputation? If you’d like to find out, drop a line to Anjelica Nixt and she’ll get you to the right person.

Last month, Dux Advisory, LLC announced it has developed a new methodology, working with a world class IT firm, to digitalize workflow processes. This methodology leverages the power of RPA and AI/ML to drastically reduce the manual interventions involved by automating the loan onboarding and/or validation processes in order to achieve significant efficiencies. For more information, please contact Richard Barrent.

In anticipation of Mother’s Day, AFR Wholesale would like to honor, and give our appreciation to, all the Moms. Whether it’s balancing work-from-home responsibilities with spending time with your children, caring for sick family members, or making sure schoolwork is done and everyone is fed, AFR recognizes how hard you work every day to keep your loved ones safe and connected during this time. From our AFR family to you and yours, we celebrate you! For more information about becoming an AFR Wholesale partner, go to afrwholesale.com, email us, or call 1-800-375-6071.

Blend President Tim Mayopoulos will be joined by Tom Parrish of BMO Harris Bank, Sonya Barcomb of CrossCountry Mortgage, and Randy Hopper of Navy Federal Credit Union for a topical customer panel on May 19. They will be discussing how they’ve applied Blend’s latest tools to thrive in uncertainty. Sign up for the digital summit.

Have you seen the new ECOA automation plug-in for Ellie Mae’s Encompass Digital Lending Platform? Connector by Velma is a next-generation Encompass plug-in enabled by the new APIs. Automating NOIA letters, including eFolder integration, means the old process of pipeline reports, manual information requests, and NOIA letter distribution is a thing of the past. Compliance teams love the certainty of accurate NOIA letter delivery, loan officers appreciate the streamlined process, and consumers feel more engaged. Get a demo of Connector’s ECOA automation today.

When the going gets tough, UNIFY CRM gets you going. UNIFY CRM is here to support top producing loan officers aiming to increase production and drive revenue. Having trouble keeping up, prioritizing tasks, touching all of your past and current clients? Adapting to the constantly changing lending landscape during the pandemic can be challenging, to put it gently! UNIFY CRM is your partner! Our Live Training gives you a guided training of our robust feature set. Recorded Training Modules let you learn at your own pace and Best Practices videos give you a short video refresher on everyday activities to reach more people and make your work more efficient. The Next Level training series puts you live with two UNIFY CRM experts to address different ways you can leverage the power of your database right now to expand business and strengthen referral relationships. We built UNIFY CRM for the challenges of this business.  Work Smart. Manage Smarter. Sell better. Schedule a demonstration.

Disaster Updates

The pandemic isn’t the only thing going on out there. On 5/2/2020, with DR-4542, FEMA declared federal disaster aid with individual assistance has been made available to 7 South Carolina counties affected by severe storms, tornadoes, and straight-line winds during 4/12/2020 – 4/13/2020.

Sun West Mortgage informed clients about the Designated Disaster Areas: Aiken, Colleton, Hampton, Marlboro, Oconee, Orangeburg, Pickens. (To view FEMA's recent update, click here: FEMA.)

The following counties in Mississippi have been added to the disaster list due to high winds, severe storms, flooding, and tornadoes. First Community Mortgage Wholesale will require a post disaster inspection prior to funding for the following counties: Covington, Jefferson Davis, and Jones. The disaster start date and end date is April 12, 2020.

On 4/24/2020, with DR-4541, FEMA declared federal disaster aid with individual assistance has been made available to 2 Tennessee counties; Bradley and Hamilton, affected by severe storms, flooding, straight-line winds, and tornadoes during 4/12/2020 – 4/13/2020. AmeriHome clients are reminded to review its inspection requirements.

Mortgage Solutions Financial posted an announcement regarding the Mississippi Flooding.

U.S. Bank’s SEL-2020-007 includes information on the following topics: Portfolio cash out requirements, anti-flipping policy on Government loans, escrow reminder, special flood hazard area zone beginning in A or V, Government ARM change dates and Correspondent overlay matrix updates.

The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Tennessee Department of Financial Institutions, collectively the agencies, recognize the serious impact of tornadoes in Tennessee on the customers and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision. The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities. A complete list of the affected disaster areas can be found at www.fema.gov.

COVID Changes

Out of San Jose, brokers found out that Symmetry Lending, “remains committed to your purchase business, up to 89.99% CLTV, with the same industry-leading Service, Speed, and Simplicity that you've come to rely on. To uphold this commitment, we have chosen to focus exclusively on our Piggyback Purchase submissions, and to temporarily suspend all refinance submissions, effective immediately.”

In preparation for the transition away from the LIBOR index, Mountain West Financial, Inc. retired all Fannie Mae and Freddie Mac Conforming and High Balance/Super Conforming ARM products as of May 1.

AmeriHome has aligned with Freddie Mac changes listed in Bulletin 2020-13 with the exception of the upcoming Freddie Mac SOFR Indexed ARM products. AmeriHome Credit Administration is currently reviewing. Updates will be provided as they become available.

FCM Wholesale issued Announcement 2020-20 which outlines the suspension of Conventional Cash-Out Refinances for all Second Homes and Investment properties.

loanDepot Wholesale is now accepting Remote Online Notarization (RON) allowing Borrowers to close loans with an online Notary using a webcam, rather than in person.

If you are looking for a lender who offers cash-out products without additional hits, forward locks, and no lender fee; Parkside Lending could be your answer. Contact Dirk Nelson.

loanDepot has issued lock policy improvements now available in the mello Broker Portal. Refinances can now be locked at "Initial UW Approval" AND Appraisal Received (or Appraisal Waiver). There are no changes to the current CD request process. Purchase transactions continue to be eligible to lock prior to loan submission. Refer to loanDepot Wholesale's Rate Lock Policy for details. NOTE: These improvements are only available in the mello Broker Portal.

And toward the end of April loanDepot Wholesale/Correspondent Newsletter covers the following topics: Unemployment Income specific to Furloughed Employees, VA IRRRL Program Restrictions, VA Broker Approval Requirements, Equity Access Program and Borrower's Declaration Form.

Effective with new locks on Monday, April 27th, Franklin American Mortgage Company implemented an additional 0.500 price adjustment for all cash-out refinance transactions.

Capital Markets

Today we had another terrible Initial Jobless Claims number, but economic data released over the last week shows the economy falling into a recession during the first quarter. The advance estimate of real GDP for the first quarter showed economic activity declined at a 4.8 percent annual rate despite most of the economic slowdown beginning in mid-March. Many are forecasting a record shattering decline for the second quarter. While the Atlanta Fed’s GDPNow model is estimating a 16.6 percent decline as of May 1st, others forecasting upwards of a 30 percent decline in the second quarter. The largest previous quarterly decline was 10 percent during the 1958 recession. The ISM Manufacturing Index fell to 41.5 in April as all ten sub-indexes showed manufacturing to be in contraction. The only 2 industries reporting growth were paper products and food. Mortgage applications increased 11.6 percent for the week ending April 24 despite a 7.3 percent decline in refinance apps. The FOMC meeting produced no changes and reiterated their commitment to keep rates low until the economy is on pace to achieve maximum employment and price stability.

Yesterday St. Louis Fed chief James Bullard recommended a gradual re-opening of the U.S. economy in the second half of the year. "You risk getting into a financial crisis or even a depression scenario" with a prolonged shutdown, he said. He expects a relatively rapid rebound in the fourth quarter after a transition period, while predicting the April jobs report will be one of the worst on record. About that jobs data: U.S. companies cut a record 20.2 million jobs in April, according to ADP. Worryingly, many layoffs that were labeled “temporary” a month ago are now tagged “indefinite” or “permanent.”

Some U.S. businesses have ample cash reserves while others have failed already due to insufficient liquidity. The lending programs that have been put in place for small- and medium-sized enterprises by the Small Business Administration and the Federal Reserve buy more time for many of these businesses, and many large enterprises have been able to lock in lower borrowing costs via record issuance recently in corporate bond markets. But this flow of credit to the non-financial business sector will eventually need to be repaid. Furthermore, the employees that have been displaced from businesses that have failed already or are soon to do so may remain unemployed for some time.

These lending measures should help to keep many otherwise healthy businesses viable, but they do not ensure that the economy returns to its pre-pandemic state in a quick fashion. 52 percent of small businesses expect to be shuttered within six months, according to a survey from the Society for Human Resource Management. The sudden drop/stop in economic activity means that many businesses will need to rely on their cash reserves to survive the next few months. For businesses looking to survive, the key may be in forgoing profits temporarily and/or refraining from purchasing most inputs.

Much of yesterday’s market action was in response to the latest quarterly refunding statement from the Treasury, which outlined the Treasury's borrowing plans for the quarter. The market was aware of the amount to be borrowed, but did not expect as much issuance through longer tenors. The Treasury will boost long-term refunding debt sales next week to a record $96 billion to provide government funding. It also announced the first issuance of 20-year bonds since the mid-1980s. The initial 20-year bond auction ($20 billion) will take place on May 20, followed by reopenings in June and July. Traders reacted by pushing up yields on longer-dated Treasuries, and stocks fell for the first time in three days as investors also digested mixed earnings and worsening economic data. The 10-year yield closed the day +5 bps to 0.71 percent.

Before today’s open, the Bank of England and Norges Bank were out with their latest monetary policy decisions. Domestically, there are a lot of economic releases today. First up was jobs cuts for April from Challenger, Gray & Christmas (671k), weekly Initial Claims for the week ending May 2 (3.169 million, hitting over 30 million in the last several weeks), Q1 Preliminary Productivity (-2.5 percent), and Q1 Preliminary Unit Labor Costs (+4.8 percent). Four Fed presidents are scheduled to appear virtually: Atlanta’s Bostic, Minneapolis’ Kashkari, Richmond’s Barkin, and Philadelphia’s Harker. The NY Fed will conduct two FedTrade purchase operations totaling up to $5.76 billion. We begin the day with Agency MBS prices better/up a few ticks and the 10-year yielding .70 percent.

Employment

Freedom to Succeed! Freedom Mortgage is growing and looking for talented and experienced Wholesale operational professionals to help us serve the needs of borrowers, brokers, and wholesale correspondents across the nation. Work from home opportunities for Loan Processors, Closers and Underwriters are available throughout the continental U.S. Prior to the COVID-19 pandemic, the vast majority of our teams already worked from home, so you will be ready to seamlessly and efficiently contribute to our goals on day 1! If you are fueled by your entrepreneurial spirit and are looking for a great work culture, please visit bit.ly/FMRecruiting.

GO Mortgage would like to congratulate its Loan Officers and Branch Managers for a record month. GO mortgage appreciates all the hard work and dedication the teams have put forth during this trying time, and looks forward to continued momentum and providing the best rates, products, and service to its customers. As we work through this crisis, it’s also important to recognize the frontline nurses and healthcare employees working to keep everyone safe and healthy. Thank you for your commitment and care you continue to provide during the pandemic.

There has been a lot of noise about extended aggregator turn times and increased risk lately, leading many originators to sell direct and retain the servicing. As some larger institutions have backed away from the correspondent space, AmeriHome remains strong, stable, and committed to its clients. AmeriHome Correspondent continues to deliver the client experience that it is known for: In March AmeriHome’s loan purchase turn time was 5.8 days (file receipt to approved for purchase); in April they grew slightly (to 8.2 days) due to vendor work from home orders. AmeriHome is built on a foundation of Relationships, Reliability and Results and knows that those commitments are more important than ever in uncertain times. With its increased hiring and a disciplined approach to capacity management, turn times are quickly returning to AmeriHome's historic best in class levels. For those companies uncomfortable retaining servicing, there are options available! Email CLsales@amerihome.com for more information. 

“On Q Financial’s mission is to simplify the mortgage process to make the dream of home ownership a reality for everyone. During this time of social distancing amidst the COVID-19 pandemic, On Q Financial is still open and is now working remotely and are still ready to help borrowers achieve the dream of homeownership. At On Q, all of our teams are working diligently to provide great service for clients purchasing or refinancing a home. With our Simplicity Mobile App and Mortgages Simplified automated processing, it’s never been easier to remotely begin and complete the closing process on a new home or refinance. Borrowers can contact On Q Financial if they’re looking to purchase or refinance. Should you want to take a closer look at potentially joining our company, please contact us to arrange a quick 15 minute demo. On Q Financial, Inc. is an Equal Housing Lender. NMLS 5645. AZ-BK-0906866.