Face facts: There are many differences between men and women. One of which is that when returning home from the grocery store, women typically are more level-headed and carry normal bag loads, whereas men typically carry as many bags as possible to save trips, sometimes with unfortunate consequences. I bring this up because the same bag of groceries seems to cost more as time passes, but (here’s your Tuesday Trivia) more shipping containers have been lost, off of ships at sea, in the first two months of this year than normally are lost during an entire year! Economists love talking about how raising the minimum wage impacts the labor force, and inflation, and Bank of America’s announcement yesterday that it is raising its minimum wage to $25/hour by 2025 (catchy) turned a lot of heads. (More inflation news below in the capital markets section.) Today’s audio version of the commentary is available here; this week’s is sponsored by loanDepot Wholesale, providing a fast, integrated, and seamless technology-based lending experience for business partners and their customers.

Products and Services

Optimal Blue and Compass Analytics, now together under the Black Knight umbrella, are leading the way in assisting the growing number of lenders shifting to the securitization delivery model. When it comes to pool formation and best execution, it’s critical to incorporate the right technology stack in daily processes. Black Knight is unmatched in its investments in technology to support securitization; the organization’s pipeline hedging technology is used by over half of the top 100 IMBs nationwide, and was leveraged to close more than $1 trillion of loans in 2020 alone. Join us today for the third and final webinar in our securitization series, which will discuss best practices in pool formation, aggregated optimization, and strategies to increase overall profitability. We will share lessons learned from over 10 years of enhancing CompassPoint’s Pool Optimizer, the industry’s gold standard for securitization delivery. Don’t miss this detailed discussion, register now!

The Oakland A’s analytics-based, sabermetric approach to assembling their baseball team, now widely known as Moneyball, resulted in trips to the playoffs in ‘02 and ‘03 despite Oakland’s small budget. Lenders would do well to approach their pipelines with a similar “do more with less” mindset as we enter a year of compressed margins (i.e., smaller budgets). Join Alex Kutsishin, CEO, Sales Boomerang; Joe Puther, President, Mortgage Coach; and Karissa Stiglic, Head of Marketing, Finance of America TOMORROW at 2 pm ET as they reveal how to build the winning strategy for higher volume, increased conversions, lightning-fast speed to lead, lower cost of funding loans and higher borrower retention. Get your seat now.

Are appraisals holding up your loans? It’s no surprise that many lenders are experiencing frustrating delays getting completed appraisal reports, partly due to the high volume of loan activity and partly due to the added complexity of getting things done during the pandemic. If you’re looking for a solution that will automate your appraisal management process (relieving your Appraisal Desk from a lot of manual work) and provides almost instantaneous turnaround times, look no further. Connexions is an industry-leading valuation software company that is customizable to reflect your appraisal management workflows and includes several Automated Valuation Model (AVM) and insured AVM appraisal products that deliver almost instantaneous appraisal reports. Learn how to add efficiency and automation to your appraisal process by scheduling a demo today!

“Silvergate Warehouse Lending is as innovative as the entrepreneurs we serve.  We offer line sizes from $20M - $200M that can accommodate unique and niche markets. Specialty products include Jumbo/Non-Agency/Non-QM, Bond Loans, and Aggregation Facilities. We build strong relationships through a high level of personal service and the ease and flexibility that comes with timely, in-house lending decisions. For more information, contact Elaine Batlis.”

Lakeview continues to grow in the HFA space, most recently announcing that it is now the proud servicer of the Louisiana Housing Corporation (LHC) Premier Program. This HFA partnership, the fourth of its kind for Lakeview in 2021, will promote LHC’s commitment to granting Louisiana residents safe, affordable, and energy-efficient housing. The program offers both first-time and move-up borrowers forgivable down payment and closing cost assistance up to 5%. Visit LHC to become an approved participating lender today.

Many banks do their own subservicing. So when you hear about a bank that makes the switch to someone from the outside to handle their subservicing, it really says something great about the subservicer. Such is the case with Plains Commerce Bank. When Plains’ management went looking for a trusted partner, one who was first-rate in terms of compliance and regulation, and delivered exceptional customer service, they looked no further than TMS Subservicing.

Using data algorithms and conversion copywriters, Monster Lead Group helped produce over $16 billion in loans last year. Its direct mail technology can target just the jumbo refis, low loan govies, or anything in between. Plus, Monster manages the mail stream and handles the creative. That's why Manny Fajardo of Premier Lending Corp. said, "We've basically stopped doing all other marketing and gone 100% with Monster.” Learn how Monster can double your lead volume in half the time or email Ron for info.

Agency Fun

There’s a lot of chatter out there about the Freddie and Fannie. Are they, at the behest of their conservator and its director Mark Calabria, exhibiting a pattern of market disruption rather than a pattern of market stability? Critics argue that caps on sales to the cash window, caps on the percentage of non-owner and 2nd home loans, and adjustments to the QM and non-QM situation aren’t made up for by an overly-restrictive bone thrown to the industry for a refi option for low-income borrowers passed over in the last year. Capital markets personnel believe that the restrictions severely limit any meaningful application of the program. (The announcements and requirements are noted in the announcements below.)

Remember that effective June 1, all whole loans secured by investment properties must be purchased against the Investment Property commitments in Pricing & Execution-Whole Loan® (PE-Whole Loan). Loan Delivery will allow whole loans for investment properties to only be delivered against a 30yr or 15yr investment property PE-Whole Loan commitment. If an investment property loan is delivered against another commitment type (e.g. 30-Year Fixed Rate, 30-Year Fixed Rate - 110k Max Loan Amount, etc.) a fatal edit will occur.

Freddie Mac announced that Refi Possible will be available in August. The Freddie Mac Refi PossibleSM mortgage will help borrowers who make at or below 80% of the area median income refinance their mortgage. Eligible borrowers with a Freddie Mac-owned single-family mortgage will benefit from a reduced interest rate and lower monthly mortgage payment, helping save an estimated $100 to $250 a month.

Fannie Mae issued additional details about its new RefiNow™ option that will enable eligible borrowers at or below 80% of the area median income (AMI) to refinance to a lower interest rate and reduce their monthly mortgage payment Available beginning June 5th for qualifying homeowners with a Fannie Mae-owned mortgage. Homeowners can determine if Fannie Mae owns their mortgage by visiting Fannie Mae’s Loan Lookup Tool at KnowYourOptions.com.

Fannie Mae Selling Guide SEL 2021-04 update includes information regarding enhanced post-closing quality control collateral risk assessment requirements; simplifies the pool closing process for all MBS settlements; updates the Desktop Underwriter® casefile archive policy; and makes a miscellaneous update.

Information regarding the end to flexibilities related to verbal verifications of employment and powers of attorney for loan applications dated on or after May 1, 2021 is outlined in Fannie Mae Lender Letter LL-2021-03. The standard Selling Guide provisions now apply to these topics. The remaining Lender Letter policies continue in effect until further notice.

On May 3, Fannie Mae updated the guide for delivering eMortgages noting specific requirements for registering eNotes and outlining situations where an error can be amended via a correction agreement or where execution of a new eNote is necessary.

Don’t forget that in LL-2021-09, Fannie Mae announced it will only buy loans under the new Revised General (Qualified Mortgage) QM definition. The Revised QM rule does not include any set debt-to-income (DTI) ratio requirements like those defined in the prior standard QM rule. Lenders should refer to the Selling Guide for our existing DTI ratio requirements. (On April 27, the CFPB announced it is extending the mandatory compliance date for the new General Qualified Mortgage (QM) rule to October 2022. Fannie Mae clarified that while QM eligibility requirements extend to the GSE Patch, it does not change the eligibility requirements announced in Lender Letter LL-2021-09. To be eligible for purchase, GSE Patch loans that do not meet the Revised QM Rule must have application dates on or before June 30 and be purchased or securitized by Aug. 31.)

Fannie Mae Connect™ login credentials are required for access The DARTS Daily Activity Report validates loan-level delinquency modifications and payment deferral case statuses from HomeSaver Solutions™ Network/Servicing Management Default Underwriter™ (SMDU™) and Servicer Investor Reporting (SIR), including loans with failed business rules. Launch the report via Fannie Mae Connect for more information.

Fannie Mae Property 360™ will eliminate manual submissions for REOgram notifications for Real Estate Owned (REO) properties acquired through foreclosure or Mortgage Release (deed-in-lieu of foreclosure). Servicers can request onboarding now. REOgrams will not be processed through Asset Management Network after September. There is currently no change for the reverse mortgage REOgrams process. Read the release notes for additional details.

Capital Markets

If you’re earning 2.5 percent on your bond portfolio, and the rate of inflation is 2.5 percent, accumulating wealth is going to be tough. All you have to do is open up your eyes to see there is inflation pressure everywhere,” says Ed Yardeni, president of Yardeni Research. “We are in stimulus shock.” For evidence, he points to the 26% year-over-year increase in M2 money supply, the largest gain since 1943, as fiscal spending in response to the pandemic has topped $5 trillion. M1, or very liquid money in circulation, is up by 316%. The Fed, meanwhile, has shown no signs of slowing the $120 billion in monthly purchases of Treasuries and mortgage-backed securities that it began in response to the pandemic.

U.S. inflation could rise somewhat further in coming months before moderating later this year, per Fed President Richard Clarida, adding that the central bank’s easy-money policies will likely remain unchanged for some time.

It is not likely the inflation debate, the very one the Federal Reserve is trying to avoid, is going away anytime soon. Economists attributed last month's inflationary spike to pandemic-related issues like higher shipping and fuel costs, supply disruptions, rising demand and understaffing at factories and distribution centers. Despite the Federal Reserve’s attempts to assuage fears of inflation by insisting that the increase was temporary, U.S. consumer sentiment deteriorated unexpectedly in early May as more Americans grew increasingly concerned about rising prices. And retail sales in April fell short of expectations, registering flat month-over-month, but showing a slowdown in growth due to a tough sequential comparison after a blockbuster March. Markets were largely unconcerned by the retail sales "miss" to close last week, taking comfort in the knowledge that hiring activity is going to increase, wages will likely increase, and a huge amount of personal savings is ready to be spent over the summer months.

Rising inflation will continue to influence the direction of mortgage rates, which declined to 3.11 percent on the 30-year fixed for the week ending May 7. Black Knight reported that despite rate offerings dropping on all loan products in April, rate lock volume hit its lowest point in almost a year. Its daily interest rate tracker showed that rates trended lower throughout much of April, with the month-end average conforming 30-year rate (3.17 percent) down 17 bps from March but still up 34 bps since the end of January. Overall lock volume was down 11.3 percent in April, with declines seen across purchase (-6 percent), cash-out (-13 percent) and rate/term (-20 percent) refinance locks. This marked the lowest overall volume since May 2020, and the lowest rate/term refi lending volume since last January.

Much like Monday, yesterday was another sleepy affair in the bond market ahead of today's release of the FOMC minutes from the April meeting. The Housing Starts/Building Permits report for April missed expectations for single-family homes across all regions, likely due to rising costs for land, labor, and materials. Aside from those FOMC minutes, today’s economic calendar is light on data. We’ve seen that mortgage applications increased 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 14. Today also sees two Fed speakers starting with the Vice Chair of Supervision Quarles followed by St. Louis Fed President Bullard and the Desk will conduct two operations that will target up to $5.2 billion 30-year 2 percent and 2.5 percent. We begin the day with Agency MBS prices worse/down a few 32nds and the 10-year yielding 1.66 after closing yesterday at 1.64 percent.

Employment

Homeowners Financial Group (HFG) has promoted Cindy Baird to SVP, National Operations Manager and oversee all operational functions across the country at HFG. Nelson De Leon, COO, commented that “Cindy is a “one-of-kind” Operations Manager with 37 years in the industry. She possesses the right balance of risk and underwriting expertise to get loans done. During her nearly seven-year tenure at Homeowners, she has created raving fans of sales and ops staff across the organization.” HFG continues to combine its nationally recognized award-winning culture for employee satisfaction with the necessary strategy and execution for continued success and significance. If you are interested in joining Homeowners Financial Group, please contact Cindy Baird, or send your confidential resume to Erin Dueck.

Make 2021 an awesome year by joining Canopy Mortgage. Check out its business model that provides LOs ultimate control, and their proprietary LOS that facilitates faster closings. See how top producing loan officers are leveraging digital storefronts to expand market reach and increase volume. Canopy Mortgage is hiring Branch Managers and top producing Loan Officers who want to stand out in the following markets: CA, CO, FL, GA, HI, IL, NC, SC, TN, TX, and WA. Reach out to Josh Neumarker at Canopy Mortgage for more information 801-330-5016.

Evergreen Home Loans™ is expanding its digital footprint with a companywide rollout of eNotes in Evergreen’s eClosing packages. A leader in digital closings, Evergreen first rolled out eClosing in 2018 and has grown to include eNote and remote online notarization (RON). Year-to-date, completed eClosings comprised 64% of total loans closed. This provides a better closing experience for customers with fewer documents to wet sign, a shorter appointment at escrow, and increased security of their personal information. eNotes also facilitate faster funding and purchase turn times by eliminating the need to overnight the paper Note. Interested in working with a company that invests in innovative technology to improve the customer experience and grow your referral base? Contact Lindsay Larson, Director of Talent Acquisition, to learn about the latest career opportunities.

“Are you looking for an exciting career opportunity with strength, stability & success? Citi is hiring mortgage underwriters, processors, and closers to join our team! Our employees enjoy long term career growth, and we recognize the importance of hiring top talent. Whether you are looking for a new place to work or to restart a career, now is the time to make the move! Our Direct-to-Consumer business is also strategically positioned for growth and hiring many sales positions. Current sales and leadership opportunities include: St. Louis Mortgage Representative, St. Louis/ Detroit National Telesales Manager, Detroit Mortgage Representative, Detroit Sales Supervisor, Dallas Sales Supervisor, and Dallas National Telesales Manager. Apply today!”

LOs, with affordability and lack of inventory possibly keeping potential homebuyers out of the market, how is your lender helping you compete? Mid America Mortgage now offers a proprietary down payment assistance program for both conventional government-issue loans, with NO income restrictions for government-issued loans. Home buyers can borrower up to 6% of the loan amount to cover the down payment and/or closing costs as a second mortgage with no interest or payments and is forgivable after 5 years. Coupled with its Close on Time Guarantee for pre-approved borrowers, which pays the seller up to $3K or 1% of the loan amount if the loan doesn’t close, Mid America has equipped its LOs with the competitive programs and pricing they need to succeed in today’s market. If you’re interested in helping more of your borrowers get into homes, contact Michael Cooksey to get the conversation started.