Real estate agents will tell you that offering above asking price is only the first step, with many buyers also waiving contingencies, skipping inspections, or providing free lease-backs to sellers, along with offers for the seller to remain in the home for a period of time after closing, rent-free. When something becomes too expensive, consumers begin talking about price elasticity and substitution. Rent instead of own. Kerosene instead of whale oil. Cod instead of halibut. Tea instead of coffee. When lumber becomes too expensive, there are substitutes like stone/masonry, steel, or… bamboo. Hey, don’t knock it: the 2,264 giant pandas left in the world can’t be wrong! Do mortgage loan originators (MLOs) ever become too expensive? They’re the drivers of a lender’s activity, but LO comp continues to be an issue, perhaps by not being an issue. LOs and their managers should have a refresher, and attorney Brian Levy addresses LO comp in his latest piece. One thing that will never have a true substitute are the Code Talkers from World War II. Unfortunately last week four of them passed away in the Navajo Nation, leaving only 27 of them alive. Do your kids a favor and explain who Code Talkers are. (Today’s audio version of the commentary is available here, and this week’s is sponsored by Richey May, providing top-quality tax, audit, business advisory, and technology risk consulting & solutions.)

Lender and Broker Products and Services

The Great Bambino, one of the greatest baseball players to ever play the game, stepped away from the plate for the last time 86 years ago today. People say the qualities that made Babe Ruth a standout can’t be taught. Luckily, elite mortgage lending IS a teachable skill. Join Sales Boomerang’s Alex Kutsishin and Mortgage Champions’ Dale Vermillion on June 16 at 3pm ET for a masterclass on the sales, tech and leadership strategies that will separate you from the competition and fill your sales pipelines. With volume down across the board, every move you make can have huge ramifications. Can your company live through an 86-year drought? (Sorry, Red Sox fans.) Register today and find out how your loan officers can hit it out of the park every time.

Here’s an example of a technology vendor hitting it out of the park. Capacity, a mortgage support automation platform powered by artificial intelligence, empowers mortgage professionals with instant knowledge and automated workflows. Mortgage professionals turn to Capacity to effortlessly tap into key systems to provide real-time access throughout the entire loan life cycle. Borrowers are benefitting from a superior customer experience with 24/7 automated support. Capacity connects apps, mines documents, captures tacit knowledge, and automates processes, all through a mobile-friendly chat interface. Deploy within 30 days. Request a demo to learn more.

According to HMDA data shared via the CFPB and Equifax data analysis, more than 40% of mortgages originate with a co-borrower. Through the Equifax Mortgage Duo solution, lenders order instant employment and income verifications for co-borrowers in a single transaction, eliminating the need to place individual orders for each borrower’s report. And with flat rate pricing, budget forecasting is simplified. “We recognize that people often apply for mortgages with a co-borrower, such as a spouse,” said Joel Rickman, SVP of Verification Services for Equifax. “The breadth of The Work Number database, with more than 115 million active records, allows us to deliver a new verification solution that helps lenders continue to build efficiency into their digital originations. With Mortgage Duo, they can instantly verify employment and income for both borrowers through a single automated transaction which helps decrease duplicative tasks and further reduces friction in the loan origination process.”

What’s more frustrating than poor customer service? Much too often, your customers wrangle with automated representatives, get lost in a never-ending phone tree, or have to repeat the whole process with rude or inefficient service reps. TMS believes that subservicers should hold themselves to a higher standard. That’s why TMS invests so much in its CAREologists, the customer care team that makes TMS who it is. Across a rigorous hiring process, 220+ hours of yearly training, and specialized brand training, TMS CAREologists create a warm, personalized subservicing experience. CAREologists routinely deliver a 92% first-call resolution rate, a 98% customer satisfaction rate, and a sub-5% abandonment rate. TMS believes that valuable subservicing starts with a smile, and it’s why its mantra is to help “Grow Happiness.”  Partner with TMS.

If you're running direct mail campaigns, consider Monster Lead Group. For one fee, they'll manage every aspect of your campaign. From strategy, data generation, creative services & design, print, mail fulfillment, tracking, lead management, call recording, and analytics. And you receive exclusive rights for a contact during your campaign. That's why the nation's top brokers and lenders rely on Monster to drive sales leads. Talk to the team at Monster if you're looking to generate more leads, or learn how they can help.

Too Much Time Spent In Email? Most mortgage teams are drowning in email, an old habit that once-upon-a-time created efficiency, but when overused significantly reduces productivity. Teams can lose as much as 50% of a workday managing, comprehending, and responding to volumes of messages flowing in-and-out of sight in their email inboxes.  However, up to 99% of internal coordination emails (and the time they consume) can be eliminated with smarter collaboration systems. As this case-study shows, a division of American Pacific Mortgage produced 280% more revenues and quadrupled production in 30 days using simple, collaborative task-based-workflows from TeamworkIQ which eliminates the effort required to coordinate loans with “email-and-spreadsheets”. TeamworkIQ provides real-time, detailed views into each loan file and actively coordinates team member priorities across all the loans your team handles. At $24/mo./user the ROI is sky-high. See the data for yourself. Make the switch. See the case-study and request a test-drive.

There is a national holiday for almost everything and today’s list includes “National Leave the Office Early Day.” For lenders who are concerned their subservicers are clocking out early, MQMR has developed a Servicing Risk Assessment. The Servicing Risk Assessment helps lenders determine if their audit, risk, and compliance needs are being met, if their servicing best practices and policies & procedures are being followed, and if so, to what extent. Once lenders complete the assessment, an MQMR servicing expert will provide personalized and actionable recommendations to ensure that your subservicers aren’t cutting corners. Take the Servicing Risk Assessment today and make sure your subservicer is on the clock.

Detailed lender pricing insights have historically been expensive and inconsistent, and more of a “nice to have” as opposed to an essential business tool - but not anymore! One of the great features available to every Lender Sponsor of ReadyPrice is our Daily Lender Market Guide. This comprehensive guide is sent out daily and serves as a valuable point of reference for your Capital Markets teams, giving them the ability to quickly see how their pricing stacks up to the competition daily. Now, along with access to promote your loan programs to ReadyPrice’s broad database of brokers, as well as engaging marketing opportunities within their network, wholesale lenders of all sizes can receive the ReadyPrice Daily Lender Market Guide to ensure you are pricing competitively effectively every day. Interested in seeing the Daily Market Lender Guide for yourself? Email Donna Varnell, VP National Sales or schedule a demo!

Non-Agency News

The month of June is kicking off some exciting new developments to Stearns Wholesale! Stearns’ Gold Jumbo Select 90 Program returned this week with criteria allowing for 90% LTV up to $1.5 million. This jumbo is 30 year fixed only and covers owner occupied 1-unit properties, as well as purchase and rate/term. This Gold Select 90 Jumbo represents a great opportunity if your client’s primary residence is in an area where the selling price of homes is higher than the conforming loan limits or if they’re a first-time homebuyer purchasing a primary residence. With 5 Jumbo options at Stearns, we have flexibility to help our brokers find the best program for their borrower. If you’d like to partner with Stearns or learn more, click here to be contacted.

Chase is expanding its Non-Agency product guidelines, which applies to best efforts loans locked on or after today, June 2. The maximum LTV/CLTV/HCLTV on Primary Purchases and NCO Refinance transactions is increasing in most markets. Improved minimum credit score requirements for Second Home Purchase and NCO Refinance. Expansion for Investment Purchase and NCO Refinance transactions will be added in most markets. The minimum reserve requirement will be reduced for most transactions. And Chase has revised the requirement for Agency and Non-Agency appraisals due to expiration of COVID-19 appraisal flexibilities. For Agency transactions follow Agency requirements. Chase will resume requiring an interior/exterior appraisal on all Non-Agency transactions.

Flagstar’s COVID Related Rental Income Requirements are being retired effective immediately for all Conventional and Non-Agency transactions. Read Memo 21068 for details. It’s Non-Agency Underwriting Guidelines have been updated with clarifications on Cryptocurrency and Power of Attorney and are effective immediately. View the announcement for details.

There’s a new Jumbo AUS program at Plaza Home Mortgage that utilizes Desktop Underwriter® (DU®) or Loan Product Advisor® (LPA®), along with Fannie Mae® and Freddie Mac guidelines providing more standardized documentation requirements.

Wells Fargo Funding (correspondent) updated its Seller Guide to align its credit report policy with the current process for Non-Conforming Loans. Approved credit report vendors and accessibility. A tri-merged credit report ordered directly from either CoreLogic Credco or Equifax is required. Wells Fargo Funding must be able to re-access the credit report from the time of Closed Loan Package receipt through Loan purchase. Issues that can impact the ability to re-access the credit report include but are not limited to: Use of an unapproved vendor, Frozen credit, Expiration of the access period.

Wells Fargo Funding will require Non-Conforming Loans to comply with the amended QM Final Rule effective with applications on and after June 21, 2021. Requirements include compliance with Wells Fargo Funding maximum DTI and other published underwriting guidelines and requirements. QM designation (safe harbor or rebuttable presumption) based on APR to APOR spread.

Wells expanded rental income documentation requirements for Non-Conforming Loans when residential or commercial rental properties are held in a subchapter S corporation, partnership, or corporation. If the borrower owns less than 25% of the business, the mortgage is not listed on their credit report, and there is no documentation indicating the borrower is personally obligated for the mortgage, three months’ proof of receipt of rental income is not required. If the borrower owns 25% or more of the business or is personally obligated for the mortgage, year-to-date financials can be used to document recent rental income in lieu of three months’ canceled checks, bank statements, or rent roll.

Wells Fargo Funding updated its adverse credit policy for Non-Conforming Loans to simplify requirements for borrowers with a charge-off. Loans to borrowers with any single (not aggregated) charge-off from a financial institution are ineligible if the charge-off is a mortgage charge-off, as reported on the credit report, within the last two years. A nonmortgage charge-off, excluding medical, utility, rental, collection, and authorized user tradelines, as reported on the credit report, within the last two years and is greater than $500.

Wells Fargo Funding removed additional LTV and CLTV limits for Non-Conforming Loans secured against condominium (condo) and cooperative (co-op) properties in certain counties as follows: Condos (attached or detached) in San Benito, Santa Clara, San Francisco, and San Mateo counties, California, Co-ops and condos (attached or detached) in Manhattan (New York County), New York.

And Wells expanded its electronic delivery and electronic signature options to include In-person electronic notarization (IPEN) for the Security Instrument, riders, and other documents requiring notarization. The Notice of Right to Cancel is now eligible for eSignature with any Closing type and Non-Conforming Loans Closed with eNotes are now eligible for purchase. Sellers must be approved for the Non-Conforming Loan program and the Wells Fargo Funding eMortgage program.

First Community Mortgage updates its Jumbo Express Matrix/Guideline. Read the details in Wholesale Announcement 2021-10.

Carrington Correspondent has expanded guidelines and improved pricing: The Carrington Investor Advantage℠ (DSCR) offers LTV up to 82.5% and a 5% LTV improvement across many FICO bands. Carrington Prime Advantage℠ expansion offering. 50% DTI allows reduced reserve options, 50% DTI allowed for second homes, LTV for short-term rentals now up to 75%, Max price of 102.5. Qualify Your Non-QM Loan Scenarios.

Carrington (CMS) has launched a Delegated Correspondent Lending channel, a great complement to its established Non-Delegated Correspondent Lending channel, as well as an exciting addition to the company’s full range of Government and non-QM loan products.

Prime Jumbo terms from A&D Mortgage: Up to $3MM loan amount, Manual UW to FNMA seller guide for loan amount over $2MM, 2nd appraisal over $2MM, VOE with 10 days of consummation, Investment property adjustment is reduced by up to 1 point.

Angel Oak Mortgage Solutions has new reduced rates and seasoning requirements for Bank Statement Mortgage Loans. Also allowing just two years seasoning for foreclosure, short sale, bankruptcy, and deed-in-lieu.

Capital Markets

Mortgage-backed securities and Treasuries have both been impacted by the massive intervention by the Federal Reserve through the actions of the NY Fed’s Desk. Not only is the Fed intervening by adding cash into the system through its QE operations, but it has recently started intervening in the Overnight Reverse Repurchase market, absorbing excess bank cash to keep that cash out of the markets. As Lepre points out, “The Fed is essentially trying to mitigate the inflationary effects of QE. This points out that the Fed can control Treasury yields and, in effect, the amount of interest paid by Treasury to service the nation's debt which is not the same as controlling inflation.”

Turning to yesterday’s bond market, which drives rate sheets for borrowers, MBS and U.S. Treasuries began the holiday-shortened week on a lower note due to solid economic news out of Japan and Europe. But intraday action saw a rebound off opening lows. In our country the Instituted of Supply Management’s Manufacturing Index for May marked the twelfth straight month of expansion and showed that companies and suppliers continue to struggle to meet increasing levels of demand (inflationary?). Total construction spending increased 0.2% m/m, less than expected and showed ongoing strength in private residential construction spending.

Aside from the Mortgage Bankers Association application stats from last week (-4 percent, the second week in a row of decline, and applications are down to February 2020 levels with refis making up about 61 percent of overall volume), we have some Fed speakers Philadelphia’s Harker, Minneapolis’ Kashkari, Chicago’s Evans, Atlanta’s Bostic, and Dallas’ Kaplan. And at 2PM ET, 8AM Hawai’i time, the latest Beige Book will be released ahead of the June 15/16 FOMC meeting. There is little reason for rates to move much, and sure enough the 10-year, which closed Tuesday yielding 1.62 percent, is hovering around 1.60 and current coupon Agency MBS prices are unchanged.

Employment 

Supreme Lending is growing, fueled by the addition of several talented mortgage professionals to the Supreme Team. Kevin Pezzani has joined the Dallas-based independent lender as Chief Operating Officer, bringing nearly three decades of leadership experience in mortgage finance, sales, operations, risk management, and regulatory compliance. Ryan Baxter is now Supreme’s National Production Manager, after leading the company’s Recruiting Department for the past five years. Ryan oversees sales, recruiting, market expansion, and business development nationwide. Paul Walker has been named Supreme’s Chief Financial Officer. Paul has nearly 25 years of finance and accounting experience, with the majority of his career spent in financial leadership positions at mortgage companies. If you’re ready to take your career to Supreme heights, contact Ryan Baxter or follow Supreme Lending on LinkedIn.

Evergreen Home Loans™ is excited to welcome Joe Hamilton as Chief Information Officer (CIO) and part of its executive leadership team! Joe Hamilton brings many years of IT related experience, including consulting across several industries and Fortune 500 companies. In this new role, Joe Hamilton will continue to drive technology initiatives to help the company deliver an excellent experience for loan officers, business partners, and customers. Evergreen is committed to advancing their mission as a technology leader and innovative mortgage lender. If you’re interested in joining a company that invests in technology to improve the customer experience and strengthen your referral business, check out the Careers page for the latest career opportunities.  

Finally, there’s a better business model that provides LOs with ultimate control, unmatched pricing, & a proprietary LOS that promotes faster closings! See how top producing loan officers are leveraging digital storefronts to expand market reach and increase volume. Canopy Mortgage is hiring top producing Loan Officers and Branch Managers. Build your business the way you want, Join Canopy 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).

Bellwether Community Credit Union has promoted Heather Tancreti to VP of Lending where she will manage lending programs, products, services and “drive the loan sales culture with a strong focus on member satisfaction while leading the consumer loan processing, loan underwriting and indirect lending teams.”