Builders & real estate agents are very interested in cost per square foot. How much does it cost to build something in New York City? How about $362 per square foot $362 per square foot – the highest in the world.
Rate Sheet, Lock Policy, and Pricing Changes
Of course “rate sheet” pricing for borrowers changes every day as the MBS market moves, servicing values fluctuate, risk is re-evaluated, and profit margins are adjusted. But below is a random sampling of more structural changes focused on purchase loan pricing, lock desk policies, overnight price protection, etc. Lenders operating across different time zones have always grappled with lock desk hours, for example, since hedging operations are done between 8AM and 5PM, ET, which is the same as, say, 2AM and 11AM in Hawai’i.
As the spring home buying season heats up, mortgage companies, including Finance of America Mortgage, are releasing new rate lock features to help home buyers combat rising interest rates. FAM’s new Lock and Live product feature is available on agency conforming FHA and VA loans and ensures that customers can lock their rates for a total of 90 days. If rates drop during the lock period, clients can exercise a one-time float down option.
Effective June 4, 2018, the Mountain West Financial 60-day rate lock option for CalHFA loans will no longer be available. CalHFA loans may only be locked for 30-days. Extensions are available in 15-day increments and must be requested prior to the issuance of the CD. The extension fee must be charged to the borrower or seller.
Effective May 14, 2018, Mountain West Financial is making changes to its Extension and Re-Lock Policies. It will remove the policy of 15-day re-locks at no cost if the market is the same or better and replacing it with free extensions up to 7 days regardless of market movement. These free extensions will be available through BOLT with no need to email the lock desk. Refer to its Auto Lock Extension How to Guide for further details.
Effective with Mountain West Financial reservations made on and after April 30, 2018, the amount of the promotional subsidy will be a set dollar amount instead of a percentage of the loan amount by AMI. Also note, the GSFA Affordable Subsidy is an additional incentive for low-income borrowers who are purchasing a home with Conventional Loan financing through the GSFA Platinum Program. The Promotional Subsidy can be used towards down payment and/or closing costs and has been extended indefinitely. MWF’s Lock desk will determine borrower’s eligibility for the subsidy and adjust the DPA amount accordingly.
Mountain West Financial is removing the No Impounds adjustment for all California loans. The pricing engine is updated with this change. It has also removed the requirement for loans ran through both DU and LPA to use direct products and pricing.
Plaza posted information regarding lock policy changes. It is allowing loans that have pricing that is a cost to the borrower and is below par to be either Lender Paid or Borrower Paid if the loan passes all QM points and fees thresholds. Also, originators that do business in multiple states may have a designated comp plan by state if there is a common plan for all transactions within a state. For more information, refer to Plaza’s Wholesale Lock Policy.
Effective with loans locked on/after May 21, 2018, Mortgage Solutions Financial is offering a 0.25 incentive for all purchase loans. The 0.25 credit will be shown as a loan level pricing adjuster.
(Effective with loans locked between April 16th, 2018 and May 18th, 2018, Mortgage Solutions Financial offered a free, one-time 15-day lock extension for all loans locked with a 15-day lock period. The lock extension was applied after the lock request had been confirmed. And before that, between 2/26 and 3/31, a 15-day lock extension incentive is being offered by Mortgage Solutions Financial.
PRMG has introduced over-night price protection. All three originating channels will be able to lock in loans after its standard cut off time, up to 4:59 am (PST). A completed manual lock form will be required. It must be forwarded to PRMG lock desk prior to its standard cut off time the following morning. Restrictions will apply regarding program, period and volume.
ResMac B2B is offering better pricing on its ResExpress product. It is also implementing a few changes to its allowable criteria on ResExpress files. Changes include: no appraisal transfers, no third-party processing fees on LPC and is no longer available for Non-Delegated Correspondents.
Capital Markets
Are you optimistic? More people certainly are, and that can help the economy. Recall that consumer confidence rose to a three-month high in May as 42.4 percent of households viewed jobs as plentiful and 38.4 percent said business conditions were good. The historically strong confidence levels helped increase spending 0.6 percent in April while personal income increased 0.3 percent. Larger paychecks due to the recent federal tax changes have also helped consumers pick up spending, however as a result, the savings rate has fallen to 2.8 percent. Additionally, spending has been in part due to rising gasoline prices which climbed another 6 percent in May and are 13 percent above last year. This has eaten into real household spending power and the disposable income created by the tax breaks.
Remember, the more geopolitical uncertainty out there, the lower U.S. rates will go. Unfortunately, for LOs yesterday, we saw an improvement in global risk tolerance, highlighted by a rebound in Italian debt. The new Italian government presented a platform that will test the European Union's rules, as Lega officials are aiming to implement a flat tax for companies, and possibly families, starting in 2019. Meanwhile, interior minister Matteo Salvini has reiterated his pledge to increase the pace of deportations of illegal migrants.
As far as economic releases went, the Factory Orders decrease yesterday showed shipments of nondefense capital goods excluding aircraft were slightly higher than what was seen in the Advance Durable Goods Orders Report for April, so this will provide an added dose of support for Q2 GDP growth forecasts.
And for those following the Ginnie saga, GNMA IIs provided a major boost to sentiment following late Friday's GNMA press release that VA originations from Freedom, SunWest and NewDay would be booted from the GNMA multi issuer program, though still allowed to originate (more expensively) via the custom program. FHA and RHS mortgages for the three issuers are still eligible for the multi program with Freedom and SunWest in the penalty box from July 1 next January 1 with NewDay now extended to Oct 1, following the April 1 start.
Turning to today, the Redbook Same-Store Sales Index for the week ending June 2 kicks off today's calendar later this morning. Next up is Markit Services, but markets will be watching more closely 15 minutes later, when we receive the ISM Nonmanufacturing PMI for May and JOLTS job openings for April. Tuesday begins with rates down slightly from Monday’s close: the 10-year is yielding 2.90% and agency MBS prices are better by about .125.
Products
GSF Mortgage Corporation continues to expand its Single Close Construction Program. More than 150 builders have been approved and have access to this product. If you are interested in offering the Single Close Construction program in your market, please contact Chad Jampedro.
Recruiting? Model Match's Production Prospector finds originators doing the type and amount of business best matched for your company. A customized criteria profile helps us learn the traits you're looking for in your ideal producer. We'll identify them and provide you with visibility into their previous years volume, trailing 12 months and most recent 90 days, as well as unit count, average loan amount, product mix, purchase percentage, and all the details you'll need to contact them today. Click here to connect and learn more. As the leading growth and retention partner in the mortgage space, Model Match strives to create efficiency and value in all areas of the recruiting process. Join us on June 12th at 12PM EST as we discuss one of the biggest challenges we all face - cold calling and relationship development.
Take your seat at this all-star CEO roundtable and engage in a dynamic peer-to-peer discussion with some of the mortgage industry’s best executive leaders. In this very special episode of Inside the Mortgage Mind, XINNIX CEO Casey Cunningham hosts a conversation with Bruno Pasceri, Wes Hunt, Steve Adamo, and Rich Phillips about how they lead and what building a culture of excellence means to them and their companies. Leaders, don’t miss out on incredible insight from these industry giants that has the power to transform your organization! Click here to download.
Orion Lending, an innovative wholesale mortgage banker, is revolutionizing how they fulfill relationships with brokers through the STAR Broker Portal. STAR is Orion’s advanced broker platform designed for the efficiency and convenience of their customers. Discover the newest proprietary enhancement, Strike Price, and change how you manage your Pipeline. How does Strike Price work? At time of registration, brokers can select the desired rate, price, and price variance, which will trigger automated alerts at each price change. The alerts communicate to the broker instantly when the target price has been achieved and it is time to lock. This real-time notification ensures brokers are locking the optimal rate for their borrowers. In a time of volatile market swings, never miss a positive intraday rate change again with Orion’s Strike Price. Explore the STAR Portal for additional information and experience the ease of doing business at www.OrionLending.com.
Employment and Personnel Moves
“PrimeLending’s commitment to customers speaks volumes year after year. PrimeLending’s relentless dedication to perfecting the mortgage process for borrowers, business partners and our loan officers is paying off. For the 5th straight year, the company was named a Top Mortgage Lender by Scotsman Guide after ranking #6 in Top Retail Volume and #10 in Top Overall Volume in 2017. By making the process more seamless, providing expert guidance and closing loans quickly, PrimeLending has become the trusted, go-to lender for borrowers, builders and real estate professionals across the country. Are you a loan officer ready to be the go-to lender in your market? It’s simple when you work with a perennial industry leader like PrimeLending. Contact Dudley Strawn at (469) 737-5743 to learn more about your game-changing opportunity.”
Sierra Pacific Mortgage is excited to announce that John Goulding has joined as the East Coast Divisional Sales Leader. Coming to the company with more than 34 years of industry experience, Mr. Goulding will be focused on increasing originations, market share and overseeing the production growth of the Eastern Region for the Retail Division. As a results-driven executive who’s experienced at taking on critical business assignments and leading teams to perform at a high level have prepared him for his new role at Sierra Pacific Mortgage. On his new position at Sierra Pacific Mortgage, John said, “Sierra Pacific presents fantastic opportunities for mortgage industry professionals and I am excited to move forward with an already successful team in place that will help drive growth and production.” Join us in welcoming John Goulding to Sierra Pacific Mortgage.
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