In case you haven’t heard, the Supreme Court ruled that a U.S. president can remove the head of Federal Housing Finance Agency, in this case, Mark Calabria (who has his thoughts on the decision). Plenty of lenders ask, “What now? Who will replace him, perhaps an economist who knows our business? And when will some of the measures Director Calabria put in place be rolled back?” There are some who will tell you that anything put in place by him can be scaled back or eliminated but anything in conjunction with other entities, like the U.S. Treasury, will take some time to change. (It is thought that Director Calabria pretty much wrote the January stock amendment, and the Treasury put a rubber stamp on it. This Amendment launched the NOO/2nd home caps, which have since caused one set of loans to be sold to Freddie or Fannie, and one set to private label investors… how are rates set for borrowers with two different execution pricing? It has led to uncertainty, and capital markets crews are in the “price discovery” mode, and forcing some lenders to be correspondents and release servicing to aggregators.) Speaking of change… today’s audio version of the commentary and is available here after 5:30AM PT and is sponsored by Candor Technology, offering a dynamic underwriting engine that eliminates underwriting bottlenecks.

Lender and Broker Products

Are your borrowers missing out on the benefit of the Homeowner Assistance Fund (HAF)? As a servicer, you can help educate borrowers and automate access to this new relief benefit! The American Rescue Plan Act of 2021 created a significant opportunity for homeowners experiencing pandemic financial hardship. Each U.S. state, territory, and tribal entity has access to HAF funding to help homeowners avoid delinquency, default, loss of utilities, and/or displacement. As protections under the CARES Act expire, don’t leave your borrowers without relief… and don’t expose your organization to loss of revenue stemming from the high cost of default administration. Implement CLARIFIRE® today to offer HAF to your borrowers, as well as other pandemic and disaster relief options. Access complex eligibility, decisioning and automated workout functionality that translates to 24/7 borrower self-serve access to relief alternatives. Read our recent blog to find out more about HAF and how CLARIFIRE® is truly BRIGHTER AUTOMATION®.

Here’s something new! #ICYMI LendingQB has officially been rebranded as MeridianLink Mortgage to help unify their product offerings. New name, same commitment to creating an innovative mortgage lending experience that automates processes from application to approval. Here’s is a new eBook ready for download with best practices for digital lending. Going digital (are we still talking about this?), creates change. It’s a guide to help you consider your growth strategies that can leverage your loan origination system to make it work for you, your ops team, your sales team, and borrowers. Navigating best-of-breed strategy is often a team effort and an LOS system that offers multiple vendors who are integrated directly to a core LOS. Having options, in platform, for ancillary services is about scaling without having to start over due to limited options. Want to feel validated that you’re doing all you can? Check out Close Faster & Smarter with a Digital Loan Origination System and soak up all the tips you can get.

AmeriHome Mortgage, the 2nd largest correspondent and 14th largest mortgage lender in the country, is getting back out on the road to connect with clients as things open up! AmeriHome’s Head of Non-Delegated Correspondent Lending, Paul Needels, has been touring the country with AmeriHome's Non-Delegated Sales Representatives visiting clients to gather feedback on what is important to them in these challenging times. AmeriHome is also excited to return to in-person events! Personnel had a great time this week at the MBA Florida Annual Eastern Secondary Conference and Annual Convention and are looking forward to attending several more state conferences this summer! Don't miss AmeriHome at the Great River Conference, the CMBA Western Secondary Market Conference, and the TMBA Annual Convention! If you'd like to set up a meeting with the AmeriHome team or get more information on how AmeriHome Correspondent can help you grow your business, reach out to CLsales@amerihome.com!

Mortgage assembly lines continue to outperform traditional operations. Henry Ford reduced car production time from 12.5 to 1.5 hours with an assembly line. The benefits were revolutionary: Shorter timelines, increased efficiency, near zero errors--plus the ability to employ both high and moderately skilled workers to get work done. The same has proven true for mortgages. 2021 has seen more mortgage operations move to a “moving assembly line” model to produce higher volumes and shorten “lead to close” timelines. Case in point: A division of American Pacific Mortgage quadrupled their volume and produced 280% more revenues after implementing TeamworkIQ, a simple task-based-workflow platform that drives virtual assembly lines. Work moves forward faster, bringing the right task to the right person at the right time with the right priority. And some tasks can even be automated to achieve even greater efficiency. See the case study and request a test-drive.

ActiveComply: Tired of having to rely on LOs for permissions to monitor social media? Are you saying NO to social media because you don’t know the rules or feel protected? ActiveComply can bring you no-headache solutions to be regulatory-compliant on social media. ActiveComply helps lenders meet responsibilities through our compliance system technology: automatically find all company and LO accounts related to your brand, examine profiles for NMLS IDs & Equal Housing information, and ensure posts are compliant (image scanning included). ActiveComply is proud to be a sponsor of the 2021 virtual ABA Regulatory Compliance Conference! Join us in the virtual conference platform for one of our lively Round Table Talks around Social Media Compliance at 11:15am or 1pm EST. Can’t make it to the conference? Reach out to ActiveComply to request a free compliance report for your company and download our free Social Media Compliance Cheat Sheet!

Give your presentation a capital gain: Nationwide Abstrax (NAX), is an InsurTech National Title Abstractor performing title search and title processing tasks for Title Insurance Companies, Title Agents, Attorneys, and other Abstractors. Andrew Michelson, EVP & Chief Operating Officer for NAX, commented, "we wanted a platform that sets us apart from our competition, helps tell our story, share our value and make a great first impression. Along came Digideck, a cloud-based platform with the ability to bring rich multimedia into our presentations with backend analytics. Digideck has been a game-changer for prospecting, business reviews, highlighting key services, and client meetings. (Get your sneak peek of Digideck here.) We have put the platform to use, and it has helped capture new business for us yielding a strong ROI." Check out NAX's Digideck:  Why NAX Digideck "click here".

Do you Have the Right Lending Model?

Which is better, an Expense Management or a Corporate Retail branch model? Understanding the key characteristics of the Expense Management Branch (EMB) and comparing the key performance metrics between it and the corporate branch model is essential to identifying which is best for your organization. In the just-released June Insights Report, STRATMOR Senior Partner Jim Cameron compares and contrasts these two models, drawing on current data from the STRATMOR files and the PGR: MBA and STRATMOR Peer Group Roundtables Program. Cameron creates a picture of profitability and performance metrics that address the question of whether one branch model is better than the other… or not. Don’t miss this intriguing analysis, especially if you’re a lender working through growth and operational strategy decisions. STRATMOR Insights Report

Leadership Change Ahead at the FHFA: Now What?

So the Supreme Court rejected claims that the FHFA exceeded its authority in the context of profit sweep from the GSEs, and concluded that FHFA's structure violated the separation of powers, giving the President the ability to remove the current FHFA Director. Now what? Think of all the new programs whose testing was put on hold under the current management that might come back!

First off, readers should know that not everyone wants to say “happy trails” to Director Calabria. CEI Senior Fellow John Berlau offered this statement in praise of Calabria's biggest achievement in that post: "Mark Calabria has served taxpayers and the housing market well in his oversight of the government-sponsored enterprises Fannie Mae and Freddie Mac. He halted and then, in collaboration with then Treasury Secretary Steve Mnuchin, reversed the Third Amendment 'net worth sweep' that left the GSEs stripped of capital and at risk of needing another massive taxpayer bailout. His 'regulatory capital framework' set a course for privatization of the GSEs and reduces their competitive advantages over private housing finance entities. His successor would do well to heed Calabria’s excellent stewardship of the GSEs."

Morgan Stanley weighed in. “While the previous administration said that it was focused on the GSEs leaving conservatorship and that it would ‘get it done reasonably fast,’ the current administration is much more focused on affordable housing. Biden has outlined a plan to ‘build, preserve, and retrofit more than two million homes and commercial buildings to address the affordable housing crisis’ through a variety of means including tax credits, grants, and the elimination of exclusionary zoning laws.

“In Biden’s presidential campaign, he also ran on a housing platform that specifically involved ‘help[ing] families buy their first homes and build wealth by creating a new refundable, advanceable tax credit of up to $15,000,’ although this specific policy has not made it into the AJP and has been proposed in a separate bill.

“We think that the timeline of moving the GSEs out of conservatorship has likely been delayed, and any large-scale changes to their footprint are also both less likely and pushed further into the future. This likely means that the status quo will continue, reducing the likelihood of the GSE footprint getting smaller at the expense of Ginnie Mae securities and private label.

“We think there are a few changes that we could see from the current landscape: 1. Increased focus on providing access to homeownership. The Biden administration has previously floated a tax credit for first-time homebuyers, which could mean an increase in supply, which would be a negative for agency MBS. We were already on a path toward easier lending standards, an increased focus here has the potential to accelerate the trajectory augmenting demand for shelter and muting (though not negating) the impact of building affordability pressures.

“2. In looking to increase access, they could also increase the cross-subsidization, where higher-credit borrowers subsidize lower-credit borrowers. One methodology would be increasing the LLPAs on the top of the credit spectrum while reducing LLPAs at the lower end, which would make their LLPAs look more like Ginnie Mae (a constant MIP). 3. We could see an increase in usage/decrease in restrictions to the programs like Refi-Now/Refi-Possible that allow lower-income homeowners to refinance with lower fees, which would be a negative for specified pool stories vs TBA. 4. If they are looking to widen out the credit box and need to pay for it, we think there is a reasonable chance that the PSPA caps on the percent of Non-Owner Occupied (NOO) loans that could be originated could be removed. This rule currently will result in NOO loans going through the private label market, but given the better credit profile of NOO loans, we think the GSEs under a different director may want to retain more. This would reduce issuance in the private market while continuing issuance in the conventional space.”

Morgan Stanley’s piece continued. “5. We would assume that, if the NOO loan ruling were removed, the restriction on the combination of no more than 3% of refis and 6% of purchase having more than ⅔ of the following characteristics would also be removed: LTV > 90, DTI > 45, FICO <680. 6. We would keep an eye out for the GSEs willingness to acquire GSE Patch loans on or after July 1, 2021. The mandatory compliance date for the Revised QM Rule has already been postponed to October 1, 2022, a move that extended that GSE Patch to that date. But the GSEs have recently stated that, under the guidance of the FHFA, they will only be accepting loans that meet the revised definition as of July 1, effectively ending the Patch later next week. While we do not expect that to dramatically tighten lending standards, aligning more closely with the mandatory compliance data would mean easier lending standards, if only on the margin.

“8. We will be paying attention to any changes with respect to Credit Risk Transfer (CRT) issuance. Issuance has been curtailed since the onset of Covid-19, with one GSE (Fannie) not issuing, since 1Q 2020, resulting in over $500 billion of mortgages yet to be referenced in CRT. Any changes here could lead to a substantial increase in new issuance volumes.”

Capital Markets

How do you mitigate risk and enhance profitability when it comes to your loan trading? MCT’s recently released Marketplace is the world’s first truly open loan exchange, where buyers can bid regardless of approval status, and sellers receive automated live pricing from every buyer on the platform. It its latest case study, MCT spoke with On Q Financial about how BAM Marketplace helped the company launch and grow its correspondent channel. BAM Marketplace enabled On Q to decrease average approval times with sellers, tailor pricing granularity to desired levels of specification, and increase loan volume as a correspondent buyer. On Q Financial also utilizes MCT’s Security Spread Commitment and AutoBid technology which gives buyers on the platform unparalleled access to new sellers. A revolutionary new era of maximized liquidity, eliminated barriers, and optimized execution is waiting for you. Read the full case study to learn how On Q Financial has gained an edge over the competition. 

Many in the mortgage industry were popping champagne bottles yesterday as the Supreme Court threw out a core part of a lawsuit (Collins et al.v. Yellen) filed by Fannie and Freddie investors that challenged the government's collection of more than $100 billion in profits from the GSEs. The ruling also concluded that FHFA's structure violated the separation of powers, leading to President Biden ousting FHFA Director Mark Calabria, an advocate for releasing Fannie and Freddie from government control. The case had implications for the structure of FHFA, the GSEs, and the outlook for agency MBS, Credit Risk Transfer (CRT) and the housing market. Following the ruling, which crushed shareholder hopes regarding re-privatization of the GSEs any time soon, Fannie and Freddie common stock cratered, plunging the most in intraday trading since 2013.

In regard to economic releases, sales of new homes fell in May for the second straight month, declining 5.9 percent to a 769k unit annual rate and sales were revised lower for each of the prior three months. This was the lowest sale rate since May 2020, though it wasn’t due to a lack of inventory as the months’ supply of new homes increased to the highest inventory (5.1 months) since May 2020. The drop in new home sales reflects increasing affordability challenges for first-time home buyers and growing frustration about the lack of new and existing homes available for sale.

I have an early flight out of Orlando this morning, and in the very early going rates appear to be pretty much unchanged from Wednesday. But we could see some market moving news in the way of advanced indicators for May, May durable goods orders, final Q1 GDP (old news), and weekly jobless claims (). Later this morning brings Freddie Mac’s Primary Mortgage Market Survey for the week ending June 24, June KC Fed manufacturing, and several Fed presidents speaking. The Desk will conduct two operations targeting up to $4.9 billion 30-year 2 percent and 2.5 percent. Yesterday the 10-year closed yielding 1.49 percent which is where we are now with Agency MBS prices roughly unchanged.

Jobs

Nick Campos has joined National MI as an Account Manager supporting customers in Iowa, Nebraska, South Dakota, and Alaska. Nick joins National MI from a well-known retail lender where he was an area manager and prior to that managed the mortgage division at Lincoln Savings Bank. Previously, he spent 22 years with Wells Fargo/Norwest with assignments in Iowa, Alaska, and Washington in retail lending and correspondent operations. Nick currently sits on the board of the Iowa Mortgage Association and is a graduate of Eastern Washington University. Nick can be reached at Nick.campos@nationalmi.com, (515) 419-9287.

Looking to build upon its already strong foothold in the Midwest, Nations Lending welcomes Tim Dowling as a Regional Sales Manager for the Midwest region. Recently serving as a Senior VP at Guaranteed Rate, and VP at Prime Lending, Dowling’s decades of unmatched success in Midwest markets will serve our company well as he oversees our growth in Illinois, Indiana, Michigan, Ohio, and Wisconsin.  “We are excited for Tim to work with our existing teams in our Midwest markets,” said Corey Caster, EVP of National Production. “Being able to add professional leadership of Tim’s caliber to our production team will help our company capitalize on multiple opportunities in the future.” Nations Lending remains a landing spot for top talent in the mortgage industry. Contact Tim Dowling to learn about opportunities in his market, or VP of Recruitment Doug Opdycke (Updike) at (623) 734-5747 to discuss opportunities anywhere with Nations Lending. #JoinTheNation

When it comes to mortgage lending, biggest isn’t always best. Planet Home Lending, LLC is big enough to close your loans quickly, effectively, and accurately, but personal enough to hear and respect you. Stop competing against your peers for the attention you deserve. Give your best referrals the best service of their lives with the company that invests in your success on a loan-by-loan basis. To find out more, contact SVP, Talent Acquisition Brian Miller 469-647-9187 or EVP, National Production Caleb Mittelstet (916-317-3072). Planet Home Lending: Right Place, Right Size… Right Now.

Creating a more energy-efficient home, protecting the environment, and saving money are all made possible with the Green Energy product recently added to the Academy Mortgage product portfolio. Academy Mortgage is one of the very few lenders across the country offering this unique Fannie Mae HomeStyle Energy variance product. This product is flexible and affordable, whether purchasing, refinancing, or renovating a home, borrowers can include a wide variety of energy, water, and resiliency improvements. Eligible improvements include appliances, air and duct sealing, solar, weather stripping, hot water heater, disaster resiliency and repairs from natural disasters, and much more. This year the lender has made several new additions to their extensive product line including the Medical Professional program (available in select states), which allows up to 100% financing, as well as the Fannie Mae RefiNow program for low-income borrowers. For more information on Academy’s ever-expanding product portfolio—contact Justin Harris, SVP of Production.

In June, the U.S. Department of Agriculture (USDA) recognized Caliber Home Loans as one of its Top 3 national lending partners for 2020. It’s just the latest recognition of Caliber’s dedication and mission to make homeownership a reality for all Americans. “Homeownership is an important step to achieving financial independence,” explained James Hecht, EVP Retail Lending at Caliber. “It’s also a critical path to building generational wealth.” The Dream Becomes Reality: Today, Caliber Home Loans operates in all 50 states. We offer a wide range of home loan options and make the homeownership journey simple with user-friendly technology and guidance from highly trained loan consultants. If you want to join the team that makes homeownership dreams come true, email Jonathan Stanley for Operations positions or James Hecht for Sales positions.