Ask any manager. It was much more fun to announce, “We’re hiring!” than it is to mutter, “We’re laying off.” Currently there are plenty of rumors about lenders, both publicly and privately held, down-sizing. (I guess the PC term is “right-sizing” but I’ve never heard an expanding company use that term.) Here is a quick reminder that anyone can post their resume for free at LenderNews where companies can view them. Although there is no correlation, residential lenders’ employee numbers are following the price of wood which has dropped dramatically to the “pricey, yet reasonable” tier of commodity valuation after rising to stratospheric heights earlier this year. Since the 1990s, lumber’s mostly traded for $200-$400 per thousand board feet. Earlier this year, lumber peaked at $1,733 per thousand board feet, but now it’s down to $712 per thousand board feet on the Chicago Mercantile Exchange. Inventory is crawling back, and all the people who wanted wood for more recreational purposes or renovations have been scared off by the high prices, and there is substitution: Housing can be built with concrete, stone, and bricks! (Today’s podcast is available here. This week’s podcast is sponsored by Black Knight, providing innovative technology, comprehensive data, agile analytics, and features Part Four of an interview with Mike Brown focused on lender risk mitigation.)

Lender Products and Services

Recently, Mississippi State’s baseball team won the school’s first-ever team national championship. Thanks to the “Flutie Effect,” and because everyone loves a winner, MSU will likely see an uptick in applications next year. The same “success breeds success” mentality should be applied when building referral partnerships. Sales Boomerang’s Realtor Referral Program cultivates two-way relationships that organically create iconic customer experiences. By following 3 simple steps, lenders can build winning referral partnerships and attract their own influx of applicants this fall, no national championship required. Contact Sales Boomerang today to start building championship quality referral partnerships.

Would you like high-intent exclusive prequalified prospects to grow your loan volume? Unify can help with that! The Unify Business Growth Platform™ PreQualified Prospects feature allows loan originators to reach out to their database contacts and leads with email communications that include a special “Get Prequalified Now” link. Once a contact clicks on the button and submits their information on a short form, Experian will instantly score their information and update the LO’s Unify account with the contact’s prequalification results. The LO also receives text and email alerts to respond quickly. These prospects have 4 key attributes: they are High Intent, Prequalified, Verified, and Exclusive to an LO. Get Started Now - Unify PreQualified Prospects is the Best Prospecting Tool You Can Use. 

We are all used to the cyclical ups and downs of mortgage application rates, and it looks like the long Covid driven ride at the top is finally coming to an end. The MBA last week reported the lowest level of new applications for both purchases and refinances since the beginning of the pandemic, despite interest rates remaining low. But the never-ending balancing act of keeping employee head count to match ever changing (and as of this week higher) loan volume is easily avoidable. By partnering with DocProbe to manage the Trailing Document back office of your operation you are always covered, and your costs stay stable as you only pay per loan, in tandem with the volume passing through. 125+ lenders across the country rely on DocProbe to retrieve, process and deliver their Final Documents so they can focus on driving revenue and closing new loans without worrying about fluctuating employee counts and unnecessary overhead. Contact Nick or visit us to find out more.

Do you refer buyers to your Realtor partners? You know that referring a buyer to a Realtor is the holy grail in our industry, the problem is how to predict which of your past borrowers will be in the market for a new loan or a new home. Well, you’re in luck. Check out this game-changing new app from Usherpa that uses SmartScore™ technology to help you do just that. UsherpAlert™ purchase notifications have a 297% higher likelihood to close! UsherpAlerts™ are based on data intelligence and machine learning algorithms that comb Loan Officer’s databases for opportunities and serve up past customers most likely to be in the buy zone for a new mortgage.  Learn how you can double your production with Usherpa’s Smart CRM - schedule your personalized demo! While you’re at it, check out this free e-guide about what top producers do to increase their purchase business.

HUD, Ginnie, and FHA/VA Updates

Ginnie Mae reported June MBS Issuance of $72 Billion; More than 272,000 Homes Financed. Read the Press Release for details.

FHA recently posted the results of its loan underwriting reviews completed during the second quarter. For those who like numbers, the reviews completed declined 6% in the quarter to 5,835 reviews (down from the 6,207 in the first quarter). Defect rates increased (initial and final). The gross (initial) material defect rate was 66.0%, not only higher than the 60.3% in Q1, but also the highest rate in more than 5 years. The net (final) material defect rate was 9.3%, up from 6.9% last quarter and the highest rate since Q2 2020. Indemnifications? 8.2% of the reviews resulted in Indemnification, up from 5.6% in Q1, and the highest since Q2 2020. There were 479 indemnifications in the quarter, a 38% increase from last quarter but 3 indemnifications higher than a year ago. There were 819 indemnifications in 2019 Q3.

Beginning July 14, 2021, servicers of FHA-Insured mortgages and other interested stakeholders in FHA transactions can access this no cost, on demand webinar on the FHA Servicing and Loss Mitigation Training web page on hud.gov. Additionally, the Frequently Asked Questions on this same topic are now available in the FHA Resource Center Knowledge Base.

FHA published Mortgagee Letter (ML) 2021-17, Revisions to Property and Appraisal Quality Control Review Requirements, updating FHA Single Family Quality Control (QC) requirements for appraisal field reviews and the evaluation of property and appraisal documentation for all FHA Title II Single Family programs. Additionally, FHA announced the expiration of the December 4, 2020, temporary waiver of Single Family QC requirements for appraisal field reviews. The temporary waiver remains in effect for QC reviews currently in process and for cases selected as part of a mortgagee’s QC review through June 30, 2021.

FHA also published Mortgagee Letter (ML) 2021-16, Extension of the End Date for COVID-10 Multisubject: Updated Temporary Guidance for Verification of Self-Employment; Rental Income; 203(k) Rehabilitation Escrow Account through September 30, 2021.

In a transaction originated by Adam Yitzhaky and Ilan Bassali of Greystone on behalf of the Northridge Group, Greystone  provided $18,320,000 in HUD 223(f) financing to refinance a 150-unit multifamily property in Grand Forks, North Dakota. Built in 2016, Aspen Lofts Apartments consists of two, detached mid-rise elevator buildings offering studio, one-, two- and three-bedroom apartments that feature modern appliances and finishes, in-unit washer/dryers and private outdoor living spaces. The $18.3 million HUD-insured loan carries a 35-year term and amortization, along with a low, fixed rate. In addition to refinancing, loan proceeds also enable the borrower to continue with ongoing site maintenance and monetize a portion of their equity.

Mountain West Financial Wholesale addressed multiple updates in various bulletins. Bulletin 21W-048 addresses Fannie Mae’s refinance assets requirement and age of appraisals, Freddie Mac updates regarding gift funds used to pay borrower’s earnest money deposit is discussed in Bulletin 21W-049 , and FHA’s End Date Extension of COVID-19 temporary guidance for verification of self-employment and rental income is covered in Bulletin 21W-047.

Effective immediately, for all FHA loan transactions where the subject property is a condo, FHA HUD Form-9991 is required, excluding FHA Streamlines. Read the MWF Bulletin 21W-039 for details.

Mountain West Financial® is offering $300 OFF the Underwriting Fee for FHA and VA loans, excluding DPA & Bond programs. Loan must be originated between July 1st and July 31st, 2021. Available to Mountain West Financial, Inc. Approved Wholesale Brokers.

First Community Mortgage posted FHA/USDA COVID-19 Updates in Wholesale Announcement 2021-18 and Correspondent Announcement 2021-14. FCM also posted information on calculating FHA deferred installment debt in Announcement 2021-15.

loanDepot Announced various updates including Qualified Mortgage Eligible Loans, Revised General QM Rule, FHA’s Extension of Self-Employment & Rental Income, VA Temporary Guidance and Updates, Employment Related Assets in loanDepot Conventional Lending Guide.

Flagstar Bank issued an Announcement regarding VA’s updated guidance for Borrowers affected financially by COVID-19. These temporary measures provide guidance for reviewing the borrowers qualification for a VA-guaranteed home loan when the borrower’s income and the processing of the home loan have been affected by the ongoing COVID-19 national emergency.

Flagstar issued information regarding the expiration of FHA’s Temporary guidance in memo 21083.

loanDepot’s Weekly Announcement covers various FHA topics including Expiration of Temporary VVOE and Appraisal Guidance, Student Loan Updates and Non-Permanent Resident Eligibility Expansion.

Carrington Mortgage Services is now conducting Delegated Correspondent Lending. Government products for FICOs from 500 and Agency from 620, Rapid purchase cycle times and minimal overlays.

Capital Markets

One often overlooked way for lenders to pick up 12+ basis points is through reviewing and optimizing their investor set. Often times lenders can experience additional pickup by adding the right investors to their mix. In this post, How to Review & Optimize your Investor Set, MCT® reviews how to quantify where to deliver your production, the process for auditing your investor base, and how to optimize your investor set. Credit Unions have also leveraged investor set optimization to generate more value for their members. Learn how Credit Unions are leveraging this strategy in MCT’s whitepaper, How Credit Unions Can Benefit Members Through Investor Set Optimization. Caleb Jeppsen, VP of Secondary at Virginia Credit Union states, “We’re able to send bid tapes to 17 investors so we’re always receiving the best price for our loans. This helps us lower our rates for members. Everything we generate goes back to our members.”

Polly’s next-gen Product & Pricing Engine is making complicated tree folder structures and duplicate logic a thing of the past. In an effort to revolutionize the way lenders distribute pricing across all of their channels, Polly has created a product and pricing engine with intuitive rule management, that allows lock desk users to configure eligibility and rule logic with ease. With the help of dynamic multi-axis grids, users can build as many rule parameters as needed, simplifying complex logic quickly and easily. Additionally, an unrivaled level of transparency provides any lock desk user instant insight into the system’s configuration. To learn more about how Polly’s Product & Pricing Engine is helping lenders stay ahead of the competition and win more business, email Jacob Gerson or visit www.polly.io.

It is good to have a basic understanding On What Originators Should Know about the Fed”. Fed Chair Powell told Congress yesterday that the U.S. economic recovery still hasn't progressed enough to begin dialing back asset purchases, as the labor market still has a "long way to go." His testimony before Congress added that inflation is likely to remain high in coming months before moderating. Economic releases on the day included the Federal Reserve's Beige Book for July, which described overall economic growth as "moderate to robust" despite reports of supply/labor shortages, low inventories, and delivery delays, and the Producer Price Index for final demand, which increased more than expected to post the largest gain since 2010 and should mean price pressures are eventually passed onto consumers. After pulling back the previous three days, U.S. Treasuries rallied by the close yesterday.

Today’s calendar sees Fed Chair Powell back on Capitol Hill, virtually. Before that, we’ve already received a heap of data starting with Empire State and Philadelphia Fed manufacturing (43.0 and 21.9, respectively), import/export prices for June (+1.0 and +1.2 percent, respectively), weekly jobless claims (360k, as expected, continuing claims sank to 3.24 million), and Philadelphia Fed manufacturing for July (). Later this morning brings MBS purchases by the Desk after it released the MBS purchase estimate for the mid-July to mid-August period and a new schedule averaging $4.9 billion per day covering the July 15 to 28 period yesterday that saw no change in coupons from the prior schedule. After the initial Thursday slew of news we have Agency MBS prices are better/up a smidge and the 10-year yielding 1.32 (after closing yesterday at 1.36 percent).

Jobs

Firstrust Bank is currently looking to hire experienced loan originators who recognize the value of an 86-year-old, 4-billion-dollar financial institution as strong enough to support your production while small enough to enhance your personal approach for referrals. If you are in the Lehigh Valley PA market or in the Baltimore MD market, please reach out to Michael Scheier. Bank branch opportunities are available in both markets and each location provides referral business. We have ample product and an aggressive compensation plan.

Planet Home Lending, LLC is going all-in on retail. Planet is growing branches and careers by offering the four things mortgage professionals must have to succeed: competitive pricing, in-branch operational services with industry-leading turn times, first-class support and committed capital. Planet’s accessible leadership and growth trajectory make it the right place to build your future. Watch our Retail Sales Leader Caleb Mittelstet talk about why originators are moving to Planet. Then send a note to Caleb or SVP Talent Acquisition Brian Miller. Grow your business with Planet Home Lending – Right Place, Right Size, Right Now!

“I am flying to speak at a private mortgage conference in Charleston, South Carolina today, and I always surprised at the obstacles that mortgage companies put in place of their growth,” says Rick Roque, Corporate Vice President at Shamrock Home Loans. “The sales structure I have implemented revolves around local leadership in target markets across the United States. We start with smart and humble leadership, and we add strong loan officers to that team”. This is why Shamrock is one of the fastest growing companies and is ranked Top 5 Mortgage Banks to work for in the United States. “If you want to grow a market to $250M++ a year, and work with me at the executive level to grow it, give me a call at 413.297.6895. Our flexible pricing and compensation strategies, and national platform for recruiting to help you grow, is at the heart of our growth. Watch this and call me.”