In these days when you can’t even get 100% of Americans to agree that water is wet, we have hurricanes, gold prices skyrocketing, COVID relief debates, and ninety-nine days more of “fun” until the election. Yes, it appears that another COVID aid package is grinding its way slowly ahead of Congress’ summer recess, but let’s talk about something that the two parties agreed upon way back when: 30 years ago, on July 26, 1990, President George H.W. Bush signed into law the Americans with Disabilities Act, which prohibits discrimination against people with disabilities in employment, transportation, public accommodations, commercial facilities, telecommunications, and state and local government services. Today, no child can legally be denied schooling because of a disability. Workplaces and public spaces have been transformed. But it’s also clear that disabled Americans continue to endure inequities. Per the U.S. Census Bureau, 40.6 million or 12.6 percent of the total civilian noninstitutionalized population in the U.S., had a disability in 2018. Disabled individuals over 16 only had median earnings of $23,848 in inflation adjusted dollars, however, in the past 12 months before that survey.
Consumer Direct Webinar
Join tomorrow’s MBA webinar: 5 Strategies for Growing Your Consumer Direct Inbound Sales, Thursday, July 28th, 2 PM ET. Join us on this new MBA webinar as Michael Hammond, host of the FinTech Hunting podcast, interviews industry leaders Ken Bartz, Chief Visionary Officer of Monster Lead Group and Ryan Farhat, Regional Senior VP of The Federal Savings Bank as they reveal how to structure your organization to leverage and capture every possible loan in this once-in-a-generation boom market. Join this tactical and strategic conversation on specialization, recruiting and hiring, marketing, managing growth and selling without over-spending or over-hiring. These are the same strategies TFSB used to grow 130% in 2019 and achieve extraordinary loan volumes in 2020. Not an MBA member? Not a problem! REGISTER HERE for FREE with PROMO CODE: MONSTER100 and save $299.
Capital Markets
Last week ended with continued U.S. - China tensions and as well as worries about a stalled economic recovery. Record monthly issuance in the MBS market on Friday and a sizable drop in daily Fed support contributed to lower MBS prices, though U.S. Treasuries across the yield curve ended the day little-changed (the 10-year was unchanged on the day; -4 bps for the week). The 5-year yield did hit a record low in the middle of the day, ignoring a strong New Home Sales report for June that saw a 13.8 percent month-over-month increase to the strongest pace of sales since July 2007 and higher than the pre-pandemic pace seen in January. The home market is healthy given the tight supply of existing homes for sale, low mortgage rates, pent-up demand, and the beginning of a shift by city dwellers to suburban settings.
While those New Home Sales figures were uplifting, most other official numbers have begun to confirm what many Americans feel in their gut: the economy is hurting once again. Multiple economic indicators have flatlined in recent weeks. In May and June, U.S. employers were adding jobs. People were eating out more often and spending more money in stores than March and April. But that mini-recovery seems to have ended, as U.S. jobless claims unexpectedly rose last week for the first time since March. Restrictions have been reimposed across the nation, and for who knows how long after the country reopened more quickly than medical experts were urging, causing virus cases to surge to past 4 million domestically.
The uptick in jobless claims and virus cases comes as Congress races against the clock to negotiate a second relief package this week. Back in March, a key component was the supplementary $600 a week in unemployment benefits until July 31. At the time, that expiration date seemed far away. But here we are, four days from expiration and nowhere near an economic recovery, with roughly one in five workers dependent on that extra $600 to pay bills, and a staggering 30 million people reportedly receiving jobless benefits. The government’s eviction moratorium is also set to expire. Treasury Secretary Mnuchin insisted the GOP had a "fundamental agreement," and said the proposal mirrors earlier stimulus payments, which would continue some portion of the expanded unemployment benefits (the exact amount is still undecided), replenish additional sources of aid (like the Paycheck Protection Program), and include funding for schools and testing.
The other big news last week, which I alluded to at the start of this section, was the ratcheting up of tensions between the U.S. and China. On Friday, China ordered the U.S. to close its consulate in the southwestern city of Chengdu, after the Trump administration’s move to close China’s consulate in Houston earlier in the week due to allegations of espionage at the location. The deteriorating ties may put the trade deal at risk, though President Trump admitted last week that the trade deal means less now than when it was made. Chinese leaders hopefully are trying to avoid a complete breakdown in relations with the U.S., as Beijing clashes with India, Britain, Canada, Australia and many other countries. Markets have slid on the news.
One sign that traders are wary that the Fed could ramp up quantitative easing and buy more long-term debt has been the flattening of the Treasury yield curve in recent weeks. The gap between 5- and 30-year yields has fallen to just above 100 basis points, from a 2020 high of 129 last month. And that comes as the belly of the yield curve has dropped toward record lows, as I mentioned in the first paragraph. You may have heard the term the “belly of the yield curve,” which refers to durations (roughly three to seven years) of Treasuries in the middle of the curve. Normally, the 10-year yield is the “benchmark” that everybody concerned with mortgage rates watches, but the belly of the curve is important for LOs to remember as well, because MBS traders follow shorter maturities since the actual maturity of the typical 30-year mortgage is closer to those time periods. When a yield curve flattens, as it has been doing recently, the belly of the curve sees the most volatility. Traders minimize volatility by balancing their portfolio between short and long-term holdings.
Speaking of the Fed and their activities, the question Fed officials face heading into this week’s July 28-29 meeting is whether they make any changes to guidance on short-term rates. Some Fed officials in recent weeks have suggested the Fed needs to achieve sustainable 2 percent inflation, a goal that likely means overshooting that target for some time. While the release of the Fed statement and Chair Powell’s subsequent press conference on Wednesday afternoon will likely be the highlight for markets this week, there are also several higher tiered economic releases including durable goods, housing data, consumer confidence, Q2 GDP, PCE and consumer sentiment.
With regards to MBS and besides Friday’s month-end-related trades, the Desk will release a new MBS FedTrade schedule covering the July 28 to August 13 period this afternoon and will conduct the last three FedTrade operations on the current schedule, targeting up to $5.6 billion MBS starting with $1.5 billion GNII 2.5 percent and 3 percent followed by $2.5 billion UMBS30 2 percent through 3 percent and $1.5 billion GNII 2 percent and 2.5 percent again. As far as economic releases go, we’ve already had June durable goods orders (+7.3 percent), ex-transportation (+3.3 percent, as expected). Later this morning brings Dallas Fed manufacturing and $49 billion 5-year Treasury note auction results (see, that belly!). We begin the week with Agency MBS prices a whisker better and the 10-year yielding .58 percent after closing last week at the same yield.
Employment
Constant’s self-service loss mitigation platform that processes loan modifications in minutes is gaining traction with top 20 banks and source systems platforms. Constant is looking for an experienced Head of Partnerships, Financial Services to drive new opportunities to build out Constant’s growing network of financial services companies. This dynamic position will operate on the frontlines focused on expanding relationships with partners at the C-Level to create customer value and forge new commercial partnerships. An existing network of relationships and a background in loan servicing, collections and/or loss mitigation is a must. A genuine desire to help lenders and servicers fully automate long-term hardship relief options, drive loss savings, and reduce compliance risk is a plus. For a full job description, and to apply, click here.
Caliber Home Loans’ CEO, Sanjiv Das was recently interviewed on Bloomberg TV providing thought-leadership on the reasons for the latest record-setting data for existing home sales. He discussed interest rates which are at a record low, housing price trends that continue to inch up, and the wide-ranging recognition that the buy vs. rent equation is now favoring purchasing a home. Caliber is focused on helping families purchase the home of their dreams as well as keeping families in their homes through all stages of home ownership. For more information in joining our team, please contact Jonathan Stanley for consideration. If you are interested in a sales opportunity at Caliber, please contact Brian Miller for immediate consideration. Visit the Caliber Careers website for opportunities across the organization!
American Mortgage Network is teaming up with the organization Active Duty Passive Income (ADPI) to help members of the military past and present. ADPI professionals are joining AmNet as employee owners, part of the ESOP. This unique “partnership” will accelerate AmNet’s ability to help veterans realize their dreams of home ownership while ADPI helps veterans to become financially independent. With all the talent at ADPI, it’s an opportunity to train future mortgage bankers: loan officers, processors, underwriters, and closers. As employee owners at AmNet, active military, veterans and their spouses can work from anywhere, no matter where they are stationed. They welcome learning new skills that are transportable regardless of where one works. VA Loans are the bread and butter of AmNet’s business and what better way to encourage participation in this market. It’s a win-win for all! If you would like to join the AmNet team, please click here.
First Guaranty Mortgage Corporation is breaking all-time company records and our award-winning leadership team is looking for highly motivated Processors, Underwriters & Closers who are ready to join a team of all-star Mortgage Mavericks! Our #MortgageMaverick culture means that we think outside the box, act with integrity, and put our people (employees, partners, borrowers) first always. We recently launched an employee experience initiative, which includes a charitable partnership with CASA, Paid-Time off to volunteer, a virtual Speaker Series, Career Launch Conversations, and an employee-led council made up of high-potential employees who will help guide our next steps for expanding our brand. Our commitment to our culture is clear and we would love for you to be part of the 150+ people that we plan to add to our team! Key benefits of our operations positions may include: Unlimited PTO, Aggressive Compensation Plans with Sign-On & Retention Bonuses, Monthly Incentive Programs, and 401-K Match with 2-year vesting! Plus, all Operations Positions are eligible for remote work. Contact us today at careers@fgmc.com or apply online to learn more!
“Freedom to Succeed! Freedom Mortgage is growing and looking for talented and experienced Wholesale operational professionals to help us serve the needs of borrowers, brokers, and wholesale correspondents across the nation. Work from home opportunities for Loan Processors, Closers and Underwriters are available throughout the continental U.S. Prior to the COVID-19 pandemic, the vast majority of our teams already worked from home, so you will be ready to seamlessly and efficiently contribute to our goals on day 1! If you are fueled by your entrepreneurial spirit and are looking for a great work culture, please visit bit.ly/FMRecruiting to review available positions and submit your resume.”
“Managing technology deployment in normal times can be challenging but doing so in a high-volume environment can seem nearly impossible. Whether implementing a CRM, deploying new POS, or simply enhancing internal systems or procedures, most mortgage companies face serious obstacles and potential pitfalls when managing change in their organization. Agility 360 a mortgage-centric recruiting and project staffing firm offers Change Management Resources to solve this problem. We provide personnel with extensive industry experience to seamlessly support critical projects and strategic initiatives. By leveraging our unique Agility Resource Network, we can rapidly deploy project and program managers, software engineers, business analyst, technical writers, and trainers to ensure everything goes according to plan. Through our comprehensive and proven client engagement process, we closely align high-performing and vetted personnel to match your specific needs and situation. If you’d like to learn more about how we can help, please contact Raj Sharma at 469-208-6337.”
Congratulations to Rich Tucker, the new COO of Waterstone Mortgage. Rich has been with Waterstone Mortgage since June of 2018, when he joined the company as a Regional Operations Manager during the onboarding of the Albuquerque, New Mexico regional branch. In September of that year, he was promoted to SVP of Loan Operations.
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