You’ve made it to Hump Day yet again, and as a reward, how about this webcam shot of Warrior Canine Connection’s Puppy Cam?! (Hey, it’s my commentary; I can put in anything I want, right?) I hope those pups have a long healthy life. Regardless of political party, millions of Americans who get health coverage from employers could lose their coverage during the COVID-19 pandemic, which will, in turn, impact the health care costs of everyone else. Previously released estimates from the U.S. Census Bureau’s Current Population Survey Annual Social and Economic Supplement show that about 55 percent of the U.S. population, nearly 180 million people, had employer-sponsored insurance (ESI) in 2018. Occupations most at risk of losing health coverage: food preparation and serving; building and grounds cleaning and maintenance; personal care and service; and retail sales, collectively comprise about 40 million workers or one-quarter of the workforce. Additionally, nearly one-half children under 19 years, also about 40 million people, have health insurance through their parents’ ESI plan. Speaking of parents, is it just me, or is Fannie Mom and Freddie Dad? “Mom, can I have an appraisal waiver?” “I say ‘no,’ but you can ask your father.” More Agency news below.

Broker and Lender Services and Products

Have you seen the results from LBA Ware’s Q2 2020 Mortgage Loan Originator Compensation Report released last week? Although paychecks were larger in Q2 2020 than Q2 2019 thanks to big gains in originated and funded volume, a 230% period-over-period uptick in refinance production contributed to a 2.7% decrease in per-loan commissions, from 108 BPS in Q2 2019 to 105 BPS in Q2 2020. If you dig this kind of data, you should see what LBA Ware is doing with its LimeGear business intelligence platform. Its out-of-the-box dashboards are designed to make BI turnkey by connecting the dots between insights and action.

It’s been an incredible two weeks since the launch of ReadyPrice, and in particular, it’s impressive to see the adoption from Wholesale Mortgage Brokers across the country in such a short period of time. As explained by ReadyPrice CEO & Founder, Rick Soukoulis, in a recent LinkedIn video “the pricing engine allows you to shop rates from over forty-five of the top wholesale lenders at no-cost, then deliver approved DU findings to them through our Fannie Mae integration.” It takes just 60-seconds to sign up for ReadyPrice, granting users immediate access to start searching rates and delivering approved loans through the easy-to-use application.

“Stearns Wholesale Lending has become a benchmark in providing brokers the blueprint to growth and success. Our focus on developing groundbreaking technology, creative solutions, and offering a broad product mix has helped our clients expand and grow their business for more than 30 years. One of the primary tools in our tech arsenal is the SNAP 2.0 portal, which makes it easy for brokers to get up and running quickly. Check out this recent profile from HousingWire and see how our SNAP 2.0 mobile app is helping our brokers access their pipeline, manage documents and lock with ease. Last week, we launched our first major update to the SNAP platform, which introduced a sleek enhanced look and exciting new features. Over the next few months, our SNAP platform will continue to roll-out upgrades that will improve business processes and usability based on feedback from our users. If you’d like to partner with Stearns, click HERE  to be contacted.”

In recent years, rapid developments in machine learning and data science have spurred an AVM renaissance. No longer just a marketing tool, AVMs are gaining popularity as an effective and trustworthy solution in higher-stakes situations, including home equity lending and portfolio valuation. But do AVMs only work in stable, upward-trending markets? What happens when markets are constantly changing and uncertain, like we're currently experiencing with the COVID-19 pandemic? Register for this webinar to learn what to expect from your AVM during uncertain market conditions, how much we should trust AVMs — stable markets or not — and why AVMs that use the "machine learning approach" will outperform and outlast all the others.

Mortgage companies turn to Capacity to increase employee productivity and job satisfaction, build customer loyalty, and improve quality and efficiency, while reducing costs at the same time. Capacity, a new kind of helpdesk powered by artificial intelligence, empowers mortgage professionals with instant knowledge and automated workflows. 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.

“A quarter million-page views, with over half of our traffic from Google via organic SEO.  If they can trust Vendor Surf, we hope you will too.  Now in its third year showcasing the most innovative solutions and recognized brands, SEARCHERS can 'Find 'em Fast,' on-screen and in real-time, via 3,000+ search filters, unlike any other site. Vendor Surf is the premier destination for decision makers at banks, mortgage companies and credit unions. Sourcing committees, and operations leaders alike, rely on Vendor Surf as the digital hub that intelligently connects them to desired vendor partners since we maintain the most robust calendar of events, conferences, webinars, podcasts, training and other unique content and resources. We post yours for free. Vendor Surf – the only search engine in the industry, with unmatched reach and credibility. See WHO JOINED the revolution in 2019.”

When something as unexpected as a global pandemic happens, it's important to check your mental health, physical health and keep your financial wellness top of mind. Unemployment, economic downturn, and fear for losing their homes were just a couple of reasons why COVID-19 pushed borrowers into forbearance. What your subservicer may be failing to do for your borrowers is educating them on their forbearance options and making sure you are catching borrower delinquencies before they happen. With the use of great technology like SIME, TMS Subservicing provides 100% real time COVID-19 reporting and insights. Take this Subservicer Health Check from TMS to determine if your subservicer has a strategy for your customers during COVID-19 and whether or not they're executing it.

Borrower risk and resiliency are hard to assess, and overstated/understated credit scores impossible to uncover, without data-driven “intelligence”. Everybody has big data…it’s how you use it that matters! The actionable Mortgage Risk & Fairness Score is powerful, incremental intelligence and enhancement that makes mortgage banking easier, safer, fairer, and more profitable. For all channels and departments, MRS delivers easy to use, predictive and prescriptive, risk & behavioral analytics such as propensity, ability, resiliency, and “willingness to pay”. The benefits are greater visibility, informed decisions, sharper pricing, fewer overlays, financial inclusion, additional DD, faster turn-times, and increased volume and margins. MRS is plug-n-play, validated (top 10 bank) and vetted (CFPB, OCC, Fed). Click for information.

Freddie and Fannie

As a reminder, the Consumer Financial Protection Bureau (CFPB) has opened a public comment period on amending the definition of a “qualified mortgage” to replace the debt-to-income limit with a price-based approach. And the CFPB proposes to extend the Fannie Mae and Freddie Mac “GSE Patch” beyond its current January 2021 expiration date to continue until the effective date of a final rule amending the qualified mortgage definition.

As of Aug. 3, Fannie Mae will begin accepting SOFR ARMs and issuing SOFR-based MBS. All Fannie Mae Single-Family applications have been updated to include the new SOFR ARM products. Review the Browse Prices Export File Specification for the updated export product order in Pricing & Execution – Whole Loan. View this page for more information about the steps Fannie is taking to help ensure a smooth transition away from LIBOR.

Fannie Mae is providing a self-assessment designed to help Fannie Mae servicers evaluate their COVID-19 response to better serve their borrowers. In this resource, topics include Fannie Mae requirements as well as recommended practices for managing servicing while successfully navigating market disruptions.

Flagstar recently implemented temporary Conventional and Government Employment Verification and Income Updates Due to COVID-19. Flagstar also posted changes to the Purchase Special and Agency Cash-Out Refinance adjustments.

Flagstar announced the launch of one-click Dual AUS which is now available in tpo.flagstar.com. This new Dual AUS feature will allow you to run both Fannie Mae Desktop Underwriter and Freddie Mac Loan Product Advisor at the same time, compare findings and options quickly, and select which response you want to use.

Caliber continues the transition from the London Inter-Bank Offered Rate (LIBOR) index to the Secured Overnight Financing Rate (SOFR) index for conventional Conforming LIBOR ARMs.

LIBOR ARMs closed on and after June 1, 2020, must include a Note and rider containing the new fallback language as published by Fannie Mae and Freddie Mac.  Fall back language provides direction for the replacement index when a loan’s current index is no longer available.

August 1, 2020 is the last day to lock a LIBOR ARM with Caliber. September 30, 2020 is last day for LIBOR ARMs to be purchased by Caliber. The anticipated timeframe for accepting locks for SOFR ARMs is the late 3rd Quarter 2020.

Speaking of preparing for the transition away from the LIBOR index, Mountain West Financial, Inc. retired all Fannie Mae and Freddie Mac Conforming and High Balance/Super Conforming ARM products as of May 1, 2020.

Recall that a few months ago, for all Fannie Mae and Freddie Mac refinance transactions delivered to AmeriHome for purchase, unless the AUS offers an appraisal waiver, an interior and exterior appraisal is required. (Exterior-only appraisals are not acceptable.) The Temporary Fannie Mae and Freddie Mac Appraisal Flexibilities Table has been updated with this change.

AmeriHome posted New Section Additions applicable to various investors. Regarding Continuity of Income, Freddie Mac and Fannie Mae updated Gap of Employment information:

A gap in employment or a reduction in income due to COVID-19 cannot be excluded from the calculation, and the year to date income must continue to be calculated over the entire time period. Refer to applicable Agency COVID-19 FAQs for complete details.

Mountain West Financial is now offering Colorado Housing Finance Agency (CHFA) Products to Wholesale. After completing the CHFA Lender Training, there are multiple fixed rate program are available for immediate use. Conventional loans, Purchase or Refinance, include CHFA Preferred: 1st mortgage with no down payment assistance (DPA). Not limited to first time homebuyers (FTHBs). CHFA Preferred Plus: 1st mortgage with a DPA 2nd. Not limited to FTHBs. CHFA Preferred VLIP: 1st mortgage with no DPA. Reduced interest rates for Very Low Income (VLIP) borrowers. Not limited to FTHBs. CHFA Preferred Plus VLIP: 1st mortgage with a DPA 2nd. Reduced interest rates for VLIP borrowers. Not limited to FTHBs.

Mountain West Financial Wholesale posted that Golden State Finance Authority (GSFA) has announced Conventional Platinum and Conventional Open Doors. Borrowers >80% Area Median Income (AMI) will be subject to income limits. These generous limits will take effect with loans locked on and after July 12, 2020. Limits will be based on the county in which the home is located and will be available on GSFA’s website July 12th. Refer to Platinum Income Limits and Open Doors Income Limits.

Capital Markets

Asset purchases by the Federal Reserve are easing, but the central bank remains committed to keeping markets functioning and stimulating economic growth. The Federal Reserve has extended emergency lending operations to year-end: "The three-month extension will facilitate planning by potential facility participants and provide certainty that the facilities will continue to be available to help the economy recover." Economists are scaling back forecasts for asset buying as demand for urgent assistance fades. The Federal Reserve might have to reconsider its forecast that an economic rebound will occur in the second half of this year, given a resurgence of coronavirus cases. Surveys show a growing number of small businesses doubt they can survive until the end of the recession.

The summer seesaw continued yesterday for MBS and U.S. Treasuries, which rallied across the curve after pulling back to start the week. It’s not like coronavirus fears went anywhere, and the same could be said for negotiations for another relief bill in Congress, and U.S. relations with China. One could argue markets were lying in wait for today’s Fed statement, but there was certainly a lack of new headlines. The day's $44 billion 7-year Treasury note auction was met with good demand, and the Conference Board's Consumer Confidence Index slipped in July more than expectations after a strong June reading as the resurgence of coronavirus cases and efforts to pause or roll back reopenings weighed on consumer attitudes. Consumers have gotten less optimistic about the short-term outlook and "remain subdued about their financial prospects," which is not good news for consumer spending. Separately, the S&P Case-Shiller 20-city Home Price Index increased 3.7 percent in May, but that was less than both expectations and the reading in April.

Today’s economic calendar kicked off with the Weekly MBA Mortgage Index, which saw mortgage applications decreased 0.8 percent from one week earlier for the week ending July 24. We’ve also had the Advance June goods trade balance (narrowed to $70.6 billion), advance June Retail Inventories (-2.6 percent), and advance June Wholesale Inventories (-2 percent). Later this morning brings June Pending Home Sales before the ever-important July FOMC Rate Decision and subsequent press conference by Fed Chair Powell. The Desk will conduct three FedTrade operations totaling up to $5 billion starting with $753 million UMBS15 2 percent and 2.5 percent at followed by $2.8 billion UMBS30 2 percent through 3 percent and $1.5 billion GNII 2.5 percent and 3 percent. We begin the day with Agency MBS prices a couple ticks (32nds) higher and the 10-year yielding .58 percent, unchanged from Tuesday’s close.