On HGTV, people can flip a whole house in a month. Meanwhile, I’ve been “getting ready to vacuum” for a week now. There isn’t a lot of mirth in residential lending, especially when it comes to discussing wealth trends. Don’t think that the housing market is helping to widen the gap between the haves and have nots? “Real estate investors purchased 67,943 U.S. homes in the second quarter of 2021, the highest quarterly figure on record. That’s up 15.1% from the prior quarter, and up 106.7% from the second quarter of 2020, when activity in the housing market was stalled due to pandemic restrictions.” And here’s a tip for lenders: make sure that you have decent cash-out refinance pricing & products. I am not a fan of using a house as a piggy bank, but “tappable” home equity is up to $9.1 trillion, according to Black Knight. The average mortgage holder has $173k in tappable equity, and debt consolidation refinances are a sales pitch for owners with high interest credit card debt. (The audio version of today’s commentary, available here, is sponsored by Origence. Its digital mortgage platform covers the entire lending life cycle, from application to closing, giving lenders the ability to replace their traditional mortgage stack with a single modern platform.)

Broker and Lender Services and Products

OptiFunder announces it’s now integrated with Encompass® by ICE Mortgage Technology™. Encompass users can tap OptiFunder’s Warehouse Management System (WMS) to reduce financing costs, streamline funding workflow, and manage all their most important warehouse relationships from a single platform. OptiFunder is now integrated with most major LOS systems and nearly 60 warehouse lenders. In 2021, IMBs have optimized and automated over $150B in fundings with OptiFunder’s decision engine, which uses AI and machine learning to analyze and factor complex terms and cycle timelines to select the best warehouse line. OptiFunder automates funding activity: Requests, wire confirmations, balance reconciliation, collateral tracking, shipping and paydown activities with Purchase Advice Reconciliation direct from the agencies and key investors. CEOs love the insights and advantages; CFOs love the savings and COOs love the automation. For a demo or more information, contact Carmel York or visit optifunder.com.

Tech Providers! Did you know ReverseVision has API Integrations that could help you expand your offerings and receive a new wave of requests from your lender customers? As the leader in the reverse mortgage industry, ReverseVision continually seeks new ways to empower its tech partners and lenders alike with the fastest way to connect to reverse mortgage lending options and create a seamless user experience across the entire HECM lifecycle. Lenders are regularly asking for a reverse mortgage lending solution within their existing technology. You could be their go-to provider! It is easy to get started: Learn how to partner with ReverseVision today.

Between 2020 and 2040, the Urban Institute projects that 70 percent of new homeowners will be Hispanic. That’s a tremendous opportunity to expand your reach and grow your business if you know how to tap into the market. Don’t miss out! MGIC can help you develop your Hispanic cultural competency and reach these first-time homebuyers with Spanish-language materials and more. Check out MGIC’s Hispanic marketing resources today!

RealtyBid®, Covius’ national online and live auction platform, now offers market-leading Fix & Flip property data in partnership with Weiss Analytics. This partnership empowers bidders to make informed decisions and delivers the numbers and insights that other auction platforms simply can’t. In addition, RealtyBid provides post-fix & flip valuation history for comparable properties to help bidders determine investment outlook and potential returns before purchase. RealtyBid users can estimate as-repaired sale value based on house specs and compare 1st and 2nd sales using an analysis of properties with similar characteristics that have recently been repaired and flipped. When numbers matter, it matters who you bid with. Find your Fix & Flip properties today at RealtyBid.com.

Why don’t our client MLOs need a yearly AML stand-alone course? Or other modules? Because www.MortgageEducation.com has a unique, more compliant, and more efficient process to save your org time and money and hours of redundant training. This unique solution is from the top partner in educational compliance (from your colleagues). Our products and solutions focus on increasing your bottom line and solidifying your audit preparation. We'd love to tell you more. Please contact Dave Olchek or request a demo.

From loan modifications and MSRs to the end of foreclosure moratoriums, the mortgage industry faces an increased need for efficient, cost-effective ways to confirm title, identify liens and judgments, and obtain tax-payment status. Black Knight offers a best-in-class Ownership & Encumbrance (O&E) Report so you can get this critical information from one, proven source. Black Knight’s affordable O&E reports offer a quick turnaround time and provide nationwide coverage. Produced by our experienced internal abstractors, the reports leverage Black Knight’s industry-leading data assets, which undergo a stringent quality-control process, so you can be confident the information is up-to-date and reliable. Try Black Knight’s best-in-class O&E reports today. Learn more. 

Don’t understand blockchain yet? It’s easy (but shortsighted) to dismiss blockchain as “a solution looking for a problem” in mortgage when it’s already mainstream in broader finance. Come learn how blockchain really works, and when it’ll go mainstream in mortgage. In this HousingWire webinar on Thu 9/16 (1pm CT), Sagent CEO Dan Sogorka, Figure founder Mike Cagney, and The Basis Point founder Julian Hebron will provide mortgage (and nonmortgage) “Blockchain 101,” then go deep into practical applications across mortgage originations, servicing, and securitization. All finance pros must stay up to speed as this megatrend evolves, and this briefing will keep you ahead. Sign up even if you can’t listen live!

Should I stay, or should I go? Other than being one of the most recognized songs from the 80's punk band, The Clash, this question is on many homeowners' and renters' minds. Mortgage rates continue to hover around 3%, and plenty of inventory is ready to be purchased. The ebbs and flows of the industry keep pressure on lenders to meet market demands. Outsourcing is often the answer. Computershare Loan Services (CLS) is a fulfillment expert staffed with highly trained, experienced processors, underwriters, and closers ready to jump in and take the overhead burdens off lenders' plates. Boom or downturn, CLS provides the operational support lenders need and helps reduce costs through a closed loan model platform — clients only pay if the loan closes. Partner with CLS and help your borrowers get to the closing table on time. In any market.

Clarification

A quick clarification on Friday’s commentary, where we ran news that Embrace Home Loans announced a partnership with Ameriprise Financial that will provide Ameriprise’s wealth management advisors and clients with mortgage financing and services. It turns out Embrace announced the partnership in May 2020, not last week. The partnership is going strong, though!

Wholesalers and Appraisals

Troy, Michigan has turned into the hotbed of appraisal news. Recall that private equity firm Gridiron Capital acquired Troy Michigan-based appraisal management company Class Valuation from another private equity player, Narrow Gauge Capital.

Earlier this year we had United Wholesale Mortgage with this: “Appraisals in 10 days or get 50% back. With Appraisal Promise, UWM-approved AMCs guarantee that the appraisal will be completed in 10 business days or 50% of the appraisal cost will be credited back. Every loan. Every UWM-approved AMC.”

On Thursday UWM announced the launch of UWM Appraisal Direct, giving clients another option when ordering an appraisal on UWM loans. “This will give UWM the ability to handle the appraisal process directly as the lender and no longer require their broker clients to utilize an Appraisal Management Company (AMC). This will give UWM the ability to handle the appraisal process directly as the lender and no longer require their broker clients to utilize an Appraisal Management Company (AMC).

“The program is currently in its pilot stage and will be fully released on Oct. 1 in all 50 states. The UWM Appraisal Direct team will manage the entire process from start to finish, including scheduling, execution, and delivery of the appraisal. The team will also provide unprecedented visibility for all parties with a tracking system and communication alerts. The new streamlined process will allow appraisals to be completed much faster than industry average to align with UWMs faster closing times… Appraisers who work with UWM Appraisal Direct will receive the full appraisal fee paid by the borrower. This means UWM will not pocket any management fees and 100 percent of the fee will go to the appraiser. Appraisers will also be paid the next business day following a successful appraisal completion.”

Many lenders and wholesalers have their own appraisal panels, of course. Wholesalers like Caliber and JMAC do the same thing. But has been pointed out several times in this Commentary, lenders and therefore their borrowers are grappling with appraiser, and appraisal, problems industry-wide. Many appraisals are expensive, few appraisers are entering the industry, and originators everywhere are seeing delays. On the flip side there is talk of technology and Agency policies changing the appraisal situation.

And called into question is the basic Appraisal Management Company (AMC) creation as a result of the Appraiser Independence Requirements (“AIR”). A lender lending, or an investor buying, a $200,000 loan put on a property worth $150,000 isn’t a winning situation, so accurate valuations are important. Certainly the CFPB has addressed the topic through publicizing the final rule on minimum AMC requirements. And although the CFPB has issued fines related to AMCs, it was because of inflated third party fees.

“In 2009, the New York Attorney General, government-sponsored enterprises Freddie Mac and Fannie Mae, and the Federal Housing Finance Agency (FHFA) established the Home Valuation Code of Conduct (HVCC) appraisal guidelines. The HVCC guidelines, no longer on the books, laid the foundation for the appraiser independence found in the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Truth in Lending Act. Laws obligating lenders to use independent appraisers led to a sharp rise in the use and number of AMCs.”

Things are always shifting in the appraisal world, of course. Canada’s Anow, a company that occasionally comes up when it comes to UWM, is owned by Canadian real estate technology company Voxtur Analytics Corp. (it acquired appraisal management software firm Appraisal Now (Anow) for approximately $30.5 million). Anow makes an automated appraisal workflow management platform for the global appraisal market.

Critics wonder if appraisers will sign up for UWM’s program, or any program for that matter, given the amount of business licensed appraisers have already. AMCs take about $125-150, maybe as much as $200. If a company like UWM offers $150 more than AMCs to take their orders, does it come with a price, such as appraiser saying they won’t do business with other AMCs? Stay tuned!

Capital Markets

Jobs and housing drive our economy, and tight labor market conditions remained the central narrative to the economy’s recovery. July’s Job Opening and Labor Turnover Survey showed there were roughly 0.79 available workers for each job opening as openings hit a record high. The rate of “quits” was one again above the pre-pandemic high indicating many workers feel the market for better opportunities is still favorable enough to be able to leave their current job for another. Businesses are still struggling to find workers in this market though many expected by this time the constraints to hiring would have faded.

The resurgence of COVID has delayed not only the return to work, but some consumers’ willingness to engage in highly social activities. Data from the Federal Reserve showed revolving debt (mostly credit cards) growth declined in July and aligns with other recent data suggesting a slowdown in consumer spending towards the end of the summer. The spending slowdown is expected to be temporary especially as the number of new cases is once again beginning to trend down. Remember that Friday we learned that inflation at the wholesale level rose 0.7 percent month-over-month and 8.3 percent year-over-year. While the annual numbers are being affected by COVID restrictions from a year ago, the 8.3 percent increase in prices is the highest reading going back to 2010.

Data this week includes updates on CPI, regional Fed surveys, import prices, industrial production / capacity utilization, retail sales, and business inventories. MBS prices are driven by supply and demand, and the NY Fed Desk is scheduled to purchase $4.9 billion MBS on average today and tomorrow. Today’s lone economic release is the August budget deficit this afternoon. We begin the day with Agency MBS prices roughly unchanged from Friday’s close and the 10-year yielding 1.33 after closing last week at 1.34 percent.

Employment and Transitions

Award-winning residential mortgage lender Homespire Mortgage proudly welcomes Stephanie Sailor as its new VP of Secondary Marketing. A seasoned mortgage executive with more than 20 years of experience, Sailor will be leading Homespire’s initiatives related to loan purchasing, sales and servicing transfers, leveraging her broad industry knowledge and proven expertise to help fuel new growth opportunities for the lender. Homespire Mortgage is a leading, fast-growing mortgage company providing exceptional borrower experiences across 42 states, helping homebuyers responsibly and affordably finance their dreams of homeownership. “At Homespire, we believe talent acquisition is a critical component to our growth and success, said Michael Rappaport, president of Homespire Mortgage. “As a secondary market expert and proven mortgage professional, Stephanie brings an in-depth knowledge of capital markets to our company, and we are excited to have her as part of our team.”

Caliber Home Loan’s very own Stephanie Kupke, VP Product Development, is among the nation’s 100 operational superstars as announced by HousingWire’s list of 2021 Insiders. “The 2021 HousingWire Insiders all possess the intellect, stamina and leadership to transform the housing industry for the better, growing businesses and supporting millions of American families,” said Clayton Collins, CEO of HousingWire Media. As Caliber’s VP of Product Development, Stephanie is responsible for creating and driving efforts to help borrowers finance the home of their dreams. “In 2021, she and her team successfully launched more than 45 individual programs across more than 20 housing finance agencies, introduced non-QM products through Caliber’s brokered partnership with Newrez, and expanded Caliber’s Jumbo investors to offer completive pricing and programs across the U.S. Way to go Stephanie! You’re definitely a superstar to us. Want to join a winning team that appreciates talent and innovation? Contact James Hecht.”

Assurance Financial is continuing to grow production, add retail branch origination offices, and expand its production reach into the midwestern U.S., particularly the Colorado, Arizona, Kansas, Missouri, and New Mexico markets. “We are searching for an established Regional Production Manager to help create and develop mortgage origination branches in the new midwestern territory, someone who is an outstanding talent and proven retail sales leader with a demonstrated track record of hiring and managing multiple production offices across several states. We are a profitable and well-capitalized full-service mortgage banker offering an entrepreneurial, customer-focused sales support environment, FNMA/FHLMC/GNMA direct status, and well-positioned to compete for more growth with state-of-the- art operations/support technology. This new Regional Production Manager position will report to the CEO. If you are interested in joining a dynamic group of mortgage bankers and building a first class production team, please contact Paul Peters, CMB or visit AssuranceMortgageLO.com to learn more.

“I don’t think I ever felt as vulnerable as I did on September 11th,” says Rick Roque, Corporate Vice President at Shamrock Home Loans. “I imagine how the families were affected and friends lost… Everyone in America knew someone affected on that day. I was living in Minnesota and my company had an office in WTC1. We lost everyone that day. While at work, we hugged, cried, and loved one another as we watched the building collapse. Why is it only in tragedy that treat one another in a deeply human way? I was attracted to Shamrock because it is a company that views both employees, clients and referral partners as people who need love, support and even prayer during critical moments in their life. We know that the mortgage transaction occurs around life’s critical moments: new jobs, marriage, divorce, childbirth, retirement, and death. You should expect more from your company: JoinTheRock@ShamrockHomeLoans.com.