This morning the Mortgage Bankers Association's Research Institute for Housing America (RIHA) released, The Impact of Climate Change on Housing and Housing Finance.” Whether or not you believe in it, if it impacts MBS pricing, it impacts your borrowers, and what are you going to do about it? Strategy is for amateurs; execution is for professionals. And Earnest Hemingway noted, “Never mistake motion for action,” but there is plenty of actual, and perceived, examples of all of this at Freddie Mac and Fannie Mae, relayed from the FHFA. Talk of exiting conservatorship (if it’s not broke, why fix it?) has vanished, replaced by forging ahead with their missions, executing the game plan of the Biden Administration, and acting on helping first time and minority home buyers. The acting Director of the FHFA, Sandra Thompson, has quickly demonstrated an industry-friendly attitude but with heavy overtones of common sense and safety & soundness, welcomed by those in the residential space. The interface between government and lending continues to be felt; see “Government Gyrations” below. The audio version of today’s commentary, available here, is sponsored by Reggora, modernizing residential valuation and helping lenders streamline their appraisal process to close loans quickly and efficiently.

Services and Products

“Are you receiving consumer complaints? Are you utilizing everything you can to handle them? Richey May’s Loan Level Testing will provide succinct and valuable insight into consumer complaints, including questions related to forced-place insurance. Our services help you drill down further into how your personal portfolio is being serviced and assist in the client-subservicer relationship providing value far beyond the basic compliance requirements to drive value for your business. Contact us to be learn more or participate in Richey May's subservicer reviews or loan level testing.”

Best Offer Package is Making its Official Debut September 24-25 at AIME FUSE 2021. Best Offer Package (BOP), designed by mortgage and real estate industry veterans, is making its official debut on September 24th & 25th at the AIME FUSE 2021 event in Las Vegas. Do you want to be the go-to Loan Officer in the purchase market? You need a hook that will get Realtors to listen to you. The BOP platform is a revolutionary pre-approval and offer generating system that creates brilliant offer packages in less than 5 minutes to help you, your Realtor, and your clients win homes in today’s crazy real estate market. Complete with a redact tool adding the extra security you didn’t know you needed, BOP helps you build stronger relationships and spotless pre-approvals. Join Loan Officers nationwide who are already using the platform, winning business, and impressing Realtors. Stop by booth1103 or email to request a demo and let them help you open the door to more purchase business.

Brokers it's time to stand out and be different! Luxury Mortgage Corp.® is Non-QM Lending. Take advantage of Luxury’s Simple Access® suite of Non-QM programs® suite of Non-QM programs; Full Doc, Bank Statement, Asset Qualifier, 1099 and DSCR. Notably, Luxury Mortgage is able to consider bank statement loans with no minimum expense ratio (with a 3rd party expense ratio statement). Also, only 1 appraisal required up to a $2MM loan amount, full doc options for borrowers recently self-employed and fast exception decisions on loans before they are formally submitted! Gifted funds allowed on primary, 2nd home and investment property purchases. Non-occupant co-borrowers allowed as well. In addition to its DSCR offering, Luxury Mortgage has NOO options for all of its other doc types up to 80% LTV while allowing gift funds. Find out what all of the industry buzz is about! Click here to become an approved wholesale broker or correspondent seller.

ActiveComply: Love it or hate it, social media is a critically important tool that lenders and servicers must utilize in order to attract new customers and stay on the cutting edge of contemporary marketing strategies. But how does one safely navigate the cluttered tangle of federal mortgage regulations and their ambiguous reach when it comes to the relatively new world of online advertising? There are many federal and state regulations designed to keep the mortgage industry fair for all and recent years have seen current laws fine-tuned to include social media, as well as new regulations specifically created for this brave new world of marketing potential. Read ActiveComply’s most recent article on Mortgage Advertising Regulations and check out our Record Retention Geomap to learn more about archiving requirements. ActiveComply: making social media monitoring simpler, more compliant, and at a lower cost. Request a free compliance report for your company today.

Here’s a company that decreases costs/increases revenue while providing training (wait... what?). Unlike other providers (NMLS/Compliance), these folks partner with IMBs - their solutions reduce MLO training time and keep the sanity of your Compliance Team with cross-certified courses – a merging of CE and mandated compliance courses with a robust tracking/assignment portal. Contact Dave Olchek or request a demo from www.MortgageEducation.com. Hear what your colleagues have to say.

Mortgage blockchain still unclear? No sweat! Check out this briefing where Sagent’s Dan Sogorka, Figure’s Mike Cagney, and The Basis Point’s Julian Hebron get real about mortgage blockchain and when — not if — it’ll go mainstream in our industry. The hugely popular HousingWire session covered specific 2021 and 2022 blockchain milestones in originations, servicing, and securitization. If you missed it live (or if it didn’t sink in yet), you can either catch our recap here (covering key points from these 3 seasoned pros) or watch the on-demand recording here. Or both … but definitely both!  

M&A

Mergers and acquisitions… owners will either veer away from thinking about it, or welcome the discussion. The STRATMOR current blog is, “An M&A Snapshot.”

Is mortgage industry M&A really as hot as it seems right now? See the September issue of STRATMOR Group’s Insights Report for the answer. Principal David Hrobon analyzes the year-to-date trends that suggest 2021 will record even more M&A transactions than the record year of 2018. “Our insight comes not only from STRATMOR’s client base, but also from our data that provides us with a significant pool of information to help make sense of the fast-changing mortgage lending business,” says Hrobon. “Current data indicates that we are experiencing some level of industry consolidation.” Is now the time to buy or sell? Sellers stand to earn a premium now and buyers can get growth at a discount — if they act now. Hrobon says doing M&A right means one plus one can equal three. Don’t miss Hrobon’s article, “Mortgage Consolidation: Fact, Fiction or Frenzy?” in the September Insights Report.

Government Gyrations

With the Democrats holding the presidency, the Senate, and the House of Representatives, we were supposed to avoid the funding and debt ceiling controversy, right? The Mortgage Bankers Association has its finger on the pulse of DC, and Bill Killmer sent out a piece, paraphrased below, from the Capitol Hill daily Punchbowl News (Anna Palmer and Jake Sherman). It is a good, fairly succinct summary on Congressional machinations happening in our capitol after the House-passed measure. The government funding and debt ceiling debate? “The White House and Democratic congressional leaders must decide very soon how far they’re willing to push this partisan showdown with Republicans over the nation’s debt limit and government funding. Funding for federal agencies runs out on Sept. 30. While we don’t believe there’ll be a shutdown, neither side has been willing to back down yet, so it’s a distinct possibility at this point. The House passed a short-term funding bill on Tuesday night that would keep federal agencies open until Dec. 3 while raising the debt limit through December 2022. Aside from one abstention, it was a straight party line vote: 220 Democrats yeas, 211 Republicans nays.

“It was sent over to the Senate Wednesday without any parliamentary advantage for quick consideration. Senate Majority Leader Chuck Schumer will then call the bill up and file cloture. That cloture vote won’t occur until Friday, Sept. 24. That’s just six days from the end of the fiscal year and a possible shutdown. Senate Democrats won’t get the 60 votes they need to overcome the GOP filibuster. At that point, Democrats will be forced into a decision. Do they continue pushing funding legislation with the debt limit increase attached, risking both a government shutdown and even more disastrous debt default? Or do they find another path? We already know that Senate Republicans, led by Minority Leader Mitch McConnell, will block this continuing resolution because of the inclusion of the debt limit…”

There are a variety of actions that may take place, but we should know by tomorrow what situation Democratic leaders and the White House face. “Their window for action will be that much smaller. But some action will be required in order to avoid catastrophic outcomes that neither Biden nor Democratic leaders will want.”

Meanwhile, lenders, national parks, non-essential workers, and many more entities are dusting off their government budget impasse playbooks.

Capital Markets

This week, Fannie Mae and Freddie Mac provided Lender Letters following the FHFA and U.S Department of Treasury announcement regarding Preferred Stock Purchase Agreements (PSPAs). Join MCT on Friday, September 24th at 10am PT for a public webinar as they review how these announcements will impact your business. They will also consider how your loan pipeline may be affected and which loan characteristics should be reviewed. Register for the webinar and join the MCT newsletter to stay abreast of the latest mortgage industry news.

The big risk event of the week was always going to be the FOMC meeting and takeaways. The Fed didn’t change rates or announce an official start of tapering on asset purchases, but did acknowledge that a moderation in the pace of asset purchases may soon be warranted in the event of continued progress toward the Fed's goals. In a unanimous vote, the FOMC agreed that economic activity continues to strengthen, inflation has risen, but will be transitory, and risks to the economic outlook persist. In layman’s terms, that means that the much anticipated “taper” of Treasury and mortgage securities purchases could begin as soon as November and be completed by mid-2022. During his press conference, Fed Chair Powell said that inflation is expected to remain at an elevated level for months before moderating, and that a formal tapering announcement could be made at the next FOMC meeting, which means that the Fed could begin scaling back asset purchases as soon as November. He did stress that does not mean a countdown to changing from zero interest rates should begin. Updated quarterly projections indicated officials are now evenly split on whether or not to increase the federal funds rate as soon as next year. In June, the median projection indicated no rate increases until 2023.

Existing home sales decreased 2.0 percent month-over-month in August to a seasonally adjusted annual rate of 5.88 million, beating expectations. Total sales in August were down 1.5 percent from a year ago as the supply of existing homes for sale remains tight, particularly at more affordable price points. The first-time homebuyer share again declined (to about 30 percent of purchases), highlighting inventory shortages and fast-rising home prices that continue to challenge prospective buyers and sales overall. Inventory of existing homes on the market is about 1/8 below last year’s levels, though there are more than 700k homes under construction.

Today’s busy economic calendar is already underway with the Chicago Fed National Activity Index for August (+.29). We’ve also received weekly jobless claims (yikes: +26k to 351k, going in the wrong direction; continuing claims +131k!). Later this morning brings preliminary September Markit PMIs, Freddie Mac’s Primary Mortgage Market Survey, KC Fed manufacturing, and a $14 billion reopened 10-year TIPS auction. The Desk will purchase up to $4.7 billion of conventionals across 15-year 1.5 percent and 2 percent and 30-year 2 percent and 2.5 percent. We begin the day with Agency MBS prices worse a solid .125 and the 10-year yielding 1.34 after closing yesterday at 1.34 percent after the Fed news and jobless claims heading in the wrong direction this morning.

Careers and Transitions

Track record of long employee tenure = Assurance Financial, 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. Best tech stack in the mortgage marketplace = Assurance Financial. Exemplary record of servicing purchase money market MLOs = Assurance Financial. Incredible entrepreneurial branch manager business and compensation model = Assurance Financial. Community-service oriented in all markets with St. Jude as our philanthropy partner = Assurance Financial. Founded in 2001, licensed in 43 states, not controlled by private equity, and growing in all markets. If you are an aggressive producing branch manager or senior mortgage loan officer considering a step up in your career, contact Paul Peters, CMB to discuss a mutual opportunity or visit AssuranceMortgageLO.com to learn more!

Hamilton Home Loans announces a new SVP, National Operations! Hamilton Home Loans, a leader in residential lending, is excited to announce the appointment of Christopher Cash as senior vice president, national operations. The announcement was made by Hamilton’s President & Chief Operating Officer Anna Beltran. Cash will report directly to Beltran and oversee processing, underwriting, and closing. “Chris is a loan veteran who is uniquely qualified to expand our reach by managing day-to-day operations,” says Beltran. “He will bring best practices to Hamilton and build on current strategies.” Cash has held many executive and operational leadership roles during his 25 years in the industry, with experience in all facets of mortgage operations. “What sets Chris apart is his passion and perseverance, on display throughout his successful career,” says CEO Patrick Sheehy. “We were immediately drawn to his many accomplishments.” To learn more about what Cash and the Hamilton team can do for you, contact Christopher Cash.

Today in 1631, the Merchant Royal got lost at sea carrying over 100,000 pounds of gold, a fortune that’s worth more than $1.5 billion today. The rough seas that assumably overtook the Merchant Royal is similar to the competitive housing market borrowers are battling today. Sellers are staying in port (aka their current homes) in fear of their home selling before they can find a new one. Luckily, Mid America Mortgage’s retail division has a lifeboat ready for those cautious homeowners. Mid America’s Bridge Loan program offers homeowners security while allowing LOs opportunity to reach a wider range of borrowers. This program provides homeowners financing to buy their next home before putting their current home on the market. While treasure hunters are still looking for the Merchant Royal, LOs looking to help as many borrowers as possible can stop their search and contact Michael Cooksey or Kerry Webb today.

AmeriHome Mortgage, the 2nd largest correspondent and 14th largest mortgage lender in the country, has had great traction with its Portfolio Express rollout in Non-Delegated and will be releasing it to Delegated clients in October, as well as launching its Portfolio Jumbo to both Delegated and Non-Delegated clients! To find out more about AmeriHome’s programs, catch them at a conference near you! In October, you can meet with AmeriHome at the NAMB National 2021 in Las Vegas, as well as in San Diego at the 2021 MBA Annual. You can find a full list of events on AmeriHome’s upcoming events page. For more information on AmeriHome's offerings, or to connect with the AmeriHome sales team, email CLsales@amerihome.com. Looking to join the AmeriHome team? AmeriHome’s Correspondent Lending Division is actively looking for Non-Delegated Account Managers, Underwriters for Non-Delegated, Delegated, and QC, as well as other positions in California, Texas, and remote! Visit their careers page to view all open positions, and submit resumes to careers@amerihome.com to schedule an interview. Be sure to follow AmeriHome Correspondent on LinkedIn for the latest updates.

Recapture rates matter to MLOs. They’re proof that the company you work for gives you the tools you need to retain your customers. Planet Home Lending services the majority of the loans we originate, and that's why we have a distributed retail recapture rate of 72.7%. Yes, you read that right. 72.7%. That's how Planet's exemplary mortgage servicing serves an MLO's bottom line. But you don’t have to take our word for it. As Regional Sales Manager Gibran Suffy puts it, “Recapture means my clients stay my clients. Keeping them happy and keeping my name in front of them on the monthly statement just makes sense.” Watch our Retail Sales Leader Caleb Mittelstet talk about why originators are moving to Planet. Then send Caleb a note or email SVP Talent Acquisition Brian Miller. Grow your business with Planet Home Lending: Right Place, Right Size, Right Now!

Rick Bechtel has joined Compass as its new President of Mortgage, and will oversee Compass' presence within the mortgage industry including the recently announced joint venture with Guaranteed Rate, OriginPoint.