We’re entering the forecasting season, where thousands of managers have to come up with figures for 2020 regarding volumes, margins, and profits for CEOs and owners. Good luck. (Yesterday I told my cat Myrtle that she needed to provide me with 2020 forecasts for kibble expenses, litter use, and mouse & lizard consumption. The look of disdain she gave me was the equivalent of giving me the “middle claw.”) But if you’re looking for guidance, the Mortgage Bankers Association is a great place to start. In 2018 we did $1.64 trillion in originations, and the MBA predicts that in 2019 we’ll clock in with $1.94 trillion, and in 2020 $1.73 trillion, down about 10%. Dr. Michael Fratantoni noted that, “We are closely watching app volume to determine whether we will push up 2019 refi volume. It is extremely sensitive to small changes in the rate path.”

Lender Services and Products

Last week, the three-part series “The 30-Year Fix” was released by Maxwell. The series examines America’s unique relationship with the 30-year fixed-rate mortgage. Part 1  covers the history and context of the 30-year fixed-rate mortgage to consider how we might be outgrowing it. Part 2 explores popular mortgage products around the world to consider why certain mortgage products are favored in different economies. Finally, Part 3, digs into the 30-year mortgage from the lender’s perspective and examines its inextricable link to government-sponsored entities (GSEs) to tease out what the future might look like as GSE reform gets underway. A must-read for all lending professionals; you don’t want to miss “The 30-Year Fix.”

Flagstar Bank announced Jeff Neufeld has joined the company as director of mortgage finance banking. He’s responsible for all aspects of mortgage finance, including warehouse lending, specialty mortgage lending, and related marketing and support operations. Joe Lathrop, Flagstar’s respected, long-time head of warehouse lending, will continue to be extensively involved in that business. Neufeld spent more than five years at Mr. Cooper Group and 11 years at Ocwen Financial Corporation, where he honed his skills managing warehouse lines and overseeing treasury operations, corporate insurance, enterprise procurement, and workplace services. Congratulations!

Arc Home LLC launches its new www.archomeloans.com site to Wholesale and Correspondent customers. The site is not only an interactive, informative extension of our organization but also a reflection of our vision and commitment to our partners and our growing relevance in the Non-QM space. This is a comprehensive resource for brokers and bankers who desire to originate or sell Non-QM and Agency loans. With access to pricing and product eligibility, scenario support and quality tools www.archomeloans.com is a single source for access to “all things Arc Home LLC”. Our proprietary NQM products are featured and we provide easy access to support with Bank Statement, DSCR and Asset Utilization calculations. Arc Home LLC is driven by a customer first philosophy.  We’re looking for brokers and sellers who want the best for their borrowers from a product and service standpoint. If this is what you seek please visit us at www.archomeloans.com today.

ARMCO Names Trevor Gauthier Chief Executive Officer: ACES Risk Management (ARMCO), the leading provider of enterprise financial risk management solutions, announced that Trevor Gauthier has been appointed as chief executive officer and board member of ARMCO. “This is exciting for me because I’ve admired the vision New Capital Partners brings to the Fintech space and to all of the organizations that are part of their portfolio, while also being incredibly intrigued and excited about the strength and momentum of ARMCO,” said Gauthier. Trevor Gauthier brings ~20 years of executive experience in enterprise SaaS technology solutions, and has a proven track record of leading companies to achieve exponential growth both organically and through acquisition. Most recently, he was president and COO at loan origination and enterprise mortgage technology provider Mortgage Cadence, an Accenture company; Here is the press release. 

With about two weeks to go until event day, Conference is gearing up with a robust list of panels and speakers. Listen to top industry thought leaders talk about their strategies that will continue to help the broker community explode in 2020. AIME Fuse 2019 connects you with the people and solutions to grow your professional skills and solidify your place in our fast-paced industry. Reserve your spot today — it promises to be an event you won't want to miss. Use promo code FUSEChrisman for $25 off your ticket! Register here today!

In modern consumer finance, speed is key. Stearns Lending Wholesale recognizes the importance of a fast, customized experience to serve more borrowers effectively and SNAP 2.0 is the solution that delivers. Tools such as Calculate My Income allow brokers to quickly and easily calculate borrowers’ income by adding docs to the Calculate My Income Tool. Say goodbye to salary keys and income documentation by generating a Day 1 Certainty eligible verification of income report in 15 seconds on pre-app files or full registrations. To learn more about this technology or partner with a lender that combines the power of people and technology, message “Set me up with Snap” to Wholesaleleadership@stearns.com.

ALTA has recently added String Real Estate Information Services to its ALTA Elite Provider Program. String underwent an extensive application and validation process to join a small group of ALTA service providers that are committed to offering comprehensive benefits to the title insurance and settlement services industry. Elite Providers “promote the highest industry standards and provide effective solutions for ALTA members' critical needs.”  Are you ready to take advantage of String’s laser-focused attention to metrics and quality, ever-expanding service offerings, and ability to make workflows exceptionally efficient? SCHEDULE time with the String team at ALTA One 2019 or MBA Annual. Or if you can’t wait, CLICK HERE to schedule something sooner. If you are an ALTA member, be sure to ask how you can take advantage of a FREE workflow efficiency review.

Non-Agency or Ability to Repay Trends

The mainstream press should spend a few days working in our business. Do reporters really understand our products? The latest example comes yesterday from the Washington Post with sensationalist headlines about how the Federal government has dramatically expanded exposure to risky mortgages.

Wells Fargo Funding has updated its Non-Conforming housing payment history documentation requirements. If renting from a professional management company, provide one of the following: Verification of rent or reference on a credit report or most recent 12 months’ cancelled checks or bank statements showing timely payments. An individual landlord reference, either by a verification of rent or on a credit report, is not required if the borrower provides evidence of timely payment for the most recent 12 months with one of the following: Cancelled checks or Bank statements showing the payment.

Need an alternative to FHA Cash-Out? Check out Plaza’s AUS Non-Conforming program for some help in bridging the gap that this change might create in your pipeline.

Carrington Mortgage Services (CMS) introduced its Interest-Only Product Enhancement that provides a flexible payment option allowing borrowers to pay just the interest with their monthly payment. For borrowers who want it, that provides additional cash flow that can be used for other priorities. A 10-year interest-only term is offered on all non-agency Carrington Advantage adjustable rate programs for qualified borrowers seeking to maximize their cash flow when purchasing or refinancing a home or investment property. For more information on CMS products and services, please visit CarringtonHomeLoans.com or CarringtonAlly.com.

Citadel Servicing provides loan opportunities utilizing Bank Statements for Income Qualification.

ACC Mortgage offers 1 Year Employment and as Little as 15% Down for ITIN Borrowers.

Mountain West Financial, Inc. has introduced a new program designed to qualify borrowers based on bank statements. Program highlights include 30 Year Fixed Product, Purchase, Rate/Term, or Cash Out, Primary Residence, Second Home, or Investment Property, Qualify borrowers on either 12 or 24-months bank statements, 1-4 Units, SFR, PUD, Condo

Max Loan Amount up to $3,000,000, LTV up to 85% with no MI, FICO as low as 620, DTI up to 50%. For details, see MWF’s matrix.

In a recent Bayview / Lakeview Announcement, reminders regarding the Retirement of Selected Bayview Portfolio Products and HFA Preferred Changes.

Prime Choice Funding Wholesale’s Expanded Prime program offering has experienced some enhancements including expanded bank statement eligibility, enhanced debt ratio overlays and Second Home overlays. Also, as a June special, PCF wholesale is offering a free appraisal on the first 3 loans submitted. View its webpage for details.

Land Home Financial Services offers a wide variety of products to meet your borrower needs including 12 and 24 Month Bank Statement Programs.

Capital Markets

Keeping rates in context, economic headlines were overshadowed last week by the news concerning President Trump and the impeachment inquiry in the House of Representatives. The news brought bonds modestly lower though it has the potential to increase market volatility. Economic reports from last week continuing to show positive, but slowing momentum due in part to global economic conditions. Consumer confidence was mixed as the two surveys that released data moved in opposite directions. Typically when confidence drops, declines in consumer spending follow. Consumer spending rose in August, below market expectations, however personal income rose 0.4% bringing the personal savings rate above 8%. New orders for durable goods rose in August, however non-defense capital goods fell. Some of this is due to the prolonged GM strike which is having an impact on inventories. Due to the slowing conditions, third quarter GDP is expected to decline from the 2.0% annualized rate seen in the second quarter.

Looking at bond prices, which drive rate sheets for borrowers, markets traded risk-off yesterday with U.S. Treasuries rallying across the curve, including the 10-year yield closing -5 bps to 1.60 percent. There was no major news, though movement was aided after the World Trade Organization ruled that the U.S. can impose tariffs on $7.5 billion worth of goods from the EU over illegal subsidies provided to Airbus. Domestically, the ADP Employment Change report for September missed expectations while the August reading was revised down, and internationally, South Korea is now expected to miss its 2019 GDP growth target, Germany's leading economic institutes lowered their forecast for German 2019 GDP growth and 2020 GDP growth, and Japan's September Household Confidence decreased, as did Hong Kong's August Retail Sales and U.K.'s September Construction PMI. The New York Fed accepted total bids of $42.05 billion in yesterday's repurchase operation, below the $75 billion maximum. New York Fed President Williams said that monetary policy is "in the right place" at this time.

Today’s busy economic calendar is already underway with job-related releases out: job cuts from Challenger, Gray & Christmas for September (41,557, down 22%), and initial jobless claims for the week ending September 28 (+4k to 219k). Later this morning sees another trio of releases, with Markit Services PMI, August factory orders, and the September ISM Non-Manufacturing Index all due out. The day is also heavy on Fedspeak, with Chicago Fed President Evans, Governor Quarles, and Cleveland Fed President Mester all set to take the stage. We begin the day with Agency MBS prices slightly better and the 10-year yielding 1.58%.

Jobs

Homespire Mortgage continues its nationwide expansion plan with the addition of Listy Limon, Regional Manager, Southwest Region. Listy joins Homespire Mortgage with over 15 years of experience specializing in the growth and development of residential mortgage branches. Listy will provide leadership and oversight to the growth of multiple branches across the Southwest region, beginning in Colorado and Texas. “We are so excited to have Listy join the Homespire family. A seasoned professional with high level experience in our industry, the addition of Listy Limon will help us develop a strong presence in the Southwest region,” said COO Todd Sheinin. Listy Limon joins Homespire Mortgage during a period of rapid growth and expansion. Recognized for its full-service marketing platform, innovative mortgage technology for both MLOs and borrowers, and generous compensation packages, Homespire Mortgage was recently named an Inc. 5000 company for the third consecutive year. For more information, please contact Listy Limon (970-237-4366). 

Occasionally I am asked about jobs at Ginnie Mae. Yes, they’re out there.