The human brain is an amazing thing. Some readers can instantaneously identify the song, and album, if I only said, “Play it pretty for Atlanta.” Others may enjoy the 20 most challenging Jeopardy questions, which aren’t as tricky as one might think. Others enjoy talking about residential lending trends, like the interview in today’s Commentary podcast, sponsored by Arch MI with Part Three of a thought leadership interview with John Sayre, VP of Client Success for Curinos on lender trends into next year. And STRATMOR’s current blog discusses what lenders are doing with shrinking volumes and margins (“Grow Your Business But Don’t Step Over a Dollar to Save a Dime”). Others like following Washington DC news, and while spending some time in Southern California this week at a California MBA event, talk came around to President Biden’s pick for Comptroller of the Currency who not only graduated from Moscow University (yes, that Moscow), but has raised eyebrows for past and recent comments praising the Soviet economy and penning an article some say advocates an end to the U.S. banking system. (One can always contact their political leaders and provide input, whether support or objection, to what their Senate and House members are supporting.) The U.S. Government, which may run out of money in a week or two, has defaulted before, and although it found the money to pay bills, it is costly. In news directly related to our biz, Redwood Trust bought into Flock, a “pioneering rental ownership platform.”

Broker and Lender Services and Products

“OptiFunder is technology that actually does what it's supposed to do," states Joe DeDominicis, CEO, CFO, CTO, Nations Reliable Lending. OptiFunder’s Warehouse Management System helps IMBs simplify, streamline, and save. The optimized decision engine selects the best warehouse line for each loan, while integration and automation reduce hours of work for funding activities and Purchase Advice reconciliation to a few clicks. Request a demo to see how OptiFunder has optimized and automated over $150B in fundings YTD. Clients love delivering loans to their OptiFunder-connected warehouse lenders because it’s so effortless. Customers are thrilled. Phillip Go, CFO of American Mortgage Services, summed it up, “It's so easy, even I can fund loans. The automation, ease of the workflow and working out of one source has allowed us to redeploy resources to other areas." For more information about OptiFunder, contact Brian Abbott or visit www.optifunder.com. 

As of this week, AmeriHome Mortgage, the 2nd largest correspondent and 14th largest mortgage lender in the country, has released its Portfolio Express program, as well as its new Portfolio Jumbo program, to both their Delegated and Non-Delegated clients! Portfolio Express is an AUS Based product with loan amounts from $50k to $2M, where Fannie Mae’s Desktop Underwriter® (DU®) drives the underwriting and documentation requirements. Portfolio Jumbo is a manually underwritten, full income documentation product with loan amounts up to $3M! As Portfolio products, loans are not required to be QM loans or meet the standards of Appendix Q. Catch AmeriHome in person at NAMB National 2021 this weekend in Las Vegas, and later this month in San Diego at the MBA Annual 2021 to find out more. Find a full list of events on its upcoming events page or email CLsales@amerihome.com to connect with the AmeriHome sales team and to get more information on AmeriHome’s offerings. Be sure to follow AmeriHome Correspondent on LinkedIn for the latest updates.

Conforming Conventional Shifts

The “resi” business has been compared to a chess match, and we are certainly seeing that with profit margins in the wholesale sector being to cut to, pretty much, breakeven. Race to the bottom, price-wise? (One result: All wholesaler’s stock prices at or near the lowest they’ve ever been.) And with the conforming conventional loan amount changes made by some, others are being forced to act before the FHFA actually makes the change. This year it happened in September; next year will it happen in August or July?

Yesterday I reminded folks of the process and timing of official changes by the FHFA, and therefore Freddie and Fannie, conforming and high balance loan limits. I received this note from PennyMac’s Kim Nichols. “PennyMac is not misleading anyone with our expanded loan limits for our broker and correspondent partners. We are not waiting for the FHFA announcement to close or purchase loans above the current FHFA limit. We have the capital and liquidity to hold these until January and would not have announced without a commitment to immediately close or purchase loans above the limit.” Thank you, Kim.

Every originator should know that demand by investors and portfolios for residential mortgage assets drives the rates and programs offered to borrowers. So lenders should be aware that the Federal Housing Finance Agency (FHFA, overseer of Fannie and Freddie) declared that Common Securitization Solutions will not expand beyond its current role of issuing mortgage-backed securities for the government-sponsored enterprises. CSS is a joint venture owned by Fannie Mae and Freddie Mac, and it manages the common securitization platform (CSP) which issues and processes more than $400 billion a month in uniform MBS. One of the recurring themes in the debate surrounding the future of the GSEs revolved around the CSP.

Should the CSP be used to create securities backed by jumbo or non-QM, or FHA/VA loans? “No,” said acting FHFA Director Sandra Thompson. “After a nearly two-year review,” the statement said, “FHFA determined that CSS should instead focus on maintaining the resiliency of the enterprises’ mortgage-backed securities platform.” FHFA said the decision allows CSS to focus on the safety and soundness of the housing finance market and reduce unnecessary expenses as the Enterprises rebuild capital.

What have the Agencies, aka Government Sponsored Enterprises, or GSEs, been up to in the last week?

Freddie Mac’s Loan Selling Advisor® September Reminders include the new URL to log in to Loan Selling Advisor, retirement of CMT-indexed ARMs, testing opportunity for its new $250K Low Loan Balance (LLB) Cash-Specified Payup, and Cash-Released XChange® update.

Fannie Mae Appraiser Update September 2021 edition, focuses on current industry trends, including time adjustments, appraisers’ role in identifying risk for condos, planned unit developments, and co-op projects, and continues Appraiser Quality Monitoring series.

Fannie Mae’s implementation of updates to Desktop Underwriter® (DU®) Version 11.0, Release Notes available, added positive rent payment history to the risk assessment, updated credit score eligibility, enabled lenders to use the DU validation service on RefiNow™ loans, and more. Additionally, Fannie Mae added new resources to help lenders make these changes, Positive Rent Payments Page and Credit Score Eligibility Fact Sheet

Fannie Mae and Freddie Mac are continuing to work with the industry on the Uniform Appraisal Dataset (UAD) and Forms Redesign initiative. A new article describes key benefits and an updated timeline shares the latest milestone estimates for this multi-year project.

Fannie Mae revised the Tennessee security instrument standard and short forms (Forms 3043 and 3034-SF) to clarify the requirement of recording tax data. Also the instructions to the Multistate 1-4 Family Rider (Form 3170) was updated to remove an extraneous authorized change.  View a summary of the updates and Access the updated instruments.

Fannie Mae updated Lender Letter LL-2021-12, Advance Notice of Changes to Investor Reporting Processes and Systems, to inform servicers of effective dates for upcoming changes and updates to data elements and adjustment types.

Fannie Mae updated the Participants Exhibit of mortgage insurance companies participating in the Mortgage Insurance Claims Portal (MICP) to include additional mortgage insurers.

Capital Markets

The Fed has indicated it will soon begin to taper its purchases of MBS. With the primary buyer of MBS pulling back from the marketplace, it is high time for a better MBS market to emerge. What if one already has? Agile made its public debut last month, and the company is well on its way to bringing the mortgage capital markets into a new digital era. From lenders to dealers, Agile is the new way to quote MBS. Join presenters Curtis Richins and Phil Rasori on October 14 at 10 a.m. PT for a webinar introducing Agile to the marketplace, the company’s mission, and a demonstration of its To-Be-Announced (TBA) request for quote (RFQ) platform and MBS pool bidding functionalities. Welcome to a world where all MBS market participants can now participate on an electronic platform that expedites the exchange of TBA MBS. Register for the webinar.

With Polly’s state-of-the-art Loan Trading Exchange, it’s now easier than ever to sell loans with confidence using automated best ex and commitment optimization. Polly’s commitment cart functionality allows you to take down agency commitments, allocate into forwards, and sell loans to aggregators with a single click. While legacy systems have unintuitive agency commitment processes that result in manual errors and lost revenue when optimizing across pools, Polly’s preview feature allows you to create a full snapshot of the day's commitment in a single view, so you can identify and optimize the best execution across all of your commitments. In short, the Loan Trading Exchange helps you confidently lock down your whole pipeline efficiently before the market moves, maximizing profit and saving valuable time. To learn more, email Jeff Krischer or visit www.polly.io.

Considering that I’ve been teasing tomorrow’s September payrolls report as the driver of mortgage rates to look out for, it’s only fair to review the preliminary ADP jobs report from yesterday. It showed the addition of 568k private payrolls in September versus expectations of an increase of 405k. (Analysts think we’ll see +475k nonfarm jobs in tomorrow’s report, but what do they know?) While Treasuries and MBS prices were little changed by the close yesterday, talk has been of increasing yields lately. Keep in mind that the 10-year remains 21 bps below the year-to-date high seen on March 31, when the 10-year closed at 1.74 percent. During inflationary periods, markets usually are driven less by fundamentals and more by sentiment.

A couple of labor market indicators led off today’s calendar ahead of tomorrow’s payrolls report: Job cuts from Challenger for September (only about 18k) and weekly jobless claims (326k, a good-sized drop). That about does it for market-moving news. Later today brings Freddie Mac’s Primary Mortgage Market Survey, a couple purchase operations by the Fed, and remarks from Cleveland Fed President Mester, and Thursday begins with current-coupon Agency MBS prices unchanged from Wednesday’s close and the 10-year yielding 1.54 after closing yesterday at 1.52 percent.

Employment and New Hires

A National Title Insurance Agency located in NY looking for a National Salesperson. This is an extremely lucrative position if you have the right connections. Real estate is thriving, and if you have the ability to tap into your contacts, this is for you. Please send your resume to Chrisman LLC’s Anjelica Nixt for forwarding if interested.

FGMC is hiring Wholesale and Correspondent Account Executives with a focus in Non-QM, contact Tom Davis to learn more! “Huge guideline expansions to Maverick Solutions, FGMC’s proprietary suite of Non-QM products, are coming next week! Let’s #RedefineMortgage and start serving more borrowers than ever with a partnership with the Mortgage Mavericks on Wholesale, Correspondent or Non-Delegated Delivery. Go to www.fgmc.com to become a partner today so you can take advantage of our exciting suite of products. We will be at the NAMB in Las Vegas, NV this weekend if you’d like to learn more about our great offering. Come to Booth #810 to be drawn by our caricature artist, enter into a giveaway to win a Yeti Cooler or Bluetooth Speaker, and pick up a Bloody Mary drink kit! Can’t make it to Vegas? Contact Lynn Bristow to schedule a meeting at the MBA Annual in San Diego, CA.”

“Citizens Home Mortgage is committed to being a leader in the industry. We know how valuable our mortgage colleagues are to our success and we reward them accordingly. We are currently looking for top notch Retail Mortgage Loan Officers and Sales Managers, as well as Wholesale Underwriters with Jumbo, FHA and/or VA experience. Citizens is dedicated to providing colleagues with opportunities to enhance their physical well-being, their work-life and emotional well-being, their financial well-being along with their social well-being. That’s why we provide traditional benefits like comprehensive health benefits, generous time off, and 401(k) options, but we also offer robust educational assistance program, discounts on banking products and services to help you achieve your financial potential sooner. Learn more about Citizens’ colleague benefits in our ‘Ready to Thrive’ article. We believe in promoting from within, so there are terrific opportunities for advancement. Let’s talk! Reach out to Sean Reilly. You can also learn more about us, or submit an application online today.”

Academy Mortgage creates life-changing experiences through lending. Its President’s Club and Executive Club Conferences are known for their bucket list destinations and one-of-a-kind experiences. Old friends and new faces were able to connect, celebrate, and recharge. Watch their amazing experience here. The adventures don’t stop there. Later this month, Academy’s President’s Club and Executive Club qualifiers will head to Charleston, South Carolina for yet another unforgettable experience. Contact EVP of Growth Patrick Welberg for more information on how to join a team who will take you places… literally.

Caliber Home Loans was ranked among the top 10 lenders for home builder production last year according to Zonda. “We offer industry-leading products, tools, services, and support to help our builder partners sell and close more new homes. ‘This impressive recognition is just the latest illustration of Caliber’s strong commitment to the new housing industry and the overall builder community,’ says Michael Brown, SVP Caliber’s National Builder Division. ‘Caliber offers the builder community an experienced and dedicated sales and operations team with a streamlined approval and closing experience that will meet the unique needs of builders and developers.’ If you are interested in growing your purchase volume with builders and want to learn more about Caliber’s builder value proposition, email Michael Brown.

American Pacific Mortgage’s Fall Symposium will be held November 3–4, 2021, at the Arizona Grand Resort. This year’s conference theme is NEXT. Attendees will have the opportunity to explore what’s NEXT with their business, strategy, influence, and growth, while experiencing all that APM has to offer. Speakers include Dr. Amy Cuddy, economist Elliot Eisenberg, Barry Habib, and APM’s leadership team. Attendees will also have the opportunity to join four breakout sessions led by Josh Pitts from Shred Media, Megan Anderson with MBS Highway, Geoff Zimpfer of Mortgage Marketing Institute, and AJ Vaden of Brand Builders Group. This event is designed to help APM originators sharpen their edge, shift with the market, elevate their connections, and influence and disrupt the competition. To learn more about this event, click here. And if you’d like to be a guest at APM’s Fall Symposium, contact Dustin Block.

Consolidated Analytics, Inc. announced that it has strengthened its leadership team for its property valuation and analytics division, which includes appraisals, hybrid appraisals, BPO’s, reviews, reconciliations, and data-driven valuation solutions. Chris McLain joins as SVP, Valuations, Jeff Rauland as Chief Appraiser, Lisa Stratton joins as VP, Operations and Strategy, and Jeanette Mills as Director, Valuations and Client Experience.