When I grow up, I want to live in… Estonia? If you need a break, and are thinking about leaving the U.S., take a gander at some highly-ranked work from home places to live besides the United States. Election Night? Forget it. It could be “Election Month” or “Election Months” if runoffs are involved or elections contested. Despite the dedication and best efforts by the Mortgage Bankers Association and state & industry organizations, do you really think that any politician is going to be focused on mortgage or housing policy? On a micro-level, one fear that residential lenders who are part of banks have is that banks will become accustomed to expecting hefty mortgage profits. Lending veterans know that margins and volumes still will be cyclical, and without rates going anywhere, refi exhaustion will eventually kick in. But with shrinkage in the primary-secondary spreads, there is hope for rate sheets. Lastly, in yesterday’s commentary I posted a video of a cougar stalking a hiker who doesn’t seem able to do anything besides film and narrate the encounter. It didn’t take long for a parody to come out.

Lender and Broker Products

Though approximately 41% of homeowners in COVID-related forbearances have exited, mortgage delinquencies aren’t expected to return to 2019 levels until March 2022, according to Black Knight. If that projection is correct, the first wave of 12-month forbearances will expire March 2021 with over 1 million excess delinquencies. Here are three ways to improve preparedness: Engage borrowers electronically to gain insight on the duration/severity of hardships to strengthen relief offerings before forbearances expire. Go beyond workflow: leverage automation of borrower input and credit underwriting to decision, display and sign the right relief option in minutes; and Prep your audit trail: Create sound records of fully auditable flows and decisions with robust reporting for improved tracking and compliance. Lenders are highlighting Constant’s ability to provide actionable data and automate loan restructurings, short sales and deeds-in-lieu of foreclosure, with a sharp focus on compliance.

Lenders, your business is booming! Your teams are all hands-on deck trying to keep up with the record loan volume. Who is dealing with your Final Documents - the one part of your business that is terribly tedious, time-consuming, and won't go away? Join dozens of lenders nationwide who in the past few months alone have partnered with DocProbe to manage their Trailing Documents. DocProbe becomes an extension of your Post Closing operation and retrieves all documents from the settlement agents. Let DocProbe work on scanning, indexing, and auditing the documents. DocProbe works with the title companies on curing any corrections. DocProbe prepares and ships to your investors or custodians and works on their exceptions reports. All you will need to do is log onto your DocProbe account to view the action, run reports, and feel confident that this small but integral part of your world is streamlined. Amen to that. Email Nick Erlanger or visit us at www.docprobe.net to learn more.

The cost of acquiring borrowers through digital channels is rising through Q4 2020 as advertisers spend more to achieve end of quarter goals, industries impacted by COVID-19 start to return, and the recent influx of political ads drive advertising costs up. The cost to acquire a borrower can be as high as $3,000! Now more than ever Lenders must have a Borrower Intelligence System that guarantees they are capturing the 20% of volume that comes from their own database every month. The cost of those loans is only $240 on average, and have a much higher chance of conversion. You already have a relationship with these borrowers! You just need to know the moment they need a loan from you. Grant yourself access to the most profitable and highest converting loans in existence. Sales Boomerang notifies mortgage lenders when someone in their database is ready for a loan.

The National Association of Minority Mortgage Bankers of America (NAMMBA) is doing its part to inject youth and diversity into the mortgage industry, especially with the efforts behind its Visionary program: An initiative to connect over 50,000 high potential, talented undergraduates and recent graduates to internships and careers in the real estate finance industry. One of its supporters, Home Point Financial, has been a leading advocate for increased diversity in the mortgage industry. Home Point recently launched a charitable community foundation, dedicating $1 million to establishing minority and female-owned mortgage brokerages across the country, in partnership with the AIME Spark program. To learn more about NAMMBA’s Visionary program, click here.

When QLMS announced it will soon rebrand to Rocket Pro TPO, it also introduced a new tech tool which its partners are using at intensely high levels. PathFinder by Rocket was created in partnership with Google and combines two of Rocket’s most popular and powerful resources (The Answer and GURU) into one easy-to-use, centralized platform. PathFinder is a broker’s go to resource to find anything from policy to process to guidelines. The lender created this knowing that every second counts for the broker community, so a consolidated, up-to-date resource like PathFinder is sure to become every LOs favorite tool. It includes smaller resources like a BPMI calculator and title gadget to make sure that brokers can find every solution needed to get their client to the closing table. If you are not yet a Rocket Pro TPO partner and want to leverage PathFinder, click here.

Lenders and Investors React to FHA, VA, and USDA Changes

Some good news! Fiscal Year (FY) 2021 funding for Rural Development’s Single-Family Housing Guaranteed Loan Program is available. The funding is authorized by the “Continuing Appropriations Act, 2021 and Other Extensions Act, (P.L. 116-159, H.R. 8337). For files in process, “Loan guarantee requests that received Form RD 3555-18/18E, ‘Conditional Commitment for Single Family Housing Loan Guarantee’ contingent upon the availability of an appropriation, will be obligated in the Agency’s financial system over the next 3-4 business days. An updated ‘Conditional Commitment’ will be electronically generated by the Agency to remove the ‘contingent upon’ language. Lender receipt of the updated Conditional Commitment will signal the request has been successfully obligated by the Agency.

United Wholesale Mortgage (UWM) offers a 50-bps discount on all VA interest rate reduction refinance loans (IRRRL) through Veterans Day on Nov. 11.

Franklin American Mortgage updated its disaster inspection requirements for FHA Products in conjunction with FHA INFO #20-73. When a disaster inspection is required, only exterior photographs are required. The requirement for interior photographs is temporarily waived. FAMC posted clarification regarding the revision to the statutory recoupment calculation which no longer includes an adjusted P & I reduction on VA IRRRL transactions. To calculate, divide all fees, expenses and closing costs, whether included in the loan or paid outside of closing (POC), by the reduction in the monthly P & I payment. The funding fee and all prepaid expenses are excluded from the statutory fee recoupment calculation. Lender credits may be used to offset fees and charges.

FHA’s ML 2020-30 announced new purchase and refinance eligibility requirements for applicants and borrowers previously granted a Mortgage Payment Forbearance, effective for case numbers assigned on and after November 9, 2020, but may be implemented immediately.

AmeriHome accepts the changes and timeline implemented with the announcement.

Recent PRMG product updates include: Profile Update 20-57, information on Appraisal Waiver clarification on Agency Texas Home Equity, joint loans on VA Products and the addition of Maryland as an eligible state for Symmetry HELOC product. Profile Update 20-56, information on HomeReady, VA and VA High Balance and Chenoa FHA Rate Advantage.

Flagstar Bank posted information regarding FHA’s underwriting guidelines for mortgages involving borrowers who were granted a previous mortgage forbearance on the subject property or other residence.

First State Mortgage posted this announcement regarding FHA Rental Income, temporary COVID-19 guidance.

In Mortgagee Letter 2020-23, and updated in Mortgagee Letter 2020-24, HUD announced additional requirements for FHA loans to borrowers using self-employment and/or rental income for qualifying. No Wells Fargo Funding-specific requirements are being implemented in response to the changes announced in these Mortgagee Letters. Sellers must follow FHA requirements.

Wells Fargo Funding told its correspondent clients that “In Mortgagee Letter 2020-30, HUD provided 30-day notice of new requirements for FHA loans to borrowers who were in forbearance on the subject property or other residence. We’re still assessing the changes, but have confirmed FHA’s policy for cash-out refinances is more restrictive than our current overlay in the Wells Fargo Funding Seller Guide (Seller Guide) Section 600.02(b): Other Wells Fargo Government Loan Restriction Requirements. To ensure your FHA Loans are insurable by FHA and eligible for purchase by Wells Fargo Funding, follow the more restrictive of FHA and Wells Fargo Funding requirements.

Wells issued a similar note about a Single Family Housing Guaranteed Origination notice from a month ago where the U.S. Department of Agriculture (USDA) Rural Development (RD) provided updates to their FAQs in relation to COVID-19. The updates included new requirements for borrowers that were in forbearance, and Wells confirmed RD policy for the waiting period after exiting forbearance is more restrictive than its current overlay. “To ensure your Guaranteed Rural Housing (GRH) Loans are insurable by RD and eligible for purchase by Wells Fargo Funding, follow the more restrictive of RD and Wells Fargo Funding requirements.”

Chase requests clients use manual locking for FHA loans.

The PennyMac Correspondent Group has posted new announcements: 20-59: Adverse Market Refinance Fee, VA LLPA and SRP Update and 20-60: FHA Mortgagee Letter 2020-30 and USDA FAQs.

Mountain West Financial® is offering .375bps price improvement on FHA and VA loans through the month of October. Applicable on FHA FF30 and VA VF30 programs, purchase transactions only. Loans must be locked between October 1st and October 31st. Offer valid on new locks only. Changes announced in Golden State Authority (GSFA) Single Family Bulletin #20-19, have resulted in a revised origination fee structure for the Platinum program. Mountain West Financial® will apply new fees, effective for loans locked on and after Monday, October 12th, 2020, the new structure will be: Borrower paid Origination: 2.00%, Origination to Broker: 1.50%, Origination to MWF: 0.50%. This is to be disclosed as follows: Loan Origination fee: 2.00% of the loan amount expressed as a dollar figure in Section A “Origination Charges.”

loanDepot Wholesale/Correspondent Weekly Announcement includes information on its Wholesale Program Matrices and Program Overlays Matrix. Also addressed, FHA Flexibilities Extension and Eligibility Updates. In other news for LD, recall that it announced temporary guideline changes. Refinance FHA 203(k) Limited and FNMA Homestyle are temporarily suspended as are Refinance Partial Condition Reviews. Simultaneous loans for the same Borrower are temporarily capped to a two-transaction maximum. Self-Employed Borrower with multiple business is temporarily suspended. All transactions that have already been submitted to loanDepot Wholesale, will not be impacted by these temporary changes.

Caliber announced that FHA 203K and HomeStyle Renovation products are available for Best Effort Commitment Confirmations effective immediately. Caliber is aligning with the underwriting guidelines announced in FHA Mortgagee Letter 2020-30, the USDA COVID-19 FAQ and VA Circular 26-20-25 Change.

Capital Markets

MSR values and MSR sales are top of mind for the industry. As market uncertainties begin to subside, MSR pricing has been improving. For example, correspondent conventional implied MSR prices are currently at about 75-85% of their pre COVID levels. MCT’s Phil Laren, Director of MSR Services, analyzes these market conditions in his latest article, Market Update for MSR Sales: Q4 2020. In the article, he provides an in-depth analysis of the MSR market this year as well as future expectations for MSR Sales. View the article to learn more about the MSR market in 2020. Do you need help with MSR sales? MCT’s MSR Services Team can help you get started evaluating bids and negotiating contracts. Their team can also review your portfolio to help determine which loans to retain or sell. Contact MCT’s MSR Services Team today for more information.

Looking at the bond market yesterday, not much was going on. No imminent stimulus coming from Washington... Poor growth expectations out of the U.K. and E.U… Mixed domestic bank earnings. But today’s economic calendar is already underway with several releases. We’ve had October New York Fed (down to 10.5) and Philadelphia Fed manufacturing figures (32.3), September Import & Export prices (+.3% and +.6%, respectively) and weekly jobless claims (898k), continuing claims still above 10 million. Later this morning brings Freddie Mac’s Primary Mortgage Market Survey for the week ending Oct 15 following last week’s 30-year rate of 2.87%, and remarks from several virtual Fed speakers (Atlanta’s Bostic, Dallas’ Kaplan, Vice Chair of Supervision Quarles, St. Louis’ Bullard, Richmond’s Barkin, and Minneapolis’ Kashkari

Mortgage rates are a function of demand for originations. The NY Fed Desk released a new purchase schedule just after the settlement close yesterday, and it contains no change to coupons, no UMBS30 1.5% yet, while GNII operations also continue to target 2% and 2.5% and UMBS15 operations will target 1.5% and 2%. Most days on the new schedule see three operations except for today, tomorrow and the following Friday. Today's two operations will see the Desk target up to $4.56 billion starting with $3.028 billion UMBS30 2% and 2.5% followed by $1.532 billion GNII 2% and 2.5%. In addition to the two MBS FedTrade operations, the Desk will report on MBS purchases for the holiday-shortened week ending October 14 in the afternoon. We begin the day with Agency MBS prices better/up a few ticks and the 10-year yielding .69 after closing yesterday at 0.72% after the mediocre weekly claims numbers.

Employment 

Continued M&A activity exists. A new, well-capitalized mortgage organization is looking to acquire a “shell” corporate entity that currently has active seller/servicer approvals with Fannie Mae, Freddie Mac, and Ginnie Mae. All three are not required, so please reach out with other options. If you are interested, please email Anjelica Nixt with the “Shell entity for sale” in the subject. All inquiries remain confidential.

“Right place, right time. That's precisely how you'll receive your high-quality, more consistent leads when you work at Wyndham Capital Mortgage. As the Fintech Mortgage Lender, we use a collection of tools to blend an omnichannel approach with intent-based lifecycle marketing to create a Perpetual Marketing Operating System. What does this mean? It means that we have created a 30-30-30-10 marketing wheel designed to maximize your earnings in less time. The wheel is made up of Digital Marketing, Lead Aggregation and Referral, topped off by your personal touches and abilities. All combining to make your work life more efficient and your success rate growing. With our perpetual wheel of quality leads combined with tech-focused innovation, WCM loan officers have a head start in filling and working with their pipeline. Find out more at JoinWyndham.com.”

“Caliber Home Loans helps put its customers on a successful path to homeownership, but we do more than that. We also help our communities by supporting and donating to non-profit organizations that serve our neighbors, friends, and families. October is Cancer Awareness month, and we’re proud to say that we support Real Men Wear Pink. cancer can affect anyone, and the men in this organization are committed to raising awareness and money to save more lives from this disease. And Caliber is committed to donating its time, talents, and funds to organizations like this. If you want to work for a company that cares about its customers and communities, then come work for Caliber Home Loans. Visit our website today to view open opportunities. To be immediately considered for Operations or Sales positions, email Jonathan Stanley or Brian Miller respectively.”

From Tennessee comes news that First Community Mortgage has named Tracey Retzer as VP of its Wholesale and Correspondent divisions.

And from Illinois, Interfirst Mortgage Company, a private equity-backed mortgage originator, announced today that Karen Gerli has rejoined the Company as its Chief Operating Officer (COO) responsible for Wholesale and Retail operations with additional oversight of four divisional areas: Credit Risk, Counterparty Risk, Training and Human Resources.