As thousands of MBA conference attendees head for the DC airports, what’s the chatter? Regulators who want to remind lenders that not being able to afford a compliance department doesn’t allow a company to make RESPA violations. That it is perfectly legal for builders to offer granite countertops, and to have a preferred lender. Companies who seem afraid, with the current industry-wide appetite for LOs, to tick off loan officers, so “drudgery” like teaching them compliance, how to use the LOS, etc., has fallen by the wayside. About how great a start Bob Broeksmit is off to as president of the MBA, and the value of the MBA’s charity, MBA Opens Doors Foundation, has in helping families.

Lender Products and Services

Gearing up for 2019, Lenders must reassess their annual compliance solutions. “Are we continually up-to-date on both federal and state regulations and changes? Is our staff “hatted” on all changes? Who’s ensuring that compliance is on the ball?” These are questions that must be asked. Yet with so much already on the Lender’s plate, that can be a tall order. Fortunately, Strategic Compliance Partners can help — whether the Lender is augmenting an existing compliance infrastructure or outsourcing to a fully integrated turnkey solution. Better yet, the services are budget-friendly as they are often less than the cost of hiring additional internal staff. Give Leslie Benjamin a call at 646.418.6635 for a free compliance savings evaluation.

Did you know? Maxwell and HW recently teamed up to survey lenders across the country and found that 70% of lending institutions are either actively purchasing or already have a digital mortgage solution in place. Even in a challenging and constrained market, lenders understand the impact that a technology-fueled process can have on internal efficiencies, close times, borrower satisfaction, and referral volume. Maxwell's robust but easy-to-implement technology empowers your team to amplify productivity, delight borrowers, and close more loans — faster. Today, lending teams on Maxwell are closing loans 45% faster than the national average, helping them achieve the ROI they deserve from a technology partner. Request your custom demo today!

Are you a Broker looking to become a Correspondent Lender or an established Correspondent Lender looking for a good Warehouse Lender to help grow your business? If so, Goldome Warehouse Lending would appreciate the opportunity to help your business achieve its goals. Goldome is an established Warehouse Lender with experienced sales and operations teams. The program was acquired by Independent Bank of McKinney Texas in 2017, and it continues to grow. Now, we want to be a part of your success story! Our flexible warehouse lines are a great fit for delegated correspondent lenders and non-delegated correspondent lenders looking to fund a wide variety of programs and products. We offer lines up to $100 million and can support the small lender all the way up to the large aggregator. Our seasoned sales team of Drey Roberts, Steve Harris, Jim Harrison, or Roxie Montoya is ready to assist. Please reach out today to learn more about Goldome Warehouse Lending!

Amidst rising interest rates and declining origination volume, lenders must cast a wider net for customers, a growing number of which are self-employed. To capitalize on this trend, lenders need a simpler, faster way to underwrite mortgages for Americans who are their own bosses. To this end, Freddie Mac has integrated fintech vendor LoanBeam’s technology with Loan Product Advisor®, our automated underwriting system, to introduce the first and only integrated self-employment income solution for the market. LoanBeam’s software uses optical character recognition technology to extract and digest a borrower’s tax returns and other financials, and then calculate a total income figure that aligns with Freddie Mac’s guidelines. This integration offers lenders several advantages, including an automated review of the accuracy of qualifying income, eliminating the need to chase down unnecessary documents that support residual/excess income and certainty that the income calculation is eligible for representation and warranty relief. Learn more.

Borrower Care and Feeding

What’s the number one complain borrowers have about the mortgage loan process?  Poor communication. Starting on the right foot with communication means providing your borrowers with a clear (and preferably complete) list of items they will need to provide, otherwise known as an initial checklist. According to data from STRATMOR Group’s MortgageSAT Borrower Satisfaction Program, giving the borrower a checklist of the information they will need to provide results in a very high Net Promoter Score (NPS) of 90. Borrowers who do not receive an upfront checklist quickly get confused and frustrated, and NPS plummets to -26. In the new October MortgageSAT tip, Mike Seminar offers three steps lenders can take to make sure that an initial checklist gets to the borrower and loan process communications start and go well.

Appraisal News From Lenders, Investors, and Vendors

Values, of course, are a factor of supply and demand, and home builders help directly determine supply. Zelman & Associates summed up the current environment for builders. "For homebuilders, we expect market conditions to remain choppy through year end and anticipate that a greater need for incentives could pressure 2019 profit margins when those homes are delivered. With that said, unit growth should reaccelerate next year as demand laps the slower current activity, new communities come online and buyers inevitably adjust to the new rate environment as they have in almost all prior instances of large rate moves. We expect builders at more affordable price points to be best positioned."

Wells Fargo Funding posted a policy update on Environmental Hazards and Environmental Deed Restrictions for Non-Conforming Loans effective on October 30, 2018.

Effective FHA case numbers assigned on or after October 01, 2018 through September 30, 2019 FHA will perform a collateral risk assessment of the appraisal submitted for use in the HECM origination. Based on the outcome of the collateral risk assessment, FHA may require a second appraisal to be completed prior to approving or closing the HECM loan. The second appraisal report should not be ordered from the first appraisal company. The cost of the second appraisal report is eligible to be financed as part of the closing costs. The lower of the two appraised values will be used to calculate the maximum claim amount. Additionally, FHA no longer requires appraisal from another appraiser if the re-sale date is between 91 days and 180 days following the date of acquisition by the seller and the re-sale price is 100% over the purchase price. For additional questions not answered by the guideline, please email Sun West’s underwriting scenario desk at uwscenarios@swmc.com for more information.

From now, until the end of the year, Royal Pacific Funding is offering free appraisals applicable to all loans $300K or greater, on all products including FHA and NonQM. Just submit a new loan*** on or after October 1st and close the loan by December 31st and Royal Pacific Funding will credit your borrower for the price of the appraisal, up to $500*. Restrictions apply, contact Royal Pacific Funding for details.

Veros and SWBC have partnered to provide Veros’ VeroPRECISION™ valuation engine and AVM solutions, including Veros’ proprietary VeroVALUE™ suite, as part of SWBC’s comprehensive selection of collateral valuation and analytics solutions. “By adding VeroPRECISION to its product line, SWBC now offers next-generation AVM decision logic technology. In cases where VeroPRECISION instantly deems a property appropriate for AVM valuation, those customers will immediately receive one of the industry’s top performing AVMs. Based upon machine learning in a production environment, the VeroPRECISION decision engine determines the most accurate valuation at the subject property level.”

Circumstances sometimes arise that require an appraisal report to be transferred from one lender to another. This process is often more complex than it may seem, and clients are oftentimes confused about the restrictions associated with this process. Coester VMS can help with the process.

Appraisal Pilot is a Potential Boon for Corelogic and helpful to Radian. Fannie Mae is testing if appraisers can determine a home’s value without visiting the property through a pilot. According to National Mortgage News, Fannie Mae is asking appraisers to combine local market data with property-specific details from a home inspection to create a “hybrid appraisal” report. This is not an entirely new approach, has been being pushed by larger/technology focused companies in the industry, and is more often used for home equity loans today. According to data provided by Moody’s, a hybrid appraisal can be completed in 3-7 days for $125-$450, while a traditional appraisal takes 3-30 days (rural markets and hot markets are longer) for $450+. If this becomes an option in the conforming mortgage market, we would expect it to be limited to a subset of loans when homes are more homogeneous and not be used for more distinct properties. Also, there will always be the “20 cats” issue as the data cannot tell how bad a home might be damaged aesthetically, while being structurally sound.

The move prompted one industry vet to opine, “With respect to the Fannie’s appraisal waivers, they only grant the waivers if there is a former appraisal of the property in their database already, if the borrower is in the database already (for refi’s), and if the borrower is very strong from an income, equity and credit perspective.  I think these waivers are a great idea, too slow to come, and long way from another mortgage meltdown.”

Capital Markets

Rates were roughly unchanged yesterday, the U.S. 10-year closing -1bps to 3.16% as headlines centered around potential Saudi acknowledgement for the murder of a Washington Post journalist, and a September Job Openings and Labor Turnover Survey that markets shrugged off (7.136 million; prior 7.077 million). International financial news was highlighted by the report that Italian officials have finalized the budget for 2019, but the European Commission is expected to reject the plan. European Commission President Jean-Claude Juncker said the eurozone would "revolt" if Italy's 2.4% deficit target for 2019 gets approved. MBS supply was on the light side with many mortgage bankers still here in Washington for the MBA's Annual Conventional & Expo, which concludes today.

MBA mortgage applications for the week ending October 12 came out, dropping over 7% (refis down to 38% of overall apps). Next up is September housings starts and building permits, with starts expected to decline while permits should go in the opposite direction. We also have some Fed speak, with Fed Governor Brainard speaking just afternoon. Finally, the minutes from the September 25thFOMC meeting will be released at 2PM DC time. In the very early going Agency MBS prices are little changed from Tuesday’s close and the 10-year is yielding 3.16%.

Jobs and Promotions

Congratulations to Gavin Ekstrom and his team on their move to CrossCountry Mortgage. Gavin has been an industry trailblazer in the mountain region for 27 years and has joined forces withCrossCountry Mortgage, an Ohio based lender with over 200 offices, and licensed in all 50 states. With a platform focused on growth, automation, and technology,

CrossCountry Mortgage is teaming up with Gavin to dominate and expand their footprint in CO, UT, AZ, and NV. As a Divisional Vice President, Gavin will be helming the launch of an operational hub and aggressively growing both internal and external sales. If you’re looking to align with a visionary leader, a company built around culture, a solid support team, and direct servicing, contact Gavin Ekstrom (720-231-6999).  

VIP isn’t a status, it’s a mindset. At Evergreen Home Loans, the VIP mindset starts on day 1 with a world-class on-boarding experience. You’re teamed up with an onboarding specialist (think of them as your Evergreen Concierge) who helps ensure you have all the tools and resources you need to be successful. This includes setting up your new platforms, syncing your smartphone to email, and assistance with your database. Changing workplaces can be stressful, let us make it feel like you’ve always been here. If you’re a high-touch loan officer looking for VIP service and a great place to work, check out the Evergreen careers page. In addition to our national awards, we’re proud to note that we were recently named the #1 best place to work in the state of Washington by the Puget Sound Business Journal.

In hiring news, Home Point Financial is on the move. With the recent addition of Phil Shoemaker as Chief Business Officer, Home Point is narrowing its focus on providing its broker and correspondent clients the best service in the industry. It all starts by attracting top sales talent, and Home Point is committed to building a platform that supports the most productive Account Executives in the industry. Ready to take your career to the next level with a national mortgage lender looking to aggressively grow? One that retains most of its servicing, leverages cutting-edge technology and delivers the dedicated operational support you need to succeed?  One that is 100% focused and committed to Third Party Originations? Contact Paul Wyner today: Home Point Financial is pointing you home.

National MI is pleased to announce that Cheri McCarthy has been promoted to Regional Sales Director for the Northeast Region. Cheri has a strong background in mortgage insurance and has been a strong Regional Team Leader with us for several years in the New England market. Rob Melton has been promoted to Regional Team Lead for the SE Region, reporting to Domenic Melillo. He will be joined by Dana Abernathy in his new role.