Let me state for the record that I am not a robot, although I often seem to be asked to check a box on certain websites by… robots. This article, however, sure grabbed my attention, as it was supposedly written by a robot that learned to read from the internet. Does anyone see the madness in this besides science fiction writers from the 1950s? What isn’t madness is the FHA extending forbearance requests through year-end. In other FHA-related news, the U.S. Justice Department announced that San Diego’s Guild Mortgage, in the press recently for being IPO-bound, will pay $24.9 million to resolve allegations it knowingly caused violations of the False Claims Act. As much of conversations these days include conjecture about 2021, there are certainly many analysts who believe that the next wave of refis will be more expensive, and that the borrower’s average credit profile may drop. In general, pipelines are still full, pointing to a solid year end and a good start for most lenders into 2021. The pandemic, and the reaction to it, will continue to heavily influence the economy, and few economists are immunologists. And remember, the only thing scarier after seeing a bug is not seeing the bug anymore.

Broker and Lender Products

If populating your marketing and sales automation system with quality content seems like a daunting task, it doesn’t have to be. Seroka’s team of strategists and copywriters specialize in creating content that is customized and branded: Definitely not cookie cutter. And because its niche is the mortgage industry, Seroka understands your target audiences and can help you ramp up your content quickly. Check out this video to learn more. For more information about how Seroka can help you develop compelling, quality content for your marketing and sales automation systems, reach out today!

Many mortgage lenders are enjoying the risk reduction and process flow improvements associated with LoanBeam and Freddie Mac’s asset and income modeler (AIM) for self-employed offering. Others, however, are curious about how to take full advantage of the program. To assist, LoanBeam is kicking off an education campaign designed to help its customers understand how to receive representation and warranty relief offered through Loan Product Advisor® (LPASM). If you use LoanBeam and LPA, contact your LoanBeam representative today to ensure you are getting the most out of your self-employed deals. Don’t know your rep, or would like to begin taking advantage of this rep and warranty relief program through LPA? Contact LoanBeam to find out more.

PHH Mortgage’s multi-channel originations platform and Enterprise Sales strategy is helping management keep up with both consumer and industry demands during COVID-19. Glen Messina, CEO and President of Ocwen (PHH’s parent company) talks about the progress that’s been made in reshaping the non-bank mortgage servicer and originator, its evolving business model and its progress in turning around the company in a recent issue of HousingWire. 

Calling all marketing pros. I’m not going to tell you something you don’t already know BUT… localized, personalized, omnichannel marketing rules. Look at the data: open rates for emails to strangers are 5-10%; emails to an LO’s past customers list increases opens to 20-30%; localized emails to Realtor partners bumps open rates north of 35%. Personalized emails skyrocket: birthday emails are opened at 40% and Loan Milestone Alerts get opened at 70+%! You see the trend. The stronger the relationship is and the more engaging the content, the better the response. What you need is Usherpa, a Relationship Engagement Platform that combines an intuitive CRM with a powerful marketing automation system. Usherpa’s Launch Pad Custom Email Wizard and branded Marketing Portal were designed for corporate marketing teams so you can create materials that align with your unique company vision and brand strategies. How can Usherpa help you accomplish your goals? Let’s talk.

Capital Markets

Banks with a booming mortgage business and an unhedged mandatory delivery strategy open themselves up to the possibility of letting their mortgage exposure subject the bank to unnecessary risk. For banks looking to mitigate their secondary risk through hedging, an experienced hedge advisory firm is the best tour guide, as State Bank discovered when it tapped Vice Capital Markets as its hedge advisor. This case study download explains how Vice Capital Markets helped guide State Bank’s bulk execution strategy so the bank retained control over its cash sales and safely maximized their profitability to enable State Bank to continue fulfilling its duty of service to their customers. To learn more about how Vice Capital can do the same for you, contact Scott Colclough.

This section of the Commentary usually focuses on the demand side of the MBS equation. What about the supply side? Although Freddie and Fannie’s forecasts are near $4 trillion for 2020, the MBA believes that originations will increase to $3.2 trillion this year, and then slowing to $2.5 trillion next year. The economics team sees purchase originations hitting $1.5 trillion this year but they see refinance activity falling to under $1 trillion next year as they forecast the 30 year mortgage rate hitting 3% by the end of the year and rising to 3.3% by the end of 2021. Lenders should know that Black Knight shows there are 32 million homes that could save 75 basis points in rate by refinancing. So the good times could continue well into 2021 especially if the primary-secondary spread narrows. But all bets are off if the Fed stops buying MBS.

Inflation data out over the last week shows consumer prices continued their overall upward trend, but not every category saw increases. Grocery prices fell for the third consecutive month following the initial stockpiling that occurred when social restrictions were implemented. Conversely the cost of dining out saw its highest monthly increased in 12 years as restaurants may be trying to recoup lost sales as well as implement costly virus acceptable protocols. September also saw the first increase in producer prices since the pandemic began in March.

Typically, inflation concerns would have a negative impact on the bond markets, leading to expectations for higher rates. Given the recent change in the Fed’s tolerance for inflation, however, no significant changes to monetary policy would be expected unless prices really started to move up. For the time being, the focus remains on the labor market and the 25.3 million unemployed who are still receiving benefits. Despite an impasse on another round of fiscal stimulus from the federal government, retail sales rose 1.9 percent in September as consumers continue to shift spending from services to goods. It remains to be seen if consumers will shift spending back to the much larger services sector of the economy once this wave of goods purchases subsides.

Looking at the bond market Thursday, it was a tale of two days. The morning was filled with negative news: claims that Iran and Russia are meddling in the U.S. election, surging virus cases in Europe, and disappointing earnings releases from Wall Street. All of those reports contributed to the early “risk-off” sentiment. But it was a different story after lunchtime. Nancy Pelosi said she and Steven Mnuchin are close to cinching a stimulus deal, despite there being significant differences (money for local and state governments and how to safely reopen schools and the economy) that are still being negotiated. There are still no indications GOP senators will take up any bill, even after the election, but investors are once again optimistic.

There were several economic releases of note yesterday. New jobless claims fell but the downward trend has stalled and initial jobless claims remain at levels that are multiple times registered during the last recession. Existing home sales increased 9.4% month-over-month in September, beyond expectations, to a seasonally adjusted annual rate of 6.54 million. September marked the fourth consecutive month of positive sales gains and a figure up nearly 21% from a year ago. Supply is constrained, reflecting a robust demand for existing homes, which should push prices higher. The downside is that it hurts first-time buyers. The Conference Board's Leading Economic Index increased beyond expectations in September, indicating more widespread growth, although a slower pace versus August points to the recent narrative of a possible slowdown in recovery momentum. By the end of the day, the 10-year Treasury yield jumped to its highest since June (with the curve steeper), impacting mortgage-backed security prices.

The week closes out with a light calendar. We’ve seen that forbearance volumes saw a modest decline this week, per Black Knight, falling by 11,000 from the week prior. GSE loans and portfolio-held and privately securitized loans declined, though forbearance plans among FHA/VA loans increased. As of October 20, nearly 3 million borrowers remain in active COVID-19 forbearance plans, representing 5.6% of first lien mortgages. More than 80% of remaining forbearance plans have had their terms extended. Today’s MBS FedTrade operations today are the lightest on the current schedule: a $4.042 billion maximum. Speaking of purchases, the Fed reported yesterday that for the week ending October 21 net purchases totaled $27 billion, or $5.5 billion per day on average versus originator selling that averaged $7.1 billion. We begin the day with Agency MBS prices unchanged from Thursday’s close and the 10-year yielding .87 after closing yesterday at 0.85 percent.

Employment and Transitions

2020 has felt like a runaway roller coaster for many of us, and a few tenacious lending executives have not only enjoyed the ride, they’re looking for new challenges. If you’re one of them, the career move you crave may be waiting at Stearns Lending’s Joint Venture Partnerships Division, aka Stearns Ventures. Stearns Ventures is creating new JV partnerships with several builders and real estate brokerages Dallas, Texas, Nevada/Arizona, DC/Virginia, Bay area/Sacramento, and Seattle/Western Washington. Now Stearns is seeking strong JV Presidents for each one. Senior lending executives with the chops for managing the development, launch and growth of one of these partnerships are invited to share your resume and contact info with Stearns Ventures through this secure link https://stearnsventures.biz/Contact. If you have the right background, skills, and outlook for leading a new joint venture, you can be assured that your rewards will be substantial and satisfying.

Gold Star Mortgage Financial Group announces astounding enhancements to IRIS (Interactive Response Information System), its proprietary AI platform that delivers invaluable market data alerts based upon real-time predictive analytics. Continuing to disrupt the industry with lead generation strategies, Gold Star breaks new ground with IRIS 2.0, now capable of far greater data assessment and delivering 50+ local in-market leads to each Gold Star Loan Officer per month. With completed beta testing demonstrating extraordinary conversion rates, IRIS exemplifies Gold Star’s 20-year commitment to creating off-the-charts potential for their Loan Officers and referral partners. Inside-track access to critical data, award-winning process automation, free marketing and recruiting assistance and an industry-best margin are the advantage features of Gold Star’s industry-leading support platform. To demo IRIS 2.0 or learn more, please visit www.JoinGoldStarMortgage.com.

First Continental Mortgage (FCM), an innovative, independent, mortgage lender, is seeking a highly motivated Producing Branch Manager in Houston, Texas, to oversee production for one of our builder partners. “Since 1993, FCM and our affiliate companies, have helped families realize the American dream of owning a home! We specialize in partnering with builders to help home buyers obtain financing for their newly built homes. The Producing Branch Manager will direct day to day operations, manage the LO production, and maintain a successful relationship with one of the largest private homebuilders in Texas. They’ll also work closely with senior management to achieve company goals and metrics. FCM is a full-service mortgage lender and will fund over $1.5 Billion in purchase loans this year through our exclusive home-builder relationships. FCM employs over 200 people across FCM and our affiliates. For a full description visit FCM Careers and to submit your resume please send to Cecil Pounds.”

Sun West Mortgage Company, [NMLS 3277] a leading full-service national mortgage lender, is excited to announce the expansion of its west coast operations. With around 16 years of mortgage experience under his belt, Matt Perez has joined Sun West’s Irvine, CA branch as a Regional Manager. Perez is dedicated to providing his clients with exceptional service. His favorite part of Sun West is the technology and 24/7/365 back-end loan processing to provide clients a timely closing and competitive financing options. Matt’s love for the industry coupled with his extensive experience will be a great asset to the company’s continued success. For more information on Sun West, please contact Managing Director, Leif Boyd at 916-270-9088 or SVP, Business Development, Peter Schwartz at 916-770-0053. For Sun West Mortgage Company, Inc. licensing information and disclosures, please click here.

“Work hard, have fun, get things done! Spring EQ is a leader in first and second mortgage lending with numerous awards for our great team culture and growth! We continue to exceed our goals and are focused on record growth as we continue to build out a Great Team, Simple Processes, and Best in Class Technology. Check out our unique opportunities including a Leader of Capital Markets, a Manager of Marketing and other valuable team positions as Loan Officers, Underwriters, Processors, Closers and more here. Take a minute to check us out! www.springeq.com.”