Lenders and servicers don’t like weather extremes. Hurricane season is nearly over. While the East Coast is bracing for a storm, however, it’s feast or famine in the West, when, in the span of a few days, large swaths of land go from drought and fires to rain and flooding. And lenders and servicers are impacted: who wants to own the collateral on a $300,000 debt when it is threatened by fires, floods, hurricanes, or tornadoes? Or ghosts. Do you believe in ghosts? Me neither… but I wouldn’t want to upset any of them in case they’re in the attic. In at least nine states, there is a law that requires home sellers to disclose if there was a recent death on the property, and the great state of New York goes so far as to have it be illegal in some circumstances to sell a building that is haunted. That’s the result of a 1991 New York supreme court ruling where a buyer sued over a house that was not marketed as haunted, but the previous owners had talked a bunch to the press about how haunted their house was, and the buyer won because it could negatively affect the value. Given that 40 percent of Americans reported they believe in ghosts as of the latest polling on the matter, and a property can lose 10 to 25 percent of its value if a murder took place there, the damages are hardly spectral. (Today’s audio version of the commentary is available here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology, and other services in the mortgage industry and in banking.)

Lender and Broker Services and Products

Stop referring your home equity loans away for free! Spring EQ Wholesale is the only second mortgage lender who allows originators to earn up to $10,000 in compensation per loan. With the widest product in the industry, Spring EQ offers CLTVs as high as 97.5%, DTIs to 50%, rates as low as 3.99%, adjustable rate HELOCs, and fixed rate home equity loans. Piggybacks, stand-alone, and 1st lien home equity loans are available.  Have a home equity scenario and need options for your clients? Try Spring EQ’s Scenario Tool! It takes less than 1 minute to submit, and their team will respond quickly with all of your home equity options.

Setting servicing grids aside and adopting an advanced cash flow model is just the first step toward more accurate, consistent MSR valuation. Servicing rights are opaque, Level 3 assets, and valuing them precisely is difficult. Since MSR brokers actively value these assets each day, lenders can gain a direct link to the market by pairing their cash flow model with broker-managed assumptions. Black Knight’s recent blog post explores the top five reasons broker-managed assumptions should be a standard component of a lender’s MSR valuation processes. Reasons include valuation consistency, real-time access to live assumptions, greater retain/release confidence and more. If you’re interested in learning more about fine-tuning MSR valuation by pairing innovative technology with real-time broker data, contact Black Knight.

“Planet Home Lending (NMLS 17022) is ready to meet with you next week at NEMBC 2021. Contact Jim Bopp, VP National Renovation Lending (518-369-8242) or Danny Hughes, Regional Sales Manager, Correspondent (203-981-5743) to meet with us at Gurneys in Newport, RI, November 3-4. A 30-minute meeting can introduce you to our competitive pricing, flexible service, deep product list, and a partnership that could increase your margins in any market. We retain the majority of our servicing and have limited credit overlays. Whether you prefer to deliver best effort, mandatory, or bulk purchases, Planet offers what you need: FHA, VA, USDA, FNMA, FHLMC, FHA 203(k), FNMA HomeStyle, as well as specialty products like renovation and manufactured home loans or buy downs for your builder clients. Learn more here.”

Disaster inspections just got a lot easier… And a lot faster. Incenter Appraisal Management’s remote inspections shorten your loss draft process to 72 hours or less from order to completion. Instead of having to schedule in-person professional inspections and then wait days for the reports, an Incenter remote inspection gets the job done in a fraction of the time, with most inspections returned in under 24 hours.* And our super-friendly technology makes it easy on the homeowner. There’s no app they need to download and try to learn. IAM handles everything for you, from inspection assignment to scheduling and quality control. We have fast team scaling for bulk requests, and we’ll integrate our reports and workflow directly into yours. To learn more and request a demo, visit Incenter Appraisal Management. *Based on homeowner availability.

Thinking about your technology roadmap? How perfectly would an end-to-end holistic platform that connects all parts of your business fit in? RM Automate, Richey May's Intelligent Automation Solution powered by the world-class Zoral Automation Platform, enables digital transformation across all areas of your business so your team can spend time focusing on more important value-adding tasks to drive your business rather than mundane tasks due to technology roadmap limitations. Contact us to see a demo of RM Automate and how it can enhance your productivity, while fitting in seamlessly with your technology stack.

The Maxwell Mortgage Optimization Platform uses technology to help local lenders thrive in today’s competitive market. Including Maxwell’s Point of Sale, Fulfillment, Diligence, and Secondary Market Trading solutions, the Mortgage Optimization Platform offers transformative efficiency and scale for small and midsize lenders. Lenders see their loan officers close 15% more loans each month 13 days faster than the national average. Plus, lenders add meaningful basis points to each loan and gain access to competitive, faster loan pricing. Flexible to your specific situation, you can choose the solutions you need or use the whole platform. Want to learn how the Maxwell Mortgage Optimization Platform can enhance your entire loan manufacturing process, from application intake to the secondary market? Click here to learn more, or request a demo today. 

The purchase market winter is coming: Game Of Thrones may be far behind us, but the great purchase war is just ahead: A 2022 market that’s 75% purchases and just 4.79 million units. Home search portals keep adding new buyers, and picking off your pre-approved buyers. But not if you have a homebuyer portal that’s slicker, more precise on valuations, and branded by you. This is how ComeHome.com by HouseCanary, a national real estate brokerage, can power this modern homebuyer experience for you this winter.

When your borrowers need assistance, who do they turn to? How does your team enable borrowers to get the information they want, when they need it? Mortgage companies such as  AmeriSave, APM, and PRMG turn to Capacity to ensure borrowers find the information they need and receive a more personalized experience. By connecting to your knowledge base and disparate information, Capacity provides 24/7 level-0 support for borrowers. Capacity correctly and instantly answers more than 90% of all prospective and current borrower questions without any human intervention. Bottom line, Capacity allows you to take care of borrowers with superior customer experience and 24/7 automated support. Deploy within 30 days. Request a demo.

Lenders, when it comes to your technology investments, do you suffer from FOMO (Fear of Missing Out)? According to the just-released October issue of STRATMOR Group’s Insights Report, you’re not alone. The likelihood of lower volumes and margin compression in the next few years puts a premium on efficient operations, driving many a mortgage banker to ask, “Are we missing out?” when it comes to the latest technology trends. In his article, “Mortgage Psych 101—FOMO (Fear of Missing Out),” STRATMOR Principal Tom Finnegan analyzes data that indicates lenders would do better to worry less about missing out on the newest technology and concentrate more on giving technology context through process and adoption. “Over time, it has been difficult to see much, if any, correlation between technology spend and either lower fulfillment cost per loan or higher net production income for banks or Independents,” says Finnegan. “If there were a technology magic bullet, the provider of that ammo would likely be the most successful mortgage software company on the planet.” Don’t miss this article on the importance of technology in context in the October Insights Report.

Agency Activities

Freddie Mac issued a statement in support of an announcement by the Federal Housing Finance Agency (FHFA) that Freddie Mac and Fannie Mae’s low-income refinance programs will be expanded to include those making at or below 100% of the area median income (AMI)—up from 80% AMI.

Freddie also created a “Client Resource Center” that “includes valuable resources like the System Status pages, which let you see the status of our Freddie Mac tools immediately.” Users must create a profile.

Fannie Mae’s newest Lender Letter (LL-2021-14) specifies temporary requirements for Condo and Co-op Projects that impact the eligibility of certain condo and co-op projects. These requirements relate to significant deferred maintenance and unsafe conditions, special assessments, reserve requirements, project eligibility waivers, and more. Additionally, these requirements are to protect borrowers from physically unsafe or financially unstable projects, and to prudently manage risk for Fannie Mae, our lenders, and investors.

Freddie Mac provided answers to frequently asked questions (FAQs) about Freddie Mac Refi PossibleSM, its refinance offering for lower-income borrowers.

Freddie Mac issued Eligibility Expansion for Refi PossibleSM Mortgages In Single-Family Seller/Servicer Guide (2021-33, announcing updates to the Freddie Mac Refi PossibleSM mortgage. Eligibility expansion includes Increasing the borrower income eligibility from 80% to 100% of area median income (AMI). Removing the requirement that the borrower’s monthly payment be reduced by at least $50. However, a reduction in the monthly payment and at least a 50 basis points (0.50%) reduction in interest rate will be required. Removing the maximum 10-year (120 months) seasoning requirement and removing the $5,000 cap on financed closing costs. The removal of the required $50 monthly payment reduction and the removal of the cap on financed closing costs are effective immediately. Sellers can ignore the feedback messages that Loan Product Advisor® returns associated with these changes until systems updates can be completed.

Capital Markets

HOW ELITE INVESTORS BUY HOMES & LOANS: As home demand shifts with plateauing list prices and short supply, Wall Street’s top buyers of homes rely on HouseCanary’s Property Explorer for real-time decision making. With 108 million home valuations within 3.5% Median Absolute Percentage Error, 88 million rental property valuations, & 19,000 zip codes, Property Explorer lets you get granular quickly.  sales@housecanary.com

And as many in this industry know, forget the price of a restaurant meal or a night in a hotel: Demand for single family housing remains healthy at these prices. An increase in existing homes sales during September indicates that the slowdown towards the end of the summer is more likely due to a lack of supply rather than waning demand. Existing home prices were 13.8 percent higher than twelve months ago, a significant slowdown from the 20+ percent annual gains observed earlier in the year, but robust nonetheless. As housing supply and demand become more in-balance, the large annual gains should continue to subside, providing some relief for buyers who are also facing higher interest rates.

Yes, there’s a lot of talk about rising rates, but yesterday was a good reminder that there are no certainties in the bond market. And nothing in financial markets goes in a straight line. Treasury yields fell, and the MBS basis closed the day tighter, and I saw plenty of price improvements late in the day. We should see some increased volatility in anticipation of the Fed meeting next week, where we will receive more clues on the FOMC’s thoughts surrounding booth tapering and inflation.

After a light day yesterday for scheduled news things pick up today, beginning with Philly Fed non-manufacturing and region indexes for October (). Later this morning brings August home price indexes from FHFA (which will affect loan limits) and S&P/Case-Shiller, consumer confidence for October, September new home sales, Richmond Fed manufacturing and services indexes for October, the Q3 homeownership rate from the Census Bureau, the Dallas Fed Texas services index for October, as well as Treasury auctions and MBS purchases from the Fed for $5.8 billion. We begin the day with Agency MBS prices unchanged from Monday night and the 10-year yielding 1.63 after closing yesterday at 1.64 percent.

Employment and New Hires

Union Home Mortgage Corp. is actively seeking experienced Account Executives nationwide. Union Home Mortgage supports both NDC and Wholesale Business Partners. You’ll receive world-class on-boarding and ongoing support as you build your business. From high-level coaching to fireside chats with leadership, you’re set up for success from the very beginning. We need to see our production team focused on adding customers. Each Account Executive is assigned a Partner Advocate to be solely responsible for their active pipeline. That relationship gives the AE the time needed on a regular basis to remain razor focused on growing their customer base. Explore our new TPO website: UHMTPO.com.  If you’re interested in advancing your career as an Account Executive with Union Home Mortgage TPO, contact Jim Wickham, Vice President - Third Party Origination at (248) 318.8553.

The Mortgage Link is a well-capitalized, full-service lender with the tools in place to expand, even if the market retracts, as the industry pivots from the refi boom to a more purchase-driven environment. We’re looking for growth-oriented Mortgage Loan Originators and Branch Managers as we broaden our reach across the U.S. We have the balance sheet to scale, the margin flexibility to enable your growth, and the transparency of a true partner. Our MLOs work with the same dedicated processors, underwriters, and support team, every day & every file, so you can concentrate on reaching more borrowers and closing more loans. We’d like to speak with you about the opportunities we provide and how we can assist you in growing your business moving forward. If you’re interested in working for, or partnering with, a company designed to help you stand out and develop innovative programs to succeed, contact Jon Lowe to discuss.

At the heart of Finance of America Companies is an emphasis on caring for its communities, its employees, and its customers. Continuing that emphasis, Finance of America celebrated its annual Pink Day on October 20th. “Pink Day” raises funds and awareness for *** cancer with the day’s proceeds going towards the National Cancer Foundation. This year’s Pink Day encouraged employees to wear pink and participate in a 30-minute fitness and social media challenge where each tagged photo earned a charity donation from Finance of America. This is just one of many examples of the ways Finance of America pulls together to invest time, effort, and care back into the communities it serves. To learn how you can join, and be an integral part of Finance of America Cares initiatives, email Tim Cotten.

Congratulations to Joe Matteo who is now the Managing Director and Head of Business Development at Invigorate Finance. Joe will be aggregating residential and business purpose loan products.