As one Native American said, “Only a white man would cut two inches from the top of a blanket, sew it to the bottom, and think he has now has a longer blanket.” (Feel free to use that one wherever you like.) Winter is coming, with its increased blanket needs. According to the Census Bureau, while the majority of U.S. households are heated by electricity (39%) or utility gas (48%), 2% rely on wood for heat. Weighing in for the top two counties reliant on wood (with populations of 65,000 or greater) is Apache county Arizona accounting for 61% and McKinley county New Mexico at 39%. On the low end, Nevada county California and St. Lawrence county New York utilize 17% wood heat.

Lender Products and Services

CALCAP Lending, LLC a leading wholesale lender in the high demand private money lending market is “Front and Center” at the upcoming NAMB 2018 conference in Las Vegas. We invite attendees to visit with us at Booth #400to find out more about our competitive rental, fix-and-flip, foreign national, and construction lending business purpose lending programs, including CALCAP’s recently released Zero Point upfront option. On pace to double production from last year, CALCAP Lending has established a “Value Partners Program” dedicated exclusively to mortgage originators who are seeking to expand their production and income opportunities. To become a CALCAP Value Partner or to learn more about CALCAP Lending and the career opportunities we offer which include sales training, please click here or give us a call at 855-372-0960.

Professional Development has been proven time and time again as a vital step for achieving business growth. There are infinite possibilities, however, to realizing deep and everlasting success & happiness when we invest in ourselves personally as well as professionally. XINNIX, The Mortgage Academy, is committed to helping you thrive in every aspect of your life. As you focus on developing plans for your business in 2019, XINNIX is offering a great year-end opportunity to enrich your personal development as well with free registration to its December 12th webinar, Infinite Possibilities presented by XINNIX CEO Casey Cunningham. In this empowering session, you will learn how to plan and prioritize your personal and professional goals, implement a formula for success, and write and effective life mission statement that guides your decisions and priorities. CLICK HERE to register today for Infinite Possibilities on Wednesday, December 12 at 10 AM ET!

“Here’s a hi-tech breakthrough in lending to self-employed borrowers. 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.

FundingShield reported an estimated $75 million per day in wire and closing fraud exposure. This will result in exposure of $20+ Billion in 2018 despite reduced volume the sector remains a hotbed for cyber criminals and fraud. Wire fraud and cyber threats such as phishing, injection and business email compromise events spike during the holiday season when fraudsters take advantage of staff being on vacation, increased consumer transactions, increased remote access by staff and more back up teams supporting production and operations. Couple this with the expansion of digital lending processes, widespread use of wireless networks that may not be encrypted and properly secured, email server threats to known and new third-party relationships of lenders, closing and settlement companies and law firms and the risk is more prevalent. Jerry Halbrook, former President of Black Knight Inc. Origination Technology and Business Intelligence Divisions and Fundingshield Advisory Board member shared "Unknown parties to the transaction as well as known and trusted vendors are being exposed to these risks hence a proactive transaction level monitoring system is needed" Contact info@fundingshield.com to create a user centric risk and control strategy to get ahead of wire and cyber fraud attempts that go beyond a vendor vetting with active defenses at the loan level that save your firm on operational and risk cost.

Capital Markets

The Fed is considering big change in how it sets US interest rates, possibly targeting the OBFR instead of the fed funds rate. But what is the OBFR? The Fed tells us that, “The overnight bank funding rate is calculated using federal funds transactions and certain Eurodollar transactions. The federal funds market consists of domestic unsecured borrowings in U.S. dollars by depository institutions from other depository institutions and certain other entities, primarily government-sponsored enterprises, while the Eurodollar market consists of unsecured U.S. dollar deposits held at banks or bank branches outside of the United States. U.S.-based banks can also take Eurodollar deposits domestically through international banking facilities. The overnight bank funding rate (OBFR) is calculated as a volume-weighted median of overnight federal funds transactions and Eurodollar transactions reported in the FR 2420 Report of Selected Money Market Rates. The New York Fed publishes the OBFR for the prior business day on the New York Fed website at approximately 9AM ET.”

To a large degree interest rates move based on supply and demand. How’s the supply going on the housing side of things? The phrase "housing market slowdown" isn’t exactly surrounded in positive connotation, but as the $220 trillion global housing market starts to cool off in some places against a backdrop of monetary policy normalization, there may be some reasons for calm. Price declines are impacting the most expensive cities, where they might not drag down consumption the way standard theory predicts. In theory, a housing price decline should leave households feeling less confident about their finances and less willing to spend. But the pace of home price increases has exceeded the rise in disposable incomes by so much in some markets that a little cool-off might instead make consumers less budget-constrained. Despite global property prices potentially peaking for the cycle in places now on the decline like London, New York, Stockholm, Hong Kong and many other cities, it may not lead to a significant weakening in consumption, as long as it remains modest and gentle. It may actually promote consumption in some areas.

The U.S. 10-year closed Thursday -1bp to 3.04% as Treasuries across the curve closed on a mostly flat note after backing off their opening highs after the market received another reminder of a weakening housing market in the form of a disappointing Pending Home Sales report for October. The FOMC Minutes from the November meeting acknowledged that almost all policymakers believe that another rate hike will be warranted "fairly soon."Policymakers also noted that fiscal stimulus and a strong consumer could produce upside risks to inflation. Personal income and personal spending both beat expectations, while Real PCE, which is the component that factors into Q4 GDP forecasts, was up a solid 0.4%. The tamer the inflation readings support the Federal Reserve taking a more deliberate approach to raising the fed funds rate.

Today will see much of the markets' attention in Buenos Aires as the G20 summit gets under way and continues into the weekend. With regards to the economic calendar, today is relatively light consisting of just Chicago PMI for November and an appearance by NY Fed President Williams. Additionally, the U.S., Mexico, and Canada are set to sign a new NAFTA deal. We begin today with the 10-year yielding 3.01% and Agency MBS prices better a smidge.

Employment and Retail Products

Caliber Home Loans, Inc., with a 25% growth rate in government volume between the Q3 2017 and Q3 2018, continues to report strong numbers – per IMF – throughout a challenging year for the industry. In 2018, Caliber has hired to-date 517 producers to join its national sales force, who will conservatively add $4.5 billion in annual purchase volume. Looking ahead, Caliber is excited to carry the positive momentum into 2019 and beyond. "Caliber is committed to establishing a local presence in markets across the nation," said Caliber CEO Sanjiv Das. "Our loan officers are strong forces in their communities, and their stellar work has helped Caliber grow tremendously in the past few years. I can't wait to grow our team further." If you're a motivated loan officer, looking to join a premiere purchase lender, visit JoinCaliberNow.com or reach out to Jeremy DeRosa.

Parkside Lending, LLC continues to expand its product offering!  Now offering USDA loans, Interest Only loans down to $100,000 and Jumbo using DU findings.  They’ve also launched Jumbo II allowing Restricted Stock Unit income, loan amounts to $4,000,000 and Non-Warrantable Condos.  With Parkside’s simplified process, automated Loan Estimates, state and federal disclosures delivered electronically, access to underwriters, and a plethora of products, it is easy to see why brokers love working with Parkside. Parkside continues to grow and is excited to welcome Alan Michaels and Debbie Baider covering the Mid-Atlantic states. They bring incredible depth and experience in the Mid-Atlantic region. Parkside isn’t done with new product roll outs; HELOCs and more Interest Only & Non-QM programs are coming soon, plus a Bank Statement program. To find out more about these programs contact your Account Executive or Sales@ParksideLending.com. If you are an Account Executive looking to join a great team or are a mortgage broker who is not currently working with Parkside Lending, please contact us at Sales@Parksidelending.com.

Gateway Mortgage Group, has introduced an innovative program designed to protect a homebuyer’s down payment. The new Down Payment Protection program is offered through ValueInsured and has been integrated into most of Gateway’s mortgage loan products. This unique program offers homebuyers an optional insurance feature minimizing market risk on the value of their home and safeguard some, or all, of their down payment. If the market price drops and the home sells at a loss, up to the full amount of the down payment could be reimbursed in a turnkey, home inspection-free process that can take 30 days or less. “Gateway is always growing and innovating,” said Alan Ferree, president of Gateway. “This program allows us to differentiate Gateway from other mortgage lenders while providing our customers a unique option that offers peace of mind and simply makes sense for certain markets or borrowers.” For more information, visit Down Payment Protection at Gateway or contact your local Gateway Mortgage Group branch.

PRMG continues to expand its national footprint by opening 5 new Retail Locations during the month of November!  Along with the drive and ambition to bring the American Dream of Homeownership to all cities across the country, PRMG has now opened its doors in Colorado Springs, CO; West Palm Beach, FL; Chicago, IL; Farmers Branch, TX and Federal Way, WA.  PRMG is Built by Originators for OriginatorsTM and is devoted to continuously growing their retail platform.  If you are a Motivated Loan Originator who wants to be Progressively Better, contact Chris Sorensen(909.262.0452).

M&A: What About Non-bank Lending?

Capital One ($408B, VA) will acquire online shopping comparison engine Wikibuy. Wikibuy provides price comparison in real time, get coupon codes at checkout and receive price drop alerts on products and services to its more than 1mm members.

Speaking of non-bank lenders, which regulators view as thinly capitalized versus banks in case something goes wrong, they now account for 44% of lending by the top 25 originators, up from 9% in 2009… Five of the largest ten are non-banks, as is the largest retail mortgage originator, Quicken Loans. Their market share for servicing mortgages, or collecting monthly payments, has risen from 5% in 2009 to 41% this year. The FDIC is certainly aware of, and concerned with, the trend.