Are you afraid of the day that the Federal Reserve stops buying mortgage-backed securities? “Afraid” is too strong a word. (For many, this activity would define “afraid”… kids, don’t try this at home.) But the largest buyer, of Agency MBS, which now owns 30 percent of outstanding Agency securities, has now sped up the pace of stopping its program. When I worked on a trading desk, back in the Paleozoic era, the saying was, “Don’t fight the Fed.” We can fully expect tighter monetary policy. The bond market, though, doesn’t seem spooked by this news although we are seeing the yield curve flattening. So, what are lenders afraid of? In a poll of lenders during a Sales Boomerang webinar of fears for 2022, the topics listed, in no order, were margins and volume, lack of inventory, pricing wars, profitability, hiring and retention, margin compression, real estate agent referrals, all-cash offers, flattening housing values, performance management, interest rates, the pandemic, and lack of being aware of innovation. available here and this week’s is sponsored by Richey May, a recognized leader in providing specialized audit, tax, technology, cybersecurity, and other services in the mortgage industry and banking.)

TPO, Lender, and Broker Software ans Services

The decision to retain or release the servicing of a loan is anything but simple. It demands continuous evaluation and careful consideration of a lender’s desire to retain the servicing vs. the SRP aggregators are willing to pay. In addition, some sellers may have limited capital to invest in servicing, so selecting the right loans is imperative. Is your hedging solution capturing the many variables that are critical to making the right economic decision at time of commitment? The CompassPoint® Pooling Optimizer has been helping the industry maximize loan sale execution for over a decade. This solution can also automate a retain/release decision based on an internal rate of return (IRR) target. By leveraging the market-leading Compass Analytics MSR valuation model, the user can define the IRR target on a loan-by-loan basis, which can then be automated into a retained or released execution strategy. To learn more, email sales@optimalblue.com.

EPMX is not your traditional housing industry summit: Xperience where you are hearing about the same things from the same people. January’s EPMX is focused on one thing and one thing only, empowering your success by building a future-proof business. EPMX is bringing global keynote speakers, experts, and thought leaders from mortgage & real estate together under one roof to Xpand your expertise show you how to create a blueprint of Xcellence for the next decade. Learn from business experts from both inside and outside the industry, such as Christine Beckwith, Rene Rodriguez, Darius Mirshahzadeh, Laura Brandao, Daymond John, Egypt Sherrod, Jackie Dunlap, Michael LaFido, Eddy Perez, Jamie Cavanaugh, Katie Sweeney, Jason Frazier, Bob Broeksmit, Emmitt Smith, and many others! Seating is extremely limited so don’t miss out on this special event. Register today!

Did you know that 54% of all consumers reported having higher customer service expectations now than they did just last year? So, how do you provide your borrowers with a delightful mortgage experience when you have limited time? A fully integrated software stack is the key to efficient, exceptional customer service–if your systems are working together and automating your repetitive processes, you’ll have more time to build the relationships that matter. Jungo, the Salesforce-based, mortgage optimized CRM, has teamed up with Newton Connectivity Services to launch the Jungo + Velocity Sync! A complete sync between Velocity and Jungo allows for powerful automations and data-driven insight into every part of the mortgage journey. Connect your most powerful mortgage software with this seamless sync today.

Critical defect rate increases 13% in Q2 2021, according to ACES Quality Management’s Mortgage QC Industry Trends Report. The critical defect rate increase ends a multi-quarter trend of decline and is likely to remain volatile well into 2022. Other notable findings from the report include Income/Employment defect category reached its highest observed rate; Improvement in some of the core underwriting categories as well as in manufacturing-related categories; A significant shift in reviews of refinance versus purchase transactions; Increased share and improved performance for conventional loans; and a decline in Early Payment Defaults (“EPDs”). Read the Report today.

“Introducing Towne Flex, Towne Mortgage Company’s newest flexible solution. Towne Flex products are fully underwritten by Towne Mortgage using DU and LP findings. Towne’s flexibility allows us to offer more competitive solutions for investment properties, second homes and high balance loans. Find Towne on LoanSifter to discover new Towne Flex products and compare our pricing to competitors. Interested in becoming a partner? Our onboarding process is smooth and straightforward. Visit tpo.townemortgage.com or call (888) 653-9037 to get started!”

Are you ready to be America's next "Top Originator"? $360M producer, best-selling author, keynote speaker, and CEO of InstaMortgage, Shashank Shekhar, is looking to personally mentor 20 Loan Officers to be the Top Originators in the next 12-24 months. To apply, you should have closed $30M either in 2020 or year-to-date. If you qualify, you will get to become part of the elite team at InstaMortgage, a mortgage lender that boasts of industry-leading tech, lightning-fast closings, and award-winning culture. Apply now by answering some basic questions and you can be on your way to becoming America's Next Top Originator. You have to be a loan officer at InstaMortgage and willing to take massive actions. Lazy MLOs who are happy working with slow processing and underwriting need not apply. Oh, and the best part: the mentorship is completely free.

Capital Markets

Where does the overwhelming majority of VA and FHA loans go? Ginnie Mae reported that MBS issuance volume for November 2021 was $67.4 billion, reflecting the liquidity of the program and its value in meeting the mortgage needs of homebuyers and rental property owners. Approximately 248,087 homes and apartment units were financed by Ginnie Mae and put into government guaranteed MBS in November. A breakdown of November 2021 issuance includes $63.7 billion of Ginnie Mae II MBS and $3.7 billion of Ginnie Mae I MBS, which in turn includes approximately $3.5 billion of loans for multifamily housing. Ginnie Mae's total outstanding principal balance as of November 30 was $2.14 trillion, up from $2.13 trillion in the prior month, and up slightly from $2.11 trillion in November 2020.

For Fed watchers, its announcement Wednesday continues the recent trend of Federal Open Market Committee (FOMC) statements gradually moving in a hawkish direction with inflation running well above target and the job market booming. By doubling the pace of tapering, it puts QE on a trajectory to end much earlier, and puts itself in a stronger position to raise rates significantly if necessary. Median economic projections showed that policymakers now expect three rate hikes in 2022, followed by three more in 2023, after three years of not having to worry about even one.

The change in the expected pace of rate hikes was the only surprise from the meeting. During his press conference, Fed Chairman Powell said that rate hikes are unlikely to be made immediately after the taper ends and that the central bank expects inflation to return toward the 2.0 percent mark by the end of next year. The Fed Chairman balanced his rates outlook with a strong dose of economic optimism, and many in the market took solace in Powell’s robust endorsement of the economy, characterizing demand and income as strong. They also were emboldened by prospects in the central-bank dot plot for fewer rate hikes in 2024. Investors are clearly gaining confidence in the Fed’s willingness and ability to fight inflation, decreasing the odds of stagflation and policy error. And even though the Fed doesn’t set 30-year mortgage rates, the same economic trends influence both. So expect mortgage rates to gradually move higher as we shift to cash-out refis and purchase biz.

Following Wednesday’s Fed events and yesterday morning’s European central bank decisions, a selloff in Big Tech yesterday pushed yields down in the bond market. The Bank of England surprised with its first rate increase since the pandemic started, but the European Central Bank made no policy changes in the face of soaring inflation. In the north, Norges Bank raised its key rate 25 bps to 0.5 percent and flagged another hike in March, and the Swiss National Bank stood firm at -0.75 percent, as expected. That all came on the heels of the Fed turning hawkish to avoid real pain later from the realities of inflation.

Today’s calendar contains no data, though Fedspeak resumes after Wednesday’s Fed events. Before the New York open, the Bank of Japan was out with its latest monetary decision. The Desk will purchase up to $3.8 billion of conventional MBS and up to $1.8 billion 22.5-year to 30-year coupons. We begin the day with Agency MBS prices up/better by .125 than Thursday night and the 10-year yielding 1.38 after closing yesterday at 1.42 percent.

Jobs

A new year is approaching. How about a great new job? Flagstar Bank’s TPO channel is rapidly expanding and hiring for multiple roles, including account executives (both inside and outside), sales assistants, and business development specialists. Flagstar was voted Top Mortgage Employer by National Mortgage Professional and Mortgage Executive magazine, and has been a leader in the TPO space for almost 35 years. Plus, they offer competitive pay and an outstanding training program. Join one of the top teams in TPO. Contact John Gibson, SVP TPO lending.

CMG Financial announced the hire of Bobby Shull as its new Area Manager based in central Texas. Bobby has managed teams at national and regional lenders throughout the Central States, most recently serving as Area Manager at Gateway Mortgage Group and, before that, Market Leader at Movement Mortgage. His demonstrated history of financial services success will be crucial to CMG’s continued sales growth in this critical region. CMG Financial continues to invest in seasoned mortgage leaders, after being ranked #2 Mortgage Lender by the Austin Business Journal, for the second year in a row. Sales leaders like Bobby Shull will lead recruiting and onboarding efforts and develop new partnerships throughout the entire state of Texas. If you’d like to join a winning Texas team, contact Central Division Manager, Chris Blevins, at 512-632-6124. Visit CMG Careers for more information.

“Want to start the new year off right?? Unite Mortgage continues to grow in the TPO space and is expanding its sales team across the country. We have open territories ready for new AEs, with no fighting over accounts. At Unite we offer our sales team some of the most competitive Conventional, Government and Non-QM pricing in the industry today. In addition, we have a competitive compensation plan and a company culture that is sales oriented. Schedule a confidential interview today! Want to know more about Unite Mortgage? Check out this short ‘Why Unite’ Video! Or email Unite Mortgage President James Hooper. Be sure to visit us and follow us on all our social channels. ‘Let’s Unite Together.’”

“Assurance Financial is looking for top-producing, entrepreneurial branch managers in the southeast and eastern regions of the U.S. We are closing out our 20th year strong with no intentions to slow our growth or production momentum. If you are a true leader and an established pro in your market who wants to grow your origination opportunity, Assurance Financial is the perfect match for you. We offer a high level of operating autonomy, an aggressive compensation model, and a world-class operations team that will close all your loans on time, every time. Our technology stack guarantees a seamless application intake, improves closing delivery time, and features an integrated CRM with turn-key marketing solutions. We have everything it takes to exceed the expectations of your clients while giving you and your team a great environment to balance family and business life. Let’s talk! Contact Paul Peters, CMB or visit assurancemortgagelo.com to learn more.”

Guild Mortgage has named Russ Fowlie 25-year mortgage vet its EVP of Loan Servicing, overseeing the loan administration division with responsibility for enhancing the overall customer experience, from customer service through default loan management, maximizing productivity, efficiency, service and compliance, and leading Guild’s investor reporting relationships with Government Sponsored Enterprises (GSEs), such as Fannie Mae and Freddie Mac.