My cat Myrtle (Myrtlus Domesticus) doesn’t have much in the way of material possessions. Need to get rid of unwanted junk during the holidays? Put it in Amazon boxes and leave them on your front porch. The holidays are a time of a lot of awkward meetings, especially your girlfriend’s parents. Here is an entertaining 3-minute video with subtitles of actual thoughts. How about buying your loved one a town? Perhaps a different question is, how does an appraiser handle an entire town in New Mexico for sale? Do you think of a particular color when you think of a ghost town? Rust and gray? Those in the know will tell you that COVID has changed the color palette of new homes. (COVID… After years of wanting to thoroughly clean my house but lacking the time, this week I discovered that wasn’t the reason.)

Lender and Broker Tools

ACES Quality Management Q2 2020 Mortgage QC Trends Report: Critical Defect Rate Highest Since 2018 Report Summary. The overall critical defect rate of 1.88% defect increase was driven primarily by a 64% increase in the Income/Employment category. Early Payment Defaults increased 197% through Sept 2020 compared to last year. “While evidence of COVID-19’s impact on loan quality was present in the Q1 data, Q2 is where “The COVID Effect” becomes truly apparent,” said ACES Executive Vice President Nick Volpe.

Bad things happen when you don't have a borrower intelligence system in place. Stop getting responses such as, "I already took a loan," or "We already bought our house." 92% of borrowers will go with the first or second lender when they are ready. Sales Boomerang notifies mortgage lenders when someone in their database is ready for a loan. “Look at the opportunity cost you have by not having Sales Boomerang. Last year we closed over $72M in loans that we would lost from not having Sale Boomerang.” (Stephen Barton, Eustis Mortgage) The numbers speak for themselves: 20X Avg ROI, $240 Avg Cost Per Acquired Loan, 20-40% Avg Lift to Loan Volume. Want to see exactly how much you lost this year? Request your report today. We will show you which competitor took your deal, the loan amount, type of loan, the term and much more.

As 2020 ends and we all start planning for another busy year, Rocket Pro TPO is looking forward to helping its broker partners bring positivity into the lives of their clients. The past year was full of challenges, but the entire broker community can assist Americans in kickstarting their 2021. There is still a record number of homeowners who can benefit from a refinance – providing a huge boost to their monthly cash flow. Plus, we are all expecting purchases to continue to be strong throughout the year with the red-hot demand that couldn’t even be slowed down by a pandemic. There are so many ways you can be a pillar of support for families looking to achieve the dream of homeownership and unlock financial freedom. Go into 2021 on a positive note and click here if you are one of the few who are not yet part of the Rocket Pro TPO network.

“The Capital Markets team at Citibank N.A. continues to provide innovative solutions that help our sellers drive higher returns and mitigate hedge risk through leveraging one of our 2 mandatory forward executions: Citi Forward-Bid Tape and Forward Direct Trade. A Mandatory forward commitment in lieu of TBA hedge allows you to avoid margin call risk; and our innovative 2-Way Pair Off feature provides true TBA hedge economics by locking in your TBA and MSR price. Tap into granular bid tape pricing, including CRA premiums with the benefit of a forward TBA hedge. Substitutions and swaps using current market levels are allowed, which means you are not subject to worst case pricing. 2021 will be an amazing year for Citi Correspondent, so please make sure you are part of it.  Find out how by contacting our National Client Services Team at 800-967-2205 or completing the Prospective Seller Questionnaire.”

Non-Agency News Tidbits

Mortgage bankers doing business along the coasts are keenly aware of jumbo investors. Who has the hot hand in jumbo/nonconforming biz? And informal poll, not meant to be exhaustive, shows Chase by far, followed in the distance by MAXEX, Redwood Trust, Huntington, TIAA Bank, PenFed and Great Lakes Credit Unions, US Bank. Also in that segment are Associated Bank, Wells Fargo, RSMC Express, Truist (SunTrust), Lakeview/Bayview, Verus, Flagstar, SG Capital Partners, Galton Funding, AIG, and New Rez.

Lenders interested in non-QM lending know that the CFPB released two final rules further defining what types of loans can be a “qualified mortgage loan” for purposes of the bureau’s Ability-to-Repay/Qualified Mortgage Rule (ATR/QM Rule). The General QM Final Rule substantially revamps the general rules defining what constitutes a General QM and removes the existing 43 percent debt-to-income threshold over which a loan cannot be considered a General QM. The Seasoned QM Final Rule creates a new class of QM that allows certain rebuttable presumption QMs and non-QMs to achieve “safe harbor” QM status three years after origination provided the consumer has strong repayment history.

Importantly, the “GSE Patch,” which provides QM status to loans qualifying for sale to Fannie Mae or Freddie Mac, expires for applications submitted before July 1, 2021, at which point the General QM Rule will take effect (although compliance with both rules is permitted 60 days after publication in the Federal Register).

Redwood Trust features expanded guidelines that allow LTV/CLTV to 90%, lower FICO scores, lower reserves, shorter seasoning requirements on credit events, borrowers with > 4 financed properties, non-occupant co borrowers with blended ratios/assets, non-warrantable condominiums and condotels.

Flagstar’s Memo 20115 provides Asset updates to it Non-Agency Guidelines.

This week MAXEX launched the first two programs in its new Environmental, Social and Corporate Governance (ESG) business line. The initial programs are designed to support the growth of minority, women, and veteran-owned mortgage lenders. “MAXEX will facilitate lending in underserved market segments by offering preferred loan pricing for qualified lenders through these ESG programs. As a leader in the capital markets, J.P. Morgan has agreed to purchase and securitize certain qualifying loans which ultimately allows for more liquidity and better access to home mortgages in a critical part of the housing market.” MAXEX has its Opportunity jumbo loan program, with improved pricing for minority, women, and veteran-owned lenders, and the Opportunity Express with “enhanced pricing and reduced manual underwriting by leveraging certain results from Fannie Mae’s Desktop Underwriter® and Freddie Mac’s Loan Prospector Advisor(SM).”

ACC Mortgage, which never stopped offering non-QM loans in March and April of 2020, offers a plethora of programs and products.

Carrington has a slate of non-QM programs.

Citadel Servicing Corporation (“CSC) launched a 3-Month Bank Statement mortgage lending program designed specifically for self-employed borrowers using the most recent bank statements will allow those borrowers who have been adversely impacted during the ongoing economic downturn caused by COVID-19 to purchase or refinance properties.

Angel Oak Mortgage Solutions offers a 12- & 24-month bank statement loan program with 90% LTV, $150,000 to $3,000,000.

Deephaven Mortgage has loan amounts to $2.5M, cash out proceeds to $500k, fixed & Interest Only products, LTVs to 90%, FICOs as low as 660, debt ratios to 50%.

Capital Markets

While the President and Congress continue to grapple with the stimulus bill, the bond market tells us that global coronavirus shutdown measures to contain the spread hurt global growth prospects yesterday, causing Treasuries to rally and the MBS basis to end wider. In Washington, Congress officially agreed to a $900 billion stimulus package, but that agreement was widely expected and didn't move the bond market. And now President Trump is threatening to not sign it, saying it is not enough.

For economic data, markets received weaker than expected Consumer Confidence data for December and Existing Home Sales data for November (-2.5% month-over-month), which marked the first time in six months that existing home sales did not increase on a month-over-month basis. Underlining the strength of the housing market, total sales were up over 25% from a year ago. The downside is that the supply of existing homes is at an all-time low, which will inevitably feed higher prices, hurting first-time buyers. Finally, markets received the third estimate for Q3 GDP, but are already looking forward to the Q4 report in less than two weeks.

Mortgage applications from the MBA started today’s busy economic calendar, increasing by 0.8 percent from one week earlier for the week ending December 18. We’ve also received November Personal Income and Spending (-1.1 percent, -.4 percent, dismal), the PCE Price Index (1.1 percent), Durable Goods (+.9 percent, ex-transportation +.4 percent) Initial Claims for week ending December 19 (-89k to 803k) and Continuing Claims for week ending December 12 (-170k to 5.34 million). Later this morning brings December FHFA Housing Price Index, November New Home Sales, and final December University of Michigan Consumer Sentiment. Today’s Desk support is the last of the week and sees the Desk targeting up to $5.7 billion. We begin Hump Day with Agency MBS prices versus Tuesday afternoon and the 10-year unchanged yielding .92 percent after the first volley of economic news showing the consumer losing momentum.

Employment 

“We’ve all have had record volume in 2020, but are you prepared for when the shift happens? Have you built your Realtor network to win and optimized your past client database for 2021? At Mortgage Unlimited, we believe our Sustainable Lending platform ensures we play a large role in our communities by lending and being active participants. From our award-winning culture, robust processes, and superior technology offerings, this is the place to start your 2021 journey! Reach out to Justin Tagliareni to find out more.”

Loan Simple Wholesale, Inc., a national mortgage wholesale lender, continues to grow its team at a rapid pace, seeking Mortgage Closers, Broker Advocates, Mortgage Underwriters, and Mortgage Loan Coordinators. Loan Simple Wholesale is a different kind of lender, so they tend to hire a different kind of person. They like people who march to their own beat and look at things. While this job isn’t always 9-5, it doesn’t mean you have to work at a place that’s all taking and no giving. Sure, they think everyone who works should have good health insurance, a generous amount of paid time off and a good 401k retirement plan. But they are really looking for people who want to build a career and have a life. Their radical ideas don’t mean you can’t make bank and maintain a respectable standing in your bowling league. You can. It’s called working smarter not harder. Get started at Loansimple.com/careers; you're going to love it.

A publicly traded bank located in Colorado is looking for an experienced and growth-oriented manager to lead its sales team in the Kansas/Missouri market. The Bank is FNMA/FHLMC/GNMA approved and experiencing record growth. Candidate will be located the in Kansas City area and must have strong sales connections and focused on associate and market expansion. Please send resumes to Chrisman LLC’s Anjelica Nixt for consideration.