California is home to approximately 39 million residents, which is about one-eighth of the U.S. population, more than the entire population of Canada, and accounts for 20-25 percent of residential loan production. Most California's residents belong to ethnic minority groups; in fact, one out of every four Californians was not born in the U.S. Here in Northern California a fair number of people are in real estate and lending, so predictions about the Federal Reserve are of great interest. Primary dealer banks have pushed back their predictions on when the Federal Reserve will end its quantitative tightening process to the fourth quarter, according to a survey by the Federal Reserve Bank of New York. On that timeline, the Fed's balance sheet would shrink from the current $7.764 trillion to $6.75 trillion… through securities maturing, mortgage loans paying off early, or the Fed selling those securities. The market expects this, which is a good thing. (Today’s podcast can be found here, and this week’s is sponsored by Truework. By connecting every verification method into one platform, Truework helps lenders eliminate process disruptions, maintain a competitive borrower experience, and reduce the fiscal impact of verifying income. Hear an interview with Smith, Gambrell & Russell’s Richard J. Traub on commercial real estate happenings and why those in the residential sector should care about the space.)
Broker and Lender Services, Programs, and Software
Did you know leveraging automated compliance testing could help you save up to 20 minutes per loan? Your LOS should provide built-in compliance capabilities to help you reduce risk, while also saving you time and money. ICE Mortgage Technology®’s Deputy Chief Compliance Officer & Senior Regulatory Counsel, Heather Clark recently shared the role technology plays in building a robust compliance management system. Read her full blog here to learn how you can confidently meet compliance requirements and identify risks with Encompass®.
There’s a rumor that Snoop Dogg recently got into the credit report business and even he can’t believe how high the fees are. I’ll show myself out... Seriously though, upfront fee collection is no crip-walk in the park, but you can automate it all with Fee Chaser by LenderLogix. Borrower gets a text message, pays on their device, and everything flows back into the LOS all at a price that will keep you out of the dogg house with your CFO.
An accomplished mortgage executive, Jim Foley, who started his career in the mortgage industry in 1985, announced that he has started a consulting company, Mortgage Savvy Advisors. Jim began his career as a loan originator, however held leadership positions, for last three decades, with top ranked mortgage companies such as George Mason Mortgage, Caliber/NewRez, and The Federal Savings Bank. Established in late 2023, MSA is focused on helping small, mid-size and large mortgage companies with their pain points by offering advice, strategies and solutions. Jim said, “Today, many companies struggle in one area or another… whether it is with Compensation Plans, IT, Operations, A.I., Marketing, Business Development, Recruiting, Retention, or M & A opportunities”. Mortgage Savvy Advisors offers industry expertise to optimize strategies to help navigate through all areas focused on profitability, growth and the future. Jim stated, “’You Know Only What You Know’ and this is where most companies find themselves…facing the same issues year after year without the guidance or knowhow to make the necessary changes to succeed.” MSA is offering a reduced fee for the first three that sign on from The Chrisman Report. To book a meeting and to learn more, click here.
“Give your Pipeline a Boost for the New Year with LoanStream’s Winter Specials (up to 50bps) on Non-QM, Prime, FHA and VA Streamlines! Here for a limited time. Learn more. Plus, don’t miss the brand new webinar on Non-QM Specialty products and DPA assistance program to help you reach more clients this year. We’ll do a deep dive into how these programs work and how to use them to thrive in today’s current market environment. Register now.”
Kick off the new year strong and join Rocket Pro TPO's IGNITE Live today, January 8th at 4pm ET with EVP, Mike Fawaz. He will cover new products and technology, including one big announcement that you don't want to miss to take your business to the next level. Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO to learn more.
“Free eBook: How to Lower Costs, Boost Profitability, and Surge Ahead of the Competition in 2024. Are you confident in the strategy you’ve set for the year? By setting a strong plan, you can reduce fixed costs, improve your bottom line, and set the groundwork to win market share as volume begins to improve. Want to learn how? We spoke to senior members of the Maxwell team, each with decades of industry experience, and the result is our new eBook: an actionable guide that will teach you the likely path for rates and volume in 2024, strategies to bulk up your pipeline, why reevaluating your cost structure is vital to achieving profitability, and more. Get your free copy today to inform your 2024 planning: Click here to download Make More Out of ‘24: How to Win Market Share as Your Competition Lags.”
The Knowledge Coop Unveils Cooper AI: A revolutionary AI assistant for FHA and VA Guideline Search. The product is a cutting-edge artificial intelligence assistant designed to revolutionize the way professionals access and retrieve information from Federal Housing Administration (FHA) and Veterans Affairs (VA) guidelines. It simplifies the process of searching for specific guidelines related to FHA and VA policies with its intuitive interface and powerful search capabilities, providing users with quick, accurate, and precise answers to their queries, along with direct references to the exact guidelines where the information was sourced. Plans are already underway to incorporate additional guidelines Fannie Mae, Freddie Mac, USDA, and CFPB laws into Cooper AI’s database, expanding its scope and utility. For more information about Cooper AI or to request a demo, visit The Knowledge Coop or contact info@knowledgecoop.com.
loanDepot hack
Cyber-attacks are not a matter of “if” but “when.” The latest example is loanDepot which has suffered a cyberattack that caused the company to take IT systems offline, preventing online payments against loans. loanDepot is one of the largest nonbank retail mortgage lenders in the USA, employing approximately 6,000 people and servicing loans of over $140 billion.
In recent weeks, at least three financial services companies (First American, Fidelity National Financial, and Mr. Cooper) have disclosed separate incidents involving cybersecurity breaches and ransomware attacks. All three companies have notified government authorities and impacted parties.
Capital Markets
The Fed has been shrinking its holdings since last year but has not given much guidance about the timeline. Minutes from the Fed's meeting last month, which were released last Wednesday, noted that some officials are now ready to talk about the how and when of ending QT. The question has been on the minds of investors and traders given the apparent end of the current rate hiking cycle and rising bets in financial markets that the central bank will be cutting rates as soon as next spring as inflation pressures wane.
The challenge for the Fed in dialing back stimulus is that it is trying to achieve a level of liquidity in the financial system that will allow it to retain control over short-term rates, with a cushion to deal with the volatility that can often strike money markets. The markets, however, don’t like uncertainty. More guidance on the QT endgame will be coming out soon, as well as how (actively selling securities, which would drive prices down and rates up, or naturally through borrowers paying off loans that are in the MBS).
Last week closed with the reveal that the U.S. economy added 216k jobs in December, well above 164k-175k estimates. Though the prior two months were revised downward by 71k, the unemployment rate registered 3.7 percent when it was expected at 3.8 percent, not necessarily great news for the Fed.
The report fostered a continuation of the trend so far this year of markets unwinding bullish bets as the Fed’s historic tightening campaign appears less ready for the dovish pivot than markets have priced in. The reprices have pushed up bond yields. It is unfortunate that bond market volatility has yet to significantly decline, which is keeping mortgage spreads elevated close to historical records. If spreads revert to long-term historical levels, that would imply mortgage rates dropping toward 5 percent even without lower 10-year yields.
This week’s highlights include the $110 billion mini-Refunding tomorrow through Thursday. On the data front, the December Consumer Price Index and Producer Price Index will be released on Thursday and Friday, respectively. Also on Friday, bank earnings will get under way with JP Morgan, Bank of America, Citigroup, and Wells Fargo in addition to BlackRock and BNY/Mellon. For anyone hedging a pipeline or issuing securities, Thursday is Class A 48-hours and Friday is Class B net out ahead of the long weekend.
Today’s calendar kicks off later this morning with the Employment Trends Index for December, followed by the NY Fed’s Survey of Consumer Expectations for December, remarks from Atlanta Fed President Bostic, and November consumer credit. We begin the week with Agency MBS prices roughly unchanged from Friday’s close and the 10-year yielding 4.05 after closing Friday at 4.04 percent; the 2-year is at 4.39
Employment
A well-capitalized, IMB, based in the NJ/PA tri- state market, is seeking Loan Officers, Sales Teams or possible acquisition opportunities of small to midsize IMBs in NJ, NY, CT, FL, PA, while expanding in MD, DC, VA, NC and SC. The IMB’s focus is a highly personable and high touch experience for LOs and Realtors. Organizationally lean, very competitive pricing, a wide array of products, and much higher LO Comp than what is offered by other larger IMBs. The focus is to attract serious loan officers who want an unparalleled service, where your voice matters and you have a seat at the table in growth. If interested, message Chrisman LLC’s Anjelica Nixt for a confidential discussion.
“Congratulations on surviving 2023! If you are looking to thrive in 2024, our boutique bank, FLCBank, has limited openings for an account executive in TX and another opening in mid-west/Minnesota and surrounding states. Interested in learning more, reach out to Bob Eisendrath, Strategic National Account Manager at 414-350-3986. If not located in specific area’s but still have interest, we welcome your call. FLCBank is an Equal Opportunity/Affirmative Action Employer.”
In the Northwest and California, Banner Bank is searching for Mortgage Loan Officers looking to create lasting Realtor and builder relationships at a bank focused on the market today. Banner has opportunities for lenders looking for local decision making with FHA, VA, USDA, state bond and true Portfolio lending opportunities along with servicing retained Fannie and Freddie loans to assist in client retention. Additional highlighted products cover CRA lending with private label no payment down payment assistance to help assist all borrowers with the right opportunity. Banner is the right fit for an established team, or the individual looking to grow their business and take the next step in their career. Please send resumes to Aaron Miller.
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