Today I am in San Diego for the SD CAMP event. At the same latitude, a poll was taken by Texas Governor Greg Abbott's office which asked whether people who live in Texas think illegal immigration is a serious problem. 29 percent of respondents answered: "Yes, it is a serious problem." 71 percent of respondents answered: "No es una problema seriosa." (Did you know that Texas even has its own pledge of allegiance?) Politics aside, Texas is home to many lenders. And many hotels. Marriott certainly has the business travel market dialed in, but just six companies in the United States control 80 percent of branded hotels, and two companies (Choice Hotels and Wyndham) may merge giving us five. Choice owns Radisson, Quality Inn and Econolodge brands; Wyndham owns Ramada, La Quinta, Days Inn, Super 8, and Howard Johnson. If a takeover/merger occurs, 16,500 hotels and 46 brands will be run by a single entity. Yikes! Today’s podcast can be found here, and this week’s is brought to you by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite's three core products (nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics) unite the people, systems, and stages of the mortgage process. Today’s features an interview with nCino’s Pam Faulkner on a topic that every mortgage lender has to contend with: change management.

Lender and Broker Services and Software

Short-term rental analysis product announcement! Opteon AMC, a top nationwide appraisal management company (AMC), announced its pioneering Short-Term Rental Analysis (STRA) product last week. The first of its kind on the market, Opteon collaborated with AirDNA, a leading short-term rental (STR) data and analytics provider, on this innovative tool set to revolutionize how non-QM lenders assess properties for STR investment. It will equip lenders with accurate rental potential, occupancy rate predictions, market trends with comparables, and an expert appraiser analysis. This appraiser-approved Short-Term Rental Analysis replaces the existing 1007 form which, while widely used, falls short in addressing the unique dynamics of STR investments. Opteon and AirDNA partnered together to create a simple, comprehensive solution that promises to reshape the appraisal process for STRs. This product is exclusively available to Opteon customers as of January 8, 2023. To learn more, visit: www.opteonusa.com or contact sales@opteonusa.com.

“FundingShield, the market leader in wire & title fraud prevention, released its Q4-2023 report showing an all-time high 51.8 percent of transactions had deficiencies. During Q4-2023, 49.23 percent of transactions had CPL issues, 7.6 percent had CPL Validation issues and 8.45 percent had increased Wire risks. This increase highlights ongoing cybersecurity challenges such as Business Email Compromise (BEC) events and phishing attacks. “Cyber-Breach Events at First American and Fidelity National Financial are driving additional demand for funding controls, cyber-security defenses and closing-agent vetting as auditors, regulators or investors ask for evidence of controls. Our tech-driven solutions to manage payment risk, vendor selection, live monitoring of service providers and more are addressing these needs with customized solutions. These sophisticated, intentional acts of cybercrime create financial losses within impacted firms and threaten enterprise valuations of listed public firms. This creates additional motivation for short players who are looking to express their negative view in free markets,” shared Ike Suri, CEO. Contact us for demos and free trials.”

“Increase your company’s pipeline and margins with Non-QM loans through Verus Mortgage Capital. The Mortgage Bankers Association (MBA) forecasts mortgage originations to increase to $2 trillion. With mortgage rates expected to stabilize through the end of the year and the possibility of a Fed interest rate cut soon, the stage is set for growth. Give your production pipeline an extra boost by adding Non-QM loans. Now's the perfect time to partner with Verus, the nation's largest issuer of securitizations backed by non-qualified mortgage (Non-QM) loans. We offer flexible non-agency loans for property investors, foreign nationals, and many others. Navigate the evolving landscape with confidence, backed by our Non-QM expertise. We’re not just a solution, we are your key to unlocking new opportunities. To learn more, contact Jeff Schaefer, EVP – National Sales or 202-534-1821.”

“Wholesale lending is more competitive than ever. These lenders are competing to win a shrinking volume of loans, fighting for attention among a sea of loan originators. Giant lenders are brandishing technology tools that only the giants can afford and using them to shoulder out smaller competitors. But as the market thaws and lenders find firmer footing, there’s an opportunity to fight back. Join our webinar, ‘Mastering the Art of Mortgage Broker Engagement’ on January 24th at 10 am PST to learn best practices and strategies that wholesale lenders are using to thrive in the TPO market. This webinar will show you proven tactics and technology tools that are helping wholesale lenders create efficient sales processes that are both scalable and effective. Click here to register for the webinar and gain insight on an origination channel that needs more attention.”

Save over 20 percent on costs and gain valuable flexibility with outsourced loan fulfillment. Maxwell’s on-demand underwriting provides the agility lenders need to scale their fulfillment expenses in proportion to loan volume. With direct integration to your LOS, Maxwell’s experienced onshore team of underwriters provides a seamless, fast, and cost-effective experience. Plus, you'll be able to maintain your operations even during gaps in in-house coverage, ensuring an uninterrupted workflow no matter the market conditions. To learn more about Maxwell’s on-demand underwriting and other fulfillment services, click here or schedule a call today.

Servicing Assistance and Software

“LoanCare®, a top U.S. mortgage subservicer, has re-imagined the homeowner digital experienced with our newly re-engineered and re-designed homeowner website: myloancare.com. Powered by LoanCare’s own proprietary software, our consumer digital experience is a fully white label capable platform designed to help you maximize your brand, recapture customers, and build lasting relationships. Frictionless functionality coupled with advanced security features, intuitive design, and comprehensive line of sight into the homeowner experience mean our clients are in the driver’s seat managing their portfolio from every angle. And did we mention? The site is available in both English and Spanish! Contact us to learn more today.”

“Delivering the Best Homeowner Experience! Cenlar is more than just a mortgage subservicer. We strive to be our clients’ trusted partner each and every day. And a big part of that is how we care for our clients’ homeowners. A home is most likely someone’s largest asset. That’s why we continue to deliver industry-leading subservicing solutions that offer the very best experience for our clients and their homeowners. Whether that’s the regular cycle of onboarding, escrow, monthly payments and year-end or challenges facing homeowners like natural disasters, we are responsive, anticipatory and always caring. Let’s discuss how Cenlar can meet the mortgage servicing needs of your organization. Call 1-888-SUBSERV (782-7378) or visit here. We want to be your trusted partner, each and every day.”

Monitoring the State of the Markets

To me, and many that I speak with, the lending biz has continued to be quiet after the flurry of activity in November. But that is just a feeling that I have. There are groups that actually provide a quantitative analysis of what is going on. Glancing around the biz…

A group of U.S. senators are calling on the Department of Housing and Urban Development (HUD) and the Consumer Financial Protection Bureau (CFPB) to review the gap in mortgage approval rates between white applicants and Black and Hispanic applicants at Navy Federal Credit Union.

Optimal Blue announced the release of its Originations Market Monitor report, looking at mortgage origination data through December month-end. Leveraging daily rate lock data from the Optimal Blue PPE, the industry’s most widely used product, pricing, and eligibility engine, the Originations Market Monitor provides a comprehensive and timely view into origination activity.

The latest ICE Home Price Index data for November 2023 showed continued home price growth resiliency, rising demand, and falling 30-year rates provided some affordability relief. ICE Vice President of Enterprise Research Andy Walden explained, “In simple dollars and cents, it requires $279 less per month to purchase the median priced home when compared to late October. Given that improvement, it’s no surprise mortgage applications have risen in recent weeks, hitting their highest adjusted levels since early September.” Annual home price growth rose to +5.1 percent in November, up from a revised +4.5 percent in October, as momentum from early year increases. On a non-adjusted basis, home prices fell by -0.46 percent in the month, but when adjusted for seasonality prices were up +0.14 percent, slightly above October’s +0.09 percent. While home affordability remains a significant challenge, falling rates in recent weeks. Due to the holidays ICE Mortgage Monitor will not publish a report in January. Reports for previous months are available online at https://www.blackknightinc.com/data-reports/. The next ICE Mortgage Monitor will be published February 5, 2024.

Capital Markets

“As a secondary marketing professional, your top priorities are managing interest rate risk and maximizing loan sale execution. But when’s the last time you stopped to consider whether your hedging software helps you achieve those goals? Optimal Blue offers the most comprehensive hedging solution in the industry, complete with exclusive API connections to the Optimal Blue PPE and aggregator bulk-bidding via the CompassPoint buy-side bid tool. This powerful combination provides you with the most accurate price discovery to drive your front-end pricing, mark to market, and best execution. Plus, optimization tools and bulk bid/AOT functionality help you squeeze every basis point out of your loan sales. Optimal Blue sets itself apart when it comes to managing risk through precise valuation and fallout modeling, use of spec pay-ups and spec durations, real-time MSR values, and much more. Contact our team to learn what this can mean for your business.”

As investors returned from a three-day weekend, corporate earnings were in focus to open the trading week. There was some optimism amongst market participants about the economy as Goldman Sachs and Morgan Stanley reported better than expected results for Q4. However, a strong economy means that the Fed is less likely to cut rates as soon as investors are predicting. Market expectations are still for up to six cuts in 2024. Fed Governor Waller yesterday urged caution for central bankers when the time comes to lower rates. He said that the U.S. central bank should take a cautious and systematic approach when it begins cutting interest rates, a process that can start in 2024 absent a rebound in inflation.

The U.S. economy continues to be resilient, with robust consumer spending. While 2024 started with expectations that inflationary pressures around the world were abating, higher military spending due to various global conflicts as well as rising healthcare costs may lead inflation to be stickier and rates to be higher than markets expect. An escalation in geopolitical tensions in the Middle East, more from incidents in the Red Sea than the war in Gaza, has introduced added costs of recalibrating shipping routes and upward pressure on energy prices. That, along with an economy fueled by large amounts of government deficit spending and past stimulus makes for a thorn in the side of central banks around the globe trying to bring inflation down.

Today’s busy economic calendar began with mortgage applications increasing 10.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending January 12, 2024. Last week’s results included an adjustment to account for the New Year’s holiday. Another increase was expected after the year-end slowing, while the 10-year yield fell 9 basis points during the reporting period with 30-year mortgage rates following suit.

Markets have also received retail sales for December (+.6 percent, also +.6 percent ex auto and gas) and import prices (flat). Later today brings Redbook same store sales, industrial production and capacity utilization for December, November business inventories, the NAHB Housing Market Index for January, a $13 billion Treasury auction of reopened 20-year bonds, and the latest Beige Book from the Fed. Three Fed speakers are scheduled: Vice Chair for Supervision Barr, Governor Bowman, and New York President Williams. We begin the day with Agency MBS prices worse .125-.250 from Tuesday and the 10-year yielding 4.11 after closing yesterday at 4.07 percent after the strong retail sales figures.

Employment

A trillion dollars in credit card debt. That’s A LOT and it’s what Americans currently owe.* The good news? There’s something you can do about it. With access to a wide variety of loan products, you can help your borrowers and boost business while you’re at it. The ability to shop hundreds of loan options with dozens of lenders means you can: * help your clients consolidate debt* and *get creative with home financing so they can reach their homeownership goals.* So, how do you get all this access? By joining your local Motto Mortgage office. Motto Mortgage brokerages are hiring talented loan originators in: AK, AZ, CA, CO, CT, FL, GA, ID, IL, IN, KS, KY, MA, MI, MN, MO, MS, NC, NJ, NM, NV, OH, OK, OR, PA, SC, TN, TX, UT, VA, WA, WI. More of a “make it happen” kind of LO? Schedule a chat to learn about joining Motto HERE.

The Association of Independent Mortgage Experts (AIME) and its advocacy group and political action committee, Broker Action Coalition (BAC) and BACPAC announced they are acting independently (AIME focuses on member services and BAC on advocacy initiatives) and AIME’s CEO Katie Sweeney will be stepping down at the end of March from her current role to lead BAC full time. “AIME has been the backbone of the independent mortgage broker community since 2018, and that’s not going to change,” stated Marc Summers, President of AIME. Along with Sweeney, BAC’s leadership will include former AIME President of Advocacy Brendan McKay who will focus on growing the advocacy network’s members, donors, and programs as the co-founder and Chief Advocacy Officer. Congratulations!

Ranieri Solutions, which has been developing a platform to address the antiquated state of mortgage servicing technology, today announced the appointment of Rob Lux as its Chief Executive Officer to spearhead the company's go-to-market efforts for its cloud-native servicing platform. The addition of a new CEO is coupled with the recent announcement of a partnership with SAP Fioneer. (The Ranieri platform's standout feature is its elegant, uniform core and modern user interface which we believe will lower the risk of misconfiguration and incompatibilities. Servicers need the agility to quickly respond to industry changes and seize market opportunities. This modern cloud-based platform was built from the ground-up with servicers in mind.)

The Mortgage Firm announce the promotion of Sheri Nedley to the position of Chief Operating Officer. With a remarkable journey spanning 25 years at the company, Nedley's promotion is a testament to her exceptional leadership and dedication with time spent as Closing Manager, SVP of Operations, and Head of Capital Markets. As COO, Sheri will oversee the company’s day-to-day operational strategies, aiming to enhance customer experience and drive sustainable growth. Her focus will be on leveraging technology, optimizing operational processes, and nurturing a culture of excellence within the organization.