While rates continue higher, from South Carolina comes, “I just got 30 minutes of cardio trying to pick up an ice cube off the kitchen floor.” Plenty of folks on the East Coast are dealing with other kinds of ice (we all know how 2 inches of snow grinds Atlanta to a halt), or may be hunkered down watching Kevin Costner in “Yellowstone” growl his way through the script like he has marbles in his mouth.

Meanwhile, digital banker Milo has plans to launch the first-ever crypto mortgage, making it easier for crypto investors to utilize their digital assets to obtain U.S. real estate. “Consumers will now be able to pledge their Bitcoin to purchase property and qualify for a low interest rate 30-year crypto mortgage.”

In other money news, broker comp is shifting. loanDepot sent a note out to its brokers increasing LD’s maximum Broker compensation threshold from $25,000 to $50,000, now available and will apply to all branch locations tied to the main Broker location. (LD’s announcement has all the details.)

And PCF Wholesale increased its maximum compensation from $20,000 to $35,000.


Broker and lender products & services

More than 300 billion emails are sent and received on a daily basis, billions of which are spam. Enter HomeBinder, which has mastered the art of earning homeowners’ attention with emails that are both helpful and actionable. According to Q4 2021 reporting, HomeBinder achieved an astonishing 64% open rate for maintenance reminder emails, blowing industry benchmarks out of the water. HomeBinder will soon add monthly emails apprising homeowners of their adaptive home value, which takes into account recent home upgrades, meaning the platform’s ability to help lenders engage with borrowers post-close will only rise. What lender wouldn’t want that? Email Meg Bennett to learn more about HomeBinder, or look for her at MBA IMB next week.

With rates on the rise, lenders will need to consider how to replace their refi revenue. There is still more than $9 trillion in untapped home equity, and experts are predicting a surge in HELOC origination as a result. As you position your business for a profitable 2022, make sure you have the best servicing partner for HELOC volume. Computershare Loan Services (CLS) is a recognized sub-servicing leader with a sophisticated HELOC program. Its Access VISA Card allows borrowers to immediately tap into available HELOC funds at ATMs, in-store, or online, resulting in an average monthly usage rate of 20 transactions per card. Activity is managed in real-time and includes fraud monitoring, transaction risk analyses, and spend reporting data. Contact CLS to learn more.

Lenders expect to fund half as many mortgages this year as they did last year, meaning they’ll have to find ways to deliver value that doesn’t involve working inbound leads. And be more diligent than ever about making sure the leads they do have don’t fall through the cracks. Some lenders, however, are still finding ways to bring in new leads, convert them, and double customer retention. Total Expert’s CRM and customer experience platform is paving the way for these lenders and filling critical gaps in the customer journey. Meet with the Total Expert team at MBA’s Independent Mortgage Bankers Conference Jan. 24-27 and see what their platform can do for you.

“Whether you’re considering a transition to mandatory delivery or you’re already hedging, Black Knight has the expertise and solutions to support your secondary marketing needs. Our comprehensive hedge analytics solution delivers a unique combination of robust hedging functionality, true best execution capabilities, industry-best practices, and trading desk services to help leading mortgage lenders confidently manage pipeline risk. We invite you to join our industry experts at our upcoming webinar, Hedging 101: The Benefits of Delivering Loans Mandatory, where we’ll examine loan pipeline management, risk mitigation and profit optimization. Attendees will gain a thorough understanding of hedging theory and best practices, hedging vehicles and their application relevance, and adaptive strategies to consider during market fluctuations. Register today to reserve your seat for this informative session, which will be held on Thursday, Jan. 20 at 1:30 p.m. ET.”

Grow your pipeline with JMAC Lending in 2022. JMAC offers flexible depth of product on five jumbo loans programs to $3M. Having problems closing your jumbos and non-QM? JMAC accepts Appraisal Transfers on select jumbo products and all Non-QM. Jumbo and non-QM up to 90% LTV, plus 40-year interest only. Get fast turn times and quick close. Contact Sales@JMACLending.com or visit JMAC. 24 years of dedicated service to mortgage brokers. Purchase is our priority. Become an approved broker today. READY. SET. FUND!

Does your Magic 8 Ball have a bias for good news? SIGNS POINT TO YES. The toy’s creators enlisted the help of a psychology professor to establish 20 possible responses, and his recommended ratio of 10 affirmations, 5 negatives and 5 neutral responses is still in use today. With the average American homeowner sitting on almost $180,000 in tappable equity, I don’t need to consult my Magic 8 Ball to know this is going to be a big year for home equity and related loan products. IT IS DECIDEDLY SO. For a great, 5-minute read on the amount of opportunity in the market, and the top 5 loan scenarios you should be considering for borrowers with equity, download the free eBook today.

If you are an Encompass user with ECOA - Adverse Action headaches, check out how Connector by Velma® delivers business results for Lenders by enhancing the Encompass® LOS with exquisite communications and workflows, including Connector’s dynamite ECOA - Adverse Action compliance solution. Curious how Connector by Velma® can help solve your ECOA-Reg B headaches, eliminate hassles, rescue at-risk properties, and improve profit margins? Click Here for more info.

“2021 was a busy year for the digital mortgage space and an even busier one for Falcon Capital Advisors’ digital mortgage practice. In addition to our ongoing digital work with Ginnie Mae and MISMO, we undertook a major transformation engagement for a top 20 lender and numerous projects for leading eMortgage providers. Our tech-agnostic experts guide clients through end-to-end digital mortgage transformations, advise on and implement eNote, RON, eClosing and eVault projects and provide MERS Auditing and Annual Report Review services. Check out our latest eYear in Review infographic for a summary of the biggest eNews of last year. To learn how Falcon can help you build a comprehensive digital mortgage strategy in 2022 contact Jim Voth.”

Automation products

“Have you improved your default mortgage servicing operations? Driving through the myriad of obstacles that mortgage servicers have encountered this past year is not for the faint of heart. As the ongoing pandemic influence, shifting regulation, and industry digitization collide with record-level volume, servicers are pressed to manage costs, maintain compliance, and facilitate borrower relief. Our recent blog looks at this evolution and what comes next. Accelerate your servicing operations! Now is the time to implement intelligent workflow automation software, delivering dynamic, logic-driven processes, complete with automated default underwriting. Overlay mobile accessible, self-service borrower engagement in one interactive, proven mortgage servicing application, and make your business ready for whatever comes next. Don’t kick off another year without the technology necessary to digitize and innovate your organization. Discover how CLARIFIRE® is truly Brighter Automation®.”

Increase UW productivity, improve accuracy and deliver faster approvals using Zoral Underwriting Automation. Leveraging Zoral’s Intelligent Automation Platform, this service automatically uploads data and documents from your LOS. Leveraging the most sophisticated AI powered capabilities available in the world, our engines categorize, analyze, and calculate all borrower income from paystubs, VOE’s, tax returns, and other income documentation. Output can be reviewed, edited, and when approved, can be exported back into your LOS at the push of a button. Over 100 data fields and e-folders are monitored for continuous updating. Contact Peter Sandler for more information or to schedule a demo.

Never worry about margin or capacity again. Candor’s AI technology makes it possible with a 1 UW touch on 70% of loans, >1,100 data cross checks to identify data mismatches, and one-of-a-kind ability to scrutinize information for integrity issues. A 47,000-defect solution gauntlet for data and information defects. 13.69 autonomous underwrites per minute. 0 defects. 0 put backs. Decisions rep & warranted. Happy clients. It’s hard to think of a reason to not contact Candor for more information. Calculate your added profit here.

Conforming conventional LLPA primer 

What has grabbed the industry’s attention, and caused most investors and lenders to shift pricing in recent weeks, is the Federal Housing Finance Agency (FHFA) implementing changes that target Fannie Mae and Freddie Mac’s (the Enterprises) upfront fees for certain loans. Recall that similar loan level price adjustment (LLPA) changes were made a year ago and then suspended in September 2021. This time around there is no seller-specific delivery concentration limits and no stated deadline, and these changes are transparent with a longer lead time for implementation. These targeted pricing changes are intended to “strengthen the Enterprises’ safety and soundness and to ensure access to credit for first-time homebuyers and low- and moderate-income borrowers.” It is hoped that Agency capital ratios will improve while allowing the Enterprises to adhere to their mission to “facilitate equitable and sustainable access to homeownership and quality affordable rental housing across America.”

The FHFA announcement earlier this month outlines substantial upfront fee loan-level price adjustment (LLPA) changes for two specific loans scenarios: High Balance loans and second homes. High-balance loans, except first-time homebuyers with income less than the area median Fannie Mae and Freddie Mac have each announced specifics of these changes and aggregators have already started to implement the new LLPAs for loans locked via best efforts. But mandatory pricing may not be affected until much later, as the agencies will be charging these new LLPAs on loans purchased on or after April 1. With the exception of first-time homebuyers with income below the median in their census tracts, loan rates on second homes and loans that exceed base conforming loan limits will go up in the short term, regardless of bond market movement.

Lenders and investors quickly changed pricing and loan delivery strategies to protect them from margin deterioration and adverse selection, as well as trying to protect margins. Lenders who can are already creating private-label securities (PLS) to capture investment property loans, the same way PLS had been capturing high-balance loans for years, and at higher prices than the GSEs.

Freddie Mac announced Credit Fees in Price for super conforming mortgages and mortgages secured by second homes in light of the significant increase in the 2022 loan limits and under the guidance of the FHFA. These updated fees are effective for mortgages with settlement dates on and after April 1, 2022. (Read the Press Release - FHFA Announces Targeted Increases to Enterprise Pricing Framework.)

Fannie Mae LL-2022-01 provides information about changes to loan-level price adjustments (LLPAs) that will apply to second home and high-balance loans. Review LLPA Matrix.

Capital markets

Volatility was the name of the game for financial markets last week, with investors recalibrating their strategies as more notable voices called for higher interest rates to fight inflation. Fed President Harker suggested four or five times this year, while JPMorgan Chase CEO Jamie Dimon told analysts the Fed could hike rates as many as seven times to fight rising inflation, though he didn't specify a timeframe. Fed officials have signaled they will combat inflation aggressively. Inflation is hurting consumer sentiment, and shopping is dropping as a result, with retail sales slumping by the most in 10 months in December. Couple that with material and labor shortages and it makes sense that wallets are hurting and the American consumer is worried. 

Potential borrowers are worried that inflation will erode living standards. Future inflation-adjusted incomes are important in determining future financial prospects. The most recent index of consumer sentiment showed nearly half of all consumers anticipated that the inflation rate would outdistance income increases to produce real income declines. Just 17 percent anticipated real income gains in 2022. When asked to assess their finances, one in three people reported being worse off financially than a year earlier, just above the April 2020 shutdown low of 32 percent, the worst reading since 2014. 

This week’s economic calendar includes updates on regional Fed surveys, the housing market and leading indicators with the Fed heading into blackout ahead of next week’s meeting. Today’s calendar is already underway with Empire manufacturing for January (-.7 to +31.9). Later this morning brings the NAHB Housing Market Index for January, expected to decline as low supply is hurting home sales. The Desk will purchase up to $3.4 billion of conventional MBS and buybacks $6.0 billion 4.5- to 7-year coupons. Last week, the Desk purchased $4.2 billion per day on average compared with originator supply of $4.6 billion: 64 percent was in UMBS30s, 5 percent in UMBS15s, and 31 percent in GNIIs. Bonds are trading again and we begin Tuesday with Agency MBS prices worse a solid .250 and the 10-year yielding 1.83 after closing last week at 1.77 percent.

Employment & promotions

JMAC Lending continues to grow in 2022. JMAC is hiring top producing Sr. Account Executives to join our industry-leading wholesale lending group in many states. Also looking to add an Eastern Regional Sales Manager and an Inside Sales Manager. Please contact Al Gruzdis at Al.Gruzdis@JMACLending.com. Other opportunities include Closers, Jumbo and FHA/VA underwriters. Contact Jessica Lara or visit www.jmaclending.com/careers to apply.

Movement Mortgage, a Top 10 purchase lender, is bolstering the ranks of its leadership with the creation of a new position and a critical promotion to meet the quickly evolving needs of the mortgage industry. John Third, Chief Operating Officer at Movement, will step into the newly created role of Chief Innovation Officer, a position that speaks to the ever-changing role of mortgage technology at Movement. Meanwhile, Jason Stenger has been promoted to Chief Operations Officer from SVP-National Director of Operations, a position he has held for the past 7+ years. As Chief Innovation Officer, Third will lead the development of the pioneering technology and process initiatives specific to mortgage operations that have propelled Movement’s growth and differentiated the company from competitors. Stenger will lead nationwide mortgage operations, continuous improvement, and process innovation, including all processing, underwriting, closing, training and technical support for loan officers and sales teams. For more information, click here.

Wholesale and Non-del AE’s, if you’re looking to up your game, it’s time to talk to Pennymac TPO. As an industry leader, with a proven track record of building scaled, sustainable businesses, Pennymac TPO brings expertise, technology and great people together to serve your broker and non-delegated clients. They’re ranked #6 in the wholesale channel (according to IMF) and were recently ranked #4 on Fortune’s List of “The Fastest-Growing Companies” in 2021. There’s still tremendous growth upside and many prime territories are available across the country. For strength, growth, and long-term career opportunities, join Pennymac while your territory is still open by reaching out confidentially to Scott Houp (East) or Jason Bannister (West).

OptiFunder is growing, and, after a year of record growth, is hiring for multiple positions, including VP, Information Technology, Warehouse Lending Operations Specialists, Implementation Managers, and Software Engineers. “As the industry's only fully automated warehouse management platform offering mortgage bankers optimized decisioning and funding automation, we grew 400% in 2021 and our recent capital raise of $25M is propelling new innovation. OptiFunder offers remote employment and a competitive compensation and benefits package. Come grow your opportunities with OptiFunder. Visit our website for the latest openings or contact Brian Abbott for more information.”

Cherry Creek Mortgage announced that Nicole McCrary has been promoted to VP of Compliance, overseeing quality control risks, consumer complaints and fair lending, as well as monitoring anti-money laundering/Bank Secrecy Act (AML/BSA) compliance, helping to develop policies and procedures to comply with changes in regulatory and investor requirements, and integrating new requirements into the company’s business processes.

LoanLogics announced that Lauren Pilon has joined the company as chief of staff. Pilon will oversee human resources and legal functions and take part in several strategic programs in collaboration with LoanLogics’ executive leadership team and its parent company, Sun Capital Partners.

A young man asked an old rich man how he made his money.

The old guy fingered his worsted wool vest and said, "Well, son, it was 1932. The depth of the Great Depression. I was down to my last nickel."

"I invested that nickel in an apple. I spent the entire day polishing the apple and, at the end of the day, I sold the apple for ten cents."

"The next morning, I invested those ten cents in two apples. I spent the entire day polishing them and sold them at 5:00 pm for 20 cents. I continued this system for a month, by the end of which I'd accumulated a fortune of $1.37."

"Then my wife's father died and left us two million dollars."