The most dangerous statement in the English language is, “But we’ve always done it this way.” Referral business has always been a mainstay in our biz, and is not “against the law,” but oddly enough one topic that has come up a few times here in San Diego at the MBA’s conference is continued talk about MSAs, or Marketing Service Agreements. The CFPB spells out everything in its FAQ site. Attorney Brian Levy also discusses the topic in one of his Musings. One session yesterday included attorneys Mitch Kider and Troy Garris; any questions on the following should be addressed to them. The shorthand notes? Referrals are fine, but paying for them, think twice! RESPA’s been around for decades, the purpose being to discourage kickbacks and illegal referrals. You can’t give someone a thing of value for a referral. You can still do lots of things that you can do with your referral partners! Setting up an MSA? Make sure it is for real services, actual, and distinct, and have a reasonable price in the marketplace. The general public has to see the marketing. Don’t pay based on the amount of business you receive. Don’t ever write, “Hey, I’m going to stop paying you since I haven’t gotten any business from our relationship!” Regulators frown on warm handoffs, although they work when you’re handing it off to multiple parties on a rotational basis and a hand-off is fully disclosed to the consumer. (This week’s podcast is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology, and other services in the mortgage industry and in banking. Listen to an interview with Richey May’s Seth Sprague and Mignonne Davis on the current servicing landscape and trends as we enter 2023.)

Lender and Broker Software, Products, and Services

A century ago, scientists thought that by 2023, people could live to the age of 200. While medical innovations have yet to double the human lifespan, innovations in alternative data analysis are reshaping the mortgage industry. FormFree’s Residual Income Knowledge Index (RIKI) enables lenders to better understand consumers’ ability to pay for a mortgage by examining their direct-source bank data. By identifying consistent rent payments and residual income, RIKI helps lenders like Guild Mortgage expand the credit box for borrowers with thin credit profiles or without a traditional credit score. With a holistic understanding of prospects’ spending habits, lenders can confidently expand sustainable homeownership opportunities to more LMI and minority borrowers. Learn how RIKI can help you become the fair housing lender that consumers need.

In this challenging environment, marketing is more important than ever. Unfortunately, many marketing departments are stretched to their limits. If you’re being asked to do more with less, let Seroka Brand Development assist. Seroka is the mortgage industry’s leading full-service agency. Its 30+ years of experience mean Seroka can hit the ground running. And, Seroka can take on project work, multi-component campaigns… Even long-range planning strategies. Seroka’s broad areas of specialty include advertising, public relations, media relations, strategic planning, content marketing, and social media. It excels at boosting SEO, improving open and click-through rates, and generating greater responses from target audiences. So don’t sacrifice quality or quantity when it comes to your marketing efforts. Let Seroka take some of the pressure off. Email John Seroka today to get started.

“The Work Number® Instant Income and Employment Insights Help Mortgage Lenders Meet Their Business Health Goals. This is the time of year that many people are focused on making changes in their lives. Maybe you are celebrating National Green Juice Day today or participating in Dry January. All lenders and brokers should be on the lookout for things that will improve the health of their business, especially in this volatile market. Automated income and employment verification solutions help lenders reduce risk and avoid longer and more cumbersome mortgage loan origination processes. With access to 584 million records, The Work Number database instantly returns records, updated each pay cycle, provided directly by employers and payroll providers. Lenders and brokers have the choice to access The Work Number directly from Equifax OR through our pre-built integrations with over 60 Point of Sale (POS) and Loan Origination Systems (LOS). Utilizing your current POS/LOS could make the integration process seamless, and it’s as easy as 1, 2, 3. Learn more here.”

The StorySeller Adventures has officially hit #1 bestseller status on Amazon. It’s an entertaining allegory and step-by-step guide to StorySelling written by Gibran Nicholas, CEO of Momentifi. “StorySelling is when we use the language, structure, and characters of story to sell more effectively,” says Gibran. “You need a better StorySelling system if, (1) you sometimes struggle to overcome objections or get buy-in for your ideas; (2) you want a more consistent way of tapping into pre-existing human desires or habits to get better results in less time; or (3) you want to grow an epic business and make a meaningful difference despite current obstacles. If that describes you and what you’re looking for, click here to get the book. Click here to sign up for The StorySeller Daily, which is a free daily email that provides StorySelling tips and leadership insights using the concepts from Gibran’s book.

Own Up is the nation’s only mortgage concierge marketplace enabling mortgage companies, banks, and credit unions to access exclusive, high intent and highly qualified borrowers. A recipient of numerous accolades, including Fintech Breakthrough's "Best Digital Mortgage Platform," Own Up is currently onboarding select lenders to further its national expansion. Own Up seamlessly integrates into all major lender CRMs, lead management systems and pricing engines. Lenders interested in acquiring qualified leads with industry-leading conversion should reach out to learn more.

Don't miss your chance to be a part of THE event of this year's ICE Experience: the 2023 Lender Toolkit Supercar Experience. Sponsorship opportunities are limited, so act fast to secure prominent branding and event tickets for your company. Brought to you by Lender Toolkit, Lenders One and Reggora, this exclusive exotic car racing event will take place on February 27th from 12:30-4:30 pm, just before the start of ICE Experience 2023. "This year's Supercar event promises to be even more exciting than last year's," says Lender Toolkit's CEO Brett Brumley. Drivers will have the opportunity to race in Ferraris, Lamborghinis, Porsches and more. Submit a request to be considered as a driver or spectator here. Sponsorship information and pricing may be found here or contact Brent Emler today. Don't miss out on this unique opportunity to boost your company's visibility at ICE Experience 23!

FHA, VA, USDA, Ginnie News

The Single Family Housing Guaranteed Loan Program (SFHGLP) announced revisions to technical Handbook-1-3555, Chapter 9, Income Analysis, and Chapter 15, Submitting the Application Package. These changes became effective upon the recent issuance of a Procedure Notice (PN).

Ginnie Mae added clarifying language to include equity, in addition to cash down payment as an acceptable component for the 25% VA guaranty for special requirements for VA-guaranteed loans. See AmeriHome Mortgage Product Announcement 20230103-CL for details.

Effective immediately, for all loans, Newrez Wholesale FHA, VA, and USDA Underwriting Guides have been updated.

The Home Equity Conversion Mortgage (HECM) is the Federal Housing Administration’s (FHA) reverse mortgage program that supports the retirement security of senior citizens by allowing them to tap the equity in their homes. Ginnie Mae supports the broad availability of HECMs through its HECM Mortgage-Backed Securities (HMBS) program. Any HMBS issuance under the program continues to have the full faith and credit guaranty of the United States Government, including the guaranty of timely payments of principal and interest to bondholders. The recent acquisition of Ginnie Mae HMBS servicing from Reverse Mortgage Funding LLC was accomplished without negatively impacting borrowers. Borrowers received a notification about the transfer of servicing as required by law. The transfer should be seamless for borrowers and does not change or amend borrower payment schedules or rights under their mortgages. Borrowers can expect to continue to receive payments as usual, consistent with the terms of their reverse mortgage. Ginnie Mae continues to work in coordination with FHA and the entire HECM industry to ensure stability and liquidity for the programs in the future. Affected borrowers with questions about the status of their mortgage should contact their mortgage servicer or the FHA.

The GSE’s updates to its Security Instrument and Note (2023 GSE Forms) with an effective date of January 1, 2023, do not align with FHA’s published instructions for adapting the 2001 versions of the GSE documents. FHA Mortgagee Letter (ML) 2023-01, announces FHA’s updated instructions containing FHA-specific modifications for the 2023 GSE Forms that must be made. FHA is not discontinuing its acceptance of the 2001 GSE security instrument and note; instead, FHA will continue to accept either the 2001 or 2023 GSE security instrument and note provided they use the appropriate FHA instructions. Instructions for the 2001 GSE security instrument and note, and 2023 GSE security instrument and note are linked in the Single Family Housing Policy Handbook 4000.1, Section II.A.6.b and are located on the Single Family Model Documents web page. These changes apply to all FHA Title II Forward Mortgages.

Ginnie Mae announced its extending of two COVID Relief Policies. Extending certain delinquency reporting exemptions for issuers and permitting the use of alternative audit procedures. Details regarding the extension of these temporary measures related to delinquency thresholds and audit policy can be found in APM 23-01, and APM 23-02 respectively.

The legacy Guaranteed Underwriting System (GUS) will be retired on April 1, 2023. The legacy system houses applications that were created prior to March 1, 2021 and has been available in a read-only mode since that time. All applications created on or after March 1, 2021 (using the redesigned Form 1003) are housed in the current GUS and will not be impacted by this change.

An Unnumbered Letter (UL) has been issued by USDA Rural Development which further extends temporary authorizations related to costs, shortages, and delays for new construction.

FHA published its latest version of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) on January 18th. This update includes enhancements and revisions to existing guidelines and various technical edits. In many cases, this newly added language augments and enhances existing policy.

Capital Markets: GDP Doing Just Fine

Tired of geocoding the MSA census tract into loan files when trying to calculate price differences and best execution? Mortgage Capital Trading (MCT) is the first secondary marketing platform to integrate with Freddie Mac’s Income Limits application programming interface (API) created for the first-time home buyer area median income (AMI) limits. This is the latest in a series of successful API integrations between MCT and Freddie Mac and helps promote both pricing transparency and housing affordability. The API, a critical technological advancement for AMI-based pricing, allows the connecting party (either a lender or Secondary Markets Advisor) to send income information and the property address through the API to return an answer on whether the borrower qualifies for the Credit Fees waiver. The API provides a more accurate confirmation than can be derived with a ZIP code estimation. To stay up to date on the latest technological advancements and news from the capital markets, join MCT's newsletter.

In interest rate news, there wasn’t much action yesterday in the bond markets ahead of today's release of a big batch of data that will be headlined by the advance reading of Q4 GDP. We did learn that U.S. housing demand is starting to show signs of recovery, evidenced by pending sales rising for the first time in more than a year. The 2.9 percent rise in December marks the first month-over-month increase since October 2021.

Today’s calendar is packed with data, and we’ve already received several economic releases. The first look at Q4 GDP (2.9 percent, a very strong number), durable goods orders (+5.6 percent, up dramatically from last month), and weekly jobless claims were186k, down from 192k, and the trade deficit widened. For inflation followers, the PCE quarterly was +3.5 percent. Later this morning brings December new home sales, Kansas City Fed manufacturing, a Treasury auction of $35 billion 7-year notes, and the latest Freddie Mac Primary Mortgage Market Survey. We begin the day with Agency MBS prices worse .125 and the 10-year yielding 3.51 after closing yesterday at 3.46 percent and the 2-year at 4.18 after this slew of news.

Jobs; Brokerage and Shell Wanted

A group of wholesale mortgage veterans is looking for a DBA opportunity to team up with an established mortgage banker. The group’s footprint covers the Mid-West & Western states, with a track record of steady sustainable purchase business. Customer service to the broker base is the most important component looked for, followed by a full spectrum of NONQM, Conventional & Ginnie products. Please send a note to Chrisman LLC’s Anjelica Nixt for forwarding.

“Are you a mortgage industry sales star based in the Midwest and interested in an opportunity to join a leading full-service AMC/valuation company with a 19-year history of success? A time-tested organization that was also recognized by INC5000 as the fastest-growing AMC of 2022! If you’re an expert at building and maintaining relationships, and share our company’s core principles of accountability, transparency, service, and innovation, then NAN wants to hear from you! We’re seeking a Regional Sales Manager to oversee growth efforts across an 11-state region of the Midwest with tremendous opportunity for expansion in 2023 and beyond. All industry sales stars encouraged to apply, however those with experience selling AMC/valuation services strongly preferred. Join a company recognized as a Certified Great Place to Work, and help us further our mission to become the nation’s #1 volume AMC! Please send resume and cover letter to Chris Seymour, VP Sales.”

Michael Jordan said, “Talent wins games, but teamwork and intelligence win championships." Do you want to be part of a winning team? A well-funded startup in the Real-Fin-Tech space wants to build up its B2C channel and is looking for a licensed mortgage brokerage which is willing to team up. Are you a mortgage brokerage with multiple state licenses, including CA? Do you want to have equity in a PropTech startup? Don’t look further, your time has come to enhance your LO’s collective intelligence through a proven homeowner and home buyer platform that connects LOs and Realtors, ultimately leading to deal certainty and repeat business for everyone. 2023 is the year of possibilities, don’t miss out on the biggest one yet. Please send me a note of interest for forwarding to the company.

Universal Component Lender Services has added Joe Amoroso to Universal Component Lender Services’ (UCLS) executive team as VP of Business Strategy and Development where he will spearhead strategy and business development, bringing à la carte servicing solutions to market. (Universal Component Lender Services (UCLS) is a “component servicer with industry-leading expertise in customer care and full cycle default servicing.”)