Here in Las Vegas, I asked a German girl if Germans are afraid of numbers. She said 9. Numbers are interesting, as we will find out with the declared Trump tariffs on Canada and Mexico. Do you know the difference between an American roulette wheel and a European wheel? The American version has “00.” Fans of Lucifer and numerology know that, for both, the numbers add up to 666. Like other disasters in Lahaina or the Carolinas, builders have some interesting numerical perspectives on how the “Black Swan event” of the LA County fires will impact housing stock, the permit process, and the ability to rebuild. Three thousand miles away, in Maryland, due to state government lenders are pulling out and local banks no longer lending, the latest example being PHH Correspondent: “PHH will no longer accept new locks for our Non-Agency products in the state of Maryland.” More below on yet another example of how entwined government is with lending, and how the stroke of a pen can negatively impact borrowers, lenders, and vendors. (Today’s podcast can be found here and this week’s is sponsored by Figure. 50 percent of the top IMB’s use them, and if you haven’t examined your HELOC & HELOAN strategy recently, it’s time to get on it. Hear an interview with CloudVirga’s Jessica Evett on consumers’ level of satisfaction with the mortgage process and their expectation of technology and AI throughout the process.)

Broker and Banker Products, Software, and Services

After NewFi, an industry-leading non-agency mortgage lender owned by funds managed by Apollo Global Management, announced its strategic partnership with Dunmor, Co-Founder and CEO Steve Abreu said his company remains highly interested in new strategic partnerships (such as a strategic capital investment) and acquisitions. “We believe the current environment provides an opportunity for us to add products, expand our footprint, and enhance our origination capabilities. Between our existing infrastructure and flexible capital, we can help supercharge the growth of high-quality teams and platforms. Of particular interest right now are opportunities that would accelerate the growth in our recently launched correspondent division.” (Reach out to Steve for more information.)

Morgan Stanley, Goldman Sachs, & Fortress have all confirmed that commercial lending is experiencing hyper growth due to $1.5 trillion in ballooning loans over the next 3-5 years with the later starting new CRE debt funds. Goldman sees this as a new future for their business model. There is a shortage of commercial mortgage brokers, and with banks liquidity issues, a perfect storm is brewing for the secondary market that will create massive deal flow. Adding commercial while continuing to do your normal residential business can be an explosive new revenue stream. 25 Year CRE loan brokers have pooled together to create a new 6-week fast track online education program. Commercial Real Estate Mortgage Broker Training covers all practical aspects of commercial lending from origination to how to get your deals over the finish line. In addition to online training, learning on your time at your pace, you will have access to Live weekly sessions with industry experts and lenders. Schedule an appointment today with an enrollment counselor to see how fast and easy it is to add commercial to your book of business, a way to expand your current product line while substantially increasing revenue.

Join USA Mortgage for an insightful virtual event exploring the Future of Community Lending, where experts will discuss how advocacy, policy, and practical integration help pave the way toward future success. Attendees will learn about the latest trends that empower national and local communities. Expert discussions will feature industry leaders sharing best practices for fostering a holistic lending and housing environment that will help shape and propel the next growth cycles. Engage with thought-provoking ideas and network with like-minded individuals committed to a collaborative and transformative approach to housing finance. The event is hosted by USA Mortgage's VP of Community Lending, John Drumgoole Jr. Panelists include Antoine Thompson, President, Black Housing Policy Network; Faith Schwartz, CEO and Founder, Housing Finance Strategies; and Gisele Roget, Founding Principal: Overbrook Square Group. Register for your free ticket on its event website. Any questions about the event can be sent here.

PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE: HTH), is committed to providing mortgage lenders with a sustainable funding source in an uncertain market. With over 30 years’ experience and a well-capitalized, diversified financial holding company. PlainsCapital Bank National Warehouse Lending provides confidence to meet our mortgage lending partners’ funding needs. With exceptional operational performance, and a focus on relationship-driven business geared towards long-term success, we do not dwell on unnecessary fees. With PlainsCapital Bank National Warehouse Lending there are NO non-usage fees, NO application or renewal fees, NO third party due diligence fees or Third Party Doc Custodians and NO interest charged on the day of loan settlement. If you are attending the TMBA Southern Secondary Conference in Houston and interested in learning more about PlainsCapital Bank National Warehouse Lending please contact Deric Barnett or Brent Amos.

The Cost of Free: A Data-Driven Case for Paid Mortgage POS Technology [NEW EBOOK]. During mortgage downcycles, the idea of cutting costs by opting for “free” technology solutions is tempting. After all, why pay for a POS when you can find one that’s free? The truth is that free technology comes with hidden costs—and as the mortgage industry becomes more competitive and demanding, the ROI from a paid POS system is undeniable. For example, did you know that an average POS customer drives almost $22 million in additional loan volume/year using Maxwell POS vs. a free competitor? In this eBook, Maxwell lays out how free mortgage technology leads to hidden costs and missed opportunities and why paid solutions are worth the investment, delivering substantial returns in terms of efficiency, borrower satisfaction, and loan officer productivity. Click here to get your copy of The Cost of Free: A Data-Driven Case for Paid Mortgage POS Technology.

FHA underwriting is complex, document-intensive, and often requires significant internal resources… until now. Indecomm announced that its DecisionGenius Now Automates Key Complexities of FHA Underwriting, reducing manual effort, streamlining FHA workflows, and improving efficiency. Powered by AI-driven intelligent document extraction (IDX) technology, intelligent automation, and FHA business rules, DecisionGenius achieves 98-99% accuracy in data verification, streamlining underwriting workflows and flagging discrepancies before they cause delays. Features include Automated Eligibility Verification; Integrated HUD/FHA Lending Rules; and Glass-Box Decisioning for Full Transparency. With DecisionGenius, FHA lenders can scale operations without increasing fixed costs, enhance accuracy, and focus on high-value underwriting decisions. Backed by the Indecomm Promise Warranty, lenders can trust DecisionGenius to deliver reliable, compliant FHA loan decisions. Learn more about DecisionGenius today!

Lending in Maryland?

Residential lenders manufacture loans, which are sold in the secondary markets or put into portfolios. If there is no unrestrained outlet for production, well, why produce the loans?

The Maryland Office of Financial Regulation (OFR) has issued guidance expanding the applicability of licensing requirements which could significantly impact the operations of state banks in Maryland. These banks may need to re-evaluate their procedures for acquiring and selling mortgage loans, raising the potential need for such banks to obtain additional licenses or adjust their loan trading practices. The guidance could also mean increased compliance costs and operational burdens for affected banks.

Why did it even come about? The guidance stems from an April 2024 court ruling and raises important considerations for entities involved in the secondary mortgage market. Maryland’s licensing laws did not explicitly require a license to purchase closed and funded residential mortgage loans but nearly a year ago the Appellate Court of Maryland ruled that an assignee of a home equity line of credit was required to obtain a license to have the legal authority to bring a foreclosure action.

The OFR’s new guidance expands upon this ruling, asserting that any assignee of residential mortgage loans, including “passive trusts,” must obtain a license under Maryland mortgage lending laws in order to acquire or obtain assignments of any mortgage loans. This applies regardless of lien position and whether the loans are open- or closed-end extensions of credit. The court highlighted that exempting assignees from these requirements would undermine consumer protection statutes designed to ensure that entities involved in mortgage lending possess the requisite oversight.

Put another way, the ruling was that because a trust wasn’t licensed in Maryland, it couldn’t foreclose. A regulator expanded it to all closed end loans, but as we all know, there are all sorts of passive vehicles like trusts involved in the securitization process. The proposed standard is that each of these entities would need to go through licensing in Maryland, which is of course unreasonable and not viable. It is much easier instead to simply not do business in Maryland.

Diving into the weeds somewhat, passive trusts are subject to licensing requirements. The guidance defines a “passive trust” as a trust that acquires mortgage loans serviced by others, does not originate loans, and does not act as a mortgage broker or servicer. These trusts are now required to obtain a license to acquire or assign mortgage loans in Maryland.

Emergency regulations facilitate licensing for mortgage trusts. The OFR has issued emergency regulations to streamline the licensing process for mortgage trusts, recognizing the potential impact of the new requirements on the secondary mortgage market. Enforcement is temporarily suspended, but action is recommended. While the OFR intends to suspend enforcement of these licensing obligations until April 10, 2025, the guidance recommends that affected parties should audit their portfolios and submit license applications promptly to ensure compliance.

In-Person Events to Start February

A good place for longer term conference planning is to start is here for in-person events in the future; and organizers can post their event!

2/3-2/5, in San Diego, is the Optimal Blue extravaganza! Don’t miss it and be sure to say hello to my son Robbie.

The Texas MBA, in partnership with CoreLogic and the Mortgage Bankers Association, is hosting a Climate and Insurance Symposium ahead of the National Servicing Solutions Conference in Dallas on Monday, February 3rd from 1pm-5pm. Registration is free thanks to CoreLogic, but seating is limited, please register here.

February 4-7, in Dallas, is the MBA’s Servicing Solutions Conference and Expo. Yes, meet your peers at MBA's Servicing Solutions Conference & Expo, February 4-7, in Dallas, TX. to better understand servicers' operational challenges. Gain critical insights on cost containment, quality assurance, business model methodologies, and more.

In Lombard, Illinois, IMBA’s 104th Annual Reception...2025 Mortgage Lending Conference will be held on Thursday, February 6, 6:00pm - 8:30pm. Network, enjoy great appetizers and drinks at The Capital Grille! IMBA Officers and Directors will be installed, and Annual Sponsor Partners and special award recipients will be recognized.

CoAMP is excited to partner with NAMB to bring its CVLS course to Denver, Friday, February 7th, 9:00 AM – 5:00 PM MST at Stewart Title, 7979 E Tufts Ave. Cost for NAMB Members is $199, attendance for NAMB Military Veteran Members is free. Cost for CoAMP Members is $299, email dmcdonald@townemortgage.com for discount code-$299 level includes a year membership to NAMB). Visit NAMB’s website for more information.

Get ready to unlock the future of the Secondary Market at TMBA's Southern Secondary Market Conference, the event that promises to kickstart your year with a bang. Join us on February 10-11, at the Omni Houston Hotel where industry leaders will gather to share invaluable insights and the latest trends that are shaping the Secondary Market landscape. This is not just another conference; it's your opportunity to connect with the best and brightest in mortgage banking.

Register for a collaborative event hosted by WCR, TPCAR, and PSMLA on Wednesday, February 12th, 10:00AM – 1:00PM at Anchor 2401 S Orchard St, Tacoma. Guest speaker, Matthew Gardner, will provide an insightful Economic Pulse discussion beginning at 11:30 am.

2/25-2/27, the Connecticut MBA is hosting the Northeast Mortgage Summit. Hear discussions about the current market and sales techniques. Ready to Level Up Your Mortgage Game? Don’t miss out on this powerhouse event, hear from industry experts like Mary Kay, Steve Richman, Stephen Robert, Kevin Stevens, Robbie and Rob Chrisman; Connect, Learn, and Thrive! Register now and attend for 1/2 price; Use discount code NMS-Friend.

Capital Markets

Yesterday’s data included an encouragingly low level of initial jobless claims (207,000) and a 2.3 percent Q4 GDP print that masked a remarkably strong 4.2 percent increase in personal spending (the best since Q1 2023). Market participants also digested Fed Chair Powell's pronouncement on Wednesday that the Committee is not in a hurry to adjust the policy rate. The ECB's decision to cut its key policy rates by 25 basis points each marked the fifth cut since June, with the region’s economy stalling and the 2 percent inflation target in reach.

In news more germane to the mortgage market, pending home sales in December decreased 5.5 percent. Compared to one month ago, pending sales declined in all four U.S. regions, with the West recording the largest drop. Year-over-year, contract signings retreated in all four U.S. regions, with the Midwest showing the biggest reduction. And mortgage rates fell for the second straight week, albeit barely, after rising in the prior weeks, according to Freddie Mac’s Primary Mortgage Market Survey. For the week ending January 30, the 30- and 15-year rates respectively slipped 1-basis point and 3-basis points to 6.95 percent and 6.12 percent. From a year ago, rates are respectively higher by 32 basis points and 18-basis points. (For the most accurate and up-to-date mortgage rates, see here: https://www.mortgagenewsdaily.com/mortgage-rates)

Today’s month-end economic calendar brings Fed-favorite Personal Consumption Expenditure (PCE) which measures the prices that people living in the United States, or those buying on their behalf, pay for goods and services. It was +2.6 percent year over year; core was +.2 percent, +2.8 percent. We’ve also seen personal income and spending, +.4 and +.7 percent respectively. The Q4 employment cost index versus expectations of increasing 0.9 percent versus 0.8 percent in Q3. Later today brings Chicago PMI for January, and the resumption of Fedspeak, with Fed Governor Bowman delivering remarks. We begin Friday with Agency MBS prices unchanged from Thursday’s close, the 2-year yielding 4.21, and the 10-year yielding 4.53 after closing yesterday at 4.52 percent.