Here we are at Groundhog Day. A rodent predicting the weather has little tie-in with the 1993 movie of repeating the same day over and over again. Locks are certainly not repeating 2021 levels for January, with initial anecdotal pipeline numbers down 30-40 percent. Are you reducing costs accordingly?

When the residential lending market is good, owners think they’re the smartest guys in the room, and in the last two years volume and margins have covered up a lot of faults. (And now, are homeowners all real estate geniuses?) Now, however, effective management is going to be tougher. Mortgage fraud is growing, and I’ve received more than one email about kickbacks on the rise. Great. At least you aren’t working in a Golden Corral in Pennsylvania! Never in the history of history of calm down has anyone calmed down by being told to calm down.

Lender & broker services and products

More than 100 people gathered in Kazan, Russia, last month to celebrate the city’s fourth annual Festival of Snowmen. Attendees competed to build the most creative snowmen, but, unfortunately, with temperatures below -10C, dry air made it a challenge to keep their creations upright. Speaking of challenges, digital home management platform HomeBinder melts away borrower confusion about how various home improvement projects affect their home’s value. With its Adaptive Home Valuation calculator, HomeBinder keeps users informed about the appreciating value of their largest asset over time, taking into consideration items that other automated valuation models don’t, like maintenance credits, appliance upgrades and home improvements or remodels. Don’t leave your borrowers in the cold post-close! Continue adding value throughout the homeownership journey with HomeBinder’s Adaptive Home Valuation calculator.

It’s been theorized that in the movie Groundhog Day, Bill Murray’s character, Phil Connors, spent nearly 34 years stuck in Punxsutawney, PA. Destined to repeat the same day again and again and again, Murray tries everything he can to get out of his repetitive purgatory. When closing packages have errors, lenders can feel a bit like Bill Murray as they repeat the same actions again and again as they work to close and ship the loan. For lenders not wanting to spend the next 34 years repeating the same day over and over, IDS has added a proprietary eVault to its eClosing platform, Solitude Solution. With the addition of the eVault to Solitude Solution, lenders now have the ability to deliver documents, including eNotes, to partners though MERS eRegistry. Contact IDS to learn more and break the cycle today. Seriously, contact IDS to learn more and break the cycle today.

Unburden your underwriters! Free up your underwriters from cumbersome income and asset calculations and help them get to more loans in less time by using the best underwriting automation tools on the market, Underwriting Automation Utilities. A product of Richey May and Zoral Group, this specialized toolset, powered by robust automation, OCR, and AI/ML capabilities, goes beyond mere validation of data points. It extracts data from borrower income and asset documents, performs complex analyses, checks for mismatches, flags malicious code, identifies and auto-clears conditions, and supplies your team with a GSE fraud checklist and ongoing analysis, all without your processing and underwriting teams having to extract data from borrower documents and enter it into your LOS. Bonus: Support for a full range of borrower types and loan products, including self-employed, FHA, VA, jumbo, and non-QM. Want to see this powerhouse in action? Sign up for a demo today.

XINNIX is excited to host a free webinar for any sales professional: “What It Takes To Be Successful in Selling - Part 2” presented by XINNIX President Michael “Go-To” Norton with special guest, Michael Altshuler, EVP of Sales at Jets.com. In October, these two selling giants focused on 5 of the 15 “Ifications of Selling” from Go-To’s book, The Ifications of Selling, in the first of a three-part series. In case you missed it or want a refresher, you can watch the recording of that event here. Now, Norton and Altshuler will cover five more “ifications” and share their unique perspectives, wisdom, and insight that they’ve gained from more than two decades each working in sales and leading others to high levels of performance. Register today to receive a free copy of Norton’s book, The Ifications of Selling.

Homebuyers search for the term "mortgage calculator" 4.1 million times a month and find 1.8 billion search results. Who's at the top? Those online lenders who shall not be named. Yeah, some of your biggest competition. There's no doubt that pre-approval tech for customers is a good idea. In a competitive market, borrowers need to understand what their financial ability will allow and how that impacts them. With QuickQual by LenderLogix, you can start the conversation ahead of their search by offering them a solution that's customized to their specific financials. This allows them to act fast on the house they find at 2 am in bed with a snack in hand… because you know that's already happening. With the ability to generate updated pre-approval letters on their own, you can create confident buyers who make informed decisions. Are you giving them everything they need to stay in your pipeline or are you losing out on those leads? Get a sample sent to your phone to learn more.

Free new ebook: The Future of Secondary Market Trading for Local Lenders, featuring insight from industry experts with 25+ years of capital markets experience. Today’s competition and changing market trends are daunting. But they’re not insurmountable. For local lenders, the secondary market provides a prime opportunity to pursue better margins, more competitive rates, and increased profitability. And yet for years, technology-driven secondary market solutions haven’t catered to small and midsize lenders. Luckily, that trend is changing, with new offerings now available that enable unprecedented access to the secondary market. Dive into this new ebook from mortgage solutions provider Maxwell to learn how partnering in this area can help you generate world-class results, allowing you to compete with the industry’s largest players. Click here to download Maxwell’s latest ebook, The Future of Secondary Market Trading for Local Lenders.

The U.S. Olympic Committee recently announced that sixth alternate Anna Hoffmann has earned a place in the women’s ski jump competition after two nations returned a quota spot and four others declined their spots. Hoffman spent weeks waiting to find out if she’d get a chance to compete at the Olympics, which doesn’t sound too bad when you consider how some lenders spend decades waiting for past borrowers to return for another loan. Luckily, Sales Boomerang’s opportunity alerts help lenders fill their pipeline with a wide range of loan opportunities, and even enables lenders to automatically generate accurate total cost analysis (TCA) loan comparisons powered by Mortgage Coach. Sales Boomerang’s borrower intelligence, enhanced by Mortgage Coach TCA presentations, helps mortgage advisors bring home the gold by providing value that earns them greater repeat and referral business. Experience a joint demo with Sales Boomerang and Mortgage Coach.

How to win the 2022 purchase “war.” Purchase loans will be 67% of the market this year, and there are only 4.79m purchase loans to go around. To win, you must convert more pre-approved buyers and not lose them to home search portals that sell those leads off. ComeHome.com by HouseCanary, a national real estate brokerage, makes your firm, and your sales force, the most modern home search & homebuyer engagement player in the game. Talk to Sales.

Compliance is the name of the game

Any bank or mortgage bank has a solid compliance department watching out for them. The economics are compelling: spend $300,000 to save $1 million in fines? I am simplifying that, but nonetheless, that expense is covered by pricing margins and profits, effectively helping a lender’s staff keep their jobs by not having a lender go out of business due to regulatory fines. In fact, today’s audio version of the commentary is available here and features an Interview with Michael Dunn, CMB, on the latest happenings in the world of compliance.

Coming out of the MBA’s Independent Mortgage Banker conference last week, I asked a couple compliance experts from the nationwide compliance training firm The Knowledge Coop about what common misconceptions about compliance.

CEO Ken Perry observed, “The biggest compliance misconception is around training. The CFPB has been so clear about how to build a compliance management system but many in the industry wants it to be more of a cookie cutter so they can check a box. In actuality the training box is different for each company. As an example, if most of your employees are working from home now then I would hope you have increased your training on licensing laws, information security, customer service, and fraud. Training needs and requirements should be changing with the market, locations, and unique factors of each company. Thinking that assigning the same boring training every year will somehow make you compliant is a common misconception. Once the industry understands this, they will be able to move closer to a culture of compliance.”

And Jim Smith, National Sales Manager, noted, “As an 8-year veteran at AllRegs and now at Knowledge Coop, I have had a unique perspective on all aspects of compliance, but particularly entity-level compliance. There has been a massive swing at the CFPB and we are trending to more enforcement. Companies will need to get their Compliance Management Systems in order. Chopra is gunning for some enforcement actions and we haven't had any real ones since 2016 and the Trump administration. Our industry has seen tremendous growth since 2016, helping millions of borrowers, and a lot of companies think that CFPB enforcement will be like it was from 2016-2020. That’s one big misconception!

Here are some other big misconceptions I see: ‘I’ll just remain a broker so my lender handles all the compliance.’ Nope. The CFPB targets ‘Loan Originator Employers.’ It doesn't matter if you are a broker or lender, you have to follow the same consumer protection laws. Lenders must have to have a Compliance Management System and that system must consist of Policies, Procedures, Training, Monitoring and Response to Consumer Complaints.

“’I'm too small for the CFPB to target me.’ Nope. I saw the CFPB go after a small lender after a consumer complained to the CFPB who sent in a whole crew to audit the small lender’s policies, procedures, and training. Every aspect of consumer protection law, not just the regulation surrounding the complaint. You are not too small; they will follow complaints.

“’Compliance education is boring.’ Nope. Not at Knowledge Coop, and please excuse the shameless plug. We use video, humor, case studies, and subject matter experts to educate not just on the law, but the reasons behind: The ‘why.’ We use case studies and humor to make the courses interesting and engaging. And when your staff is engaged, they learn more.”

Jim wrapped up with, “I wrote a white paper on the new CFPB and what to expect going forward.” Thank you, Ken and Jim!

Capital markets

The right hedging option is integral to effectively managing pipeline risk and increasing returns. Whether your institution is new to mandatory delivery, or you are interested in re-evaluating your current hedging approach, the most important consideration should be risk management for your pipeline – how can you most effectively mitigate the increased risk of mandatory delivery and fully realize the associated benefits? Learn more with Black Knight’s white paper contrasting two hedging strategies: To-be-announced (TBA) mortgage-backed securities (MBS) hedging and note-rate hedging. While TBA MBS hedging involves the use of a well-known, highly liquid hedging instrument, it can come with greater price variability and risk. Note-rate hedging, on the other hand, offers a more conservative approach, but the method can compromise scalability and efficiency without suitable technology. Take a deeper dive into Black Knight’s objective and detailed comparison between TBA MBS hedging and note-rate hedging in the full white paper.

How precise is your 3-year home valuation model? Housing looks reasonably stable, but you still must have the smartest forward-looking information to manage your property portfolios. HouseCanary’s Property Explorer 3-year forecast lets you account for market volatility, local income, and other home valuation factors that influence your returns. With 108 million home valuations within 2.9% accuracy, Property Explorer lets you get granular quickly. Test drive Property Explorer free to see the highly accurate values of any home.

Turning to rates, it was an uneventful day in the bond market yesterday, though we did receive some indicators of the direction of the U.S. economy. The January ISM Manufacturing Index dipped, but still beat expectations as January marked the 20th straight month of expansion for the manufacturing sector. Pricing pressures worsened in January as supply chain problems persisted, meaning manufacturing registered the slowest pace since September 2020 as the effects of the Omicron variant impacted production.

Closer to the point of a daily commentary on the mortgage biz, total construction spending increased 0.2% month-over-month in December, but missed expectations and was the slowest pace of increase in six months. New single-family construction remains strong, reflecting the ongoing demand for new homes amid a scarcity of supply in the existing home market. Shortages of skilled labor and materials remain big issues, acting as a brake on the economy from the supply side, not the demand side.

Recent economic news is contributing to investors' angst about the Fed pivoting to a more hawkish mindset as it works to tamp down inflation pressures. Speaking of which, Philadelphia Fed President Harker and St. Louis Bullard spoke yesterday, with the takeaway being that the Fed must act “hawkishly,” but that a 50-basis point rate hike at the March meeting would be a bit severe.

Today’s calendar kicked off with mortgage applications shooting up 12.0 percent from one week earlier, per the MBA Weekly Mortgage Applications Survey, when another dip was expected with mortgage rates rising during the reporting period. Ahead of tomorrow’s payrolls report, we saw this morning that ADP employment for January (-301k versus expectations of +207k!). Additionally, the Quarterly Refunding announcement () where further cuts in coupons were expected despite the increase in Monday’s quarterly funding estimate. Later this morning brings the Q4 housing vacancies and homeownership rate and the Desk purchasing up to $3.6 billion in 30-years ranging from 2 percent to 3 percent. We begin the day with Agency MBS prices unchanged and the 10-year yielding 1.78 (versus yesterday’s close at 1.80 percent) after the weak ADP number.

Employment, business opportunity

Fairway Independent Mortgage Corp is looking to fill a Vice President Secondary Marketing, Hedging & Analytics, position to support the company’s growth. The person will be responsible for a team of analysts, primarily managing the interest rate risk of the mortgage pipeline and running analytics. Knowledge in best execution analysis, issuing/pooling MBS, MBS trading, co-issue constructs and reporting is required. The position will be located in Lisle, IL however, it is open to remote work for the right candidate. Fairway is a top independent mortgage company employing more than 10,000 employees, with a strong focus on purchase business, funding more than $72 billion in 2021. If interested, please send your resume to Anjelica Nixt; please specify this opportunity.

Businesses won’t reap the benefits of workplace diversity unless women are in the C-suite. SimpleNexus attributes much of its success to the work of its gender-diverse leadership team of mortgage industry experts. Led by CEO Cathleen Schreiner Gates, a 2021Housing Wire Vanguard and Mortgage Women Magazine Mortgage Star, SimpleNexus champions workplace equality by sponsoring a women’s group that gives female employees a space to network, collaborate and achieve their career goals. The achievements of women at SimpleNexus haven’t gone unnoticed either, with CCO Andria Lightfoot earning a place on National Mortgage Professional’s 202140 Under 40 lineup and EVP/General Manager Lori Brewer being named a 2020HousingWireTech Trendsetter. If you are interested in advancing your career in a diverse environment, check out the current job opportunities at SimpleNexus.

Have you ever wondered how Originators close $100M + per year? The answer is simple; They have a team in place that allows them to originate all day without distractions or getting pulled back into files. One of the Top Originating teams in the nation is looking to provide 1 Originator an extremely unique opportunity. This Originator would plug directly into the team, have their files worked on by 2 processors, 2 underwriters and 1 operations manager with a combined 70 years of experience. Sounds pretty good right? This Originator will also be personally coached by one of the top producing Originators over the last decade. If you close $30M or more per year and are looking for a breakthrough in your career, contact Anjelica Nixt to schedule a confidential conversation.

At Evergreen Home Loans™, incredible people and innovative technology are at the center of everything. The company empowers each team member to grow personally and professionally and provides real-world resources to make it happen. This includes investing heavily in technology to create a world-class digital lending experience which results in customer and agent relationships that last for years. Evergreen believes when you focus on people first, you can change the world one relationship at a time. In fact, 99% of associates surveyed by Great Place to Work® say Evergreen is a great place to work. Loan officers seeking careers in retail or consumer direct mortgage lending are encouraged to visit the Careers page. Great Place to Work® is a trademark of Great Place to Work® Institute Inc.