What is $9,140? It was the production cost, per IMB loan for the 3rd quarter in 2021. (The Q4 2021 results are coming out on March 22.) I bring this up because, generally speaking, lenders are selling the loans they manufacture at roughly the same price, so profitability, and long-term success, will depend on lowering their manufacturing costs. Costs “may” very well set a record-high in Q4 2021. As is, for Q3 2021 we were at the second highest levels, right behind the 1st quarter of 2019 when volume was much lower than Q3 2021. (Questions about the MBA Quarterly Performance Report, including what is in the numbers, should be directed to Marina Walsh, VP, Industry Analysis, Research, and Economics with the MBA.) Residential volume is impacted by interest rates, which in the short-term have been driven down by Russia attacking Ukraine, but in the long term influenced by economic trends… Are we heading toward a market with ramped-up adjustable-rate mortgage volume? Perhaps. Mortgage rates, through their volatility, have moved higher, and we have the recent release of the CFPB’s Prepaid Interest and the General Qualified Mortgage APR Special Rule for Adjustable Rate Mortgages factsheet. (Today’s audio version of the commentary is available here and this week’s is sponsored by SimpleNexus, an nCino company and award-winning developer of mobile-first technology for the modern mortgage lender.)

Lender and Broker Products and Services

Alexa, play Feeling Good by Michael Bublé… Our friends at LenderLogix are excited to announce that they have been named a 2022 HousingWire TECH100 Mortgage Honoree! LenderLogix creates customized mortgage technology for IMBs, banks, and credit unions and currently works with lenders in 42 states. LenderLogix’s products include adjustable pre-approvals, automated fee collection, automated closing gifts, milestone SMS and CRA analytics. Products are offered a la carte and designed specifically to each lender. On average, LenderLogix can save lenders up to 40% more time in their day, increase their conversion rates up to 60%, and realize hundreds of thousands of dollars in unpaid upfront fees. With 300% revenue growth over the last three years and a team that’s doubled in size in just the last eight months, LenderLogix is definitely a name you’re not going to want to forget. Check out its site for more information.

Help us congratulate Karaline Venezia on her promotion to VP of Industry Solutions at Capacity! Karaline recently shared how businesses can leverage Capacity internally for lenders and externally for borrowers at NMP Originator Tech Q1. Capacity, an AI-powered support automation platform, empowers mortgage professionals with instant knowledge and automated workflows. Mortgage companies continue to turn to Capacity to increase employee productivity and job satisfaction, build customer loyalty, and improve quality and efficiency, while reducing costs at the same time. Capacity's AI-powered chatbot can answer 90% of borrower questions without human intervention. This speeds up the approval process, keeps the borrowers happy, and empowers your loan officers to focus on other core tasks. Discover how Capacity can support your team.

Cloud-based LoanMAPS, a fully integrated digital processing and underwriting system, will eliminate your need for a POS, a LOS, a CRM, report writer, and income calculator. Do you know your costs of your full-time employee? Does your Fintech truly improve streamline the work process and reduce your cost to produce? LoanMAPS does. With LoanMaps you can have confidence you will start the loan with an agency compliant AUS underwrite, and our workflow will have entry level mortgage bankers closing in no time! “LoanMAPS is not about replacing people, it is about using technology to its fullest potential so that your employees can reach theirs.”-Take3Tech! In conjunction with our partner DocMagic, users can finish closing documents in 15 minutes. See more about how you can reduce your cost to close with the LoanMAPS Closing Module!

Servicing Products

“Your mortgage servicing partner is ready for this moment and the next. Meeting and exceeding homeowners’ needs during challenging times is what we do. Time-tested and with a ready-for-anything approach, Cenlar is uniquely prepared to handle the mortgage servicing challenges of our clients and their homeowners for 2022 and beyond. We are a financially strong, wholesale bank, delivering customized solutions to our clients and their homeowners that lead in quality, innovation, and flexibility. Cenlar does not participate in retail lending or take retail deposits so as not to compete with our clients… Mortgage servicing is what we do. Let’s discuss how Cenlar can meet and exceed the mortgage servicing needs of your organization. Call 1-888-SUBSERV or visit Cenlar. We want to be your trusted partner, each and every day.”

With rates on the rise, lenders will need to consider how to replace their refi revenue. There is still more than $10 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. Their 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.

Retail News

This commentary usually has news from the Agencies or third-party originators (TPO) in the wholesale or correspondent channels. But retail originators are also busy going after market share and offering their retail clients new programs. Let’s take a random look.

TD Bank, America's Most Convenient Bank®, has launched a product designed to increase home ownership and accelerate affordable home lending in Black and Hispanic communities across several markets within the Bank’s footprint. The new product, TD Home Access, provides prospective buyers with an affordable mortgage option, including a $5,000 lender credit which does not require repayment, that borrowers can use for closing costs or toward a down payment on a home purchase. It also offers more flexibility with a greater debt-to-income (DTI) ratio and expanded underwriting requirements, as well as credit parameters that increase accessibility.

Geneva Financial (Geneva) announced it will offer full-service credit monitoring, assessment, recovery, and restoration through Geneva Guardian™ for borrowers across their 46-state licensure. Borrowers may now receive a certificate for 1 year of fully managed recovery and protection against identity theft as a closing gift from their mortgage loan officer including dark web monitoring, credit score tracking, mobile phone protection, and much more. Geneva Financial clients will remain informed on the status of their identity and credit for 365 days of defense after closing with an optional for renewal. Additionally, if their identity or information is compromised, the Geneva Guardian™ team will stop at nothing to remediate the damage with white-glove service that personalizes the customer experience.

Nations Lending will be launching a new joint venture with Indianapolis-based Carpenter Realtors. The announcement comes as Nations has continued to expand across the U.S., now operating more than 120 branches with nearly 1,300 employees. Erick Cavalcanti has been tapped to lead the initiative as President. Nations Lending will provide Carpenter clients with access to a strong independent mortgage lender, in-house loan officers, and fast loan assistance to real estate agents. Nations Lending, an agency-direct lender with Fannie Mae, Freddie Mac, and Ginnie Mae, retains nearly 100 percent of its mortgage servicing rights resulting in a consistent, unified experience from the very start of the borrower’s home search right on through to the application process and monthly payments. The joint venture aims to launch late Q1 2022.

Capital Markets

New blog post: 3 Secondary Market Strategies to Improve Profitability in Q2 2022. As we enter the last month of Q1, now is the time to adjust strategies to market changes. With loan costs rising and competition heating up, profitability is likely to become a challenge. Forward-thinking lenders are beginning to audit their processes, knowing even small cost savings and efficiency gains can bolster margins. Here, lenders shouldn’t ignore a potentially high-reward area: their secondary market function. By improving access and pricing in this business segment, lenders can reap sizable improvements to their bottom line. In the latest blog post from mortgage solutions provider Maxwell, 33-year mortgage veteran Anthony Ianni lays out steps to take now to improve profitability as 2022’s market becomes more challenging. Click here to read “3 Secondary Market Strategies to Improve Profitability in Q2 2022.”

While the war in Ukraine garnered most of the headlines last week, the latest economic data showed the U.S. economy was gaining steam before the start of the conflict. Nonfarm payrolls were expected to show 423k jobs gained in February, but blew past consensus to come in at 678k, and the unemployment rate fell to 3.82 percent from 4 percent, its lowest level since the start of the pandemic. Total employment is roughly 2 million below its February 2020 peak. Job gains are expected to continue as many large employers are set to head back to the office which should help surrounding businesses in those areas. However, given that the majority of the jobs added were in lower-paying industries, average hourly earnings stagnated month-over-month to come in up 5.1 percent year-over-year. The data will underpin Fed notions that the labor market is solid enough to withstand tightening. Fed Chairman Powell announced that a 25 bps increase in the fed funds rate would be appropriate at the upcoming FOMC meeting next week as the committee seeks to control persistently high inflation. U.S. Treasuries ended a volatile week rallying again.

While attention will remain on what happens in Ukraine, and surging oil prices, this week’s most likely market moving impact will come from either the $102 billion mini-Refunding, conducted over tomorrow to Thursday, or February’s Consumer Price Index, coming out Thursday. The CPI will show how painful U.S. inflation is getting. On Friday, the Desk will release a new MBS purchase schedule which will consist of just paydowns with the end of Quantitative Easing. Estimates are for $1.7 billion per day on average. This week the NY Desk will purchase up to $2.8 billion per day on average, including up to $2.9 billion of 30-year 2.5 percent and 3 percent today. With the Fed in blackout ahead of next week’s FOMC meeting, “Fed speak” will be absent. Today’s calendar only has February employment trends and January consumer credit. Driven by updates on Russian hostility, we begin the week with Agency MBS prices .250 worse and the 10-year yielding 1.77 after closing last week at 1.72 percent.

Employment

A $10B+/year national lender based out of the Midwest is looking for an EVP of Secondary/C- Level Capital Markets person to manage its entire securitization/trading desk. The candidate must have extensive experience with Ginnie Mae Securitization, selling to both Fannie and Freddie’s windows, managing loan modifications and EBO trades for a large book of MSRs; private securitization experience is a plus. “We are only looking for the best of the best. Ultra-competitive compensation and profit sharing is available for the right candidate. Interested parties should email Anjelica Nixt to forward their resume and for more information.

Berkshire Bank, headquartered in Boston, MA is expanding its mortgage and consumer lending businesses and is currently looking for a Vice President, Consumer Lending & Payments Compliance Officer. This individual will execute the compliance monitoring plan for the Consumer Lending & Payments business line, identify and manage the development and implementation of respective compliance regulations and fair lending efforts for retail lending operations, participate in the development of policies, procedures, new products and strategies, and manage the implementation of self-monitoring testing, conduct quality control reviews, prepare detailed analysis of results and provide recommendations for correction actions. The candidate should have a minimum of 5 years of retail lending and servicing compliance experience, at least 1 year of supervisory/leadership experience, have knowledge of federal laws and regulations governing residential mortgage, home equity loan/lines and consumer loans. If you are interested in learning more about the role, reach out to Kim Conroy or apply here.

“Non-QM is easy. When you work with ACC, the oldest and most established Non-QM lender only in the industry, doing Non-QM is easy. While other lenders are trying to figure out Non-QM, ACC has it down to a science: 90% Bank Statements, 90% P&L Only, 85% True ITIN, 80% DSCR and now the 75% Last Chance Program for those tough deals. Go to ACC’s Non-QM Pricer to see programs and pricing or call 877-349-0501 to connect with an experienced AE. Interested in joining the most stable Non-QM Lender? E-mail your resume to recruiting@accmortgage.com.”

“Tomo is a purchase-focused mortgage lender founded by an all-star team of former Zillow, Microsoft, USAA, and Amazon executives. We’re currently looking for a Senior QA Analyst who will be responsible for identifying, assessing, and measuring pre-funding loan file risks. Additionally, this role will help ensure the lending team is making secure and sound underwriting decisions while adhering to all federal and state compliance requirements. If you have 3-7 years of pre-/post-fund quality review, processing, and/or underwriting experience, as well as excellent analytical skills with the ability to make quick decisions, we encourage you to apply! We’re transforming the mortgage industry and having a great time doing it. Come join us!”

FHA is hiring a Title Management Information Specialist in Washington, DC, to manage information system investments, support the Office of Single Family in special studies and plans, prepare and implement a wide range of plans, assessments, and reports: Job Announcement Number 22-HUD-734-P.