Today, for yield curve fans, the 3, 5, and 7-year Treasury yields are all above the 10-year yield. But yesterday was the Spring Equinox, aka Vernal Equinox, above the equator. The technical description of this event is beyond the scope of this Commentary, but suffice it to say we continue to have more sunlight in the Northern Hemisphere. Miami has plenty of sunlight, and the influences of Cuban and Central American culture are reflected in this smash hit (7.7 billion views) from a few years ago, written and recorded in Miami. What is the chatter in the hallways of The Mortgage Collaborative event? Even though volumes were up for many lenders, by the time 2021 was tallied, profits were down mostly due to margin compression which accelerated in 2nd half of 2021, becoming even more acute in Q1 2022 as lenders who were fully staffed reduced margins to keep loans coming in the door and their staff occupied. Some of the talk is about how banks (with increased deposits in 2020 and 2021 from increased savings) need to put money to work and are pricing to bring in the business, especially jumbo, and replace any servicing runoff. Stop me if you’ve heard this before… And so the cycle continues… (Today’s audio version of the commentary is available here and this week’s is sponsored by Ice Mortgage Technology: Comprehensive Real-Time Data, On-Demand.)

Products and Services

Engaging past clients can be as tricky as herding cats. Thankfully HomeBinder’s home management platform keeps borrowers engaged long past the close by helping them centralize home data, send automated maintenance reminders, and notify them when they may be in a good position to sell or refinance. HomeBinder’s numbers don’t lie: a top mortgage lender reported more than half of their past customers opened HomeBinder’s email marketing during a recent product pilot. That’s more than double the real estate industry benchmark open rate of 21.7%! Connect with the HomeBinder team at TMC’s Member Conference this week, or schedule a demo to start offering post-close value that makes homeowners think you’re the cat’s meow!

Dan Harrington, Usherpa’s Founder, writes, “I've been thinking a lot recently about automation. Well, who isn't? I'm all in with automation, so much so I'm writing a book called Automate to Great. Today though, the word most occupying my frontal lobe is relationships. Usherpa was built on relationships, for many years, 24, in fact. That being said, I've got to tell you how thrilled I was when I saw a report from the nation's premier mortgage advisory firm yesterday. Usherpa was compared with 34 other CRM technologies, and we ranked number one in highest overall satisfaction and highest loyalty rating. We are proud and humbled too. Knowing our customers scored us highest in satisfaction and loyalty gives us clear marching orders, keep giving 100% to our mortgage partners every single day to make sure our relationships remain exemplary in the future. Usherpa.com. Enterprise Solution. Boutique Service.”

The MBA has a limited-time Membership Savings opportunity! Join MBA at our 2022 dues rate to enjoy member benefits through the close of the 2023 membership year. That is 19 months for the cost of 12 months. Your MBA membership grants you access to education, research, committees, informational webinars, and so much more. With MBA, you will have the backing of a trusted name and endless resources. See a recap of what MBA delivered for its members and the industry in the 2021 Annual Report. Start your membership with MBA today and be a part of the impact we will make together this year. We are stronger as one! We would love to hear from you… What is important to you and your company this year? Let’s talk. Call or email Laura Hopkins, 202-557-2757.

From Planet of the Apes (1968) to Spiderman: Homecoming (2017), movie-goers love a shocking reveal. Borrowers, on the other hand, don’t want a twist ending to their homebuying experience, and typically prefer a process that is as transparent and digital as possible. However, while search engine marketing (SEM) is central to generating online leads, optimizing your digital footprint can be overwhelming to the uninitiated. Luckily, Black Knight is sharing SEM strategies that help lenders generate more leads without adding to their budget or toolset. By capturing data to create a deeper understanding of consumer behavior, Black Knight’s Surefire CRMSM and Mortgage Marketing Engine gives an added boost to lenders’ digital marketing. For a deeper look into budget-friendly SEM strategies for the modern lender, download the free eBook today.

Experience matters. Mortgage Banker Magazine is looking to recognize the Legends of Lending: the key players who have dedicated their expertise and years of experience to mortgage, and represent the industry with confidence, compassion, and pride. Click here, to nominate yourself, or someone you know who has blazed the path and left their mark on the industry for years to come.

Does your sub-servicer have a compliance team that will evaluate and communicate regulatory change and its impacts? Do they have operational controls and staff in place to ensure appropriate action is taken? In the face of heightened regulatory scrutiny, be sure you have the best servicing partners. Computershare Loan Services (CLS) is a sub-servicing leader with a tightly managed compliance management system that helps clients sleep at night. CLS’ COO, Jeff Johnson, states, “We are fully transparent with our clients and instill confidence that we are available to them, we provide guidance on new regulations, and we align with them on how we are interpreting those regulations.” Contact CLS to learn more about how they help clients thrive, and sleep better, even in a challenging regulatory environment.

MGIC’s cash flow worksheets for tax year 2021 are now available! Self-employed borrowers? No sweat. MGIC’s editable worksheets help you analyze cash flow, liquidity, rental income, and comparative income easily and accurately. And best of all, they’re auto-calculating! Download your worksheets.

CFPB: Power Grab or Spreading its Wings?

On March 16, CFPB announced it was targeting unfair discrimination in finance by making changes its supervisory procedures to include examining companies for discriminatory conduct that CFPB alleges could constitute unfair practices in violation of the Dodd-Frank Act. In other words, when CFPB examines a company for unfair, deceptive, or abusive acts or practices (UDAAP) CFPB is telling the examiners to also assess discrimination regardless of whether that product or service is subject to the Equal Credit Opportunity Act (ECOA). (Fair lending laws only apply to credit products). In particular, the CFPB’s announcement noted, “A discriminatory act or practice is not shielded from the possibility of being unfair, deceptive, or abusive even when fair lending laws do not apply to the conduct. For example, not allowing African-American consumers to open deposit accounts, or subjecting African-American consumers to different requirements to open deposit accounts, may be an unfair practice even in those instances when ECOA does not apply to this type of transaction.”

Of course, tongues are wagging at a lot of big consumer finance law firms on this development. For example, CFPB Announces It Will Seek to Extend ECOA-Like Antidiscrimination Provisions Broadly to All Consumer Finance Activities | Perspectives & Events | Mayer Brown and CFPB updates examination manual to use UDAAP authority to target discriminatory practices, including those involving non-credit products or services | Consumer Finance Monitor.

Meanwhile, attorney (and Mortgage Muser) Brian Levy had this to say, “The CFPB isn’t really creating any new prohibition with this announcement because it has been illegal to discriminate against consumers based on race since the Civil Rights Act was passed in the year I was born. What is really happening is that CFPB is telling its examiners to treat illegal discrimination as also being a UDAAP violation. That brings into play massive additional penalties under the Dodd Frank Act. CFPB believes that it can use disparate impact analysis to prove illegal discrimination to bootstrap a UDAAP violation even where ECOA doesn’t apply. In addition to the usual validity arguments about disparate impact, however, CFPB may face a few other challenges in expanding the scope of its UDAAP authority in this manner. First, outside of the mortgage industry which has HMDA data to analyze lending patterns, there is no way to accurately track and analyze racial or other consumer characteristics that might demonstrate illegal discrimination. This issue was highlighted about a decade ago in auto lending litigation where surnames and zip codes were used as proxies for racial data that turned out to be highly questionable. Second, if CFPB seeks UDAAP enforcement actions for discriminatory conduct it may also face challenges under the Administrative Procedures Act to the manner in which it declared illegal discrimination is also a UDAAP violation without having notice and comment rulemaking.”

Capital Markets: 50 bps Increase Ahead?

The main economic headline last week was the beginning of the Fed’s monetary tightening cycle. Price stability has finally taken center stage at the Fed with inflation at 40-year highs and disruptions to supply chains caused by Russia’s war in Ukraine as well as another COVID-related lockdown in China. Inflation has neutralized much of the income gains households have won over the last year. Retail sales increased 0.3 percent in February, however since they are reported nominally the gains are heavily influenced by rising prices. Industrial production saw a 0.5 percent increase as some manufacturers saw some supply chain relief that allowed a catch-up on backorders.

Meanwhile, housing starts were at their highest pace since 2006; a 1.77-million-unit pace. Rising home prices continue to weigh on buyers’ minds and existing home sales slid 7.2 percent in February to an adjusted annual pace of 6 million as extraordinarily low supply left some on the sideline. The median home price of an existing home has risen every month over the last ten years and currently stands at $357,300. Buyers are faced with both rising mortgage rates and sustained price increases. Monthly housing payments have risen by 28 percent from one year ago.

This week’s economic calendar includes many Fed speakers following last week’s Fed events, including Chair Powell today. Economic data is not expected to be very market-moving with the highlights including regional Fed surveys, new home sales, durable goods, and Markit PMI flashes. Today’s calendar is already under way with the Chicago Fed National Activity Index for February (-.08 to +.51, as if it matters). We begin the week with Agency MBS prices worse nearly .250 and the 10-year yielding 2.23 after closing Friday at 2.15 percent on thinking that the Federal Reserve will step up its aggressiveness as 2022 rolls on.

Employment

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, and participate in the development of policies, procedures, new products, and strategies. 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, excellent organizational skills, be analytical, a multi-tasker, a problem solver and strong attention to detail. To learn more about the role, reach out to Kim Conroy or apply here.

A Mortgage Boutique, First Community Mortgage’s Wholesale Division, aims to continue its remarkable growth, now with the addition of veteran TPO team builder Jeff Raich, who has been named Regional Sales Manager, based in McKinney, TX. Raich is hiring Account Executives in three channels (broker, delegated correspondent, and non-delegated correspondent) and strengthening FCM’s wholesale work across the 46 states in which it originates mortgages. He’s first focusing on filling positions in Austin, DFW, Houston and San Antonio. If you are interested in learning more about AMB or signing up to be a lending partner, please contact Raich.

Keller Mortgage is growing it’s retail mortgage footprint, and LoraLynne Ball (Regional Distributed Sales Head) is searching for area managers and loan officers throughout the country. Keller Williams is the largest real estate company in the world and currently creating partnerships with agents throughout its ecosystem to work with loan officers. There are great ground-floor opportunities to capture leads by working directly with Realtors. Please contact LoraLynne Ball with interest (727-458-4315).

On the departure side of the equation, veteran mortgage executive Bill Dallas has left his position as president of Finance of America Mortgage. Interesting times everywhere out there.