Rates can be 0 percent, but if there are no homes to buy, lender and real estate agent activity will grind to a halt. I realize that this is an extreme example, but you get the point, and headline bait like, “Home Sales Plummet” should be viewed skeptically. That said, in my travels, I am continuing to hear about a lack of inventory at lower/first-time home buyer price points. And out of the MBA’s Bob Broeksmit came, “One hurdle for many prospective buyers this spring continues to be low supply, especially for new listings at the lower end of the market.” And the various generations continue to compete for homes, with multiple bids being reported by agents in many places: Baby Boomer versus Millennial cage fight. Turning from the primary markets to the secondary markets, investors continue to sit on the sidelines of the $11 trillion mortgage-backed securities market as they await BlackRock helping the Federal Deposit Insurance Corp. liquidate the roughly $100 billion MBS portfolio it acquired from Silicon Valley Bank and Signature Bank. Those banks will probably be mired down in lawsuits for years. (Today’s podcast can be found here and this week it’s sponsored by Milestones. Giving homeowners an all-inclusive homeownership experience including home value and equity monitoring, home maintenance reminders and how-to articles, cloud-based document storage, one-click access to hire professionals for various projects around the home, and much more.)

Lender and Broker Services, Programs, and Software

“Newrez Wholesale is proud to announce the official launch of our recharged and revamped RezClub broker recognition program! Being a RezClub member means greater resources, early payoff waivers, exclusive RezConnect alerts and access to the tools and support you need to elevate your business. This includes exclusive perks like preferred pricing and priority service levels for our Elite tier members and plenty more! Don’t waste another second-- contact your Newrez Wholesale account executive or email WholesaleProspects@NewRez.com to see how you can qualify for RezClub status!”

“At Selene, we want you to be confident in the management of your portfolio. We specialize in performing, non-QM, RPL, NPL and business purpose loans. Selene is rated by S&P Global, Moody’s and Fitch for Prime, Subprime and Special Servicing and trusted by a diverse client base including large banks, Wall Street, originators, investors, aggregators and government entities. Learn more about our subservicing capabilities and how Selene’s proven performance can benefit your organization.”

“Looking for 100 percent financing with competitive pricing? All roads lead to ESSEX CORRESPONDENT and our Down Payment Assistance (DPA) product. Become a fully delegated and underwrite/fund your own 100 percent LTV purchase product. FHA 1st 96.5 percent LTV with two 3.5 percent 2nd mortgage options; 0% Forgivable or a 10 year Fully Amortized. No DTI limit, AUS approval required. FICOS as low as 600. One set of guidelines is available in 47 states. Generous Income limits using 160% of AMI or SMI, whichever is MORE. No first-time home buyer requirement. No 3rd party underwrite allows you to close as quickly as your team can originate. Email Kim Schenck or contact your Account Executive today and get signed up!”

Momentifi CEO, Gibran Nicholas, announced yesterday his long shot bid to challenge President Biden in the 2024 Democratic Presidential primary. You can learn more about this on his official website: GibranNicholas.com. The website contains a 61-minute video and 82-page outline of his proposals. Housing is a big part of his platform, specifically pages 29-32 of his letter. More on that in tomorrow’s newsletter. In the meantime, check out Gibran’s upcoming StorySeller Virtual Summit on April 19 where he shares more of his personal story and how to use archetypes and the nine human archetypes to find more meaning in your work and grow your epic business. The event features other guest speakers and topics include How to Overcome Objections About Today's Housing Market, Top 3 Habits of Top Producers and How to Implement Them, and How to Use Better Questions and Listening Skills to Uncover Hidden Opportunities in Life and Business. Click here to sign up.

“With your 2022 audit behind you, now is the time for reflection. Did you find yourself educating your auditor on the mortgage industry? Did your audit firm assign a new engagement team again this year who wasn’t familiar with your business? If there was ever a time to rely on an industry expert, that time is now. At CWDL, we’ve built our audit team by recruiting seasoned experts who understand the regulations and complexities of the industry so they can support and guide you, never the other way around. Your engagement management will be the same every year, and our partners are actively involved in all aspects of your audit. Don’t wait to make a transformative change for your business. Reach out to Kasey English or 619.302.0010 or visit us to learn how the mortgage experts at CWDL can take the stress and anxiety out of your 2023 audit.”

Yesterday at the Great River MBA conference, LenderLogix talked about the numbers lenders should track and how incremental changes at each sales funnel phase can yield significant results. They shared a hypothetical scenario worth sharing: “Let’s say you’re bringing in 150 leads a year at 90 bps with an average loan amount of $225,000. And let’s say your pre-approval to application conversion rate is 50%, resulting in $9.2 million in volume and $83,000 in annual income. By implementing strategies (like clear option comparisons) and tech (like custom-tailored mortgage calculators), you could potentially increase that specific conversion rate by 10%. That minor tweak would result in $11 million in volume and $99,000 in annual income.” Read “Positioned to Win with Mortgage Lead Conversion Optimization” to get a good summary of their presentation, as it was top-notch.

Compliance Changes

Thank you to Brian B. who sent along, “Long Island brokerages, landlords accused of Section 8 discrimination”… Berkshire Hathaway HomeServices among players named in Housing Rights Initiative suit.

Orrick Law sent out, “On April 3, 2023, the Consumer Financial Protection Bureau (CFPB) issued a policy statement on its interpretation of the prohibition on abusive conduct under the Consumer Financial Protection Act (CFPA). Director Rohit Chopra said the policy statement would "provide a practical analytical framework for identifying abusive conduct." Anyone who cares about UDAAP should read it.

Recently, the CFPB announced that it determined that certain state disclosure laws covering business lending in California, New York, Utah, and Virginia were not preempted by TILA.

Silicon Valley Bank and Signature Bank. Those banks will probably be mired down in lawsuits for years. On April 26 at 1PM ET, join Weiner Brodsky Kider’s managing partner, Mitch Kider, for a live webinar on current litigation risks affecting the mortgage industry and how mortgage professionals can effectively manage those risks from start to finish. Mitch will highlight recent litigation trends, the current market’s effect on litigation, and ways to successfully manage both litigation risks and costs.

HUD issued a reminder to servicers about the availability of the Homeowner Assistance Fund (HAF) through which eligible, distressed borrowers can receive financial assistance to cover qualified housing-related expenses.

Anyone originating Agency loans took note that a month ago Fannie Mae published Lender Letter 2023-02, permitting Fannie Mae to purchase shared equity loans secured by properties that are subject to private transfer fee covenants, where certain conditions are satisfied.

Capital Markets

It was a muted day of action yesterday in the bond markets ahead of today’s payrolls report and early close in the U.S. Treasury and MBS markets for Good Friday. The market digested an FDIC announcement which said that portfolio sales of the failed banks would “be gradual and orderly, and will aim to minimize the potential for any adverse impact on market functioning by taking into account daily liquidity and trading conditions.” Of the $114 billion in portfolio sales, $27 billion is from Signature Bank and $87 billion from SVB, mostly in coupons expected to be 3 percent and lower. St. Louis Fed President Bullard, a noted hawk, said yesterday that the central bank should remain on its hiking path.

Remember that mortgage pricing is a result of supply and demand. Recall the Federal Reserve buying MBS every day, driving up the prices and down the yields. Now, whether it is $91 billion or $114 billion, investors are wondering who will be the buyer of the MBS portfolio. “The smartest guys in the room” at BlackRock will help the Federal Deposit Insurance Corp. liquidate the MBS portfolio it acquired from Silicon Valley Bank and Signature Bank.

Jobs and housing drive the U.S. economy. The March payrolls report comes as questions are arising about the strength of the labor market with job openings dropping and the rolling average of jobless claims rising. Nonfarm Payrolls came in at 236k, as expected. The unemployment rate came in at 3.5 percent when it was expected to be unchanged at 3.6 percent, and average hourly earnings increased .3 percent, spot on with expectations (month-over-month) and 4.3 percent year-over-year compared with 0.2 percent and 4.6 percent in February. (The only other economic release today will be consumer credit for February.) Before today’s early close at noon ET, Good Friday’s Agency MBS prices are worse a solid .250 versus Thursday’s close, and the 10-year is yielding 3.36 after closing yesterday at 3.29 percent.

Employment

Radius financial group inc. is looking for a dynamic Chief Compliance Officer and General Counsel. Based in Norwell, MA, radius is a full-service retail mortgage lender founded in 1999 that has become one of the leading independent mortgage bankers through our customer obsessed curiosity. We are seeking an experienced Chief Compliance Officer to lead our bullet proof regulatory compliance, licensing and internal audit functions. We are also seeking an in-house general counsel that is licensed to practice law (ideally in MA) with experience in litigation, contract law and complex business transactions. Remote candidates that are a good cultural fit will be considered. Interested candidates should send inquires to Carla Herrera.

“At Fairway Independent Mortgage Corporation, customer service is a way of life. #FairwayNation mortgage loan officers are dedicated to finding great rates and loan options for our customers while offering some of the fastest turn times in the industry. Our goal is to act as a trusted mortgage advisor, providing highly personalized service and helping you through every step of the loan process, from application to closing and beyond.”