Who is Harrison Ruffin Tyler? Answer: He is the last living grandchild of former U.S. president John Tyler, born in 1790. (Tyler was President from 1841-1845.) Between him, and his father Lyon, and John, they’ve been alive for nearly the entire span of the United States. One of the topics here in Atlanta at the MBA STRATMOR Peer Group meetings, besides M&A (more below), is reliability and longevity, managing risk in the face of competition, and about, in the capital markets arena, how MIAC’s systems lapse for several days gave competitors an opening. For many years MIAC has seen many loans reliably flow through its hedging system, just as the Tylers have seen a lot of people in the world come and go during their lives. Which reminds me, there are three types of people in the world. Those who can count, and those who can’t. Don’t inflate your numbers, especially when dealing with a buyer. Ever heard of Frank, a college financial aid tool that JPMorgan Chase bought? Despite having a cute, trendy photograph, Charlie Javis found out that defrauding the bank of $175 million by artificially increasing your number of units is nothing to smile about. (Today’s podcast can be found here and is sponsored by SimpleNexus, an nCino company and award-winning developer of mobile-first technology for the modern mortgage lender. Nexus Closing delights homebuyers with a convenient, single sign-on experience that makes it possible to close on a loan from anywhere.)

Lender and Broker Services and Software

Seats are filling up for The StorySeller Virtual Summit on April 19. Momentifi CEO and long shot Presidential challenger candidate Gibran Nicholas will be hosting a virtual Summit on April 19 based on concepts from his newly published book, The StorySeller Adventures: How to Grow an Epic Business and Find More Meaning in Your Work. You’ll learn how to use StorySelling and the nine human archetypes to launch your next chapter in life and business. The event also contains exclusive interviews with seven guest speakers and business-building sessions that include: How to Overcome Objections About Today's Housing Market, How to Uncover Hidden Opportunities in Your Client’s Story and Gain a Competitive Advantage, and Top 3 Habits of Top Producers and How to Implement Them. You’ll walk away with a step-by-step guide for how to use StorySelling to overcome burnout, rediscover purpose, and find more meaning in your work. Click here to reserve your spot.

“Currently in our industry, making the right technology decisions is more important than ever. We ask ourselves critical questions such as: Is there a rapid, tangible ROI? Will it disrupt our internal process? Do I have enough volume to support this decision? Will there be a decrease in quality? Candor is honored to offer a solution to these and so many other important questions. CandorPLUS is a Lean Six Sigma Man + Machine solution spanning the entire loan fulfillment process. CandorPLUS supports all loan types assisting underwriting and processing staff by delivering a complete decision-ready/action-ready file. This technology driven service delivers quality, speed, productivity improvements, capacity, and cost arbitrage, allowing lenders to instantly scale and deliver concierge-level satisfaction to borrowers. Click here to learn more.”

AREAL.ai, the no-code automation platform for the title and mortgage ecosystem that makes it easy to reliably extract data from complex documents and integrate data with existing tools and workflows, announced today the release of the Closing Disclosure Balancer Automation Tool, an AI-powered solution that allows lenders and their title agency partners to easily compare and balance Closing Disclosures to remain in full compliance with the CFPB’s TRID rules. REAL.ai’s CD Balancer is designed to reduce the friction between industry partners with advanced software that flags every unmatching section on the Closing Disclosure, highlights any changes made and then sends the corrected data back to the various systems of record automatically. This new offering has been very well received by the industry and the company is now supporting new customers on a first come first served basis. To get on the waitlist and learn more about AREAL.ai’s CD Balancer Automation Tool, please visit here or email Bill Hajjar.

“Get ready for homebuying season with Xactus! Verify income quickly and accurately with automated IRS data feeds. We provide comprehensive, real-time tax information instantly! While you’re at it, take advantage of the hot HELOC market and close loans quickly with our HELOC verifications bundle. It allows you to see who qualifies by mining your existing portfolio, utilizing pre-screened leads with Pre-QualificationsX and assessing risk with Credit ReportsX, AVMs, Income VerificationsX, Employment VerificationsX and Flood. Speaking of flood, you can obtain quick, accurate and compliant flood risk assessments with Flood ReportsX. It uses parcel data and building footprints to deliver 90%+ automation rates without sacrificing accuracy. Heading to TMBA’s Conference in San Antonio or the Mid-Atlantic Regional in Maryland? Stop by our booth or email us to schedule a meeting. Find out how Xactus is advancing the modern mortgage and can help you succeed in this spring!”

“Did you know that with Val-Insure from R3 AMC, every FHA and conventional loan you process is covered for agency repurchase and bias claims risk? It’s the industry’s first appraisal solution to provide protection from overvaluation inaccuracies and undervaluation due to biases or other regulatory issues and it’s proving to be quite popular. Val-Insure went live earlier this month and we’re already seeing tremendous interest in it! Not only that, the cost of the E&O insurance is absorbed in our AMC fee so there is no cost to our lender clients – making it an easy decision for operations and risk managers. For more information visit our website or contact Brent Jones CEO/Chief Appraiser at bjones@r3amc.com or 1-800-791-6817.”

Did you know Flagstar Bank warehouses construction loans, and has for more than five years? As the nation’s 2nd-largest warehouse lender, Flagstar knows the construction-loan market inside and out. More importantly, Flagstar knows what clients want from their lending partner: best-in-class service that always keeps their clients’ needs top of mind. And of course, construction loans are just the start with Flagstar. They also warehouse conventional, government-insured, non-QM, second mortgage, manufactured housing, and reverse mortgage loans. So, look for a partner you can grow with. Look to Flagstar for your construction loans, and for consolidating all your warehouse lines of credit. Contact Jeff Neufeld or Patti Robins to discuss what Flagstar can do for your business.

Broker Product

Rocket Pro TPO is delivering all of the solutions you need to win this spring purchase season. Their offerings begin with a comprehensive product menu from conventional to government - plus solutions for self-employed clients. Talk to them to optimize your purchase strategies around FHA – the recent FHA mortgage insurance premium reductions have created new opportunities for higher FICO clients. Rocket Pro TPO’s elite purchase experience is supported by Crews - their dedicated teams delivering certainty, speed and expertise on every loan. Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO.

Freedom Mortgage Wholesale posted an important update, effective as of April 1 regarding Mandatory Use of VA Form 26-1820 and 26-6393. Compliance requirements for Clients that generate their own closing documents, Non-Delegated Correspondent Lenders, will be responsible for providing the correct forms on any loan where Freedom Mortgage Wholesale Division does NOT send the closing documents.

Capital Markets

This morning we’re receiving a gaggle of big bank earning reports. Mostly better than expected, share prices of the likes of JPMorgan Chase, Citi (still restructuring), Wells, US Bank, and Bank of America are doing well. Perhaps any bank issues can be attributed to a lack of Fed oversight? The large inflow of deposits they’ve seen may be a one-time event, but it still helped.

This week was headlined by a couple benign inflation reports: A cooler-than-expected headline March CPI (+0.1 percent) and an unexpected decrease in March PPI (-0.5 percent). On an annual basis, the 5 percent annual CPI in March marks a steady improvement from 9 percent last summer, 8 percent in the fall, 7 percent over the holidays, and 6 percent in the early months of 2023, minus a blip in January. This is good news as it takes some of the pressure off the Fed to keep raising rates.

The Fed’s target of 2 percent inflation is still a way away, and though moderating inflation will eventually mean lower mortgage rates, the Federal Reserve is likely to keep its fed funds rate higher for longer until it sees a meaningful increase in the unemployment rate. Jobless claims and the fed funds rate should correlate, but over the past year they have not. The central bank would like to see a better balance of labor supply and demand, and high rates are meant to reduce demand for labor. In an alternative scenario, increasing labor supply would accomplish the same thing, and in a less painful way than a recession-induced spike in unemployment.

As we move into Q2, goods inflation and supply chain issues seem to be in the past: There is no more chip shortage, commodities like lumber are back at pre-pandemic levels, and housing inflation will stop adding to headline figures during the summer. Additionally, we are moving away from what was a volatile quarter in Q1 caused by high inflation, strong labor prints (which pushed rate expectations to “higher for longer”), and a banking stability crisis. Rising rates are meant to act as a brake on the economy, and the banking crisis, from which banks are now more conservative in their lending and restrictive in doling out credit, will only serve as an aid in that sense.

Things are tough all over, so it's not limited to just you and other mortgage bankers. After the deluge of easy credit thrown upon the markets during QE4, the Fed’s raising rates by nearly 500 basis points over the past year and allowing all those bonds it purchased to begin rolling off its balance sheet has had adverse effects all over the mortgage industry. Artificially low interest rates are not sustainable unless the market is flooded again and again with a renewed torrent of credit. That game is easier to play with inflation running near the 2 percent target rather than at an annual rate nearly three times above that. The next Fed meeting is May 2-3, and we will get one more inflation reading, in the form of PCE (Personal Consumption Expenditure, a measure of what people are paying for things), before the meeting.

Today is packed with potential market moving data starting with March retail sales (-1.0 percent, worse than expected) and import (-.6 percent) and export prices. Retail sales were expected to slip 0.2 percent month-over-month versus declining 0.4 percent previously. Import and export prices were both expected to fall 0.1 percent. Later today brings industrial production and capacity utilization for March and preliminary April Michigan sentiment. The day’s lone Fed speaker sees Governor Waller speaking on the economic outlook. As noted above, today also sees bank earnings from JP Morgan, Citigroup, Wells Fargo, and BlackRock. We begin the day with Agency MBS prices worse about .125 from Thursday evening and the 10-year yielding 3.48 after closing yesterday at 3.45 percent; the 2-year is at 4.02.

IMB Wanted

Merger and acquisition action is alive and well, and when one talks to a group of lenders, they’re either looking to acquire or merge, or looking to be acquired. The latest example is First Federal Bank announcing an agreement to acquire the mortgage division from BNC National Bank. “First Federal Bank will continue to originate loans out of existing locations in Georgia, Wisconsin, and Florida… First Federal will purchase BNC's National Bank's mortgage business assets and will continue to serve BNC National Bank's mortgage customers from its existing locations in Overland Park, Kansas, Moline, Illinois and Bismarck, North Dakota locations and in the Phoenix market.

“A National Mortgage Lender Looking to Acquire IMB! A leading, privately-owned national mortgage lender is seeking to acquire a thriving IMB. With over 130 retail branches nationwide and licensed in all 50 states, this lender is committed to growth and continues to invest capital to ensure they have the best technology stack and loan products to be successful in any market. This lender retains about 99 percent of servicing rights on all Fannie, Freddie, and Ginnie Mae products it originates. This lender supports every facet of marketing, including lead generation campaigns, social media, content creation, PR, events, partner programs, and more. If you are an owner who would like an exit strategy or just want to provide a soft landing for your people where they will thrive, let us know by calling (216) 264-3521 or filling in your confidential information here.”