Don’t believe in climate change, rising sea levels, or cities sinking (“subsiding”)? Venice is sinking. So are Rotterdam, Bangkok, and New York (though a few spots are rising!) But no place compares to Jakarta, the fastest-sinking megacity on the planet. Over the past 25 years, the hardest-hit areas of Indonesia’s capital have subsided more than 16 feet due to illegal wells, diminishing groundwater, and a rising sea level. Many billions will be spent moving an entire city. In the United States, insurance issues have become obvious problems. Do you think you have privacy in your car? Think again, and not only that, insurance companies are using driving data to set premiums. Uh oh. In Florida, several high-rise condo projects (with units for sale) are sitting as insurance companies have dramatically hiked their hurricane coverage costs so some projects are renewing at 50-60 percent coverage only, which makes the units unable to be financed. I’m told we would have to review each one as an exception, and it would probably depend on the loan to value. SFRs are one thing when it comes to un-insurability, but when entire condo projects have units at risk, what are folks to do? This is not up to the individual condo owners as it’s covered in the master condo policy, not an individual HOA policy. (Found here, this week’s podcasts are sponsored by Essex Mortgage. Essex specializes in providing exceptional mortgage subservicing solutions tailored to meet your specific needs. Looking to capitalize on your excess servicing strip? Check out Essex’s servicing offerings today! Hear an interview with Jeremy Potter on if home ownership is still part of the American Dream.)

Lender and Broker Products, Software, and Services

Just like Billy Joel, Optimal Blue is in a New York state of mind as we gear up for MBA’s Secondary and Capital Markets Conference. We’re proud to be a gold sponsor of the largest gathering of secondary and capital markets professionals, and we look forward to seeing you there. Once again, this year, we’ll be set up for personalized meetings at Carmine’s Italian Restaurant, just around the corner from the event. This is a great opportunity to step outside, get some fresh air, and check in with our experts on your 2024 goals. And since no trip to the Big Apple would be complete without a little fun, be sure to join our happy hour at Blue Midtown on May 20 to grab a drink, network, and unwind after a day of learning. Schedule a meeting with the Optimal Blue team and RSVP for our happy hour today!

Equity Prime Mortgage (EPM) experiences success with OptiFunder’s Warehouse Management System for optimized funding decisions and workflow automations. “We leverage several warehouse lenders, investors, and technologies to ensure everyone gets impressive cost-saving benefits.” said Eddy Perez, CEO & Founder of EPM. “OptiFunder is a natural addition to our tech stack because it allows us to transfer between several warehouse lines, customize our warehouse capacity management, automate manual tasks from wire checks to purchase advice reconciliation. And we’re seeing significant savings in our warehouse expense.” OptiFunder offers a consultative approach, process review, multiple LOS and warehouse integrations, and a highly configurable system to automate and optimize the entire mortgage lending process. Compare your actual warehouse lending costs versus the cost savings realized through OptiFunder by scheduling a demo. Sign up for OptiFunder’s Monthly Warehouse Insights, out the second Tuesday of the month.

The key to winning borrowers in 2024? Pairing human-led support with leading technology: Download Maxwell’s free eBook to learn how. Nearly 70% of millennial and Gen Z buyers report having “some,” “very little,” or “no” knowledge about the mortgage process, and a third find the process to be confusing. The good news? Buyer illiteracy creates a massive opportunity for lenders prepared to step up. Created in partnership with ACUMA, Maxwell’s newest eBook will teach you how to provide expertise and resources to home buyers early and often, creating a lasting bond that translates into long-term business. Learn how to select technology that wows buyers, ways to balance human-led support with a borrower experience, and more. Click here to download Finding Balance: How to Pair Mortgage Technology with Human Support to Drive Homeownership in Your Community.

“Truv offers income and employment verification through Fannie Mae's DU validation service. We're thrilled to announce that Truv is now an authorized report supplier for mortgage lenders using Fannie Mae's Desktop Underwriter® (DU®) validation service. With Truv, lenders can lower costs by up to 80%, reduce risk of fraud and buybacks by leveraging real-time data directly from the source, and accelerate growth by increasing pull-through rates and closing loans faster. Contact our team for a demo today to start saving. Learn more.”

STRATMOR Automation Survey

In today’s market, borrower experience matters most. Lenders: If you’re considering updating or changing your automation capabilities to meet the needs of today’s borrowers, STRATMOR Group’s Technology Insight® Study (TIS) can help. It is the only independent study in the industry that gathers data on how lenders feel about their experiences with the systems and the vendor services and support available in the mortgage market today. The Lender Intelligence TIS Survey is now open. Participating lenders receive a summary report for each survey completed. The report includes comprehensive mortgage systems data, analyzed and quantified by STRATMOR’s team of data experts. Complete the survey today. For more information on the Technology Insight® Study, please email the Technology Insight® Study team.

Bank Mergers

Mergers and acquisitions are not confined to independent mortgage banks and vendors. Depository (commercial) banks do it as well, whether on the Mainland or in The Islands.

Hope Bancorp, Inc. (NASDAQ: HOPE), the holding company of Bank of Hope, and Territorial Bancorp Inc. (“Territorial”) (NASDAQ: TBNK), the stock holding company of Territorial Savings Bank, announced the signing of a definitive merger agreement expected to create the largest regional bank catering to multi-ethnic customers across the continental United States and the Hawaiian Islands.

“As of December 31, 2023, Territorial had total assets of $2.24 billion, total loans of $1.31 billion, and total deposits of $1.64 billion. Territorial Savings Bank, a state-chartered savings bank, originally chartered in 1921 by the Territory of Hawai‘i, conducts business from its headquarters in Honolulu, Hawai‘i, and operates 28 branches in the state.

“Hope Bancorp intends to preserve the 100-plus year legacy of the Territorial Savings Bank brand name, culture, and commitment to local communities. The legacy Territorial franchise in Hawai‘i will continue to do business under the Territorial Savings Bank brand, as a trade name of Bank of Hope.”

Specifically mentioned as one of the strategic highlights of the proposed transaction is home loans. “Adds stable, low-cost core deposit base to the combined company and accelerates diversification of the combined company’s loan mix through the addition of a residential mortgage portfolio with excellent asset quality. The combined footprint expands to include attractive Hawai‘i market with large Asian American and Pacific Islander communities.

Webinars, Training, and Events This Week

One place for longer term conference planning is to start is here, and click on “Conference List” for in-person events in the future. There’s only a week left in April, and May begins next week already, and vendors and lenders are taking a critical look at travel & entertainment budgets.

Today at 10AM PT join Kristin Messerli, Robbie Chrisman, and The Mortgage Collaborative for the latest episode of Mortgages with Millennials as they chat with industry experts Christy Beck of Caruso Homes/the Raleigh-Wake County Home Builders Association as well as Skye Laudari of Crib Equity about making home ownership more affordable, especially for first-time buyers. Topics will include challenges home builders face in building an ”affordable” product, expanding accessibility to home ownership, and some creative products designed to meet the needs of the next generation of homeowners. Register here; sponsored by TMC.

Looking for more in-depth commentary on weekly mortgage news? Register here for "Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT join Robbie Chrisman and Justin Demola for a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Tomorrow’s features Joe Zeibert, Vice President, Mortgage and Capital Markets, FICO.

Artificial Intelligence (AI) is already changing the way the mortgage industry operates, and companies across the country are launching innovative products and discussing ideas that will impact our business practices for the better. Join MBA and MISMO for the one-day event, Artificial Intelligence & Mortgage: The Art of the Possible, on June 3 in San Francisco. There are dozens of speakers, including Jason Bressler, EVP and Chief Technology Officer, United Wholesale Mortgage, Keith Canter, CEO of First Community Mortgage, Josh Friend, CEO and Founder of Insellerate, Amy Gromowski, Executive Science and Analytics, CoreLogic… Don't miss this opportunity to connect with thought leaders and learn about some of the latest technologies in AI. Early Bird Registration ends on May 3.

Spring homebuying season is here and condos are a growing opportunity. Register for Freddie Mac’s webinar on Wednesday, May 1st, 10:00 AM - 11:00 AM and hear from a panel of industry experts on how you can advance condo lending and make home possible. During the webinar, speakers will discuss: the state of the condo market, opportunities for longstanding challenges and process and technology best practices to speed up underwriting.

Did you know that qualified borrowers may be able to use a reverse mortgage to purchase a home? It’s a great tool that many lenders don’t know they can leverage for a purchase. Join Mark Reeve, VP of Plaza Home Mortgage Reverse Mortgage Division, Thursday, May 2nd, 11:00 AM - 12:00 PM PDT. where he will share with you everything you need to know to help your clients use a Plaza Reverse Mortgage to purchase a home.

Friday the 3rd is the next episode of The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT, 3PM ET, in “The Rundown”.

Capital Markets

Obviously Fannie Mae is a key component of the capital markets for lenders, and the company reported first quarter earnings this morning: $4.3 billion net income with its net worth reaching $82.0 billion as of March 31, 2024. “Net income increased $377 million in the first quarter of 2024 compared with the fourth quarter of 2023, primarily driven by a shift to fair value gains and a shift to a benefit for credit losses, partially offset by a decrease in net interest income.”

As mentioned yesterday, highlights this week from a market-moving perspective are Friday’s jobs report and tomorrow’s Fed (non) decision. The jobs report is expected to show that American employers continue to add jobs at a strong rate in the month of April, while average hourly earnings growth moderated to the slowest pace since mid-2021.

On Wednesday, the Federal Open Market Committee is widely expected to note that the first quarter's economic data fell short of justifying interest rate cuts. The wording of the press release holds weight, particularly if it mentions inflation risks leaning towards future rate hikes. Additionally, the Fed is likely to outline plans for altering balance sheet run-off following one of their next few meetings.

The Fed injected trillions of dollars into the financial system from 2020 to 2022 throughout and in the wake of the pandemic. In mid-2022, the central bank began reducing the size of its balance sheet to reverse this stimulus, which remains an ongoing process. Each month, the Fed accepts repayments of up to $60 billion in Treasuries and up to $35 billion in mortgage-backed securities (MBS), effectively withdrawing cash from the financial system and the economy. The Fed is expected to conclude balance sheet reduction by late 2024 or early 2025.

Today’s economic calendar is under way with the Employment Cost Index for Q1 (+1.2 percent, stronger than expected). Later today brings Redbook same store sales for the week ending April 27, February house price indices from Case-Shiller and FHFA, Chicago PMI for April, consumer confidence for April, and Dallas Fed Texas services. We begin Tuesday with Agency MBS prices worse .125-.250 from Monday evening, the 10-year yielding 4.66 after closing yesterday at 4.61 percent, and the 2-year at 5.01 after the strong ECI number.

Employment

A mid-sized, Mid-West lender is looking for a Wholesale Underwriting Manager to join its leadership team. As a key player in a growing organization, you'll be responsible for overseeing and elevating the wholesale underwriting process. If you’re looking for a role with a seat at the table and the ability to make a difference, this position may be for you! Remote applicants will be considered. Interested parties should contact Chrisman LLC’s Anjelica Nixt to forward your resume.

“Looking for a change? At MegaStar Financial, we value your success! As a boutique lender, we work only for Loan Officers who take a complete and qualified application so we can provide personalized service. Our technology eliminates the use of multiple systems. Our efficiencies allow us to take your application through closing so you can move on to the next sale. We touch files once, and our processors also close. A study we participated in showed we outproduce our peers 2 to 1 in units per support employee. Top commissions paid because we manage expenses. We have an impressive 97% employee retention rate for those with a tenure of 3+ years. Because of our Loan Officers’ commitment to quality, we offer profit sharing and an opportunity to earn equity stock. Join MegaStar and become a valued member of a thriving company that welcomes your input and nurtures your professional growth! Contact us.