Ahead of the upcoming MBA conference in Manhattan, as a reminder, we have five senses. All of them are important, with perhaps smell being the most under-rated. Hotel chains are very cognizant of this, and here’s how hotels smell their best. It is also worth a reminder that secondary and capital markets folks are not fans of rate volatility. They are fans of environments where requests for extensions or renegotiations are not filling their inboxes… or hitting their P&L. Cap markets personnel use generic mortgage-backed securities to hedge pipelines. Would it be a mortgage-backed security without mortgages backing it? Would it be olive oil without olives, or canola oil without canola? (This question doesn’t work with baby oil.) Would it be a Swiss Army Knife without a blade. Thank you to Indiana’s Carol K. who sent the latest invention: A Swiss Army Knife without the knife so that people can travel with it on a plane. What’ll they think of next? Luggage with wheels? Yowza! (Found here, this week’s podcasts are sponsored by LoanCare. The mortgage subservicer is known for delivering superior customer experience through personalization and convenience. Its award-winning portfolio management tool, LoanCare Analytics, supports MSR investors with a focus on customer engagement, liquidity, and credit risk. Hear an interview with Vesta’s Mike Yu on current technology capabilities and adoption within the mortgage industry.)

Lender and Broker Software, Products, and Services

Why does Dominos have a better digital experience ordering a pizza than most lenders have for a mortgage? I wish there was a punchline but there's only a solution: LiteSpeed by LenderLogix. Enjoy your mortgage process even more than your pizza.

“Crafted with today's real estate investors in mind, our Bayview Non-Agency Loan Product Suite sets the industry standard with its innovative range of offerings. We offer both Agency and Non-Agency products, this suite is tailored to meet the unique needs of your real estate investors. Learn more about these exciting products by meeting with us at the upcoming New York MBA Secondary Conference later this month!”

Take your accounting department from “Cost Center” to Revenue Generator” with Loan Vision & LV-PAM. Loan Vision customers report a 10 percent reduction in loan fallout, 30 percent+ decrease in days to close the books, and 20 percent+ reduction in accounting headcount. Interested in learning how Loan Vision can reduce internal costs and help you gain a competitive edge? Contact Carl Wooloff to schedule a call today.

“LoanStream has Extended Specials to help you close more! Includes specials on Prime, Non-QM and Closed End Seconds now through May 31st, 2024. May 2024 Specials LoanStream Wholesale - Wholesale Mortgage Lending includes 25 BPS price improvement on FHA/VA loans 620+ FICO (excludes DPA and CalHFA) and a 25 BPS price improvement on all Non-QM loans (excluding our 'Select' credit grade). We're not done: Get another 25 BPS price improvement on Closed-End Seconds. Restrictions apply: Contact your LoanStream Account Executive to learn more. Specials are valid for loans locked 5/1/2024 through 5/31/2024. Offers subject to change at any time, terms and conditions apply. Visit www.LoanStreamWholesale.com for more information and our May specials page.”

Does it feel like your current point-of-sale vendor has lost focus on mortgage? As a mortgage-specialized partner, Maxwell is committed to giving lenders a competitive advantage in a changing mortgage market. With Maxwell Point of Sale, lenders can tailor workflows to fit the unique needs of their organization, so back-end teams can work quickly without costly interruptions. Compared to a top competitor, Maxwell Point of Sale averages a 5.9 percent higher pull-through rate from rate-lock to close. For the average lender using Maxwell POS, this equates to $42MM in additional loan volume. Schedule a call with the team to learn how Maxwell Point of Sale can start working for you, your borrowers, and your lending team quickly.

Sponsored Webinars on Product Offerings

On May 1, Fannie Mae, Freddie Mac and the FHFA announced new requirements for reconsideration of value (ROV) that go into effect Aug. 29, 2024. Attend a complimentary webinar hosted by ICE to hear directly from Fannie Mae and Freddie Mac about their implementation of these requirements and have the opportunity to ask questions. The webinar, GSE new requirements on ROVs: What you need to know, will take place Thursday, May 16, from 11 a.m. – 12 p.m. ET. Save your seat today.

At Spring EQ, second mortgage TPO is the primary focus. Register for its monthly webinar tomorrow, May 14th at 1:00pm ET! This month, Spring EQ’s Capital Markets team joins the conversation and will provide insights on the current market conditions and opportunities to grow your second mortgage business. The need for home equity solutions is surging among borrowers, so make sure your business is prepared to meet this demand by partnering with the experts in home equity at Spring EQ. Whether you’re a correspondent seller looking for a new partner, or a wholesale broker in search of an expansive suite of home equity products, Spring EQ can help. Interested in a correspondent partnership? Click here. Interested in a wholesale partnership? Click here. Second mortgages are Spring EQ’s specialty, so think of them first for all your seconds.

Are you tired of soaring costs for income and employment verifications? You're not alone! Join Truv's webinar on May 23 at 1pm CT: “There is a Better Way: Better product. Better experience. Less cost.” It features Justin Venhousen, COO of Compass Mortgage, and Richard Grieser, VP Marketing at Truv. Faced with mounting verification expenses, Justin embarked on a quest for a cost-effective solution without compromising data quality. Discover how Truv empowered Compass Mortgage to slash verification costs by up to 60 percent, offering a modern, efficient approach to income and employment verification. Register now.

Join us for the "Are You Smarter than an Underwriter?" webinar, co-hosted by AFR Wholesale® and Enact, featuring industry expert Mary Kay Scully. Dive into the Fannie Mae and Freddie Mac guidelines and test your knowledge this Thursday, May 16th at 2 PM EDT. Don't miss out on gaining valuable insights and an exclusive coupon only for participants. Space is limited—register now to secure your spot! For more information, contact us at sales@afrwholesale.com or 1-800-375-6071, or visit our website at www.afrwholesale.com. Ignite your learning, elevate your skills, and join us for an unforgettable webinar experience!

STRATMOR on Customer Service

In a high-rate mortgage environment, having a unique company culture is a way to stand out from the crowd. However, simply being nice to your borrowers will not set you apart. You need to be different… unexpectedly and delightfully different. In his latest Customer Experience Tip, STRATMOR Group Customer Experience Director Mike Seminari uses a recent family trip to Disneyland to show what “Disney magic” can teach us about curating unforgettable experiences for our mortgage borrowers. Read “CX Lessons from Disneyland” for tips on how to begin creating a Disney-level culture in your organization today.

Freddie and Fannie Updates

Non-controversial, or raising eyebrows, Freddie and Fannie are always up to something. For example, last week many denounced Freddie’s announcement about buying HELOCs as being “the illusion of it being something that increases access and helps the American consumer when that need is already being well served.”

Ed Groshans with Compass Point Research and Trading suggests, “To assess the risk of Freddie Mac’s (FMCC- not covered) home equity loan (HEL) product, we need to know several key data points. How much equity does a homeowner have access to? For homeowners with significant home equity (i.e., $30-50k), how many carry high-cost consumer debts? We have not been able to pull these data points together. Experian did provide some good data that provides some insight showing that U.S. consumers tend to carry credit card, auto, and personal debts as well as mortgage debt… The Experian data shows that regardless of age, many homeowners likely have other types of consumer debts. The average debt profile combined with a low first-lien mortgage, and increased borrowing costs for other types of consumer debts creates an environment that is favorable to using a GSE-insured HEL product. Interest from the Mortgage Bankers Association indicates that there is likely solid demand for this product. In our assessment, the interest in the product, current economic environment, and structure of interest rates can contribute to a successful launch of Freddie’s HEL product. Our expectation is FHFA will approve the product on or before June 21.”

Freddie Mac’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2024-C announced the area median income (AMI) limits for 2024, effective on May 19, 2024. Sellers will be able to access the AMI data files from the Single-Family news article.

Freddie published an Industry Letter to address Seller/Servicer and industry partner feedback regarding clarifications made in recent Single-Family Seller/Servicer Guide (Guide) Bulletins related to our hazard insurance requirements, specifically around replacement cost value. The Letter announces temporary changes, effective May 8, to the citation of Counterparty Operational Risk Evaluation (CORE) review findings for noncompliance related to a Servicer obtaining replacement cost values for the purposes of determining coverage amount sufficiency.

Federal bank regulatory agencies released a Guide to support Community Banks in managing risks presented by third-party relationships. Community banks engage with third parties to help compete in and respond to an evolving financial services landscape. Third-party relationships present varied risks that community banks are expected to appropriately identify, assess, monitor, and control to ensure that their activities are performed in a safe and sound manner and in compliance with applicable laws and regulations. The guide offers potential considerations, resources, and examples through each stage of the third-party relationship and may be a helpful resource for community banks. While the guide illustrates the principles discussed in the third-party risk management guidance issued by the agencies in June 2023, it is not a substitute for that guidance.

Fred Gooch from Docutech reports, “On May 1, 2024, the Federal Housing Finance Agency released an announcement regarding Enterprise Reconsideration of Value policies. The announcement states: “The Federal Housing Finance Agency (FHFA) today announced that Fannie Mae and Freddie Mac (the Enterprises) published new Reconsideration of Value (ROV) policies after months of collaboration with FHFA and the U.S.... The post Compliance News: FHFA Announces Enterprise Reconsideration of Value Policies appeared first on Compliance.”

Fannie Mae announced new enhancements to its Income Calculator tool that will help mortgage professionals serve the growing number of mortgage applicants in the U.S. who are self-employed and don’t have traditional sources of income. Available now on FannieMae.com, lenders and other loan originators can leverage Fannie Mae's web-based Income Calculator for easy, accurate, and immediate calculation of self-employment income, at no additional cost.

The new web interface provides an additional, free avenue to access Fannie Mae's existing Income Calculator functionality, introduced last year to help lenders streamline their processes and reduce loan defects. Lenders also still have the option to partner with one of Fannie Mae's authorized third-party technology service providers to automate the calculation of self-employment income streams during the underwriting process.

Fannie Mae responding to concerns regarding lenders’ and servicers’ ability to comply with long-standing policy to obtain the replacement cost value following its February Selling Guide and Servicing Guide announcements.

Fannie Mae’s May Servicing Guide update includes changes to clarify the submission requirements for the annual Audited Financial Statement and other forms, and provides other miscellaneous updates.

Community land trusts (CLT) are some of the most effective ways to preserve affordable homeownership. Fannie Mae’s May Selling Guide update recently expanded eligibility for loans financing manufactured homes in CLTs. Learn more about MH financing and shared equity financing.

Fannie Mae updated the Property Data API Review Tool (PDART) to allow lenders to view all Uniform Property Data (UPD) submissions to Property Data API.

Capital Markets

Some days up, some days down… Why did mortgage rates creep a little lower last week? All rates reacted to a slight increase in Federal Reserve interest rate cut expectations, primarily after news that the highly resilient U.S. labor market was cooling down and some “dovish” actions from European central banks. All eyes are on Wednesday's scheduled U.S. retail sales and consumer price index (CPI) reports. Both readings have the potential to move the needle significantly in terms of Federal Reserve interest rate cut expectations.

Last week was very light in terms of economic releases. So light, in fact, that Thursday’s unemployment claims was the first data point of the week to produce any notable market movement. New claims rose by 22k to 231k for the week ending May 4, well above expectations, and the highest number since last August. A continued modest rise in new claims from near historical lows could help to slow wage inflation, furthering the Federal Reserve’s objectives. Friday saw the release of the University of Michigan’s consumer sentiment which showed expectations for future inflation increase from 3.2 to 3.5 percent.

Consumer sentiment possibly points to price fatigue among consumers who continue to feel the strain of rising prices. Despite the decline in consumer sentiment, the report does not necessarily translate directly to consumer spending habits. Put another way, while consumers might not like the current price environment and are willing to express their dissatisfaction, it’s not a foregone conclusion they will pull back spending in response.

This week brings updates on key inflation reports for April, which could impact rate cut odds, starting with PPI tomorrow and CPI on Wednesday, as well as retail sales. Other releases of interest include business inventories, housing-related data, industrial production / capacity utilization, factory orders, and leading indicators. Fed Chair Powell is scheduled to speak tomorrow. Regarding MBS, Class B 48-hours is today, and Class C is Thursday. The week gets off to a quiet start with no economic releases of note, though we will receive some remarks from Fed speakers. We begin the day with Agency MBS prices roughly unchanged from Friday, the 10-year yielding 4.48 after closing last week at 4.50 percent, and the 2-year up at 4.84.

Employment

In the Northwest and California, Banner Bank is searching for Mortgage Loan Officers looking to create lasting Realtor and builder relationships at a bank focused on the market today. Banner has opportunities for lenders looking for local decision making with FHA, VA, USDA, state bond and true Portfolio lending opportunities along with servicing retained Fannie and Freddie loans to assist in client retention. Additional highlighted products cover CRA lending with private label no payment down payment assistance to help assist all borrowers with the right opportunity. Banner is the right fit for an established team, or the individual looking to grow their business and take the next step in their career. Please send resumes to Aaron Miller.

It is nice to leave the industry on your own terms. Congratulations to PrimeLending’s Patti Conley, a personal friend of mine, who has announced her retirement from the industry on May 31 after 15 years at Prime and over 30 in the lending industry! As Senior Vice President of Investor Relations she has had a front-row seat to resi business roller coaster over the years, and now on to new fun and having family time and travel! You’ll be missed.

And congratulations to 45-year industry vet, and Kansas resident, Ruth Stevenson who recently retired from National Bank Holdings Corp. I had the privilege of getting to know Ruth when she was President and Chief Operating Officer of Peoples Bank (Overland Park, KS). After Peoples was purchased by NBH, Ruth moved into a role as NBH Bank's Chief Client Executive, Deposit Operations Executive and was on the board of directors. She managed with a knowledgeable steel fist wrapped in a velvet glove.

Floify announced the appointment of 23-year vet Jason Mapes as head of sales where he will spearhead Floify’s national sales initiatives.