“I used to be indecisive. Now I'm not so sure.” Management teams at lenders and vendors can’t be indecisive in this environment. Who’s going to be right, come Q4 of this year, and Q1 of 2023, which many believe are going to be extremely painful as the purchase market seasonally slows. Are the cuts lenders are making now enough to show warehouse lenders and broker-dealers profitable months and quarters? News continues to hit the tape, including Russia’s first default on debt since 1918. As mentioned in Saturday’s commentary, last week we had the FGMC (First Guarantee) big layoffs/closure of its correspondent and wholesale divisions. There was JPMorgan’s mortgage-related layoffs. That said, what makes headlines these days should be lenders and vendors who aren’t laying people off rather than those that are. How about lenders, servicers, and asset holders watching the Florida (“The Plywood State”) homeowner’s insurance nightmare: FedNat Insurance has said it will cancel 68,200 homeowner insurance policies in Florida at the end of June, just the latest insurer to retreat from “God’s Waiting Room” where we’ve seen powerful storms and pervasive fraud. Managers definitely have their hands full. (Today’s podcast is available here and this week’s is sponsored by Ignite Integration Solutions, Inc., a custom software provider that has created industry leading LOS CORE integrations in addition to a library of Encompass base tools and plug ins, and custom API development with our team of 100% on shore developers to support both Mortgage Lenders and Vendors as clients and partners.)

Lender and TPO Programs, Products, and Services

Julia Child once said, “With enough butter, anything is good,” and believed in the ingredient so much, she used 753 pounds in four seasons of “Baking with Julia.” Regardless of the type of loans you want to originate, equity is the most important ingredient in keeping pipelines full this year, even if your institution specializes in purchase lending. On June 30 at 2 pm ET, join Sales Boomerang’s Alex Kutsishin, Mortgage Coach’s Dave Savage, and NEO Home Loans’ Josh Mettle as they share the recipe to being successful in today's equity-heavy market. This Mortgage Bankers Association-sponsored webinar is open to all MBA members, and non-MBA members can also join the conversation free of charge using code SALESBMRNG100. You don’t have to be Julia Child to cook up wealth-building benefits to lenders and borrowers. We’ve got the recipe and just like The French Chef, we’re sharing it with you. Bon Appetit.

“In conjunction with our $30 billion commitment to advance racial equity, Chase Correspondent Lending created our Community Lending Program (CLP) to support our clients’ dedication to helping underserved customers and communities. Recently, we worked with Intercontinental Exchange, Inc, (ICE) to deliver CLP pricing automatically on eligible loans via their pricing engine. As a result, our mutual clients are now able to see the amount of CLP incentives in real time without ever leaving Encompass Product and Pricing ServicesTM (EPPS). We look forward to working with our clients in using these new tools to collectively serve areas in need.”

Orion Lending has enhanced its cutting edge, proprietary STAR Broker Portal yet again! Approved Broker Partners will now be able to lock your loan in seconds, directly from QuickPricer, without the NEED to upload the 3.2 OR 3.4 FILE! Orion’s commitment to technology is propelled by innovation and the constant drive to provide industry leading tech through their STAR Portal technology! Additionally, New Brokers can get Express Approved – meaning you can start submitting loans by the end of the day. And if that wasn’t enough, New Brokers receive a15 BPS Price Special** on all products!

Loan originators: it’s your last chance to have your voice heard! Take the Loan Originators Survey from MGIC and Loan Officer Hub and share your insights on marketing, working with referral partners and consumers, the trends that impact you the most, and more. From our last survey, we know that learning from your peers is one of the best ways LOs grow and improve: Complete the survey by July 1 and you’ll be the first to receive the full survey report this fall!

“Give your pre-approved borrowers the opportunity to reduce their interest rate risk with a Mortgage Boutique’s new Lock & Shop program with a float-down option and NO UP-FRONT COSTS available on our conventional and government fixed rate products. Also, make sure you take a look at our Home Opportunity Loan (HOL) which caters to ITIN borrowers. Available on primary, second homes, and investment properties, it allows for LTVs up to 85% on primary residences and up to 80% for borrowers that do not have a credit score at very competitive rates. Lastly, COMING SOON is our "FCM First" Community Lending 1st with a DPA 2nd allowing for CLTVs to 105%. State and income restrictions apply. Watch for our roll-out of this exciting new program in the days ahead! Contact your AE for details on these programs and others and partner with us.”

Mid America Rebranding to Click n’ Close

The drive toward a complete digital mortgage process gains traction every year. However, did you know Mid America CEO, Jeff Bode was a tech pioneer before it was cool? He forged the company’s path by creating its own operating system and LOS and was one of the first to adopt eNotes and e-close technology. Today marks the company’s official rebrand to Click n’ Close following the sale of the majority of its retail lending operations to Houston-based Legend Lending. Click n’ Close will retain retail operations related to its reverse mortgage and Native American lending business and focus on delivering innovative down payment assistance (DPA) and adjustable-rate mortgage (ARM) products through its third-party originator (TPO) channels. Click n’ Close will focus on technology enhancements and the delivery of specialized product offerings to address today’s housing market challenges. Learn more here.

Freddie and Fannie Continued Updates

Don’t forget that on June 14, Fannie Mae and Freddie Mac (the “Enterprises") both announced an upfront fee for the guarantee each Enterprise (Fannie Mae and Freddie Mac) provides covering the collateral of the other Enterprise in commingled securities effective July 1. The Enterprises instituted this fee to accommodate the increased capital requirements associated with this activity as proposed and finalized in the 2020 Enterprise Regulatory Capital Framework. And we had this statement from FHFA Director Sandra L. Thompson on FHFA's ongoing commitment to UMBS.

The Urban Institute was quick to point out that, “Although the fee makes sense given the capital charge, it may pose some risk to the UMBS over the long term. By eliminating the fungibility of the GSEs’ commingled securities, investors may begin to pay more for Fannie Mae’s security, again forcing Freddie Mac to pay lenders a premium to make up for the weaker investor demand for their security… The FHFA has taken steps to align the prepayment speeds of the GSEs’ two securities, which has mitigated how differently investors value them. But the degree to which investors are folding Freddie Mac MBS into Fannie Mae re-securitizations at a much higher rate than the reverse signals that many market participants still consider Freddie Mac’s security the weaker of the two securities.”

Fannie Mae has issued Lender Letter LL-2022-02 to provide requirements that apply to loans impacted by the Equifax coding issue.

Wells Fargo Funding (correspondent) will discontinue Prior Approval underwriting option on conventional Conforming Loans, effective after July 1, 2022. Note: Conforming cooperatives (co-ops) will also be discontinued. Change does not impact Non-Conforming Prior Approval program or any other Wells Fargo Funding programs. View Wells Fargo Funding Newsflash C22-024 for additional details, lock, and “purchase by” dates.

Pennymac posted information regarding Fannie Mae and Freddie Mac Cryptocurrency & Foreign Asset Requirements when Used as Source of Funds for Closing and Reserves in Announcement 22-39.

FAMC/Citizens Correspondent issued information on Conventional Home Possible 2022 AMI limits. See FAMC/Citizens Correspondent National Bulletin 2022-09 for additional information and all lock, delivery and purchase by dates, if required.

Conventional Conforming product updates were announced in FAMC/Citizens Correspondent National Bulletin 2022-10. Updates include information regarding DU limited cash-out refinances, Group Homes, LPA accessory dwelling unit (ADU) eligibility, Ineligible property types, Comparable sales, Zoning, and LPA desktop appraisals.

Fannie Mae recently published guide updates announcing changes to several topics, including but not limited to virtual currency (cryptocurrencies) and Community Seconds® providers. See AmeriHome Correspondent Announcement 20220605-CL for details. (AmeriHome Correspondent General Announcement 20220506-CL summarizes previously published changes made during May, additional changes made with the announcement, and recent Agency and regulatory news.)

PRMG Product Update 22-28 includes updated QC Audit verbiage on all products, clarification on agency requirements specific to Agency Freddie Mac, Agency Texas Home Equity, and Home Possible, requirement of Certificate of Accuracy for documentation not in English, and completion of the PRMG PUD/Condo Warranty Form.

Capital Markets

We saw a bit of a rally in the bond market last week, which closed with a reassuring reading on inflation (a decrease in five-year inflation expectations to 3.1 percent from 3.3 percent), and comments from the Fed's James Bullard who suggested recession fears are overbaked. Traders are now attempting to price out any Fed action on rates beyond the December meeting, but are still struggling with the question of what comes next if an economic downturn takes hold. Expectations are still a lock for a 75-basis point hike at the next meeting.

Friday included an above-consensus New Home Sales report for May while the final reading of the University of Michigan Consumer Sentiment survey for June dipped to a fresh record low. New Home Sales rose 10.7 percent month-over-month to a seasonally adjusted annual pace of 696k units, though still down over 5 percent on a year-over-year basis. Housing is now a bit of a drag on the economy. The University of Michigan Consumer Sentiment index slipped in June to register down a whopping 41 percent on a year-over-year basis. Inflation expectations did tick lower.

This week brings the half-way mark for the year including quarter-/month-end on Thursday with Friday seeing an early close ahead of Independence Day. The U.S. Treasury will conduct its month-end coupon auctions for $133 billion and we have a full slate of scheduled economic releases. Fedspeak is on the lighter side, though Fed Chair Powell will participate in an ECB Forum discussion with ECB’s Lagarde and BoE’s Bailey on Wednesday.

Today’s busy calendar is under way with the always volatile durable goods orders for May (+.7 percent both headline and ex-transportation, so businesses are still spending). (Why always volatile? Because one big airline or ship order, or an order being cancelled, will make the number jump.) Later this morning brings the Pending Home Sales Index for May, Dallas Fed manufacturing, and a Treasury auction of $46 billion 2-year notes and $47 billion 5-year notes. The NY Fed Desk will purchase up to $719 million UMBS30 4.5 percent and 5 percent before releasing a new schedule tomorrow afternoon that covers the June 29 to July 14 period which is expected to total $6.8 billion. We begin the week with Agency MBS prices worse .250 and the 10-year yielding 3.20 after closing last week at 3.13 percent.

Careers

“PowerTPO is expanding its leadership team! Marla Guillaume has joined PowerTPO as Managing Director, overseeing Business Development. Additionally, Jason Dumke and Jeff Lochmandy, two veteran Sales Leaders, bring their expertise to PowerTPO. If you are a seasoned and proven top producer and interested in joining the PowerTPO Team, contact Marla Guillaume. As a Direct Seller Servicer, PowerTPO has a national presence offering a variety of competitive loan products. We’re an innovative multi-channel fintech leader, providing concierge personal resources to each account. Power Up and become a PowerTPO partner today. People, Process and Partners equals Power!”

“GHMC is continuing to grow our sales force and is currently hiring professional, Wholesale Account Executives in the following states: Arizona, California, Florida, Illinois, Maryland, Michigan, Missouri, Nevada, North Carolina, Texas, Wisconsin. To inquire contact Rex Hagood. To become an approved Lending Partner, please visit us here. Top reasons you should be partnering with Guaranty Home Mortgage Corporation (GHMC): Our new user-friendly, high-tech, high-touch GConnectTPO Portal is here! Price scenarios, lock loans and manage your pipeline with ease. GConnect now allows simultaneous DUAL AUS runs, saving time, reducing documentation, and moving your loans to closing faster. Announcing our new Lock & Shop Program including extended locks! Lock & Shop offers a new and easy way to lock rates now while still shopping for your dream home. Terms and Conditions apply. Coming in July! Manufactured Homes Contact your Account Executive today for more information on our all products!”

Are you a Branch Manager or Loan Officer looking to elevate your career? How does your current employer stack up against these questions: 1) Is the company in a solid financial position? 2) Do you get support at every level? 3) Do they offer a wide array of products? 4) Does the culture inspire you? At Academy Mortgage, the answer to ALL these questions is “yes.” Academy is not only a financial steward in the industry, but they are thriving. Academy provides operational, marketing, and sales support at the local level and unrivaled support companywide. The product portfolio at Academy is ever-growing with new products added on a weekly basis. And a true differentiator in the industry is the culture at Academy, which is built on a vision to Inspire Hope, Deliver Dreams, and Build Prosperity. Take the next step to accelerate your career with a rock-solid company: Contact EVP of Growth Patrick Welberg today!

We’re thrilled to announce the launch of PACRES Wholesale, a division of Pacific Residential Mortgage, LLC (PACRES). “The timing is right to create and launch our TPO channels of business,” said Matt Stashin, CEO and founding partner of PACRES. “I could not be more enthusiastic and optimistic about our growth and opportunities in the wholesale sector of our growing business,” said Matt. “Today’s market is creating opportunities for top talent to seek a progressive, people first, company culture,” said Erik Anderson, Director of TPO. “That’s why I could not be more excited to announce the addition of Pam Davis as head of PACRES Wholesale Operations. And with our July 5th launch date approaching quickly, we’re currently onboarding brokers by invitation as foundational partners.” Want to join Pam and join the PAC? Contact Erik Anderson to learn more.