“What do you get when you cross the Atlantic Ocean with the Titanic? Halfway.” We’ve crossed the halfway point of 2022, and where’s everyone’s attention? As always, lenders offer product, service, and price. Cheap HELOCs, 2nds, down payment assistance programs, and bond programs are in vogue, and any time the possibility of an insurance cut for FHA-backed loans makes it into the Wall Street Journal, it’s become mainstream thinking. Lenders have ramped up training existing staff: why pay a huge signing bonus to someone new when boosting existing LO productivity by a loan or two a month does wonders across the sales staff? Prices (and rates) are a function of the economy, and although inflation is on everyone’s watch list, jobs are still important. The U.S. jobs report for June is expected to show 250K jobs were added to the economy during the month and the unemployment rate held steady at 3.6%. The ongoing strength of labor demand is anticipated to translate into another month of solid wage growth as employees would like nothing better than to have the rate of change in their pay beat the inflation rate. (Today’s podcast is available here and this week’s is sponsored by Real Estate Connection (REC), a boutique real estate brokerage that acts as a centralized and organized, fully-managed real estate fulfillment service, connecting buyers with local qualified Real Estate Agents and walking them through the entire home purchase and selling process with the lender partner.)

Lender and Broker Products, Software, and Services

“Symmetry Lending has just made some incredible enhancements to our Concurrent, Stand-Alone, and Post-Close HELOCs! We’re lowering the minimum credit score to 700 and raising the maximum line size to $500,000 on Stand-Alone HELOCs! Our Concurrent and Post-Close HELOCs now offer maximums of $500,000 with 89.99% CLTV and $750,000 with 80% CLTV or less. And with 30-year mortgage rates at more than 5%, you can help your clients avoid rising monthly payments and gain financial stability by offering a 10-year interest-only payment using a Symmetry Concurrent HELOC instead of a Jumbo loan! Visit Symmetry’s Credit & Income Guide and Pricing Guide or call your Area Manager to learn how the Symmetry HELOC can be your clients’ lending solution!”

“The market is shifting. Businesses are changing focus. They’re concerned about their bottom line… Who’s concerned about yours? Planet Home Lending Correspondent believes genuine partnership ensures mutual success. That’s why we’re committed to underwriting in 2022, 2023, and beyond. We don’t just underwrite Conventional. We handle FHA, VA, USDA, manufactured homes, and renovation, and we do it all with speed, great pricing, and the best support in the industry. Join Planet Home Lending at the Western Secondary Market Conference, July 25-27, at the Waldorf Astoria Monarch Beach Resort & Club. Just 30 minutes with Regional Sales Managers: Jennifer Caldwell (909-225-8444), Kimberley Caffrey (425-652-0029) and Tiffany Ta (714-376-3214) can support your bottom line all year long. Will we see you there?

New Data: Millennials & Gen Zs are eager to buy homes despite a challenging market, with 78% seeking personal service from lenders. As these generations enter the mortgage market as first-time buyers, they represent a massive opportunity for lenders to boost loan volume. To gain a deeper understanding, mortgage solutions provider Maxwell surveyed more than 1,000 millennial and Gen Z home buyers about their plans, sentiments on the mortgage process, and preferences in a lender. These results, along with tips on how you can reach this demographic, are available in Maxwell’s newest free eBook. There, you’ll find the up-to-date, sometimes surprising insight you need to capitalize on home-buying interest in today’s challenging market and earn the business of the largest borrower cohort. For the results of the survey and actionable advice, click here to download Maxwell’s 1H 2022 Millennial & Gen Z Borrower Sentiment Report for free today.

Join AmeriHome Mortgage for A Conversation About the Economy and Financial Literacy Tools with Freddie Mac on Wednesday, July 13th from 10 - 11 am PDT. Join Freddie Mac experts, Leonard Kiefer, Deputy Chief Economist and Sandra Heidinger, Affordable Lending Manager to explore insights, solutions, and resources. Discover how to advance homeownership and overcome borrower challenges with the help of CreditSmart®, a Freddie Mac suite of financial capability and homebuyer education resources. Be part of the discussion and have the opportunity to interact within their live Q&A session! Register for the webinar here! AmeriHome is now offering Western Alliance Bank warehouse lines to its clients, both Delegated and Non-Delegated, for both Agency and Non-Agency business. In addition, Western Alliance Treasury Management and Depository services are now available with dedicated customer service from trained mortgage specialists. Western Alliance Bank, Member FDIC. Reach out to CLsales@amerihome.com for more information about what AmeriHome can do for you!

Natural Disaster News

Disasters, whether natural or manmade, coast to coast and beyond, can happen with no notice whatsoever or with plenty of warning. Lenders, investors, servicers, and insurance companies take their cue from FEMA’s declared disasters. And it is expensive stuff. For example, FEMA estimates that just one inch of water can cause $25,000 in damage to a home.

Homeowners in disaster-prone areas are paying a heftier price of insurance every year, especially along the Gulf Coast (hurricane season is approaching) or out West (wildfires and earthquakes). How much the government is involved varies. But remember that five federal regulatory agencies jointly issued revised questions and answers (Q&As) regarding federal flood insurance law and the agencies’ implementing regulations replacing those originally published by the agencies in 2009 and 2011 and consolidate Q&As proposed by the agencies in 2020 and 2021. The Q&As cover a broad range of technical flood insurance topics, including the escrow of flood insurance premiums, the detached structure exemption to the flood insurance purchase requirement, force placement procedures, and private flood insurance. More information is available in the FDIC Press Release - Interagency Q&As Regarding Flood Insurance.

FEMA continues to rezone flood areas on an ongoing basis. But lenders and servicers know that there are many different scenarios that can cause flooding to a structure: a landslide, a dam or levee miles away could burst or overflow, or a neighborhoods’ drainage system could become blocked. New flood maps are typically issued twice monthly, with anywhere from five to 10 counties receiving mapping revisions at a time.

On June 30, FEMA declared 3 counties in Montana as disaster areas. First Community Mortgage will require an additional property inspection, details are available in FCM Montana Disaster Announcement DA-22-5.

On 6/30/2022, with Amendment No. 1 to DR-4655, FEMA declared federal disaster aid with individual assistance to 3 Montana counties. For AmeriHome inspection requirements, view AmeriHome Disaster Announcement 20220610-CL – Montana Flooding.

Due to severe storms, tornadoes and flooding in Oklahoma, FEMA declared 7 counties as disaster areas on June 29th. Property inspection requirements are posted in First Community Mortgage Oklahoma Disaster Announcement DA-22-4.

The U.S. banking regulators jointly issued final Flood Insurance Questions & Answers (Q&As) after almost two years after their proposal. The final Q&As reflect significant changes to the flood requirement made over recent years and provide flood compliance guidance to the financial services industry. View the Compliance Bulletin posted by OSC Insurance Services that provides summaries of any new Q&A and all of the force placement Q&As.

The NFIP was created in 1968 to provide flood insurance to people who live in areas with the greatest risk of flooding, otherwise known as SFHAs, the “100-year floodplain” or the “regulatory floodplain.” Most communities across the U.S. (more than 22,000 of them) participate in the NFIP. Therefore, as long as the communities where your properties are located participate in the NFIP, any homeowner can purchase federal flood insurance. In the rare instance that a specific community does not participate in the program, a private flood insurance policy can be acquired. Regardless of whether or not you have properties in a SFHA, from a cost/benefit analysis, some level of protection pays for itself in the case of a flood emergency.

Capital Markets

Bad news = rates down. The start of the new quarter didn’t bring much optimism, causing Treasury yields to tumble and MBS prices to rally at the end of the week last week. Economic data was mostly disappointing on Friday, with the ISM Manufacturing Index for June prompting another downward revision to the Q2 GDPNow forecast from the Atlanta Fed. The central bank now expects that the economy contracted 2.1 percent in Q2, down from the previous forecast for a 1.0 percent contraction. If that figure is true, it would add to the recession argument. (Recessions are more complicated than merely two quarters of negative GDP.) Despite this, the markets still expect the Fed to continue to raise the Fed Funds target 75-basis points at the end of the month.

Sure enough, economic data supports what many consumers have been feeling for quite some time: growth concerns are justified. Real personal spending declined 0.4 percent in May as prices increased another 0.6 percent during the month. Saving has declined and eventually, some consumers will have to start reigning in their spending. The expectations component of the consumer price index fell to its lowest point in the last nine years signaling a shift in consumer mindset.

Consumer spending will likely remain resilient until after the busy summer travel season after which a slowdown is expected. Goods spending has already fallen to its lowest levels since the start of the pandemic at 39.1 percent of total spending. This should help to alleviate supply chain issues at many retailers although there is already talk of potential oversupply that could lead to steep discounting. While manufacturers still have a backlog to work through, the higher interest rate environment is not favorable for capex (capital expenditures) and new orders for durable goods are slowing. Home prices are proving resilient, which is good news for homeowners, but bad news for the Fed. With housing a key driver of inflation, the central bank has to turn down the heat on demand.

This holiday-shortened week is headlined by the June payrolls report on Friday, though we do receive the minutes of the June 14/15 policy meeting on Wednesday. Also on the docket are factory orders, nonmanufacturing PMIs, and the usual job market indicators ahead of payrolls including JOLTS job openings and Challenger job cuts. Today’s calendar contains just one data point, with May factory orders. The NY Fed will then purchase up to $922 million UMBS30 4 percent through 5 percent. Yes, its Tuesday already and we start it with Agency MBS prices better about .125 and the 10-year yielding 2.85 after closing last week at 2.89 percent.

Loan Originator Employment

Benjamin Franklin said, “When you’re finished changing, you’re finished.” What are you doing to keep up with 2022's changes? If you haven't already, we recommend taking a peek at Canopy Mortgage: A better business model that provides Mortgage Loan Officers with ultimate control, unmatched pricing and a proprietary Loan Origination System that promotes highly efficient loan processes and faster closings! Finally, you can give your clients better pricing AND you can make more on your deals. Canopy provides a sustainable mortgage business model that’s good for everyone. Interested in learning more? Reach out to Josh Neumarker at Canopy Mortgage (888-696-9076).

After National Bank Holdings Corporation announced an agreement to acquire Bank of Jackson Hole (with operations in Jackson Hole, WY and Boise, ID, it has been full speed ahead. There are advantages in being an originator for a national bank, and NBH is looking for growth-oriented originators in its footprint states which include CO, MO, KS, TX, UT, NM, ID, and WY. Any loan originators interested in a career with NBH, please send me a confidential resume for forwarding.

In the Northwest, Banner Bank is searching for a Builder Direct Mortgage Loan Officer as well as Mortgage Loan Officers. These are true portfolio lending opportunities with local decision making and direct to Fannie and Freddie loans with retained servicing to assist in client retention and marketing opportunities. Additional highlighted products cover CRA lending with private label no payment down payment assistance to help assist all borrowers with the right opportunity. 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 resume to Aaron Miller.