Who’s in your wallet? I imagine every compliance person at every bank, large and small, are once again reviewing their policies after the Consumer Financial Protection Bureau (CFPB) ordered Bank of America to pay more than $100 million to customers for systematically double-dipping on fees imposed on customers with insufficient funds in their account, withholding reward bonuses explicitly promised to credit card customers, and misappropriating sensitive personal information to open accounts without customer knowledge or authorization. My Dad would sometimes say, “You can’t tell the players without a scorecard.” (The NY Yankees and Boston Red Sox famously don’t have names on their home jerseys.) A scorecard of sorts is the 2022 HMDA info with 4,460 institutions reporting data including banks, credit unions, and mortgage companies; The number of reporting institutions increased by 2.63 percent from 2021. (Today’s podcast can be found here and this week’s is sponsored by SimpleNexus, the homeownership platform that unites the people, systems, and stages of the mortgage process into one seamless, end-to-end solution that spans engagement, origination, closing, incentive compensation, and business intelligence. Hear a discussion between Robbie and me on historical comparisons for the current environment and what margins we could see for originators moving forward.)

Lender and Broker Software, Services, and Products

Did you know most burglars enter homes through unlocked doors and windows? Hackers are no different, except instead of looking for easy entry points into your home, hackers search for the weakest link in your systems. As an increasing number of organizations take advantage of API functionality to connect systems, it’s important to be mindful of potential cyberthreats. In fact, every connection and transfer of data using an API can provide a door for hackers trying to steal data or carry out malicious acts. Subba Ayyagari, chief technology officer at Black Knight, has outlined several steps you can take to stand prepared and keep hackers out. Read more in Black Knight’s blog post, “Securing Your APIs From Threats.”

Discover how Georgia’s Own Credit Union improved its audit throughput by 66%. As an organization that prides itself on innovation, Georgia’s Own Credit Union had grown to a point where they needed an automated solution that could improve their quality control processes. “ACES’ affordability, customization capabilities and focus on financial services compliance made it the obvious choice for our institution,” said Emilee Rada, Director of Lending Operations at Georgia’s Own. “ACES has improved communication between QC auditors and other areas of responsibility for more immediate defect remediation.” Watch Emilee Rada’s success story today.

“The right banker can boost your business, from cash management to financing to account security. The Specialized Mortgage Services team at strong, stable Western Alliance Bank provides banking solutions tailored to your needs, plus industry knowledge to take you further. Our experienced, responsive relationship bankers and treasury management professionals deliver trusted options for treasury management and mortgage finance products including warehouse lending, MSR financing and note financing, with speed to approval and certainty of execution. Conveniently manage custodial and payroll accounts and originate streamlined online wire transfers while taking advantage of competitive rates for business banking. Discover how efficient cash flow cycles and a streamlined banking relationship can work for you by contacting: Mark Short (469) 702-6212, Nick Richards (646) 708-1211, Nicole Avey (720) 633-4759, Elizabeth Mix (480) 329-2122, Jim Karr (626) 390-8534 or Chris Martin (480) 341-5483. Western Alliance Bank, Member FDIC.”

What's an internal audit anyway and do you need one? An internal audit acts as a third line of defense for your mortgage operation. It provides comprehensive assurance based on the highest level of independence and objectivity to evaluate the effectiveness of management’s internal controls. This function should advise your mortgage operation on plans to achieve the company's strategic, operational, financial and compliance goals. An effective internal audit should go far beyond just checking a compliance box; it should be an integral part of protecting your company. If you want to ensure you’re adhering to regulatory requirements and demonstrating good faith business practices, a Richey May internal audit is a good fit. If you’re looking to be Fannie Mae approved in the future or want to maintain your approved status, it’s required. If you’re unsure whether you need an internal audit, ask one of Richey May’s experts today or learn more here.

Processing Tools for LOs and Lenders

Do you want to see your pull-through rate increase by 15%? Make it happen with Candor Pre-Check. Using Pre-Check, mortgage lenders can identify inconsistencies between loan applications and borrower-provided documents to ensure data accuracy, effectively eliminating snags that keep a loan file from moving through the pipeline. Powered by Candor’s award-winning Loan Engineering System (LES) and its patented CogniTech Expert System Technology, Candor Pre-Check improves data quality earlier in the loan process, resulting in fewer underwriting conditions and improved efficiency. Click here to request a demo and take your business to the next level.

“What’s a real bummer in the summer? We think it’s a buzzkill for mortgage brokers to spend the summer indoors bogged down with loan processing paperwork. That’s why wemlo® is here to take over the processing operations so you can focus on capturing more business this summer. At wemlo, we appreciate that brokers’ needs fluctuate depending on market conditions. That’s why wemlo offers scalable “virtual in-house” processing. It’s like having a personal loan processing concierge on your team but not your bankroll. Best of all, there is no subscription or minimum loan requirement meaning brokers have all the flexibility they could need when working with a third-party processor like wemlo. Ready to get all the benefits of in-house processing without the financial strain? Learn about wemlo’s scalable third-party processing today. NMLS ID 1853218”

“’Mortgage operations teams are struggling,’ says Curtis Knuth, CEO of Service 1st. ‘Especially in the Northeast, most trimmed their staff some time ago. They’re struggling to find the right balance for processing and underwriting credit-challenged borrowers and doing this with a reduced team. LOs are ordering supplements and managing multiple processes previously spread amongst other staff. Processors and underwriters manage all sorts of conditions as they underwrite borrowers across the eligibility spectrum. We’ve seen and grown business for our customers in these transitional cycles before.’ Since 1926, S1 has successfully partnered with our clients to succeed in challenging environments. From outsourced solutions to innovative income analysis tools, we’re your partner for just this time. Visit srv1st.com today.”

81% of all retail mortgage applications come through an online loan application according to the MBA. Knowing that, don’t you think you should have the slickest one? Borrowers expect simple, easy to navigate online applications that don’t require instruction manuals. Check out LiteSpeed by LenderLogix, beautifully designed with the borrower in mind and seamlessly integrated into Encompass® by ICE Mortgage Technology™, it’s the point of sale your loan officers have been asking for.

While the process of verifying a borrower’s employment and income would seem to be a simple process, what has evolved over the past decade has been an ever-increasingly complex web of third-party verifiers, whose technology is often layered on top of other mortgage tech platforms and systems. Instead of making the process simpler and easier, many lenders have found that adding one more layer to their tech stack duplicates work and may not save time or money. If the VOE/VOI product doesn’t align with your POS, LOS, and other systems, workflows break down, and the possibility of inefficiency increases. If you’re frustrated with the inefficiencies of verifying employment and income, check out Informative Research’s Verification Waterfall. With it you can significantly improve your process and turn times while reducing expense. It’s a one-click service that fulfills salaried verification of employment requirements with a custom-designed fully integrated workflow.

Training and Events

FREE Webinar alert! July 19th at 1PM CT! With volumes down 40% or more midway through 2023, large-scale digital transformation feels more out of reach than ever. Instead, many lenders are focusing on smaller projects to produce short-term ROI gains. Join executives from Fairway Independent Mortgage Corp., Lennar Mortgage, Stavvy, Wolters Kluwer and Falcon Capital Advisors as they discuss the shift in approach from open-ended “digital journeys” to targeted incremental “sprints." We will delve into various aspects such as the prioritization of digital transformation projects, the evolving objective of achieving fully digital closings and eNotes, and the potential impact on the upcoming cycle. Don’t miss out: register now.

If you're in the Seattle or Boise area this July 18-20th, and looking to learn about incredibly unique purchase loan programs that will help you close more homes, the Guild Mortgage Homebuying Solutions Seminars may be a good place to get the inside industry scoop on the strategies and new product options available to qualify more buyers. Hear from Freddie Mac Affordable Lending Manager Nora Guerra, Clayton Homes CrossMod Development Manager, Andrew Bryant, and local Guild Mortgage leadership on the challenges and solutions to improve housing affordability in the Pacific Northwest. Invited are real estate agents, developers, aspiring homeowners, and any others with a vested interest in attainable homeownership. Guild is holding three in-person sessions. Click on the location of your choice to register now! July 18th in Bellevue, WA; July 19th in Puyallup, WA and July 20th in Boise, ID.

Join MBA/MW on July 18th at 2:30 PM EDT for a Top Producers Panel followed by a Happy Hour at Patsy's American. The registration fee includes 2 drink tickets and light appetizers: $45 for members and $75 for non-members.

The 2023 CMLA Convention is back in Vail on August 2-4 at The Hythe. Register today and join us for compelling speaker sessions, ample networking opportunities, and the annual golf tournament. Please find this year's agenda below - it has been reimagined to provide increased value for our attendees and sponsors, as well as a better event flow. Come and celebrate CMLA and the mortgage industry's resilience.

FAMP! Florida Association of Mortgage Professionals 2023 Annual Convention & Trade show, “A Grand Affair”, is August 2-5, 2023, at Signia by Hilton Orlando Bonnet Creek. For Over 60 years, this is the annual event that attracts Florida’s top mortgage professionals, and this year is no different. Exhibitors from all over the country will be exhibiting current mortgage products and industry tools for all originators. Do not miss this opportunity to network with mortgage brokers and lenders from across Florida and the United States.

MBA Education is bringing the best-in-class training to Seattle, WA., August 8-11. Begin advancing your career by enrolling in the School of Mortgage Banking I: An Introduction to the Real Estate Finance Industry provides a foundation in residential loan production, underwriting, secondary marketing, regulatory compliance, warehousing and servicing.

In Michigan, the MMLA Annual Lending Conference is 8/9-8/11 is in Mt. Pleasant. “Our event brings attendees from all of the state and country to hear our nationally renowned speakers give expert advice on how you can grow your business even in these challenging times!

The 2023 Kentucky Affordable Housing Conference (KAHC), Rising to the Challenge: Building A Stronger Kentucky, will be held at Central Bank Center in Lexington on Thursday and Friday, August 24-25, 2023. Offering a wide range of training, panel discussions and networking opportunities, whether you're interested in specialized housing, mortgage lending, single-family development, multifamily development, or HMIS. The general business development sessions will cover cyber security, diversity, language access and more. #KAHC23 is hosted by Kentucky Housing Corporation (KHC).

Capital Markets: Focus on Consumer Price Index

Interest rates didn’t do much yesterday ahead of today’s June Consumer Price Index release, especially with no releases of note and no Federal Reserve speakers. Ahead of this morning's CPI release, pricing in fed funds futures markets implied a 95 percent chance of a 25-basis points hike. The overnight rate currently sits at 5.00-5.25 percent, and despite chatter suggesting an additional 25 basis points hike (beyond this month’s hike) is likely before year end, and that rates need to stay elevated for an extended period, pricing in futures markets still favors the 5.25-5.50 range as the fed funds rate at the end of the year.

We did learn yesterday that Small Business Optimism in June increased due to higher optimism on the economic outlook, according to the NFIB Small Business Optimism Survey. Inflation and labor quality are the most important problems facing small businesses in June. Employment, consumer spending, and credit availability remain strong, while earnings trends and employment are trending lower, but the outlook is becoming less dour. The overall outlook has improved, but the reading marks the 18th consecutive month below the historical average and currently sits at levels associated with 2008 - 2013. The number of small businesses raising prices fell to the lowest level since March 2021. While still inflationary, the trend is moving lower.

It was also reported that mortgage credit availability increased marginally in June, according to the Mortgage Credit Availability Index report from MBA. Availability remains close to the lowest level since early 2013 as the industry continues to operate at reduced capacity. Lenders are offering fewer loan programs, and we have seen notable exits of large players from certain channels over the course of this year. The Jumbo Index declined for the second straight month as liquidity conditions have tightened for jumbo lending.

This morning we learned that last week’s mortgage applications increased 0.9 percent from one week earlier, according to data from MBA. This week’s results include an adjustment for the observance of Independence Day. Applications are more than 30 percent lower than a year ago and at the slowest pace since December 2022.

That all-important June CPI report has also been released: +.2 percent, lower than expected, and +3.0 percent year over year. The core rate, ex food and energy, was also +.2 percent, and +4.8 percent year over year. Expectations were for increases of 0.3 percent month-over-month and 0.4 percent month-over-month in the headline and core resulting in year-over-year readings of 3.2 percent and 5.1 percent compared with 4.0 percent and 5.3 percent previously. Later today brings a Treasury auction of $32 billion reopened 10-year notes, a heavy slate of Fed presidents speaking (Richmond’s Barkin, Minneapolis’ Kashkari, Atlanta’s Bostic, and Cleveland’s Mester), the release of the latest Beige Book, and the Bank of Canada will be out with its latest monetary policy decision where another 25 basis points hike to 5 percent is expected. After the consumer price data Agency MBS prices are better .250-.375, the 10-year is yielding 3.89 after closing yesterday at 3.98 percent, and the 2-year’s at 4.77.