Thank you to Ira S. who points out that today marks the Spirit Halloween Stores opening. The origins of Halloween go back thousands of years via dozens of cultures, unlike personal computers (PCs) that only date from the 1970s, but also springing forth from dozens of companies. (I consider myself fortunate to be on very good terms with Apple’s Steve Wozniak, and in fact many of my jokes come from him.) Old timers remember the snippet, “PCs didn’t replace people, but people who used PCs did replace ones that didn’t.” Perhaps something similar could be said for AI: AI won’t replace human workers but people that use it will replace people that don’t. “It’s not if, but when.” How ‘bout the latest hack: AT&T and all its customer’s personal information! Are you controlling your company’s technology, or is it controlling you? There’s so much going on and you, the user, don’t know it. Computer viruses can spread by using ChatGPT to write sneaky emails. Social media influencer Lisa Li crafted her version of an AI boyfriend using ChatGPT. (No comments, please, about how she probably can’t get a real boyfriend.) OpenAI’s ChatGPT Mac app was storing conversations in plain text. Meanwhile, some auto dealerships are returning to keeping paper and pen records of their transactions due to cyber-attacks. (Today’s podcast is found here and this week’s is sponsored by Optimal Blue. Optimal Blue bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform, helping lenders maximize profitability and operate efficiently so they can help American borrowers achieve the dream of homeownership. Hear an interview with new Optimal Blue CEO Joe Tyrrell on leadership, the race for AI in mortgage, and Optimal Blue’s strategy as a capital markets leader.)

Lender and Broker Software, Products, and Services

Stand Out in a Crowded Market! In today’s competitive market, it’s crucial to differentiate yourself. By becoming one of only three featured professionals in a real estate agent’s personalized directory, you position yourself as a trusted and recommended expert. This exclusive placement ensures you stand out and attract more recognition. Your name will be highlighted to a targeted audience actively seeking professional services. This isn’t just about visibility; it’s about being seen as the preferred choice. The trust and credibility you gain from this association can set you apart from the competition and drive your business forward. Make your mark in a crowded market. Stand out by securing your exclusive placement today. Join Now to take the next step towards elevating your business!

Retaining mortgage servicing rights is considered a key milestone in the growth of every mortgage banker. Learn about valuing, retaining, and selling this crucial asset from our expert team. Join MCT as they host an MSR 101: Reviewing MSR Principles, Advantages & Disadvantages, & Key Portfolio Valuation Drivers Webinar on August 15th at 11:00 am PT. In this webinar, MCT’s MSR experts, Bill Shirreffs, Azad Rafat, David Burruss, and Natalie Martinez will provide MSR insights, elaborate on their advantages and disadvantages, describe the difference between fair, market, and economic value, and give a current market update. Join this team of MSR experts as they break down how changing market conditions affect lender portfolios, how to manage associated risk, and key valuation drivers.

OptiFunder has funded its one millionth loan through its Warehouse Management System (WMS), saving mortgage originators collectively over $65 million in warehouse expense. The team at OptiFunder has developed a more effective way for mortgage bankers to fund loans through warehouse banks, which has proven to be a huge success. Originators can achieve optimal warehouse spread on every loan and easily connect with all parties, from LOS systems to warehouse lenders, custodians to investors. Today, one in every seven loans originated by IMBs are funded through OptiFunder's WMS. Funding one million loans is a major milestone in the team’s mission to bring innovation to the industry. The success of OptiFunder’s WMS led to the release of Greyhound, a modern-day management system for warehouse lenders, backed by the same configurable and secure technology. OptiFunder’s innovative solutions are driving transparency and efficiencies in the mortgage industry, bridging the gap between the primary and secondary markets.

Mortgage technology companies have a way of making things waaaay more complicated than they need to be... What if it was 10 times easier to get conditions from borrowers? What if you could send a Needs List to a borrower right from the LOS that was clear and descriptive, and the borrower could upload docs right into the eFolder? Check out LiteSpeed by LenderLogix. Built for Encompass® by ICE Mortgage Technology™, it's the technology your borrowers are looking for.

“Here at Newrez Correspondent, our main mission and goal is to support our customers. We were recently ranked the #3 Correspondent Lender in the country in the Scotsman Guide® Top Mortgage Lenders for 2024. This can only be achieved by having incredible customers who trust in the value we bring each and every day. In striving to improve our client offerings, we recently launched our co-issue platform, enhanced our closed-end second mortgage program, and added eNote delivery for a significant number of clients. We have an array of products and pricing options to meet every customer’s needs, so if you aren’t a partner today or offering these programs please contact us here. You can also meet Chris Nobile at the Michigan Mortgage Lenders Association August 14-16 or Rebecca Sommer, David Pistone, and Baird Marble at the Western Secondary Conference August 19-21. #TheTimeIsNow.”

FHA/VA Changes

Government applications tend to run 10-20 percent of the overall application pie, per our MBA. What’s new out there?

FHA posted a new draft Mortgagee Letter (ML), Calculation of Debenture Interest Rates for Home Equity Conversion Mortgages (HECM), on FHA’s Office of Single-Family Housing Drafting Table for public review and feedback. This draft ML proposes updates to HUD’s calculations for the payment of debenture interest for HECM claims and establishes a process for retroactively adjusting the calculation of debenture interest for claims filed on HECMs that became due and payable on or after September 19, 2017. View FHA INFO 2024-47 for full details.

FHA published Mortgagee Letter (ML) 2024-15, Third Extension of the Foreclosure Moratorium in Connection with the Presidentially-Declared Major Disaster Area in Maui County, Hawaii. This new extension, which is effective immediately, gives homeowners with FHA-insured mortgages in Maui County additional time to access available federal, state, or local housing resources; consult with HUD-approved housing counselors; and/or rebuild their homes. The provisions of ML 2024-15 apply to all FHA Title II Single Family forward and Home Equity Conversion Mortgage (HECM) programs. The moratorium will remain in effect through January 1, 2025.

FHA published updates to the SF Handbook 4000.10 including the incorporation of changes in previous Mortgagee Letters. AmeriHome Mortgage accepted the updates in the timeline provided by FHA. Unless otherwise stated, updates may be implemented immediately, but are mandatory for case numbers assigned on or after August 19, 2024. Key changes are highlighted in pink font in Amerihome Product Announcement 20240709-CL.

Plaza Home Mortgage has improved pricing on FHA and VA loans to help support affordable housing, act now to take advantage of this great opportunity. For government loans under $300,000, use the Quick Pricer tool in BREEZE to secure the best pricing. Many note rates may have better pricing not shown on the rate sheet. This applies to all FHA and VA loans, except for the FHA 100% Combo Loan Program and Renovation loans.

Ginnie Mae’s observation of increased prepayment activity in certain areas of its program has prompted Pennymac, posted in Pennymac announcement 24-71, to monitor prepayment speeds of correspondents (for all loan products) and will proactively address those exhibiting elevated speeds.

Capital Markets

Is it a hawk or is it a dove? As expected, the Fed held the federal funds target steady at the July 31 decision, but tweaked its policy statement to show they think a rate cut will likely be appropriate soon. Where the June statement said the Fed is still primarily focused on inflation, the July statement said the Committee sees downside risks to the job market as balancing upside risks to inflation. So, that question to open the paragraph may be more apt for international central banks: after the Bank of Japan raised rates yesterday, the Bank of England today decided to cut.

Expectations are still overwhelmingly for the Fed to make quarter percentage point rate cuts in September and December, with gradual rate cuts likely continuing in 2025. It’s a bit of an odd situation with the Federal Open Market Committee wanting to cut, but the data potentially not allowing the committee to do so if it is truly “data dependent.” One quote from Fed Chair Powell’s press conference yesterday particularly caught my attention: "We're certainly well positioned to respond to weakness...but that's not what we're seeing... (GDP) is not signaling a weak economy." To me, that sounds like inflation is still too high and the economy is not showing enough weakness. So why cut?

Today’s economic calendar kicked off with U.S.-based employers announcing 25,885 job cuts in July, a 47 percent decrease from the 48,786 cuts announced one month prior. It is up 9 percent from the 23,697 cuts announced in the same month in 2023, according to a report released Thursday from Challenger, Gray & Christmas (if you can’t spell my last name correctly, maybe you think I’m involved there). We’ve also received preliminary Q2 productivity / unit labor costs and weekly jobless claims (249k, moving higher… signs of a weakening labor market?). Later today brings July Manufacturing PMIs from S&P Global and ISM, Construction spending in June, and Freddie Mac’s latest Primary Mortgage Market Survey.

After U.S. Treasuries finished July on a solid note, pressuring the 10-year yield to its lowest settlement since mid-March while yields on shorter tenors ended the month at levels not seen since early February, we begin the day with Agency MBS prices better by .125-.250, the 10-year yielding 4.02 after closing yesterday at 4.11 percent, and the 2-year down to 4.24. Lenders are warning staff about early pay off (EPO) penalties.

Employment and Transitions

In today's competitive mortgage landscape, Sierra Pacific Mortgage (SPM) provides top-tier loan originators and account executives with the products and tools they need to succeed. To meet the ever-changing needs of borrowers, we continually update our extensive suite of products to include innovative options. Our new DSCR (Debt Service Coverage Ratio) product qualifies buyers based on property income, not personal income, and our HELOC program makes it faster and easier than ever to access home equity. Additionally, our AI-driven tool, Hey Sierra™, enables quick and accurate loan scenario qualification, and our proprietary loan origination system, ExpressLoan™, streamlines the lending process, ensuring precise and efficient borrower guidance. SPM's commitment to providing comprehensive loan options and top-tier technology ensures that our team is equipped to serve clients more effectively. Ready to join a team that invests in your success? Reach out to Erik Skalstad or Cassidy OSullivan, VPs of Strategic Growth.

“Join ICE and embark on an exciting career in mortgage technology! We’re redefining the industry with innovative solutions that enhance every step of the end-to-end mortgage lifecycle. Our open network integrates groundbreaking technologies, connecting origination and servicing seamlessly. ICE’s dynamic and collaborative environment is perfect for those eager to advance our cutting-edge origination and servicing tools, evolve our product and pricing engine (PPE), enhance our consumer engagement suite and help deliver best-in-class closing solutions. Whether you're new to the field or a seasoned expert, we have opportunities to shape the future of mortgage technology and the industry itself. Explore our job openings and help us transform the industry at ICE!”

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.

“Loan officers! Discover the radius advantage. Are you navigating a market that's forgotten the value of loyalty? At radius financial group, we're rewriting the script with our MLO Partnership-Proposition (MPP). We understand the industry's pulse and the need for a genuine partnership, not just a platform to process loans. As lenders focus on consumers, we concentrate on you, the heartbeat of our business. You're not just a number here; you're the face of our brand, co-branded for success. We're committed to investing in you, providing a stable home where your talents are nurtured and your book of business flourishes. For confidential inquires please contact Carla Herrera (781-742-6500).