We began 2022 thinking that this might be the “Year of Non-QM.” The product certainly has its advantages for some borrowers, and lenders & investors. And then First Guaranty and Sprout vanished, and the herd of lenders was spooked, began talking about March of 2020 when some investors backed away from the market, and everyone was reminded to never have only one “take out” for a given loan or product. And then the headline yesterday: “SEC Charges Angel Oak Capital Advisors with Misleading Investors in $90 Million Fix-and-Flip Securitization.” Meanwhile, the industry is watching inflation numbers yesterday and today. One way to fight inflation is for a food supplier to put four tomatoes in a box that held five in the past. And don’t get me started on restaurant portions: higher prices and smaller portions have caught the attention of Consumer Affairs. Know that since the CPI report yesterday, Fed speakers have been quick to temper excitement around the numbers and have been reminding the market that inflation is still a very big issue. (Available here, this week’s podcast is sponsored by SimpleNexus, an nCino company and award-winning developer of mobile-first technology for the modern mortgage lender. Today’s has an interview with Interview with Jason Biegel, COO of Change Lending’s residential lending division, on “Securitization 101” and the capabilities it affords.)

Broker and Lender Services, Programs, and Software

The Wonder Twins of mortgage lending, Sales Boomerang’s borrower intelligence and Mortgage Coach’s lead conversion capabilities combine to help lenders reach their profit goals in any market. For example, Mortgage Coach’s interactive loan comparisons have helped Churchill Mortgage advisors provide heightened consultative service and boost bottom-line KPIs for years. Just ask Churchill’s Tennessee District Manager Kevin Watson, who credits Mortgage Coach for increasing production pull-through in his region by more than 10% just one year post-implementation: “The uptick in closing ratios we’ve experienced since implementing Mortgage Coach speaks to the way that informing borrowers of their options really increases their confidence in doing business with us.” See how Sales Boomerang and Mortgage Coach’s best-in-class technologies can supercharge your lead conversion.

It's still “game on” at UWM! 50-100 basis points lower pricing across the board. Giving brokers the tools to compete against retail and win is what we do every day at UWM. Turn times up to 3x faster than the industry average. Tools and technology that let you work smarter. Services that connect you with real estate partners, past borrowers, and hot leads. And now, we’ve dropped rates across the board by 50-100bps. Every loan. No exceptions. If your borrower has a 620 FICO or higher, there’s no need to look anywhere else. Price a loan today!

TRUE or FALSE? Down Payment Assistance (DPA) programs’ are only for First Time Homebuyers? FALSE!!! A borrower does not need to be a First Time Homebuyer to qualify for a DPA loan product. Orion Lending is the #1 CHENOA DPA Lender in the Nation! With Repayable and Forgivable Options not only on our Chenoa Program BUT on the National Homebuyers Fund DPA as well: Orion is committed to serving more of your customers! Orion’s DPA’s are underwritten in house, with 24-hour UW on Purchases, and allow for FICO’s as low as 600. With Orion’s new QuickLock feature, now you can secure the rate straight from the QuickPricer, without uploading the loan! Click here to get approved today!

Social Impact

Tony Thompson, CMB, Founder & CEO of NAMMBA, writes, “I am sure most of your readers have seen the announcement from the DOJ and CFPB regarding the $4M civil penalty for Trident Mortgage, which is a subsidiary owned by Home Services of America, Inc. NAMMBA has created the Accredited Social Impact Lender certification to help lenders grow multicultural market share while creating a playbook for the regulators: less than 5% of lenders will have an ASIL. The Accredited Social Impact Lender™ certification will provide a blueprint for organizations to use to demonstrate to regulators, shareholders and industry stakeholders a comprehensive plan to increase homeownership in communities in which they serve backed by NAMMBA. To learn more about the ASIL program click here.”

Non-Agency, Non-QM, Jumbo News

“Ready to catch a break on pricing? ClearEdge Lending delivers! We've sharpened our pencil by 50 bps on price across several of our Non-QM programs including DSCR, Prime Connect, purchase and cash-out. This pricing offer is set to expire September 6, so contact us today for more details. ClearEdge Lending offers an extensive and innovative portfolio of Non-QM and specialized mortgage solutions backed by a diverse team of experts. If you're a mortgage professional looking to grow your pipeline, call us at (866) 690-2474 or visit our site to become an approved mortgage partner.”

In this week’s report on last week’s application data, the MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.47% from 5.43%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) increased to 5.09% from 5.06%. Remember, there’s no Agency g-fee with jumbo.

Weak demand for non-Agency MBS in the second quarter is being felt. Real estate investment trust Angel Oak Mortgage lost $52.1 million in the second quarter, bringing its net losses for the year to $95.6 million. The REIT is managed by a unit of Angel Oak Capital Advisors, which also has affiliated lending operations. Why? The losses mostly came from declining values for non-qualified mortgages and non-agency MBS. At the end of June, the REIT held residential mortgages with a total unpaid principal balance of $1.28 billion and loans in non-agency MBS and other securitization trusts with a total balance of $1.91 billion.

Automated Decision Manager, the AD Mortgage enhanced loan origination platform, is a key element in its Partners' experience. The new Broker Portal has been built from the ground up in partnership with AD Mortgage Broker community to optimize your experience and streamline the mortgage process.

Mountain West Financial® is now offering 5/6, 7/6, and 10/6 Conforming, High Balance and Jumbo ARM programs effective 07/29/2022. Program Highlights include Loan amounts up to $3 million, FICO scores as low as 620, Purchase, Refinance & Cash Out options available, options for as little as 5% down.

Mountain West Financial® announced the availability of AzIDA Non-Forgivable Home Plus as a One-Off Exception. The non-forgivable Home Plus is a temporary program created by AzIDA in response to the current market and will be retired once funds are depleted (approximately 1,000 loans). The regular Home+Plus Guidelines and processes apply to the non-forgivable DPA product. The following represent additional overlays strictly associated with the non-forgivable DPA offerings. View program details in MWF Bulletin 2022-065.

Sellers approved for Non-Conforming Loans with Wells Fargo Funding Correspondent should note recently published Wells Fargo Funding Newsflash C22-019nc. Non-Conforming Loans with LTVs and/or CLTVs greater than 80% will be ineligible effective with Locks, relocks, and renegotiations on and after August 22, 2022.

Are you a National Real Estate Investor looking for a one-stop-shop for all your nationwide direct hard money & NON-QM Loan Programs? Stratton Equities® is the leading Hard Money and Non-QM Lender for Real Estate Investors. For example, highlights from Stratton Equities’ No-Doc Loans include rates starting at 6.74%, LTV’s up to 85%, 5/1 ARM, 7/1 ARM & 30 Year Fixed Terms, Fix and Flip up to 90% LTV, 75% ARV with rates starting at 7.25%. No upfront fees, no junk fees, and no tax returns. For a complete list of loan programs, visit Stratton Equities Products page.

Capital Markets

MCT recently became the first company connected to the Fannie Mae purchase advice API, but did you know MCT clients can also leverage MCT’s Rapid Commit for Fannie Mae to pull live note pricing and deliver multiple commitments? MCTlive! is the first platform integrated with all available Fannie Mae Capital Markets APIs. MCT clients approved by Fannie Mae are utilizing this integration to save on average up to 5 hours per month. From 2019 to 2021, these integrations and efficiencies helped contribute to a 609% increase in volume through Rapid Commit, from $14.75 billion to $104.65 billion in just two years. Visit MCT’s new Rapid Commit for Fannie Mae page to learn how clients are improving efficiency through integrations. You can also learn more about the unique features of the Fannie Mae Purchase Advice API in the recent episode of Rasori’s Relentless Releases, “Features Overview – Fannie Mae Purchase Advice API.”

Peak inflation? The Consumer Price Index came in lower than expected yesterday, driving bond and MBS prices up in a rally, and rates down, at least for most of the day. CPI was flat month-over-month in July, and on a year-over-year basis, prices were up 8.5 percent. The number reflects lower energy prices, though food costs continue to rise. While one data point is obviously not a trend, the report is good news for the Fed, as it provides comfort that inflation is moving in the right direction and potentially gives the Fed breathing room to pivot to a smaller pace of rate hikes.

Speculation that we have seen peak inflation didn’t stop two Fed officials from saying that the data doesn't change the path toward even higher interest rates this year and next. Don’t forget, inflation still increased by a large 8.5 percent from a year earlier. Fed Funds futures have gone to a 60 percent chance of a 50-basis point hike from a 32 percent chance on Tuesday. The renewed debate about 50-basis points or 75-basis points at the September FOMC meeting means uncertainty, and thus volatility. The immediate reaction in the bond market was to steepen the yield curve easing, but not erasing, the recent significant inversion.

July PPI (-.5 percent, 9.8 percent for the year; ex-food and energy +.2 percent, +7.6 for the year) and weekly jobless claims (262k, a slight rise, 1,428k continuing claims) led off today’s calendar. After the Commentary goes out, we’ll see Freddie Mac’s Primary Mortgage Market Survey and a Treasury auction of $21 billion 30-year bonds (following stellar 10-year note and 3-year note sales). Today’s MBS purchase operation, using money from early pay offs, sees the Desk in GNII 4 percent through 5 percent for up to $497 million in the last operation on the current schedule before releasing a new two-week purchase schedule and MBS purchase estimate this afternoon that includes the $17.5 billion tapering cap which will double to $35 billion in the next period. We begin the day with Agency MBS prices better by .125 and the 10-year yielding 2.74 after closing yesterday at 2.79 percent after the weak Producer Price Index number.

Employment

Evergreen Home Loans™ is committed to fostering diverse communities through homeownership. The company recently launched Evergreen for Everyone, an initiative that supports anyone who dreams of owning a home by cultivating an unmatched set of resources aimed at first-time homebuyers. The Evergreen team is equipped with strong expertise in working with first-time homebuyers and they intentionally provide information and education to empower those looking for their dream home. With resources and niche programs to help make homeownership a reality, it’s the mission of Evergreen for Everyone to empower their BIPOC neighbors and help increase homeownership rates among their communities where they’re statistically lower. If you want to work for a company dedicated to leveling a playing field that’s been historically skewed, check out Evergreen’s Careers page.

“What’s LO-focused, built and capitalized for this market, growing as the industry contracts, and turning a profit? Planet Home Lending! We offer incredible pricing due to three factors: back-end efficiencies, limited management layers, and secondary market excellence. What does that mean for MLOs? Reaching more borrowers and closing more loans. And with our pod system, you’ll work with the same team of processors and underwriters, day after day and file after file. Given the tech stack and the data-driven marketing, the product array both wide and niche, the leadership that gives you what you need and then gets out of your way, why haven’t you emailed Caleb Mittelstet, EVP, National Production, or SVP Talent Acquisition Brian Miller? Check out this video of Caleb laying out the advantages, then get in touch. Grow your business with Planet Home Lending — Right Place, Right Size, Right Now!”

“At Pezian Search Group, we celebrate successes with both our Candidates and Clients. Even in a slower market, we’ve partnered with many Clients coast-to-coast to bring on great Candidates with an emphasis on strengthening their teams for what is to come. Some recent successes have included Loan Servicing Managers, Operations Managers, Escrow Specialists, Account Executives, National Marketing Managers, SVP’s of Sales, and Strategic Initiatives and more. If you are a Hiring Manager looking for high-level, long-term Talent (with a skill-set and fit guarantee), or are a job seeker that is frustrated with online job boards and canned responses, please reach out to us at info@peziansearchgroup.com and we’re happy to discuss further. From Operations to Sales, the Call Center to the C-Suite, and the Front-Office to the Back-Office, Pezian Search Group is focused on the Mortgage, Banking, and their supporting industries to find great Talent.”

Academy Mortgage is expanding its national footprint with the latest addition of five new branch locations spanning the U.S. in California, Arizona, South Carolina, and Maryland. In addition, the company recently opened its doors to welcome 40 new originators. As the industry ebbs and flows, maintaining a standard of exceptional service to their branches and team members nationwide remains a core focus for Academy. Aside from the people, two key reasons Branch Managers and Loan Officers thrive at Academy Mortgage are the local autonomy and national support. Academy provides unparalleled national, regional, and local support to allow Loan Officers to focus on what they do best—creating relationships and delivering the dream of homeownership. The company continues to actively expand and hire talented sales professionals nationwide. If you're interested in exploring how a company that delivers next-level support can help your business thrive, contact EVP of Growth Patrick Welberg.