One issue currently facing the mortgage industry is a lack of supply, or as rapper Cardi B said over the weekend in her analysis of high home prices and rents, “a lack of m*****f***ing inventory.” She does have a point: Despite the increase in rates continuing to dampen demand and put downward pressure on home prices, inventory remains inadequate. Versus last year, shoppers do have more homes to consider, although inventory still isn’t back to pre-pandemic levels. Who wants to sell their home when they have a 3 percent 30-year fixed rate mortgage and move to a home where the rate would be closer to 6 percent? We learned yesterday that home values fell for the second consecutive month and builders are cutting prices and adding incentives as the confidence of builders in the new home market fell for the ninth straight month, according to NAHB. The way to stabilize values is to build more housing, but if nobody wants to build then that presents a problem. And who would buy these newly built homes? A recent study revealed adults with school-aged children will account for nearly one in four home sales over the next 10 months. Families with kids over 18 and empty nesters will also be active, singles and retirees not as much. In 2021, according to the National Association of Realtors, the typical buyer was 33 years old, while the typical repeat buyers were at an all-time high of 56 years of age. And according to Freddie Mac, millennials purchased more than half of all mortgage loans in the past two years. Millennials surpassed baby boomers as the largest demographic in 2019 at 72.2 million in population. So, the average buyer is young and uses technology as a tool to buy everything, including homes and rates. But would millennials be okay with a 3D printed house? (Today’s podcast is available here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services in the mortgage industry and in banking.)

Lender and Vendor Services and Products

Fifth Third Bank, National Association, announces the launch of its Mortgage Warehouse Finance business. As one of the largest regional banks in the U.S., Fifth Third offers the liquidity, credit and banking solutions that mortgage bankers require, all in one place. Fifth Third’s Mortgage Warehouse Finance business is led by industry veteran Donnie Martin, who brings more than 25 years of mortgage experience to the bank. This new business joins Fifth Third’s Correspondent Lending Group, Capital Markets Whole Loan Trading Desk and Treasury Management Solutions Team in meeting the needs of independent mortgage bankers across the country. To learn more about how they can support your business, contact David Ingram or Jeff Bonner to arrange a meeting at the upcoming Mortgage Bankers Association Annual Conference in Nashville.

What keeps you up at night? For many lenders, it’s regulatory requirements, volume downturns and labor force concerns. However, these challenges are beyond a lender’s control. Instead, it’s better to focus on matters within your own power. By taking a step back and evaluating your secondary marketing approach, you may find there are strategies to both improve top-line revenue and drive efficiencies in your operation. As part of Optimal Blue’s commitment to sharing its unmatched expertise with the industry, the division of Black Knight recently released a free e-book, “5 Steps for Improving Secondary Marketing Profitability.” Download this informative resource to discover the benefits of offering a broad range of loan programs, pricing confidently and more!

Flagstar Bank is expanding its leadership role in the mortgage space with the upcoming introduction of the Advantage Bank Statements, a new program with more flexible qualifying guidelines for the self-employed borrower. And that’s just the start of Flagstar’s innovative solutions. They now offer a stand-alone HELOC with a minimum 680 score and I/O options, and a Jumbo One-Close construction product with ARMs and higher loan limits up to $3 million. That’s on top of their Advantage Non-QM product which includes ARM options, LTVs up to 90%, loan limits from $100,000 to $3 million, and more flexible guidelines including a higher DTI up to 55%. For 35 years, Flagstar’s commitment to all four channels of the space has been strong and will remain strong. Count on it. To learn more or start a conversation, visit Flagstar.com/why or contact John Gibson.

In today’s market, every lead counts. Brokers need the right technology at their disposal that can get them in front of more potential borrowers, speed up their origination process and increase productivity. In fact, getting in front of a potential borrower at the beginning stages of the loan process through a POS increases the likelihood of capturing their business by 70%. Zip is Calyx’s easy to use, point of sale platform that allows Calyx users to capture and collect borrower information and directly integrate it into their Calyx LOS. Borrowers receive a link to complete a questionnaire that is unique to their situation and loan inquiry, thus improving the borrower experience and ultimately the quality of leads you receive! Best of all, set up takes minutes and your first submission is free. In fact, you only pay for your actual usage. No initial fees, no monthly software license fees. Contact us to learn more.

With lower volumes and tighter margins, business intelligence is more important than ever. You need to know how you’re performing in real time as market conditions change on a dime. Richey May’s RM Analyze is business intelligence designed by and for mortgage industry experts. Our platform consolidates data from every department and every piece of software you use, so you can get answers quickly. It provides just the right reporting from the C-suite to the front line, plus the functionality to build visually engaging reports on key indicators. Bonus: Our analysts have deep mortgage experience, so you don’t need to train us on your business. Get the cross-functional data, user-friendly dashboards and real-time analysis you need. Contact us today for a walk-through and custom implementation plan.

As we all take a moment to honor Pepperoni Pizza Day, it’s important to remember that sometimes plain old pepperoni doesn’t cut it; you want a little variety to get what you need. The comparison to home mortgages may be a bit of a stretch, but the result is just as tasty. When you need more than one option for your customers, we invite you to Meet America’s Borrower at Finance of America Mortgage TPO. FAM TPO has a wide variety of Non-QM mortgage solutions with our Two-X Flex of offerings that are sure to take care of the needs of your customer. Is your customer’s situation a tall order and you are in need some direction? Give us a call: 1-877-FAM-TPO1. Finance of America Mortgage TPO is here to walk you through the process to ensure your customers have the right loan for their needs. Contact us today!

With the number of borrowers who need Non-QM options on the rise, it is more important than ever to choose the right Non-QM lender. Angel Oak remains fully committed to the Non-QM sector and with over $15B in total origination volume closed since inception, we are the clear leader in this space. Account Executives from Angel Oak Mortgage Solutions are ready and able to assist you with everything from structuring deals to helping you market Non-QM to your referral partners. With program options for borrowers that include self-employed, real estate investors and those with credit events, Angel Oak can help you close loans for the underserved borrowers in today’s market. Reach out to your account executive today! Or email to learn more.

It’s a fact. You can increase your productivity in this market. XINNIX is helping hundreds of loan officers every week do just that. Year-to-date, participants in the EDGE™ Program increased their referral sources by 107.68%, referral source meetings by 286.12%, and applications by 53.6%. These numbers are within your reach. Whether your current LOs have been in the industry two years or 20, XINNIX has the right Performance Program to elevate their business in TODAY’S market. EDGETM is perfect for those who are performing well but want to take their business to the next level. Top producers looking to grow their pipelines even more should check out ELITE™. For the experienced Loan Officer with a desire to create an explosive pipeline, IGNITE™ is the perfect fit. Schedule a call today to find out which of their Experienced Mortgage Sales Performance Programs is the right fit for your team.

Investor and Guideline Updates

FHA is reassessing aspects of the development and implementation of the Electronic Appraisal Delivery (EAD) module on the FHA Catalyst platform. As it completes this reassessment, FHA is pausing full completion and integration for the FHA Catalyst: Electronic Appraisal Delivery (EAD) Module. FHA strongly recommends that industry partners pause EAD onboarding and direct integration activities until final determinations are made regarding the electronic appraisal delivery system for loans originated for FHA insurance endorsement. This recommendation is only for the FHA Catalyst: Electronic Appraisal Delivery Module and does not impact integration or onboarding activities for any other FHA Catalyst module.

Zelman is serving as exclusive M&A adviser to DiamondHead Holdings Corp. (Nasdaq: DHHC) in connection with its recently announced acquisition of Great Southern Homes, Inc. (GSH), valuing the combined company at a pro forma enterprise value of $572 million. GSH is one of the largest and fastest-growing private homebuilders in the Southeastern U.S. focusing on entry-level and move-up buyer segments. GSH employs a “land light” operating model providing for lower cyclical risk and higher returns on capital compared to integrated builder / developer operating models. Upon transaction close, GSH will become a publicly-traded company and be renamed United Homes Group trading under the ticker symbol “UHG” on the Nasdaq.

Fairway Wholesale Lending is offering a New HELOC Option to give you greater flexibility in serving your borrowers. The S Series HELOC is available in addition to existing HELOC offerings, the Q Series & Q Series Express HELOCs. View Fairway Wholesale Lending Client Announcement 2021-09-16 to see some of the key differences.

Move your Pipeline in the right direction with LoanStream Mortgage New Conforming Loan, Limits up to $715,000!

A&D Mortgage, the leading Non-QM lender is now taking the lead with Conventional loans, too raising loan limits on Conforming and High Balance Conventional loans. In addition, rates on all Non-QM programs were recently improved.

Coming September 19, 2022, PRMG’s Dual AUS on TPO Portal. One-Click Dual AUS will provide TPO Partners with the ability to run an application through both systems and quickly identify which one works best for the customer.

Capital Markets

Rates continued their rise to open the week. Economic data was on the light side, leaving the focus on news and inflation. We learned last week that the consumer price index eased on an annual basis from 8.5 percent to 8.3 percent in August though it was up month-over-month. The financial markets were most interested in the month's core reading, which increased by 0.6 percent, well above expectations. While increases were broad-based, the swift rise in shelter costs, which tend to change infrequently, pointed to elevated inflation readings for a prolonged period. Producer prices declined as well for the month, but remain elevated. It will take some time before lower producer prices affect consumer prices.

Despite the market’s dissatisfaction with the inflation data, household expectations for future inflation are easing according to the Fed’s most recent survey. The Fed has worried that if consumers continue to expect higher prices that it will eventually become a self-fulfilling prophecy. Given the hot inflation data and a robust labor market, rate hikes alone may not do the trick and the Fed could consider selling its $2.8 trillion mortgage portfolio.

Today’s economic calendar is under way with August housing starts / building permits (1.575 million and 1.517 million, respectively) along with Philadelphia Fed non-manufacturing indices for September (19.5). Later this morning brings Redbook same store sales and a Treasury auction of $12 billion reopened 20-year bonds. We begin the day with Agency MBS prices worse .375 and the 10-year yielding 3.57 percent after closing yesterday at 3.54 percent.


Employment

As the market contracts, lending products are not meeting the needs of borrowers, making origination a challenge. A new alternative residential and commercial lender is seeking to hire originators for the bridge and alternative real estate space. This NYSE listed lender is unique in that it has its own capital to lend in an agile fashion in this changing marketplace. Not being obligated to a fund, they are able to access the lowest cost of funds providing borrowers lower interest rates. The lender seeks to build a high-volume business using technology and inbound leads to support the lending pipeline. The main sales office is based in Tampa, Florida with remote work opportunities. If you are interested in a residential bridge originator position that does not require an MLO License, please contact Sarah Maynard.

More than a business; it’s a movement. Join the team of Kind Ambassadors shaking up the retail mortgage market. Kind Lending, LLC is actively seeking Retail Branch Managers and National Mortgage Loan Officers for all retail products, including Non-QM. If you or your team are looking to serve your clients with white glove customer service and a full suite of competitive loan products while putting the “fun” in funding while doing it, join the #KindMovement alongside CEO/Founder Glenn Stearns and the team of seasoned industry veterans, poised to grow your impact in the field. Find all open positions and submit your confidential resume today or contact SVP of National Retail Sales, Orlando Gutierrez.