Hey, I like a good raccoon swarm as much as the next guy, but you couldn’t pay me to walk out there in that yard. Speaking of pay, a common question is how much how are LOs and managers paid, and STRATMOR’s blog is titled, “Lenders and Vendors Must Pay to Play.” Geographical differences have diminished in comp, but they still very much exist in weather and rental markets. The best weather of the year for different regions varies. While Florida is evacuating, it is arguably the best time of the year in the Midwest. Accordingly, Chicagoland has matched Miami's long-standing dominance as the nation's most competitive rental market, signaling housing pressures spreading beyond coastal hotspots. Renters struggled this summer due to high lease renewal rates and potential homebuyers remaining in the rental market, limiting available options, and creating strong competition for apartments. This change was boosted by the Midwest’s rejuvenated economy, coupled with a higher lease renewal rate of 69.5 percent and a drop in new units to 0.11 percent. NYC's Manhattan is growing more competitive: With less than 5 percent of rentals still available and almost no new units opened recently, 65.8 percent of renters decided to stay put. This led to nine renters competing for a single unit, which typically got filled in 37 days. (Today’s podcast is found here and this week’s is sponsored by LoanCare. The mortgage subservicer is known for delivering superior customer experience through personalization and convenience. LoanCare is part of Fidelity National Financial, a Fortune 500 company and leading provider of services to real estate and mortgage industries. Hear an interview with Corporate Settlement Solutions Ashley Jelinek on trends in home equity and valuation.)

Lender and Broker Software, Services, and Loan Programs

There’s now one more way to get insights and expertise from Optimal Blue! The leader in mortgage capital markets technology has added a podcast to its Market Advantage mortgage data report, which means subscribers get an additional layer of insight into U.S. mortgage trends. Each month, the Market Advantage provides a complimentary and trusted view into early-stage origination activity through direct-source mortgage lock data. The latest edition highlights September activity, which included a 700% YoY surge in rate-and-term refinance locks and the first YoY increase in purchase locks since the Fed began raising rates in Spring 2022. In the corresponding podcast episode, Brennan O’Connell, Optimal Blue’s director of data solutions, dives further into September’s findings before chatting with guest commentator Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association. Read more in the complete Market Advantage report and listen to the podcast on major streaming platforms.

It’s said the number “1010” signals that financial goals are within reach and to keep the faith. It’s also coincidentally the day we’re launching a new feature within Floify POS that will verify income and employment (VOI/E) at a cost-effective price point, potentially saving lenders 60–80% over legacy providers and alleviating the hassle of managing additional third-party vendors. Called Floify Verify, this native VOI/E tool is powered by Argyle, an authorized report supplier to both Fannie Mae and Freddie Mac, to help lenders of all sizes regain control over the spiraling cost of VOI/E verification and reverification. Shore up your faith by booking a demo at MBA Annual (where you can collect our very cool “Mountain Must Haves Kit”) or, if you prefer not to wait until late October to start saving money, schedule a virtual session with Jason Mapes.

As weather events continue to increase in frequency and intensity, many individuals and businesses are met with tremendous hardships due to these climate-related incidents. Federal regulators have also put an increased focus on understanding the implications climate is having on the mortgage market. As a result, lenders and servicers need to better understand climate impact and implement processes and solutions to help mitigate potential risks. Join ICE for an informative webinar on October 17 to learn how climate-related events are impacting home affordability, insurance costs and interest rates. As the regulatory focus on climate risk management grows and weather-related events further impact lenders’ loan portfolio, learn how ICE data and solutions can provide you with the actionable insights to help manage and mitigate potential risk.

Thinking about changing your audit and tax firm, but worried that the benefits won’t outweigh the hassle? First year client Prateek Khokhar, CFO of market leader American Pacific Mortgage, shares why he relies on the mortgage industry experts at CWDL: “What I value the most about CWDL is the personal attention that we get as a client both on the audit and tax side. The fact that CWDL is able to take their experience in the mortgage industry and use that as guidance to navigate GAAP and tax issues that arise is invaluable in the highly volatile industry that we all know and love. And it allows them to understand each mortgage company’s business and advise and audit accordingly.” Don’t wait to make a transformational change for your business. Reach out to Kasey English at 619.302.0010 to learn how the mortgage industry experts at CWDL can help you navigate the complexities of audit and tax compliance.

“What if the brightest and most experienced servicing minds got together and built a system from the ground up with everything they had ever wanted in their long careers? That is precisely what we did at MortgageFlex with our cloud-native servicing system, which is why we added so many new customers in 2024. How did we do it? Comprehensive Dashboards: You will gain instant access to a dashboard that provides a holistic view of performance standards across all levels. Operational Excellence: Leverage years of operational experience embedded in a solution designed to meet the needs of any client size. Cost Efficiency: Discover ways to reduce costs and make loan retention more affordable. Modern Technology: Say goodbye to outdated systems and embrace a solution built for today’s market. Let's chat if you’re looking to cut costs, rethink loan retention, or upgrade from antiquated technology. Contact John McCrea or schedule time at the National MBA Conference in Denver. Take control of access to your data in your own private cloud.”

Correspondent Offerings

Boost your bottom line with Planet, your one-stop shop for end-to-end solutions. Meet with us at MBA Annual, Oct 27-30 in Denver, to discover how we can drive year-round correspondent growth and profitability in all market cycles. From niche products like renovation, manufactured home lending, and USDA, to co-issue for consistent MSR pricing and fast funding, we offer full-service flexibility. Whether you need best effort, mandatory AOT, delegated, or non-delegated delivery, we’ve got you covered. As the fastest-growing non-prime sub-servicer, we provide unmatched, best-in-class sub-servicing and asset management. Start your path to performance with Planet. Contact your Regional Sales Manager or book a meeting at MBA Annual. Put Planet to work for you.

To clients, business partners, and friends that were impacted by Hurricane Helene and are now dealing with Milton, the entire AmeriHome Mortgage team is sending thoughts and prayers your way. The human spirit has a way of overcoming adversity, especially when people come together as one. AmeriHome has a human triumph story of its own: it is thrilled to announce the return of Non-Delegated Sales Executive Jeremy Hebert, who suffered a major stroke seven months ago. Jeremy’s internal strength, resilience, and perseverance are an inspiration to all who know him. Jeremy is ready to meet with clients: Catch him and the AmeriHome team at events through the rest of 2024! Speaking of events, don’t miss AmeriHome next week in Las Vegas for the NAMB National 2024 Conference and the following week in Denver for the MBA Annual Convention & Expo! For more details on where to catch AmeriHome, check out its Upcoming Events and reach out directly to schedule a meeting.

Ignore Compliance Trends at Your Own Risk

My cat Myrtle was never a fan of the CFPB. But she never ignored it, nor the Department of Justice, nor the myriads of other groups that could warn, penalize, or shut down a company. TD Bank faces $3 billion in penalties and growth restrictions in a U.S. settlement: the Canadian bank’s U.S. unit is expected to plead guilty today to charges that it failed to build proper anti-money-laundering systems.

Garris Horn wrote, “The U.S. is said to have amassed over $75 billion in ‘recoveries’ under the False Claims Act (‘FCA’) since Congress added whistleblower, or ‘qui tam,’ provisions in 1986 allowing private individuals to sue on behalf of the federal government and share in the recovery. The Department of Justice reported that FCA qui tam recoveries totaled over $2.3 billion in the last year alone. This arguably abusive program now may be in jeopardy. The U.S. District Court for the Middle District of Florida, on September 30, 2024, issued a landmark ruling in U.S. ex rel. Zafirov v. Fla. Medical Assoc. LLC finding that these qui tam provisions are unconstitutional. Read the court’s order here.

Orrick noted that the FHFA published Advisory Bulletin AB 2024-03 which provided guidance to FHLBanks on establishing and maintaining a member credit risk management framework. The bulletin highlighted the importance of FHLBanks’ underwriting and credit decisions being based on a member’s financial condition rather than relying on collateral securing the member’s credit obligations. The guidance was divided into four key components to ensure sound credit risk management practices.

On September 27, the FHFA released its NPRM and request for comment to amend capital requirements for FHLBanks to modify limits on unsecured credit extensions. The proposal seeks to exclude interest-bearing deposit accounts (IBDAs) and other authorized overnight investments from the more restrictive “general limit” on unsecured credit to a single counterparty. This change is aimed at providing greater flexibility and enhancing FHLBanks’ liquidity management capabilities.

On September 26, the U.S. District Court for the Northern District of Illinois dismissed a case against two banks where the plaintiff alleged violations of TILA and the Illinois Consumer Fraud and Deceptive Business Practices Act. The court ruled in favor of the defendants granting their motion to dismiss all claims with prejudice. The plaintiff claimed the defendants failed to provide required repayment disclosures for his open-end line of credit, which he argued violated TILA. The defendants countered that the regulations limit these disclosure requirements to credit card accounts, exempting general purpose open-end lines of credit similar to the plaintiff’s account. The court sought to determine whether TILA’s repayment disclosure requirements applied only to credit card accounts. The District Court invited the CFPB to submit an amicus brief to address the issues under TILA and its implementing Regulation Z.

Cybersecurity is a top concern for lenders. After all, that’s where the money is. Garris Horn recommended, “C-suite executives should take steps immediately to strengthen their company’s security infrastructure. Here are five such steps. 1. Conduct a Comprehensive Data Security Audit. 2. Enhance Encryption and Data Access Controls. 3. Ensure Vendor Compliance. 4. Stay Informed About CFPB Rulemaking. 5. Implement a Strong Data Breach Response Plan.

While we’re on legal issue implications, the Loan Originator Compensation Rule has been a thorn in the side of the mortgage industry since 2011 and in his Mortgage Musing, comparing LO Comp to the Berlin Wall, attorney Brian Levy again criticizes this uniquely anticompetitive price fixing rule that prevents mortgage commission negotiation at the expense of all consumers.

Capital Markets

Bets on large rate cuts heading into year-end have been pared back following last Friday’s strong payrolls print, and adding fuel to that fire was yesterday’s release of the Fed Minutes from the September FOMC meeting, which showed that there was some pushback for the 50 basis-point cut last month. Multiple policymakers favored a smaller quarter-point reduction. Fed funds futures markets are pricing in around a one-in-five chance that the Fed hits the pause button at the November FOMC meeting, while still favoring nearly two 25-basis points rate cuts by year end.

Today’s economic calendar kicked off with the all-important CPI report for September: +.2 percent, core was +.3 percent in September, higher than expected. We’ve also had weekly jobless claims (258k, higher than expected). On the back of lower energy prices, headline Consumer Price Index inflation was expected to have slowed further in September, with core inflation holding steady for the third consecutive month. Later today brings Freddie Mac’s Primary Mortgage Market Survey and remarks from several Fed officials. We begin the day with Agency MBS prices worse a few ticks (32nds), the 2-year at 4.01, and the 10-year yielding 4.08 after closing yesterday at 4.06 percent.

Employment

“Have you considered the potential of becoming a dual-licensed real estate agent? By offering mortgage services alongside real estate, you can guide your clients through the entire home-buying process, including the financial aspects. Realfinity’s embedded lending platform is built specifically for real estate agents and increases your commissions by around 40% per transaction, without changing your current setup. At Realfinity, our mission is straightforward: we aim to become the leading platform enabling real estate agents to offer mortgages to their clients both at the point of sale and post-closing. We know that many of your readers and listeners are traditional lenders or brokers, but we are actively hiring experienced loan officers to serve as account representatives, helping to build a network of dual-licensed real estate agents.”

American Pacific Mortgage (APM) announced the strategic addition of three seasoned mortgage industry leaders: Balenda Hetzel as regional vice president, Brent Hicks as divisional president, and Justin Fitzhugh as divisional president. “These positions are designed to bolster APM’s focus on expanding the company’s national footprint, providing transparency, and delivering unmatched value to producers and clients across the nation.” Hetzel will oversee teams with a clear focus on driving growth while prioritizing excellence in customer service. Hicks will be leading the company he founded, Clear Modern Mortgage, “with a vision to eliminate the opaque practices often found in lending. And Justin Fitzhugh will be the Divisional President of True North Home Loans, a Division of APM.

Waterstone Mortgage announced the promotion of 25-year vet Jim Harper to Chief Financial Officer. Congratulations!

(As a reminder, anyone searching for employment can post their resume at no charge at www.lendernews.com, and potential employers can view all resumes for several months for only $75.)