My cat Myrtle is enthralled with Artificial Intelligence (AI). Okay, I made that up. She’s only interested to the extent that it impacts the supply of Icelandic Sea Trout into her bowl. AI is a hot topic these days, and in fact today’s Mortgage Collaborative’s “Rundown” at noon PT, 3PM ET, features David Karandish, the CEO of Capacity, discussing that and other trends in mortgage tech. A trend continuing to rifle through the ranks is mergers and/or acquisitions as a handful of well-known residential lending companies crisscross the country in search of small institutions that fit their business models and are ready for a change. Sometimes discretion is the better part of valor in terms of staying in business: Unfortunately, yet another trend is a lack of profitability, especially among small and mid-sized lenders who have gone through their 2020/2021 savings and sold their servicing. Lastly, volume trends aren’t good either: According to Curinos, October 2023 funded mortgage volume decreased 19 percent YoY and 5 percent MoM. (Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures. We drill into this data further here.) Today’s podcast can be found here, and this week is sponsored by nCino makers of the nCino Mortgage Suite. With three products tailored to the needs of the modern mortgage lender, nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics unite the people, systems, and stages of the mortgage process. Hear an interview with Millennial homebuyer Megan Sinclair on her lender choices behind her third time financing a residence.

Lender and Broker Software, Products, and Services

They're back! Foreclosures are fast approaching their previous levels. Today's market has changed significantly and doesn't favor struggling homeowners. With trending interest rates well above those experienced over the past several years, relief for borrowers facing default will be significantly strained. Before thinking foreclosures are not an immediate concern, read Clarifire's recent blog, "Foreclosures are Back!" to understand what's happening, why this environment is different, and what servicers can do to stave off disruption. It's time to experience the capabilities needed to manage borrower impact and your cost to service with CLARIFIRE®, truly BRIGHTER AUTOMATION®, delivering a better approach, better results, and better software, today!

Are you ready to take your lending operations to the next level? Join the live event on November 16th @ 2pm EST where we unravel the secrets to optimizing your processes, systems, and resources to achieve unparalleled productivity and cost-effectiveness. You'll even learn how to save up 80 percent on several of your operations costs through specific automation and optimization strategies. Join industry leaders Taylor Stork, CMB of Developer's Mortgage, Josh Friend, CEO of Insellerate, and Kirill Klokov, CEO of TRUV. They are ready to share proven strategies to ensure your operations and borrower interactions are optimized for success. Join now!

What’s better than the holidays? Never answering the same question twice. Give yourself (and your team) the gift of Capacity, so in 2024 you can spend less time struggling through the origination process and more time closing loans. Support internal teams, current borrowers, and prospects with secure integrations to over 150 systems, including Encompass and Total Expert. Capacity is designed to streamline lending as your personal assistant. On your behalf, it can read GSE guidelines, retrieve loan information, and assist current and prospective borrowers. Turn a costly, repetitive process into an affordable, scalable one. All you have to do? Ask Capacity. Don't know where to start? Whether you're an AI newbie or ready to join the mortgage AI revolution, we're here to help. Reach out today to ask us about our AI Assessments, or book a demo.

In this market, hustle is everything. You can’t afford to waste a single deal, or a single minute. That’s why ReadyPrice has launched Shop, Lock, Deliver, an innovative platform designed to help independent mortgage brokers and their lenders save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders, all on a single platform, at no cost to brokers. It’s already helping brokers around the country thrive and compete in the toughest market. Multiple lenders. One platform. Zero b.s. Come check us out today.

TPO Products for Brokers and Correspondents

Loan officers! You’ve likely heard that The Loan Store pays a whopping 200 bps per HELOC…but do you know HOW to sell a HELOC? You’re in luck: TLS is hosting the second of its 7-part HELOC Mastermind Series next week. This series features Loan Officers sharing their tips/experiences on how they’re using HELOCs to stay in front of clients and generate additional income. Next live event is Thursday, Nov. 16 at 1 p.m. EST. Register here to attend!

Do you need new affordable mortgage solutions in the communities you serve? Rocket Pro TPO’s Purchase Plus program offers first-time homebuyers in many low-income communities $5,250 in lender credits to use toward down payments and closing costs. The program is available in six metro areas: Atlanta, Baltimore, Chicago, Detroit, Memphis, and Philadelphia. Additionally, the introduction of ONE+ by Rocket Mortgage provides an incredible opportunity for Rocket Pro TPO partners and real estate professionals. With this product, eligible clients provide 1 percent toward the down payment and the other 2 percent down payment requirement is covered… Plus clients are not responsible for paying the mortgage insurance! Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO to learn more.

Wholesaler and Correspondent News

As a quick aside, in news for any originator, Down Payment Resource is highlighting 61 down payment assistance (DPA) programs offering up to $120,000 in funds for Veterans and service members. In addition to these programs, Veterans and service members are also eligible for the other 2,256 DPA programs available nationwide.

Overall, the big are getting bigger, often at the expense of smaller companies. Inside Mortgage Finance reports that the top 25 mortgage producers in the second quarter generated $231.95 billion, a 33.2 percent sequential increase. In the second quarter “United Wholesale Mortgage reclaimed the top ranking, which it had lost by a narrow margin to PennyMac in the first quarter, with $31.85 billion in second-quarter production.” In terms of purchase biz, AmeriHome Mortgage and Guaranteed Rate were both up more than 50 percent from the first quarter. Chase nearly doubled its purchase-loan originations after assimilating First Republic Bank into its operations.

Reports show that Cenlar FSB, and Dovenmuehle ruled the roost in terms of subservicing, with $860 billion and $508 billion, respectively.

United Wholesale Mortgage came out with its third quarter results: Revenue of $677.1 million, with originations of $29.72 billion. (The 4th quarter production estimates run from $19-26 billion, which would put 2023 production at $103 to $110 billion range.)

Nations Direct Mortgage has just lowered its NonQM 2nd underwriting fee from $1499 to $995! In addition, Nations Direct Mortgage is pleased to announce their Veterans Special for the month of November! Honoring those who served with a $500 credit at closing on all VA loans submitted in November.

With Amendment No. 7 to DR-4724, issued on 10/13/2023, FEMA provided an Incident Period End Date of 9/30/2023, for a Hawaii county affected by wildfires and high winds from 8/8/2023 to 9/30/2023. See AmeriHome Mortgage announcement 20231006-CL for inspection requirements.

As part of its commitment to maintain the highest quality and security of its client’s data, Pennymac will begin to use Multi-Factor Authentication (MFA) technology to log into the P3 portal. In the coming days, all P3 users will receive an email to complete the pre-registration process. View the Pennymac Announcement 23-71 to review.

United Wholesale Mortgage, (UWM) announced eligibility expansion for its Investor Flex DSCR loan program by allowing borrowers to close in a Limited Liability Company (LLC). “This enhancement allows borrowers looking to expand their real estate portfolios an additional option to separate their personal properties and their investment properties while benefiting from the faster, cheaper, and easier experience of the wholesale channel. Investor Flex allows borrowers to qualify for investment properties based on perspective monthly rental income of the subject property rather than their current income. Investor Flex was later expanded in July 2023 with four additional DSCR loan options. Additional details on the Investor Flex program can be found here.”

Angel Oak Mortgage Solutions shared an innovative solution that could change the way you help your clients achieve homeownership dreams. Angel Oak non-QM Bank Statement Mortgage, tailored specifically for self-employed individuals and business owners, is now accepting Profit and Loss (P&L) statements as a valid form of income verification.

Capital Markets

Why do markets still seem to underestimate the Fed’s resolve? U.S. Federal Reserve Chair Jerome Powell said yesterday in prepared remarks that the central bank will continue to move carefully but won’t hesitate to tighten policy further to finish off inflation. Fed Governor Bowman said that she would support another rate hike in the event of stalling progress on inflation, and Atlanta Fed President Bostic said that the road to 2 percent will still include some “bumps along the way.” Conversely, Richmond Fed President Barkin said that in aggregate, we are still not seeing the full effects of policy.

Even with policymakers trying to cool expectations for rate cuts as the market underestimates their resolve on inflation, Fed funds futures are currently pricing in a less than 10 percent chance of a rate hike in December, and nearly a 20 percent chance of a rate cut at the March meeting. And that is with bond markets seemingly in a “sell any rally” position. Before Fed Chair Powell expressed doubts that policy rates were “sufficiently restrictive,” Treasury yields spiked after an auction of $24 billion in 30-year bonds met much weaker demand than sales of 3-year and 10-year notes over the past two days

On the housing front, NAR reported that single-family existing-home sales prices rose in 82 percent of measured metro areas (182 of 221 areas across the nation) in the third quarter, up from 58 percent in the previous quarter. The national median single-family existing-home price grew 2.2 percent from one year ago to $406,900, while the monthly mortgage payment on a typical, existing single-family home with a 20 percent down payment was up 19.2 percent from a year ago to $2,192. Twenty-five markets, or 11 percent of all markets, experienced double-digit annual price appreciation (up from 5 percent in the prior quarter).

Today’s economic calendar begins later this morning with preliminary November Michigan sentiment where inflation expectations will be closely scrutinized. Two Fed speakers are currently scheduled: Dallas President Logan and Atlanta President Bostic. We begin Friday with Agency MBS prices worse a few ticks (32nds) from Thursday’s close and the 10-year yielding 4.64 after closing yesterday at 4.63 percent.

Employment, Companies Wanted, and Transitions

Kind Lending is seeking a candidate for the position of Director of Non-QM. As Director, you will be responsible for spearheading the growth of our non-QM division. The ideal candidate will have a deep understanding of non-QM lending, and a proven track record of success in the industry. In this role, you will be responsible for program pricing for multiple channels, loan sales, trading, and hedging, overseeing analytics and pricing engines, as well as margin management and reporting for non-QM production. “At Kind Lending, we pride ourselves on providing our partners and customers with the best possible mortgage lending experience. As the Director of Non-QM, you will play a key role in achieving this goal. If you are a motivated and experienced professional looking for a new opportunity, we encourage you to apply today: Click here to learn more about this opportunity!

“Independent Mortgage Banker owners: If you are uncertain how you will survive this winter if rates remain higher, please call me direct to discuss a win-win opportunity. Equity Resources, Inc. is an established mortgage banking company that has been successfully in business for 30 years. We are privately owned and continue to look at growth opportunities. We offer a full marketing team and a media production team to provide best-in-class support to our loan officers and partners. Our history and culture are exceptionally important so let’s have a conversation to see if we may be a fit. We are large enough to offer exceptionally sharp pricing and products, yet we have a boutique feel where you may talk to the owner of the company at any time. We have a successful history of incorporating other companies into our model. Please contact Tom Piecenski, EVP of Sales.”

Mortgage Machine Services, an industry leader in digital origination technology to residential mortgage lenders, announced that Crystal Stanton will manage customer success and onboarding. “Crystal will onboard new Mortgage Machine customers, leveraging a success-centric approach with a commitment to white glove service to ensure a smooth experience and productive outcome.”