If olive oil is made from olives, what is baby oil made from? The regulatory framework, some would say “tangled web,” facing lenders is made from hundreds of federal, state, state, local, and quasi-governmental bodies. Analogies aside, near the top of the heap is the Consumer Finance Protection Bureau. The CFPB makes its priorities known and is concerned with redlining among other things. The CFPB can’t do anything about rising credit score costs, but for some reason people think it can. On Wednesday at 2PM ET, 9AM HT, the CFPB’s Mark McArdle will be educating us in a session sponsored by L1. (If you have questions you’d like asked, submit them to Robbie Chrisman.) The show will not be recorded, so tune in. Today’s podcast can be found here, and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. Today’s has an interview with Change Wholesale’s Jeff Seabold on how lenders in the non-QM space plan to navigate amid higher interest rates, a growing affordability crisis, and other macroeconomic headwinds.

Lender and Broker Products, Programs, and Services

Popular history tells us the U.S. gold craze began with the rush of 1849 in California, but the first documented gold finding in America actually occurred half a century earlier in North Carolina. In 1799, 12-year-old Conrad Reed found a 17-pound nugget of pure gold while fishing in a creek just outside of Charlotte. Another golden opportunity awaits mortgage lenders in Charlotte this spring, as nCino is seeking speaking proposals for its nSight 2024 conference taking place May 14–16. If you're an nCino Mortgage customer interested in sharing a success story or industry perspective, submit a speaking proposal by December 15. The final speakers selected receive free nSight registration!

Continuing in its theme of growth and innovation, Class Valuation unveils Class Union, a new, specialized division dedicated to meeting the unique needs of credit union clients. This strategic move follows its 2023 acquisitions of Incenter Appraisal Management and TrUnion Appraisal Services. Led by industry veteran Sally Carothers, now EVP of Class Union, the division is tailored to the community-centric, member-first nature of credit unions. “There is no other AMC that has this dedicated resource of valuation experts actively advocating for credit unions, their members, and community of appraisers,” Carothers said. Class Union is uniquely poised to deliver unparalleled value to credit union clients by leveraging Class Valuation's advanced valuation technology and expansive coverage. Clients can expect to benefit from modern appraisal solutions that streamline processes, enhance accuracy, and provide a better experience for all stakeholders. Explore the future of credit union valuations with Class Union here.

“Revolution Mortgage estimates that they can save up to $20,000 in cost on verifications with TRUV over competitors. Femi Ayi, EVP Operations shares how he estimates he is saving 80 percent on his verification costs with Truv in this recorded event. "Let's talk about our documentation costs and those giant monopolies that are out there and laughing at customers and increasing prices because they have a particular monopoly. You want to lower your manufacturing costs. Contact TRUV today to discuss how we can help you with your income, employment, insurance, and asset verifications.”

ICE can help your loan originators uncover holiday magic in their databases with the Surefire℠ CRM and Mortgage Marketing Engine. Our award-winning content library and automated marketing blueprints assist mortgage professionals with attracting new borrowers, winning clients for life and earning repeat business. As you embark on your holiday marketing journey, let Surefire be your guiding star. We have messages ready to help you maximize the sparkle in consumer and real estate agent relationships. Explore how you can shine bright among the competition and schedule a demo with the ICE team today.

Loan officers looking to 10x their time savings while providing real-time 2-1 buydown mortgage options to potential borrowers can now turn to Uplist. In an industry first, the Uplist technology suite provides real-time 3-2-1, 2-1 and 1-0 buydown rate and payment options, as well as the temporary buydown cost for any scenario, with the click of a button. Uplist connects to your live pricing, calculates the cost of the selected buydown, and provides your agents and buyers easy-to-read rates, payments and buydown cost. No more manually rerunning numbers and calculators each time the market moves. Easily stand out with partners and boost your business! Interested loan officers should email sales@getuplist.com or request a live demonstration.

NEW GUIDE: Make More Out of ‘24: How to Win Market Share as Your Competition Lags. Across the industry, the mantra of “stay alive until ‘25” has gained traction, with many lenders planning to hunker down as they wait for rates to descend. We’d like to lay out an alternative: Use this time to shape a forward-looking strategy that improves your financials immediately and helps you get ahead of the competition by winning market share. Want to learn how? We spoke to senior members of the Maxwell team, and the result is our new eBook: an actionable guide that will teach you the likely path for rates and volume in 2024, strategies to bulk up your pipeline, why reevaluating your cost structure is vital to achieving profitability, and more. Click here to get your free copy of Make More Out of ‘24: How to Win Market Share as Your Competition Lags.

“Make 2024 your most profitable year yet! With Lender Toolkit’s AI-powered AI Underwriter you’ll be able to get loans approved in under two minutes. By providing lightning-fast underwriting decisions, your market reputation with borrowers and Realtors will soar, which means more repeat and referral business. Notes Mark Workens, CEO of Mortgage 1 Inc.: “Lender Toolkit's Maas™ Platform solutions have fundamentally transformed how we do business Our profitability has skyrocketed, and our employees have never been happier.” This Thursday, Lender Toolkit is also introducing a new BizRule Analyzer Power tool, an extremely powerful tool for Encompass® administrators who need to search for system settings that include a particular field or text string. It allows you to troubleshoot system issues related to specific fields and ensure that planned changes don’t conflict with existing settings. To learn more about all Lender Toolkit has to offer, email us.”

“Maximize your efficiency and lower costs with Richey May's RM Analyze. Our business intelligence solution will show you where you can make improvements and save money. Stay ahead of the competition by operating leaner and smarter. For the cost of half a full-time employee, you'll gain access to a team of experts with a wealth of experience in the mortgage industry and a wide range of reports, including up-to-the-minute benchmarking data. With this valuable knowledge, you can make informed decisions that will propel your business forward. Don't just survive: thrive by learning how to operate leaner with Richey May.”

Wholesaler Products and Program Updates

JMAC Lending: More products + faster service + open lines of communication with operations = more loans funded. Today’s market demands fast, dependable service with a complete range of mortgage solutions to qualify your clients: FHA with FICOs from 500, VA and FHA with Manual Underwriting, LENDER PAID 1-0 Buydowns, 3-2-1 and 2-1 Buydowns, Jumbo to $4M, Unlimited cash-out to max. LTV, Closed-End Seconds to $500K, Alt Doc, No Ratio investor DSCR, Bank Statements, 1099, WVOE, Self-Prepared P&L, 40-year fixed, 30- and 40-year Interest-Only… whatever your borrower’s scenario, JMAC Lending can find a fit for your loans. JMAC has been in business since 1997. Start lending with JMAC today! Click here join JMAC and sign up for marketing and rates or contact sales. Let’s grow your business and fund more loans in 2024. Happy Holidays from Team JMAC. Let’s Win the Market in 2024.

Whether you've recently signed up with Plaza Home Mortgage or are in need of a refresher on originating loans in BREEZE, Plaza has comprehensive training resources available at your fingertips. Access its library of training videos and quick-step guides directly through the Plaza client portal.

Kind Lending expanded access to credit and provides support for affordable rental housing, the maximum allowable LTV, CLTV, & HCLTV ratios for 2–4-unit, principal residence, purchase, and limited cash-out transactions are now updated to 95 percent, does not apply to high-balance mortgage loans and loans with manual underwriting. To adhere to these changes, Kind's updates have been applied to Fannie Mae's (FNMA) Conforming & HomeReady programs, Fannie Mae (FNMA) HomeStyle is not available at Kind Lending.

To maintain the highest quality and security of client’s data, Pennymac will begin to use Multi-Factor Authentication (MFA) technology to log into the P3 portal. Read Pennymac Announcement 23-84 for details on completing the setup process.

Plaza Ranked #5 in Wholesale Lending, read the latest news and updates.

Capital Markets

The focus last week was on the payrolls data before the final Federal Open Market Committee (FOMC) meeting of the year. Nonfarm payrolls rose by 199k in November, more than October and slightly above market forecasts, while the unemployment rate dropped to 3.7 percent, earnings rose, and the labor force participation rate increased.

The jobs numbers portray a U.S. economy that is easing toward a “soft landing” and is not on the brink of a recession, despite the predictions we’ve been hearing for nearly two years. And while it wasn’t strong enough for the Fed to reconsider its stance of not hiking rates this week, it did put pressure on stock and bond prices following the run up in November. The report defied expectations of continued softening in the labor market as the Fed seeks to "stick a soft landing," deflating hopes that the central bank will cut interest rates early next year and lending to concerns that price pressures might be harder to stamp out than previously anticipated.

Using last week’s numbers, 2023’s monthly payroll averaged 232K, well below the nearly 400K monthly average in 2022. Additional data last week from the Job Openings and Labor Turnover Survey (JOLTS) revealed openings fell to 8.7 million in October, their lowest level since March 2021. The labor market is slowly normalizing, and reduced job availability has eased pressure on wage growth to a more balanced level. Despite cooling income growth, demand remains higher for services. The ISM services index rose to 52.7 in November and strong demand has allowed service firms to keep prices high. This complicates the Fed’s mission to get inflation back to 2 percent even though significant progress has been made.

The recent, rapid decline in rates, in particular the mortgage rate (down nearly 80 basis points since the end of October), along with continued job growth, are beneficial for homebuyers. But if the labor market remains strong, the pace of mortgage rate declines will likely not continue in the near term or may partially reverse. It is widely expected that the FOMC will hold rates steady this week though market expectations are that the Fed will begin to cut rates in the spring of 2024, as job market trends are likely to weaken from here.

Besides the FOMC decision on Wednesday, along with updated Summary of Economic Projections (dot plot) followed by Chair Powell’s press conference, and the mini-Refunding today and tomorrow, there are several key economic releases this week. Tomorrow sees CPI as well as the November budget statement, Wednesday sees PPI ahead of the Fed, Thursday sees retail sales, import prices, and business inventories, and NY manufacturing, industrial production / capacity utilization and S&P Global services PMI are on Friday. After the Fed, the ECB, BoE and SNB will be out with their latest monetary policy decisions on Thursday.

Today is all about supply with Treasury auctions of $68 billion 6-month bills and $50 billion 3-year notes, followed by $75 billion 3-month bills and $37 billion reopened 10-year notes. The only data point is the Employment Trends Index for November, due out later this morning. We begin the week with Agency MBS prices roughly unchanged versus Friday’s close and the 10-year yielding 4.27 after closing last week at 4.25 percent.