Do we have an 8-year memory in an industry with 10-year business cycles? Bridging the gap between affordability, qualifying with a low income, and rising house prices are not issues confined to the United States. A new company and product out of London (Habito) claims to do all that, and is offering medical professionals and public servants a break. We don’t need to slide down the credit curve at the same time investors want higher yielding assets, as that didn’t work out so well in 2006-2008. Switching gears, New York’s Westminster Dog Show is the latest COVID variant casualty, being postponed. I received plenty of notes (most complimentary, some not) about the COVID and work-from-home (WFH) policies of major financial service sector companies. One person sent me a study by the U.S. Census Bureau titled, “Who Are the Adults Not Vaccinated against COVID.” There is no denying that lenders and vendors have more people are working from their homes these days than was the case two years ago. Once considered a luxury, dedicated home office space is now a must-have for homeowners; builders have adapted, and there are some trends in there worth a skim for home owners who want to set up an office in that extra bedroom. (During this seasonal quiet time the daily podcast is having some down time but will return Monday, January 3. Earlier versions of the audio are available here; questions about interviews and sponsorships should be directed to Robbie Chrisman.)

Lender and Broker Services and Products

An experienced, private, lender offering Fix and Flip, bridge, and rental loans for real estate investors is searching for a warehouse line/bank financing as a loan aggregation facility. The Lender has conservative underwriting, an experienced team, and proven disposition execution. Warehouse lenders should contact Chrisman LLC’s Anjelica Nixt to forward their note of interest to the Lender.

What do you pay for your LOS and FinTech stack today? If you’re paying more than $70 per unit or $200 per user, are you paying too much? Cloud-based LoanMAPS, a fully integrated digital processing and underwriting system, will eliminate your need for a POS, a LOS, a CRM, report writer, and income calculator. Do you know your costs of your full-time employee? Is the cost to run your loan through your Fin-Tech add-on higher than your employee? Or your cost to produce a loan? Does your LOS notify your team of contract due dates or sales activities? LoanMAPS does. One clean database; no more imports/exports so you now have clean and accurate reports from one system! “LoanMAPS is not about replacing people, but about using technology to its fullest potential so that your employees can reach theirs.” Take3Tech! Visit LoanMAPS  to learn more!

5, 4, 3, 2, 1 Happy New Year! Welcoming the New Year also means getting rid of the bad and embracing the good… Do you have a New Years’ resolution? What better way to start the year than to increase efficiencies, decrease overhead, and gain greater data integrity. Many lenders will accomplish this by leveraging third-party fintech vendors. Ring in the New Year with MQMR! MQMR’s Fintech Vendor Management Whitepaper will guide you through the unique considerations of working with fintech vendors. Let MQMR help you create or enhance your current vendor management program and help you plan strategically for 2022! Schedule a meeting with the team today!

On the last night of the year, Peruvians throw three potatoes (one peeled, one unpeeled, and one half-peeled) under their beds. At midnight, they pull out the first potato they touch. Peeled represents financial problems, unpeeled indicates abundance and half-peeled means a financially average year. Like an unpeeled potato on New Year’s Day, Sales Boomerang brings lenders financial success (and an average 20-40% lift to loan volume) by monitoring your database and notifying you when borrowers are eligible for a loan. As John Kresevic from JFQ Lending says, “Sales Boomerang converts just as well as inbound phone calls we receive. I have LO’s that only work Sales Boomerang leads, and my ROI is in the 20-30X Range. My expectation now is that 10% of my $275M monthly loan volume comes from Sales Boomerang.” Stop chasing small potato leads that won’t convert. Contact Sales Boomerang today.

Only two days until the New Year! Do you have a plan to combat rising loan costs in 2022? Maxwell Processor Edge is a first-of-its-kind fulfillment workflow platform that integrates with your loan origination system to increase efficiency and reduce costs. Digital mortgage solutions provider Maxwell developed Processor Edge after spending hundreds of hours with processors to understand how technology could help them work faster and more accurately. The result is a powerful solution that accelerates the document review process, detects data discrepancies before underwriting, and streamlines communication with borrowers and stakeholders. With Processor Edge, processors can move a file into approval in days instead of weeks, reducing the per-unit cost of a loan while lessening errors and mistakes. Ready to see how your team can benefit? Click here to learn more about Maxwell Processor Edge, or schedule a demo today.

Conventional Conforming Moves

Fannie Mae and Freddie Mac are updating the Uniform Loan Delivery Dataset (ULDD) to align with current GSE requirements and support the continued improvement of our loan delivery standards. The updates include new data requirements as well as updates to existing data points. Detailed information is available in ULDD Phase 4a specification release announcement

Fannie Mae updated project standards FAQs with a new section to address questions regarding Lender Letter LL-2021-14 requirements, deferred maintenance, and special assessments. 

Freddie Mac Guideline Updates are available in First Community Mortgage Correspondent Announcement 2021-33 and FCM Wholesale Announcement 2021-40. 

Fannie Mae is requiring appraisers to use ANSI standards starting April 1st. What does that mean for appraisers and how can they make sure they are following all the new guidelines correctly? These questions and much more will be answered as Joan Trice and Bryan Reynolds have their discussion on this subject.

Freddie Mac and Fannie Mae set the standards in both the primary and secondary markets for single-family business. And with the record-setting business comes elevated buybacks, unfortunately, although both Fannie Mae and Freddie Mac spell out the process and how to appeal a repurchase request. Inside Mortgage Finance reports that during the third quarter of 2021, sellers had to repurchase $818.3 million of single-family loans from mortgage-backed securities issued by Fannie and Freddie. That was up 16.8% from the second quarter. “The third quarter brought year-to-date repurchases to $2.13 billion, an 80% jump from the first nine months of 2020. As of September 2021, this already represented the highest annual buyback total (which includes indemnifications as well as repurchases) since 2014.”

FHFA raised conforming loan limit by 18% providing opportunities for more flexibility (and possibly lower rates) when financing a higher priced home. Check out any area in the U.S., posted by Priority Financial Network (“PFN”). 

To take advantage of the higher limits, Carrington Mortgage must fund and sell the loans to Fannie Mae/Freddie Mac on and after January 1, 2022, and loans will be conditioned so they cannot close until January 1, 2022, or after. Carrington’s Pricing Engine has been updated to price and lock loans with the new higher conventional loan limits. Full details are available in Carrington Correspondent Announcement 21-0050.

In accordance with Freddie Mac changes to project approval and delivery requirements, Flagstar’s Conventional Condominium Guidelines will be updated with changes listed in Flagstar Bank Announcement 21171 for projects with five or more attached units.

Capital Markets

The prices of mortgage-backed securities and U.S. Treasuries ended Wednesday on a mostly lower note, lifting yields on the 10-yr note and the 30-yr bond to their highest levels in at least a month. Liquidity is already challenged, with many taking an extended holiday break. (In foreign news, the latest bond payment deadline for China’s Evergrande passed with no indications of a payment being made, not a good sign. The developer faces about $7.4 billion in debt payments in 2022.) The $56 billion U.S. 7-yr note auction saw weaker demand than sales of 2- and 5-yr notes that took place over the past two days, and pending home sales fell 2.2% in November after increasing 7.5% in October.

Yesterday the NY Fed Desk did its usual buying of Agency MBS, Wednesday to the tune of $4.5 billion. (Since the restart of asset purchases in March 2020, the Desk has purchased $2.8 trillion MBS.) Today it is planning to purchase up to $2.703 billion in UMBS (Uniform Mortgage-Backed Securities). For scheduled news, we’ve already had the weekly Initial Jobless Claims for last week (-8k to 198k, indicating more labor market recovery; continuing claims -140k to 1.716 million), later we’ll see the Chicago Purchasing Manager’s Index. U.S. financial markets are open tomorrow, by the way, and in the early going today rates are steady: the yield on the risk-free U.S. 10-year note is 1.53 percent after closing Wednesday at 1.54, and Agency MBS prices are nearly unchanged despite the strong employment numbers this morning.

Careers 

SMU COX School of Business Unveiled its 2021 Ranking of the fastest-growing private companies in Dallas-Fort Worth. Highlands Residential Mortgage ranked and was recognized as the “#2 Fastest Growing Private Company in North Texas! “This was our sixth consecutive year to be in the Top 100 and our highest ever ranking. The dedication, hard work and unwavering commitment from all of our Highlands teammates who produce a Higher Standard of Lending is truly second to none!” said Brian Bennett, President. To find out more about Highlands growth and expansion plans, visit whyhighlands.

In the Northwest, Banner Bank is hiring loan officers. Banner has rolled out its Household Plus mortgage which lets residing family members or boarders contribute up to an additional 30 percent of the borrowers’ qualifying income. So, if the primary borrower earns $5,000 a month, another $1,500 can come from one or more adults who will live in the same single-family residence ($1,500 is 30 percent of $5,000).

In the Northeast, Radius Financial Group is hiring. Radius’ existing employee demographics indicate that 57% are female, 43% male, 31% of executives are female, 18 percent are minorities/LGBTQ/disabled, and 4 percent are military/veterans.