A friend out in California asked me how much, on average, I spend on a bottle of wine. I replied, “About half an hour.” Plenty of wine is being consumed while watching Yellowstone and 1923, and while all the women are ogling Spencer Dutton in 1923, in some non-mortgage news to save the economy the Secretary of Homeland Security will announce next month that the Immigration and Customs Enforcement will start deporting seniors (instead of illegals) to lower Social Security and Medicare costs. A major study concluded that older people are easier to catch, offer less resistance, and, more importantly, will not remember how to get back home. In actual news, lenders who own servicing continue to peel it off because it either doesn’t fit their portfolio, or they need the cash. The owners of lenders continue to examine various business strategies as we start 2023, with some thinking that it doesn’t make sense to remain the size they are. There was a lot of mergers and acquisition activity last year, big and small. I am told by my M&A friends at STRATMOR (Garth & David) that 2023 is lining up for even more. (Both will be in San Diego at the IMB Conference if you want to confidentially meet up.) This week’s podcast is sponsored by Candor. Candor’s patented automated underwriting decision engine, CogniTech™, is a state-of-the-art, 100% machine platform that can handle infinite loan scenarios. Today’s has Part Two of an interview with Tom Booker and Tom Showalter on how every underwrite is an anomaly.

Lender and Broker TPO Loan Products

“Have you ever run into a well-qualified business owner purchasing their dream home whose income didn't quite translate to their tax return? They have great credit, and plenty of money in the bank but the type of program where those compensating factors matter doesn't exist…until now. With Angel Oak Mortgage Solutions LLC’s (NMLS ID #1160240) NEW Business Bank Statement Elite Program, say goodbye to calculating income with only the borrower’s tax returns. The new program includes lower rates, allowing you to qualify more borrowers than our standard bank statement program, helping you retain loans you normally would not make, capture additional business, and help borrowers qualify using their credit history along with their business bank statements. Join our “Deep Dive into Bank Statement Loans” webinar Thurs 1/19 @ 1pm. For more information on this new program, call your local Angel Oak representative or request information at here. Angel Oak is leading the way as a wholesale and correspondent non-QM lender with loan products including Bank Statement, Investor Cash Flow, Platinum Jumbo and more.”

“Verus Mortgage Capital understands that when it comes to rates, timing is everything. If you haven’t looked at our rates lately, you should. They’ve improved dramatically over the past 45 days now that rates and markets are stabilizing. This is due to several factors such as the Federal Reserve’s monetary policy, the economic recovery, and spreads tightening. Given the current trend of declining rates, Verus believes now is an ideal time to consider offering Non-QM programs. These programs are designed for borrowers who may not meet conventional mortgage qualifications. Verus is the leading investor in Non-QM mortgages, with the expertise and financial resources to help originators succeed in the current market. Check out our rates and learn more about why now’s the time to begin offering non-QM. Contact Jeff Schaefer, EVP, Correspondent Sales, or call 202-534-1821.”

Lender and Broker Software, Products, and Services

What happens in origination doesn’t stay in origination. Those who work in mortgage risk management know that defects in your loan pool can flow downstream from origination through post-closing, and servicing like a bad penny. If those defects aren’t accurately captured and addressed, they come back to haunt you with fines, fees, and repurchases. Lucky for you, Indecomm’s mortgage QC technology, AuditGenius, accurately captures risk early in the QC process and stores your loan data, documents, QC results for future reference. With AuditGenius, you get QC right early, reduce your repurchase risk, and have a single, reliable source of loan quality data and documentation. Reach out to Linda Bomar to learn about AuditGenius.

Every borrower app counts! Service 1st (S1) is closing proposal after proposal for mortgage credit reporting and borrower verification solutions following a late 2022 unexpected price increase for credit and employment data providers. Are you leveraging pre-qual credit & Credit Assure? What employment data vendor is 1st, 2nd or 3rd position for your VOE waterfall/cascade? Get educated: Don’t get gouged and make the right choice for your lending footprint w/ S1. How are your LOs leveraging soft pulls/prequal credit, reissues v. resubmits, and negotiated bundles for credit reporting? Is that bundle really working? Don’t get caught spending thousands upon thousands on borrowers that have no chance to close. There are huge implications upon cost per loan in 2023. There’s a reason we’re “Service 1st”. Try us today!

“What’s topping your list of New Year’s resolutions? Hitting the gym every morning? Strengthening referral partner relationships? Capturing more business? While we can’t be your gym buddy, wemlo® can help make your 2023 business goals a reality with our third-party processing services. By passing the loan processing operations to wemlo, you’ll have a dedicated, go-to loan processor (plus a backup loan processor and manager) who care about your customers and loans as much as you do. Our results-oriented processors hustle to take care of business and keep your customers happy: Just look at our 4.9/5-star rating from borrowers. Ready to cross loan processing off your to-do list? Schedule your 1:1 call to learn about wemlo’s knowledgeable, professional, and dependable processors.” (NMLS ID 1853218. *Borrower Score: 48 responses / 4.9)

Return on marketing investment is nothing to sleep on in a tight purchase market. Luckily, Surefire by Black Knight has modern tools to help lenders meaningfully connect with prospects out of the gate. Surefire Power Messaging makes text message marketing a hands-free process. Of course, messages should be eye-catching and relevant to effectively engage borrowers. That’s where Surefire Power Video comes in, taking lenders’ text message marketing to the next level by embedding relevant video content directly within their outreach. Go from just another LO to homebuyers’ BFF with Surefire Power Messaging and Power Video.

To survive in this market, lenders must adapt, evolve, and become faster and cheaper all while increasing loan quality and margins. Candor Technology’s Loan Engineering System (LES) is powered by CogniTechTM the only patented automated underwriting engine in the mortgage industry. The system utilizes aerospace and expert systems technology to provide unmatched decisioning ability. Meet with us at the IMB conference in San Diego to learn how Candor Technology is blazing new trails from POS to Servicing and helping clients realize economic benefits not achievable with other platforms. Schedule time during the IMB here or request a demo outside of IMB here.

Whether applications are up or down, you should be collecting upfront fees. When you can get a borrower to invest early, they’re much more likely to finance with you when all is said and done. But it’s such a manual process, and we’d rather eat that cost upfront. In today’s market? Let’s be real. You're leaving money on the table if this isn't built into your top-of-the-funnel strategy. Okay, but we still have to spend time getting the financials and running the payments. Do you? With an automated solution like Fee Chaser by LenderLogix, you can request the payment with one click. On average, 60% of lenders receive their payments within 5 minutes and 94% within 24 hours. Everyone is notified, the receipt is added to your LOS, and you don’t hold on to the financial information. Work smarter, not harder, this year. Get a sample request sent to your phone.

“Need to generate more revenue and stand out from competitors in 2023? Matic, an embedded home insurance platform built for the mortgage industry, has helped top lenders and servicers add a new revenue stream: unlike most tech solutions, we add revenue to your bottom line. We help you give borrowers an amazing experience with personalized insurance offers from 40+ names you know, like Progressive, Travelers, Nationwide and more. And we automate the home insurance process, meaning faster closings and less headaches for your loan teams. BOOK A QUICK DEMO with our team of mortgage experts to learn more about partnerships.”

Experience fast turnaround times at competitive pricing with QC reviews from Maxwell Diligence. QC doesn’t have to burden your lending business with slow, inconsistent results. While many quality control firms are months behind on reviews, Maxwell Diligence delivers trusted outcomes fast, leveraging an experienced team of 100% onshore talent. Its technology-enabled platform streamlines the process and produces competitive turnarounds, including 36 hours for initial review and 24 hours to review and clear conditions. Plus, Maxwell’s client-dedicated customer service ensures transparency and support throughout the process. To learn how QC from Maxwell Diligence can save you money while driving reliable results, click here to schedule a call with our team.

UMortgage, a national mortgage platform, continues to grow after announcing that retail loan officer, Andrew Cady, and the Epic Mortgage Team would be leaving their previous national retail lender to join UMortgage. “2022 was one of the hardest years the mortgage industry has seen in the last several decades with an average 21% decline in quarter-over-quarter volume,” claimed Cady. “Meanwhile, UMortgage’s quarter-over-quarter volume increased 13%, 22%, 39%, and 11% each quarter of the year. What’s different here? UMortgage is more than a mortgage company; it’s a platform for loan originators to succeed.” Hear more from Andrew Cady regarding his decision to ditch the retail lending model and step forward into the future of the mortgage industry by signing up for The Future of Loan Origination Virtual Event, which he’ll host alongside President & CEO, Anthony Casa, on Thursday, January 19 at 2pm ET/11am PT.

Capital Markets

Traders and investors are always comparing mortgage-backed security prices and yields versus Treasury securities of similar maturities. The MBS “basis” got off to a rough start this holiday-shortened week with spreads sharply wider, Treasuries ending yesterday mixed, and the yield curve much steeper as concern over the outlook for corporate earnings weighed on risk sentiment. MBA mortgage application weekly survey came in at +28% week over week (more below), explaining the drastic increase in TBA hedging by originators. This is the largest single week increase (by %) since 3/2020. MBS showed weakness as it struggled to digest the supply.

The rest of the week won't have much in the way of market-moving data, although today we received retail sales (-1.1 percent, worse than expected, ex-auto and gas -.7 percent) which are a barometer on the holiday shopping season and are a big input into Q4 GDP. The Producer Price Index was -.5 percent, falling more than expected, and for the year +6.2 percent, roughly as expected. Later this week brings housing starts and existing home sales, but the focus will likely be on financial earnings and any news that comes out of the World Economic Forum meetings in Davos.

Aside from retail sales for December, we’ve also already learned today that mortgage applications increased 27.9 percent from one week earlier (!), according to data from MBA. Before we get ahead of ourselves, the refinance index is still 81 percent lower than the same week one year ago and the purchase index is 35 percent lower than the same week one year ago. Loan officers know that mortgage rates are now at their lowest level since September 2022 and about a percentage point below the peak mortgage rate last fall.

Later this morning brings December Industrial production and capacity utilization, November business inventories, the NAHB Housing Market Index for January, and a Treasury auction of $12 billion reopened 20-year bonds. We also have a full slate of Fed speakers, with Atlanta’s Bostic, St. Louis’ Bullard, Kansas City’s George, Philadelphia’s Harker, and Dallas’ Logan all set to deliver remarks before and after the Beige Book is released in the afternoon ahead of the February 1/2 FOMC meeting. We begin the day with Agency MBS prices better .125 and the 10-year yielding 3.43 after closing yesterday at 3.54 percent and the 2-year at 4.12 percent after the producer price number.

Employment

Sure, the mortgage industry is.... shall we say... unpredictable right now. We all know it. But there’s something you can do about it! With mortgage loans skewing away from refis and toward purchase loans, building real estate agent relationships is more important than ever! Lucky for you, the majority of Motto Mortgage offices are affiliated with established real estate brokerages. That means more agent connections without all the time and energy. And you know what else that means: More time for building business. Motto Mortgage brokerages are hiring talented loan originators in: AZ, CA, CO, DC, FL, GA, ID, IL, IN, MA, MD, MI, MO, NC, NJ, NV, OH, OR, PA, SC, TX, UT, VA, WA, WV, WY. Click here for more information on becoming a Motto LO!