“If I had a dollar for every girl that found me unattractive, they would eventually find me attractive.” New York Community Bancorp, buyer of Flagstar (2022) and Signature Bank (2023), wishes it had a few more dollars: it announced a shock earnings release and 70 percent dividend cut in response to a steep increase in credit provisions. Its share price has plummeted over the past week out of fear that round two of the banking crisis from last year might be approaching. Yes, NYCB owns Flagstar Bank, a long-time staple in the residential lending biz. NYCB added to reserves and cut its dividend as assets crossed the $100B threshold, while commercial real estate concerns compounded investor worries. Investors, analysts, and the rating agencies will be piling on. Today’s Commentary podcast can be found here and this week’s is sponsored by Vesta, the new, modern Loan Origination System (LOS) which helps lenders reduce their costs to originate and improve their ability to integrate with new technologies in the ecosystem. Hear part one of an interview with Curinos’ John Sayre on Q4 origination trends and statistics.

Lender and Broker Software, Products, and Services

“This February, your automation strategy needs love too. If you’re looking to problem-solve disjointed underwriting processes, we have the perfect resource for you. Tune into ICE Mortgage Technology's recent webinar to hear new perspectives from some of the industry's top automation experts that will inspire you to turn ideas into actionable plans. Watch now for their top tips on leveraging automated underwriting, including where to start, what to prioritize and how to gain buy-in with your team.”

“Now that we’ve entered the new year, it's time to set new goals and meet updated production targets. Axos Bank’s Wholesale & Correspondent Lending program offers unique financing solutions to help you reach those goals. Qualify more buyers with Pledged Assets for loans of up to $30MM, Closed-End Seconds with a CLTV of 85 percent, buy-before-sell options, and Reverse Exchanges. For more information, reach out to your AE. Don't miss our free webinar, Buy Before Selling Options, on Feb. 20, for valuable mortgage origination tips to help you reach your goals. (Contact J Shoop, National Sales Director, to schedule.) Our Axos Residential Warehouse Lending team is also available to provide strategic direction and support your business growth. Schedule a call today! Email Eric Nelepovitz or call the Warehouse Lending team at 888-764-7080 to learn more about our warehouse program.”

“In a recent Power House Podcast episode, Clayton Collins, CEO of HousingWire, engages in an intriguing conversation with Phil Shoemaker, the dynamic CEO of The Loan Store. Stepping into the CEO role last June, continuing a successful 28-year mortgage career, Phil brings unparalleled expertise to the forefront. Phil passionately underscores the importance of prioritizing exceptional customer service over relying solely on technology. He explores maintaining a startup growth mindset as The Loan Store scales, shedding light on the organization's journey, production volume, and scale. The discussion navigates through Phil's unique executive perspective, The Loan Store's differentiators, and strategic approaches for market dominance and broker empowerment in 2024. Catch up now to discover invaluable insights from Phil Shoemaker. Explore the benefits of adding The Loan Store to your tool belt and providing your borrowers with the flexibility to secure the most favorable terms based on their financial goals. Ready to seize these advantages? Connect with us today or visit our website to take the next steps.”

Lenders that outsource volume can save over 20 percent on fulfillment costs. Maxwell’s on-demand underwriting allows lenders to be agile, scaling their fulfillment expenses in proportion to loan volume. With direct integrations to your LOS, Maxwell’s experienced onshore team of underwriters provide a seamless, fast, and cost-effective experience. Because we understand the value of an uninterrupted workflow, Maxwell’s on-demand underwriting empowers you to seamlessly maintain your operations during gaps in your in-house coverage. To learn more about Maxwell’s on-demand underwriting and other fulfillment services, click here or schedule a call today.

VA, FHA, and USDA Updates

Government products amount to 25-30 of the mortgage application data, so it is important to know what’s going on out there.

In FHA & VA news, in mid-January the Secretary for Housing and Urban Development, Marcia Fudge, testified at the House Financial Services Committee hearing on the Oversight of HUD and the FHA. Orrick reported that the topics included qualification for housing programs by veterans, HUD efforts to support more affordable housing, and oversight of public housing authorities, among other things. Secretary Fudge addressed the possibility of eliminating the Mortgage Insurance Premiums (MIP) from Federal Housing Administration (FHA) mortgages. Specifically, Rep. Brad Sherman (D-CA) asked Secretary Fudge whether she would be willing to eliminate MIPs, to which Secretary Fudge replied “Yes, I’m willing to look at it.” Rep. Gregory Meeks (D-NY) asked whether FHA insurance could follow the same model as private mortgage insurance, where the product is terminated after a certain amount of payment on the principal of the loan. In response, the Secretary replied positively with “I would love to see it happen.”

Existing Manufactured Homes, are they eligible for USDA? Many inquiries are received by USDA regarding existing manufactured homes and whether they are now eligible everywhere since the "Existing Manufactured Home" Proposed Rule was published. The proposed change does not become effective until the Final Rule is published which is anticipated to be late summer or fall. Until that time, existing manufactured homes can only be financed in designated states under the Pilot Program.

The Federal Housing Administration (FHA) published a final rule in the Federal Register, Changes in Branch Office Registration Requirements [Docket No. FR-6321-F-02]. This regulation eliminates the current requirement for mortgagees and lenders to register the branch offices where they conduct FHA Title I or Title II loan originations. This final rule takes into consideration comments received in response to the proposed rule that was published on March 1, 2023. As the mortgage industry has evolved to better leverage technology and remote service delivery, FHA believes that requiring a mortgagee or lender to register all branches is an unnecessary administrative and cost impediment to program participation

USDA will be removing the required data entry in the Immigration/Naturalization Check Information section of the Additional Data screen for non-U.S. Citizen applicants in upcoming GUS changes. The anticipated implementation date for these changes is April 1, 2024.

Capital Markets

The economy is ripping ahead. The U.S. labor market added 353k jobs last month, twice what was expected and the most in a year, as economic growth remained strong. Wages jumped in the month and rose 4.5 percent from the prior year, and November and December figures were revised 126k higher.

The pickup in average hourly earnings and overall strength in hiring suggests the odds of a rate cut in March are quickly fading but the drop in the average workweek to 34.1 hours from 34.3 hours reflected weakness below the strong surface. While investors and average Americans are eager for the Fed to unwind some of its interest-rate hikes, the central bank is expected to hold rates steady for a fifth consecutive meeting in March.

The prices of mortgage-backed securities, Treasuries, and nearly every financial instrument are directly correlated to supply and demand. We mention this because this week’s highlight is the Quarterly Refunding where the Treasury will auction $121 billion in new 3-year, 10-year, and 30-years over Tuesday to Thursday. The data has less market moving potential with non-manufacturing PMIs, trade, consumer credit, and wholesale inventories/sales. Fedspeak will resume after last week’s FOMC events, while the RBA will be out with their latest monetary policy decision tomorrow.

This week’s economic calendar has news throughout the day, including the final January S&P Global services PMI, followed by ISM non-manufacturing PMI for January, the Employment Trends Index for January, and remarks from Atlanta Fed President Bostic. We begin the week with Agency MBS prices worse .125-.250, the 10-year yielding 4.10 after closing last week at 4.03 percent, and the 2-year at 4.44.

Jobs, Transitions, and a Tragic Farewell

“Mega Capital is excited and ready for 2024. Heading into our 26th year of being a lender and broker partner, we see great things for the broker/banker community. We had recently announced our mGenius platform to support our Non QM business. Bank Statement to 90 percent, DSCR including No Ratio, WVOE, 1099, Foreign National and ITIN programs.

Mega Capital is proud to announce our new broker platform: mPOWERs. This new platform will enhance our ability to speed up the mortgage loan process for all our brokers. Ease of Use, ability to track a loan more efficiently and complete all tasks quickly are just some of the enhancement mPOWERs will bring to the broker community. Mega is always looking for talented AEs with territories still available as we continue to grow in 2024. Contact Ed Darrow (818 657 2600, ext. 340).”

“Logan Finance is actively hiring inside and outside Non-QM Account Executives! Listen up Non-QM AE superstars! Logan is hiring experienced outside AEs across the country and inside AEs for our Plano, TX, and Hauppauge, NY, office locations. We offer competitive Non-QM products including many niche loan products to meet today’s lending needs, a competitive benefit package, strong tech stack, and custom marketing support so let’s talk. Catapult your career working with industry veterans like Aaron Samples, Nick Pabarcus, and Dave Weatherford who know a thing or two about the Non-QM world. Contact Terry Mitchell for details or check out LoganWholesale.com and LoganCorrespondent.com for more information. Join Logan and become a #LoganLeader today!”

SecurityNational Mortgage Welcomes Jeff Mason as New Director of Strategic Growth! SecurityNational Mortgage Company (SNMC) is delighted to announce the appointment of Jeff Mason as Director of Strategic Growth, a move poised to bolster the company's ambitious expansion goals. Renowned for his strategic acumen and stellar background in team development that has generated tangible success across various lending institutions, Mr. Mason brings a wealth of experience and a proven track record to SNMC. "Jeff's unparalleled expertise in talent acquisition and his visionary approach to growth make him an invaluable asset to our team," said Joel Harward, SNMC's Senior Vice President. "His leadership is key to fortifying our commitment to sourcing and nurturing premier talent within the industry." Mr. Mason’s appointment underlines SNMC's dedication to excellence and its ongoing pursuit of success. For more insight into SecurityNational Mortgage's innovative approach and their reasons for attracting industry-leading professionals like Jeff Mason, click here.

loanDepot emphasizes VA loan education to serve our nation's heroes, connecting Veteran homebuyers with originators. Under the direction of its VP of National VA Lending, David Smith, loanDepot's industry-leading VA Council, comprised largely of Veterans, continues to expand outreach on the VA loan program. The Company offers an expansive VA product portfolio (which includes VA renovation loans and programs with a 520 minimum FICO) and a proprietary tool that identifies in-market real estate pros with strong Veteran client connections. Having educated thousands of Veterans and connecting hundreds of Veteran buyers with in-market originators, loanDepot is growing its realtor and Veteran education outreach programs and rolling out enhanced training and in-house certification programs for its originators - increasing benefits to both Veterans and mortgage pros. Smith, a former US Army Sergeant, said, “Our mission is to inform and empower so that more of our country’s military families can take advantage of the powerful benefits of the VA loan program.” If you’re looking to grow your VA business, contact David directly.

“As a job seeker, have you found an opportunity you’re interested in applying to only to realize that there are already hundreds of applicants, and it’s only been open for a day or two? You may have better odds buying a Powerball ticket. As an employer, have you set aside a few precious minutes to review applicants only to realize that very few (if any) are qualified? At Pezian Search Group, we have a thorough process that ensures our Clients are only receiving qualified candidates to review, while also providing Candidates the opportunity to be considered for fantastic roles from coast-to-coast, many of which aren’t posted on job boards. Let us show you the value added, and frustration saved when working with us whether you’re hiring or seeking your next career move. You can reach our team directly and on LinkedIn to learn more.”

Last Thursday the Commentary mentioned that Mike Gill, a SVP of Capital Markets at the Housing Policy Council, was fighting for his life after a shooting during a car-jack. Unfortunately for Mike’s family and the industry, Mike lost that fight. A tragic untimely death. (The person who is believed to have shot him was killed by police.)