I travel a fair amount via commercial airplane. (Greetings today from Ft. Lauderdale; this afternoon it’ll be Chicago.) But forget traveling in heavier-than-air-craft: there are people who live in airplanes! Meet Jo Ann, a beautician. Let’s see this baby appraise out for a refi! But the price is right for anyone willing to make the effort, as airplane carcasses are very affordable. One big topic at the Bank of England Mortgage event going on here is how interest rates impact affordability. Last week the Commentary included a link to a “handy-dandy chart for LOs to help borrowers to see how rates impact affordability.” I received several emails pointing something out, succinctly summed up by Fairway’s Mike S. “A quick glance shows that only 20% of the population’s affordability is determined by interest rates. At 3%, 65% of the country is already priced out. At 9%, that number is 85%. That means for 80% of the population, the interest rate is not a factor in determining whether they can afford to buy a home. Of course, it certainly affects which home they can buy.” Today’s podcast can be found here and this week’s is sponsored by SimpleNexus, an nCino company and homeownership platform unites the people, systems, and stages of the mortgage process into one seamless, end-to-end solution that spans engagement, origination, closing, and business intelligence. Today’s has an interview with CalculatedHire's Blair Bender on common candidate pitfalls and ways to set yourself apart for potential employers.

Lender and Broker Software, Products, and Services

Prioritization is more important than ever as lenders look for ways to grow their business, and customer acquisition will be a key component to drive growth in 2023 and beyond. Couple that with the fact that consumers are craving financial advice to make their homeownership dreams a reality. Fintech evangelist Sue Woodard joined Total Expert Founder and CEO Joe Welu on the Expert Insights podcast to discuss how lenders can fulfill this need and the mindset they need to have to win in any market. Listen to their insights.

The Black homeownership gap is wider today than it was in 1960 when racial discrimination was rampant and legal. As the gatekeepers of home financing, mortgage lenders are in a position to reverse this trend and enact positive change. FormFree, the award-winning fintech leading the alternative credit revolution, has created tools that empower mortgage lenders to confidently extend home financing opportunities to consumers who have the ability to repay a mortgage loan but are being held back by thin credit files. FormFree’s Residual Income Knowledge Index (RIKI) is a groundbreaking, unbiased method of measuring creditworthiness based on cash-flow analyses that is already being used by Guild Mortgage. Learn more about how to diversify and strengthen your purchase pipelines with the latest and greatest innovation in mortgage lending.

Western Alliance Bank’s Specialized Mortgage Services group provides access to a team of mortgage financing and treasury management professionals that custom tailor debt and deposit solutions. Treasury management and liquidity solutions help Independent Mortgage Bankers find efficiencies and cost savings, and we have a proven track record with escrow and operating accounts. Our clients receive best-in-class service with high-speed account opening and implementation from a dedicated service team. Western Alliance also offers speed to approval and certainty of execution for flexible MSR financing structures to accommodate your MSR retention strategy. To learn more about how our treasury management solutions can add efficiencies to your cash flow cycle and to inquire about traditional warehouse lending, MSR financing, note financing and other mortgage finance products, please contact Jennifer Schachterle (720) 261-5774, Mark Short (469) 702-6212, Chris Martin (480) 341-5483 or Nick Richards (646) 708 1211. Western Alliance Bank, Member FDIC.

What makes you different as an industry vendor? “The biggest challenge most industry vendors will have in 2023 is that most mortgage companies are focused on cutting costs,” says Gibran Nicholas, CEO of Momentifi. But what if you could turn your product, service, or initiative into a profit center for your mortgage company clients? That’s why Momentifi just launched an Enterprise Content Marketing Platform for industry vendors and wholesale lenders. It’s designed for vendors and lenders who want to (1) give your sales team and channel partners a quick and easy way to tell your story and generate immediate results; and (2) roll out expert marketing content for your sales team or channel partners without tying up internal resources. Click here to learn more and get Gibran’s executive briefing, Five New Ways to Use an Enterprise Content Marketing Platform to Drive B2B and B2B2C Sales in 2023.

Wholesale Account Executives: Do you want to be a hero to your brokers? OptifiNow has technology that makes you smarter and faster than ever before. OptifiNow recently announced an integration of OptifiNow TPO with the Lender Price Flex Pricing Engine. Imagine answering a broker's loan scenario question and sending them a detailed description of your pricing in seconds. An automated email and SMS sequence follows up with your broker for days or weeks afterward, freeing you up to price even more broker scenarios. Results show that when account executives run scenarios using OptifiNow and Lender Price's unique integration, they generate more loan volume. Are you ready to be a hero? Call OptifiNow and schedule a demo.

Non-QM Updates

“Since 1999 ACC has led the way in Non-QM through all economic and rate environments. 24 years proves this is not hype or hyperbole and ACC has never broken a lock or stopped lending. If you are looking for stability, sharp pricing and a complete product offering, then you need to connect with the oldest Non-QM lender in the industry. If your company is struggling with Non-QM or you are looking to make a career switch, call us at 877-349-050 or e-mail.”

Deephaven Presents Alternative Income Solutions for Self-Employed Borrowers February 10th at 2:00 PM. Register now to increase your value to real estate agents and their self-employed borrowers! A bank statement loan allows self-employed borrowers to document their income using bank statement deposits instead of tax returns. Click here to register today.

“The New Year is off to a fast start in the Non-QM space! Beginning on Thursday, February 9, Northpointe Bank Correspondent Lending will be offering a series of 30-minute training sessions covering the most popular features of Northpointe’s leading-edge Expanded Portfolio (Non-QM) programs: Prime Non-Agency focuses on higher credit borrowers looking to take advantage of Non-QM features, such as interest-only payments, 40-year terms, alternative doc options, including bank statements, one year’s tax returns, and asset depletion; or financing for non-warrantable condos and condotels. Expanded Access and New Start help borrowers with seasoned or recent credit events and Investor Cash Flow offers financing for investment properties utilizing DSCR rather than the borrower’s DTI. Available in all 50 states and Washington DC, Northpointe Bank provides tailored solutions to maximize your profitability and help grow your business. View program details, and for more information on the training schedule and registration, email us.”

Putting Your Loans Into Securities?

On Saturday, the Commentary had some good legal news for lenders. The owner of a small Chicago mortgage company, accused of violating the Equal Credit Opportunity Act (ECOA) and redlining, has succeeded in his battle with the Consumer Financial Protection Bureau. After years of discovery and back-and-forth motions, the CFPB’s case against Barry Sturner, owner of Townstone Financial, and his mortgage company was dismissed with prejudice.

But life is often a balancing act. Lenders also took note of a case decision which was also issued which goes in the opposite direction for the industry. As attorney Brian Levy pointed out, “There is no way to sugar coat this case. It is a terrible result for PRMI and all mortgage originators who don’t bother to negotiate the terms of loan sale agreements before they sign. In addition to nearly $5 million in loan related damages, the lender also must pay $16 million in the other side’s legal fees (and their own). Yes, PRMI has over $16 million to pay in the plaintiff’s legal fees, costs and pre-judgement interest. All the folks who settled with RFC should be very glad they did while they could.”

Disaster Updates

FEMA is the official source of disaster declarations. And when FEMA publishes them, lender and investor policies and procedures are triggered. And with the United States stretching from Maine through California, out to Hawai’i, and up to Alaska, we can be guaranteed something is going on somewhere, sometime. Recently, Alabama, Georgia, and California.

Alabama Disaster - FEMA DR-4684 Amendment No.4, two counties added: Mobile and Morgan

California Disaster - FEMA 4683-DR-CA Amendment 006, four counties added: Alameda, Contra Costa, Ventura and Mendocino.

On 2/3/2023, with Amendment No.4 to DR-4684, FEMA declared federal disaster aid with individual assistance available to 2 additional Alabama counties, Mobile and Morgan. See AmeriHome Mortgage Disaster Announcement 20230202-CL for inspection requirements.

With Amendment No. 6 to DR-4683, 4 additional counties in California have been declared federal disaster aid with individual assistance: Alameda, Contra Costa, Ventura and Mendocino. View AmeriHome Mortgage Disaster Announcement 20230201-CL for additional information.

Capital Markets

Lots of jobs = booming economy, right? January’s job data, released on Friday, rattled markets with significantly higher job gains than expected, 517k for the month. The unemployment rate fell to the lowest level in 53 years, and annual wage growth moderated to 4.4 percent. Given the continued strength in the labor market, it is hard to imagine a recession is imminent. From the Fed’s perspective, slowing wage growth, especially in the labor-intensive services sector, is necessary if they are going to achieve their desired disinflation.

We also learned last week that Job openings increased to 11.0 million during December, which brought the number of open jobs to 1.9 per unemployed person. While the services sector of the economy continues to expand, the same cannot be said for manufacturing. The ISM Manufacturing Index remained in contractionary territory for the third consecutive month in January. The housing industry continues to face challenges. However, mortgage rates dipped below 6 percent for the first time since September, which could help residential construction find its floor.

Supply and demand set prices and rates in the bond market. This week’s most likely market moving potential will come from the Quarterly Refunding when Treasury auctions $96 billion new 3-year, 10-year, and 30-year securities over tomorrow to Thursday. Data this week is mostly second tier including updates on trade, consumer credit, wholesale inventories, with Michigan sentiment and Treasury’s budget statement on Friday. Fedspeak also resumes with Chair Powell currently scheduled to speak on Tuesday and Wednesday. Class A 48-hours is on Thursday. The week gets off to a quiet start with just the non-market moving Employment Trends Index for January due out during the day. We begin the week with Agency MBS prices worse .250, the 2-year at 4.39, and the 10-year yielding 3.60 after closing last week at 3.53 percent.

Employment

Are you a service-minded sales mastermind with a passion for affordable homeownership and down payment assistance? Then you’ll be right at home at Down Payment Resource! The award-winning technology provider is on the hunt for an experienced Enterprise Sales Executive to drive business growth and further its market penetration. Be a part of an expert team of housing industry veterans as they transform the housing finance ecosystem by helping mortgage and real estate professionals connect homebuyers with the financial assistance they need. Learn about the Enterprise Sales Executive role and other opportunities at Down Payment Resource.

In the Northwest and California, Banner Bank is searching for Mortgage Loan Officers looking to create lasting Realtor and builder relationships at a bank focused on the market today. Banner has opportunities for lenders looking for local decision making with FHA, VA, USDA, state bond and true Portfolio lending opportunities along with servicing retained Fannie and Freddie loans to assist in client retention. Additional highlighted products cover CRA lending with private label no payment down payment assistance to help assist all borrowers with the right opportunity. Banner is the right fit for an established team or the individual looking to grow their business and take the next step in their career. Please send resumes to Aaron Miller.