Yesterday I visited Sacramento to speak to an audience of real estate agents and originators in a joint MGIC/Golden 1 Credit Union event. The mood was good, and much of the discussion was about rent (give or take a little, 50 percent the U.S. is paying 50 percent of their income in rent) and products offered by depositories and portfolio lenders. Attendees also remarked how fast 2022 is moving. We’re fast approaching Memorial Day, marking the unofficial start of summer. Radio stations start playing summer-themed songs (“I thought I knew what love was, what did I know? Those days are gone forever, I should just let them go…”) Time does indeed fly, and it is important to keep things in perspective. Fairway Independent’s Jennifer S. sent over this tweet from Congress. “The median annual pay during the Great Depression was 22 percent of the cost of an average home. Today it’s 14 percent. That means that pay relative to home cost made it easier to buy a home during the Great Depression than right now.” Originators have their work cut out for them in becoming subject matter experts for their clients in this rate and affordability environment! (Today’s podcast is available here and this week’s is sponsored by Matchbox LLC, igniting ideas for the mortgage industry. Expertise in assisting clients through transition periods with Technology, Capital Markets, and Education.)

Lender and Broker Software, Services, and Programs

Technology advancements happening at the speed of light are the standard nowadays, so you need a subservicer who understands how crucial it is to have dynamic, intuitive platforms that provide important data at a moment's notice. TMS quickly recognized the need for technology that could go beyond the standard fare in mortgage servicing. That's why TMS created its revolutionary servicing platform SIME (Servicing Intelligence Made Easy). It's a fully transparent, 100% accessible, on-demand view of your portfolio where you can run 90+ standard and customizable reports, listen to recorded customer calls, get escrow analysis, and much more. SIME also powers TMS' Happinest app, and customer websites, which lets customers manage all their mortgage affairs, leading to an 82% self-service rate. That award-winning technology combined with their outstanding people is the winning combination behind the best-in-class experience that TMS provides for its customers and clients. Ready for exceptional power at your fingertips? Partner with TMS.

Why let the market cycle dictate your profits? With Candor as your AI Underwriter, you reduce cycle time which lowers your cost to produce. The added elasticity means you can seamlessly scale up or down with no change to staff. Candor can autonomously determine borrower eligibility, documents required, conditions required, and loan defects that require resolution. Plus, Candor clears conditions and repairs defects, or provides precise instructions for your team to DIY. No guesswork, no speculation, no rework, and no bias. In addition to ingesting AUS, OCR, income calculations, data validation & verification and cross checks, Candor conducts a hands off underwrite, saves every detail to a permanent database, and backs up decisions with a warranty. Our clients rave. Implementation is a fast 30 days. It’s worth 30 minutes to learn more.

During a volatile climate, one must stay vigilant to counter market headwinds. MCT pairs expert advice with its full arsenal of industry-disrupting software to help you Bring BPS Back. View our webinar from May 25, Improving Profitability to Counter Market Headwinds. The webinar demonstrates how MCT leverages unique software and services like BAM Marketplace, bid tape AOT, and Trade Auction Manager to help clients squeeze every basis point from their best execution loan sale strategy. Topics include leveraging bid tape Assignment of Trade (AOT), strategies and tools to optimize your investor set, how to find new buyers with BAM Marketplace, and more. MCT continues to be a leader in the industry for bringing the future of digitization in the secondary market to your fingertips, increasing profitability and efficiency. Also, be sure to utilize MCT’s new hedge advisory profitability calculator aimed to calculate your potential profitability and efficiency gains.

Due diligence is a critical element of every mortgage transaction. This is why many originators are outsourcing to third-party providers the responsibility of conducting the risk and data analysis. If you’re interested in partnering with a provider, there are critical factors to consider, such as experience, product diversification, accuracy, and responsiveness. To learn more, read Selene Diligence’s latest article “Five things to look for when partnering with a third-party review provider”. Selene Diligence reviews in detail all loan attributes, documentation, and third-party data sources to identify and mitigate risk and is fully affirmed as a third-party review (TPR) firm by all major RMBS rating agencies.

Introducing eClosing from Maxwell: a better closing experience for borrowers and LOs. Mortgage solutions provider Maxwell has partnered with Snapdocs, an industry-leading digital closing platform, to bring lenders a best-in-class eClose experience. Maxwell Point of Sale and its eClose solution streamline the closing process so you can exceed borrower expectations, reduce delays and errors, and handle more closing volume. Supporting a variety of closing options including wet sign and hybrid closings, Maxwell eClose empowers LOs with automatic preparation of all lender and title documents and frees lending teams from communicating deadlines, sending reminders, and coaching borrowers to prepare for closing. Plus, borrowers can stay in the point of sale from start to finish, with the ability to preview and sign documents before closing day. Want to simplify your closing process for LOs and borrowers alike? Click here to learn more or request a demo today.

Loan production revenue is down, and lenders are approaching that reality with mixed reactions. Some are saying “no big deal” as they look to grab more market share, and others are having serious discussions about cutting costs and scaling down their teams. The most successful lenders will handle this market shift by seeking efficient ways to set themselves apart from their competition. For some, that may mean investing in technology that not only enhances their value in the market but helps to trim down their expenses too. Those lenders should check out the technology LenderLogix offers. Two of their most noteworthy products include QuickQual, the adjustable pre-approval that has proven to increase pre-approval to application conversion rates, and Fee Chaser, an automated upfront fee collection solution that eliminates the need for manual management and helps lenders realize 10% more revenue. Check out LenderLogix’s site for more information and schedule a demo with their team today!

STRATMOR on Appraisals

Appraisals were a very hot topic in the industry in 2021 due to the pain the high costs and long turn times caused. With the recent volume drop, lenders are turning their attention to new fires, but they can’t unsee the glaring inefficiencies and lack of control around appraisal operations. This leads STRATMOR Group’s Customer Experience Director Mike Seminari to ask, “Will the next big digital innovation in mortgage be appraisal management tools? In the just-released STRATMOR Group Insights Report, Seminari shares data from the recent STRATMOR study on appraisal operations commissioned by Reggora. Results revealed, among other details, that lenders prioritized turn times as the most important factor in the appraisal process (38 percent) with “Quality” following at a close second (35 percent). Efficiency gain opportunities derived from an effective appraisal operations process are important as lenders focus on both improving margins and the customer experience. Don’t miss Seminari’s article, “The Next Big Mortgage Technology Change: Appraisals” in the May Insights Report.

FHFA in the News

Warning: acronyms ahead! Yesterday, our industry received some good news with the confirmation of Sandra Thompson as Director of the Federal Housing Finance Agency (FHFA), which oversees FNMA and FHLMC. Bob Broeksmit, CMB, President and CEO of the Mortgage Bankers Association (MBA), sent, “MBA applauds the confirmation of Sandra Thompson to continue leading the Federal Housing Finance Agency. Since being appointed Acting Director in June 2021, she has repeatedly demonstrated leadership, expertise, and a strong commitment to sound risk management principles while safely expanding access to mortgage credit and creating equitable and sustainable housing solutions for homeowners and renters.”

Addressing its book of business, Rocket recently sent out a piece addressing trends it is seeing. “Through a push from FHFA to ensure that the GSEs responsibly promote equitable access to affordable housing that reaches low- and moderate-income families, minority communities and other underserved populations, products and guidelines that specifically target FTHBs continue to be developed and promoted. This has caused a substantial increase in the high LTV/low down payment group among GSE origination volume (in addition to responding to rising home prices).

“This high LTV/low down payment group is exactly where the FTHB market resides. As of December, FTHBs accounted for 42.5% of the GSE purchase market and significantly more in the high LTV space; 56% of 90.01 – 95 LTVs and 96.7% of 95.01 – 97 LTVs. Recent developments by mortgage insurance providers to improve pricing execution for borrower paid mortgage insurance (BPMI) in select down payment and credit score combinations means that this trend will continue. The portion of the GSE market with private mortgage insurance will continue to rise.”

And the FHFA announced a new form requirement for lenders selling to Fannie Mae and Freddie Mac. Read the post from First American Docutech Compliance News: Supplemental Consumer Information Form.

Capital Markets

More signals over the past few days point to recession fears overtaking inflation concerns, but if growth is slowing that takes some pressure off of the Fed. A downside miss in April’s Durable Goods, decent demand at a Treasury 5-year note sale, and Fed minutes revealing officials largely endorsed the need for 50 basis point hikes over the next couple of meetings were the headlines yesterday. Wednesday saw Treasuries rally to the lowest yield levels since mid-April at one point. The past few days presented a return to the "risk off" mentality where investors sell stocks to buy bonds, driving the price up and yield down. Mortgage rates are beginning to come down too: good news for borrowers.

Market turbulence found a soft patch after the latest Fed minutes, which even though it helps shape opinions about policy action and the path of inflation, proved to be a snoozer, welcome news for a jittery bond market. Minutes from its latest policy meeting showed an agreement over 50 basis points rate hikes toward a neutral policy stance at the next couple meetings, saying it would give the central bank flexibility afterward, and revealed no signals that officials would turn more hawkish in their fight to tame inflation amongst unanimity that prices are too high and the labor market too tight. Policymakers also agreed that a restrictive policy stance may become appropriate depending on the economic outlook.

There was broad support for reducing the balance sheet and numerous participants voiced support for sales of Agency mortgage-backed securities. “After balance sheet runoff was well under, it would be appropriate for the Committee to consider sales of agency MBS to enable suitable progress toward a longer-run SOMA portfolio composed primarily of Treasury securities. Any program of sales and agency MBS would be announced well in advance.” Nothing new. But traders are “dialing back” expectations for rate hikes after poor U.S. economic data recently. 134 basis points of increases over the next three meetings are currently priced into the market, down from 141 earlier this week.

Today’s calendar is already under way with the second look at Q1 GDP (-1.5 percent versus originally coming out at -1.4 percent) as well as weekly jobless claims (210k, down from 218k last week). Markets were hoping for some relief in the month-over-month numbers to indicate that inflation is on the decline. April pending home sales are seen falling later this morning. Treasury auctions $42 billion 7-year notes and Fed Vice Chair Brainard speaks before the House Financial Services Committee to close the day. The Desk will conduct the last two operations on the current MBS purchase schedule before releasing a new schedule covering the May 27 to June 13 period which is expected to total $18.0 billion. We begin the day with Agency MBS prices roughly unchanged and the 10-year yielding 2.74 after closing yesterday at 2.75 percent.

Careers

Synergy One Lending continues its expansion with the addition of five branches since April 1! From Portland, OR to Peoria, AZ, and the Lone Star state back home to San Diego, top-producers continue to be drawn to S1L’s Modern Mortgage Experience™. “We are thrilled to join forces with these high integrity, purchase-focused leaders, and can’t wait to support their teams’ growth through our commitment to innovation and transparency,” says Synergy One’s President, Aaron Nemec. Combine this incredible talent withS1 FinFit and theS1L HELOC and you’ll be ready to take your business next level in today’s ultra-competitive market. Ready to learn more? Contact Aaron Nemec or Ben Green today!

Celebrating 18th years of serving its customers, iServe Lending truly provides loan officers and branches with a comprehensive strategic partnership. “Our loan officers are our customers,” says Michael Wilson, COO. “iServe’s user friendly team environment and can-do attitude produce a culture which results in a much higher degree of success for loan originators. With support such as, dedicated Marketing Department and direct access to your personal Operations Team, you can be confident that iServe will put you on the path for long term success. For a confidential conversation and to learn why our average loan officer tenure is over 6 years, and branch managers over 8 years, contact Shay Curran, national recruiter at 760.338.5851. “Let’s Build something extraordinary together.”

PacRes Mortgage, formerly known as Pacific Residential Mortgage, is excited to announce its “soon to be launched” Wholesale and Correspondent Division. Joining new Director of Wholesale and Correspondent Lending, Erik Anderson, are industry veterans Greg Woolsey, Terri Buckman, Greg Freeman, and many others who have reconnected to form a powerful and extremely experienced group of wholesale mortgage industry professionals. “To find myself working with and guiding this mortgage industry dream team once again is truly my dream come true. I’m excited to experience the positive growth we will have on our newly formed PacRes TPO Division,” said co-owner Robert Boliard. If you want to join the dynamic and growing PacRes team, and be a part of a brand that has all the resources of a large corporation without the corporate bureaucracy, contact Erik Anderson, Director of Wholesale and Correspondent Lending 425-417-1610.